ADMINISTRATIVE REPORT
MEETING DATE: March 24, 2025 AGENDA CATEGORY: New Business TO: Finance, Economic Development and Jobs Committee
FROM: Zachary Meyer, Public Works Director
DATE: March 5, 2025
SUBJECT: Rate Increase for Refuse Rate Structure
Proposed rate increase for refuse rate structure.
RECOMMENDATION:
Staff recommends approval of the proposed refuse rate increase.
BACKGROUND:
Staff proposes an 9.75% increase to residential and commercial refuse and recycling rates for F iscal Year (FY) 2025-26. The proposed increase is necessary to fund proposed operating and capital improvement budgets. Over the past years, the City has maintained competitive rates while facing increasing costs related to city growth, equipment cost, regulatory compliance, infrastructure, and Clean City Initiative services. Despite cost -cutting measures and efficiency improvements, the current rate s tructure is insufficient to sustain our financial obligations and service commitments. In addition, refuse rate increases are required to fund increased state-imposed regulations and City’s contractual obligations with hauling contractors. Outside hauling contractors pick up approximately 50% of the City’s refuse. Per the hauling agreement, the hauling contractor’s compensation is to be adjusted annually by the consumer price index (CPI). The CPI increased by 3.3 % in 2025.
The City of Bakersfield is dedicated to keeping its refuse rates as low as possible while also complying with State mandates. The City charges residents no more than the cost of providing solid waste, recycling, and organic waste services as required by Proposition 218 (Prop 218) and only increases rates when operating costs rise. Rates for single-family dwellings are proposed to increase from $286 to $314 annually, which equates to a monthly change from $23.83 to $26.17 —an increase of just $2.34 per month. If approved, the City’s refuse rates will continue to be amongst the lowest in the state. Residential new homes have increased by 1,017 in FY 22/23, 1,249 in FY 23/24, and projected to increase by 1,380 in 2025.
Commercial rates are also proposed to increase by 9.75%. Commercial costs are increasing due to new laws including the California Senate Bill (SB) 1383, which is designed to reduce greenhouse gas emissions by diverting businesses and multifamily dwellings units that generate waste to receive recycling and organic waste collection services. In January 2025 Senate Bill (SB) 1383 required the City to reduce organic waste sent to landfills from all commercial businesses to 75% by 2025. SB 1383 adds organic diversion requirements for residential and business customers and will requir e monitoring, reporting and compliance enforcement by City staff and resources which will raise operating and salary costs. These requirements will require more staff and resources. Since January 2022 when SB 1383 was first implemented City staff identified 10,942 generators, businesses and multifamily dwellings that required organic and recycling services. City staff have made significant progress with only approximately 20% left to comply with SB 1383.
Clean City Initiative (CCI) services is a program that was implemented FY 21/22 and was funded by PSVS.
Over the past three years CCI Teams have removed 4,220 tons of illegal dumping. Operational costs have significantly grown, and all expenditures have be en transitioning out of PSVS funds and into the Kern County Illegal Dumping funds. The current funding is insufficient to sustain current financial obligations and service levels. The proposed rate increase will allow service levels to not be interrupted.
Prop 218 notices will be mailed to property owners in early April. The Prop 218 process ensures the public is notified of rate increases and provides an opportunity to protest rate changes.
FISCAL IMPACT:
The status of the enterprise fund, including th e revenue requirements, reserve fund balance requirements, operating and maintenance costs, and capital improvement costs have all been considered when generating this rate increase. As a whole, the proposed changes ensure that the refuse enterprise is fin ancially stable, the costs are equitably divided amongst user groups, and Proposition 218 requirements are met.
COUNCIL GOAL:
Innovative and Efficient City Government
ATTACHMENTS:
Refuse Rate Increase Presentation