Loading...
HomeMy WebLinkAboutCOW 2019-07-08 Item 3D - Ordinance / Letter of Understanding - Solid Waste Utility Tax and Recycling Surcharge for CommercialCOUNCIL AGENDA SYNOPSIS -------------IrziIial.; Meetio D zle Prepared by May evien' Ca,,acrl rc:niez 07/08/ .9 HK 1... 07/15/19 HK ITEM INFORMATION ITEM No. 3.D. S`rr\ ' ' SPONSOR: HARI PONNEKANTI ORIGIN \I, AGI:ND \. a\ I'I.: 07/08/19 AGENDA ITEMITITLE Solid Waste (Commercial Only) Ordinance Amending Solid Waste Utility Tax Rate and Recycling Surcharge on 7/08/19 E Motion Mt5 Date ❑ Resolution Mtg Dale ❑ Bid: i;nard ❑ Public•: -loaring Date ❑ Other 1L1t5 Dale C. '1'I:GORY ►1 Disew ►1 Ordinance Mtg Date AJ/g Date 07/15/19 SPONSOR ❑Council Clllayor CL-CR ❑DCD ❑Finn'e ❑:Fire ❑TV ❑Pc K CI'olie 0PIt% ❑Court SPONtioR'S Council is being asked to approve two items; 1) Approve an Ordinance amending TMC 3.51 SLTM\I, R1' that establishes the Solid Waste Utility Tax to 11%, effective 11/1/19, and thereby to 16%0 efffective 07/01/20 and, 2) Approve a Letter of Understanding with Waste Management of Washington, Inc for additional services and a 5%o Recyclable Cost surcharge. Both items will only impact commercial customers for solid waste collection throughout the City. REVIEWED BY ® C.O.W. Mtg. ❑ CDN Comm ❑ Arts Comm. 21/ 19 & 06// 18/ 19 ❑ Finance ❑ Parks Comm. ❑ Public Safety Comm. Comm. ❑ Planning Comm. CHAIR: ZAK IDAN /1 Trans &Infrastructure DATE: 05/ COMMI EPEE RECOMMENDATIONS: SPONSOR/AI)NIIN. COMM Public Works Department ITT I? Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPENDTT'URE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $0 $0 $0 Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 07/08/19 07/ 15/ 19 MTG. DATE ATTACHMENTS 07/08/19 Informational Memorandum dated 06/14/19 Draft Ordinance - Revised after 06/24/19 Trans & Infrastructure Cmte recommendations Draft Letter of Understanding Solid Waste Rate Comparison Tables Draft Additional Garbage Collection Locations Minutes from the Transportation and Infrastructure Committee Meeting of 6/18/19 07/15/19 81 82 10,0;44, Public Works Department - Henry HasDirector I F TI L 0 Allan Ekberg, Mayor TO: Transportation and Infrastructure Committee FROM: Henry Hash, Public Works Director BY: Hari Ponnekanti, City Engineer CC: Mayor Allan Ekberg DATE: June 14, 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% (in two increments) 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 implemented in two increments with the first increase from 6% to 11% effective beginning November 1, 2019 and the second increase from 11% to 16% effective July 1, 2020. 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. This recyclable surcharge is only approved for a period of two -years, from November 1, 2019 through October 31, 2021, 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 two-year surcharge period and must be approved by both parties. 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. 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 83 IIPWStore1PW Common$1PW Eng \OTHER\ Hari PonnekantilInfoMernoTIC0618-HRdocx Infoimational Memo Page 2 Breakdown of Proposed Monthly Increases Size Current Tukwila Rate Existing 6')/0 Utility tax 5% Recycling Surcharge Effective Nov, 2019 Rate Increase 5% Utility Tax Effective Nov, 2019 Rate Increase 5% Utility Tax Effective July, 2020 Total Rate Including increase in utility tax and proposed surcharge 1- yard $70.80 $4.25 $3.54 $3.54 $3.54 $85.66 1.5- yard $99.06 $5.94 $4.95 $4.95 $4.95 $119.86 2- yard $122.20 $7.33 $6.11 $6.11 $6.11 $134.20 3- yard $175.14 $10.51 $8.76 $8.76 $8.76 $211.92 4-yard $228.33 $13.70 $11.42 $11.42 $11.42 $276.28 6- yard $323.89 $19.98 $16.19 $16.19 $16.19 $391.91 8- yard $424.54 $25.47 $21.23 $21.23 $21.23 $513.69 Comparison of Monthly Recycling Rate Charges by Jurisdiction Size Current Tukwila Proposed Tukwila SeaTac Newcastle Burien Des Moines 1-yard $70.80 $85.66 $109.06 $123.73 $94.63 $94.15 1.5-yard $99.06 $119.86 $146.74 $169.99 $137.03 $137.09 2-yard $122.20 $134.20 $188.78 $213.87 $176.14 $177.27 3-yard $175.14 $211.92 $270.11 $314.37 $254.39 $257.65 4 Yard $228.33 $276.28 $351.59 $385.75 $312.91 $332.53 6 Yard $323.89 $391.91 $502.40 $533.30 $449.68 $482.27 8 Yard $424.54 $513.69 $659.41 $669.97 $573.31 $620.99 RECOMMENDATION (1) Staff recommends Council approve the ordinance establishing the Solid Waste Utility Tax at 11%, effective November 1, 2019, and thereby to 16% effective July 1, 2020 and to consider this item at the July 8, 2019 Committee of the Whole and the subsequent July 15, 2019 Regular Meeting. (2) Staff recommends approving a 5% Recycling Rate Surcharge, effective November 1, 2019 for two years, and to consider this item at the July 8, 2019 Committee of the Whole and the subsequent July 15, 2019 Regular Meeting. ATTACHMENTS • Draft Ordinance • Draft Letter of Understanding • Solid waste rate comparison tables • Draft additional garbage collection locations 84 \\PWStore\PW Common$WW Eng \ OTHER \Hari Ponnekanti\InfoMemoTIC0618-HP.docx NOTE: Strike-through/underline text shows changes made after the 5/28/19 Committee of the Whole meeting, and before (and after) the 6/18/19 Transportation and Infrastructure Committee meeting. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING ORDINANCE NO. 2250 §1 (PART), TO INCREASE THE SOLID WASTE UTILITY TAX; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council shall periodically reconsider the need for a Solid Waste Utility Tax given current economic conditions; and WHEREAS, the heavy vehicles used for solid waste collection impact City streets with significant wear and tear, thereby shortening the life span of roads and accelerating the need for costly maintenance and repair; and WHEREAS, the City has availed itself of all appropriate revenue sources currently authorized; and WHEREAS, the City's basic road maintenance service levels may suffer a reduction without a new source of revenue; and WHEREAS, an increase in the solid waste utility tax measured by gross income from non-residential customers is expected to generate additional revenue to help offset the on- going impact of heavy vehicle operations and maintain current road condition levels; and WHEREAS, the City Council has determined the public interest is best served by a 10`)/0 increase to the existing 6% solid solid waste utility tax, with the increased percentage amount to be designated for road maintenance and road related projects; and WI E E incrementally increasing the solid waste utility tax to 11% on November 1, 2019, and then to 16°/o on July 1, 2020, will allow customers time to adjust to the increases; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: W: Legislative Development\Solid Waste Utility Tax increase strike -through 6-24-19 CK:bjs Review and analysis by Barbara Saxton Page 1 of 3 85 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: 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 City Council shall direct through its biennial budget process. a, The revenues shall be used as follows: (1) 6% shall remain in the General Fund and may be used for any City purpose. (2) The remaining revenues may remain in the General Fund, and will be dedicated to maintain and repair City streets 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 need for a Solid Waste Utility Tax given current economic conditions. Section 2. TMC Section 3.51.040 Amended. Ordinance No. 2250 §1 (part), as codified at TMC Chapter 3.51.040, "Occupations Subject to Tax — Amount," is hereby amended to read as follows: 3.51.040 Occupations Subject to Tax — Amount A. There is levied upon, and shall be collected from a person because of certain business activities engaged in or carried on in the City of Tukwila, taxes in the amount to be determined by the application of rates given against gross income as follows: B. Upon a person engaged in or carrying on the business of providing solid waste collection service, a tax equal to 6% for the calendar year 2020 and beyond of the total gross income from such business from all customers in the City, except residential customers, during the period for which the tax is due. On November 1, 2019, said tax rate shall increase to 11%, and shall then increase to 16% effective July 1 2020 W: Legislative Development\Solid Waste Utility Tax increase strike -through 6-24-19 CK:bjs Review and analysis by Barbara Saxton Page 2 of 3 86 Section 3. TMC Section 3.51.050 Amended. Ordinance No. 2250 §1 (part), "Tax Year," as codified at TMC Chapter 3.51.050, is hereby amended to read as follows: 3.51.050 Tax Year The tax year for purposes of this -increase in the solid waste utility tax shall commence on January 1 and end on December 31 each year, except for the following tax periods which constitute separate tax periods: November 1, 2019 to June 30, 2020, and July 1, 2020 to December 31 2020.November 1 2019 and end December 31 2020 and Section 4. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal 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. 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, WASH NGTON, at a Regular Meeting thereof this day of , 2019. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Rachel B. Turpin, City Attorney Allan Ekberg, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Legislative Development\Solid Waste Utility Tax increase strike -through 6-24-19 CK:bjs Review and analysis by Barbara Saxton Page 3 of 3 87 88 Allan Ekberg, Mayor Public Works Department- Henry Hash, Director June 4, 2019 Mary Evans Area Director, Public Sector Solutions Pacific Northwest/BC Area Waste Management of Washington, Inc. 720 4th Avenue, Suite 400 Kirkland, WA 98033 RE: Additional Services and Recyclable Market Surcharge City of Tukwila Contract No. 12-027 Dear Ms. Evans, The purpose of this Letter of Understanding ("LOU") is to approve a 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 recyclable processing and marketing. This recyclable surcharge is only approved for a period of two -years, from November 1, 2019 through October 31, 2021, 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 two-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 containers. By signing below, the City and Waste Management acknowledge 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 more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 6300 Building o 6300 Southcenter Boulevard Suite 100 © Tukwila, WA 98188 0 206-433-0179 Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 9 188 • 206-433-1800 • Website: TukwilaWA.gov 89 Waste Management Letter of Understanding Page 2 Acknowledged and agreed upon by: CITY OF TUKWILA WASTE MANAGEMENT OF WASHINGTON, INC. By: By: Its: Its: VVVVV Eng1PROJECTS \Solid Waste\WM LOU Recycling 060419.Docx 6300 Building o 6300 Southcenter Boulevard Suite 100 0 Tukwila, WA 98188 0 206-433-0179 Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov 90 Tukwila (Current) fukwila (5% Surcharge + 1.6% Utility tax) SeaTac Newcastle ir Burien im Des Moines LID II) CC) C) JC Cr) Lc, 0 • CO 0, Li) LO- 1 YARD to CY:1 CO tO 0 tO in -VD, CO *O. OS CO OD CD 0 CO rr) TiC 1.5 YARD it 2 YARD U- PS 3 YARD LC; CC), U1 r,1 4 YARD Ui PU 0- 11 ciT 6 YARD CO if) CC r-, CO p 'CC U Cr, a- CC) LC.) CO 8 YARD sit co N �6OOO S50OO ,l8,95 S17'41==. 10eai $31.49 Z0ga|. $Z4.19 $38.44 358aL 648aL $40.28 pagem $59.72 46.7 94 Trash Pick-up Locations 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. W. PW EngtOTHERICyndy Knighton\TIC Agenda Items\5-21-19\WM Solid Waste Utility Tax \Garbage Can Locations.doc 95 96 Tukwila iMap )!, 0,N,',4m401 97 98 ia iMap 37 42 AA A4244, W't 44444 ,1444r, 14, - 4,1z 4 A44,4 , 4 AMAgi,k4iAl., MAO' 1440.4 1 4404 99 100 C^ty f Tukwila CifvCouncil T[an5DOrtnt'oDB^|n6'a3hmrtU[eFo00'ttee TRANSPORTATION Q^INFRASTRUCTURE COMMITTEE Meeting Minutes June 18, 2019 - 5:30p.m. - Hazelnut Conference Room, CityHoll Coundin/ernbenz Zak |dan.Chair; Kate Krui|er,Thomas McLeod Staff: David Cline, Laurel Humphrey, Brandon Miles, Han Kirkland, Hari Ponnekanti'Henry Hash Guests, Meg Moorehead, King County Solid Waste Division; Thomas Mun, BE[U; Emily Newcomer, Waste Management; Mike[ Hansen, Sabey Corporation; Andrea Reey, Seattle SouthsideChamber ofCommerce CALLTOORDER: Chair Idan called the meeting to order at 5:30 p.m. |' PRESENTATIONS King County Solid Waste King County staff provided an overview of the Comprehensive Solid Waste Management Plan, which is pending approval ofcities representing atleast T5Y6ofthe population during the lZO'dayapproval period. The Plan outlines programs to prevent' recycle, and dispose of waste, and includes six major planning elements: existing solid waste system, forecasting & data, recycling, transfer &processing, disposal &iendMii management, and finance, Once the cities have acted the Plan will go to the Department of Ecology for final approval, expected this fall. Staff will present the Plan to the Committee atits next meeting. Committee members expressed interest intouring related facilities. U. 8US|NESSAG2ND& A. Ordinance: Amending Solid Waste Utility Tax Rate& Recycling Surcharge Staff returned with changes requested bvthe Committee Vfthe Whole. The proposed ordinance now includes a stepped increase over two years and clarity around revenues being dedicated to street maintenance and repair. Comments and questions are summarized as follows: Proposed new section 3.51. (2) [oundbnenlbor McLeod asked why the proposed new section states that remaining revenues "m8yremain iOtheGenero|FUnd."Staff replied thatitprovides accounting direction buttheintent about street repair is still captured. Staff offered to change the sentence to "The remaining revenues will bededicated tnmaintain and repair streets." [ounciimemberMru|ierasked staff to check with the Finance Director prior to the Committee of the VVhn|e, as she may have a good explanation for wanting itto remain asis. Cheir|dan mentioned that the "remaining revenues" should specifically mention the percentage so it is consistent with subsection 1. Proposed amended section 3.S2.02D(3) Cound|mernber KnuUer asked why the sentence was changed from "shall" to "may." Staff replied that the new language provides greater flexibility for the Council. The Committee rejected the 101 Transportation &/n0oatructureCommittee Minutes June I8,209 need for aSolid Waste Utility Tax given current economic conditimns,"Mr. Hansen and Ms. Reay addressed the Committee, and both mentioned appreciating the change to the stepped increase over two years. UNANIMOUS APPROVAL ASAMENDED. FORWARD TOJULy8,2O19 COMMITTEE OFTHE WHOLE. B. 8NSF|ntemnoda|Facility Access Project Update Committee members and staff discussed the status of the BNSF Intermoda[ Access Study, which was funded jointly by the City and BNSF in 2015 and resulted in a draft report issued in 2016 that identified the 48^h Avenue South Bridge as the preferred alternative. Because the construction estimates in the draft study are out of date, staff proposes to contract with David Evans and Associates tnupdate the numbers and finalize the report atanestimated cost ofupto$l5,O00.The construction estimates developed in 2017 were approximately $20 million but in today's numbers could beoshigh as$34million. [oVnci|memberKruUerasked for acopy ofthe original contract in order to review the scope and deliverabies, expressing surprise that the City never received a final report. Staff pointed out that it was during this same time period thatthe42"«Avenue South Bridge had been determined tobestructurally deficient and axaresult took greater priority regarding determination ofafunding strategy, Chair |danstated that hewould like the Committee 'tomake a recommendation to the full Council on the preferred location, and funding discussions could cnmpiater. He feels it would be good for staff and impacted stakeholders to have certainty around the location. Committee members agreed to forward the update to the Committee of the Whole with o recommendation that staff identify funding to complete the study in an amount not to exceed$I5'000. FORWARD TOJUNE24,2O19COMMITTEE C)FTHE WHOLE. U|, SCAT8d/RTC Councilmember Hougardy attends SCATBd and RTC and reports on both at City Council meetings. IV. MISCELLANEOUS 53 d Avenue South Street GomeCounci|mornbers have asked that staff address public confusion around street parking on 53rd Avenue South. Prior toconstruction there was room, but the new street design does not allow for on - street parkingevceptinoneupeciMcareanear5VuthI4OmStreet.CounciimemberMcLeodaskedifsi ns could be installed. Engineering standards do not indicate need for signage, nor does the Police Department need them for enforcement. Staff recommends allowing construction tocomplete and 1f on -street parking continuesto be a problem, signs will be considered. Counci[member Kruiler requested that the neighborhood be informed via flyers. Chair |danstated that hefeels people will quickly adapt and not much outreach isneeded. Hesuggested posting onTukwila Talk and other neighborhood news groups. Speed Cushions onS3mAvenupSouth The Council has received public comment inquiring why 53 d Avenue South only has two speed cushions, City staff installed them but used the design that KPG had created during construction. The Council was notified of the design last summer. Staff suggests allowing construction to complete and then collecting data to measure their effectiveness, Factors impacting the placement of speed cushions include mailboxes, driveways, and street geometry. Counci|nnenoberMcLeod asked ifthe same standards were used tVdetermine placement on South l6OmStreet. Counci|rnemberKru\\erasked where o speed cushion that was removed from South 16 oth Street was relocated. Staff will follow up. 102