Item B: Ordinance Concerning Solid Waste Administrative Powers

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Another concern which has been expressed is that there is no equity between the different levels of surcharge which would likely be passed through to different garbage customer categories and no connection to the use of city streets by those customers. In the 2007 Council committee discussions of this potential surcharge, it was noted that the solid waste surcharge, because it is based on volume, is also based on weight. Since weight is one of the primary factors in the damage caused to city streets by garbage hauler vehicles, there is a relationship between the level of surcharge paid (higher revenue means more customers and more tonnage of solid waste transported on city streets) and the damage done to streets. Given the current economic situation and the financial stress people in our community are experiencing, why is the city looking to impose a new fee or charge? The lack of sufficient resources in the Road Fund to maintain existing levels of street services has prompted several studies and a number of proposed solutions (including a solid waste hauler surcharge) over the past decade. Despite these efforts, and through a period of economic expansion and relative prosperity, the funding gap in the Road Fund has grown to nearly $4 million per year. Chronic operating deficits are now projected to deplete the fund balance to zero by the end of this year. Time has run out, and the Council must decide whether or not the city continues to deliver traditional street operations and maintenance services in the upcoming fiscal year. Why can’t this road O&M funding gap just be funded from the city’s General Fund? The city’s General Fund is also facing substantial financial challenges in the form of a projected $12 million budget shortfall for FY10, which will require significant changes in the way the city delivers traditional General Fund services, as well. To the extent that the General Fund budget currently reflects community priorities, it is unlikely that the General Fund will be in a position to offer even one-time financial assistance to the Road Fund, let alone contemplate being part of a long-term, sustainable funding solution for transportation system service needs. I’m a garbage hauler, and I am concerned about how I’m going to implement this new surcharge, exactly how I’m going to sort through which collections are subject to the surcharge, and what changes I might have to make to my systems to comply with this new fee. When am I going to have answers to some of these questions? City staff in the Solid Waste Program and in the Public Works Department are committed to working with city-licensed garbage haulers to develop administrative rule changes and implementation agreements that are reasonable and practical for all parties concerned. Staff will be inviting suggestions and proposals from the hauler community as to how they would suggest we approach some of these implementation and administrative issues. How much are the hauler administrative costs expected to be to collect this fee? Administrative costs per customer billing are anticipated to be very small. Minimizing administrative costs will be a strong consideration when the City Manager develops the administrative rules for this new surcharge. There is likely to be some variance in administrative costs among the haulers, depending on what types of collection systems they currently have in place. A hauler’s additional expense to administer and collect this fee will be reported as an operational expense for the 2009 calendar year, which will then be incorporated into the next rate-of-return and collection rate review, scheduled to be performed by city staff in the spring of 2010. As a garbage hauler, I already paid an annual license fee to the City of Eugene based on my hauler collection revenues. Doesn’t this separate 5% surcharge represent double-taxation by the city on this same revenue? What is the difference in the two fees? Under administrative rules, city staff exclude a number of expense categories from the License Fee calculation, including county disposal fees, income taxes, interest expense, and political/charitable contributions. Staff will exclude the collections generated from the transportation surcharge in 3