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FUNDING & FEES

Home >> About Us >> Funding and Fees >> 2012 Rate Increase


2012 Rate Increase


Download 2012 Rate Increase Memo

WHAT THE PROGRAM DOES

The Program serves residents that generate RCRA (the Federal Resource Conservation and Recovery Act, that governs hazardous waste) categorically exempt household hazardous waste, and businesses that generate RCRA conditionally exempt small quantities of hazardous waste. This work is required under Washington State law (RCW 70.105.220); and is locally enabled in King County Board of Health code (KCBOH 2.08) and undertaken through a Program Plan that was approved by the King County Board of Health and the Washington State Department of Ecology. We accomplish this work by providing:

Collection & Disposal
    services, such as:

  • Collection facilities in North & South Seattle, and Factoria/Bellevue;
  • Wastemobile service throughout King County, and service at the Auburn Supermall;
  • Funding for the Suburban/Other Cities’ & Tribes’ collection events.
Use & Storage information &
     technical assistance about toxic
     products and safer alternatives for:
  • Individuals,
  • Businesses, institutions and schools,
  • Historically underserved populations (immigrants/non-English speakers/elderly/homebound/
    disabled), and
  • Vulnerable populations (children/pregnant women/women of childbearing age).
Prevention/Upstream
     
work to:


  • Urge that less toxic products be manufactured, and/or
  • Divert those products from sewer and solid waste streams, and our ground and surface waters.

SOURCES OF THE PROGRAM'S FUNDING

The Program is currently funded 95% by user fee surcharges. Those surcharges are drawn 19% from sewer ratepayers, 60% from solid waste ratepayers, and 16% from transfer station/landfill users. The remaining 5% is drawn from state grants. We monitor those revenues from business and households, and our expenditures, so that businesses and institutions pay for business services, and households pay for household services.

HOW THE NEED FOR A RATE INCREASE WAS DETERMINED

The Management Coordination Committee (the Program’s governing board) determined that the Program needed to increase its rates in 2012 just to maintain services at their current levels. The Program’s previous rate increase was in 2006 - which will be a six-year span between rate adjustments. The King County Board of Heath sets the Program’s fee rates. After raising those rates in 2006, the Board of Health instructed Program staff to update them every 3-5 years on the Program’s financial status. Program staff reported to the Board in past years that rate increases could be deferred in 2009 and 2010, and again in 2011 as the economy worsened. That was possible through attrition, targeted under-spending, finding new efficiencies, and not expanding Program services beyond what could be accommodated with existing resources and through internal re-prioritization of work. However, those measures were exhausted, and if a rate increase had not been approved, dramatic cuts in services to residential and business ratepayers, and the public, would be the result.

HOW MUCH IS NEEDED TO MAINTAIN CURRENT SERVICES

The Program’s fund would be exhausted in 2012 without a fee rate increase or significant cuts in services. The table below shows projected revenues and expenses, and the difference between the two without an increase.

Amounts
Notes
+$36.6M
Projected revenues, from 2012 through 2014, at 2006/current fee rate levels (without a fee rate increase).
-$48.5M
Projected expenses, from 2012 through 2014, which will maintain services at 2011 levels.
-$12.1M
Gap between revenues without a fee rate increase, and expenses. (Amount that would be generated by the originally proposed fee rate increase.)

This section shows the revenue that will be generated by the approved Board of Health increase and the remaining shortfall that will be have to be absorbed by the Program.

$11.1M
Amount that will be generated by the 2012 fee rate increase approved by the Board of Health (slightly less than was originally proposed).
-$1M
Remaining shortfall to be absorbed by the Program over the 3-year rate period.

WHAT FACTORS CONTRIBUTE TO THE FUNDING GAP

Two sets of factors drove this rate proposal. They include declines in revenues and projected increases in expenses.

The revenue side of the gap involves declines in transfer station visits and tonnage disposed of, and the amount of sewage treated. On the expenses side of the issue, the most significant Program costs are labor-related and Program partner agencies’ overhead charges. Most of these cost increases are structural in nature, and essentially outside of the Program’s control.

These factors, reduced revenues in the past, flat revenues projected in the future, and increasing structural costs in the next few years, along with our active work to live within our means and delay a rate increase in 2009, 2010 and 2011, propelled the need for a rate increase in 2012.

WHAT SERVICES WOULD BE CUT IF RATES WERE NOT INCREASED

If no rate increase had been approved, cuts in the following areas would have been made:

  • Collection facilities hours of service, Wastemobile services and funding for Suburban
    Cities' collection events
    would be reduced.
  • Business services, including field technical support, incentives programs, fee-free
    business waste collection, and funding for hazardous site clean-ups, would be
    reduced or eliminated.
  • Field services and inspections of schools and childcare facilities for hazardous
    chemicals, lead and mercury, would be significantly reduced.
  • Services to historically underserved populations, such as Vietnamese nail salon
    workers, Hispanic & Ukrainian janitorial workers, Hispanic landscapers, Korean dry
    cleaners, low-income housing residents, and the elderly/homebound, would be
    reduced or eliminated.

WHAT RATE CHANGES WERE APPROVED

The Board of Health formed a sub-committee in December 2010 and deliberated the Program's proposal for a fee rate increase through February 2011. Based on the desire to maintain the current levels of service, to the extent possible, they approved the fees at the requested amounts with one exception. That exception was a slightly lower business solid waste rate increase than was originally requested.

The following table shows the rates set in 2006 and the NEW rates beginning in 2012.

Program Revenue Sources
Rates
Set in
2006
Amount
of
Increase
New
2012
Rates
Solid Waste
      Residential Accounts
$0.80/month
$0.28/month
$1.08/month
      Business/Institutional Accounts
$9.07/month
$2.17/month
$11.24/month
      Transfer Station – Private Vehicles
$1.34/trip
$0.47/trip
$1.81/trip
      Transfer Station – Commercial Vehicles
$3.50/ton
$1.23/ton
$4.73/ton
Sewer
      Charge per million gallons treated
$33.92/M gal.
$11.87/M gal.
$45.79/M gal.
      Estimated Residential Customer
      Equivalent (RCE)
$0.19/month
$0.07/month
$0.26/month

WHAT IS THE COST TO INDIVIDUALS & BUSINESSES

Solid Waste Accounts
  • For residential solid waste accounts, the average monthly solid waste charge is $17.90. The hazardous waste surcharge under the proposed new rate would be $1.08 per month, or $0.28 more per month than in 2006. That new surcharge rate is approximately 6% of the total monthly charge.
  • For commercial solid waste accounts, the average monthly solid waste charge is $285.60. The average hazardous waste surcharge under the proposed new rate is $11.24 per month, or $2.17 more per month than in 2006. That new surcharge is approximately 3.9% of the total monthly charge.
Transfer Station Use
  • For those that self-haul their solid waste to a transfer station, the solid waste charge for residents in Seattle is $30 per trip, and $17.49 per trip in King Co. The hazardous waste surcharge under the proposed new rate is $1.81 per trip, or $0.47 more per trip than in 2006. That new surcharge is 6% of Seattle’s and 10% of King Co’s. total per trip charge.
  • Commercial users of a transfer station are charged $145 per ton in Seattle and $109.00 per ton in King Co. for disposal of their solid waste. The hazardous waste surcharge under the proposed new rate is $4.73 per ton, or $1.23 more per ton than in 2006. That surcharge is approximately 3.3% in Seattle and 4.3% in King Co. of the total tonnage charge.
Sewer Accounts
  • The wholesale sewage treatment charge from King Co. Wastewater Treatment Division is $36.10 per month per residential customer equivalent (RCE).
  • For commercial customers, the sewage treatment charge is $36.10 per 750 cu. ft. treated.
  • These individual customer charges equate to a sewage charge of $6,435.00 per million gallons treated.
  • The hazardous waste surcharge is assessed per million gallons treated. Under the proposed new rate that charge would be $45.79 per million gallons treated, or $11.87 more per million gallons treated than in 2006.
  • At the customer level, this translates to a hazardous waste surcharge under the proposed new rate of $0.26 per month per RCE, or $0.07 more per month per RCE than in 2006. That new surcharge is approximately 0.7% of the wholesale sewage treatment charge.

WHO WAS CONSULTED ABOUT THE RATE INCREASE

Program staff made presentations to, and took input from, a variety of implementing agencies and others, including:

  • Commercial & City solid waste haulers;
  • Sewer Service Providers (MWPAAC endorsed the proposal on 10-27-10);
  • Suburban Cities (SCA endorsed the proposal on 12-15-10);
  • Tribal Governments in King County (Muckleshoot and Snoqualmie Tribes);
  • The Directors of the Program’s implementing agencies: Seattle Public Utilities; King County Dept. of Natural Resources & Parks; and Public Health - Seattle & King County.