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Home My WebLink AboutMINUTES - 07281992 - H.4 H. 4 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA Adopted this Order on July 28, 1992, by the following vote: AYES: See below NOES: ABSENT: ABSTAIN: ------------------------------------------------------------------ ------------------------------------------------------------------ SUBJECT: Hearing on Keller Canyon Landfill Rates On May 5 , 1992 , the Board of Supervisors adopted an interim rate for the Keller Canyon Landfill and authorized an amendment to the Keller Canyon Landfill Franchise Agreement to implement the Board' s approved rate for a limited time. Phil Batchelor, County Administrator, commented on the Board' s previous charge to staff to meet with the applicant to do more refinement and research on the rate and to prepare a recom- mendation on the matter for Board consideration. Sara Hoffman, Senior Deputy Administrator, presented the staff recommendation to establish a base rate of $38. 48, equivalent to a gate rate of $49. 08. Ms. Hoffman commented on the composition of the proposed rate and advised that it would require amendment of the franchise agreement. She also commented on the participation in the workshops that had been held on the rate and on the issue of the post closure and closure trust fund which still needs resolu- tion. Ms. Hoffman advised that the rate before the Board for consideration today meets the criteria of being defensible in court, not confiscatory to the company, and is fair to the rate payer as well as the company. Gary Brayton, Deloitte & Touche, summarized what had transpired while they had been reviewing the rate, commenting on the differences in the rate that had been requested by the Keller Canyon Landfill Company and the recommendations to the Board today. Supervisor Torlakson requested clarification on the question of the fixed royalty versus the variable royalty. Mr. Brayton responded to Supervisor Torlakson' s request, recommending the inclusion of the fixed royalty in the rate. Supervisor McPeak requested clarification on the as- sessment of the the return on equity and the analysis of the appropriate return on equity as presented by Deloitte & Touche. Mr. Brayton explained the analysis on the return on equity as presented today. Tom Bruen, Bruen and Gordon, 1990 N. California Street, Walnut Creek, representing Browning Ferris Industries, stated that in the spirit of cooperation, they were prepared to accept and support the staff recommended base rate of $38 . 48 per ton, and to accept in principle the proposed amendments discussed in the staff report, and he expressed that they had serious concerns and reser- vations about the rate. Steve Utoff representing Browning Ferris Industries, spoke on material which he presented to the Board commenting on the difficulty of the decision to accept this rate. Avon Wilson, 4737 Imhoff Place #4, Martinez, represent- ing the Contra Costa Solid Waste Authority, commented on items contained in the Public Managers report relative to the after tax return on equity being 16. 8 percent, the operating ratio being 92 percent and the nexus on the mitigation fees for open space, transportation and local host community mitigation. Sue Rainey, 160 Bexley Place, Walnut Creek, representing Central Contra Costa Sanitary District, expressed concerns on issues including the rising cost of garbage, the export of garbage, the return on equity, the risk premium and the charge for source control reduction. Sara Hoffman responded on the issue of what the export alternatives are. John B. Clausen, 24 Crest Court, Walnut Creek, speaking for himself, commented on not being willing to pass through the three charges of $2 . 00 each nor the County franchise fee to the rate payers. Supervisor Powers and Mr. Clausen discussed the issue of the city franchise fee and the county franchise fee. Sara Hoffman spoke on the question of the rate per can for the franchise fee. Victor Westman, County Counsel, addressed the legal issues related to the franchise fee. At the conclusion of the testimony, the Board discussed the issues including the risk premium, the operating ratio, and the commitment of the wastestream. Supervisor Powers suggested sending a letter to all of the cities and the franchising agencies requesting them to submit a wastestream commitment either to the Board or the landfill operator to aid in reducing the rate, and that since that would take some time, perhaps the rate agreed upon could be retroactive to today. Mr. Batchelor commented that at the workshops the cities had indicated no interest in committing the wastestream. Supervisor Powers advised that this should be requested in a letter to the cities and that if they did not wish to commit the wastestream, that perhaps they could consider sharing in the defense of a no risk premium if the County were to be sued by Browning Ferris if the rate were lower. The Board discussed the commitment of the wastestream the the reduction of the risk premium. Supervisor McPeak indicated that the appropriate policy focus for the Board is to examine the fair return on equity. She advised she did not have all the data to make a decision. The Board discussed continuing this matter for two weeks to obtain the information from the cities on the commitment of the wastestream. Supervisor Fanden spoke in favor of Supervisor Powers' recommendation, but expressed that she would rather have adopted the rate today. Supervisor Schroder advised he was not adverse to taking action today. Supervisor Torlakson moved to continue the matter to August 11 , 1992, authorize a letter under the Chair' s signature to the cities requesting they indicate their interest in committing the wastestream and raising the issue of joint indemnification or handling of law suits that may occur if the risk premium is y lowered, to request that a trust fund be firmly and clearly established, and that when the new rate is finally set that it be retroactive to August 6, 1992. Supervisor Powers seconded the motion. Supervisor McPeak clarified that the motion also in- cluded provision of information Supervisor Powers had requested and the information on the trust fund for the twenty-nine cents for closure and post closure costs. The vote on the motion was as follows: AYES: Supervisors Powers, Fanden, Schroder, Torlakson and McPeak NOES: None ABSENT: None ABSTAIN: None Tom Bruen requested that the Board direct staff to prepare an agreement extending the amendment to the franchise agreement, extending the operating agreement one week. Supervisor McPeak requested that Ms. Hoffman and County Counsel pursue the issue of the clarification on the trust fund. Supervisor Torlakson moved the authorization of an amendment to the franchise agreement. Supervisor Fanden seconded the motion. The vote on the motion was as follows: AYES: Supervisors Fanden, Schroder, Torlakson and McPeak NOES: None ABSENT: Supervisor Powers ABSTAIN: None IT IS BY THE BOARD ORDERED that further consideration of the Keller Canyon Landfill rates is CONTINUED to August 11, 1992 at 2:00 p.m. ; the County Administrator is INSTRUCTED to send a letter to the cities requesting their commitment of the wastestream to the Keller Canyon Landfill; and Sara Hoffman and County Counsel are DIRECTED to prepare an amendment to the franchise agreement ex- tending the interim operating agreement with Browning Ferris Industries (Keller Canyon Landfill) for one week; and Ms. Hoffman and County Counsel are REQUESTED to review legal issues pertinent to these rates. I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Su iso on the date shown. ATTESTED: PHIL B CHE R.Clerk of the Board Supervl r8 a d n Administrator By ,Deputy cc : Community Development County Counsel