To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Solid waste collection rate increase for residential and commercial customers in the unincorporated areas served by Allied Waste / Republic Services under County Franchise Agreement
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE a 17% solid waste collection rate increase, effective July 1, 2026, for residential and commercial customers served by Allied Waste Systems, Inc., under its franchise agreement with the County.
FISCAL IMPACT:
The costs for County staff time spent and any related consulting services focused on administering the County’s Franchise Agreement with Allied, are covered by solid waste/recycling collection franchise fees.
BACKGROUND:
The Franchise Agreement between the County and Allied (owned by Republic Services) grants Allied the exclusive privilege and duty to collect solid waste, recyclables and organics routinely generated by residential and commercial customers within the designated Allied service area (also known as the “Franchise Area”). The Allied Franchise Area covers the following ten (10) unincorporated areas:
1. Alhambra Valley (portion) - District I & V
2. Canyon - District II
3. Antioch, Unincorporated - District III
4. Marsh Creek / Morgan Territory - District III & IV
5. Concord, Unincorporated (portion) - District IV
6. Clayton, Unincorporated - District IV
7. Pleasant Hill, Unincorporated - District V
8. Pacheco / Vine Hill / Martinez, Unincorporated - District V
9. Bay Point (eastern portion) / Clyde - District V
10. Cummings Skyway (portion) - District V
The existing Franchise Agreement between the County and Allied expires on July 31, 2026. County staff has been negotiating a new long term Franchise Agreement with Allied Waste which is expected to be presented to the Board of Supervisors on July 14, 2026.
History of Solid Waste Collection Rate Adjustments Since 2016: There have been numerous rate adjustments in the Allied Franchise Area since 1998 when the County adopted a Rate Manual. Below is a summary of rate review and subsequent allowable rate adjustments since 2016.
• 2016: Base Year Rate Review - The recommended rate increase for residential and commercial customers was 19.27%, which was phased in over a two-year period. For the first year a 14.28% increase was needed to cover the costs of the hauler’s operations. This increase was implemented in conjunction with service enhancements. For the following year there was a 4.99% base year rate pass through as described below.
• 2017: Interim Year - An increase of 8.5% was implemented, which was comprised of a 4.99% phased in 2016 base year increase and a 3.51% CPI adjustment. This increase was implemented in conjunction with service enhancements.
• 2018: Interim Year - CPI increase of 4.3%
• 2019: Interim Year - CPI increase of 2.7%
• 2020: Base Year Rate Review - No increase to rates
• 2021: Interim Year - CPI increase of 1.59%
• 2022: Extraordinary Circumstances Year - An increase of 11.8% to implement new services for compliance with SB 1383 regulations (moved from every other week collection to weekly collection of recycling and organics, adding food waste/scraps to be placed in organics cart for composting and route monitoring for container contamination).
• 2023: Interim Year - CPI increase of 5.69%
• 2024: Base Year Rate Review - The recommended rate increase for residential and commercial customers was 22.76%. Although there were no new services included with this rate increase, the Base Year Rate Review identified significant cost increases as a result of the service enhancements implemented in 2022. To lessen the impact of this rate increase on customers, Allied agreed to split this rate increase over two years, starting with a 12.76% rate increase in 2024. For the following year, the remaining 10% rate increase was passed through, plus the allowed CPI for that year, as described below.
• 2025: Interim Year - An increase of 12.7% was implemented, which was comprised of a 10% phased in 2024 base year increase and a 2.7% CPI adjustment.
2026 Rate Change: The 17% rate increase proposed to take effect on July 1, 2026 for the residential and commercial customers in the Allied Franchise Area is due to increased costs and deteriorating profit margin. Cost increases include, but are not limited to, labor increases resulting from recently approved collective bargaining agreements, fuel increases as well as proportional cost of some new collection vehicles to replace trucks that are at the end of their life.
Table 1 below shows the existing residential customer monthly rates based on cart size, the change in dollar amount with the 17% increase, and the new monthly rate that will take effect July 1, 2026. The 32-gallon cart size is the most popular cart size for this Franchise Area.
Table 1 - Residential Rates
Table 2 below is a rate comparison table reflecting the 17% rate increase against other unincorporated communities and cities throughout Contra Costa County. It shows the mean and median pricing for all of the jurisdictions listed, and the difference from the mean for the new proposed County/Allied residential rates. After the 17% rate increase, these customers will still be paying 19-32% less than the average residential customer around the County.
Table 2 - Residential Rate Comparison
CONSEQUENCE OF NEGATIVE ACTION:
If the Board of Supervisors does not approve the recommended 17% rate increase effective July 1, 2026, the collection rates would remain the same. Without the proposed rate increase, Allied is not willing to continue providing services because the company would not have the means to collect sufficient revenue from the customers in the County Franchise Area to cover the company’s costs for providing collection services to said customers.