Disposal Firm Finds It Owes Seattle About $400,000

Art Dudzinski slid the piece of paper across the table. Here, almost, was the news.

``This is what we found,'' said Dudzinski, regional operations vice president for Waste Management, the garbage people.

The paper said:

``Last December, Waste Management of North America Inc., received an inquiry from a local reporter asking whether one of its local subsidiaries, Bayside Disposal, was paying utility taxes to the city of Seattle on garbage-collection services provided to Naval Station Puget Sound.

``Until this time, there had been no indication from the city or otherwise that utility taxes related to this or similar facilities might be due the city.''

An internal review was begun immediately, Dudzinski's piece of paper said. And a discovery was made.

``Bayside has now concluded that services provided to most of these accounts were not exempt from city utility taxes.''

So far, so good. Except all this we have reported earlier. The question was still: How much did Waste Management owe?

When last we left them, neither the city nor Waste Management would tell.

After we filed a public-disclosure request, and many letters were exchanged, Waste Management informed us it would release the information.

This was being done, said W.A. Jeffry, regional general counsel, ``in the interest of public trust.''

So here it was, a piece of paper, sitting on the table in front of me, with Dudzinski watching while I read.

Read the paper:

``Bayside's review further determined that the company has, in fact, paid the city of Seattle nearly $6.2 million in utility taxes, which is approximately 95 percent of the total utility taxes it estimates to be payable to the city for the period 1985 through 1989.''

Dudzinski, a nice man, smiled.

``That's what we found,'' he said.

Thus, the answer to how much they haven't paid in taxes was: how much they have paid in taxes.

In other words, go figure.

It took me a moment, being that I calculate in Swedish.

Ten percent of $6.2 million is $620,000.

Half of that, or 5 percent of the big number, would be $310,000.

I looked up, pleased.

``You owe about $300,000.''

``Yes, that's what we found,'' Dudzinski said.

``Me, too,'' I said.

At last, I could write it:

Waste Management, which is negotiating a potential record-setting $400 million garbage-hauling contract with the city, failed to pay the city $300,000 in taxes during the past five years.

This was information that failed to surface during ``exhaustive'' City Council hearings and ``nationwide'' reports on Waste Management's background.

Release of the information also was refused by Dale Tiffany, acting director of the city's Department of Licenses and Consumer Affairs, who argued that, under law, it was not public information.

That seemed to conflict with earlier statements by then-Mayor Charles Royer and City Council members who said they wanted the public to know everything about their expensive new partner.

The Licensing Department also said that since it allows taxpayers to decide for themselves how much taxes to pay, the city would not have known about the unpaid amount if The Times had not inquired about it.

At any rate, now we all know.

Two-thirds of the bill, Dudzinski said, is from taxes Bayside did not pay to the city on a garbage-hauling contract with the University of Washington.

That was contrary to city ordinance, which says companies providing services within city limits must pay the city a tax, even if the service is rendered to another governmental (county, state, federal) entity.

``Bayside, apparently on its own, just decided not to pay it,'' Dudzinski said. The practice continued after Waste Management acquired the company in 1987. Dudzinski says the company also accepts responsibility for the 1985 and 1986 tax years.

The other third in taxes due consists of numerous smaller contracts and the naval station pact, Dudzinski said.

Josie Razore, head of a Seattle hauling-recycling firm, Rabanco, complained earlier that he lost out on the naval-station contract last year because he included the city tax - about $35,000 - in his bid, and Waste Management did not.

Dudzinski said the company didn't realize the company was doing that.

``We didn't know about it until you brought it to our attention,'' he said. ``So if we owe it, we'll pay it.''

As an afterthought, I asked Dudzinski whether the company might owe city taxes on any other accounts.

``Well,'' he said, ``there is another $100,000 or so on some federal accounts we'd like to resolve with the city.''

You mean you may owe that in addition to the $300,000?

``Yes. We're discussing it.''

Stop the presses. Give me rewrite:

Waste Management, which is negotiating a potential record-setting $400 million garbage-hauling contract with the city, failed to pay the city up to $400,000 in taxes over the past five years.

We think.

You read it here last.

Rick Anderson's column appears Monday, Wednesday and Friday in the Northwest section of The Times.