The chairwoman of the Tulare Chamber of Commerce said that business operators in the city are confused and concerned about a proposal to increase the cost of commercial waste service by about 60 percent over five years.
But Renee Soto said her organization and its members aren’t ready to challenge City Hall on the rate hike proposal — at least not yet.
“I honestly was not aware of this, and I think most business owners are not aware of this,” said Soto about the Feb. 1 meeting of Tulare’s Board of Public Utilities.
The Business Journal contacted Soto and the Chamber prior to the meeting, and that was the first she had heard of the matter.
Those increases would occur in increments over five years, with a 20-percent hike each of the first two years, 10 percent the year after followed by hikes the next two years — fiscal 2021-22 and 2022-23 — equal to the rate of increase in the U.S. Consumer Price Index (CPI).
For now, city officials have estimated a 3-percent increase in the CPI each of those years, though the amount could end up being less or more. Using the city’s estimated numbers, the total increase in Tulare’s commercial trash bills would total just over 63 percent by the fifth year.
The proposal was no secret, as Tulare’s Public Works Director Trisha Whitfield noted the city had contracted for a study to look at it solid waste costs and funding needs, with a report issued in October. In addition, the matter was clearly stated in the agenda for last week’s BPU meeting, she added.
“It’s pretty large,” said Soto, who owns a Tulare insurance business. “I’m a small business owner, so I don’t know how my rates would compare to larger businesses.”
Also of concern is how much of the additional fees would affect the bottom lines of businesses in Tulare. The proposal includes a series of lesser, successive rate increases for renting roll-off garbage containers, which often are used in construction.
No rate hike is proposed for street sweeping and the only rate hikes for residential customers are two in fiscal 2021-22 and 2022-23 equal to CPI in those years — with the city using the 3 percent estimate, for now.
Soto said she was surprised about such a low residential rate increase, adding that at last week’s BPU meeting, the Chamber sent its CEO Donnette Silva Carter, who spoke along with Tulare Downtown Association Director John Harman.
“Basically, we commented along the lines that we were contacted by local businesses that shared concerns about the increase of rates,” Silva Carter said.
“People had not really heard about it, and they are curious about what it’s all about and why us, the need for the increase and how it affects their businesses and business expenses,” she said in an interview, adding that some operators mistakenly believed the matter involved raising all of their utility rates.
Rather than launch an opposition campaign, Soto said the Chamber is waiting to decide how to respond and has asked city officials to come to the organization’s government affairs meeting on March 1 to explain the reasons for the rate hike and why businesses seem to be bearing the brunt of it.
“I would really need to have somebody explain to me why they need that kind of increase,” said Bill Brown, a partner in Apple Annie’s restaurant in Tulare. “I wish I could increase my menus 63 percent over five years, but then I would be out of business.”
He added, “I am not opposed to an increase,” as solid waste costs probably are going up, “but to increase that sort of amount, they would need to give me a reason why.”
Brown also expressed concerns that politicians “always assume that businesses have money” without taking into account their growing costs, which includes having to raise minimum wage to $15 in the coming years under California law.
Some businesses barely getting by will struggle with such a high bump to their trash bills, he added.
During their meeting last week, the BPU board voted to advance the rate proposal to the Tulare City Council, but part of that includes holding a public hearing on the matter in April where business operators and the public can weigh in.
Tulare city officials will soon be sending out letters to trash customers explaining the issue and why the city needs to raise trash rates.
A draft of that letter states the added revenues would be used “to ensure that the utility collects sufficient revenue to cover fixed expenses, to fund capital improvements and to increase reserves used to fund ongoing repair and replacement of the solid waste operations in order to maintain reliable service in future years.”
It goes on to say that over the next five years, Tulare officials plan to make operational and capital improvements to the city’s solid waste operations, which would include increasing Solid Waste Division staff “to meet the city’s growth since the previous rate increases in 2011.”
The letter also cites added costs for taking on more customers as the city has grown and the added distance haulers are driving to transport garbage to a landfill north of Visalia after a closer one in Woodville shut down in 2013.
“The last increase we did for solid waste [fees] was 2009-11,” at which time both commercial and residential rates went up by 10 percent each of the three years, said Whitfield, who confirmed the reasons fore the current proposal stated in the letter.
She said she couldn’t provide estimates on how much additional revenue would be raised by the new rates.
“We found over there years that they are just not covering their costs of services,” Whitfield said of the current commercial trash rates.
But residential fees are more than covering their costs for services provided, and they’re helping fund other portions of Solid Waste Division services, which is why significant residential rate hikes aren’t being sought, she added.