2024-25 Solid Waste Rate Study
September 3, 2024
Background
• Solid waste enterprise provides comprehensive
collection and disposal service to 7,116 customers
– Three bin, weekly residential service
– High recycling participation, low contamination
– Low-income/Senior discount ($10/month)
– Bulky item pickup service 2x per year
– Weekly street sweeping
• Solid waste enterprise is self-supporting, and rates are the main source of revenues
• Rates need to be set at levels adequate to fund the cost of providing service
• In 2019, the City implemented a 5-year, phased-in rate increase
– Final increase was on July 1, 2023
2 Current Rates
Size Weekly
Frequency
Current
Residential Three Toter Service Monthly Rate ($ per Service) Residential 1 X $41.83
Extra green waste toter 1 X $6.81
Commercial Trash Service Monthly Rate ($ per Service)
(1) 96 gal toter 1 X $41.87
2 yd bin 1 X $145.46
Commercial Recycling Service Monthly Rate ($ per Service) (1) 96 gal toter 1 X $20.95
2 yd bin 1 X $72.74
Commercial Organics Service Monthly Rate ($ per Service) (1) 96 gal toter 1 X $13.94
6 yd bin 1 X $436.27
Current Rates
3 Study Objectives
• Financially Sound
– Fund all costs while maintaining
prudent reserves
• Legally Compliant
– Prop. 218
4 Prop. 218 states that a customer’s rates
“must not generate revenues in excess of the
cost of service for which the fee is charged.”
Cal. Const., art. XIII D, § 6, subd. (b).
Proposition 218
• Voter-approved constitutional amendment 1996
– Added Articles 13C & 13D to the California Constitution • Substantive requirements for property-related
charges
– Rates cannot exceed cost of providing service
– Proportionate cost recovery (fair and equitable)
• Procedural requirements for rate increases
– Mail notice of rate increases to all property
owners/customers
– Hold public hearing at least 45 days after the mailing – Rates are subject to “majority protest”
5 Financial Plan Key Issues
• Increasing cost of providing solid waste service
– Waste hauler cost increases
• Contract amendment
– Increasing disposal cost
– Prevailing costs for contracted out services
– State mandates for organics and recycling
• Green waste diversion program
• New equipment, additional staff
– State mandate for EV, zero emissions for new vehicles and equipment – Inflation
• Eleven new staff positions
– Projected cost of new staff by FY 29/30, $202,867
• Equipment and capital improvements
– Projected $1.3 million through FY 29/30
• Maintain prudent reserves
6 – Target 3 months O&M
Assumptions
• Bertolotti Requests:
– 86 cent residential rate increase and higher commercial recycling service fees due to the increase in the cost to process recycling and state organics mandates
• Cost Increases for Service:
– Tipping fee credits no longer in effect in FY 25/26
– SB 1383 Mandate, State of California requirements for City program – Recycling is now a cost not a revenue
• Cost Reduction Efforts:
– Postponing hiring of staff, purchasing of equipment, and lowering costs of improvements.
– Delaying Street Sweeping Services due to timing of electrical sweepers and staffing to Year 3.
– Reduced SB 1383 Green Waste Diversion Facility concrete pad cost estimate.
– Delaying Sewer Fund reimbursement for Compost/Mulch Blower in the amount of $500,000 by three years.
– Postponing one year of Street Fund 327 transfer in the amount of $100,000 for street and alley maintenance.
7 Rate Recommendations
• Rates updated to reflect the proportional cost of service • Developed two rate implementation scenarios (rates
implemented on 1/1/2025)
– Scenario 1, immediate switch to recommended rates
• Full revenue recovery
• Meet reserve target in all years of the 5-year period. – Scenario 2, phased-in large rate increase by FY 29/30 • Reduced revenue during phase-in, $373,041
• Mitigates impact of significant rate changes to certain commercial services
– Meet reserve target in FY 29/30
– Residential and senior/low-income service rate is the same in both scenarios
• Increase
– Keep senior/low-income customer rate flat from FY 24/25 to FY 25/26. Increase senior/low-income rate by $1.35 per year from FY 26/27 to FY 29/30.
– Discount currently is $10.00. By FY 29/30, the proposed discount will grow to $25.03.
8 Financial Plan - Scenario 1
9 $0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Bertolotti Expenses
Equipment and Transfers
O&M Expenses
Revenue
Reserves
Reserve Target
Solid Waste Cashflow ($ millions)
Financial Plan - Scenario 2
10 *Revenue reduced $373,041 due to rate phase-in
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Bertolotti Expenses
Equipment and Transfers
O&M Expenses
Revenue
Reserves
Reserve Target
Solid Waste Cashflow ($ millions)
Proposed Rates Scenario 1
11 Recommended Rates Current 1/1/2025 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Size Weekly
Frequency
Current Proposed Proposed Proposed Proposed Proposed Proposed Residential Three Toter Service Monthly Rate ($ per Service) Residential 1 X $41.83 $43.98 $47.28 $50.83 $54.64 $58.74 $62.26 Increase % 5.1% 7.5% 7.5% 7.5% 7.5% 6.0%
Low Income/Senior 1 X $31.83 $32.91 $34.56 $36.34 $38.25 $40.30 $42.06 Increase % 3.4% 5.0% 5.2% 5.3% 5.4% 4.4%
Extra green waste toter 1 X $6.81 $19.43 $20.89 $22.46 $24.14 $25.95 $27.51 Increase % 185.3% 7.5% 7.5% 7.5% 7.5% 6.0%
Commercial Trash Service Monthly Rate ($ per Service)
(1) 96 gal toter 1 X $41.87 $73.14 $78.63 $84.53 $90.87 $97.69 $103.55 Increase % 74.7% 7.5% 7.5% 7.5% 7.5% 6.0%
2 yd bin 1 X $145.46 $146.28 $157.25 $169.04 $181.72 $195.35 $207.07 Increase % 0.6% 7.5% 7.5% 7.5% 7.5% 6.0%
Commercial Recycling Service Monthly Rate ($ per Service) (1) 96 gal toter 1 X $20.95 $73.14 $78.63 $84.53 $90.87 $97.69 $103.55 Increase % 249.1% 7.5% 7.5% 7.5% 7.5% 6.0%
2 yd bin 1 X $72.74 $146.28 $157.25 $169.04 $181.72 $195.35 $207.07 Increase % 101.1% 7.5% 7.5% 7.5% 7.5% 6.0%
Commercial Organics Service Monthly Rate ($ per Service) (1) 96 gal toter 1 X $13.94 $73.14 $78.63 $84.53 $90.87 $97.69 $103.55 Increase % 424.7% 7.5% 7.5% 7.5% 7.5% 6.0%
6 yd bin 1 X $436.27 $438.85 $471.76 $507.14 $545.18 $586.07 $621.23 Increase % 0.6% 7.5% 7.5% 7.5% 7.5% 6.0%
Proposed Rates Scenario 2
12 Recommended Rates Current 1/1/2025 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Size Weekly
Frequency
Current Proposed Proposed Proposed Proposed Proposed Proposed Residential Three Toter Service Monthly Rate ($ per Service) Residential 1 X $41.83 $43.98 $47.28 $50.83 $54.64 $58.74 $62.26 Increase % 5.1% 7.5% 7.5% 7.5% 7.5% 6.0%
Low Income/Senior 1 X $31.83 $32.91 $34.56 $36.34 $38.25 $40.30 $42.06 Increase % 3.4% 5.0% 5.2% 5.3% 5.4% 4.4%
Extra green waste toter 1 X $6.81 $10.26 $13.71 $17.16 $20.61 $24.06 $27.51 Increase % 50.7% 33.6% 25.2% 20.1% 16.7% 14.3%
Commercial Trash Service Monthly Rate ($ per Service)
(1) 96 gal toter 1 X $41.87 $52.15 $62.43 $72.71 $82.99 $93.27 $103.55 Increase % 24.6% 19.7% 16.5% 14.1% 12.4% 11.0%
2 yd bin 1 X $145.46 $146.28 $157.25 $169.04 $181.72 $195.35 $207.07 Increase % 0.6% 7.5% 7.5% 7.5% 7.5% 6.0%
Commercial Recycling Service Monthly Rate ($ per Service) (1) 96 gal toter 1 X $20.95 $34.72 $48.48 $62.25 $76.02 $89.78 $103.55 Increase % 65.7% 39.7% 28.4% 22.1% 18.1% 15.3%
2 yd bin 1 X $72.74 $95.13 $117.52 $139.91 $162.29 $184.68 $207.07 Increase % 30.8% 23.5% 19.1% 16.0% 13.8% 12.1%
Commercial Organics Service Monthly Rate ($ per Service) (1) 96 gal toter 1 X $13.94 $28.88 $43.81 $58.75 $73.68 $88.62 $103.55 Increase % 107.1% 51.7% 34.1% 25.4% 20.3% 16.9%
6 yd bin 1 X $436.27 $438.85 $471.76 $507.14 $545.18 $586.07 $621.23 Increase % 0.6% 7.5% 7.5% 7.5% 7.5% 6.0%
Bill Impacts Scenario Comparison
13 Scenario 1: No Phase-In Scenario 2: Phase-In
Bill Impact Comparison
Number of
Customers
Current
Rates
FY 2023/24
Proposed
FY 24/25
Rates
Rate
Increase
FY 2024/25
Rate
Increase
FY 2024/25
Proposed
FY 24/25
Rates
Rate
Increase
FY 2024/25
Rate
Increase
FY 2024/25
Commercial Trash Service Monthly Rate
Size Weekly
Frequency
# $ per Month $ per Month $ per Month % $ per Month $ per Month % (1) 96 gal toter 1 X 112 $41.87 $73.14 $31.27 74.68% $52.15 $10.28 24.55% 2 yd bin 1 X 48 $145.46 $146.28 $0.82 0.56% $146.28 $0.82 0.56% 2 yd bin 2 X 11 $290.85 $292.56 $1.71 0.59% $292.56 $1.71 0.59% Commercial Recycling Service
(1) 96 gal toter 1 X 6 $20.95 $73.14 $52.19 249.12% $34.72 $13.77 65.71% 2 yd bin 1 X 16 $72.74 $146.28 $73.54 101.10% $95.13 $22.39 30.78% 2 yd bin 2 X 2 $145.46 $292.56 $147.10 101.13% $190.24 $44.78 30.79% Commercial Organics Service
(1) 96 gal toter 1 X 30 $13.94 $73.14 $59.20 424.68% $28.88 $14.94 107.14% 6 yd bin 1 X 1 $436.27 $438.85 $2.58 0.59% $438.85 $2.58 0.59% Residential Three Toter Service
Residential Customers 1 X 6,635 $41.83 $43.98 $2.15 5.14% $43.98 $2.15 5.14% Low Income/Senior
Customers 1 X 56 $31.83 $31.83 $0.00 0.00% $31.83 $0.00 0.00% Residential Extra Service
Extra green waste toter 1 X 20 $6.81 $19.43 $12.62 185.32% $10.26 $3.45 50.66% Garbage Rates Comparison with
Surrounding Agencies
14 $35.78 $36.07 $36.73 $37.06 $38.41
$41.35 $41.83 $43.02 $43.98 $45.50
$55.46 $56.01
$70.87
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
Average: $44.84
Next Steps
15 • Council considers authorizing
mailing of Prop 218 notices
September
3rd
• 218 notices mailed. 45-day period
begins (September 6th - October
21st)
September
5th
• Public hearing, tabulation of
protests, consider adoption of new
rates
November
19th
• New rates become effective January 1st
,
2025
16 Questions and Comments?