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18a THE CITY OF CITY COUNCIL AGENDA REPORT PLEASANTON. June 20, 2023 City Manager's Office TITLE: CONSIDER AND ADOPT A RESOLUTION TO APPROVE RATES FOR SOLID WASTE, RECYCLABLE MATERIALS, AND ORGANIC MATERIALS COLLECTION FOR FISCAL YEAR 2023/2024 AS REQUIRED BY THE FRANCHISE AGREEMENT BETWEEN THE CITY AND PLEASANTON GARBAGE SERVICE, INC. SUMMARY Pursuant to the existing Franchise Agreement between the City of Pleasanton (City) and Pleasanton Garbage Service, Inc. (PGS) garbage collection rates shall be adjusted annually with City Council approval, commencing on July 1 of each year of the term of the agreement (see Section 8.2 C). The rate setting process identified in the Franchise Agreement for rate period six is a rate application using an index-based rate adjustment methodology. The Franchise Agreement also provides an option of capping the rate increase at not more than 6 percent, with the option of carrying forward the excess to be applied in the subsequent rate period. On March 28, 2023, PGS submitted a rate application request for rate period six with a proposed increase of 8.1 percent, which was set based on the index-based methodology. After review by the City's consultant, HF&H Consultants, Inc. (HF&H), the requested 8.1 percent increase was reduced to 7.3 percent to reflect the adjusted cost basis due to the special rate adjustment effective January 1, 2023. RECOMMENDATION Adopt a resolution approving rates for solid waste, recyclable materials, and organic materials collection for fiscal year 2023/2024 as required by the franchise agreement between the City and PGS. • Staff Recommendation - Adopt a rate increase of 7.3 percent as indicated by index rate application after the adjustment for mid-year special rate adjustment in rate period five. • Alternative Recommendation 1 —Adopt a rate increase of 6 percent, employing the 6 percent cap allowed in the Franchise Agreement, and carry-forward $417,786 (1.3 percent) to rate period seven. • Alternative Recommendation 2 — Adopt a rate increase of 6.65 percent, employing the 6 percent cap allowed in the Franchise Agreement, and carry- forward $210,033 (0.65 percent) to rate period seven.