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HomeMy WebLinkAboutWISE Presentation PowerPoint 03 23 2026Waste Infrastructure System Enterprise (WISE) Agreement MARCH 23, 2026 EXECUTIVE SUMMARY •Action Requested •Adopt the WISE Agreement with Orange County Waste & Recycling (OCW&R) •Why •Adoption ensures stable long-term disposal rates, modernizes terms, and maintains participation benefits •Impact •Phased disposal rate increases beginning Fiscal Year 2026-2027 •Residential / Commercial bills will increase in July 2026 per franchise terms with Republic Services •Term •10 years, with one optional 10-year extension BACKGROUND •The current Waste Disposal Agreement (WDA) governs disposal at OCW& landfills. Cities and sanitary districts deposit waste at OCW&R landfills for stable rates. The City entered into the WDA in 2009. •OCW&R introduced the new WISE Agreement as WDA neared the June 30, 2025 expiration date. •Upon review, the Orange County City Manager Association (OCCMA) requested a 12-month extension to negotiate for better terms. Cities, including Seal Beach, adopted amendments to extend the WDA term to expire June 30, 2026. •Why a new agreement? •Current WDA limits increases to CPI only and does not reflect rising operational, regulatory, and environmental compliance costs. •OCW&R needs capital for landfill closure and capacity expansion. KEY PROVISIONS NEGOTIATED •Rate Structure •Phased rates for FY 2026–27 through FY 2028–29. •CPI adjustments begin FY 2029–30. •Slower increases than originally proposed by OCW&R. •Annual “true-up” process starting in 2030. •May freeze CPI adjustments depending on OCW&R cost recovery and tonnage revenue. •Cities may initiate “meet and confer” with review by an independent consultant. KEY PROVISIONS NEGOTIATED (continued) •Transparency and Oversight •Annual review and notification provisions, ensuring OCCMA participation and visibility. •Risk Mitigation •Removed language that would make cities financially responsible for hauler non-payment. •Blended CPI index adopted. •Blended CPI: 60% Solid Waste/Water/Sewer + 40% All Urban Consumers. •Organics Flexibility •Removed requirement to send all organics to OCW&R; OCW&R to offer optional organic processing services. •Staff does not recommend executing the optional organics agreement. •Cities must adopt WISE by April 30, 2026 to secure these rates; otherwise, cities are subject to a 10% increase. FINANCIAL IMPACT •Republic Services rates use a blended formula for annual increases •70% is adjusted based on CPI •30% is adjusted based on landfill tipping fees (WISE) •Under the City’s solid waste hauler agreement, an increase in tipping fees is passed directly through to solid waste collection accounts. •Per WISE, the tipping fees will increase from $43.76 to $67 per ton on July 1, 2026. •Original request prior to OCCMA negotiations: $82 per ton Fiscal Year Contract Rate 2026–27 $67.00/ton 2027–28 $74.00/ton 2028–29 $81.00/ton 2029–30 $81.00/ton + CPI Customer Class FY 25-26 monthly FY 25-26 bi-monthly FY 26-27 monthly FY 26-27 bi-monthly Single Family Residential $24.56 $49.12 $28.92 $57.84 Multi-Family Residential $23.66 $47.32 $27.86 $55.72 Commercial, 3 yard, once per week $208.28 n/a $245.20 n/a Republic Services Customer Rates WISE Rate Structure ALTERNATIVES AND RECOMMENDATIONS •Alternatives •OCW&R owns all of the landfills in Orange County. •In theory, waste could be taken outside of the County. In practice, this would be more expensive due to increases in labor and transportation fees, in addition to being subject to public disposal rates outside of the County. •As far as we know, no cities are not signing WISE. •Recommendation •Execute the WISE Agreement to ensure stable disposal rates, which is in the public interest. THANK YOU!