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Ayes: Councilmembers Cook-Kallio, McGovern, Thorne, Mayor Hosterman Noes: Councilmember Sullivan Absent: None 14. Public Hearing: Consider adoption of a resolution establishing fixed and uniform refuse collection and recycling service rates for residential and commercial customers and approval of curbside residential and commercial recycling programs Assistant City Manager Steve Bocian gave the staff report and provided background on the City's refuse franchise with Pleasanton Garbage Service (PGS). Since 2000, PGS rates have increased an average of 2.6% per year. PGS has again submitted a rate increase request based on unrealized revenue projections, the decrease in commercial construction and subsequent revenue decreases, and increased regulatory and landfill costs. The proposed increase of 13%, or $3.64, on a 96-gallon residential bin service also accounts for consumer assumption of food scrap program costs which were initially covered by the City's Measure D fund reserves. Commercial rates would increase 14.71% and reflect its share of operating cost deficits and projected revenue reductions. Pleasanton has experienced a tapering of growth and somewhat stagnant revenue subject to inflationary pressures. City staff and PGS are concerned with what this means for the future of existing rates and have initiated some preventative measures. PGS has agreed to undertake an independent operations audit to determine overall efficacy and in the event that PGS realizes it has a deficit, is required by the agreement to notify the City immediately. Staff is recommending that the current franchise fee of $1.50 per City unit be increased to 1 % of the entire revenue base. This is estimated to yield approximately $180,000 per year which will be placed in the General Fund for supporting environmental programs in the future. Mr. Bocian noted that other Alameda County cities receive franchise fees of roughly 10% which are used for General Fund purposes and recycling related programs. During the course of meetings with PGS, consultants, and the subcommittee, it was realized that Pleasanton lags behind as the only community without a curbside recycling program and with limited commercial recycling incentives. Based on this, recently approved state legislation, and last year's agreement to meet a countywide diversion target of 75%, the subcommittee recommended implementation of a citywide residential program by the end of the year. The current blue bag program will be replaced by weekly recyclable cart pickup but green waste and food scrap programs will remain in place. It is anticipated that the program will increase the current 54% diversion rate by 15-40%, enhance public awareness of recyclables, and comply with the full intent of Measure D as well as other state and county programs. The City has agreed to a program cost of 9.29% which is related to PGS' MERF conversion, truck replacement, and the additional staff required to provide the service. PGS will offer 35- gallon and 96-gallon bin garbage service, each with a 96-gallon recycling bin; discounts are offered on the 35-gallon bin service to maximize recycling incentives. The new commercial recycling program will expand on the paper gobbler program by delivering recycling bins inside town businesses. Firms would be responsible for placing the carts outside for pickup and PGS would redeposit them inside the building. Mr. Bocian stated that 96-gallon bin service will realize a rate increase of $3.64, which is comparatively low to other cities, but noted that at $29.13, 35-gallon bin rates are a bit high. It is City Council Minutes Page 8 of 17 April 7, 2009