HomeMy WebLinkAbout2025-06-12; Solid Waste Rate Adjustment - Year 4 Cost-Based Increase (Districts - All); Gomez, PazPublic Works Branch
Environmental Sustainability Department
1635 Faraday Avenue Carlsbad, CA 92008 442-339-2646 t
Council Memorandum
June 12, 2025
To:
From:
Via:
Re:
Honorable Mayor Blackburn and Members of the City Council
Paz Gomez, Deputy City Manager, Public Works
Sheila Cobian, Assistant City Manager
Solid Waste Rate Adjustment – Year 4 Cost-Based Increase (Districts – All)
This memorandum provides an overview of the solid waste rate setting process for Year 4 of
the city’s franchise agreement with Republic Services, Inc. It summarizes the contractually
required cost-based calculation and describes the city’s efforts to explore rate reduction
opportunities with the hauler.
The cost-based calculation submitted by Republic Services Inc, increases solid waste hauling
fees by 15% for the upcoming year which was validated by SCS Engineers and is scheduled to go
into effect on July 1, 2025.
Background
Under the terms of the city’s franchise agreement with Republic Services, Inc., annual rate
adjustments are typically calculated using a formula based on inflation indices, such as the
Consumer Price Index (CPI). Contractually, these rate adjustments are capped at 5% per year.
In 2023, Year 2 of the contract, the rate increase was 5.0% based on CPI, and in 2024, Year 3 of
the contract, the rate increase was 4.25%. However, every fourth year of the agreement (i.e.,
Years 4 and 8), the rate adjustment must be determined through a detailed cost-based
calculation that incorporates audited financial data. The cost-based adjustment is intended to
more accurately align rates with actual revenues and operating costs by evaluating the effects
of inflation, customer growth or decline, and variations in service levels.
The city engaged SCS Engineers, an independent third-party consultant funded by Republic
Services, Inc. as required by the franchise agreement, to validate the revised cost-based rate
calculation. This approach ensured transparency, objectivity and technical rigor in the review
process while also providing expert analysis at no cost to ratepayers, supporting contractual
compliance and informing the city’s decision-making.
Discussion
Staff entered this year’s rate-setting process with the clear goal of minimizing the rate impact
on Carlsbad residents while ensuring compliance with the solid waste franchise agreement. On
April 1, 2025, Republic Services, Inc. submitted to the city the contractually required documents
including audited financial statements and a proposed rate adjustment of 17.8%.
Memo ID# 2025035
To the members of the:
CITY COUNCIL
Date: 6-12-25 CA X CC X CM X ACM X DCM (3) X
{city of
Carlsbad
Council Memo – Solid Waste Rate Adjustment – Year 4 Cost-Based Increase (Districts – All)
June 12, 2025
Page 2
Upon review, staff identified an unapproved Ecology Transportation Fee included in the
Palomar Transfer Station disposal costs—$5.94 per ton for solid waste and $6.94 per ton for
organics—as well as discrepancies in disposal cost assumptions. After raising these issues with
Republic Services, Inc., the unapproved fees were removed, resulting in a revised rate increase
proposal of 15.8%.
As part of this effort, staff retained SCS Engineers to conduct an independent review of
Republic Services, Inc.’s rate adjustment proposal and identify practical opportunities for cost
reduction. In addition to fulfilling contractual obligations, staff proactively identified
opportunities to minimize costs for Carlsbad residents and businesses. SCS Engineers prepared
a report outlining areas that could be further explored for potential cost savings such as
disposal and organics processing costs.
The report identified several recommendations to improve consistency and reduce long-term
rate impacts. These included aligning the use of inflation indices with contract terms,
standardizing the revenue forecasting methodology and renegotiating disposal and organics
tipping fees—areas where Carlsbad appears to pay more than some peer cities. SCS Engineers
also suggested that the city and Republic Services, Inc. explore temporary adjustments to the
hauler’s profit margin or operating ratio to further mitigate ratepayer impacts.
Ultimately, Republic Services, Inc. proposed a per-ton reduction to the base disposal tipping
fee. However, this proposal was contingent upon contractual changes and an extension of the
Palomar Transfer Station contract, all of which are outside of the scope of this year’s rate-
setting process and are not feasible to implement within its timeframe.
Following the detailed review of the cost-based calculations under the contract requirements,
Republic Services has submitted a rate increase for Year 4 of 15.0%. This increase is allowed
under the current contract and does not require approval by City Council. The new rates will be
included in the city’s Master Fee Schedule presented as part of the fiscal year 2025-26 budget.
Next Steps
Republic Services, Inc. will proceed with a 15.0% rate adjustment beginning July 1, 2025, and
notify customers of the rate increase.
Staff remain committed to long-term fiscal oversight and ensuring Republic Services, Inc.
adheres to the terms of the franchise agreement. Moving forward, staff will continue to explore
opportunities to improve operational efficiency and rate affordability in future rate-setting
periods.
Attachment: A. Year 4 Solid Waste Rates
Council Memo – Solid Waste Rate Adjustment – Year 4 Cost-Based Increase (Districts – All)
June 12, 2025
Page 3
cc: Geoff Patnoe, City Manager
Cindie McMahon, City Attorney
Laura Rocha, Deputy City Manager, Administrative Services
Tim Lyons, Assistant City Attorney
Zach Korach, Finance Director
James Wood, Environmental Sustainability Director
Avecita Jones, Senior Program Manager
Type of Service Freq.: July 1, 2025
Residential Service
Standard Three Cart
3-Cart 64 or 96 Gallon $ 35.27
3-Cart 35 Gallon Trash (Low Generator)$ 32.15
Additional Solid Waste Cart $ 3.84
Additional Recycle Materials Carts (4+)$ 3.84
Additional Organics Carts (4+)$ 3.84
Back Yard Service Fee (Added to Curbside Rate)$ 44.39
Return to Service $ 53.89
Commercial Service
Solid Waste Containers
64-gal Cart 1 $ 35.18
2 $ 70.37
3 $ 105.55
4 $ 136.30
5 $ 167.18
6 $ 198.03
96-gal Cart 1 $ 35.18
2 $ 70.37
3 $ 105.55
4 $ 136.30
5 $ 167.18
6 $ 198.03
Extra Pick up 96 gal - per occurrence rate $ 16.57
Solid Waste - Recycling and Organics Included
96-gal Cart 1 $ 73.78
2 $ 130.42
3 $ 186.99
4 $ 241.48
5 $ 296.19
6 $ 350.86
Multi-Family: Per Unit Rate
Set of Solid Waste, Recycling, and Organics 1 $ 16.08
ATTACHMENT A
Type of Service Freq.: July 1, 2025
Solid Waste Containers
1 cubic yard container 1 $ 92.70
2 $ 157.46
3 $ 222.46
4 $ 287.25
5 $ 352.36
6 $ 417.39
Extra Pick up 1 cubic yard bin - per occurrence rate $ 44.59
2 cubic yard container 1 $ 125.93
2 $ 221.62
3 $ 317.35
4 $ 412.92
5 $ 508.69
6 $ 604.41
Extra Pick up 2 cubic yard bin - per occurrence rate $ 60.56
3 cubic yard container 1 $ 171.06
2 $ 311.91
3 $ 452.73
4 $ 604.41
5 $ 734.38
6 $ 875.24
Extra Pick up 3 cubic yard bin - per occurrence rate $ 81.28
3 cubic yard container Split Bin 1 $ 138.15
(Includes 2 locks)2 $ 252.14
3 $ 366.10
4 $ 480.07
5 $ 594.03
6 $ 708.02
4 cubic yard container 1 $ 228.14
2 $ 426.02
3 $ 623.98
4 $ 821.87
5 $ 1,019.77
6 $ 1,217.69
Extra Pick up 4 cubic yard bin - per occurrence rate $ 97.24
5 cubic yard container 1 $ 285.22
2 $ 540.25
3 $ 795.21
4 $ 1,019.77
5 $ 1,305.22
6 $ 1,560.24
Extra Pick up 5 cubic yard bin - per occurrence rate $ 113.17
Type of Service Freq.: July 1, 2025
6 cubic yard container 1 $ 311.91
2 $ 604.41
3 $ 875.24
4 $ 1,217.69
5 $ 1,560.24
6 $ 1,999.15
Extra Pick up 6 cubic yard bin - per occurrence rate $ 141.48
Special Haul - 3 cubic yard container 1 $ 209.13
2 $ 326.83
3 $ 444.52
4 $ 562.22
5 $ 679.94
6 $ 797.64
Extra Pick-ups - 3 cubic yard container $ 68.28
Commercial Bin Compactors - Solid Waste
3 cubic yard container 1 $ 239.80
2 $ 449.05
3 $ 658.31
4 $ 867.54
5 $ 1,076.80
6 $ 1,286.10
Extra pick up 3 cubic yard compactor service per occurrence $ 97.52
4 cubic yard container 1 $ 396.00
2 $ 758.72
3 $ 1,122.00
4 $ 1,485.19
5 $ 1,848.51
6 $ 2,211.90
Extra pick up 4 cubic yard compactor service per occurrence $ 161.05
6 cubic yard container 1 $ 619.01
2 $ 1,220.10
3 $ 1,822.29
4 $ 2,425.09
5 $ 3,028.16
6 $ 3,631.36
Extra pick up 6 cubic yard compactor service per occurrence $ 251.72
Commercial Services - Recycling
32-gal Cart 1 $ 25.71
2 $ 51.45
3 $ 77.17
4 $ 99.64
5 $ 122.22
Type of Service Freq.: July 1, 2025
6 $ 144.79
64-gal Cart 1 $ 28.15
2 $ 56.29
3 $ 84.43
4 $ 109.04
5 $ 133.75
6 $ 158.42
96-gal Cart 1 $ 28.15
2 $ 56.29
3 $ 84.43
4 $ 109.04
5 $ 133.75
6 $ 158.42
Extra Pick up 96 - gal cart - per occurrence rate $ 13.26
1 cubic yard container 1 $ 74.16
2 $ 125.96
3 $ 177.96
4 $ 229.79
5 $ 281.89
6 $ 333.91
Extra Pick up 1 cubic yard bin - per occurrence rate $ 35.66
2 cubic yard container 1 $ 100.75
2 $ 177.28
3 $ 253.87
4 $ 330.33
5 $ 406.95
6 $ 483.53
Extra Pick up 2 cubic yard bin - per occurrence rate $ 48.45
3 cubic yard container 1 $ 136.85
2 $ 249.54
3 $ 362.19
4 $ 483.53
5 $ 587.50
6 $ 700.19
7 $ 815.91
Extra Pick up 3 cubic yard bin - per occurrence rate $ 65.02
4 cubic yard container 1 $ 182.49
2 $ 340.81
3 $ 499.18
4 $ 657.49
5 $ 815.82
6 $ 974.15
7 $ 1,132.64
Extra Pick up 4 cubic yard bin - per occurrence rate $ 77.80
Type of Service Freq.: July 1, 2025
5 cubic yard container 1 $ 228.17
2 $ 432.19
3 $ 636.17
4 $ 815.82
5 $ 1,044.17
6 $ 1,248.20
Extra Pick up 5 cubic yard bin - per occurrence rate $ 90.54
6 cubic yard container 1 $ 249.54
2 $ 483.53
3 $ 700.19
4 $ 974.15
5 $ 1,248.20
6 $ 1,599.32
Extra Pick up 6 cubic yard bin - per occurrence rate $ 113.19
Commercial Bin Compactors - Recycling
3 cubic yard container 1 $ 191.84
2 $ 359.25
3 $ 526.64
4 $ 694.03
5 $ 861.44
6 $ 1,028.87
Extra pick up 3 cubic yard compactor service per occurrence $ 78.02
4 cubic yard container 1 $ 316.80
2 $ 606.98
3 $ 897.59
4 $ 1,188.15
5 $ 1,478.82
6 $ 1,769.52
Extra pick up 4 cubic yard compactor service per occurrence $ 128.83
6 cubic yard container 1 $ 495.21
2 $ 976.09
3 $ 1,457.82
4 $ 1,940.07
5 $ 2,422.53
6 $ 2,905.10
Extra pick up 6 cubic yard compactor service per occurrence $ 201.38
Temporary Commercial Bins - Basic Service
Special Haul Bin (no Storm Water Fees) 1 week or less $ 147.69
2 cubic yard container - Recycling C&D Per Pull $ 172.20
3 cubic yard container - Recycling C&D Per Pull $ 175.02
4 cubic yard container - Recycling C&D Per Pull $ 190.21
6 cubic yard container - Recycling C&D Per Pull $ 196.50
Type of Service Freq.: July 1, 2025
Commercial Services: Organics Recycling
32-gal Cart 1 $ 25.71
2 $ 51.45
3 $ 77.17
4 $ 99.64
5 $ 122.22
6 $ 144.79
64-gal Cart 1 $ 28.15
2 $ 56.29
3 $ 84.43
4 $ 109.04
5 $ 133.75
6 $ 158.42
96-gal Cart 1 $ 28.15
2 $ 56.29
3 $ 84.43
4 $ 109.04
5 $ 133.75
6 $ 158.42
Extra Pick up 96 - gal cart - per occurrence rate $ 13.26
1 cubic yard container 1 $ 74.16
2 $ 125.96
3 $ 177.96
4 $ 229.79
5 $ 281.89
6 $ 333.91
Extra Pick up 1 cubic yard bin - per occurrence rate $ 35.66
1.5 cubic yard container 1 $ 87.46
2 $ 151.63
3 $ 215.92
4 $ 280.06
5 $ 344.43
6 $ 408.72
Extra Pick up 1.5 cubic yard bin - per occurrence rate $ 42.06
2 cubic yard container 1 $ 100.75
2 $ 177.28
3 $ 253.87
4 $ 330.33
5 $ 406.95
6 $ 483.53
Extra Pick up 2 cubic yard bin - per occurrence rate $ 48.45
3 cubic yard container 1 $ 136.85
Type of Service Freq.: July 1, 2025
2 $ 249.54
3 $ 362.19
4 $ 483.53
5 $ 587.50
6 $ 700.19
Extra Pick up 3 cubic yard bin - per occurrence rate $ 65.02
4 cubic yard container 1 $ 182.49
2 $ 340.81
3 $ 499.18
4 $ 657.49
5 $ 815.82
6 $ 974.15
Extra Pick up 4 cubic yard bin - per occurrence rate $ 77.80
Commercial Bin Compactors - Organics
3 cubic yard container 1 $ 191.84
2 $ 359.25
3 $ 526.64
4 $ 694.03
5 $ 861.44
6 $ 1,028.87
Extra pick up 3 cubic yard compactor service per occurrence $ 78.02
4 cubic yard container 1 $ 316.80
2 $ 606.98
3 $ 897.59
4 $ 1,188.15
5 $ 1,478.82
6 $ 1,769.52
Extra pick up 4 cubic yard compactor service per occurrence $ 128.83
6 cubic yard container 1 $ 495.21
2 $ 976.09
3 $ 1,457.82
4 $ 1,940.07
5 $ 2,422.53
6 $ 2,905.10
Extra pick up 6 cubic yard compactor service per occurrence $ 201.38
Roll-Off Services
Service Fee Per Pull $ 351.06
Disposal Fee (pass through) Per Ton $ 61.31
Recycling Processing Fee (pass through) Per Ton $ 40.49
Organics Processing Fee (pass through) Per Ton $ 87.93
C&D Processing Fee (pass through) Per Ton $ 82.75
Contaminated Load Per Occurrence $ 351.06
Type of Service Freq.: July 1, 2025
Demurrage Fee Per Day $ 7.48
Delivery Per Occurrence $ 90.34
Delivery Demo (includes signage) Per Occurrence $ 95.51
Relocation Charge - Onsite Per Occurrence $ 70.59
Relocation Charge - Offsite Per Occurrence $ 100.69
Wash Out Receiver Boxes Per Occurrence $ 80.75
Dead Run Per Occurrence $ 121.04
Standby Per Minute after
5 Minutes $ 3.27
Delivery of extra cart 18.46$
Bin Exchange 95.58$
Bin Lock Set Up 59.73$
Overloaded Bins 82.29$
Bin Paint Charge Fee (1 allowed per year)164.50$
Bin Relocation (first 25 feet free)11.35$
Special Haul Bin Delivery 65.87$
Scout service 77.41$
Commercial Return to Service Fee (for 2 or more calls in 1 month period)105.98$
Contamination Fee 85.55$
Locking Fee 22.71$
Copy Fee - The charge for copies requested by customers 2.25$
Late Fee on delinquent accounts ($3.00 minimum)5.68$
Certified burial at Miramar (includes special handling fee charged by Miramar)515.66$
Restart Fee for commercial service 32.33$
Single & Multi-Family Bulky Pick-ups
First item exceeding allowed 5 per pick-up 67.10$
Additional Item 17.19$
Commercial Bin Customer Bulky Pick-ups
First item 67.10$
Additional Item 17.19$
Bulky Item requiring 2 people to handle 96.36$
Miscellaneous Services (Per Occurrence)