STAFF REPORT
Meeting Date: August 11, 2026
To: Honorable Mayor & City Council
From: Robert Welch, P.E., Utilities General Manager
Colonel J. Burnley, Solid Waste Manager
Subject: Three-Stream Solid Waste Collection System Transition Update Attachments: None
INTRODUCTION
The purpose of this item is to provide an overview of the City’s strategy to transition to a three-stream solid waste collection system to comply with State requirements under Senate Bill 1383 (SB 1383).
The City is also conducting a five-year Solid Waste Cost-of-Service Study to establish rates that support ongoing operations, maintain required reserve levels, and fund future regulatory compliance. The study assumes implementation of a commercial three-stream collection system and will return to the City Council through Proposition 218 rate-setting process.
BACKGROUND
The City currently operates a two-stream solid waste collection system offering mixed waste and organics collection services to residential and commercial customers. Under this system, the City’s mixed waste is processed by the City’s exclusive franchised hauler, Athens Services, at its Materials Recovery Facility, where recyclable materials are recovered through mechanical and manual sorting processes. Organic waste is collected separately and transported to composting facilities for processing. While this collection system has historically enabled the City to meet State diversion requirements, SB 1383 established additional processing requirements for jurisdictions operating two-stream collection systems.
Beginning January 1, 2025, SB 1383 requires jurisdictions operating a two-stream collection system to deliver mixed waste to a certified High Diversion Organic Waste Processing Facility (HDOWPF). Athens has informed the City that its processing facilities will not obtain HDOWPF certification, requiring the City to evaluate alternative compliance strategies.
Meeting Date: August 11, 2026
After negotiating with Athens and evaluating available compliance pathways, the City determined that Athens’ proposal was not in the City’s best interest and did not support the terms presented. The City recommends transitioning to a three-stream collection system that will be the most cost-effective long-term compliance strategy. A three-stream system separates trash, recyclables, and organics at the source and eliminates reliance on future HDOWPF availability.
DISCUSSION
The City anticipates transitioning to a three-stream collection system, beginning with commercial customers followed by residential customers. The City directed Athens to provide source-separated recycling service to commercial customers as the first phase of the transition. Athens staff will evaluate individual properties to determine the most appropriate collection configuration. Properties with adequate space will receive a sourceseparated blue recycling bin, and the properties with limited space will be assessed for a 96-gallon recycling cart where appropriate. Under the current agreement, there is a recycling bin rate, and customers will be charged at that existing rate; however, since a recycling and trash cart rate is not included, an agreement amendment will be required.
Following commercial customer three-stream implementation, the City will prepare for residential implementation, if necessary. If residential recycling carts are determined to be necessary, curbside residential customers would receive a 96-gallon cart, while alleyserved properties would receive a 240-gallon or 300-gallon cart.
Transitioning residential and commercial customers will require public education and outreach, operational planning, and, if necessary, residential recycling cart procurement.
Associated future rate adjustments necessary to support the solid waste program sustainability would be considered through Proposition 218 process as part of the City’s upcoming cost-of-service study.
Long-Term Program Strategy
In preparation of the expiration of the current franchise agreement on March 31, 2030, staff plans to release a Request for Proposals (RFP) to maintain competitive pricing and maximize long-term flexibility. The RFP will reflect the City’s transition to a three-stream collection system and will allow the City to evaluate competitive collection and processing options, which may include a two-stream collection system. If a two-stream collection system can achieve long-term compliance with SB 1383 while meeting the City’s operational and financial objectives, the City may consider that alternative through the competitive procurement process.
Cost-of-Service Study Process & Next Steps
The cost-of-service study includes the assumption that the City will transition to a threestream collection system and evaluates the costs associated with collection, processing, cart procurement, public education, outreach, and regulatory compliance to establish rates that adequately support solid waste program operations while restoring and maintaining the required reserve levels. The study reflects the City’s prior use of solid waste reserves to lessen the initial rate impacts associated with the existing franchise agreement and ensures that future rates are sufficient to replenish the reserves and support long-term financial sustainability of the program. If the City pursues an alternative collection approach, the additional rate revenues will remain within the Solid Waste Enterprise Fund and be used to support other solid waste services and operational needs.
Meeting Date: August 11, 2026
Over the coming months, staff will continue refining the implementation strategy and return to City Council with:
A proposed amendment to the franchise agreement;
Final cost-of-service study recommendations; and
Authorization to initiate Proposition 218 noticing process; public hearing to consider adoption of updated solid waste rates.
FISCAL IMPACT
There is no direct fiscal impact to this item. The costs associated with implementing the three-stream collection system will be considered in the Solid Waste Cost-of-Service Study and future Proposition 218 rate-setting process this fall.
RECOMMENDATION
Staff recommends that City Council receive this report regarding how staff is proceeding with the three-stream transition, beginning with source-separated recycling service to commercial customers, and will return to City Council to initiate the Proposition 218 ratesetting process. .
Shana Epstein,
Director of Public Works
Approved By