Item 4: Ordinance Concerning Solid Waste Administrative Powers

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ATTACHMENT A Staff Responses to Commonly-Asked Questions on the Proposed Solid Waste Hauler Surcharge How much would the proposed garbage hauler surcharge raise and what would it be used for? A 5% transportation surcharge on garbage hauler collection revenue is projected to generate an estimated $900,000 for the fiscal year beginning July 1, 2009. Assuming that the surcharge on hauler collection revenue is passed on to the customer, slightly more than half of the revenue from a 5% surcharge would come from commercial garbage customers, with the remainder coming from residential customers. Revenues from the proposed garbage hauler surcharge would be used by the City of Eugene in the upcoming fiscal year to maintain current services levels for traditional street operations and maintenance (O&M) activities. In the most current version of the ordinance, those monies would specifically be designated for maintaining street services on local streets (i.e., those not designated as either arterial or collector streets by the City). Specific examples of the critical street services which this revenue will fund for local streets include keeping the street lights lit, the street signs and signals in good working order, and the potholes and cracks patched. What is the likely financial impact on my monthly garbage hauler bill from this 5% surcharge? Assuming that the 5% surcharge would be passed on to a residential customer with a weekly 32-gallon service (the most common level of residential service), that typical customer would see an increase in their monthly bill of approximately 98 cents per month, or $11.76 annually. Commercial customers would see a proportionate 5% increase in their bills for garbage service. In its 2007 recommendation for a package of road funding solutions, the Council Committee on Transportation Funding Solutions noted the fact that “garbage services customers from all sectors would pay this fee, regardless of whether they were public, private or nonprofit entities,” thereby acknowledging that the intention was to spread the impact of this surcharge broadly across the community, so that everyone would pay a little towards the Exhibit 1 funding of a well-maintained street system. to this Attachment illustrates the estimated financial impact of the proposed 5% garbage surcharge on a range of residential and commercial customers at various levels of service, along with a list of seven actual commercial customers and the estimated financial impact of the proposed surcharge on their monthly bills. When would I likely see the impact of this proposed surcharge on my garbage bill? It is the Manager’s current intention that this new surcharge would take effect on August 1, 2009, assuming that the administrative rule-making and customer noticing processes can reasonably be completed in that timeframe. Likely, most customers would see the change in their garbage fees on the next subsequent billing cycle. What would happen if the garbage hauler fee is not approved by council? The portion of the city budget that pays for road operation and maintenance services such as keeping streetlights lit, street signs and signals in good working order, and potholes and cracks patched currently faces a shortfall of about $900,000 in the fiscal year that begins July 1, 2009. To balance the road operating budget for FY10, the city must increase revenue to the Road Fund, decrease road services, or some combination of the two. The garbage hauling surcharge, which would raise an estimated $900,000 a year dedicated to maintaining local streets, would fill the gap and avoid the need for road service reductions. If the surcharge or some other form of additional revenue is not secured for the FY10 Road Fund budget, then the Manager will have to cut road services by an offsetting amount. $900,000 represents approximately 10% of the city’s proposed FY10 Road Fund operating budget. While specific service cuts have not been identified at this time, it is likely that significant road service reductions would have to be made to accommodate a budget reduction of this magnitude. 1