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BACKGROUND The City has entered into a Refuse Collection Agreement (Franchise) with Pleasanton Garbage Service (PGS) for the collection and disposal of refuse and recycling material in the City of Pleasanton. As part of this Franchise, PGS may request adjustments to the refuse and recycling collection rates and amendments to address operational or regulatory matters. At its meeting of June 3, 2008, the City Council approved interim refuse and recycling collection rates requested by Pleasanton Garbage Services and indicated its intent to modify the current system of recycling by adding an additional container that will be used exclusively for recyclable material. The Council indicated an interest in revisiting the matter in six month. The City has used R3 Consulting Group, Inc., over the past few years to provide technical assistance with analyzing refuse collection and recycling rate reviews and operations. To date all work has been satisfactory. In reviewing the needs for the recycling and service changes indicated by the Council, staff has determined that R3 will provide a level of technical assistance that will assist the process and as a result it is recommending a third amendment to R3's current professional services agreement. The services to be provided include continuing to assist staff with its negotiations with PGS regarding collection rates and providing information regarding residential and commercial recycling programs that will assist the City with designing the new program. The services will be provided on a time and material basis not to exceed $50,000. The recommended amendment, including the fee schedule, is included as Attachment 1. DISCUSSION As detailed in Attachment 1, R3 is proposing to provide a range of technical services related to refuse collection and recycling services and related collection rates. A summary of the key services is as follows: Conduct a review of PGS' rate application for amended recycling services and refuse collection rates. Review the reconciliation of financial information included in the rate application and from audited financial statements as submitted in the rate application; Review the forecasted revenue generated from rates and calculate current revenues; • Assist in facilitating discussion with PGS regarding the design and effectiveness of new recycling services. • Facilitate meetings with City staff and representatives of PGS to evaluate the results of the Rate Review, discuss the proposed rates and provide necessary support and documentation to substantiate the rate review findings. As indicated previously, fees for this work is $50,000 plus reimbursable expenses for mileage, unusual duplications etc. Staff has been satisfied with the services provide by R3 previously and its knowledge of the PGS refuse collection franchise and rate Page 2 of 5