SANGER – Before residents and business owners throw out a notice from the city of Sanger next month, they’ll want to be sure to check out the proposed trash rate increases that could take effect this spring.
Based on a recent rate study by consultant IGService, trash rates may increase by 5% for residential customers and by an average of 37% for commercial customers, IGService Principal Dan Bergmann told the Sanger City Council on Dec. 19. With authorization from the council, the city plans to hold a public hearing on the rate increase on March 20; if approved, the new rates will begin on April 1.
Bergmann said the main factor in the rate increase was the updated contract with service provider Mid Valley Disposal approved by the council on Dec. 5. Fees charged to the city by Mid Valley will increase by an average of 30%, also beginning on April 1, largely as a result of Senate Bill 1383 compliance costs.
“The approach to setting rates was to take the new fees that Mid Valley gave us and increase them by the same percentage, except a different percentage for commercial than for residential because of the cost differences to serve them,” Bergmann said.
The trash rates, also referred to as refuse rates, charged to residents and businesses by the city of Sanger incorporate the fees charged by Mid Valley Disposal and various overhead costs incurred by the city. As outlined in Sanger’s contract with Mid Valley, Sanger handles billing, payment collection and customer service for trash, recycling and organics pickup.
Rates are currently split into two customer classes — residential and commercial — and are set at a 35% markup above Mid Valley’s fees for residential customers and a 7% markup for commercial customers. Bergmann explained that the commercial rates are proposed to increase by a much larger percentage than the residential rates because the new rates recommend a more even allocation of the overhead costs between residential and commercial customers.
According to the rate study, the change is “necessary and correct to achieve cost-of-service equity between the two customer classes.”
With the new structure, residential rates will be marked up by 20% and commercial rates by 16%. Residential rates will still be marked up more than commercial rates, as it costs the city more to provide customer service to residential customers because there are significantly more of them than there are commercial customers.
New rates
After the first rate increase on April 1, residential and commercial rates will both increase by 4% every year for four years beginning on July 1, 2026. Bergmann said he set up the rate increases over a five-year planning period to keep up with inflation and end with a net-positive cash flow in the city’s disposal enterprise fund, which currently sits at a healthy balance of $3.4 million.
“We could burn more into the fund balance, but we don’t want to get to the end of five years and then have to be facing a bigger increase to break even,” Bergmann told the council. “But along the way, if inflation isn’t that high, or for other reasons, city council, you could elect to pass on the 4% increases if you wanted to.”
In addition to the rate increases, trash customers will see changes to the way recycling rates are charged. For residential customers, Bergmann said the existing single-family and multi-family rates include a recycling rate component of $3.15 per unit per month that shows up as a line-item on customer bills; the proposed structure eliminates the line-item and incorporates it into the proposed rates.
With the 5% residential rate increase, the current cost for single-family service involving the standard 95 gallon three cart service, including the $3.15 recycling charge, would increase from $27.57 per month to $28.95. After the proposed annual 4% increases, the rate would be $33.87 per month beginning on July 1, 2029.
Bergmann highlighted that Mid Valley did not increase its fees for service to seniors, and so the rates for residents who qualify for the senior discount will not change.
Commercial customers with a 3-yard bin that receives service once a week, which Bergmann said is a popular category in Sanger, will see their rates increase from $115.58 per month to $153.72. The rate implemented on July 1, 2029, would be $179.83. Further, commercial customers will also have to pay for recycling services, which Mid Valley did not previously charge to the city, Bergmann said.
Sanger’s commercial trash rates have not changed since 2013, and its residential rates have been in place since 2011. City Manager Nathan Olson said that with these increases, the city can continue to maintain a positive revenue balance in its trash fund while keeping up with inflation and state mandates to reduce greenhouse gas emissions.
Olson added that city staff also intend to bring a proposal to the council that would use some of the excess disposal enterprise funds to rebuild city alleyways that are used by Mid Valley. When heavy commercial trucks, like those used for garbage collection, run through city alleys, the alleys deteriorate faster than they would otherwise.
Proposition 218 hearing
The council set a Proposition 218 hearing for March 20, at which time the rate increase will be approved by the council if there is no majority protest from utility customers. Prop 218, passed by California voters in 1996, gives taxpayers a level of oversight when it comes to their city-run utilities.
First, cities must conduct a study to analyze how much it costs to deliver a utility service to customers, and then use the results of that study to determine how rates should be divided among utility customers. Prop 218 requires city councils to accept the results of the study and issue a notice to all utility customers of the potential rate increase at least 45 days before holding a public hearing on the increase.
At the scheduled public hearing, utility customers will have the chance to protest the rate increase; customers can also send in written protest. If more than half of the utility’s total customers protest the increase, the city council is not allowed to approve it.
The city intends to send out Prop 218 notices by Feb. 1, and all written protests must be received by the city before the start of the council meeting at 6 p.m. on March 20.
