Rhea Rivera, CGFM

Director, Financial Services

Issue Statement: A preliminary residential solid waste assessment rate must be adopted by the Commission to be provided to the County Property Appraiser by August 4, 2026. 

The ordinance establishing this program requires a preliminary rate resolution and an annual rate resolution be adopted during the budget process each fiscal year. This agenda item is for the preliminary rate resolution. 

Recommended Action: The City Commission adopt a resolution establishing a preliminary FY 2027 residential solid waste assessment rate of $344 per residence and setting 6:00 pm on Monday, September 14, 2026, in the City Commission Chambers at City Hall as the time, date, and place for a public hearing in regard to the adoption of the final FY 26 residential solid waste assessment rate. 

The City Commission established a Solid Waste Collection and Recycling Services Assessment Program in FY 06. This program applied initially to residences in the areas annexed in 2005 – North Andrews Gardens, Twin Lakes South and the Sartori Area. Prior to annexation, these residents had been charged by the County for this service with a non-ad valorem assessment on their annual property tax bills, and the City chose to continue this practice. In 2010, staff proposed that the residential solid waste assessment concept be expanded to the remainder of the City. The City Commission approved this recommendation and provided direction to proceed with the expansion of this program. As a result, for FY 11 and going forward, the program was expanded to all residences citywide having less than five dwelling units.  The ordinance establishing this program requires a preliminary rate resolution and an annual rate resolution be adopted during the budget process each fiscal year. This agenda item is for the preliminary rate resolution.

In FY 2012, the residential solid waste rate was $300 per residence and was reduced to $255 in FY 2013.  In fiscal year 2014, the annual residential solid waste cart service assessment rate was further reduced to $205, a reduction of 19.6%.  Similar reductions were made for commercial accounts, which are billed monthly by the City rather than through an assessment. 

A comprehensive review of the City's solid waste operations, including an analysis of service rates charged to residents and commercial customers was presented by Kessler Consulting in 2017.  The analysis showed that the earlier rate reductions were not sustainable.  The firm recommended that the City consider potential operational changes to reduce expenses in addition to commercial and residential rate adjustments to maintain a healthy and self-sustaining Solid Waste Fund.  As part of the study, the Firm performed a number of rate scenario forecasts.  These projections demonstrate that the major reductions to the rate structure were not sustainable into the near-future and that the fund would exhaust reserves almost completely in 2021. Based on this study, the City approved a series of rate increases to the residential and commercial rates. 

In FY 22, an update to the rate assessment study was made by the same Firm, Kessler Consulting.  The study concluded with the presentation made to the City Commission on June 15, 2022. Similar to the previous studies, the Firm performed a number of rate scenario forecast to see where the fund can be more sustainable into the future. The study showed that additional rate adjustments would be needed to match growing operational costs.  In response to the major increased cost in tipping fees for regular solid waste and bulk trash, the rate of $340 per residential unit was adopted for FY 25 and was maintained for FY 2026. 

The most recent Solid Waste Rate Study was completed by Kessler Consulting and was presented to the City Commission on June 17, 2026. The study reviewed current and projected solid waste fund operations, including operating costs, disposal costs, personnel costs, fleet replacement needs, and reserve levels. While the study presentation included a scenario with no increase to the residential solid waste assessment, management recommends a modest adjustment for FY 2027 to better support the long-term financial sustainability of the fund. The recommended $4 increase would bring the residential solid waste assessment from $340 to $344 per residential unit.

A copy of the Kessler Consulting presentation is attached for reference.

For FY 2027, it is recommended that the residential solid waste cart service assessment rate of $344 be adopted.  This is an increase of $4 or about 1.2% over the current rate.

For twelve years (2010 to 2023), the City's solid waste rates have remained well below the 2010 level of $300, even as the operating costs and capital needs of the solid waste fund have increased over the years. The proposed rate of $344 remains below the current countywide average rate of $417.42 per residential unit.

For commercial solid waste service, a rate increase of twelve and a half percent (12.5%) is recommended.  In the summer of 2024, an ordinance to change the rate setting to resolution was adopted by the City Commission during the final budget hearing in September 2024, thus commercial billing rates are set via resolution.  

The proposed residential rate will appear on the TRIM notice mailed to all property owners in August. There will be a hearing in regard to the final adoption of this rate on September 14, 2026, to establish the final rate that will appear on the property tax bill to be mailed to all property owners at the beginning of November. At the time of the final hearing, a lower rate may be adopted by the Commission if it so chooses, but a higher rate can be adopted at that time only with significant effort and expense.

The recommended assessment rate for residential cart service of $344 is expected to generate $3.75 million, net of prompt payment discount. The proposed rate is $4 more or about 1.2% higher than the current rate of $340, and is expected to generate an additional $44 thousand including discounts.  

Solid waste costs are highly driven by three main factors: vehicle replacement, personnel costs, and disposal fees.  Vehicle replacements are planned many years in advance, but changes to disposal fees can be subject to larger market forces, such as the decline in demand for recycling goods.  Likewise, personnel costs are affected by changes in pension costs, the insurance market, and collective bargaining.  As was noted in the Kessler study, additional increases in the rate structure will be needed in future years to ensure the fund has sufficient revenues to meet rising costs.  

Commercial accounts will experience a 12.5% rate increase and the additional revenue from commercial accounts will help offset the increases in operating costs. Despite this commercial rate increase, the fund will require the use of $0.13 million in reserves to balance revenues and expenditures. Continued use of reserves will not be a feasible option in the future.  Maintaining a healthy level of reserves for the fund is vital, as it absorbs the costs of hurricane and storm debris removal after emergency events. The commercial rates will be adopted by Resolution and will be included in the Fee Schedule Booklet that is part of the annual budget adoption process in September. 

The updated Rate Study continues to identify vehicle replacement as a significant cost driver. The five-year vehicle replacement schedule included in the FY 2027 Recommended Budget includes five solid waste vehicles, with an average age of 13 years to be replaced in FY 2027.  The estimated cost of these vehicles is $1.5 million.  As an Enterprise Fund, it is critical that the City sets user rates to provide the financial resources needed to operate this important service.  Continued rate adjustments will be needed in subsequent budget years to maintain financial sustainability, matching operating revenues with operating expenses and providing resources for the replacement of solid waste trucks, including the potential issuance of debt in fiscal year 2027 to help fund fleet purchases.