Finance Committee Agenda and Packet 2023 02 16

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LL 1ty.��f� FINANCE COMMITTEE Louisville ITEM 2 COLORADO -SINCE 1878 SUBJECT: DISCUSSION/DIRECTION- BAG TAX FUNDED WASTE REDUCTION PROGRAMS DATE: FEBRUARY 16, 2023 PRESENTED BY: KAYLA BETZOLD, SUSTAINABILITY COORDINATOR JEFF DURBIN, CITY MANAGER SUMMARY: Staff is presenting proposed waste reduction programs funded through disposable bag tax revenue that support commercial waste diversion, with the goal of increasing commercial waste diversion from its current rate of 24%. DISCUSSION: Project Background In 2020, Louisville voters approved Ballot Question 2A, which aims to reduce single -use bag consumption within the community by applying a $0.25 tax on every paper and plastic bag provided to customers by Louisville retailers. Retailers will retain $0.10 of each disposable bag tax collected as a vendor's fee to be used for administration of the tax, such as training staff, improving or altering infrastructure for administration of the tax, and improving infrastructure to increase bag recycling. The remaining $0.15 of each disposable bag tax collected and remitted to the City shall be used only for costs related to administration of the tax or other sustainability- related initiatives and programs. The bag tax went into effect January 1, 2022. Louisville Bag Tax Business Profile When the tax began, there were 345 total businesses on the bag tax list. Of those businesses, 130 (37.7%) businesses have completed a Retailer Correction Form and are now exempt from the tax, leaving 215 businesses remaining on the bag tax list. New businesses are added to the bag tax business list when they submit for a new business license and, if the business does not use bags, are removed from the list when they complete a Retailer Correction Form and the form is reviewed and approved by City staff. Of the 215 current bag tax businesses, 72 are food -related (restaurant, bakery, cafe), 50 are vendors (products, art, catering — likely does not have a physical location in Louisville), 46 are retail (convenience, hardware, gifts), 40 are service (salon, dentistry, pet grooming, yoga, etc.), 7 are grocery and liquor. The percentage breakdown is shown in the graph below. 7/57