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The new agreement includes a July 1, 2018 commencement date (a year earlier as the current term does not expire for another year), an overall 13.3% reduction in cost, increase in services including bulk-item waste pickup three times annually for residential users, motor-oil and filter collection, a new state-of-the-art financial system, and a franchise fee that will increase up to 4%, with '/s% to be paid in advance. Future service rates adjustments will be based upon an index. PGS will institute a recycled and organic diversion education program and other customer service programs. The City can review the agreement two times and request three audits over the life of the agreement, and PGS will allow e-waste and u-waste by permit at the transfer station. The City will ultimately find another party to process recycle and organic material at the transfer station. This is the essence of the overall franchise agreement as presented. There is a second review agreement to resolve other matters outside of the main agreement. The balance of the reserve account has approximately $4.2 million. The City apportioned the reserve balance between PGS and the City based upon costs including depreciation of expenses purchased under old agreement ($1.2 million), costs associated with financial auditing between April 1 — June 30, 2018, and the approximately $2 million left over would be sufficient to pay the '/% percent of the 4% franchise fee in advance of the contract term. After the $2 million is paid, the City and PGS would divide the balance ($260,000), with any overage flowing back to the City. The City will secure a separate contract with a vendor for the processing of organics. In advance of July 1, 2018 the City will meet with the subcommittee to establish rates. The results of the RFP's will likely be known by the end of July, after which the rates will be adjusted again. It is possible regulations may impact costs for processing of organics. Staff will return when the information is available. Staff thanked PGS for their good faith efforts to come to an agreement, and the City's consultant and staff. Councilmember Pentin inquired regarding the definitions of e-waste, which staff confirmed are typically electronic waste items such as computers and printers, and u-waste. Staff noted there are special regulatory definitions for u-waste items including batteries, light bulbs, and mercury switches. Councilmember Pentin confirmed household hazardous waste must still be taken to Livermore. Councilmember Narum confirmed the updated management system under the new agreement would include upgrades to the website. Staff confirmed PGS will complete the upgrades under the new agreement. Councilmember Brown inquired regarding the bulk-item pickup. Staff remarked each resident will be eligible for three free bulk-item pickups annually and the resident coordinates scheduling with PGS directly. The bulk-item pickup will include green waste and other household items such as mattresses and washer/dryers. Tires are included, however, there are limitations to the number which are allowed per pickup. There will be an education campaign conducted due to the high level of community interest in the bulk-item pickup program. Councilmember Pentin confirmed there is a limitation to the amount of items which can be included per bulk-item pickup. It was stated the resident can also take the items to the transfer station directly. Councilmember Brown confirmed the rates will be reviewed and the residents will be informed as to the final result. Staff stated not all rate-payers will receive a 13.3% reduction, as the City will determine the reductions are equitably distributed. The final proposed rates will return to the City Council for review and approval. City Council Minutes Page 4 of 12 March 20,2018