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ATTACHMENT 1 Managing Tomorrow's Resources Today 590 ygnacio Valley Road,Suite 105 Robert D.Hilton,Emeritus Walnut Creek,California 94596 John W.Farnkopf,PE Telephone:925/977-6950 Laith B. Ezzet,CMC www.hfh-consultants.com Richard J.Simonson,CMC Marva M.Sheehan,CPA Robert C.Hilton November 15, 2022 Ms. Becky Hopkins Assistant to the City Manager City of Pleasanton P. 0. Box 520 Pleasanton, CA 94566-0802 Re: Review of Pleasanton Garbage Service, Inc. Request for Special Rate Adjustment Dear Ms. Hopkins: Following are the findings from our review of Pleasanton Garbage Service, incorporated's (PGS) Application for a Special Rate Adjustment due to a City Directed Change in Scope. Summary Findings A.' PGS has notified the City that the current Approved Organics Processing facility Central Valley Compost in Lathrop, California, is unable to continue to process the City's Commercial Organic Materials as they do not have the State required license to do so.The City has directed PGS to enter into a contract with Recology Blossom Valley Organics — North, to process the City's Commercial Organics Materials effective November 1, 2022. B. Costs for transfer and processing of commercial organic material were increased from $68.16 to $146.75 per ton to account for the proposed change in processing facility.The proposed additional cost is equal to $117,682,from November 1, 2022 through June 30, 2023. On an annual rate basis this amount would require a rate increase of 0.37%. Should a rate increase be applied during Rate Period 5 to offset these increased costs, a 0.74% rate increase effective January 1, 2023 would be required. C. Using the tonnage projections from Rate Period 5, the annual cost of processing materials at Recology Blossom Valley—North,would amount to $176,524, a 0.56% rate increase in addition to prescribed application of other indices such as CPI. Should PGS allow the deferral of a rate increase to be added to the Rate Period 6 rates in lieu of implementing a rate increase mid-year,that amount of$117,682 would be added to the $176,524 annual cost projection as a one-time back payment, the total rate increase required for Rate Period 6 as a result of this change would amount to 0.92%.