Title
Amend City Code - Proposed Solid Waste Service Rate Increase (Ordinance G-7510) - Citywide
Description
Request the City Council to amend Phoenix City Code Section 27-48 to increase residential solid waste service rates, including an increase to the monthly curbside green organics collection subscription fee. The last residential solid waste rate adjustment was approved in 2020, and the green organics collection subscription fee was established in 2012. The Solid Waste Management Program (Program) is considered an Enterprise Fund and does not receive support from the General Fund. The majority of expenses are recovered by the monthly residential solid waste rate. Since the last residential rate adjustment approved by City Council in February 2020, the Program has experienced substantial inflationary cost increases for staff (32 percent), trucks (52 percent), and construction (40 percent).
Report
Summary
This report outlines the current status of the Program’s inflation-driven cost increases affecting operations, public outreach efforts conducted by the Program and the recommendation to increase the monthly residential solid waste rate. Additionally, Staff recommends reviewing all other solid waste rates and services, which includes the Commercial Gate Rate and Director-approved rates. Evaluating the current service delivery will help stabilize the Program’s fund and reduce future residential rate adjustments.
Public Works, in conjunction with the Finance Department, developed a financial plan to identify the revenue needed to support the Program’s operating budget, capital infrastructure, vehicle replacement, and debt service requirements. The proposed rate adjustment addresses a substantial structural deficit of up to $20.8 million in Fiscal Year 2025-26 and helps ensure the health and resiliency of the Program. Ensuring the Program has adequate funding safeguards resident expectations about reliable solid waste collection and processing for the City while also keeping the City free of litter and debris. The final recommended rate increase includes an inflationary factor for future years. This inflationary factor is necessary to keep pace with rising operational costs and help reduce the likelihood of future large residential rate increases.
On October 20, 2025, the Solid Waste Rate Advisory Committee met to review the Solid Waste Fund and assess a 2024 Cost-of-Service Model prepared by NewGen Strategies and Solutions. After evaluating the rising costs of labor, equipment, and infrastructure, it was determined that a solid waste rate adjustment is required to maintain service. The Solid Waste Rate Advisory Committee unanimously approved staff’s proposed recommendation for a multi-year rate increase, an inflation adjustment, and an increase to the green organics collection subscription fee for consideration by the City Council.
Background
Public Works provides essential Citywide services to support a safe, clean, and visually appealing environment through solid waste collection, disposal, recycling, composting, and public education. Public Works provides solid waste collection and post-collection services to more than 425,000 rate-paying customers. Delivering these essential services requires a significant investment in personnel, fleet, and infrastructure, including 626 full-time employees and 656 trucks and pieces of heavy equipment. These resources are necessary to ensure proper disposal of waste that meets all regulatory requirements.
In Fiscal Year 2024-25, solid waste collection vehicles traveled nearly five million miles and collected and processed more than one million tons of material at two City-owned transfer stations, two materials recovery facilities, and one compost facility. Public Works also owns and operates the State Route 85 Landfill in Buckeye, Arizona (60 miles from downtown Phoenix), and manages the maintenance and regulatory oversight for five closed landfills within the City.
In April 2016, the City Council adopted a goal to achieve zero waste by 2050. Public Works remains committed to that goal and continues to advance its programs and services designed to achieve 50 percent waste diversion by 2030 and zero waste by 2050. As of Fiscal Year 2024-25, the City’s waste diversion rate is 33.3 percent, above the U.S. Environmental Protection Agency’s average national diversion rate of 32.1 percent. These goals support the City’s 2021 Climate Action Plan by increasing material reuse and enhancing recycling efforts to reduce landfill disposal.
The Program operates as an Enterprise Fund and is responsible for covering all related expenses, including operations, capital improvement projects, debt service, and indirect costs. Revenues are generated primarily from monthly residential service fees, disposal fees charged at the transfer stations and landfill, and the sale of recycled materials. Approximately 86 percent of the Program’s funding comes from the monthly residential solid waste rate. Phoenix City Code Chapter 27 establishes residential collection service for dwelling units defined as single dwelling units; buildings with fewer than five dwelling units, including duplex, triplex, and fourplex units; multi-family dwelling units with five to 30 units; mobile home parks; townhomes; and condominiums. Unlike many other municipalities, the City does not provide solid waste collection services to commercial or industrial establishments or to any building with more than 30 multi-family dwelling units.
Since the last Council-approved rate adjustment in 2020, the Program has experienced significant increases in operational costs and is projecting a budget shortfall in the current fiscal year. Since 2020, the average cost of living in the United States has increased by approximately 25 percent, based on official inflation measures. To address these financial challenges, staff recommends a proposed multi-year rate adjustment to ensure the program can continue providing reliable service and meet regulatory compliance requirements for operating and maintaining critical solid waste infrastructure, including active and closed landfills, the compost facility, materials recovery facilities, and transfer stations.
Proposed Solid Waste Rate Adjustment
A report on the City’s Solid Waste Financial Status and Rate Update was presented to City Council during the February 10, 2026, Policy Session (Attachment A). As required by Arizona Revised Statutes (ARS), section 9-499.15, the Notice of Intent to consider an increase in residential solid waste rates was posted on February 10, 2026.
Residential solid waste rates are established by Phoenix City Code Chapter 27. The current monthly residential solid waste rate is $37.32, which includes the final two-percent inflationary increase approved in 2020, which took effect on January 1, 2026. Additionally, Public Works offers a subscription-based weekly curbside green organics collection service. The current subscription fee for weekly curbside green organics collection with a 90-gallon container is $5 per month per container. This rate has remained unchanged since 2012.
Since the last residential rate adjustment approved by City Council in February 2020, the Program has experienced substantial cost increases across key operational areas. Staff costs have increased by approximately 32 percent, primarily attributed to the City’s recent Class and Compensation Study and rate adjustments made in 2023 to ensure that City staff's pay is in line with regional pay for similar work. Vehicle and equipment costs have increased by 52 percent, and construction-related costs to maintain critical infrastructure have increased by 40 percent. Despite implementing operational efficiencies and deferring vehicle replacements and infrastructure projects, the Program is projected to experience a budget shortfall of up to $20.8 million in the current Fiscal Year and is forecasted to be drawn close to zero by Fiscal Year 2027-28.
The proposed solid waste rate adjustment was calculated by assessing current expenditures and revenues, as well as identifying future capital improvement needs, along with maintaining a continued fund balance of $50 million, based upon a best practice recommendation from the Finance Department. The final recommended solid waste adjustment is projected to generate approximately $72 million for the Solid Waste Fund over a three-year period. Beginning in year four, July 2029 through June 2034, staff will provide City Council with an annual update of the Program’s Fund and determine if an inflationary adjustment is necessary, and what percentage, not to exceed five percent. The included inflation rate aims to maintain long-term fund stability and reduce the necessity for significant future residential rate increases. The inflationary factor is based upon the previous five-year average Consumer Price Index increase for garbage and trash collection as reported by the U.S. Bureau of Labor Statistics for the Garbage and Trash Collection price Index.
If a solid waste rate adjustment is not implemented for Fiscal Year 2026-27, the City’s ability to provide solid waste collection and post-collection services will be severely impacted, resulting in significant service reductions, staff reassignments or layoffs. These impacts would compromise the City’s ability to maintain reliable services; meet Council-adopted zero waste goals; adequately operate and maintain critical solid waste infrastructure; and comply with Phoenix City Code Chapter 27, Maricopa County Environmental Health Code, Arizona Department of Environmental Quality rules, and U.S. Environmental Protection Agency regulations.
Public Outreach
Public Works published a dedicated webpage for the 2026 Proposed Solid Waste Rate Adjustment (phoenix.gov/swrate2026). The webpage provided comprehensive information, available in English and Spanish, about the proposed rate, including an overview of the proposal, details of the multi-year rate adjustment, community information session dates, a link to a customer survey, timeline of the rate adjustment process, Frequently Asked Questions, and important documents and recordings of meetings related to the rate adjustment discussion. The webpage was launched on February 10, 2026, and generated 4,743 visits from its launch through March 31, 2026. The webpage remains published on phoenix.gov.
Public Works hosted eleven Community Information Sessions. A total of 83 residents attended the sessions. Residents who attended the information sessions were engaged and asked many questions about current solid waste operations. Feedback received from these community meetings includes incorporating additional lower rates for residents who generate less trash; increasing the Save As You Reduce and Recycle (SAYR&R) monthly discount; concerns with residents contaminating recycle containers; and Appointment-Based Bulk Trash Collection Model concerns. Meeting summaries from eleven hosted community information sessions are in (Attachment B). Public Works staffed an outreach table at 12 City community budget hearings and also participated in and presented at 12 additional neighborhood, council-hosted, block watch, and business meetings, engaging approximately 225 attendees.
The proposed solid waste adjustment information was also included in City Council newsletters. In addition to the community information sessions, Public Works coordinated several outreach efforts through a mix of digital communication, including targeted messaging on the City’s website, social media platforms, email campaigns, newsletters, and radio and TV interviews. An overview of outreach efforts and public engagement activities completed is outlined in (Attachment C).
Public Works received 94 emailed comments and six phone calls from customers sharing feedback on the proposed solid waste rate adjustment. Many of the comments expressed concern about affordability and offered solutions to maintain service quality while easing the financial impact on households.
A survey was created to gather input and allow feedback from single-family residential customers regarding the proposed solid waste rate increase. The survey was made accessible to residents via the dedicated solid waste rate webpage, via City social media channels, at community meetings and engagements, as well as through survey cards distributed by each of the City transfer station scale houses, and through Solid Waste Environmental Specialists conducting field calls throughout the City.
A total of 6,729 participants completed the Solid Waste Rate survey. Most respondents (71.6 percent) reported being satisfied with City of Phoenix Solid Waste services, including 41.4 percent of respondents who said they were ‘very satisfied’. Customers are split between the importance of receiving weekly recycling collection service. Of respondents who do not value weekly recycling collection (52.7 percent), the vast majority (82.9 percent) noted they are interested in the City researching the potential to transition to an every-other-week recycle collection model to potentially reduce future rate increases. 59.7 percent of respondents are interested in the City researching alternative service methods, such as reducing the number of annual bulk trash collections and/or establishing a separate rate for bulk trash collection to potentially reduce future rate increases. Survey respondents (59.1 percent) are willing to pay the proposed rate to continue services that keep the community clean and safe, such as illegal dumping support, household hazardous waste collection, and encampment cleanups.
In response to the feedback received by the community, staff is committed to exploring all of these options and others, along with working with Arizona State University to undertake a benchmark study of municipal solid waste collection services to better understand industry trends and identify best practices that can be utilized to reduce future rate impacts.
A total of 1,045 written responses were received to the survey question: “Is there anything else you would like us to know?” The dominant themes from these written responses were:
- Concern with the overall cost of the proposed rate adjustment and customers' ability to afford the increased costs.
- Dissatisfaction with the transition to the Appointment-Based Bulk Trash Collection model.
- Distrust of recycled materials being recycled.
- Service quality (missed collections, broken cans, driver behavior, inconsistent collection times).
- Illegal dumping, encampment, and alley cleanliness. Request for more enforcement and City to clean alleys.
- Service customization.
Recommendation
Since presenting the initial multi-year rate recommendation at the February 10, 2026, Policy Session, staff reviewed feedback from the Community Solid Waste Rate Information Sessions and the customer survey. Considering community and City Council feedback and concerns, and staff’s continued efforts to identify operational efficiencies, the original three-year rate recommendation has been reduced from $17 to $14.
The final rate recommendation includes a $5 monthly increase, effective the first bill day of July 2026 ($42.32), followed by an additional $5 increase, effective the first bill day of July 2027 ($47.32), and a $4 increase, effective the first bill day of July 2028 ($51.32). The recommendation includes an annual inflationary adjustment not to exceed five percent, to be applied from July 1, 2029, through June 30, 2034. This annual inflationary adjustment will help minimize future double digit rate increases. Additionally, eligible customers participating in the curbside green organics program would pay one-quarter of the applicable monthly residential solid waste rate, effective the first bill day of July 2026 ($10.58). The final rate recommendation includes increasing the current SAYR&R monthly discount from $3 to $5 per month. Effective July 2026, the monthly rate for a 60-gallon container will be $37.32. The final rate recommendation is less of an increase than the rate proposed by the City in the 60- and 15-day notices posted pursuant to ARS § 9-499.15, and City Administrative Regulation 1.98. See (Attachment D) for proposed ordinance revisions reflecting these rates.
With these rate changes, including the inflationary factor, the current structural deficit in the Program’s fund will be addressed, enabling a positive balance in future years. This will directly help stabilize the fund and allow for smaller rate adjustments for residential customers in the future. Public Works also recommends continuing to evaluate current services, revenue sources, such as the Commercial Gate Rate, and Director-approved solid waste rates, as potential ways to reduce future residential rate adjustments. Staff will assess the feasibility of implementing future service changes across the City that may lead to operational cost savings. The Department will also evaluate customer service impacts from these changes, and present findings to the City Council for future consideration.
Department
Responsible Department
This item is submitted by Deputy City Manager Alan Stephenson and the Public Works Department.