STAFF REPORT
Meeting Date:
March 24, 2026
CONSENT
7 SUBJECT: APPROVAL OF WASTE INFRASTRUCTURE SYSTEM ENTERPRISE (WISE)
AGREEMENT
RECOMMENDATION: It is recommended that the City Council:
1. Approve the Waste Infrastructure System Enterprise (WISE) agreement with the County of Orange for municipal solid waste disposal rates and services;
2. Authorize the City Manager, or designee, to execute the agreement on behalf of the City and make minor, non-substantive modifications as necessary on behalf of the City;
3. Decline to enter into the proposed Organics Services Agreement (OSA) at this time and direct staff to continue utilizing the City’s existing organic waste processing facilities pursuant to the City’s Franchise Agreement; and
4. Find that approval of and entering into the WISE agreement is exempt under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061 (b)(3) and 15308.
Or in the alternative that the proposed action is not a “project” under CEQA pursuant to CEQA Guidelines section 15378.
SUMMARY OF THE MATTER
Staff is requesting that the City Council approve the Waste Infrastructure System Enterprise (WISE) Agreement with the County of Orange for municipal solid waste disposal services and rates and decline to enter into the optional Organics Services Agreement (OSA) at this time.
The County of Orange, through Orange County Waste & Recycling (OCW&R), operates the County-owned landfill system used by most cities in Orange County for municipal solid waste disposal. Since 1997, cities have participated in the Waste Disposal Agreement (WDA), which provided guaranteed landfill capacity and disposal rates at least 10 percent below non-contract customers.
The current WDA is scheduled to expire on June 30, 2026. OCW&R developed the WISE Agreement as the successor agreement to establish landfill access, capacity, and disposal rates for participating jurisdictions.
The Orange County City Managers Association (OCCMA) coordinated negotiations on behalf of cities beginning in late 2024. In 2025, OCCMA secured a one-year extension of the WDA through June 30, 2026 to allow additional time to negotiate improved terms with OCW&R.
Approval of the WISE Agreement will allow the City to maintain contract disposal rates and continued access to the County landfill system, while declining the optional Organics Services Agreement will allow the City to continue utilizing its existing organic waste processing facilities pursuant to the City’s Franchise Agreement.
APPROVAL OF WASTE INFRASTRUCTURE SYSTEM ENTERPRISE (WISE) AGREEMENT March 24, 2026
DISCUSSION
Background:
The County, through OCW&R, operates the County-owned landfill system, including three active landfills and approximately 20 inactive sites. Since 1997, Orange County cities have participated in the WDA, which provided guaranteed landfill capacity and disposal rates of at least 10 percent below noncontract customers.
The WDA has been amended several times, in 2004, 2009, 2015 and most recently for a one-year extension in 2025.
As the WDA neared expiration, OCW&R developed the successor WISE Agreement (Attachment 1). The OCCMA, representing cities, sanitary districts, and special districts that rely on the landfill system, coordinated review and negotiations beginning in late 2024. In 2025, OCCMA secured a one-year extension of the WDA through June 30, 2026, allowing additional time for negotiations.
Negotiated Rate Structure:
The current WDA limits annual rate increases to the Consumer Price Index (CPI) and does not account for rising operational, regulatory, and environmental compliance costs. OCW&R also indicated that additional capital was needed to fund the Brea Olinda landfill closure and to significantly expand the capacity of the landfill in San Juan Capistrano over the course of the 10-year term. OCW&R’s initial WISE proposal would have increased disposal rates from $43.76 per ton (FY 2025-26 rate) to $82.00 in the first year and were projected to rise to nearly $107.00 by 2035.
Through negotiations, OCCMA reached an agreement on a phased rate structure for the first three years of the agreement. Starting in FY 2029-30, the rate includes an annual CPI adjustment.
Fiscal Year Contract Rate
2026–27 $67.00/ton
2027–28 $74.00/ton
2028–29 $81.00/ton
2029–30 $81.00/ton + CPI
Customer Rate Impacts:
Effective July 1, 2026, the increased disposal rates are expected to result in:
• Approximately 10% increase to monthly residential customer bills • Approximately 16% increase for commercial customers.
These increases are in addition to any hauler-related cost increases associated with collection service.
The Fiscal Year 2026–27 rate schedule, inclusive of the disposal component and the hauler-related service component adjustments, is under negotiation and not yet final. Staff will return to City Council with the proposed rate schedule for review and will set a public hearing once negotiations are complete.
APPROVAL OF WASTE INFRASTRUCTURE SYSTEM ENTERPRISE (WISE) AGREEMENT March 24, 2026
Additional Provision Negotiated by OCCMA:
While the primary focus of the negotiations was tied to the disposal rate, OCCMA successfully negotiated the following key provisions:
• Beginning in 2030, an annual “true-up” process that may freeze CPI adjustments depending on OCW&R’s cost recovery and tonnage revenue. Cities may initiate a ‘meet and confer’ process with review by an independent consultant.
• Review and annual notification provisions to ensure continued OCCMA participation to improve transparency and oversight of OCW&R’s financial status and implementation of the WISE Agreement.
• Removal of language that would have made cities financially responsible for hauler non-payment. • Adoption of a blended CPI index (60% Solid Waste, Water, and Sewer; 40% All Urban Consumers). • Removal of a mandatory requirement that all residential organic waste is sent to OCW&R; the County will offer optional organic waste processing services.
Cities must adopt the WISE Agreement by April 30, 2026, to avoid disposal rates up to 10% higher. Cities and districts that do not enter into the WISE Agreement by July 1, 2026 will be charged the non-contract rate, beginning July 1, 2026. The non-contract rate schedule is as follows:
Fiscal Year Non-Contract Rate
2026–27 $92.70/ton
2027–28 $100.40/ton
2028–29 $108.10/ton
2029–30 $110.77/ton*
FY 29-30 show per OCW&R projected non-contract rate.
The WISE Agreement includes a participation threshold requiring ratification by jurisdictions representing at least 50% of the tonnage disposed at County landfills for the agreement to become effective. The agreement term is for 10 years, through June 30, 2036, with one optional 10-year extension.
Optional Organics Services Agreement:
The WISE Agreement also includes an Optional OSA (Attachment 1, Appendix 5). The OSA would allow the City to deliver preprocessed organic waste to the OCW&R’s organics infrastructure at an initial contract rate of $67 per ton, receive processing services up to a defined tonnage limit, and arrange for take-back of bulk recovered organic waste products such as compost and mulch.
The OSA also provides for OCW&R assistance with education and outreach and contemplates potential future regional services for food waste processing and edible food recovery. However, participation is subject to several conditions, including delivery of only City-generated controllable organic waste that meets OCW&R processing standards, quarterly origin reporting, payment of the organic contract rate, and a proportional share formula that credits the City at 60 percent of delivered tonnage.
APPROVAL OF WASTE INFRASTRUCTURE SYSTEM ENTERPRISE (WISE) AGREEMENT March 24, 2026
Participating jurisdictions may arrange for bulk recovered organic waste product (ROWP), such as compost or mulch, to be taken back at no charge. However, non-bulk products, including bagged materials or compost wattles, may be additional charges, and any take-back would remain at City expense.
If the City elects not to participate in the OSA, it may still access OCW&R organics services and finished organic products, but those materials, services, and any applicable gate fees would be available only at market-based or non-contract rates established by the OCW&R rather than at the OSA contract rate and associated terms.
OSA Considerations and Risks:
Staff have identified several risks and limitations associated with opting into the OSA. The OCW&R retains broad discretion to impose special charges for bagged materials, wattles, expanded services, hard-to-handle materials, and fee increases imposed by outside agencies, in addition to annual CPI adjustments beginning in 2027. The agreement also allows for a true-up process that could increase the organic contract rate beyond CPI if OCW&R costs exceed projections.
If changes in law or operating conditions require more costly alternative processing methods, the parties must negotiate a new rate, and if no agreement is reached, the OSA may be terminated on 90 days’ notice.
The OCW&R also reserves the right to refuse material that exceeds tonnage limits, does not meet contamination or processing specifications, would exceed permitted limits, or would violate applicable law, and expressly states it is not obligated to accept material if sufficient permitted processing capacity is unavailable.
The City’s existing Franchise Agreement already designates CR&R’s Yuma facility as the City’s organics processing facility, and that the City’s current ROWP needs for giveaway events and landscape use can be met through existing franchise obligations and separate procurement methods.
FINANCIAL ANALYSIS
There is no net fiscal impact to the City’s General Fund. Disposal costs under the WISE Agreement are treated as pass-through expenses pursuant to Section 14 and Attachment J of the City’s Franchise Agreement with CR&R, Incorporated.
Any increases in landfill disposal fees will be incorporated into solid waste customer service rates, as allowed under the Franchise Agreement. Staff will return to the City Council with the proposed updated rate schedule once negotiations with the hauler are finalized.
ALIGNMENT WITH CITY COUNCIL GOALS AND PRIORITIES
Approval of the WISE Agreement supports the City Council’s goals related to Environmental Stewardship and Sustainable Infrastructure by ensuring the City maintains long-term access to regional landfill capacity and responsible waste management services.
The agreement also supports Fiscal Sustainability by securing contract disposal rates and protecting the City from significantly higher non-contract landfill rates.
APPROVAL OF WASTE INFRASTRUCTURE SYSTEM ENTERPRISE (WISE) AGREEMENT March 24, 2026
ENVIRONMENTAL ANALYSIS
The project is exempt under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061 (b)(3) in that the proposed agreement is covered by the commonsense exemption in that it does not have the potential for causing a significant effect on the environment. It can be seen with certainty that an increase in the cost of per ton disposal rate with the County will not have a significant effect on the environment. Further, the proposed agreement is not a “project” for purposes of CEQA pursuant to CEQA Guidelines section 15378, as it has no potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. The WISE Agreement sets out the terms and price for services related to landfill capacity and the applicable disposal rates. Finally, the amendment is exempt pursuant CEQA Guidelines section 15308 as this is an action by the City to ensure compliance with the various State laws on solid waste. Thus, it is an action by the City for the protection of the environment.
ATTACHMENTS
1. WISE Agreement (Pgs. 6-74)
Submitted By:
.Mark McAvoy Approved: .David A Kiff
Mark McAvoy, Director of Public
Works & Utilities
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Ashley Moran, Sr. PW Analyst/Solid Waste
Coordinator
Patrick Donegan, Assistant City Attorney