HomeMy WebLinkAboutMINUTES - 10041994 - H.4 H. 3 and H.4
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on October 4. 1994 by the following vote:
AYES: Supervisors Smith, Bishop, DeSaulnier, Torlakson and Powers
NOES: None
ABSENT: None
ABSTAIN: None
SUBJECT: Report From The director, Growth Management and
Economic Development Agency, to Consider Tipping
Fees and Other Landfill Relation Actions; and
Hearing On Amendment 1 to Land Use Permit 2020-89
Regulating Keller Canyon Landfill, Bay Point/Pittsburg
Area.
On September 27, 1994 the Board of Supervisors continued to
this date the hearing on the recommendation of the Contra Costa
County Planning Commission on the request of the Keller Canyon
Landfill Company (applicant and owner) for approval of Amendment
1 to Land Use Permit 2020-89 which regulates Keller Canyon
Landfill . Amendment 1 proposes to delete or revise conditions of
approval established by LUP 2020-89 pertaining to fees paid by
the Landfill to Contra Costa County. These include fees for
transportation and open space, and resource recovery. Some fees
may be eliminated or reduced. Rate setting conditions would be
modified. Area-of-origin provisions would be revised for
consistency with recent federal court decisions . Amendment 1
does not propose any physical changes to the Landfill facility or
site, or any changes to its operating requirements . None of the
fee changes affect mitigation measures imposed by the Landfill' s
Environmental Impact Report . A Notice of Exemption has been
filed pursuant to the California Environmental Quality Act, in
the Bay Point/Pittsburg area; and
On September 27, 1994, the Board of Supervisors also
continued to this date the report from the Director, Growth
Management and Economic Development Agency to consider tipping
fees (their amounts and levels) and other landfill related
actions .
Val Alexeeff, Director, Growth Management and Economic
Development Agency, presented the staff report addressing
concerns raised by the Board at the September 27, 1994 meeting.
Supervisor Powers requested clarification on the number of
the land use permit issues that had been referred to the Planning
Commission.
Charles Zahn, Community Development Department, responded to
Supervisor Powers request .
Victor Westman, County Counsel, commented on a memorandum
provided by his office to address some of the concerns contained
in a letter from Mr. Randall Morrison from last week.
Supervisor Powers inquired as to whether there was a letter
or written document from Browning Ferris Industries which
reflects conditions upon which the proprietary rates will be
reduced.
Tom Bruen, representing Browning Ferris Industries,
responded that there had been a letter provided two or three
hearings back and he commented on a proposal to the Central
Contra Costa Solid Waste Authority and to the Browning Ferris
Franchises which would result in the combined rate for the
transfer station and the landfill at Keller Canyon being reduced
to $39 a ton in exchange for a seventeen month wastestream
commitment .
Supervisor Powers and Mr. Bruen discussed the proposed rate .
The following persons appeared and presented testimony:
Frank Aiello, 1734 Bridgeview, Pittsburg, representing
Citizens United;
Lance Dow, 2232 Concord Drive, Pittsburg;
Supervisor Smith inquired about lowering the proprietary
rate and justifying previous Board action, and a possible refund
to the rate payer.
Mr. Bruen responded on going back to the assumptions made by
Deloitte Touche when the rate was originally set for the Keller
Canyon Landfill .
Supervisor Powers inquired about the ability of Browning
Ferris Industries to address the environmental issues as a losing
proposition.
Mr. Bruen advised that the parent company stands behind this
operation like all of its operations and that that really should
not be an issue .
Supervisor Bishop requested clarification on a copy of a
landfill receipt that was provided by Supervisor Powers and why
the rate is still what it is, and on most of the changes to the
conditions being housekeeping changes, or relating to things that
are no longer applicable, not truly substantive changes .
Mr. Bruen responded that his understanding of the amendments
was to clean up the use permit to give this Board discretion to
act in accordance with its view of the best interests of the rate
payers and public policy.
Supervisor Bishop inquired as to the assets of Browning
Ferris Inc .
Mr. Bruen responded that he did not have a specific answer
but would be happy to provide it .
Supervisor DeSaulnier inquired as to the difference between
the $39 rate and what was being offered some five months ago.
Mr. Bruen responded on the differences .
Supervisor Torlakson inquired as to Browning Ferris
Industries' position on any change in the mitigation fees whether
they are batched together in a generic mitigation Land Use Permit
condition.
Mr. Bruen responded that they support the staff
recommendation and the recommendation of the Planning Commission
before the Board with respect to the Land Use Permit and that the
franchise agreement has an anti-challenge clause in it .
Victor Westman, County Counsel, inquired whether Browning
Ferris Inc . is going to accept the franchises which the County
has offered to them, and that the amendments to the land use
permit are to some extent premised on the acceptance of the
franchises that the Board approved a few weeks ago.
i
Mr. Bruen responded affirmatively and commented that there
were a couple of clerical changes that need to be made in the
agreement where they felt that it does not reflect what the Board
did but the form of the agreements is acceptable to them.
Supervisor Torlakson expressed discomfort with removing the
fee language from the land use permit and placing it in the
franchise agreement .
Mr. Westman suggested consideration of a condition if the
Board approves the amendments to the land use permit that they
would not become operative until Browning Ferris Industries and
whatever other corporation have executed the franchise .
The Board discussed the issue of the fees and their
placement in documents .
Randall Morrison, 1999 Harrison Street, Oakland,
representing Valley Waste Management, expressed concerns with BFI
lowering the proprietary rate .
The Board discussed the issues raised by Mr. Morrison.
Supervisor Bishop commented that what was before the Board
is the land use permit and the open space and the transportation
aspect, and that it was appropriate to determine whether or not
they are truly mitigation.
Supervisor Powers requested a letter with a commitment from
Browning Ferris Industries to this County about what will happen
if the rates that the Board reduces are implemented and what they
will do and he requested one week to determine how the land use
permit provisions relate to the franchise agreement .
Supervisor Smith moved that the staff be authorized to draft
documents to join the Contra Costa Solid Waste Authority.
The vote on the motion was unanimous .
Supervisor Powers advised that without objection the matter
would be continued for one week and he advised that the franchise
was to be back with proposed clerical changes and for
consideration of possible Board changes .
Supervisor Torlakson expressed his concerns about changing
the land use permit .
Supervisor DeSaulnier requested staff to prepared some
alternatives for Board consideration.
IT IS BY THE BOARD ORDERED that the report from the
Director, Growth Management and Economic Development Agency, to
consider tipping fees (their amount and levels) and other
landfill related actions is CONTINUED to October 11, 1994 at 2
P.M. ; and staff is AUTHORIZED to draft documentation to join the
Contra Costa Solid Waste Authority; and
IT IS BY THE BOARD ORDERED that the hearing on the
recommendation of the Contra Costa County Planning Commission on
the request of the Keller Canyon Landfill Company (applicant and
owner) for approval of Amendment 1 to Land Use Permit 2020-89
which regulates Keller Canyon Landfill is CONTINUED to October
11, 1994 at 2 P.M. ; and staff is REQUESTED to respond to Board
concerns raised at this meeting.
cc : GMEDA
County Counsel
Community Development t hereby certify that this Is a true and correct copy of
Browning Ferris Industries an action taken and entered on the minutes of the
Board of Supervb #W date dro
Bawn.
ATTESTED: 4 1 G 9 q
PHIL SATGtELOP,Clark of the Board
8u and Adminldrdpr
v
By - --9-1-A. . .DsauN
COUNTY COUNSEL'S 'OFFICE
CONTRA COSTA COUNTY
MARTINEZ, CALIFORNIA
Date: October 4, 1994
To: Board of Supervisors
From: Victor J. WestmanCounty Counsel
By: Silvano B. Marchesi, Ass't County Counseln
Re: Keller Canyon Landfill, Proposed Land Use Permit Amendment
The Board received the letter of 26 September 1994 from Randall D. Morrison,
representing Valley Waste Management. This office and Community Development
Department staff have reviewed the letter and provide the Board with this joint response.
Mr. Morrison's letter makes five points, as follows:
1. Contrary to the Staff Report, the Keller EIR identifies transportation (roadway)
impacts to be mitigated through County fees.
RESPONSE:
a) None of the transportation-related impacts identified in the Draft EIR
proposed mitigation measures that resulted in Condition 35.1 (Transportation
Impact Fee). The attached table shows that each mitigation measure identified
in the Draft EIR (#1-9) resulted in one or more conditions of approval other
than 35.1.
b) Also, Conditions 35.1 and 35.2 were not prepared until one month after
the Final EIR was certified by the Board. Those conditions were not approved
by the Board until five months after the Final EIR was certified.
c) When the Board approved the Keller Land Use Permit, it made the
required CEQA findings, addressing each impact and mitigation measure
identified in the Final EIR. Each finding also tracked which condition of
approval was being imposed to implement those mitigation measures. None of
the Board's findings mentioned Conditions 35.1 or 35.2 as implementing any
mitigation measures listed in the Final EIR.
Board of Supervisors
October 4, 1994
Page 2
2. The EIR identifies open-space impacts and secondary community impacts. These
impacts "can be mitigated through general fees like the open-space fee and host fee."
RESPONSE:
a) Again, the attached table demonstrates that each of the impacts and
mitigation measures cited by Mr. Morrison resulted in a different condition of
approval (#10-19).
b) Even if a certain EIR-related impact CAN be mitigated by a fee such as the
open-space fee or host mitigation fee, that does not mean that such fees were,
in fact, imposed for that purpose.
c) Mr. Morrison quotes a passage (p. 6 of his letter) of the Draft EIR (p. 3-
288) that was superseded in the Final EIR. Information received after the
Draft EIR was circulated eliminated potential increased cancer cases as an
influence to depress property values. (Final EIR, p. 1-3)
d) Mr. Morrison asserts that you address impacts that the EIR says are
unavoidable by imposing the subject fees. Actually, CEQA authorizes
approving a project with significant impacts that cannot be mitigated. Pursuant
to that authority, the Board made a finding that those impacts are unavoidable,
and adopted a statement of overriding considerations.
3. Rescinding Conditions 31.9 ("County Resource Recovery Management Program")
and 35.4 ("Resource Recovery Program Fee") will significantly reduce Keller Canyon
Landfill Company's ("KCLC") obligation to fund the County's program. Without such
assurance, there may be an effect on the landfill's operation.
RESPONSE:
The County retains the power to ensure the adequacy of funding for its
program, in an amount it deems appropriate. The program does not depend
on a particular tipping fee component. For further explanation, please see the
attached memo from Charles Zahn to this office.
Board of Supervisors
October 4, 1994
Page 3
4. The net result of fee changes will be elimination or severe reduction in mitigation
measures for KCL's environmental impacts.
RESPONSE:
All of the significant avoidable impacts identified in the Final EIR are
mitigated by measures and conditions other than these two fees.
5. The Common Sense Exemption is improper, because there is a probability that
reducing these fees will cause a significant environmental effect--reduce the mitigation
measures for real impacts identified in the EIR.
RESPONSE:
As stated earlier, all the mitigation measures identified in the EIR resulted in
conditions of approval other than conditions 35.1 and 35.2. None of the
mitigation measures recommended the fees imposed in those two conditions.
Thus, the proposed deletion of these two conditions will not affect the
mitigation of any of the identified significant impacts.
However, the exemption (State CEQA Guidelines, § 15061(b)(3)) may be
challenged. It is applicable "[w]here it can be seen with certainty that there is
no possibility that the activity in question may have a significant effect on the
environment...." Several cases have construed this exemption narrowly.
Thus, we cannot assure the Board with certainty that the exemption will be
upheld if it is challenged in court.
On the other hand, staff has not ascertained any potential environmental impact
that possibly could result from the proposed amendment to the Keller LUP. In
staffs view, Mr. Morrison has not suggested any plausible impact that could
result from the amendment. Staff concludes that at this point it would be pure
speculation to attempt to analyze any potential impacts.
cc: Phil Batchelor, County Administrator
Val Alexeeff, Dir., GMEDA
Harvey E. Bragdon, Director, Community Development Department
Attn: Charles Zahn, Assistant Director
KELLER CANYON CERA MITIGATION MEASURES
Impact Mitigation Measures Condition
1 . Effects on Highway 1 . a. Limit trips from 1 . Condition 29.9, 8.1
4 (p. 3-186): Change KCL to Transfer
current traffic patterns Stations 6:30-8:30
& generate new traffic a.m. This reduces
volumes, esp. truck impact to insignificant.
traffic b. Use TS, and
prohibit self-haul.
c. Implement hwy.
projects to widen &
improve Hwy 4. (p. 3-
187)
2. Cause damage & 2. Option 1 : a. 2. Condition 29.5,
wear. to pavements on Require applicant to 29.7. Maintenance fee
Bailey Road (p. 3-188). contribute to (Option 2) has not
improvements fee to been established.
upgrade & improve
pavement sections on
roads impacted by
transfer truck traffic to
KCLC.
b. Require
applicant to contribute
to maintenance fee.
Option 2: Have
surcharge on each
truck trip to be applied
toward future
maintenance of these
roads. (p. 3-189)
3. Site Access: 3. Design proper sight 3. Condition 29.4
Location & design of distance & intersection
access road at entrance. This
intersection on Bailey would reduce impact
Rd. is critical design to insignificance (p. 3-
element. (p. 3-190) 190).
KELLER CANYON CEOA MITIGATION MEASURES
Impact Mitigation Measures Condition
4. Traffic Safety on 4. Site access 4. Condition 29.4,
Bailey Road: improvements 29.5
Additional traffic to proposed by appl., plus
KCLC may result in marked left-turn
add'l accidents, entrance. Also, traffic
especially in fog (p. 3- signal. (p. 3-193)
190-193).
5. Traffic Capacity & 5. Roadway 5. Condition 29.8.
Congestion: Traffic improvements at Improvement dist. or
would increase V/C freeway ramps. area of benefit not yet
ratios, & may add to Reconstruct inter- established.
capacity impacts on change. App. to
access roads in participate with others
vicinity. (p. 3-193) in funding needed
improvements pro rata.
(p. 3-196)
6. Safety of 6. Implement bike & 6. Condition 29.10.
Pedestrians & pedestrian path system Bicycle lane-pedestrian
Bicyclists: Increased on roads to site. (p. 3- path installed.
traffic hazards on 196)
Bailey Rd. (p. 3-196)
7. Traffic Effects on 7. Use transfer 7. Condition 8.1, 9.1,
Adjacent Land Use: stations, eliminate pub. 22.1, Development &
commercial & access to KCLC, Improvements Plan
residential visual/noise berms,
developments along & control hours of truck
west of Bailey Rd. (p. operation (p. 3-197)
3-197)
2
KELLER CANYON CEQA MITIGATION MEASURES
Impact Mitigation Measures Condition
8. Costs of Rd. 8. App to pay pro 8. Condition 29.8
Improvements: Bailey rata. Pay all entrance
Rd.: $1 .5 million; costs & Bailey n. of
Bailey/SR4 intersec- entrance, plus
tion: To be maintenance (p. 3-
determined; Entrance: 198).
$300,000 (p. 3-197-
198)
9. Construction- 9. None. Insignificant. 9. Condition: N/A
related Traffic Impacts:
Add'I traffic during
construction (p. 3-198)
Open-Space Impacts And Secondary Community Impacts
10. Traffic: See 10. See above 10. See above
above impacts. mitigation measures. conditions.
11 . Visual: Alteration 11 . Manage grading, 11 . Condition 22
of Topography (p. 3- landscaping plans;
150) establish park, plant
trees (p. 3-1158-159)
12. Visual: Views 12. Screen auxiliary 12. Condition 22
from Bailey Road (p. 3- areas, enhance entry,
163) design admin. bldgs.
(p. 3-163)
13. Visual: Water 13. Construct berms 13. Condition 22.12
tanks (p. 3-164) around all water tanks,
plant grasses. (p. 3-
164)
14. Visual: Light and 14. Directional lighting 14. Condition 22.14
glare (p. 3-164) on access road (p. 3-
3
KELLER CANYON CEQA MITIGATION MEASURES
Iml2act Mitigation Measures Condition
164)
15. Visual: Litter 15. Litter control plan, 15. Condition 25
inc. debris fences, litter
patrols, perimeter
berms, daily cover. (p.
3-165)
16. Noise: Operations 16. Limit hours of 16. Condition 21
& Site Preparation (p. construction/operation,
3-245) berm (p. 247)
17. Noise: Traffic (p. 17. Noise suppressors 17. Condition 21 .6,
3-247) on transfer trucks (p. 21 .7
3-248)
18. Odor (p. 3-132) 18. Small working 18. Condition 20.2,
face; quickly cover 20.3, 20.4
sludge; enclose
leachate collection
system; gas collection
& flare system. (p. 3-
132)
19. Cancellation of 19. Provide for quality 19. Condition 23.2
Williamson Act grazing for about
contract (p. 3-29) same number of cattle.
Require range
management plan. (p.
3-29)
4
CONTRA COSTA COUNTY
COMMUNITY DEVELOPMENT DEPARTMENT
DATE: October 4, 1994
TO: Victor J. Westman, County Counsel
Attn: Silvano Marchesi, Assistant County Counsel
FROM: Harvey E. Bragdon, Director of Community Development
By: Charles A. Zahn, Assistant Director C:;�_Z
SUBJECT: PROPOSED CHANGES TO RESOURCE RECOVERY PROGRAM
CONDITIONS IN AMENDMENT 1 TO LAND USE PERMIT 2020-89
FOR THE KELLER CANYON LANDFILL
The following comments on the financial implications of Amendment 1's proposed changes to
the resource recovery provisions of Land Use Permit 2020-89 are provided in accordance with
our discussion yesterday.
The Crosby, Haefy, Roach, and May letter of September 26, 1994 (for Valley Waste
Management) claims that:
"Rescinding Conditions 31.9 and 35.4 will significantly Reduce Keller Canyon's
Obligation to Fund the County Resource Recovery Management Program."
The letter goes on to imply that Condition 31.9 obligates the Keller Canyon Landfill to support
the entire County Resource Recovery Program.
Both Conditions pre-date the preparation and adoption of the 1993 County Integrated Waste
Management Plan. Their terms could neither predict the requirements of the plan nor foresee
how it would be financed.
Virtually the same condition was put in the 1987 Land Use Permit for the Acme Transfer
Station. There was an expectation that the costs of the program --capped at$100,000 annually -
- would be spread among other facilities as they came on line.
It is noted the waste facilities approved by the County all include Land Use Permit conditions
l
that obligate the permittees to cooperate with the County to provide resource recovery services
to their respective service areas.
AB 939, mandating waste reduction goals and calling for a new plan for reaching the goals went
into effect in January, 1990. A central idea of AB 939 is that individual cities and counties (for
unincorporated areas) should be primarily responsible for meeting the goals. It wasn't until mid
1993 that the new Integrated Waste Management Plan was completed.
Amendment 1 would help provide for the maintenance and implementation of the Integrated
Waste Management Plan by adding Condition 31.10, specifically authorizing the Board of
Supervisors to impose a tonnage surcharge for AB 939 program purposes. The County is not
limited to moneys from Condition 3 1.10 to finance resource recovery. If, for example, the
geographic base for the provision of the County's resource recovery program does not
correspond to the service area of the landfill, the County can use collection franchise area
administrative fees to obtain funding.
The County, then, can anticipate that the changes to resource recovery program funding in
Amendment 1 will not be deleterious to the program.
CAZ:rw
RCZ3:KCLAmend.np
- Page 2 -
BRUEN & GORDON
A PROFESSIONAL CORPORATION
1990 NORTH CALIFORNIA BOULEVARD
SUITE 608
WALNUT CREEK.CALIFORNIA 94596
(510)295-3131
FAX(510)295-3132
October 4, 1994
The Hon. Thomas Powers, Chairman
and Members of the Board of Supervisors
County of Contra Costa
651 Pine Street
Martinez, California 94553
Re: Item H.4; Recommendation of the County Planning
Commission for Approval of Amendment 1 to Land Use
Permit 2020-89
Dear Chairman Powers and Members of the Board:
We are writing you on behalf of the Keller Canyon Landfill
Company ( "KCLC", the owner/operator of the Keller Canyon
Landfill) to briefly address the comments dated Sptember 26, 1994
submitted to your Board by counsel for Valley Waste Management.
By and large, the comments are unfounded legal assertions
and claims made on behalf of a competitor of the Keller Canyon
Landfill. The authors of the letter can point to no specific
examples either in the Keller Canyon Landfill Environmental
Impact Report ("the EIR") or the Keller Canyon Landfill
Conditions of Approval ("the COA") wherein mitigation fees to be
reduced or eliminated under the requested Amendment 1 were
established to mitigate an impact identified in the EIR. Instead,
the letter refers to what the County "may" have done or "could"
have done, without any substantiation for the claims.
The Valley Waste Management letter claims that these
mitigation fees were imposed to mitigate certain impacts , such
as roadway/traffic impacts, as well as impacts which could not be
mitigated to a level of insignificance. In fact, the record more
than amply demonstrates that the fees established in the COA
(see, e.g. , COA 35. 1, 35.2) were not established to mitigate
impacts identifed in the EIR, but were imposed as additional
conditions by the Board of Supervisors. For example, there are
very specific conditions in COA 29 which implement the mitigation
measures identifed in the EIR (and which are referenced in the
Valley Waste Management letter) for traffic and roadway impacts.
In addition, for those impacts (i.e. , visual impacts) that could
not be fully mitigated, the Board adopted a Statement of
The Hon. Tom Powers and
Members of the Board of Supervisors
October 4, 1994
Page 2
Overriding Considerations as required by CEQA. These fees were
not adopted as part of, or in connection with, the Statement of
Overriding Considerations.
As the Board of Supervisors has previously noted, there is
substantial competition within Contra Costa County for the use of
solid waste transfer and disposal facilities. The proposed
Amendment No. 1 to Use Permit 2020-89 simply recognizes this
fact. We urge you to approve the Staff recommendation.
Very truly yours,
Scott W. Gordon
SWG:cg
NORRIS r4A NORRIS
RICHARD E.NORRIS HILLTOP OFFICIE. PARK
m.jr-rFP9Y MICKLAS
DOUGLAS C.STRAUS 2460 GLUME DRIVE. SUITE ZOO ISIOj 242.VOO
CY 9PST9*1N
COLIN J.COVFVf MCB:MOND, CAXX70V2TZA 04806-4061
.JOSHUA G.GENSER
rOWAPQ L.SHAFFER (5101422-9.992
DAWO S.SMITH
rahAADN M.IVERStN
JUSTI 14 0.SCHWARTZ
NOEL M.CAUGHMAN
J.CRICK DIMALANTA
FACSIMILE COVER SKEET
Date: 0
To* omPa_&
—&oe,w -�
J&r\
Enclosure: IL4a
From: Shelly Hartman, ext. 120, ass'Listant, to Richard Norris and
Justin Schwartz
Total Number of Pages (including this cover page)
Message:
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contact Shelly Hartman at 510-222-2100, extension 120. Thank you.
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NORRIS !:� NORRIS
RICHARD E.NORRIS HILLTOP OFFICE PARKM.JtrlT[LEPHONE
DOUGLAS
MTRAUS 9260 BLUME DRIVE, SUITE 200 16101 Z22•$100
DOUG LA$ C•$TRAUS
Cr EPSTEIN
COU N J•COFREY RIczxoNn, CAxj"RNL& 9"o6-wei
JOSMuA G.CENSER FACSIMILE
EDWARD 6.SHAFFER
DAVID S.SMITH 15101 22 •5992
SHARON M.IVERSEN
JUSTIN D.5CHwART2
NOEL M.CAUGMMAN
J.ERICK 01MALANTA
October 4, 1994
The Honorable Tom Powers, Chair BY FACSIMILE
CONTRA COSTA COUNTY BOARD OF SUPERVISORS 510-646-1059
100 - 37th Street, Room 270
Richmond, CA 94805
Members of the Board of Supervisors 510-646-1059
CONTRA COSTA COUNTY BOARD OF SUPERVISORS
651 Pine Street
Martinez, CA 94553
Dear Mr. Powers and Members of the Board:
This letter is in response to Thomas Bruen's letter to you
dated October 3 , 1994. In that letter, Mr. Bruen, on behalf of
his clients, BFI, Keller Canyon Landfill and Acme (hereinafter
referred to jointly as BFI) , incorrectly claims that Solano
County has acted to lower landfill business license fees in
Solano County. while the matter is currently being considered,
no such action has been taken by Solano County.
BFI goes on for the better part of three pages arguing the
fine points of whether the fees which Potrero Hills Landfill
collects are "State Fees" or "Proprietary Fees. " In any event,
BFI does not deny that the fees are a part of the cost to Potrero
Hills Landfill of doing business and are included in the $41.50
rate.
Potrero Hills has advocated lower government fees in Solano
County. But the government fees at issue in Solano County are
not mitigation promised to local communities in order to get
permits approved when Potrero Hills was opened. However, the
fees that are at issue in Contra Costa are, for the most part,
the money that was promised to Keller Canyon Landfill 's neighbors
to mitigate the development of the landfill. It is a plain fact
that if BFI had not promised to pay all of the mitigation fees
that are currently in effect, Keller Canyon Landfill would not
have been approved.
The overarching theme of BFI's desperate attempts to secure
a waste stream by government intervention has been BFI's breach
of the trust of the community in which it has chosen to do
business. It is interesting that Mr. Bruen does not deny the
specific charges against BFI included in my letter of September
22, 1994, which are:
VOW0059011\109171
Mr. Tom Powers and Members of the Board
October 4, 1994
Page 2
1. BFI tried and failed to use closure litigation at Acme
as a club to coerce Contra Costa County to direct waste to HFI.
2. BFI has tried to blame the Contra Costa Board of
Supervisors for the high cost of disposal at BFI when the fact is
that BFI agreed to all of the fees and costs which go into the
BFI rate - and charged Contra Costa rate payers a risk premium on
top of the costs.
3 . BFI advocates have made false statements regarding
Potrero Hills , environmental record, its permitted life, and the
cost of direct haul of waste to Potrero Hills Landfill in order
to attempt to gain an unfair competitive advantage.
4. Acme 'paid Potrero Hills Landfill over $1, 000, 000. 00 in
damages per an award by a retired Supreme Court justice in an
arbitration, for having directed waste to more expensive
landfills (than Potrero Hills) notwithstanding a contractual
obligation on the part of Acme to direct waste to Potrero Hills.
BFI cannot and does not deny the specific facts. Rather
they argue that there will be no funds to mitigate the impacts of
Keller Canyon Landfill if it does not receive waste. The BFI
position begs the question: if Keller Canyon Landfill ceases to
receive waste, would there be impacts to mitigate? Of course,
the flow of waste to Keller canyon Landfill and the flow of
mitigation dollars from Keller Canyon Landfill will balance out.
Potrero Hills Landfill is the best and the least cost
alternative to Contra Costa County rate payers for disposal of
waste, and will be regardless of the amount of fees charged by
Contra Costa County.
very truly yours,
(2z'-
NORRIS
& NO
BY RICHARD E. NORRIS
(Colin Coffey for Richard Norris)
REN:slh
cc: Richard Granzella, by delivery
Dennis Varni, by delivery
Caesar Nuti, by delivery
Joe Della 2oppa, by devliery
Thomas Bruen, 510-295-3132
\00W005901>>t09171
4GENDA DATE _ IC) -lzI ' ay- ITEM N0,
BACKGROUND NOT AVAILABLE AT
THE TIME AGENDA PACKET COMPILED
INFORMATION FOR THIS ITEM PREVIOUSLY
FURNISHED
ORAL REPORT TO BE GIVEN AT BOARD MEETING
ERROR IN NUMBERING AGENDA ITEM
.DELETED
DOCUMENTS ON FILE WITH
CLERK
S-
Text of item H. 3 and H.4 from October 4, 1994
Supervisor Powers : Okay, we' ll go to the afternoon hearings .
Item H. 3 and I guess we can take H.4 together.
Val Alexeeff : Good afternoon. We have a requested holdover from
the previous week today at this time and there was some testimony
that was provided last week and the Board moved to hold the
matter over, to keep the hearing open and to bring the matter up
again this week. The items before you are essentially in two
bites . One is the issue of the use permit which was brought up
in an effort to reduce fees and handle some other issues . And
secondly, on the various issues related to the franchise, a
number of matters that the Board had requested to be brought back
last week that are outlined in the staff report . There are some
additional studies and some additional analyses here for the
Board' s consideration and so I' ll stop with that and be happy to
answer any questions .
Supervisor Powers : Questions?
Supervisor Smith: I just asked Chuck Zahn off the record. I
just want to comment on the record. Keller started accepting
waste on 5/7/92, is that correct?
Val Alexeeff : That date sounds right, yeah.
Supervisor Smith: Is that right? Scott . Nobody knows . Tom I
mean okay thanks .
Supervisor Bishop: I believe 5/7/92 they started accepting
waste?
Val Alexeeff : That' s correct . Is there a disagreement over
that?
Supervisor Smith: Not that I know of . I wasn' t there.
Supervisor Bishop: Nor was I .
Supervisor Powers : Okay, you know I looked over this report and
the one report that refers to let me see if I can find it because
there' s a lot of reports here . It' s a report dated September
22nd and it' s on the land use permit and I you know there' s a
whole host of issues that are raised in this that I didn' t
realize that the Board requested to be discussed at the Planning
Commission. As I recall it, we referred two items to the
Planning Commission, one was the fees related to agriculture and
transportation and the other one was the issue of the rate
regulation process, having a lid and a floor, yet there are a
whole bunch of other conditions in the land use permit that are
being modified and or eliminated and they seem to have a
substantial amount of impact even though they' re referred to in
some places as housekeeping and I for instance well I could say a
lot of for instances because there are a whole bunch of them.
And where they contract with the County for the mitigation,
geotechnical services is now being shifted to an independent,
supposedly independent contractor paid for by the landfill
operator and eliminating a couple of surcharges that the Board
did not discuss . Cost of the resource management program. And
it' s being changed to a fixed fee . Tonnage charge . A portion
and I can' t quite understand how it' s being dealt with and
elimination of the tonnage fee referred to and adding a section
in 31 . 10 tonnage fee or other means of funding and I'm not quite
understanding that . So, I'm just wondering where, what Board
Orders those other issues were derived from or just how did they
get before the Planning Commission without the Board directing
that they be done? And I mean all of those besides the issue of
rate setting floor and ceiling and the two fees . Wherein can you
say that those issues got referred to the County 'Planning
1
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Commission by this Board?
Chuck Zahn: Mr. Chairman, members of this Board, the particular
items related to the financing, by and large related to the
financing of programs to the Keller Land Use Permit, subject of
what kind of fees were being imposed on Keller and what could one
do with those fees . What did one have the latitude to do with
those fees under the land use permit had been discussed at
several meetings including the joint committee' s meetings . The
intent as is indicated in the staff report is to enable the Board
to have the latitude or the ability to deal with these fees in
terms of their amount relative to other fees and in instruments
other than the land use permit where they' re locked in. The fees
that relate to the resource recovery program for example, there
were two separate fees in the original land use permit . Those
have basically now been melded into one condition and the
condition that enables the Board to consider the level of these
fees with other fees in setting them under the cap for fees
that' s being discussed. The fees dealing with the compliance and
mitigation monitoring program where again there were two and now
we' re proposing one, the level of those fees was again discussed
at the ad hoc committee meetings . It' s been part of the
discussion of fees that' s been before the Board.
Supervisor Powers : Well, I surely agree that some of these
conditions are linked to fees but we discussed very specifically
issues that related to fees that we referred to the Planning
Commission and secondly, and so I'm surprised that other fees
were referred at least without some discussion by the Board and
secondly, the some of these conditions do not relate to fees .
They relate to the process by which mitigation monitoring is
carried out, the process by which the geotechnical services are
going to be carried out, the discussion of hauling of vehicles,
waste hauling vehicles and the extent allowed by law that that
should be done. So, they' re well beyond some of the things that
I recall being discussed and I'm just wondering whether or not
there' s some Board Order that I missed that had those in because
as I recall, there were a very specific set of Board Orders
referring matters to the Planning Commission. What I'm gathering
is that someone took license and to do that, those other things
and I'm just wondering how that got carried out .
Val Alexeeff : The applicant for the use permit amendment was
BFI . They also had a role because they actually made formal
application to amend the use permit .
Supervisor Powers : I see . Okay, so it was their application
that desired these to be . . .
Supervisor Bishop: I have a couple of questions . At this
juncture, we have before us the land use permit and what is the
other item that we are looking at? The franchise . .
Val Alexeeff : Okay, well what the Board did was instruct staff
to come back with a series of information items the JPA item, the
comparison of the landfill proposals that the three contenders,
the three currently contenders have made . I believe Supervisor
Bishop that you wanted some additional information on the current
balances in the various mitigation accounts and I think that' s
what we have before you. You also wanted the tonnages in
different parts of the County.
Supervisor Bishop: You know I'm sure that before I arrived on
this Board, the determination of where to site a landfill created
all kinds of chaos and headaches on the part of the prior Board,
but I can tell you this is an issue that it' s like sinking in
quicksand, that the more we try to get out of it, the deeper we
sink and it is an extremely complex issue but sometimes I think
we really need to cut through it and say what are we really
trying to achieve and I think if we would all just be real
2
i
straightforward about what the questions are that we have and
what are the answers that we require, I think we need to make a
decision and get on with the business of this County. I
understood you to say Supervisor Powers that there was something
here about conditions in the land use permit, that certain things
are being deleted and certain things are being added. It would
help me if after I finish speaking you could give me some
specifics . I have a great deal of concern one, and this is a
concern that goes back before I ever took office and that was
concern with fees that we are imposing on a landfill, especially
as they relate toward to mitigation fees to open space and
transportation improvements. This is not a new you know position
that I'm taking. It is something that I have taken one of the
very first things that I was extremely concerned about that those
fees added on the cost of garbage disposal or solid waste
disposal and it has always been my objective to get those fees
down and when I go back historically as sometimes we are wont to
do, and I recall when there was no option to take garbage out of
the County. Excuse me for calling it garbage instead of solid
waste but before we were taking garbage waste and we had no
option to it out of the County, I can remember conversations with
Mr. Norris in the back and I can remember conversations with
Waste Management and I can remember conversations from an
assortment of people about how outrageous those fees were, that
there was no nexus between because at that time, everyone was
going to have to pay those fees and it made the overall cost of
disposal extremely high, so there were a lot of people joining
with me and being concerned . . . . . . . .they' re dealing with Eastin
fund, how some of those costs are fixed, that we have no
discretion over but I'm also getting mixed . . .as to how other
Counties are dealing with this . It helps me to understand how
other Counties are dealing with this and quite frankly, it was
really distressing to me to be here on last Tuesday morning and
up until that time receiving one correspondence from Mr. Bruen' s
office to the effect that in Solano County, they are considering
a reduction of fees and having a counter opposition to that
saying that is not true, they are not considering that, it is not
on the calendar and that $41 . 50 won' t go up and it won' t go down
no matter what they do and then getting another letter after I'm
here at the Board at 9 : 30 in the morning from Mr. Norris saying
yes, it is true . It' s not that complex. We either have to make
an effort on our part to get the fees down to bring the
transportation and open space under out from under a land use
permit and incorporate it and handle it at this Board so that we
don' t have to go back to the Planning Commission and have it
governed by a land use permit . To me that was one of the
objectives that we were trying to accomplish and that we could
have some reasonable rate setting or fee setting here at the
Board and frankly, again I think when we end up with a $12 and
something, we haven' t gone far enough but I'm looking here to me
the important documents that are simple that are not complex, are
the documents that were provided to us the last time on September
27th and we just look at this and look at what the recommendation
at the Planning Commission made a recommendation and at this
point, I'm not sure that they did make a recommendation, but I
think we need to deal with this issue..
Supervisor Powers : Thank you for those comments . I think you
missed one big issue . First of all, what I'm referring to is
page 8, 9, 12, 13 and 14 of a staff report dated September 22nd
by Harvey Bragdon and Charles Zahn to the Board of Supervisors .
Supervisor Bishop: Okay, could you give me those pages again 8 . .
Supervisor Powers : Why don' t you write them down and look at
them later, 8, 9, 10, 11, 12, 13, and 14 of the staff report dated
September 22nd. Okay, now let me say one thing you forgot and
that is getting the rates down. Now you talked about fees and I
think we acted on that . And we did reduce the fees substantially
on two occasions . . 80 on one and x number of dollars to get it
3
s'
down to $12 . 24 on the other and I thought when we did that, along
with our July action eliminating the floor on the rates, that we
would get some rate relief from the ACME/BFI corporation. I have
here in my possession and October 3rd dated ticket from the ACME
landfill corporation reflecting and I don' t know who' s it is but
the words whose went through here went out but it was a garbage
truck carrying 31, 900 pounds gross weight of I guess the TARE
weight is about 28, 000 pounds and the most important thing is the
rate that' s being charged. $76 . 88 . It does not reflect the fee
decrease that we enacted a couple three weeks ago. It does
reflect an . 80 reduction that we did oh a couple of months ago I
believe. But it does not reflect the July reduction in rates .
So, the one thing we don' t have to give up at this point is a
private corporation charging too much for municipal waste and the
$62 a ton being charged today is substantially higher than we
were being told when we reduced the rates to 39 supposedly, well
we didn' t reduce them, we let them float and they haven' t floated
anywhere and frankly, that disturbs me and it disturbs me that
several conditions that are suggested by the operator when they
filed the land use permit modification are in their favor and not
in the public' s favor and it reduces fees and inspection programs
even further and that' s why I'm concerned about it, so I think we
can go and ask our questions . I'd appreciate being able to take
testimony from individuals who are here to testify and then we
can argue about what we' re here about and make some decision.
Supervisor Bishop: Could I ask you a question about the piece of
paper you have . Where did that come from and . . .
Supervisor Powers : I got it on my fax machine and it came from
Garaventa Enterprises . So, they didn' t scratch out all the. . .
Supervisor Bishop: Could we have a copy, could each of us have a
copy of that .
Supervisor Torlakson: So, basically you' re saying that the
tipping charge is still at $77 . It hasn' t gone down at all . And
that' s a serious concern. I'm glad that you've raised that
publicly because we want to see the rates go down and we need to
do some more things here to discuss the fees and so forth but
there' s the ability and been so for months to have the fees drop
at the tipping fee point at the transfer station. It hasn' t
happened. And I think we need to register our collective concern
about that .
Supervisor Powers : Okay, were there any other comments by staff
before we take public testimony.
Val Alexeeff : Not at this time .
Supervisor Powers : Very good.
Vic Westman: Mr. Chairman, could I mention that we provided you
with a memorandum that addressed some of the concerns of Mr.
Morrison I believe that' s his name' s letter which was provided to
me at the time of the hearing last week. We were not asked to
respond to those but after looking at his letter during the week,
we decided to respond and that' s why you' re now receiving our
comments . Thank you.
Supervisor Powers : And that' s this October 4th memo from you to
the Board.
Victor Westman: Yes, I just want to note for the record that
it' s filed and it had not been requested but after reviewing Mr.
Morrison' s letter after the meeting, we decided that we should
file at least some sort of response for the record. Thank you.
Supervisor Powers : Let me ask all of the staff collectively and
those who represent BFI or ACME or anybody related thereto. Has
4
there been a letter or written document sent to this County which
reflects conditions upon which the rates, the proprietary rates
will be reduced? Has anyone in staff first of all received such
correspondence. Mr. Bruen, I' ll ask you when you come up. I'm
searching for. I understood the day that the representation
orally was made that $39 was the rate that there had been some
written document circulating in the Board Room and it hasn' t
turned up yet and I wanted to know if maybe you can answer that
now.
Tom Bruen: Well, if I'm not mistaken, I believe we did provide
the Board with a letter I think two or three hearings back.
We've made proposals to the Central Contra Costa Solid Authority
and to the BFI Franchises which would result in the rate, the
combined rate for the transfer station and the landfill at Keller
Canyon being reduced to $39 . 00 a ton in exchange for 17 months
wastestream commitment . And it' s our understanding, the Solid
Waste Authority is considering that proposal on its October 13th
agenda.
Supervisor Powers : Did you submit anything to us reflecting that
you would reduce your rates if we reduced the fees . I mean
irrespective of conditions for how long or whatever.
Tom Bruen: Not in so many words, no. I believe we submitted a
proposal to this Board soliciting a wastestream agreement from
the County for the unincorporated area.
Supervisor Powers : For the same period of time?
Tom Bruen: For that same period of time. Similar to what we've
indicated other jurisdictions we'd be willing to enter into. And
we have had discussions with a number of City Managers in the
County and it' s our understanding that a number of jurisdictions
are going to be considering that proposal within the next several
weeks .
Supervisor Powers : So, if in fact, we did not enter into an
agreement with you to for the period of time that you've
suggested, that therefore the rate would not be reduced to
$39 . 00 . For instance, if we were to franchise any of the
unincorporated area haulers that would come to you and we did not
direct them or they did not wish to enter into an agreement that
was on the terms and conditions that you requested, that you
would not reduce the rate to $39 . 00 .
Tom Bruen: Well, I think it' s important to note first of all
that we' re talking about rates that are going to be charged at
the permanent transfer station. We hope that will start
operation in October. It' s my understanding that the gate rate
at the permanent transfer station for uncommitted waste will be
substantially less than the current total of the proprietary
rates for the interim station and Keller Canyon. I don' t think
that rates been set yet . It will be more than $39 . 00 a ton.
Somewhere in the $40 to $50 a ton range is my understanding. And
that would go into effect when the permanent transfer station
opens its doors .
Supervisor Powers: Okay, now is it accurate that the $39 . 00 rate
would go that was predicated on all the unincorporated waste
going to ACME/Keller.
Tom Bruen: Well, not all of the unincorporated waste because
some of the County' s wastestream permits unincorporated area has
already been committed to the West County Transfer Station and
you know we need to hear back from the County as to what kind of
commitment if any the County wanted to make. We've made
proposals to individual cities that weren' t conditioned on other
cities also committing their wastestream so, I think at this
point, we' re waiting to hear back from the Board.
5
Supervisor Powers : Thank you very much. Okay, we have Frank
Aiello and Lance Dow to speak and whatever order. You guys talk
a lot together so whatever order:
Frank Aiello: Good afternoon. I think we've just had a
confirmation that there was a rate proposal before this Board and ,
again I will reiterate as I did last week that this Board still
rate regulates Keller Canyon under conditions 12 . 1 through 12 . 6
of the land use permit . And along with those conditions, full
financial disclosure has to be made along with the rate proposal .
So, I would assume that any rate proposal that was made to this
Board did have full financial disclosure. Otherwise that was a
clear violation of the land use permit that was issued. Was
there any financial disclosure to this Board that anybody is
aware of . Was there any audit papers submitted.
Supervisor Powers : We' ll get some answers .
Frank Aiello: I know. Nice snicker over there Tom.
Supervisor Powers : We could try to get answers for you Frank at
the conclusion of your testimony.
Frank Aiello: I wanted to comment briefly. Supervisor
DeSaulnier made a comment last week that Mr. Dow and myself will
be happy if this landfill were to shut down. I think that about
ten years ago, Citizens United started up and Mr. Torlakson was
involved in that . Citizens United wanted no landfills in East
County. With Keller sure we wanted it shut down and sure we
wanted and Concord wanted it shut down. But we have to look at
the realistics of the situation. Keller is there and we have to
deal with it and the homeowners next to it have to deal with it
and the realistic problem that we have is that we' re not getting
fair and equitable treatment from the landfill operator. And I
think I can point to a few things that have happened recently.
Recently Bailey Road had a collapse I think most of you all know
this morning. There' s no alternative route to the landfill .
Trucks are being routed through Bay Point . Willow Pass Road down
Railroad Avenue through the City of Pittsburg, down Leland Avenue
through all residential neighborhoods up to the landfill . Now
this is not the firs time. We had a gas explosion. We had a
fire at Keller Canyon Landfill property. This is the fourth
time. How can we alleviate the problem if there is no
alternative route . We suggest that there be an alternative route
from the south, coming through the City of Concord. Now if we do
that, that transportation fund has to stay intact because there
are going to be impacts to Bailey Road coming from the other way
and that road must be improved in its entirety to take the impact
of those trucks coming from the other way. We do need an
alternative route. At current time, one does not exist . And we
have seen clearly over the past year that with four instances we
do need one. I don' t think it would be as in Ms . Bishop' s
statement she didn' t want to live next to a landfill . Well, I
don' t think you' d want contaminated soils trucks passing through
your front yard either. And that' s clearly what happened today.
So, I think that has to be considered when you' re considering
fees . I also think it has to be considered in a June 13th letter
made by Mr. Westman to the Board that in order to reduce these
fees, you will have to double tonnages at the landfill in order
to maintain environmental control and Mr. Alexeeff made a
statement in the paper, stating that the first thing to go at
Keller should you reduce these fees would be environmental
control and the cities of Bay Point and Pittsburg should be
worried. I think that' s a very serious statement and we are very
worried. We have just had an admission by County staff that
environmental control is going to be sacrificed. Are we going to
sacrifice human lives . I don' t want to see that happen and I
think this Board knows what the right decision is . I think we
need to leave those fees intact . The statute of limitations has
expired. County staff told us that last week. This was not an
6
arrangement . This was a contract . This was a agreement by BFI
with the County for doing business in Contra Costa County. It' s
as simple as that . We have no obligation as citizens to help BFI
compete in this county. We have no obligation. They made that
commitment . They signed the dotted line. Nobody put "the gun to
their head" and said sign this contract . They were willing to
sign that because they got the landfill . Well, you got it now
you got to live with what you signed with. Thank you.
Supervisor Bishop: I actually have a question of staff . Mr.
Alexeeff let me ask you a question. Instead of using the ACME
transfer station you were to use the Pittsburg Transfer station
if that were to be utilized. If there were a failure at Bailey
Road such as we had this morning. Where, if those trucks going
from Pittsburg to Solano County the most direct route would be
what . Down Highway 4?
Val Alexeeff : There are surface streets through the north side
of Pittsburg that probably would bypass whatever the problem was .
As long as Port Chicago is open, that would be an alternate route
though it' s not a very good one.
, Supervisor Bishop: So they would all, so that would be an
alternate route that if we were utilizing solano or if pittsburg
using the Pittsburg Transfer Station, that would happen is that
correct .
Val Alexeeff : Yeah or they would go up the opposite way up
through Rio Vista. I guess it depends on what the problem is .
But I think that it' s important I think from the testimony and
just the circumstances to take a look at some kind of an
alternate route structure for any transfer station landfill
combination. I think that' s a worthwhile endeavor and it' s
something I think we' ll take a look at anyway.
Supervisor Powers : Okay, Lance Dow and I would like that letter.
I never saw that letter that was referred to us from BFI . You
haven' t got it okay.
Lance Dow: Good afternoon Board. I think Miss Bishop is right .
This isn' t a very complex issue. The issue that' s before us is
the amendment and basically what we' re talking about is fees and
I'm not real clear by what the County staff has presented if
we' re still talking about area of origin. It' s not real clear
but that also would be a very big issue but I' ll just address the
fees right now and I think Mr. Aiello pretty much hit on it . We
had a garbage conglomerate come here and promise to do all sorts
of things and over the last three years, a lot of us, especially
those that live next to the landfill have seen a lot of those
promises go by the wayside. And the fact remains that the main
promises that they made were the transportation and open space .
They knew that those were things that certain Board members
wanted and so to get their landfill they committed to that . And
here we are again today talking about competition and really what
we' re talking about is selling out your constituents . I think
you have to understand what the County, the County as far as I
can see has done enough. They've sited a garbage dump, they
lowered the fees, they gave the Central County cities the lowest
legal rate, so you've done your job. And I think it' s time for
the cities if they want lower rates, if they want to use that
garbage dump, then they' re going to pay the price to the host
communities, to our infrastructure, etc. etc . Now if they don' t
want to use the landfill then obviously they' re not obligated to
do that but once again I just want to express to this Board that
these were commitments that were made and that they should be
kept . Thank you.
Supervisor Powers : Thank you very much. Thank you Mr. Dow for
your testimony. I saw some yellow cards flipping around out
there but I haven' t gotten any additional ones so unless there is
7
someone who stands up and wishes to speak at this time, then
testimony will be closed on the issue . I do well I better wait
till two Board members come back because I think it may require
full participation of the Board particularly Mr. Torlakson in
this because a lot of it has an impact on his . .maybe we can keep
going till they get back. I know that they have gone upstairs
for a moment Mark and Tom Torlakson to talk about a hospital
issue and so that' s all I was told but they will be back. In the
meantime, Jeff, guy on theleft .
Supervisor Smith: I have a question. It' s alright it' s not that
important . As we've been struggling through all of this with all
the newspaper coverage and everything you can imagine, we've all
gotten lobbied by constituents considerably and a question was
asked of me by a friend the other day that I had a hard time
answering and so I'm hoping you can answer it for me . 2 and a
half years ago, the Keller Landfill began to accept waste and did
so with a interim fee or interim charges . Under rate review by
the Board of Supervisors with the analysis being that there was a
big profit range, profit margin, fixed expenses and the fee being
charged by the governmental entity were fixed as we talked about
numerous times . In that 2 and a half years, my understanding is
that basically everything has been charged about the same rate
some moderate change . The question is now Keller is saying that
they can operate at $39 . 00 for proprietary rate rather than $62
or $63 a ton so about a $22 or $23 a ton difference . But over
the entire preceding 2 and a half years that $23 a ton been
charged about 300, 000 tons a year so if you calculate that up
that' s somewhere in the 17 million dollar range over that time
period. Their question was how can the Board accept a lowering
of the proprietary rate and still justify the previous action
that they took. Because essentially when BFI came to this Board
previously they were saying we need that 17 million dollars to be
profit . Now, you' re saying you don' t need it . So the question
they raised to me is isn' t the rate payer entitled to a refund of
the $17 million dollars . How do I respond to this .
Tom Bruen: Well, I think you would respond to your constituent
by going back to the assumptions made by Deloitte Touche when the
rate was originally set for the Keller Canyon Landfill . Deloitte
Touche assumed that Keller Canyon would receive all of the
County' s wastestream except that portion going to the West County
Landfill . For starters, that didn' t happen. And as soon as you
adjust that assumption and look at the impact on Keller Canyon' s
profit picture by taking away all of the wastestream that
Garaventa Enterprises essentially which went to Potrero Hills
starting about two years ago roughly. That not only didn' t
result in the landfill making the kind of profit that Deloitte
Touche recommended this Board they make for all the risks
attendant to siting a landfill, but also that rate didn' t take
into account because we BFI haven' t gone into this Board for any
rate increase since then the additional capital expenditures that
have been poured into this landfill . The landfill in short has
not made anywhere near the profits that Deloitte Touche
originally recommended to the prior Board of Supervisors as being
a fair rate of return for the size of their investment and the
risk associated with that investment . How is it that BFI can
offer a lower rate now, well I think if you adopt the assumption
which is incorrect that BFI is going to be making a substantial
profit at $39 a ton then maybe it' s a legitimate question but the
fact of the matter is that BFI has spent about 100 million
dollars on a fixed investment at Keller Canyon. It is not an
investment that can be put on large tires and brought to another
County where maybe rates are more favorable. And so they' re put
in a position where they' re trying to recoup as much of that
investment as possible or at least cover the interest on that
investment . Under a $39 a ton proposal, BFI would not be able to
recover its investment in that landfill unless thing dramatically
change in the market in the future and perhaps larger volumes of
waste become available maybe a prospect for waste from other
8
jurisdictions but they will be operating at a loss at $39 a ton
when you consider their fixed investment in the landfill and it
will be a considerable loss in the short term.
Supervisor Smith: I think you've hit on the thing that is
confusing to me or at least a conundrum because the previous
environment was certainly less risky than the current environment
because there was a presumption essentially of monopoly and that
was changed by the Supreme Court ruling, had you know you point
out that Deloitte Touche presumed that all the waste was going to
Keller except for the West County. So, those two factors would
argue that actually that the $77 ton rate, Keller should have
made even more money because they should have been getting more
waste, less risk. Now, we' re going to a more risky environment,
Imean they were getting more waste less risk, now we' re going to
have a more risky environment less waste and you' re saying that
either you' re going to make much less profit or maybe even lose
money on using the landfills . And I guess from the perspective
of the County, I wonder which one it is . I mean if you' re going
to go bankrupt at $39 a ton, that' s a problem. If on the other
hand, the $77 a ton was much more than it cost to actually pay
for overhead plus a reasonable profit, that' s a problem too. I
just have a hard time explaining it to constituents who ask me
how come I've been paying this extra money. Don' t I get a refund
if we' re changing the rate.
Tom Bruen: Well, I don' t think I agree with your analysis, Jeff .
First of all because the landfill didn' t receive the volume it
was anticipated it would receive, it didn' t receive the profit
that it was anticipated it would receive. It' s not that we' re
going to be making a smaller profit at $39 a ton. That number
will not provide a profit when you consider the landfill' s fixed
costs . It' s as simple as that . When I was in college, I had
this economic textbook from a professor by the name of Paul
Samuelson and it' s a little esoteric but businesses have twokinds
of costs . Fixed costs and marginal costs . The marginal costs
are the incremental costs associated with manufacturing that
extra widget . So, what basically Samuelson said is if you' re a
rational business person, and your widget costs . 10 to make and
you can sell it for . 11, and that' s the market, you' ll make that
widget even if you have a huge fixed investment that you' re not
covering because you at least got one penny that you can put
against that fixed investment . That' s essentially the position
that BFI' s in. Because of the considerable capital investment in
a modern up to date landfill, they have a huge fixed investment
and if they can even cover the interest on that investment or a
portion of the interest on that investment, it still makes sense
for them not to close their doors . You referred to bankruptcy.
Well, obviously BFI is a large company and it has a lot of other
businesses . If this were a company with only that business, I'm
sure the shareholders would be very disappointed. I 'm sure
they' re disappointed as it is . You know, obviously that' s not a
concern given the size of the company.
Supervisor Smith: Well, actually you brought up the issue more
eloquently than I can in terms of the comparison of marginal cost
versus fixed cost . Of course, ultimately somewhere along the
line you let' s use the example of making widgets . Somewhere you
have to face up to the reality, even if you' re making a dollar a
widget, you have 100 million dollars that you've already
invested. Somebody has to end up paying off that 100 million
dollars . And that' s the question I have is that if what you' re
telling me is Keller Landfill Corporation is going to be losing
money on the operation of the landfill but able to use the
marginal income to survive temporarily what' s going to happen
down the line .
Tom Bruen: That' s not what I'm telling you. What I'm telling
you is they've already spent the money. It' s they've already
written the check 100 million dollars the landfill is there, they
9
can' t move it, so now they have to make economic decisions based
upon this point forward. It' s reasonable for them so long as
they cover their cost of operations and if they can recoup
something over and above that to stay in business, I assure you
they have a lot of people who are very much sophisticated in
questions of finance and operations much more so than I that have
to make these hard decisions. And they are hard decisions to
make but really it' s a question of survival at this point .
There' s no question in my mind that the company has very
substantial assets . It' s a New York Stock Exchange Company. The
second largest solid waste company in the world. So, it' s going
to stay in business I can assure you of that no matter how bad
their investment at Keller Canyon may turn out to be viewed as a
single investment .
Supervisor Powers : Okay, I'm going on this same lines Mr. Bruen.
I did want to ask you a few questions . I do recall what happened
not all the details but the essence of what happened when we set
the rates . It was my understanding the rate you requested was
around $95 a ton and that the consultant in evaluating the amount
of tonnage at the time didn' t evaluate all the waste but about
250, 000 tons and came back to us and said you would make a profit
at about $77 a ton including fees and that profit I think was
estimated to be about 11 percent if I'm not — in any event, you
accepted that interim rate at $77 as opposed to $95 indicating
that there was some profit and then raised the questions about a
couple of things I recall . One was the continued ability to
monitor some of the environmental issues because there wasn' t
enough revenues and two, to continue to extend the landfill' s
permit and I think we' re talking about some of the regional and
state permits . As I understand it you only have a Phase I permit
from the Regional Water Quality Control Board and that you' ll
need at some time in the future to go back and extend those
environmental permits . I guess that set of circumstances raises
further question about going down to $39 proprietary rate creates
even further risk from the one you had indicated before at $77
and I'm just wondering how we feel assured particularly in view
of some of those conditions in the land use permit being
eliminated as to how we can explain to the residents particularly
those in the environs of the landfill, how the environmental
issues are going to be addressed at a losing proposition.
Tom Bruen: Well, that' s the first time I've heard anyone express
a concern about BFI' s ability to pay for mitigation measures . I
can assure you that the parent company Browning Ferris Industries
which is located in Houston Texas has provided this County with a
parent company guarantee of all the Keller Canyon Landfill
Company' s obligations to this County. I'm not aware of any
relationship between the amount of money for "environmental
mitigation" and what our proprietary rate is . It seems to me
they' re unrelated. With respect to the Water Board and you
indicated you thought you heard we had a Phase I permit . We have
a waste discharge requirement from the Water Board. As with any
landfill, those are renewable every five years . We have to give
reports everytime we build a new unit or phase to the Water Board
indicating how it' s going to be built and how it will comply with
those regulations . We' re in full compliance with our water
permit and all of our other permits and I don' t think anyone has
suggested to us that the amount of our proprietary rates is
somehow going to jeopardize our ability to comply with our
permits . The parent company stands behind this operation like
all of its operations and so far as I'm concerned, that really
shouldn' t be an issue.
Supervisor Powers : Well, one of the reasons that we in
government here try to make sure we don' t know what' s happening
back home and we don' t know whether you will institute what most
businesses do when they start losing money is start cutting
corners and that' s the problem. It isn' t so much that we don' t
have faith in your corporation you know, we don' t own stock in
10
your corporation, and we don' t decide on who spends things but we
do have the ability to protect the public and we have the duty to
protect the public and so we don' t know what you' re going to do
in terms of business practices and I'm always worried when you or
anybody says they' re not making money, that they might try to
find a way to cut corners, so despite the reputation of the
company and I must say you get different opinions about that, we
have the obligation to do those kind of things .
Tom Bruen: All I can tell you is that Keller Canyon Landfill
Company is closely regulated by a number of regulatory agencies .
Bay Area Air Quality Management district, the Regional Water
Quality Control Board, the California Department of Fish and
Game, U. S. Army Corps of Engineers . And the landfill has an
excellent compliance record. Anything that BFI would do at any
site would affect its relationship with those agencies at all of
its sites . No one has ever suggested that the company would cut
any corners when it comes to environmental regulation. There' s
no evidence of that and I don' t think that should be a concern.
Supervisor Powers : I appreciate that but when as you did when
you filed for the land use permit ask to have certain conditions
changed including changing from the County geologist to a
geologist hired by you and by changing the mitigation monitoring
program outside of County to something paid directly by you, I
and asking for other modifications that were put originally in
this land use permit in the Board' s estimation and maybe those
change for protecting the Community from the possible
contingencies . Just like we have a fire station for fires . We
felt it was important and so I begin to worry. That' s all I'm.
saying. Appreciate your representation.
Supervisor Bishop: I have a few questions if for no other reason
than to provide some balance in the questioning. It almost
brings to mind a joke that I recall many years ago when I lived
in Florida and civil rights was quite the issue and I worked on a
lot of voter registration issues and the joke about the
African/American who was being qualified to vote and he was shown
a sign and it was an excerpt from I'm trying to thinkof
Aristophenes or one of those discourses and he says would you
read the sign and the African American says that sign says this
is one African American only a different expletive who is not
going to get to vote today. I think the nature of the questions
that you've had over the series of the past few months basically
says Mr. Bruen that BFI is not going to get the support of
certain members of this Board. I do have some questions and
perhaps I will address them to you. One is the piece of paper
that was provided by Supervisor Powers . I would at some point
like you to respond to this why on October 3rd, we are still, you
know the rate is still what it is. That is one of my questions
but also, I'm looking through trying I had gone through the
conditions that were being considered under the land use permit
and which ones were being changed or deleted and of course, one
of those conditions related to export and the limitation on the
receiving waste from out of county which the law has changed and
my going through the conditions the substantive conditions
attached to that land use permit, correct me if I'm wrong but
most of those are housekeeping and most of those do do they not
relate to things no longer applicable or they are not truly
substantive changes is that that is my read on the matter.
Tom Bruen: Well, let me answer that in two ways . First of all,
the change in the import/export language was recommended by the
Planning Commission based on a staff recommendation to be deleted
from the proposed amendments before you so the import/export
language in the use permit would remain the same under the
Planning Commission recommendation that' s before you. It was my
understanding and remains my understanding that all of the other
changes were put together based on our application by your staff
in an effort to be consistent with resolution which Supervisor
11
i.
1
Smith offered several months ago to try to take all of the County
fees that were fixed in stone in the use permit and transfer the
ability to determine the amount of those fees over to the
franchise agreement so this Board would have flexibility in
determining how to spend the money raised through surcharges at
Keller Canyon and the franchise agreements approved by this Board
several weeks ago basically envision that kind of scenario where
the percentage surcharge represents an overall cap on the use
permit fees . So, the whole idea of these amendments as I
understood it was to clean up the use permit to give this Board
discretion to act in accordance with its view of the best
interests of the rate payers and public policy. Right now the
use permit ties your hands in that regard. So, I would concur
that I regard them as being housekeeping items in that sense .
Supervisor Bishop: moving on to another subject raised by both
Supervisor Smith and Supervisor Powers regarding the financial
ability of BFI to perform in the event that mitigation should go
beyond what our fees are and to your proprietary having recourse
to BFI, I am not as experienced obviously in water resource
matters etc . and regulatory agencies, government regulatory
agencies of that kind but I am quite familiar with securities and
exchange commission regulations and the regulation that you file
quarterly 10K and you file or 10Q' s and 1OK' s on an annual basis
that reflects what your annual financial report looks like. What
are the assets, the unencumbered assets of BFI, what would you
estimate that to be . I mean dollar amounts not enumeration of
them but . .
Tom Bruen: I believe it' s a multi billion dollar company but I
don' t have that specific answer. I' d be happy to provide that to
you.
Supervisor Bishop: I must share with you and maybe I have
previously but I was amazed Supervisor Powers and I were in the
United Kingdom a few weeks ago and I looked up and I could not
believe I could not get away from Solid Waste but there was a BFI
truck going down the street .
Supervisor DeSaulnier: were you in England together.
Supervisor bishop: Oh, no. anyway I think that answers my
question. Can you answer this question.
Tom Bruen: Well, yes, I think I had already addressed that . The
rates, the proprietary rates at ACME will go down when the
permanent station opens and they will go down to somewhere in the
vicinity of $40 to $50 a ton for waste that hasn' t been committed
on any long term basis. The $39 a ton rate is being offered to
the jurisdictions and this County in exchange for a 17 month
commitment .
Supervisor Bishop: Let me ask you this . Now this was from
Garaventa and my understanding was that Garaventa was going is
Garaventa currently going to the temporary transfer station. I
thought they were going to Solano County.
Tom Bruen: I have heard I haven' t followed any trucks there. I
have heard that most of Garaventa Enterprises' fleet is going to
the Protrero Hills Landfill . I have seen some trucks going to
the West County Landfill but I don' t know if they' re carrying
yard waste or what .
Supervisor Powers : Do you have any reason to believe that that' s
not an accurate representation of a gate rate ticket from the
ACME/Keller Landfill .
Tom Bruen: Well, to be honest with you , I've never seen one of
their tickets before . Idon' t deny it but I've never seen one so
I can' t tell you.
12
V
• Supervisor Powers : Well, you don' t deny the fact that the rate
is still about $77 .
Tom Bruen: It' s 76 . 88, that' s the current rate per ton until the
permanent station opens yes .
Supervisor DeSaulnier: Tom, before you leave, I have a question.
You are offering and you have offered the $39 rate which is the
same rate that you offered before we came out of closed session
when you were trying to get us to commit for 7 years with two 7
year options . So, where is in your mind, where is what we have
in front of us now any different from what you were offering many
lifetimes ago, was it five months ago. Where are we different
today than we were . . .
Tom Bruen: Well, I' ll tell you what I think a difference is .
The difference is that the prior proposal was a 21 year lock in
on a rate. The proposal that' s on the table right now is a 17
month lock in which is not to say and we've suggested to Solid
Waste Authority not suggested, they've asked if we' d be willing
to extend that for another 7 year option at their request with
CPI and various adjustments and we've said we'd do that and we' d
do the same for other jurisdictions as well, so I think the short
answer is I believe there' s an advantage in tying down a rate
over a period of years because I think that rates are going to
climb probably dramatically so over time. And if it were me and
I were a city, I'd want a longer term agreement rather than a
short term agreement . If the County wants a longer term
agreement, we' re happy to negotiate that as well . Certainly the
rate is the same.
Supervisor DeSaulnier: Well, I think the question is where are
you sitting and right now with all of you competing with one
another, we will I think all of the franchisees want to get to
the point where that just right point and then we want to commit
our waste so that it' s as low as possible so I guess my point
being my first question is what we have in front of us in terms
of the fees that we will charge and the fees that you will charge
are very similar to what you were asking us to vote for four
months ago.
Tom Bruen: Yes, with the exception that I think under the
proposal that was before the Board in June there was at least
suggestion or proposal by the cities that the County reduce its
fees below $10 a ton, the total state and County fee so they' re
now at $12 . 24 but that would be the only difference .
Supervisor DeSaulnier: We also had $2 included in that for post
closure.
Tom Bruen: True .
Supervisor DeSaulnier: so, we' re very, very close .
Tom Bruen: Okay._
Supervisor DeSaulnier: That' s all I wanted to get from you.
Thanks .
Supervisor Torlakson: Mr. Chairman, I had a question for Mr.
Bruen relating to the Mr. Bruen related to the report from Mr.
Westman last week on the land use permit . There was the
indication that the original LUP conditions on open space and
transportation, the mitigation fees, were something that BFI had
basically agreed to and not challenged and the statute of
challenge period had expired. If there is any change and I don' t
know that there should be I expressed this last time whether
those fees are relabeled or whether they' re batched together in
generic mitigation LUP condition, is BFI willing to say you' ll
agree to any or all such combinations or you know what is your
13
thinking about that in terms of challenging that because
basically what' s in there now is locked in and secure unless this
Board changes it . No one can legally challenge and undo it . If
we change even a few words or change the numbers in any way that
is open to your challenge and I'm wondering if you have thought
that through and have a company position on that .
Tom Bruen: Well, I' ll try to answer that question. We support
the staff recommendation and the recommendation of the Planning
Commission that' s before you with respect to the use permit . We
certainly wouldn' t challenge that . The Franchise Agreement has
an anti challenge clause in it that says if we challenge anything
the County does under the Franchise Agreement it makes the
Franchise Agreement null and void. I think the use permit has
similar provision. And you' re right there has been no challenge
by BFI to any provision in the Franchise Agreement or the use
permit . I the only reason I'm hesitating Tom is the way you
phrase the question, you were asking me under any circumstances
would BFI object and I guess I could conjure up some
circumstances where they might but certainly we support the
recommendation that' s before you.
Supervisor torlakson: And what is that exactly as it relates to
the LUP on the LUP what does it exactly say in your staff
recommendation?
Vic Westman: Perhaps Mr. Chairman you may want to ask Mr Bruen
is BFI going to accept the Franchises which the county has
offered to them. The amendments to the LUP are to some extent
premised on the acceptance of the franchises that you approved a
few weeks ago and at least as of right now, I'm not aware that
BFI has accepted those franchises .
Supervisor torlakson: I think that' s a good question to go along
with this one.
Tom Bruen: The answer is yes . There are a couple of clerical
changes that we need to make in the agreement where we think the
franchise agreement doesn' t reflect what this Board did but other
than that yeah I think the agreements are, I think we already
told you the form of the agreements were acceptable to us . So,
that answer the question?
Supervisor Powers : Okay.
Val Alexeeff : On the LUP specifically. I don' t think we can put
in a poison pill in it where it self-destructs if anybody
challenges it .
Supervisor Torlakson: What is the language you' re proposing
right now from the Planning Commission and your staff to the
Board. I mean is it $4 or $0 .
Val Alexeeff : No, it' s that it be determined by franchise as
opposed to determined by use permit . We did not set an amount .
we would not presume to do that .
Supervisor torlakson: And the LUP language says that the amount
will be set or is the LUP language just eliminated in your
proposal? Does the LUP condition totally disappear or does it
say it will be implemented in the franchise agreement . Look to
the franchise agreement for it' s implementing dollar amount and
spending guidelines .
Chuck Zahn: Supervisor Torlakson, the proposed amendments to the
Land Use Permit identify a number of program areas but leave it
to the discretion of the Board in setting the amount of the fee .
In other words, it' s not specified anymore in the land use
permit . The Board has the ability to take it up in another
instrument such as the franchise agreement . We have described
14
this amendment as an enabling amendment .
Val Alexeeff : I think the intent was to make it all flexible and
into the direct Board' s discretion. It was not to predispose the
ultimate number.
Supervisor Torlakson: That' s it . I mean that adds to my
discomfort about taking it out of the LUP and removing that .
Vic Westman: Well, perhaps Mr. Chairman, I would suggest you may
want to consider a condition if you approve the amendments to the
LUP that they won' t become operative until BFI and whatever other
corporation we' re dealing with have executed the franchise .
Tom Bruen: That would be fine .
Vic Westman: And then the franchise itself does provide . . .
Supervisor Powers : Well, I don' t think that' s what he' s getting
at . He' s not getting at that .
Supervisor Bishop: I understood Tom' s question a lot better than
I did the answer and I think his question is a question in my
mind. As a practical matter, how what we are suggesting is the
land use permit still has all the mitigation measures included in
the conditions but that the fee setting become a part of the
franchise and the fee setting becomes can you say it in one
simple sentence what would happen. No. Two simple sentences .
What we are proposing taking it out of the land use permit arena
and moving it into the franchise and determining one that those
things will be covered but the amount will be determined under
the franchise . Tom, you give it a shot :
Tom Bruen: I was going to say what you' re doing is you' re
removing the specific dollar amounts from the land use permit and
bringing them under the umbrella of a percentage surcharge in the
franchise agreement .
Vic Westman: Could I perhaps add in there and at least the staff
report you receive take the position that these two fees, I think
we' re talking about the open space and transportation fees were
not mitigation fees that were required because of a CEQA
mitigation program but were imposed for other public purposes .
The. . .
Supervisor Powers : Everybody' s missed Tom' s point . He doesn' t
like the ag and transportation fee designation eliminated.
That' s his point and no matter what else you say, it doesn' t make
any sense to, I mean that' s what he' s concerned about .
Supervisor Bishop: I do have a question along those lines and
it' s not of you Tom. It' s of staff and it may be in the report
you gave us this morning but what it does it takes transportation
and open space out of the land use permit and those amounts are
incorporated into the surcharge but we will determine that within
the surcharge and that will be determined by the County what that
amount will be . But now I'm going to ask, on transportation and
open space, can you even though we' re in the middle of public
testimony can you tell me what has been spent . Have you provided
that information, that was a question I had last week.
Supervisor Powers : In the meantime while let' s while you' re
looking that up, let' s have Mr. Randall Morrison testify. He
submitted a card and wishes to.
Randall Morrison: Thank you verymuch. I don' t have any
testimony to offer but a question that I think you should
consider in view of the dialogue between Supervisor Smith and Mr.
Bruen. Now Mr. Bruen has told us today quite explicitly that
when BFI lowers it' s rate to $39 a ton it will be operating at a
15
4.
loss and a considerable loss . As a competitor of BFI, Valley
Waste Management has a legitimate concern in knowing whether or
not this whole arrangement that the County is currently
discussing with BFI is going to result in a below cost predatory
pricing scheme by our competitor. I think it' s of interest to
you as well as to us whether or not what Mr. Bruen said is truly
accurate . BFI is now going to be pricing its landfill disposal
in competition with my client and others in the County at below
cost . If that' s the case, I think there are some very serious
competitive implications that ought to be explored. Now, I'm not
prepared today to give you a dissertation on the Cartwright Act
and I doubt that Mr. Bruen is either but I think this is an issue
that ought to be looked into because we've been expecting to
compete with a competitor who would use appropriate pricing
methods and I don' t believe that operating below cost is one of
those sanctioned under California law. So, I simply request and
suggest that the Board consider this, maybe staff consider this
and that BFI report to you a little bit more fully on what they
had in mind. This could open up a whole new dimension of problems
probably none of us would like to see .
Supervisor Powers : I appreciate that from your perspective as a
competitor. I'm not sure that I'm really concerned about it and
as a regulator unless it affects our contract in some way our
franchise or some other aspect of operating that company and in
that respect, is that worth taking a look at or do we . . .
Vic Westman: Well, we don' t regulate in that area. If Mr.
Morrison that his request, perhaps we should refer this to the
appropriate State or Federal authorities who consider those
matters from a governmental point of view and of course, his
client can always exercise his fully and adequate private civil
rights to sue in this area.
Supervisor Powers : Yeah, I don' t think we need to refer it
anywhere . That' s not what I'm concerned about Vic . With this
allegation, were it true is that going to affect anything about
us doing. . .
Vic Westman: No, you have removed the floor pricing and I
appreciate the concern but BFI within the range of setting its
proprietary rate will set it and you have at least indicated
recently that you are no longer going to be involved in that area
of regulation.
Supervisor Powers : Very good, okay. Thank you Mr. Morrison.
Supervisor Torlakson: If litigation emerged out of this issue
and BFI could not charge the rates they've offered, do we have an
escape clause in the franchise agreement that deals with that?
In terms of any waste commitment or any other. .
Vic Westman: Well, remember BFI has the option which they can. . .
Supervisor Torlakson: Say if they' re forced to put the price
back by some litigation to a higher level .
Vic Westman: Well, that in fact may force them out of business .
As I understand it competitors are offering similar or lower
rates at this time and it would appear that at some point BFI
will no longer be operating and of course, that' s an option they
have under the LUP and the franchise is simply to not operate.
Supervisor Smith: I guess I'm not concerned so much from the
perspective of competition or anti-trust issues or all of that
but I am concerned about the fact that the franchise under which
the interim rates were set was a contract between the County and
the operator that committed the operator to run at a certain
profit margin at a certain fixed rate and now essentially we' re
being told that they can actually operate quite a bit lower and
16
a
it just seems to me that a question is raised about the process
and the decision and the assumptions and the information that
were made two and a half years ago and whether that process was
tainted by artificially inflated costs or operational costs that
led the Board to allow them to charge a fee much higher than
apparently now they' re able to run at and in that sense whether
they owe a refund to the people who've been paying the rate in
the County. And I think that' s an appropriate concern for us to
have .
Supervisor Powers : We spent a tremendous amount of money in
consulting fees and going back and forth trying to get
information from ACME and BFI and there' s a lot of data on this
that' s for sure about what actually did happen during the rate
setting process . I still have some in my office library and I
mean we can look at it but I'm not sure where we go with that . I
mean I think it' s worth looking at in terms of I mean is there a
way I guess Vic if there was inappropriate pricing situation and
we weren' t given the proper information can we go back and seek a
refund for the rate payers.
Vic Westman: Well, I think that would be very difficult
considering that the Board exercised its discretion to fix a
price after hearing a great deal of testimony from many sides in
this matter and since the date of that, there has never been any
either BFI or County initiated reconsideration of that rate
setting process and as far as I know there' s been no studies done
specifically to support any change in those rates .
Supervisor Powers : Assuming we did a study to indicate that
historically the information was not accurate, now that we' re
giving up rate regulation, we can' t jump out of the situation and
ask them to even reduce a lower rate in order to gather that back
from them.
Vic Westman: Well, I don' t know if the rate, if the information
that was provided by BFI to our consultants was not accurate at
the time. I mean it was a very complex process and we did hire a
consultant who did review a lot of information and then provide
us with the consultant' s recommendation. Whether any of that
information that the consultant evaluated was incorrect, I don' t
believe that' s ever been established. Even the Grand Jury does
not even purport to establish that in their report . If you want
that examined, you'd have to direct staff . .
Supervisor Smith: Well, that' s why I raised it now because
actually until this land use permit is modified, we have not
really forgone rate regulation. I raise it at this point,
because if we take this step forever if this is a concern we
never have the option of dealing with that issue in the future .
Whether we want to or not is another question.
Supervisor Bishop: What is before us is the land use permit and
the open space and the transportation aspect, the $2 and $2 as
far they were phrased mitigation, but I think in looking at how
those funds have been expended, it is appropriate for us to
determine I think whether or not we are truly talking about
mitigation. Under transportation, I there' s no question but
there is mitigation, that there is a nexus between the impact of
the landfill and the transfer station and what the funds are
being spent on. For example, going down in 92 , 93 , 93-94, Bailey
Road widening, traffic signs Evora Road, litter pickup, route
restriction enforcement so on and so forth. I think there is a
clear nexus there . On open space, I have some real problems .
Rodent and thistle control, tree planting, East Bay Regional Park
District trail maintenance, Ambrose Wetlands mitigation, farm
bureau, the ag soils bank and the audubon outreach, I mean I'm
just going over those. In both of those, there was a fund
balance for 92-93 of $236, 000 in the transportation and $395, 000
in open space . My view is perhaps transportation we are
17
addressing mitigation. In open space, we are talking about other
County needs and other County programs that I think are not
directly tied to the landfill and the transfer station. I think
within the structure that we have and the surcharge and the
percentage amount that easily we could address some of the same
issues that are addressed here and the issues are going to be the
same from year to year rather than having to go through the land
use permit process that it is something that is appropriate for
the purvue of this Board and we will take a continuing interest
in it . I feel that yes we took a step, a very small step in the
direction of reducing our fees . I feel as I said initially, that
by getting it down to someplace in the range of $7 or even lower
than that . But the first priority going toward just host
mitigation and within that host mitigation talk about
transportation because I think basically that' s what we' re trying
to mitigate, transportation and something that comes back to the
host community out of that percentage surcharge but frankly, to
deal with the land use permit and set up that mechanism does not
seem particularly productive and looking at the numbers and how
the dollars were spent, clearly we had fund balances both years
in both of those mitigation fees and—that' s my. . .
Supervisor Powers : Thank you for your comments . I asked staff
for a copy of a letter that apparently was circulated in the
Board Room two weeks ago about the conditions and the setting of
the rate . I'm informed that the staff never got that letter. It
just got circulated around and where it went I dont' know, nobody
does .
Supervisor Bishop: Who was the letter from?
Supervisor Powers : I don' t know. Purported to be from BFI or
ACME or Mr. Bruen or somebody in that crowd about what they were
doing with rates . I feel extremely insecure about making a
decision today about a very complicated set of circumstances
dealing with the franchise agreements which now we understand
there are "some clerical changes that need to be made" , with the
land use permit relationship with the franchise agreement, and
with particularly disturbed the fact that this Board made a good
faith effort to try to reduce the rates and now we understand the
conditions are changed or they weren' t sincere. I want a letter
with a commitment from BFI to this County about what will happen
if the rates that we reduce are implemented and what they will
do. I want to know what they will do and I want to have
something in writing from an appropriate person that has the
ability to make that commitment and I want to take the
opportunity to figure out how the land use permit provisions
relate to the franchise agreement so I just ask for one week to
do that and we can in the meantime absorb all of this and
hopefully Mr. Bruen you've heard my request for that letter and I
appreciate having it as soon as possible.
Supervisor Smith: Can I .make one request . I attended the Contra
Costa Solid Waste Authority meeting now two weeks ago when we
presented to them our intent, our letter of intent to join and
they were anxious to get moving with that . I wonder if we might
at least proceed with authorizing the staff to proceed with that
effort to join the Solid Waste Authority.
Supervisor Powres : I'm not sure I agree with all of the
conditions they've imposed on it but I think we ought to respond
that yes, we want to negotiate some arrangement .
Supervisor Smith: Well, I think the bottom line that I
represented and I think the Board agreed was that we need when we
join we need to be equal partners with all the cities with no
external otherwise unreasonable requirements and no other
limitations on our authority. So, I'd make the motion that we
authorize staff to draft documents to join the Solid Waste
Authority.
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Supervisor Powers : Motion and a second. Any further discussion?
If none, all in favor of the motion signify by saying aye . And
is there objection to putting the matter over one week. I' d like
to see the franchise back with proposed clerical changes and
there may be some changes that this Board is going to consider
too because of the interrelationship between the land use permit .
The land use permit and those items should be on the agenda.
Vic Westman: You' re continuing the hearing on the land use
permit till next week at whatever time 2 o' clock.
Supervisor Powers : That' s correct . What' s a good time?
Morning? No time is a good time . 2 o' clock again. Okay.
Supervisor Torlakson: Mr. Chairman, along with the request
you've made I want to further explore and I want to express my
concern about changing the land use permit and understand better
between now and next week the mechanisms by which the franchise
agreement either the dollar amounts or the dedication of funds
can be changed. What guidelines do we have . Is there just three
votes on any given noticed hearing of the Board on any given
Tuesday. I'm speaking on behalf of the community of Pittsburg
and Bay Point that are the host communities in terms of what they
expected and what the guarantee of the land use permit is in
terms of both the environmental process which included CEQA but
also the environmental review/public discussion process which
involved everybody coming in with information and those fees
getting locked into the land use permit . So, for the City of
Pittsburg' s point of view, the Bay Point Municipal Council' s
point of view, for Citizens United and property owners, the LUP
is a place that' s pretty firm. Where the franchise agreement is
sort of in never, never land in terms of something could change
next month a different alignment of Board members on different
issues . THe money that might be earmarked or dedicated to the
community might go to something else instead. So, that' s the
kind of thing I wanted explored and I will be looking at with
staff between now and next week.
Supervisor Powers : Okay. Val did you have . .
Val Alexeeff : Yeah, did you want us to prepare any alternatives
for that or were you going to prepare them yourself . I'm not
sure of the direction on how the Board would make such a
decision.
Supervisor Powers : I'm not sure there' s any direction at this
point but clearly we' d like to know about the letter from ACME
Keller. We' d like to have some indication about what those
"clerical changes" are and if you have anything to add please
feel free to do.
Supervisor DeSaulnier: For me, I think it would be helpful if
you came up with some options . I mean it doesn' t say the Board
is going to take it but as Supervisor Bishop said an hour and a
half ago, we get into the quagmire of it would be nice to finally
make some decisions on garbage.
Supervisor Powers : Okay, that will be fine . Without objection
the matter and the hearings are put over. We also want the
franchise on at the same time. And the alternatives, so, we take
five minutes and then we' ll go to the Concord Diamond issue.
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