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Waste Infrastructure System Enterprise Agreement with the County of Orange <br />April 21, 2026 <br />Page 4 <br />5 <br />7 <br />0 <br />0 <br /> <br />In addition to the phased rate structure, OCCMA successfully negotiated several key <br />provisions intended to improve transparency, accountability, and cost control, including: <br />An annual “True-Up” process beginning in 2030 that may freeze CPI adjustments <br />depending on OCWR’s cost recovery and tonnage revenue, with the ability for <br />cities to initiate a meet-and-confer process supported by an independent <br />consultant. <br />Ongoing OCCMA participation through annual reporting and notification <br />requirements to improve transparency and oversight of OCWR’s financial status <br />and implementation of the WISE Agreement. <br />Removal of language that would have held cities financially responsible for <br />hauler non-payment. <br />Adoption of a blended CPI index consisting of 60% Solid Waste, Water, and <br />Sewer index and 40% All Urban Consumers index. <br />Removal of the requirement that all residential organic waste be sent to County <br />facilities, allowing cities flexibility in selecting organic waste processing services. <br />Cities must approve the WISE Agreement by April 30, 2026 in order to receive the <br />negotiated rate structure. Jurisdictions that do not participate may be subject to landfill <br />disposal rates of at least 10% higher than the negotiated rates. The agreement will <br />become effective once jurisdictions representing at least 50% of the disposal tonnage <br />delivered to County landfills approve the agreement; that threshold has been met. The <br />WISE Agreement has an initial ten-year term through June 30, 2036, with one optional <br />ten-year extension. <br />With the agreement taking effect July 1, 2026, the increased WISE agreement costs are <br />anticipated to increase waste servicing costs by up to 12% for commercial, 15% for <br />residential, and 23% for industrial customers, excluding any hauler-related service cost <br />adjustments. <br />Given the County’s ownership and operation of the regional landfill system, the City has <br />limited alternatives for waste disposal. As a result, participation in the WISE Agreement <br />represents the most cost-effective option available for maintaining reliable disposal <br />services for the City’s solid waste system. <br />Memorandum of Understanding (MOU) with Republic Services <br />To mitigate the immediate financial impact of the landfill disposal rate increase, staff <br />recommends a one-year rate stabilization strategy for FY 2026-27 through a MOU with <br />Republic Services. <br />Staff reviewed the City’s Refuse Collection Service Enterprise Fund and determined <br />that sufficient spendable fund balance, $8.3 million, is available to temporarily offset the <br />increase in landfill disposal costs. The estimated cost to offset the FY 2026-27 disposal <br />rate increase is approximately $6.8 million. The enterprise fund currently maintains