Federal Way increases solid waste tax to improve roadways

Ten percent increase will generate $1.5 million annually.

Federal Way is looking to improve roadway conditions throughout the city that have worsened over the past two years.

In response to this, the City Council passed an ordinance that will increase solid waste management tax from 7.75% to 17.75%, and use 10% of that tax to add to the Public Works budget specifically for roads in Federal Way.

The city analyzes its roadways with a measure called a Pavement Condition Index. This is how cities know the condition of their roadways and when it is time to make appropriate upgrades.

Federal Way’s overall PCI is 75 out of 100, according to Public Works Deputy Director Desiree Winkler at the July 16 council meeting. Winkler said this is a two-point drop from 2017, and a budget increase for roadway condition upkeep is needed to keep the PCI from dropping 10 more points over the next 10 years.

Finance Director Ade Ariwoola said the city’s current overlay program that helps pay for road maintenance and repair comes mostly from utility tax, not including Proposition 1 tax, general fund money and occasionally Real Estate Excise Tax funding.

The new excise tax is expected to generate around $1.5 million in revenue annually once it takes effect in September 2020, Ariwoola said. The total revenue from solid waste was $1.08 million in 2018.

Ariwoola noted that 6% of the 7.75% solid waste tax goes towards the general utility tax, spent on streets and other things as determined by the council. The remaining 1.75%, he said, was dedicated to items listed in the Proposition 1 tax such as having a certain number of police officers, judges and law department staff.

“Currently the cost of these items is higher than the revenue being generated from Prop 1,” he said.

Ariwoola said the tax increase would not be put directly onto citizens, and instead the tax would only apply towards solid waste collection organizations.

However, he said the city could not control if the solid waste collection agencies passed this tax along to consumers.

Gary Chittim, a media spokeperson for Waste Management, which partners with Federal Way for solid waste collection, said he was unaware of the council passing an increased excise tax ordinance.

Chittim declined to provide any further comment by press deadline and requested that the Mirror’s questions be directed to the city.

The council heard a second reading of the ordinance on Aug. 13, when they passed the resolution unanimously with no discussion.

The ordinance itself relates “to an increase of the excise tax upon everyone engaged in the business of collecting solid waste within Federal Way and expanding the definition of ‘solid waste.’”

The ordinance also amends FWRC’s 3.10.020 and 3.10.040.

Tyler Hemstreet, communications coordinator for the city, said these amendments essentially reworked the definition of solid waste, and to esnure the extra tax only goes to the overlay program and no where else in the general fund.

Hemstreet said the current overlay program, funded at $1.5 million, is not enough to maintain main city roadways and residential streets. This new tax will increase the funding to $3 million to allow residential streets to also be repaired to increase the city’s PCI.

“Keep in mind that even with the increase in excise tax, there is still a $9.81-per-month savings for the average household over the proposed rates, which amounts to about $120 per year,” Hemstreet said.

The tax would be implemented the same time a new waste management contract would be signed, he said.

According to Hemstreet, the city’s current contract with Waste Management ends Aug. 31, 2020.

“The September 2020 implementation was done to allow the proper time to secure new equipment to service the contract,” he said.

The PCI score dropped a total of 11 points from 86 in 2007, and Hemstreet says with the $3 million budget the PCI will increase and stabilize.

“Based on goals established by the City Council, the c+ity would need to fund the overlay program at $4.5 million a year, which would restore the PCI to 86 in a period of 15 years,” he said.

Another reason the city is increasing solid waste tax is because “solid waste, recycling and yard waste collection trucks create a disproportionate impact that causes increased maintenance, repair and overlay to all city streets,” according to the ordinance memorandum.

The average garbage truck weighs anywhere from 33,000 pounds empty to 80,000 pounds full, while the average car weighs about 2,000 to 3,000 pounds. The memorandum reads in part that the estimated impact of a fully loaded garbage truck on the road is equal to the same impact of 1,500 cars driving on it.

This has a larger impact on residential areas because “there is only minimal heavy truck traffic on these streets,” the memorandum states.

Ariwoola noted the new the new solid waste tax is unrelated to the Lakehaven Water and Sewer District tax that is currently in litigation.