Rhea Rivera, CGFM

Director, Financial Services

Issue Statement: The City recovers a portion of the annual cost of providing solid waste services through a Residential Solid Waste assessment which must be adopted each year.  A preliminary residential solid waste assessment rate of $344 per residence was approved by City Commission on July 15, 2026.

Recommended Action: It is recommended that the City Commission conduct a public hearing and thereafter adopt the Final Annual Residential Solid Waste resolution to authorize an assessment to fund a portion of the cost of FY 27 solid waste services in the amount of $344 per residential unit.

Background: 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 2011 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 final rate resolution.

In FY 2011, the residential solid waste rate was $300 per residence and was reduced to $255 in FY 2012.  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 by 2021.  

In FY 2022, Kessler Consulting completed an update to the rate assessment study and presented its findings to the City Commission on June 15, 2022. The study recommended adjusting rates based on financial needs of the Fund, as the costs of processing solid waste and recycling had increased considerably more than the forecast. 

Following the recommendations made in the prior rate studies, the residential solid waste cart service assessment rate was adjusted to $217 in FY18, to $227 in FY 20, to $235 in FY 21, to $255 in FY 22, to $280.50 in FY 23, to $310 in FY 24, to $340 in FY 25. The rate remained unchanged for FY 26.

Earlier this year, Kessler Consulting completed another update to the rate study, with the results presented to the City Commission on June 17, 2026. The study identified the need for continued rate adjustments to support the long-term financial health of the Solid Waste Fund, particularly in light of projected operating costs and planned fleet replacement.  However, the study did not incorporate the financial impacts associated with the creation of the Solid Waste Authority.  Those impacts will be evaluated as additional information becomes available and will be incorporated into future rate analyses.

The rate scenario presented on June 17 reflected no increase to residential rates for FY 2027.  Following further review, Kessler Consulting's final report reflected a revised rate scenario that included a 1% increase to residential rates in FY 2027, 12.5% increases to commercial rates in FY 2027 and FY 2028, and CPI-based adjustments in subsequent years.  Consistent with the revised residential rate scenario, the FY 2027 residential rate proposed in this agenda item is $344 per residential unit, an increase of $4 from the current annual rate of $340.

A copy of the June 17, 2026 Kessler Consulting presentation is attached for reference.

The ordinance establishing this program requires a preliminary rate resolution and an annual rate resolution be adopted during the budget process each fiscal year. The preliminary rate resolution was adopted by the Commission at the July 15, 2026 Commission meeting, R-2026-085. This agenda item is for the final annual rate resolution.

As reflected in the preliminary rate resolution, it is recommended that the residential solid waste cart service assessment rate be set at $344.00 for FY 2027, an increase of $4 from the current FY 2026 rate of $340.

For years, the City's solid waste rates remained well below the 2011 level of $300 per residential unit, even as operating costs for the solid waste fund continued to increase. The FY 2024 adopted rate of $310 was the first to exceed the FY 2011 rate. The rate increased to $340 in FY 2025 and remained unchanged for FY 2026. 

The proposed FY 2027 rate of $344 remains well below the average annual residential rate of $446 among the twenty-seven (27) Broward County municipalities for which rate information was obtained. 

Separately, commercial solid waste rates are proposed to increase by 12.5% for FY 2027.  Commercial solid waste accounts will continue to be billed monthly as part of the utility bill.

The Annual Rate Resolution sets the rates for the residential solid waste assessment. The Resolution meets all requirements of the assessment program and the budgetary needs of the City. All property owners have been notified of the provisions of the Annual Rate Resolution through the “truth-in-millage” (TRIM) notice mailed by the Broward County Property Appraiser.

As required, the notice of the public hearing on the Annual Rate Resolution scheduled for Monday, September 14, 2026, was published in the Sun-Sentinel on Sunday, August 16, 2026.

The recommended residential cart service assessment rate of $344 is expected to generate approximately $3.75 million, net of the prompt payment discount. The increase in commercial rates will help address the immediate financial needs of the Fund for FY 2027; however, despite the commercial rate adjustment, the Fund will require the use of approximately $131,000 in reserves to balance revenues and expenditures. The proposed rate adjustments begin addressing the Fund's financial needs while moderating the immediate impact on residential customers. Continued use of reserves will not be a feasible option in future years. Maintaining a healthy level of reserves is vital, as reserves provide resources for hurricane and storm debris removal following emergency events. Although a portion of these costs may ultimately be reimbursed by FEMA, the reimbursement process can extend over multiple years.  

The proposed rate is based on recent costs and trends. Solid waste costs are primarily driven by three main factors: vehicle replacement, personnel costs, and disposal fees. Vehicle replacements are planned many years in advance; however, disposal fees can be affected by broader market conditions, including changes in the demand for recyclable materials. Likewise, personnel costs are affected by changes in pension costs, the insurance market, and collective bargaining. As noted in the Kessler study, additional rate increases will be needed in future years to ensure the Fund has sufficient revenues to meet rising costs.

As shown in the five-year vehicle replacement schedule included in the FY 2027 Recommended Budget, five solid waste vehicles, with an average age of about 14 years, need replacement 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.