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HomeMy WebLinkAboutWS 2026-05-15 COMPLETE AGENDA PACKETCITY OF TUKWILA City Council Work Session Monday, May 18, 2026 at 5:30 p.m. Location: Tukwila City Hall, Council Chambers, 6200 Southcenter Boulevard, Tukwila, WA 98188 Join remotely: 1-253-292-9750, Access Code: 56095437# or click here to join the meeting. AGENDA 1. CALL TO ORDER 2. PUBLIC COMMENTS Those wishing to provide public comments may verbally address the City Council both on -site at Tukwila City Hall or remotely via phone or Microsoft Teams for up to 5 minutes for items both on and not on the meeting agenda. Per the Council Rules of Procedure, the total time for public comment should not generally exceed 30 minutes and time may be reduced to 3 minutes if there are more than 6 speakers. To provide comment remotely, please email citycouncil(cr�tukwilawa.gov with your name and topic by 5:00 PM on the meeting date. Please clearly indicate that your message is for public comment during the meeting, and you will receive further instructions. 3. BUSINESS ITEMS a. Utility Rate Update — Regional Rate Increases and Impacts Pg. 2 Griffin Lerner, Public Works Analyst 4. ADJOURNMENT This agenda is available at www.tukwilawa.gov, and in alternate formats with advance notice for those with disabilities. Tukwila Council meetings are audio/video taped, and available at www.tukwilawa.cov If you are in need of translation or interpretation services at a Council meeting, please contact us at 206-433-1800 by 12:00 p.m. on the meeting date. Regional Utility Rate Update City Council Work Session May 18, 2026 Griffin Lerner, Public Works Analyst Jen Tetatzin, PE, PMP, Public Works Director 2 Why this discussion matters Utility costs are rising across the region, and rate increases are driven by multiple factors and policy decisions. The affordability challenge Utility bills affect residents, businesses, and the City's own operating costs. Rates must fund reliable service, operations, maintenance, capital replacement, debt, compliance, and contracts. Regional increases can be confused with the City's rate adjustments and sometimes dwarf local rates entirely. The challenge How can we support affordability while utility rates continue to rise due to decisions beyond our control? Ratepayers can make certain choices about utility usage but cannot directly influence costs set by regional providers, contracts, and regulations. 3 Utility affordability is a regional issue, limited local control A single customer bill includes local and external usage rates, regional charges, and contractual costs. Locally controlled Rates set by Tukwila to fund City -owned or City -managed utility service. Locally billed service shaped by wholesale supply, rate design, contracts, or regulatory obligations. ited or no control Rates set by regional utilities, outside providers, or contract formulas. Key takeaway Not all utility rates are the same. The City's ability to influence rate changes depends on who sets the rate and system -specific cost drivers. 4 Why regional utility rates are increasing Primary Drivers "The Big Three" as identified at the November Regional Rate Sum PRIMARY DRIVER 1 Aging Infrastructure & Asset Renewal Maintenance, rehabilitation, and replacement of older systems, facilities, pipes, and equipment. Additional shared cost pressures Labor, Procurement & Market Costs Inflation, construction pricing, supply chain pressure, labor costs, tariffs, and permitting delays. PRIMARY DRIVER 2 Regulatory Compliance & Uncertainty Costs tied to current requirements and emerging issues like PFAS, nutrient removal, and environmental compliance. Environmental Mandates Clean energy requirements, watershed protection, disposal regulations, and resource recovery expectations. t, and recent updates. PRIMARY DRIVER 3 Capital Investments Large infrastructure programs needed to maintain reliability, expand capacity, and modernize regional systems. Common across multiple utility systems Funding Challenges Reliance on ratepayers, limited grant funding, and growing need for affordability and assistance programs. 5 Why utility investment matters Ut ity infrastructur ostfy invisible until it fails. Rate revenue 1 Reliability Keeps essential services operating without major disruptions. unds the systems ratepayers rely on every day. 2 Quality service 3 Redundancy Maintains safe drinking water, wastewater treatment, drainage, collection, communications, and customer service. Resilience Prepares systems for storms, earthquakes, climate impacts, emergencies, and aging assets. Builds backup capacity so one failure does not become a systemwide service problem. © Capacity Supports growth, redevelopment, public safety, and economic activity. Key takeaway: A rate discussion is also a service -level discussion: what level of risk, reliability, and long-term asset health is acceptable? Affordability matters, but underinvesting shifts higher costs and greater risk into the future. 6 Utility Bill "Stack" The typical customer pays multiple utility bills and may not understand who sets the different u continue to rise across the entire region. Representative monthly household utility bill for a Tukwila homeowner Why this matters for Tukwila Ratepayers feel the combined impact of all utilities. Regional increases also drive local rate increases. Clear communication helps residents understand what Tukwila controls and what it does not. *Regional Average y rates, Rates Overall Cost: 1 $413 Costs are cumulative. Some bills are fixed and others vary with consumption. 7 Utility Summary: rate control and impacts Utility Surface Water Sewer Water Solid Waste Energy Tukwila control External costs High ) Ecology requirements None N Near term impact Stable; no major increases foreseen High: County treatment is —65% County +12.75% of bill +$8/month High: Cascade wholesale supply Cascade +9.5% +$300k to cost fund Contract + King County FAC SCL and PSE provider rates County FAC +8.5% +$0.12/month SCL +9.5%; PSE electric +16.75% Council lens NPDES Compliance + Salmon recovery Reliability need + equity Reliability need + equity Contract oversight City as customer + advocate Ratepayers are affected by different rate environments and navigating them can be difficult. 8 Surface Water The clearest example of a locally controlled utility r4te, shaped by water cuality permit requirements and environmental goals. None Pass -through component ERU $279.53/y Current structure Current Rate Key Takeaway Surface Water fees are locally controlled, and decisions about service levels, capital priorities, and regulatory compliance are made by the City. ER IJ - Equivalent Residential Unit Tukwila control: High What Ratepayers should know Tukwila controls Surface Water rates and fees are collected with property taxes. The City recently moved to an Equivalent Residential Unit (ERU) method following 2024 Rate Study. Utility Fund is designed to meet NPDES requirements, including inspection, maintenance, mapping, reporting, and spill response. Also funds Salmon recovery efforts, shoreline restoration, and conservation goals. 9 Sewer Most of the reside tial sewer bill is driven by King County wastewater treatment costs. Current monthly residential sewer bill components Tukwila $34 King County $62.44 King County portion is about 65% of the total residential sewer bill. 12.75% +$8/mo +$1/mo King County proposed Estimated residential increase impact Tukwila 2027 model What Ratepayers Should Know Bills are based on a fixed fee and generally paid by the property owner. King County leadership and state legislators play key roles in determining regional fees. The City's charges cover the local collection system, which safely transports the waste to the County for treatment. Utility bill payment assistance and reductions for low- income households are available. Key takeaway The sewer rates are dominated by regional costs. Assistance is available to qualifying low-income households. 10 Water Locally managed, but heavily shaped by wholesale supply costs and rate structure decisions, Water Fund operating cost breakdown Purchased water -50% Taxes & fees -30% Other 20% 2026 average cost for residential ratepayers: $4.76 per CCF (748 gallons) 9.5% Cascade projected 2027 ncrease 300k Approximate added Water Fund cost 50% Purchased water share of operating budget Key takeaway Water affordability is directly tied to wholesale costs, rate structure, and consumption levels. What Ratepayers should know Bills are based on consumption level and generally paid by the end user. Tukwila is a member of Cascade Water Alliance and purchases water through a contract. Wholesale water costs are pass -through costs but not shown separately on customer bills. Residential ratepayers receive a significant cost subsidy from commercial ratepayers. Assistance is available for low-income households. 11 Solid Waste Near -term increases are relatively modest and mostly governed by contract terms, Average 2026 household monthly charge (32-gallon can) Recology $22.92 5$1,14§11 10 years Contract term 8.5% 0.12 King County projected Estimated added monthiy impact increase Key Takeaway Monitor contract performance, customer service, and future regional disposal cost trends. Ttikwila t ntr .1; Lirhittih What Ratepayers Should Know The City contracts with Recology to transport solid waste to King County transfer stations and landfill. Long-term Recology contract provides predictability and a high level of service. Annual CPI adjustment is required. Fixed Annual Charge (FAC) assessed by King County. Assistance is available. 12 Energy: Electricity and Gas Tukwila has no control over ratt-setting. mpacts every resident, business, and City's budget. Seattle City Light Electricity franchise 9.5% Planned increase Puget Sound Energy Electricity / gas franchise 16.75% Residential electricity figs?dillatERINUIMENitlieNt#1, Puget Sound Energy Right-of-way / street light service 2 Street light service Key Takeaway Tukwila is an energy consumer (not a provider). Higher energy costs can force us to increase our local utility rates. Assistance is available for low-income households. 13 Current Utility Assistance Programs Assistance exists today, but income thresholds and application pat City: Water / Sewer Discount 62+ or disabled; income < $32k/year Reduced -rate program for City utility ...ratepayers. is vary by provider. / City: Solid Waste Discount 50% Area Median Income (AMI) City: Utility Tax Relief < $46.5k combined; < $32k if single 50% discount on garbage and/or food & yard Applies to PSE / Seattle City Light taxes. waste. Seattle City Light Puget Sound Energy 80% AMI or 200% Federal Poverty Line (FPL) whichever is greater Bill Discount Rate: 5%-45% ongoing monthly discount. UDP: 70% State Median Income (SMI) 60% discount on SCL bills. Other Providers Thresholds vary; some are not clearly posted Valley View Flush Fund: 200% FPL Highline Water & KC Property Tax: <$84,000 income Key takeaway Residents face a patchwork of eligibility thresholds, providers, and application paths. Thresholds shown are high-level references; residents should confirm current eligibility directly with each provider. 14 How to engage in the utility rate conversation Individuals cannot control regional rate drivers, but Council, residents, and regional partners can influence decisions made by large utilities. Sound Cities Association is leading advocacy efforts to raise awareness. King County • Engage on wastewater treatment rates, solid waste system costs, capital plans, and regional affordability strategies. Washington UTC • Participate in investor -owned utility rate cases and customer protection discussions, especially for PSE. WA State Legislature • Advocate for infrastructure funding, regulatory flexibility, permitting reform, low-income assistance, and affordability State Agencies/Ecology • Engage on rulemaking, compliance timelines, nutrient/PFAS implementation, and cost-effective environmental City of Tukwila • Review local rate components, modernize utility assistance, and clearly distinguish local costs from external costs. Key takeaway: Customer voices are strongest when amplified at the regional and state -level where major cost decisions are made. 15 The City of opportunity, the community of choice. 16