TO: The Solid Waste Disposal District Board of Commissioners
THROUGH: John A. Titkanich, Jr., County Administrator
THROUGH: Sean C. Lieske, Director of Utility Services
FROM: Himanshu H. Mehta, PE, Managing Director, Solid Waste Disposal District
DATE: June 6, 2025
SUBJECT: Annual SWDD Rate Study Update
__________________________________________________________________
BACKGROUND
On April 4, 2023, the Indian River County (IRC) Solid Waste Disposal District (SWDD) Board of Commissioners were presented with the Solid Waste Rate Study prepared by Kessler Consulting, Inc. (KCI). Per KCI and staff recommendations, the SWDD Board approved new tipping fees starting October 1, 2023, as well as implementing the proposed change in Waste Generation Units (WGU) by 50%; with the remaining 50% change being implemented October 1, 2027. On June 20, 2023, staff provided an update to the SWDD rate study to include the proper use of the available unrestricted cash balance and the importance of following the SWDD policy of maintaining an absolute minimum fund balance of 20% with the total fund balance goal of 30%. The rate study recommended a final residential assessment rate increase of 2.4% and a commercial assessment rate increase of 15.42%.
On July 10, 2024, at the Preliminary Budget Hearing workshop, the County Administrator presented the annual SWDD rate study update by KCI to the SWDD Board with a final residential and commercial rate increase of 8% with a tipping fee rate increase of 3%. The current baseline service assessment is $68.80 per Waste Generation Unit (WGU) and the current recycling service assessment is $39.95 per WGU or a total of $108.75 per WGU which results in a single family annual assessment of $163.12 per 1.5 WGU's.
The purpose of this agenda item is to present the annual SWDD rate study update provided by KCI on June 6, 2025 with recommendation from staff for consideration by the SWDD Board.
ANALYSIS
The annual 2025 SWDD rate study update by KCI factored in a starting fund balance of $15,079,059 along with the proposed FY25/26 budget which included significant contractual increases as well as the new universal curbside collection program to start October 1, 2025 within unincorporated IRC. KCI has presented a baseline and four additional scenarios wherein the service assessments and/or the tipping fees are varied to see the resulting impact on the fund balance.
The Baseline scenario maintained the 6% increase in service assessments and 3% increase in tipping fees which resulted in not complying with SWDD fund balance or in negative fund balance in years 2 thru 5.
|
Scenario - Baseline |
FY26 |
FY27 |
FY28 |
FY29 |
FY30 |
|
Service Assessments |
6% |
6% |
6% |
6% |
6% |
|
Tipping Fees |
3% |
3% |
3% |
3% |
3% |
|
Fund Balance |
20% |
8% |
-3% |
-20% |
-39% |
Next, Scenario 1 presented an aggressive increase of 40% in service assessments in year 1 followed by 6% annual increases in years 2 thru 5 with a 3% increase in the tipping fees across all five years. The baseline scenario results in complying with the SWDD fund balance policy; however, the service assessments would increase from $163.12 to $228.38 per year for next fiscal year.
|
Scenario - 1 |
FY26 |
FY27 |
FY28 |
FY29 |
FY30 |
|
Service Assessments |
40% |
6% |
6% |
6% |
6% |
|
Tipping Fees |
3% |
3% |
3% |
3% |
3% |
|
Fund Balance |
32% |
37% |
41% |
40% |
37% |
Next, Scenario 2 presented an increase of 25% in service assessments in year 1 followed by a 22% increase in year 2 with 6% annual increases in years 3 thru 5 with a 3% increase in the tipping fees across all five years. Scenario 1 results in complying with the SWDD fund balance policy; however, the service assessments would increase from $163.12 to $203.91 per year for next fiscal year.
|
Scenario - 2 |
FY26 |
FY27 |
FY28 |
FY29 |
FY30 |
|
Service Assessments |
25% |
22% |
6% |
6% |
6% |
|
Tipping Fees |
3% |
3% |
3% |
3% |
3% |
|
Fund Balance |
27% |
31% |
37% |
38% |
37% |
Next, Scenario 3 presented an increase of 12% in service assessments as well as a 12% increase in tipping fees in years 1 thru 3 with 6% increases in both service assessments and tipping fees in years 4 thru 5. Scenario 2 would result in not being in compliance with the SWDD fund balance policy.
|
Scenario - 3 |
FY26 |
FY27 |
FY28 |
FY29 |
FY30 |
|
Service Assessments |
12% |
12% |
12% |
6% |
6% |
|
Tipping Fees |
12% |
12% |
12% |
6% |
6% |
|
Fund Balance |
23% |
20% |
21% |
18% |
14% |
Finally, Scenario 4 presented an increase of 15% in service assessments as well as a 15% increase in tipping fees in years 1 thru 3 with 6% increases in both service assessments and tipping fees in years 4 thru 5. Scenario 4 would lead to being compliant with the SWDD fund balance policy and result in the least increase between scenarios 1, 2, and 4, with an increase from $163.12 to $187.59 per year for next fiscal year.
|
Scenario - 4 |
FY26 |
FY27 |
FY28 |
FY29 |
FY30 |
|
Service Assessments |
15% |
15% |
15% |
6% |
6% |
|
Tipping Fees |
15% |
15% |
15% |
6% |
6% |
|
Fund Balance |
25% |
25% |
30% |
33% |
34% |
BUDGETARY IMPACT
This agenda provides an update to the SWDD rate study and is not requesting any funding.
PREVIOUS BOARD ACTIONS
Item 15.B.3, File #23-0291, was approved by the SWDD Board on April 4, 2023.
Item 15.B.3, File #23-0538, was approved by the SWDD Board on June 20, 2023.
POTENTIAL FUTURE BOARD ACTIONS
Approval of SWDD service assessment and universal curbside collection rates.
STRATEGIC PLAN ALIGNMENT
Infrastructure
STAFF RECOMMENDATION
Recommended Action
Staff recommends that the SWDD Board approve Scenario 4 of the KCI annual SWDD rate study update as presented with an increase of 15% in service assessments as well as a 15% increase in tipping fees in years 1 thru 3 with 6% increases in both service assessments and tipping fees in years 4 thru 5. This would result in a base service assessment increasing to $79.12 per WGU and the recycling service assessment increasing to $45.94 per WGU.