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Approving the use of the special revenue fund for costs related to the implementation of <br /> SB 1383 provides the City Council the option to delay passing on costs to the rate payer <br /> through the garbage rates. <br /> Street maintenance costs. The Franchise Agreement between the City of Pleasanton <br /> and PGS includes a Vehicle Impact Mitigation Fee. The purpose of this fee is to <br /> reimburse the City for street maintenance costs incurred from collection vehicles <br /> traveling on city streets. The Vehicle Impact Mitigation Fee is a pass-through cost, <br /> collected through the rates and paid monthly to the City by PGS. Currently the Vehicle <br /> Impact Mitigation Fee is set at zero dollars ($0) per month. Before a fee may be set, a <br /> Nexus Study must be conducted. The estimated cost of such a study is $20,000. <br /> Approving the use of the special revenue fund for street maintenance costs would allow <br /> staff to complete the required Nexus Study and bring forward results of the study to the <br /> Council for further consideration regarding setting a Vehicle Impact Mitigation Fee. <br /> Smoothing of garbage rates. The current agreement between the City and PGS <br /> stipulates that annual rate increases will be provided based on an Index-based Rate <br /> Increase and a Cost-based Rate Increase. The Index-based Rate Increases are <br /> scheduled during Rate Periods Two through Six and Nine through Eleven and a Cost- <br /> based Rate Increase is scheduled in Rate Period Seven (Table 2). <br /> Table 2. <br /> Rate Period Fiscal Year Type of Rate <br /> increase <br /> Five 2022-2023 Index-based <br /> Six 2023-2024 Index-based <br /> Seven 2024-2025 Cost-based <br /> Eight 2025-2026 Index-based <br /> Nine 2026-2027 Index-based <br /> Ten 2027-2028 Index-based <br /> Eleven 2028-2029 Index-based <br /> Per the Agreement, the Indexed-based adjustment involves use of various cost <br /> adjustment factors (such as the percentage change in the Consumer Price Index and <br /> percentage change in the Approved Disposal site tipping fee) to calculate adjusted <br /> rates. The Cost-based adjustment involves a detailed review of PGS's actual costs of <br /> service and determination of adjusted rates to reflect PGS's projected costs. <br /> Additionally, as previously discussed the implementation of State law SB 1383 will <br /> require the City to incur new costs which may be paid through the garbage rates. <br /> Page 3 of 4 <br />