Consent Item 4m
STAFF REPORT
City Council Consent Item
DATE: June 16, 2025
TO: Honorable Mayor and Council Members
FROM: Amy Nilsen, City Manager
SUBJECT: Approve the Request for Solid Waste Collection Franchise Rate Adjustment STAFF RECOMMENDATION:
Staff recommends that the council approve the solid waste rate adjustment requested by Recology, Inc. to reflect the weighted average increase of 4.8% for the coming fiscal year.
EXECUTIVE SUMMARY:
The City of Fortuna entered into a franchise agreement with Eel River Disposal in 1998 for solid waste and recycling and collection. The franchise agreement was transferred to Recology, Inc. in 2017. The term of the franchise agreement currently ends in 2025.
In accordance with Sections 2.03.06, and 2.03.07 of the franchise agreement, rates may be adjusted annually based Consumer Price Index (CPI) for the rates effective on July 1 of the following year. A copy of those sections are shown in Table 1, below. The consumer price index is based on the All Urban Consumers, West-C index determined by the Bureau of Labor Statistics of the United States Department of Labor (CPI Index) and the month identified for annual comparison is March.
The CPI Index increase between March 2024 and March 2025 was 1.8%. Recology submitted a rate adjustment request to the City reflecting a weighted average increase of 4.8% to their solid waste collection and disposal rates in accordance with the provisions of the Franchise agreement.
A copy of the calculation is attached to this staff report. The net increase to solid waste collection rates is more than the CPI, as garbage disposal costs will increase in the next fiscal year due to inflation and additional regulatory requirements while recycle processing costs are rising amid decreasing CRV materials in the recycling stream and relatively flat commodity values.
The proposed rates shown with the current rates are presented on page 7 of the Recology Adjustment request. The cost of the 32-gallon can with the proposed rates in Fortuna is still lower than all of the other communities in the Eel River Valley.
Consent Item 4m
Table 1. Sections 2.03.06 and 2.03.07 of the Franchise Agreement between the City of Fortuna and Recology, Inc.
City staff has reviewed the requested increase for accuracy and has determined that the request meets the provisions of the Franchise Agreement for this type of adjustment.
Under the provision of paragraph 2.03.07, the City Manager has the authority to approve CPI increases of less then or equal to 3%. However, the City Council must approve any annual CPI adjustment greater then 3%. Therefore, this item is presented to the Council for approval.
Consent Item 4m
RECOMMENDED COUNCIL ACTION
Approve the solid waste rate adjustment requested by Recology, Inc. to reflect the weighted average increase of 4.8%. Consent Agenda vote.
ATTACHMENT:
• June 1, 2025 Recology Rate Adjustment Request and Calculation