Rapid City staff outlines four options to address solid-waste deficit; committee acknowledges presentation

City Solid Waste Division leadership told the Rapid City Legal & Finance Committee on Oct. 29 that the division faces a structural deficit driven by higher-than-expected wage and health-care costs, equipment price increases and the unexpectedly large cost of constructing landfill Cell 15.

"We had to implement a $5 per hour increase in order to retain any of our sanitation workers," Solid Waste Director Daniel Ainsley said during the committee meeting. He told the committee that wage increases, higher health-care costs and construction inflation left the division in a deficit that was not covered by the rates approved in 2021.

The department and consultant Burns & McDonnell presented four scenarios to close the gap. Scenario 1 keeps city-provided services but raises residential rates more steeply in the near term. Scenario 2 combines rate adjustments with reduced capital spending and service changes — for example, reducing free utility-bill dump coupons from 12 to 6 per year, moving recycling collection from weekly to every other week, and introducing a subscription curbside yard-waste service with a city-provided tote — producing smaller monthly increases. Scenario 3 would make deeper service cuts including closing two remote drop-off sites. Scenario 4 would outsource collection to private haulers and leave the city operating only the landfill, eliminating household hazardous waste collection, yard-waste pickup, recycling and free dumping.

Luke Grodig, Burns & McDonnell, said the modeling aims "to really rebuild the target reserve fund balance back to meet the minimum target reserve fund balance goal by 2030," and listed major capital needs that will affect future finances, including relocating the yard-waste operation (2027–28) and constructing Cell 19 (estimated $10–$13 million, targeted for 2028–29).

Staff presented estimated cost impacts used in the analysis: reducing free-dump coupons from 12 to 6 would lower costs by about $400,000 annually (the program's total cost was presented at roughly $800,000); switching recycling collection from weekly to biweekly would save about $131,100 a year; a city curbside yard-waste program was estimated at about $325,000 annually (staff said fewer than 5% of customers currently use the curbside yard-waste pickup); and the two remote drop-off sites cost roughly $309,000 per year to operate. Ainsley said the city’s recycling program is currently a net loss of about $3 million a year and could rise to about $4 million annually after planned upgrades and associated debt service.

Councilmembers asked operational and regulatory questions. Councilmember Bill Evans asked why the difference in monthly rates between a 35‑gallon and a 95‑gallon container is small; Ainsley and the consultant responded that collection labor, equipment and fuel drive the bulk of costs and that disposal tonnage is a smaller component of the residential cost-per-customer. Councilmember Lindsay Seacrest asked about tote size for any subscription yard-waste service; staff said a 95‑gallon tote was anticipated under Scenario 2. Staff said landfill permitting and state regulations would be involved if recycling or other services were removed from the permit.

Staff told the committee a draft resolution attached to the agenda implements Scenario 2 and that the proposed rates would be effective Jan. 1, 2026, if approved by the council. The committee did not adopt rates at the Oct. 29 meeting; instead, Councilmember Bill Evans moved and Councilmember Lindsay Seacrest seconded a motion to "acknowledge" Item 16 (the presentation and analyses). The motion carried.

Next steps: staff will provide slides and supplemental materials requested by councilmembers ahead of the council meeting where a resolution to modify rates and services will be presented.