DATE: December 4, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Water Utilities Department
TITLE: RESOLUTION INCREASING THE SOLID WASTE USER RATE CEILINGS TO INCLUDE WASTE MANAGEMENT'S ANNUAL REQUEST FOR A MULTI-INDEX RATE ADJUSTMENT
RECOMMENDATION
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Staff recommends that the City Council adopt a resolution increasing the solid waste user rate ceilings to include Waste Management's request for Multi-Index Rate Adjustment.
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BACKGROUND AND ANALYSIS
Waste Management of California, Inc. (WM) is the City's contractor for solid waste disposal services. The current Franchise Agreement (Contract), approved by the City Council on April 6, 2022, established initial rate ceilings for all user services, including both residential and commercial collection.
On November 15, 2023, the City Council approved new residential and commercial solid waste user rate ceilings to implement the programs and services required of the current Contract. This included additional programs such as compost and mulch giveaways; City-wide donation and landfill weeks; transition from City to contractor billing; and curbside household hazardous waste pickup for seniors and disabled ratepayers. Additionally, the provision of residential curbside organics collection inclusive of food waste and food-soiled paper was included.
Pursuant to section 8.2.C and Exhibit E of the Contract, WM may request an annual index-based adjustment to the rates it is allowed to charge, to reflect changes in various cost indices (Consumer Price Index (CPI-U), Employment Cost Index (ECI), a Fuel Index based upon the price of Natural Gas (for fueling collection vehicles), and Motor Vehicle Maintenance and Repair Index (MVI)), and changes to processing and disposal costs based on materials collected and changes in tipping fees. The index-based adjustment calculates the percent difference between the total cost for the upcoming rate period and the total cost for the current rate period to determine the ra...
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