1 Rick Simonson, Senior Vice President, HF&H Consultants Gabe Sasser, Project Manager, HF&H Consultants
Request of Council
• Conduct the 218 Protest Hearing
• If a majority protest does not exist, approve the 2025 solid waste collection rates included in the Prop 218 notice and available on the City’s website
• Approve the appropriation of $400,000 to Recology to reduce the balancing account
2 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
3 The Solid Waste Process & What Rates Cover
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…”
5 2025 Revenue Requirement
6 Recology collection costs are increasing 8% for 2025 Inflationary increases allowed in the franchise agreement Additional increases from 2024 cap carry forward amount Disposal and Processing costs are increasing 7%
Increase is approximately $700,000 over 2024
5% due to deferred 2024 cost increase paid for with SBWMA rate stabilization funds City Fees – solid waste program, street sweeping, franchise fees Decreased approximately $177,000 from 2024
Suspended annual collection of landfill closure fees and trash capture device funding 2025 Revenue Requirement Adjusted
7 Revenue Increases/
Reserves Required to
Address Shortfall
2025 Revenue Requirement Projections
1 Collection Costs
2 Recology's Base Compensation $17,768,415
3 2025 Cap Carry Forward Deferral ($331,333)
4 2024 Cap Carry Amount $492,047
5 Incentives/Disincentives ($24,633)
6 Total Collection Costs $17,904,496
7 Disposal Processing Fees $11,219,103
8 City Expenses $4,322,656
9 Total Revenue Requirement $33,446,255
10 Projected Revenue at Current Rates $31,864,894
11 Revenue Surplus/(Shortfall) ($1,581,360)
2025 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
9 With the 2025 shortfall, the City faces a cumulative shortfall of $1.8 million.
Balancing Account Projection
Surplus/
(Shortfall)
2021 Reconciliation ($473,576)
2022 Reconciliation $157,710
2023 Reconciliation ($587,411)
2024 Reconciliation (projected) ($318,771)
Estimated 2024 Balance Accrued/(Owed) ($1,222,048)
Use of Reserves per 2024 Council Direction $1,000,000
Total Balance Accrued/(Owed) as of 2024 ($222,048)
2025 Shortfall (projected) ($1,581,360)
Total Balance Accrued/(Owed) as of 2025 ($1,803,408)
10 1. Increase revenues by addressing rates that do not meet the cost of service.
Adjust Commercial Solid Waste Cart Rates.
Adjust Commercial Organics Cart Rates.
Adjust Residential Rates.
2. Remit $400K to Recology in 2025 from City’s reserves. City’s $4.4 M in reserves for the purpose of rate stabilization during COS implementation.
Steps to Address $1.8M Revenue Shortfall
Recommended Increase to Commercial Solid Waste and
Organics Cart Rates and to Address Cost of Service
11 Note: No increase is proposed for Commercial bins (containers 1 CY and larger).
Commercial
Solid Waste Proposed Proposed Rate
Accounts Cart Size Increases ($/mo.)
80 20-gallon $6.50 $34.84
802 32-gallon $5.75 $42.93
323 64-gallon $0.00 $64.26
835 96-gallon $0.00 $94.47
Revenue Added: $93,287
Commercial
Organics Proposed Proposed Rate
Accounts Cart Size Increases ($/mo.)
22 20-gallon $6.50 $34.84
442 32-gallon $5.75 $42.93
530 64-gallon $0.00 $64.26
159 96-gallon $0.00 $94.47
Revenue Added: $32,751
2025 Solid
Waste Rate
Realignment
Process
Long Term Plan to Realign Rates to Cost of Service which began in 2021 Current Residential Subscriptions
• 20-gal accounts: 4,068 (19.5%)
• 32-gal accounts: 11,465 (55.1%)
• 64-gal accounts: 4,579 (22.0%)
• 96-gal accounts: 697 (3.3%) 12
0%
50%
100%
150%
200%
2022 2023 2024 2025
% Variance from COS Rate
% Progress Toward COS Over Time
20-gal 32-gal 64-gal 96-gal
Residential Solid Waste Current Rate COS Rate Difference Cart Size ($/mo.) ($/mo.) $ %
20-gallon $28.59 $57.57 $28.98 101%
32-gallon $37.93 $64.14 $26.21 69%
64-gallon $63.93 $85.07 $21.14 33%
96-gallon $94.08 $109.41 $15.33 16%
Proposed Increase to Residential Rates and
to Address Cost of Service
Proposal would achieve the following:
• Use Solid Waste reserves to reduce
increases to ratepayers
• Align rates closer to the cost of service
13 Current Residential Subscriptions
• 20-gal accounts: 4,068 (19.5%)
• 32-gal accounts: 11,465 (55.1%)
• 64-gal accounts: 4,579 (22.0%)
• 96-gal accounts: 697 (3.3%)
Residential Solid Waste Proposed Proposed Rate
Cart Size Increases ($/mo.)
20-gallon $7.50 $36.09
32-gallon $8.00 $45.93
64-gallon $8.50 $72.43
96-gallon $9.00 $103.08
Residential Rate Comparison (20-gallon)
*All current rates reflect
2025 unless noted.
Average excludes
proposed San Mateo rate.
$7.50/month increase
assumed for San Mateo.
14 $27.32
$28.59
$32.19
$33.65
$36.09
$38.87
$41.03
$45.62
$46.02
$50.31
$56.43
$63.63
Foster City
San Mateo (current)
Burlingame
San Carlos
San Mateo (proposed)
Redwood City
Belmont
Unincorporated County
No. Fair Oaks
Menlo Park
West Bay SD
Hillsborough
Cost of Service = $57.57
Residential Rate Comparison (32-gallon)
15 *All current rates reflect
2025 unless noted.
Average excludes
proposed San Mateo rate.
$8.00/month increase
assumed for San Mateo.
$35.76
$37.66
$37.93
$45.93
$46.02
$48.95
$50.27
$52.86
$54.22
$58.64
$63.75
$70.69
Burlingame
Foster City
San Mateo (current)
San Mateo (proposed)
No. Fair Oaks
Belmont
San Carlos
Redwood City
Unincorporated County
Menlo Park
West Bay SD
Hillsborough
Cost of Service = $64.14
Residential Rate Comparison (64-gallon)
16 *All current rates reflect
2025 unless noted.
Average excludes
proposed San Mateo rate.
$8.50/month increase
assumed for San Mateo.
$63.93
$65.16
$71.54
$72.43
$73.93
$76.56
$77.36
$80.00
$80.20
$82.29
$92.29
$96.36
San Mateo (current)
Foster City
Burlingame
San Mateo (proposed)
Menlo Park
San Carlos
No. Fair Oaks
Unincorporated County
Redwood City
West Bay SD
Hillsborough
Belmont
Cost of Service = $85.07
Residential Rate Comparison (96-gallon)
17 *All current rates reflect
2025 unless noted.
Average excludes
proposed San Mateo rate.
$9.00/month increase
assumed for San Mateo.
$92.21
$92.69
$94.08
$98.93
$103.08
$105.26
$106.16
$107.10
$107.31
$109.27
$120.11
$144.54
Menlo Park
Foster City
San Mateo (current)
San Carlos
San Mateo (proposed)
No. Fair Oaks
Burlingame
West Bay SD
Redwood City
Unincorporated County
Hillsborough
Belmont
Cost of Service = $109.41
City Solid Waste Reserve Fund
Available June 30, 2024 Balance: $4.4 million
City plans to use $400K in reserves in 2025 to reduce historical balancing account. City plans to use additional reserves in future years to reduce rate increases and mitigate balancing account deficit.
18 Solid Waste Rates - Summary
19 • Rates must cover the cost of solid waste services
• Rates can not be progressively “pay-as-you-throw”
• Proposed 2025 rates move the City closer to compliance • Additional increases will be needed in future years
• SBWMA Capital Improvements
• Zero Emission Vehicles Infrastructure
• SB 54
Solid Waste Rates – Summary of 2025 Rate Proposal
• Rate Increases Provided in Proposition 218 Notice
• Maximum revenue added from rate increases: $1.63 million • Council to Remit $400k to Recology to reduce balancing account deficit in 2025.
20 Commercial
Solid Waste Proposed Proposed Rate
Accounts Cart Size Increases ($/mo.)
80 20-gallon $6.50 $34.84
802 32-gallon $5.75 $42.93
323 64-gallon $0.00 $64.26
835 96-gallon $0.00 $94.47
Revenue Added: $93,287
Commercial
Organics Proposed Proposed Rate
Accounts Cart Size Increases ($/mo.)
22 20-gallon $6.50 $34.84
442 32-gallon $5.75 $42.93
530 64-gallon $0.00 $64.26
159 96-gallon $0.00 $94.47
Revenue Added: $32,751
Residential Solid Waste Proposed Proposed Rate
Cart Size Increases ($/mo.)
20-gallon $7.50 $36.09
32-gallon $8.00 $45.93
64-gallon $8.50 $72.43
96-gallon $9.00 $103.08
Revenue Added: $1,506,821
Rate Adoption Timeline
21 13 Jan. 2025
Council approval to mail public notice
17 Jan. 2025
45-day public notice mailing deadline
3 Mar. 2025
City Council Public Hearing
1 Apr. 2025
Rates effective, if adopted
Request of Council
• Conduct the 218 Protest Hearing
• If a majority protest does not exist, approve the 2025 solid waste collection rates included in the Prop 218 notice and available on the City’s website
• Approve the appropriation of $400,000 to Recology to reduce the balancing account
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) 522-7346
23