PLEASANTON GARBAGE FRANCHISE AGREEMENT

J. The costs to properly close the landfill will exceed the $100,000.00 set aside by Resolution 81 -36. K. PGS is seeking authorization to expend said funds to be recovered out of a future rate increase. NOW, THEREFORE, PGS and CITY agree and approve as follows: 1. PGS may expend funds in further closure efforts including the installation of a storm drain system and a methane gas control system as set forth in the July 8, 1986 letter from Brown Caldwell, attached hereto as Exhibit B. The actual cost of these closure efforts in excess of the allotted $100,000 shall be recoverable out of future rate increases. The presently contemplated expenditures are estimated as $25,000 for PGS share of the storm drain line and $122,000 to $167,000 for the boundary control system. 2. PGS costs pursuant to the Gas Migration Mitigation Agreement between PGS and Ralph Martin and Marilyn Mociun (attached as Exhibit C) shall be recoverable in future rate increases, provided however, that if the mitigation involves a land purchase as permitted by Article VII of that Agreement, then the recoverable cost shall be reduced by the net resale value of the land. Between the time of a land purchase as referenced in Article VII and the time of resale of that land, the land purchase payments shall be a chargeable expense of the landfill closure. Upon resale, the amounts so charged shall be credited to the account for costs related to closure of the landfill site. 3. PGS shall consult with CITY concerning any future expenditures for studies, monitoring or other purposes in closure of the landfill. Any expenditures for closure of the landfill greater than $10,000.00 shall be approved by the City Manager in order to be recoverable from the rate base. The City Manager shall not unreasonably withhold such approval. 4. PGS covenants to achieve and maintain compliance with standards established by the state and federal government regarding closure of the landtill site. The CITY will approve a transfer of the landfill site if legally adequate assurances are presented to the CITY that the transferee will have the obligation and resources to comply with state and federal requirements. 5. Should the landfill be sold and /or developed, any moneys received after costs of sale shall be allocated first to reimburse PGS for its cost of the land which value is $77,876.00. Second, to be retained by PGS or the then current franchisee to offset future rate increases in an amount equal to the expenditures necessary for closure efforts. Third, any remaining residual moneys shall be split equally between the City for the benefit of the ratepayers and PGS as a return on its investment in the land. 6. If PGS ceases to be the City's franchisee, costs of the landfill closure including ongoing monitoring shall remain the responsibility of PGS provided, however, the City shall require that the subsequent franchisor shall reimburse ongoing costs of landfill closure to PGS from then existing garbage rates.