City Council Staff Report Page 1 of 4 June 23, 2026
Staff Report
Agenda Item No. 4.5
DATE: June 23, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt a Resolution to Receive and Acknowledge the Annual Rate Adjustments for Solid Waste, Recycling, and Organics Collection Services, Effective July 1, 2026, Pursuant to Article 11 of the Franchise Agreements with Allied Waste Services of North America, LLC and Tri-City Economic Development Corporation
EXECUTIVE SUMMARY
Staff recommends that the City Council adopt a resolution to receive and acknowledge the annual rate adjustments for solid waste, recycling, and organics collection services, effective July 1, 2026, pursuant to Article 11 of the Franchise Agreements with Allied Waste Services of North America, LLC (“Allied” dba “Republic Services”) and Tri-City Economic Development Corporation (“Tri-CED”).
The City's Franchise Agreements with Republic Services and Tri-CED provide for solid waste, recycling, and organics collection services and prescribe an annual Index-Based Rate Adjustment and City review. The annual rate review component is designed to ensure that rates remain consistent with actual operating costs while maintaining reliable collection services for solid waste, recycling, and organics for Union City residents and businesses. The approved rates are then charged directly to both residential and commercial customers.
STRATEGIC PLAN ALIGNMENT
This report is in alignment with the following City Council priorities:
Goal D: Environmental Sustainability and Infrastructure Strategy 12: Coordinate with City departments, commercial and residential customers to implement the requirements of state organics and food recovery legislation.
Strategy 13: Continue monitoring the Collection Services Franchise Agreement Contractors' assistance with organics regulations and waste diversion compliance.
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BACKGROUND
The City maintains Franchise Agreements with Republic Services and Tri-CED for the collection, processing, recycling, and disposal of solid waste, recyclable materials, and organic materials generated within the City. The Franchise Agreements include a methodology for annual Index-Based Rate Adjustments that allows rates to be adjusted to reflect changes in operating costs and regulatory requirements. Under the Franchise Agreements, the compensation and rate-setting methodology, commencing in FY 2026- 2027, relies on the annual change in a single index or CPI, specifically series CUSR0000SEHG, Water and Sewer and Trash Collection Services in the U.S. City Average, all urban consumers, seasonally adjusted, compiled and published by the U.S.
Department of Labor, Bureau of Labor Statistics. In addition, there is an annual 5.0% cap on the rate increase for solid waste, recycling, and organics collection. Any percentage above 5.0% rolls over to the next fiscal year.
Republic Services and Tri-CED had submitted their Fiscal Year ("FY") 2026-2027 rate adjustment applications in accordance with the Franchise Agreements. The City retained R3 Consulting Group, Inc. ("R3"), the City's solid waste and recycling consultant, to independently review the submitted applications, verify the calculations, and confirm compliance with the Franchise Agreements.
The annual rate review process ensures that collection rates remain consistent with the actual cost of providing service while maintaining compliance with contractual obligations and regulatory requirements.
Using the Index-Based Rate Adjustment methodology established in the Franchise Agreements, the FY 2026-2027 rates were adjusted to reflect changes in collection costs, disposal costs, bad debt, City fees, and the newly adopted StopWaste Regulatory Fee.
The resulting rate adjustments include:
• Residential customers receive services from both Republic and Tri-CED. As a result, the combined residential rate adjustments range from approximately 3.11% to 3.53%, depending on cart size and service level.
• Commercial and multi-family customer rate adjustments vary based on service type, container size, collection frequency, and customer-specific service configurations. Depending on the services received, commercial and multi-family customers may be affected by rate adjustments from Republic, Tri-CED, or both. • The rates also include the new StopWaste Regulatory Fee adopted by the Alameda County Waste Management Authority, effective July 1, 2026, to support implementation of regional waste reduction, recycling, organics diversion, and regulatory compliance programs, including SB 1383, SB 54, and AB 939.
DISCUSSION
Rate Adjustment Review
On February 27, 2026, Republic Services and Tri-CED submitted their FY 2026-2027 Index-Based Rate Adjustment applications to the City.
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The City retained R3 Consulting Group to conduct an independent review of the submitted applications and supporting documentation. R3's review included verification of:
• Index calculations
• Disposal cost adjustments
• Bad debt calculations
• City fee adjustments
• Supporting documentation
• Mathematical accuracy
• Compliance with Franchise Agreement requirements
Following review by both R3 and City staff, it was determined that the calculations submitted by Republic Services and Tri-CED were accurate and consistent with the methodology established in the Franchise Agreements. Republic Services and Tri-CED subsequently reviewed the final calculations and concurred with the results. While the rate application process authorizes the City Manager to approve adjustments of up to
5.0%, staff recommends that the City Council acknowledge and receive the FY 2026- 2027 rate adjustments calculated pursuant to the standard methodology outlined in the Franchise Agreements.
The complete Republic Services and Tri-CED rate schedules are included as exhibits to the resolution. Below are explanations of the rate increases, including the StopWaste regulatory fee.
Residential Rate Adjustments
The proposed FY 2026-2027 residential rates include adjustments for collection services, disposal costs, bad debt, City fees, and the implementation of the new StopWaste Regulatory Fee.
The resulting residential rate adjustments range from approximately 3.11 percent to 3.53 percent depending upon cart size and service level.
As an example, the monthly rate for a customer subscribed to a 35-gallon landfill cart, with any sized recycling and organics carts, will increase from $69.09 per month to $71.76 per month, representing an increase of $2.67 per month.
Commercial and Multi-Family Rate Adjustments
Commercial and multi-family rates were calculated using the same Franchise Agreement methodology and include adjustments associated with collection costs, disposal costs, bad debt, City fees, and regulatory fees.
Commercial and multi-family rate adjustments vary depending upon:
Container size
Service frequency
Service type
Recycling and organics service levels
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Customer-specific service configurations
As an example, a commercial customer using one 1-yard landfill bin, one 96-gallon recycling cart, and one 64-gallon organics cart, serviced once per week, will experience a monthly increase from $283.11 to $292.88.
StopWaste Regulatory Fee
In March 2026, the Alameda County Waste Management Authority (StopWaste) adopted a new Regulatory Fee applicable to residential, commercial, multi-family, and drop-box accounts effective July 1, 2026.
The fee was adopted to support regional implementation of State-mandated waste reduction, recycling, organics diversion, and producer responsibility programs, including:
• SB 1383 Short-Lived Climate Pollutants Program
• SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act • AB 939 Integrated Waste Management Act
• Other regional waste reduction and sustainability initiatives The StopWaste Regulatory Fee is included within the proposed FY 2026-2027 rates.
FISCAL IMPACT
The Fiscal Year 2026-2027 Collection Services Rate Schedules will become effective July 1, 2026. The proposed rate adjustments will support the continued provision of reliable solid waste, recycling, and organics collection services while maintaining compliance with contractual obligations and regulatory requirements.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution to receive and acknowledge the annual rate adjustments for solid waste, recycling, and organics collection services, effective July 1, 2026, pursuant to Article 11 of the Franchise Agreements with Republic Services and Tri-CED.
Prepared by: Todd Storti
Submitted by: Jennifer Phan, Deputy City Manager
Attachments
1. Draft Resolution
2. Exhibit A – Republic Services - Fiscal Year 2026-2027 Solid Waste, Recycling, and Organics Rate Schedules
3. Exhibit B – Tri-CED - Fiscal Year 2026-2027 Recycling Rate Schedules
4. Exhibit C – R3 Consulting Group, Inc. - Fiscal Year 2026-2027 Rate Adjustment Review Memorandum