August 13, 2018 City Council approved an amendment to the contract with MVD that included new rates for commercial recycling and organics collection and a 7-year extension. MVD had also agreed to waive its right to the automatic CPI increase for residential customers for 2018 and 2019 at that time.
The existing contract with MVD allows for CPI increases annually which started again in August 2020. The City is currently paying MVD a rate that is slightly higher than what the City can legally collect from residents (and therefore the City will not make enough to cover costs any longer).
New rates are needed not only to meet the contractual obligation of the City with CPI increases annually, but also to fund the new requirements associated with SB 1383.
SB 1383 establishes targets to achieve a 50 percent reduction in the level of the statewide disposal of organic waste from the 2014 level by 2020 and a 75 percent reduction by 2025.
Specific measures the City may be required to implement:
Residential customers have benefited from two years of no rate increases but the City must now act to increase rates or risk losing precious capital set aside for street sweeping costs, offset for administration and billing costs, and alley reconstruction and maintenance costs in the future.
Rate increases are designed to be spread out over the next five years to gradually increase as costs that are projected to increase over time with the bulk of the changes in Fiscal Year 2021 and 2022 to absorb the new mandated programs in time to comply with SB 1383.
The new rates listed below will become effective July 1, 2021 and changed each year thereafter through July 1, 2025. At that times, rates will need to be evaluated again to determine if the services and trash utility fund are being appropriately funded and operated.
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