Interoffice Memorandum
DATE: May 14, 2025
TO: Mayor Jerry L. Demings and County Commissioners
THROUGH: N/A
FROM: Ed Torres, MS, PE, LEED AP, Director, Utilities
CONTACT: David Gregory, Manager, Solid Waste Division
PHONE: 407-254-9622
DIVISION: Solid Waste Division
ACTION REQUESTED:
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Approval to establish the haulers’ compensation rates as listed, set the MSBU rate of $400 for Program Year 2026, and authorization to include the Tentative Mandatory Refuse Collection Program Rate of $400 on the 2025 Notice of Proposed Taxes. All Districts. (Solid Waste Division)
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PROJECT: N/A
PURPOSE: Orange County contracts with waste hauling companies (Haulers) to provide residential solid waste and recyclable materials collection service through the Mandatory Refuse and Recycling Program (Program). Section 32-183 of the Orange County Code requires that the Board set the annual compensation rate to the contract waste hauling companies for collection of solid waste and recyclable material by July 15th of each year. Additionally, in order to include the Municipal Services Benefit Unit (MSBU) assessment for the Program on the Notice of Proposed Taxes, the Board also needs to set the tentative MSBU rate per household. This memo outlines the Program cost components, the Hauler compensation, and the MSBU rate recommendation for Program Year 2026. The final approval of the MSBU rate will occur during the first budget public hearing in September.
The MSBU rate has six main components: Collection, Disposal, Program Administration, Recycling, Cart, and Reserves/Rate Stabilization. The collection component reflects the payments to Haulers to provide waste and recycling collection services to Program households. On November 19, 2024, the Board approved the award of contracts for Residential Solid Waste and Recycling Collection Service to FCC Environmental Services of Florida, LLC for Zone 4 and Zone 5, GFL Solid Waste Southeast, LLC for Zone 3, Waste Management Inc. of Florida for Zone 6, and Waste Pro of Florida, Inc. for Zone 1 and Zone 2. In awarding the contracts, the annual compensation rates to the Haulers were determined by the amounts set forth in their proposals for collection service. The compensation to the contract haulers for calendar year 2026 will be as follows:
Zone 1 $297.60 per Residential Unit
Zone 2 $328.56 per Residential Unit
Zone 3 $324.00 per Residential Unit
Zone 4 $275.16 per Residential Unit
Zone 5 $306.96 per Residential Unit
Zone 6 $303.48 per Residential Unit
The system weighted average for the 2026 collection component is $305.92 per household. This is a $137.60 or 81.75 percent overall increase from the 2025 collection component.
Disposal Component
The disposal component of the MSBU represents the cost for disposing of residential solid waste material. The projected system average disposal per household is 1.14 tons of Class I and 0.26 tons of yard waste per household. The average system disposal cost is increasing primarily because of an increase in tipping fees. The annual disposal component for 2026 is projected at $76.30 per household. This represents a $8.02 or 11.75 percent increase from the 2025 disposal component.
Program Administration Component
The program administration component represents the cost per household for operation and administration of the Program, including customer service support. The principal causes for the increase to this component are the intradepartmental charges for customer service, managerial, fiscal, and administrative support required for program operations. For 2026 program administration costs are $18.24 per household, an increase of $4.85 or 36.25 percent from the 2025 cost component.
Recycling Component
The recycling component represents costs associated with processing collected recyclables and the Recycling Quality Improvement Program that provides enhanced education and direct curbside feedback to residents about their setout recyclables. Cost reductions in this component reflect projected recycling expenses. For 2026, program recycling component costs are $30.22 per household, a decrease of $5.85 or 16.22 percent from the 2025 cost component.
Cart Component
Historically, the cart component represents the cost per household per year for the purchase of new carts and funding replacement carts over the term of the contract. With the start of the new collection contracts, the haulers will be responsible for maintaining cart inventories, replacing damaged carts, and providing carts to new residences. This component will be removed from future discussions of Program cost components. For 2026, the cart component is $0 per household, which is a decrease of $14.62 or 100 percent from the 2025 cost component.
Reserves/Rate Stabilization Component
The rate stabilization/reserves component was established to provide funding for reserves that were to be used to replenish the initial $20 million cart purchase in 2015 and to help smooth out any required future rate increases. Because the cart responsibility will transfer to the haulers in the new contract, reserved funds will be used to smooth the required rate increase. For 2026, the reserves/rate stabilization component costs are ($30.68) per household.
MSBU Rate Recommendation
The total cost of the program with the reserves/rate stabilization component for 2026 is $400 per household an increase of $100.00 or 33.33 percent from 2025. Staff recommends setting the MSBU rate for 2026 at $400 per household.
A summary of rate components is shown in the table below.
2026 Tentative Mandatory Refuse Collection Program MSBU Rate Components
Component CY 2025 CY 2026 Change
Collection $168.32 $305.92 $137.60
Disposal $68.28 $76.30 $8.02
Administration $13.39 $18.24 $4.85
Recycling $36.07 $30.22 ($5.85)
Carts $14.62 $0.00 ($14.62)
Reserves/Rate Stabilization -$0.68 ($30.68) ($30.00)
Total $300.00 $400.00 $100.00
BUDGET: N/A