Public Works Agency
www.santa-ana.org/pw
Item # 16
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
April 21, 2026
TOPIC: Waste Infrastructure System Enterprise Agreement with the County of Orange, Rate Stabilization Memorandum of Understanding with Republic Services, and an Agreement with HF&H Consultants for a Refuse Rate Adjustment Analysis
AGENDA TITLE
Agreement with the County of Orange for the Waste Infrastructure System Enterprise, Rate Stabilization Memorandum of Understanding with Republic Services, and an Agreement with HF&H Consultants, LLC for a Refuse Rate Adjustment Analysis (Non- General Fund)
RECOMMENDED ACTION
1. Authorize the City Manager to execute the Waste Infrastructure System Enterprise agreement with the County of Orange for municipal solid waste disposal rates and services for a ten-year term beginning July 1, 2026 and expiring June 30, 2036, with provisions for one optional, ten-year extension (Agreement No. A-2026-XXX).
2. Direct the City Manager to negotiate a Memorandum of Understanding with Republic Services to memorialize an agreement between Republic Services and the City to address the subsidization of the County of Orange, Orange County Waste & Recycling landfill tonnage disposal rate increases for Fiscal Year 2026- 27 (Agreement No A-2026-XXX).
3. Authorize the City Manager to execute an agreement with HF&H Consultants, LLC to provide a Proposition 218 rate adjustment analysis in an amount not to exceed $150,800 for the term beginning April 21, 2026 and expiring April 20, 2027, with a provision for one, one-year extension. (Agreement No. A-2026- XXX).
GOVERNMENT CODE §84308 APPLIES: No
Waste Infrastructure System Enterprise Agreement with the County of Orange April 21, 2026
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EXECUTIVE SUMMARY
On January 27, 2026, the County of Orange adopted a successor agreement to the existing Waste Disposal Agreement (WDA) that governs disposal of municipal solid waste at County landfill facilities. The new agreement, titled the Waste Infrastructure System Enterprise (WISE) Agreement, establishes a revised landfill disposal rate structure and operational framework intended to address increased regulatory, operational, and capital costs associated with landfill management.
The WISE Agreement was approved by the Orange County Board of Supervisors and will become effective if jurisdictions representing at least 50% of the landfill tonnage delivered to County facilities ratify the agreement. Participating cities must approve the agreement by April 30, 2026 to receive the negotiated rate structure identified below in Figure 1 or else be charged rates that are higher than the negotiated rates. As of April 14, 2026, 27 cities have adopted the WISE Agreement, surpassing the 50% threshold.
Cities that fail to enter into the WISE Agreement will be charged the non-WISE rate of $92.70/ton rate (as opposed to the $67.00/ton WISE rate), beginning July 1, 2026.
Although the WISE Agreement increases landfill disposal costs by 53%, the City has limited alternatives due to the County’s control of the regional landfill system.
Redirecting waste outside the County is economically unfeasible: Riverside landfills are at capacity, and the Orange County City Managers Association (OCCMA) consultants estimate that outsourcing to Los Angeles or San Diego would cost approximately $100 per ton.
To mitigate the near-term financial impact of the increased disposal costs, staff recommends a one-year rate stabilization strategy and execution of a Memorandum of Understanding (MOU) with Republic Services that keeps trash disposal rates subsidized for the near term and initiating a Proposition 218 process to update refuse collection rates in a manner that reflects the increased landfill disposal costs in Fiscal Year 2026-
27. Approval of the WISE Agreement, the professional services agreement with HF&H Consultants, and directing the City Manager to negotiate an MOU with Republic Services will allow the City to maintain reliable solid waste disposal services while managing the financial impacts associated with the new County disposal rate structure.
BACKGROUND & DISCUSSION
The County of Orange (County), through Orange County Waste & Recycling (OCWR), manages the regional solid waste disposal system serving Orange County. The County operates three active organic processing facilities, 20 inactive solid waste disposal sites, and four household hazardous waste collection centers.
Solid waste generated within the City of Santa Ana (City) is disposed of at County landfill facilities and has historically been governed by the 2009 WDA between the City Waste Infrastructure System Enterprise Agreement with the County of Orange April 21, 2026
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and the County. Under the WDA, all 34 Orange County participating jurisdictions agreed to dispose of solid waste within the County landfill system in exchange for stable disposal rates and guaranteed landfill capacity.
The WDA established parameters for landfill disposal rates and the importation of waste from outside the County. The City Council approved the original WDA on May 4, 2009, with a term beginning July 1, 2010. The agreement was subsequently amended several times to maintain rate stability for participating jurisdictions.
Most recently, the City Council approved an amendment to the WDA on May 20, 2025, extending the agreement through June 30, 2026 to allow the Orange County City Managers Association (OCCMA) time to finalize negotiations with the County on a successor agreement, now titled the Waste Infrastructure System Enterprise (WISE) Agreement (Exhibit 1).
WISE Agreement
The County developed the WISE Agreement as the successor to the WDA to address increased operational requirements associated with landfill management, including new State regulatory mandates, environmental compliance obligations, and long-term infrastructure and closure costs. The proposed agreement was adopted by the Orange County Board of Supervisors and requires ratification by a majority of Orange County cities to become effective. The majority has been met; as of April 14th, 27 cities have adopted the WISE Agreement, surpassing the 50% threshold.
Participating cities coordinated negotiations with the County through OCCMA to secure more favorable terms for local jurisdictions. During negotiations, OCWR identified rising operational and regulatory costs related to landfill operations, as well as the need for additional capital funding to support closure activities at the Brea Olinda Landfill and the long-term capacity expansion of the landfill in San Juan Capistrano.
OCWR’s initial WISE proposal included a substantial increase in disposal rates from the current $43.76 per ton in Fiscal Year (FY) 2025-26 to $82.00 per ton in the first year of the new agreement, with projected increases reaching approximately $107.00 per ton by 2035. Through extensive negotiations, participating agencies secured a phased rate structure for the first three years of the agreement, followed by annual Consumer Price Index (CPI) adjustments beginning in FY 2029-30.
Figure 1 – Disposal Fee Structure
Fiscal Year Contract Rate % Increase
2025-26 (Current) $43.76/ton ---
2026-27 $67.00/ton 53.1%
2027-28 $74.00/ton 10.4%
2028-29 $81.00/ton 9.5%
2029-30 $81.00/ton + CPI Variable
Waste Infrastructure System Enterprise Agreement with the County of Orange April 21, 2026
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In addition to the phased rate structure, OCCMA successfully negotiated several key provisions intended to improve transparency, accountability, and cost control, including:
An annual “True-Up” process beginning in 2030 that may freeze CPI adjustments depending on OCWR’s cost recovery and tonnage revenue, with the ability for cities to initiate a meet-and-confer process supported by an independent consultant.
Ongoing OCCMA participation through annual reporting and notification requirements to improve transparency and oversight of OCWR’s financial status and implementation of the WISE Agreement.
Removal of language that would have held cities financially responsible for hauler non-payment.
Adoption of a blended CPI index consisting of 60% Solid Waste, Water, and Sewer index and 40% All Urban Consumers index.
Removal of the requirement that all residential organic waste be sent to County facilities, allowing cities flexibility in selecting organic waste processing services.
Cities must approve the WISE Agreement by April 30, 2026 in order to receive the negotiated rate structure. Jurisdictions that do not participate may be subject to landfill disposal rates of at least 10% higher than the negotiated rates. The agreement will become effective once jurisdictions representing at least 50% of the disposal tonnage delivered to County landfills approve the agreement; that threshold has been met. The WISE Agreement has an initial ten-year term through June 30, 2036, with one optional ten-year extension.
With the agreement taking effect July 1, 2026, the increased WISE agreement costs are anticipated to increase waste servicing costs by up to 12% for commercial, 15% for residential, and 23% for industrial customers, excluding any hauler-related service cost adjustments.
Given the County’s ownership and operation of the regional landfill system, the City has limited alternatives for waste disposal. As a result, participation in the WISE Agreement represents the most cost-effective option available for maintaining reliable disposal services for the City’s solid waste system.
Memorandum of Understanding (MOU) with Republic Services To mitigate the immediate financial impact of the landfill disposal rate increase, staff recommends a one-year rate stabilization strategy for FY 2026-27 through a MOU with Republic Services.
Staff reviewed the City’s Refuse Collection Service Enterprise Fund and determined that sufficient spendable fund balance, $8.3 million, is available to temporarily offset the increase in landfill disposal costs. The estimated cost to offset the FY 2026-27 disposal rate increase is approximately $6.8 million. The enterprise fund currently maintains Waste Infrastructure System Enterprise Agreement with the County of Orange April 21, 2026
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adequate reserves to offset this cost for one fiscal year without affecting essential solid waste operations.
The Solid Waste Enterprise fund balance has been strategically accumulated to provide a fiscal buffer against emergencies, including unforeseen rate increases and the potential cancellation of revenue-sharing programs. Consistent with enterprise fund accounting standards, all balances held in this fund must maintain a direct nexus to solid waste operations. The Solid Waste Enterprise fund balance is also utilized to ensure compliance with evolving state mandates including new regulatory requirements and programming, improving public building’s waste storage and disposal facilities, rigorous auditing standards, and comprehensive reporting obligations.
Approval of the MOU formalizes the City’s strategy to stabilize refuse rates for residents and businesses during FY 2026-27 while the City evaluates long-term rate adjustments.
The purpose of a MOU is to memorialize the agreement between the City of Santa Ana and Republic Services regarding the refuse rate structure for Fiscal Year (FY) 2026-27.
The MOU will establish how the City will plan to mitigate the impact of the WISE rate increase on residents and businesses by using rate reserves to offset most of the increases in disposal costs in the initial year. Reserves contained in the City’s Refuse Enterprise Fund would be used to cover the increased landfill tipping fees associated with the WISE Agreement for all customer classes. Under this approach, the City would reimburse Republic Services for the incremental disposal cost increases, thereby shielding customers from these additional charges, during fiscal year 2026-27. The MOU will also establish the methodology of that rate structure including the formal payment process and reporting structure.
Staff is seeking City Council to direct staff to proceed with the rate stabilization strategy and to negotiate an MOU with Republic Services acknowledging the rate stabilization structure. Staff will return to Council in the future for approval of such an MOU.
Agreement with HF&H
To ensure the long-term financial sustainability of the City’s solid waste program, it is critical to recognize that the City cannot indefinitely absorb the added costs imposed by the County’s WISE Agreement. While the use of approximately $6.8 million from the Refuse Collection Service Enterprise Fund provides a necessary "Rate Stabilization Shield" for Fiscal Year 2026-27, these reserves are finite and intended for one-time emergency or stabilization use rather than ongoing operational subsidies. Relying on reserves to offset a permanent 53% increase in landfill tipping fees would lead to the rapid depletion of the fund and insolvency. Consequently, staff will initiate several actions, including a formal Proposition 218 process, to update refuse collection rates to reflect the increased landfill disposal costs associated with the WISE Agreement for consideration by January of 2027.
Waste Infrastructure System Enterprise Agreement with the County of Orange April 21, 2026
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Staff recommends awarding a professional services agreement to HF&H Consultants to conduct the necessary financial analysis and manage the Proposition 218 rate adjustment process (Exhibit 2). HF&H is a recognized leader in solid waste, recycling, and organics consulting, specifically known for their expertise in complex municipal rate modeling and regulatory compliance. The firm has an established contractual relationship with the City over eight years, providing a deep understanding of Santa Ana’s unique solid waste rate structures, historical tonnage data, and operational requirements. Most importantly, HF&H was a primary technical participant in the regional negotiations between the OCCMA and the County. Their deep involvement in crafting the WISE Agreement’s phased rate structure and transparency provisions makes them uniquely qualified to translate these regional changes into local rate protections. Lastly, HF&H has a deep understanding of the City’s Hauler Agreement with Republic Services as they were the main consultant in developing the contractual requirements, including the existing rate structure.
Santa Ana Ordinance No. NS-3041 authorizes the City to utilize competitively procured contracts from other public agencies. The City of Palm Desert’s Contract No. C48690 with HF&H Consultants was awarded through an open and competitive bidding process and meets the City’s procurement requirements.
Recommendations
Staff recommends approval of the WISE Agreement and the professional services agreement with HF&H Consultants. Staff further recommends a rate stabilization strategy for FY 26/27 and negotiating an MOU with Republic Services to that effect.
Together, these actions provide a coordinated approach to maintaining reliable solid waste disposal services while responsibly managing both the near-term and long-term financial impacts associated with the County’s new landfill disposal rate structure.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Funds are budgeted and available for the HF&H Consultant agreement in the following account for FY 2025-26. Any remaining balances not expended by the end of the fiscal year will be presented to City Council for approval of carryforwards into FY 2026-27.
There is no immediate fiscal impact associated with the approval of the WISE Agreement. The estimated $6.8 million of spendable fund balance required to stabilize refuse rates for Santa Ana customers over the 12-month period in FY 2026-27 will be presented to City Council for consideration as a part of the FY 2026-27 budget. This is intended as a one-time use of fund balance to mitigate near-term rate impacts, with staff anticipated to return to City Council at a later date to evaluate future rate adjustments.
The Refuse Collection Service fund is projected to end the fiscal year with Waste Infrastructure System Enterprise Agreement with the County of Orange April 21, 2026
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approximately $8.3 million in spendable fund balance.
Fiscal
Year
Accounting Unit –
Account No.
(Project No.)
Fund
Description
Accounting Unit,
Account Description Amount
CURRENT BUDGET
2025-26 06917640-62300
Refuse
Collection
Service
Refuse Collection
Service, Contract
Services -
Professional
$150,800
TOTAL $150,800
EXHIBIT(S)
1. Waste Infrastructure System Enterprise Agreement
2. HF&H Consultant Agreement
Submitted By: Rodolfo Rosas, P.E., Acting Executive Director, Public Works Agency Approved By: Alvaro Nuñez, City Manager