REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Chau Vu, Director of Public Works
PREPARED BY: Debra Jubinsky, Senior Management Analyst
Subject:
title
REVISED - Approve Changes to Residential and Commercial Trash Collection Services and to Residential Trash Collection Rates by A) Adopting Waste Infrastructure System Enterprise (WISE) Agreement Between County of Orange and City of Huntington Beach; B) Approving for Introduction Ordinance No. 4348 Adopting the First Amendment to the Revised and Restated Refuse Collection and Disposal Services Franchise Agreement Between City of Huntington Beach and Rainbow Disposal Company, Inc.; and C) Conducting a Public Hearing to Adopt Resolution 2026-11 Increasing Residential Trash Rates Effective July 2, 2026 and Ratifying the Methodology for Future Rate Adjustments
body
Statement of Issue:
The City of Huntington Beach is required to update its residential and commercial trash collection services and adjust its residential rates to ensure long-term landfill disposal capacity at preferred rates, comply with state law (SB 1383, the Short-Lived Climate Pollutant Act of 2016), and maintain a balanced Refuse Fund.
The City Council is asked to consider approval of the 10-year Waste Infrastructure System Enterprise (WISE) Agreement with the County of Orange with an increase to cost of landfill disposal; approve for introduction Ordinance No. 4348 adopting the First Amendment to the Revised and Restated Refuse Collection and Disposal Services Franchise Agreement (Franchise Agreement) with Rainbow Disposal Company, Inc.; and adopt Resolution No. 2026-11 increasing residential trash rates $7.58 per household per month effective July 2, 2026 and ratifying the methodology for future rate adjustments. This topic was the subject of a City Manager’s Report presented on March 17, 2026.
Financial Impact:
If the rate is approved as proposed, additional revenue of approximately $336,000 per month will be collected from residential ratepayers in Fiscal Year 2026-27 to pay for the cost of this service.
Approximately 8% of this revenue is retained in the Refuse Fund to offset the cost of 0.75 new full-time employees for monitoring and enforcement, as well as the cost of City Account Services. The remaining 92% is pass-through revenue paid to Rainbow/Republic Services for contract services as provided in its Franchise Agreement.
Recommended Action:
recommendation
A) Approve and authorize Mayor and City Clerk to Execute the Waste Infrastructure System Enterprise Agreement Between County of Orange and City of Huntington Beach Effective July 1, 2026 through June 30, 2036; and,
B) Approve for Introduction Ordinance No. 4348, “An Ordinance of the City Council of the City of Huntington Beach Amending the Franchise to Collect Refuse Granted to Rainbow Disposal and Rainbow Transfer and Recycling Companies”; and,
C) Conduct Public Hearing and Adopt Resolution No. 2026-11, “A Resolution of the City Council of the City of Huntington Beach Adjusting and Ratifying Residential Trash Rates by the Formula Established in the Revised and Restated Refuse Collection and Disposal Services Franchise Agreement.”
end
Alternative Action(s):
Do not approve the proposed agreements, ordinance introduction, resolution adoption, or rate adjustments, and direct staff accordingly. Any proposed alternative is likely to result in a Refuse Fund deficit for the increased costs of disposal and/or services which will require a General Fund subsidy to balance the Refuse Fund.
Analysis:
There are two key issues that affect the City’s cost for residential trash collection services and the rates charged for residential and commercial services by the City’s franchise hauler, Rainbow Disposal Company, Inc., a division of Republic Services (Republic).
1. A new Agreement with the County of Orange for landfill disposal at increased rates; and
2. A change in state law mandating the City to implement food waste recycling for residential customers and the City’s solid franchise to provide organics recycling programs for all businesses that generate those materials.
The recommended actions proposed to address these issues are described in detail below.
New County of Orange Landfill Disposal Agreement (WISE Agreement)
The current residential and commercial rates include the per-ton cost for disposing of trash at the County landfill, where Republic delivers all non-recyclable material collected in Huntington Beach. Since 1997, Orange County cities have participated in the Waste Disposal Agreement (WDA), which provides guaranteed landfill capacity and disposal rates at least 10% below non-contract customers. The WDA was amended in 2004, 2009, 2015, and most recently in 2025 for a one-year extension.
As the WDA neared expiration, OC Waste & Recycling proposed a successor agreement called the Waste Infrastructure System Enterprise (WISE) Agreement. The Orange County City Managers Association (OCCMA) led the review and negotiation process on behalf of all the County jurisdictions that rely on the landfill system with City Public Works staff representing Huntington Beach.
Faced with a proposed 85% increase in disposal fees, OCCMA negotiated a three-year phased increase to lessen the immediate impact on ratepayers. After the three-year phase-in, landfill rates in FY29-30 and beyond will include a CPI increase.
The table below shows the schedule of increases under the WISE Agreement (Attachment #1)
alongside the non-WISE rates:
|
|
WISE Contract Rate per Ton |
Non-WISE Rate per Ton |
|
Current WDA |
$43.76 |
$67.76 |
|
July 1, 2026 |
$67.00 |
$92.70 |
|
July 1, 2027 |
$74.00 |
$100.40 |
|
July 1, 2028 |
$81.00 |
$108.10 |
|
July 1, 2029 |
$81.00 + CPI |
$110.77 (estimated) |
To ensure continued access to Orange County landfills at the preferred rate, staff recommends approval of the WISE Agreement. Approval will provide guaranteed capacity and access to local landfills. Although the 85% increase is substantial, the resulting per-ton rate remains lower than what the City could secure independently from a neighboring county. Staff researched the neighboring counties of Riverside, San Bernardino, and Los Angeles to assess the potential availability of landfill capacity. Publicly available information found that none are accepting material generated outside their boundaries. There is no guarantee the City could secure landfill space elsewhere, and increased transportation distance would further add to costs.
First Amendment to Revised and Restated Refuse Collection and Disposal Franchise Agreement
SB 1383 (Lara, chaptered 2016) amended sections of the Public Resources Code relating to Solid Waste programs administered by the California Department of Resources Recycling and Recovery (CalRecycle) and imposed a requirement to divert organic waste from the landfill. Prior to SB 1383, food waste was disposed of in the trash container and landfilled.
On November 3, 2020, the California Office of Administrative Law approved lengthy, specific and comprehensive regulations requiring the implementation of residential and commercial organics recovery programs and making local jurisdictions responsible for ensuring 100% compliance. Under these regulations, the City is mandated to:
• Provided organic waste collection to all residents and businesses, meaning service must be provided automatically and not rely on the generator to subscribe or “opt-in.”
• Conduct outreach and education to all affected parties including residential and commercial trash customers, edible food generators, schools, and school districts.
• Adopt ordinances to enforce mandated programs (completed February 2022).
• Inspect and enforce compliance with SB 1383.
• Maintain accurate and timely records of SB 1383 compliance.
The regulations became effective on January 1, 2022. CalRecycle provides regulatory oversight for SB 1383 programs and compliance. Failure to enact and carry out all SB 1383 responsibilities will result in CalRecycle taking compliance action, which may include fines up to $10,000 per day.
Public Works staff, HF&H Consultants, and Republic negotiated refinements to the food waste recycling program and the education, outreach, and enforcement components for both residential and commercial customers. The result is the First Amendment to the existing Franchise Agreement, which incorporates the program terms and conditions necessary to ensure City compliance with SB 1383. Additionally, because the Franchise Agreement was adopted 20 years ago, HF&H and staff included provisions to modernize the Agreement for the final 11 years of the term, which ends June 30, 2037. Key changes include:
• The annual compensation adjustment will now use two weighted factors instead of three: the national Garbage-Trash Index and the per-ton landfill disposal cost, weighted to match local industry standards
• New language provides additional protections for the City and our customers, including improved definitions, performance measures, and liquidated damages for service failures.
• A three-year phase-in of increased compensation to Republic smooths the impact on residential and commercial customers.
Since the Franchise was adopted via Ordinance, a new Ordinance is required to adopt the First Amendment. (Attachment #s 2 and 3)
Republic collects compensation for commercial refuse services through direct Agreements with commercial customers. Commercial refuse fees are not set, received, or processed by the City but staff reviews annually to ensure compliance with the Franchise Agreement.
Republic calculated its 2026 commercial rates, including SB 1383 mandates and landfill increases, and provided a comprehensive pro-forma of their costs. This pro-forma was reviewed and vetted by Public Works staff and HF&H Consultants to ensure that the proposed charges are accurate, compliant, and align with industry standards.
• Commercial trash bin rates increase 14% based on the index and updated landfill disposal rates.
• Commercial recycling rates increase 12% based on the index and the cost of SB 1383 services.
• Commercial food-waste bin rates increase 76% based on the cost of providing SB 1383 services compared to current pilot program rates.
Only businesses that generate threshold amounts of organics will be required to subscribe to recycling, organics, and/or edible food recovery programs. Businesses that can demonstrate they do not have adequate space for the additional containers may apply for an exemption.
The new Commercial Containers and Direct Billed Charges rate schedule can be found in Attachment #4. This schedule becomes an Exhibit to the Franchise Agreement on July 2, 2026. Republic Services notifies their commercial customers of rate increases directly through their monthly billing. Republic and the City will provide outreach and education to affected businesses about SB 1383 and the requirements to recycle organics, including paper, cardboard, landscape trimmings, food waste, and edible food recovery.
Resolution Amending Residential Trash Rates
The landfill disposal increase combined with the increased cost of the new food waste recycling programs represents an additional cost of approximately $560,000 per month for residential trash and recycling services. This increase shall be phased in over three years and equates to a pro rata share of $11.68 per residence per month. The proposed increase for July 2, 2026, is $7.58 per household per month and includes the first increment of Republic’s SB 1383 costs per unit per month, plus the weighted cost of the County landfill disposal increase. On July 1, 2027, and July 1, 2028, the phased increases for SB 1383 will be $2.68 and $1.46, respectively, plus any CPI index changes.
Approximately 92% of the residential trash fee is a pass-through paid to Republic for the cost of residential collection, recycling, and disposal. The remaining approximate 8% is retained in the Refuse Fund and used to pay the City’s cost of Account Services and Recycling Education.
The monthly fee increase includes funding for additional Public Works staff needed to support the customer service, outreach, and enforcement responsibilities required under SB 1383. The cost of 0.75 new full-time employees is included in the increased monthly fee and is shown in City Account Services in the table below. City Account Services represents the portion of the residential trash fee retained by the City to support account management, billing, and customer service. The Public Education component of the fee is not changing and does not increase annually. This portion of the fee provides funds for educating our residents about recycling programs.
To maintain a balanced Refuse Fund and avoid the potential need for General Fund subsidies for residential trash services, staff recommends that the City Council approve an increase of $7.58 per household per month. This adjustment is necessary to ensure the fiscal stability of the Refuse Fund by passing the increased cost of services through to residential trash customers. The table below illustrates the proposed fee change:
|
|
Current Charge to Residents |
7/2/2026 Charge to Residents |
Difference |
|
Refuse Collection and Disposal (to Republic) |
23.40 |
33.93 |
10.53 |
|
Materials Recovery and Sorting (to Republic) |
3.19 |
legacy line discontinued by amendment |
-3.19 (discontinued by amendment) |
|
Total Compensation to Republic per Residence/Month |
26.59 |
33.93 |
7.34 |
|
City Public Education Programs |
0.15 |
0.15 |
0.00 |
|
City Account Services |
2.32 |
2.56 |
0.24 |
|
Total Charge per Residence per Month |
29.06 |
36.64 |
7.58 |
Proposition (Prop) 218 Requirements
Proposition 218 regulates how local governments may impose fees and charges for utilities and services such as trash collection. Prop 218 requires local governments to notify property owners of proposed rate increases and provides an opportunity for property owners to protest.
The City is conducting this public hearing in accordance with the majority protest procedures outlined in Article XIII D of the California Constitution. Under these requirements, fees cannot be imposed or increased unless a majority protest proceeding is held at least 45 days after mailing notices to all affected fee payers.
On April 3, 2026, the City mailed Proposition 218 notices to all residential refuse customers, including both property owners and tenants. These notices included information about the public hearing, the proposed rate adjustments, and instructions on how to submit a protest. Property owners may file a written protest at any time up to the conclusion of the public hearing. If a majority of property owners submit valid protests, the City is prohibited from adopting the proposed rate adjustments.
A majority protest occurs when more than 50 percent, specifically, 50 percent plus one, of affected property owners submit valid written protests. Based on property and municipal billing records compiled through March 25, 2026, there are 48,299 residences receiving trash service at 46,513 properties. State law allows one protest per property. Therefore, the City must receive 23,257 valid protests to constitute a majority protest. The City Clerk will report the number of valid protests received at the opening of the public hearing.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections
15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change
in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the
CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for
resulting in physical change to the environment, directly or indirectly.
Choose an item.
Strategic Plan Goal:
Non Applicable - Administrative Item
For details, visit www.huntingtonbeachca.gov/strategicplan.
Attachment(s):
1. Waste Infrastructure System Enterprise Agreement Between the County of Orange, California and the City of Huntington Beach
2. Ordinance No. 4348, “An Ordinance of the City Council of the City of Huntington Beach Amending the Franchise to Collect Refuse Granted to Rainbow Disposal and Rainbow Transfer and Recycling Companies”
3. Resolution No. 2026-11, “A Resolution of the City Council of the City of Huntington Beach Adjusting and Ratifying Residential Trash Rates by the Formula Established in the Revised and Restated Refuse Collection and Disposal Services Franchise Agreement”
4. Commercial Containers and Direct Billed Charges
5. PowerPoint Presentation