03/09/2010: "CC Exploring New Tax For Solid Waste"

The County Council (or is it the County Solid Waste Disposal District?) will take another look Tuesday (03-09-10, 1:30pm) at creating a new tax to help fund the solid waste program.

Last week the Council decided they were sitting as the County Solid Waste Disposal District (SWDD), and were informed by the SJC Prosecutor that a flat parcel fee to fund the solid waste program was not legal. This led the council to entertain the idea of closing the Lopez & SJI transfer stations.

Since then, Gaylord has produced a memo (.pdf (45\k file) to the County Council laying out how the SWDD can legally impose an excise tax, but only if it is done in a manner that allows for some exemptions so that it is not in fact a flat rate.

Gaylord makes the point that “If the primary purpose is to raise revenue used for the desired public benefit, the charges are a tax,” but “If the money must be allocated only to the authorized purpose, the charge is considered to be a fee.”

In other words there has to be a nexus between a tax and a service provided, and Gaylord states “If no such relationship exists, the charge is probably a tax in fee's clothing.”

The imposing of a new tax does not preclude the ability to also charge a fee to drop off trash at a transfer station. This is important, since the use of “tipping fees” will allow the SWDD to sell revenue bonds and use the money from tipping fees to pay off the bonds. The money from the bonds can be used for capital improvements of the existing transfer stations; something that must be done in order to keep them open to the public.

The use of tipping fees will not, however, give the County the best deal on the bonds, since the repayment is tied to the tipping fees, as opposed to a general obligation bond, which puts all of the property owners on the hook to pay back the bonds if the SWDD cannot generate enough money -e.g. from tipping fees- to pay the bond payments.

Gaylord of course is the county attorney, and as such he is always concerned about law suits and how much liability the county has. Gaylord states in the memo that: “As a general rule, a fee system will withstand a judicial challenge if the fee charged is based on the amount of waste generated. So long as the rate is reasonably based on usage -i.e., the amount of the property owner’s contribution to the problem- the fee will be considered directly related to the service provided.”

The County Council will discuss the memo at 1:45 pm in the Legislative Hearing Room -the building across from the court house in Friday Harbor