Special Notice / Hearing: Complied with Notice
Requirements / Public Hearing
Vote Required: Majority
To: Honorable Board of Supervisors, Acting as the Governing Board of County Service Area No. 8
From: Carolyn Bloede, Director, Sustainability Department
Subject: Adopting the 2025 Garbage and Recyclables Collection Rates for County Service Area No. 8 (North Fair Oaks)
RECOMMENDATION:
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Acting as the Governing Board of County Service Area No. 8, recommendation to conduct a public hearing:
A) Open public hearing
B) Close public hearing
C) Adopt a resolution adopting the 2025 Garbage and Recyclables Collection Rates for County Service Area No. 8 (North Fair Oaks).
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BACKGROUND:
The South Bay Waste Management Authority (SBWMA) is a joint powers authority formed by eleven local government jurisdictions. This authority owns and manages the Shoreway Environmental Center, and provides oversight, and support of service providers that collect, process, and dispose of materials. Recology San Mateo County (Recology) is the current franchise holder and provides solid waste collection services to County Service Area No. 8 (CSA-8) and the Unincorporated Franchised Area (CFA) within the SBWMA service area (Burlingame to Menlo Park).
On October 20, 2009, this Board adopted Resolution No. 070423 which approved a franchise agreement with Recology to provide services for the collection of garbage as well as recyclable and organic materials from January 1, 2011, through December 31, 2020.
On June 4, 2019, this Board adopted Resolution No. 076641 approving the Amended and Restated Recology Franchise Agreement (Recology Franchise Agreement) for an additional 15-year term expiring on December 31, 2035.
On August 13, 2024, this Board adopted Resolution No. 080557, approving the FY 2024-25 Garbage and Recyclables Collection Service Charges Report for CSA-8. These charges appear on the tax roll for FY 2024-25 and are calculated based on the effective rates adopted in January 2024.
On November 12, 2024, this Board adopted Resolution No. 080736 setting January 14, 2025, at 9:30 a.m. as the time and place for a public hearing on the 2025 Garbage and Recyclables collection rates for CSA-8.
The adoption of the annual garbage and recyclables collection rates follows a Proposition 218 rate setting process as defined under Articles XIII C and XIII D of the State Constitution. The County Sustainability Department completed this process for 2025 by: setting a public hearing to consider any new or increased property related fees (rates), mailing mandated notices to property owners alerting them of the public hearing and the opportunity to submit protest letters, and publishing a notice of the public hearing twice in a local newspaper.
To date, no protest letters have been received by the Clerk of the Board. If there were a successful majority protest in writing from the property owners, the Board would be prevented from increasing the rates for the service area. In CSA-8, this could lead to larger rate increases in the future due to the amended solid waste contracts and the need to achieve cost recovery for services provided. Additionally, on November 21, 2024, the Sustainability Department presented information on the proposed rate increases to the North Fair Oaks Community Council.
DISCUSSION:
Cost Allocation
The SBWMA provides cost and revenue data to each jurisdiction in an annual report. The report, titled “SBWMA Final Report Reviewing the 2025 Recology San Mateo County Compensation Application,” (SBWMA 2025 Rate Report), dated September 19, 2024, was adopted by the SBWMA Board on September 26, 2024. The report contains collection, disposal, and processing costs and the revenue collected for the service area. These costs are allocated each year based on the updated indices and statistics. Therefore, the percent of cost allocated to each Member Agency changes each rate year.
The proposed rates are developed using the cost and revenue data provided by the SBWMA for the CSA-8 service area. The proposed rates for CY 2025 are listed in Exhibit A and represent a recommendation for an 11 percent rate increase for residential dwellings mandatory services (two 32-gallon or one 64-gallon cart) and for commercial cart and bin services from the rates previously set by the Board in CY 2024.
Rate Adjustment
The proposed rate increases for two 32-gallon garbage carts or one 64-gallon garbage cart for one to four residential dwelling units will be $4.56 per month, representing an increase in monthly charges from $41.46 to $46.02. For dwellings that contain over four units, or are considered a mixed-use parcel, the proposed rate increase for 32-gallon garbage carts is $4.56 per month (an increase from $41.46 to $46.02 per month). The 32-gallon minimum service for mixed-use parcels will appear on the tax roll. The recommended rates will continue to reflect a five percent franchise fee that will be paid to the County from Recology to administer these programs.
Garbage and recycling rates are developed to generate adequate revenues to pay for the projected costs of service in the upcoming calendar year. In CY 2024, a new contract for processing and disposal, as well as new state-mandated services, resulted in larger-than-usual annual cost increases for SBWMA members. To offset these increases, SBWMA applied rate stabilization reserves, and the County implemented a range of rate-reduction strategies. This included applying a surplus of $126,087 from 2021, exercising a contract provision with Recology to limit cost increases to 5% and Carry Forward remaining costs to the 2025 Rate process, and increasing the rates over a two-year period (CY2024 and CY2025). These strategies were approved by the Board in January of 2024. In alignment with the rate reducing strategies approved last year, the proposed 11 percent increase for CY 2025 includes the remaining cost increase from CY 2024 and will conclude the two-year phased approach.
If approved by the Board, these new rates will be effective on January 1, 2025 (Exhibit A). The charges based on the rates will appear on the property owner’s tax bill for FY 2025-26 for all parcels with dwelling units, pursuant to County Ordinance Codes 4.04.200 and 4.04.220. Additional elective services will be billed directly by Recology. Commercial parcels without dwelling units will be directly billed by Recology for all services.
Unscheduled Services (Additional Services)
The rates for Unscheduled Services are additional services beyond the basic mandatory collection services and are electively subscribed to by the ratepayers, per the Recology Franchise Agreement. The Recology Franchise Agreement allows for a consumer price index (CPI) increase to the Unscheduled Service fees. The Unscheduled Service fees for CY 2025 reflect a 2.97 percent CPI adjustment above the CY 2024 fees charged by Recology. Any unscheduled service requested by the customer will be billed directly to the customer by Recology effective January 1, 2025. These Unscheduled Service fees are not property related fees and, therefore, not subject to the Proposition 218 rate setting requirements. These fees are reflected in Exhibit B.
The County Attorney’s Office has reviewed and approved the resolution as to form.
FISCAL IMPACT:
There is no direct impact to the Net County Cost. The garbage and recyclables rates are levied on properties that are leased or owned by the County that are in CSA-8.
EQUITY IMPACT:
The proposed rate increase may have varying impacts on households in the County Service Area No. 8 (North Fair Oaks Area), including low-income households and renters, who are more vulnerable to rising costs. To ensure that all residents are informed and can participate in the Proposition 218 process, public noticing will include multilingual outreach to improve accessibility across diverse communities.
ATTACHMENTS:
1. Exhibit A: 2025 Garbage and Recyclables Collection Rates in County Service Area No. 8
2. Exhibit B: 2025 Unscheduled Service Fees for County Service Area No. 8