Salem council approves operating fee, higher garbage rates

The Salem City Council voted Tuesday to enact a new operating fee, raise garbage hauling rates and send a proposed payroll tax to voters.

The operating fee on utility bills will start appearing in February and the voters could be asked to approve a separate, employee-paid payroll tax as soon as May.

The operating fee and payroll tax are the two prongs of Salem's plan to stop its savings accounts from running dry in 2022 as revenues fail to keep pace with city spending.

Proposals would raise $16 million

Talk of the tax and fee has circulated since 2018 when a city revenue task force started weighing the two income sources.

The two charges are expected to bring in $16.2 million in revenue the first full year both are implemented.

The payroll tax would not affect minimum wage earners. But it would stand at .266% for those who make more than minimum wage and as much as $15 an hour. For those earning more than $15 an hour, the rate would be .39%. 

For example, a worker earning $15 an hour for 40 hours a week would pay $6.92 a month or $82.99 a year for the new tax, according to a city calculator.

How much would the tax cost you? Click here for the city's payroll tax calculator

The city would charge the tax to anyone working within city limits, regardless of whether they live in Salem.

The operating fee ranges from $8 to $36.56 a month, bringing in a projected $7.1 million the first year. 

Here's how the operating fee changes across the board:

• The charge will be $8 per account each month for residential accounts. That's an additional $96 a year.
• The charge will be $6.40 per unit a month for multifamily accounts such as apartments. That's $76.80 a year.
• Institutional, commercial, public and industrial accounts will be charged $38.56 per account each month. That's $462.72 a year.

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Garbage hauling rates rise

Garbage haulers are asking for more money to dispose of Salem's trash and recycling after councilors approved rate hikes last year.

City councilors raised rates for 35-gallon cart service by $1.25 per month in Marion County and by $1.20 in Polk County. That means rates would stand at $30.75 in Marion County and $25.05 in Polk County starting in January 2020.

The council is involved in setting rates because the City of Salem manages franchise contracts with six garbage haulers for disposal services: Pacific Sanitation; Loren's Sanitation and Recycling Service; Suburban Garbage Service; Pacific Sanitation; Republic Services; Valley Recycling and Disposal; and D & O Garbage Service.

Last year:Salem council OKs garbage rate hikes, questions cost of Covanta incinerator

A city report pointed to the recycling market as the big cost driver. Processing recycled materials continues to be expensive in the wake of China's decision to stop taking recyclables from the U.S. 

Haulers in 2017 made an average of 33 cents per ton of mixed recyclables they collected, but they now pay $110 per ton to have recyclables processed, according to the city staff report. 

"The abruptness of China's announcement resulted in major disruptions in global recycling markets," the report stated. "While the rising cost to process recycled material has slowed and appears to be flattening, no relief is anticipated over the next few years."

Contact reporter Jonathan Bach by email at jbach@statesmanjournal.com or by phone at 503-399-6714. Follow him on Twitter at @jonathanmbach.