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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Solid Waste Collection Rates Update
1. Motion to note and file this report on the Solid Waste Collection Rates Update
COUNCIL ACTION
Item Type: Consent Calendar
Approved for June 10, 2025 calendar
EXECUTIVE SUMMARY
On June 6, 2023, the City Council passed a resolution setting residential solid waste collection rates for the upcoming five years. At the time, the City Council requested annual updates on the implementation of the new approved rate structure.
MSW Consultants developed the original Cost of Services Analysis (COSA), that was the basis for the five-year refuse rate adjustment plan approved by the City Council. MSW Consultants recently analyzed actual revenue and expenditures for FYs 2023 & 2024, to evaluate how they compared against the COSA projections. They then used this analysis to re-project future revenue, expenditures and resulting cash balances for the fund.
The original COSA projected that if the recommended refuse disposal rates were implemented, the Refuse Disposal Fund would experience annual operating deficits from FY 2023-2025, and then first realize a surplus in FY 2026. In their recent analysis, MSW Consultants determined that the Refuse Disposal Fund continued to operate in annual deficits for FYs 2023 & 2024 and they project another annual deficit for FY 2025 which is consistent with the original COSA. However, because actual revenue so far exceeds the original COSA projections and actual expenditures so far has come in below these projections, the amount of the total deficit is less than projected in the original COSA.
Because the Refuse Disposal Fund continues to experience annual operating deficits and because another annual deficit is projected through FY 2025, proceeding with the next adjustment scheduled on July 1, 2025, is justified.
RECOMMENDATION
Approve a motion to note and file this report on the Solid Waste Collections Rate Update. 4c2
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ANALYSIS
The City Council approved five-years of rate adjustments, with the first having been applied on July 1, 2023, at various percentages dependent upon cart size, and the second on July 1, 2024 at a 45% increase consistent for all cart/bin sizes. The remaining increases are scheduled to be applied on July 1st of years 2025, 2026 and 2027 at an increase rate of 25%, 10%, 10%, for all cart/bin size, respectively.
MSW Consultants’ mid-year review found total revenue in the Refuse Disposal Fund for both FYs (2023 & 2024), exceeded the amount of total revenue projected in the COSA by approximately $3.6M, or 12.4%. Over the same period, total expenditures came in under the projected amount by approximately $5.6M or 11.8%. Despite this, the Refuse Fund operated at a deficit for these two fiscal years and is projected to complete FY 2025 in an annual deficit as indicated in the attached mid-year report (Exhibit 1).
The actual two-year shortfall for the Refuse Disposal Fund was determined to be $9.3M as opposed to the original projected shortfall of approximately $18.4M. This is due to several factors. MSW Consultants noted that AB 939 revenue was significantly more than projected and that the city experienced less expenses for disposal and processing than what was projected. The cumulative cost of organics and green waste recycling has been less than projected over these two fiscal years due to less tonnage than originally anticipated. However, disposal costs and other expenses have subsequently increased in FY 2025 and we expect year-end expenditures for FY 2025 to be significantly higher than for FY 2024.
While the COSA does project that under the adopted rate structure, the Refuse Disposal Fund will never experience a deficit, the city generally projects deficits related to a fund’s unrestricted fund balance while the COSA tracks the fund balance as cash on hand.
According to the consultant, setting rates related to maintaining cash on hand is more common in the waste management private industry. Therefore, after adjusting for all liabilities and expenses, the unrestricted balance for the Refuse Disposal Fund is currently in the negative as shown the city’s Annual Comprehensive Finance Report for FY 2024. However, the fund still currently has over $5.2M in cash earning interest. The COSA projects a loss of cash of about $5M in FY 2024-25 and then an increase of $1.1M in FY 2025-26.
STAKEHOLDERS/OUTREACH
In conjunction with the original COSA and rate adjustments from 2023, extensive notification was provided to all residential refuse customers as required by state law. No additional outreach was performed related to this report on Solid Waste Collection Rates Update.
FISCAL IMPACT
There is no fiscal impact associated with this report. However, if the scheduled rates are not implemented on July 1, 2025, the Refuse Disposal Fund will continue to operate in annual deficits.
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ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is not subject to the California Environmental Quality Act (“CEQA”) and, therefore, an environmental review is not required pursuant to Section 21080(b)(8) of the California Public Resources Code and Sections 15272(a) and 15061(b)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3 because CEQA does not apply to the establishment, modification, restructuring, or approval of rates and other charges by public agencies for purposes such as those set forth herein.
CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements.
ALTERNATIVES TO STAFF RECOMMENDATION
1. Do not approve a motion to note and file this report and provide direction to staff regarding residential refuse rates.
2. The City Council may consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Daniel Hernandez, Director of Public Works
Prepared by:
Orlando Urquidez Jr., Senior Public Works Management Analyst Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1. 2025 Update – Mid-year review of 2023 Solid Waste Cost of Service Analysis (COSA)
2. Rate Adjustment Table
3. 2023 Solid Waste Cost of Services Analysis Study