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Home My WebLink AboutReg 2019-07-15 Item 4B - Ordinance / Letter of Understanding - Solid Waste Utility Tax / Recycling Surcharge (for Commercials Only)COUNCIL AGENDA SYNOPSIS Thitiatr Mall*Dale Prepared by Me!ye ' eyiew Council leviem 07/08/19 HK LI- 07/15/19 HK C. K9 N ITEM INFORMATION ITEM No. 4.B. STAFF SpoNsoR: HARI PONNEKANTI ORHANAL AGENDA DATE: 07/08/19 AGENDA ITEMTITLE Solid Waste (Commercial Only) Ordinance Amending Solid Waste Utility Tax Rate and Recycling Surcharge CATIG( )RY D is e 'to' sion MisDale 7/08/19 Motion At/ Dale . Resolution n Ordinance E Bid Award 1INDate 0 Public Hearing MeigDate [1] Other A41gDate ItItgDate Mt Dale 07/15/19 SPONSOR Council Mayor LIR DCD flFinane Fire IJTS P&R Police Pil7 Court SPONSOR'S Council is being asked to approve two items; 1) Approve an Ordinance amending TMC 3.51 SummARy that establishes the Solid Waste Utility Tax to 11%, effective 11/1/19, and thereby to 16% efffective 07/01/20 and, 2) Approve a Letter of Understanding with Waste Management of Washington, Inc for additional services and a 5% Recyclable Cost surcharge. Both items will only impact commercial customers for solid waste collection throughout the City. RINI kW1j) BY E C.O.W. Mtg. E] CDN Comm Ei Finance Comm. 0 Public Safety Comm. E Trans &Infrastructure LIArts Comm. E Parks Comm. Ei Planning Comm. DATE: 05/21/19 & 06//18/19 COMMITTEE CHAIR: ZAK IDAN RECOMMENDATIONS: SPONSOR/ADMIN. CommITIEE Public Works Department Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPENDITURF; REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $0 $0 $0 Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 07/08/19 Forward to Regular Meeting 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 Ordinance in final form, with Letter of Understanding 37 38 Washington Ordinance No. 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% increase to the existing 6% solid waste utility tax, with the increased percentage amount to be designated for road maintenance and road related projects; and WHEREAS, incrementally increasing the solid waste utility tax to 11 % on November 1, 2019, and then to 16% 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 7-9-19 CK:bjs Review and analysis by Barbara Saxton Page 1 of 3 39 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% 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. 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 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. 40 W: Legislative Development\Solid Waste Utility Tax increase 7-9-19 CK:bjs Review and analysis by Barbara Saxton Page 2 of 3 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, WASHINGTON, 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 7-9-19 CK:bjs Review and analysis by Barbara Saxton Page 3 of 3 41 42 City of Tukwila 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 m 6300 Southcenter Boulevard Suite 100 0 Tukwila, WA 98188 206-433-0179 Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov 43 Waste Management Letter of Understanding Page 2 Acknowledged and agreed upon by: CITY OF TUKWILA WASTE MANAGEMENT OF WASHINGTON, INC. By: By: Its: Its: W:\PW Eng1PROJECTSISoIid Waste\WM LOU Recycling 060419.Docx 6300 Building m 6300 Southcenter Boulevard Suite 100 0 Tukwila, WA 98188 d 206-433-0179 Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov 44