The City Council of Redwood City will be considering an 18% increase in the residential and commercial rates for garbage and recycling collection within Redwood City. The proposed rate increase will be discussed at a public hearing on Monday, January 10th, 2011, beginning at 7 pm in the Council Chambers in City Hall. If approved by the Council, the rate increase would be effective the following day, January 11, 2011. Notices of the proposed increase have been sent to all garbage/recycling service customers in Redwood City. Customers have the opportunity to protest the proposed rate increase in advance of the public hearing by writing to the City. Details of the protest procedure were included in the mailing, and are available online at www.redwoodcity.org/finance/utility

Solid waste collection rates are adopted each year, and proposed rates are developed by the Board of Directors of the South Bayside Waste Management Authority (SBWMA – the joint powers agency which oversees various cities’ contracts for solid waste collection). The City Council then considers the recommended new rates. Each year an analysis is done of the expenses and revenues from the prior year, along with projected expenses and revenues for the following year, and a recommendation is made concerning the following year’s rates.

The proposed 2011 rate increase is based on a financial evaluation of 2010 actual operating costs and revenues for the current carrier, Allied Waste, and projected operating costs and projected revenues for Recology San Mateo County, the new carrier which will begin service on January 1, 2011. The proposed rate increase is based on these factors:

• A 10.1% increase in costs for providing new collection services in 2011 with Recology;
• A 15.0% increase in costs for collection services provided in 2010, including balancing the account with Allied (the 2010 collector) to meet the contractual revenue level (primarily due to increases in Allied’s employee costs and disposal fees, and revenue shortfalls from loss or downsizing of commercial customers);
• A 2.5% reduction in revenue due to known garbage/recycling bin size reductions (based on the number of customers who have already indicated they will use smaller bins, which are charged at a lower rate, resulting in lower revenue);
• A 2.2% reduction in revenue due to projected 2011 bin size reductions (based on the projection of how many customers will change to a smaller bin size in 2011);

The above percentages are offset by 11.8% from the City’s rate stabilization fund to reduce the overall cost impact on customers. Without the City contributing from its rate stabilization fund, the total increase to customers would have been nearly 30%. The rate stabilization fund is used to lower the overall annual increase to customers, and reduce the “price shock” of the rate increase. It provides for smaller, but continuing, increases.