HomeMy WebLinkAboutUtilities 2009-04-14 Item 3A - Discussion - Solid Waste Utility TaxCity of Tukwila
TO: Mayor Haggerton
Utilities Committee
FROM: Public Works Directo
DATE: April 8, 2009
SUBJECT: Solid Waste Utility Tax
ISSUE
INFORMATlONA! MEMORANDUM
Jim Haggerton, Mayor
Provide estimated revenues that would be generated from imposing a utility tax on solid waste
services.
BACKGROUND
During the March 10, 2009 Utilities Committee Meeting, the Committee requested a report
providing revenue projections assuming a 4 6% and 8% utility tax on solid waste services.
DISCUSSION
Under Washington State law, cities are authorized to levy a utility tax on solid waste services.
There is currently no limitation placed on solid waste utility tax rates. In a 2008 survey
conducted by the Association of Washington Cities, over 140 cities reported imposing utility
taxes on solid waste services. Some cities reported rates as high as 20 -40 Of the South
King County cities that charge solid waste utility taxes, on average the tax is 6%.
The total utility tax revenue that the City would receive depends on the following key factors:
1. Utility tax rate selected. Based on the Utilities Committee's guidance, a 4%, 6% and
8% utility tax rate on gross revenue is assumed.
2. Type of account (commercial or residential) that would be affected with the tax.
3. A determination must be made on whether the tax would be applied to both the disposal
and service fees.
The attached Utility Tax Options sheet provides four options for the Committee's
consideration. Based on the assumptions and factors discussed above, the City could
potentially collect approximately $12,298.71 to $46,176.87 per month in utility taxes.
The attached Solid Waste Rate Adjustment sheet illustrates the effect of Option 1 on selected
residential and commercial service levels.
The implementation of a solid waste utility tax would require Council approval and an
ordinance. No change to the current contract with Allied Waste is required.
RECOMMENDATION
Present to the Utilities Committee for information.
Attachments: Utility Tax Options
Solid Waste Rate Adjustment
P:\PROJECTS \SOLID WASTE \Infomation Memo -Solid Waste Utility Tax sb.doc
1
City of Tukwila
Solid Waste Utility Tax Options
Option #1: iriCrease Disposal Service fees on all accounts
}Account Type: 4.0% 6.0% 8.0%
Residential $1,883.76 $2,825.65 $3,767.53
'Commercial 21,204.671 31,807.00 42,409.34
Total Monthly Revenue: 1 $23,088.43 1 $34,632.65 1 $46,176.87 1
Option #2: Increase only Service fees on all accounts
}Account Type: 4.0% 6.0% 8.0% 1
(Residential $1,092.58 $1,638.87 $2,185.17
Commercial 12,298.71 18,448.06 24,597.42
Total Monthly Revenue: 1 $13,391.29 1 $20,086.93 1 $26,782.59 1
Option #3: Increase Disposal Service fees on Commercial account
'Account Type: 1 4.0% j 6.0% i 8.0% I
(Commercial 1 21,204.67 31,807.00 I 42,409.34 1
Total Monthly Revenue: 1 $21,204.67 1 $31,807.00 1 $42,409.34 1
Option #4: Increase only Service fees on Commercial account
(Account Type:
(Commercial
Total Monthly Revenue:
P \PROJECTS \SOLID WASTE \Uthlrty Tax Options- 4 -8 -09
4.0% 6.0% 8.0%
12,298.71 I 18,844.06 1 24,597.421
$12,298.71 1 $18,844.061 $24,597.421
2
Residential:
Commercial:
P \PROJECTS \SOLID WASTE \Solid Waste Rates with Utiity Tax Applied- Optionl.doc
SOLID WASTE RATES
UTILITY TAX OPTION #1
(Monthly Disposal Service Charges)
Description Current Rate 4% 6% 8%
10 Gal Mini Can 7.55 7.85 8.00 8.15
20 -Gal Mini Can 8.87 9.22 9.40 9.58
32 -Gal Can /Toter 11.97 12.45 12.69 12.93
64 -Gal Gal Toter 17.14 17.83 18.17 18.51
90 -Gal Toter 24.74 25.73 26.22 27.72
Description Current Rate 4% 6% 8%
1 Yard Container
2 -Yard Container
4 -Yard Container
6 -Yard Container
10 -Yard Container
12.36 12.85 13.10 13.35
21.68 22.55 22.98 23.41
41.11 42.75 43.58 44.40
57.37 59.66 60.81 61.96
106.07 110.31 112.43 1 14.56