Palo Alto residents should expect to see their trash rates spike by 13 percent this fall to help cover a gaping budget hole in the city's refuse operation.
The rate adjustment would supplement the 6 percent rate increase the City Council approved for residential customers in October. If approved by the council, it would push the residential monthly rate for a mini-can container from $15.90 to $17.90. The rate for the regular 32-gallon trash bin would rise from $32.86 to $37.16 under the new proposal from the Public Works Department.
The rate increases, which the council's Finance Committee is scheduled to discuss Tuesday night, are part of a Public Works plan to close a $3.7 million hole in the city's Refuse Fund. The fund has been struggling financially in recent years as residents increased their recycling efforts and switched from large cans to mini-cans, slashing their bills and creating revenue shortages for the city, which doesn't charge for recycling.
In October, the City Council raised residential rates by 6 percent and commercial rates by 9 percent. These rates are scheduled to expire on Sept. 30, but staff has recommended extending them into next year.
In addition to raising rates, Public Works staff is proposing to construct a smaller Recycling Center with more limited hours of operations than the existing center in Byxbee Park. Other cost-cutting measures include freezing a Zero Waste Coordinator position and raising rent for the Utilities Department's use of the Los Altos Treatment Plant site.
The city is also exploring changing its street-sweeping services from weekly to biweekly or monthly, though that change isn't expected to take effect for at least another year and only after a public-outreach process.
Even if the city adopts the latest proposal, the residential refuse rates will almost certainly see further adjustments and increases in the coming years. Palo Alto is in the midst of a "cost of service" study that will likely lead to an overhaul in the rates structure, shifting the burden from commercial to residential customers. Preliminary results from the study have shown that rates for commercial customers currently exceed the cost of serving these customers. Residential customers, meanwhile, are not covering their proportional expenses, according to a report from Brad Eggleston, manager of the city's environmental control programs. This puts the city in conflict with California's Proposition 218, which prohibits refuse rates from exceeding the cost of service.
Eggleston wrote that the new recommendations are "based on the need to bring the residential rates up to a fuller cost recovery level while attempting to correct existing inequities between residential and commercial sectors."
Under the proposed rate changes, commercial customers would not see any additional rate increases.
The Finance Committee will consider the proposed rate increases at 7 p.m. Tuesday in the Council Conference Room at City Hall.