HomeMy WebLinkAbout2025/04/29 - Public Works Subcommittee Agenda Packet
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April 29, 2025 – 3:30 P.M.
Public Works Subcommittee Agenda
Special Meeting
City Hall, Rains Conference Room
10500 Civic Center Drive, Rancho Cucamonga, CA 91730-3801
This is the time and place for the general public to address the Public Works Subcommittee on any item
listed on the agenda. State law prohibits the Subcommittee from addressing any item not previously
included on the Agenda. The Subcommittee may receive testimony and set the matter for a subsequent
meeting. Comments are to be limited to five minutes per individual.
C1. Approve and File Minutes of: April 26, 2023.
C2. Review and Provide Feedback on the Solid Waste Rate Adjustment Request Proposed by
the City’s Franchise Waste Hauler.
D. ADJOURNMENT
I, Linda A. Troyan, MMC, City Clerk Services Director, or my designee, hereby certifies that a true,
accurate copy of the foregoing agenda was posted on April 24, 2025 at least twenty-four (24) hours prior
to the meeting per Government Code 54954.2 at 10500 Civic Center Drive, Rancho Cucamonga,
California, and on the City’s website.
Linda A. Troyan, MMC
City Clerk Services Director
City of Rancho Cucamonga
C. ITEM(S) FOR DISCUSSION
A. CALL TO ORDER
A. Roll Call: Kennedy Hutchison
B. PUBLIC COMMUNICATIONS
If you need special assistance or accommodations to participate in this meeting, please contact the City
Clerk’s Office at (909) 774-2023. Notification of 48 hours prior to the meeting will enable the City to make
reasonable arrangements to ensure accessibility.
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April 26, 2023
CITY OF RANCHO CUCAMONGA | PUBLIC WORKS SUBCOMMITTEE SPECIAL MEETING MINUTES
A special meeting of the Rancho Cucamonga Public Works Subcommittee was held on Wednesday,
April 26, 2023, in the Rains Conference Room of the Rancho Cucamonga City Hall located at
10500 Civic Center Drive, Rancho Cucamonga, California, Mayor Pro Tem Lynne B. Kennedy, and
Council Member Ryan A. Hutchison called the meeting to order at 4:00 p.m.
A1. Roll Call:
Present Council Members: Mayor Pro Tem Lynne B. Kennedy, and Council Member
Ryan A. Hutchison.
Staff Present: Fred Lyn, Deputy Director of Engineering Services/Utilities, Justine Garcia, Deputy
Director of Engineering Services, Linda Ceballos, Environmental Programs Manager, Scott Rapp,
Environmental Programs Coordinator, Marissa Ostos, Management Analyst, A. Linda Wyman,
Administrative Assistant
Public: Michael Heftman, Burrtec Waste Industries, Inc.
B1. No public communications were made.
C1. Approve and File Minutes of September 21, 2022:
Councilmember Hutchison motions for approval and Mayor Pro Tem Kennedy seconds approval of previous
meeting minutes.
C2. Review Revised Rate Adjustment of the City’s Franchise Waste Hauler.
Scott Rapp began by providing the timeline of the rate adjustment packet. Per Scott Rapp, on February
24, 2023, the City received a request for a rate adjustment packet from Burrtec Waste Industries, Inc.,
and a revised rate packet on March 27, 2023, due to the new amendment to the franchise agreement.
The amended agreement was approved in August 2022. There is a new component in the rate, due to
the amended rate methodology.
The five components of the rate are:
• There is an annual 5% CPI cap on Burrtecs’ service component.
• It also includes a pass-through cost of disposal and processing.
• A franchise fee of 15%
• HHW fee that increased from .75% to 1.75% to make up for the increase in disposal cost of
residents dropping material off at the HHW facility.
• Page two of the handout outlines SB 1383 fee, which is an addition to this rate methodology.
In the new SB 1383 fee component, there is going to be 77 cents added to the formula for each residential
customer. In addition to, 38 cents per cubic yard for commercial customers that take into consideration
the requirements of SB 1383. This is due to the requirements for municipality and franchise haulers to
A. CALL TO ORDER – RAINS CONFERENCE ROOM
B. PUBLIC COMMUNICATIONS
C. ITEM(S) FOR DISCUSSION
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implement mixed green waste recycling, and food recovery. Included in the SB 1383 rate of 77 cents,
is the outreach and education part of the rate, record keeping and enforcement.
There are two additional portions to the SB1383 fee, that are not included in the current SB1383 fee.
This includes, edible food rescue, and procurement of recovered organics. They are currently being
funded by a two year grant, and will depend on if the grant is extended out past the two years. Once the
grant expires, these portions will be added to the SB1383 fee. It could possibly roll into the 77 cents, or it
could increase.
Additionally, the revised rate methodology includes a 24-month rate cycle, whereas in odd years, we’ll go
to City Council, and a public meeting will be held, and approve the rates. In the revised methodology, in
even years, the rate adjustment will have a look back provision and true up the disposal and processing
costs, as well as the SB1383 costs, and the service component of CPI.
For example, if this rate packet is approved, rates will go into effect July 1, 2023, however, we’re also
approving 2024’s estimates and in 2025 when we go back to City Council, they will look back at the
processing fees and true up the numbers, increasing or decreasing the rate, depending on what the actual
costs are.
Another addition to the revised methodology, is that in order to avoid an off-cycle rate adjustment during
the economic times, Burrtec proposed to the City to implement residential food waste/mixed organics, as
required by the state in September 2022 through June 30, 2023, without adjusting the rates. Burrtec has
the ability to recoup the cost over a five-year period, beginning with the next rate adjustment in 2023 and
ending in 2027.
Page 3 illustrates a breakdown of the residential components, such as the HHW fee (1.75%) and then
the 77 cent SB1383 fee, MRF Fees, franchise fee (15%), landfill and disposal fee, organics disposal, and
service component, adding up to $30.57 for the residential rate. The next page shows the different
percentages of the rate adjustment, the residential rate increased by 5% from the current rate to the
proposed 2023 rate and increased by 9.5% in 2024. The number can increase or decrease based on the
look back provision.
A new rate was proposed in the rate packet, which included bulky item pick-up for all multi-family and
commercial accounts. Scott Rapp provided the background for this new proposed rate. A few years ago,
some of the private businesses had issues with illegal dumping on their properties. Business owners
reached out to the City, to discuss options and address this issue. The City requested that Burrtec provide
a pilot program which involved 19 multi-family complexes, where there was a high number of illegal
dumping. The map is on page 5 of the handout. It includes complexes west of Haven, and North of
Hermosa.
Mayor Pro Tem Kennedy asked if those are the areas where they had the most illegal dumping.
Mr. Rapp replied that is the multi-family that is just north of the commercial area where industrial
complexes were found to have illegally dumped bulky item products. The multi-family, and commercial
customers with bin service will be the accounts that receive a bulky item collection service. It will be a
bundled rate, that includes recycling, and trash. Multi-family will be routed once a week, and the
commercial facilities would get unlimited pick-up, however they would need to contact Burrtec for service.
Mayor Pro Tem asked to provide more information on the multi-family pilot program, and what the
outcome was. Mr. Rapp explained that at the 19 facilities, they had a total of 2,481 units that were serviced
for bulky item, and a total of 24.98 tons were collected. The pilot program began in February 2022 and
ended in February 2023. An estimated collected pounds per unit is estimated at 20 pounds. Mayor Pro
Tem asked if this proposal would distribute the additional cost of bulky items, having done once a week
spread across multi-family. Mr. Rapp explained that it is spread throughout all of the multi-family. There’s
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103 multifamily complexes within the city limits, they have an estimate of 15,572 units total, and within
those estimated pounds collected 313,000 pounds or an estimate of 156 tons.
Mayor Pro Tem asked if they attributed that bulky item to this transitioning rate, such as people moving
out and need to leave bulky items behind. Mr. Rapp clarified this is just for multi-family, and page 6 reflects
the commercial and multifamily rate and that includes with the bulky item fee.
Councilmember Hutchinson asked if the majority of the rate increase for the new multi-family rate with
bulky item is increased by 19%.
Is the
Mr. Rapp clarified that if the bulky item was not implemented, it would be about $225, and an 8%
difference. The rate for bulky item is $237, which is a 19% increase, a twelve dollar difference from the
rate without the bulky item included.
Councilmember Hutchinson asked how multi-family bulky item pick up would work. Mr. Rapp clarified
that multi-family would be serviced once a week.
Mr. Heftman also explained that it would be routed, on service day, bulky items are to be placed right
next to the enclosure similar to the multi-family the pilot program, labels would also be used. The process
for commercial accounts is slightly different from multi-family. For commercial bulky item, if a driver sees
that a bulky item is out, Burrtec will collect it. This practice will be done throughout the city. Drivers will be
designated to the bulky item system. Commercial drivers will be collecting illegally dumped or bulky items
as they come across them.
Council member Hutchinson asked to clarify for Commercial, if they would have to call or would it be
routed automatically? Mr. Heftman indicated that both practices would take place. If a driver observes
bulky items at business enclosures, they will call to get it scheduled for pick-up.
Mayor Pro Tem Kennedy asked what the bulky items would include. Mr. Heftman explained that it would
include couches, chairs, mattresses, etc. which are often found in the enclosures.
Mr. Rapp continued to explain that on page 7 of the handout, the rate packet also includes new service
rates. It includes 95-gallon barrels for commercial accounts. As well as, 15 to 35 gallons for mixed
organics multi-family customers. There is also a 15 gallon to 35 gallon food waste barrels for restaurants.
The variation in sizes are due to space constraints, or if businesses or multi-family produce less volume
they can pay less for the service. Burrtec also provided downgraded sizes, for those do not have enough
room for a 3-yard bin. Another new rate that has been added to the rate packet is the barrel and bin
exchange for commercial accounts. In the past, there have been issues where bins and carts are either
missing or damaged. The first exchange/replacement is free, and the second replacement would get
charged per the rate schedule.
Councilmember Hutchison asked if the 95-gallon barrels are the same size as residential barrels. Mr.
Rapp confirmed that those are the same size. Mr. Rapp also went on to explain that there are also 35
gallon containers, that are retrofitted with a false bottom, and measure up to 15 gallons.
Mr. Rapp went on to explain that a consultant also reviewed the rate package, and provided a draft of
their findings. The final draft is expected back by the consultant April 27, 2023. In the draft report, the
consultant confirmed that Burrtec calculated the rate formulas correctly. The CPI method that was used
was the Riverside- San Bernardino- Ontario index, and this was found to be correct. The franchise and
HHW fee were calculated correctly. The SB1383 fee was also reviewed, and found that the appropriate
back-up documentation provided by Burrtec to the consultant was found reasonable. The consultant also
confirmed that the bulky item per yard rate was calculated correctly.
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Mr. Rapp indicated that the next steps include; proposition 218 requirements, which require public hearing
notices to be mailed out at minimum 45 days prior the public hearing. The public hearing notice will be
published in the Inland Valley Daily Bulleting newspaper on May 2, 2023. Public hearing notices and the
rate exhibit will be sent by mail to each residential and commercial account, on May 5, 2023. The public
hearing is scheduled for June 21, 2023. This concluded Mr. Rapp’s presentation, and Public Works
Subcommittee members had final questions before concluding.
Councilmember Hutchinson asked for clarification if the amendment that is adjusted during mid-cycle for
2024 is due to SB1383 Fee, and Mrs. Ceballos confirmed it was for the SB1383 fee as well as consumer
price index. It was also confirmed by Mrs. Ceballos to Councilmember Hutchison that the lookback
provision can cause the rate to decrease or increase.
Councilmember Hutchison asked if the current $34.00 plus $12.47 is the current rate for commercial
accounts. Mr. Rapp confirmed, that is correct, the additional amount that they pay now per bulky item
pick-up request.
Councilmember Hutchison wanted clarification if the HHW .75% increase to 1.75% increase is related to
the HHW facility that is off of Lions Street. Mrs. Ceballos confirmed that the HHW fee that is collected by
Burrtec and provided to the City is used to pay for disposal costs at HHW.
Councilmember Hutchison asked for an update on food waste pails. Ms. Ostos confirmed that we gave
out approximately 300-400 pails, and have about 400-500 in stock. They are purchased through the state
grant, and can be given out to residents that sign up online, or available at weekend events such as
CVWD Earth Day event.
Councilmember Hutchison asked to clarify the threshold requirements for proposition 218, and minimum
percentage for sending out notices. Mrs. Ceballos explained that is always the practice to send out
notices, whether it is 1% or 10% adjustment. The most notable difference is there will be two increases
before the next rate recycle. The public hearing notices are going to have rate adjustment for 2023 and
2024. An alternative is to choose a five-year adjustment, in which some cities elect to send out notices
and hold one public hearing, and implement an increase every year. Burrtec had requested to do a rate
review every year, however the City opted to stick with a rate review every two years. Mrs. Ceballos goes
on to explain that there are a lot of changes with this rate package, and some of the adjustments to the
volume density actually reduced from the last rate review. For example, food waste reduced in volume
and the density that was calculated per container decreased, it was the same for recycling as well. Mr.
Fred Lynn agreed that there is no threshold to send out proposition 218 notices, and any adjustments
should follow the proposition 218 requirements.
Councilmember Hutchinson requested that Public Works Subcommittee members receive a copy of the
final report from the consultant when it is available and confirmed that is all the questions and comments
he had.
Mrs. Ceballos added that the multi-family and commercial do receive outreach materials, such as
quarterly newsletter and annual brochures. Information regarding bulky item is being pushed out to multi-
family and commercial accounts so that they are aware of the practices. Mrs. Ceballos also added that
when recycling was proposed as a bundled rate, it increased for those that did not have recycling service
to about 25%. However, those that already established recycling service with Burrtec, saw a decrease in
their bill. In this case the multi-family and businesses are either paying Burrtec for bulky item or doing
something else with it. If this rate packet is approved, there will be one uniform program. It is common for
staff to receive phone calls from residents that live in a multi-family complex that try to arrange a bulky
item pick-up, and the property management does not want to take on that responsibility, it is difficult to
bill the resident if they do not have an account with Burrtec. The bulky item bundle rate provides
uniformity, and less impact on business and multi-family.
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Mr. Rapp also added that looking at it from an aesthetic point of view, illegally dumped items will be picked
up right away and automatically included in their rate, the property management does not have to take
on the burden of the cost when something is illegally dumped. Mr. Heftman added that this helps out
every property manager. If there is a problem with illegal dumping, they can also share with their tenants
on who to contact, and will decrease the likelihood of illegal dumping. It also takes the pressure off of
commercial vendors that always have their barrels and bins full. Mayor Pro Tem Kennedy agreed that is
a nice perk.
D1. The Public Works Subcommittee meeting adjourned at 4:23 p.m.
Councilmember Hutchinson made a motion to move forward with noticing and accept hearing for
City Council. Mayor Pro Tem Kennedy second the motion.
Respectfully submitted,
Date: __________________________________
Jason C. Welday
Director of Engineering Services/City Engineer
D. ADJOURNMENT
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STAFF REPORT
RECOMMENDATION:
Review and provide feedback on solid waste rate adjustment request from Burrtec Waste
Industries, Inc.
BACKGROUND:
The City of Rancho Cucamonga’s (City) franchise waste hauler, Burrtec Waste Industries, Inc.
(Burrtec), submitted a written request for a biennial adjustment to the residential and commercial
solid waste collection rates to the City on March 31, 2025. The second amendment to the
franchise agreement, approved by City Council on August 17, 2022, contains certain criteria,
deadlines, and rate adjustment methodology that Burrtec must follow to be considered for a
biennial rate adjustment. The amendment revised the rate methodology to include pass through
of disposal and processing fees; five percent (5%) cap on service fee; a change to amount of the
household hazardous waste fee; and a new SB 1383 Compliance Fee. The amendment also
includes a mid-cycle increase. Additionally, the City and Burrtec agreed to implement residential
food waste collection in September 2022 and instead of implementing the increase in 2022 as
initially proposed, the cost is being distributed over a five-year period ending in 2027.
The rate adjustment submittal has been reviewed by staff and additionally by a consultant to
ensure it is in accordance with the terms of the franchise agreement. The last solid waste rate
adjustment occurred in July 2023. A 45-day notification to the public is required in accordance
with Proposition 218.
ANALYSIS:
The franchise agreement establishes frequency and methodology for rate adjustment requests,
including verification of CPI, correctly calculating SB 1383 fee, City fees and Household
Hazardous Waste fees, and confirming the rates were calculated correctly. Additionally, the rate
adjustment request is reviewed to determine if Burrtec has included the accurate amount to be
spread over a five-year period, ending in 2027.
The consultant found that the CPI adjustment factor was correctly calculated. The consultant also
found that the SB 1383 fee, City fees, and Hazardous waste fees were calculated correctly, the
correct disposal components were used, and that Burrtec used the correct amount to be spread
over a five-year period, as agreed to in the amendment to the agreement approved in August
2022. The appropriate back-up was provided to confirm disposal fees, organics and recycling
components.
DATE: April 29, 2025
TO: Public Works Subcommittee
FROM: Neil Plummer, Director of Public Works Services
INITIATED BY: Linda Ceballos, Environmental Programs Manager
SUBJECT: Review and Provide Feedback on the Solid Waste Rate Adjustment Packet
Proposed by the City’s Franchise Waste Hauler.
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The following is a summary of the changes proposed for this rate adjustment:
HHW Fee
Staff reviewed the existing fund balance and found the reserve had an adequate balance to
address increasing household hazardous disposal costs. Therefore, staff is recommending a
decrease to the Household Hazardous Waste Disposal Fee, from 1.75% to 1.20%. This program
is utilized by hundreds of residents each week and helps eliminate illegal dumping and improper
disposal of hazardous waste products from homes in the City, resulting in safer and healthier
community for City residents.
Commercial Bulky Item Pick-up
The bulky item pick-up rate is based on a cost per yard per month basis. This was a new program
established in 2023. Burrtec has calculated a 2025 rate of $0.71 which is a reduction from the
2024 rate of $0.84.
Recycling Container Density
Burrtec has calculated a recycling container density of 50 pounds per cubic yard, a reduction from
the 2024 value of 55 pounds per cubic yard.
Food Waste Container Density
Burrtec reduced the food waste container density from 300 pounds to 275 pound per yard in 2025
and projects 250 pounds per yard in 2026.
New Proposed Services
Additional 95-gallon recycling barrel option for commercial customers that may need a smaller
recycling barrel or have space constraints. Starting rates at $29.44 in 2025 for one day week,
through $96.06 for 6 day a week service.
The table below shows rates that are currently on the rate schedule, and the proposed rate
adjustment included in the packet from Burrtec.
Account Type Current Rate
Proposed 2025
Rate
Estimated
2026 Rate
Residential $ 33.44 $ 34.93 $ 37.61
Senior Residential $ 22.40 $ 23.40 $ 25.20
Multi-Family Barrel $ 8.91 $ 9.36 $ 9.69
Multi-Family Bin* $ 257.78 $ 257.66 $ 273.63
Commercial* $ 302.51 $ 296.58 $ 308.00
*Multi-family bin and commercial rates vary by bin size and frequency of service.
All proposed rates are displayed in Attachment 1. Attachment 2 provides the detailed breakdown
of the residential rate.
Next Steps
The City will provide the required forty-five (45) day notification to the public in accordance with
Proposition 218 by publishing notice of this hearing on May 1, 2025, in the Inland Valley Daily
Bulletin, a local newspaper of general circulation, as well as a separate mailing to each residential
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and commercial address on May 2, 2025. The proposed rates have also been available for public
review in the City Clerk's Office.
FISCAL IMPACT:
The City receives a franchise fee from Burrtec, paid quarterly, which equals fifteen percent (15%)
of the gross receipts received by Burrtec. The franchise fee amount is expected to change as the
proposed adjusted rate is revised.
ATTACHMENTS:
Attachment 1 – Exhibit ‘A’- Proposed Solid Waste Collection Rates
Attachment 2 – Residential Rate Worksheet
Attachment 3 – Final Report – 2025 Review of Burrtec Rate Adjustment Calculation
Current
2024 Rate
Proposed
2025 Rate
Proposed
2026 Rate
Approved
2024 Rate
Proposed
2025 Rate
Proposed
2026 Rate
Residential Barrel Service Commercial Trash & Recycling Bin Service with Bulky Item Pick-up*
Includes 1 barrel each for trash, recycling, organics Includes 1 trash & 1 recycling bin, same size & frequency
Residential customers are billed every 2 months Size Freq
Standard 33.44$ 34.93$ 37.61$ 1.5 yrd 1 168.62$ 168.79$ 175.07$
* Senior 22.40$ 23.40$ 25.20$ 1.5 yrd 2 266.08$ 263.29$ 273.28$
* Primary acct holder 60yr, of age or older are eligible to apply 1.5 yrd 3 362.20$ 356.47$ 370.08$
35-Gallon Barrel 28.55$ 30.31$ 32.92$ 1.5 yrd 4 459.06$ 450.37$ 467.68$
Multi-Family-Per-Unit 30.08$ 30.70$ 32.25$ 1.5 yrd 5 555.95$ 544.33$ 565.35$
Additional Trash Barrel 8.91$ 9.36$ 9.69$ 1.5 yrd 6 653.48$ 638.93$ 663.65$
Additional Recycling Barrel 1.80$ 1.89$ 1.96$ 2 yrd 1 195.94$ 194.89$ 202.23$
Additional Organics Waste Barrel 4.61$ 4.84$ 5.01$ 2 yrd 2 319.47$ 314.26$ 326.29$
Backyard Pull-Out Service 59.91$ 42.14$ 43.65$ 2 yrd 3 443.36$ 433.99$ 450.74$
Bear Proof Barrel (+ Regular Barrel)16.65$ 17.48$ 18.11$ 2 yrd 4 564.86$ 551.23$ 572.63$
Temporary Bins 129.41$ 135.88$ 140.74$ 2 yrd 5 686.39$ 668.52$ 694.53$
Dump and Return 129.41$ 135.88$ 140.74$ 2 yrd 6 808.65$ 786.54$ 817.24$
Bulky Items (in excess of 4 collections/5 items per collection)3 yrd 1 249.47$ 245.95$ 255.37$
- Trip Charge 37.49$ 39.36$ 40.77$ 3 yrd 2 415.44$ 404.84$ 420.61$
- Per Item Charge 13.74$ 14.43$ 14.94$ 3 yrd 3 582.27$ 564.65$ 586.79$
3 yrd 4 748.54$ 723.84$ 752.37$
3 yrd 5 914.82$ 883.05$ 917.94$
Multi-Family Trash & Recycling Bin Service with Bulky Item Pick-Up*3 yrd 6 1,081.86$ 1,043.05$ 1,084.34$
Size Freq 4 yrd 1 302.51$ 296.58$ 308.00$
1.5 yrd 1 182.50$ 186.72$ 200.21$ 4 yrd 2 516.76$ 501.05$ 520.72$
1.5 yrd 2 287.23$ 289.18$ 309.97$ 4 yrd 3 730.71$ 705.25$ 733.14$
1.5 yrd 3 390.70$ 390.46$ 418.50$ 4 yrd 4 944.55$ 909.31$ 945.42$
1.5 yrd 4 494.87$ 492.34$ 527.71$ 4 yrd 5 1,158.37$ 1,113.35$ 1,157.66$
1.5 yrd 5 599.04$ 594.34$ 637.00$ 4 yrd 6 1,372.54$ 1,317.79$ 1,370.33$
1.5 yrd 6 703.94$ 697.06$ 747.05$ 6 yrd 1 388.79$ 377.06$ 391.84$
2 yrd 1 210.18$ 213.05$ 227.49$ 6 yrd 2 697.06$ 670.13$ 696.80$
2 yrd 2 341.31$ 340.60$ 363.20$ 6 yrd 3 1,005.36$ 963.25$ 1,001.77$
2 yrd 3 472.89$ 468.67$ 499.50$ 6 yrd 4 1,314.01$ 1,256.73$ 1,307.15$
2 yrd 4 602.08$ 594.15$ 633.12$ 6 yrd 5 1,622.27$ 1,549.80$ 1,612.06$
2 yrd 5 731.27$ 719.70$ 766.78$ 6 yrd 6 1,930.49$ 1,842.80$ 1,916.97$
2 yrd 6 861.26$ 846.12$ 901.36$ *Business to contact Burrtec for bulky item service pick-up.
3 yrd 1 257.78$ 257.66$ 273.63$ Commercial Compactor Trash with Recycling Bin Service
3 yrd 2 435.54$ 428.78$ 454.46$ Includes 1 trash & 1 recycling bin, same size & frequency
3 yrd 3 613.41$ 600.12$ 635.50$ Size Freq
3 yrd 4 762.73$ 741.43$ 785.36$ 3 yrd 1 368.83$ 368.69$ 377.42$
3 yrd 5 931.77$ 903.40$ 956.70$ 3 yrd 2 612.53$ 606.83$ 619.74$
3 yrd 6 1,101.69$ 1,066.38$ 1,129.04$ 3 yrd 3 857.51$ 846.31$ 863.46$
4 yrd 1 318.13$ 315.65$ 333.71$ 3 yrd 4 1,101.65$ 1,084.89$ 1,106.28$
4 yrd 2 541.62$ 529.41$ 558.64$ 3 yrd 5 1,345.63$ 1,323.37$ 1,348.95$
4 yrd 3 764.88$ 743.02$ 783.45$ 3 yrd 6 1,590.99$ 1,563.26$ 1,593.08$
4 yrd 4 988.01$ 956.40$ 1,007.99$ 4 yrd 1 446.97$ 444.83$ 454.84$
4 yrd 5 1,211.10$ 1,169.79$ 1,232.53$ 4 yrd 2 760.96$ 750.95$ 766.17$
4 yrd 6 1,434.63$ 1,383.63$ 1,457.60$ 4 yrd 3 1,074.82$ 1,056.92$ 1,077.33$
*Bulky items picked up once per week.4 yrd 4 1,388.52$ 1,362.73$ 1,388.33$
4 yrd 5 1,702.16$ 1,668.50$ 1,699.28$
Commercial Trash & Recycling Barrel Service 4 yrd 6 2,016.00$ 1,974.45$ 2,010.44$
Rate includes 1 trash & 1 recycling barrel 6 yrd 1 596.72$ 590.33$ 602.67$
Size Freq 6 yrd 2 1,054.13$ 1,035.33$ 1,054.99$
95Gal 1 42.79$ 42.36$ 43.99$ 6 yrd 3 1,511.39$ 1,480.21$ 1,507.17$
95Gal 2 70.10$ 68.60$ 71.25$ 6 yrd 4 1,968.53$ 1,924.93$ 1,959.21$
95Gal 3 97.60$ 95.01$ 98.75$ 6 yrd 5 2,425.66$ 2,369.65$ 2,411.23$
95Gal 4 124.95$ 121.32$ 126.07$ 6 yrd 6 2,882.94$ 2,814.53$ 2,863.41$
95Gal 5 152.35$ 147.64$ 153.44$
95Gal 6 179.88$ 174.08$ 180.93$
Additional Services Residential/Commercial
Barrel Exchange (first exchange free)18.91$ 19.86$ 20.57$
Push-Out Rates, per container, per service frequency Bin Exchange (first exchange free)94.51$ 99.24$ 102.78$
Distance Freq Bin Replacement + actual cost of bin 104.69$ 109.92$ 113.85$
0 - 25 ft All N/C N/C N/C Extra Pick-up (Barrel)25.70$ 26.99$ 27.95$
26 - 50 ft 1 49.64$ 52.12$ 53.98$ Extra Pick-up (Bin)54.22$ 56.93$ 58.97$
26 - 50 ft 2 99.29$ 104.25$ 107.98$ Extra Pick-up (Compactor)108.45$ 113.87$ 117.94$
26 - 50 ft 3 148.95$ 156.40$ 161.99$ Extra Pick-up (FW Barrel)73.59$ 77.27$ 80.03$
26 - 50 ft 4 198.61$ 208.54$ 216.00$ * Cart Replacement Fee (Comm Only)91.18$ 95.74$ 99.16$
26 - 50 ft 5 248.24$ 260.65$ 269.97$ * Lost, stolen, or damaged cart due to customer negligence
26 - 50 ft 6 297.90$ 312.80$ 323.98$ Bin Lock 14.28$ 14.99$ 15.53$
Over 50 ft 1 99.28$ 104.24$ 107.97$ Steam Clean - Per Container 192.94$ 202.59$ 209.83$
Over 50 ft 2 198.59$ 208.52$ 215.98$ Contamination Fee 54.22$ 56.93$ 58.97$
Over 50 ft 3 297.86$ 312.75$ 323.93$ Illegal Hauler Impound Fee - Per Day 115.76$ 121.55$ 125.89$
Over 50 ft 4 397.14$ 417.00$ 431.91$
Over 50 ft 5 496.42$ 521.24$ 539.88$
Over 50 ft 6 595.73$ 625.52$ 647.89$
EXHIBIT A
CITY OF RANCHO CUCAMONGA, CALIFORNIA
2025 ACTUAL SOLID WASTE RATES
ALL RATES ARE BILLED MONTHLY UNLESS OTHERWISE NOTED
Service Type Service Type
ATTACHMENT 1
Current
2024 Rate
Proposed
2025 Rate
Proposed
2026 Rate
Approved
2024 Rate
Proposed
2025 Rate
Proposed
2026 Rate
EXHIBIT A
CITY OF RANCHO CUCAMONGA, CALIFORNIA
2025 ACTUAL SOLID WASTE RATES
ALL RATES ARE BILLED MONTHLY UNLESS OTHERWISE NOTED
Service Type Service Type
Green Waste Multi Family / Commercial Bin Service
Additional Recycling Bin Service - Existing Accounts Only Size Freq
Not available to accounts established after 6/30/2017 2 yrd 1 176.88$ 178.53$ 184.63$
Size Freq 2 yrd 2 275.08$ 277.40$ 287.24$
3 yrd 1 69.11$ 69.20$ 71.62$ 2 yrd 3 374.09$ 377.10$ 390.70$
3 yrd 2 123.52$ 123.05$ 127.14$ 2 yrd 4 472.58$ 476.26$ 493.62$
3 yrd 3 165.73$ 164.22$ 169.30$ 2 yrd 5 570.97$ 575.31$ 596.42$
3 yrd 4 209.78$ 207.26$ 213.48$ 2 yrd 6 670.25$ 675.26$ 700.16$
3 yrd 5 252.55$ 248.99$ 256.25$ 3 1 210.37$ 216.21$ 224.55$
3 yrd 6 296.83$ 292.27$ 300.68$ 3 2 337.23$ 345.31$ 358.96$
3 3 465.01$ 475.35$ 494.38$
Additional Recycling Bin Service - New Accounts 3 4 592.18$ 604.77$ 629.14$
Size Freq 3 5 719.27$ 734.11$ 763.81$
1.5 yrd 1 123.05$ 125.02$ 131.09$ 3 6 847.29$ 864.45$ 899.49$
1.5 yrd 2 177.00$ 177.98$ 187.63$ Barrel Size Freq
1.5 yrd 3 229.63$ 229.57$ 242.72$ 95Gal 1 51.20$ 52.88$ 54.87$
1.5 yrd 4 283.00$ 281.92$ 298.60$ 95Gal 2 87.52$ 90.26$ 93.66$
1.5 yrd 5 336.35$ 334.22$ 354.50$ 95Gal 3 119.05$ 122.64$ 127.29$
1.5 yrd 6 390.39$ 387.29$ 411.11$ 95Gal 4 150.99$ 155.44$ 161.35$
2 yrd 1 136.02$ 137.47$ 144.53$ 95Gal 5 192.13$ 197.85$ 205.37$
2 yrd 2 201.68$ 201.50$ 213.13$ 95Gal 6 214.21$ 220.35$ 228.82$
2 yrd 3 267.76$ 266.01$ 282.15$
2 yrd 4 331.50$ 328.05$ 348.68$ Mixed Organics Multi Family Barrels - Stand Alone
2 yrd 5 395.22$ 390.11$ 415.17$ Size Freq
2 yrd 6 459.65$ 452.89$ 482.47$ 15 Gal 1 41.07$ 41.31$ 42.68$
4 yrd 1 185.21$ 184.33$ 195.36$ 15 Gal 2 67.00$ 67.32$ 69.58$
4 yrd 2 284.74$ 279.31$ 298.23$ 15 Gal 3 88.01$ 88.31$ 91.36$
4 yrd 3 383.96$ 373.94$ 400.79$ 15 Gal 4 109.42$ 109.71$ 113.56$
4 yrd 4 483.12$ 468.53$ 503.23$ 15 Gal 5 140.37$ 140.78$ 145.68$
4 yrd 5 582.22$ 563.02$ 605.64$ 15 Gal 6 151.59$ 151.87$ 157.24$
4 yrd 6 681.69$ 657.91$ 708.45$ 35 Gal 1 42.58$ 42.47$ 44.08$
6 yrd 1 214.79$ 210.76$ 224.99$ 35 Gal 2 69.95$ 69.56$ 72.30$
6 yrd 2 351.30$ 339.87$ 365.51$ 35 Gal 3 92.37$ 91.61$ 95.37$
6 yrd 3 487.28$ 468.41$ 505.44$ 35 Gal 4 115.18$ 114.09$ 118.85$
6 yrd 4 623.24$ 596.95$ 645.37$ 35 Gal 5 147.57$ 146.24$ 152.32$
6 yrd 5 758.81$ 725.07$ 784.84$ 35 Gal 6 160.19$ 158.41$ 165.18$
6 yrd 6 894.32$ 853.15$ 924.31$ 65Gal 1 44.80$ 44.18$ 46.13$
Barrel Size Freq 65Gal 2 74.29$ 72.88$ 76.32$
95Gal 1 -$ 29.44$ 30.89$ new 65Gal 3 98.85$ 96.55$ 101.35$
95Gal 2 -$ 42.64$ 45.07$ new 65Gal 4 123.80$ 120.62$ 126.79$
95Gal 3 -$ 56.07$ 59.44$ new 65Gal 5 158.29$ 154.38$ 162.20$
95Gal 4 -$ 69.32$ 73.68$ new 65Gal 6 173.06$ 168.15$ 177.02$
95Gal 5 -$ 82.61$ 87.95$ new 95Gal 1 47.04$ 45.89$ 48.21$
95Gal 6 -$ 96.06$ 102.35$ new 95Gal 2 78.64$ 76.21$ 80.35$
95Gal 3 105.32$ 101.46$ 107.30$
Extra Recycling Barrel Commercial 95Gal 4 132.41$ 127.12$ 134.70$
65Gal 1 2.15$ 2.26$ 2.34$ 95Gal 5 169.03$ 162.48$ 172.06$
95Gal 6 185.92$ 177.86$ 188.84$
Trash Roll-Off Service Food Waste Service - Bins
*10 Yard 736.02$ 756.75$ 780.05$ Size Freq
*20 Yard 736.02$ 756.75$ 780.05$ 2 yrd 1 316.32$ 293.83$ 305.53$
*40 Yard 736.02$ 756.75$ 780.05$ 2 yrd 2 576.19$ 528.78$ 550.14$
*40 Yard Compactor 1,070.15$ 1,098.13$ 1,131.46$ 2 yrd 3 817.96$ 744.80$ 775.17$
2 yrd 4 1,061.35$ 962.54$ 1,001.97$
*Roll-Off and compactor service rate is charged per service 2 yrd 5 1,339.52$ 1,216.59$ 1,266.34$
Recycling Roll-Off Service 2 yrd 6 1,545.49$ 1,395.31$ 1,452.76$
*10 Yard - Inert (Temp includes 8Tons)292.05$ 304.64$ 315.20$
*10/20/40 Yard - C&D includes 8Tons 228.83$ 238.70$ 246.97$ Food Waste Service - Barrels
*20/40 Yard - Recycling 228.83$ 238.70$ 246.97$ Size Freq
*40 Yard - Recycling Compactor 228.83$ 238.70$ 246.97$ 15 Gal 1 49.84$ 50.32$ 51.93$
*40 Yard - Wood/Green Waste include 228.83$ 238.70$ 246.97$ 15 Gal 2 84.47$ 85.19$ 88.01$
6 tons 15 Gal 3 114.15$ 115.07$ 118.94$
*Roll-Off service rate is charged per service and subject to disposal and processing fees charged 15 Gal 4 144.23$ 145.37$ 150.27$
by ton. Also, subject to Transportation Fee, if customer requests haul to a specific location.15 Gal 5 183.87$ 185.35$ 191.58$
Unless otherwise noted.15 Gal 6 203.76$ 205.32$ 212.29$
35 Gal 1 62.92$ 63.32$ 65.55$
Additional Roll Off Services 35 Gal 2 110.55$ 111.13$ 115.14$
-Dry/Run Relocation Fee 77.01$ 80.86$ 83.75$ 35 Gal 3 153.21$ 153.96$ 159.58$
-Tilthopper Rental 49.95$ 52.45$ 54.32$ 35 Gal 4 196.30$ 197.17$ 204.43$
-End Dump (Hourly Rate)229.02$ 238.89$ 247.17$ 35 Gal 5 248.91$ 250.07$ 259.25$
(Plus actual Disposal Fee)35 Gal 6 281.80$ 282.96$ 293.47$
-Roll Off Rental Fee 30.58$ 32.11$ 33.26$ 65 Gal 1 81.14$ 82.59$ 85.93$
(Per Day after 7 days if not scheduled for weekly service)65 Gal 2 147.40$ 149.68$ 155.79$
-Flat Bed 436.18$ 457.99$ 474.37$ 65 Gal 3 208.88$ 211.74$ 220.48$
-R/O Liner -$ 126.00$ 130.51$ new 65 Gal 4 270.75$ 274.27$ 285.60$
-Receiver Rental BWI owned -$ 262.50$ 271.89$ new 65 Gal 5 341.84$ 346.36$ 360.68$
-Compactor Rental BWI owned -$ 367.50$ 380.64$ new 65 Gal 6 393.85$ 398.59$ 415.18$
`
Burrtec Waste Industries, Inc
City of Rancho Cucamonga - Residential Rates
Effective 7/1/25
2024 2024 2024 2025 2026
Approved Actual True-Up Estimated Estimated
Components Rate Rate Carried to 2025 Rate Rate
Service 17.63$ a/17.57$ (0.06)$ 18.03$ 18.50$
Shortfall (to hold Max Allowed)(0.60) (0.54) 0.06 (0.15) -
Net Service 17.03$ 5.0%17.03$ 5.0%-$ 17.88$ 5.0%18.50$ 3.5%
1) Landfill / Disposal Transfer - 95Gal 5.27$ 5.54$ 0.27$ 5.54$ 5.68$
2) Green Waste Disposal - 95Gal
3) MRF Fees - 65 Gal 2.06 2.25 0.19 2.29 2.35
Disposal/Processing Total 7.33$ 7.79$ 0.46$ 7.83$ 8.03$
SB1383
Program Compliance 0.77$ 0.77$ -$ 0.77$ 0.77$
2b) Mixed Organics Processing - 95 Gal 5.61 4.81 (0.80) 5.06 5.19
SB1383 Cost 6.38$ 5.58$ (0.80)$ 5.83$ 5.96$
Recovering 2024 True-Up (0.34)$ (0.34)$
Recovering prior Shortfall
Shortfall (to hold Max Allowed)
Burrtec SB1383 Phase-In (2.90)$ (2.90)$ -$ (1.93)$ (0.97)$
Franchise Fees 15.0%5.01$ 4.95$ (0.06)$ 15.0%5.24$ 5.63$
HazMat Fees 1.75%0.59 0.58 (0.01) 1.20%0.42 0.45
City Fees Total 5.60$ 5.53$ (0.07)$ 5.66$ 6.08$
Total 33.44$ 33.03$ (0.41)$ 34.93$ 37.61$
Changes vs Current Rate 2.87$ 2.46$ 1.49$ 2.68$
9.39%8.05%4.46%7.67%
All Senior Rates 22.40$ 22.13$ (0.27)$ 23.40$ 25.20$
CPI Service Max Cap 5.00%5.00%5.00%5.00%
2023 2023 2024 2025
a/ Avg CPI comparing 2 years 5.00%est.4.65%2.61%2.61%
1) Landfill / Disposal Transfer
West Valley Fee per Ton 55.92$ 2024 est 55.74$ Actual 57.83$ 59.34$
Annual Tons/House 1.2084 original 1.1920 1.1489 1.1489
Weekly Lbs/House 43.48 adjusted 45.84 44.19 44.19
Disposal Component per Home 5.27$ 5.54$ 5.54$ 5.68$
2) Green Waste
West Valley Fee per Ton
Annual Tons/House
Weekly Lbs/House 3.00
Disposal Component per Home
2b) Mixed Organics Processing Mixed Organics Mixed Organics Mixed Organics Mixed Organics
West Valley Fee per Ton 91.31$ 2024 est 89.57$ Actual 93.15$ 95.58$
Annual Tons/House 0.6590 original 0.6446 0.6514 0.6514
Weekly Lbs/House 28.34 adjusted 24.79 25.05 25.05
Disposal Component per Home 5.61$ 4.81$ 5.06$ 5.19$
3) Recycling
Recycling (Rev)/Cost per Ton 81.19$ 2024 est 82.48$ 88.89$ 91.21$
Annual Tons/House 0.3042 0.3278 0.3092 0.3092
Weekly Lbs/House 11.70 12.61 11.89 11.89
Processing Component per Home 2.06$ 2.25$ 2.29$ 2.35$
Total Disposal/Processing 12.94$ 12.60$ 12.89$ 13.22$
ATTACHMENT 2
450 14th Street, Suite 350, Oakland, CA 94612 | p 916.782.7821 | f 916.782.7824 | www.r3cgi.com
April 23, 2025
Ms. Marissa Ostos
City of Rancho Cucamonga
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
submitted via email: Marissa.Ostos@cityofrc.us
SUBJECT: 2025 Review of Burrtec Rate Adjustment Calculation
Dear Ms. Ostos:
R3 Consulting Group, Inc. (R3) was engaged by City of Rancho Cucamonga (City) to review its franchised
hauler’s requested rate adjustment for Rate Period 6 (July 1, 2025 – June 30, 2027). This letter report
provides the results of our review, in which we made adjustments to projected tipping fee increases and
bulky waste fee charges. Additionally, we note items of interest for the City to continue to monitor.
Background
The City entered into a franchise agreement (Agreement) with Burrtec Waste Industries, Inc. (Contractor)
for Integrated Solid Waste Management Services. The current term of the Agreement began on July 1,
2016, expires on June 30, 2028, and has the option for two (2) five-year extensions. Article 6 of the
Agreement (Contractor Compensation and Rates) provides for bi-annual adjustments to the maximum
rates listed in Exhibit 5 of the Agreement. Starting on July 1, 2017, the Contractor may submit a request
for a bi-annual adjustment to the maximum rates, which is to be received by the City by April 1st preceding
the Rate Period for which the adjustment is requested. In August 2022, the City and Contractor agreed to
a Second Amendment to the Agreement.
The Contractor’s Rate Application including R3 Adjustments is provided in Attachment 1. The
methodology for calculating the bi-annual rate adjustment is specified in Exhibit 5 of the Agreement. The
methodology in Exhibit 5 was recently updated and included in the Second Amendment to the Agreement
(Attachment 2) which was signed into effect in August 2022. The previous methodology maintained the
same rates for both years of a Rate Period (e.g., the same rate for both 2023 and 2024). The update to
the methodology allows for “Even Year” (e.g., rate years 2024, 2026, 2028) adjustments based on
projected changes in costs. This resulted in a separate rate adjustment for 2024, which is then “Trued-up”
to the actual costs in this Rate Application with either a credit or debit passed on to rate payers. Likewise,
this Rate Application contains projected rate increases for “Even Year” 2026 and which costs will be
“Trued-up” in the 2027 Rate Application. In no event may the adjustments in the Service Component of
any rate be an increase of more than five percent (5%) compared to the previous Rate Period.
The rate adjustment methodology specified in Exhibit 5 involves the following general steps to determine
the rates for the coming Rate Period:
1.Adjust the Service Component for the current Rate Period by the CPI;
2.Adjust the Disposal Component and/or Processing Component(s) by the actual changes to those
components;
ATTACHMENT 3
City of Rancho Cucamonga | Review of Biennial Rate Adjustment Request Page 2 of 5
3. Adjust the Franchise Fee 1 and Household Hazardous Waste (HHW) Fee2 Components based on
the agreed-upon percentage of Gross Receipts; and
4. Include any “True-up” from the “Even Year” in the total rate.
The Contractor submitted its original Rate Application to the City by March 31, 2025. This report presents
the results of R3’s review of that application.
Methodology
R3 reviewed the Rate Application for consistency with the Exhibit 5 of the Agreement (Rate
Adjustment Methodology);
R3 reviewed the 2023 Rate Application Report for context and to follow-up on suggested
recommendations. The Contractor appears to be following prior R3 recommendations;
R3 downloaded the Riverside-San Bernardino-Ontario, CA (CPI Series ID: CUURS49CSA0) Index
and recalculated the CPI adjustment factor, and compared it to the Contractor’s calculated CPI
adjustment factor;
R3 checked that correct “base” rate (from 2023) was used in the Contractor’s calculations and
noted any deviations;
R3 checked that the 2024 “Actuals” were included and that the “True-Up” was correctly calculated;
R3 reviewed the Rate Application calculations for mathematical accuracy;
R3 tied the rates in the Rate Application to the City’s Approved Rate Schedule 3;
R3 checked that the Franchise Fees and HHW Fees were calculated correctly;
R3 checked that the Compliance Costs (SB 1383 related) tied to the calculated rate;
R3 reviewed the Bulky Pick-Up program costs for reasonableness; and
R3 reviewed additional (new) charges for reasonableness based off our knowledge and experience
reviewing similar information for other jurisdictions in California.
Limitations
Findings, below, are based upon the procedures described above. Procedures are intended to meet the
City’s objectives at a minimum cost. However, they do not constitute an audit in accordance with auditing
standards generally accepted in the United States of America. Furthermore, had additional procedures
been performed, other matters might have come to our attention that would have been reported to you, and
those matters may have been material.
We were not able to verify the accuracy of the Contractor’s base information used to determine the rate
adjustment. As such, unless otherwise noted, we have assumed that the information presented in the
Contractor’s Application, including but not limited to the container quantity, facility costs, tonnages,
1 Franchise Fee - Per Section 3.1 of the Agreement, the Franchise Fee is equal to fifteen percent (15%) of
the Gross Receipts received by the Contractor.
2 Household Hazardous Waste Fee – Per the City, the Household Hazardous Waste (HHW) Fee is now
equal to one and twenty hundredths of one percent (1.20%) of the Gross Receipts received by the Contractor. The
Second Amendment of the Agreement had adjusted the HHW Fee to equal one and seventy-five hundredths of one
percent (1.75%).
3 The Contractor’s Rate Application included various new rates not included in the City’s Approved Rate Schedule.
City of Rancho Cucamonga | Review of Biennial Rate Adjustment Request Page 3 of 5
customer information, recycling revenue and expenses information, and barrel density information, are
correct.
Findings
The Contractor correctly calculated and applied the CPI adjustment factor using the Riverside-
San Bernardino-Ontario, CA (CPI Series ID: CUURS49CSA0) Index.
o Contractor-calculated CPI Adjustment = 2.61%
The Contractor correctly calculated the City Fees (i.e., Franchise Fee and HHW Fee).
The Contractor used the correct trash Disposal Component and provided the back-up
calculations for the Green Waste and Recycling components; these rates match the tipping fees
used in 2023. Actual tipping fees are used for 2025 and 2026 fees are adjusted by CPI.
The Contractor calculated the Additional Service Fees by multiplying the current fees by the
calculated CPI adjustment factor.
The Contractor provided supporting information for the documentation of current tip fees,
calculated CPI adjustment, a tonnage summary, and Residential, Commercial, and Multi-family
Barrel and Bin Density information.
The Contractor has built in recycling processing costs into the commercial recycling rates (both
standalone recycling and bundled with commercial trash rates). The Contractor calculated the
recycling processing cost based on actuals to calculate the 2025 rates. To calculate the 2026
rates, the Contractor used an adjustment of 5.0% over 2025 rates, with the reasoning that facility
costs are increasing at respective rates. Without further facility information, R3 has adjusted this
projected recycling processing cost change to CPI (2.61%), which matches the projected
adjustments for the other facilities and respective rates.
o For recycling bundled with commercial trash service, the Contractor calculated the actual
recycling cost in 2024 on a per trash yard basis, which was found to be $3.89 per trash-
yard, and applied that cost to each subscription level based on volume of trash. The
Contractor applied the 2.61% CPI increase to project 2025 and 2026 rates.
The Contractor continued to incorporate the commercial Bulky Pick-Up rate as calculated and
implemented in the 2023 Rate Application, and which is based on a cost per yard per month
basis. The Contractor calculated a 2025 rate of $0.71 which is a reduction from the 2024 rate of
$0.84. Additionally, the Contractor included a slight increase in this fee (from $0.71 to $0.73) for
certain 2026 rates. R3 adjusted these fees to be consistent at $0.71 for all 2025 and 2026 rates.
The Contractor correctly included a 38-cent charge for “SB 1383 Compliance” in the “Commercial
Refuse Bin Service w/Recycling” tab – This line-item charge for SB 1383 Compliance was
calculated in the 2022 “Off-Cycle” rate review and replaces the 15-cent Compliance charge
related to recycling in 2021 which was included in the 2019-2021 approved rate sheet, and
included in the rates charged in FY 2019-2020 and 2020-2021.
The Contractor correctly included a 77-cent charge for “Compliance” in the Residential rate tabs –
this line-item charge was also in the 2022 “Off-Cycle” rate application.
The Contractor calculated a recycling container density of 50 pounds per cubic yard, a reduction
from the 2024 value of 55 pounds per cubic yard. In the 2023 Rate Application, the Contractor
explained an increase in density would be likely, due to the rollout of additional recycling
City of Rancho Cucamonga | Review of Biennial Rate Adjustment Request Page 4 of 5
containers, particularly at smaller volumes, in which higher recycling rates would lead to higher
recycling container densities. The average recycling container density has varied slightly in the
past as the Contractor worked to rollout a full recycling program. It is expected that this density
will stabilize over time. The density calculated is found to be logical and reasonable, however the
City should continue to monitor densities for unusual changes.
The Contractor reduced the food waste container density from 300 pounds per yard to 275
pounds per yard in 2025, and projects 250 pounds per yard in 2026. The Contractor explained
that as food waste containers are deployed to smaller volume generators now required under SB
1383, it is anticipated that the overall density will decrease. R3 found this to be logical and
reasonable.
The Contractor correctly applied the would-be residential rate increase from the “Off-Cycle” rate
application in 2022 over the five (5) remaining years in the term of the Agreement.
The Contractor correctly projected 2026 rates by increasing 2025 calculated rates by the
anticipated 2025 CPI (2.61%).
The “Even Year” 2024 resulted in actual rates that are less than the approved 2024 rates due to
CPI being less than what was projected. This results in at 2024 “True-Up” that provides a credit to
2025 rates.
2022 “Off-Cycle” Rate Increase Request
The Contractor received a bi-annual rate adjustment in 2021 and 2023; however, to implement the state-
mandated SB 1383 requirements, the City and Contractor agreed that the Contractor would provide the
additional services before that date (2022), and the Contractor had been doing so without an additional rate
increase. To recover the Contractor’s costs for providing these new services, the City agreed to a special
one-time rate adjustment in 2022 noted as an “off-cycle” rate adjustment. The City and Contractor agreed
to an amendment to the Agreement to allow for such “off-cycle” rate adjustment and which includes the
amended associated methodology in Exhibit 5.
The review of the 2022 “Off-Cycle” rate request resulted in increased rates to support SB 1383 compliance
and organic waste collection and processing. However, the City and Contractor agreed not to implement a
new rate in 2022 and instead, wait for the next regularly scheduled rate adjustment in 2023 (this review).
The City and Contractor further agreed to implement the residential portion of the 2022 “Off-Cycle” rate
increase equally over the remaining five (5) years in the term of the Agreement. This intent is included in
Section 6.3.2 of the Second Amendment to the Agreement. As such, the Contractor added one-fifth (1/5)
of the residential 2022 “Off-Cycle” rate adjustment to the 2024, 2025, and 2026 residential rates. After 2026
the full cost shall have been incorporated into the residential rates.
Carry Forward
Rate stabilization offset / carry forward are to be carried forward or applied in subsequent rate periods, per
Exhibit 5 of the Agreement. Previous to the Second Amendment to the Agreement, there was a 5% cap on
the total rate increase between subsequent years. In the Second Amendment, the City and Contractor
changed this language such that the 5% cap is only applicable to the Service Components.
Exhibit 5 the Amended Agreement states, “In no event may the adjustment of the Service Component
pursuant to this Exhibit, and Article 6 of the Agreement, be an increase in an amount greater than 5% of
the Service Component, compared to the previous Service Component. In the event that calculations in
accordance with this Exhibit result in an increase above five percent (5%) of the Service Component, any
City of Rancho Cucamonga | Review of Biennial Rate Adjustment Request Page 5 of 5
amount above five percent (5%) shall be carried forward and applied to the Service Component in
subsequent Rate Adjustments until such time as the carried over amount has been applied in full.”
Carry-forward from application of the 5% cap on the Service Component in Rate Period 5 was retained.
Recommendations
Approve the R3 Adjusted Rate Exhibit / Application (Attachment 1);
Approve and include in the rate sheet, additional rates for additional services the Contractor is now
providing (95-gallon commercial recycling barrels);
Continue to monitor changes in container densities and check that densities are being properly
applied to customer rates; and
Next year: Review the Contractor’s actual adjustments for 2026 and reconcile with the approved
projected 2026 rates in this rate application to calculate actual rates effective July 1, 2026.
* * * * * * *
We appreciate the opportunity to be of service to the City. Should you have any questions regarding this
submittal, please contact me by phone at (916) 655-2104 or by email at jmuratsuchi@r3cgi.com.
Sincerely,
Jordan Muratsuchi | Sr. Consultant Rose Radford | Director
R3 Consulting Group, Inc. R3 Consulting Group, Inc.
916.655.2104 | jmuratsuchi@r3cgi.com 415.347.9536 | rradford@r3cgi.com
Attachments:
1. R3 Adjusted Rate Application
2. Exhibit 5 – Rate Adjustment Methodology