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Commissioners approve bed tax, discuss rural recycling costs


July 11, 2018

JOE WONDERLICK, representing Sweet Home Sanitation, speaks to County Commissioners, from left, Roger Nyquist, John Lindsey and Will Tucker.

Linn County Commissioners last week approved what amounts to a 5 percent transient occupancy tax that will be collected from county businesses that offer lodging to visitors.

The approval was unanimous, with little discussion at their meeting on Tuesday, July 3.

The actual tax will be 3 percent, but the agency collecting the tax will collect a fee of 2 percent of whatever fees visitors pay to stay in local lodging houses – hotels, motels, bed and breakfasts and

Oregon law allows counties to impose such taxes if at least 70 percent of the revenue collected will be used to fund tourism promotion or tourism-related facilities. No more than 30 percent can be used to cover collection or administrative costs.

Collection of the tax will begin Oct. 1.

The city of Lebanon will initially collect the tax from short-term lodging facilities – hotels, motels, bed and breakfast and Airbnb services throughout the county, Commissioner John Lindsey said later.

"Eventually, the state will collect it, but the structure's not there," he said.

"Everybody's going to pay," Commissioner Will Tucker said, though he said it may be difficult to collect from private "mom and pop" businesses that rent out a room or two but may not know they have to pay the tax.

Money collected in the Albany Zip Code areas will go to fund projects at the Expo Center. Fees collected in the rest of the county will go to the county Parks and Recreation Department, which will use it to buy capital equipment.

Tucker said that although the parks department is completely self-sustaining, "when Brian (Carroll, county parks director) needs to buy capital equipment, like stand-up paddle boards or kayaks to rent, it's coming out of the General Fund.

"This will allow him to do other things, to add facilities and capabilities that they don't have today."

Lindsey emphasized that the tax revenue would be used for capital improvements, "not for payroll."

He noted that with the amount of camping and recreation offered in Sweet Home and other areas of east Linn County, "it's self-explanatory."

He said money from the tax could be used for improvements in communities like Harrisburg, Scio and Mill City as well.

Commissioners also discussed trash collection rates for rural parts of the county, including Sweet Home, with representatives of two local haulers, Sweet Home Sanitation, which provides trash collection in Sweet Home and Brownsville/Halsey rural areas, and Republic Services, which handles rural areas of Lebanon.

After about 45 minutes of discussion, Lindsey and Tucker indicated they wanted another week to think about the 10 percent rate hike proposed by the county's Solid Waste Advisory Committee. Commissioners agreed to table the issue until their July 10 meeting.

Rick Partipilo, SWAC administrator and county Health Department staffer, said the committee held a meeting May 31 to discuss the increased costs local haulers are experiencing in handling commingled recycling materials.

Partipilo said the committee recommended 10 percent and he personally suggests 8 percent.

Board Chairman Roger Nyquist acknowledged that there's been "considerable angst" over the issue of increasing fees to cover recycling.

Local haulers have asked for rate increases from both cities and the county after China stopped accepting the level of contamination contained in recycling from the Northwest that's been shipped there. That has forced haulers, who last year were being paid for recycling, to now find alternatives that are costing them money – storage by recycling processors or depositing it in landfills.

Partipilo said in a report to the commissioners that SWAC members reviewed financial statements from Waste Connections, which operates Sweet Home Sanitation, Republic Services and Pacific Sanitation, all of which serve rural areas of the county and had Merina and Company, a Portland-area accounting firm, review the companies' requests.

The committee also reviewed profitability data from three of the largest waste haulers in the nation and met individually with all three local companies to review how they've handled the recycling ban, he said.

Partipilo said in his report that SWAC members were told by the haulers that an 8 percent increase "does not provide much resiliency in the event of an economic disruption, such as the China recycled materials import ban." He said the haulers have lost money in the first six months of this year due to the ban.

Lindsey said he didn't want to approve an 8 percent increase, saying he had questions about the costs haulers reported experiencing.

"I'm not liking some of the figures (relating to) 8 percent," he said. "Something's not matching." He said he wanted a "couple of more weeks to verify" figures in Partipilo's report.

Nyquist said he generally believed what Merina had checked.

"While I appreciate your sentiments, we have a process, we have a committee," he said.

Tucker said he wanted to make sure that any fee increase would restore local companies' profits "back to a good point."

Julie Jackson, municipal and community relations manager for Republic Services, told the board that "we haven't recovered" from the recycling crisis.

She said the West Coast has been hit "much harder" than other regions of the country because recycling from the West Coast has traditionally been sent to China.

She estimated her company's losses thus far this year as between $70,000 and $90,000.

"A piece of the argument for 10 percent is that's money we're not going to get back," she said, predicting, "It won't stay at 10 percent. Margins will continue to erode. But (10 percent ensures) it will be longer before we're back here."

Joe Wonderlick, pricing manager for Waste Connections, said that the national profits numbers for Toronto-based Waste Connections that SWAC referenced in its deliberations were "a guidepost" and that "really, (Sweet Home Sanitation) is a local business.

"The guidelines are something to look at for the end margin, but the businesses are different. They cycle in different ways," he said.

Tucker told Underlick he appreciated what Sweet Home Sanitation has to offer the community, noting that he's used the transfer station twice recently.

"It's the only place I can take building materials," he said.

He said that he was concerned that the local companies make sufficient profit, but he said he also wanted to protect consumers.

Lindsey said "some things changed" when Sweet Home Sanitation, a "family organization," was sold to Waste Connections.

He said he wondered who the "major stockholders" are for Waste Connections, asking whether the Chinese government could be one.

"If you allow a stockholder to manipulate the byproduct of an industry, then you've got a problem," Lindsey said. "I just want to make sure that isn't the case."

In another action Thursday, the commission approved a $15,000 agreement with the Ore-gon Health Authority to continue surveillance for the West Nile Virus in Linn County.

Partipilo said the county will hire a university master's degree candidate who has vector control experience in Utah and for whom the research will be a master's project. The county will fund the temporary position, which will include seeking out, trapping and testing mosquitos and any birds suspected to be infected by the virus.


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