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While the above program would represent a "first step" in addressing commercial recycling, the Subcommittee has requested that within one year from the date that the commercial program is approved, that City staff provide the City Council with a report and recommendation regarding the potential for working cooperatively with the City of Dublin's waste hauler to determine if there are costs savings for using the Pleasanton MRF for processing recyclable materials collected from the City of Dublin. While the outcome of this option is uncertain, it warrants further review as a means of addressing commercial recycling. Staff estimates the commercial program being implemented in March 2010. New Recycling Program Service Rates As indicated on Attachment 2, the cost of the program for residential customers will be 9.29% for the 96-Gallon Service and 1.58% for the 35-Gallon service. The 7.71 reduction for the 35-Gallon Service reflects a discounted rate provided as a financial incentive to encourage residential customers to switch to the smaller 35-gallon refuse cart service as a means of maximizing the amount of recyclable material that needs to be removed from the waste stream. It does not reflect the actual cost of servicing the 35-gallon carts which is approximately 2.00% less then servicing a 96-gallon service. PGS and staff financial estimates assume that approximately 40% of residential customers will move from the current 96-gallon service to the new 35-gallon service. If a larger number of residents make this service change, there will be an impact on future rates that will need to be addressed no later then the next regularly scheduled rate increase in March 2011. Tables summarizing residential and commercial rate adjustments are included as Attachment 2. The detailed rates are included in Attachment 1. A summary of the residential service rate are as follows: SUMMARY OF MONTHLY SERVICE RATE ADJUSTMENTS FOR ALL EXISTING AND NEW PROGRAMS Existing New Existing New 96-Gallon 96-Gallon 35-Gallon 35-Gallon (1~ $28.04 $34.57 $25.20 $29.13 Residents will have the option to switch from the 96-gallon service to the new 35-gallon service which results in a cost differential of $1.09/month (3.9%) As indicated in Attachment 2, the increase for commercial accounts will be 12.47% which includes 9.29% plus 3.18% to reflect its cost of the incentive to allow for the 35- gallon service. In addition, the commercial rate will increase by 2.50% when the commercial program is fully implemented in March 2010 for a total recycling adjustment of 14.97%. Cost for the program are derived from the need to establish a new collection route including five additional drivers and five new trucks, conversion of the MRF to Ylandle recyclable material exclusively, additional employees to sort material, the new collection carts, and general operating costs related to fuel, insurance, maintenance for the new equipment. These costs factor in the additional revenue that could be generated by Page 8 of 9