Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Carolyn Bloede, Director, Sustainability Department
Subject: Setting a Public Hearing for 2025 Garbage and Recyclables Collection Proposed Rates in Unincorporated Franchised Area
RECOMMENDATION:
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Adopt a resolution:
A) Setting Tuesday, January 14, 2025, at 9:30 a.m. at the regularly scheduled Board meeting as the time and place for a public hearing on the proposed garbage and recyclables collection rates for Unincorporated Franchised Area for calendar year 2025; and
B) Direct the necessary notices for said hearing.
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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 of the contractors that collect, process, and dispose of garbage and recyclables. Recology San Mateo County (Recology) is the franchise operator that 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, the Board adopted Resolution No. 070423 which approved a franchise agreement with Recology to provide collection of recyclables, organics, and garbage from January 1, 2011, through December 31, 2020. On June 4, 2019, the Board adopted Resolution No. 076641 which approved the amended and restated Recology Franchise Agreement for an additional 15-year term expiring on December 31, 2035.
On November 14, 2023, the Board adopted Resolution No. 080036 which exercised the Recology Carry Forward contract provision and used Non-General Fund General Reserves to address the 2022 shortfall. The Board also approved a two-year rate increase strategy, with a 13.6% rise in 2024 and the remaining increase to be addressed in the 2025 rate application.
On November 14, 2023, the Board also adopted an Appropriations Transfer Request (ATR) No. ATR24-B0019 appropriating $96,240 from Non-General Fund General Reserves to Service and Supplies to offset the calendar year (CY) 2022 shortfall and reduce the impact of garbage and recycling rate increases in CFA for CY 2024.
On January 23, 2024, the Board adopted Resolution No. 080118, approving a 13.6 percent rate increase for CY 2024 for all garbage carts, effective as of January 1, 2024.
The adoption of the annual garbage and recyclables collection rates follows a Proposition 218 rate setting process, which allows new or increased property related fees such as the one before the Board. This includes setting a hearing and adopting a resolution of the proposed collection rates (Exhibit A and Exhibit B to this Resolution), sending notices to property owners alerting them of the public hearing to consider any new or increased property related fees (rates), and holding a public hearing and receiving testimony on the proposed rates. In addition, the Sustainability Department posts a notice in a newspaper of general circulation informing the public of the hearing on garbage and recyclables collection proposed rates for the service area (Exhibit C to this Resolution). If there is a successful majority protest in writing from the property owners, the Board would be prevented from increasing the rates for the service area. In CFA, this action could lead to larger rate increases in the future due to the interest that would be assessed according to the terms in the Amended Franchise Agreement.
DISCUSSION:
The County sets the rates for solid waste collection to meet the projected SBWMA costs for the service area. The proposed rates for CY 2025 are listed in Exhibit A to the Resolution and represent a 9.3 percent rate increase for residential and commercial cart and bin services from the rates previously set by the Board in CY 2024.
The proposed rate change for one 20-gallon garbage cart for one to four residential dwelling units will increase $3.88 per month, representing an increase in monthly charges from $41.74 to $45.62 per month. The proposed rate change for a 32-gallon garbage cart will increase $4.61 per month, representing an increase in monthly charges from $49.61 to $54.22 per month. The recommended rates will continue to reflect a 5 percent franchise fee that will be paid to the County from Recology to administer these programs.
The proposed rates are developed using the cost data published by the SBWMA in the “SBWMA Final Report Reviewing The 2025 Recology San Mateo County Compensation Application” (Rate Report) dated September 19, 2024, as necessary to meet the revenue cost requirements to provide garbage and recyclables collection services for CY 2025. This report was adopted by the SBWMA Board on September 26, 2024.
The garbage services costs include two components: (1) processing and disposal; and (2) the Recology collection services. The Rate Report indicates that, in CFA, a 9.3 percent rate increase is needed to cover the costs, representing an estimated $408,563 revenue shortfall for collection, disposal, and processing services.
In alignment with the rate reducing strategies approved last year, the proposed 9.3 percent increase for CY 2025 includes the Recology Carry Forward costs that were deferred from 2024. The proposed rate increase percentage also includes the remaining cost increase from CY 2024 and will conclude the two-year phased approach.
The recommended proposed rate increase of 9.3 percent would be effective on January 1, 2025. All cart and bin services will be directly billed to the customer by Recology.
Unscheduled Services are in the franchise agreement and are additional elective services that are specifically requested and paid for by the ratepayers in addition to the basic collection service charges. The franchise agreement allows for a Consumer Price Index (CPI) increase to the Unscheduled Services Fees. The Unscheduled Services fees for CY 2025 reflect a 2.97 percent CPI adjustment above the CY 2024 fees charged by Recology, effective January 1, 2025. Any Unscheduled Services requested by the customer will be billed directly to the customer by Recology. These Unscheduled Services fees are not property related fees and, therefore, not subject to the Proposition 218 rate setting requirements. These fees are reflected in Exhibit B to the Resolution.
County Attorney has reviewed and approved the Resolution as to form.
EQUITY IMPACT STATEMENT:
The proposed rate increase may have varying impacts on households in the Unincorporated Franchised Areas, 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.
FISCAL IMPACT:
There is no direct impact to Net County Cost. The garbage and recyclables rates are levied on properties that are leased or owned by the County that are in the CFA.
ATTACHMENTS:
1. Exhibit A, Proposed Garbage and Recyclables Collection Rates in County Franchised Area
2. Exhibit B, CY 2025 Unscheduled Service Fees
3. Exhibit C, Draft Notice of Public Hearing with the County of San Mateo, Board of Supervisors for January 14, 2025