HomeMy WebLinkAboutTIC 2019-05-21 Item 2D - Ordinance - Amend Solid Waste Utility Tax Rate and Recycling Surcharge for Commercial OnlyPublic Works Department - Henry Hash, Director
INFORMATIONAL
EMORANDU
Allan Ekberg, Mayor
TO: Transportation and Infrastructure Committee
FROM: Henry Hash, Public Works Director
BY: Hari Ponnekanti, City Engineer
CC: Mayor Allan Ekberg
DATE: May 17, 2019
SUBJECT: Solid Waste (Commercial Only)
Ordinance Amending Solid Waste Utility Tax Rate and Recycling Surcharge
ISSUE
There are two separate but related issues: (1) Approve an ordinance to adjust the Solid Waste Utility Tax
by 10% and amending TMC 3.51; and (2) Approve a Letter of Understanding with Waste Management
of Washington, LLC (WM) for additional services and a 5% Recyclable Cost surcharge. Both issues would
only impact commercial users.
BACKGROUND — Issue 1: Utility Tax
Many causes of asphalt damage exist, leading to roadways needing repair and replacement. Specifically,
heavy solid waste vehicles can cause significant damage to road surface and shorten the life of
pavement. The expenses to operate and maintain the City's road infrastructure have increased each
year.
BACKGROUND — Issue 2: Recycling Costs
Waste Management (WM) recently made a presentation to the Transportation and Infrastructure
Committee about the changes in the global recycling market and the increased costs. In order to offset
the additional costs associated with recycling, WM has requested an increase to the recycling rates.
DISCUSSION — Issue 1: Utility Tax
An existing Solid Waste Utility Tax provides a revenue source to the City's general fund which can be
used to fund roadway and roadway related projects. Adjusting the Solid Waste Utility tax is proposed to
provide additional revenue to the City where the increased percentage can be used for road maintenance
and road related projects. The current solid waste utility tax rate is 6% and it has not been adjusted since
2009. The increase in the Solid Waste Utility Tax would be effective beginning November 1, 2019.
DISCUSSION — Issue 2: Recycling Costs -
Staff recommends that the City approve the 5% Commercial Recyclable Cost surcharge to offset WM's
costs associated with the weakening recycling market. The proposed surcharge would be in place for
two years, beginning November 1, 2019, but it may be extended with Council approval. Also included
with this surcharge, WM will now pick up twice weekly, an additional 20 City -owned garbage containers
at locations chosen by the City (see attached location list).
FINANCIAL IMPACT
The proposed utility tax and the recycling surcharge only apply to commercial users, not residential. With
the proposed increases, the solid waste and recycling rates remain below Tukwila's neighboring cities.
The following two tables illustrate the impacts of the two proposed increases and compare the proposed
rate for Tukwila commercial customers with rates charged by nearby jurisdictions. Additional details can
be found in the attachments.
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Informational Memo
Page 2
Breakdown of Proposed Monthly Increases
Size
Current
Tukwila Rate
5%
Surcharge
5% Total
Rate
10% Utility
Tax
Proposed
Total
Rate
1- yard
$70.80
$3.54
$74.34
$7.44
$81.78
1.5- yard
$99.06
$4.95
$104.01
$10.40
$114.41
2- yard
$122.20
$6.11
$128.31
$12.83
$141.14
3- yard
$175.14
$8.76
$183.90
$18.39
$202.29
4-yard
$228.33
$11.42
$239.75
$23.97
$263.72
6- yard
$323.89
$16.19
$340.08
$34.01
$374.09
8- yard
$424.54
$21.23
$445.77
$44.58
$490.35
Comparison of Monthly Recycling Rate Charges by Jurisdiction
Size
Current
Tukwila
Proposed
Tukwila
SeaTac
Newcastle
Burien
Des
Moines
1-yard
$70.80
$81.78
$109.06
$123.73
$94.63
$94.15
1.5-yard
$99.06
$114.41
$146.74
$169.99
$137.03
$137.09
2-yard
$122.20
$141.14
$188.78
$213.87
$176.14
$177.27
3-yard
$175.14
$202.29
$270.11
$314.37
$254.39
$257.65
4 Yard
$228.33
$263.72
$351.59
$385.75
$312.91
$332.53
6 Yard
$323.89
$374.09
$502.40
$533.30
$449.68
$482.27
8 Yard
$424.54
$490.35
$659.41
$669.97
$573.31
$620.99
RECOMMENDATION
(1) Staff recommends Council approve the ordinance establishing the Solid Waste Utility Tax at 16%,
effective November 1, 2019, and to consider this item at the May 28, 2019 Committee of the Whole and
the subsequent June 3, 2019 Regular Meeting.
(2) Staff recommends approving a 5% Recycling Rate Surcharge, effective November 1, 2019 for two
years, and to consider this item at the May 28, 2019 Committee of the Whole and the subsequent June
3, 2019 Regular Meeting.
ATTACHMENTS
• Draft Ordinance
• Draft Letter of Understanding
• Solid waste rate comparison tables
• Draft additional garbage collection locations
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AN ORDINANCE OF THE CITY COUNCCITY OF
TUKWILA, WASHINGTON, AMENDIN r4 ANC . 2250
§1 (PART), TO INCREASE THE SO STE UTILI AX;
PROVIDING FOR SEVERABILIT 'AND ESTABLISH
EFFECTIVE DATE.
WHEREAS, the City Council shall periodically r ®'gyider the need for a Solid Waste
Utility Tax given current economic co ions; and
WHEREAS, the heavy vehicles us
significant wear and tear, thereby shorten
for costly maintenance and repair; and
WHEREAS, the
authorized; and
waste coil
of roa
mpact City streets with
and accelerating the need
ailed itself , all appropriate revenue sources currently
WHEREAS, the Cit inter ce service levels may suffer a reduction
without a n
e in olio waste utility tax measured by gross income from
no r��,��® tial custome�® �> expec o generate additional revenue to help offset the on-
going im. .f heavy veh opera ions and maintain current road condition levels; and
WHERE e City Cat ncil has determined the public interest is best served by a 10%
increase to thee utility tax, with the increased percentage amount to be
designated for roa • 4 y`enance and road related projects;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 3.51.020 Amended. Ordinance No. 2250 §1 (part), as
codified at Tukwila Municipal Code (TMC) Chapter 3.51.020, "Use and Accountability of Tax
Proceeds," is hereby amended to read as follows:
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3.51.020 Use and Accountability of Tax Proceeds
1. All revenues collected pursuant to this chapter shall be deposited into the
General Fund, and shall be used for the funding of City services or capital requirements
as the fit Council shall direct through its biennial budget process.
2. In addition to the automatic annual review of the Financial Planning Model, the
City Council will review the need for rate or other changes as part of the biennial budget
process.
3. The City Council shall periodically reconsider the needy a Solid Waste Utility
Tax given current economic conditions.
Section 2. TMC Section 3.51.040 Amended. Or ' - o. 2250 §1 (part), as
codified at TMC Chapter 3.51.040, "Occupations Sub j- to T:a Amount," is hereby
amended to read as follows:
3.51.040 Occupations Subject to Tax — Amo
A. There is levied upon, and shall be colle
business activities engaged in or carried on in the Cit
determined by the application of rate •'ven against gro
erson becse of certain
kwila, taxes in the amount to be
ome as follows:
B. Upon a person engaged in or' ' •• n the bust
collection service, a tax equal to 6 1dar ye
the total gross income from such business
customers, during the p_'� which the f: `,` due.
Section 3. T,
Year," as codified *a
3.51.050 T
T
O:
commen
ax year for
20O9Noven 1
►- • January
f providing solid waste
9 2020 and beyond of
in the City, except residential
1.050 Ames • ed. Ordinance No. 2250 §1 (part), "Tax
3.51.050, is 4Q by amended to read as follows:
0'1 •end December ease in the solid waste utility tax shall commence
^ 31, 92020, and thereafter shall
end, n December 31 each year. ��� ���
Section by City Clerk or Code Reviser. Upon approval of the City
Attorney, the Clerl: nd the code reviser are authorized to make necessary
corrections to this •• `, ce, including the correction of clerical errors; references to other
local, state or feder laws, codes, rules, or regulations; or ordinance numbering and
section/subsection numbering.
Section 5. Severability. If any section, subsection, paragraph, sentence, clause,
or phrase of this ordinance or its application to any person or situation should be held to
be invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity of constitutionality of the
remaining portion of this ordinance or its application to any other person or situation.
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Section 6. Effective Date. This ordinance or a summary thereof shall be published
in the official newspaper of the City, and shall take effect and be in full force five days
after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2019.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk Allan Ek
APPROVED AS TO FORM BY:
Rachel B. Turpin, City Attorney
Pu.
Effec
Ordinan
with the City Clerk:
•d by t City Council:
ate:
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May Xx, 2019
Mindy Rostami
Senior Manager, Strategic Contracting & Municipal Legal A
Waste Management of Washington Inc.
720 4th Avenue, Suite 400
Kirkland, WA 98033
RE: Additional Services and Extra Ordinary Recyclable Cos
Dear Ms. Rostami,
The purpose of this Letter of Understanding ("LOU") is to approve an recyclable market
surcharge between the City of Tukwila ("City") and Waste Management of Washington, Inc.
("WM").
City and WM agree to increase Commercial rates by five percent (5%), effective November
1, 2019, to reflect increased costs in recyclables processing and marketing. This surcharge is
only approved for a period of 2 years, However WM may request to extend the surcharge
by providing justification of the need to the City. Any request must be made no later than
90 days prior to the end of the 2-year surcharge period and must be approved by both
parties.
Furthermore, WM agrees to commence twice weekly collection and disposal service for
twenty (20) city -owned Garbage containers at locations chosen by the City staff for the
duration of the Agreement. The City reserves the right to change the locations of these
Garbage cans.
By signing below, each of the City and Waste Management acknowledges its approval and
acceptance of the terms of this LOU and acknowledges that this LOU: (a) creates a legally
binding obligation upon the parties, (b) shall be governed and constructed in accordance
with the laws of the State of Washington regardless of any conflict of law provisions, (c) sets
forth the entire agreement between the City and WM with respect to the subject matter
hereof and supersedes all prior negotiations, representations, understandings and
agreements with respect to the subject matter hereof, and (d) may be executed in two or
116
more counterparts, each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.
Acknowledged and agreed upon by:
CITY OF TUKWILA WASTE MANAGEMENT OF
WASHINGTON, INC.
By: By:
Its: Its:
117
cai
• Tukwila (Current) Tukwila (5% Surcharge + 10% Utility tax) I SeaTac Newcastle • Burien • Des Moines
1 YARD
1.5 YARD
N
N
r
2 YARD
3 YARD
LO
COI
N
CY)
rn
N
cx)
4 YARD
CYO
CO
U
6 YARD
N
N
N
N
r
N
8 YARD
$ 70.00
$60,00
$ 50, 00
$30,00
$20.00
$Eaa
10 gal,
')1
20 gal.
35 gal.
Tukwila (Current) a SeaTac a Newcastle
$47.82
6
64 gal,
Burien II Des Moines
Page 10
$36,4
$59.72
40.
96 gal.
Additional City -Owned Garbage Containers
1. Tukwila Intl Blvd — Northbound, (2) cans at the bus stop by KFC and Taco Bell.
2. Tukwila Intl Blvd — Northbound, (2) cans at the bus stop north of S. 148th Street at
Pizza Hut.
3. Tukwila Intl Blvd — Northbound, (2) cans at the bus stop north of S. 144th Street by
Car Wash.
4. Tukwila Intl Blvd — Northbound, (2) cans at the bus stop at S. 140th Street.
5. Tukwila Intl Blvd — Southbound, (2) cans at the bus stop south of S. 141st Street at
the Casino.
6. Tukwila Intl Blvd — Southbound, (2) cans at the bus stop south of S. 144th Street at
the Market.
7. Tukwila Intl Blvd — Southbound, (2) cans at the bus stop south of S. 148th Street at
the Church.
8. Tukwila Intl Blvd — (2) cans at the NE & NW intersections with S. 144th Street.
9. S. 144th Street — Westbound, (1) can at the bus stop west of 37th Ave South at the
Park.
10. S. 144th Street — Eastbound, (1) can at the bus stop east of 37th Ave South at the
Market.
11. S. 144th Street — Westbound, (1) can in front of brick structure.
12. S. 144th Street — Eastbound, (1) can in front of brick structure.
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