Garbage hauling rates will increase by 6.5%, or $1.76 for a 35-gallon bin, per month on March 1.
The Keizer City Council approved the rate changes at its meeting Tuesday, Jan. 19, in a 6-1 vote. Councilor Ross Day was the lone dissent. Loren’s Sanitation and Valley Recycling and Disposal customers will both be affected by the increase. Local haulers need the council’s approval to change rates because they hold franchise agreements with the city.
The monthly rate will increase again in March 2022 by 3%. That increase will add another .87 cents to bills for those with mid-size containers.
“We thought we would be here a year ago, but decided that [2020] was not the year to be increasing rates,” said Dr. Estle Harlan, a business consultant who represented the two local haulers for much of the evening.
Responding to a request by Keizer city councilors in 2019, rates are being raised over the course of two years rather than a hefty increase in a single year.
In addition to residential rate increases, commercial hauling rates would increase by 3% this year and next while roll-off container hauling will only increase once, by 9%, in March 2021.
Harlan said costs to haulers have increased despite its decision to delay an increase for a year.
“Processing costs for co-mingled recycling have risen 13%. Mixed organics [processing] has increased by 19.3%. Labor costs have gone up by 2.2%, and we expect more increases in all areas this year,” Harlan said.
Aside from increased costs, Harlan said the haulers are trying to achieve a 10% profit, the goal throughout the industry. With the approval granted by the council, Loren’s and Valley Recycling’s profit margin will rise from 6.4% to 9.2%. After the 2021 increase, Harlan said, the haulers will achieve the 10% target. Without the increases profit margins would drop to 3.4%.
Day took issue with the reasoning and the timing of the request.
“Why do I care what the industry’s target is? We are not here to make sure private business is making a profit,” Day said.
Raising costs on essential services when people are struggling with the economic impacts of a global pandemic were also part of Day’s no-vote.
Essentially forcing haulers to operate at such a low margin gave Councilor Kyle Juran pause.
“If I were to try to operate on a 3% margin it would be hard to keep it going year to year. If I had to ask permission to raise my rates, I would be in trouble,” Juran said.
Even with the rate hike, Keizer won’t be an outlier compared to rates in nearby cities or Marion County as a whole.
“When I look at the rates and compare them to others, I think Keizer is still getting a pretty good bargain,” said Councilor Dan Kohler.
John Sulivan, general manager of Loren’s Sanitation, said both of Keizer’s haulers are willing to work with any residents having trouble meeting the monthly cost of garbage and recycling collection. Calling the haulers’ main offices is the first step to resolving the situation.
