San Luis Obispo council restates garbage franchise, adopts 2025 solid-waste rate increase

SAN LUIS OBISPO, Calif. — The San Luis Obispo City Council on March 18 approved an updated franchise agreement with San Luis Garbage Company and adopted the city's 2025 integrated solid-waste rates following a public hearing and staff briefing.

The council voted 5-0 to introduce and then advance to second reading an ordinance restating the city's existing solid-waste, recycling and organics franchise agreements into a single “discarded materials” agreement, and separately adopted a resolution setting the 2025 rates after city staff said a mailed Proposition 218 protest did not reach the required majority.

The package negotiated with San Luis Garbage (SLG), which operates under Waste Connections, included multiple customer-facing service enhancements staff said were requested during outreach and community events. Utilities Director Aaron Floyd and Solid Waste and Recycling Program Manager Meg Buckingham said those additions are intended to reduce illegal dumping and help lower-income residents afford service.

Key service changes the council approved include: - A customer assistance program offering a 20% discount to eligible low-income residential customers enrolled in cart service (cart sizes discussed were 20, 32 and 64 gallons); current water/sewer assistance enrollees will be notified about the new offering. - Free bulky-item collection: single-family customers may schedule up to three no-cost bulky-item pickups per year; multifamily properties may schedule up to 12; some pickups must be scheduled during SLG’s semiannual cleanup weeks. - One no-cost annual cart exchange for cleanliness, odor or damage (replacements for normal wear-and-tear do not count toward the exchange limit). - No-cost curbside pickup of holiday trees (whole trees accepted with no stand, ornaments or flocking for two weeks after Christmas). - Formalized no-cost collection of illegally dumped items on sidewalks or public rights-of-way (excluding hazardous materials), and up to 12 no-cost community/cleanup events per year. - A change to the municipal code process that would allow the city and SLG to place delinquent solid-waste charges on the property tax roll less frequently: the franchise agreement would limit the process to no more than every five years or when accumulated delinquent charges exceed $50,000, while the municipal code amendment clarifies statutory noticing requirements.

Meg Buckingham described the negotiation outcome and outreach approach: “We have 2 public hearing items tonight for the consideration, 1 for the restated franchise agreement with San Luis Garbage Company, and then following will be the public hearing for the proposed 2025 integrated solid waste rates.”

Rate methodology changes and bill impacts Staff and a third-party consultant, R3 Consulting Group, presented an updated rate-setting methodology to replace the city’s 1994 manual. R3 principal Garth Schultz and staff said the new approach is designed to prioritize rate stability, predictability, transparency and compliance with Proposition 218 noticing.

Principal changes in the methodology and rate proposal presented to council included: - Interim CPI adjustments capped at 5% with a 2% floor; amounts outside the floor/cap carry forward to future adjustments. - Updated equipment depreciation (collection vehicles from seven to ten years). - A temporary profit allowance increase for SLG collection compensation to 9% in 2025 (moving to 10% in 2026), with staff noting that post-collection disposal fees do not include profit. - A revenue-balancing mechanism beginning in 2027 to add or credit prior shortfalls/surpluses to future adjustments. - Fewer cost-based adjustments (maximum every five years unless requested), intended to reduce periodic “spike” years in rates.

R3 consultant Garth Schultz emphasized the profit allowance does not guarantee earnings: “Yes, in the event that San Luis garbage were to not incur expenses at the level forecasted by this study in this effort, yes, their profit achievement would be greater than the 9% on collection costs. The last 5 years worth of history would seem to indicate that that's an unlikelihood.”

Staff also recommended a change to commercial recycling (bin/dumpster) billing: commercial customers with once- or twice-weekly recycling bin service would begin paying for recycling at 25% of the corresponding trash/bin rate (many comparable jurisdictions charge 50%). Cart-based recycling (residential carts/wheelers) would remain bundled in the trash rate and not change.

Council and staff gave examples of customer impacts. Using staff’s tables, a typical 32‑gallon residential customer — the most common cart size in SLO — would see an increase of $1.88 per month under the adopted rates. The rate adoption resolution sets a 7.98% increase and, because the council delayed the effective date to March 19 to allow outreach, staff said the total annual amount paid will be equivalent if adopted now or applied retroactively to January 1.

Protests and vote City Clerk records show the city received 19 validated written protests during the Proposition 218 notice period. With 16,412 active accounts in the city, a successful majority protest would have required 8,207 valid protests; the clerk confirmed the protest did not meet the threshold.

Councilmember Marx moved to approve the franchise restatement and municipal code amendment; Councilmember Francis seconded. The roll call vote on the franchise ordinance introduction and municipal-code amendment was 5-0 in favor. Councilmember Francis moved adoption of the 2025 integrated solid-waste rate resolution; Vice Mayor Schorzman seconded; the resolution passed 5-0.

Public comment and business groups Rachel Whelan, governmental affairs coordinator for the SLO Chamber of Commerce, spoke in support of the rate changes and requested that the city consider spreading any retroactive charges for commercial recycling bins to reduce the short-term burden on businesses. The Chamber also urged classifying recycling at apartment complexes as residential rather than commercial and promoted larger recycling bins at multifamily properties to reduce overflows and inefficiency.

Implementation and next steps If adopted at second reading, the restated franchise ordinance will return to the council for a second reading on April 1, at which point service enhancements and program enrollment (for example, the customer assistance discount) would be scheduled for implementation as staff and the hauler finalize outreach and enrollment. Staff and SLG said they will monitor pilot elements (for example, the multifamily bulky-item cap) and return to council if adjustments are needed.

Speakers quoted or referenced in this article were present during the public hearing and included council members, city staff, the city clerk, the R3 consultant and representatives of San Luis Garbage Company.