1 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 The Solid Waste Process & What Rates Cover
3 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
4 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
5 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
6 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 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
8 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 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 $255.33
2024 Solid
Waste Rate
Realignment
Process
To meet Cost of Service:
• 2023
• 20-gal needed a 152% increase
• 32-gal needed a 90% increase
• 64-gal needed a 33% increase
• 96-gal needed a 13% increase
• Gradual re-alignment over next 8-10 years
Single Family Residential
Residential Solid Current Rate COS Rate Difference
Waste Rates ($/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
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 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 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
14 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.
15 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
16 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
17 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
18 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
19 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.
20 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
21 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 22 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
23