CC 12-05-23 Item No. 6 Adapt a maximun rate schedule for Rate Period Four for Recology_Written CommunicationsCC 12-05-2023
Item No. 6
Adopt a maximum
rate schedule for Rate
Period Four for
Recology
Written Communications
From:Tatiana S. Popova
To:City Council
Subject:12/5 Council Meeting Agenda Item 6 (Recology)
Date:Monday, December 4, 2023 12:20:07 PM
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Dear City Council Members,
I am writing in regards to 12/5/23 Meeting Agenda Item 6 (Recology).
I am kindly asking to not approve agenda item 6 and instead revisit the item to ensure there is
no hike for SFH. There maybe opportunity for the negotiation for the lower rates with
Recology and use of city funds to ensure the residents do not see hike if that happens.
Thank you very much in advance.
Sincerely,
Tatiana Kuzmenko
20233 Northcove sq, Cupertino
From:Rhoda Fry
To:City Clerk; City Council
Subject:City Council Agenda Item #6 Garbage
Date:Monday, December 4, 2023 10:38:43 AM
Attachments:GARBAGE.pdf
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Dear City Clerk,
Please post the attached inline (rather than as an attachment) for City Council Agenda Item #6
Garbage.
The summary for Rhoda Fry’s public comment is: Data shows that our garbage rates are not
competitive; this needs to be fixed.
This document is an updated version of the previous one.
Thanks,
Rhoda Fry
From: Rhoda Fry
To: Cupertino City Council
Re: Agenda Item #6 Recology
I am writing you regarding two aspects of the garbage contract, the fees paid by Recology to
Cupertino and the garbage rates.
Fees Charged by City to Recology - looks like a Tax
In 2024 (actually Feb 2024 – Jan 2025) the City will charge Recology a Fee of approximately
$3.7M. If garbage rates go up, the fee goes up. In 2021, this fee was $2.9M per year. That’s a 27%
increase in fees levied on Recology! An $800K hike in just three years! (2.9 x 1.27 = 3.7). In order
for Recology to recoup that cost and remain profitable, it would need to charge more for our
garbage. INCREASES IN CITY FEES, INCREASES RESIDENTS’ COST OF GARBAGE.
Fees Collected from Recology go to Two City Funds
• General Fund gets $2.1M. That looks like a tax. There’s no apparent connection (nexus)
between the fee charged and the purpose for which it has been charged.
• Solid Waste Fund Operations Fees Fund 520 gets $1.6M. But that money hasn’t been used
much. In August 2023, that fund balance was $4.8M.1 So once again, there’s no apparent
connection (nexus) between the fee charged and the purpose for which it has been charged.
Furthermore, is it okay to use this restricted fund to kick back money to Recology to
“smooth” garbage rates?
And because the City is reducing its kickback to Recology, the net increase to the City
coffers has been just over $1M in the past three years.
Why Do We Care? Taxation without Representation
The City appears to be taxing our garbage in order to raise funds for general use and for a fund that
is not being fully used. The residents have not voted for these fees that sure look like taxes and the
California Supreme Court thinks so too. The City cannot tax residents without a vote.
California Supreme Court Ruled on Franchise Fees in 2022
In 2022, the City of Oakland failed to demonstrate that solid waste franchise fees included in the
City’s solid waste franchise agreements were exempt from voter approval.2 The firm BBK,
recommends “Local agencies that receive franchise fees from a solid waste hauler may wish to
consult with their legal counsel to discuss implications of the case.”
1. Please consider that fees charged to Recology are taxing residents on their garbage rates
2. Please ask City Attorney to provide an opinion as to whether:
A) Is it okay to use the Restricted Fund 520 to kickback money to Recology?
B) The California Supreme Court ruling on fees applies to Cupertino.
1 City Treasurer’s Report 8/23:
https://cupertino.legistar.com/LegislationDetail.aspx?ID=6348231&GUID=1BB9CCFE-6363-4367-ADC0-
903E190950E0&Options=&Search=
2 Franchise Fees BBK: https://bbklaw.com/resources/california-supreme-court-rules-on-franchise-fees-for-solid-
waste-contract; Franchise Fees CAL Cities: https://www.calcities.org/news/post/2022/08/24/california-supreme-
court-ruling-in-franchise-fee-case-offers-more-questions-than-answers
Garbage Rates are High It looks like we are getting less for our money than other communities.
Our effective rate without the $2.01 per month subsidy is $44.20; this puts Cupertino higher than
Campbell, Gilroy, Morgan Hill, and Mountain View. Separately, our Council had received a
presentation on reducing our environmental impact through improved trash sorting that is used by
our neighbors such as Mountain View and Sunnyvale.3 This service would increase our rates by $5
to $8 per month (see $5 added in table below titled Cupertino GREEN to compare).
If Cupertino offered a greener level of services like Mountain View Sunnyvale,
Cupertino rates would be higher than most communities in Santa Clara County.
1. Please read the San Francisco Chronicle article, “S.F. waste giant Recology made millions
more in profits than allowed, according to new report” 4
2. Please try to improve the Recology contract or consider a different vendor so that resident’s
get their money’s worth.
City/Monthly Cost 19-24 Gal 32 Gal 35- 36 Gal 64- 65 Gal Company
Campbell $34.51 $42.74 $77.56 West Valley
Cupertino $37.78 $40.18 $77.33 Recology
Cupertino Hills $62.10 $64.51 $125.91 Recology
Cupertino 2024 $39.67 $42.19
Cupertino 2024 $41.68 $44.20 Including Subsidy
Cupertino GREEN $46.68 $50.20 Minimum of $5 more if Cupertino goes greener
Gilroy $40.42 $57.81 Recology
Los Altos $48.44 $96.87 Mission Trail
Los Altos Hills $42.52 $59.26 $118.58 Green Waste
Milpitas $36.46 $53.54 Milpitas Sanitation
Monte Sereno $42.48 $52.83 $96.64 West Valley
Morgan Hill $37.75 Recology
Morgan Hill Hills $40.99 Recology
Mountain View $28.90 $42.10 $84.20
Palo Alto $27.81 $50.07 $100.15
San Jose $51.40 $102.80
Santa Clara $49.12 $72.74
Saratoga $37.38 $46.40 $84.65 West Valley
Sunnyvale (43 gal) $38.46 $46.64 $52m.46 Bay Counties
Links to Garbage Rates in Santa Clara County Cities:
https://westvalleyrecycles.com/garbage-rates-and-cart-sizes/city-of-campbell-garbage-rates/
https://www.cupertino.org/home/showpublisheddocument/30289/638150887302100000
https://www.cityofgilroy.org/DocumentCenter/View/13481/Gilroy -Franchise-Agreement---12-01-2022-
https://missiontrail.com/losaltos/los-altos-service-rate-for-cart-bin-dumpster/
https://www.losaltoshills.ca.gov/479/GARBAGE-RECYCLING-COMPOST
https://www.milpitassanitation.com/residential/servicemenu/ (sizes are different)
https://westvalleyrecycles.com/garbage-rates-and-cart-sizes/city-of-monte-sereno-garbage-rates/
https://www.morganhill.ca.gov/DocumentCenter/View/43478/Recology-South-Valley-Agreement?bidId=
https://www.mountainview.gov/our-city/departments/finance-and-administrative-services/billing/utility-billing/trash-
recycling-rates?locale=en
https://www.cityofpaloalto.org/Departments/Public-Works/Zero-Waste/About-Us/Refuse-Rates
https://www.sanjoseca.gov/your-government/departments-offices/environmental-services/recycling-
garbage/residents/garbage-recycling-rates-billing
https://www.santaclaraca.gov/our-city/departments-g-z/public-works/environmental-programs/residential-garbage-
recycling/solid-waste-rates-14235
https://westvalleyrecycles.com/garbage-rates-and-cart-sizes/city-of-saratoga-garbage-rates/
https://www.sunnyvale.ca.gov/homes-streets-and-property/utility-billing/utility-rates (2-month billing)
3 https://www.sunnyvale.ca.gov/homes-streets-and-property/recycling-and-garbage/smart-station-recycling-center
4 https://www.sfchronicle.com/sf/article/S-F-waste-giant-Recology-made-millions-more-in-17177504.php
From:Kitty Moore
To:Pamela Wu; City Clerk; Kirsten Squarcia
Cc:Matt Morley
Subject:December 5 Item 6 Staff Questions and Written Communications
Date:Monday, December 4, 2023 7:45:26 AM
Hi,
Thank you for the report and recommendations for the Recology Franchise Agreement.
The following questions/comments are for Staff and for Written Communications:
Question 1:
What is the new annual expected Franchise Fee amount? Is this still going to be calculated at 12%
(Gross Receipts – Solid Waste Fund Operations Fee)?
Question 2:
Where has the city specified the use of the Franchise Fee showing some nexus between the fee and
its use? Is it necessary from Prop 26 to provide a connection between the Franchise Fee being
possibly earmarked for the use of the city streets for waste hauling trucks and bins? If we say this
Franchise Fee is for street repair from the wear and tear of hauling trucks, must we have that in
writing and do we then have to place the funds in a separate account for that purpose or may it be
mixed with the General Fund?
Question 3:
Our city has a significant number of recyclables and food waste mixed in with our trash which
does not get sorted and goes directly to the landfill.
San Jose has a higher cost, but their waste is sorted and diverted without the customer having
to separate food waste out.
Sunnyvale requires food and recyclables to be sorted out, but the trash is further sorted to
increase the diversion.
To have our trash sorted and diverted, Cupertino residential rate increases would be
estimated at $5-8/month.
Please add the information about what the customers in each city are provided with their solid
waste services and a note about the cost to sort if Cupertino were to add that so that we can make a
fairer comparison.
For example: Does the customer at City X pre-sort food waste and recyclables? Is there post-pickup
waste diversion or is misplaced waste sent to the landfill as is done in Cupertino?
Question 4:
The Resource Recovery Fund (Solid Waste Fund Operations Fee) is approximately $5.4 M as of
October 31, 2023 and receives revenue ranging from a low of $123,429 (the contracted amount) to
over $200k in a month, what accounts for the receipts over the contract amount? The Franchise Fee
goes to the General Fund, so it is not accounting for it.
Question 5:
Adopted Budget page 485 for the (Solid Waste Fund Operations Fee) Resource Recovery Budget Unit
520-81-801 shows a Contract Services amount of $1,388,927 and there are 3.6 full time Staff
assigned to this environmental program. What contracts are in the Contract Services? This relates to
the Recology contract item 7.2 page 59.
Thank you,
Kitty Moore
Kitty Moore
Councilmember
City Council
KMoore@cupertino.gov
(408) 777-1389
From:Peggy Griffin
To:City Council
Cc:City Clerk
Subject:2023-12-05 City Council Mtg-Agenda ITEM6-Recology rate increases are indirect taxes
Date:Sunday, December 3, 2023 8:14:05 PM
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Dear City Council,
I am requesting that you PULL Agenda Item 6 – Recology rate increases. This truly needs to be
discussed in public. Rate increases are not Consent Items!
Yes, there is an agreement and a calculation specified in it but there are variables that are not fixed
in this agreement that the city specifies such as the
Franchise Fee
Solid Waste Fund Operations Fee
Residential vs Commercial and multi-family homes
The actual costs (math) should show why the single family homeowner’s costs are increasing over
5% (12%) yet the others are not. This needs to be discussed in public, not just a statement in a
report. Please present the data.
It appears that the residents and businesses of Cupertino are being taxed without representation.
The Recology Franchise Fee comes out of their profits. This fee is transferred to the General Fund.
It feels like a kick back. As the Franchise Fee goes up, their profits go up so that both Recology and
the City get their money, leaving the taxpayers paying the bill. Please explain.
Thank you and sincerely,
Peggy Griffin
From:Peggy Griffin
To:Ursula Syrova (she/her)
Cc:City Council; City Clerk; Matt Morley
Subject:2023-12-05 City Council Mtg-Agenda ITEM 6-Recology Profit is 27.5%!!!:
Date:Sunday, December 3, 2023 7:49:35 PM
Attachments:A - Report of City-wide Receipts Disbursements and Cash Balances October 2023.pdf
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Dear Manager Syrova,
I have several questions regarding this Recology rate increase and I’d appreciate it if you could
answer these questions before the upcoming City Council meeting on Dec. 5, 2023.
Q1: How much percentage profit is Recology guaranteed to receive in this agreement each year?
Is it really approximately 27.5%?
If so, why so high?
In Attachment C – HFH Report – Review of RP 4 Application.pdf, Section I Profit, Page 7 of 12
Q2: Is there any incentive in the agreement for Recology to reduce their costs from year-to-
year? If so, what are they?
Q3: Can this agreement be terminated and re-negotiated?
This is an unreasonable “guaranteed profit” not to mention during a time of financial stress on
residents and the city. Going out to bid would be a reasonable approach to reduce costs. It seems
that the profit margin given Recology is not comparable to other cities that have agreements with
them (Gilroy, Morgan Hill to name a few). I have never seen a contract where you guarantee the
recipient a profit that large! This is in addition to all the pass-through costs that they get re-
imbursed for as specified in the contract. What a sweet deal!
The Resource Recovery Enterprise Fund 520-330 started out funded with $500k transferred from
the General Fund in (Dec. 15, 2020 resolution) plus an increased appropriations of $285,864 for a
total of $785,864. That total was Dec. 2020 or early 2021. Now that Resource Recovery enterprise
Fund 520-330 sits at a balance of approximately $5,386,568 as of Oct. 31, 2023. $5 MILLION
dollars! I’ve attached the Treasurer’s Report for Oct. 2023 for your reference.
Q4: Where did all this money come from?
Q5: Did it come from our Recology rate increases since Dec. 2020? If not, where did it come
from?
Sincerely,
Peggy Griffin
October 2023 Report of City‐wide Receipts, Disbursements, and Cash Balances
Cash and Investments
Beginning Balance Ending Balance
Fund Type Fund Number/Name as of September 30, 2023 Receipts Disbursements Journal Adjustments as of October 31, 2023
General Fund 100 General Fund 132,497,616 5,825,348 (4,220,431) 51,740 134,154,273
General Fund 130 Investment Fund (4,723) ‐ ‐ 194,719 189,996
Special Revenue Funds 210 Storm Drain Improvement 2,010,278 ‐ (443,734) ‐ 1,566,544
Special Revenue Funds 215 Storm Drain AB1600 1,921,375 5,782 ‐ ‐ 1,927,157
Special Revenue Funds 230 Env Mgmt Cln Crk Strm Drain 640,582 4,000 (62,870) ‐ 581,712
Special Revenue Funds 260 CDBG 658,011 1,324 (1,226) (367,951) 290,158
Special Revenue Funds 261 HCD Loan Rehab 222,300 ‐ ‐ ‐ 222,300
Special Revenue Funds 265 BMR Housing 5,141,955 ‐ (37,960) ‐ 5,103,995
Special Revenue Funds 270 Transportation Fund 12,576,645 423,538 (108,528) ‐ 12,891,654
Special Revenue Funds 271 Traffic Impact 779,541 ‐ ‐ ‐ 779,541
Special Revenue Funds 280 Park Dedication 18,925,191 15,000 ‐ ‐ 18,940,191
Special Revenue Funds 281 Tree Fund 66,682 3,300 ‐ ‐ 69,982
Debt Service Funds 365 Public Facilities Corp 2,684,450 ‐ ‐ ‐ 2,684,450
Capital Project Funds 420 Capital Improvement Fund 26,789,063 ‐ (58,248) 827,951 27,558,766
Capital Project Funds 427 Stevens Creek Corridor Park 154,692 ‐ ‐ ‐ 154,692
Capital Project Funds 429 Capital Reserve* 11,034,444 ‐ ‐ ‐ 11,034,444
Enterprise Funds 520 Resource Recovery 5,331,751 134,724 (79,907) ‐ 5,386,568
Enterprise Funds 560 Blackberry Farm 891,810 1,829 (45,022) 54,007 902,624
Enterprise Funds 570 Sports Center 1,527,828 ‐ (165,103) 214,172 1,576,896
Enterprise Funds 580 Recreation Program 3,416,063 8,120 (55,293) 72,117 3,441,007
Internal Service Funds 610 Innovation & Technology 4,159,336 5,666 (184,800) ‐ 3,980,202
Internal Service Funds 620 Workersʹ Compensation 3,698,977 ‐ (5,162) ‐ 3,693,815
Internal Service Funds 630 Vehicle/Equip Replacement 1,575,254 ‐ (179,910) ‐ 1,395,344
Internal Service Funds 641 Compensated Absence/LTD 886,384 ‐ 286 ‐ 886,671
Internal Service Funds 642 Retiree Medical (1,703,970) ‐ (110,200) ‐ (1,814,171)
Total 235,881,535$ 6,428,630$ (5,758,109)$ 1,046,754$ 237,598,810$
* For reporting purposes, this fund rolls up/combines with Fund 420
Printed November 09, 2023
For more information on funds, please see cupertino.org/fund‐structure
From:Peggy Griffin
To:City Council; Pamela Wu; Christopher Jensen
Cc:City Clerk
Subject:2023-12-05 City Council Mtg-Agenda ITEM6-Recology RATE INCREASE-misleading agenda description!
Date:Sunday, December 3, 2023 12:30:55 PM
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Dear Mayor Wei, City Manager Wu and City Attorney Jensen,
The description for Agenda Item 6, although “legally correct” is misleading to the public. It reads like
you are setting a max rate that can be charged but in reality, you are setting the RATE THAT WILL BE
CHARGED! This is basically a rate increase to homeowners yet it doesn’t say it. And buried in the
staff report is another rate increase coming within this next year!
It would be nice if the agenda descriptions gave residents a heads up when a rate increase to basic
services are being discussed so they are not blindsided. Trash collection is not a service residents
can “opt-out” of nor do we want them to do so. Please make agenda descriptions “reader friendly”.
Sincerely,
Peggy Griffin
From:Santosh Rao
To:Pamela Wu; Matt Morley; City Council
Subject:12/5 council meeting: Recology agenda item.
Date:Sunday, December 3, 2023 12:41:38 AM
Attachments:Staff Report.pdf
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Dear City Manager,, City Council,
Could you kindly clarify the % stated in the staff report for 12/5 agenda item related to
Recology.
The Recology staff report cites rate hikes of 12% smoothed down to 5%. It is not clear what
the % is. Is it 5% of the total Recology bill, 5% of garbage cart, 5% each for garbage and
recycle.
A Recology bill is not typically the amount listed in the table. It is much higher. Please clarify
if the recycle cart will also see a 5% hike. What will be the % hike on a sample total Recology
bill that Cupertino residents currently see.
Also given the processing is not included what is the reason for the steep hike of 12%. (Albeit
proposed to be smoothed down to 5%).
What is the hike for processing estimated to be and when will that be coming.
Also, is the consultant report included or will be in attachments.
https://cupertino.legistar.com/View.ashx?M=F&ID=12488784&GUID=434CB313-A747-
4721-B1E2-6356AD14F56F
In addition it seems illogical to burden single family home owners with a 12% hike while
commercial and Multifamily gets 0%. Can you please kindly consider negotiating passing on
the hike to commercial and Multifamily to subsidize the costs for single family homes.
Finally, council members, could you kindly pull this item off consent calendar as cost
increases to residents need you to explore options to reduce further by negotiating with
Recology or seek a different bid but not approve this rate hike.
Thank you in advance for looking out for Cupertino residents monthly Recology costs and
negotiating on behalf of residents.
Thanks,
Santosh Rao
CITY COUNCIL STAFF REPORT
Meeting: December 5, 2023
Subject
Adopt a maximum rate schedule for Rate Period Four for Recology to provide recycling,
organics, and solid waste collection, recycling and organics processing services, and
transport for disposal as calculated using the allowed and approved methodology in the
Franchise Agreement.
Recommended Action
Adopt Resolution No. 23-XXX (Attachment A) to:
1) Adopt a maximum rate schedule for Rate Period Four for Recology to provide
recycling, organics, and solid waste collection, recycling and organics processing
services, and transport for disposal pursuant to the franchise agreement
(Attachment B; (FA Exhibit E2)), and
2) Authorize the use of $547,800 of restricted-use enterprise funds to smooth and
mitigate the Rate Period Four adjustment.
Reasons for Recommendation
On December 15, 2020, the City of Cupertino Council approved a new 10-year Franchise
Agreement (Attachment B)1 with Recology South Bay d/b/a Recology Cupertino
(“Recology”) to provide recycling, organics, and solid waste collection, recycling and
organics processing services, and transport for disposal. The Franchise Agreement as
adopted included rates for the first three years along with detailed methodologies to
calculate rates for each year through the remainder of the agreement term.
The methodology to determine the maximum rates for the upcoming Rate Period Four
(RP 4), which begins February 1, 2024, is a cost-based adjustment detailed in Exhibit E.2
to the Franchise Agreement. City and Recology staff calculated the cost-based
adjustment as specified, and the resulting rates are hereby presented for approval by the
City Council (Exhibit A to the Resolution). Under Exhibit E to the Franchise Agreement,
1 For ease of use and reduced file size, the attached copy of the franchise agreement has section
bookmarks and Recology’s original pre-negotiation proposal is not included. The full executed
version can be accessed via Cupertino.org/records and a search for agreement 21 -232 or via this
link.
“[t]he City Council shall make a good faith effort to approve Rates by January 1 of each
year, and such Rates shall be effective on each subsequent February 1.”
The RP 4 adjustment does not include changes to how materials are handled after
collection. However, Staff is currently working on an RFP to solicit new options for
disposal of garbage, and on May 2, 2023, Council approved incorporating options to
process garbage into that RFP. Currently, materials placed in the gray bins and carts
(garbage) go directly to landfill. Processing the garbage would recover organic and other
recyclable materials that are put into the garbage instead of being sorted properly,
reducing the tons sent to landfill by a third or even a half. Processing garbage is more
expensive than disposing it directly to landfill, but routing garbage for processing is a
recommended action in the City’s Climate Action Plan 2.0 under item W1.2. Any
changes in rates that would result from sending garbage to be processed would be
addressed during a future rate period adjustment.
Regulation of Maximum Rates
The City does not set the rates for Recology’s provision of solid waste services, but
rather approves the maximum rates Recology may charge its customers.
Review of the Rate Period Four Application
On August 1, in accordance with Section 8.2.C of the Franchise Agreement, Recology
submitted its RP 4 application. To assess the appropriateness of Recology’s proposed
rates, the City engaged a consultant, HF&H, to perform a detailed review of the
Recology application, including data about Recology’s costs to provide the proposed
services as well as their revenue requirements to cover costs and maintain profitability.
The review conducted by HF&H included determining completeness, compliance with
the adjustment methodology, mathematical accuracy, reasonableness, and logical
consistency of the assumptions supporting the projected revenues and expenses. Details
of the analysis are included in HF&H’s report (Attachment C).
Rate Adjustment and Rate Smoothing
Per Recology’s RP 4 application and subsequent review, the overall increase in revenue
needed by Recology in the upcoming Rate Period is 5.02%. Based on the cost to provide
services, the single-family home residential rates would increase by 12.16% while
commercial, multi-family, and roll-off box rates remain unchanged because projected
revenues from those sectors are currently adequate to cover the costs to provide service.
The increase for single-family home residential rates can be smoothed downward to 5%
by using $547,800 from the Resource Recovery Enterprise Fund. This reserve fund is
earmarked for uses that benefit solid waste ratepayers, including smoothing of rate
impacts. The City intends to use these funds through the remainder of the 10-year
agreement to smooth rates for customers and avoid significant rate jumps in any one
year. The recommended rate adjustment for each category of customer after using the
Resource Recovery Enterprise Fund is shown in Table 1 below.
Table 1: Application of Rate Adjustments
Monthly Rate
Service Type Current Rate Period Four
(eff. 2/1/2024) % change $ per month
change
Residential:
32-gallon garbage cart
(bundled with recycling and
organics carts)
$40.18 $42.19 5% $2.01
Commercial/MFD:
1-3yd/1x/week, MSW $317.04 $317.04 0% $0
1.5yd/1x/week, Recycling $95.12 $95.12 0% $0
1.5yd/1x/week, Organics $198.14 $198.14 0% $0
Rate Comparisons with Neighboring Cities
Even with the proposed rate increases, Cupertino rates will be low in comparison with
those of neighboring cities. The following tables 2 and 3 show Cupertino’s rates in
comparison to nearby cities, both currently and with the proposed maximum rate for
Rate Period Four.
Table 2: Residential Monthly Rate Comparisons
2023 single-family residential garbage rates per month sorted by 32 gallon cart
City
20 or 24 gallon
cart
32 or 35 gallon
cart
Extra per
month
Milpitas $36.46 $39.63
Cupertino $37.78 $40.18 Current
Mountain View $28.90 $42.10
Cupertino $39.67 $42.19 5% increase $2.01
Campbell $34.51 $42.74
Sunnyvale $38.46 $44.64
Los Gatos $36.73 $45.74
Saratoga $37.38 $46.40
Los Altos $44.98 $48.45
Santa Clara $41.41 $49.12
Palo Alto $27.81 $50.07
San Jose n/a $51.40
Note: Rates shown are for July 1, 2023. The rates do not reflect subsequent adjustments
including any adjustments for January 1, 2024.
//
//
Table 3: Commercial Rate Comparisons
City 3 CY bin 1x/week
San Jose $266.53
Milpitas $298.68
Cupertino $317.04
Mountain View $385.45
Campbell $395.23
Santa Clara $431.81
Los Gatos $488.91
Sunnyvale $498.51
Palo Alto $504.40
Saratoga $566.53
Los Altos $570.21
Note: Rates shown are for July 1, 2023. The rates do not reflect subsequent adjustments
including any adjustments for January 1, 2024.
Sustainability Impact
Effective waste disposal programs that are convenient, well utilized and properly
funded are essential to diverting recyclable and compostable materials from the landfill
in accordance with AB939, the California Integrated Waste Management Act that
requires at least 50% diversion from landfill after 1/1/2020, the City of Cupertino’s Zero
Waste Policy adopted December 19, 2017, and compliance with SB 1383 Short-Lived
Climate Pollutants (SLCP): Organic Waste Methane Emissions Reductions. The City and
Recology partner on many of the diversion and waste reduction activities described in
the community solid waste measures W-1, W-2, and W-3 in Cupertino’s Climate Action
Plan 2.0 section “Getting to Zero Waste.”
Fiscal Impact
The City expects to receive about $3.7 million in RP 4 from Recology. These funds are
received in the form of Franchise Fees and Solid Waste Fund Operations Fees. As noted
earlier, staff recommends using $547,800 from the Resource Recovery Fund to offset part
of the calculated rate increase in Rate Period 4 for the benefit of ratepayers. These costs
are already included in the FY2023-24 Final Budget for fund 520, no budget adjustment is
necessary. The amount of revenue raised by the fees, and their uses, have been
independently evaluated by HF&H.
On December 15, 2020, Council established a minimum reserve in Fund 520-330 of
$500,000 to ensure that drawdown of this fund does not exceed a prudent reserve of 2%
of the City’s solid waste program operating costs.
Table 4 shows the fiscal impact to the City since the agreement began. Because the current
Rate Period (RP 3) is not yet complete and RP 4 is projected, some numbers are not known
yet and are shown in italics.
Table 4
Fiscal Summary
Feb 2021 –
Jan 2022
(RP 1)
Feb 2022 –
Jan 2023
(RP 2)
Feb 2023 –
Jan 2024
(RP 3)
Feb 2024 –
Jan 2025
(RP 4)
Franchise Fees
(for use by Gen. Fund) $1,513,007 $1,771,937 $2,047,763
(projected)
$2,140,000
(projected)
Solid Waste Fund
Operations Fees
(Fund 520 – restricted use)
$1,396,128 $1,438,008 $1,481,148 $1,635,967
Total Received $2,909,135 $3,209,945 $3,528,911 $3,775,967
Use of Fund 520 for rate
smoothing ($ 686,072) ($ 957,082) ($ 840,405) ($547,800)
Net to City $2,223,063 $2,252,863 $2,688,506 $3,228,167
California Environmental Quality Act
Not applicable.
_____________________________________
Prepared by: Ursula Syrova, Environmental Programs and Sustainability Manager
Reviewed by: Chad Mosley, Director of Public Works
Reviewed by: Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:
A – Draft Resolution
B – Recology Franchise Agreement
C – HF&H Report – Review of Recology RP 4 Application