03/10/2010: "CC: Approve Another Levy Lift & Raise Rates For Dumps"

It was a confusing day at the County Council on Tuesday, when the Council took off their council hats, put on their Solid Waste District hats, and after much discussion on four options presented to them by staff, they approved a motion by a 5 to 1 vote (Gene Knapp opposed) to move forward on a plan to fund solid waste. The motion by Rich Peaterson was:

“I move we direct staff to prepare for bond sale preparations,
Investigate the exchange of properties,
Declare an emergency to institute a $15 minimum fee”

What this translates out to is a 87.5% increase to dump one can of garbage ($15.00), and a slight break to dump two cans ($18.00). And then there is the rest of the motion, which was the confusing part.

As for the “exchange” of properties, this will “raise” $220,000.00 by using a shift of money from one account to another to allow money to be used to address some of the solid waste operation costs. The official statement is shift will "transfer the Utility’s interest in a tract of land on Beaverton Valley Road and a closed land fill on Lopez to the County’s Equipment Rental and Revolving fund, to produce some cash and reduce the Utility’s responsibility for debt." The debt remains, but it is now in another fund that can be used to help offset $700,000.00 of PW debt in the solid waste accounts

The sale of bonds will raise money for capital improvement at the three transfer stations, and last, and perhaps least, the raising of those fees to drop off trash may or may not raise enough money to pay back the bonds; if not, then the tax payer will have to pick up the difference, one way or the other.

Another tax levy approved by the voters will of course increase property tax, and the money raised could be used to re-pay the bonds, but the intent is to pay off the bonds by use of the revenue from the transfer stations.

The selling of bonds raised a number of questions on how to pay back the bonds. A tax to pay back the bonds sold by the Solid Waste District (District) would have to be approved by the voters every year. This makes the sale of revenue bonds (bonds sold with the understanding that the voters will continue to tax themselves to pay back the money) more difficult to sell, due to the lack of certainty the voters would continue to approve the levy needed to pay back the bonds.

Karen Vedder said “the question is, will the bond market buy bonds not based on the full faith and credit of the county,” which would be the case if the bonds are not issued by the county, but by the Solid Waste District.

Jon Shannon cleared that up, when he said “they” had no intention of selling revenue bonds, only selling general obligation bonds by the county council, not the District, which removes the problem of voter approval.

Shannon said the county council -not the council sitting as the Solid Waste District- can sell general tax obligation bonds that are backed by “the full faith and credit” of the government ( i.e. the tax payer is obligated to pay back the bonds, come what may), then the Council can transfer the money into the Solid Waste District, and the Council sitting as the District can spend the money; but it will be the intent of the Council to pay back the bonds using revenue from the transfer stations, so the tax payer will not be on the hook.

This solves some problems of obtaining the needed money, but Shannon said the remaining problem is, can they in fact manage the bond debt by paying back the bonds using only tipping fees?

If not, then the money will have to come from the tax payers. Shannon said If the County Council -not the Solid Waste District- puts another levy lid lift measure on the ballot “we avoid the 40% voter turnout with a 60% voter approval requirement for approval of a tax increase”, and this also avoids the problem of the voters having the right to approve it each year.

Based on the approved motion, the staff will begin work obtaining more information on bonding, and draft the emergency declaration necessary to impose the new fee schedule without having to have a public hearing, and begin the work necessary to transfer property from one account to another to allow a transfer of money into the solid waste accounts.

Once all that is done, the council will once again take off their council hats, put on their District hats, and decide if they want to approve the program outlined by the motion. According to the County: "New fees, including any minimum drop off fee, must be adopted by ordinance after a public hearing. Council Members also indicated that they will seek public input and conduct additional discussion and deliberations before advancing a tax proposal to put on the primary or general election ballot."