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7.A. - Page 2 of 18 <br />increases. If the City Council approves the proposed solid waste rates, the City's rates will continue to be <br />less than the average cost charged by nearby communities. <br />ANALYSIS <br />Each member agency of SBWMA is contractually obligated to ensure that rates are, at a minimum, <br />sufficient to generate the revenue necessary to match the 2020 Total Revenue Requirement, as any <br />shortfall in net revenue to Recology may result in an interest payment for the shortfall in the following <br />year. For 2020, this contractual obligation equates to a 0.4% increase for regular, scheduled solid waste <br />services and a 2.26% increase for unscheduled solid waste services. However, SBWMA strongly <br />recommended that member agencies consider Recology's 2021 Compensation Projections when <br />determining rates in 2020 and 2021, as there is projected to be a marked increase in Recology's Total <br />Revenue Requirement due to the transition into a new contract, set to begin in 2021. Taking into <br />consideration SBWMA's strong recommendation and the City's desire to stabilize rates and avoid <br />substantial rate increases in the future, staff recommends the following increases: <br />■ $3.00 monthly increase for regular, scheduled, basic collection of residential solid waste and <br />recyclable materials for 20 -gallon bins, <br />■ $2.00 monthly increase for regular, scheduled, basic collection of residential solid waste and <br />recyclable materials for 32 -gallon bins, <br />■ 4% increase for regular, scheduled, basic collection of commercial solid waste and recyclable <br />materials and residential solid waste and recyclable materials for 64 -gallon and 96 -gallon bins, <br />and <br />■ 2.26% increase for unscheduled solid waste services. <br />Regular, scheduled solid waste services refer to the basic collection of residential and commercial solid <br />waste and recyclable materials, such as weekly collection. Unscheduled services include miscellaneous <br />services that are above and beyond routine garbage collection, such as backyard collection, key service, <br />or additional carts. <br />The proposed rate increases will be just the third increase to regular solid waste rates since 2013. Figures <br />1 and 2 below chart Redwood City's current and proposed rates against those of other Bay Area agencies. <br />Even with the proposed increases, Redwood City's rates will remain less than the average for the region. <br />For a residential customer with a 32 -gallon cart service, the most popular service level, the increase is two <br />dollars per month. Staff first presented this recommendation to the City Council's Utilities Subcommittee <br />at their October 30, 2019 meeting. <br />Page 2 of 5 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />81 <br />