Ashland council says no to higher trash fee
A divided Ashland City Council last week voted down a rate increase for Recology Ashland trash collection fees.
The proposed increase of 6.5% would have taken effect April 1 for all customer classes, amounting to an estimated increase of $1.38 per month for the typical residential consumer, according to council documents.
Per a 2013 franchise agreement, Recology annually brings forward a rate adjustment projection for the upcoming rate period in February or March. The council last approved a CPI-based rate adjustment of 2.6% in March 2020, according to council documents.
Recology Ashland General Manager Gary Blake requested the 6.5% increase March 15 after forgoing a change last year. Since last summer, Recology has paid higher landfill fees while attempting to contain costs with efficiency actions so that its fee request would align with the Consumer Price Index and not more, Blake said.
“One of the concerns we had was that we knew that the Dry Creek Landfill, which is where all the garbage waste goes, was in the process of requesting a substantial increase in fees from the county,” Blake said. “County commissioners increased landfill rates 18% effective July 1, 2021.”
“Exacerbating the 18% landfill increase, of course, are the inflationary costs that everybody’s feeling,” he continued. “Clearly, fuel is a big driver of our overall costs, as are driver wages, and everything across the board, including getting parts for our trucks. All of those items have gone up faster than the rate of inflation the last 12 months.”
The request fell below the inflation rate since 2020 of 7.7%, with more impacts expected as cost-of-living trends up and the landfill plans another rate increase in July, Blake said.
The proposed base rate of $22.67 was comparable to surrounding communities, which do not provide the same recycling services as Ashland, he said. A separate pass-through charge recovers the cost associated with a greater variety of items recycled curbside in Ashland, such as office paper, which accounts for about 40% by weight of curbside recycling, he said.
Interim Finance Director Alison Chan said the franchise agreement allows Recology to issue a request for the specified CPI, but the increase is not automatic.
Councilor Shaun Moran asked what would happen if the council didn't approve the increase.
“We’ve got many decades of relationship with the city of Ashland,” Blake said. “We’re going to work through whatever we need to work through. My concern is … if we forgo an increase this year, then at some point you gotta pay the bill.”
“If costs of disposal at the landfill are rising 18% ... and there’s no corresponding pass-through to the customers who are creating the trash, ultimately that’s going to create a situation at some point where you’ve got to raise rates and it’s going to be a big, shocking amount when that happens,” he continued.
Councilor Tonya Graham made a motion to approve the resolution modifying solid waste franchise rates and fees as presented.
“These conversations and these votes are the worst part of this job, hands down,” Graham said. “We know what’s happening in our larger community right now around these inflation rates, and our local waste disposal; they’re not immune from this.”
Graham said Recology “knew how bad the community was hurting” last year in the midst of the pandemic and deliberately did not request a rate increase at the time.
“They showed up as a community member in a really important way,” she said.
With cost of living on the rise, Graham said keeping pace with agreements to avoid large increases ahead was important, and that Recology bringing a request below the CPI reflected an effort to control unpredictable costs. Graham added that the increase would not fully solve impending problems with fuel costs and landfill rate increases.
“As much as I don’t want to increase this cost, I also recognize that it is in fact staying in alignment with what else is happening in the valley, aside from those additional services that this community has decided that it wants to have, and we’re not talking about any increases in those fees, we’re talking about just increasing the base fee,” Graham said.
Councilor Paula Hyatt said honoring the franchise agreement by approving a 6.5% increase this year was preferable to confronting the community next year with a double-digit rate hike.
“It is with looking downstream to avoid a double-digit increase on our residents, in working to maintain our efforts and the values that we have regarding our recycling efforts and our environmental stewardship, that I second the motion,” Hyatt said.
Moran voted no, Graham voted yes, Hyatt voted yes, Councilor Gina DuQuenne voted no, and Councilor Stefani Seffinger was absent. Lessard said Seffinger sent an email stating that her “screen went blank and she’s having some difficulties.”
Seffinger dropped off the screen after Blake’s preliminary presentation, around the 1-hour, 37-minute mark, according to the meeting video.
After directing the city recorder to attempt to bring Seffinger back into the meeting (to no avail), City Attorney Katrina Brown advised that “she’s not present, therefore she just doesn’t get a vote,” leaving Mayor Julie Akins to break the tie with a no vote.
“I understand you guys have had a tough time and you’ve got increases, but with everything that’s going on and people having 7.5% inflation on food products and everything else, it’s just too tight for folks,” Akins said.
Hyatt said Wednesday that the outcome may have compliance implications regarding the franchise agreement.
“In that agreement, Recology has an expectation — and there is a legal provision in the contract — that provides an operating margin requirement,” Hyatt said. “If they come to us and request us to raise rates by CPI, it typically is to keep them within that clause so that we don’t fall below the lowest part of the percentage point.”
According to council documents, a component of the agreement was a “rate adjustment methodology intended to provide the franchisee (Recology) an annual operating margin range of between 8% and 12%.”
“From a financial management perspective, you don’t want to drop below the 8%, because then you’re not compliant with your contract,” Hyatt said. “The one thing we don’t know now is if that ‘no’ vote created any implications for that clause.”
Reach reporter Allayana Darrow at firstname.lastname@example.org or 541-776-4497.