The Merced City Council convened on January 20, 2026, at 6:00 PM in the City Council Chamber. The meeting included a study session on solid waste collection rates, a public hearing on maintenance district assessments, action on several contracts and grants, and a report on council goals and priorities. Key actions included the acceptance of a $28.2 million Homekey+ grant for affordable housing, general support for a preliminary annexation, and approval of funding for community engagement services. The council also continued a tree removal contract item after a bid protest and directed staff to proceed with a 45-day Proposition 218 notice for solid waste rate adjustments.
To order. Okay, agenda item A study session roll call. Councilmember DuPont. Present. Tao. Present. Harris. Present. Smith. Present. Sean. Mayor Pro Tem Boyle. Here. And Mayor Serrado. Okay, agenda item B, study session B1 study session for solid waste collection and related services rate study. Glen Coordinator. Is that better? Sorry. Okay. Um we're here to present our rate study to you, and I have our consultant Garth Schultz here to do the presentation. Good evening, Mayor Pro Tem Council. Um I'm Garth Schultz. I'm principal and president of R3 consulting group, joined by my colleague Jordan Muratsuchi. Together we did the rate study for you this evening on your solid waste rates. Uh we actually, uh, as our firm did our last weight rate study for you about seven years ago. So it's nice to be in this room again and speaking to all of you about uh the next steps in your future solid waste rate adjustments. So, in terms of this evening's presentation, ultimately, uh, we've got a presentation for you that covers uh recommended rate adjustments and their reasons for them, as well as options available to the council. We are seeking council direction this evening with respect to which of the options uh you would like to see moving forward, or if you have variance on those options, and then to direct staff to proceed to issue the 45 day proposition 218 notice to ratepayers uh so that you can have your rates come back to you at a future public hearing and be considered for adoption by the council. We've got a little bit of background for you first. Um you may know this already, but it's just helpful to cover this in terms of a base. What we're talking about when we talk about solid waste services is ultimately those trucks that go by every home and business in the city on a weekly basis to collect garbage, recycling, and organics. They're important for health and safety and reduction of vectors. Uh, they're also important in terms of compliance with mandatory state laws that the city or that the state pushes on all local jurisdictions in California. Um, our firm here, we conducted a rate and financial analysis and projections over multiple years. We haven't done an operation study of your operations, but what we can tell, having worked with your staff on this over the course of the last year, is that they appear well managed and well run. Your solid waste rates at present are reasonable, they're proportionate to the cost of providing service, and overall the fiscal house has been in relatively good order. Um that said, revenues to your to fund your solid waste collection services uh do require some adjustment. Without adjustment, the rates don't continue to escalate with the escalating cost of providing service, which is largely labor and capital and fuel driven, and those costs, of course, change and tend to increase over time. Uh so those adjustments are necessary in the course of the coming five years in order to maintain the health of this operation and to maintain the current services that your residents and businesses in the city enjoys. In terms of future action that you would make, you may authorize up to five years worth of rates at once in one action. That's what you did back in 2019 for your prior five-year rate adjustment. Uh, there aren't any other ongoing adjustments outside of a five-year rate schedule. So you can't adopt it once and have it go on for CPI in perpetuity. So it is necessary to come back to council uh at minimum every five years in order to reauthorize rates. In terms of our recommendations, um, what we've found is that um even year-to-year fiscal year to fiscal year rate adjustments uh will be sufficient. You don't need an initial bump, um, even though the last couple of years there have been no rate adjustments, and we're recommending rate adjustments somewhere between 4.5 and 5.3%, corresponding to the two options that we put before you this evening. Oh, sorry, that was the wrong direction. Um a little bit of background. Um, so as I mentioned, we did your last five-year solid waste rate study, which was culminated in 2019. That's set in uh the council at the time at authorized rate adjustments for the following five fiscal years.