Waste Rate Stability.pdf

Exclusive franchise waste and recycling systems in LA County have maintained stable commercial rates despite increasing disposal fees, fuel, and equipment costs. Over 10 years, average commercial rates in 34 exclusive franchise cities increased by less than 9% cumulatively. This stability is due to the structure of exclusive franchise systems, where haulers submit competitive bids, and cities negotiate final rates in franchise agreements. Rate increases are often tied to the Consumer Price Index.

Key cost drivers in the waste and recycling industry include:

1. Disposal costs: Landfill disposal fees in LA County increased by 36% from 2002 to 2010, with Puente Hills Landfill's fees rising by 70%.
2. Fuel costs: Diesel fuel costs in California increased by 75% from 2002 to 2010, affecting the majority of waste trucks in the region.
3. Equipment costs: Equipment costs increased by over 30% from 2002 to 2010, as measured by a national producer price index.
4. Labor costs: Labor costs increased by nearly 20% from 2003 to 2010, as measured by a national index.

In contrast, non-exclusive franchise systems lack transparency and stability, with customers paying varying rates for the same services. Exclusive franchise systems allow haulers to offer better pricing, secure low-cost financing, and realize operating efficiencies, ultimately benefiting customers with stable rates.