City considering garbage rate increases
City Commissioners will conduct a public hearing on proposed sanitation rate increases during their May 6 meeting.
The proposed increases are for the next two years and would go into effect each June 1.
City public works staff are proposing an 8 percent residential and 10 percent commercial increase for each of those years.
Staff annually reviews the sanitation fund to ensure adequate funding for daily operations, equipment and emergencies. Staff presented the proposal during the commission’s April 1 work session.
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City code requires that commissioners adopt a resolution establishing rates to defray the costs of sanitation services for the fiscal year, according to the staff report.
The city last increased both residential and commercial rates in 2024.
The proposed increases for the next two years are needed to provide services will “covering increased expenses largely due to the increase in operations, equipment, fuel and landfill costs,” according to the staff report.
If approved, a regular residential rate would increase from $17.33 to $18.71 monthly in 2025 and increase to $20.20 monthly in 2026.
Staff has also proposed phasing out the current senior rate over the next two years, transitioning instead to a discounted rate for existing senior customers and those who qualify for the low income water and sewer rate.
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Beginning June 1, the city would grandfather existing senior rate customers, increasing that rate from $12.13 to $14.20 monthly, but that still does not cover the cost of service, according to the city.
In 2026, the grandfathered senior rate will be eliminated and all seniors meeting the criteria will be eligible for the 10 percent discounted residential rate.
A new low income rate will be $16.84 monthly, which is the 10 percent discount on the residential rate.
A new rate for multi-family complexes of 10 or more units has been added in the resolution of $16.84 monthly per unit to allow the city “to offer a competitive rate to mobile home parks and condominiums,” according to staff.
If approved, a commercial 3-yard container would increase by $8 from $84 to $92 monthly.
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Cardboard recycling would increase from $25 to $28 monthly to cover the cost of service and vacant business one-a-month pickups would remain $7 monthly.
Commercial sanitation rates would increase by 10 percent to cover the cost of capital improvements such as vehicles and equipment, according to city staff.
“The increases are necessary to continue to provide required pickup and disposal services as well as fund the sanitation fleet. Increased landfill fees, equipment fees, and unknown but likely higher fuel costs are the most significant drivers for a rate increase,” according to the city staff report.
The public works department is projecting that fuel costs will continue to increase.
In fiscal year 2023, which ended June 30, 2023, the city paid $313,482.400 for fuel.
For fiscal year 2024, which ended June 30, 2024, the city’s fuel cost decreased by $44,747.14.
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For the current fiscal year, which runs through June 30, staff is projecting fuel costs will increase slightly to $325,868.
Landfill fees rose “sharply” this year and “are the most significant driver of increases rates, while also driving a delay in the city’s goal of transitioning a portion of its fleet to front end loaders to serve commercial customers,” according to the staff report.
The High Plains Landfill is owned and operated by Republic Services. The city has a multi-year contract with Republic for use of the landfill.
The city paid $1,151,092 last fiscal year and staff is projecting a total of $1,430,402 this budget year for landfill fees, or an estimated increase of $279,310.
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City staff said Republic informed them the increase is required to cover the city’s portion of a new infrastructure project at the landfill to capture methane gas.
During their April 1 work session, city staff said there was a 16.75 percent increase in landfill fees from Republic this budget year.
That includes the 2.45 percent consumer price index increase, as included in the city’s contract with Republic, but also 14.3 percent “due to a late notice methane infrastructure project,” according to city staff, equating to a $282,000 annual increase in landfill fees, for a project total for landfill costs of $1,430,402.
City staff said they were notified of Republic’s methane project at the landfill in January and that it was coming with a big fee increase, which will compound each year with the remainder of the city’s contract with Republic, meaning the city will have to raise rates to keep up with those costs.
Cascade County officials, who have had their own recent issues with Republic, said in April that they had not been notified of the project or any associated fee increase.
David Dennis, city attorney, said in April that the city sent Republic a letter detailing their disagreement with the rate increase and Republic’s interpretation of their 2016 contact.
The contract expired in 2024, but had options to extend.
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Gaub told The Electric that late last year, the city opted to let the contract auto-extend through December 2029, when there will be the option to auto renew for another five years.
The city has to give 180 days notice if it’s not going to renew the contract, he said.
Dennis said in April that the letter is a first step and if Republic doesn’t respond, the city has the option to file legal action, asking a judge to interpret the contract.
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Dennis said it would be unusual for a company like Republic not to respond, but if it doesn’t, staff will come back to the commission to discuss next steps.
Roman Blahoski, Republic’s director of external communications, told The Electric on April 4 that the landfill completed the installation of a new gas collection system in 2024 as required by federal regulations.
“Once the project was complete, Republic submitted a contractual fee increase request, consistent with the terms of its contract with the city,” Blahoski said.
In their report for the May 6 commission meeting, staff wrote that Republic had notified the Montana Department of Environmental Quality of the project, but did not make the city aware of the project of additional costs until it was completed.
“The city was not made aware of this project, or its alleged financial implications, either before or during project construction. This late notice did not enable the city to gradually adjust rates to account for the cost of the project. The city is currently paying this rate under protest while seeking confirmation that the city is obligated to pay into the cost of the project,” according to the city staff report.
During their annual retreat in January, commissioners briefly discussed privatizing city sanitation since Republic had approached the city about buying out the city’s existing program.
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The city sanitation division is scheduled to replace one residential side loader and one commercial rear loader this year.
The residential unit being replaced is a 2018 model with 14,510 hours of operation.
The commercial unit is a 2017 model with 10,814 hours of operation.
The new residential unit is expected to cost $456,850, up from the 2017 price of $270,000, according to staff.
The commercial unit is expected to cost $389,740, up from the 2016 price of $207,224.
