Lacey City Council eyes exit from state regulated garbage collection 

The Lacey City Council is exploring a potential exit from state regulated solid waste collection.

Lacey is the only Washington city in its population range that is still subject to state regulation of garbage collection. 

During a council work session on May 26, Special Projects Administrator Shanelle Pierce presented options for exiting state regulation. She noted the state divided itself into 46 solid waste franchise areas in 1961, awarding contracts to private haulers. 

The Washington Utilities and Transportation Commission (UTC) has regulated those areas ever since, governing rates and service levels for garbage, recycling and yard waste collection. 

To exit UTC regulation, the City of Lacey must first negotiate a UTC transition franchise agreement with Harold LeMay Enterprises, doing business as Pacific Disposal, the company currently servicing Thurston County. The transition typically takes seven to 10 years, and a full contract with any private hauler is only possible after that period ends. 

Of Lacey's 13 peer cities, 11 have private hauler contracts: Kirkland, Pasco, Redmond, Shoreline, Burien, Bothell, Issaquah, Wenatchee, University Place, Walla Walla and Des Moines. 

Olympia and Yakima, meanwhile, provide their own municipal collection. None of the peer cities remain under UTC regulation, according to the staff report. 

Statewide, 92 cities still fall under UTC regulation, but those cities and towns are largely smaller, Pierce noted. 

Potential revenue stream 

A franchise agreement could also make the city eligible to collect fees from its hauler for the first time. 

Lacey currently cannot collect solid waste fees outside of a utility tax, but staff projected a 5.5 percent franchise fee could generate an estimated $444,583 annually based on historical utility tax data.  

A 1 percent fee would still produce about $80,833 per year. Any fee, however, requires a negotiated agreement with Pacific Disposal and is not guaranteed. 

Centralia's 2025-30 franchise agreement with LeMay, which was included in the staff report, illustrates what a negotiated deal could look like. The agreement includes a 5.5 percent franchise fee, free garbage and recycling collection at all city-owned facilities, and a 10 percent discount for low-income senior and disabled customers. 

An alternative 20-gallon mini cart is also available to qualifying customers at $9.50 per month. 

Mayor Andy Ryder said the city may have missed earlier opportunities to begin the process, noting previous negotiations would have opened more options for contracting with any private hauler. He encouraged staff to move forward with outreach to LeMay. 

Council Member Ryan Siu asked staff to gather comparable rate data from cities already through franchise agreements, specifically whether rates increased or decreased relative to the consumer price index after entering a deal. 

Jeanette Jurgensen, of Bin There Consulting, said rate comparisons between UTC-regulated and contracted cities are difficult. She said services are bundled differently in contracts, and overhead costs may shift when a jurisdiction separates from the wider UTC service area. 

For Lacey households, rate changes are not expected in the near term. Throughout the transition period, tariffs would continue to be set by the UTC. 

After negotiations with Pacific Disposal conclude, though, the city could pursue service customization, low-income customer discounts and new annual franchise revenue. 

City staffers plan to meet with Pacific Disposal in June or July, and will report findings to the council between July and August 2026.