For City Council Meeting July 22, 2025
TO: Honorable Mayor and City Council
APPROVAL: Tanya Williams, City Manager
FROM: Tim Sullivan, Assistant City Manager
Title
Request City Council to: (1) Conduct a Public Hearing to Consider the Placement of Solid Waste Handling Service Charges on the Property Tax Roll; (2) Adopt Resolution No. 8384 Approving Municipal Solid Waste Collection, Recycling, Organics, and Disposal Rates for Fiscal Year 2025/2026; and (3) Adopt Resolution No.8385 Authorizing the Placement of Solid Waste Handling Service Charges and Fees on the Property Tax Roll.
POWERPOINT
(ACTION)
Body
RECOMMENDATION
Staff recommends that the City Council:
1) Conduct a public hearing to consider the placement of solid waste handling service charges on the property tax roll;
2) Adopt a Resolution Approving Municipal Solid Waste Collection, Recycling, Organics, and Disposal Rates for Fiscal Year 2025/2026; and
3) Adopt a Resolution authorizing the placement of solid waste handling service charges and fees on the property tax roll.
BACKGROUND
Burrtec Franchise Agreement and Refuse Collection Rates
On April 16, 1996, the City Council approved a Franchise Agreement with Burrtec Waste Industries, Inc. (“Burrtec,” formerly EDCO Disposal Corporation) for municipal refuse/recycling collection and disposal services. In accordance with the Franchise Agreement, an allowance is made for adjustment of rates to reflect changes in the cost of doing business, as measured by fluctuations in the Consumer Price Index (CPI), published by the U.S. Department of Labor, Bureau of Labor Statistics, for All items in Riverside-San Bernardino-Ontario, CA, all urban consumers, not seasonally adjusted and applicable disposal costs.
On November 5, 1996, the people of the state of California voted in favor of Proposition 218, the “Right to Vote on Taxes Act.” Proposition 218 added Articles 13C and 13D to the California Constitution, implementing restrictions on methods by which local governments can create or increase taxes, fees, and charges without taxpayer consent. Specifically, Proposition 218 requires the City to provide certain notifications of new or increased assessments, charges, and user fees, and in certain cases, requires a balloting and election of property owners prior to implementing any new or increased assessments, charges, and user fees.
Pursuant to Article 13D of the California Constitution, (Article 13D), a "fee" or "charge" means any levy other than an ad valorem tax, a special tax, or an assessment imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service. “Property-related service” means a public service having a direct relationship to property ownership. Section 3 of Article 13D allows the City to assess a fee or charge for property-related services upon any person as an incident of property ownership. Pursuant to § 6 of Article 13D, the City must follow prescribed procedures for imposing or increasing any fee or charge for property-related services.
In 1997, the California Legislature approved the “Proposition 218 Omnibus Implementation Act”, adding California Government Code §§ 53750-53758. This Act incorporated regulations necessary to implement the intention of Proposition 218, to ensure local government followed the appropriate process to establish new or increase existing assessments, charges, and user fees. Of importance, California Government Code § 53750 clarified that an “increase” as applied to a property-related fee or charge does not occur when the increase “adjusts the amount of a tax or fee or charge in accordance with a schedule of adjustments, including a clearly defined formula for inflation adjustment that was adopted by the agency prior to November 6, 1996.” Since the City’s Franchise Agreement with Burrtec was approved before November 6, 1996, the City is empowered to annually increase and adjust rates and charges for refuse collection services.
California Government Code § 53756 allows an agency providing refuse collection services to adopt a schedule of fees or charges authorizing automatic adjustments that pass-through adjustments for inflation if it adopts the schedule of fees or charges for a property-related service for a period not to exceed five (5) years pursuant to California Government Code § 53755.
According to the agreement between the City of Rialto and Burrtec Waste Industries, the contract requires the City Council to consider rate adjustments on an annual basis. Sections 3.1 through 3.3 outline how the rates are set and adjusted. The City Council has sole authority to determine the contractor’s compensation through a formal resolution. Rates may be reviewed and adjusted each year, at the Council’s discretion, based on changes in the cost of doing business, such as inflation. Additionally, if unexpected events or legal changes increase the contractor’s costs, the contractor can request a special rate adjustment. However, they must justify the request, and the City Council has full discretion to approve or deny it.
Tax Roll Billing
On July 25, 2017, the City Council adopted Resolution No. 7169, approving residential refuse collection service charges to be collected on the property tax roll. The collection of these service charges has occurred on a routine basis since the adoption of the Resolution, which is attached to this report as Attachment 1. Pursuant to the City of Rialto Municipal Code Chapter 8.08 and Health and Safety Code (“H&S”) Section 5470 et seq., the City may collect fees or charges for commercial, single-family residential, and multifamily residential solid waste handling services on the property tax roll for those premises.
In accordance with H&S Section 5473, the City has prepared a written report that contains a description of each parcel of real property, fees and charges subject to tax roll billing. This report is on file with the City Clerk and is included as Attachment 2 Exhibit “A” to the proposed resolution authorizing the collection of the fees and charges on the tax rolls. By approving the proposed resolution, the City Council would authorize the City to collect solid waste handling charges and fees for the described properties on the tax roll in the same manner and at the same time as the general taxes.
ANALYSIS/DISCUSSION
On June 27, 2023, the City Council conducted a Public Hearing in accordance with Proposition 218 procedures and adopted Resolution No. 8109, approving the adoption of the Four-Year Municipal Solid Waste Collection, Recycling, Organics, and Disposal Service Rates for Fiscal Years 2023/2024 through 2026/2027. These rates incorporated a new Mixed Organics Waste (Food Waste) Recycling component.
During the annual rate review process, rates for Fiscal Year 2025/2026 were determined to be lower than the Prop 218 rates approved in 2023. The proposed rates for the 2025/2026 Fiscal Year are included in Attachment 3, and the following tables are a sample of the most common customer rates.
Proposed Residential Rates
The proposed 2025/2026 residential rates, which are lower than the rates adopted by the City Council through the 2023 Proposition 218 process for 2025/2026, are identified in Table 1 below.
Table 1
Residential Rates
Proposed Commercial Rates
Fiscal Year 2025/2026 rates for Commercial customers are recommended to include the following components:
• CPI adjustment for the FY 2025/2026 Commercial Hauler Fee is equal to 2.61%.
• A decrease in the recycling fees from $4.28/yard to $4.15/yard.
• Decreases in the Food Waste recycling fees from $1.41/yard to $1.06/yard.
• No change in the Multi-Family Bulky Program from $1.68/yard to $1.68/yard.
• No change to the Windy Day Tonnage charge from $0.00/yard to $0.00/yard.
• No change to the WDA solid waste disposal rate (will remain at $42.07 per ton).
Table 2 below shows the most common Commercial Service levels with the various Fiscal Year rates.
Table 2
Commercial Rates
Solid Waste Subcommittee Review
At its April 10, 2025, meeting, the Solid Waste Subcommittee reviewed the proposed rate adjustment.
Utilities Commission Review
At its May 20, 2025, meeting, the Utilities Commission reviewed the proposed rate adjustment and recommended that the City Council approve the rates as proposed.
Tax Roll Billing
Prior to approving the placement of the service charges and fees on the tax roll, H&S Section 5473 et seq. requires the City Council to conduct a public hearing. Notice of this public hearing was provided in accordance with H&S Section 5473.1 by publishing a notice of the hearing in the San Bernardino Sun newspaper on July 7, 2025, and July 14, 2025.
During the public hearing, the City Council shall hear and consider all objections or protests, if any, to the report and the placement of the charges on the tax roll. If the City Council finds that a majority of the parcel owners subject to the charges have submitted protests or appeared to protest, the report shall not be adopted, and the charges must be collected separately from the tax roll. Upon the conclusion of the hearing, the City Council may adopt, revise, change, reduce, or modify any charge listed in Exhibit “A” included as Attachment 2 or overrule any or all objections. The resolution placing the charges on the tax roll must be approved by a two-thirds vote of the City Council, which is included in this report as Attachment 4.
ENVIRONMENTAL IMPACT
This action is exempt from the California Environmental Quality Act (CEQA) review in accordance with Section 15268, Ministerial Projects and Section 15378(a).
Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
Section 15268 allows for public agencies to make nondiscretionary determinations as part of implementing its regulations.
GENERAL PLAN CONSISTENCY
Approval of this action complies with the City of Rialto General Plan Goals and Policies:
Measure 8.43: Provide Solid Waste and Recycling Programs, which states: continue to meet the community’s needs for solid waste disposal and recycling, and provide that operations are done in an efficient and cost-effective manner.
LEGAL REVIEW
The City Attorney's Office has reviewed the resolutions and approved them as to form.
FINANCIAL IMPACT
Operating Budget Impact
Refuse revenue is collected by Burrtec Waste Industries. The City derives revenues from the adopted rates including Household Hazardous Waste (HHW) fees and AB 939 revenues, which the City uses to fund the Household Hazardous Waste programs and for public education on recycling and protection of the environment.
Revenues presented with changes in the Residential and Commercial fee amounts are estimated as follows:
• AB 939 funds are estimated to be $302,145/year and will be credited to Account No. 22127040-47544.
• HHW funds are estimated to be $308,197/year and will be credited to Account No. 22127041-47542.
• Franchise fees are estimated to be $1,640,771/year and will be credited to Account No. 10100001-47116.
Approval of the Resolution and collection of solid waste handling charges and fees on the San Bernardino County Auditor tax rolls will not create an increased financial burden. These fees will be collected and remitted to the solid waste franchisee in accordance with the City’s franchise agreement.
Capital Improvement Budget Impact
There is no impact to the Capital Improvement Budget related to the adoption of the Resolutions.
Licensing
A Business License application and payment of a Business License tax is not required for this action.