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Rate Increase Explained

On April 1, Mill Valley Refuse Service delivered a Rate Application to all of the jurisdictions it services, requesting a sizeable rate increase due, in large part, to the shocking collapse of recycling markets that has turned collecting recyclables from being a source of revenue to a burdensome cost on operations.

MVRS has not raised rates in the past two years, but a new labor contract, rising fuel prices, and increases in dump fees for trash, compost and especially recyclables led to the requested average rate hike of 14.41% this year. More than half of that rate hike was due to the fact that in the past year, the cost of dumping recyclables rose from $0/ton in April, 2017, to a shocking $80/ton today. MVRS paid out just under half a million dollars last year to cover this completely unanticipated new cost of delivering recyclables to processing plants. However, per its contracts with the jurisdictions it serves, MVRS cannot recover a previous year’s losses in the next year’s rates, so only anticipated costs, including the new dump fees for recyclables, are covered in this year’s rates.

The company’s case for the rate increase was supported by R3 Consulting, an independent firm hired by the jurisdictions to analyze MVRS’s rate application. R3 reviewed the cost projections for rate year 2018-19 in the application, and verified the market conditions described by MVRS that were a driving factor behind this year’s unusually high rate increase. The consulting firm made a presentation of its findings at several public meetings, one of which (presented in Strawberry) can be read on the following link: R3 Consulting Review of MVRS 2018 Rate Increase.

One positive note for rate payers is that R3 proposed a plan—to which MVRS agreed—that will adjust rates downward in coming years if markets rebound and the current $80/ton price for recyclables drops significantly. MVRS will also be conducting a pilot program in selected neighborhoods starting in September to test dual stream collection of recyclables. If successful, MVRS could deliver the less contaminated material to Marin Sanitary Service in San Rafael for a reduced price of under $20/ton. Information on the pilot program can be found at millvalleyrefuse.com/pilot.