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HomeMy WebLinkAbout3/18/2025 Item 6b, Floyd and Buckingham - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: March 18, 2025 TO: Mayor and Council FROM: Aaron Floyd, Utilities Director Prepared By: Meg Buckingham, Solid Waste and Recycling Program Manager VIA: Whitney McDonald, City Manager SUBJECT: ITEM 6B – 2025 INTEGRATED SOLID WASTE RATES Staff received the following questions regarding the proposed 2025 integrated solid waste rate adjustment. The questions are below with staff’s response shown in italics: 1) A question about the inclusion of Corporate Overhead costs in the rate structure. How was it determined that these costs could be no higher than 4% of the total cost projection? Why this percentage vs. say, 1, 2 or 3%? The 4% cap on corporate overhead, calculated as a percentage of collection expenses, will apply to future cost-based rate adjustments and was a negotiated outcome between the City and the garbage company. Other values were considered during negotiations but were not mutually agreed upon. While similar rate-setting methodologies in other jurisdictions do not impose restrictions on corporate overhead, the City deemed it important to maintain a limitation on this aspect of the methodology to protect the ratepayer. 2) On page 380 of the packet, it states that businesses that will be affected by the changes in recycling rates have been notified via email from San Luis Garbage and from the SLO City business updates. What efforts have been made to ensure that we have the correct email addresses for the appropriate people at these businesses to make sure the right person/people received these emails? Informational emails to commercial customers regarding the proposed rate adjustment and the implementation of paid bin recycling were sent by the garbage company to the email addresses associated with customer accounts, where electronic bills and notifications are also received. To ensure customers were informed, details about the rate adjustment were also included separately in their monthly bills. Separately, in coordination with the Economic Development and Tourism Program, staff also emailed information via the SLO Business Update, which is a City-developed monthly newsletter sent to businesses within the City using email addresses provided from the business license list. 2025 Integrated Solid Waste Rates Page 2 3) On page 384/5 of the packet, it describes that the City will receive funds from the hauler ($368K for the solid waste and recycling program) and $220K for franchise fees. How is this money spent by the city? The $368,041 in Assembly Bill 939 fees is collected by the garbage company directly from ratepayers to fund the majority of the City’s Solid Waste and Recycling program. This program consists of two full-time staff members who oversee City functions related to waste diversion and reduction efforts. Examples include conducting community outreach as well as developing and implementing waste reduction and diversion initiatives aligned with the City’s Climate Action Plan, California Assembly Bill 939, and Senate Bill 1383. Franchise fees are 10% of the garage company’s gross revenues, are paid to the City on a monthly basis, and are considered general fund revenue. These funds support the City in administering the solid waste franchise agreement and overseeing effective waste management services for ratepayers, and account for infrastructure impacts and franchisee utilization of public property for its business uses related to the provision of the garbage service.