Garbage Rates Set to Jump

Written by Neil Farrell

Neil has been a journalist covering the Estero Bay Area for over 27 years. He’s won numerous journalism awards in several different categories over his career.

February 23, 2023

County Supervisors have set a March 21 hearing date on proposed garbage rate hikes in the unincorporated towns of San Luis Obispo County, with Los Osos garbage customers alone looking at a more than 41% increase.

But if you think new Los Osos rates are high, it’s nearly double that for other areas of the County.

Mission Country Disposal “submitted a request to the County of San Luis Obispo for a base year rate increase of 41.87% for solid waste disposal collection services provided within the Los Osos Community Services District and surrounding areas,” reads a staff report by Mladen Bandov, the County’s Solid Waste Division Manager.

The requested increase consists of: 

• Capital investments of new collection vehicles, replacement containers and additional containers to meet the demands of Senate Bill (SB) 1383 compliance; 

• Capital equipment investments and escalating operating expenses related to the HZI anaerobic digester facility; 

• Market rate wage adjustment to attract and retain quality employees; 

• Increased costs of insurance premiums; 

• Increased costs of gas and oil; and 

• Other costs including increases to commingle processing fees, landfill disposal, truck repairs, other outside services, franchise fees, and consumer price index. 

The increase will also restore an agreed upon 7% allowable profit margin for garbage contractors.

LOCSD Gets Back Garbage Franchise

The LOCSD has its own franchise agreement with MCD that dates back to the infancy of the CSD and the bankruptcy that followed a 2005 recall election.

That bit of political theatrics killed the CSD’s community sewer project. It thrust the agency into default of a low interest State Revolving Fund Loan; and violated the Regional Water Quality Control Board’s cease and desist Order from 1988 for which the water board promptly handed down a $6 million fine (which the bankruptcy court promptly canceled).

As part of its bankruptcy, the LOCSD signed over its garbage franchise agreement to the County for use in repaying millions the County had spent on trying to get that sewer project built.

Back in April 2021, the County turned the franchise agreement for Los Osos back over to the CSD to administer but the County had already begun negotiations on this garbage rate hike application, so the LOCSD asked the County to continue with negotiations on its behalf.

The LOCSD agreed to repay the remaining $1.19 million owed to the County stemming from the bankruptcy over a 10-year period, according to Bandov’s report. 

“Last April [2022] the LOCSD Board of Directors approved the new base rate hike,” Bandov said, “and the current actions is to satisfy Prop. 218 and allow a protest vote of the proposed rate hike.”

Time is Now to Protest

Essentially, all MCD customers in Los Osos proper (Cayucos, Cambria and San Simeon too) should have already received a notice of the rate hike in the mail. Written protests against the rate hike are being accepted now with the formal public hearing slated for Tuesday, March 21 at the Board of Supervisors meeting.

If over 50% of the Los Osos garbage customers oppose the rate hike in writing, then Supervisors would not be able to enact it. Essentially, that would mean the County, LOCSD and the garbage company re-enter negotiations in hopes of coming up with a rate increase that ratepayers will support.

Written protests may be mailed or dropped off in person to:

County of San Luis Obispo Administrative Office

Attn: Clerk of the Board

1055 Monterey St. Suite D430

San Luis Obispo, CA 93408

Rates Outside Cities to Double

But if you think a 41% rate hike is high, be glad you don’t live in the areas between the towns, because their rates will be jumping over 82% for the rest of this year.

Bandov told Estero Bay News that the people living outside the jurisdictions of the local CSD are under the County’s franchise agreement with MCD.

Those customers, which Bandov said are not mandated to have garbage service like the town and city dwellers are, will get hit with the 41% base rate hike discussed above, plus a 9.1% inflationary hike; and “temporary short-term rate increase of both due to delayed rate implementation, for a total overall rate increase of 82.22% for solid waste collection services provided by Mission Country Disposal for the unincorporated and rural areas of the County of San Luis Obispo, effective on February 1, 2023,” reads his staff report.

He acknowledged that 82% is a huge rate hike but noted that 40% of that would end at the end of December.

That double hike was granted to MCD because the County took so long to review and approve its rate hike request.

MCD had put in for a base rate hike — which it can do every 3 years — back in October 2021 asking for a 45.93% increase in its County franchise agreement.

A year passed with the two sides going back and forth with requests for information and analyses with the result of MCD reducing its rate hike request to 41.87% and restoring the 7% profit margin allowed under the contract.

But County Public Works decided it wanted an expert to review the negotiations under the franchise agreement and the County hired Bill Statler, who Bandov said is the local expert on these franchise agreements and is the person every jurisdiction in the county hires for such reviews.

Statler’s review confirmed that everything was on the up-and-up and also that due to the lengthy negotiations, MCD was owed the back charges because it continued to provide services when it was technically not under contract.

“Mr. Statler’s report,” Bandov’s report said, “concludes that the requested rate adjustment application is supportable and recommends the requested base year rate increase of 41.87% and a temporary rate increase through the end of 2023 due to the delayed rate implementation with a recovery start date of July 1, 2022.”

So at the end of December, the 82% rate increase will drop back down to reflect the 41% base rate hike plus the 9.1% inflation increase for a total of 50.97%.

So what does this mean in terms of dollars and cents? In rural Los Osos the minimum can size is 32-gallons, which was $27.97 a month as of the 2021 rates. That cost will jump to $50.97 as of Feb. 1 and then drop back down to $43.29 at the end of December.

In rural Morro Bay the 2021 rate for a 32-gallon container was $15.43 and jumped to $28.21 on Feb. 1 and will drop back to $23.88 after Dec. 31. 

Rural Cayucos residents will pay these same rates but they are a bit higher for the rural areas of Cambria, San Simeon and Harmony — $26.14, 47.63 and $40.45 respectively.

And because garbage service is not mandatory for the areas between the towns, there is no Prop. 218 vote on these rate hikes.

In the towns where the CSD’s hold the franchise agreements, garbage service is mandatory making it a tax and thus giving ratepayers the right to vote in protest against the rate hikes.

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