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Page 1 of 4 <br />Item #4 <br /> CITY COUNCIL AGENDA REPORT <br /> <br />May 21, 2024 <br />City Manager <br /> <br />TITLE: ADOPT A RESOLUTION TO APPROVE RATES FOR SOLID WASTE, <br />RECYCLABLE MATERIALS, AND ORGANIC MATERIALS COLLECTION FOR <br />FISCAL YEAR 2024/25 AS REQUIRED BY THE FRANCHISE AGREEMENT <br />BETWEEN THE CITY AND PLEASANTON GARBAGE SERVICE, INC. <br /> <br />SUMMARY <br />Pursuant to the existing Franchise Agreement between the City and Pleasanton Garbage <br />Service, Inc. (PGS), garbage collection rates shall be adjusted annually with City Council <br />approval, commencing on July 1 of each year of the term of the agreement (see Section 8. 2 <br />C). The rate setting process identified in the Franchise Agreement for rate period seven is a <br />rate application using a cost-based rate adjustment methodology. <br /> <br />On December 22, 2023, PGS submitted a rate application request for rate period seven, which <br />covers Fiscal Year 2024/2025. After review and discussion with PGS and the City's waste and <br />recycling consultant, HF&H Consultants, Inc., staff recommends a 3.90 percent rate increase <br />adjustment effective July 1, 2024. <br /> <br />RECOMMENDATION <br />Adopt a resolution to approve rates for solid waste, recyclable materials, and organic materials <br />collection for fiscal year 2024/25 as required by the franchise agreement between the City and <br />Pleasanton Garbage Service, Inc.. <br /> <br />BACKGROUND <br />The current garbage service Franchise Agreement outlines the process for annual rate <br />adjustments, which includes an index-based rate adjustment and a cost-based rate adjustment <br />(Table 1). July 1, 2024, begins the Seventh Rate Period, which is a cost-based rate adjustment <br />period. As stipulated in the Agreement, all rates are set by the City Council. In past practice, <br />rate adjustments were presented to the City Council among the meeting's Consent Calendar <br />items because the adjustment approach is provided within the Agreement and is constrained <br />by specified methodology. <br /> <br />Table 1 - Anual Rate Adjustment Increase Basis <br />Rate Period Fiscal Year Type of Rate <br />increase <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 /> <br />Per the Franchise Agreement, Exhibit I, the cost-based adjustment mechanism involves review <br />Page 25 of 720