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rate adjustment for that year into the remaining three years of the rate proposal and in some years, it creates a significant impact on the proposed rates. Pleasanton Garbage Services agreed to staff's proposal to recover the current "lagging year" deficit over the remaining term of the franchise. (3) Request for Additional Operational Space - the approved conditional use permit called for reallocation of employee parking to on-site locations, but the expansion ot! the property belt and the implementation of the City C & D recycling directive has had an impact on the space requirements for the existing site keeping the Company from being able to move employee parking on-site as contained in the Conditional Use Permit. Pleasanton Garbage Services requests that Council conditionally approve the 1.41% rate adjustment for the operational expansions requested pending the completion of the review of the Conditional Use Permit and associated planning requirements. The adjustment would be implemented only afier the Council is satisfied that the proposed expansions were appropriate. Mayor Pico pointed out that the letter submitted from Robert Molinaro, President, Pleasanton Garbage Services did not address the other issues, concerns and adjustments that staff has proposed to modify. If Council adopts the 12.28 percent residential and commercial rate increase, conditionally approves the 1.41 percent rate adjustment for operating expansions, agrees to the annual review of the Company's financial experience, and addresses the "lag" year issue, could Pleasanton Garbage Services live with this agreement for the next four years. Mr. Oliver said that Pleasanton Garbage Services would commit to these conditions. Peter MacDonald, 400 Main Street, Suite 210, legal counsel for Pleasanton Garbage Services, noted that the 1.41 percent rate adjustment is a serious operational issue, and if not resolved in the near future, it would present another problem for the City and the ratepayers as there is currently not enough space to undertake activities that are occurring on site. Pleasanton Garbage Services is currently negotiating with Hansen Building Materials of America, Inc. The lease has essentially been negotiated since March 2004, and Pleasanton Garbage Services was waiting on a determination as to whether a conditional use permit was required. A conditional use permit was required and Pleasanton Garbage Services has been working on the conditional use permit since that time. There is a real possibility that this would be an administrative conditional use permit because the immediate effect is to take an operation that has squeezed onto a 7.5 acre site and allow it to expand out. He provided a site plan map illustrating the existing transfer station and the proposed expansion. The lease with Hansen Building Materials of America for the 5.5-acre site to expand the transfer station is valid for five years and then it would roll over on a yearly basis. Part of this lease is a cooperative agreement to discuss the move of the entire transfer station further east to E1 Charro Road when a Specific Plan has been approved for the east Pleasanton area. The current problem is between the negotiation of the lease and the approval of the conditional use permit. He noted that Pleasanton Garbage Services is willing to work with the 12.28 percent increase as recommended by staff. It requests a conditional approval for the 1.41 percent rate adjustment that would cover the expense of the 5.5-acre site to expand the transfer station Pleasanton City Council 21 07/20/04 Minutes