TO: LINDA REICH, CITY MANAGER
FROM: HYE JIN LEE, PE, DIRECTOR OF PUBLIC WORKS
SUBJECT
Integrated Waste Management Services Rates Fiscal Year 2026-27.
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RECOMMENDATION
Adopt Resolution No. 2026-037, establishing the integrated waste management service rates for Fiscal Year 2026-27, effective July 1, 2026, and authorize the City Manager to execute all necessary documents on behalf of the City.
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FISCAL IMPACT
The proposed rates ensure full cost recovery for landfill disposal, green waste processing, collection services, utility billing, and the City’s compliance with unfunded State-mandated recycling and diversion programs.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Public Service Excellence through Internal and External Partnerships
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BACKGROUND
On December 16, 2025, the City Council approved an Amended and Restated Agreement with USA Waste of California, Inc. (DBA Waste Management) for the provision of integrated waste management services, including refuse and recycling.
The Agreement allows for annual rate adjustments based on the Consumer Price Index (“CPI”) for Garbage and Trash Collection published by the United States Department of Labor, Bureau of Labor Statistics. These adjustments apply to landfill disposal and collection services. Organics processing charges are treated as a direct pass-through based on rates established by Waste Management’s third-party processor. In accordance with Proposition 218, the City conducted a public hearing on June 6, 2023, and approved a five-year schedule of potential rate adjustments.
ISSUES/ANALYSIS
The reporting period for the CPI comparison is based on the 12-month average for the periods ending December 31, 2024 (January through December 2024) and December 31, 2025 (January through December 2025). The adjustment therefore reflects the change between the two annual 12-month average periods ending December through December. Pursuant to the franchise agreement, annual increases to the service-related portion of the rates are capped at a maximum of 5%. Any increase above the 5% cap is not carried forward or applied in future years. In addition, fees, charges, or surcharges paid to the City, including but not limited to Franchise Fees and administrative fees under Section 9 of the agreement, are excluded from the 5% cap and may be passed through directly to customers, as applicable.
For the applicable 12-month period, the CPI increased by 5.27%. Consistent with the terms of the franchise agreement, the service-related portion of the rates has therefore been adjusted by the maximum allowable increase of 5%. The 5% adjustment has been applied to applicable residential, commercial/industrial, compactor, and ancillary service rate components, as reflected in the updated rate schedule attached as Exhibit A.
Although the service-related increase is limited to 5%, the total residential rate adjustment also includes pass-through disposal and tipping fee costs based on actual disposal rates and estimated tonnage projections, consistent with the franchise agreement and the City’s cost recovery methodology, as further described below.
Landfill & Organics Tipping Fee Increases
The following adjustments reflect updated landfill disposal and green waste/organics processing costs for Fiscal Year 2026-27:
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• Commercial / Industrial Disposal (per ton): $55.83 to $58.40 (4.6% increase) |
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• Residential Disposal (per ton): $47.66 to $49.82 (4.5% increase) |
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• Green Waste / Organics Processing (per ton): $108.33 to $110.95 (2.4% increase) |
These increases are based on updated rates established by Riverside County for landfill disposal and by Viramontes Express / South Valley Compost Facility for green waste and organics processing. The organic’s processing fee is a direct pass-through cost to customers and reflects the actual rates charged by the processing facility.
Residential Service Rates
The following residential service rate adjustments are proposed effective July 1, 2026:
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• Single-Family Rate (3-Cart, 96-Gallon) $38.82 to $41.15 (approximately 6.0% total increase) |
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• Senior Citizen Rate (3-Cart, 96- or 64-Gallon) $34.06 to $36.12 (approximately 6.1% total increase) |
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• Low Volume Generator Rate (3-Cart, 64-Gallon) $34.06 to $36.12 (approximately 6.1% total increase) |
As noted above, the total residential rate adjustments reflect both the capped 5% service-related increase and the pass-through disposal and processing costs based on historical tonnage and projected disposal activity. Please refer to Exhibit B - Residential Rate Components.
The proposed fees remain within the rate limits established under Proposition 218 notice approved in 2023.
Cost Recovery and Compliance Mechanisms
The residential and commercial service rates also include various City cost recovery and regulatory compliance components necessary to support ongoing solid waste program administration and compliance with state mandates, including the following:
• Recycling Administration Fee - Supports the City’s administrative and compliance obligations associated with state-mandated diversion and recycling programs, including AB 939, AB 341, AB 1826, and SB 1383.
• Franchise Fee - Provides General Fund support for franchise oversight and offsets public impacts associated with refuse collection activities, including roadway wear, regulatory administration, public safety, and legal compliance.
• Billing Fee - Offsets City costs associated with billing operations, customer service, account maintenance, and coordination with utility billing providers.
Together, these rate components enable the City to sustainably operate its integrated waste management, recycling, and organics programs while fulfilling applicable regulatory, financial, and operational obligations.
Therefore, staff recommends that the City Council adopt Resolution No. 2026-037 establishing integrated waste management service fees for Fiscal Year 2026-27, effective July 1, 2026, and authorize the City Manager to execute all necessary documents on behalf of the City. The proposed fees are designed to fully recover contractual costs associated with refuse, recycling, and organics collection services in accordance with the franchise agreement.
Attachments: Resolution 2026-037
Exhibit A - Schedule of Rates
Exhibit B - Residential Rate Components