cabee64e-3.a-marin-sanitary-service-franchise-amendments — San Rafael City Council, April 20, 2026

____________________________________________________________________________

FOR CITY CLERK ONLY
Council Meeting:

Disposition:

Agenda Item No: 3.a
Meeting Date: April 20, 2026

SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: City Manager
Prepared by: Cory Bytof,
Sustainability Program Manager
City Manager Approval: __________
TOPIC: MARIN SANITARY SERVICE FRANCHISE AMENDMENTS
SUBJECT: A RESOLUTION ADOPTING A FEE STUDY FOR THE CITY’S COST OF SOLID WASTE SERVICES FEE AND THE CITY’S FRANCHISE FEE FOR THE USE OF CITY PROPERTY IN THE PROVISION OF SOLID WASTE RELATED SERVICES; (2) REPEALING THE CITY’S IMPOSITION OF THE REFUSE VEHICLE IMPACT FEE; AND (3) DECREASING THE CITY’S COST OF SERVICE FEE AND FRANCHISE FEE IMPOSED ON MARIN SANITARY SERVICES: CEQA DETERMINATION: EXEMPT PURSUANT TO CEQA GUIDELINE 15378(b)(4)

A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT

TO THE FRANCHISE AGREEMENT WITH MARIN SANITARY SERVICE TO REQUIRE

STREET SWEEPING SERVICES, AND TO CLARIFY AUTHORIZATION TO ENCROACH

UPON PUBLIC RIGHT-OF-WAY, AND FOR THE CITY TO IMPOSE A FEE FOR RIGHT

OF ENCROACHMENT
RECOMMENDATION:

Staff recommends that the City Council adopt a

1. Resolution adopting a Fee Study for the City’s Cost of Solid Waste Services (“Cost of Service”) Fee and the City’s Franchise Fee for the use of City property in the provision of solid waste related services; repealing the City’s imposition of the Refuse Vehicle Impact Fee, and decreasing the City’s Cost of Service and Franchise Fees imposed on Marin Sanitary Service.

2. Resolution authorizing the City Manager to execute an amendment to the Franchise Agreement with Marin Sanitary Service to require street sweeping services, and to clarify authorization to encroach upon public right-of-way, and for the City to impose a fee for right of encroachment.

BACKGROUND:

Franchise Agreement, Franchise Fees, and Franchisors’ Group Article XI of the California Constitution and the California Public Resources Code allows cities to regulate refuse and recycling services. Marin Sanitary Service is the City’s sole refuse provider and provides refuse, recycling, and organic materials collection for all residents and businesses in San Rafael, as well SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
as for several other jurisdictions in Marin. The City has a Franchise Agreement with Marin Sanitary Service that outlines the terms of the agreement, the services they provide, and how rates are calculated and adjusted periodically. The City Council adopted the last amendment to the Franchise Agreement on November 4, 2024.

In 2023, the City conducted a Franchise Fee Study to determine the appropriate amount of fees the City can collect based on the City’s actual costs and property use charges, which resulted in a total of $3,077,000 for calendar year 2024. In addition, the Fee Study calculated the City’s Refuse Vehicle Impact Fee based on common vehicle impact calculations. The City Council adopted this Fee Study on December 18, 2023.

Marin Sanitary Service also provides other refuse services, including street sweeping, which they conduct for several Marin cities and towns, including the City of Larkspur and the Town of Fairfax. They do not currently provide this service for the City of San Rafael. The San Rafael Public Works Department provides street sweeping services for residential and commercial areas to reduce the amount of debris that enters the City’s storm drains, which can clog and cause flooding during storms. Historically, the majority of material entering these storm drains is refuse-related, including plastic and other trash. The services currently provided by the City are insufficient to meet demand.

ANALYSIS:

This year, the City’s consultant, R3 Consulting Group, Inc., updated the City’s 2023 Franchise Fee Study to reflect current costs of service and values of property used for storage and collection of refuse containers. R3’s fee calculations are set forth in the Solid Waste Costs and Property Use Charge Study Report. New maximum authorized fee amounts are shown in the Study, included as Attachment 2. City staff recommends reducing the Cost of Service Fee by $32,401 to $1,913,000 and retaining the Franchise Fee at $1,216,000, the same level as last year.

In addition to these updates, Rogers v. City of Redlands (2025) 112 Cal.App.5th 667, 673-76 recently held that Vehicle Code Section 9400.8 prohibits a city from charging a fee for the use of its roadways.

Based on this decision, Marin Sanitary Service has stopped making payments to the City for revenue generated by the Refuse Vehicle Impact Fee, effective January 1, 2026. Accordingly, staff is recommending rescinding the Refuse Vehicle Impact fee. Revenue collected through this fee have been used to support the City’s annual Pavement Maintenance Program. One-time funding has been identified to partially back-fill for the loss of this revenue source through FY2026-27.

In consultation with the Public Works Department and the Finance Department, the City has determined it would be beneficial to require street sweeping in Marin Sanitary Service’s provision of services to the City to supplement the current street sweeping conducted by the City to meet resident and business expectations. Currently, the City Public Works Department must divert staff time from other duties to conduct street sweeping and is still unable to meet regulations and demands requiring the City to prevent trash from entering the storm drain system. Having Marin Sanitary Service provide residential street sweeping services, in addition to the street sweeping services that the City will continue to provide, would allow the City to increase services in commercial and industrial areas to meet compliance and demand.

This change requires an amendment to the current Franchise Agreement.

Since this would not start until mid-year and would only cover a partial year, the cost for adding street sweeping services to the Marin Sanitary Service rates for 2026 would be roughly $56,337. It has been determined that no adjustment to the current Marin Sanitary Service rates will be necessary to fund street sweeping services at this time, as the rates currently support such a move. Marin Sanitary Service will track the costs, and any potential overages could be reconciled in the 2027 rate application. In 2027, the cost would increase to approximately $97,000 per year as the service would be provided for a full twelve months. In 2027 and future years, the rate impact would be less than 0.5% added to the rates.

SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
Each year, Marin Sanitary Service submits a rate application to the City that calculates costs and revenues as well as projections for the coming year’s customer rates. This is based on the rate setting methodology found in Exhibit B of the Franchise Agreement the City has with Marin Sanitary Service and is reviewed by R3 Consulting Group, Inc. Owing to the repeal of the Refuse Vehicle Impact Fees imposed by the City on Marin Sanitary Service, no adjustment to solid waste rates is necessary in 2026 to meet the likely increase in Marin Sanitary Service’s calculated rate revenue requirement for 2027. The surplus in 2026 projected rate revenues compared to the 2026 revenue requirement will be carried forward to the 2028 compensation adjustment application and will offset the 2028 rate adjustment, as per Exhibit B, Section II.B.10.d of the Franchise Agreement. That provision establishes that surplus rate revenues are applied to offset future years’ rate adjustments. Therefore, the surplus rate revenues in 2026 will serve as rate stabilization reserves, reducing the amount by which rates would need to be increased in 2028 to keep up with the cost of providing service.

ENVIRONMENTAL DETERMINATION:

Staff has determined that pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4) adoption of the 2026 Fee Study, the repeal of the Refuse Vehicle Impact Fee, and decreasing of the Cost of Service and Franchise Fees are not a project under CEQA because these actions do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.

FISCAL IMPACT:

These changes, if adopted, would reduce the annual amount of Cost of Service Fees remitted to the City’s General Fund from $1,945,401 to $1,913,000, a difference of $32,401. The Franchise Fee would remain at $1,216,000. Removing the Refuse Vehicle Impact Fee would reduce funding supporting the City’s Pavement Management Program City’s revenue to the City’s General Fund by roughly $1,480,000 per year. One-time funding has been identified to partially back-fill for the loss of this revenue through FY 2026-27.

RECOMMENDED ACTION:

Staff recommends that the City Council adopt a

OPTIONS

1. Adopt resolutions as presented

2. Adopt resolutions with amendments

3. Don’t adopt resolutions and direct staff to return with more information ATTACHMENTS:

1. Resolution Adopting Fee Study, Repealing the Refuse Vehicle Impact Fee, and Decreasing Cost of Service and Franchise Fees

2. Exhibit A to Resolution: Solid Waste Costs and Property Use Charge Study Report

3. Exhibit B to Resolution: Cost of Service Fee and Franchise Fee Amounts

4. Resolution Adopting 6th Amendment to Franchise Agreement with Marin Sanitary Service SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4

5. Exhibit A to Resolution: 6th Amendment to Franchise Agreement with Marin Sanitary Service

6. Attachment 1 to 6th Amendment: Marin Sanitary Service Street Sweeping Proposal

7. 2026 MSS Compensation Report
1 RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL (1) ADOPTING A FEE STUDY FOR THE CITY’S COST OF SOLID WASTE SERVICES FEE AND THE CITY’S

FRANCHISE FEE FOR THE USE OF CITY PROPERTY IN THE PROVISION OF SOLID WASTE RELATED SERVICES; (2) REPEALING THE CITY’S IMPOSITION OF THE REFUSE VEHICLE IMPACT FEE; AND (3) DECREASING THE CITY’S COST OF SERVICE FEE AND FRANCHISE FEE IMPOSED ON MARIN SANITARY SERVICE: CEQA DETERMINATION: EXEMPT PURSUANT TO CEQA GUIDELINE 15378(b)(4)
WHEREAS, the City of San Rafael and Marin Sanitary Service have entered into an “Amendment and Restatement of Collection Agreement of the City of San Rafael and Marin Sanitary Service,” dated September 4, 2001, and amended by a written first amendment dated March 1, 2005, a written second amendment dated November 14, 2012, a written third amendment dated February 25, 2019, a written fourth amendment approved by the City Council on December 6, 2021, and a written fifth amendment approved by the City Council on November 4, 2024 (hereafter the “Franchise Agreement”); and
WHEREAS, Section II(B)(6)(d) of Exhibit B of the Franchise Agreement authorizes the City to establish and impose fees or charges for benefits conferred, privileges granted, or services or products provided to the Company, or for the City’s reasonable regulatory costs, related to or involving Marin Sanitary Service’s responsibilities under the Franchise Agreement; and WHEREAS, Section II(B)(9) of Exhibit B of the Franchise Agreement authorizes the City to set a franchise fee at any amount equal to or less than the reasonable market value of the City property, as determined by the parties and set forth in the Franchise Agreement, used by Marin Sanitary Service, for solid waste-related services; and WHEREAS, R3 Consulting Group produced a Solid Waste Franchise Fee Study Report, dated December 6, 2023 (“2023 Franchise Fee Study”), which determined the reasonable fees the City could impose, pursuant to Article XIII C, Section 1 of the California Constitution, to (1) recover its costs of providing specific benefits or privileges, services, and/or products to Marin Sanitary Service for the provision of solid waste-related services; (2) to recover the costs of addressing the impacts of solid waste refuse vehicles on City streets; and (3) for the reasonable value of City property used by Marin Sanitary Service in its provision of solid waste-related services; and WHEREAS, The City Council accepted and adopted the 2023 Franchise Fee Study and found and determined that the City’s Cost of Service Fee, Franchise Fee, and Refuse Vehicle Impact Fee complied with Article XIII C of the California Constitution and were justified by the City’s costs of providing solid waste-related services, reasonable charges for the use of City property for 2 solid waste services, and the City’s costs of addressing the impacts of solid waste refuse vehicles, when it adopted Resolution No. 15265 on December 18, 2023; and WHEREAS, on November 4, 2024, the City Council adopted Resolution No. 15355, which adopted a Cost of Service Fee, an updated Refuse Vehicle Impact Fee, and a Franchise Fee, authorized by the analysis in the 2023 Franchise Fee Study, in compliance with Article XIII C of the California Constitution, which were to be imposed on Marin Sanitary Service for the City’s costs of providing solid waste-related services and regulatory activities, the City’s costs of addressing the impacts of solid waste refuse vehicles, and the reasonable value of Marin Sanitary Service’s exclusive and special right to use City property for solid waste services; and WHEREAS, since the City Council adopted the updated Refuse Vehicle Impact Fee on November 4, 2024, the Fourth District California Court of Appeal decided Rogers v. City of Redlands (2025) 112 Cal.App.5th 667 (“Rogers”); and
WHEREAS, in response to Rogers, the City stopped collecting the Refuse Vehicle Impact Fee from Marin Sanitary Service on January 1, 2026 and desires to repeal the Refuse Vehicle Impact Fee on Marin Sanitary Service; and
WHEREAS, R3 Consulting Group reviewed the 2023 Franchise Fee Study and produced a Solid Waste Costs and Property Use Charge Study Report – 2026 Update, dated March 31, 2026 (“2026 Fee Study”), attached hereto as Exhibit A, and incorporated herein which determined that the City’s Cost of Service Fee and Franchise Fee continue to be reasonable and justified pursuant to Article XIII C, Section 1 of the California Constitution; and WHEREAS, the City desires to set the Cost of Service Fee and the Franchise Fee at amounts set forth in Exhibit B, which is attached hereto and incorporated herein, and which are lower than the fee amounts adopted by Resolution No. 15355.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4), this action is not a project under CEQA because the City’s adoption of the 2026 Fee Study, repeal of the Refuse Vehicle Impact Fee, and decreasing of the Cost of Service and Franchise Fees do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.

Section 2. The City Council hereby repeals the Refuse Vehicle Impact Fee, which the City ceased to impose on Marin Sanitary Service on January 1, 2026. 3 Section 3. The City hereby sets the Cost of Service Fee and the Franchise Fee at the amounts set forth in Exhibit B.

Section 4. The City Council hereby approves and adopts the 2026 Fee Study, attached hereto as Exhibit A, and finds that the City’s Cost of Service Fee, as set by this Resolution, does not exceed the City’s reasonable costs for providing services or products, and/or the City’s reasonable regulatory costs, related to Marin Sanitary Service’s provision of solid waste-related services, and the City’s Franchise Fee, as set by this Resolution, does not exceed the fair market value of the Marin Sanitary Service’s exclusive right to use City property for the provision of solid waste-related services, as negotiated by the parties and set forth in the Franchise Agreement.

Section 5. To the extent the provisions of this resolution conflict with any prior resolutions, the provisions of this resolution shall control.

I, Lindsay Lara, City Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael, held on Monday, the 20th day of April 2026, by the following vote, to wit:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:
__________________________
LINDSAY LARA, City Clerk
1504 Eureka Road, Suite 220, Roseville, CA 95661 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com March 31, 2026
Mr. Paul Navazio
Interim City Manager
City of San Rafael
submitted via email: [email protected]
SUBJECT: Solid Waste Costs and Property Use Charge Study Report – 2026 Update Dear Mr. Navazio,
R3 Consulting Group, Inc. (R3) is pleased to submit the attached Report of 2026 Update to the Solid Waste Costs and Property Use Charge Study (Study) for the City of San Rafael (City). This Report presents our analytical methodology, results and findings. The purpose of this Study was to comprehensively analyze and calculate the following:

City Costs: The annual costs to the City for performing its management, administration, regulatory compliance and enforcement, solid waste collection and clean-up, and other obligations associated with the Contractor’s Agreement and the sanitation system.

Property Use Charges: The annual use charge to the Contractor for its special and lasting right to use and encroach upon City property in the public right-of-way for the placement of solid waste containers and collection of the solid waste contents.

This 2026 Update updates findings and values originally included in our December 6, 2023, report. That report calculated values as of fiscal year (FY) 2023-24 with City Costs being $1,904,000 and Property Use Charges being $1,173,000. This 2026 Update to the Study revises the FY 2023-24 City costs to provide solid waste-related services to $1,825,000 and revises the value of the public right-of-way used for solid waste services to $1,642,000 based on updated figures for the areas used for the set out of solid waste collection containers to match the guidance provided by the City’s Contractor. This Study makes the conservative assumption that costs for calendar year (CY) 2024 were the same as FY 2023-24.

This 2026 Update further projects the CY 2025 and CY 2026 City Cost of Service Fee and Franchise Fee based on the annual change in the Consumer Price Index (CPI) for All Urban Consumers (CPI-U) for the San Francisco Bay Area. Using June of the most recent year compared to the June of the prior year (which matches the approach included in the Contractor’s Agreement) results in a 3.24% increase for CY 2025 and a 1.54% increase for CY 2026. Applying the CY 2025 CPI increase of 3.24% to the CY 2024 amounts calculated via this Study results in CY 2025 City Cost of Service Fee of $1,884,000 and Franchise Fee for the use of government property of $1,695,000. Applying the CY 2026 CPI increase of

1.54% to the CY 2025 amounts shown in the prior sentence results in CY 2026 City Cost of Service Fee of $1,913,000 and Franchise Fee of $1,721,000.

We appreciate the opportunity to be of service to the City. If you have any questions regarding this Report or need additional information, please contact me.

Sincerely,

Garth Schultz | Principal
R3 Consulting Group, Inc.
510.292.0853 | [email protected]
Exhibit A

TABLE OF CONTENTS
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update toc - i

1. Executive Summary
page 1

2. Methodology and Calculations
page 3

1. EXECUTIVE SUMMARY
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 1 of 10 Background & Purpose
The City’s Refuse and Recyclable Material Collection and Disposal Services Agreement (Agreement) with Marin Sanitary Services (Contractor) is for the collection, processing, and disposal of solid waste from covered waste generators in the City. The Agreement provides the Contractor with the exclusive right to provide critical aspects of the City’s sanitation system including solid waste collection and the other services and programs included in the Agreement.

The Agreement specifies that the Contractor will charge solid waste service subscribers, with the Contractor billing and collecting revenues from subscribers and the City authorizing the maximum rates that the Contractor may charge pursuant to the rate adjustment methodology included in the Agreement.

The City incurs costs for providing solid waste collection services (City Costs). R3 Consulting Group, Inc. (R3) was engaged to review, analyze, and quantify the annual amounts of these costs. R3 was also engaged to review, analyze, and quantify the annual amount of a reasonable property use charge for the use of the public right-of-way for the special and lasting access to use and encroach on it for setout and collection of solid waste containers (referred to in the Agreement as the Franchise Fee). This Report summarizes R3’s methodology, analysis, and findings regarding the City’s costs and property use charge amounts.

Methodology and Findings
R3 reviewed and analyzed information provided by the City pertaining to the City Costs and a Franchise Fee. R3 used the information provided by the City, as well as information obtained via research and analysis, to calculate the annual amounts for the City’s provision of solid waste collection services and a property use charge for use of the public right-of-way. All calculated amounts in this Study are in prior Fiscal Year (FY) 2023-24 dollars and are rounded to the nearest $1,000, except where otherwise noted.

City Costs
The annual costs to the City for management, administration, regulatory compliance and enforcement, solid waste collection and clean-up, and other obligations associated with the Contractor’s Agreement and the sanitation system includes: staffing salary and benefits, contracted services, capital and equipment depreciation, operations and maintenance, supplies, and overhead for distributed costs including but not limited to property, utilities, insurance, human resources, payroll administration, accounts payable and receivable, and other finance functions. Staffing costs are calculated based on estimated time allocations (based on historical experience) and other costs are calculated based on estimated share allocations associated with the sanitation system, with distributed overhead applied to both.

The calculation results for FY 2023-24 were $1,568,000 in staffing costs and $257,000 in other costs for annual City Costs totaling $1,825,000.

Calendar year 2024 amounts were set equal to the FY 2023-24 amounts of $1,568,000 in staffing costs and $257,000 in other costs for annual City Costs totaling $1,825,000.

Calendar year 2025 amounts are calculated based on the calendar year 2024 amounts and escalated by the 3.24% CPI resulting in annual City Costs totaling $1,884,000.

Calendar year 2026 amounts were calculated based on the calendar year 2025 amounts and escalated by the 1.54% CPI resulting in annual City Costs totaling $1,913,000.

Executive Summary
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 2 of 10 Franchise Fee
The annual charge to the Contractor for use of government property in the public right-of-way is calculated as a function of estimates for the number of solid waste accounts setting out solid waste collection containers in the right-of-way, the set-out area used, the amount of time it is used, and the market value for the per square foot use of the public right-of-way.

The CY 2024 calculation result for the use of the public right-of-way is an annual total Franchise Fee of $1,642,000.

Calendar year 2025 amounts are calculated based on the calendar year 2024 amounts and escalated by the 3.24% CPI resulting in an annual Franchise Fee of $1,695,000.

Calendar year 2026 amounts were calculated based on the calendar year 2025 amounts and escalated by the 1.54% CPI resulting in an annual Franchise Fee of $1,721,000.

Conclusions
The sum of CY 2024 annual City Cost of Service Fee and Franchise Fee calculated in this Study is $3,467,000. For CY 2025, the total is $3,579,000 and for CY 2026, the total is $3,634,000.

Limitations
This analysis relies on information provided by the City, which has been reviewed and analyzed for reasonableness and accuracy but not independently audited. It was necessary to estimate certain values for information that the City did not have, and for which reasonable ranges are known to exist. When it was necessary to establish estimates or assumptions for those values, R3 relied on decades of professional experience working with dozens of local government agencies in California on solid waste collection and other local government public administration matters. We recommend that City staff and legal counsel conduct a thorough review of all information contained in this Report to affirm assumptions, estimates, calculations, and dollar results so that we can achieve mutual concurrence on applicability and reasonableness of estimated and assumed values. This analysis includes estimation of a property use charge value – R3 does not employ property appraisers and the property use charge value presented in this Report is an estimate of reasonable fair market value and does not constitute an appraisal.

2. Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 3 of 10 City Costs
Methodology
R3 reviewed and analyzed information provided by the City pertaining to the General Fund costs incurred for management, administration, regulatory compliance and enforcement, solid waste collection and clean-up, and other obligations associated with the Contractor’s Agreement and the sanitation system. These costs include any may not be limited to:

Staffing costs, including salaries and benefits.

Contracted services.

Capital and equipment depreciation.

Capital and equipment operations and maintenance.

Supplies and materials.

Overhead for distributed costs such as property, utilities, insurance, human resources, payroll administration, accounts payable and receivable, and other finance functions.

Using the total annual salary, benefit and other cost information provided by the City we estimated the proportion of costs associated with management and administration of the agreement and the sanitation system. We then calculated the totals and categorized them by the functions listed in the sections below.

Variables, Estimates and Assumptions
Staffing Costs
Variables associated with salaries and benefits include the allocation of time that positions are dedicated to management and administration of the Agreement and the sanitation system (including time supervising others with primary responsibility for these duties), the amount by which funding of salaries and benefits is paid by the General Fund, and the applicable amount of General Fund overhead. The estimated time allocation by position category used in this Study (and based on historical experience) is shown in Table 1, on the following page, along with the explanation for the allocation values.

Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 4 of 10 Table 1 – Allocations of Staffing Time by Position
Positions Time
Allocation Explanation
City Manager, Assistant City Manager, City
Attorney, Assistant City Attorney, City Clerk,
Deputy City Clerk, Public Works Director, Deputy
Public Works Director, Management Analyst,
Operations and Maintenance Manager, Sr. Code
Enforcement Supervisor, Code Enforcement
Supervisor, Police Lieutenant, Police Sergeant
(2), Police Officer.

4.9%
Estimated amount of time spent
on solid waste activities.

Code Enforcement Official I and II. 10%
Estimated amount of time spent
on solid waste code enforcement
obligations.

Sustainability Program Manager. 25%
Estimated amount of time spent
on job duties for management
and administration of the
Agreement and the sanitation
system.

Public Works Maintenance Crews responsible for
Street Sweeping, Catch Basin Waste Removal,
and Illegal Dumping Clean-up.
80%
Estimated amounts of time spent
handling and removing solid
waste.

R3 verified with City staff that the salaries and benefits included in this Study are paid by the General Fund – any non-General Fund portions of positions included in Table 1 have been excluded from the calculations. A General Fund overhead rate of 10.6% (provided by the City’s Finance Director and for the distributed costs such as property, utilities, insurance, human resources, payroll administration, accounts payable and receivable, and other finance functions) is also applied to the total allocated costs.

Other Costs
Variables associated with the City’s other (i.e., non-salary and benefit) costs include the allocation of those costs that are for management and administration of the Agreement and the sanitation system, the amount by which these costs are paid by the General Fund, and the applicable amount of General Fund overhead. The estimated time allocation by cost category used in this Study is shown in Table 2, on the following page, along with the explanation for the allocation values.

Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 5 of 10 Table 2 –Allocations of Other Costs by Category
Cost Category Cost
Allocation Explanation
Public Works Maintenance Crews responsible for
Street Sweeping, Catch Basin Waste Removal,
and Illegal Dumping Clean-up.
80%
Estimated allocation based on
proportion of waste generation in
City.

Consulting costs for direct management and
administration of Agreement and sanitation
system.
100%
All these costs are directly
associated with management and
administration of the Agreement
and the sanitation system.

R3 verified with City staff that the other costs included in this Study are paid by the General Fund – any non-General Fund portions of these costs as included in Table 2 have been excluded from the calculations. A General Fund overhead rate of 10.6% (provided by the City’s Finance Director) is also applied to the total allocated costs.

Analysis
Direct Management and Administration
This category includes City staffing and consulting costs for direct management and administration of the Agreement and the sanitation system. Staffing costs include allocated costs for the City’s Public Works Director, Deputy Public Works Director, Sustainability Program Manager, Management Analyst, and Operations and Maintenance Manager, for a calculated $116,000 in annual staffing costs. Other costs include solid waste consulting services provided by R3, for $7,000 in annualized consulting costs. The total calculated cost for this category is $123,000.

Indirect Management and Administration
This category includes City staffing costs for indirect management and administration, including supervision of those responsible for direct management and administration of the Agreement and the sanitation system and associated responsibilities. Allocated costs for the City Manager, Assistant City Manager, City Attorney, Assistant City Attorney, City Clerk, and Deputy City Clerk are calculated for total annual costs in this category of $111,000.

Code Enforcement
This category includes City staffing costs for enforcing the solid waste provisions of the City’s Municipal Code, which includes illegal solid waste accumulations, illegal dumping, littering, improper waste collection setouts, nuisances, and the associated investigations, warnings, notices of violation, and administration of penalties. Staffing costs include allocated costs for the City’s Code Enforcement Supervisors and Officials and Police Officer, Sergeants, and Lieutenant for calculated total annual costs in this category of $107,000.

Street Sweeping
When the Contractor or individual waste generators do not properly manage the collection of solid waste, that mismanaged solid waste tends to end up in the public right-of-way and on streets, where it must be removed by the City. Street sweeping captures solid waste that ends up in public streets because of improper collection. Most if not all of the solid waste that ends up Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 6 of 10 in the streets is generated by properties that receive solid waste collection services from the Contractor.

For the purposes of this Study, we do not assume that all mismanaged solid waste that ends up on the City’s streets is generated by properties receiving solid waste services. Rather, because there is the possibility that some solid waste collected by street sweeping operations was originally generated by other sources, this Study estimates that only 80% of the solid waste collected by street sweepers was generated by properties receiving solid waste services. This assumption is consistent with other studies conducted by R3 (for the cities of Garden Grove and San Bruno) wherein street sweeping activities were allocated between 77.4% and 90% to the sanitation system.

This category includes City staffing, capital equipment, and operations and maintenance costs for the City’s street sweeping operations in commercial areas. This Study does not include the costs for street sweeping in residential areas, as the City intends to outsource that service to the Contractor. Allocated staffing costs for the Public Works maintenance crews are calculated to be $284,000 annually. The allocated and annualized costs for capital equipment and operations and maintenance costs are calculated to be $113,000 annually, for a calculated total in this category of $397,000.

Catch Basin Waste Removal
As with street sweeping, solid waste that is not properly managed by waste generators or the Contractor, and not otherwise captured by street sweeping operations, accumulates in catch basins and other trash capture devices in the City’s storm drain system. As with the street sweeping category, we do not assume that all mismanaged solid waste that ends up in catch basins or trash capture devices is generated by properties that receive solid waste services; the 80% estimate used for street sweeping costs is also applied here, and for the same reasons.

This category includes City staffing, capital equipment, and operations and maintenance costs for the City’s catch basin waste removal operations. Allocated staffing costs for the Public Works maintenance crews are calculated to be $844,000 annually. The allocated and annualized costs for capital equipment and operations and maintenance costs are calculated to be $136,000 annually, for a calculated total in this category of $980,000.

Illegal Dumping Clean-up
The City’s Public Works maintenance crews also clean up solid waste materials that are illegally dumped throughout the City. As with street sweeping and catch basin waste removal, an 80% waste generation allocation is applied. This category includes City staffing costs for illegal dumping clean-up. Allocated staffing costs for the Public Works maintenance crews are calculated to be $106,000 annually. The allocated costs for equipment maintenance and fuel are calculated to be $1,000 annually, and the for a calculated total in this category of $107,000.

Annual Total of City Costs
Table 3, on the following page, shows the total of the City Costs for management and administration of the Agreement and the sanitation system as calculated in this Study, by category.

Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 7 of 10 Table 3 – Annual City Costs by Category and in Total FY 2023-24 Category Staffing Costs Other Costs Total
Direct Management
and Administration $116,000 $7,000 $123,000
Indirect Management
and Administration $111,000 N/A $111,000
Code Enforcement $107,000 N/A $107,000
Street Sweeping $284,000 $113,000 $397,000
Catch Basin Waste
Removal $844,000 $136,000 $980,000
Illegal Dumping Cleanup
$106,000 $1,000 $107,000
Total Annual City
Costs $1,568,000 $257,000 $1,825,000
Franchise Fee
Methodology
R3 reviewed and analyzed information provided by the City and the Contractor pertaining to the Franchise Fee for Contractor’s use of the public right-of-way for collection of solid waste collection containers. We then calculated the annual Property Use Charges based on:

The setout area used for collection of solid waste containers (in square feet).

The amount of time that the area is used.

The market value for use of the public right-of-way (in dollars per square foot).

The number of solid waste subscribers setting out collection containers in the public right-ofway.

Using these values, we calculated the market value for the Contractor’s use of and special right to encroach upon government property in the City.

Variables, Estimates and Assumptions
Setout Area
Standard residential solid waste collection setouts include three solid waste collection containers, usually carts with wheels and lids, with one each for garbage, recycling, and organics waste streams. The setout area needed for placement of these containers is inclusive of the width of each container (typically two feet) as well as minimum required space between the containers and other objects such as cars (minimum of two feet between containers and five feet between containers and other objects per Contractor’s guidance documents - https://marinsanitaryservice.com/residential/).

Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 8 of 10 The set-out area also takes up available parking space and is thus assumed to extend six feet out from the curb. Taken altogether, the area for residential setouts is calculated as three containers that are each two feet wide, plus two feet between each container and other objects, for a total area fourteen feet wide times six feet in depth. The result is 84 square feet of setout area used for collection of solid waste containers in residential areas.

The amount of area used for commercial setouts (in this Study, use of the term commercial also always includes multi-family) can vary widely, as there is no standard commercial subscription size profile – each commercial solid waste subscriber can select from a range of container sizes, with most of them being larger than the containers used in residential areas. Given this complexity, this Study assumes that the average commercial setout area is twice that of the residential setout area for 168 square feet.

Setout Time Usage
Standard residential solid waste collection is performed once weekly. Most residential containers are set out the evening prior to collection and are removed from the public right-ofway the following afternoon. Thus, for the purposes of this Study, we assume that collection containers are in the public right-of-way for an average of 18 hours per day, one day per week, which amounts to approximately 10.71% of the time (18 hours divided by 24 per day divided by 7 days per week).1
Commercial solid waste subscription setout times can vary widely – just as there is no standard commercial subscription size profile, likewise there is no standard collection frequency.

Commercial solid waste subscribers can select collection frequency between once and six times per week, and with different frequencies for different waste streams. Given this complexity, this Study assumes that the average commercial collection frequently is twice weekly, for 21.42% of the time. As with the setout area, this estimate is likely lower than the average commercial collection frequency and is therefore conservative.

Market Value for Use of Public Right-of-Way
The City’s “Streatery” Program established a use charge for the use of the public-right-of way of $3,600 annually. That amount is for the use of an area equivalent to one parking space, which the typical parking space being 24 feet wide by 8 feet deep for an area of 192 square feet. Therefore, the City’s established annual use charge for the use of the public right-of-way is $3,600 divided by 192, for a resultant $18.75 per square foot. Other cities in the Bay Area have also established use charges for use of the public right-ofway, like the City’s program.

Other Marin County communities including Fairfax, Larkspur, and San Anselmo also have similar use charges, as do other communities including Healdsburg, Oakland, Torrance, and Windsor. The minimum annual use charge per square foot in these communities is $5.21 (Fairfax and Oakland) and the largest is $30.00 (Windsor). The 1 Section 9.19.130 of the City’s Municipal Code permits collection containers “to be placed in public view and on a public street, sidewalk or footpath only during the forty-eight-hour period commencing at 12:01 a.m. on the day preceding the day of scheduled pick-up and terminating at 12:01 a.m. on the day following such pick-up.” Since this Study presumes that containers, on average, are only set out for 18 hours, rather than 48, it conservatively estimates the actual usage of and encroachment on the public right-of-way to be less than what is legally permitted.

Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 9 of 10 average annual per square foot use charge, including the City, is $15.67. To be conservative in our calculations, we use the average annual value of $15.67 per square foot rather than the higher City-specific value of $18.75. The Streatery Program fees are a good metric for the value of the special and lasting use of the public right-of-way because they establish the amount that businesses are willing to pay for this use.

R3 also researched rental charges for paved parking spaces in the region of the City. The average rental value of the paved parking spaces was $22.86 per square foot per year. Had R3 used the average rental value of paved parking spaces of $22.86 in calculating the reasonable market value for the use of the public right-of-way in this analysis, the resulting annual franchise fee would have been 65% greater than the amounts calculated by this Study.

Number of Subscriptions Setting Out Containers
The Contractor reports that there are 12,385 residential and 2,529 commercial solid waste service subscribers in the City. However, not all subscribers set out their containers in the public right-of-way for collection all the time. To account for non-setouts (either because subscribers don’t have waste materials to set out or because they receive on-premises service) we assume that only 90% of residential solid waste subscribers set out containers on a regular basis, for a resulting total of 11,146 average residential setouts. It is also understood that most commercial subscribers do not set out containers in the public right-of-way, and therefore we conservatively assume that only 5% of commercial subscribers set out containers on a regular basis, for a resulting total of 126 average commercial setouts.

Analysis and Total Annual Property Use Charges
Calculating the total annual Property Use Charges using the variables, estimates and assumptions from the prior section is a function of multiplication, as shown in Table 4, on the following page.

Methodology and Calculations
City of San Rafael | Solid Waste Costs and Property Use Charge Study Report – 2026 Update 10 of 10 Table 4 – Calculation of Total Annual Property Use Charges CY 2024 Variable Category Residential Commercial
Grand Total Annual
Property Use Charge
Setout Area 84 SF 168 SF
Setout Time Usage 10.71% 21.42%
Annual Use Charge $15.67 per SF $15.67 per SF
Number of Setouts 11,146 126
Total Annual Property
Use Charges $1,571,000 $71,000 $1,642,000
Based on this analysis, the estimated FY 2025-26 market value for Contractor’s use of the public right-of-way is $1,642,000.

As an alternative to curbside collection, the Contractor offers on-property service to residential accounts at a monthly charge of $7.27 per cart, per direction (pulled out from and then on to property) per month. If the 11,146 residential setouts (90% of residential accounts) shown in Table 4 were to all subscribe to on-property service, the additional cost would be $5,835,000 per year ($7.27 per cart per direction per month, times 2 for pulling out from and on to property, times 3 carts per account, times 12 months, times 11,146 accounts) and that does not account for the fact that the Contractor’s on-property service rate is not structured to be applicable to all accounts.

If the Contractor were to collect all solid waste containers via on-property service, there would be substantial impacts to operational efficiency that could result in far greater costs than the $5,835,000 in additional fees. Thus, the $1,642,000 Franchise Fee for the Contractor’s special right to use and encroach upon the public right-of-way is far less than it would cost the Contractor to collect the containers without the right to encroach, and therefore, is a reasonable estimate of the value of the right-of-way to the Contractor.

Exhibit B - Cost of Service Fee and Franchise Fee Amounts The City adopts the Cost of Service Fee and Franchise Fee set forth below. Amounts shown are annual calendar year figures effective January 1, 2026, through December 31, 2026.

Cost of Service Fee - $1,913,000
Franchise Fee - $1,216,000
As authorized by Resolution No. 15355, effective January 1, 2027, and annually every January 1st thereafter, the Cost of Service Fee and the Franchise Fee shall be automatically adjusted in proportion to the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco Bay Area (U.S. Bureau of Labor Statistics series ID: CUURS49BSA0).
1 RESOLUTION NO.

A RESOLUTION OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO

EXECUTE AN AMENDMENT TO THE FRANCHISE AGREEMENT WITH MARIN SANITARY

SERVICE TO REQUIRE STREET SWEEPING SERVICES, AND TO CLARIFY AUTHORIZATION

TO ENCROACH UPON PUBLIC RIGHT-OF-WAY, AND FOR THE CITY TO IMPOSE A FEE FOR

RIGHT OF ENCROACHMENT
WHEREAS, the City of San Rafael and Marin Sanitary Service have entered into an “Amendment and Restatement of Collection Agreement of the City of San Rafael and Marin Sanitary Service,” dated September 4, 2001 and amended by a written first amendment dated March 1, 2005, a written second amendment dated November 14, 2012, a written third amendment dated February 25, 2019, a written fourth amendment dated November 29, 2022 and a written fifth amendment approved by the City Council on November 4, 2024 (hereafter the “Franchise Agreement”); and
WHEREAS, the City of San Rafael and Marin Sanitary Service now desire a sixth amendment to the Franchise Agreement to update Marin Sanitary Service services to include street sweeping services for City residents and businesses, and WHEREAS, the City of San Rafael has determined that such an amendment is proper, in the best interest of all citizens, and will promote public health, safety, and welfare; and WHEREAS, Marin Sanitary Service’s additional costs for street sweeping services are separate from and not duplicative of the City’s costs for street sweeping services included in the Cost of Service Fee imposed on Company by City pursuant to the terms of the Agreement; and WHEREAS, the City and Marin Sanitary Service desire to make certain adjustments to the Agreement’s authorization for the City to adopt and impose a Franchise Fee for Marin Sanitary Service’s special and unique right to use and encroach upon the public right-of-way for the placement of collection containers for the provision of solid waste services; and WHEREAS, the City and Marin Sanitary Service desire to clarify that the Franchise Fee imposed by the City on Marin Sanitary Service is imposed for the exclusive and special right and license to use and encroach upon the public right-of-way for the purpose of placing its collection containers for collection services; and
WHEREAS, on April 20, 2026, the City Council held a duly noticed public hearing to consider the rate application request and receive public testimony thereon; and WHEREAS, the City Council has reviewed and duly considered the Staff Report, documents, and other oral and written evidence presented at the hearing. 2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DOES RESOLVE, DETERMINE AS FOLLOWS:
1) The “Sixth Amendment to the Amendment and Restatement of Collection Agreement of the City of San Rafael with Marin Sanitary Service” attached hereto as "Exhibit A” and incorporated herein by reference, is hereby approved and shall be included as part of the Amendment and Restatement of Collection Agreement dated September 4, 2001. The City Manager is hereby authorized to execute the Sixth Amendment, subject to final approval as to form by the City Attorney.

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:
__________________________
LINDSAY LARA, City Clerk

SIXTH AMENDMENT TO THE

AMENDMENT AND RESTATEMENT OF COLLECTION AGREEMENT

OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE

Page 1 ends

THIS SIXTH AMENDMENT to the Amendment and Restatement of Collection Agreement of the City of San Rafael (City) with Marin Sanitary Service (Company) is made and entered into this __ day of ___________, 2026.

WHEREAS, the City and Company entered into a written agreement on September 4, 2001, as amended on March 1, 2005, November 14, 2012, December 17, 2018, December 6, 2021, and November 18, 2024 (together the “Agreement”) pursuant to which the Company renders Solid Waste, Recyclable Material and Green Waste collection, processing and disposal services to businesses, residents and government institutions in the City; and
WHEREAS, the City conducts street sweeping in residential, commercial and mixed-use areas, which are currently insufficient to meet the demand of street sweeping services necessary to ensure that refuse does not enter the storm drains; and
WHEREAS, the Company provided the City with a proposal to provide Residential Street Sweeping services dated January 28, 2026 quoting $8,0148.13 in monthly costs to provide residential street sweeping services during calendar year 2026; and
WHEREAS, the City and Company now desire to add Residential Street Sweeping to the suite of services provided by the Company to allow for the City to increase street sweeping services in commercial and industrial areas; and
WHEREAS, a change in compensation to the Company is necessary and warranted to compensate the Company for provision of Residential Street Sweeping Services; and WHEREAS, these additional costs for street sweeping services are separate from and not duplicative of the City’s costs for street sweeping services included in the Cost of Service Fee imposed on Company by City pursuant to the terms of the Agreement; and
WHEREAS, the City and Company have met in good faith to develop the terms, conditions, and compensation for provision of the Residential Street Sweeping Services; and NOW THEREFORE, it is mutually agreed as follows:

1. Section 1. Definitions, shall be amended to add:
“Residential Street Sweeping” means provision of monthly street sweeping on residential streets in the City.

2. Section 3. Services, Rate Setting and Rates, Equipment, shall be amended to add:
(F) Compensation Adjustment for Residential Street Sweeping:

Exhibit A

SIXTH AMENDMENT TO THE

AMENDMENT AND RESTATEMENT OF COLLECTION AGREEMENT

OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE

Page 2 ends

(1) 2026 Adjustment to Compensation for Residential Street Sweeping. Company’s compensation shall include a new line titled “Residential Street Sweeping Provided by Collector” with the 2026 compensation amount being the 2026 monthly compensation amount $8,048.17 (inclusive of profit margin) times seven (7) months for Residential Street Sweeping Services from June through December 2026.
(2) Annual Adjustment to Compensation for Residential Street Sweeping. Starting January 1, 2027 and annually thereafter, Company’s monthly compensation via “Residential Street Sweeping Provided by Collector” shall be adjusted annually from the prior year by the percentage change in the Consumer Price Index for Water and Sewer and Trash Collection, U.S. city average, Bureau of Labor Statistics Series I.D. CUSR0000SEHG, subject to a minimum increase of 2.5% and a maximum increase of 5.0%. The percentage change is calculated by dividing the Index value for June of the current year by the Index value for June of the prior year, rounded to the nearest hundredth of a percent.

3. Exhibit A - Description of Services, is amended to include the services described in Attachment 1 to this Sixth Amendment, titled “City of San Rafael Street Sweeping Proposal” dated January 28, 2026.

4. Exhibit B – Collector’s Rate Revenue Requirement and Rate Adjustment, is amended as follows:

Section II.B.9. Forecasted Franchise Fees Expense, is replaced in its entirety as follows:

City and Company agree that Company will pay City a franchise fee for the value of City property used by Company to provide solid waste-related services. The Franchise Fee for use of City property shall be in an amount determined by the parties to reflect the reasonable value of City property used in Company’s provision of solid waste-related services and for Company’s purposes and/or responsibilities under this agreement. Pursuant to this Agreement and the City’s Municipal Code, Company has been granted an exclusive and special right and license to use and encroach upon the public right-of-way for the purpose of placing its collection containers for collection services. The Franchise Fee shall not exceed the reasonable market value of Contractor’s exclusive and special right to use and encroach upon the public right-ofway. For calendar year 2025 the parties have determined, based on available data, that the value of the City property used by Company for the provision of solid waste-related services shall not exceed $ 1,474,000. The parties further agree that the reasonable market value of the City property will increase annually in proportion to the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the San Francisco Bay Area (U.S.

Bureau of Labor Statistics series ID: CUURS49BSA0). City may set the franchise fee, by ordinance or resolution, at any amount equal to or less than the reasonable market value of the City property, as determined by the parties and set forth in this agreement.

SIXTH AMENDMENT TO THE

AMENDMENT AND RESTATEMENT OF COLLECTION AGREEMENT

OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE

Page 3 ends

5. City and Company agree and acknowledge that, except as explicitly modified by this Amendment, the Agreement remains in full force and effect.

SIXTH AMENDMENT TO THE

AMENDMENT AND RESTATEMENT OF COLLECTION AGREEMENT

OF THE CITY OF SAN RAFAEL WITH MARIN SANITARY SERVICE

Page 4 ends

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment the day and year first above written.

Date (month, day and year) Date (month, day and year)
Marin Sanitary Service City of San Rafael
By: By:

President City Manager
By: By:

Secretary City Clerk
APPROVED AS TO FORM:

By:

City Attorney
1 1/2 /2026

CITY OF SAN RAFAEL

STREET SWEEPING PROPOSAL
Attachment 1 to 6th Amendment to Franchise Agreement
2 1/2 /2026
Overview
MARIN SANITARY SERVICE is pleased to submit a proposal for residential street sweeping services in the City of San Rafael. For decades we have been proud partners with San Rafael for solid waste collection and our neighboring communities to provide street sweeping services by executing the highest quality of service to our customers with consistent reliability, flexibility, and professionalism.

Contractor Identification:

Name: MARIN SANITARY SERVICE
Address: 1050 Andersen Drive, San Rafael, CA 94901
Contacts: Justin Wilcock Director of General Operations [email protected]
Phone: 415-755-9528 cell
Magda Loczi Senior Business Development Manager
[email protected]
Phone: 707-361-0450 cell
24/7 Emergency Contact:

Justin Wilcock
Mobile (707) 303-0033
Tax ID: 94-1520192
3 1/2 /2026
Marin Sanitary Service has a fleet of three sweeping trucks to cover the companys current sweeping commitments and provide sweeping service at company facilities. For the City of San Rafael services, the company will be using a recently leased new truck. The company uses a Tymco 600 air sweeper with two rotating brooms and a vacuum system. Unlike other sweeper trucks with either a main broom or a vacuum the regenerative air system dislodges debris, is directed to the central suction hose and the air is then recirculated avoiding a dusty exhaust system. This results in a more effective cleaning without polluting exhaust. This truck, along with the other available trucks in the fleet will ensure that the company is able to provide consistent services without interruption due to equipment failure.

All routing for the company is communicated through a mobile tablet system. This can also help ensure the most efficient routing using RouteSmart software. The company intends to complete the scope of work with one driver assigned to the San Rafael sweeping route. We aim to optimize street sweeper routing for San Rafael with this software in the future. 4 1/2 /2026
Marin Sanitary Service will manage disposal of material collected during the street sweeping process.

The costs for disposal are equal to the general debris disposal rate which is listed in the table below.

All driver costs are accounted for in the proposed labor allocation. Marin Sanitary Service has a current collective bargaining agreement with the Teamsters local No. 665. As such all wages paid are at or above prevailing wages prescribed by the California Labor Relations Board.

This cost proposal does not anticipate needing many additional hours beyond the proposed hours for any time throughout the year. This is based on the request to provide street sweeping for residential areas only. If the amount of sweeping needed during any time exceeds regular hours, Marin Sanitary reserves the right to charge for the number of extra hours required to complete the job.

City of San Rafael
Annual / Monthly Cost Rates
Line Item Rate # per month Cost per month
# of
months Total annual cost
Hourly cost $ 203.75 39.5 $8,048.13 12 $96,577.56
Dumping cost $
OT cost $ 242.65 As needed As needed 12 As needed
Emergency cost $ 281.55 As needed As needed 12 As needed Total Cost $8048.13* $ , 77.56* *Total Cost Based an estimated total hours and tons. Actual total cost will depend on actual tons received.

The hourly sweeping rate will be adjusted annually from the prior year by the percentage change in the Consumer Price Index for Water and Sewer and Trash Collection, U.S. city average, Bureau of Labor Statistics Series I.D. CUSR0000SEHG, subject to a minimum increase of 2.5% and a maximum increase of 5.0%. The percentage change is calculated by dividing the Index value for June of the current year by the Index value for June of the prior year, rounded to the nearest hundredth of a percent.
12 5 1/2 /2026
MARIN SANITARY SERVICE has been in business for more than 75 years providing top-tier waste management planning for residential and commercial customers throughout Marin County and surrounding areas.

Starting out as scavengers in San Francisco, Marin Sanitary Service began when the Garbarino family joined forces with several other Italian families to start a new garbage service. MSS currently serves over 33,000 residential and commercial accounts. You can still find three generations of the Garbarino family working at MSS.

Marin Sanitary Service is known as innovators of the waste management industry. According to Rosalie Mule of the California Integrated Waste Management Board, our operations have served as a model for both the state and the nation, keeping us at the forefront of the movement to reduce, reuse, and recycle, and end waste as we know it today.
Besides providing solid waste collection, recycling, resource recovery, shredding services, and household hazardous waste disposal, Marin Sanitary Service also currently provides street sweeping services to the City of Novato, Town of Ross, Town of Fairfax, Larkspur and unincorporated areas throughout Marin County.

Marin Sanitary uses RouteSmart and SoftPak software programs including system route maps, tablets, customer service and dispatch teams to provide real-time tracking of services provided by street address. In addition, we utilize a mobile application called ReCollect for scheduling and notifying customers of their sweeping day.

Marin Sanitary Service prides itself on the quality of work provided to its customers. From friendliness, trustworthiness, and reliability to top-notch communication anticipating the needs of our customers, we are confident there is no better choice.
6 1/2 /2026
BELOW IS A LIST OF THREE (3) PROJECTS COMPLETED BY MSS WITHING THE PAST FIVE (5) YEARS

INVOLVING CALIFORNIA MUNICIPALITIES
1) City of Larkspur Street Sweeping Services (172 tons collected annually) a. Residential and Commercial Street Sweeping Services
b. Scheduled sweeping services including streets, medians, storm drain. c. Weekly sweeping
d. City of Larkspur, CA
e. 1996-present
2) Town of Ross Street Sweeping Services (49 tons collected annually) a. Residential and Commercial Street Sweeping Services
b. Scheduled street sweeping
c. Weekly sweeping
d. Town of Ross, CA
e. 1996-present
3) Town of Fairfax Street Sweeping Services (44 tons collected annually) a. Commercial Street Sweeping
b. Scheduled sweeping in core commercial downtown
c. Weekly sweeping
d. Downtown Fairfax
e. 2022-present (MSS has held contracts with the Town of Fairfax going back to 2008) 7 1/2 /2026
Please feel free to contact any of our existing Street Sweeping client references.

CONTACT
NAME

TITLE ORGANIZATION ADDRESS PHONE PROJECT
1 Dan
Schwartz
City
Manager
City of
Larkspur
400 Magnolia Ave.

Larkspur, CA 94939
(415) 927-5110 Street
Sweeping
2 Christa
Johnson
Town
Manager
Town of Ross 31 Sir Francis Drake Blvd
Ross, CA 94957
(415) 453-1453
ext. 107
Street
Sweeping
3 Loren
Umbertis
Public
Works
Director
Town of
Fairfax
142 Bolinas Rd
Fairfax, CA 94930 (415) 453-1584
Street
Sweeping
4 Emily
Warne
Public
Works
City of Novato 922 Machin Avenue
Novato, CA 94945 (415) 899-8952
Street
Sweeping
8 ~ S~ Se/Ul«e
CONSERVATION - OUR EARTH. OUR MISSION, OUR JOB
Conclusion
We look forward to working with the City of San Rafael to provide street sweeping services. We are confident we will exceed the city's expectations to deliver on a promise of excellence as we have shown consistently with our current street sweeping customers.

Marin Sanitary Service is ready to serve the City of San Rafael by providing the technical expertise, manpower and highest level of customer service required for the job every step of the way.

If you have questions on this proposal, feel free to contact me at your convenience by email at [email protected] or by mobile phone at (707) 361-0450. We are happy to address any concerns and look forward to serving you.

Thank you for your consideration,
Magda Loczi
Senior Business Development Manager
1/28/2026
REPORT
City of San Rafael
Submitted electronically on October 22, 2020
submitted electronically: March 31, 2026
Review of Marin Sanitary Service’s
2026 Rate Application
r) ::2._.. CONSULTING GROUP, INC.

K_____.-1 RESOURCES· RESPECT· RESPONSIBILITY
450 14th Street, Suite 350, Oakland, CA 94612 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com March 31, 2026
Mr. Paul Navazio
Interim City Manager
City of San Rafael
submitted via email: [email protected]
SUBJECT: Report – Review of Marin Sanitary Service’s 2026 Rate Application Dear Mr. Navazio,
R3 Consulting Group, Inc. (R3) is pleased to submit this report detailing the results of our review of Marin Sanitary Service’s (MSS’s) 2026 rate application for the City of San Rafael.

This review was conducted pursuant to R3’s engagement with the seven agencies (Agencies) served by MSS, including the City of San Rafael, City of Larkspur, County of Marin, Las Gallinas Valley Sanitary District, Town of Ross, Town of Fairfax, and the Town of San Anselmo.

This report summarizes results from our review of MSS’s 2026 indexed rate application per the streamlined rate setting methodology established in 2019. The methodology is described in the amended Exhibit B to the Franchise Agreement that the City holds with MSS. * * * * *
We appreciate the opportunity to be of service to the City. If you have any questions regarding this report or need additional information, please contact me via the information below.

Sincerely,
Garth Schultz | Principal
R3 Consulting Group, Inc.
510.292.0853 | [email protected]

1. FINDINGS
City of San Rafael | Review of MSS’s 2026 Rate Application Page 1 of 4 Executive Summary
On August 29, 2025, MSS submitted its application for annual compensation adjustment, effective January 1, 2026. This is an indexed year rate adjustment, which primarily projects compensation due to MSS based on the applicable Water-Sewer-Trash CPI Index (WST). Based on our review of the rate application, R3 concurs with MSS’s calculated 2026 rate revenue requirement of $31,431,863, which is less than the 2025 rate revenue requirement of $31,895,957. No adjustment to solid waste rates is necessary in 2026 to meet the calculated rate revenue requirement. The $464,094 surplus in 2026 projected rate revenues compared to the 2026 revenue requirement will be carried forward to the 2028 compensation adjustment application and will offset the 2028 rate adjustment, as per Exhibit B, Section II.B.10.d of the Franchise Agreement. That provision establishes that surplus rate revenues are applied to offset future years rate adjustments, and therefore surplus revenues serve as rate stabilization reserves.

Table 1: 2026 Rate Adjustment Summary
Compensation Category 2025 2026 Dollar
Change
Percentage
Change
Adjustment
to Rates
Collector Operations $19,086,959 $20,643,241 $1,556,282 8.15% 4.88% Garbage Landfilling and
Organics Processing $3,182,484 $3,403,540 $221,056 6.95% 0.69% SB 1383 Compliance $224,558 $221,634 -$2,924 -1.30% -0.01% Illegal Dumping Program $571,291 -$59,925 -$631,216 -110.49% -1.98% Profit Calculation $2,421,219 $2,541,223 $120,004 4.96% 0.38% Recyclable Materials Processing $660,900 $433,034 -$227,866 -34.48% -0.71% Interest $434,061 $455,765 $21,704 5.00% 0.07%
Zero Waste Marin Fees $287,781 $371,915 $84,134 29.24% 0.26% Franchise Fees $3,161,401 $3,129,000 $407,548 -1.02% -0.10% Other Agency Fees $1,480,601 $0 -$1,480,601 -100.00% -4.64% Annual Rate Revenue
Reconciliation $281,947 $140,840 -$141,107 -50.05% -0.44% Recycling Property Insurance $102,755 $95,260 -$7,495 -7.29% -0.02% Street Sweeping $0 $56,337 $56,337 N/A 0.18%
Total Annual Rate Revenue
Requirement $31,895,957 $31,431,863 $464,094 N/A -1.46% City of San Rafael | Review of MSS’s 2026 Rate Application Page 2 of 4 2026 Rate Adjustment Details
Collector Operations
Collector Operations compensates MSS for labor, benefits, general and administrative, depreciation and lease, maintenance, fuel and oil. Per Exhibit B, compensation for Collector Operations is adjusted using the CPI index for Water and Sewer and Trash Collection. R3 used publicly available Bureau of Labor Statistics data to verify the calculated increase of 5.0% to Collector Operations. Per Exhibit B, the rate adjustment is subject to a 2.5% minimum and a 5% maximum rate cap for MSS’s collection operations.

The value for 2026 also includes a $162,078 increase for the Illegal Dumping Program (as per agreed upon compensation changes for the phasing-in of the Program from 2025 through 2027 per the Fifth Amendment to Agreement) as well as a placeholder $160,000 reduction due to Illegal Dumping Program funds that were not spent in 2025 (and which will be fully reconciled in 2026 and any remainder credited to the 2027 rate application).

The result is $20,643,241 in Collector Operations for the City of San Rafael in 2026, which is an increase of $1,556,282 compared to 2025.

Garbage and Organics Tipping Fees
Garbage Landfilling and Organics Processing tipping fee projections are calculated using actual tonnages collected from January 1 through June 30, 2025, which are then annualized to project total 2025 tonnages. Those tonnages are then multiplied by the projected 2026 tipping fees calculated in accordance with Exhibit B. This is based on the actual per ton tipping fees for each waste stream category, or if unavailable, projected tipping fees are calculated using the current year per ton tipping fees escalated by the change in WST— subject to a minimum increase of 2.5% and a maximum increase of

5.0%.

R3 reviewed MSS’s projected 2025 tons and the 2026 per ton tipping fees for residential garbage, residential green waste/organics, commercial garbage, commercial mixed waste for processing, commercial food scraps, and MSS-served Agencies’ waste delivered to MSS. Per Exhibit B, R3 confirmed that MSS correctly projected tons by category using annualized actual tons for the first six months of the current rate year and, as actual tipping fees are unavailable, applied the 5.0% WST adjustment to project 2026 per ton tip fees. The result is $3,403,540 in Garbage and Organics Tipping fees for the City in 2026, which is an increase of $221,056 compared to 2025.

Compliance with SB 1383
MSS is requesting continued revenue in association with SB 1383 with the goal of increasing compliance with the State of California’s organics state mandate(s). The company will continue to provide compliance monitoring and inspection services, contamination monitoring, outreach and education, and reporting functions on behalf of the City. The 2026 revenue recovery for these new SB 1383 compliance measures for MSS in the City is $221,634, a decrease of $2,924 from 2025.

Illegal Dumping Program Funding
Since 2020, the City had been piloting and testing programs to reduce and abate incidences of illegal dumping in the City, in partnership with MSS and others. In 2025, the City allocated $571,291 for the illegal dumping pilot program. In 2025, the City incorporated the illegal dumping program as an on-going program (no longer a pilot program) via the execution of the Fifth Amendment to the Agreement. That action resulted in ongoing funding of the illegal dumping program being included in Collector Operations.

The $59,925 credit to this category in 2026 is simply to recognize that some 2025 illegal dumping pilot program funds were not spent and therefore are a credit to the 2026 rate application. This category will no longer be present starting in 2027 since the illegal dumping program will remain part of Collector Compensation.

City of San Rafael | Review of MSS’s 2026 Rate Application Page 3 of 4 Profit Calculation
R3 reviewed the calculation of MSS’s profit, which is a function of total allowable operating expenses of $24,208,489 for the City, divided by the contractually set operating ratio of 90.5% and subtracting the same sum, rounded to the nearest dollar. MSS’s actual profit achievement will vary depending on the company’s real revenues and expenses; as such, profit is not guaranteed. The result is $2,541,223 in Calculated Profit for the City in 2026, which is an increase of $120,004 compared to 2025. The increase is due to increases in allowable operating expenses, which were described in the previous sections of this report.

Recyclable Materials Processing
A net recyclable materials processing cost is calculated each year to share the risks and rewards of changing recycling markets between rate payers and MSS. Per Exhibit B, the Recyclable Materials Processing cost is escalated by the annual change in the WST and that amount is then divided by the number of all tons of recyclable materials processed at Marin Recycling Center from July 1 of the prior rate year through June 30 of the current rate year.

The recyclable materials revenue amount is calculated based on 90% of the total revenue received by the Marin Recycling Center for recyclable materials, which is then divided by the number recyclable material tons processed at Marin Recycling Center. The calculation does not include income or tons from recyclable materials processed for third parties or agencies that were not customers of MSS or the Marin Recycling Center as of December 31, 2018. For Rate Year 2026, the resulting Net Recyclable Materials Processing Cost Per Ton is $49.64, a decrease of $23.94 from the 2025 value of $73.58. The primary driver of this change is that CRV is now collected on wine and spirit containers. The result is $433,034 in Recyclable Materials Processing costs for the City in 2026, which is a decrease of $227,866 from 2025.

Interest
Interest is based on MSS’s actual interest from its loan amortization schedules for actual and projected capital expenditures for services under the Agreement as of the last base year review in 2019. This is increased in the same manner as Collector Operations, as described above, via WST annually.

The result is $455,765 in interest for the City in 2026, which is an increase of $21,704 compared to 2025.

Zero Waste Marin Fees
Zero Waste Marin Fees are set as a pass-through as government fees and, per Exhibit B to the agreements, changes in such fees result in appropriate adjustments to rates to compensate MSS for increases or decreases in such fees. Zero Waste Marin fees included in the annual indexed rate applications for the MSS service area are set to be equal to the current Zero Waste Marin Fee assessments for the current fiscal year, with 100% of the MSS hauler fees passed through to the MSS Agencies, and with none of the MSS Transfer Station fees passed through to the MSS Agencies. The result is $371,915 in Zero Waste Marin Fees for the City in 2026, which is an increase of $84,134 compared to 2025. The increase is due to expiration of grant funding from CalRecycle.

Cost of Service and Franchise Fee
The City’s Cost of Service Fee is set by the City to cost the City’s costs associated with management and administration of the Agreement with MSS and the solid waste utility. The Franchise Fee is established via agreement of the City and MSS and for the value of City property used by MSS in collection operations. Taken together, the Cost of Service Fee and Franchise Fee amount to $3,129,000 in 2026.

This is a reduction of $32,401 compared to 2025.

City of San Rafael | Review of MSS’s 2026 Rate Application Page 4 of 4 Other Agency Fees
Other Agency Fees are calculated and applied to each of the Agencies based on the specific fees set by those Agencies. No Other Agency Fees are including the 2026 compensation and rate application for the City.

Annual Rate Revenue Reconciliation
The Rate Revenue Reconciliation item serves to reconcile the projected rate revenue from the 2024 rate adjustment to the actual revenue collected through rates charged during the 2024 rate year. MSS experienced a shortfall of $140,840 in 2024 billed revenues in the City compared to the 2024 revenue requirement. That amount is therefore included in the 2026 rate application as line item contributing towards the total 2026 revenue requirement. The $140,840 amount of rate revenue reconciliation from 2024 and applicable to 2026 is a reduction compared to the $281,947 from 2023 that was applicable to the 2025 revenue requirement. Therefore, the overall impact to the 2026 revenue requirement is a decrease of $141,107, reducing the overall 2026 rate adjustment by 0.44%.

Recycling Property Insurance
Property insurance for recycling processing facilities has gone up across the country due to due to fire risks from lithium batteries. MSS has had no such claims but had previously received premium increases based on its risk profile. MSS has previously and separately briefed the Agencies on this item, and R3 is aware of the market circumstances surrounding it. R3 finds that this extraordinary item is supported and reasonable. The result is $95,260 in Recycling Property Insurance for the City in 2026, which is a decrease of $7,495 compared to 2025.

Street Sweeping
The City has requested that MSS provide residential street sweeping funded in the solid waste rates. The 2026 compensation application includes $56,337 in street sweeping costs, accounting for 7 months of residential street sweeping service starting in June 2026 at a cost of $8,048.13 per month. The inclusion of this cost is contingent on City Council authorization of a 6th Amendment to the Agreement for MSS to begin providing this service.

San Rafael City CouncilApril 20, 2026

San Rafael City Council
April 20, 2026