2025 Solid Waste Rate
Adjustment & New Rate
Adjustment Methodology:
City of Grover Beach
January 27, 2025
Jordan Muratsuchi &
Garth Schultz
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1 Solid waste services are critical services and are
required for health and safety as well as compliance
with State laws
The City’s solid waste collection operations are
contracted out to South County Sanitary Services
(SCSS) and are funded through solid waste rates
The City may authorize up to 5-years of solid waste
rate adjustments at a time – there are no ongoing
automatic adjustments outside of Council authorization
Executive Summary
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2 Executive Summary
SCSS submitted a cost-based rate adjustment
application for 2025 per existing methodology and
schedule
The last cost-based adjustment occurred in 2022, with CPI adjustments in 2023 and 2024
Existing rate adjustment methodology was established
in 1994 and is outdated
The City along 9 other Agencies in San Luis Obispo
County and SCSS’ parent company (Waste
Connections) all see benefit in a new approach to
annual rate adjustments
SLIDE
3 2025 Cost-Based Rate Adjustment
⎻ Projects future costs based on recent actual costs per audited financial statements
⎻ Increases in organics processing costs
⎻ Increases in landfill disposal costs
⎻ Inflation-related increases in collection costs
⎻ Revised approach to corporate overhead
⎻ Updated profit allowance
2025 Rate Adjustment and New Methodology
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4 2025 Cost Projections
2025 Rate Adjustment and New Methodology
City of Grover Beach
2025 Projected Cost-of-Service
Basis of Rate
Adjustment
Collection Services 1,574,059
Profit Allowance 141,665
Post-Collection Services 884,245
Agency Fees 275,149
Total 2025 Cost Projections 2,875,117
Revenue at Prior (2024) Rates 2,750,690
Shortfall Prior to Rate Adjustment (124,428)
Recommended Rate Adjustment 5.02%
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5 2025 Rate Adjustment Outcomes
2025 Rate Adjustment and New Methodology
Original Adjustment per 1994 Rate Manual 3.97%
Revised Depreciation Schedule -1.33%
Remove Limitation on Corporate Overhead 1.51%
Service Enhancements 0.54%
Updated Profit Allowance 0.24%
Recalculated District Fees 0.10%
Revised Adjustment for New Methodology 5.02%
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6 2025 Monthly Residential Rates
2025 Rate Adjustment and New Methodology
Service Level 2024 2025 Change
32-gallon $24.23 $25.45 $1.22
64-gallon $32.74 $34.38 $1.64
96-gallon $41.23 $43.30 $2.07
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7 Service Enhancements
⎻ Customer Assistance Program: 20% low-income
discount provided to residential customers using 32-gallon cart service (or below) and using existing City practices on low-income relief for their offered utility type services ⎻ Free Bulky Waste Collections: No charge collection for one bulky item during clean-up weeks
⎻ Annual Cart Exchange: Once annual exchange of a
residential garbage, recycling, or organics cart per
customer account
2025 Rate Adjustment and New Methodology
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8 New Rate Adjustment Methodology
⎻ Enhances rate stability, predictability, fairness,
transparency, ease of administration, and cost- effectiveness ⎻ Capped CPI adjustments to SCSS Collection and Post- Collection Services – 2% floor, 5% ceiling with roll-overs ⎻ Revenue balancing mechanism – surplus or shortfall
revenues carries forward to future years
⎻ Less frequent cost-based adjustments – no more
frequently than every 5 years
⎻ Extraordinary Adjustments
2025 Rate Adjustment and New Methodology
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9 Open Public Hearing and Count Written Protests
If no majority protest exists, adopt a resolution
authorizing the proposed 5-year solid waste rates
with South County Sanitary Service
Approve Amendment to Franchise Agreement to
incorporate new rate adjustment methodology
Recommended Action
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1 0
REGIONAL COMPARISON
Residential: 32-Gallon Cart Rates (Monthly)
$0
$10
$20
$30
$40
$50
$60
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1 1
Regional Comparison
Residential: 64-Gallon Cart Rates (Monthly)
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
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1 2
$0
$20
$40
$60
$80
$100
$120
$140
Regional Comparison
Residential: 96-Gallon Cart Rates (Monthly)
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1 3
Regional Comparison
Commercial: 2-CY Bin Rates (Monthly)
Most Common Service
$0
$50
$100
$150
$200
$250
$300
$350