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Mayor Thorne inquired whether the City and consultant have had a discussion regarding users not disposing or sorting garbage/recyclables. Ms. Hopkins advised that PGS and city staff would be developing and distributing educational materials. Councilmember Pentin inquired if the "meet-and-confer" requirement only applied to Option 3, or could apply to all. City Manager Fialho noted the City Council has discretion over requiring the process for any options. Councilmember Pentin inquired as to the threshold of significant migration and how that is determined. City Manager Fialho noted that PGS will speak to the issue, however, based upon his discussion with them, he estimates a 3% change could be perceived as significant. The City's consultant, Rob Hilton, of HF&H Consultants, spoke regarding migration in reaction to rate changes in Alameda County. He provided examples from various cities and noted that historically, migration occurred in concert with the recession and in reaction to other rate increases. Councilmember Brown inquired whether the $1 million set-aside would be available. City Manager Fialho stated it is a City Council policy and they have discretion over where and when it is allocated. Councilmember Pentin felt going forward, as residents are educated and learn to recycle more they will migrate to 35-gallons not because of price but because they are actually being more conscious of ecology and recycling, so at what point do we draw the line, one, two or five years. City Manager Fialho stated it is a good point and noted the obligation to meet-and-confer to address migration and on other occasion's off-cycle to address extraordinary considerations. Councilmember Brown inquired whether the City would have the opportunity to recover any profits if the vendor were to exceed their revenue expectations. City Manager Fialho noted that the vendor assumes risk introducing new technologies, etc. as well as the reward of exceeding their revenue expectations. Councilmember Brown inquired why Livermore and Dublin averages were included in the PGS revenue comparison, as they do not service Livermore. Assistant City Manager Dolan reported it was included so there was less incentive for users to migrate. Councilmember Narum inquired whether the migration rate was factored into the profit/loss statement. Mr. Hilton noted the migration assumption was incorporated for two different issues that were known during negotiations, that being the commercial cardboard and paper gobbler programs. There is no other migration assumed in any of the other rates, including the 96-gallon cart. Mr. Hilton noted there is a budget item listed in the proforma for cart replacement 96 to 35 gallon. Councilmember Olson inquired whether the City Council was open to considering various rates. There was consensus among the Council to entertain rate options. Mayor Thorne opened the public hearing. Gordon Galvan, representing PGS, confirmed PGS wants to work in the spirit of cooperation with the City and get the agreement "right." He expressed concern PGS was not at the table during rate-setting and concluded the proposed rate-setting model will invite migration. He acknowledge the $1 million set- aside in year one as an agreeable revenue-offset in the event of migration, however, he expressed concern regarding the impacts of migration in year two and thereafter. He requested additional time for PGS to review the impacts of the proposed rates and a more collaborative approach by the City in including PGS into the rate-setting discussions. He expressed concern with the meet-and-confer solution coinciding with concurrent revenue shortfalls. He requested a provision in the proposed contract to specifically address migration losses. City Council Minutes Page 2 of 5 July 3. 2018