HomeMy WebLinkAboutMINUTES - 12041990 - IO.2 j� • i I .O.-2
TO: BOARD OF SUPERVISORS s_ L
Contra
y.:
FROM: COSta
rn is
INTERNAL OPERATIONS COMMITTEE
County
DATE: November 26, 1990 -
SUBJECT: AGREEMENT WITH ACME LANDFILL IN WHICH THE COUNTY AGREES TO
PLEDGE REVENUE FROM COUNTY REGULATED TRANSFER STATIONS
AND/OR LANDFILLS FOR POSTCLOSURE COSTS FOR THE ACME LANDFILL.
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1. Request staff from the Community Development Department to
provide our Committee with the following in augmentation of
the agreement and memorandum which is attached:
A. Documentation of earlier actions taken by the Board of
Supervisors regarding the use of a trust fund for the
money required for the closure and/or postclosure
maintenance of Acme Landfill, and regarding the manner
in which the franchising agencies would provide the
funds required to complete the postclosure maintenance
of Acme Landfill.
B. The actual exhibits which are referenced at the
conclusion of the agreement.
C. An expanded discussion of beneficial use options # 3
and # 4 as described briefly in the last two pages of
the attached documents.
D. A summary of the meeting held with the cities on
November 28, 1990 to discuss with them the manner in
which the balance of the postclosure costs would be
assigned to each community in the County.
2. Request the Community Development Department staff to
furnish this information to our Committee in time for our
CONTINUED ON ATTACHMERfe q YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF OARD COMMITTE
APPROVE OTHER
SIGNATURES
ACTION OF BOARD ON T)Pc-t-mhP Y 40 1990 APPROVED AS RECOMMENDED X OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. O
CC: ATTESTED— � A/ �7�0
PHIL BATCHELOR,CLERK OF THE BOARD OF
Please see Page 3 . SUPERVISORS AND COUNTY ADMINISTRATOR
M382 (10/88)
BY -" DEPUTY
meeting on this subject which will be held Monday, December
10, 1990, at 1: 00 P.M. at the George Gordon Center.
BACKGROUND:
On August 7, 1990 the Board of Supervisors referred to our
Committee the proposed agreement with Acme Landfill under which
the County would pledge future revenues from transfer stations
and landfills in the unincorporated area to state and federal
authorities for postclosure financial assurances. The agreement
would allow collections for postclosure over ten years, rather
than two years, thus substantially reducing the impact on
ratepayers.
On November 27, 1990 our Committee met with the Community
Development' Director, our Solid Waste Manager, . County Counsel and
Scott Gordon and Jim Pezzaglia representing Acme Landfill. We
reviewed the attached memorandum and the terms of the attached
.proposed agreement.
As additional background, it should be noted that the complete
closure and postclosure maintenance for a period of probably 30
years for, both the hazardous waste portion of the Acme Landfill
Site and the non-hazardous portion of the Site will cost some
$41. 5 million (calculated in 1990 value dollars) . This is made
up of four portions:
1. The closure of the hazardous waste portion of the Landfill
Site. The cost is estimated to be $6, 326,800. Acme has the
ability to fund this portion of the closure.
2. The closure of the non-hazardous waste portion of the Acme
Landfill Site. This cost is currently estimated to be
$14,126,000. Acme currently has all but $524, 972 of this
amount.
3 . The postclosure monitoring and maintenance costs
attributable to hazardous waste which are estimated to be
$2,106,000.
4. The postclosure monitoring and maintenance costs
attributable to non-hazardous waste are estimated to be
$18,954,000.
The non-hazardous postclosure maintenance costs are the primary
costs covered by the attached agreement. Accumulating the total
costs for the postclosure maintenance by the time the Interim
Transfer Station closes would require more than a $20 per ton
surcharge on all solid waste going through the Interim Transfer
Station, thereby placing a substantial burden on the rate payers.
In an effort to spread these costs over a longer period of time,
and to distribute the costs on an equitable basis, it was
determined that the costs should be spread over a ten year period
of time and paid for by the historical users of the landfill in
amounts based upon historical usage of the landfill. The
agreement allows this to take place.
The State requires that all postclosure maintenance costs be
provided or guaranteed in advance. The Acme Landfill Closure
Plan cannot be approved, and closure activities cannot begin,
without financial assurances. It is being proposed that Acme
comply with the postclosure maintenance financial assurance
requirements by the County pledging revenue from transfer
stations and/or landfills in the unincorporated area, regulated
by the County, because a pledge of revenue by the County is
probably the most cost-effective mechanism, from the ratepayers
perspective, to provide the required financial guarantees.
-2-
Scott Gordon, speaking on behalf of Acme Landfill, indicated that
it was his understanding that the agreement would require the
Board of Supervisors to impose the surcharge at the Transfer
Station to the extent and for the period of time that the Board
of Supervisors was legally authorized to do so. However, Mr.
Gordon also indicated that if, for whatever reason, the Board of
Supervisors were no longer legally entitled to impose the
surcharge that the Board' s financial obligation terminated at
that point.
We also clarified that it was everyone' s understanding that the
Board, by approving this agreement, would not be pledging any
General Fund dollars and that is understood by Mr. Gordon and is
acceptable to him and Acme.
Our Committee continues to have some concerns about the extent to
which the agreement which is attached is consistent in all
respects with previous Board actions on this subject. We are,
therefore, asking staff to review the Board' s previous actions
regarding the need for a trust fund for the closure costs so that
some agency, other than Acme itself, had control of this money.
We are also asking staff to review the Board' s previous actions
regarding the manner in which the collection of the revenue to
pay for the postclosure costs of the non-hazardous waste portion
of the site was to be accomplished We have, therefore, requested.
the additional detailed above and will reschedule this matter for
a further meeting on December 10, 1990.
cc: County Administrator
Community Development Director
Solid Waste Manager
County Counsel
Scott Gordon, Gordon DeFraga Watrous & Pezzaglia
611 Las Juntas Avenue
Martinez, CA 94553
CONTRA COSTA .COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
DATE: November 19, 1990
TO: Supervisor. Tom Powers
Supervisor Sunne McPeak
Internal operations Committee
FROM: Sara Hoffman
Solid Waste Manager
SUBJECT: Pledge of Revenue for Acme Landfill Closure
The Board of Supervisors requested that the I0 Committee review the
Pledge of Revenue Agreement between the County and Acme Landfill.
The Agreement sets forth the terms and conditions under which the
County would provide the financial assurances for postclosure
maintenance of Acme Landfill. This financial assurance mechanism
will allow for the collection of postclosure maintenance funds over
10 years, thus reducing the financial impact to ratepayers.
The draft Agreement is the result of extensive discussions with
Acme representatives, However, Acme's Board of Directors has not
taken a . position on the draft Agreement.
Another element of the draft Agreement is implementation of policy
adopted by the Board of Supervisors to provide beneficial public
use of the landfill in proportion to the public's contribution
towards closure funds. Four alternatives are presented for the 10
Committee's consideration:
1. Land for public use;
2 . Shared development benefits;
3 . Hybrid development/land option; and
4 . Repayment by Acme.
cc: Claude Van Marter
Vic Westman
Lillian Fujii
Acme Landfill
SH:hs
h14/iocomm.mem
DRAFT
AGREEMENT
BETWEEN ACME FILL CORPORATION
AND THE COUNTY OF CONTRA COSTA
FOR PLEDGE OF REVENUE
BY COUNTY FOR POSTCLOSURE MAINTENANCE
OF ACME LANDFILL :
1. PARTIES. Effective , the County of Contra
Costa ( "County" ) and the Acme Fill Corporation ("Acme" ) agree as
follows.
2. BACKGROUND AND PURPOSE.
y
a. Pursuant to Public Resources Code section 43600 and
Article 3.5 (S 18280 et seq. ) of Chapter -5 of Title 14 of the
California Code of Regulations, Article 17 (S 67001 et seq. ) of
Chapter 30 of Division 4 of Title 22 of the California Code of
Regulations, and Subpart H (5 .264.140 et seq. ) of Title 40 of the
Code of Federal Regulations, Acme must demonstrate financial
responsibility for postclosure maintenance of the Acme Landfill
at Martinez, California.
b. The County maintains that it has no duty or obligation
under the above laws to assist Acme in complying with the above
financial responsibility requirements.
(November 16, 1990) . -1-
c. The County and Acme mutually agree that the most cost
effective way from the ratepayers' perspective appears to be for
Acme to meet its postclosure maintenance financial responsibility
requirements by the County making a ,pledge of revenue to the -
California Integrated Waste Management Board ( "Board" ) pursuant
to Section 18290 of Title 14 of the 'California Code of
Regulations, the State Department of Health Services ( "DHS,*)
pursuant to section 67022 of Title 22 of the California Code of
Regulations, and to the U.S. Environmental Protection Agency
( "EPA" ) pursuant to section 264.149 of Title 40 of the Code of
Federal Regulations.
d. The purpose of this agreement is to set forth the terms
and conditions pursuant to which County will pledge revenue to
the Board, DHS and EPA.
3 . BENEFICIAL USE. Within 60 days of the effective date of this
agreement, Acme shall grant to County, rights to beneficial use
of 45.7% of the landfill. The form and content of the grant of
rights to beneficial use shall be as shown in Exhibit A, attached
hereto and incorporated herein by this reference. The percentage
of rights granted to the County shall be readjusted within 60
days of approval of the closure plan by all regulatory agencies
in proportion to the community contributions towards paid or to
be paid in satisfaction of the closure and POBtclosure. costs that
are shown in the closure plan. Should actual closure and
(November 16, 1990) -2-
postclosure costs differ from those indicated in the closure plan
by 10% or more, than then the percentage of rights granted to the
County shall be readjusted commensurately within 60 days of
determination of such costs.
4 . POSTCLOSURE COSTS ATTRIBUTABLE TO HAZARDOUS WASTES. Acme
shall pay to the County pursuant to the payment schedule attached
hereto as. Exhibit B and incorporated herein by this reference,
the amount required to pay the portion of the postclosure cost
attributable to hazardous wastes. County may determine the
amount of closure and postclosure costs that are attributable to
hazardous wastes as opposed to municipal solid waste; provided,
however, that any such determination by County shall be based on
the definitions of hazardous wastes followed by the appropriate
regulatory agencies (DOHS and EPA) for postclosure maintenance.
In the event that Acme. disagrees with any such determination of
the County, the dispute shall be resolved by County after review
of a report and recommendation by an appropriate engineering or
accountancy firm selected by the County. The current estimate
of postclosure costs attributable to hazardous waste is
$2, 106,000. If the cost of postclosure activities attributable
to hazardous waste increases, Acme shall pay such increased
amounts to County within a reasonable amount of time, but in any
event before the need to expend such money.
(November 16, 1990) -3-
5. POSTCLOSURE COSTS--ATTRI13UTNBLE ,TO NONHAZARDOUS WASTE. Acme
shall set aside and pay to County, .from fees collected at the
Acme Interim Transfer Station and any other transfer station or
landfill owned by Acme and rate-regulated by the County, pursuant
to the payment schedule attached hereto as Exhibit C and
incorporated herein by this reference, the amount required to
fund all nonhazardous postclosure maintenance requirements.
Payments to the County shall be accompanied by an accounting
of total tonnage received, tonnage from each hauler, tonnage from
each community by hauler (to the extent reported to Acme by each
hauler) , and tonnage from self-haulers. For purposes of the
accounting, the communities shall be those listed in Exhibit C,
plus a total tonnage for any communities not listed.
Exhibit C hereto and any aspect thereof may be revised from
time to time, at County's option and pursuant to terms
established by County, upon providing _ days prior written
notice to Acme to reflect changes in postclosure estimates; to
provide for or reflect collection of fees for nonhazardous
postclosure maintenance requirements at other transfer stations
or landfills rate-regulated by the County; to lengthen the term
of collection as necessary to prevent undue economic hardship to
ratepayers; or to reflect any postclosure prepayments by a
community.
(November 16, 1990) -4-
The current' postclosure maintenance estimate is $21,060,000
of which $18,954,000 is attributable to nonhazardous waste.
6. CLOSURE. COSTS. Acme currently has* $13,,601,,028 (as of May,,
1990) of the currently estimated $14,126,000 required to fund all
nonhazardous closure requirements. The intent of this section is
to ensure that Acme sets aside sufficient funds to- pay all
closure costs.
Acme shall allocate at least $20 from every ton disposed at
Acme Landfill from December 16, 1989, to its closure fund.
In addition, Acme shall set aside and make payments to the
County from the fees collected at the Acme Interim Transfer
Station, and any other transfer station or landfill owned by Acme
and rate-regulated by. the County, pursuant to the payment
schedule attached hereto as Exhibit D .and. incorporated herein by
this reference.
Payments to the County pursuant to Exhibit D shall be
accompanied by an accounting of total tonnage received, tonnage
from each hauler, tonnage from each community by hauler (to the
extent reported to Acme by each hauler) , and tonnage from self-
haulers. For purposes of the accounting, the communities shall
be those listed in Exhibit D, plus a total tonnage for any
communities not listed.
(November 16, 1990) -5-
Upon cessation of disposal activities at the landfill, Acme
shall submit an accounting of total tonnage received at the
landfill from December 16, 1989 to the date of cessation, plus
accrued interest.
If the $13,601,028 plus interest and the $20 per ton plus
interest is not enough to fund all of the nonhazardous related
closure costs, the County shall pay. the shortfall to Acme, from
the payments received pursuant to Exhibit D. Any money in excess
of the payment to Acme shall be held by the County and used only
to fund nonhazardous postclosure maintenance requirements .
Exhibit D hereto may be revised from time to time, at
County's option and pursuant to terms established by County, to
reflect changes in closure estimates and costs, as necessary to
prevent undue economic hardship to ratepayers, or for any other
purpose.
7 . Use of Funds.. County agrees that all monies transferred to
it by Acme pursuant to this agreement are to be expended solely
to defray the costs of closure and postclosure at the Acme
Landfill or for costs incurred by County in connection with this
(November 16, 1990) -6-
agreement, including payments to accountancy firms and other
consultants.
County shall provide Acme with periodic reports on the
amount of funds held by County. In investing monies held by
County pursuant to this paragraph, County shall be guided by the
same investment principles that govern other County investments.
8. RATES. In setting rates for the Interim Transfer Station,
Permanent Transfer Station, and any other solid waste facility
owned by Acme and rate-regulated by the County, County shall
allow the amounts to be paid to County pursuant to Exhibit C and
D of this agreement to be included in the rates and allowed as
pass-through costs.
9 . COMPLIANCE. Acme shall perform all closure and postclosure
activities in a manner and timeframe that satisfies all
regulatory requirements in the opinion of the regulatory
agencies, provided such determination is the final action, of such
agencies and said action has not been appealed. For purposes of
determining Acme's compliance with the terms and conditions of
this agreement, "regulatory requirements" shall
requirements as set by the final administrative appeal officer or
board. This section shall not be construed to abridge Acme' s
right to appeal any agency determination regarding noncompliance
with closure and postclosure laws and regulations .
(November 16, 1990) -7-
10. PLEDGE OF REVENUE. Conditioned upon Acme's compliance with
the terms and conditions hereof, County will enter a pledge of
revenue agreement with the Board, DHS and EPA, copies of which
agreements are attached hereto as Exhibits 11 2, and 31 and
incorporated herein by this reference. Any change to Exhibit 11
2 or 3 necessitated by the Board, DHS or EPA shall cause this
agreement to be voidable at County's option.
11. EARLY TERMINATION. a. This agreement shall terminate, at
County's election after giving 15 days' notice to Acme, upon
Acme's failure to comply with any of the terms of this agreement,
or upon a finding by the County that Acme has obtained the
ability to fund postclosure maintenance activities in a manner
that satisfies all regulating agencies. County shall not
determine that Acme has failed to comply with this agreement
unless County has provided Acme with reasonable written notice of
the failure to comply and allows a period of time to correct the
condition of non-compliance, not less than 15 days, nor more than
60 days, except as allowed by the County for extraordinary
circumstances.
b. This agreement shall terminate, at Acme's election after
giving 15 days notice to the County, prior to commencement of
postclosure maintenance activities upon Acme' s providing
alternate financial assurances acceptable to the Board, DOHS and
(November 16, 1990)
EPA for postclosure maintenance. Upon certificate of the
acceptability of such financial assurances by the regulating
agencies, County shall reimburse Acme monies paid to the 'County
for hazardous waste postclosure costs, plus accrued interest
minus County expenses within 60 days. The County shall also
return monies (including accrued interest minus County expenses
related to Acme Landfill closure and postclosure) collected for-
nonhazardous
ornonhazardous waste post-closure to the communities of originator.
12. TERM. Except for termination under Section 11, this
agreement shall terminate upon the termination of the required
postclosure maintenance period. Termination of this agreement
shall not effect the deed of development rights granted to County
pursuant to Section 3, except in the case of termination pursuant
to Section llb, which will void the deed of rights to beneficial
use.
13. EXCESS FUNDS. Except upon Acme providing alternative
financial assurances for closure and postclosure maintenance,
acceptable to the regulating agencies, upon the termination of
this agreement for any cause, disbursement of excess funds shall
be determined by County, except that any amounts remaining of the
$2,106,000.00 received from Acme for the hazardous waste portion
of the postclosure estimate shall be distributed pursuant to
directions from EPA and DHS.
(November 16, 1990) -9-
14 . CONTEST. Should any party successfully challenge the
validity of this Agreement or the County's pledge of revenue
pursuant to Section 8 _hereof, Acme shall have no cause of action
for damages or. any other relief against County as a result of
such successful challenge.
Acme has the right but not the' duty to defend this Agreement
and County. County has the right but not the duty to Acme to
defend the validity of this Agreement or any provision hereof.
15. TRANSFER. The County has a legitimate . security interest in
ensuring that Acme does not sell or encumber its real assets, and
therefore Acme agrees that it shall not sell, lease, convey,
. encumber or in anyway transfer any interest in the Acme Landfill,
the Interim Transfer Station, and/or the Permanent Transfer
without the express written consent of the County. However, in
considering any transfer, the County shall only consider the
effect of the transfer on Acme's ability to fund the hazardouis
waste related costs of postclosure not previously deposited with
the County pursuant to Paragraph 4, and Acme's ability to fulfill
its responsibility for performance of postclosure maintenance.
Consent of the County shall not be unreasonably withheld.
Notwithstanding the above prohibition against property
interest transfers, this Agreement 'shall be binding upon Acme' s
successors, assigns and transferees .
(November 16 , 1990) -10-
16 . . ASSIGNMENT. Acme shall not..sell, assign or transfer this
Agreement or any right or obligation hereunder without the
express written consent of County's Board of Supervisors.
17. ATTORNEY'S FEES. In the event of litigation between the
parties arising hereunder, each party shall pay its -own expenses,
including attorney's fees.
LTF/jh
J-5s At\Acne-agr.1tf
y
(November 16 , 1990) -11-
EXHIBITS
EXHIBIT A: Grant of Rights of Beneficial Use.
EXHIBIT B: Schedule of payments from Acme to the County for
postclosure costs attributable to hazardous waste
($2. 106 million) .
EXHIBIT C: Schedule of payments from Transfer Station to
County for postclosure costs attributable for
nonhazardous waste. Payments would be derived from
hauler surcharge, based on historic use of Acme
Landfill by each community served by each hauler.
EXHIBIT D: Schedule of payments from Acme to County for any
unfunded nonhazardous closure costs, after landfill
closure (currently $524,972) , which will be reduced
by allocation of $20 for every ton disposed at Acme
Landfill.
RIGHTS TO BENEFICIAL USE
In November 1989, the Board of Supervisors adopted policy regarding
funding for the closure and postclosure maintenance of Acme
Landfill including
Explor[ing] alternatives for the County to
receive beneficial use, with an option to
exercise rights-of-ownership or participation
in future benefits from the land (based on
closure contribution) .
Paragraph 3 of the Draft Agreement between Acme and the County for
the pledge of revenue provides that .the Rights to Beneficial Use
shall be proportional to the contributions for closure and
postclosure of the landfill - currently 45.7%. Readjustment of the
percentage is provided upon adoption of the closure plan by the
regulatory- agencies and in case actual costs vary 10% or more from
anticipated costs.
Staff and Acme representatives have extensively discussed
alternative ways to .implement the beneficial use provision in the
Pledge of Revenue Agreement. Four alternatives are presented for
the 10 Committee's consideration.
1. Land for Public Use - the County would select any
contiguous 111.5 acres (45.7% of the 244 acre landfill)
for a grant of rights to beneficial use from Acme to the
County. The grant would need to provide Acme with
sufficient access and authority to perform appropriate
postclosure maintenance activities. Following
postdlosure activities, provision could also be made to
convert the grant of rights to beneficial use to fee
simple ownership upon the County's option. Since the
north parcel contains hazardous waste, staff would
strongly recommend that any selection of land be confined
to the east and south parcels only.
2. Shared Development Benefits - Acme or the County would
have the right to develop any portion of the landfill;
however, the other party would receive a percentage of
the profit from the value of the land, as if there was a
ground lease. The percentage would be equivalent to each
party's contribution (45.7% for the County and 54 . 3% for
Acme) . Under this alternative, staff believes that
either party should have the option to disapprove of any
development.
3. Hybrid DevelopmentlLand Option More complex,omplex, this
option would allow for either shared development benefits
or control of land. ' ' If either Acme or the County
proposed to develop all or a portion of the landfill,
either party would offer to participate with the other
party under the terms of the Shared Development Benefits.
If other party did not want to participate in the
development, that party would select the appropriate
number of acres for its sole control (provided, however,
that County acreage would not be on the north parcel) .
Acme's acreage would be relieved of the beneficial use
restrictions for that portion of the landfill. The
County's acreage could be owned by the County upon
conclusion of postclosure maintenance, at the County's
option.
4. Repayment by Acme - Acme would have the right to develop
any portion of the landfill without sharing the
development benefits with the County provided that Acme
first "bought out" the public share in that portion of
the landfill. They buy-out amount could be determined by
one of two formulas:
1) (value of development site)x (total postclosure fund) = payment by Acme
(value of landfill)
2) (development site acreage) x (total postclosure fund) = payment by Acme
(total landfill acreage)
For purposes of this procedure, the total postclosure
fund would include the postclosure cost estimate
attributable to municipal solid waste, all interest on
all nonhazardous postclosure monies received to date and
all expended administrative expenses.
Staff believes that the first formula would be preferable
since not all portions of the landfill have the same
development potential. However, as pointed out by Acme
representatives, the first formula would require
appraisals which could be subject to multiple
interpretations.
The Beneficial Use Rights to the County would commence upon
completion of the closure activities on a particular parcel. Any
development of the landfill would only be in accordance with the,
regulations of EPA, DOHS and the Waste Management Board as the
regulating agencies of the closure Activities.
hl4/benerts.ppr