Strategic Plans by tyndale


									                                     SOLID WASTE

Background. Solid waste jurisdiction in Washington is fragmented. The UTC regulates
solid waste collection statewide except cities can choose to provide (directly or by
contract) solid waste collection and counties can choose to contract for residential
recycling collection. The Department of Ecology (DOE) prepares and implements the
state’s solid waste management plan. Counties, and a few larger cities, prepare and
implement local solid waste management plans. Most cities provide solid waste
collection service either directly or by contract.

Industry. The industry continues a trend of consolidating local and regional companies
into larger regional and national companies. However, I do not expect that will affect the
UTC’s work in the near future. Acquiring companies have maintained the local hauler’s
separate operating areas and trade names. Although staff will deal with fewer companies,
as a practical matter, the number of operating service areas and associated rate case
filings will not change. Consolidations should result in improved, centralized accounting,
increased ownership expertise and better access to capital markets. Rate filings will
require additional work on overhead allocations and affiliated interest transactions.

Economic / Operating Environment. A healthy state / local economy supports growth
in both commercial and residential services, which tend to stabilize solid waste collection
rates and postpone the need for regulated companies to increase rates. At the national
level, higher levels of inflation will drive costs up and require regulated companies to file
more frequent rate cases.

The state solid waste management plan proposes many new recycling programs that the
UTC will need to work with regulated companies and counties to implement.

Political environment. Sen. Rasmussen and, most recently, Rep. Campbell Some
members of the Legislature have criticized UTC regulation and regulated solid waste
collection companies for…?. Sen. Rassmussen – regulated haulers own the company that
built the 304th Avenue landfill in her district. Rep. Campbell made broad statements
about LeMay (operates in his district) and I got the impression that he thought the
regulated companies make too much money. Rep. Mielke because he had a close
connection to a company in Clark County that the commission took action against for
collecting solid waste without a certificate. Former Rep. Mielke (Clark County)
introduced The Legislature also briefly considered a bill several years ago to deregulate
solid waste. Counties are sometimes interested in authority to provide service directly or
by contract. Clark County is the only county I know of that is currently interested in that
authority. Clark County is the only county that currently contracts for residential
recycling. Kitsap County contracted for residential recycling in the past. The Washington
State Association of Counties has not taken a position on this issue.

Partners. The Department of Ecology (DOE) prepares and implements the state solid
waste management plan. Regulated solid waste collection companies are key players in
solid waste collection statewide. Although DOE staff frequently view the UTC and solid
waste regulation in general as barriers to accomplishing specific recycling goals, etc., we
have developed a good working relationship with DOE staff.

Local governments prepare and implement local solid waste management plans. The
UTC requires regulated haulers to comply with county solid waste management plans and
implementing ordinances. We also work with counties to implement recycling revenue
sharing programs.

There are no key initiatives or dependencies / connections between UTC, DOE and local

Funding. Current regulatory fees are set at 0.19 percent of gross revenue. The statutory
maximum is 1.0 percent. Puget Sound area companies provide the greatest percentage of
regulatory fees. If the legislature passed a county “option” to provide (directly or by
contract) solid waste collection and the larger Puget Sound area counties “opted” out of
the regulated system, the UTC would lose a significant amount of funding. That could
result in an underfunded program.

Internal Capacity. The UTC has a staff of knowledgeable, experienced analysts who
work on the solid waste industry. Unlike other regulated industries, the solid waste
industry’s structural, financial, and operational environment is stable. Several of the
current employees are nearing, of eligible for, retirement. The greatest challenges for the
section will be retaining the current employees, succession planning succession planning
for retirements and recruiting qualified staff in the future.

Background. The UTC regulates private water companies that serve 100 or more
customers or charge more than $471 average annual revenue per customers. The UTC
regulates 61 companies that operate about 700 water systems and serve less than five
percent of the state’s population.

Industry. The water industry is an increasing cost industry. Small water companies
generally have limited technical, managerial and financial capacity. The water systems
are generally characterized by aging and failing infrastructure. Additional Safe Drinking
Water Act requirements for water quality require new investment in treatment and
filtration facilities. All of these are driving the need for significant capital investment in
the near future. Small companies generally cannot access traditional capital markets. The
companies generally have limited funding sources and the owners have little equity.

Economic / Operating Environment. Several external factors will cause the UTC to
regulate more small water companies in the future. A healthy economy supports both
commercial and population growth. Stand-alone water systems serve most of the growth
in rural areas. More water systems likely means more regulated water systems.

Because the water industry is an increasing cost industry, average water bills will
increase faster than inflation and drive more water companies above the jurisdictional
revenue threshold. The jurisdictional revenue threshold increases by an inflation index.

The Municipal Water Law requires Department of Health to adopt rules on water use
efficiency. The rules will require all companies to consider conservation programs,
including installing meters and using conservation (inverted) rate designs. These
programs will likely drive additional investment and higher water bills, resulting in more
jurisdictional companies.

Political environment. Water has been an important topic in the legislature the last
several sessions. The Municipal Water Law will require all water systems to address
water use efficiency and conservation. Those activities cost money and will increase

Every year, the UTC staff works with legislative staff regarding nonregulated water
companies that charged customers higher bills. As water companies move from “flat
rate” (no limit on the amount of water) pricing to metered rate pricing, customers are
shocked by high water bills (up to $400 per month). Angry customers call their
legislators and the UTC. Staff works with customers and legislative staff during our
investigations to determine whether the UTC has jurisdiction over the company and its
rates. Most customers end up paying higher water bills for less water and they are not
Partners. Our primary partner in water regulation is the Department of Health (DOH)
Drinking Water Program. DOH regulates water quality and quantity for all water
systems. Although the UTC has statutory jurisdiction over water quality and quantity, the
UTC has a Memorandum of Understanding (MOU) with DOH stating that DOH takes
primary responsibility for water quality and quantity issues. Staff is currently reviewing
and redrafting the MOU with DOH.
The Public Works Board, Department of Community, Trade and Economic Development
(CTED), administers the drinking water State Revolving Fund. Staff works with the
board and DOH on issues related to regulated water companies.

Staff works with both DOH and the county when a regulated water company is failing.
Counties are the receiver of last resort in a receivership proceeding. Several regulated
water companies have failed and the courts appointed the county as receiver.

There are no key initiatives or dependencies / connections between UTC, DOH and
CTED. ((NOTE: We have a MOU and we are rewriting it, so this statement is at least
too broad, if not inaccurate.)) I understand this is a scoping document for the near future.
However, we are close (weeks?) to completing the MOU and, so far, there are very minor
changes to current MOU.

Funding. The water program is severely underfunded. The UTC collects about $32,000
in regulatory fees and spends about $500,000 regulating the industry. Energy companies
subsidize water regulation. Although staff frequently discusses the need to propose
legislation to increase funding, the UTC has not yet made any proposals.

Employee Capacity. The UTC has a staff of knowledgeable, experienced analysts who
work on the water industry. Because of funding limitations, our work is bare bones.
Although there are many changes in the water industry, those changes do not generally
affect our work. The greatest challenge for the UTC will be to retain current employees
and maintain current service levels in the face of continued severe funding deficits.

Background The UTC, Department of Licensing and the State Patrol share responsibility
to regulate private transportation providers. Some local jurisdictions choose to regulate
taxis. The transportation industry is not limited to private sector providers. The
Department of Transportation and numerous local and regional transportation
jurisdictions also fund or directly provide transportation services. Because regulation and
ownership of the transportation industry is so fragmented, the agency’s external
environment is extremely complex.
Background. In addition to solid waste collection, The UTC regulates:

       Ferries – entry, rates and service.
       Airporters - entry, safety, rates and service.
       Scheduled Intercity Bus - entry, safety, rates and service.
       Nonprofit Special Needs - registration and safety.
       Charter and Excursion – registration and safety.
       Household Goods – limited entry regulation, safety, limited rate regulation (rate
        bands) and service.
       Oil Pipe Lines – safety, rates and service.
       Low Level Radioactive Waste Disposal – rates.


Industry. None of the industries face significant structural or operational changes.

Bus and airporter companies face increasing competitive pressures from a public
transportation system that is expanding service and improving coordination. The
Department of Transportation was recently mandated and funded to encourage public
transit agencies to coordinate service and otherwise fill in the gaps in public
transportation. Sound Transit is making progress in developing light rail that will
eventually serve SeaTac Airport and its commuter rail program and rapid bus transit
program will provide consumers alternatives to buses and airporters. The Legislature
restructured regional transportation governance in the Puget Sound this session, which
will only encourage the above trends. We do not know how the bus and airporter
industry will respond to these pressures.

The Washington State Ferries marginalized the commercial ferry operators up until a few
years ago, relegating the operators to the routes WSF did not serve or did not plan to
serve. In 2003, the Legislature created an opening for competition by the commercial
ferry operators on major commuter routes. Some operators began service or applied to
provide service on three of the four major potential routes. In 2006, the Legislature
created a funding program that limits the involvement of both the Washington State
Ferries and the commercial ferry operators in providing commuter-oriented passenger-
only service, and encourages county ferry districts to become the primary providers. If
the new program is successful, commercial ferry operators will only be able to serve low
volume routes that the state or local governments do not wish to serve.
Private for-profit special needs transportation providers are transporting a significant
share of special needs consumers. The agency does not regulate these providers, because
when the law passed, private for-profit providers were non-existent or a very small share
of the market. The agency is being encouraged to support legislation to extend regulation
to the for-profit providers.

Economic / Operating Environment

The public sector provides passenger transportation through public transportation benefit
areas, municipal transit, and Sound Transit. The Department of Transportation develops
plans for and funds public transportation, with special emphasis on “filling gaps” in
service or funding provided at the local level.

The private sector provides passenger transportation through airporters, scheduled
intercity bus companies, charter and excursion companies, and non-profit special needs
providers regulated by the UTC. The private sector also provides service through
limousines and “for hire” taxis that are regulated (to a lesser degree) by the Department
of Licensing.

Passenger transportation service is provided by:
     Public Entities - public transportation benefit areas, municipal transit agencies,
       and Sound Transit.
     UTC-Regulated Private Companies - airporters, scheduled intercity bus, charter
       and excursion companies, and nonprofit special needs providers.
     Nonregulated Private Companies - limousines and “for hire” taxis.

The Washington State Ferry System, county ferry districts, transit agencies, tribes and
UTC-regulated commercial ferries provide ferry service.

Many different state and local government entities are engaged in transportation
        The Washington Transportation Plan provides a high-level goal-oriented
          overview of a 20-year horizon.
        Washington State Department of Transportation’s (WSDOT) system plans are
          detailed for state-owned elements and address local or private elements in
          “state-interest” goals and programs.
        Specific WSDOT offices and other agencies focus attention and provide
          coordination: Freight Office, Transit Mobility Office, Public Transportation
          and Rail Office, Freight Mobility Strategic Investment Board, and the Agency
          Committee for Coordinated Transportation. These offices are not necessarily
          comprehensive or systematic in their approach.
        Regional Transportation Planning Organizations produce regional plans,
          mostly oriented toward highway investment with some incorporation of public
          transit, ferries and rail.
          The Regional Transportation Investment District in the Central Puget Sound
           has planning and funding functions intended to complement state and local
           plans and investments.
          Local jurisdictions produce transportation plans for those segments of the
           system that they own or operate.
          Ad-hoc organizations provide input with their own proposal, such as the
           “Farmhouse Gang” in the North Sound region. They tend to develop proposals
           that are folded into larger plans to the degree they prove useful.
          There is not a single central document that provides a detailed, systematic,
           comprehensive plan for who will provide what transportation services, at what
           level of service and how to fund it.

Airporters operate to and from airports, on schedule or on demand door-to-door. The
industry claims because it faces substantial competition from private automobiles,
nonregulated private transportation companies (limos and taxis) and public transit, the
UTC should not regulate fares. The industry claims the competition from alternative
transportation modes will adequately regulate fares.

Rising fuel prices adversely affect all transportation companies. Airporter operators use a
greater amount of fuel compared to other transportation industries, so rising fuel prices
have a greater impact on that industry. Economic and national issues that reduce airline
travel also affect this industry. After the September 11, 2001, terrorist attacks, airline
traffic decreased significantly and this industry lost many passengers.

Political Environment.

Both the UTC and the private transportation operators function in a planning and funding
environment that is fragmented. Regulators and operators find it difficult to make
informed decisions when the public sector transportation system (which provides the bulk
of passenger transportation) is unpredictable. Examples of the environment in which the
UTC and the operators have to operate within include:
     The Transportation Commission adopts a high-level, goal-oriented plan with a
        20-year horizon.
     The Department of Transportation develops system plans within that context, but
        while they are detailed for the state-owned (highways, ferries) programs, they
        lack detail for the “state-interest” programs (public transportation, rail, local
        ferries, etc.). The Department also has “modal offices” that advocate for and
        fund specific programs and projects in the “state-interest” arena.
     Regional planning and funding entities, such as regional transportation planning
        organizations and the Regional Transportation Investment District, develop more
        detailed plans which are required to be consistent with the state plan.
     Local governments and agencies develop their own plans and funding programs.
     From July 1, 2005 through June 30, 2007, state law prohibits the commission
        from considering applications from private companies to provide passenger-only
        ferry service between Kitsap County and King County. The moratorium provides
         public entities the opportunity to develop and implement passenger ferry
         operations before private companies initiate service.
While the laws that created all of these entities and processes requires consultation and
coordination, there is no oversight of all the planning and funding efforts, and
participants report examples of conflicts and gaps. Further, the public and private
operators do not always communicate well when making planning and funding decisions.
Finally, the public sector’s planning and funding decisions are subject to substantial and
frequent changes in the political climate.

The state legislature has struggled the last two sessions over the question of whether
public entities (state or local governments) or private companies should provide ferry
service. The UTC has two applications for ferry service pending, but they are on hold
until July 1, 2007, due to a statutory moratorium designed to allow public entities time to
start ferry service.

Sen. Haugen announced her interest in transferring UTC transportation regulation
functions to other state agencies. She has not yet introduced any legislation.

The UTC collects approximately $2.4 million through the Single State Registration
System (SSRS). Federal legislation eliminates the SSRS effective January 1, 2007, and
replaces it with the new Unified Carrier Registration (UCR) program. However, the US
DOT has not yet taken any action to start the development of the UCR program and states
are worried that the UCR program will not be operational before the SSRS program
expires. The National Association of Transportation Specialist (NCSTS), the National
Association of Utility Regulatory Commissioners (NARUC), the UTC and other affected
states, and various industry groups are working to delay the change by one year until
January 1, 2007. A delay will give the US DOT enough time to develop and implement
the UCR program and give states additional time to adopt enabling legislation and change
their programs. The UTC is also working internally to consider what actions the state
could take if the federal UCR program is not in place before the SSRS program expires.


The Department of Transportation conducts substantial passenger transportation planning
and administers grant programs to subsidize and develop passenger transportation
operations within and between communities that do not have adequate transportation
services. The UTC’s statutory regulation of inctercity bus passenger transportation
companies conflicts is not consistent with WSDOT’s goal of using desire to use its grant
program to select which private company should provide passenger transportation

The Seattle Port Authority (SeaTac Airport) manages the traffic flow of passengers into
and out of SeaTac International Airport. The port authority has always been interested in
deciding which private transportation companies it would allow to operate into and out of
The Washington State Patrol does not inspect the passenger motor carrier vehicles
regulated by the UTC, but shares its interest in the safe operation of all motor vehicles on
the state highways.

Funding. With the exception of Oil Pipe Line and Low Level Radioactive Waste
Disposal, all of the transportation industries fail to cover operating expenses at the current
regulatory fee level. Revenues collected from the SSRS program subsidize all of those
programs. The UTC needs to review funding options for these industries.

Employee Capacity. The current UTC staff are knowledgeable and experienced in the
various regulatory functions for all of the different transportation industries. There is
much uncertainty regarding the near term future of regulation for these industries. In
addition to funding issues, public policy reviews and political interest may lead to
deregulation of some industries or transferring regulatory functions from the UTC to a
different state agency. The UTC’s challenge will be to retain current experienced
employees and maintain current service levels in the near term.

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