We have prepared a preliminary Solid Waste Rate Study. At the May 13th Regular Board meeting, the Board directed staff to begin public outreach. We are asking residents to review the study and contact us if any errors are found. For those interested, we will be holding public outreach and special committee meetings to review the study. These meetings will take place via Zoom on the following dates:
- Thursday, May 27th at 6pm, Public Outreach
- Friday, May 28th at 1pm, Public Outreach
- Tuesday, June 1st at 1pm, Public Outreach
- Thursday, June 3rd at 9:00 am, Special Finance Committee Review
- Thursday, June 3rd at 11:00 am, Special Infrastructure Committee Review
We encourage all property owners to attend the informational meetings. The Zoom information for each meeting will be published to the events calendar in the near future. The preliminary study is available online and video of a Public Outreach meeting will be available on the District YouTube Channel after the meetings have been conducted.
Frequently Asked Questions
What is the Solid Waste Service?
Services include trash, recycling, green waste, and manure disposal.
Why is this service important?
Collection and removal of solid waste help keep the community clean, prevent illegal dumping, reduce wildfire fuels, and prevent the spread of disease and environmental contamination caused by improper disposal of garbage and manure.
What is a rate study and why was it done?
The rate study is a comprehensive analysis of the District’s solid waste rates that addresses several factors, including operational costs, reserve fund balance, and routine capital repair and replacement. The rates for solid waste services have not been adjusted since 2007, although the cost of providing those services has risen and the current rate structure was not designed to cover routine repair and replacement costs for facilities and machinery used on the site.
How was the study conducted, and who was involved?
District staff conducted the study as instructed by the Board of Directors. The rates are based upon the number of existing accounts plus a conservative estimate of 5 new homes per year divided by estimated expenses for the next five years, including proposed capital and reserve fund requirements.
Are inflation and growth projections accounted for in the study?
Yes. A conservative growth rate of 5 new homes per year was forecasted, and a regional Consumer Price Index (CPI) was used to anticipate inflation over the next five years.
What are the benefits of conducting such a study?
The study provides an objective analysis of the solid waste rates, allowing the District to ensure that the enterprise remains self-sufficient. It also documents the rate model and ensures that the District’s utility rates are appropriately aligned with the substantive and procedural requirements of California’s Proposition 218.
What were the results of the rate study?
Due to inadequate funding of operations, reserves, and routine capital needs, the study found that a rate increase is necessary for the enterprise fund to remain solvent.
When was the last rate increase?
The District last increased rates 14 years ago. Those rates did not provide for repair or replacement of facilities or equipment.
How and when will the recommended rate changes be implemented?
If approved, the following table explains how the rate will be adjusted:
Where will the revenue from these rates go?
- Aging Infrastructure: the repair and maintenance of the facilities and equipment necessary to the operation of the utility. The 2007 rate increase did not include funding for capital repair, replacement, or improvements that could increase the cost-efficiency of the operation. The block wall is crumbling, the facility needs to be paved to control mud and dust, and the decades-old machinery used to load and compact bins requires frequent repair and must be retired by 2024 to meet air pollution standards. Some improvements can be made to make the site more cost-effective and environmentally responsible.
- Reserve Fund: the solid waste fund has a reserve level intended to work as an emergency savings account. The purpose of this fund is to have money available for unplanned and unforseen expenses. The District's Solid Waste Operating Fund Balance Policy calls for a reserve equal to 20% of the annual operating costs. Over the past several years the utility has been drawing on this reserve to cover repairs and operational costs because rate revenue is inadequate. The new rate will generate enough revenue to rebuild the reserve fund.
- Operating Costs: The solid waste rates should adequately fund the daily operating costs in addition to funding capital repairs and building the reserve fund. These operating costs include proper staffing. Before 2020 the solid waste facility was not staffed in compliance with the permit requirements.
Are the solid waste revenues used solely for the solid waste utility?
Yes, monies collected through these rates are restricted and can only be used to fund the costs of providing solid waste services.
What is being done to prevent significant increases from happening again?
- Revenue and expenses will be reviewed annually to confirm the Rate Study’s projections and adjust the budget as appropriate. If needed, we will conduct a solid waste rate study update in fiscal years 2025/26.
- Long-term planning is underway to schedule significant infrastructure improvements and spread capital costs over many years to avoid substantial rate increases in any one year in the future. The current Rate Study includes only a 5-year Capital Improvement Plan, which is the limit under Prop. 218. The District is developing a 20-year Capital Improvement Plan to better identify future needs and funding.
- The rate includes the funding needed to rebuild reserves so that we will be prepared for unanticipated expenses.
What is Proposition 218?
Proposition 218, also called the Right to Vote on Taxes Act, was approved by California voters during the 1996 statewide general election. California Constitution Article 13D includes numerous procedural and substantive requirements for property-related charges, such as utility rates imposed by local governments.
Who receives the Public Hearing Notice?
The Public Hearing notice will be mailed to all property owners on record within Bear Valley Springs. Notices are mailed to the owners at the address of record, provided by the Kern County Assessor’s Office.
If the proposition fails, will the community fund the solid waste utility through the General Fund?
No. The General Fund does not have the means to cover the yearly operational deficit and be available for other community needs. If the rate increase fails, it will be necessary to reduce operations to function within current revenues.