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Page 3 of 9 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />Cap carry forward <br />The City deferred $348,006 in compensation owed to Recology in 2024 until the following year through a <br />“cap carry forward” provision within the franchise agreement. This “cap carry forward” provision allowed <br />the City to cap the non-disposal portion of Recology’s projected costs at 5% for 2024; however, in 2025, <br />the City is responsible for paying for the $348,006 deferred from 2024 along with those same costs from <br />2025. <br />Proposed Rates <br />As mentioned previously, when approving maximum rates, the City endeavors to make the rates <br />proportionate to the costs of service, which is required under Proposition 218 for solid waste rates <br />imposed by public agencies. As such, the $2.45 million shortfall must be attributed to the 20, 32, 64, and <br />96 gallon cart rates. <br />Shown in Figure 1 are the proposed rates necessary to meet the revenue requirements for 2025, while <br />still abiding by Proposition 218, if no outside or one-time funding is considered. <br />Figure 1 –2025 Rates Required Without Using One-Time Funds <br />In order to reduce the impact of rate increases to solid waste customers, staff also looked at utilizing one- <br />time monies from the City’s Rate Stabilization Fund, which has a total balance of about $1.23M. By using <br />$500,000 in one-time funds for 2025, the required rate increase for each cart size can be reduced. Shown <br />in Figure 2 are the recommended 2025 proposed rates, after utilizing one-time funds. <br />7.A. - Page 3 of 32 <br />129