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Page 6 of 14 <br />facility, relocation is later determined to be necessary, ratepayers would bear the <br />compounded costs of both projects. <br /> <br />In either scenario, PGS would expect to recover the costs of these improvements through <br />customer rates, placing the financial burden on City ratepayers. City staff have significant <br />concerns about investing tens of millions of dollars from Pleasanton ratepayers into <br />infrastructure that is owned and controlled by a private business. It is also important to <br />note that the proposed improvements and new facilities will significantly increase the <br />enterprise value of PGS in the event of a company sale (as has recently occurred in both <br />Dublin and Livermore). If the City Council places a priority on maintaining this asset for <br />public use and benefit, staff recommend negotiating a separate contract with the transfer <br />station, including provisions for transfer to public ownership under certain conditions, such <br />as a sale of PGS or the property. If a new site is developed and funded by the ratepayers, <br />the City may consider whether that site should be owned by the City, but developed and <br />operated by a private contractor to ensure permanent public access. <br /> <br />Cost Analysis: Direct Hauling and Transfer Station Options <br />As part of the community engagement plan, staff met with multiple waste service <br />providers who demonstrated both an interest in and an ability to serve the City. Several of <br />these companies have existing assets in the region that could be adapted for the City’s <br />use, though some level of additional buildout and investment would still be required. This <br />indicates the City has viable alternatives beyond continued sole reliance on the current <br />PGS transfer station. <br /> <br />As part of this engagement and in evaluating long-term options, the City commissioned an <br />analysis to determine whether direct hauling of material could serve as a feasible <br />alternative to maintaining or upgrading a transfer station. While the City’s partnership with <br />PGS has historically been cost-effective—since transferring was more efficient than direct <br />hauling—the financial outlook will change once the costs of a major facility upgrade or new <br />construction are considered. <br /> <br />Table 1: Cost Comparison of Direct Hauling and Transfer Station Options <br /> <br /> <br />The analysis shows that the existing PGS transfer station upgrade will require a substantial <br />Page 78 of 399