The City of San Mateo contracts with a private hauler to provide residential and commercial solid waste, recyclable materials, and green waste collection services. The City wanted to restructure their existing solid waste collection rates in order to recover the increase in the private hauler’s costs, an increase in the City’s franchise fee, increase the participation in the waste diversion program, and establish a discounted rate for commercial food scrap collection.
HF&H Solutions
HF&H developed a rate model which calculated the necessary rates by customer type (i.e., residential customers, commercial can customers, commercial bin customers, etc.) based on the current number of customers and their current level of service.
To encourage recycling, tiered (or progressive) rates were established. Rates were set so that customers disposing of more solid waste than another customer would pay a higher per-gallon or per-yard rate than customers disposing of less. For example, residents using a 64-gallon solid waste container paid $22.40 per month ($0.35 per gallon) and residential using a 32-gallon solid waste container paid $10.56 per month ($0.33 per gallon).
To encourage less frequent collection of commercial accounts, therefore, decreasing operating costs, HF&H established a frequency surcharge. The commercial customers’ per-gallon rates were increased by $0.01 per gallon for every collection greater than once per week and per-yard rates were increased by $1.00 per yard for every collection greater than once per week.
Results
The City was able to implement and fund a new commercial food scrap collection program, primarily targeting restaurants, which increased quantities of recycling and decreased materials going to the landfill. To encourage participation, the rates for the food scrap collection were set 25% lower than the solid waste collection rates for the same size container.
A frequency surcharge was established for commercial customers requesting collection service more than one time per week. The frequency surcharge successfully transitioned many customers to larger containers which could be serviced less frequently; therefore, reducing the private haulers operating costs and ultimately reducing costs to the rate payers.;
The new progressive rates successfully transitioned many customers to smaller refuse containers; therefore, resulting in increased recycling and decreased disposal costs.
City of San Mateo