Agenda packet, regular meeting — San Mateo City Council, January 16, 2024 (part 2 of 2)

Total Number of Valid Votes 10,032
Total Number of “Yes” Votes 5,195
Total Number of “No” Votes 4,837
Total Number of “Invalid” Votes 85
As determined by the ballots cast, 51.78% of the valid votes cast by property owners were in support of the measure, representing a majority. Since a majority protest, as defined by Article XIII D of the California Constitution, did not exist on the October 16th public hearing and a majority of valid ballots cast by property owners were in favor of the fee, City Council has jurisdiction to order levying the Community Flood and Storm Protection Fee. Staff recommends City Council adopt the attached resolution to certify the tabulation results and order the levying of the Community Flood and Storm Protection Fee for Fiscal Year 2024-25. Staff would then proceed with providing the County Assessor’s Office the necessary fee details for each parcel to enable placement of the fee on the 2024-25 tax roll.

BUDGET IMPACT:

If the proposed fee is levied, the revenue will be approximately $4,000,000 in the first fiscal year. The fee is subject to a maximum annual increase of 3% based on the Consumer Price Index (CPI), to be approved annually by Council. Staff will bring recommended stormwater fee assessments based on CPI annually to City Council for consideration.

ENVIRONMENTAL DETERMINATION:

This action is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)

NOTICE PROVIDED
All meeting noticing requirements were met.

ATTACHMENTS
Att 1 – Proposed Resolution
Att 2 – Final Tabulation Report

STAFF CONTACT
Jimmy Vo, Senior Engineer
[email protected]
(650) 522-7319

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CITY OF SAN MATEO
RESOLUTION NO. ____ (2024)

CERTIFYING THE TABULATION RESULTS FOR THE COMMUNITY FLOOD AND STORM PROTECTION FEE, A PROPERTY-RELATED FEE CONFORMING TO ARTICLE XIII D, SECTION 6 OF THE CALIFORNIA CONSTITUTION, AND ORDERING LEVIES OF THE COMMUNITY FLOOD AND STORM PROTECTION FEES FOR FISCAL YEAR 2024-25 WHEREAS, on July 17, 2023, the City Council of the City of San Mateo adopted Resolution 80-2023 initiating proceedings to obtain approval of the proposed new Community Flood and Storm Protection Fee (“Fee”), which is a property related fee conforming to Article XIII D, Section 6 of the California Constitution; approving the Fee Report for the Fee (“Fee Report,” dated July 2023); and setting a public hearing before the City Council on October 16, 2023 in the City Council Chambers at 330 West 20th Avenue, San Mateo CA 94403 at 7:00 pm to consider all property owner protests to the proposed fee; and WHEREAS, on July 17, 2023, the City Council of the City of San Mateo adopted Resolution 81-2023 adopting ballot procedures applicable to the proposed fee pursuant to Article XIIID, Section 6(c) of the California Constitution; and
WHEREAS, pursuant to the provisions of Article XIII D of the California Constitution, the City has provided 45-day written mailed notice to each record owner of parcels of real property subject to the Fee of a public hearing, which was held at a regular meeting of the City Council on October 16, 2023 at 7:00 pm in the City Council Chambers on the issue of whether the proposed property related fee should be levied and collected as proposed in the Fee Report for Fiscal Year 2024-25; and WHEREAS, the mailed notice of the public hearing contained the following information: (a) the total amount of fee proposed to be levied for fiscal year 2024-25; (b) the fee chargeable to each owner’s parcel; (c) the reason for the Fee; (d) the basis upon which the amount of the proposed Fee was calculated; (e) the date, time and place of the public hearing as specified in this resolution; and (f) a summary of the effect of a majority protest; and
WHEREAS, on October 16, 2023, the City Council adopted Resolution No. 112-2023 finding that a majority protest did not exist and, ordering a ballot proceeding to obtain property owner approval for the Fee consistent with Resolution 81-2023; and
WHEREAS, on November 1, 2023 a ballot and information guide were mailed to every owner of property that would be subject to the proposed Fee; and
WHEREAS, the balloting period for the proposed Fee closed on December 17, 2023 at 5:00 p.m.; and WHEREAS, the tabulation of the ballots is complete.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN MATEO, CALIFORNIA, HEREBY RESOLVES that:

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1. Tabulation of the Votes. For each valid ballot, each property subject to the proposed fee counted as one vote. Property owners with more than one property could have up to 14 properties listed on a ballot, with each property counting as one vote, resulting in more than one vote for that ballot.

Therefore, since some ballots contained more than one vote, the total number of valid votes (10,032) is larger than the total number of valid ballots (9,232). The canvass of the fee ballots submitted by property owners, has been computer-tabulated and the votes cast are as follows:

Total Number of Valid Ballots Processed: 9,232
Total Number of Valid Votes: 10,032
Total Number of Valid “Yes” Ballots Processed: 4,857
Total Number of “Yes” Votes Processed: 5,195
Total Percentage of “Yes” Votes Processed: 51.78%
Total Number of Valid “No” Ballots Processed: 4,375
Total Number of “No” Votes Processed: 4,837
Total Percentage of “No” Votes Processed: 48.22%
Total Number of “Invalid” Ballots Processed: 76
Total Number of “Invalid” Votes Processed: 85

2. Ballot Return Rate. 9,308 fee ballots were returned and received prior to the close of the balloting period on December 17, 2023. This represents a 34.83% ballot return rate on the 26,726 ballots mailed. Of the fee ballots returned, 76 ballots were declared invalid, in that they were either not marked with a “Yes” or “No”, were marked with both a “Yes” and a “No,” were not signed, or the property ownership and barcode information was illegible.

3. Ballots Results. As determined by ballots cast, 51.78% of the votes cast by property owners were in support of the measure. Since a majority of the property owners approved of the Fee, this Council thereby acquired jurisdiction to order the levy of the Fee.

4. Findings. The City Council finds that the Fee is being implemented in compliance with the requirements of Proposition 218, as codified in Article XIII D of the California Constitution. Based on the oral and documentary evidence, including the Fee Report, received by the Council, the Council expressly finds and determines that it is in the best interest of the City and the public to order the fee to be levied.

5. Ordering of the Levies. The Council hereby orders the fees for fiscal year 2024-25 shall be levied at the rates specified in the Fee Report.

6. CPI. The authorized maximum fee amount to be levied in future fiscal years shall be increased annually based on the San Francisco-Oakland-Hayward Consumer Price Index for All Urban Consumers (CPI), not to exceed 3% per year. Any change in the CPI in excess of 3% shall be cumulatively reserved as the “Unused CPI” and be available to increase the maximum authorized rate in years in which the CPI is less than 3%. The fee amount charged in any year cannot exceed the

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cost to provide the stormwater services and improvements and the City Council may authorize any fee up to the authorized fee in any given year.

7. Corrections. The Fee, as it applies to any parcel, may be corrected, cancelled or a refund granted as appropriate, by order of the City Council or its designee, the City Manager, upon a determination that the fee for that parcel should be revised to be consistent with the fee method established in the Fee Report. Any such corrections, cancellations or refunds shall be limited to the current fiscal year in which the correction, cancellation or refund was requested.

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Presentation of Balloting Results
January 16, 2024
1 Proposition 218 New Stormwater Fee
Fiscal Years 2024-25
Presented By: Public Works – Jimmy Vo, Senior Engineer

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City Council to review the ballot results for the
Community Flood and Storm Protection Fee, and
consider adopting a resolution, as amended, certifying
the ballot results, order levies for fiscal years 2024-25, and designate the City Manager to administer the fee.
2 Purpose

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3 Background
Mail Balloting
• 26,726 ballots for the new stormwater fee for were mailed on November 1, 2023. • Deadline for ballots to be received was December 17, 2023 at 5:00 PM PST. • Single ballot mailed to each property owner, with each ballot listing each property/parcel owned by property owner. Vote cast on the single ballot applied to each property/parcel owned by homeowner.
• 34.83% ballot return rate on 26,726 mailed ballots.
• Third-party CPA enlisted to tally votes.

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4 Ballot Results
• Ballots Mailed 26,726
• Ballots Received 9,308
• Total Votes 10,117
• Total “Yes” Votes 5,195 (51.78%)
• Total “No” Votes 4,837 (48.22%)
• Total “Invalid” Votes 85

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5 Next Steps
• Council to vote on Resolution to certify results and order levying of fee • Staff will send notifications out to all property owners of ballot results • Fees will be sent to County to be included on 2024 -2025 tax rolls • Property owners will see a split fee into two installments • City anticipates receiving approximately $4 million in revenue annually starting next fiscal year

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CITY OF SAN MATEO

CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 17 Section Name: NEW BUSINESS Account Number: 21-4678 File ID: 24-8342 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: January 16, 2024
SUBJECT:

Solid Waste – 2024 Rate Setting and Proposition 218 Notification RECOMMENDATION:

Provide direction on whether to increase solid waste rates by $5, $6, or $7 per month for residential solid waste customers; increase commercial solid waste and organics collection rates; and authorize staff to mail a notice to all property taxpayers proposing a not-to-exceed increase in solid waste, recycling, and compost collection rates for 2024; and provide direction on the future approach to using the Solid Waste Fund reserves.

BACKGROUND:

The City’s Solid Waste Program (Program) includes waste diversion, compost/recycling education and outreach, special collection events, construction and demolition recycling plan processing, litter reduction programs, illegal dumping abatement, hazardous materials management, and ensures compliance with all county, regional, state, and federal regulations. Solid waste, recycling, and organics collection, processing, and disposal services are available to all residents and commercial businesses in the City of San Mateo. The City is one of eleven local jurisdictions who are part of the joint powers authority, South Bayside Waste Management Authority (SBWMA), which oversees various aspects of solid waste services and programming for all members.

Each year, Council approves the solid waste rates to cover the costs of the collection services provided by Recology San Mateo County (Recology); the processing and disposal services provided by South Bayside Industries, Inc. (SBI); the City’s portion of the costs of membership in our joint powers authority, SBWMA; and the City fees, which include the City’s solid waste program, street sweeping, litter reduction, and illegal dumping programs, trash capture device maintenance, and franchise fees. The City retains HF&H Consultants (HF&H) to assist in developing a rate structure to fund the cost of solid waste services.

In 2021, the City adopted a long-term plan for incremental adjustment to the residential solid waste rates to bring them into alignment over time with their true cost of service. A phased-in cost-of-service implementation plan was presented to City Council in May 2023 and staff received direction to continue to implement the plan. However, at that time, cost increases for collection services and processing and disposal were unknown, and not factored into the presentation. For 2024, the cost increases for collection, processing, and disposal services are significantly higher than the City has experienced in recent years.

For instance, collection costs in 2024 will increase 9% compared to 2023. Recology’s annual compensation is set by the exclusive franchise agreement between the City and Recology. The agreement was renewed in 2019 and will expire in 2035.

The agreement includes a methodology for allowable increases. These increases are due to high inflationary costs for labor, fuel, and other operating expenses, as well as increases in the number of drivers, additional routes, and route costs due to the increases in organics collection service mandated by Senate Bill 1383 (SB 1383), which requires all customers to have

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separate organic material collection services to keep organic materials out of the landfill. Recology’s annual compensation is reviewed and approved by the Board of Directors of the SBWMA.

Additionally, the processing and disposal fees in 2024 will increase 25% compared to 2023.A competitive bid process conducted by the SBWMA, which included review and approval by City representatives, chose a new operator for the Shoreway Environmental Center where all materials collected by Recology in the City of San Mateo are taken for processing before recycling or disposal. The new operator is SBI, who began as of January 1, 2024. The City has a representative on the Board of Directors of the SBWMA and the former City Finance Director was a member of the SBWMA Finance Committee who reviewed the franchise agreement renewal, and the SBI contract.

Due to uncertain times during the COVID pandemic, the City suspended rate increases for two years. While this was prudent action taken by the Council at the time, this has resulted in the need for higher rate increases for customers to make up the shortfall that has been created.

Maintaining rates at the 2023 level to meet the 2024 projected expenses would lead to an anticipated deficit of $3,880,569.

However, staff worked to lower the deficit to $1,769,277 to lessen the impact on customer rate increases. The proposed reduction is a result of the following actions:

$660,669 from a one-year deferral of Recology collection cost increases which will require City Council approval, at a future meeting, of the “Cap Carry Forward” option identified below.

$517,296 from a one-year reduction in processing and disposal fees from the use of SBWMA rate stabilization funds approved by the SBWMA in September 2023. This cost will need to be covered by San Mateo rate payers in the future- rates yet to be established.

$933,427 by suspending the City’s landfill closure fee and reducing the trash capture device fee to cover only maintenance of existing devices. The landfill closure fee is collected to provide funds to maintain the 3rd Street landfill as required by state mandate. The current balance in the fund is sufficient for current and proposed projects. The trash capture device fee has been collected to pay for the construction of trash capture devices required by a state mandate to reduce trash entering the San Francisco Bay to zero. Funding for current identified trash capture devices has been collected and a reduction in this fee is proposed to cover annual maintenance of the devices.

The collection, processing, and disposal fee reductions are temporary. Suspending collection of the landfill closure fee and trash capture device fee will need to be reviewed annually to fund future projects, if needed.

To establish 2024 customer rate increases, staff recommends the following terms of addressing the revenue shortfall:

1. Adopt the “Cap Carry Forward” option allowed under the City’s franchise agreement which will limit Recology’s compensation to a 5% increase from the previous year’s compensation. This will defer $660,669 of Recology’s compensation until 2025 without incurring interest in the City’s balancing account with Recology. If approved, staff will notify the SBWMA and Recology as required under the franchise agreement. The alternative would require an additional $660,669 to be raised through rates in 2024.

2. Raise the 20-gallon commercial cart rate by $2.85, as shown in Table A. No additional commercial rate increases are recommended because current commercial rates cover their costs. After this increase, all commercial cart rates will meet their true cost of service.

3. Remove the 25% discount on organics collection service subscription offered to all commercial accounts, which has been in place for many years. Under SB 1383, organics subscription is mandated so this incentive is not needed. Further, the current discounted rate does not cover the cost of the collection and processing. This change

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would increase all commercial organics rate, as shown in Table B.

4. Raise residential rates by $5.00, $6.00, or $7.00 per month based on the options presented in Tables C-E and in the chart below. The higher the 2024 rate City Council chooses will lead to lower annual increases in the following years if costs remain consistent with projections within the rate model. Depending on which option the Council authorizes, the Solid Waste Fund has sufficient reserves to reduce the impact on rate payers in 2024. However, the use of reserves acts only as a one-time rate relief as the revenue requirement remains the same going forward into future years.

Tables A and B below summarize the current and proposed 2024 commercial solid waste and organic collection rates, respectively. The subsequent Tables C-E summarize the current and proposed 2024 residential rate options. These rates include collection, processing, and disposal of garbage, recycling, and organics.

Table A – PROPOSED 2024 Commercial Solid Waste Rate Changes Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Cart Rates
20 Gallon Cart $25.49 $28.34 $2.85
32 Gallon Cart $37.18 $37.18 $0.00
64 Gallon Cart $64.26 $64.26 $0.00
96 Gallon Cart $94.47 $94.47 $0.00
Commercial Cart Rates
1 Yard $170.18 $170.18 $0.00
2 Yard $340.45 $340.45 $0.00
3 Yard $510.65 $510.65 $0.00
4 Yard $680.90 $680.90 $0.00
6 Yard $1,021.31 $1,021.31 $0.00

Table B – PROPOSED 2024 Commercial Organic Rate Changes Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Cart Rates
20 Gallon Cart $19.12 $28.34 $9.22
32 Gallon Cart $27.89 $37.18 $9.29
64 Gallon Cart $48.20 $64.26 $16.06
96 Gallon Cart $70.85 $94.47 $23.62
Commercial Cart Rates
1 Yard $127.63 $170.18 $42.54
2 Yard $255.33 $340.45 $85.11
3 Yard $382.99 $510.65 $127.66
4 Yard $510.68 $680.90 $170.23
6 Yard $765.98 $1,021.31 $255.33

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Table C – PROPOSED 2024 Residential Solid Waste Rate Changes ($5/mo. Increase) Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Residential Cart Rates
20 Gallon Cart $23.59 $28.59 $5.00
32 Gallon Cart $32.93 $37.93 $5.00
64 Gallon Cart $58.93 $63.93 $5.00
96 Gallon Cart $89.08 $94.08 $5.00

Table D – PROPOSED 2024 Residential Solid Waste Rate Changes ($6/mo. Increase) Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Residential Cart Rates
20 Gallon Cart $23.59 $29.59 $6.00
32 Gallon Cart $32.93 $38.93 $6.00
64 Gallon Cart $58.93 $64.93 $6.00
96 Gallon Cart $89.08 $95.08 $6.00

Table E – PROPOSED 2024 Residential Solid Waste Rate Changes ($7/mo. Increase) Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Residential Cart Rates
20 Gallon Cart $23.59 $30.59 $7.00
32 Gallon Cart $32.93 $39.93 $7.00
64 Gallon Cart $58.93 $65.93 $7.00
96 Gallon Cart $89.08 $96.08 $7.00

Balancing Account:

In accordance with the City’s franchise agreement, Recology maintains a balancing account which tracks the annual surplus or deficit between what Recology is owed and what the City collects from solid waste rates. Deficits increase the balancing account shortfall and are charged interest. City Council direction has been to keep the balancing account as low as possible to avoid excessive interest charges.

Because the City chose to forego solid waste rate increases in 2020 and 2021 in both residential and commercial sectors due to the pandemic, the City’s balancing account deficit with Recology is over $1 million in arrears. In March, staff will bring forward to the City Council, a resolution requesting authorization to remit payment from the Solid Waste Fund reserves in the approximate amount of $1 million to Recology to reduce the balancing account deficit. This will avoid accruing additional interest on the deficit, and the City will not need to pass interest charges onto rate payers.

Based on discussions with the Finance Department, the Solid Waste Fund has $6.3 million available for rate stabilization and to reduce the balancing account deficit. Beyond use of the recommendation for the $1 million above, staff is requesting Council direction on how to use these reserves in future years. Staff recommends that the Council consider strategically utilizing $4 million in Solid Waste Fund reserves, to be determined each year during the rate setting process, to help offset added costs for service and/or partially offset future rate increases over the next several years. Reserves are proposed to be used in this current year to pay the balancing account deficit as stated above.

Rate Setting Procedures:

While the courts have not ruled that Proposition 218 applies to solid waste collection rates from a franchise hauler, in an

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abundance of caution, the City has historically followed the “majority protest” proceedings set forth in Proposition 218.

Accordingly, with City Council’s direction, a public notification of the proposed maximum increase in solid waste rates will be mailed to property owners no later than February 1, 2024. The notification will instruct property owners wishing to submit a written protest that they must state the purpose of the letter; include the owner or customer’s name, service address, assessor’s parcel number, and the owner’s or customer’s signature for the property served; and mail the statement to the Office of the City Clerk. Statements of protest that include the above criteria will be accepted through the time of the public hearing currently scheduled for the March 18, 2024, City Council meeting.

At the end of the public hearing, the City Clerk will tally and report the qualifying written protests and the City Council will certify whether the written protests in opposition to the increase meet or do not meet the majority protest threshold. In accordance with Article XIIID, Section 6, of the California Constitution, a "majority protest" exists if written protests against the proposed fee or charge are presented by a majority of owners of the identified parcels. If a majority protest is not received, the City Council may then approve adoption of the increased rates. If a majority protest is received, the City cannot increase the rates and the rates will remain unchanged. New rates will be effective April 1, 2024.

BUDGET IMPACT:

The recommendation to authorize staff to mail a notice to all property taxpayers proposing a not-to-exceed increase in solid waste, recycling, and compost collection rates does not have a financial impact. If the proposed rate adjustments are approved, the Solid Waste Fund's revenues will increase toward the goal of aligning all rate classes with the costs of service.

ENVIRONMENTAL DETERMINATION:

This action by the City in setting the maximum rates to be charged by Recology San Mateo County relates to funding an on- going solid waste collection service and is not a project subject to CEQA, because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (CEQA Guidelines Section 15378(b)(4).)

NOTICE PROVIDED
All meeting noticing requirements were met.

ATTACHMENTS
Att 1 – Proposed Public Hearing Notification – 5 dollar Att 2 – Proposed Public Hearing Notification – 6 dollar Att 3 1 Proposed Public Hearing Notification – 7 dollar

STAFF CONTACT
Jack Johnson, Waste Management Supervisor
[email protected]
650-522-7346

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Notice of Public Hearing
Proposed Increase for Solid Waste/Recycling/Compost
Collection for Rate Year 2024

CITY OF SAN MATEO CITY COUNCIL CHAMBERS
330 West 20th Avenue, San Mateo, CA 94403
MARCH 18, 2024, 7:00 P.M.

The City of San Mateo is currently considering an increase to the charges set by the City and collected by Recology for solid waste/recycling/compost collection and disposal. You are receiving this notice because City records indicate that you are a Recology customer in the city.

On March 18, 2024 at 7:00 p.m., or as soon thereafter as the matter may be heard, the San Mateo City Council will hold a Public Hearing to accept public input and testimony on a proposed increase on the maximum allowable charge for solid waste/recycling/compost collection and disposal, to be effective April 1, 2024. Any interested person may present verbal or written input to the City Council. Although the City Council will consider all input, State law provides that only the written protests of property owners may be counted to determine whether a majority protest (50% of all parcels +1) to the proposed maximum exists. If, at the conclusion of the public hearing, a majority protest of property owners does not exist, the City Council will consider adoption of the proposed increase in the maximum allowable charges.

How Solid Waste Rates are Determined
The total cost of the solid waste program includes those for collection services provided by Recology San Mateo County (Recology), processing and disposal services provided by the South Bayside Waste Management Authority (SBWMA), and City fees that support the City’s sustainability goals and efforts to meet all regulatory compliance mandates. These include the solid waste program, street sweeping, litter and illegal dumping abatement, trash capture device management, and franchise fees. Customer rates are adjusted as required to generate enough revenue to cover the cost of the provided services. These services are available to or provided as a benefit to all City of San Mateo residents and commercial businesses. Recommended rates are reviewed by the South Bayside Waste Management Authority Board of Directors based on a financial evaluation of operating costs and projected revenues. Single family residential bills are based on the size of your solid waste cart and cover the cost of collection, processing, and disposal of solid waste, recycling, and organic material. Commercial and multi-family bills are based on the size of your solid waste container and frequency of collection (e.g., 1 time per week, 2 times per week) and covers the cost of collecting solid waste and recycling. In addition, commercial and multi-family bills include a charge for organic material collections based on the size and frequency of collection of the organic material container.

Proposed Rate Increases
The proposed change is directly related to the significant increases to Recology collection costs and disposal and processing costs due to: a new contracted operator at the Shoreway Environmental Center which have caused costs to exceed revenues; increases due to high inflationary costs for labor, fuel, and other operating expenses, and; increases in the number of drivers, additional routes, and route costs due to increases in organics collection service mandated by Senate Bill 1383 (SB 1383), which requires all customers to have separate organic material

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collection services. In addition, the proposed rate changes reflect the need for all rates to cover the cost of the actual services provided.

Impact of Proposed Increase on Solid Waste Bills
The following chart illustrates the monthly rates, including all City fees, for residential services and the most common service level rates for commercial customers. Residential cart rate increases for all carts will increase $5.00. Rates charged to commercial garbage customers with a 20-gallon cart will increase $2.85. All other Commercial/Multi-family garbage rates for larger containers or metal bin service rates will remain flat.

Commercial/Multi-family Organics Collection rates will increase so that the cost of each organic cart or bin is equal to the commercial garbage rate and meets the actual cost to provide the service. The full rate schedule, including all commercial services, is available for review at www.cityofsanmateo.org/SolidWasteRates or at the City Clerk’s Office at 330 West 20th Avenue, San Mateo.

Recology provides additional services upon request that are not included in the City’s solid waste collection rate.

Additional services include backyard or distance service, additional carts, and extra on-call pickups of bulk items.

The fees for optional services will appear on the customer’s Recology San Mateo County bill as separate line items in addition to the standard cost of collection. A complete list of all the additional services and their 2024 cost is available at www.cityofsanmateo.org/SolidWasteRates or at the City Clerk’s Office located at 330 W. 20th Avenue, San Mateo. For questions, please call the City of San Mateo, Public Works Department at 650-522- 7346.

Residential and Commercial/Multi-family Garbage Collection (Single family homes are billed quarterly, assuming service one time per week, commercial customers billed monthly) Size of
Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Residential Cart Rates
20 Gallon Cart $23.59 $28.59 $5.00
32 Gallon Cart $32.93 $37.93 $5.00
64 Gallon Cart $58.93 $63.93 $5.00
96 Gallon Cart $89.08 $94.08 $5.00
Commercial Cart Rates
20 Gallon Cart $25.49 $28.34 $2.85
32 Gallon Cart $37.18 $37.18 $0.00
64 Gallon Cart $64.26 $64.26 $0.00
96 Gallon Cart $94.47 $94.47 $0.00
Commercial Rates
1 Yard $170.18 $170.18 $0.00
2 Yard $340.45 $340.45 $0.00
3 Yard $510.65 $510.65 $0.00
4 Yard $680.90 $680.90 $0.00
6 Yard $1,021.31 $1,021.31 $0.00

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Commercial/Multi-family Organics Collection (Commercial customers billed monthly) Size of
Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Organics Cart Rates
20 Gallon Cart $19.12 $28.34 $9.22
32 Gallon Cart $27.89 $37.18 $9.29
64 Gallon Cart $48.20 $64.26 $16.06
96 Gallon Cart $70.85 $94.47 $23.62
Commercial Organics Bin Rates
1 Yard $127.63 $170.18 $42.54
2 Yard $255.33 $340.45 $85.11
3 Yard $382.99 $510.65 $127.66
4 Yard $510.68 $680.90 $170.23
6 Yard $765.98 $1,021.31 $255.33
How to Protest the Rate Increase
A property owner or Recology customer may submit a written protest to the proposed increase in maximum rates to be charged by the City’s franchisee by U.S. mail, to be received prior to the meeting date, or hand delivered to the City Clerk, at any time before the end of the public hearing. The City Clerk’s address is: 330 West 20th Avenue, San Mateo, CA 94403. Only one protest per parcel will be counted. Written protest must include the owner or customer’s name, service address, assessor’s parcel number (the nine-digit number that appears on your property tax statement) and the owner’s or customer’s signature for the property served. While protests may not be submitted by electronic means such as email or texts, as they are not an official rate protest mechanism under Proposition 218, the City values all residential input and will read all correspondence regarding rates.

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Notice of Public Hearing
Proposed Increase for Solid Waste/Recycling/Compost
Collection for Rate Year 2024

CITY OF SAN MATEO CITY COUNCIL CHAMBERS
330 West 20th Avenue, San Mateo, CA 94403
MARCH 18, 2024, 7:00 P.M.

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collection services. In addition, the proposed rate changes reflect the need for all rates to cover the cost of the actual services provided.

Impact of Proposed Increase on Solid Waste Bills
The following chart illustrates the monthly rates, including all City fees, for residential services and the most common service level rates for commercial customers. Residential cart rate increases for all carts will increase $7.00. Rates charged to commercial garbage customers with a 20-gallon cart will increase $2.85. All other Commercial/Multi-family garbage rates for larger containers or metal bin service rates will remain flat.

Recology provides additional services upon request that are not included in the City’s solid waste collection rate.

Additional services include backyard or distance service, additional carts, and extra on-call pickups of bulk items.

Residential and Commercial/Multi-family Garbage Collection (Single family homes are billed quarterly, assuming service one time per week, commercial customers billed monthly) Size of
Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Residential Cart Rates
20 Gallon Cart $23.59 $30.59 $7.00
32 Gallon Cart $32.93 $39.93 $7.00
64 Gallon Cart $58.93 $65.93 $7.00
96 Gallon Cart $89.08 $96.08 $7.00
Commercial Cart Rates
20 Gallon Cart $25.49 $28.34 $2.85
32 Gallon Cart $37.18 $37.18 $0.00
64 Gallon Cart $64.26 $64.26 $0.00
96 Gallon Cart $94.47 $94.47 $0.00
Commercial Rates
1 Yard $170.18 $170.18 $0.00
2 Yard $340.45 $340.45 $0.00
3 Yard $510.65 $510.65 $0.00
4 Yard $680.90 $680.90 $0.00
6 Yard $1,021.31 $1,021.31 $0.00

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Commercial/Multi-family Organics Collection (Commercial customers billed monthly) Size of
Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Organics Cart Rates
20 Gallon Cart $19.12 $28.34 $9.22
32 Gallon Cart $27.89 $37.18 $9.29
64 Gallon Cart $48.20 $64.26 $16.06
96 Gallon Cart $70.85 $94.47 $23.62
Commercial Organics Bin Rates
1 Yard $127.63 $170.18 $42.54
2 Yard $255.33 $340.45 $85.11
3 Yard $382.99 $510.65 $127.66
4 Yard $510.68 $680.90 $170.23
6 Yard $765.98 $1,021.31 $255.33
How to Protest the Rate Increase
A property owner or Recology customer may submit a written protest to the proposed increase in maximum rates to be charged by the City’s franchisee by U.S. mail, to be received prior to the meeting date, or hand delivered to the City Clerk, at any time before the end of the public hearing. The City Clerk’s address is: 330 West 20th Avenue, San Mateo, CA 94403. Only one protest per parcel will be counted. Written protest must include the owner or customer’s name, service address, assessor’s parcel number (the nine-digit number that appears on your property tax statement) and the owner’s or customer’s signature for the property served. While protests may not be submitted by electronic means such as email or texts, as they are not an official rate protest mechanism under Proposition 218, the City values all residential input and will read all correspondence regarding rates.

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Notice of Public Hearing
Proposed Increase for Solid Waste/Recycling/Compost
Collection for Rate Year 2024

CITY OF SAN MATEO CITY COUNCIL CHAMBERS
330 West 20th Avenue, San Mateo, CA 94403
MARCH 18, 2024, 7:00 P.M.

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collection services. In addition, the proposed rate changes reflect the need for all rates to cover the cost of the actual services provided.

Impact of Proposed Increase on Solid Waste Bills
The following chart illustrates the monthly rates, including all City fees, for residential services and the most common service level rates for commercial customers. Residential cart rate increases for all carts will increase $6.00. Rates charged to commercial garbage customers with a 20-gallon cart will increase $2.85. All other Commercial/Multi-family garbage rates for larger containers or metal bin service rates will remain flat.

Recology provides additional services upon request that are not included in the City’s solid waste collection rate.

Additional services include backyard or distance service, additional carts, and extra on-call pickups of bulk items.

Residential and Commercial/Multi-family Garbage Collection (Single family homes are billed quarterly, assuming service one time per week, commercial customers billed monthly) Size of
Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Residential Cart Rates
20 Gallon Cart $23.59 $29.59 $6.00
32 Gallon Cart $32.93 $38.93 $6.00
64 Gallon Cart $58.93 $64.93 $6.00
96 Gallon Cart $89.08 $95.08 $6.00
Commercial Cart Rates
20 Gallon Cart $25.49 $28.34 $2.85
32 Gallon Cart $37.18 $37.18 $0.00
64 Gallon Cart $64.26 $64.26 $0.00
96 Gallon Cart $94.47 $94.47 $0.00
Commercial Rates
1 Yard $170.18 $170.18 $0.00
2 Yard $340.45 $340.45 $0.00
3 Yard $510.65 $510.65 $0.00
4 Yard $680.90 $680.90 $0.00
6 Yard $1,021.31 $1,021.31 $0.00

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Commercial/Multi-family Organics Collection (Commercial customers billed monthly) Size of
Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Organics Cart Rates
20 Gallon Cart $19.12 $28.34 $9.22
32 Gallon Cart $27.89 $37.18 $9.29
64 Gallon Cart $48.20 $64.26 $16.06
96 Gallon Cart $70.85 $94.47 $23.62
Commercial Organics Bin Rates
1 Yard $127.63 $170.18 $42.54
2 Yard $255.33 $340.45 $85.11
3 Yard $382.99 $510.65 $127.66
4 Yard $510.68 $680.90 $170.23
6 Yard $765.98 $1,021.31 $255.33
How to Protest the Rate Increase
A property owner or Recology customer may submit a written protest to the proposed increase in maximum rates to be charged by the City’s franchisee by U.S. mail, to be received prior to the meeting date, or hand delivered to the City Clerk, at any time before the end of the public hearing. The City Clerk’s address is: 330 West 20th Avenue, San Mateo, CA 94403. Only one protest per parcel will be counted. Written protest must include the owner or customer’s name, service address, assessor’s parcel number (the nine-digit number that appears on your property tax statement) and the owner’s or customer’s signature for the property served. While protests may not be submitted by electronic means such as email or texts, as they are not an official rate protest mechanism under Proposition 218, the City values all residential input and will read all correspondence regarding rates.

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Request of Council
• Provide direction on:
• Residential rate increase-- $5, $6, or $7
• Commercial rate increases
• 20 gallon cart increase of $2.85
• Removing organics discount
• Authorize staff to mail a Prop 218 notice to all property taxpayers proposing a not-to-exceed increase in solid waste, recycling, and compost collection rates for 2024
• Provide direction on future use of Solid Waste Fund reserves 2 245 of 266

The Solid Waste Process & What Rates Cover
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Annual Rate Review Process
• Council reviews and approves fees for
all solid waste services
• City follows CA Prop 218 process
• Rates must be based on cost-of-
service
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Background
• 2006 progressive “Pay as You Throw” system adopted
• 2016 & 2022 State imposed recycling and organics mandates • Proposition 218 - “...fees and charges must be proportional to the cost of providing the service attributable to the parcel…”
• Large cost increases in 2024
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2024 Revenue Requirement
▪ Recology collection costs are increasing 9% for 2024
▪ Increase is approximately $1.4 million over 2023
▪ Inflationary increases allowed in the franchise agreement ▪ Disposal and Processing costs are increasing 25%
▪ Increase is approximately $ 2.2 million over 2023
▪ New operator, SBI, took over site operations January 1 ▪ City Fees – solid waste program, street sweeping, franchise fees ▪ Decreased approximately $933,000 from 2023
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2024 Revenue Requirement Adjusted
$2.1 M reduced
▪ One-year deferral of
Recology increases
▪ $660k saved
▪ 2024 temporary reduction
in tipping fees by SBWMA
▪ $517k saved
▪ Reduced City expenses,
fees collected from
Recology
▪ $933k savedRemaining 2024 deficit
Original
2024 Revenue Requirement Projections Projections $ Variance 1 Collection Costs
2 Recology's Base Compensation $17,075,363 $17,075,363 $0 3 Cap Carry Forward Deferral $0 ($660,669) ($660,669)
4 Incentives/Disincentives ($29,961) ($29,961) $0
5 Total Collection Costs - Recology Comp. $17,045,402 $16,384,733 ($660,669) 6 Disposal/Processing Fees $10,345,929 $10,345,929 $0
7 (Less) 2024 rate stabilization- 5% savings $0 ($517,296) ($517,296) 8 City Expenses $5,421,081 $4,487,654 ($933,427)
9 Total Revenue Requirement $32,812,412 $30,701,020 ($2,111,392) 10 Projected Revenue at Current Rates $28,931,843 $28,931,843 $0 11 Revenue Surplus/(Shortfall) ($3,880,569) ($1,769,177) $2,111,392 7 250 of 266

2024 Revenue Requirement
▪ Recology maintains a balancing account payable to (or from) the City at the expiration of the agreement
▪ Interest is charged to the City if the cumulative balance goes negative Revenue >
Approved cost
of service
Revenue ˂
Approved
cost of
service
Balancing Account Increases
Balancing Account Decreases
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Existing Balancing Account Deficit
Balancing Account Projection
Surplus/
(Shortfall)
2021 Reconciliation ($473,576)
2022 Reconciliation $157,710
2023 Reconciliation (projected) ($760,530)
Estimated 2023 Balance Accrued/(Owed) ($1,076,396)
▪ City is carrying an existing deficit before revenue shortfall of $1M in 2024 is incorporated. 9 252 of 266

Commercial Rate Increases Proposed
• Increase 20-gallon cart $2.85/ mo.

Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Solide Waste Cart Rates
20 Gallon Cart $25.49 $28.34 $2.85
32 Gallon Cart $37.18 $37.18 $0.00
64 Gallon Cart $64.26 $64.26 $0.00
96 Gallon Cart $94.47 $94.47 $0.00
Commercial Solid Waste Rates
1 Yard $170.18 $170.18 $0.00
2 Yard $340.45 $340.45 $0.00
3 Yard $510.65 $510.65 $0.00
4 Yard $680.90 $680.90 $0.00
6 Yard $1,021.31 $1,021.31 $0.00 • Remove Comm Organics rates discount. 10 Size of Collection
Cart/Bin
2023 Current
Monthly Rate
Proposed 2024
Monthly Rate
Monthly
Difference
Commercial Organics Cart Rates
32 Gallon Cart $27.89 $37.18 $9.29
64 Gallon Cart $48.20 $64.26 $16.06
96 Gallon Cart $70.85 $94.47 $23.62
Commercial Organics Rates
1 Yard $127.63 $170.18 $42.54
2 Yard $255.33 $340.45 $85.11
3 Yard $382.99 $510.65 $127.66
4 Yard $510.68 $680.90 $170.23
6 Yard $765.98 $1,021.31 $255.33

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2024 Solid
Waste Rate
Realignment
Process
To meet Cost of Service:
• 2023
• 20-gal needed a 152% increase
• 32-gal needed a 90% increase
• 64-gal needed a 33% increase
• 96-gal needed a 13% increase
• Gradual re-alignment over next 8-10 years
Single Family Residential
Residential Solid Current Rate COS Rate Difference
Waste Rates ($/mo.) ($/mo.) $ %
20-gallon $23.59 $54.05 $30.46 129%
32-gallon $32.93 $60.59 $27.66 84%
64-gallon $58.93 $81.47 $22.54 38%
96-gallon $89.08 $105.77 $16.69 19%
• 20-gal accounts: 3,993 (19.3%)
• 32-gal accounts: 11,667 (56.3%)
• 64-gal accounts: 4,407 (21.3%)
• 96-gal accounts: 654 (3.1%) 11

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Three Options to increase Residential Rates and
Address Cost of Service
Each option would achieve the following:
• Use Solid Waste reserves to reduce increases to ratepayers • Align rates closer to the cost of service
• Allow the City to generate revenues to meet expenses by rate year 2028. 2024 Rate Increase Options $7/Mo Increase $6/Mo Increase $5/Mo Increase First Year Increase to Residential Rates (2024) $7.00 $6.00 $5.00 Annual Increases (2025-2028) $5.89 $6.17 $6.41
5-Year Cumulative Increase to Residential Rates $29.58 $30.68 $30.64 Amount of SW Fund Reserves Used (2024-2028) $1,500,000 $1,850,000 $2,210,000 12 255 of 266

City Solid Waste Reserve Fund
▪ Available June 30, 2023 Balance: $6.2 million
▪ City plans to use $1M in reserves in 2024 to reduce historical balancing account. ▪ City plans to use up to $3M in future years to reduce rate increases and mitigate balancing account deficit.
▪ City recommended to keep $2M in reserves for two reasons:

1. Replace current street sweepers.

2. City recommended to keep $1.6M or 6 months of solid waste expenses in reserves. 13 256 of 266

Three Options to increase Residential Rates and
Address Cost of Service
Each option would achieve the following:
• Use Solid Waste reserves to reduce increases to ratepayers • Align rates closer to the cost of service
• Allow the City to generate revenues to meet expenses by rate year 2028.
• Reduce the balancing account deficit.
$7/Mo Increase $6/Mo Increase $5/Mo Increase
Size of Collection
Cart/Bin
Customer
Accounts
2023 Current
Monthly Rate
2024
COS Rate
Proposed 2024
Monthly Rate
Proposed 2024
Monthly Rate
Proposed 2024
Monthly Rate
20 Gallon 3,993 $23.59 $54.05 $30.59 $29.59 $28.59
32 Gallon 11,667 $32.93 $60.59 $39.93 $38.93 $37.93
64 Gallon 4,407 $58.93 $81.47 $65.93 $64.93 $63.93
96 Gallon 654 $89.08 $105.77 $96.08 $95.08 $94.08
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Residential Rate Comparison (20-gallon)
$16.13
$22.58
$23.59
$23.87
$29.59
$30.81
$36.22
$36.74
$36.79
$39.31
$54.00
$60.89
Burlingame
Foster City (2024)
San Mateo (Current)
Redwood City
San Mateo (Proposed)
San Carlos
Belmont
Unincorporated County
No. Fair Oaks
Menlo Park
West Bay SD (2024)
Hillsborough (2024)
Average = $34.63
*All current rates reflect
2023 unless noted.
$6/month increase
assumed for San Mateo.
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Residential Rate Comparison (32-gallon)
*All current rates reflect
2023 unless noted.
$6/month increase
assumed for San Mateo.
$29.83
$32.92
$32.93
$36.79
$38.86
$38.93
$43.21
$43.67
$46.04
$47.64
$61.00
$67.65
Burlingame
Foster City (2024)
San Mateo (Current)
No. Fair Oaks
Redwood City
San Mateo (Proposed)
Belmont
Unincorporated County
San Carlos
Menlo Park
West Bay SD (2024)
Hillsborough (2024)
Average = $43.69
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Residential Rate Comparison (64-gallon)
*All current rates reflect
2023 unless noted.
$6/month increase
assumed for San Mateo.
$58.93
$59.66
$60.42
$61.84
$64.43
$64.93
$67.20
$67.22
$70.11
$78.75
$85.06
$88.32
San Mateo (Current)
Burlingame
Foster City (2024)
No. Fair Oaks
Unincorporated County
San Mateo (Proposed)
Redwood City
Menlo Park
San Carlos
West Bay SD (2024)
Belmont
Hillsborough (2024)
Average = $69.27
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Residential Rate Comparison (96-gallon)
*All current rates reflect
2023 unless noted.
$6/month increase
assumed for San Mateo.
$70.15
$84.14
$87.95
$88.00
$88.54
$89.08
$90.59
$95.08
$95.31
$105.00
$114.94
$127.59
Menlo Park
No. Fair Oaks
Foster City (2024)
Unincorporated County
Burlingame
San Mateo (Current)
San Carlos
San Mateo (Proposed)
Redwood City
West Bay SD (2024)
Hillsborough (2024)
Belmont
Average = $94.66
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Solid Waste Rates - Summary
• Rates must cover the cost of solid waste services
• Rates cannot be progressively “pay-as-you-throw”
• Proposed 2024 rates move the City closer to compliance • Additional increases will be needed in future years
• Rates are still below many jurisdictions
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Solid Waste Rates – Summary of 2024 Rate Proposal
• Rate Increases recommended to Council
• Increase Commercial Solid Waste 20-gallon cart rate by $2.85/month. • Remove Commercial Organics discount for all containers • Organics rates = Solid Waste rates for each container size • Increase Residential rates by $7,$6, or $5/month.
• Council to Remit $1M to Recology to reduce balancing account deficit in 2024. Action to be taken in March.
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Rate Adoption Timeline
• January 16, 2024: Council approval to mail public notice • February 2, 2024: 45-day public notice mailing deadline • March 18, 2024: City Council Public Hearing
• April 1, 2024: Rates effective, if adopted
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www.cityofsanmateo.org/publicworks
Stewards of your infrastructure
330 W. 20th Avenue
San Mateo, CA 94403
650-522-7300
Thank you for your time.

You can reach me at:
[email protected]
(650) 522-7303
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San Mateo City CouncilJanuary 16, 2024

San Mateo City Council
January 16, 2024