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HomeMy WebLinkAboutAgenda Item - 2025-10-07 - Number 12.1 - Solid Waste Rates - Study Session 12.1 V o� 0 E 0 COUNCIL REPORT � — GREGO� Subject: Republic Services Annual Rate Review Meeting Date: October 7, 2025 Staff Member: Amanda Watson, Sustainability Program Manager Report Date: September 25, 2025 Department: City Manager's Office Action Required Advisory Board/Commission Recommendation ❑ Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑ Resolution ❑X Not Applicable ❑ Information Only Comments: ❑X Council Direction ❑ Consent Agenda Staff Recommendation: Update rate schedule to adjust bulky waste fees and remove unneeded rates; otherwise keep solid waste collection rates at current levels for the next year. Recommended Language for Motion: Move to direct staff to prepare a resolution updating solid waste collection rates for 2026. Project/ Issue Relates To: Solid Waste Franchise; Sustainability Issue before Council (Highlight Policy Question): ❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑X Not Applicable ISSUE BEFORE COUNCIL Review of Republic Services' 2024 franchise results and adjustment of solid waste and recycling collection rates. BACKGROUND Garbage and recycling collection services in Lake Oswego are provided by Republic Services, operating under a 10-year exclusive franchise with the City of Lake Oswego (Ordinance No. Respect cv el'erce. Trust. Se-iv 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 2 2901). As part of the City's regulation of solid waste collection, City Council is responsible for ensuring that rates are just and reasonable and adequate to provide necessary public service. The City's 2022 franchise ordinance provides for an annual service rate adjustment to provide the franchisee with a target return of 10%, within an acceptable range of 8— 12%. The process for establishing service rates is outlined in Ordinance 2901, Subsection 8(ii)(b), and specifies: "In determining the appropriate rate to be charged by the Franchisee, the City Council shall consider: a. The cost of performing the service provided by the Franchisee, including any additional costs (or savings) resulting from recycling. b. Anticipated increases in the cost of providing the services. c. The need for equipment replacement and the need for additional equipment to meet service needs; compliance with federal, state and local law, ordinances and regulations; or technological change. d. The investment of the Franchisee and the value of its business and the necessity that the Franchisee have a reasonable rate of return or fair operating margin. e. Rates in other cities in this metropolitan area. f. Other factors deemed relevant by the City Council." The services provided by Republic Services for which City Council establishes rates are residential, commercial, and industrial collection of garbage, recycling, and organics (food scraps and yard debris), as well as drop box service, on-call services, and extra container pick- ups. Rates for each customer type vary based on the level of service—the size of the garbage cart or container and the frequency of pickup. To assist with reviewing Republic Service's 2024 annual financial report (Attachment 1) and determining the need for rate adjustments, the City contracted with Chris Bell of Bell & Associates, Inc., a consulting firm with expertise in solid waste collection operations and detailed cost reporting analysis, to conduct the review and provide recommendations on rate adjustments. The report from Bell &Associates is Attachment 2. As part of the rate review, Republic Services requested that the City update bulky waste collection fees to list fees by item category (size or type), rather than list fees for each individual type of item. DISCUSSION As part of their analysis, Bell &Associates projected 2025 results for Republic Service's Lake Oswego franchise. The estimated results indicated an overall return of 13.65%. The increase in profit over the expected results from the previous year's rate review is attributed to a 14% increase in commercial revenue. Since the projected 2025 rate of return is greater than the 8— 12%target rate of return specified in the City's franchise agreement with Republic Services, a rate increase is not needed for 2026. Bell &Associates did not recommend that the City reduce rates to reduce the 2025 Respect. Excellence. Trust. Service N 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 3 margin to 12%; their analysis did not project expenses for 2026, but there are a couple of expected cost increases in the coming year, including an expected increase to Metro's disposal fee and a scheduled increase to wages in Republic Services' labor union contract in July 2026. Proposed Updates to Rate Schedule Although a general rate adjustment is not needed, City staff asked Bell &Associates to make a recommendation for a new structure for bulky waste collection rates in response to Republic Service's request. Bell &Associates recommended that the City adopt the same rates as Washington County, where Republic Services also operates, which uses a flat pickup fee and category-based item charge structure preferred by Republic Services (see proposed rates in Attachment 3). In 2024, the City Council approved a change to bulky waste fees from a per-yard item charge to an itemized list of fees in 2025. This change was intended to provide greater transparency for customers, however Republic Services provided feedback that having many individual rates made it more difficult for their customer service representatives to provide an accurate quote when people called in to inquire about a pickup for their bulky items. Republic Services is supportive of adopting the same structure as Washington County's bulky waste rates. The proposed bulky waste collection rates would see the service charge for some items increase and others decrease compared with current 2025 rates. However, the new rate structure would eliminate "1 truck+ 1 driver" fees and "1 truck+ 1 driver+ 1 helper" fees and introduce a flat pick-up fee for each service request, which will make it simpler for customers to understand what they would be charged for collection of their items. The City Council approved several new service rates for 2025 that were requested by Republic Services, including for contaminated recycling and yard debris front-load containers. To understand the impacts of these new service rates and given the high projected rate of return for 2025, City staff requested that Bell &Associates look into how Republic Services was charging these and other supplemental service rates for commercial customers. Staff also asked Republic Services to identify any rates on the rate sheet that were no longer needed, and any needed rates that were missing from the rate sheet. In response to this analysis, staff recommends the following adjustments to the rate sheet: • Remove rates for multifamily and commercial cart service summary billing accounts, which are no longer used. These rates were previously used for residential customers in some HOAs where the HOA paid for yard debris service on behalf of residents. • Remove the Reinstatement Fee which is charged when service to an address was stopped and needs to be restarted —this is the same as Cart Redelivery Fee and is redundant. • Pause contamination fees for recycling carts and containers. Over the coming year, Clackamas County will be developing a countywide contamination reduction program to comply with new regulations under the Plastic Pollution and Recycling Modernization Act (RMA). Staff recommend removing contamination fees for recycling carts and containers from rates in 2026 and aligning our approach with Clackamas County's plan during the next rate adjustment. • Update Extra Yardage fee to specify that the fee only applies to garbage, not recycling containers. Bell &Associates' analysis of supplemental service rates found a higher than Respect. Excellence. Trust. Service N 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 4 expected incidence of extra yardage fees charged to commercial customers. If a commercial customer has more than occasional extra recycling beyond the capacity of their container, the expectation is that Republic Services will work with the customer to adjust service levels as needed and/or refer them to Clackamas County for recycling education outreach to address the issue. • Add a standard container lock fee, which was included on previous rate sheets but omitted in 2025. RECOMMENDATION Staff recommends City Council keep current collection rates the same in 2026, with the exception of bulky waste rates and the removal of several fees described above. ATTACHMENTS 1. Republic Services 2024 Annual Report for City of Lake Oswego 2. Solid Waste and Recycling Collection Rate Report for Lake Oswego (prepared by Bell & Associates, Inc.) 3. Proposed 2026 Bulky Waste Rates Respect. F-. P!'P„ Trust. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY ATTACHMENT 1 Cit of Lae ...: ....-..,0-4 sweo 2024 Annual Report ,. . ^ , Republic Services of Lake Oswego : t • •I, ,.1..• 1 ` ' • I- ,• �I• • 1. -'d • 4 f ',..,...:44 ` 4._. 4i1.:..., ,,•_ _, .. .__....... ..‘ . ., ....„ .. . J11.. \ • .... . r) li' a 1 . 11 r, . .4 . • . . .. tr.... . _. . yilipr ,....,. t i 1 1:.--, 111 -• - y ris11 i rA , I I ,/, l• , 1 .Ni): .... I , 1 ram' .`I 1, ��4 •s• 1; I.` '•; 4`� ` —1.. ' _ -• !Air . L _____ .,_ -10.4 v VP i il I I I i kill 71 : 4., 14414 -. i‘ .47 i , - . +4 kNk ..... q - -,• ,),r• "--- / \• .... '.,111c-r.do.s / _ y� - REPO_BLIC ' �� .,�%.- 11% t e Cr i J. ii ly., , _ - — Nirri-.-----. —;zrzt ,- WIT MU i Iks' J 1 i i • 40, W O ; k••yuu,uu • .«sq�flF' , Table of Contents 2024 Annual Report Material Hauled 3 Material Destinations 7 Statement of Income 8 Schedule of Expenses 9 Customer Counts 10 Customer Service Summary 11 Employee Training 12 Community Outreach 14 Sustainability in Action 17 Recycling System Update 18 Recycling Simplified 19 Company Highlights 21 ' Printed on Recycled Paper 2 Material Hauled 2024 Annual Report Residential Material Hauled January through December 2024 Material Destination Q1 Q2 Q3 Q4 2024 Commingle Willamette Resources Inc. 704 715 705 766 2,890 Glass Willamette Resources Inc. 161 146 141 147 595 Garbage Metro South 22 41 22 28 113 Willamette Resources Inc. 1,898 1,933 1,983 1,995 7,809 Mixed Organics Willamette Resources Inc. 1,618 1,992 1,348 2,153 7,111 Totals: 4,404 4,826 4,199 5,088 18,517 CHART NOTE: All material reported in tons. 10,000 8,000 6,000 4,000 2,000 Commingle Glass Garbage Mixed Organics ■ 2020 2021 ■ 2022 ■ 2023 ■ 2024 ' Printed on Recycled Paper 3 Material Hauled 2024 Annual Report Commercial Material Hauled January through December 2024 Material Destination Q1 Q2 Q3 Q4 2024 Cardboard Willamette Resources Inc. 274 270 269 298 1,111 Commingle Willamette Resources Inc. 67 70 63 64 264 Glass Willamette Resources Inc. 31 43 41 42 157 Garbage Metro South - 7 - - 7 Willamette Resources Inc. 1,196 1,203 1,182 1,252 4,833 Food Waste Willamette Resources Inc. 284 256 248 300 1,088 Totals: 1,853 1,847 1,803 1,956 7,459 CHART NOTE: All material reported in tons. 5,000 4,000 3,000 2,000 1,000 - I i ■■■■. _ 11111 11111 Cardboard Commingle Glass Garbage Food Waste ■ 2020 ■ 2021 ■ 2022 ■ 2023 ■2024 '4 Printed on Recycled Paper 4 Material Hauled 2024 Annual Report Industrial Material Hauled January through December 2024 Material Destination Q1 Q2 Q3 Q4 2024 Asbestos Hillsboro (Rose City) - - 3 - 3 Concrete S&H Recycling 90 118 63 138 409 Brian Clopton - 8 30 8 46 Dirt and Stone S&H Recycling 65 71 11 141 288 Dry Waste Willamette Resources Inc. 1,441 1,107 1,247 1,196 4,990 Metal Willamette Resources Inc. 6 - - 7 13 Garbage Hillsboro (Rose City) I - 5 - - 5 Willamette Resources Inc. 414 422 409 451 1,696 Sod S&H Recycling - 14 - - 14 Wood Willamette Resources Inc. 3 1 - - 4 Yard Debris S&H Recycling 119 46 9 56 229 Grimm's 5 - - - 5 Willamette Resources Inc. 7 3 - 1 12 Totals: 2,149 1,795 1,771 1,998 7,713 CHART NOTE: All material reported in tons. tw Printed on Recycled Paper 5 Material Hauled 2024 Annual Report Industrial Material Hauled 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Min•I Concrete Dirt and Stone Dry Waste Garbage Yard Debris ■ 2020 IN 2021 ■ 2022 ■ 2023 ■ 2024 CHART NOTE: All material reported in tons. t-o Printed on Recycled Paper 6 Material Destinations 2024 Annual Report Material Destinations Destination Location 2024 Brian Clopton Excavating Sherwood, Oregon 46 Grimm's Fuel Company Tualatin, Oregon 5 Hillsboro (Rose City) Hillsboro, Oregon 8 Metro South Oregon City, Oregon 119 S&H Recycling Tualatin, Oregon 940 Willamette Resources Inc. Wilsonville, Oregon 32,573 Total: 33,691 CHART NOTE: All material reported in tons. w 4. z ' __i .1.t.,„,,,c. ' e- 4 t -' s.. , rn J 2549 '? F - Protecting our 3 — I Blue Planet:,...e ,. V li! ICI to MI - - - 0 _ _ ___ -i. ..i6 4 0 ; 00 _ _ ..... f. Printed on Recycled Paper 7 Financials 2024 Annual Report Statement of Income For Years Ending December 31 , 2022-2025 4Y Financials 2022 2023 2024 2025 Actuals Forecasted Revenue $ 10,026,448 $ 10,289,646 $ 11,246,486 $ 11,625,493 Franchise Fees $483,985 $ 509,929 $ 555,443 $ 581,275 Cost of Operations $ 7,384,000 $ 8,241,697 $ 8,386,164 $ 8,679,680 Gross Profit $ 2,158,463 $ 1,538,020 $ 2,304,880 $ 2,364,539 Sales, General and Administrative $ 1,063,313 $ 854,969 $ 831,361 $ 856,302 Operating Income $1,095,150 $ 683,051 $ 1473,518 $ 1,508,236 Op Income as a %of Revenue 10.9% 6.6% 13.1% 13.0% Income Taxes $ 408,710 $ 192,074 $414,353 $416,273 Net Income $ 686,440 $490,977 $ 1,059,165 $ 1,091,963 Net Income as a %of Revenue 6.8% 4.8% 9.4% 9.4% ../ � .ttr�yy � � t71' i ; " }. C�• �.rt +� f 2501 w Mph• ' lk O. REPUBLIC ^` • z' * ,ke i •� ' _ i SEr.cES , '� 4-. ,ij .. ,, 4,,z... ,4,0,r.f.,,.. .. . „ lb,. ....., , __ �} , . -- ' ' ' _....._._ ''... 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S� Printed on Recycled Paper 8 Financials 2024 Annual Report Schedule of Expenses For Years Ending December 31 , 2022-2025 4Y Financials 2022 2023 2024 2025 Actuals Forecasted Pass Through Expenses Franchise Fees $483,592 $ 509,929 $ 555,443 $ 581,275 Franchise Fees $ 483,592 $ 509,929 $ 555,443 $ 581,275 Cost of Operations Disposal & Recycle $ 3,264,688 $ 3,982,026 $4,325,394 $4,476,783 Labor $ 2,372,396 $ 2,588,828 $2,590,358 $ 2,681,020 Truck & Equipment Expense $ 1,567,313 $ 1,450,273 $ 1,252,158 $ 1,295,983 Other Direct Expense $ 179,603 $ 220,570 $ 218,254 $ 225,893 Cost of Operations $ 7,384,000 $ 8,241,697 $ 8,386,164 $ 8,679,680 Sales, General and Administrative Management&Administrative Expense $ 864,885 $ 726,789 $ 749,199 $ 771,675 Other Overhead Expenses $ 198,428 $ 128,180 $ 82,163 $ 84,628 -les, --neral, and Administrative $ 1,063,313 $ 854,969 $ 831,361 $ 856,302 - MiliP -2 a4 t Printed on Recycled Paper 9 Customer Counts 2024 Annual Report Customer Counts Residential 20-Gallon Can 1,387 35-Gallon Cart 6,418 . INI ' I ill 65-Gallon Cart 2,680 �1 ■ 95-Gallon Cart 1,085 1 i' .( 1 Monthly 246 Multifamily 35-Gallon Cart 8 65-Gallon Cart 4 95-Gallon Cart 6 --- - 000a i Front Load 85 . Commercial . . kj;,•;„ WI. - . 0 35-Gallon Cart 27 w1 ..-A....65-Gallon Cart 34 95-Gallon Cart 98 Front Load 271 Industrial Hauls 10 Yard Drop Boxes 168 *�„ * ,1 20-Yard Drop Boxes 922 - _ f►- 30-Yard Drop Boxes 918 '4411tdinib 40-Yard Drop Boxes 186 - 0 CHART NOTE: 95gallon Residential customers are`grandfathered' in with there service level, but that service level is no longer offered in the City of Lake Oswego. S� Printed on Recycled Paper 10 Customer Service 2024 Annual Report Lake Oswego Customers "The drivers are like a part of the family. They are the best drivers around. So nice, they go above and beyond" Jennifer "Very happy with both of my drivers! Having physical limitations, I truly appreciate the drivers servicing my containers up at my house. " -Bea "Moving away and wanted to say that I will miss all of the friendly drivers on my route. They are all awesome guys!" -Morris "Wants to shoutout all drivers! Garbage, Recycling, and Yard Waste, They are amazing as they always speak when we are walking the dogs & very courteous during school drop offs to assure safety! Way to go team & thanks for your dedi- cation & hard work! You are appreciated!" -Andrew "Have to say thank you, for the team going above and beyond by being willing to look through our recycling container for contamination. You are all superstars!" -Lake Oswego Summit "We have the nicest drivers, for all of the carts! Thank you all, so much!" -Sylvia and Steve Customer Service Summary Vim; 40 customer complaints in 2024; all were resolved within 24 hours % 40 customer compliments (six listed above) ' Printed on Recycled Paper 11 Employee Training 2024 Annual Report Employee Training Workshops Advanced Safety and Driver Training IN — IMP ER ril. 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J.: Irv:. ... ..v„, . _ ._. - S ,. 1,—411I1,,, 'Cji '11 k. t ,^ l = _ 1 , r.'-,_ '___ f•--Tgi I • J '', , — ..-,_. -- r 1 -.‘ :1 1 '1 --- opulain: , N�. te 1 •al: /� � 70774i5� • ` �� lid � l ., ............ ___ ,_ r 41111N% oik .1 ...v.,, c _. . . , . ..* ._. ..10,f,.,.. t", — 'It \ s. -, ..,1,0Ni. .may +�� Printed on Recycled Paper 14 Community Outreach 2024 Annual Report Community Outreach Touch -a -Truck Events T ,..._ r(7 . _ ) __ .- ,... .._., _ \ r� ,e ` .I , i, t t. t'lliiiiPil . . ...11,- 11-- , I..... . ti ir .' iv r a IL, , 1 ' O li I WIT P.I '10 N - lir? F,i A ' 1 ' , . . ... 4, ,.. ._ . {.t. ; . i n iiii. : , _ .)t 11C-0114M7455 •k 1.4•-. 4"., :": -.' j : . 11. - 41111711r -: 1 �� y« r *� h,' 1 71 r..,17411" -47. pow r a 0i e-...AI : . ......--- -... ' ... f . , , \111111 , • .;)k' rat !- ‘-• '..; -.Pew- Idle si r 7' t ® E ea Irigi Ii: '•,, . is \lif 1.1 4 , -• r • +y low +�� Printed on Recycled Paper 15 Community Outreach 2024 Annual Report Community Outreach Sustainability Resource Fair TREF.c 1 LAKE OSWEGO ,.. mit ,,; z IUSTAINAäkIÜ ,,all, , ��°','.� •-' UR . ��FAIR , a 1 odis, - _ I um lip o 'CD ,_ _ , e , i : ) ,' 1 %.„..„__ . , i nT• •I ir-2 7 • a FI —s• _ 7_ iiitom MOM- Allri lr <: �R� REPUBLIC •4 �j4 SERVICES V in A� �,Istainabilit cfon Y tillail- +.j Printed on Recycled Paper 16 Sustainability in Action 2024 Annual Report Sustainability in Action Electronic Waste Recycling Events yr J , r I t .`i Alaimo plow i Off --'• a ( lir V t r * R� REPUBLIC L— , SERVICES Sustainability in Action ! aliV M 1 A / • - - , "IF.' littiPP2' W . 38311138 313 331,1 JI 411*\ -`, I I / \0 __ c i _ , , , „ h.," Ai , _ , , 7 ---,--,A., #1. , +a� Printed on Recycled Paper 17 Recycling System Update 2024 Annual Report Senate Bill 582 The Plastic Pollution and Recycling Modernization Act The Plastic Pollution and Recycling Modernization Act (RMA) will update Oregon's recycling system by building on local community programs and transitioning to an Extended Producer Responsibility (EPR) model. EPR programs require producers of plastic packaging to financially support the recycling system. This incudes producers of plastic packaging that is not currently or may never be recyclable, meaning all producers help to cover the programs costs. This new incentive structure is meant to encourage plastic circularity and the production of more sustainable products. The law became effective January 1st, 2022 and the recycling system changes will start July 1st, 2025. This will be a rolling implementation, meaning some services will be added as funding becomes available. HOW IT WILL July Required for ALL as Ensure that commingled materials are directed WORK 2�25 regardless of to approved processor(s).(ORS 459A.905) size "r Producers Ensure at a minimum that materials identified in Required the statewide collection list are collected at w Will join a Producer Responsibility for ALL cities disposal sites(or more convenient locations) {�I Organization and pay fees based on regardless of required by ORS 459A 005.Note that materials the products they sell in Oregon site not on the list may be collected separately if desired.(ORS 459A.914) Producer Responsibility Collect materials identified on the statewide Organizations Required collection list for on-route collection.Ensure that for cities with commingled collection programs are only Will use the fees to fund and reimburse populations various local recycling service expenses over 4,000' collecting materials on the uniform statewide collection list.(ORS 459A.914) Implement new contamination reduction ,l Required activities from the DEQ program elements list Recycling Processing for cities with (ORS 459A 929)PROS will provide funding for Facilities over 4.0ulati00s ove ' these activities based on the population of the Will establish new permit and jurisdiction. a I certification requirements Required for cities with Use educational resources created by PROS populations (ORS 459A.893) Uniform Statew •. over 4,000' Collection List G Eligibility for compensation for local governments • If establish a uniform list of GI Optional for ALL cities or their designated service providers for specific materials that are recyclable t. y expenses,including transportation of covered across Oregon regardless products greater than 50 miles from a recycling • of size depot or reload facility to a commingled recycling processing facility or responsible end market. atiltt overnmonts (ORS 459.890) Will receive financial support to January Required Ensure that newly purchased roll-carts.bins and expand recycling services and address 2026 s ALL for Aties contamination for ALL ci of containers have at least 10 percent verified post- size consumer recycled content.(ORS 459A.908) t� • Printed on Recycled Paper 18 Recycling Simplified 2024 Annual Report Re c c in g SliMpli-Atots Republic Services collaborated with professional educators to develop a free Pre-K through High School academic resource for educators. This project turned into Recycling Simplified (https://recyclingsimplified.com/for-educators). Available resources include lesson prep for teachers, grade level presentations and lesson plans, children's stories, activity worksheets, student certificates, and take home materials for parents. All of this is provided to all Lake Oswego Schools free of charge. Accessible Value O O Engaging activities for learning at home Developed by teachers,vetted by Empowers entire family to make a parents difference by recycling O O 1-A Flexible and easy-complete any time, Easily access on any device Printer optional in any order too Printed on Recycled Paper 19 Recycling Simplified 2024 Annual Report Organics Recycling Organics recycling solutions for residences and businesses to divert food waste from the landfill. ID /It 0 COccursollection II O O til 0 Organic Waste Produced How 0 Anaerobic Digestion or Composting Process' Organics ,` ® 1 -T-4 Recycling I, Mulch Heat Electricity Fuel Works IiE V V i O Uevelop End = .T Use • ITN Upgrade Biogas to �; O Renewable Natural Gas OInject Renewable Natural Gas into Grid ✓ Free waste assessment by an industry expert ✓ Acceptable materials can also be processed into ensures you receive the correct size and service compost, mulch or other products for beneficial use, also reducing methane production ✓ Accepted food scraps include:fruits,vegetables, rice,grains, pasta, beans, breads, cheese,cereals, ✓ Consistent and reliable pickup schedule to coffee grounds and filters,tea bags, eggs and accommodate your needs cooked meats / I1111\ C ) 1 III@)j Cart & dumpster Meets federal Environmentally service available regulations responsible solutions irs t • Printed on Recycled Paper 20 Company Highlights 2024 Annual Report About Republic Services Republic Services, Inc. is a leader in environmental services. Our commitments to advance circularity and decarbonize operations are helping us deliver on our vision to partner with customers to create a more sustainable world. w 13M 94% $14.9B 5M 17K Customers Customer In Revenue Z} Average Daily Trucks Z Retention 0_ Pickups a 17 Q $1 .8B 4.7M o 1 ,000+ 208 Investment in People Positively Impacted Locations in Active, Modern Acquisitions Through Charitable Giving North America' Landfills' 76 15% 42K 86 inRenewable 11111 GHG Emissions Employees Employee c Energy Projects Reduction Since 2017 Engagement a Z Score W Lu J _I20% 50% 40% 48% 'a Of Fleet Powered Of Truck Purchases Better Safety Diversity By RNG EV By 2028 Performance' I } 6.3M 22 2B 75 $325M Tons of Organics Pounds of Recycling Planned vRecyclable Materials Facilities' Organics Centers' Investment in Four a Managed Recycled Polymer Centers u FORTUNE FORBES USA TODAY BARRON'S ETHISPHERE Most Innovative Best Employers for America's Climate 100 Most World's Most i^ Companies 2024 Diversity 2024 Leaders 2024 Sustainable Ethical 0 cc Companies 2024 Companies 2024 Q a CDP DJSI FORTUNE GREAT PLACE S&P GLOBAL Discloser 2023 World&North World's Most Admired TO WORK Sustainability America Indices 2023 Companies 2024 Certified 2017-2024 Yearbook 2023 Fiscal year 2023 data unless otherwise stated. I 'As of Q2 2024 I :than industry average over last 10 years based on OSHA recordable races 1 • Printed on Recycled Paper 21 Instant Account Access, Wherever & Whenever Want 24/7 support at the tap of a button? Meet your online account: Set up paperless billing & pay bills online Sign up for autopay Set up alerts & notifications Schedule a pickup And more! Q�RT Rsstlmb Businesses Communkes 1.r99631800 Robb.tow 3'�•-"1' a N REPUBLIC ucoun oaxrr ��4 SERVICES Dashboard Payments Services Customer Support Ct Welcome.Rabble Recycler Account Name:FELICE NIARCELIN Account It 308000073492 ..� �.•-..m � ® Account Dashboard - W^. I I ••-•—•••••• I � Total Balance, raymenr f8] 4 _ _... 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' ••... - AAR" . - . • . ., . ... ... . •111111115, , Travis Comfort, Vunicipa Contract Administrator 10295 SW Bidder Road Wilsonville Oregon 97070 ilkwRitID REPUBLIC® SERVICES • Sustainabi i •ity in Action ATTACHMENT 2 (C-A E°4 2;4'4- Solid Waste and Recycling ,._, - 0 c-, Amp Collection Rate Report - - ..„_.... ....--, i-.. _ _ . — _... _ , . l' 7A.• ' -. ‘ . .„,--..--• ',--".-- -.- - -- - - _ - . - - _ -- - - • ,.., ...,.. ...,. ._• ...• _ c . - _ • ....4...- - 4, - i - -_ .. -7-. .,._ - i, -46-r "/ ; — . . 'trot 1'• ,.,. , -7,-lit. a•A ^5. __... •‘3.. 1.-- t 1 ,. ,....kt , ',.,-. _ • •it. ,,,Hill,"-",:.... .-,..0, . - -•;-: ilt- .4,3("."-" • ' ia It . r--- - ,_,?, - 1 - 4 ,,.- .,.., , ... tip, - pa, - 4_ : , ' .444' ,p,-,' -- , • •i,-• :A.",c, ', •s,,., " Fr,„.- I,, i,_ ',/•• *' ' - • ,, , "',,- *-: - - ---*** ' ,'. c--;%=f- . '• ';.:: - '-',•i,"-•its"?'• . 'fr-% - .. 4 --.611,- ; :-,-,,1,- 1*. - ? •, ' --:'''7 -_1,,.ei I „A--.,,:,,,i -: ,„-.• ,,,s, :„,-,-,,,.,,,,,P.... 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August 2025 2024 SW Rate Review Report City of Lake Oswego Solid Waste Rate Review Table of Contents Project Background 1 Annual Cost Report 1 Table 1: 2024 Lake Oswego Adjusted Franchise Results 1 2025-26 Collection Expense Increases 2 Table 2: Rate Impacts from the Metro Disposal Fee Increases 2 Rate Impact of Increased Collection Costs 3 Table 3: Revenue and Expense Comparison from 2024 to 2025 3 Table 4: Projected 2025 Results by Service 3 Rate Recommendations 3 2024 SW Rate Review Report Project Background Collection of waste and recycling within the City of Lake Oswego (City) is accomplished under an exclusive franchise agreement between Rossman Sanitary Service, doing business as Republic Services, and the City. As the regulator of waste and recycling, the City Council is responsible for ensuring rates are just and reasonable, and adequate to provide necessary public services. Section 8, paragraph B.ii. of Ordinance 2901, the City's Solid Waste Management Ordinance, states the following: In determining the appropriate rate to be charged by the Franchisee, the City Council shall consider: (1) The cost of performing the service provided by the Franchisee, including any additional costs (or savings) resulting from recycling. (2) Anticipated increases in the cost of providing services. (3) The need for equipment replacement and the need for additional equipment to meet service needs; compliance with federal, state, and local law, ordinances and regulations; or technological change. (4) The investment of the Franchisee and the value of its business and the necessity that the Franchisee have a reasonable rate of return of fair operating margin. (5) Rates in other cities in this metropolitan area. (6) Other factors deemed relevant by the City Council. Republic Services submitted its 2024 annual report to City staff in May 2025. To review the reported results and calculate the rates, the City contracted with Bell &Associates, a consulting firm with expertise in solid waste collection operations, to provide the City with solid waste and recycling consulting services. Annual Cost Report The annual cost report provides line-item costs and revenues associated with providing services within the City and combined line-item totals for their operations outside of Lake Oswego. The report format enables the calculation of service costs for each line of business (cart, container, and drop box). Cart collection is primarily for residential customers, whereas business customers are serviced with a container. Financial data was consolidated by service, showing the total revenues and expenses of the collection system. This consolidated report allows the calculation of the system's return-on-revenue and provides a measure of the adequacy of rates. Table 1 details the return for each collection service provided within the Lake Oswego franchise collection system. Table 1: 2024 Lake Oswego Adjusted Franchise Results Cost Component Roll Cart Container Drop Box Total Revenues $6,213,658 $3,313,466 $1,718,949 $11,246,0703 Allowable Costs for Rates $5,517,326 $2,604,221 $1,557,970 $9,679,517 Franchise Income $696,332 $709,245 $160,979 $1,566,556 Return on Revenues 11.2% 21.4% 9.4% 13.9% 'a, Bell &Associates, Inc. Page 11 2024 SW Rate Review Report 2025-26 Collection Expense Increases The current collection rates became effective on February 1, 2025, with increases ranging from 2.13% to 4.45% for residential cart collection and 2.47% to 4.57% for commercial container service, depending on cart or container size and collection frequency. The expected increases for collection services were calculated by applying known and measurable costs to the line item expenses. Republic Services has incurred the following additional cost increases for the current year. • The labor contract with the Clackamas County Sanitary Truck Drivers Association increased wages by 3.9% effective on July 1, 2025. • Administrative wages are estimated to increase by 5.0% • Inflation increased by 2.35% (CPI West- Size Class A all items) • The CNG Tax Credit expired in 2025, which will increase fuel costs by 61.6% • The Metro regional government controls the flow and cost of disposal within the Portland metropolitan service area. Metro has increased the disposal cost by $48.32 per ton from $113.82 per ton in 2021 to $162.14 on July 1, 2025. The disposal fee increases have averaged 10.6% annually since 2021. Disposal in the current rates was calculated with a disposal cost of$146.86 per ton. The estimated disposal cost in January 2026 will be the same as the Metro disposal fee at $162.14 plus the transaction fee. Table 2 details the rate impacts from the fee increase approved by Metro from FY18 to the current year. Table 2: Rate Impacts from the Metro Disposal Fee Increases Metro 35 gal cart 3 yard cont. Year Disposal % A disposal cost disposal cost Rate (22#) (300#) 2017 $94.95 $5.32 $72.55 2018 $97.52 2.7% $5.46 $74.52 2019 $97.45 -0.1% $5.46 $74.46 2020 $98.35 0.9% $5.51 $75.15 2021 $113.82 15.7% $6.38 $86.97 2022 $123.45 8.5% $6.92 $94.33 2023 $137.30 11.2% $7.69 $104.91 2024 $153.67 11.9% $8.61 $117.42 2025 $162.14 5.5% $9.09 $123.89 'a, Bell &Associates, Inc. Page 12 2024 SW Rate Review Report Rate Impact of Increased Collection Costs Table 3 compares projected revenue and expenses by category for 2025 to the adjusted amounts from 2024. Table 3: Revenue and Expense Comparison from 2024 to 2025 Labor Cost 2024 Adjusted 2025 Projected $ ♦ $ Collection Revenue $11,246,073 $11,662,080 $416,007 3.7% Waste and Organic Disposal $3,837,578 $4,026,395 $188,817 4.9% Recycling Processing $348,333 $348,333 $- 0.0% Labor $2,575,960 $2,653,442 $77,482 3.0% Truck R&M, Fuel, Depreciation $1,056,291 $1,128,771 $72,480 6.9% Equipment $149,613 $150,352 $739 0.5% Franchise Fees $555,442 $583,104 $27,662 5.0% Other Direct $228,047 $229,815 $1,768 0.8% G &A $928,252 $950,393 $22,141 2.4% Total Expenses $9,679,516 $10,070,605 $391,089 4.0% Table 4 summarizes the projected returns by each service type provided in Lake Oswego. Table 4: Projected 2025 Results by Service Roll Cart Container Drop Box Total Revenues $6,460,840 $3,424,639 $1,776,601 $11,662,080 Allowable Costs for Rates $5,698,718 $2,726,381 $1,645,506 $10,070,605 Franchise Income $762,122 $698,258 $131,095 $1,591,475 Return on Revenues 11.80% 20.39% 7.38% 13.65% Rate Recommendations The estimated results for 2025, as shown in Table 4, indicate an overall return of over 12%. The increase in profit over the expected results from the previous year's rate review is attributed to a 14% increase ($427,000) in commercial revenue. The current year's rate of return is adequate to keep rates unchanged through December 2026; therefore, no rate adjustment is proposed for the current year. Although a general rate adjustment is not being proposed, Republic Services and City Staff have requested an update to the bulky waste rate structure. To address this, Bell &Associates are recommending the adoption of the Washington County Bulky Item Collection Rates, which are considered fair and are expected to provide a more simplified and transparent rate structure for customers. 'a, Bell &Associates, Inc. Page 13 2024 SW Rate Review Report Note: A rate decrease of$218,200 would be required to reduce the 2025 margin to 12%; however, expenses for 2026 were not projected. If overall expenses increase by more than $218,200 in 2026, the return will be under the 12% return on revenue. Metro is likely to increase disposal fees in July 2026, and the union contract also has a scheduled increase in the same month. 'a, Bell &Associates, Inc. Page 14 ATTACHMENT 3 O�� EQ U 0 OREGOx4 City of Lake Oswego Republic Services Rate Schedule for Garbage, Recycling, Yard Debris, and Organics Collection DRAFT SUPPLEMENTAL SERVICE RATES Bulky Waste Collection Rates Type of Service Rate Extra large items: (entertainment center, sectional couch, king size mattress $39.00 including box spring) Large Items: (recliner, dresser, couch, other size mattress including the box $27.00 spring) Medium Items: (desk, bookshelf, chair) $15.00 Small items: (pallet, end table, bicycle) $11.00 Appliance items—coolant containing: (freezer, refrigerator, portable air $26.00 conditioner) _ Appliance items: (BBQ grill, stove, washer, dryer) $16.00 Electronics: (television, laptop, printer) $10.00 Tire: (passenger vehicle,tire off the rim) $23.00 first tire, each additional is $15.00 Pick Up Fee * applies to each service request $16.00 Pick Up Fee is applied as a flat rate regardless of the number of items for disposal. Pick Up Fee is billed regardless of whether the item(s) are onsite at time of agreed upon pick up. Standard Call Back rates apply if the customer does not set out as directed. Contact your garbage & recycling company to confirm schedule availability and pricing. Items not listed will be billed Standard Pick Up Fee and a Cost Per Item Rate based on the size/material type.