Salem City Council considers raising garbage rates for 2018, 2019

Salem ratepayers are being asked to pay more for garbage services under proposed rate increases coming before the city council.

Residents can weigh in Monday evening during a public hearing at Salem City Hall. New rates, if approved, go into effect Jan. 1, 2018.

With franchised garbage haulers facing rising costs, business and city officials are looking to ratepayers to help them stay in the black.

"The cost of doing business is increasing," said Ryan Zink, the city's franchise administrator.

Under Salem's proposal, Marion County residents using 35-gallon cans would pay 80 cents a month more in 2018, while Polk County residents would see only a 25-cent per month increase under the proposal.

In 2019, rates would rise by 60 cents for Marion County ratepayers and 25 cents for those in Polk County.

The disparity between Marion County ratepayers and their West Salem neighbors in Polk County stems partially from the fact that Marion County garbage is hauled to an incinerator north of Salem, which has higher operating costs.

While the city of Salem sets rates for garbage haulers, Marion County commissioners voted last year to raise fees for haulers who use the incinerator, which turns trash into energy.

The city of Salem sets rates with the goal of providing garbage haulers with a 10 percent pre-tax profit margin, with variations from 8 to 12 percent possible.

Haulers' net income is already close to falling below 8 percent. Without rate increases, revenues are expected to fall below the target in 2019.

Keeping them in that sweet spot becomes more difficult as business costs rise. Costs include wages increases, general inflation, increases in medical insurance for workers and a minor uptick in fuel costs, Zink said.

David Lear, general manager of the Mid-Valley Garbage & Recycling Association, said the proposed increases would allow haulers to continue to invest in employees, low-polluting vehicles and the community.

Salem officials also are toying with the idea of setting rates two years at a time instead of one year, as it does now. The move is aimed at giving haulers and the public a measure of stability regarding future rates, Zink said.

It also makes rate increases more gradual over time, instead of ratepayers going a few years without an increase and then seeing a big jump, he said.

Marion County says the Covanta Energy from Waste facility processes 75 percent of the county's garbage, "which creates enough electricity to power a city the size of Woodburn."

Garbage haulers pay a "tipping fee" to dump at the Covanta plant. The $20 tipping fee increase, approved by county commissioners, was the first since 1992 and went into effect last October, raising the rate haulers pay from $67.45 a ton to $87.45, according to the county.

Residential customers could expect their garbage bills to go up between 6 and 8 percent because of the new fee, Marion County said after commissioners approved the rate increase.

Marion County claims the plant has an "exceptional" environmental compliance record.

But records show that Covanta Marion, Inc. has violated state environmental standards at least once.

In February 2016, a state Department of Environmental Quality inspection found Covanta Marion was letting ash-laden wastewater from the plant drain into basins meant for storm water as vehicles brought the wastewater outside on their tires.

"The wastewater generated from maintenance and cleaning of the ash conveyor system ... is not an authorized non-stormwater discharge and must be eliminated," a department inspector, Jill Seale, told the company in an April 2016 warning letter.

By mid-May 2016, the plant had corrected course, with Seale writing a letter acknowledging the company had responded appropriately to the warning. She said further violations could mean a civil penalty.

Covanta spokesman James Regan said in an email, "After receiving the notification letter from DEQ, we revised the facility’s (storm water pollution control plan) and made corrective actions to the facility’s storm water management system to ensure compliance with the permit."

Reach Jonathan Bach by email at jbach@statesmanjournal.com or by phone at 503-399-6714. Follow him on Twitter @JonathanMBach and Facebook at https://www.facebook.com/jonathanbachjournalist/.

© 2017 KGW-TV


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