CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
11/24/2025
1 SUBJECT:
Recology of the Coast’s Application for Rate Increase for 2026 RECOMMENDED ACTION:
Adopt a Resolution confirming Recology of the Coast’s application for rate increase of 2.94% is accurate and consistent with the annual rate adjustment procedures specified in the agreement with Recology for Recyclable Materials, Organic Materials, and Solid Waste Collection Services (“Agreement”); and finding the confirmation of the rate increase exempt under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines 15061(b)(3).
STAFF CONTACT:
Melissa L. Tigbao, P.E., QSD/P, Director of Public Works (650) 501-5016
[email protected]
Louis Sun, P.E., Deputy Director of Public Works
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:
In February 2010, the City of Pacifica entered into a franchise agreement with Recology of the Coast (“Recology”) for recyclable materials, organic materials, and solid waste collection services (“ Agreement”).
The City and Recology executed a First Amendment to the Agreement on March 11, 2013. On October 24, 2016, the City Council adopted Resolution No. 67-2016, extending the term of the Agreement for an additional five years until December 31, 2022.
The Agreement generally grants Recology the exclusive right and franchise to collect waste materials in Pacifica. This includes solid waste, targeted recyclable material and organic materials on residential, commercial and City premises as well as construction and demolition debris.
On October 10, 2022, the City Council adopted a Resolution approving the Second Amendment to the Agreement, which among other things, extended the term an additional 10 years until December 31, 2032, with an option to extend an additional five years. The Second Amendment also revised the Annual Rate Application Process identified in the Agreement to clarify that Recology ultimately sets the rate charged to the ratepayers. For future rate adjustments, the City’s role would be to undertake an administrative review of the application for a rate increase to confirm accuracy and consistency with the Rate Adjustment procedures specified in the Agreement. Given that the City does not set, establish, or impose the rates charged to the ratepayers, the City is not obligated to follow the procedures for establishing or increasing a proposed assessment under Proposition 218 (Article XIII D of the California Constitution).
Pacifica City Council 2
November 24, 2025
On November 25, 2024, the City Council adopted a Resolution approving the Third Amendment to the Agreement, which added grit and screenings disposal services for the Calera Creek Water Recycling Plant and revised the location of the organic material disposal facility.
The City received Recology's application for an annual rate increase on May 30, 2025. The City engaged HF&H Consultants in August 2025 to conduct a financial review of the proposed 2026 rate increase in accordance with Section 11.03(B) of the Agreement.
HF&H worked closely with Recology to verify the index-based cost increases applicable for 2026. The findings were documented in a report dated October 20, 2025 (Attachment #1).
HF&H confirmed that a 2.94% rate increase is applicable for Recology’s services to the City of Pacifica in 2025. This increase is below the maximum allowable rate adjustment of 6%, as outlined in the Agreement, and aligns with the adjustment procedures in the Agreement.
Based on the findings of HF&H’s financial review, the City Manager recommends that the City Council approve a resolution confirming Recology of the Coast’s proposed 2.94% annual rate increase for 2026. The proposed increase does not exceed the allowable maximum rate of 6% and City has reviewed the annual rate increase to confirm accuracy and consistency with the Rate Adjustment procedures specified in the Agreement.
ALTERNATIVE ACTION:
Council may choose not to adopt the resolution confirming the Recology rate increase, however, this would not be in accordance with the Agreement the City signed with Recology of the Coast and is not recommended.
FISCAL IMPACT:
The Recology of the Coast rates would increase by 2.94% starting in 2026.
CEQA:
The confirmation of the rate increase would be exempt under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility approval would cause a significant effect on the environment as it is an administrative item and will not change the services provided by Recology.
ORIGINATED BY:
Public Works
ATTACHMENT LIST:
Attachment 1 - Pacifica RY17 CBRA 10.20.25 (PDF)
Pacifica City Council 3
November 24, 2025
RESOLUTION NO. ______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA CONFIRMING RECOLOGY OF THE COAST’S (RECOLOGY) 2026 RATE APPLICATION FOR A RATE INCREASE OF 2.94% IS ACCURATE AND CONSISTENT WITH THE ANNUAL RATE ADJUSTMENT PROCEDURES SPECIFIED IN THE RECOLOGY AGREEMENT; AND
FINDING CONFIRMATION OF RATE INCREASE EXEMPT UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”) PURSUANT TO CEQA GUIDELINES SECTION 15061(b)(3)
WHEREAS, in February 2010, the City of Pacifica entered into a franchise agreement with Recology of the Coast (“Recology”) for Recyclable Materials, Organic Materials, and Solid Waste Collection Services (“Agreement”); and WHEREAS, the City and Recology executed a First Amendment to the Franchise Agreement on March 11, 2013; and
WHEREAS, on October 24, 2016, the City Council adopted Resolution No. 67-2016, extending the term of the Agreement for an additional five years until December 31, 2022; and WHEREAS, the Agreement generally grants Recology the exclusive right and franchise to collect waste materials in Pacifica. This includes solid waste, targeted recyclable material and organic materials on residential, commercial and City premises as well as construction and demolition; and
WHEREAS, on October 10, 2022, the City Council adopted a Resolution approving a Second Amendment to the Franchise Agreement, which among other things, extended the term an additional 10 years until December 31, 2032 with an option to extend an additional five years; and
WHEREAS, the Second Amendment also revised the Annual Rate Application Process identified in the Agreement to clarify that Recology ultimately sets the rate charged to the ratepayers; and
WHEREAS, for future rate adjustments, the City’s role would be to undertake an administrative review of the application for a rate increase to confirm accuracy and consistency with the rate adjustment procedures specified in the Agreement; and WHEREAS, on November 25, 2024, the City Council adopted a Resolution approving the Third Amendment to the Agreement, which added grit and screenings disposal services for the Calera Creek Water Recycling Plant and revised the location of the organic material disposal facility; and
WHEREAS, the City hired HF&H Consultants in August 2025 to conduct a financial review of the proposed 2026 rate increase in accordance with Section 11.03(B) of the Agreement; and
WHEREAS, HF&H Consultants have confirmed the accuracy and consistency of the requested Recology rate adjustment procedures specified in the Agreement.
Pacifica City Council 4
November 24, 2025
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Pacifica does hereby resolve as follows:
1. The confirmation of the rate increase would be exempt under CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility approval would cause a significant effect on the environment as it is an administrative item and will not change the services provided by Recology.
2. Recology of the Coast’s application for 2026 rate increase of 2.94% is accurate and consistent with the annual rate adjustment procedures specified in the Agreement and does not exceed the allowable maximum rate of 6%.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 24
th day of November 2025, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
_________________________________
Sue Beckmeyer, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney