GreenWaste Recovery Inc. out of San Jose serves both communities with weekly collection of garbage, recyclable materials and compostable materials. In presentations to the councils, company officials noted that customers are producing less garbage — the key to the current rate structure. In both cases, GreenWaste asked for 8.58 percent increase and was refused.
The rate structure is old, said Emily Hanson, GreenWaste's director of business development and communications. It's a vestige of the days when people needed incentives to recycle, and collection companies responded by making recycling and yard waste collection free. "As the industry has evolved, we still have a cost based on garbage volume," she told the Portola Valley council. "We're trying to catch-up the rate model to match the processing system."
Because rates are based on the garbage component, customers can put out any number of carts of recyclable and compostable materials and it does not affect the fee, Ms. Hanson said. Frequent shoppers at Amazon.com, a generator of packaging waste, are being subsidized, Mayor Ann Wengert noted.
GreenWaste's expenses have also risen faster than the consumer price index. According to statistics provided by the company, health insurance premiums have gone up 39 percent and diesel fuel up 54 percent over the last five years. (The U.S. Energy Information Administration shows California diesel fuel prices rising 48.5 percent since 2009.)
Costs for transporting compostable materials are up 14 percent, and while composting effectively recycles materials that would otherwise rot in landfills, the company is lucky if it can give it away, Ms. Hanson said.
Meanwhile, revenues from selling recyclables, a volatile market that depends on the state of the Chinese economy, dropped 13.5 percent between 2011 and 2013, she said.
One goal for the new rate structure, Ms. Hanson said, is an innovative, sustainable volume-based fee, or "Pay as you throw." Another is using the methane from the composting process to fuel the trucks — when the current fleet is replaced and if trucks of the right size are equipped with natural-gas engines, said Frank Weigel, the chief operating officer.
When might a new rate structure be ready, Mayor Ann Wengert wanted to know. Perhaps three months, Ms. Hanson said. Worst case would be January 2015, she added. Collecting waste material is "an incredibly complex business," she said at one point.
Councilwoman Maryann Moise Derwin wondered why the town held back on the other 3 percent. To give GreenWaste an incentive to figure out a better rate structure, Town Manager Nick Pegueros said.
"We certainly don't, from our perspective, want to be seeing you losing money," Ms. Wengert said.