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Home My WebLink AboutCapital Needs & Financing Issue Paper1 March 18, 2026 ISSUE PAPER Capital Needs & Financing Statement of Issue: In the 2023-2025 Solid Waste budget the first goal given in the summary budget is to “manage the Solid Waste Enterprise Fund using a triple bottom line methodology, balancing financial health, environmental stewardship, and social responsibility goals”. Good environmental stewardship can be measured by: • surpassing the State recycling goal more than a decade ago • a 2022 comparative study showing that Public Works delivers more waste diversion opportunities at its two solid waste facilities than at King County facilities • the decentralized approach to landfill diversion for food waste begun in 2010 which has brought Jefferson County close to meeting the State-wide organics diversion goal before the Department of Ecology has completed the rule making for the most recent organics management bill • the transfer of $1.00 per ton of garbage delivered to the solid waste facilities to Public Health to assist with costs associated with responses to illegal dumping with a $23,000 transfer made in 2024 • maintaining the same rate for disposal of refrigerated appliances since 2014 which is the lowest rate in Western Washington • transitioning from a fixed Moderate Risk Waste Facility to remote collection events for household hazardous waste which has improved service equity to south County residents and increased material collection by 20,000 pounds per year • transitioning to ruminant (goats) instead of chemical control of vegation at the closed landfill in 2024 Success in meeting social responsibility goals can be found in: • maintaining an increase in the per ton fee schedule in line with the Consumer Price Index as shown in the table below: 2009 - 2024 Cumulative Increase to CPI & Per Ton Tipping Fee % CPI Increase* % Tipping Fee Increase 43.7 43.5 *Source: https://www.bls.gov/regions/west/cpi-summary • drawing precisely $0.00 from the Jefferson County General Fund or any other tax revenue since 1993 • meeting facility and equipment Capital needs on a cash basis so that the tipping fee does not include debt service • over three decades of support for employment of individuals with intellectual and developmental disabilities at the transfer station with funding for the contracted service from the tipping fee for garbage disposal 2 • a low-income discount for garbage disposal that Public Works initiated in 2023 as the second only such program in the state after King County which provided $52,820 in discounts in 2024 • staff’s coordination with the Washington Utilities and Transportation Commission (UTC) and the UTC G-Cert hauler, Waste Connections, on a low-income rate in the UTC tariff which would be the first such tariff rate in the state • maintaining both a minimum and per ton fee rate slightly under the Western Washington regional average as shown in the table below despite the disadvantage of distance to rail service and operating an aging and inefficient facility at 44% over design capacity • Revising operational hours for the public in order to address deferred maintenance with staff labor at reduced costs Notes on fee survey: • The San Juan County transfer station on San Juan Island was excluded from this survey because the $440 per ton fee is an outlier and would skew the regional average • The Blue Mountain Transfer Station near Sequim and operated by the City of Port Angeles was excluded from this survey because the $332.90 per ton fee is an outlier and would skew the regional average • The Whatcom County solid waste program is entirely privatized with several companies providing self-haul drop-box and transfer station options. The $300/ton rate shown is for the Birch Bay and Cedarville transfer stations which provide disposal options comparable to the Jefferson County transfer station Success in balancing enterprise fund health with environmental stewardship and social responsibility goals can be measured with benchmarks found in Resolution No. 28 23, adopted by the Board of County Commissioners on July 3, 2023. These are: • A projected year-end reserved capital fund balance of 25 percent of current capital replacement value in equipment and buildings, excluding any GO bond funds • A projected year end reserved operations fund balance of 25 percent of the projected annual total solid waste operation expenditures The below table shows that short term operational fund balances are healthy and that we are one front- end loader or knuckle-boom crane emergency replacement away from exhausting capital reserves or Location Minimum Per Ton Fee Jefferson County 20.00$ 171.00$ Clallam County (PA)10.00$ 244.03$ Kitsap County 42.00$ 125.19$ Mason County 21.19$ 130.62$ Skagit County 27.00$ 137.00$ Island County 14.75$ 211.43$ Whatcom County 5.00$ 300.00$ Snohomish County 20.00$ 105.00$ King County 36.00$ 217.20$ Pierce County 36.23$ 181.13$ Grays Harbor 12.77$ 127.69$ Thurston County 18.00$ 119.00$ Seattle 35.00$ 165.00$ Average (w/o Jefferson)23.16$ 171.94$ 2025 Regional Fees (incl. 3.6% tax) 3 worse, not having adequate funds to maintain facility operations should essential equipment require immediate replacement. Benchmark 2025 Target Year End Balance January 1, 2025 Actual +/- Target Balance Year End Equipment Reserve (Capital) Fund Balance* $2,361,555 $546,205 -$1,815,350 Year End Reserved Operations Fund Balance $1,310,923 $1,813,199 +$502,276 *Target Capital Fund Balance is 25% of the 2022 estimated facility replacement value of $8.2M with a multiplier of 5% for each of years 2023, 2024 and 2025 The 20-year history of the Equipment Reserve (Capital) Fund is shown in the graph below. Between years 2010 and 2011 a transfer was made of $502,000 to the County’s Capital Improvement Fund. By 2023 the fund had begun to recover but two equipment purchases necessary for improved efficiency of the transfer station brought the fund to $1.8M under the target balance. Also shown in the graph below is the effect of the first tipping fee increase since facility operations began and the improvement to the fund balance that followed. Analysis: Public Works has been able to keep the per ton tipping fee near or slightly below the Western Washington average only by deferring facility Capital projects over many years. We are now unable to meet prudent Capital fund balances and will no longer be able to maintain the transfer station on a cash basis. Solid Waste customers will now be burdened with debt service as part of the disposal fees. The table below shows the near-term Capital projects and estimated expenditures necessary for uninterrupted transfer station operation. Note that project management costs are not included. - 200,000.00 400,000.00 600,000.00 800,000.00 1,000,000.00 1,200,000.00 1,400,000.00 1,600,000.00 200520062007200820092010201120122013201420152016201720182019202020212022202320242025EQUIPMENT RESERVE (CAPITAL) FUND $502,000 Transfer to Capital Improvement Excavator and Telehandler 1st fee increase since 1993 4 With critical infrastructure costs exceeding Capital reserves, Public Works will need to finance these projects either, or in combination with, GO Bonds or grants or loans from the Public Works Board. Regardless of funding source, the tipping fee will need to be adjusted to produce adequate revenue to pay down the principal and interest. Fiscal Impact/Cost Benefit Analysis: The below calculator shows the annual and cumulative yield from a $10.00 capital surcharge applied to the current per ton tipping fee of $171 per ton. The two columns to the right show the annual project costs from the project list above and the deficit between project costs and the additional revenue from a capital surcharge. As shown circled below, a $10 capital surcharge would not meet current Capital needs until somewhere between a 14th and 15th year. This demonstrates that Public Works cannot continue to meet transfer station Capital needs on a cash basis. Capital Project 2025 2026 2027 2028 Tarping Rack Replacement 150,000$ Lower Lot Asphalt Improvements 150,000$ Upper Lot Asphalt Repairs 100,000$ Tipping Floor Roof 566,000$ Scale Replacement 50,000$ 600,000$ Tipping Floor Leachate Drain 100,000$ Recycling Center Roof 594,000$ Recycling Center Loading Dock 75,000$ Recycling Center Stormwater Drain 75,000$ Knuckle-boom Crane Replacement 180,000$ 900,000$ Back-up Generators 100,000$ Annual Total:150,000$ 866,000$ 1,624,000$ 1,000,000$ All Capital Improvements:3,640,000$ Year MSW Tons Surcharge Rate Annual Yield Cumulative Yield Projected Capital Expenditure Expenditure vs Funding 2025 23,725 10.00$ 118,626$ 118,626$ 150,000.00$ (31,374)$ 2026 23,962 10.00$ 239,624$ 358,250$ 866,000.00$ (626,376)$ 2027 24,202 10.00$ 242,020$ 600,270$ 1,624,000.00$ (1,381,980)$ 2028 24,444 10.00$ 244,440$ 844,710$ 1,000,000.00$ (755,560)$ 2029 24,688 10.00$ 246,885$ 1,091,595$ 2030 24,935 10.00$ 249,354$ 1,340,949$ 2031 25,185 10.00$ 251,847$ 1,592,796$ 2032 25,437 10.00$ 254,366$ 1,847,162$ 2033 25,691 10.00$ 256,909$ 2,104,071$ 2034 25,948 10.00$ 259,478$ 2,363,550$ 2035 26,207 10.00$ 262,073$ 2,625,623$ 2036 26,469 10.00$ 264,694$ 2,890,317$ 2037 26,734 10.00$ 267,341$ 3,157,658$ 2038 27,001 10.00$ 270,014$ 3,427,672$ 2039 27,271 10.00$ 272,714$ 3,700,387$ Assumptions: Annual MSW Tonnage Increase of 1% Capital Surchage effective date of 7/1/25 Projected Capital Expenditures 5 Recommendation: Public Works recommends the adoption by Resolution of a Capital surcharge on the per ton tipping fee rate effective July 1, 2025 Attachments: Map of needed transfer station Capital repairs and equipment replacement