Athens Services asked the Santa Paula City Council on Aug. 5 to approve a two-part rate adjustment after the company said it absorbed large, unexpected disposal and organic-processing costs. Athens told council staff that those costs — roughly $257,000 tied to increased disposal (“tip”) fees and about $341,000 annually tied to a California Department of Food and Agriculture citrus quarantine — had driven the request. Council did not approve the increases that night; instead it created an ad hoc committee to examine the fiscal impact and return recommendations.

Athens’ vice president of government affairs, Rhondy Guthrie, told the council the citrus quarantine forced Athens to take organics to a farther facility, raising “labor, fuel, maintenance, and disposal” costs and producing an estimated $341,000 annual impact. Guthrie said Del Norte recycling and disposal fees also rose sharply and that Athens’ preferred alternative destinations were either unavailable or more expensive. “At the time there were no other local facilities available to accept the organic stream,” she said.

City Solid Waste staff and an industry consultant presented the contractual and technical framing for council. Bruce Bilewski, a Public Works presenter, explained the item was before council because the Athens request invoked the city’s exclusive collection agreement (section 4.08), which allows the city to consider contractor petitions for interim rate review on grounds of events that are not reasonably foreseeable and not within the contractor’s control.

Athens proposed a one-time 3.55% adjustment to the base rate to offset Del Norte’s disposal fee increases and a separate 4.7% adjustment spread over two years to recover costs tied to the citrus quarantine; on the example bill used in the staff packet that would raise a typical 64‑gallon household bill by roughly $2.79 per month in the first year. Athens said the citrus-related cost was temporary and would be removed after the two‑year recovery period.

Council members and staff pressed Athens on whether the events were “usual business risk” (a contract standard). City attorney Monica Castillo recited the contract test council must apply: the council may consider a request when an event is (a) not reasonably foreseeable or outside the contractor’s control and (b) not a usual business risk (the contract lists routine cost changes and market fluctuations in recyclables as examples of usual risk). Several council members said the disposal-fee spike at Del Norte — which Athens described as a jump from no fee to a substantial per‑ton charge for some streams — felt extraordinary; others said sharp market or facility cost swings are an inherent business risk.

Given the complexity and divergent legal views, council voted to form an ad hoc committee — Council Member Crosswhite and Mayor Chavez — to work with staff and Athens, analyze the numbers and options, and return recommendations for a September meeting. The motion directed staff to include scenarios that would avoid a direct rate increase on residents (for example, altering franchise fee allocations) and asked Athens to provide firm, documented cost reconciliations. Guthrie told the council Athens would cover mailing costs for a Proposition 218 (majority protest) balloting process if the council chose to move forward.

Why it matters: the city’s franchise contract is long-term and includes built-in annual increases; Athens’ request would be a permanent adjustment to the base rate (the disposal portion) plus a temporary surcharge (the quarantine recovery). Any council decision could affect household bills, the city’s general fund (franchise fee revenue), and how Santa Paula compares to rates in neighboring jurisdictions.

What’s next: the ad hoc committee will receive detailed financial reconciliations from Athens and staff comparisons of regional rates, and report back to council before any Prop 218 process is initiated.