Lake Oswego staff recommend no residential rate hike after Republic Services review; council gives direction on fee changes

City staff and consultant Bell and Associates presented the annual review of Republic Services’ 2024 franchise financial report to the Lake Oswego City Council on Oct. 7 and recommended no overall rate adjustment at this time.

Lindsay Waldrum, senior associate at Bell and Associates, summarized the analysis. After auditing reported route hours, accounts and disposal data, and adjusting for known cost changes — including a 3.9% increase in driver wages tied to a labor contract, an estimated 5% increase in administrative wages, a 5.5% Metro disposal rate increase effective July 2025, a 2.35% CPI adjustment, and a large fuel‑cost uptick tied to an expired CNG tax credit — the overallAdjusted return on revenues was calculated at roughly 13.65%. Waldrum said, “We believe the current projected return is sufficient to maintain existing rates through December 2026.”

The presentation included service‑line results: adjusted returns were about 11.8% for roll‑cart residential service, 20.4% for container/commercial service, and 7.4% for Dropbox service. Staff told council that a 14% increase in commercial revenue accounted for higher returns this year.

Although staff did not propose a general rate increase, they recommended several rate‑schedule updates for council consideration:

- Restructure bulky‑item fees into simple item categories (small, medium, large, extra‑large, Freon items and electronics) following Washington County’s recently adopted structure, to simplify billing and customer service. Staff said Washington County’s structure had already been reviewed by Bell and Associates.

- Pause recycling contamination fees until Clackamas County finalizes a countywide contamination‑reduction plan and the education/feedback process is in place. Staff argued the county is developing a coordinated plan funded by the state Recycling Modernization Act, and that a pause would align Lake Oswego with regional practice. Republic Services representatives said they prefer retaining contamination fees to avoid the optics of dumping contaminated recycling into garbage and for fairness across customers.

- Restrict the extra‑yardage fee so it applies only to garbage containers (commercial dumpsters) and not to recycling; staff said charging extra‑yardage for recycling is not standard regionally and the preferred approach is to work with customers on service adjustments rather than frequent surcharges.

Staff also proposed housekeeping changes to the city’s approved rate sheet — removing obsolete summary‑billing rates, eliminating a duplicate reinstatement fee, adding a late‑payment fee that matches Republic’s policy and restoring a standard industry lock fee for containers.

Council discussion focused on Metro disposal fee increases, enforcement and education around recycling contamination (especially at multifamily properties), and whether fees should be retained to provide cost signals to customers. Several councilors asked staff to obtain more information from Metro about disposal‑fee drivers; staff agreed to follow up and return with additional context.

Outcome: Council accepted the consultant’s finding that no overall rate change is required for calendar 2026 and provided direction to staff to pursue the recommended rate‑schedule updates (bulky‑item restructure, pause contamination fees pending county plan, restrict extra yardage to garbage, and cleanup of obsolete fees) and return with final ordinance language as needed. No formal rate ordinance vote was taken at the Oct. 7 meeting.

Why it matters: changes to how bulky items, contamination and extra yardage are billed affect businesses, multifamily property managers and residents. Pausing contamination fees pending a countywide plan prioritizes coordinated education and feedback over immediate penalties but may shift some cost burdens across customers in the short term.

Key figures cited: adjusted overall return on revenues ≈13.65%; sample rate drivers: driver wages +3.9% (labor contract), administrative wages +5%, Metro disposal increase +5.5% (effective July 2025), CPI adjustment 2.35%, fuel increased ~61.6% due to CNG tax credit expiration.