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El Segundo council votes 4-1 to phase out residential solid-waste subsidy over five years
Summary
The City Council approved a plan to reduce and eliminate the city’s monthly subsidy that offsets residential solid-waste charges, moving the city from about a 29.4% subsidy toward full cost recovery by May 2029.
The El Segundo City Council voted 4-1 to begin phasing out the city’s subsidy for residential solid-waste collection, approving a staff-recommended schedule that would reduce the subsidy to zero by May 1, 2029.
City Chief Financial Officer Paul Chung told the council the phase-out was the product of nearly a year of Finance Committee deliberations and would lower the city’s current subsidy level of roughly 29.4 percent. “After a few calculations, it was recommended to phase it out over a five-year period,” Chung said, explaining the schedule and budget impacts.
The measure matters because the city has budgeted roughly $300,000 annually to cover the existing subsidy. Staff said moving the subsidy to 20 percent starting May 1, 2025 and then reducing it by 5 percentage points each subsequent year would reduce the city’s annual subsidy cost immediately and yield an estimated $3 million in savings over a 10-year span.
Chung summarized the options presented to council: keep the current subsidy level, phase it out over five years (staff recommendation), or maintain resident rates and have the city absorb CPI increases. He told council the monthly franchise rate charged by the contractor rose to $25.87 and that an upcoming CPI adjustment would increase the contractor rate further to $26.67 on May 1, 2025.
Councilmembers who spoke during the discussion said the prior council intended to move the fee burden to residents gradually, that collection and disposal costs have been rising, and that other large California cities have already eliminated similar subsidies. Several members said a phase-out was reasonable; one member said the city should continue its century-long practice of subsidizing certain services for long-term, fixed-income residents.
Councilmember Drew moved to approve the staff recommendation to phase out the subsidy over five years; Councilmember Boyle seconded. The motion passed 4-1 (tally announced by the council; recorded votes were not read aloud). The council also instructed staff to maintain the city’s lifeline assistance program for qualifying residents.
The council’s action is scheduled to take effect with the franchise CPI adjustment on May 1, 2025. City staff said they will reimpose specified subsidy amounts in the budget as needed under the adopted schedule and return with any implementing ordinance or resolution if required.
Council discussion and the vote occurred after a public presentation by the CFO and roughly an hour of council comment and questions about history, comparative municipal practice, and equity for fixed-income residents.
