Item9_Prop-218-Solid-Waste-Hearing-and-Franchise-Agreement-Amendment — Grover Beach City Council, January 27, 2025

Agenda Item No. 9
$3.6

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: January 27, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: Proposition 218 Public Hearing for South County Sanitary Service Rate Increase; Resolution to Amend the Master Fee Schedule; and Approval of Amendment Two to the Franchise Agreement
Incorporating the Updated Rate Methodology

RECOMMENDATION
1) Conduct a Proposition 218 public hearing and determine the official number of written protests received on the proposed solid-waste rate structure; and if the number of valid protest letters are below 50% plus one of the number of property owners or customers authorized to submit protest, adopt the Resolution amending the Master Fee Schedule for solid-waste fees effective January 1, 2025; and
2) Authorize Amendment Two of the Franchise Agreement between the City and South County Sanitary Services.

BACKGROUND
Since 1997, the City has a Franchise Agreement with South County Sanitary Service (SCSS), a subsidiary of Waste Connections, for collection, diversion and disposal of solid waste in the City.

Through the terms of the Franchise Agreement, SCSS is entitled to compensation for its “labor, equipment, materials and supplies, taxes, insurance, bonds, overhead, transfer and transport, processing, division, disposal, provide and all other things necessary to perform all of the services required by [the] Agreement.” This compensation is received through the rates and charges paid by the City’s customers, which are presented to the City through cost-based rate adjustment applications and reviewed by the City Council through the Proposition 218 process.

The City joined the other cities in San Luis Obispo County to contract with the consulting firm R3 to conduct a detailed review of the 2025 cost-based rate applications submitted by SCSS. After R3’s review of SCSS’s rate increase application, the cities negotiated adjustments for new regional service enhancements and application of a new rate adjustment methodology, The new adjustment methodology is intended to prevent large year-over-year increases through revenue rebalancing. The recommended 2025 rate adjustment for the City is 5.02% beginning January 1, 2025, with CPI adjustments beginning January 1, 2026.

The Council received a presentation on this requested rate adjustment from SCSS on November 12, 2024 and approved the Proposition 218 noticing process which was carried out by SCSC on behalf of the City in preparation for the public hearing on January 27, 2025.

Staff Report: South County Sanitary Service Rate Request and Proposition 218 Noticing Page 2 January 27, 2025
Regional Service Enhancements
As part of the proposed service level agreement changes, residents can expect several enhancements to service offered to the City of Grover Beach. • Customer Assistance Program (CAP): 20% low-income discount provided to residential customers using 32-gallon cart service, using existing jurisdictional practices on lowincome relief for their offered utility type services with evidence of qualifying financial hardship. In the City’s case, verification would be based on existing enrollment in lowincome utility subsidy programs including the City’s CAP and PG&E CARE program. • Free Bulky Waste Collections: Collection of a bulky waste item twice annually from residential accounts at no cost via bi-annual clean-up weeks. • Annual Cart Exchange: Once annual exchange of a residential solid waste, recycling, or organics cart per customer account.

New Rate Adjustment Methodology
Pending City Council approval, the new methodology recommended by R3, will replace the 1994 Rate Manual and will regulate annual rate adjustments for the City’s solid waste rates starting in 2025, as shown in Attachment 1. The new methodology fulfills key objectives including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness.

Additionally, the new methodology can be applied on a regional scale and is recommended alternative to the 1994 Rate Manual.

The proposed adjustments will increase the rates for customers within Grover Beach by 5.02% relative to current rates. This approximate 5% increase is a similar increase as proposed in both Arroyo Grande and Pismo Beach. For the 32-Gallon Cart, Grover Beach has the fourth lowest monthly cost within the region. For additional regional comparison, please see Attachment 2 providing monthly rate comparisons for jurisdictions within the region by size of trash bin. The new methodology for rate adjustments have been incorporated into the Franchise Agreement between the City and South County Sanitary Services and are provided as Amendment 2, shown in Attachment 5, Exhibit A, for Council’s authorization.

Proposition 218 Hearing
Pursuant to Proposition 218, any owner or customer of record that is required to pay the subject fees of a parcel subject to the proposed rates may submit a written protest the proposed rate revision. Attachment 3 includes a copy of the notice which informed the registered property owners along with customers about the proposed rate increases and the January 27th public hearing along with how to submit a protest. A total of 5,710 notices were mailed and included a link to a Spanish translation of the notice. SCSS also conducted two public forums to discuss the rate increases with one at Ramona Park Community Center on December 18 and another at the Trouville Community Center on January 20.

A written protest must contain the street address or Assessor’s Parcel Number (APN) for the parcel(s) with respect to which the protest is made. The protest must also be signed by the registered owner or customer who pays the fees. Protests are required to be mailed or handdelivered to the City’s offices.

Staff Report: South County Sanitary Service Rate Request and Proposition 218 Noticing Page 3 January 27, 2025

Only one protest per address can be accepted and no protest will be accepted or valid if submitted after the close of the public protest hearing. At the end of the public hearing, the City Clerk will tally and report the qualifying written protests, and the Council will then certify whether the written protests opposing the increases meet the 50% plus 1 threshold required to constitute a majority protest. If a majority protest does not exist, it is recommended that the Council adopt the Resolution shown in Attachment 4 to amend the Master Fee Schedule reflecting solid waste fee schedule. At time of report publication, the City has receive nine protests.

FISCAL IMPACT
Upon approval, the updated rate structure will result in an additional $14,000 per year in franchise fees collected by the City from SCSS.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Conduct a Proposition 218 public hearing and determine the official number of written protests received on the proposed solid-waste rate structure; and if the number of valid protest letters are below 50% plus one of the number of property owners or customers authorized to submit protest, adopt the Resolution amending the Master Fee Schedule for solid-waste fees effective January 1, 2025; and

2. Adopt the Resolution Authorizing the execution of Amendment Two to the Franchise Agreement between the City and South County Sanitary Services; or

3. Provide alternate direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act. A Proposition 218 Hearing Notice was mailed on December 9, 2024, to all customers and registered property owners that receive solid waste services, including a link providing a Spanish translation of the notice. Information regarding the proposed rates and a link to the online copy of the Proposition 218 notice, as well as other related information, was posted on the South County Sanitary Services website. A Public Hearing Notice was also published January 16, 2025.

Attachments

1. New Solid Waste Rate Adjustment Methodology

2. Charts for Regional Comparison

3. Proposition 218 Notice

4. Resolution to Amend the Master Fee Schedule

5. Resolution to Authorize the City Manager to Execute Amendment Two to the Franchise Agreement with SCSS
Annual Rate Adjustment Methodology

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Section 1 Objectives
This Exhibit details the process by which Maximum Service Rates are adjusted annually to provide fair and adequate compensation to Franchisee for collection of solid waste and other services provided to Customers and the City per the Agreement. The annual rate adjustment methodology described herein fulfills key objectives established by the City and Franchisee, including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness.

Section 2 Index-Based Rate Adjustments
Except in the case of a Cost-Based Rate Adjustment (see Section 3, below) Franchisee’s Maximum Service Rates shall be adjusted via the Index-Based Rate Adjustment methodology described in this section. The Index-Based Rate Adjustment methodology shall be used to adjust Maximum Service Rates effective each January 1 of 2026, 2027, 2028, and 2029 and any subsequent year during which a CostBased Rate Adjustment is not allowed or not requested by the City or the Franchisee.

In years during which Maximum Services Rates are to be adjusted pursuant to this Index-Based Rate Adjustment methodology, Franchisee shall submit a report to the City on or before September 1 detailing its calculations of Index-Based Rate Adjustment. City shall have the right to review Franchisee’s calculations of Index-Based Rate Adjustment for mathematical accuracy and adherence to the terms and conditions of this Exhibit. City shall prepare written findings regarding adjustments to the Franchisee’s calculations of Index-Based Rate Adjustment that are required for mathematical accuracy and adherence to the terms and conditions of this Exhibit on or before October 30.

Index-Based Rate Adjustments shall be prepared and calculated in accordance with the steps described below. All Index-Based percentages shall be rounded to the nearest hundredth of a percent, and all cost calculations shall be rounded to the nearest dollar.

A. Calculation of CPI Adjustment to Franchisee’s Collection Services and Post-Collection Services
Franchisee’s prior year cost projections for Collection Services and Post-Collection Services shall be adjusted in accordance with the Consumer Price Index (CPI) for Garbage and Trash Collection, U.S. City average, Bureau of Labor Statistics Series I.D. CUUR0000SEHG02.

The CPI Adjustment shall be equal to the percentage change in the average 12-month CPI value ending June of the current year and compared to the average 12-month CPI value ending June of the prior year.

For example, the CPI used to set the 2026 rates shall be calculated as follows:
(Average CPI from July 1, 2024 to June 30, 2025) − (Average CPI from July 1, 2023 to June 30, 2024) Average CPI from July 1, 2023 to June 30, 2024
If the percentage change is below 2%, the applicable CPI Adjustment shall be 2%, with the difference in the amount below 2% being carried forward as a credit on the rates and applied to the subsequent year. If the percentage change is above 5%, the applicable CPI Adjustment shall be 5%, with the difference in the amount above 5% being carried forward and applied to the rates in subsequent years. Franchisee’s prior year cost projections for Collection Services and PostCollection Services shall be escalated by the resultant CPI Adjustment, rounded to the nearest dollar.

Franchisee’s 2025 cost projection for Collection Services is $1,574,059 and Franchisee’s 2025 cost projection for Post-Collection Services is $884,245. For 2026, by way of example, if the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 5%, then Franchisee’s 2026 cost projection for Collection Attachment 1
Annual Rate Adjustment Methodology

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Services shall be $1,652,762 and Franchisee’s 2026 cost projection for Post-Collection Services shall be $928,457. Likewise, if the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 2%, then Franchisee’s 2026 cost projection for Collection Services shall be $1,605,540 and Franchisee’s 2026 cost projection for Post-Collection Services shall be $901,930.

Example Calculation for application of amounts above cap on CPI increases applied to Collection Services component of CPI Adjustment (noting that cap on CPI increases also applies to PostCollection Services):

Year 1
Collection Services: $1,574,059
12-month average CPI index increase: 6.00%
$1,574,059 x (1+5.00%*) = $1,652,762
*5% cap on CPI increases. 1% difference carried over to next year Year 2
Collection Services: $1,652,762
12-month average CPI index increase: 6.00%
$1,652,762 x (1+5.0%*) = $1,735,400
*5% cap on CPI increases. 1% difference carried over to next year Year 3
Collection Services: $1,735,400
12-month average CPI index increase: 3.00%
$1,735,400 x (1+5.0%*) = $1,822,170
*3.00% + 1.00% carried forward from Year 1 + 1.00% carried forward from Year 2 The above is also demonstrated in Table 1, on the following page.

Annual Rate Adjustment Methodology

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Table 1 – Example of CPI Cap and Carryforward
2025 2026 2027 2028
Collection Services $1,574,059 $1,652,762 $1,735,400 $1,822,170 12-Month Average CPI 6.00% 6.00% 3.00%
CPI Adjustment (5% Cap) 5.00% 5.00% 5.00%
B. Calculation of Profit Allowance
The Index-Based Rate Adjustment methodology includes a component for Franchisee’s fair and reasonable Profit Allowance. Profit Allowance is used for the purposes of calculating Index-Based Rate Adjustments and does not constitute a guarantee of profit to the Franchisee.

Franchisee’s Profit Allowance for the purposes of Index-Based Rate Adjustments is calculated as a function of Franchisee’s current year cost projection for Collection Services. For 2025, Franchisee’s Profit Allowance is 9% of the cost projection for Collection Services and in 2026 and thereafter, Franchisee’s Profit Allowance shall be 10% of the cost projection for Collection Services.

Franchisee’s 2025 cost projection for Collection Services is $1,574,059; therefore, Franchisee’s Profit Allowance for 2025 is $1,574,059 times 9%, rounded to the nearest dollar, equaling $141,665. Using the first example from Section 2.A above, if Franchisee’s 2026 cost projection is $1,652,762 (corresponding to a 5% CPI Adjustment), Franchisee’s 2026 Profit Allowance for the purposes of calculating Index-Based Rate Adjustment shall be $165,276. Likewise, and using the second example from Section 2.A above, if Franchisee’s 2026 cost projection is $1,605,540 (corresponding to a 2% CPI Adjustment), Franchisee’s 2026 Profit Allowance for the purposes of calculating Index-Based Rate Adjustment shall be $160,554.

C. Calculation of Franchise Fee
Franchisee pays the City a Franchise Fee of 10% of Franchisee’s gross revenues received from Customers in the City. For the purposes of Index-Based Rate Adjustments, the Franchise Fee is calculated as 10% of Franchisee’s annual Total Cost Projection, per Section 2.E below, rounded to the nearest dollar. For 2025, Franchisee’s annual Total Cost Projection is $2,888,854, yielding Franchise Fee component of $288,885. Actual Franchise Fee payments made by Franchisee to City shall be calculated as a function of Franchisee’s gross revenues received from Customers in the City and may differ from the amount used in calculating adjustments to the Maximum Service Rates.

D. Calculation of Annual Revenue Reconciliation
Starting with the 2027 Index-Based Rate Adjustment, the difference between the Franchisee’s annual Total Cost Projection and the Franchisee’s actual annual total billings to Customers in the City shall be included in the annual Index-Based Rate Adjustment as an Annual Revenue Reconciliation.

For example, for the 2027 Index-Based Rate Adjustment, the difference between Franchisee’s 2025 Total Cost Projection and Franchisee’s total 2025 billings to Customers in the City shall be included in the 2027 annual Total Cost Projection. By way of example, if Franchisee’s 2025 total billings to Customers in the City is a shortfall of 1% (-$28,889) then $28,889 will be added to Franchisee’s Total Cost Projection for 2027. Conversely, if Franchisee’s 2025 total billings to Customers in the City is a surplus of 1% (+$28,889) then $28,889 will be subtracted from Franchisee’s Total Cost Projection for 2027.

Table 2, on the following page, provides an example of the case in which there is a 1% shortfall of billed revenues in 2025, which is added to the Total Cost Projection in 2027. The table shows a continuation of 1% shortfalls being added in 2028 and 2029 for example purposes only, and Annual Rate Adjustment Methodology

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assumes the CPI adjustment to Collection Services, Post-Collection Services, and AB 939 Fee at the 5% cap. Table 2a on the following page, provides an example of the case in which there is a 1% surplus of billed revenues in 2025, which is added to the Total Cost Projection in 2027. The table shows a continuation of 1% surpluses being added in 2028 and 2029 for example purposes only, and assumes the CPI adjustment to Collection Services, Post-Collection Services, and AB 939 Fee at the 5% cap.

Table 2 – Example Revenue Reconciliation of -1% Annually 2025 2026 2027 2028 2029
Collection Services $1,574,059 $1,652,762 $1,735,400 $1,822,170 $1,913,278 Profit Allowance $141,665 $165,276 $173,540 $182,217 $191,328 Post-Collection Services $884,245 $928,457 $974,880 $1,023,624 $1,074,805 Franchise Fee $288,885 $305,166 $323,634 $339,836 $356,864 Revenue Reconciliation Example N/A N/A $28,889 $30,517 $32,363 Total Cost Projection $2,888,854 $3,051,661 $3,236,343 $3,398,364 $3,568,639 Indexed Rate Adjustment 5.64% 6.05% 5.01% 5.01%
Annual Rate Adjustment Methodology

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Table 2a – Example Revenue Reconciliation of +1% Annually 2025 2026 2027 2028 2029
Collection Services $1,574,059 $1,652,762 $1,735,400 $1,822,170 $1,913,278 Profit Allowance $141,665 $165,276 $173,540 $182,217 $191,328 Post-Collection Services $884,245 $928,457 $974,880 $1,023,624 $1,074,805 Franchise Fee $288,885 $305,166 $317,215 $333,055 $349,743 Revenue Reconciliation
Example N/A N/A $(28,889) $(30,517) $(31,721)
Total Cost Projection $2,888,854 $3,051,661 $3,172,146 $3,330,549 $3,497,433 Indexed Rate Adjustment 5.64% 3.95% 4.99% 5.01%
Significant, unexpected increases or decreases in revenue may be included or excluded from the Annual Revenue Reconciliation if deemed reasonable by the parties. As a one-time exercise, the Franchisee may request to review the entirety of its revenue earnings with the City as a check-in to evaluate alignment with its revenue forecast and conditions outlined in this exhibit. By no later than September 30, 2025, the Franchisee shall provide the City with documentation of actual todate receipts or billings, accompanied by an analysis of all corresponding service trends. Upon receipt of these materials, the City and the Franchisee shall engage in a good-faith meet-andconfer process to discuss and determine an appropriate resolution, which may include a rate adjustment in January 2026 if necessary.

E. Calculation of Total Cost Projection
Franchisee’s annual Total Cost Projection shall be the sum of the resultant values from Section 2.A through 2.D above. For 2025, the Total Cost Projection is $2,888,854. Table 3 below demonstrates the 2026 Total Cost Projection if the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 5%. Table 4, on the following page, demonstrates the 2026 Total Cost Projection in the percentage change in the average 12-month CPI value ending June 2026 compared to the average 12-month CPI value ending June of 2025 is 2%.

Table 3 – 2026 Total Cost Projection at 5% CPI Value for 2026 2025 2026
Collection Services $1,574,059 $1,652,762
Profit Allowance $141,665 $165,276
Post-Collection Services $884,245 $928,457
Franchise Fee $288,885 $305,166
Total Cost Projection $2,888,854 $3,051,661
Table 4 – 2026 Total Cost Projection at 2% CPI Value for 2026 Annual Rate Adjustment Methodology

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2025 2026
Collection Services $1,574,059 $1,605,540
Profit Allowance $141,665 $160,554
Post-Collection Services $884,245 $901,930
Franchise Fee $288,885 $296,447
Total Cost Projection $2,888,854 $2,964,471
F. Calculation of Annual Index-Based Rate Adjustments
The Index-Based Rate Adjustment shall be calculated as function of the Franchisee’s forthcoming annual Total Cost Projection divided by the then current year Total Cost Projection, minus 100%, rounded to the nearest hundredth of a percent.

For example, taking the results shown in Table 3, on the prior page, the Index-Based Rate Adjustment for 2026 would be $3,051,661, divided by $2,888,854, minus 100%, yielding a 5.64% adjustment to the Maximum Service Rates effective January 1, 2026. Using the results of Table 4, above as an example, the Index-Based Rate Adjustment for 2026 would be $2,964,471, divided by $2,888,854, minus 100%, yielding a 2.62% adjustment to the Maximum Service Rates effective January 1, 2026.

This Index-Based Rate Adjustment calculation described herein shall repeat in 2027, 2028, and 2029, with the addition of the Annual Revenue Reconciliation amounts calculated pursuant to Section 2.D of this Exhibit. Rate adjustments shall be effective on January 1st of each year (unless otherwise agreed to in writing by the parties) and any delay in rate change approval not caused by Franchisee will result in additional adjustments so that all required revenues are billed within the rate year. Any delay in rate change approval that is caused by Franchisee shall not result in additional adjustments corresponding with the delay in approval.

Section 3 Cost-Based Rate Adjustments
Franchisee or City shall have the right to request a Cost-Based Rate Adjustment effective January 1, 2030. Franchisee’s request for Cost-Based Rate Adjustment in 2030 shall be requested in writing on or before January 15, 2029 and City’s request for Cost-Based Rate Adjustment in 2030 shall be requested in writing on or before January 31, 2029. To the extent possible any City request for Cost-Based Rate Adjustment shall be coordinated with the other agencies in San Luis Obispo County that follow the rate adjustment methodology described in this Exhibit, with all such agencies opting to request Cost-Based Rate Adjustment effective in the same rate year
Upon request by either party for Cost-Based Rate Adjustment, Franchisee shall prepare and submit financial records and calculations to the City in accordance with this Section by April 30, 2029. City shall have the right to review Franchisee’s financial records related to the Cost-Based Rate Adjustment and calculations of Cost-Based Rate Adjustment for mathematical accuracy and adherence to the terms and conditions of this Section. City shall prepare written findings regarding adjustments to the Franchisee’s calculations of Cost-Based Rate Adjustment that are required for mathematical accuracy and adherence to the terms and conditions of this Exhibit on or before June 30, 2029. City shall make every effort to seek City Council authorization of Cost-Based Rate Adjustment prior to August 30, 2029. If neither party requests a Cost-Based Rate Adjustment in writing as specified above, then an Index-Based Rate Adjustment shall be applied for adjustments to Maximum Service Rates effective January 1, 2030 and subject to the terms and conditions of Section 2 of this Exhibit.

Annual Rate Adjustment Methodology

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Franchise or City shall have the right to request subsequent Cost-Based Rate Adjustments no more frequently than every five (5) years following the prior Cost-Based Rate Adjustment. For example, if a Cost-Based Rate Adjustment is requested as stipulated in above in January, 2029 (and effective January 1, 2030) then the next Cost-Based Rate Adjustment may not be requested by either party until January, 2034 (for effectiveness in 2035). The schedule from the following paragraph would also apply: Franchisee would prepare and submit financial records and calculations by April 30, 2034, City would prepare written findings regarding adjustments to Franchisee’s calculations of Cost-Based Rate Adjustment that are required for mathematical accuracy and adherence to the terms and conditions of this Exhibit by June 30, 2034, and City would make every effort to seek City Council authorization of Cost-Based Rate Adjustment prior to August 30, 2034.

Notwithstanding the above, nothing shall prevent the parties from mutually agreeing to conduct CostBased Rate Adjustments in other years (i.e., years other than 2030 and 2035), provided that both parties agree in writing to waive the five (5) year limitation on Cost-Based Rate Adjustments expressed herein. If neither party requests Cost-Based Rate Adjustments in subsequent years pursuant to the five (5) year schedule described above, then Index-Based Rate Adjustments shall be applied for adjustments to Maximum Service Rates in such years, subject to the terms and conditions of Section 2 of this Exhibit.

Franchisee shall provide all financial information and supporting documentation required by this review in a format acceptable to City (or City’s designated consultant) in a timely manner. Franchisee shall not require City (or City’s designated consultant) to review any such documents at Franchisee’s worksite but shall instead allow for all required information and supporting documentation to be provided to City (or its designated consultant) via physical mail,e-mail, or any other delivery method approved by City.

Cost-Based Rate Adjustments shall be prepared and calculated in accordance with the steps described below.

A. Projection of Collection Services and Post-Collection Service Costs Franchisee shall prepare financial records and calculations of Cost-Based Rate Adjustment using audited financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) for Franchisee’s immediately preceding three (3) fiscal years. Such financial records and calculations shall include Franchisee’s projected costs for Collection Services and Post-Collection Services as well as Franchisee’s projected gross revenues at then-current Maximum Service Rates for the forthcoming year (e.g., 2030 at the earliest).

Franchisee shall promptly assemble, provide, and submit such information that is reasonably necessary to support the assumptions made by the Franchisee with regard to the assumptions underlying the forecast. Upon submission of such information, the City holds the ability to make appropriate changes for non-allowable costs, large unsupported variances in cost projections including but limited to corporate transactions and allocations, large variances in inter-company and related party transactions and allocations, unjustifiable variances in any cost category, non-conformance with agreed upon depreciation terms, nonconformance agreed upon profit allowances, and other customary and reasonable adjustments as detailed in the Agreement. Cost projections for Collection Services and PostCollection Services prepared by Franchisee must be justifiable, supportable with financial information, and provide accountability for all expenditures. In preparing such cost projections, Franchisee shall assemble and submit its forecasts of:
a. Revenues at current Maximum Service Rates for the then-current year, including delineation of revenues by sector (single-family residential vs. commercial and multifamily) and with details of the number of subscribers by type within each sector. b. Projected costs of Collection Services for the then-current year and the forthcoming year, with comparison to and explanation of any variances to actual costs for Collection Services in the prior three (3) fiscal years. Costs for Collection Services include labor, corporate overhead, depreciation (with rolling stock at 10-year depreciation lifespan), and general and administrative costs and shall be delineated as per the primary cost categories included in Franchisee’s Audited Financial Annual Rate Adjustment Methodology

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Statements. Franchisee must provide documentation of, and explanation for, material variances in any cost category. Projected costs for the forthcoming year shall be based on Franchisee’s actual costs per Audited Financial Statements and escalated by the CPI Adjustment described in Section 2.A of this Exhibit, with the exception that Franchisee may adjust projections to account for other documentable changes in costs. Corporate overhead costs shall be limited to be less than 4% of Franchisee’s Total Cost Projection for the forthcoming year and Franchisee must provide documentation and justification for any amounts of Corporate Overhead above 3% of Franchisee’s Total Cost Projection for the forthcoming year. City retains the right to make appropriate adjustments to cost projections to cost categories for which Franchisee does not or cannot provide adequate documentation and explanation of material variances compared to prior years.
c. Projected costs of Post-Collection Services for the then-current year and the forthcoming year, with comparison to and explanation of any variances to actual costs for Collection Services in the prior three (3) fiscal years. Costs for Post-Collection Services include landfill disposal, organics processing, recyclables processing and marketing, related-party transportation, and related-party rent and shall be delineated as per the primary cost categories included in Franchisee’s Audited Financial Statements. Franchisee must provide documentation of, and explanation for, material variances in any cost category. Projected costs for the forthcoming year shall be based on Franchisee’s actual costs per Audited Financial Statements and escalated by the CPI Adjustment described in Section 2.A of this Exhibit, with the exception that Franchisee may adjust projections to account for other documentable changes in costs. City retains the right to make appropriate adjustments to cost projections to cost categories for which Franchisee does not or cannot provide adequate documentation and explanation of material variances compared to prior years. d. Franchisee shall not include any non-allowable costs in its cost projections for Collection Services or Post-Collection Services. Non-allowable costs include but are not limited to:
i. Entertainment and non-work related travel expenses, unless authorized in advance by City.
ii. Advertising for services not within the scope of this Agreement or outside of the service area of the City of Grover Beach.
iii. Fines or penalties of any nature.
iv. Liquidated damages assessed under this Agreement.
v. Federal or State income taxes.
vi. Profit sharing payments not related to an IRS approved pension program. vii. Charitable or political donations.
viii. Attorneys’ fees and other expenses incurred by Franchisee in any court proceeding in which City and Franchisee are adverse parties, unless Franchisee is the prevailing party in said proceedings. ix. Attorneys’ fees and other expenses incurred by Franchisee in any court proceeding in which Franchisee’s own negligence, violation of law or regulation, or other wrongdoing, is in issue and occasions part of the attorneys’ fees and expenses claimed, provided, however, such attorneys’ fees will be allowed to the extent Franchisee can demonstrate they were reasonable and necessary and a cost of doing business, and were not the result of any intentional or willful misconduct by Franchisee or its employees; and attorneys’ fees and expenses incurred by Franchisee in a court proceeding in which the legal theory or statute providing a basis of liability Annual Rate Adjustment Methodology

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against Franchisee also provides for separate strict liability for City arising from the action of its citizens or ratepayers (such as in a CERCLA lawsuit). x. Payments to related party entities for products or services (other than lease expense, calculated as provided below), in excess of the fair market value for those products or services. For purposes of this Agreement, related party expenses are those resulting from transactions between Franchisee and another company (companies) that has (have) common ownership or management control.
e. Franchisee’s audited financial statements, and any other documentation as deemed necessary by the City, will be reviewed to determine Franchisee’s cost projections for each of the foregoing categories during the year involved. City will use the financial statements to determine that costs have actually been incurred and have been assigned to the appropriate category.
f. City may adjust the actual costs in two ways: (1) to exclude any non-allowable costs, set out below, and (2) to exclude and/or reduce any costs that were actually incurred but which are not reasonable and necessary in keeping with industry standard best practices.

B. Calculation of Profit Allowance
Franchisee’s Profit Allowance shall be 10% of the cost projection for Collection Services, rounded to the nearest dollar.

C. Calculation of Franchise Fee
Calculation of Franchise Fee shall be calculated in accordance with Section 2.C, above, for the applicable year as appropriate.

D. Calculation of Annual Revenue Reconciliation
Calculation of Annual Revenue Reconciliation shall be calculated in accordance with Section 2.D, above, for the applicable year as appropriate.

E. Calculation of Total Cost Projection
Calculation of Total Cost Projection shall be calculated in accordance with Section 2.E, above, for the applicable year as appropriate.

F. Calculation of Cost-Based Rate Adjustment
The Cost-Based Rate Adjustment shall be the calculated as function of the Franchisee’s forthcoming annual Total Cost Projection divided by the then current year Total Cost Projection, minus 100%, rounded to the nearest hundredth of a percent. This is the same calculation described in Section 2.F, above. The resultant percentage shall be applied to the then-current Maximum Service Rates and be effective January 1 of the forthcoming year.

Rate adjustments shall be effective on January 1st of each year (unless otherwise agreed to in writing by the parties) and any delay in rate change approval not caused by Franchisee will result in additional adjustments so that all required revenues are billed within the rate year. Any delay in rate change approval that is caused by Franchisee shall not result in additional adjustments corresponding with the delay in approval.

Section 4 Annual Audited Financial Statements
Franchisee shall annually prepare Audited Financial Statements in accordance with Generally Accepted Accounting Principles (GAAP) for its operations in the San Luis Obispo County region. Franchisee shall provide City with copies of the annual Audited Financial Statements upon request and with any CostBased Rate Adjustment submittal.

Annual Rate Adjustment Methodology

Page 10 of 10 ends

Section 5 Extraordinary Adjustments
Except as provided herein, Franchisee may not request adjustments to Maximum Service Rates in years during which Index-Based Rate Adjustments are scheduled to be applied and must follow the timeline described in Section 3. Notwithstanding the above, Franchisee may request extraordinary adjustments to Maximum Service Rates due to changes in law affecting collection operations, including for compliance with the California Air Resource Board’s (CARBS’s) Advanced Clean Fleet (ACF) electrification mandate.

The City may, but is not obligated to, consider requests for extraordinary adjustment to Maximum Service Rates due to changes in law affecting Post-Collection Services. Requests for extraordinary changes in Maximum Service Rates are subject to good faith negotiations between City and Franchisee.

In the event of any Change in Scope or Change in Law (each as described below) that results in an material increase or decrease in Franchisee’s costs or revenues, in the event of an Extraordinary Cost Increase (as defined below), or in the event of any Change in Fees (as described below), an appropriate adjustment will be made to the Maximum Service Rates in order to compensate, to the maximum extent possible, for such increase or decrease in costs, revenues or Fees, commencing from the Effective Date(s) such increase or decrease first occurs. Any adjustment to Maximum Service Rates due to a Change in Scope, a Change in Law or an Extraordinary Cost Increase shall be in the reasonable discretion of the City.

A. “Change in Scope” shall mean any change in the services provided by the Franchisee under the Agreement whether proposed by the Franchisee or by the City.

B. “Change in Law” shall mean the enactment, adoption, promulgation, issuance, modification or written change in any law, regulation, order or judgment of any governmental body that affects the Franchisee’s performance of services under the Agreement including, without limitation, the issuance of final regulations under existing laws.

C. “Change in Fees” shall mean any change in franchise fees, vehicle impact fees and other fees charged to the Franchisee by the City connection with the services provided by the Franchisee under the Agreement the cancellation of any existing fees, and the adoption of any new fees.

D. “Extraordinary Cost Increase” shall mean a substantial increase in the Franchisee’s operating or capital costs or expenses that is outside of the Franchisee’s control but not due to a Change in Scope or Change in Law.

E. “Effective Date” shall mean the date in which the Franchisee notifies the City of the reasons for the cost estimate associated with a Change in Law, Change in Fees, and/or Extraordinary Cost Increase or when the Franchisee begins incurring costs for the Change in Law, Change in Fees, or Extraordinary Cost Increase, whichever is later.

In the case of a Change in Scope, a Change in Law or an Extraordinary Cost Increase, the Franchisee shall provide the City with projected operational, cost and revenue data reflecting the entire financial effect of such Change. The City reserves the right to require that the Franchisee supply any additional operational, cost and revenue data, or any other information it may reasonably need, to ascertain the appropriate financial impact of the Change and any necessary adjustment to Maximum Service resulting from such Change.

Extraordinary adjustments to Maximum Service Rates for a qualifying Change in Scope or Change in Law, for a Change in Fees, or for an Extraordinary Cost Increase shall take effect as of the beginning of the next year and will include all impacts of the extraordinary adjustment from the Effective Date of the impact; provided, however, that, in the case of any Change in Fees charged by the City, the Extraordinary adjustment shall take effect as of the Effective Date of such Change in Fees. The underlying service, cost, revenue or Fee changes supporting any rate adjustment under this Section 5 will be added to the appropriate category under Sections 2 and 3 above for purposes of future cost projections.

SLIDE
11 Regional Comparison
Monthly 32-Gallon Cart Rates
$0
$10$20$30$40$50$60
Attachment 2
SLIDE
12 Regional Comparison
Monthly 64-Gallon Cart Rates
$0
$10$20$30$40$50$60$70$80$90
SLIDE
13 Regional Comparison
Monthly 96-Gallon Cart Rates
$0
$20$40$60$80
$100$120$140
SLIDE
14 $0
$50
$100$150$200$250$300$350
Regional Comparison
Monthly 2-CY Bin Rates
This notice is intended to inform you that the City of Grover Beach (the “City”) will hold a public hearing regarding rate adjustments (the “Proposed Rate Adjustments”) proposed by South County Sanitary Service (the “Garbage Company”) for properties and customers receiving solid waste, recycling, and green waste services within the City. The Proposed Rate Adjustments will be considered by the Grover Beach Council at the date, time, and location specified below. Consistent with the requirements of Proposition 218, this notice also provides you with the following information:
• The Date, Time, and Place of the Public Hearing;
• The Reason for the Proposed Rate Adjustments;
• The Effective Date of the Rate Adjustment if Approved; • The Basis for the Proposed Rate Adjustments; and
• The Majority Protest Procedures.

January 27, 2025 6:00 pm
Grover Beach City Hall located at 154 South 8th St, Grover Beach The Proposed Rate Adjustment for 2025 is based on the Garbage Company’s documented cost of providing solid waste services and is a 5.02% increase above current solid waste rates. This cost-based adjustment is necessary PARA UNA VERSIÓN EN ESPAÑOL DE ESTE “AVISO DE AUDENCIA PÚBLICA SOBRE LOS AUMENTOR PROPUESTOS DE LA TASA DE RESIDUOS SÓLIDOS”, UTILICE EL SIGUIENTE ENLACE AL SITIO WEB:
https://www.sanluisgarbage.com/assets/docs/uploads/articles/groverbeach-prop-218-notice-2025-spanish.pdf Attachment 3
for the Garbage Company to continue to provide safe, environmentally sound and reliable solid waste removal, transportation and disposal services to the residents and businesses of the City. The adjustments are requested due to:
• Increases in organics processing costs – Third-party costs for the organic waste post-collection processing facility operated by the company formerly named Hitachi Zosen INOVA, and which are not within the Garbage Company’s control, have doubled since 2022. The change in cost is the result of changes in facility capital and operating costs.
• Increases in landfill disposal costs – Related party costs for landfill waste disposal at Cold Canyon have remained flat since 2016. The 2025 rate adjustment reflects a market adjustment to these costs, from a per ton tipping fee of $41 per ton (in place since 2016) to a per ton tipping fee of $70. The Garbage Company provided market comparison demonstrating the applicability of the $70 per ton market tipping fee.
• Collection costs including labor, vehicles, operating expenses and overhead – These costs are increasing approximately 4.21% in 2025.
• Adjustments necessary for moving to a new methodology for annual rate adjustments that provides for increased rate stability, predictability, fairness, transparency, ease of administration, and costeffectiveness. These include updated depreciation lifespans for solid waste collection vehicles, removal of a limitation on corporate overhead costs for legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs, and updated profit allowance inkeeping with industry standards. • Adjustments for new service enhancements, including the ability for residents to exchange a solid waste collection cart once annually at no additional cost, no charge collection for one bulky item during clean-up weeks, and a rate assistance program providing a 20% low-income discount provided to residential customers using 32-gallon cart service (using existing jurisdictional practices on lowincome relief for their offered utility type services).

The Proposed Rate Adjustments for 2025 applicable to residential solid waste customers are shown in the table below.
32-gallon $24.23 $25.45 $1.22
64-gallon $32.74 $34.38 $1.64
96-gallon $41.23 $43.30 $2.07
In addition, commencing each January 1 of 2026, 2027, 2028 and 2029 solid waste rates will be adjusted based on the following:
• Annual change in the Bureau of Labor Statistics’ Consumer Price Index (CPI) for Garbage and Trash Collection in the U.S all city average, with a minimum 2% adjustment and a maximum 5% adjustment.

Amounts below the minimum or above the maximum will carry forward to the following year. • Calculation of a 10% profit allowance starting in 2026 (estimated at additional 0.67% to 0.69% adjustment in 2026).
• Addition of a revenue balancing mechanism starting in 2027, wherein actual revenues from solid waste rates over or under projections carry forward as additions to, or offsets against, the annual CPI adjustment.
• Rate adjustments for January 1, 2026, 2027, 2028 and 2029 are not expected to exceed 7%.

The Proposed Rate Adjustments have been independently reviewed for consistency with the City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management dated June 1994 and in accordance with the provisions of the City’s Franchise Agreement with the Garbage Company, as amended, governing solid waste service within the boundaries of the City. The Proposed Rate Adjustments contemplate implementation of a new methodology for annual rate adjustments which is described in New Solid Waste Rate Adjustment Methodology and 2025 Rates report authored by independent reviewer, R3 Consulting Group, Inc. The consultant’s report and the complete set of proposed 2025 solid waste rates is available at the City Clerk’s office located at Grover Beach City Hall located at 154 South 8th St, Grover Beach.

Pursuant to Section 6 of Article XIII D of the California Constitution, the following persons may submit a written protest against the Proposed Rate Adjustments to the City Clerk before the close of the Public Hearing referenced above.
§ An owner(s) of property (parcel(s)) receiving solid waste, recycling, and green waste services within the City limits. If the person(s) signing the protest, as an owner, is not shown on the last equalized assessment roll as the owner of the parcel(s) then the protest must contain or be accompanied by written evidence that such person signing the protest is the owner of the parcel(s) receiving services; or
§ A tenant(s) whose name appears on the Garbage Company’s records as the customer of record for the corresponding parcel receiving solid waste, recycling, and green waste services within the City limits (tenant-customer).

A valid written protest must contain a statement that you protest the Proposed Rate Adjustments, the address or Assessor’s Parcel Number (APN) of the parcel or parcels which receive solid waste, recycling, and green waste services, and a signature by either the owner or the tenant-customer of the parcel or parcels. One written protest per parcel shall be counted in calculating a majority protest to the Proposed Rate Adjustments subject to the requirements of Section 6 of Article XIII D of the California Constitution. Written protests will not be accepted by e-mail or by facsimile. Verbal protests will not be counted in determining the existence of a majority protest. To be counted, a protest must be received in writing by the City Clerk before the close of the Public Hearing referenced above.

Written protests regarding the solid waste rate adjustments may be mailed to:

Written protests may also be personally delivered to the City Clerk at Grover Beach City Hall located at 154 South 8th St, Grover Beach, California.

If valid written protests are presented by a majority of owners and/or tenants-customers of parcels receiving solid waste, recycling, and green waste services within the City limits, then the City will not adjust the rates for the services.

The Garbage Company coordinated additional informational sessions as an opportunity for the public to learn more and ask questions regarding the rate adjustments. These informational sessions will be done prior to the public hearing as shown below.

Date: December 18, 2024
Time: 5:00PM – 6:30PM
Place: Ramona Garden Park Center
993 Ramona Avenue
Grover Beach, CA 93433
Date: January 20, 2025
Time: 5:00PM – 6:30PM
Place: Grover Beach Community Center
1230 Trouville Avenue
Grover Beach, CA 93433
For additional questions or inquiries outside of these informational sessions, please feel to contact the Garbage Company at (805) 489-4246 and one of our customer service representatives will be able to assist you. Please note, written protests must be received or mailed to the City Clerk at Grover Beach City Hall prior to the rate hearing date.

Si tiene preguntas o consultas adicionales, no dude en comunicarse con la compañía de basura al (805) 489- 4246 y uno de nuestros representantes de servicio al cliente podrá ayudarlo.

PARA UNA VERSIÓN EN ESPAÑOL DE ESTE “AVISO DE AUDENCIA PÚBLICA SOBRE LOS AUMENTOR PROPUESTOS DE LA TASA DE RESIDUOS SÓLIDOS”, UTILICE EL SIGUIENTE ENLACE AL SITIO WEB:
https://www.sanluisgarbage.com/assets/docs/uploads/articles/groverbeach-prop-218-notice-2025-spanish.pdf

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
RESIDENTIAL SINGLE FAMILY DWELLING AND MULTI-UNIT (4 UNITS OR LESS):
32 Gallon Waste Wheeler 1 $24.23 1.22 $25.45
64 Gallon Waste Wheeler 1 $32.74 1.64 $34.38
96 Gallon Waste Wheeler 1 $41.23 2.07 $43.30
TWO-64 Gallon Waste Wheelers 1 $49.76 2.50 $52.26
ONE 64 & ONE 96 Gallon 1 $58.26 2.92 $61.18
TWO-96 Gallon Waste Wheelers 1 $66.77 3.35 $70.12
Residential customers must use the waste wheelers provided by the garbage company. This solid service fee for residential trash collections (container with black or gray lid) includes once a week pick-up of one greenwaste/organics container (green lid), and one recycling container (blue lid).

MULTI-FAMILY (5 or MORE)
Rates are the same as commercial dumpsters and waste wheeler rates (below).

COMMERCIAL DUMPSTERS - ALL AREAS:
1 yd dumpster 1 $113.14 5.68 $118.82
1 yd dumpster 2 $168.23 8.45 $176.68
1 yd dumpster 3 $229.18 11.50 $240.68
1 yd dumpster 4 $290.11 14.56 $304.67
1 yd dumpster 5 $342.30 17.18 $359.48
1 yd dumpster 6 $409.07 20.54 $429.61
1 yd dumpster 7 $499.60 25.08 $524.68

1.5 yd dumpster 1 $130.55 6.55 $137.10

1.5 yd dumpster 2 $205.98 10.34 $216.32

1.5 yd dumpster 3 $290.11 14.56 $304.67

1.5 yd dumpster 4 $377.16 18.93 $396.09

1.5 yd dumpster 5 $461.25 23.15 $484.40

1.5 yd dumpster 6 $548.29 27.52 $575.81

1.5 yd dumpster 7 $667.07 33.49 $700.56
2 yd dumpster 1 $147.95 7.43 $155.38
2 yd dumpster 2 $243.68 12.23 $255.91
2 yd dumpster 3 $356.80 17.91 $374.71
2 yd dumpster 4 $469.97 23.59 $493.56
2 yd dumpster 5 $574.37 28.83 $603.20
2 yd dumpster 6 $687.54 34.51 $722.05
2 yd dumpster 7 $840.70 42.20 $882.90
3 yd dumpster 1 $176.96 8.88 $185.84
3 yd dumpster 2 $339.44 17.04 $356.48
3 yd dumpster 3 $469.97 23.59 $493.56
3 yd dumpster 4 $612.10 30.73 $642.83
3 yd dumpster 5 $728.17 36.55 $764.72
3 yd dumpster 6 $864.50 43.40 $907.90
3 yd dumpster 7 $1,100.96 55.27 $1,156.23
4 yd dumpster 1 $229.18 11.50 $240.68
4 yd dumpster 2 $388.71 19.51 $408.22
4 yd dumpster 3 $556.98 27.96 $584.94
4 yd dumpster 4 $728.17 36.55 $764.72
4 yd dumpster 5 $896.43 45.00 $941.43
4 yd dumpster 6 $1,067.56 53.59 $1,121.15
4 yd dumpster 7 $1,362.59 68.40 $1,430.99

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
6 yd dumpster 1 $343.77 17.26 $361.03
6 yd dumpster 2 $583.05 29.27 $612.32
6 yd dumpster 3 $835.47 41.94 $877.41
6 yd dumpster 4 $1,092.26 54.83 $1,147.09
6 yd dumpster 5 $1,344.68 67.50 $1,412.18
6 yd dumpster 6 $1,601.36 80.39 $1,681.75
6 yd dumpster 7 $2,043.91 102.60 $2,146.51
8 yd dumpster 1 $458.37 23.01 $481.38
8 yd dumpster 2 $777.43 39.03 $816.46
8 yd dumpster 3 $1,113.97 55.92 $1,169.89
8 yd dumpster 4 $1,456.37 73.11 $1,529.48
8 yd dumpster 5 $1,792.87 90.00 $1,882.87
8 yd dumpster 6 $2,135.16 107.19 $2,242.35
8 yd dumpster 7 $2,725.17 136.80 $2,861.97
The rates shown above include the monthly container rental fee and a semi-annual dumpster cleaning.

COMMERCIAL - OTHER CHARGES:

Rates for all commercial customers include recycling or greenwaste/organics pickup once per week, included with the garbage service rate. Customers can choose from a 64 or 96 gallon blue commingled recycle waste wheeler or a 32 or 64 gallon organics waste wheeler included with the garbage service rate (96 gallon waste wheelers can only be used with green waste due to weight). If you need a bin for recycling there is a charge (see below).

If you need more frequent recycling, including organics/greenwaste service, it can be provided at a 50% discount from the garbage service rates for the specified level of service required.

COMMERCIAL GARBAGE CANS - ALL AREAS:
32 Gallon Waste Wheeler 1 $31.91 1.60 $33.51
64 Gallon Waste Wheeler 1 $58.03 2.91 $60.94
96 Gallon Waste Wheeler 1 $72.54 3.64 $76.18
Re-deliver bin to stopped acct $54.16 2.72 $56.88
MISCELLANEOUS CHARGES - ALL CUSTOMERS:

Overstacked Garbage & extra bags
Minimum/unit
each $7.56 0.38 $7.94
Overstacked Greenwaste & extra
bags Minimum/unit
each $3.79 0.19 $3.98
Overstacked Blue Bin & extra bags
Minimum/unit
each $3.80 0.19 $3.99
In yard service (per can or
commodity) IN ADDITION TO

STANDARD GARBAGE RATES
per month $18.88 0.95 $19.83
Monthly charge for additional 32, 64
or 96-gallon green waste/organics
service
per month $5.23 0.26 $5.49
Monthly charge for additional 32, 64
or 96-gallon recycle service
per month $2.14 0.11 $2.25
Vacant Rate per month $17.62 0.88 $18.50
Waste wheeler cleaning each time $28.17 1.41 $29.58
Trip charge each time $18.89 0.95 $19.84
Non-payment downsize service each time $18.89 0.95 $19.84 Non-payment redeliver waste
wheeler
each time $45.41 2.28 $47.69
Non-payment reconnect service each time $45.41 2.28 $47.69 Small item pickup (TV, toilet) each $44.31 2.22 $46.53
Appliance pickup-residential each $62.49 3.14 $65.63

SOUTH COUNTY SANITARY SERVICE
RATE ADJUSTMENT EFFECTIVE JANUARY 1, 2025

CITY OF GROVER BEACH
Service Description Pickups Per Week Monthly Rates
Effective
01/01/2024
Proposed Rate
Adjustment
Monthly Rates
Effective
01/01/2025
Lock Charge per month $10.52 0.53 $11.05
City Clean Up each $16.44 0.83 $17.27
Garbage extras on your scheduled
pickup day
per yard $15.94 0.80 $16.74
Garbage extras -NOT ON YOUR

SCHEDULED PICKUP DAY
per yard $44.00 2.21 $46.21
Commercial Waste Wheeler rent per month $5.85 0.29 $6.14 Re-deliver bin on stopped acct each time $54.16 2.72 $56.88 Compactors per yard $21.48 1.08 $22.56
Sunday Service (in additional to
garbage service level)
per month $94.55 4.75 $99.30
Recycle bin rental per month $65.28 3.28 $68.56
Stand by time per hour $90.63 4.55 $95.18
Extra bin cleaning $84.51 4.24 $88.75
Damage/Destruction of bins or waste
wheelers
Replacement/repair at market price
Short Term Dumpsters:

Delivery & Pickup-Bin $54.16 2.72 $56.88
Delivery & Pickup-Waste Wheeler $18.88 0.95 $19.83
Rental Per Day $5.85 0.29 $6.14
Empties Per Yard $44.00 2.21 $46.21
Mattress:

Twin PER SET $24.59 1.23 $25.82
Double PER SET $24.59 1.23 $25.82
Queen PER SET $24.59 1.23 $25.82
King PER SET $24.59 1.23 $25.82
ADDITIONAL INFORMATION ALL CUSTOMERS:

1. Customers requesting Temporary Bins or Roll-off Box Service can call the office for current rates

2. Polystyrene (Styrofoam, Plastic #6) is not collected for recycling and should be thrown away as trash. Please bag Styrofoam packing peanuts before placing in trash container.

3. It is encouraged to bag your trash in the garbage container but do not bag your recyclables or green waste in their respective containers and keep it loose.

4. Recycling, Greenwaste/Organcis and Garbage containers should spaced 3 feet apart away from any obstacles (i.e mailboxes, cars, etc) before 6:00am on collection service day.

5. The fee schedule above only includes the Garbage Company rates and does not include IWMA fees, which are separately noted on the billings.

6. Cleaning fees will be billed on a time and materials basis

7. Late Fees are imposed for residential customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill.

8. Customers can be charged for contamination fees in the trash, recycling and/or the greenwaste/organics containers.

Any additional recycling, including greenwaste/organic services are charged out at 50% of the garbage rate of equivalent size and frequency.

South County Sanitary Services
4388 Old Santa Fe Road
San Luis Obispo, CA 93401
Standard
US Postage
PAID
Santa Barbara, CA
Permit No. 800
RESOLUTION NO. 25-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,

CALIFORNIA, ESTABLISHING INTEGRATED SOLID WASTE RATES FOR JANUARY 1, 2025, AND EACH SUBSEQUENT JANUARY 1ST THROUGH 2029 WHEREAS, The City of Grover Beach (“City”) and South County Sanitary Service (“SCSS”), Inc. entered into a Franchise Agreement for collection, diversion and disposal of solid waste, dated November 1, 1997 (“Prior Solid Waste Agreement”); and WHEREAS, the City and SCSS also entered into a Recycling Franchise Agreement (“Prior Recycling Agreement”) and a Greenwaste Franchise Agreement in November 1997; and
WHEREAS, the City and SCSS entered into an Amended and Restated Solid Waste Collection Franchise Agreement, dated July 7, 2008, which amended the and restated the Prior Solid Waste Agreement and incorporated, amended and restated the Prior Recycling Agreement and Greenwaste Franchise Agreement; and WHEREAS, The City and SCSS entered into a First Amendment to the Amended and Restated Solid Waste Collection Agreement, dated June 20, 2016; and WHEREAS, SCSS has submitted a rate increase application (“Application”) in accordance with the Amended and Restated Solid Waste Collection Franchise Agreement; and
WHEREAS, the rate increase request compared with the rate in effect at the date of the agreement exceeds the cumulative cost of living increase from that same date, giving the City the option of terminating the SCSS Franchise Agreement within nine months following approval of the requested rate increase (Section 8.3 of the Franchise Agreement) (hereinafter, the “Termination Option”); and WHEREAS, due to the fact that a detailed review has concluded the rates have been calculated in accordance with the Rate Manual, that the costs identified are reasonable, and that the City will continue to maintain one of the lowest rates in the Central Coast, for this period and fee increase only, the City will not pursue the Termination Option; and
WHEREAS, notices of the proposed rate increase were sent to property owners and tenants in accordance with the requirements of Proposition 218; and WHEREAS, on January 27, 2025, the City Council conducted a Public Hearing, considered testimony, and at the conclusion of the protest hearing determined that a majority protest to the proposed rate increase did not exist.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, DOES DELARE, DETERMINE, AND ORDER AS FOLLOWS:

1. The application for a rate increase is hereby approved and solid waste collection service rates set forth in Exhibit “A” attached to this Resolution and incorporated by Attachment 4
Resolution No. 25- Page 2
reference shall become effective on January 1, 2025, and each subsequent January 1st through 2029.

2. In addition to the rate adjustments set forth in Exhibit “A”, commencing each January 1st of 2026, 2027, 2028 an d2029 solid waste rates will be adjusted based on the following:
a. Annual change in the Bureau of Labor Statistics Consumer Price Index for Garbage and Trash Collection in the U.S. all city average (“CPI”), with a minimum two percent (2%) adjustment and a maximum five percent (5%) adjustment. Amounts below the minimum or above the maximum will carry forward to the following year.
b. Calculation of negotiated profit allowance starting in 2026. c. Addition of a revenue balancing mechanism starting in 2027, wherein actual solid waste revenues that exceed or fall short of projections will carry forward as additions to, or deductions from, the annual CPI adjustment.

3. Due to the reasonableness of the requested rate increase, the City will not pursue the termination option set forth in Section 8.3 of the City’s Franchise Agreement with SCSS.

On motion by Council Member _____, seconded by Council Member ____, and on the following roll-call vote, to wit:

AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
RECUSED: Council Members –
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California this 27TH day of January 2025.

KASSI DEE, MAYOR
Attest:

WENDI B. SIMS, CITY CLERK