On Oct. 28, 2025, the Rapid City Public Works Committee heard a presentation on a new cost-of-service analysis for the city’s Solid Waste Division and discussed four rate-and-service options the city could use to stabilize the division’s finances.

Daniel, a Solid Waste Division staff member, told the committee the analysis evaluates four scenarios and that staff has prepared a resolution to implement Scenario 2, the staff-recommended option. "The point of today's presentation is to provide an updated cost of service analysis...and then to present to the committee 4 different scenarios," Daniel said. The presentation recommended rates take effect Jan. 1, 2026, if the council decides to proceed.

The study, presented in greater detail by Luke Grodig, a consultant with Burns & McDonnell, showed the division has experienced several years of negative net revenue driven by capital and equipment cost increases deferred into 2024–25. Grodig said the analysis intends to rebuild the utility’s reserve fund to the city’s target by 2030 while spreading rate impacts to be less abrupt for customers.

Staff emphasized several drivers for the shortfall: labor and benefit costs rose far faster than expected (projected wage growth of about 19% from 2021 to 2024 became 58%; health-insurance costs rose about 62%), a major landfill construction project (Cell 15) came in far above the 2021 estimate (about $6 million then vs. roughly $11 million actual), and the city absorbed an $820,000 interdepartmental charge for sanitation in 2026. To balance the 2026 budget, sanitation’s equipment budget was cut by about $1.1 million and the division’s capital program was effectively paused.

The presentation laid out four scenarios: Scenario 1 (status quo services with rate-only increases); Scenario 2 (staff recommended: constrained capital spending, reduce free-dump frequency from 12 to six times per year, biweekly recycling pickup instead of weekly, and a $10-per-month subscription curbside yard-waste option); Scenario 3 (deeper service changes: eliminate curbside waste subscription, close two remote drop-off sites, retain limited recycling/yard-waste options); and Scenario 4 (major program reductions, including eliminating city recycling collection, yard-waste collection and household hazardous-waste events, transferring residential collection to private haulers, and the city providing only landfill disposal services).

Grodig summarized estimated savings and costs that informed the scenarios: eliminating free dumping entirely would save about $799,000 annually; switching recycling from weekly to every-other-week would save about $131,000; the current curbside yard-waste collection program costs about $324,000 annually but has a low participation rate (staff said set-out rates are under 5% among roughly 22,000 households); and the two remote drop-off sites cost roughly $309,000 to operate.

Staff also noted upcoming capital needs that affect rates: relocating the compost facility (planned 2026–27), construction of a future landfill cell (Cell 19, estimated for 2029), and major upgrades to the city’s material recovery facility (equipment and controls approaching 30 years old). Those projects will create additional debt-service or capital costs in the coming years.

Committee members asked about private haulers, regional arrangements, and program effectiveness. One member noted private hauler residential rates collected from local benchmarks average about $52 per month for collection-only services, compared with Rapid City’s current rates that include recycling and yard-waste options. Another member pointed out a speaker’s assertion that "statutorily, the county is responsible to provide landfill services," and asked whether the city should seek cost-sharing from counties that use the landfill; staff replied that Rapid City has historically served a multi-county region dating to the 1960s.

Council members pressed staff on operational details: how an opt-in $10 monthly yard-waste subscription would lower labor costs by allowing crews to avoid driving every street looking for set-outs; whether biweekly recycling pick-up would overflow containers (staff and the consultant said regional peers routinely use biweekly recycling and that set-out rates are low enough that biweekly pickup is typically adequate); and how the city’s billing system change led to coupons for free-dump access (staff said the previous mailing machine could no longer be supported and coupons are a more secure, unique identifier than a standard invoice).

The committee did not make a recommendation on a specific scenario. Instead, members voted to "acknowledge the presentation without a recommendation" and to forward the matter to the full City Council with the presentation materials. The motion to acknowledge passed; no named mover or recorded roll-call tally was provided in the transcript.

Next steps: staff said a prepared resolution to implement Scenario 2 is ready if the City Council chooses that option; otherwise staff will prepare a different resolution reflecting any alternative the council selects. Staff recommended rates, if adopted, be effective Jan. 1 so the division’s financial projections can proceed.

The committee’s discussion highlighted trade-offs between rate increases and reductions in city-provided services, regulatory constraints (staff noted yard waste cannot be landfilled and that changes to recycling programs could require permit modifications), and the potential costs and customer impacts of shifting more collection to private haulers. The City Council is scheduled to consider the matter at its next meeting.