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HomeMy WebLinkAboutMINUTES - 01091996 - D7 TO: BOARD OF SUPERVISORS Ckn`ra FROM: VAL ALEXEEFF, DIRECTOR Costa_ GROWTH MANAGEMENT & ECONOMIC DEVELOPMENT AGENCYCouqy DATE: December 12, 1995 SUBJECT: KELLER CANYON LANDFILL PROPERTY VALUATION STUDY SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. CONSIDER the challenge(s) to the "Keller Canyon Landfill Property Valuation Study," prepared by [CPA - Sonoma State University, which were received from BFI - Keller Canyon Landfill & City of Pittsburg. 2. DIRECT staff on preferred option of evaluating Challenges, arbitrator or peer economist or other option developed by the Board. 3. DETERMINE whether or not compensation to property owners is warranted.. 4. If compensation is determined not to be warranted then no further action is required; however, if compensation is determined to be warranted then: a. DETERMINE which persons/properties should be included or excluded based on timing of sale, purchase and other qualifications. b. DETERMINE method of compensation, option can be chosen from those provided below, or the Board may choose to develop other options. C. DIRECT.staff as necessary whether to seek opinions or advice from other experts, i.e., economists or appraisers. CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON Decem5E'FTT—, —M5 APPROVED AS RECOMMENDED OTHER X VOTE OF SUPERVISORS X UNANIMOUS (ABSENT I HEREBY'CERTIFY THAT THIS IS A TRUE AND AYES: NOES: CORRECT COPY OF AN ACTION TAKEN AND ABSENT: ABSTAIN: ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Val Alexeeff (510) 646'1620 cc: Community Development Department ATTESTED December 12, 1995 Growth Management&Economic Development Agency PHIL BATCHELOR, CLERK OF THE County Counsel BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY: J , DEPUTY VA:DD:rw RDD3:KCL-PVS2.BOD - Board Order Keller Canyon Landfill Property Valuation Study December 12, 1995 -Page 2- FISCAL IMPACT The fiscal impact is expected to be borne by the landfill operator (BFI - Keller Canyon Landfill). The Keller Canyon Landfill Land Use Permit 2020-89 Conditions of Approval require the "landfill developer to fund it [compensation program] in the manner specified by the Board ... shall be considered a pass- through business cost". BACKGROUND On October 17, 1995, the Board of Supervisors accepted the "Keller Canyon Landfill Property Valuation Study" prepared by the Institute for Community Planning Assistance (ICPA) - Sonoma State University dated November 30, 1994 as complete. Also the Board allowed a 30-day comment period during which written challenges to the Study could be submitted. At the conclusion of the challenge period we received an extensive challenge from Coopers &Lybrand for Browning-Ferris Industries (BFI) which is attached. Also a challenge was received from Gruen & Gruen for the City of Pittsburg which is also attached. -Due to the complex nature of the Challenge received from BFI-Keller Canyon Landfill it will be important to have someone knowledgeable in economic models and assumptions used in the study prepared by ICPA - Sonoma State University to render their independent opinion on whether or not the challenge is warranted. CHALLENGES BFI - Keller Canyon Landfill has provided two types of challenges: 1. Challenge to procedure 2. Challenge to substance Cha/lenges to Procedure 1. The conditions necessary for compensation have not been achieved since no significant physical impacts have been documented by the study or other means. The effects are psychological and are thus illusory. 2. The fees expected to be paid were unknown at the time of approval. 3. There is inadequate nexus between the use impact and the fee. 4. The fee violates Proposition 13. 5. Other waste handling facilities have been approved without requiring compensation. 6. Keller Canyon Landfill should be allowed to exercise full due process rights to the hearing. Challenges to Substance Coopers and Lybrand (on behalf of BFI - Keller Canyon Landfill) have prepared a statement which argues that four separate aspects of the ICPA - Sonoma State University Study are flawed and that the conclusions, that property values have been affected, are also flawed. Claude Gruen, on behalf of the City of Pittsburg, supports the conclusion that subdivisions identified as impacted, were financially affected. However, he indicated that other subdivisions were also affected and the City of Pittsburg, as a whole, was impacted. OPTIONS FOR EVALUATING CHALLENGE(S) 1. ARBITRATOR. Seek a Court appointed Arbitrator to reconcile the ICPA - Sonoma State University with the Challenge. 2. INDEPENDENT ECONOMIST. Use an agreed upon peer Economist to arbitrate the positions of ICPA - Sonoma State University and BFI/Coopers & Lybrand. There is a less comprehensive challenge from the City of Pittsburg (copy attached) indicating that other subdivisions have been affected as well as the City as a whole. However there is no data provided beyond generalized impressions. Does the Board want additional study regarding this Challenge? Board Order Keller Canyon Landfill Property Valuation Study December 12, 1995 -Page 3- BACKGROUND (CONT'D) DETERMINATION REGARDING COMPENSATION If the BFI - Keller Canyon Landfill Challenge is sustained and the Board determines that no compensation is warranted then no further action would be required. However, if the challenge is not sustained and the Board determines that compensation is warranted several key principals of procedure will be important. First, the Board is reminded that the Condition of Approval (35.3) of the Keller Canyon Landfill Land Use Permit 2020-89 which called for this Study reads as follows: "Property Value Compensation Program. The Landfill operator shall provide funding for the preparation of a property value compensation program study when requested by the County of Contra Costa. The study will address the means of determining the extent of property value losses or reductions attributable to Landfill impacts, such as aesthetics, noise,traffic, or pollution, and the means of compensating property owners for said losses or reductions. When a compensation program is adopted by the Board of Supervisors,the Landfill developer shall fund it in the manner specified by the Board. If the Board of Supervisors determines that progress on the implementation of a compensation program is not proceeding in a timely manner, the Board may require the use of a facilitator and/or an arbitrator. The fee shall be considered to be a pass- through business cost for the purpose of rate setting." Second, some fundamental limits should exist within in this process. The following properties/persons should be eliminated from compensation: 1. any seller who sold their home prior to the Keller Canyon Landfill Land Use Permit (2020-89) approval on July 24, 1990, 2. any buyer who purchased their home after the Keller Canyon Landfill Land Use Permit (2020-89) approval on July 24, 1990; 3. any house built after (or building permits issued after) the Keller Canyon Landfill Land Use Permit (2020-89) approval on July 24, 1990. OPTIONS FOR COMPENSATION: Potential options which could be explored by staff if so directed by the Board. OPTION 1. ICPA - Sonoma State University Study Recommendation. A compensation program may be warranted for neighborhoods which experienced loss of property values (Hillsdale, Bailey Road). An appraisal of each particular property in impacted neighborhood is needed. One method of implementing the above study recommendation is to set an amount, at an average of $5,000 per house ($5,700 is average.for.Hillsdale in study, no average is given in study for Bailey Road), and determine criteria to establish whether the impact is equivalent to, greater than average or less than average loss ($5,000). Select an independent appraiser to determine the sub-criteria for impact and method of application to individual houses. OPTION 2. Method used to award legal claims in class action lawsuits. Claim Award (based on Newberg on Class Actions): Class awards are generally awarded by the courts but are distributed by a special master, committee of counsel or some other method. As a part of settlement of Class Action lawsuits: 1. lump sum amount is established 2. class is defined 3. distribution methodology is established There are four steps in the distribution of damages (a standard claim form should be established): 1. Notice 2. Submission of proof of claim 3. Claim verification 4. Actual distribution Board Order Keller Canyon Landfill Property Valuation Study December 12, 1995 -Page 4- BACKGROUND (CONT'D) The settlement fund is usually not distributed until a fund judgment has been entered and the appeal period has expired. Exclusions/reasons for disallowance are (procedures should be established for appeal of exclusions): 1. No damage was indicated 2. The claim was not signed or signed by the appropriate party 3. The claim was not timely filed 4. The claim could not be verified 5. The claim was withdrawn 6. The claim duplicated another claim 7. The class member excluded themselves from settlement 8. The claimant was not a member of the class OPTION 3. Independent evaluation of each property in two neighborhoods. Conduct a property by property (lot by lot) evaluation for the two neighborhoods identified in the Study (Hillsdale, Bailey Road) to determine what if any effect each property has experienced. The study would be used as a background informational document only. OTHER PROPERTY VALUE STUDY & COMPENSATION FROM TWO EXISTING LANDFILLS IN CALIFORNIA Background is provided here regarding two other existing California landfills and how potential changes to nearby Property Values were addressed. Puente Hills Landfill - Property Value Impact Study According to staff of the LA County Sanitation Districts, a Property Value Impact Study for Puente Hills Landfill was completed in early 1983 (by Donahue & Company Inc.) for the Los Angeles County Sanitation Districts. The study was prepared as background evidence for a permit, the study proved there was no property values from the landfill. In 1989 a follow-up study was done, looking at the same area (east of the landfill), and the results of the 1989 study found no effect on property values in the area, again verifying the 1983 results. In 1992 an MAI (Member of Appraisal Institute) did a review of both studies and looked at the overall market and came to the conclusion that the previous studies were correct. In 1993 a use permit condition was imposed that requires that a program be established to compensate property owners if effects are found. LA County Sanitation Districts are currently designing the program. They have defined the area of impact and identified comparable areas outside the landfill's influence. The envision the program steps to be: (1) resident requests a review of their potential impact, (2) homeowner has an appraisal done that demonstrates that the sale price is less than a comparable-and that the decrease is due to the landfill, (3) if LA County were to disagree they would be able to have a separate appraisal done and if the results conflicted then a third appraisal would be done to attempt to reach a consensus. The permit condition has been in effect since 1993 and no residents have requested to initiate the LA County compensation process/program. San Marcos Landfill - Paul McKee & Betty Bates-McKee, et. al. v. County of San Diego A suit was filed against San Diego County's San Marcos Landfill by over 20 homeowners who alleged their property values suffered because they were located too close to the landfill (landfill located approximately 1000 ft. from the active landfill). The homeowners together sought over $4.5 million alleging property value losses of 30-34%, however the County argued the homeowners loss was 0-8% for a combined total of $585,000. To quantify what the County felt were appropriate damages, the County hired an Appraiser to evaluate the 20 plus homes and give them ratings according to value influencing factors such as distance, odors, noise, view, etc. The value influencing factors were considered those issues that are important to a prospective buyer. After the Appraiser calculated the amount each home value could have been influenced according to those factors, the home with most of the value influencing factors from the landfill became rated as the "worst" or most impacted. Then each of the other homes were calculated as a percentage of the "worst" according to each of their calculated values dependant on each of their factors. Using this methodology, the County allocated each property a percentage of the total of $585,000 according to the percentage of damage (as discussed above). Board Order Keller Canyon Landfill Property Valuation Study December 12, 1995 -Page 5- BACKGROUND (CONT'D) The jury awarded only a total of $530,000 to the homeowners. The amounts awarded to each varied and went as low as $1.00. Additional background regarding the ICPA-Sonoma State University Study and the process which has been followed up to this point is provided in the attached Board Orders dated October 17, 1995 and June 6, 1995 (with attachments). RDD3:KCL-PVS2.00D ADDENDUM TO ITEM D. 7 DECEMBER 12, 1995 On this date the Board of Supervisors considered challenges and options regarding the Keller Canyon Landfill Property Valuation Study. Val Alexeeff, Director, Growth Management and Economic. Development Agency, presented the staff report on the matter. The following persons presented testimony: Lance Dow, 2232 Concord Drive, Pittsburg; Warren L. Smith, 1300 Bailey Road, Pittsburg; Jim MacDonald, 274 Pebble Beach Loop, Pittsburg; Mark Miller, 2374 Peachtree Circle, Antioch. The public comment was closed. Following discussion of the issues, the Board of Supervisors took the following action: REFERRED to the Finance Committee for discussion and report to the Board. of Supervisors in January, 1996, the challenges and options regarding the Keller Canyon Landfill Property Valuation Study; AUTHORIZED staff to seek a facilitator and discuss with the Finance Committee on December 18, 1995, resolution of the issues regarding the Keller Canyon Landfill Valuation Study.;. DIRECTED staff to meet as soon as possible with the parties involved to resolve" the issues in a quick timeframe. .t y 4 NO w "q, �� r •. �- Analysis of the, Sonoma State_ .r .� A. y. University Property Valuation a Study 'i a November 1599x6 . Coo Coopers& Lybrand LLP. 2901 Worth Central Avenue telephone (602) 2841800 -� a professional services firm Suite 1000 & Ly rand Phoenix.Arizona 85012-2755 facsimile (602)2841999 finanew Advisory s.rHoss November 15, 1995 Thomas Bruen, Esq. Bruen& Gordon 1990 North California Boulevard Suite 940 Walnut Creek, California 94596 RE: Analysis of the Sonoma State University Property Valuation Study Dear Mr. Bruen: In accordance with your request, we have evaluated the conclusions of the Sonoma State University study of the impact of Keller Canyon Landfill on surrounding neighborhood property values (the "Study"). The purpose of this engagement was to determine if the conclusions were logically drawn from the Study. Distribution of this report is intended for and restricted to the use of the parties involved in the above captioned matter. This report is not to be used with, circulated, quoted or otherwise referred to in whole or in part for any other purpose, or in connection with a registration statement or any other document without our express written consent. We have no responsibility to update our analysis for events and circumstances occurring after the date of this report. No member of Coopers &Lybrand L.L.P. has any financial interest in the subject property or the matter described herein, and the fee for this report was not contingent upon the conclusion reported. We appreciate the opportunity to have been of service to you. Should you have any questions, please feel free to contact Coopers&Lybrand L.L.P. at (602)280-1800. Sincerely, ce:�O� SDF/djd Coopers&Lybrand L.L.P.is a member of Coopers&Lybrand International,a limited liability association incorporated in Switzerland, Table of Contents ExecutiveSummary ........................ ........................ .................... i 1.0 Introduction .................................... ........... ........ . ............... 1 2.0 Sonoma.State Study Damage Analysis Conclusions are Implausible ................ 3 2.1 No Physical Evidence of Nuisance Impacts .............................. 3 2.2 No Proximity Impacts Within the Neighborhoods ........................ 3 2.3 Only One Neighborhood Was Allegedly Affected, While Other Neighborhoods Close to the Landfill Were Not .......................... 4 2.4 Neighborhood Combinations ............................................ 5 3.0 Sonoma State's Market Model is Useless for Predicting Changes in Property Values ......................................................................... 10 3.1 Important Factors Affecting Home Prices Were Omitted ................. 10 3.2 Single-Year Regressions ................................................ 15 3.3 The Model Produces Results Unrelated to the Landfill That Defy CommonSense ....... .................................................. 15 3.4 Average Price Miscalculation ..... .... . ... ..................... ........ . 16 3.5 The Study Performs an Incorrect Test on the Market Model ..... ........ 16 4.0 No Locational Pattern of Abnormally Low and High Sales ......................... 17 5.0 The Underlying Database is Fundamentally Defective ............................. . 20 5.1 Nonsensical Transactions ............................................... 20 5.2 Inadequate Quality Control ............................................. 21 6.0 Coopers&Lybrand L.L.P. Conclusions ................................ ..... . ..... 22 AppendixA .......... ............. ......... .. . .........I..... . ..... ... . ........ . .... 23 AppendixB ....... ......... ... ............. . . . .... ....... .... . . . . . . .. ... . ..... ..... . 31 AppendixC .. ......... . .......... .. . ...... . .......... . . . . . ..... . ... .... ... . ..... . .. . 32 EXECUTIVE SUMMARY L Sonoma State University's Conclusions Are Implausible Sonoma State University's basic conclusions are inconsistent with each other. No Evidence of Physical Impacts The Sonoma State University study(the"Study")demonstrates that there were no significant physicalimpacts from the Keller Canyon Landfill(the"Landfill")operations. The Study's field observers who visited the neighborhoods around the Landfill on several occasions found that only a fraction of the homes in the Hillsdale neighborhood had a view of the tce-berm of the Landfill,which has been vegetated to look like the surrounding hills,and that only 10%percent of the homes in the Hillsdale neighborhood were able to bear noise from construction vehicles at the Landfill—and this due primarily to back up beepers which have since been disconnected. Brokers and appraisers interviewed about the Landfill by the Study confirmed that they did not expect the Landfill to adversely impact property values. No Evidence of Proximity Impacts WITHIN Neighborhoods Furthermore,the most direct measure used by the Study to determine whether the Landfill was lowering property values—the"distance effect"analysis--found no evidence that homes located nearest the Landfill were selling for lower prices than homes farther away. This was true for homes in the Hillsdale neighborhood as well as others examined. In fact,in the Woodside neighborhood adjacent to the Landfill property,homes nearer the Landfill sold for a higher average price than homes farther away--just the opposite of what one would expect if the Landfill were adversely affecting property values. No Evidence of Proximity Impacts BETWEEN Subject and Comparable Neighborhoods Except in One Case In addition to there being no distance effects,only one of the neighborhoods near the Landfill(Hillsdale)was found to be allegedly impacted when compared to a composite neighborhood. The One Case of Impacts is an Anomaly The fact that Hillsdale has a proximity impact when compared to the composite neighborhood of Hillsdale 11 and Country Club is simply a result of combining dissimilar neighborhoods. The Country Club neighborhood failed to pass the Study's own test for measuring whether a neighborhood can be used as a comparable neighborhood. That is,the Study tested to see whether price trends in Country Club matched those in Hillsdale and found that they did not. The Study concluded that the difference in growth rates in these two neighborhoods was"statistically significant."(Study,pages 3940). Country Club is a less desirable neighborhood than Hillsdale and the homes there sell for less than in Hillsdale (average prices in 1990 were$155,106 in Hillsdale and$135,262 in Country Club). The Study's own data showed that during the 1990-1991 real estate recession,homes in Country Club lost less value than homes in Hillsdale. This is consistent with general real estate behavior. Real estate recessions tend to have a greater impact on more expensive homes. When we examined the Study's results and noted the dissimilarity of the Country Club neighborhood,we tested to see if this dissimilarity was producing the result found by the Study(instead of the Landfill)by simply using the Study's own regression analysis model and looking at comparisons between Hillsdale and Country Club and Hillsdale and Hillsdale 11 separately. The Study's model demonstrated what we expected to find: that there was no loss in property values found in Hillsdale when comparing Hillsdale with Hillsdale 11 alone or even when comparing Country Club separately with Hillsdale. Homes in Hillsdale have always sold for a premium over homes in Country Club,and this remained true after the Keller Canyon Landfill was built. In recent years,this premium of home sales prides in Hillsdale over Country Club has persisted. i II. The Study's Model Is Useless For Predicting Changes In Property Values The Study's market model fails to take into account several important factors affecting local property values. These factors include:general maintenance and upkeep,existence and quality of landscaping,the shape and topography of,a lot,whether the home has a view or backs-up onto open space,proximity to busy roads or intersections, proximity to overhead power lines,and proximity to the proposed BART station and other local development. This failure to take into consideration important factors affecting what a buyer will pay for a home renders the model incomplete,since a proper regression analysis must account for all factors or"variables"which will significantly affect a home buyer's decision. Otherwise,the model will fail to control for these other factors in order to accurately examine whether a given factor(such as the alleged impacts from the Landfill)is affecting property values. The Study made the determination to gather only data that were readily available,and available in every data source they used. Therefore,Sonoma State made a deliberate decision to ignore other important market variables. If a regression analysis omits several important market factors influencing a home's price,the model will fail to predict even the most basic,common sense relationships between factors affecting the sales price of a home For example,a regression analysis should predict that factors such as more rooms,more bathrooms,and a swimming pool,will add some value to a home and will do so in a generally consistent manner from year-to-year. But this is not the case in the Study's market model. The Study's market model found that an additional room added$6,484 in value in 1992 but subtracted$2,375 in 1982. In 1989,a pool contributed$27,143 to the sales prices,but detracted$4,675 two years earlier. These are just two of numerous examples that show that there are other factors influencing the prices of homes in the model that the model is failing to take into account. If the model fails to consistently predict the effects of such home attributes,it cannot be relied upon to accurately predict any alleged effects of the Landfill. It is possible to do a statistical analysis on whether the market model can reasonably predict common sense relationships between home prices and factors affecting home values within a given year. Using this analysis,we determined that the Study's market model had no consistent predictive power and that the model's lowest predictive power in the Hillsdale neighborhood occurred in the most critical years of the study: 1991 and 1992,when the model's predictive power was as low as 6 percent and 10 percent,respectively. For these reasons,the Study's market model is useless for making reliable predictions about the relationship between home prices and factors affecting these prices. The Study's model cannot serve as a scientifically reliable model for drawing conclusions about alleged impacts of the Keller Canyon Landfill on adjacent property values. ii IIL The Study's Database is Fundamentally Defective Sonoma State University students input data into the Sonoma State University computer from several different sources. Due to a lack of quality control,the Study's database included over 79 obvious instances where the same sale was entered twice or more—giving those sales disproportionate weight compared to the other sales in calculating average prices. Other problems with the data base include the entry of"non-arms4ength"transactions such as bank foreclosures. These transactions should not be included in a market price analysis because the reported"sales price"in a foreclosure is dependent solely on the amount of the home buyer's mortgage and independent of the property's market value. Some examples of improper data reporting are as follows: *Parcel no.95.391.006 was reported twice in the database as having sold for$147,000 on September 25, 1992. We found 53 such duplicate entries in the Study's database during our review of the data. *Parcel no.95.342.024 was reported as having sold for$150,500 on January 10, 1990 and for$150,000 on January 25, 1990. This is very likely the result of Sonoma State University's students entering data on the same sale twice from two different data sources. These duplicates are more difficult to detect,but we found a mum of 26 such probable duplicate entries in the Study's database. *2236 Santa Maria Drive is reported twice in the database as having sold on August 21, 1991 for$71,000 and for$145,000. Either this is a gross error or the transactions are non-arms-length market transactions. Either way,these sales should not be in the database. There are many such instances of sales prices which do not appear to be arms-length transactions. In July,we had a tentative agreement with Dr.Lewis of Sonoma State University to gather data on more factors affecting home prices and to look for errors in the database. Unfortunately,Sonoma State University was then instructed by Contra Costa County representatives to cease cooperating with us and to provide us with no further information about their database. The students who did the original data inputting have since left the school,and there remain many unanswered questions about how the inputting of data was managed by Sonoma State University. Without the cooperation of Sonoma State University,it is impossible for us to conclude how many actual data errors exist in the Study's database. But we can conclude from our limited review of the data that it contains so many obvious and likely errors that the Study's regression analysis results cannot be used to draw any meaningful conclusions. Ill IV. Conclusion This was Sonoma State University's first property value diminution study. Major errors were incorporated into the model and into their gathering of data,to such an extent that the results of the Study's regression analysis are unreliable and meaningless. The results of the Study's calculations are inconsistent with each other. The Study used a dissimilar and less-desirable neighborhood(Country Club),where the homes were lower priced,as a comparison neighborhood to Hillsdale,and thereby skewed the data to show an affect in Hillsdale which disappears when Hillsdale is compared separately with Hillsdale B. Moreover,homes in Hillsdale have always sold for a premium over homes in Country Club and this premium has persisted since the Landfill was built. The Study concludes that homes closer to the Landfill showed no value impact compared with homes farther from the Landfill—this finding of no"distance effect"undercuts any attempted conclusion that the Landfill is impacting property values. iv 1.0 INTRODUCTION Coopers&Lybrand L.L.P.was originally asked by Browning-Ferris Industries("BFI")to examine the conclusions of Sonoma State University's study of the impact of Keller Canyon Landfill (the"Landfill")on surrounding neighborhood property values. The intent of the initial examination was to determine if the conclusions were logically drawn from the Sonoma State study(the"Study"). Sonoma State University was commissioned by Contra Costa County to conduct a stud) to examine whether impacts from the Landfill were adversely affecting the values of surrounding homes. To answer this question,the prices of homes with and without the presence of the Landfill need to be determined. The prices of the homes with the presence of the Landfill can readily be observed from the market. The difficult judgment is to estimate the value of homes in the absence of the Landfill. The only way this can be accomplished is to go outside the neighborhoods close to the Landfill("subject"neighborhoods)and identify neighborhoods that are comparable("comparable"neighborhoods). The three subject neighborhoods in the Study. Hillsdale,Oak Hills and Woodside,are detailed in Figure 1. Figure I Map of Subject Neighborhoods State Fre~y 4 Oak Hills Hillsdale Leland Rd. Jf N 1 VA&r Canyon Landfill The comparable neighborhoods selected by the Study to be matched with subject neighborhoods are as follows: Oak Hills was matched with California Seasons,Hillsdale was matched with Hillsdale II and Country Club,and Woodside was matched with Willow Glen and Woodland Hills. The subject and comparable areas are detailed in Figure 2. Figure 2 Map of Subject and Comparable Neighborhoods �-- Calilorris seasons ••. WWbw Gien LJ ••....... .State Freemy 4 Hillsdale II Oak Hills "` "t '•• Hillsdale Leland Rd. Woodside N coin club tWoodiend Hills Keller Carryon Landfill In order to conduct this type of analysis, it is crucial to gather reliable data to input into a representative market model. Damage analysis depends critically upon a well-defined market model,and the market model depends critically upon the data set. Data The data is the foundation and a very crucial component of the analysis. The data must be from a reliable source, complete in nature and without errors and non-market transactions in order to be useful in any sort of analysis. Market Model The market model must accurately reflect the market. To do so,it must include the attributes consumers actually consider when determining what they would pay for a house. Damage Analysis The results are assessed through Neighborhood and Distance Effect Tests and damage analysis is formulated in a particular dollar amount. The final analysis is only as reliable as the initial data collected and the market model specified. 2 2.0 SONOMA STATE STUDY DAMAGE ANALYSIS CONCLUSIONS ARE IMPLAUSIBLE 2.1 NO PHYSICAL EVIDENCE OF NUISANCE IMPACTS Our experience has been that physical evidence of nuisance,that is,odor,noise,or dust is a necessary condition in nearly all cases where property value diminution truly exists. However,based on our physical site inspections in the area,no such supporting evidence exists. In addition,the Study finds that,"Landfill-generated dust,odor and wind-carried trash were not found to affect any of the primary neighborhoods." The Lenders and Appraisers Surveys conducted in the Study also conclude that, "Clearly,an overwhelming percentage of lenders and appraisers who knew the area felt the presence of the Landfill would not affect property values. Tberefore,ALL EVIDENCE to date concludes that no physical evidence of a nuisance impact exists. 2.2 NO PROXIMITY IMPACTS WITHIN THE NEIGHBORHOODS Investigating allegations of adverse impacts typically takes on two different forms. The first form of testing for impacts is called the*Distance Effect Test"and the second is called the*Neighborhood Effect Test". The two tests are simply applications of a market model. See Appendix A for a more detailed explanation of these two tests. Distance Effect Test The Distance Effect Test determines if proximity to the Landfill has a significant impact on property values. We are testing whether or not the relationship between distance,as measured in feet from the Landfill,and sales price has changed over time. None of the neighborhoods analyzed showed any negative Distance Effects. In other words,pTo)dn-dty to the Landfill had no effect on home value within Oak Hills, Woodside or Hillsdale. Page 7 of the Sonoma State University Study Page 6 of the Sonoma State University Study 3 b v 2.3 ONLY ONE NEIGHBORHOOD WAS ALLEGEDLY AFFECTED,WHILE OTHER NEIGHBORHOODS CLOSE TO THE LANDFILL WERE NOT Neighborhood Effect Test All neighborhoods are unique. Even when comparing houses in two very similar neighborhoods,one house could have more value than the other. This difference in value would be attributable to differences between the neighborhoods,not the house. Once such a relationship is established,we can observe any changes that occur over time. For instance,we can observe whether or not the Landfill being close to one of the neighborhoods has changed the existing relationship between the two neighborhoods. The Study found that the Oak Hills neighborhood had exhibited no Neighborhood Effect. The Woodside neighborhood similarly displayed no Neigbborbood Effect. The Hillsdale neighborhood when compared with another,later-named comparable neighborhood(Antioch),had no Neighborhood Effect. The only effect found in the Study was in the comparison of Hillsdale to the composite of the Hillsdale II and Country Club neighborhoods. These findings are summarized below in Figure 3. Figure 3 Summary of the Study's Findings from Neighborhood and Distance Effect Tests Oak Hills Hillsdale Woodside NeiphtWothwd Effect Neiphbothwd Effect NeCNwt=d Effect •CaVorne seasons—NO •Antioch—NO •Antioch—NO Distance Effect—NO +Hillsdale 11&Country Ckb—YES •Wllwt Glen&Woodland Hills—NO DmnoeEffect—NO Distance Effect—NO rrrrrrrrrr Freeway a rrrrrr rrrrr rrrrrrrN rrrrrrrfrrr j - Ireland Rd. KOw Canyon Landfill 4 We would expect that if a neighborhood closer to the Landfill suffered an impact,then the homes closer to the Landfill in that neighborhood should be more severely impacted than homes farther away. It makes no sense that there was a Neighborhood Effect in Hillsdale,but no Distance Effect. If,in fact,a Neighborhood Effect existed, and that effect arose from the Landfill,then one would expect the effect to vary with distance from the Landfill. However,in this instance there was no such relationship with distance from the Landfill. Only one neighborhood was allegedly affected by the neighborbood effect,but there was no distance effect within that neighborhood. It is not logical that Hillsdale has adverse effects while Oak Hills and Woodside have absolutely none,since they are all close to the Landfill. How can consumers determine that houses less than 200 feet from one another are impacted so differently from the Landfill? The Study finds no distance effect within Hillsdale,which means that it does not matter to consumers if the house is close to the Landfill or far away. Yet,the Study would have you believe that Hillsdale has a Neighborhood Effect while Oak Hills and Woodside,which are immediately adjacent to Hillsale,have no such effects. In the next section,our findings show that when the Hillsdale II and Country Club neighborhoods are compared separately to Hillsdale,there are no effects whatsoever. 2.4 NEIGHBORHOOD COMBINATIONS The Study knowingly combined dissimilar neighborhoods together for comparison. The Study found that Hillsdale and Country Club were fundamentally different neighborhoods after performing rigorous tests to determine which neighborhoods were suitable for comparison. Disregarding Sonoma State University's own test results,the Study combined Country Club with Hillsdale H for use as the comparable neighborhood for Hillsdale. The Study found the Country Club neighborhood was not a comparable neighborhood for Hillsdale. In order to establish confidence in the reasonableness of the combining of neighborhoods,comparisons of neighborhood growth rates were examined by the Study. These growth rates measure the annual increase in average sales prices. The Study overlooked the statistically significant differences in the year-to-year increases in sale prices in the Country Club neighborhood relative to the Hillsdale neighborhood as seen in two different comparisons performed in the Study: Median Price Comparisons The annual median sales prices for existing single-family homes in the Hillsdale,Hillsdale II and Country Club neighborhoods experienced a growth period from 1979 to 1990,followed by a decline. However,it is clear that the growth rate of the Country Club neighborhood peaks one year later than that of the other two neighborhoods.' This stands to reason,as we would expect the sales prices of less expensive homes to fall later in a recession than the sales prices of more expensive homes. It should be noted that the onset of the housing market recession coincided with the construction of the Landfill. Annual Growth Rate Comparisons The Study states,*...it appears that the difference in growth rates for NA (Hillsdale)and NK (Country Club)(6.3-/,5.1 =1.21%)is statistically significant.*' This means that the two neighborhoods are not alike and would,therefore,not be suitable to compare with each other. ' Page 37 of the Sonoma State University Study Tables 1 I and 12 on pages 39 and 40 of the Sonoma State University Study 5 The fact that the statistical comparison of the Hillsdale and Country Club neighborhoods revealed different growth rates has important implications for using Country Club as a comparable neighborhood. The purpose of these tests was to establish that comparable neighborhoods were fundamentally the same as Hillsdale. If the selected comparable neighborhoods are fundamentally the same,combining them for testing purposes would be acceptable. However,combining dissimilar comparable neighborhoods to test against the subject neighborhood is deceptive and misleading. This error could lead to conclusions of damage where only dissimilar neighborhoods exist. In fact,as illustrated in what follows in this report,this was the case. 6 Separate Neighborhood Comparisons These findings,coupled with an initial site visit,prompted a consideration of comparing Hillsdale with Hillsdale Il and Hillsdale with Country CIub separately. The Hillsdale II and Country Club neighborhoods are quite different and we suspected that pooling of the two neighborhoods blurred the effects of each in comparison to Hillsdale. There has not been a consistent premium for Hillsdale relative to Hillsdale IL A comparison of the Hillsdale and Hillsdale II neighborhoods,revealed that the premium for Hillsdale existed only in 1982, 1983,and 1987,but that a discount existed in 1985. This demonstrates that Hillsdale has not had a consistent premium over Hillsdale H for the specified time period. These findings are shown in Figure 4. Contrary to the Study's conclusion,there is no evidence of any decrease in the value of the Hillsdale neighborhood due to the Landfill. The legend in Figure 4 indicates statistical significance. The dark bars are above the 95%level(discussed in Appendix A)and,therefore,are deemed reliable. The clear bars are below the 95%level(discussed in Appendix A)and,therefore,could as likely be equal to 0. The Pre-Keller phase in Figure 4 identifies the time period before the Keller Canyon Landfill was sited. The Siting time period occured during the siting process. The Approved phase identifies the time period after the Landfill had been approved. Figure 4 Hillsdale Premium Relative to Hillsdale U $15,000 Pre-Keller Approved $10,000 $5,000 $0 -$5,000 80 81 82 83 84 85 i t 87 88 89 90 91 92 93 94 Years Fl(>=915% E3<95% NOTE: 1981 was the first year of sales in Hillsdale II with only one sale reported that year. 1982 was the first year with a significant number of sales. 7 There has been a consistent premium for Hillsdale relative to Country Club. This shows no evidence of property value diminution due to the Landfill. A comparison of the Hillsdale and Country Club neighborhoods,using the correct average sales price,contradicts the Study's conclusion as well. The results,displayed in Figure 5,demonstrate that Hillsdale has consistently had a premium over Country Club and that the premium continues to be present since the Landfill was built. Again,contrary to the Study's conclusion,there is no evidence of any decrease in the value of the Hillsdale neighborhood due to the Landfill. Figure 5 Hillsdale Premium Relative to Country Club $15,000 Pre-Keller Approved $10,000 $5,000 $0 X5,000 80 81 82 83 '814--8L5- 485 86 87 88 89 90 91 92 93 94 Years ■>=95% ❑<95% 8 3 These findings caused us to revise Figure 3 so that Figure 6 is as follows: Figure 6 Revised Neighborhood and Distance Effect Tests Oak Hills Hillsdale Woodside Neighborhood Effect WOhbatwod Effect Neghbwt*W Eftet +Wform SevAns—NO .Amy—NO +Antioch—NO distanoe Effect—NO +Hhdale II—NO +Wilow Glen 8 Woodland HMIs—NO +Country Club—NO Oimnoe Effeet—NO Dtonce Effect—NO ••''•. Freevey4 Leland Rd. S �^—Keller Canyon Landfill The results of performing the Neighborhood Effect Test on Hillsdale compared with Hillsdale II independently and then Country Club independently contradict the results attained when Hillsdale is compared to the two neighborhoods as a composite. This fact brings the underlying stability of the Study's market model and the integrity of the Study's underlying data further into question. 9 3.0 SONOMA STATE'S MARKET MODEL IS USELESS FOR PREDICTING CHANGES IN PROPERTY VALUES The inconsistencies in the damage analysis discussed in the previous section,as seen in the contradictory Neighborhood and Distance Effect Test results,lead us to question the Study's market model. Our analysis found the market model was so flawed that it cannot be reliably used to conduct damage analysis. Initial observations revealed that the Study's market model had numerous problems. Among them: 1.) Important factors affecting home prices were omitted from the market model. 2.) The market model relies on time as the primary factor to explain basic relationships,as found in the year-by-year analysis. 3.) The market model produces results unrelated to the Landfill that defy common sense. 4.) The Study calculates the"average sales price"in the market model incorrectly. 5.) The Study performs an incorrect test on the market model. 3.1 IMPORTANT FACTORS AFFECTING HOME PRICES WERE OM TTED A site visit revealed many attributes that distinguish the homes of Hillsdale. These attributes are certainly considered by consumers when shopping for a home. Omitting these attributes from the market model misrepresents the criteria consumers consider when determining what they would pay for a home and, therefore,the Study's market model cannot be expected to accurately reflect what occurs in the market place. Some of the omitted attributes are as follows: • Overhead Power Lines • Proximity to Busy Roads • Proximity to BART (Bay Area • Number of Stories Rapid Transit) Station • Building Materials • General Up-keep • Roofing Materials • Landscaping • Lot Topography • Fireplaces • Access to Open Spaces • Corner Lot • Cul-de-sac Lot • Shape of Lot • View • Color of the House The Study's market model fails to take into account all of these important factors affecting local property values. 10 The photos depicted in Tables 1 through 4 illustrate the attributes that the Study failed to incorporate in the market model. Table 1 These homes which were both sold in 1992,have the same number of bedrooms and bathrooms, and are roughly the same age and total square footage. However,2245 Mt. Whitney Dr.sold for $160,000,while 1129 Adobe Place sold for$120,000,which is 25%less than the house on Mt. Whitney Drive. The major differences in the two houses are the architecture,the condition of the landscaping,the topography of the lot,the color of the houses,and the location of one on a cul-de-sac while the other is not. None of these attributes are included in the Study's market model. Address Sales Price dot Sa.Ft, Total Sq.Ft. Dgd=ms leo An 2245 Mt. Whitney Dr $160,000 7920 1474 4 2 11 7r1 't`1':-T.T'� J. Address SWesPrice Lot$g.Ft. Total�%Ft. Be-d%Qms Bathrooms Age 1129 Adobe Place $120,000 NM 1497 4 2 14 11 Table 2 These two homes are right down the street from each other and have virtually the same features. However,they differ greatly in sales price. 2217 Daffodil Dr. sold for$172,500 in 1989,while 2205 Daffodil Dr. sold for S 155,000 in 1989,or 10%less. There are two important distinctions that the market model failed to identify: the proximity of 2205 Daffodil Dr.to a major intersection and the existence of a power line transmission tower directly behind its backyard. The point is,the Study's market model does not accurately reflect the market and does not include the attributes consumers consider when determining what they would pay for a house. r Address Sales Price Lot Ft. Total So.Ft. Bedrooms Bathrooms Am 2217 Daffodil Dr. $172,500 13195 1823 4 3 4 r Address Sales Price Lot S4. Ft. Total SA. Ft. Bedrooms Bathroo_ Age 2205 Daffodil Dr. $155,000 13040 1823 4 3 4 12 tw t Iipilli• i I i i• .� • 1, i t i- 1 i - fi - i It' /wi •t ii - i. *711i t t tt t t- `•: Y1 i •: - t t •.'+.- i' It- _ t' i. • .' t I !.' • i' ii! i .� i{ •ti illi t ♦ i •� t•t i- 1 �.i t t ! •- t l + ' n i t 1 i i ! t i t t+ ! M. i t t ! t • e t t t •r: Ir T_c"',�YY,.� h �z �, � N`. t 9♦fly .YR � t�r�`y�/,�2s,r� :: ••mow, _ �' �t �• •_ �t �t_(t t �t 1 _- i 1 �. is• � !1 :1 1 •1 ! E • Y t ;ZZas �' Ir. ' 1,��\ it �- • � t � _.a�..Sit t!1 _ 1 i. rit E ' 111 1 1 •! Table 4 These two homes are the,same age and have the same number of bathrooms. In 1988,2108 Sugartree Dr. sold for$113,500,and 2177 El Seco Way sold for$79,500. The house at 2108 Sugartree Dr. has more lot square footage,but less total square footage and one less bedroom than the other house and still sold for 30%more. This relationship deviates from what we would normally expect. Once again,this confirms that there are variables missing from the Study's market model that would properly explain the sales prices. We determined from our site visit that 2177 El Seco Way backs up to a major street,an inferior quality,while 2108 Sugartree Dr. is a superiorly well-maintained house. J I, f v Address Sales Price Ft Total Ft Bedroo Bathrooms Age 2108 Sugartree Dr. $113,500 6510 1159 3 2 8 1 Address Sales Price Lot SaFt Total SgFt Bedrooms Bathrooms Age 2177 El Seco Way $79,500 6000 1503 4 2 8 14 3.2 SINGLE-YEAR REGRESSIONS The Contra Costa County Board of Supervisors asked Coopers&Lybrand L.L.P. to clarify why the Neighborhood Effect disappeared when the two comparable neighborhoods were separated. The first step in this analysis was to inspect the market model to find out why it was behaving so erratically. We determined that the Study's market model depends heavily on the average price variable,which approximates the effects of time. In order to examine the ability of the model to explain the differences in sales prices between homes absent the effect of time,we analyzed the sales for each year individually. To do so,we looked at each year's set of sales independently.We ran regressions using the same set of factors as the Study,except the average price factor which attempts to account for year-to-year differences. When we performed these single-year regressions,we discovered that time was the single strongest component of the model. The explanatory power varied greatly by year. However, the Study's variables did not consistently explain the sale prices from year-to-year. Regression results are summarized in Appendix B. The variation in sales price that is explained by the variation in the home attributes is called R-squared and represents the explanatory power of the model. When sales price is fully explained by the home attributes used in the market model,an R-squared near 100%results. Conducting regression analysis on a year-by-year basis,we discovered that the R-squared varies greatly from year-to-year,ranging from as low as 6°lo in 1991 to as high as 86%in 1987.(See Appendix B.)This means that only 6%of the variation in the sales price in 1991 was explained by the home attributes chosen for use in the Study's market model. In 1992,only 10%of the variation in the sales price was explained by the same set of home attributes. In other words,the Study's market model explains virtually nothing in 1991 and 1992,and so would be of no value whatsoever in determining whether or not there were Landfill effects on sales price. 3.3 THE MODEL PRODUCES RESULTS UNRELATED TO THE LANDFILL THAT DEFY COMMON SENSE As explained in Appendix A,regression analysis estimates a number that measures the relationship between a factor and the sales price. This allows us to observe the relationship,white simultaneously controlling for all other factors. Typically,we can predict the types of relationship that the factor will have with sales price. These relationships tend to remain relatively consistent over time. For example,we could predict that more square footage will have a positive impact on the sales price of a home and that the age of a home will have a negative impact on sales price. The Study's model,however,generates single-year results where,in some instances,the bedroom variable,the total rooms variable and the pool variable change from a positive impact in one year,to a negative impact in another, and back to a positive impact in a subsequent year. In Appendix B,for example,statistics indicate that one additional room in 1982 detracted$2,375 from the sales price of a home,while ten years later in 1992,the additional room increased the sales price$6,484. This plainly makes no sense. Another example is that in 1987,if a house had a pool,it decreased the sales price by$4,675; two years later in 1989,if a house had a pool,it increased the sales price by$27,143. This problem illustrates the major defects of the model to the point that the model is essentially useless. The Study's market model fails to predict basic relationships between home attributes and changes in value, let alone hypothetical effects due to alleged impacts from the Landfill. 15 3.4 AVERAGE PRICE MISCALCULATION The Study's calculation of the average sales price variable,the sum of average sales prices for the three areas divided by three,does not recognize the unequal number of sales in each of the neighborhoods. To correct this,we calculated a true average sales price for the composite neighborhood which equals the sum of sales prices for the three areas divided by the total number of sales. Adjusting the average price variable reduced the magnitude of Study's impact. More significant,however,was the fundamental nature of the error. 3.5 THE-,STUDY PERFORMS AN INCORRECT TEST ON THE MARKET MODEL The Study attempted to test if,in any given year,there was a premium for homes in Hillsdale over homes in the comparable neighborhood. For example, the Study attempted to test if,in 1979,Hillsdale had a premium over the combined neighborhoods of Hillsdale II and Country Club in 1979. However,the manner in which the test was constructed tested if Hillsdale's 1979 sales had a premium over the average of sales in the comparable neighborhood between 1979 and 1994,rather than just sales in 1979. The Study,therefore,did not test what it intended to test. Although it was the Study's intent to distinguish between years,the Study's market model tests did not achieve this objective. Summary The inadequacies of the market model indicate that the model failed to provide a foundation on which to make conclusions of loss of property value. From major oversights such as miscalculating the average price variable, neglecting to include factors that determine the sales price in the market model,disregarding the criteria for determining what neighborhoods should be selected for oampanson to relying on a time trend rather than fundamental relationships to explain the sales price,the evidence is overwhelming that the Study's market model is unstable and that its results are meaningless. 16 4,0 NO LOCATIONAL PATTERN OF ABNORMALLY LOW AND HIGH SALES Statistical significance(discussed in Appendix A)measures how much one can rely upon a market model's estimates. As revealed by the single-year regressions discussed previously,the Study's model consistently estimated statistically insignificant coefficients for the factors TOTALRMS and BEDROOMS. Therefore,in an effort to improve the consistency in the model's estimates,we removed these two factors from the model. From the single-year regressions of this specification,we determined the sales in Sonoma State University's database that the regression equation least explained. We looked at the 20%of the sales where the market transaction price was the farthest below what the model predicted as well as the 20%of the sales where the market transaction price was the highest above what the model predicted. These sorts of sales can indicate what is missing from the model. If there were truly property value diminution in the Hillsdale neighborhood associated with the Landfill,actual market transaction prices of houses closer to the Landfill would be consistently less than what the model would predict. Plotting the market transactions that were the farthest below what the model predicted and the market transactions that were the highest above what the model predicted on a map yields no intuitive explanation or pattern in the differences in sale prices,as depicted in the following maps,Figures 7 and 8. Note that in Figure 8,the transactions for the years 1990 through 1992 are more numerous in the area closest to the Landfill than in the three previous years, 1987 through 1989,in Figure 7. Not only are the sales more numerous,the transactions appear to be predominately within the normal range. 17 LAW son �Nor logo ioon MINE ���nidi� � �� .►�i "���I/I��I/II��0������ ass now low Vii.• *� � ���� nit � • 1� �� . - NINO IN given BIMINI mill nAI111► . �■ uu■� � .1 ♦ vi I C toss I POP Boom sop I' m my 'i m : /I►►I, ./ 111111 t "• t. 5.0 THE UNDERLYING DATABASE IS FUNDAMENTALLY DEFECTIVE The problems cited in the previous section lead us to investigate the underlying data set. A preliminary examination of the database revealed that the database contained invalid data. We discovered duplicate entries,foreclosures and other transactions that do not reflect arms4engtb transactions. 5.1 NONSENSICAL TRANSACTIONS We found the database to be fraught with mistakes. We carne across many transactions in the database that did not make any sense and certainly caused distortions in the analysis.The following tables,7 through 9,detail a sample of the mistakes we discovered and are titled"Red Flags"since they alert us to bigger problems in the data. Table 10 provides a summary of the data problems we encountered with the data set. Table 7 Red Flags These transactions of this property occurred on the ,Street Address f1ja Date of Sale SAME DAY with a price difference of$74,000. Either 2236 Santa Maria Dr $71,000 8/21/91 this is a gross error or the transactions are not arms-length. Regardless,they should not be in the 2236 Santa Maria Dr $145,000 8/21/91 database. Table 8 Red Flags These transactions of this property occurred within one Street Address Edo pate of Sale day of each other with a price difference of 564,955. Either this is another gross error or the transactions are 2105 Ascot Court $164,000 7/25/90 not arms-length. Regardless,they should not be in the 2105 Ascot Court $99,045 7/24/90 database. Table 9 Red Flags Street Address Ed= Date of Sale Apparently,not all transactions in the database are 3532 Crestview Dr $103,000 8/18088 arms-length. These transactions appear to be 2179 Sugartree Dr $127,200 7/2/93 foreclosures as the document type listed in a supplemental database is Trustee's Deed,which does not 2129 Riesling Ct $97,000 1/28187 fall under the definition of an arms4ength transaction. 20 5.2 INADEQUATE QUALITY CONTROL Apparently,there was no quality control in the construction of the database. In evidence of this,there are clearly many duplicate cases. As a result,the integrity and reliability of the database are destroyed. Until this point, we were operating under the assumption that we could rely on the database. However,after reviewing the data set received from Sonoma State University,we discovered at least 79 errors. These findings are summarized in Table 10 below. Table 10 Sonoma State NAM Data Set Questionable Transactions Ukely and Near- Total Near-certain Percentage Ukety Percentage Certain Percentage XL Nervations Mislisatsx of Total QUlicates of lotjl DuRlicates of Total 1979 217 0 0.0% 0 0.0% 0 0.0% 1980 217 1 0.5% 2 0.9% 3 1.4% 1981 211 2 0.9% 1 0.5% 3 1.4% 1982 120 1 0.8% 0 0.0% 1 0.8% 1983 185 3 1.6% 2 1,1% 5 2.7% 1984 188 2 1.1% 3 1.6% 5 2.7% 1985 250 5 2.0% 4 1.6% 9 3.6% 1986 193 6 3A% 1 0.5% 7 3.6% 1967 155 7 4.5% 7 4.5% 14 9.0% 1988 173 5 2.9% 1 0.6% 6 3.5% 1989 164 6 3.7% 0 0.0% 6 3.7% 1990 152 7 4.6% 2 1.3% 9 5.9% 1991 116 3 2.6% 2 1.7% 5 4.3% 1992 87 5 5.7% 1 1.1% 6 6.9% 1993 0 Q 0.0% Q 0.0% Q 0.0% 2493 53 26 79 Because of the lack of cooperation from Sonoma State University,we were unable to explore the database further. We believe this is only the tip of the iceberg and basad on our work,many more such mistakes exist. The inclusion of non-market transactions,duplicates and the omission of pertinent variables by the Study raise serious questions as to the integrity of the underlying data used in the Study. This question goes directly at the foundation of the damage analysis. The Study states on page 25 that,"exploratory data techniques were used to discover questionable data". The anomalies they discovered-accounted for less than one-half of one percent of the total number of rases and were discarded. Having encountered numerous flaws in the data set used to produce the results published in the Sonoma State University Study,the quality control efforts used by Sonoma State were clearly inadequate. As the authors declare on page 26, "The data contained therein farmed the foundation upon which most of the subsequent analysis is based." Indeed,the data is the foundation of the analysis. The data,however,is flawed. Accurate results cannot be obtained from flawed data. 21 6.0 COOPERS & LYBRAND L.L.P. CONCLUSIONS In light of the underlying model specification errors,omitted variables,and flawed and unreliable data,placing any degree of confidence in the Study's conclusion of impact in the Hillsdale area,where no physical evidence of nuisance exists,would be unsound. Even if the market model were accurate,the data flowing into the model is flawed. We cannot obtain a rational or reliable damage conclusion with bad data. However,the problem is compounded by the fact that the market model does not capture the reality of consumers'purchase decisions. So,in addition to bad data,a defective model assures that the results are meaningless. THE DATA IS FLAWED. THE MARKET MODEL IS FLAWED. THE DAMAGE CONCLUSIONS MUST BE FLAWED. This comports with our experience that in order for there to be property value diminution,there must be a nuisance present. We did not observe any nuisance. Sonoma State did not observe any nuisance. There are no causal mechanisms and absolutely no empirical evidence of property value diminution. The property valuation study does not provide any evidence that the Landfill has caused a diminution in local property values. 22 APPENDIX A METHODOLOGY BACKGROUND Rather than analyzing sales individually,the most reliable way to estimate the value of homes in the absence of an impact is to compare values between subject and comparable neighborhoods by looking at a large number of sales data using statistical analysis. Sales data are the inputs into a market model,from which damage analysis is conducted. Market Model The market model is an attempt to understand why consumers pay more for one house than another. When shopping for a house,consumers consider many factors,such as the age of a house,the lot size,the number of bedrooms, or whether or not it has a garage,a pool,a view,or power transmission lines nearby. These attributes either add or detract value from the house which,in turn,affects the sales price of the house. Regression analysis is a statistical technique that is widely used in creating market models. It is used when many relationships between the attributes,or factors,and the sates price of a house exist. Regression analysis enables one to see the effect of a single factor on home price,while controlling for the effects of the other factors. In residential real estate,regression analysis can control for all house specific characteristics and examine the relationship between one specific variable and the sales price. In Table A-1,a simple application of the regression analysis technique can be seen. Table A-1 Example of a Data for a Regression Model Puss Squafe Feet Bedrooms $100,000 2000 3 $100,200 2000 4 Assuming that all other attributes of the two houses are identical and given the fact that only the number of bedrooms vary between the two observations,it is easy to see that,all else equal,the market perceives the value of the additional bedroom as$200. There is no need to utilize a regression analysis to see the relationship between the additional bedroom and the change in the sales price. However, conducting a regression analysis on the data in Table A-I shows how the technique works. The equation for the model in Table A-1 would be of the following form: Price= B1 (Square Feet)+B2(Bedrooms) The regression analysis estimates two numbers in this instance,BI and B2. These estimates are called coefficients. Coefficients here are interpreted as the relationship between the variable listed and the sates price. Literally,the interpretation would be,all else equal,an additional bedroom increases the sales price by$200,that is,B2=$200. 23 However,in the real world, matters are much more complicated. Table A-2 illustrates sales where more than one variable has an effect on sales price and where variables have many different values. Table A-2 Example of a More Sophisticated Data for the Regression Model kria Square Feet Beal Bathrooms $78,000 1477 3 2 $115,000 1823 4 3 $103,000 1537 3 2 $95,500 1419 3 2 $112,500 1823 4 3 $89,000 1252 2 2 $91,000 1349 3 2 $93,000 1349 3 2 Clearly,it is not possible to determine the relationships between the variables and the sales prices by casually reviewing the table.The advantages of regression analysis become very clear. Here,the equation would take on a slightly different form: Price= B l (Square Feet)+B2(Bedrooms)+B3 (Bathrooms) In this instance,the regression analysis estimates three numbers,BI,B2 and B3. The coefficient estimates from the regression are as follows: BI 18 B2 215 B3 14,207 The coefficient for square feet,B 1,takes the value of 18. The interpretation is,all else equal,the addition of one square foot increases the sales price by$18.00. The coefficient for bedrooms,B2,takes the value of 215. Now the interpretation is,all else equal,an additional bedroom increases the sales price by$215. The coefficient for bathrooms is 14,207. The interpretation is,all else equal,an additional bathroom increases the sales price by $14,207. Bear in mind that this is only an example illustrating the methodology of regression analysis. Due to the limited number of observations used in this example,the results are simply illustrative of how the methodology works and do not indicate true market relationships. 24 Statistical Significance_ The regression analysis will always produce a coefficient that estimates the relationship between the variable and the sales price. In statistical analysis,however,there is a measure as to how much one can rely upon the estimate. The standard that is used to determine the level of reliability is called statistical significance. This measure is usually expressed in terms of a percentage. The percentage most commonly used as a threshold for statistical significance is 95%. In other words,if the regression equation estimates a coefficient for bedrooms of 215 with a statistical significance of 97%,the estimate is deemed to be reliable. If the regression equation estimates a coefficient for bedrooms of 215 with a statistical significance of 65%,the estimate is deemed to be unreliable. In other words,the true coefficient could as likely be 0 as 215. Summary of the Market Model The market model must contain the variables that consumers consider in determining the value of a home. Only when the market model accurately represents the criteria considered by the consumers can we place confidence in the model. Damage Analysis The application of regression analysis in investigating allegations of adverse impacts typically takes on two different forms. The first form of testing for impacts is called the"Neighborhood Effect Test"and the second is called the"Distance Effect Test". The two tests are simply extensions of the market model. Neighborhood Effect Test All neighborhoods are unique. Even when comparing houses in two very similar neighborhoods,one house could have more value than the other. This difference in value would be attributable to the neighborhood,not the house. Once such a relationship is established,we can observe any changes that occur over time. For instance,we can observe whether or not the introduction of a potential impact into one of the neighborhoods has changed the existing relationship between the two neighborhoods. In order to observe neighborhood relationships,the sales data need to be distinguished by neighborhood. This distinction is used in the regression analysis. 25 Table A-3 adds neighborhood information to the data we examined before. Now the equation will be of the form: Price= B 1 (Square Feet)+B2(Bedrooms)+B3(Bathrooms)+B4(Neighborhood) Table A-3 Example of a Data for a Regression Model with a Neighborhood Factor PL1f�g Sauare Feet Bedrooms Bathrooms Neighborhood $78,000 1477 3 2 Sunnyvale $115,000 1823 4 3 Foxwood $103,000 1537 3 2 Foxwood $96,500 1419 3 2 Sunnyvale $112,500 1823 4 3 Sunnyvale $89,000 1252 2 2 Foxwood $91,000 1349 3 2 Foxwood $93,000 1349 3 2 Sunnyvale In this instance,the regression analysis will estimate four numbers,B1,B2,B3 and B4. The coefficient estimates from the regression are as follows: BI 10 B2 5,176 B3 11,653 B4 6,065 The coefficient estimated as 134 measures the relationship between the neighborhood and sales price while controlling for all the other factors in the equation. The coefficient for neighborhood,B4,takes on the value of 6,065. Now the interpretation is,all else equal,a house in the Foxwood neighborhood is worth$6,065 more than a house in the Sunnyvale neighborhood. That is, there is a premium of$6,065 in favor of Foxwood. 26 To determine if the difference between two neighborhoods has changed over time,the Neighborhood Effect Test can be conducted on a year-by-year basis. As displayed in hypothetical Figure A-1 below,during the Pre-Event period,the Neighborhood Effect might have shown a premium of$6,065 for a home in the Foxwood neighborhood adjacent to the impact. This premium could be attributable to any number of factors such as prestige of the neighborhood,school district,etc. If Post-Event,the Neighborhood Effect dropped to$2,000,we could conclude from this hypothetical example that a$4,065 loss occurred in the property value of homes in the Foxwood neighborhood. Figure A-1 Example of What a Neighborhood Effect Would Look Like Premium of Foxwood over Sunnyvale $10,000 Pre-Event Post-Event $8,000 $6,000 $4,000 $2,000 $0 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Years Distance Effect Test The Distance Effect Test determines if proximity to the impact has a significant effect on property values. First, we introduce a factor which measures proximity to the impact. This factor measures the distance in feet from the impact to a particular property. Again,sales data are compared using regression analysis. In this instance,we are testing whether or not the relationship between distance,as measured in feet from the impact,and sales price has changed over time. We expect the results of the Distance Effect Test to confirm the results of the Neighborhood Effect Test. That is,if a house is worth Iess because it is in a neighborhood close to the impact,then the distance a home is from the impact within a neighborhood must also have an effect on the price of the house. 27 Table A-4 adds the distance information and the equation is revised to include the distance factor as follows: Price= B1 (Square Feet)+B2(Bedrooms)+B3 (Bathrooms)+B4(Distance) Table A-4 Example of a Regression Model with a Distance Factor Price Square Feet brooms Bathrooms Distance $78,000 1477 3 2 1500 $115,000 1823 4 3 5000 $103,000 1537 3 2 6000 $96,500 1419 3 2 4000 $112,500 1823 4 3 3500 $89,000 1252 2 2 5500 $91,000 1349 3 2 5000 $93,000 1349 3 2 4000 In this instance,the regression analysis will estimate four numbers,B1,B2,B3 and B4. The coefficient estimates from the regression are as follows: B1 15 B2 7,269 B3 7,653 134 5 The coefficient estimated as 134 measures the relationship between distance and sales price while controlling for all the other factors in the equation. The coefficient for distance,B4,takes on the value of 5. Now the interpretation is,all else equal,each foot a house is from the Landfill adds$5.00 to the sales price. 28 To determine if the distance relationship has changed over time,the Distance Effect Test can be conducted on a year-by-year basis. As evident from the hypothetical Figure A-2,during the Pre-Event period,suppose there was a $2.00 per foot premium for distance from the impact. However, during the Post-Event period,suppose the premium rose to$5.00 per foot for distance from the impact. This would indicate that a$3.00 gain occurred in price per foot for distance from the impact in the Post Event period. That is,being farther from the impact is now better than it used to be. Figure A-2 Example of What a Distance Effect Would Look Like Dollar Per Foot Premium for Distance from the Impact $2.5 Pre-Event Post-Event $2 51.5 S1 50.5 $0 , 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Yea rs 29 Overall Structure of the Analysis All statistical analyses of this type depend fundamentally upon the development of a quality market model and the underlying data. This dependency is illustrated by the pyramid in Figure A-3. Figure A-3 A Pyramid Represents the Overall Structure of the Analysis Damage Analysis Market Model Data Each layer of the pyramid rests completely upon the previous layer. The integrity of the structure as a whole is reliant upon the integrity of each layer. The damage analysis depends critically upon a well-defined market model, and the market model depends critically upon the reliability of the data set. Summary of Methodology Data The data is the foundation and a very crucial component of the structure. The data must be from a reliable source, complete in nature and without errors and non-market transactions in order to be useful in any sort of analysis. Market Model The market model must accurately reflect the market. To do so,it must include the factors consumers actually consider when determining what they would pay for a house. These factors may include size of the home,number of bedrooms,proximity to busy streets,power lines,open spaces,lot size and shape,as well as roofing and building materials. Damage Analysis The results are assessed through Neighborhood and Distance Effect Tests,and damage analysis is formulated in a particular dollar amount. The final analysis is only as reliable as the initial data collected and the market model specified. 30 Appendix B Single-Year Regression Results for Hillsdale SALE,YR nARBLT IQTAUF TOTALRMS BEDROOMS POOLX R-sau r' 1979 -113 20 -1312 1220 4968 0.47 11% 1000/0 990/0 89010 1000/0 1980 -1576 26 82 -619 -991 0.55 1000/0 1000/0 11% 38% 27% 1981 -1583 12 2904 -5875 0.37 73% 76% 72% 87% 1982 2710 35 -2375 4503 0.81 95% 1000/0 72% 78% 1983 961 29 -1328 -1272 2679 0.54 67% 1000/0 43% 38% 51% 1984 1622 26 -41 2159 0.77 100% 100% 3% 72% 1985 2077 32 -1628 2843 0.81 1000/0 1000/0 990/0 1000/0 1986 787 31 28 2171 0.76 1000/0 1000/0 28% 86% 1987 2252 44 -3206 3079 -4675 0.86 1000/0 1000/0 990/0 85% 63% 1988 2350 47 -2892 -2482 0.50 1000/0 1000/0 80010 45% 1989 1071 51 633 436 27143 0.58 86% 1000/0 16% 14% 970/0 1990 1868 63 -893 835 14461 0.28 83% 1000/0 14% 7% 53% 1991 2349 7 -8715 27280 0.06 79% 22010 74% 92% 1992 -185 20 6484 -14992 0.10 70/a 41% 48% 81% 1993 2304 55 -2889 1344 0.75 100% 1000/0 74% 29% Note: statistical significance of the coefficient is listed under each estimated coefficient. 31 r Appendix C COUNTY OF CONTRA COSTA DISCLAIMER OF LIABILITY AND WARRANTIES User understands and agrees that it is quite possible that errors and omissions will occur in data input and/or programming done by county to provide the data in the form desired, and user further understands and agrees that it is highly probable that errors and omissions will occur in any record keeping process, especially when large numbers of records are developed and maintained, and that the data may not meet user's standards as to accuracy or completeness; notwithstanding,user agrees to take the data "as is,"fully expecting that there may well be errors and omissions in the data obtained from county. User further understands and agrees that county makes absolutely no warranty whatsoever, whether expressed or implied, as to the accuracy, thoroughness,value, quality,validity,merchantability, suitability,condition, or fitness for a particular purpose of the data or any programming used to obtain the data, nor as to whether the data is error-free,up-to-date,complete or based upon accurate or meaningful facts. User further understands and agrees that it forever waives any and all rights, claims, causes of action or other recourse that it might otherwise have against county for any injury or damage of any type,whether direct, indirect, incidental,consequential or otherwise,resulting from any error or omission in data or in any programming used to obtain the data, or in any manner arising out of or related to this agreement or the data provided hereunder. User agrees that county shall not be liable to user for any liability, claim, loss, damage, injury of expense of any kind caused or alleged to be caused, directly or indirectly, by the inadequacy of any CMS or GIS data or any other deficiency of the systems,by any delay or failure to provide any service,or by any other interruption, disruption of loss of user operations. User agrees that it will, irrespective of any alleged liability, claim, loss, injury,damage or expense, continue to pay all charges in the amounts stated herein until this agreement is properly terminated in accordance with its terms. NOTE: "This map/database contains copyrighted information of the County of Contra Costa" 32 ,y BEFORE THE BOARD OF SUPERVISORS . CONTRA COSTA COUNTY RE: KELLER CANYON PROPERTY VALUATION STUDY DECLARATION OF DWIGHT DUNCAN I, Dwight Duncan, declare: I am a Senior Associate with Coopers & Lybrand L.L.P. ("Coopers & Lybrand"), a professional services firm. My office is located at 2901 N. Central Avenue, Suite 1000, Phoenix, AZ 85012. I hold a Masters degree in Economics at Arizona State University. I have worked extensively at Coopers & Lybrand on regression analysis modeling to determine the property value impacts of environmental effects such as pollution and land use impacts. I assisted Dr. James Chalmers of Coopers & Lybrand during the past year in reviewing the Sonoma State University Study ("Study") on the Keller Canyon Landfill. The facts set forth in this declaration are based on my own direct personal knowledge and if called as a witness I could and would competently testify to the facts set forth in this declaration. In February of 1995, Sonoma State University provided us with a computer disk containing the data that was used in their study. I familiarized myself with the model and with the database and ensured that I was able to run the model in the same manner that it had been run by Sonoma State University. a During the course of my work in reviewing the Study, I have had several conversations with Dr. Steven Lewis of Sonoma State University and on a few occasions have also discussed the Study with Dr. Steven Orlick. The purpose of my conversations with Drs. Lewis and Orlick was to determine the way in which Sonoma State University put together the regression analysis model used in the Study, and how Sonoma State University decided what information to put into the computer database that the model used to come to the statistical conclusions contained in the Study. In short, I was attempting to retrace the steps taken by Sonoma State University in the course of preparing their Study in an effort to understand the study's conclusions. During the course of my discussions with Drs. Lewis and Orlick, I learned the following facts which I believe are important in assessing the validity of the Study's conclusions: FIRST PROPERTY VALUE STUDY This was the first property value diminution study ever conducted by Drs. Lewis and Orlick. It was my impression from talking to Dr. Lewis and Dr. Orlick that Dr. Lewis had a background in statistics and that Dr. Orlick's role was more in the nature of an administrator of the department which provided the manpower for the data collection. SONOMA STATE'S DIFFICULTIES IN OBTAINING SALES INFORMATION Dr. Lewis told me that the vast majority of the data gathering for the study was performed by students working at Sonoma State University. These students were asked to gather data on the sales of properties in the vicinity of the Keller Canyon Landfill and in other comparable neighborhoods by using sources of information that were readily and publicly available. Dr. Lewis told me that the students at Sonoma State began by using data from Metroscan,which is a nationwide company that collects data on residential, commercial and industrial property sales. Metroscan is selective in the data that it puts in its database and uses a confirmation process to avoid reporting transactions that are "non arms-length" transactions; that is, transactions between relatives, bank foreclosures, or any other transaction in which the reported "sales price" does not represent a true market transaction. However, the Metroscan database has certain limitations. Metroscan only reports sales in the areas studied by Sonoma State going back to the year 1990 and usually only reports the last two transactions involving a given piece of property. Dr. Lewis told me that because of the limitations in the data that was available through Metroscan, he had his students gather additional sales data from the local multiple listing service and the Contra Costa County Assessor's office. Because of difficulties involved in inputting multiple sales prices over time for the same piece of property, Sonoma State switched at one point from inputting data into a single entry for each parcel of property to attempting to record each sale separately. Also, because the County Assessor's office and the multiple listing service have a much higher likelihood of including sales transactions that are "non arm-length" transactions,there is a much greater chance that sales that would not be reported in the Metroscan database would be reported by the multiple listing service or the Assessor's office and therefore included in the data on which Sonoma State built its conclusions. Dr. Lewis stated that because of the way in which the data was input, he realized there was a chance that the same sales could be reported more than once. Dr. Lewis told me approximately 20 to 25 observations were removed from the database because it was concluded by Sonoma State that they represented duplicate transactions. (As will be discussed below, however,many duplicate transactions remained in the database.) I asked Dr. Lewis if it would be possible in looking at his database to determine where data entries were from, i.e., Metroscan, the multiple listing service or the County Assessor's office. Dr. Lewis informed me that in viewing the database it would not be possible to tell from which source the data was obtained. I confirmed this myself. SONOMA STATE UNIVERSITY MADE DECISION TO LIMIT INFORMATION ON SALES LEAVING OUT IMPORTANT FACTORS AFFECTING HOME VALUES Because Sonoma State University used more than one source for its data on sales, Dr. Lewis stated that they only included in their database those factors that would affect the sales price of a home which could be obtained from all of the sources they were using. Dr. Lewis agreed it would have been better if the model had included all of the important factors affecting the values of homes, but he said they were limited by time and money in obtaining information on these factors. Also, Dr. Lewis said that Sonoma State University could not spend time collecting information on home sales independent of the information available in these databases. In other words, Dr. Lewis did not want to have his students determine which homes had views, or whether homes had more than one story or were near transmission lines, busy streets, etc. In an attempt to model changes in home values using a regression model, it is essential that the model contain all of the important factors or variables that would be important to a home buyer. A model which fails to take into account all of these important variables loses its power to make accurate predictions about the impacts of a given factor on home values. I discussed with Dr. Lewis a number of variables that I felt were potentially important and which were not included in the Sonoma State database. These included: • proximity to busy roads • view • overhead power lines • irregular shaped lot • cul-de-sac lot • lot on golf course • landscaping • access to open spaces • fireplace number of stories • general up-keep • building materials • roofing materials (wood shingles versus lesser grade materials) In many cases, a single such variable can have an important effect on the value of a home. For example, a home that is on a very busy road would generally sell for significantly less than a house on a cul-de-sac lot. Similarly, some houses near the Keller Canyon Landfill directly abut the high electric voltage transmission lines which could have a similar impact. Furthermore, in many cases, a concurrence of several of these factors (such as a home with excellent landscaping, access to open spaces and a view on a cul-de-sac) will generally command a significantly higher value because of these several factors. Yet,the model failed to consider these factors in comparing the sales prices of homes. MISCALCULATION OF AVERAGE PRICES During the course of our discussions, Dr. Lewis acknowledged that he had miscalculated the average price variable used in the study. That is, the study compares the average price of homes selling in the Hillsdale neighborhood with the average price of homes selling in the Hillsdale II and Country Club neighborhoods. Instead of taking the sales in all three neighborhoods and preparing a single average price for all of those sales, Sonoma State calculated the average for each neighborhood and then took those three average numbers and averaged them together. This has the consequence of giving equal consideration to each neighborhood's average. This gives an undue weight to the sales in that neighborhood that had the least number of sales (Country Club) and a corresponding lesser weight to the sales in the neighborhood with the most sales (Hillsdale). Using the Sonoma State approach, it would be equivalent to saying that a student with an A in a four credit hour class and a C in a one credit hour class has a straight B average. COOPERATIVE EFFORTS WITH SONOMA STATE WERE HALTED I worked with Dr. Lewis in attempting to correct for these shortcomings, and it was during the course of our work on the model that I concluded that the basic problem with the model was that important factors affecting value were not included in the Sonoma State database, and that there were other problems with the entry of data. I then discussed with Dr. Lewis a suggested plan of action to address the problems that we had observed in Sonoma State's model and database. I suggested to Dr. Lewis that we collect data on the additional factors that could affect home � a values in the neighborhood of the landfill and input this data into the database. Dr. Lewis agreed that this would be a proper way to proceed. I discussed with Dr. Lewis that it would take approximately six months to a year to collect the additional datam and he said he would present this proposal to Dr. Orlick. I then had a subsequent meeting with Dr. Lewis and Dr. Orlick. During the course of that meeting Dr. Orlick informed me that Sonoma State had talked to the County and had been directed by the County to cease working with Coopers & Lybrand, that the County believed that the Study was complete and that Sonoma State should not do any more work on the Study, and that he, Dr. Orlick, felt that by continuing to work with Coopers & Lybrand, others might question Sonoma State University's independence and objectivity. As a result, I was informed that Sonoma State would cease cooperating with Coopers & Lybrand and providing Coopers & Lybrand with information to investigate the workings of their model and their database. t THE MODEL DOES NOT TEST WHAT SONOMA STATE INTENDS TO TEST Another problem with the Sonoma State model is that it does not test what it intends to test. To put this in simple terms, the model attempts to test for the existence of a premium for Hillsdale over Hillsdale II and Country Club on a yearly basis. The analysis concludes that the premium disappeared after the landfill was sited. However, the Study does not truly test for premiums on a yearly basis. For example, the Study tests the 1979 Hillsdale premium over the average of the year's sales in Hillsdale II and Country Club from 1979 through 1994, rather than just the sales in 1979. Clearly this is a major theoretical oversight. Dr. Lewis agreed with me and we were in the process of developing the correct tests when communications were broken off by Sonoma State. DEFECTS IN DATABASE Within the last few weeks, I have analyzed the Sonoma State database to determine how many duplicate sales are included in the database. To date I have discovered approximately 50 transactions that are definitely the same sale (transactions within a week of each other where the sales price is identical for the same home) and approximately 30 additional transactions where the sales price is so similar and so close in time to the prior sale that it appears to be the same sale possibly reported through a different data source. In addition, several sales clearly appear to be foreclosures. Such transactions cannot be used to determine the fair market value of properties because they do not represent market transactions. Moreover, to include duplicate sales in a database skews the results of the computer model in an unpredictable manner. r 1 CONCLUSION The effect of the Sonoma State model in not including all of the variables that are important to a potential home buyer, combined with the fact that the Sonoma State database contains numerous duplicate sales and sales that clearly appear to be "non arms-length" transactions, means that the model cannot be used to draw any reliable conclusions about the effects of any factor on property values, let alone any alleged impact that may be stemming from the landfill itself. During the course of my discussions with Dr. Lewis, he said that no one had ever asked his opinion on the existence of property value diminution in the neighborhood study. He further stated that if anyone had asked, he would have told them that in his opinion there were no property value diminution effects arising from the landfill. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration was executed on November 14, 1995, in Phoenix, Arizona. a79- a0m mu--.O� ight Duncan NOV-20-1995 1602 FROM Gruen Gruen + Associates. TO 15106461599 P.02 November 15, 19.95 Via Patcsimik Trammisaiors (510)646-1599-. and U.S.Mail Val Alexeeff Director Growth Management and EconomiC I)MIOpment Agency Contra Costa County 651 Pine Start,W Floor North Vuig Martinez,CA 94553-0095 . _ Deaf Mr.Aleacee#1: Grua n Gruen+Associates(GG+A)has been retained by the City of Pittsburg to review the study that the Iistitute for Community Planning Assistance(ICDA)at Sonoma Stare University conducted for yam The study, "Keller Cmnyon Landfill Property Valuation Study,'° found there had been'a significant dmhmtion of property in the area due to the introduction of the landfill. That conclusion is indeed correct and we eridmirage you to a©ocpt iL However,the ICPA study did not rapture the full extent of the dimbwdon in value, The study failed to provide a full assessment of the damages to values in the Galt Hills and Woodside neighborhoods partly because the methodology omitted socioe0onomic vadab_ les, and the identification of comparable neighborhoods was questionable. More importandy, the study'ignored the impact•of the landfill on the dynamics of residential development in Pittsburg. The vacant land near the landfill site and witWn the City of Pittsburg's sphere of influence offered the locational advantages that would enible Pittsburg to attract higher income residents. A trend to attract an increased proportion of higher income households into Pittsburg had burn prior to the announcement of the landfill choice. It appears that this trend would have continued if it were not for the introduction of the landfilL Therefore,while we agr+oe With the fundamental finding ofICP Vs stud►that the lmdfill has had a negative impact on the surrounding area's properly values,the full amount of diminution both now and in the future has not been capftvd, Out conclusions are based'on a caref4 reading of the ICPA, study, discussions with Professor Steven C. Lewis,'consideration of the comments made by Coopers & Lybrand, a review of the literature in the field, and past GG+A work on the effect of disamenities in East Contra Costa. Cmznty. We agree with Professor Lewis that the comments presented by Coapen&Lybrand do not suggest the basic validity ofthe study's findings should.be questioned. Below,are briefly consider the validity of the study in the light of similar studies,.point out the City-wide effects of the landfill on residential values that had not been considered in the ICDA studkr and comment on the Coopers& Lybrand critique. �. Gruen Gruen+Associates b .564 Howard Street t. San Francisco.CA 94105-5002 Tel:(4 7 5)433-7596 FAX:(415)989-4224 NOV-20-1995 16:02 FROM Gruen Gruen + Associates. TO 15106461599 P.03 V4Akmff November.15, 1995 Page 2 THE VALMY OF II''AWS. MGS. <THAT -THE VALUW OF =STW( RESWENCES WAS DIMSHI® There is nothing:sWidsing about ICPA*i Hedonic ligression Price Models providing empuiral edtdence that st ; ' that the landfill has diminishedvalues in atfjoAdnucighborhoodL Since the early 1970'x, iresearchers laavt.discoveied,that landfills*can have a negaxive impact ozi adjoining rteighboncoxxPs real estate values. The pioneer is thu field of study was thelate Proftsor Joseph Horki of Ohio State University. His measurem at of the imparts of solid waste disposal sites led him to conclude-if 1971 that there im ifi&cd a strong correlaticin between:proximity to a Ian fill and the dim.inutim of propsi!vAm', Another study;poiidu�d.in:199Z, fouria.that the of residential properties were negatively impacted ug to 2.5 miles front a landfill: Atovrdingtso the article,the devaluation of property W a r.aw t of the intrtiducdon of a landfill'.has:Leen well duc=cnted,in the literature: "the jnegatxvel pace of landfills on si4e'farrrily valuer.presented here are oommon to other landfills as shown in the literature xMew.. ' A resent report ui I.nd Bojv*=naests t Ia�y undesuabk land uses(LULU's�in the farm of. Stiperfund sites have a negative impact ars:the surrounding regioia's real estate market. The study -found1hat as distance from such sitaInc reased sti did property values.' _ Evidence of the�inution of propeety,valves as a iciWt of a landfill was.i±Coenfly accepted by a Califoria'State Montt+ ln,jurie 1995,Superior Coautjudge,j•Morgan Lester ruled that the County of`Sari Diego "sobitantiallk al&Mued tI*:prs�ptrtq of about til families when it expanded the San hlaZoas tandfrll:"" ; . Mm findings of rhe 1t2A study'are dearly in line rzih,the conclusions reached by other studies vg6orted in the literature of the field. 1H vhckjoreph. "Me um*the Impacte4Solid Taft'Disposal Site Location ou Proptm Values.' -ftwZwx jat+ri�a�lr��gnark ,�ai>aami {17e ba Lp'19)..•. . ; : . _ '.=Nelson, Ai�err,John Girx�ux.arid.l+rftcdi&Geciriruic "Prix of I.assaiflls on Home al�tes d isconov ie(November 1992). 31(a:iL 1Caohdrine A. "1•umdous W. Sites and Ho=VaWes." Lwd frxowaia QVQwniber 1995} 48erliraan,jos n. "Dump Slashsd Propsrtx Whits,judge Rules"kSm DiV Uviol;T3i�sast,22 June 1995.. t NOV-20-1995 16:03 FROM Gruen Gruen + Associates. TO 15106461599 P.04 Val Ale meff November 15,1995 Pap 3 THE EHECT OF THE LANDMI ON FUTM RESMENML VALUES IN TIM CITY Of PITTSBURG The dynamics ofeity-wide property values in Pittsburg are suggested by a finding of a study,GG+A did for The Martinez Local Assessment committee in 1990 and diumned further in an article that J=mjaW and Claude Gruen wrote for M WhWx OrY it,Much of 1990 'They found that in the 1984-1999 period data at the office of the Contra Ceuta Cmmty&"Wor showed that the rate of pmpeny value Appreciation in Pittsburg per square foot was consistently Im than the average of such app=iation for the county,as a whole or other West Con=COM County communities 6 The City recognized iYu. its redevelopment poh6a and long range plans for thg We and value Of neighborhoods that had begurt to&wJop war Keller Cart w before,the landfill was constructed were working to MVCM this fteftA InSeptember of 1990,GG+A itmviewed six Pittsburg area Rzalbxs about the*names of the market in PiWbwg. Tice Mowing are dm conclusion;rqmftd to us with a high degree of consensus from thew Realtors. 1. Over the last decade, Pittsburg has significantly improved its image w a desirable residential COMMUni'tY. NQrAheleSS,the City Continues to offer the most affordable housing in East Contra Costa County. M supports what is also suggested by the data an salts per=j%=foot duough 1980,that locational values(land values)are still the Immst in the region,but they are rwing. 2. The more-recently-built hillside housing ha served as an attraction to a higher. inc'omc,white collar resident base in the City of Pittsburg, The attraction of them higher income residents to the City is playing apart in raising the locational valm. of Pittsburg as a residential location. Cn= Asweiatts. %=omic and 1rmancWA=umwt of the Impact of*c Proposed Opention of a Hazar&us Waste Storqe and Indra i6on NOY in Matinee,QV(Fcbr=Y MO. 6QruMC3&u&and ja=jAt1. -M&onomict of =menides:What to do When Nobody Wants LULU" warim CiD,Odarch 1991}. NOV-20-1995 1604 FROM Gruen Gruen + Associates. TO 15106461599 P.05 Val Alexeeff November 14 1995. Page 3. : Some of the'oit?s nmest ntost de$u'able housing developments are located in close proximity to the proposed Keller Canyon Landfill TJ[jt:C0()PMtS_&>f.YsllArna�Ia;I I[t vE Dr. Chahneiis baa•crititizect ICPA's funding concerning the identified diaiiaution of valuc-in the higwt area studied,Ifillsdaie,and contends that there wss no g$tesnaiic cffcrt arising;from proximity tea the landfill. He doted,as discoxsed on•pagc 3.1 of 1C PA's study,the distance variable(DFM L)for the'Hiilsddc netghb0rh00d indicated that for t1* Keller site approval and early part of the b�ristRiction period,'theie liras a premium paid within the neighborhood not.to:bc located near the laddfill. Bur during t3rc last t1Vo peals(IM i99 the clistaticc variable was found to be insignificant. Instead ofihkrprWM this to mean that thcte is no distance effect,which is what Dr. Chalmers does, we Wdt dd suggt that by 1993 and 1994,tive effect of the landfill on the entire ti4ghborhood—if not the entire C4—swamped the affect of'shorter distances. We believe that rather than invalidate the .eandusiarix of KPA's study,dadr coma tents wapst the,hypdthesis that the effect of the landfill goes -far beyond the imsttiediate 15 til:2 stiles Yiear the landk CONCLUSION: Even .with the study's failure'to-consider socioeconomic variables, which,made some of the "camP=blr neighborhoods gixstionable their finding:of a$5,700 per unit loss in Hillsdale clearly established that the landfill does have a negative effect on.adjoining property values, While valid,this should be-x6psidered as an initial'assemmerit of:ilamages because it did not take into account the broader dynamics of the Vittsbn seal eMW market"' Major City-wide efficts resulted because the area a►heme the'iaradfill is ndw..situated .was becoming.a .desirable location for higher-income iiouseiiolds. An Increase in the.praportigia of higher-ind61FLe households in Pittsburg would have tended to improve values in marry of Pimbprgts neighborhoods. a NOV-20-1995 1604 FROM Gruen Gruen + Associates. TO 15106461599 P.06 Val Ab xc tff November IS, 1995 PV.5 DECEMBER STB BOARD ARETING I urtdmtand that•the Contra Costa COUnty Board of Supeaviscrs plan to m iew the mattcr on December 5, 1995: If you think it would be useful,I would be'viuy glad ' be available to answer questions at the ineetir g. Sineen}y, Claude Gruen, Prix e l Economist oC; Gaylc Bishop;Chair Tom Torlakson jeffSmith Mark Ddaulnier. Jim Rodgers Michael Woods , u TO: BOARD OF SUPERVISORS Contra FROM: VAL ALEXEEFF, DIRECTOR Costa GROWTH MANAGEMENT & ECONOMIC DEVELOPMENT COI,r y DATE: October 17, 1995 SUBJECT: KELLER CANYON LANDFILL PROPERTY VALUATION STUDY SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1 . ACCEPT the Keller Canyon Landfill Property Valuation Study which was completed by the Institute for Community Planning Assistance of Sonoma State University on November 30, 1994. 2. ALLOW a 30-day period for written challenges. 3. DIRECT staff to return to the Board of Supervisors with options for the next step in this process after the 30-day period. FISCAL IMPACT The fiscal impact is unclear at this point due to the uncertainty of what amount may be authorized, how it would be dispersed and how it would be funded. BACKGROUND/REASONS FOR RECOMMENDATIONS On June 6, 1995 the Board of Supervisors directed that the County's economic consultant (ICPA of Sonoma State University) meet with economists representing BFI and the City of Pittsburg, who provided comment at the Board hearing, to discuss the details of the study and the economic model which were being disputed. If possible the meetings were intended to try and resolve these differences. CONTINUED ON ATTACHMENT: YES SIGNATURE ACTION OF BOARD ON APPROVED AS RECOMMENDED _ OTHER_ VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE _ UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. Contact: Charles Zahn (510/646-2096) ATTESTED cc: Community Development Department (CDD) PHIL BATCHELOR, CLERK OF THE GMEDA BOARD OF SUPERVISORS AND Keller Canyon Landfill Company COUNTY ADMINISTRATOR City of Pittsburg Citizens United Bay Point Municipal Advisory Council BY , DEPUTY DD9:KCL-PVS.BO Keller Canyon Landfill Property Valuation Study October 17, 199E Continued - Page Twc BACKGROUND/REASONS FOR RECOMMENDATIONS (continued) After over 100 hours of follow-up work performed by the County's consultant (ICPA of Sonoma State University) issues are still unresolved. Each discussion begets new questions and the County's consultant and staff fear that the consultant could spend another six months reviewing each issue from varying perspectives without any clear resolution. The County's consultant is confident that their original recommendations set forth in their report dated November 30, 1994 have not had fatal flaws in the methodology or results and they stand behind their recommendations. Additional background is included in the previous Board Order dated June 6, 1995 which is provided as Attachment Al (accompanied with multiple attachments). Also a concerned homeowner has submitted a letter which is provided as Attachment A2. 6 DD9:KCL-PVS.BO Attachment Al ' TO: BOARD OF SUPERVISORS Contra FROM: HARVEY E. BRAG-DON Costa DIRECTOR OF COMMUNITY DEVELOPMENT ; Coirty DATE: June 6, 1995 SUBJECT: KELLER CANYON LANDFILL PROPERTY VALUATION STUDY REPORT SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. Determine whether an impact has taken place on property values. 2. Direct staff to determine method of evaluating impact on specific values, if determined there has been a negative impact. 3. Establish procedure to determine the extent of the landfill operator's (BFI) responsibility. 4. Direct staff to pursue recommendations for methods of payment if any. FISCAL IMPACT No identified impact.to the County General Fund. BACKGROUND/REASONS FOR RECOMMENDATIONS The Keller Canyon Landfill Property Valuation Study ("Study") was required by a Condition of Approval (35.3) in the Land Use Permit (2020-89). The purpose of the Study is to "address the means of determining the extent of property value losses or reductions attributable to Landfill impacts, such as aesthetics, noise, traffic, or pollution, and the means of compensating property owners for said losses or reductions". CONTINUED ON ATTACHMENT: o/ YES SIGNATU Aar ACTION OF BOARD ON APPROVED AS RECOMMENDE _ dTHER_ VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE _ UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. Contact: Charles Zahn (510/646-2096) ATTESTED cc: Community Development Department (CDD) PHIL BATCHELOR, CLERK OF THE GMEDA BOARD OF SUPERVISORS AND Keller Canyon Landfill Company COUNTY ADMINISTRATOR City of Pittsburg Citizens United Bay Point Municipal Advisory Council BY , DEPUTY Keller Canyon Landfill Property Valuation Study Report June 6, 1995 Continued - Page Two BACKGROUND/REASONS FOR RECOMMENDATIONS (continued) The Land Use Permit 2020-89 Condition of Approval 35.3 "Property Value Compensation Program" states: The Landfill operator shall provide funding for the preparation of a property value compensation program study when requested by the County of Contra Costa. The study will address the mans of determining the extent of property value losses or reductions attributable to Landfill impacts, such as aesthetics, noise, traffic, or pollution, and the means of compensating property owners for said losses or reductions. When a compensation program is adopted by the Board of Supervisors, the Landfill developer shall fund it in the manner specified by the Board. If the Board of Supervisors determines that progress on the implementation of a compensation program is not proceeding in a timely manner, the Board may require the use of a facilitator and/or an arbitrator. The fee shall be considered to be a pass-through business cost for the purposes of rate setting. In March 1992 the Contra Costa County Community Development Department entered into a contract with the Institute for Community Planning Assistance of Sonoma State University ("Institute") to develop a methodology for the Keller Canyon Landfill Property Valuation Study. The Institute completed the Study methodology. In October 1992 the Contra Costa County Community Development Department entered into a contract with the Institute to undertake the Study. The Study was developed to occur over a two-year period which allowed data to be collected under varying conditions: i.e. construction and operations as well as different seasonal and weather conditions. The Study was completed and released on November 30, 1994. The Keller Canyon Landfill Property Valuation Study Executive Summary is attached (Attachment A). The Executive Summary includes the Study approach and recommendations. The Study area consisted of four primary neighborhoods. The Study concluded that there had been an impact to property values (loss of premiums) in the Hillsdale neighborhood (Neighborhood A) since 1990 which could be attributable to the landfill siting, approval, construction and operation. The Study recommended that a compensation program may be warranted and also recommended appraisals for the Hillsdale neighborhood prior to or as a part of the compensation program. The Study recommended that no additional analysis or compensation would be warranted for the Woodside (Neighborhood C) or Oak Hills (Neighborhood B) neighborhoods. The Study indicated that the Bailey Road (Neighborhood E) neighborhood may have been affected but further conclusions could not be made because there was limited data due to the unique nature and age of this neighborhood. The Study recommended that appraisals would be warranted for the Bailey Road neighborhood. On November 30, 1994 the County Board of Supervisors' Ad Hoc Solid Waste Committee heard the first presentation of the Study by the Institute. The Ad Hoc Solid Waste Committee forwarded the matter to the Keller Canyon Landfill Local Advisory Committee and directed the matter to go back to the Ad Hoc Solid Waste Committee before going before the full Board of Supervisors. The matter was presented and discussed at the Keller Canyon Landfill Local Advisory Committee meeting of February 8, 1995. There was not a quorum present at that Committee meeting and therefore no action or votes could take place, however the meeting included discussion and public comment. Staff has prepared Minutes from the Committee meeting held on February 8, 1995 which are attached (Attachment B). The matter was brought back to the Ad Hoc Solid Waste Committee on May 4, 1995. The Committee received public comment about the Study, Committee members discussed the Study and the Committee forward the Recommendations itemized above Keller Canyon Landfill Property Valuation Study Report June 6, 1995 Continued - Page Three BACKGROUND/REASONS FOR RECOMMENDATIONS (continued) to be brought before the full Board of Supervisors on June 6, 1995. Staff has prepared a summary of the public comment and discussion portion of the Ad Hoc Solid Waste Committee meeting on May 4, 1995 which is attached (Attachment C). At the May 4, 1995 meeting, the Ad Hoc Solid Waste Committee directed staff to obtain information regarding complaints received by the Bay Area Air Quality Management District (BAAQMD) and the County Local Enforcement Agency (LEA). The complaint information from the agencies is summarized below: The BAAQMD indicated that there had been 34 complaints received since January 1, 1992 - May 22, 1995. Of the 34 complaints, 14 had been confirmed. The BAAQMD has not issued any violation notices to the Landfill. All confirmed complaints occurred between January 1992 - January 1993 and all were dust complaints. The January 1992 - January 1993 time period included construction activities which were more likely to generate dust than landfill operational activities. This was also the time that major construction was taking place at the State Route 4/Bailey Road Interchange. The complaint information provided by the BAAQMD is attached (Attachment D). The LEA has indicated that approximately 85 operational complaints were received since December 1991 . Only 2 of the 85 complaints were substantiated by LEA staff. Both of the substantiated complaints occurred before May 1992, during the construction of the landfill. One complaint was of excessive dust the other was regarding noise from earth moving equipment. In both instances, the LEA reports that the landfill operators immediately corrected the problems upon verbal notification. The complaint information provided by the LEA is attached (Attachment E). Also at the May 4, 1995 meeting, the Ad Hoc Solid Waste Committee recommended that the Institute, in light of issues raised at the meeting: (a) further study the impacted neighborhoods (Neighborhoods A & E) related to the appraisal/statistical issues, (b) prepare formal responses to issues raised by Lance Dow, Citizens United (i.e. debt-to-equity ratio), and (c) respond to issues raised by James Chalmers (representing BFI). The Committee further asked that the matter be brought to the full Board of Supervisors on June 6, 1995 with as much information as possible. The Institute prepared written responses to as many of the questions/comments as time permitted which are attached (Attachment F). The Institute will also continue to prepare additional responses to be presented orally at the June 6, 1995 Board meeting. Two written correspondences have been received regarding the Study. A commentary report from James Chalmers, Coopers & Lybrand (representing BFI) and a letter from Claude Gruen, Gruen & Gruen (representing the City of Pittsburg). These documents are attached (Attachments G & H respectively) Attachments: A Property Valuation Study Executive Summary B LAC Minutes of February 8, 1995 C Summary of public comment received at the Ad Hoc Solid Waste Committee (5/4/95) D BAAQMD Complaint Information E LEA Compliant Information F ICPA Response dated 5/30/95 G James Chalmers (representing BFI) Commentary H Claude Gruen (representing City of Pittsburg) Letter DD&PROP-VAL SO Keller Canyon Landfill Property Valuation Study 1CPA Institute for Community Planning Assistance Sonoma State University November 30, 1994 Project Directors: Steven C. Orlick,Ph.D. Department of Environmental Studies and Planning Stephen D. Lewis,Ph.D. Department of Economics a a DEDICATION This report is dedicated to Vicki Conklin, planner with the Contra Costa County Community Development Department,who passed away while this study was being conducted. It was with a deep sense of loss that the ICDA staff members who had worked closely with her completed the remainder of this study. H ACKNOWLEDGMENTS We would like to express our appreciation to the many individuals who participated in and contributed to the two year research effort documented in this report. Jane Riley, ICPA Projects Manager,had the challenging responsibility of keeping the entire project moving along on schedule and within budget. Kristine Bickell, ICPA Senior Research Assistant, assumed marry different responsible roles during the duration of the project. She deserves special praise for overseeing the preparation of the final document.Kim Mahurin Holt provided invaluable help both in rechecking the accuracy of the economic analysis sections of this report, as well as with general proofreading. Misti Cobb skillfully assisted in producing the graphics for the final report. Helen Persson superbly performed hedonic regressions which helped to refine the analysis. ICPA Research Assistants,Margaret Pennington, Jeff Cichocki Jr.,Robin Kirby, Clare OBrian,Mike Demers, and Eric Duncan conducted the various surveys,helped construct the database, and construct and test the model. Special thanks go to Shelley Chambers, Greg Jann,Karen O'Conner,Margaret Pennington,Helen Persson, Anne Shatara, and Theodore Watrous, senior students in Dr. Lewis'Economics 419 (Seminar in Econometrics and Forecasting) class at Sonoma State University for helping to test certain data and techniques later employed in this study. We wish to express our appreciation to John Bedford,Bedford and Associates Century Twenty One,Pittsburg, for allowing ICPA staff to utilize his firm's sales history data sources. Finally,we would like to thank Charles Zahn and Deidra Dingman, planners with the Contra Costa County Community Development Department,for the considerable assistance they provided and professionalism they exhibited throughout the project. We warmly remember the helpfulness, competence, and good humor of Vicki Conklin, a planner with the same department, who passed away halfway through our study. Steven C. Orlick Stephen D. Lewis Project Directors Sonoma State University TABLE OF CONTENTS PART I. EXECUTIVE SUMMARY ..................................... 1 EXECUTIVE SUMAL4,RY ............................................................ 2 Introduction ......................................................................... 2 Chapter 1:Background and Development of the Study ............................... 3 Chapter 2:Database Construction and Identification of the Neighborhoods ........... 4 Chapter 3: Real Estate Trends ....................................................... 4 Chapter 4:Hedonic Regression Price Model ......................................... 5 Chapter 5: Antioch Comparable Neighborhoods ..................................... 5 Chapter 6: Support Surveys ......................................................... 6 Lenders and Appraisers Surveys ................................................. 6 FieldSurveys ............................................. ...................... 6 Community Opinion Surveys .................................................... 7 Chapter 7: Willingness to Pay Analysis ............................................... 9 Chapter 8: Integration of Statistical and Survey Results by Neighborhood ............ 9 Neighborhood NA(Hillsdale) ................................................... 10 Neighborhood NB (Oak 11ills) ................................................. 10 Neighborhood NC (Woodside) ................................................. I 1 Neighborhood NE (Bailey Road) ............................................... 11 Chapter 9.Recommendations ....................................................... 12 Neighborhood NA(Hillsdale) ........................... .................... 12 Neighborhood NB (Oak Fills) .................................................. 12 Neighborhood NC (Woodside) ................................................. 13 Neighborhood NE(Bailey Road) ............................................... 13 Conclusion of the Study ........................................................ 13 PART II. KELLER CANYON LANDFILL PROPERTY VALUATION STUDY ............................................... 15 CHAPTER 1: BACKGROUND OF THE STUDY ................................... 16 History of the Keller Canyon Landfill ............................................... 16 ICPA's Involvement in the Study ................................................ 18 Development of the Study Methodology ......................................... .. . I8 Adjustments to the Work Program While Conducting the Study ..................... 20 iv Appraisal Disclaimer ............................................................... 20 CHAPTER 2: DATABASE CONSTRUCTION AND IDENTIFICATION OF NEIGHBORHOODS ............................................................. 23 Introduction ........................................................................ 23 Database Development ............................................................. 23 Primary Neighborhoods ........................................................ 23 Comparable Neighborhoods .................................................... 23 Availability of Data ............................................................. 25 Collection of Data .............................................................. 25 Construction of Database ....................................................... 25 Database Summary ............................................................. 25 Neighborhood Statistics ............................................................ 26 Exploratory Data Analysis ...................................................... 26 Year-Built Analysis ............................................................. 28 Housing Characteristics-Ratios ................................................ 28 Housing Characteristics Summary Statistics ................................... 29 Summary Neighborhood Statistics .............................................. 29 CHAPTER 3: REAL ESTATE TRENDS ............................................ 30 Statistical Analysis of Geographic Areas ............................................ 30 Graphical Description .......................................................... 32 Long-Term Growth Trends ..................................................... 32 Long-term Growth Rate Comparisons .......................................... 33 Annual Growth Rates ........................................................... 34 Summary of Statistical Analysis for Different Geographical Areas ............... 35 Statistical Analysis of Composite Neighborhoods ................................... 35 Graphical Description .......................................................... 36 Long-Tenn Growth Trends ..................................................... 36 Long-Term Growth Rate Comparisons ......................................... 39 Annual Growth Rates .......................................................... Conclusion .................................................... ........ 41 CHAPTER 4s HEDONIC REGRESSION PRICE MODEL ......................... 42 Review of Literature ............................................................... 42 Model Specification ................................................................ 43 Estimation ......................................................................... 45 Individual Neighborhoods-Primary and Comparable ............................... 46 V Composite Neighborhoods ......................................................... 47 Geographical/Locational Variable-Dummy Variable NHD ......................... 49 NAvs. NAJK .............................. ................................. 49 NBvs.NBI ....................... ........................................... 49 NCvs.NCFM .................................................................. 49 NHDSummary ................................................................ 51 Primary Neighborhoods-Distance Variable DFTLL ................................. 51 NAand DFILL ......................................... .................... 51 NB and DFILI. .... ....... 53 NCand DFULL ................................................................. 53 SummaryDFILL .............................................................. 53 Conclusion ........................................................................ 54 CHAPTER S: ANTIOCH COMPARABLE NEIGHBORHOODS .................. 55 Exploratory Data Analysis .......................................................... 55 Regression Results .............:................................................... 57 NAvs. NA/ANC ............................................................... 57 NCvs.NC/ANC ................................................................ 59 Summary ........................................................................... 59 CHAPTER 6: SUPPORT SURVEYS ................................................ 60 Lenders and Appraisers Surveys .................................................... 60 Purpose ........................................................................ 60 Methodology .................................. ............................... 60 Findings of First Telephone Interviews with Lenders ............................ 61 Findings of First Telephone Interviews with Appraisers .......................... 61 Findings of Second Telephone Interviews with Lenders ......................... 61 Findings of Second Telephone Interviews with Appraisers ....................... 61 Conclusions about Lenders and Appraisers ................................... 62 FieldSurveys ...................................................................... 62 Purpose ........................ ............................................. 62 Methodology .............................................. ......... 62 Findings of Field Surveys ....................................................... 63 Nuisance Factors ............................................................... 66 Community Opinion Surveys ....................................................... 67 Methodology ................................................................... 68 Vi Findings of the First Community Opinion Survey ........ ...................... 68 Design and Distribution of Second Community Opinion Survey ................. 70 Findings of the Second Community Opinion Survey ............................. 70 Design and Distribution of the Third Community Opinion Survey ................ 72 Findings of the Third Community Opinion Survey ............................... 72 Conclusion ......................................................................... 73 CHAPTER 7: WILLINGNESS TO PAY ANALYSIS ............................... 74 Background ..... ................................................................. 74 WTP Questions Included in the Community Opinion Surveys ..................... 74 WTPData ......................................................................... 75 Price Variable Differences .......................................................... 75 Willingness To Pay Analysis ........................................................ 76 Summary ...................... .................................................... 77 CHAPTER 8: INTEGRATION OF STATISTICAL AND SURVEY RESULTS BY NEIGHBORHOOD .............................................. 78 Neighborhood NA(Hillsdale) ...................................................... 78 Neighborhood NB (Oak Hills) ...... ........•I ...................................... 79 Neighborhood NC (Woodside) ..................................................... 80 Neighborhood NE(Bailey Road) ................................................... 81 Lenders and Appraisers Surveys .................................................... 81 CHAPTER 9: RECOMN[ENDATIONS ............................................. 82 Neighborhood NA(Hillsdale) ...................................................... 82 Neighborhood NB (Oak Hills) ...................................................... 82 Neighborhood NC (Woodside) ..................................................... 83 Neighborhood NE(Bailey Road) ................................................... 83 Conclusion of the Study ............................................................ 83 vii LIST OF TABLES Table 1 Keller Canyon IAndf l Chronology of Events .............................. 21 Table 2 Description of Pittsburg Neighborhoods ................................... 24 Table 3 Neighborhood Matches ................................................... 26 Table 4 Year Built Comparisons ................................................... 28 Table 5 Housing Characteristics Ratios ............................................ 28 Table 6 Housing Characteristics Summary Statistics ............................... 29 Table 7 Exponential Growth Rates for Different Geographical Areas ............... 33 Table 8 Long-term Growth Rate Comparisons ..................................... 34 Table 9 Annual Growth Rates for Five Geographic Areas .......................... 34 Table 10 Exponential Growth Rates for Composite Neighborhoods ................. 39 Table 11 Long-term Growth Rate Comparisons .................................. 39 Table 12 Annual Growth Rates for Comparable Neighborhoods .................... 40 Table 13 Ordinary Least Squares Regressions Individual Primary and Comparable Neighborhoods ............................................... 48 Table 14 Ordinary Least Squares Primary and Comparable Neighborhoods .......... 48 Table 15 Composite Neighborhoods -NHD Comparisons ........................... 50 Table 16 Primary Neighborhoods -DFILL Comparisons ............................ 52 Table 17 Antioch Comparable Neighborhoods ...................................... 55 Table 18 Composite Neighborhoods-NHD Comparisons .......................... 58 Table 19 Responses from Interviews with Lenders&Appraisers .................... 61 Table 20 Answers of Respondents Who are Familiar with the Area ................... 62 Table 21 Percentage of Properties Having Views of the Landfill ..................... 64 Table 22 Percentage of Properties Exposed to Noise or Sight of Landfill Trucks ................................................................... 65 Table 23 Percentage of Parcels Affected by Noise ....................... ........... 66 Table 24 Distribution of Nuisance Factor Ratings ................................... 67 Table 25 Distribution of Concerns .................................................. 69 Table 26 Neighborhood A Survey Responses ....................................... 71 Table 27 Neighborhood B Survey Responses ....................................... 71 Table 28 Neighborhood C Survey Responses ................................ 71 Table 29 Overall Survey Responses Regarding Impacts of all Neighborhoods ........................................................... 73 Table 30 Willingness to Pay Paired Difference Analysis ............................. 76 viii LIST OF FIGURES Figure I Project Location Map ................................................... 17 Figure 2 Location of Primary Neighborhoods .................................. 29A Figure 3 Location of Comparable Neighborhoods ............................... 29B Figure 4 Composite Neighborhoods ............................................ 29C Figure 5 Pittsburg Sun Ray Plots ................................................. 27 Figure 6 Annual Median Sales Prices for Five Geographic Areas .................. 31 Figure 7 Annual Median Sales Prices for NA,NJ, and NK ......................... 37 Figure 8 Annual Median Sales Prices for NC,NF, and NM ........................ 38 Figure 9 Antioch Sun Ray Plots .........................................:........ 56 Figure 10 Antioch Comparable Neighborhood .................................... 59A Figure 1 I Primary Neighborhoods ............................................... 73A Figure 12 Distribution of Yew of Service Road ................................. 73B Figure 13 Distribution of Yew of Berm ......................................... 73C Figure I4 Distribution of Odor Impacts .......................................... 73D Figure 15 Distribution of Traffic Impacts ......................................... 73E Figure 16 Distribution of Noise Impacts ......................................... 73F Figure 17 Distribution of Nuisance Factors ...................................... 73G Figure 18 Distribution of Community Opinion Survey Respondents ............... 73H ix APPENDICES Appendix A Glossary of Terms .................................................... 85 Appendix B Community Opinion Survey One ...................................... 86 Appendix C Community Opinion Survey Two ...................................... 87 Appendix D Community Opinion Survey Thee .................................... 88 Appendix E Verbatim Answers to Lenders and Appraisers Surveys ................ 89 Appendix F Keller Canyon Dump Alert Flier ....................................... 90 Appendix G Real Estate Sales Database ........................................... 91 Appendix H Bibliography .....................................................:.... 92 X PART I. EXECUTIVE SUMMARY EXECUTIVE SUMMARY Introduction One of the consequences of the growth of population and jobs in communities and regions throughout the country is the need to expand existing public facilities, and often to build new facilities: Few people would argue with the need to address certain general problems resulting from rapid growth, such as expanding a local school system, constructing new streets and roads, increasing the capacity of the sewage collection and treatment system, enlarging and improving water supply facilities, developing new medical and research centers, or building a new jail. While the facilities necessary to accommodate an influx of people and economic activity may be locally or regionally needed and wanted,many are vigorously opposed by those people who are living near sites selected for them. This rapidly growing class of facilities has been termed "locally unwanted land uses," or LULUs. A solid waste landfill is a typical example cf a LULU. Landfills traditionally have been called "dumps," a term that usually has negative connotations resulting from actual or perceived environmental impacts. In recent years,the technologies used in the design, construction, and operation of modern "sanitary landfills" have greatly decreased the likelihood of such negative environmental impacts. Nevertheless,the siting of a needed landfill facility is likely to be a highly controversial and emotional issue. Eastern Contra Costa County has experienced considerable growth during the past two decades. This growth resulted in increasing pressure on County officials to find a local, long-term solution to the rapidly declining capacity of existing solid waste disposal facilities. After several years of studies, including the evaluation of a long list of potential landfill sites, the County approved the development of a "state-of-the-art" sanitary landfill in July 1990. The 2,628 acre site was in Keller Canyon, located southwest of the City of Pittsburg, in an unincorporated section of the county. There are four Pittsburg neighborhoods,totaling over 1,300 residential parcels, located within one and 1/4 miles of the primary waste placement area of the now-operating landfill. Many residents of these neighborhoods, and other Pittsburg residents and City officials, have objected to the construction and operation of the landfill. Despite its careful design, many still consider it to be a LULU. In attempting to address local concerns,the Contra Costa County Board of Supervisors applied numerous Conditions of Approval to the Land Use Permit for the project. One such Condition was related to one of the major fears voiced by residents, a potential loss in the value of their properties. It called for the private operator of the landfill to fund a study of the property value losses(if any)attributable to the construction and operation of the landfill. The County contracted with the Institute for Community Planning Assistance(ICPA)at Sonoma State University, a non-profit research center,to design the comprehensive study. The County subsequently contracted with ICPA to conduct the study. This report documents the findings of ICPA's two year research effort. The report is divided into two parts. Part I contains an introduction to, and summary of the Keller Canyon Landfill Property Valuation Study. It is designed to stand alone and may be read by 2 a general audience. It presents an overview of each of the nine chapters in Part U. In Part II,the first seven chapters document in detail the surveys and research conducted by ICPA staff. The eighth chapter contains conclusions drawn from an integration of the results of the various components of the overall study. The final chapter contains ICPA's recommendations; Several chapters in Part 11 of necessity contain technical language and are primarily intended for a more specialized and professional audience. An interested reader will find a glossary of terms in the Appendix section at the end of the report. Chapter 1: Background and Development of the Study The development of a landfill in Keller Canyon had a lengthy and eventful history. A complete chronology of events has been documented. These events reflect four general periods in the history of the landfill: Pre-Keller Phase(1984-1986); Site Selection Phase(1987-1990); Site Approval Phase(1990-1991);and Construction and Operation Phase(1991-present). Briefly,Keller Canyon was identified as a possible landfill location as early as mid-1984 in a Central Contra Costa Sanitary District/Contra Costa County study. An Environmental Impact Report for the Central Landfill project at the Keller Canyon site was distributed in April 1986. The proposal was later withdrawn by the applicant who cited inadequate political support as the reason. The project was revived in mid-1988 by Boyd Olney, Jr. The Board of Supervisors placed it and three other sites on the November 1988 ballot for an advisory vote. None received a majority approval. An Environmental Impact Report on the project was approved by the County Zoning Administrator in February 1990. The Planning Commission recommended approval of the Land Use Permit to the Board of Supervisors,who held hearings on the necessary General Plan Amendments and Land Use Permit Conditions of Approval. The Board placed a referendum on the General Plan Amendments on the June 1990 ballot. When the project was not rejected by the voters,the Board approved the Land Use Permit with Conditions of Approval in July 1990. Construction of the landfill began in late 1991, and it opened on May 7, 1992. One of the Conditions of Approval specified that the landfill operator,Keller Canyon Landfill Company, a subsidiary of Browning-Ferris Industries(BFI),was to fund the preparation of a study to determine the extent of property value losses(if any)attributable to landfill impacts. This study was to serve as a basis for developing a Property Value Compensation Program, also to be funded by the landfill operator. In response to a request from the Contra Costa County Community Development Department,the Institute for Community Planning Assistance entered into a contract in January 1992 to design a study that could be used to evaluate the impact of the Keller Canyon Landfill on residential property values. The ICPA staff designed the methodology to meet the needs and requirements specified by County staff. The methodology also incorporated the concerns expressed by the Keller Canyon Landfill Local Advisory Committee,the Property Valuation Subcommittee,and members of the public. It was to be based on a Hedonic Regression Price Model,the traditional method used to study property values. However, due to the high level of concern exhibited by neighbors and Pittsburg city officials, it was designed to go far beyond the usual property valuation studies and to include surveys such as a parcel-by-parcel observation of environmental impacts under varying weather conditions,telephone surveys of lenders and 3 appraisers, and a series of community opinion questionnaires called a"Delphi"survey. The latter survey was to include questions which could be used in a "willingness-to-pay"economic analysis. A review of the literature suggested that the proposed study was perhaps the most comprehensive investigation ever conducted for a landfill LULU. The methodology was submitted to the Community Development Department in August 1992 and approved shortly thereafter. The Community Development Department and ICDA entered into a second contract in November 1992 to conduct the Keller Canyon Landfill Property Valuation Study. The study was to include data through May 1994,two years after the opening of the landfill. Chapter 2: Database Construction and Identification of the Neighborhoods Two of the initial tasks in the Property Valuation Study were delineation of"primary"and "comparable" neighborhoods, and the development of the comprehensive database. A computer database was created which included 15 year sales histories and housing characteristic information for 6,246 parcels in 15 neighborhoods in the Pittsburg vea. Because of their proximity to,the landfill (within a one and 1/4 mile radius),three of the neighborhoods were designated as "primary."These three, labeled NA,NB,and NC,were to be carefully,ommined for possible impacts attributable to the landfill. An additional group of homes along Bailey Road, designated NE, also were considered in the analysis despite a lack of sales data. The remaining 11 neighborhoods were designated as potential "comparable"neighborhoods. These neighborhoods were evaluated using a series of graphical and data analysis techniques. All of these neighborhoods were checked in the field to ensure that matching neighborhoods indeed were similar. The goal was to match primary neighborhoods as closely as possible with neighborhoods that have similar housing stock built within the same time frame. Five of the neighborhoods,NJ,NK,Ni,NF,and NM were found to be close matches with the primary neighborhoods. They were designated as "comparable neighborhoods."In theory,if close matches in housing characteristics could be obtained between neighborhoods near the Keller Canyon Landfill and those some distance away from it,any difference in selling prices found in later analyses could be attributable to the landfill. Chapter 3; Real Estate Trends In order to evaluate the historical behavior of local real estate values,it was necessary to put these values in perspective relative to the real estate market in general:An analysis of real estate trends and growth rates from 1979-1993 was undertaken for the United States, for California,for the San Francisco Bay Area, and for two "composite"neighborhoods in Pittsburg. The composite neighborhoods consisted of a combination of a primary neighborhood and its comparable neighborhoods. This combining enabled a closer look at the similarities and differences of these neighborhoods. Real estate behavior in the different geographical area was found to be remarkably similar. The statistical evidence suggests that the price experiences in the Pittsburg neighborhoods are similar to those experienced throughout California as a whole. All Pittsburg composite neighborhoods experienced significant appreciation of real estate values over the entire 15 year period. Although real estate values for the Pittsburg neighborhoods generally fell below those of the Bay Area, 4 growth rates for these neighborhoods were found to be similar to those for California and for the United States. Nothing was found to suggest any obvious differences in real estate values or growth rates as a result of the decision to construct a landfill in Keller Canyon. Chapter 4: Redonic Regression Price Model The primary focus of this study is the residential property value impacts of the Keller Canyon Landfill. An extensive literature search was part ofICPA's initial contract to develop the study methodology. It revealed that the most popular and extensively used technique for measuring the impact of Locally Unwanted Land Uses on residential property values is the Hedonic Regression Price Model (HRPM). The model is a statistical procedure that predicts the sales price of a house based on a collection of housing characteristics, such as square footage,lot size,number of rooms,bedrooms, bathrooms,view,and location. The HRPM was developed and tested using data in the comprehensive database for the previously designated "primary"and "comparable"neighborhoods. A high level of confidence in the results was achieved. Following this initial statistical analysis,a new element was introduced to measure potential landfill impacts. This allowed for a comparison between primary and comparable neighborhoods. Finally, another consideration was introduced into the analysis, distance from the landfill. This variable was designed to measure the importance of distance from the landfill in determining property values in primary neighborhoods. Results for each primary neighborhood were found to be unique. Houses in neighborhood NA sold for a premium price (buyers paid more)when matched with similar houses in comparable neighborhoods NJ and NK from I981 to 1990. This premium declined over this time period from a high of$8,400 to a low of$4,900. Premiums were found to disappear since 1991. In neighborhood NB, a relatively new neighborhood,premiums averaging 512,600 were measured for the 1989-1994 period.Neighborhood NC experienced no premiums with the exception of 1989,when a premium of$7,200 was measured. The analyses of the influence of distance from the landfill on sales prices also produced varying results in the different primary neighborhoods. In neighborhood NA during the periods 1979-1989 and 1991-1992, sales prices increased with distance from the landfill site. This distance premium disappeared in 1993-1994. For neighborhood NB, a distance premium also was discovered for 1989-1994. Finally, discounts(not premiums)were experienced in.neighborhood NC for the 1990-1994 period. This suggests that sale prices declined with increasing distance from the landfill. The results of the Hedonic Regression Price Model show that each primary neighborhood has its own unique sales price history.No general conclusions are possible. Chapter 5:Antioch Comparable Neighborhoods In order to determine with some certainty that all neighborhoods in Pittsburg were not in some way influenced by the Keller Canyon Landfill,four neighborhoods outside Pittsburg in the city of Antioch were explored. The approach followed was identical to that used for the Pittsburg neighborhoods. The emphasis of this investigation was determining whether or not there was any 3 significant difference in the behavior of sale prices between"Primary"neighborhoods in Pittsburg, and comparable neighborhoods in Antioch. This difference might be attributable to the geographic factor of the possibility or existence of the Keller Canyon Landfill. The results of these analyses were mixed.When matched with its comparable Antioch neighborhood,the Pittsburg neighborhood experienced premiums in the early years. These disappeared and became discounts for 1987-1988. Since 1989,no premiums or discounts have existed, suggesting an effect potentially attributable to the landfill.No differences in prices were found for the other primary Pittsburg neighborhoods,suggesting no landfill impact. Chapter 6: Support Surveys The Hedonic Regression Price Model described earlier in this summary exPlaim what happened to residential sales prices over time. It does not explain why. In order to develop a better understanding of human and environmental factors potentially influencing property values in the primary neighborhoods near the Keller Canyon Landfill,ICPA staff conducted a number of interviews and surveys. These included a two-phase telephone survey of lenders and appraisers, field surveys to document the existence and distribution of potential environmental impacts, and a "Delphi" series of community opinion surveys. Lenders and Appraisers Surveys During a meeting with the Landfill Advisory Committee(LAC)as part of the methodology formulation stage of the study, a number of citizens expressed a concern that the presence of the landfill would cause or had caused difficulty in obtaining mortgage loans or refinancing their homes. Between February and March 1993,40 lenders and appraisers were randomly selected and contacted by telephone. They were asked how they felt the existence of the landfill might affect a nearby home. An additional 40 lenders and appraisers were randomly contacted and asked the same question between August and September 1993. The purpose of the second set of calls was to help determine whether their attitudes had changed over time. The results of the survey generally did not confirm the expressed concerns of the residents. There was no significant difference recorded from the first survey to the second. Forty-six percent of all the respondents said that the landfill would have no effect. Twelve percent said that the landfill would have a measurable effect.Forty-two percent were unsure, or had no opinion. Of those respondents who knew the area in question, 70 percent said that the landfill would have no effect. Only 13 percent said it would have a measurable effect. Seventeen percent were unsure, or had no opinion. Clearly, an overwhelming percentage of lenders and appraisers who knew the area felt the presence of the landfill would not affect property values. Field Surveys In order to develop some understanding of physical effects of the landfill on nearby neighborhoods,ICPA staff conducted a series of three field surveys. These were conducted for all 1,373 parcels in the primary neighborhoods during different times of the year, under varying weather conditions, and during specific times and days suggested by the respondents in the Community Opinion Surveys(discussed below). The purpose of these surveys was to determine the existence and distribution of effects of the landfill since construction began and operations commenced. It was hoped that by recording observed effects such as views of the toe berm and 6 other landfill features, noise from the landfill equipment and transfer truck traffic, odor, dust, and litter for each parcel in the primary neighborhoods, a better understanding might be obtained of possible reasons for loss of property values(if any)suggested by the Hedonic Regression Price Model. Most of the parcels in neighborhoods NA and NC have views of the landfill's perimeter fence, 83%and 82%, respectively.Not surprisingly,neighborhood NA,which is located closest to the landfill's waste placement area,was found to have a large percentage(31%)of parcels with views of the landfill's toe berm. There were almost no views of the berm outside this one neighborhood. This neighborhood also had the greatest landfill-generated noise impacts,with 10 percent of the parcels affected. Landfill-generated noise was generally absent in the other primary neighborhoods. Landfll-generated dust, odor, and wind-carried trash were not found'to affect any of the primary neighborhoods. Those parcels along Bailey Road, in the small area designated as neighborhood NE, are severely impacted by landfill transfer truck traffic. Almost all parcels (94%) cperienced traffic noise, and a lesser but still significant exposure to odor and litter from transfer trucks. These were not found to be problems in the other neighborhoods. The field surveys suggested that the parcels and residences along Bailey Road in neighborhood NE were the most severely impacted in the entire study area. Neighborhoods NB and NC experienced very few landfill-generated impacts. Less than half of the parcels in neighborhood NA experienced impacts, and of those that did, most had a view of the landfill toe berm. Community Opinion Surveys In order to determine the actual concerns and perceptions of the residents in the primary neighborhoods, along with their sources of information about the landfill and understanding of the local housing market, ICPA developed and administered a series of three "Delphi" questionnaires. A"Delphi" is a systematic method for soliciting and compiling judgments, and possibly reaching consensus, on a particular topic. Results from the previous round of the survey are provided to the respondents and serve as a basis for the questions on the next questionnaire. The questionnaires were administered between May and November 1993 to all residents who had returned a pre-paid postcard indicating their willingness to participate. Of the 238 who initially returned the postcards, 185 (78%)completed and returned the first questionnaire. Of the 185 second questionnaires mailed out, 154 (83%)were completed and returned. Of the 154 participants sent the third questionnaire, 119 (77%)responded. ICPA staff was pleased with these high response rates, suggesting that a high level of interest had been sustained. The first Delphi questionnaire had broad, open-ended questions. Respondents were asked about their sources of information about the landfill and whether they felt personally affected by it. The newspaper was the most popular source of information, and general knowledge had been achieved over a long period of time. The vast majority of respondents(840%)felt they had been personally affected by the landfill,with the highest response(92%) coming from respondents in neighborhood NA_ They also were asked about their perceptions about the value of their homes, and the effects of the landfill that concerned them the most. Responses varied widely as to the value of their homes, 7 with many possible explanations. The one concern shared by respondents in all the primary neighborhoods was a potential loss in property values of their homes. Over 72%of respondents from neighborhoods NA and NC stated that this was their most important concern. The second Delphi questionnaire contained more specific questions than the first. Respondents were asked on what their previous estimates of home value were based. Over 36%indicated that their estimate was based on a professional appraisal,while 25%gave realtors or friends as the source. Respondents were given the average(mean)estimated home value calculated for their neighborhood from the previous questionnaire and asked if they wished to change their original estimate, and why they felt their home was worth above,below,or about the same as,the average. Two-thirds did not wish to change their original estimates. The particular model of home related to other models in the neighborhood was the most frequent reason for their variance from the average. Respondents also were asked to be more specific about the types of impacts affecting them. Since the kinds of concerns on the first survey were different in each neighborhood, the tabulated answers for each neighborhood were reported back only to those respondents in the same neighborhoods. They were asked if they personally experienced the impacts listed, and if so, when. "Increased traffic"was frequently listed as being an impact that was personally experienced. Times of the day and days of the week cited for various impacts were specified, which assisted ICPA staff in scheduling additional site visits. The last question in the second Community Opinion Survey asked residents how much more they would be willing to pay for their same house in an identical neighborhood away from the landfill. The results of the"Willingness-to-Pay" analysis are reported in the next chapter. Questions in the third Community Opinion Survey focused on identifying the level and accuracy of information about the landfill that was received by respondents, and on determining where residents experienced impacts they attributed to the landfill. Approximately two-thirds reported that they recently had received information about the landfill. Of these,43%mentioned ballot Measures R and S or Fall 1993 campaign literature as their most recent source. Only twenty-two _percent of the respondents who received this election material indicated that they felt it was accurate and reliable. A majority of residents indicated that they had not experienced noise, odor, or blowing trash, either while in their homes or while in their yards. More than 40%of respondents indicated that they had experienced an increase in dust on their properties. As a major amount of construction activity had been occurring in.the vicinity of the primary neighborhoods unrelated to the landfill,respondents were asked about their experiences with the BART station construction and Highway4 expansion. They were asked if they had personally experienced any noise,traffic, dust, or other impacts of these projects. The vast majority(81%) said that they had. (It should be noted that during the site surveys,ICPA staff members sometimes found it difficult to pinpoint the landfill or other major non-landfill activity as the source of noise they heard). 8 a The last question on the third survey sought to determine how much respondents felt the lengthy economic recession had caused the value of their properties to decline. This proved to be a difficult question for many to answer. The average perceived loss in value by those who answered the question from neighborhood NA was$12,589;from neighborhood NB, $14,578;and from neighborhood NC, 513,040. The support surveys produced a considerable amount of interesting and useful information. An integration of the findings of these surveys with the results generated from the Hedonic Regression Price Model is found in the next two chapters. Chapter 7: Willingness to Pay Analysis An objective of the Delphi series of Community Opinion Surveys was to determine opinions and beliefs of property owners related to real estate values in their neighborhoods. In order to determine the reasonableness and accuracy of these expectations,the data from these surveys were compared with the ravilts from the Hedonic Regression Price Model. The general approach employed by ICPA staff was a modification of Willingness to Pay analysis traditionally used by economists. Use of this method made it possible to determine the extent to which property owners in the primary neighborhoods were acquainted with the real estate market in the Pittsburg area. In the Community Opinion Surveys,respondents were asked to place a value on their houses and to estimate the amount they would be willing to pay for houses identical to theirs in neighborhoods not subject to any potential landfill impacts. Their answers were compared with objectively determined predictions of house prices from the Hedonic Regression Price Model. This analysis produced two important findings. First, respondents in all primary neighborhoods consistently overestimated the amount required to purchase a house with similar characteristics in a neighborhood away from the landfill by an amount ranging from$15,000 to$30,000. Second, respondents underestimated the value of their houses in their own neighborhoods when their responses were compared with the model's predictions. The main conclusion from this analysis is that primary neighborhood property owners did not have an accurate picture of the local real estate market. Several statistical measures were applied to the data, and revealed that the respondents apparently lacked accurate information. They were willing to pay more than would be required to purchase an identical house in a neighborhood away from possible effects of the landfill. Chapter 8: integration of Statistical and Survey Results by Neighborhood The primary issue investigated in the Keller Canyon Property Valuation Study has been the property value effects of the landfill on nearby residential neighborhoods. The methodology developed by ICPA in the initial phase of this study was designed to approach this emotionally charged matter comprehensively,that is,from many different directions and perspectives. The Hedonic Regression Price Model approached it in the generally accepted objective way, developing a computer model using many years of sales data.Responding to the concerns expressed by members of the Local Advisory Committee and other residents during the methodology development phase,ICPA staff designed several "support"surveys to incorporate 9 more subjective"human factors"like concerns and perceptions into the study. ICPA staff anticipated that the results of the three main support surveys would assist in understanding and interpreting the findings of the Hedonic Regression Price Model. The results of the Hedonic Regression Price Model and the support surveys were sorted by, and integrated for, each of the primary neighborhoods.By combining the information applicable to each of the neighborhoods, a more complete picture was provided of how each had been affected by the landfill site selection decision, as well as by its construction and first two years of operation. These pictures generally contain few contradictions. Neighborhood NA (Hillsdale) Results of the Hedonic Regression Price Model show that houses in this neighborhood sold for a premium over similar houses in comparable neighborhoods during the period from 1979 to 1990, with the one exception being 1980. These neighborhood premiums averaged $5,700. From 1991 to May 1994 no premiums were measured. The disappearance of premiums coincides with site approval, and construction and operation of the landfill. This suggests that a loss of property values has occurred. When taking into account distance from the landfill,the model shows that during the periods 1979-1989 and 1991-1992 the prices of similar houses in this neighborhood increased with distance from the landfill. Since 1992 no distance premiums were measured. The results of the Community Opinion Surveys received from FERsdale respondents show that there is a very strong feeling in this neighborhood that they have been personally affected by the landfill. The Willingness-to-Pay analysis indicates that respondents from this neighborhood were not fully aware of local real estate market conditions. The findings of the field surveys suggest that few properties have experienced any significant impacts from the landfill other than having views of portions of it. Most properties have a view of the landfill perimeter fence, and about one-third have a view of the toe berm. These views appear to be a primary factor contributing to their feelings. While the results of Hedonic Regression Price Model suggest that their concerns over loss of property value appear to have been justified since 1990,this is not supported by the opinions given by the majority of the most knowledgeable lenders and appraisers,who felt the landfill would have no property value effect. Neighborhood NB(Oak Hills) Results of the Hedonic Regression Price Model indicate that houses in this neighborhood sold for a premium over a similar house in a comparable neighborhood during the period from 1989-May 1994. The average premium was$12,600.Property values were found to increase with distance from the landfill,perhaps reflecting the desirability of living away from the busy Bailey Road and nearby commercial areas. The results of the Community Opinion Surveys received from Oak Hills residents show that nearly three-quarters felt that they had been personally affected by the landfill. Traffic on Bailey Road was their primary concern. The willingness-to-Pay analysis indicates that respondents generally were willing to pay more for a similar house in a comparable neighborhood than would be necessary, suggesting that they were not fully aware of local real estate market conditions. 10 The findings of the field surveys suggest that the Oak Hills neighborhood has been virtually unaffected by any landfill impacts, less so than any of the other primary neighborhoods. As the Hedonic Regression Price Model found no loss of premium in this neighborhood, it appears that concerns of residents that they have been affected by the landfill are generally unsupported. Neighborhood NC(Woodside) Results of the Hedonic Regression Price Model indicate that with the exception of 1989, houses in this neighborhood did not sell for a premium over similar houses in a comparable neighborhood during the period from 1982-May 1994. Since 1990, sales prices were found to decrease with increasing distance from the landfill. The results of the Community Opinion Surveys received from Woodside respondents indicated that nearly three-quarters felt they had been personally affected by the landfill. Their primary concern was loss of property value. They expressed a"wilLngness-to-pay" considerably more than would have been necessary for a similar house in a comparable neighborhood away from the landfill. The results of the field surveys indicate that this neighborhood has experienced very few impacts.Four-fift of the parcels have a view of the landfill's perimeter fence. Although the sound of backup "beeps" from landfill vehicles was recorded for half of the parcels in the early field surveys, complaints were registered and a change in landfill operations occurred that eliminated these sounds. This was verified in the last field survey. Residents in this neighborhood believe they have suffered a loss. Nevertheless,the Hedonic Regression Price Model has suggested that no loss in property values has occurred in this neighborhood because of the construction or operation of the landfill. Neighborhood AE(Bailey Road) The parcels along Bailey Road represented a unique situation that made their inclusion in this study problematic. First,the houses are of widely varying type, size, and age. Second, a large portion of this "neighborhood"was demolished during the study period to make room for the new BART parking lot. Third, and most importantly,the small number of homes and lack of sales data made it impossible to perform both Hedonic Regression Price Model and Willingness-to-Pay analyses. Though this area was included in the Community Opinion Surveys,the small number of respondents from this area made it difficult to make inferences about the opinions of residents as a whole. However,these parcels were included in the series of three site visits. In general,this is a heavily impacted portion of the primary neighborhoods. Almost all of the parcels are exposed to noise from landfill transfer trucks. Many of the parcels experience transfer truck litter and odor. One-third of the parcels have a view of the landfill buildings or service mads. Every parcel in this area is impacted to some degree,with at Ieast one-half experiencing multiple impacts. II Chapter 9: Recommendations As shown in the previous chapter,the findings of the Hedonic Regression Price Model and support surveys generally reinforce one another. For example,where landfill-generated impacts • have been observed in the field surveys, computer model results provide a quantitative measure of their influence on property values. Where results of the model suggest that a loss of premium has occurred, respondents to the Community Opinion Surveys reported they have felt personally affected. Some noteworthy inconsistencies in the results of the model and support surveys have been found. There is a generally widespread feeling in all of the primary neighborhoods that the landfill has affected residents and their property values. Yet,in two of the neighborhoods, Oak Hills (NB) and Woodside(NC),this feeling is not validated by any of the findings of the computer price model and support surveys. A loss of premium has been found in the Hillsdale neighborhood (NA), yet the magnitude of the loss is much less than the residents have claimed. The generally low level of landfill impacts recorded by ICPA staff in the field surveys in this neighborhood appears to be closely'related to the actual level of premium loss calculated by the Hedonic Regression Price Model. It must be reiterated here that the results of the Hedonic Regression Price Model are average values for specific neighborhoods. The actual value of a particular home in a neighborhood at any point in time is dependent on many factors. An appraisal would be needed to establish the price of any particular parcel. The recommendations of the Keller Canyon Landfill Property Valuation Study for each of-the primary neighborhoods are as follows: Neighborhood NA (Hillsdale) There have been premiums (higher prices paid than for similar properties in comparable neighborhoods) averaging $5,700 experienced in this neighborhood extending over many years. Between 1991 and May 1994, these premiums disappeared. This occurrence coincides with site approval, construction, and operation of the Keller Canyon Landfill. A general loss of property values in this neighborhood has occurred. A compensation or mitigation program may be warranted for properties in this neighborhood. An appraisal of each particular property is needed. The sales history of each property must be documented. It is necessary to know when the parcel was purchased and/or when it was sold, and who was involved in the transactions. Compensation would not necessarily go to the current owner. Alternative compensation approaches should be investigated. Neighborhood NB(Oak Hills) There have been significant premiums in this neighborhood over all years relative to comparable neighborhoods. There has been no loss of premiums in the time between the decision to locate the landfill in Keller Canyon and its operational status in May 1994.No compensation program is indicated for this neighborhood. 12 Neighborhood NC(Woodside) Except for an unusual premium in 1989,no premiums historically have existed in this neighborhood relative to comparable neighborhoods. Sales prices have been higher close to the landfill and lower farther away. No compensation program is indicated for this neighborhood. Neighborhood NE(Bailey Rood) As noted in the previous chapter,there is great variation in the characteristics of the properties along Bailey Road. Historical sales data for this area are not plentiful. A large number of homes in this area recently were demolished for the BART parking lot. The parcels along Bailey Road are greatly impacted by traffic on this busy thoroughfare. Many of them were found in the field surveys to be severely impacted by landfill transfer trucks, especially from noise, litter, and odor emanating from these vehicles, and a few also are affected by views of the landfill service road. Under this complex set of circumstances, and lacking sufficient historical sales data, it is difficult to provide any definitive recommendations for this area. Because parcelb Jong Bailey Road are heavily impacted by landfill traffic activities, more so than parcels in the primary neighborhoods, a compensation or mitigation program may be warranted. Because of the existing traffic an14 other activities appraisals of individual parcels will be needed. Conclusion of the Study In approaching the Keller Canyon Property Valuation Study from so many different perspectives, a comprehensive picture of the effects of this regionally needed but locally unwanted facility on nearby neighborhoods has emerged. The Keller Canyon Landfill has been found to be a classic example of a "locally unwanted land use" (LULU). A loss in property values has been documented for one neighborhood near the landfill but not for two others. One conclusion has emerged from this study. The cause and effect relationship of the introduction of a landfill into the landscape near established neighborhoods, and the resultant adjustment in housing prices, can be much more complex than initially it might appear. The distance from the landfill alone may not be enough to explain the value prospective buyers place on homes in a neighborhood. The level and accuracy of housing market information held by buyers and sellers may be a factor.Landfill impacts, whether real or perceived, may contribute to the "image" of the neighborhood held by its existing residents,local realtors, and prospective buyers. This may translate into a greater eagerness to sell on the part of homeowners. The attitudes of, and negative publicity generated by,neighborhood residents may damage the image of neighborhood. This is what Alan K. Reichert in his 1991 study of the impact of landfills on property values terms a "self-fulfilling prophesy." It is difficult to pinpoint what or who actually may have caused a loss of property values in one of three neighborhoods near the Keller Canyon Landfill.What can be said with certainty is that the growth of eastern Contra Costa County has resulted in a need for an additional solid waste disposal facility. Keller Canyon was selected as the site for a state-of-the-art sanitary landfill. The landfill was constructed and has been operating for over two years. It has been a locally unwanted land use. Many nearby Pittsburg residents and city officials have vigorously opposed it over a period of several years. This opposition has been well documented in the media. The construction 13 and operation of the landfill has had some impacts on nearby residential neighborhoods. Finally, one neighborhood has experienced a loss of premium since the decision to locate the landfill nearby. 14 s ` Table 1:Keller Canyon Landrdl Chronology of Events Pre-Keller Phase(Spring 1984-December 1986) Spring 1984 Landfill siting study identifies the Keller location as a potential landfill site. d-1984 This location is fist identified as a possible site for a Inndfiil. alt.1984 The Central Landfill project is announced. This project specified the use of three canyons for landfills,including a portion of the Keller Canyon.The head of the canyon was not part of the proposal. May 24, 1985 Notice of Preparation is given for the EnvironmeaLll Impact Report(EIR)for the Central Landfill. Spring 1985 The original sponsor submits a project description for a smaller version of the landfill (does not include the southern part). April 28, 1986 The Draft EIR for the Central Landfill is circulated for comment. June 16, 1986 Comment period for the Central Landfill Draft EIR ends. December 1986 The Central Landfill application is withdrawn,citing inadequate political support. Site Selection Phase(1987-January 1990) 1987 Blue Ribbon task force studies sites for landfill. Keller Canyon is not included on the list. ovember 1988 Application is submitted for Bailey Road Landfill General Plan Amendment. November 1988 Board of Supervisors puts this site on the ballot as an advisory measure along with three others.None:receives a majority vote. )ecember 1988 The original sponsor announces taldng an option on the southernmost Keller Canyon parcel. January 1989 An agreement is reached between the California Waste Management Board (CWB) and the County of Contra Costa that the site would be designated as a"reserve site"in the County Solid Waste Management Plan(CoSWMP)and General Plan in order to demonstrate the Count's disposal capacity. February 1989 Bailey Road Landfill General Plan Amendment application is withdrawn. February 1989 Keller Canyon Landfill project is proposed by Boyd Olney. April 1989 A public scoping session is held for the Keller Carryon Landfill EIR y 1989 Contra Costa County enters into a contract for preparation of the EIR une 1989 Zoning Administrator(public)hearing is held regarding the Draft EIR for the CoSWMP,where Keller is cited as one of five possibilities. August 1989 CoSWMP is circulated to cities for approval. IMa 1989 Board of Supervisors approves the General Plan Amendment with five landfill sites, including Keller Canyon. ober 30, 1989 The Keller Draft EIR is distributed for comment,starting the required 45-day comment period. avembrr 28, A public hearing is held at Ambrose Center to allow public comment of the Draft EIR 1989 mber 6, The County Solid Waste Commission holds a hearing to provide staff with comments 1989 Ion the Keller Draft EIR. 21 ber 12, The County Board of Supervisors approves the COSWMP,and Contra Cassa County 1989 accepts it. 14, Draft EIR comm=l periods ends. 1989 anuary 1990 AB 939 is enacted,which includes the requirement for new county waste management plans(Countywide Integrated Waste Management Plan). Site Approval Phase(February 1990-May 1991) ebruary 1990 The Zoning Administrator(public)accepts the Keller Canyon landfill EIR as adequate and complete and recommends that the Board of Supervisors certify it. The Planning Commission recommends approval of the land Use Permit(LUP)for the Keller Canyon Landfill to the Board of Supervisors. The Board of Supervisors certifies the EIR. The Board holds its first public hearing on the General Plan Amendment and Land Use Permit Conditions of Approval(COA). The Board orders the General Plan Amendment referendum to be placed on the June 1990 ballot. June 1990 The public rejects the referendum to not accept the Keller Canyon Landfill General Plan Amendment. , A public notice is published for the Keller Canyon Landfill Land Use Permit hearing. W y 1990 The Board approves the Land Use Permit subject to the Conditions of Approval. ch 20, 1991 The Regional Water Quality Control Board issues the Keller Canyon Landfill Waste Discharge Requirements. May 30, 1991 The Bay Air Quality Management District issues the Keller Canyon Landfill Authority to Construct. Construction and Operation Phase(November 1991 to Present) October 25, 1991 Initial construction of Keller Canyon Landfill authorized by Contra Costa County. January 1992 Contra Costa County Community Development Department contracts with ICPA to design property valuation study. y 7, 1992 Keller Canyon Landfill opens. ovember 1992 Contra Costa County Community Development Department Contracts with]CPA to conduct property valuation study. August 22, 1993 Keller Canyon Dump Alert meeting,sponsored by Citizens United,is held at Stoneman Park in Pittsburg.Topics on the agenda included: 1) Request by Keller to mass import asbestos,contaminated dirt from military and infectious medical wastes. 2)Heath risk report.-blowing dust and contaminated garbage. 3)Property values update-average loss$40,000 per home. 4 Community mitigation fees. 22 k mac, Pit ton • � i •�r �_�» �i �• ! 5 ! 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IK n F°kFR „(�',`.�+.,� .rte , 1 ..�'; .. fie.�• ,: !JJ l♦L � ter„—'�' �^`;� •,• �. �` `n � , r,;..•; ..- � � ..to � y.�.-} G • Y•ititie ' IS Oz L—' L M J MINUTES OF THE KELLER CANYON LANDFILL LOCAL ADVISORY COMMITTEE February 8, 1995 Members Present Glen Williams, Chair, Bay Point MAC Dave Hobbs, Alternate, City of Pittsburg Roger Riley, Delta Board of Realtors Al McNabney, Mt. Diablo Audubon Society Frank Aiello, Citizens United Scott Gordon, Alternate for KCL, Bruen & Gordon Members Absent Mary Erbez, City of Pittsburg, (notified staff) Carmen Gaddis, CCC Planning Commission Rev. Lynn E. Kirkland,, TDMA Rev. Frank Selkirk, Pre-school Coordinating Council Alex Dongallo, Ambrose Recreation and Park District Timothy J. Cox, Keller Canyon Landfill Company Others Present Val Alexeeff, Director, Growth Management and Economic Development Charles A. Zahn, County Community Development Deidra Dingman, County Community Development Rebecca Ng, County Environmental Health (LEA) Steven C. Oriick, Institute for Community Planning Assistance (SSU) Steve Lewis, Institute for Community Planning Assistance (SSU) Jane Riley, Institute for Community Planning Assistance (SSU) Dave Hobbs, City of Pittsburg Kevin Carunchio, City of Pittsburg Bob Maes Rita Hinde Jim MacDonald Jose-Luis Agredano Antonio Loze Lance J. Dow Mark Clark Mary Martin - Grace Jones Andrew Kobayashi R.M. Benson Greg Adams Peter S. Terry Others Present (continued) Stefan Burdt Frank Sharkey Gary Carr Vicky Carr Sally Bere Bob Miller Meredit Furtney Jeff Fischer Jane Fischer Dave Fogleman Pat Baird 1. INTRODUCTIONS. Introductions were made. ANNOUNCEMENTS. There were was not a quorum of members present. APPROVAL OF MINUTES. No action could be taken due to the lack of a quorum. OLD BUSINESS. There was no old business. 2. FACILITY OPERATIONS UPDATE. Scott Gordon indicated that there were no changes in operations to report. ALTERNATIVE DAILY COVER PROGRAM. Roger Riley asked when the Alternative Daily Cover Program would take effect. Scott Gordon replied that BFI had scheduled to begin in late spring pending necessary approvals. Frank Aiello asked if the Local Enforcement Agency (LEA) would allow stockpiling. Rebecca Ng responded that they are awaiting word from the Regional Water Quality Control Board (RWQCB) and the Bay Area Air Quality Management District (BAAQMD). There is no formal review or formal application. If the RWQCB and BAAQMD approve the proposal then the LEA is likely to approve it. Frank Aiello inquired if the dust suppressant used is magnesium chloride. Rebecca Ng indicated that this compound is designated by the BAAQMD for use as a dust suppressant. Scott Gordon added that there are no health-based impacts related to the compound. Frank Aiello indicated that he felt a health risk assessment is needed to analyzed potential impacts associated with the spraying of magnesium chloride d on a contaminated soil stockpile. Rebecca Ng replied that the matter would be discussed with the BAAQMD before a decision is- made. Frank Aiello said the information should be made available to citizens before the ADC is approved. Scott Gordon said research has been done previously by the BAAQMD and that public hearings were held on the permit. 2 Roger Riley inquired as to the nature of the contaminated soils. Scott Gordon said that the soils were contaminated by materials as diesel fuels, heavy oils, gasoline remnants. The soils typically come from gas tank removals or industrial sites. These soils are wastes which are already approved for disposal at the landfill. Dave Hobbs stated that Mayor Erbez has written to the LEA discouraging approval of the ADC program. Additionally, it is the City's position that the California Environmental Quality Act (CEQA) process is needed prior to approval of the ADC program. Dave Hobbs said the second page of the advisory, which had been handed out, is missing and that the LEA advisory is not intended as a substitute for CEQA. Hobbs indicated he as pleased that Rebecca N.g indicated that the County is looking at this matter seriously. Al McNabney inquired if there was an application. Rebecca Ng replied that there is no application but a letter of proposal. Many other requirements need to be met before a permit is actually filed or modified. The proposal is intended to start preliminary discussion regarding the proposal,without having to file an application and trigger the state permit processing timelines. Glen Williams noted that Frank Aiello's concerns are being looked at. Frank Aiello commented that in the LAC meeting in July that BFI representatives had stated that there was no need for cover material. Glen Williams asked that the LAC and community be kept informed about the ADC program. Rebecca Ng said she would do SO. Glen Williams asked if anyone had any questions for Rebecca Ng. James MacDonald indicated that he felt the issue regarding toxins on top versus toxins inside, because the reactions could be very different. Rebecca Ng responded that the LEA would not act alone but would work closely with the BAAQMD and RWQCB. 3. PRESENTATION ON FINDINGS OF THE KELLER CANYON LANDFILL PROPERTY VALUATION STUDY BY THE INSTITUTE FOR COMMUNITY PLANNING ASSISTANCE (ICPA) OF SONOMA STATE UNIVERSITY. Steve Orlick, Project Director, extended appreciation for the attendance by the LAC members and audience. He explained that the ICPA is a non-profit, independent research center. The students used for project research are carefully selected and trained. The property valuation study was a more comprehensive study than ever done before for "locally unwanted land uses" (LULU's). ICPA was cognizant of the sensitive nature of the report. The approach used included a standard economic methodology and model, community opinion questionnaires ("Delphi"), field studies related to 3 physical issues (three.rounds under different conditions), attitudes and opinions of lenders and appraisers. The various segments of the study supported each other and the results were consistent. By a show of hands, most members of the audience indicated they were residents of a "primary" neighborhood, primarily from Hillsdale (Neighborhood A). Steve Orlick explained the document. It is divided into two parts: the Executive Summary and the full report. While most of the document is written for the understanding of a general audience, portions by necessity are in technical jargon. A glossary of terms is therefore included. Steve Orlick explained that the methodology used in the survey which included such factors as real estate trends, price models, comparable neighborhoods, support surveys and integration of statistical and survey results by neighborhood. Steve Orlick said the LAC provided good input which was included in the study. Steve Lewis, Project Co-Director (an economist and.statistician), explained that the study was a detailed analysis. He looked at impacts from many different angles. A wealth of information was collected and analyzed. Real Estate Trends. The analysis included looking at the sales price of homes between 1979 and 1993 for'the Bay Area, California, the United States and two "composite" neighborhoods in Pittsburg. The composite neighborhoods consisted of a combination of a primary neighborhood (which are in close proximity to the landfill) and comparable neighborhoods. Statistics indicated similarities in prices in Pittsburg neighborhoods compared to the state as a whole. All Pittsburg composite neighborhoods experienced significant appreciation of real estate values over the entire 15 year period. Although real estate values for the Pittsburg neighborhoods generally fell below those of the Bay Area, growth rates were similar to those of the state and the United States. General Categories Considered. General categories used in the analysis included: base price, business cycle, housing characteristics, geographic area and location. The sales history for each home was reviewed. A larger range is used to reduce the margin of statistical error. Sometimes numbers are called "insignificant" for purposes of the report. Neighborhood Premiums. The most popular and extensively used technique for measuring the impact of LULUs on residential property values is the Hedonic Regression Price Model (HRPM), a statistical procedure that predicts the sales price of a house based on. a collection of housing characteristics (such as square footage, 4 lot size, number of rooms, bedrooms, bathrooms, view and location). The same types of homes were analyzed, both close to and farther away from the landfill. In Neighborhood A (Hillsdale) buyers paid a premium (paid more for a home in Hillsdale that a similar home farther away from the Landfill) of $5,000 to $8,000 until around 1989-1990. After 1990, these homes sold for the same as comparables (similar homes not near the landfill), this is an indication that the landfill could have impacted the prices. Neighborhood C (Woodside) had positive premiums in only 1989. Neighborhood B (Oak Hills) was unique (for statistical reasons) because it is quite new and there have been positive premiums since 1989. Distance Premiums. Within the primary neighborhood, the distance was looked at in feet from the landfill to the parcels. These are included as averages. For Hillsdale, the premiums were on areas further away from the landfill, however many of the premiums were from 1979-1983 when the landfill was not a factor. Oak Hills homes had positive premiums from 1989-1993, except in 1990. Woodside homes had positive premiums although they were closer to the landfill from 1990-93, which was unique but could be due to the golf course expansion. Lenders and Appraisers Survey. In this, the first support survey, 40 lenders and appraisers (picked at random), were anonymously called and asked questions regarding loans or appraised value on homes on Jacqueline Drive. Six months later another 40 lenders and appraisers (picked at random) were called. Seventy percent said the landfill would have no effect. Others, less familiar with the area, said they didn't know or guessed it might. Field Surveys. Field surveys were done to determine if physical impacts could be observed. If trends were found then the physical impacts may be able to further explain or discredit the information due to such factors as view or odor. In Neighborhood A (Hillsdale) most had a view of the perimeter fence and others could see toe berm, in Neighborhood B (Oak Hills) there was a partial view of fence or berm, and in Neighborhood C (Woodside) almost nothing could be discerned of the landfill. Neighborhood E (Bailey Road) was the most affected, mostly by trucks, some noise and escaped trash and/or odor. Community/Delphi Surveys. A Delphi survey is a systematic method for soliciting and compiling judgments, and possibly reaching consensus, on a particular neighborhood. The study tried to determine the feelings and concerns of the residents (also to help focus observations for the next round of field surveys). A series of surveys were conducted, then given responses for purposes of fine tuning (price, why sales prices were different). Instead of cross sections/random sampling, a determinations was made to invite all of, those interested to participate. There was a good return rate. 5 An analysis of the results of different survey approaches supported each other. It was found that anxiety was higher in Neighborhoods B and C than physical evidence could support. Lenders and appraisers did not support economic findings. Recommendations. There has been a loss of premiums in Hillsdale since 1990. It was felt that this could be due to the landfill siting, approval, construction and operation. It was recommended that a compensation program may be warranted. Any compensation program would be up to the County Board of Supervisors. Appraisals were recommended for the Hillsdale neighborhood prior to or as a part of the compensation program. It recommended that no additional analysis or compensation would be warranted for the Woodside and Oak Hills neighborhoods. Bailey Road may have been affected, but further conclusions could not be made because there was limited data due to the unique nature and age of this neighborhood. Appraisals were recommended for the Bailey Road neighborhood would be warranted. The reason for the loss of premium is at best speculative, the desire is to limit conclusions of the study and any additional compensation program to facts and data. Public Comment on the Property Valuation Study. James MacDonald noted that the trend of developers is scaling down in new development because they don't feel they can sell bigger homes in Pittsburg and homes are being converted to rentals. Steve Lewis said there was no data on rentals, looked at housing characteristics and sales data. James MacDonald said smaller homes mean more rentals and lower values. Val Alexeeff responded that the City of Antioch experienced the same issue, all of East County does. There is an opposite issue in the San Ramon Valley. Antioch and Pittsburg have continued to battle to get housing diversity. The issue of "developer preferences" is an ongoing Countywide/statewide issue. This is different and separate than landfill impacts. He indicated that upon determining an impact that the next step is to determine the exact degree. Steve Lewis explained that they were not asked to look at new development or projects, but instead evaluated potential impacts on existing residences. Andrew Kobayashi said the report did not look at how long homes were on the market compared to other areas. Steve Lewis replied that was not a part of the report; it would be difficult to pinpoint that as a landfill impact and additionally that factor does necessarily directly affect property values. Andrew Kobayashi then asked how to look at time on the market, how can this be measured in dollars. Steve Lewis replied that he did not have access to that information, but that some historical sales information in the report may be helpful. 6 Frank Sharkey asked if Bailey Road was compared to Arthur Road in Martinez; he felt these could be comparable neighborhoods from years of landfill traffic. They would both share a stigma related to proximity to a landfill. Steve Lewis indicated that it is difficult to fully analyze because of the complexity of the neighborhood and lack of comparables. Arthur Road is different because it is an older landfill. Many property value studies have been done, the results are very different dependant on site/location and many other factors. Frank Sharkey said he understood the recession trends but felt Bailey Road was unique. Bob Mull said he felt that the landfill traffic would be comparable on Arthur Road or Bailey Road. There was concern about depreciation that will be suffered, but think it should be considered when compensation is discussed and decided on. Lance Dow said he appreciated the fact that refinancing was looked at but what about debt-to-equity ratio, he felt additional information is still needed. He had to pay $15,000 to refinance because there was no debt-to-equity ratio. As interest rates were low people wanted to refinance, but without a debt-to-equity ratio one could only refinance if they had cash. He is now stuck with a higher interest rate and this is a loss which should be considered in the Property Valuation process. Dave Hobbs said there was more loss than $5,000 or $6,000 if someone is stuck at the higher interest rate due to lack of debt-to-equity ratio. Steve Lewis indicated that this was not a part of the study. The refinancing/interest rate issue is complex, but that it would be difficult maybe even impossible to quantify and include into the study. Val Alexeeff asked the LAC members and audience to follow-up in writing with the County on those questions that were more complex and could not be answered in this meeting. Upon receiving the written materials the consultants could respond and/or request authorization from the County if additional work was requested. Dave Hobbs asked where the County planned to go with the Study now. Val Alexeeff said it would go back to the Ad Hoc Solid Waste Committee, then to the full Board of Supervisors to decide. Roger Riley said that lost equity (and lack of ratio) and related difficulties in refinancing which resulted in continued higher interest rates are a bigger/long term effect. He asked whether this be addressed at the meetings of the Ad Hoc Solid Waste Committee or Board of Supervisors. He indicated that a comparable neighborhood used in the report (ANC) in Antioch was affected by the Antioch dump. He indicated he had also experienced occasions where a sale was lost after disclosure (before landfill approval). It was stated as the reason for cancellation of sale. He felt these issues should be considered before the matter is -taken to the Board of Supervisors. 7 Val Alexeeff stated that he appreciated the comments and that having them in writing would be helpful. There is not good data for statistical analysis of "opportunity costs" - how much and when. Steve Lewis said the Antioch neighborhood was not a major factor in the study. They conducted that study to include the matters required by their contract with the County. Premiums could be tracked by years so can relate to chronology/timeline. The annual data gave much more to work with that the month-by-month. Frank Aiello said he wanted to point out: (1) negative press by neighborhood could have impacted, but what about press by the landfill - what impacts might this have had, (2) appraisals from the lawsuit showed $20,000 plus loss - how can this discrepancy be cleared up, (3) the lenders and appraisers can't "redline" so he felt the telephone survey is not realistic. Jim MacDonald stated when he moved in homes sold very quickly, but now sales just sit there for a long time and as a result the homes are turned into rentals. Did the survey consider rentals. Steve Lewis replied that the report did not look at rentals versus owner occupied residences; it just analyzed values (sales); if rentals were affecting property values this should show up in sales data when the homes ultimately sold. Frank Aiello inquired if San Marcos houses were looked at as comparables. Steve Lewis responded they were not looked at as comparable because they are too far away to account for all the necessary characteristics. Many other property value reports were looked at. Roger Riley stated that lenders and appraisers are not useful for this report because they are on commission. They are very limited as to what they can and cannot say and that there were misinterpretations because of not being familiar with the industry jargon. Steve Lewis replied that it was just a part of the whole study and he did not think the information should be thrown out. Bob Creaman said there should be clarification ' regarding the appraisal recommendation. It should be recommended to the Board of Supervisors that the appraisal were done on Neighborhoods A and E but not on Neighborhoods B and C. Steve Lewis and Steve Orlick both noted that was correct,the recommendations were to further look at Neighborhoods A and E. Val Alexeeff stated that they have answered their charge; the property by property analysis is not a part of this report. The assumption is that this could be the next step. Jeff Fisher inquired.if the potential impact BART could have on property values was 8 t looked at. Steve Orlick replied that homes disappeared due to the BART extension. Jeff Fisher inquired if BART and interchange construction could have skewed results (because they would have a positive impact). Steve Lewis replied that it was not quantified. Val Alexeeff noted that studies in the past have shown BART has a positive impact. Dave Hobbs said that if BART is not considered then there is a hole in the study. This offset must be part of the consideration. Val Alexeeff replied that those questions should be included in a letter and sent to the attention of the Ad Hoc Committee. Of course, there are many levels of consideration. The next step is to determine to what extent and how to deal with it, pose it to the Ad Hoc Committee and then to the Board of Supervisors. We will send notices to interested parties to attend the Ad Hoc Solid Waste Committee meeting. Grace Jones inquired if this was all, or would there be additional studies a year or more from now because things change. Val Alexeeff replied that the more time that passes the harder it is to quantify, but that the study was to look at property values through two years of landfill operation and that has been done. Steve Lewis said the impact of BART could impact a five-mile area. Facts and figures are hard to come by to quantify future impacts, this would likely be inaccurate for statistical or modeling purposes. Grace Jones stated she did not want this to be the final word; she wanted this matter to be open for further analysis in the future. Frank Aiello urged keeping in contact with the Board of Supervisors; without the community keeping vocal concerns will like not be heard. Al McNabney said it seems that the general/large-scope has been completed. For individuals to deal with specifics one should make their concerns known in writing to Val Alexeeff and the Ad Hoc Solid Waste Committee, then the Board of Supervisors. Val Alexeeff agreed with Al McNabney. He added that he is unsure where the Board will go from here. There were no further questions. Glen Williams stated that the function of the Committee is to provide a written response, but without a quorum there can be no vote to write a letter to the Board of Supervisors. The intent is that the minutes will represent the Committee's concerns to the Board of Supervisors. Frank Aiello said it takes three members to call a special meeting next month per the by-laws (ADC,etc.). There was no interest expressed by other members to hold a special meeting. 9 a 4. CONSIDER THE DURATION OF THE KELLER CANYON LANDFILL LOCAL ADVISORY COMMITTEE. Due to the lack of quorum no action could be taken. 5. PUBLIC COMMENT. No separate public comment was submitted aside from that which was provided in discussion of the above agenda items. 6. AGENDA TOPICS FOR NEXT MEETING. This Committee is not expected to schedule additional meetings (Committee sunset date of February 28, 1995 has been established by the Board of Supervisors). 7. ADJOURNMENT. The meeting was adjourned. DE)SAACFE895.MIN 10 A44aeA m e t+ C CONTRA COSTA COUNTY BOARD OF SUPERVISORS' AD HOC SOLID WASTE COMMITTEE May 4, 1995 KELLER CANYON LANDFILL PROPERTY VALUATION STUDY Questions and comments discussed at the meeting Glen Williams indicated that the positive impact BART was expected to have on the property values of the local neighborhoods have not come to be (and may not be for quite some time), residents feel that it Is due to impacts from the landfill. Frank Aiello indicated that there were a number of unanswered questions which had been expressed at the Keller Canyon Landfill Local Advisory Committee (LAC) meeting on February 8, 1995. He indicated that on February 8th persons at the meeting had raised the following issues which they felt should have been included in the study: (1) potential impacts to homeowners which were unable to refinance and therefore stuck with a "$200-$300 per month" loss due to the higher interest rates and some homeowners could lose their home; (2) potential impacts from negative press generated by the landfill (like the recent press surrounding the contaminated soils & asbestos) which may now be new additional "disclosure" required for real estate transactions -- unfair that the report "blamed" the residents for negative press; (3) he felt this study and the process to date has been in conflict with the "good neighbor" presence and promises from the County Board of Supervisors that residents would not be able to "see it, hear it or smell it"; (4) potential impacts from the "intangible" of homebuyers which are lost because of the proximity of home to the landfill; and (5) residents deserve compensation and the issue of how to pay that compensation remains - he felt that the landfill should pay for the appraisals and lump sum compensation to residents. Supervisor Gayle Bishop asked staff to contact the Air Board (BAAQMD) and Local Enforcement Agency (LEA) to determine if there have been any verified complaints and if so how many. Mr. Gruen raised questions regarding selection of comparables and residents knowledge of "sales trends". Steve Lewis responded and Val Alexeeff provided a copy of the Property Valuation Study report with the corresponding information. - Page 1 - Ad Hoc Solid Waste Committee Keller Canyon Landfill Property Valuation Study ' May 4, 1995 Lance Dow requested that the consultants provide responses to the following questions which were raised at the February 8th LAC meeting: (1) refinancing problems for residents near landfill; (2) impacts from local homes becoming rentals; (3) impact to values of homes which remain "on the market" for long periods of time; (4) relationship of study and property values with the incoming BART station; (5) were crime statistics looked at in the selection of comparable neighborhoods (the contention is that the primary neighborhoods from the study area are "low crime" and that is a factor of property values); (6) potential impact to homeowners from the "expectation of appreciation"; (7) due to the requirement for "disclosure" of proximity of home to landfill, residents have limited pool of interested homebuyers and that could affect sale price; and (8) what are impacts to property values in light of "kickbacks" which are not shown in the sales price like who pays for termite inspection and other such costs. Frank Sharkey expressed his frustration that this process has taken so long and that it has been almost five years since the landfill was approved and residents have still not been compensated. He wanted to know when this would be resolved and by who, if he did not get action soon from the County he would turn to the courts. Supervisor Bishop indicated that the Board was ready for this issue to be resolved. Supervisor Gayle Bishop indicated that she felt that the above issue about "kickbacks" was a valid point and hoped it could be addressed. Dave Fogleman provided written documentation which he felt proved his inability to sell his home. He asked that the information be considered in this process. John Hawthorne indicated that residents should be compensated because residents moved to this area to be near the open space (per the County General Plan). Supervisor Bishop felt there were still things to be worked out like debt-to-equity ratio (refinancing). She thought that financial hardships are real but most often a function in a change of income (loans are issued based on income) and that the overall real estate market is down (i.e. Vallejo and general real estate trends). James Chalmers (economist representing BFI)presented different approach which they felt would yield different results (i.e. Average Price, distance from landfill). Supervisor Jeff Smith asked that BFI have there information written out and forwarded to the County staff prior to the Board hearing on June 6th and in time for some analysis. - Page 2 - Ad Hoc Solid Waste Committee Keller Canyon Landfill Property Valuation Study May 4, 1995 Supervisor Bishop asked that a full presentation be given to the Board on June 6th. This Committee takes the following actions: 1. Forward the Keller Canyon Landfill Property Valuation Study report to the Board of Supervisors with'the following recommendations: a. Determine whether an impact has taken place on property values. b. Direct staff to determine method of evaluating impact on specific values, if determined there has been a negative impact. C. Determine extent of landfill operators (BFI) responsibility. d. Recommend method of payment if any. e. Direct staff to report back to the Board regarding validated complaints registered with the BAAQMD and LEA. Supervisor Smith recommended that the consultants: (1)further study Neighborhoods A& E related to the appraisal/statistical issues, (2) prepare formal responses on issues raised by Lance Dow (i.e. debt to equity), and (3) respond to issues raised by James Chalmers. Supervisor Smith asked that the matter be brought to the full Board of Supervisors on June 6th with as much information as possible. Supervisor Smith accepted the amended motion. DD6:ADHOC.KCL - Page 3 - 05/23/95 14:34 BAfGM QUALITY BA'Y AREA AIR NLANAGEMENT DISTRICT FAX COVER MEMO CCNT1iA COSTA COUNTY VOMMUNITY Liz ;;L(.,r' rwr 1P.1'ARTMENT CMINTY ADMIN. BU=ING TO: DEIDRA n 1 NryllAN DATE m M x995 FROM: MILTON FELDSTE IN, APCO MESSAGE:rvifl Llft RFSruM3t; TO YOUR I.,rTTFR (FAX) MAY 22: .Tan 1 , 1942 - ?' MIX- 1995 14 confirmed cvrmT lairjt,n PO imcanflrmjd complaints 0 violntinn naticcu iuuucd G PAGES TO FOLLOW IF YOU ARE HAYING PROBLEMS RECEMNG$ PLEASE CALL. GLORIA PERRYMAN, EXECUTIVE SECRETARY PHONE 413 749-4956 EXT. 4956 BAY AREA AIR QUALITY MANAGEMENT DISTRICT FAX NUMBER (415) 928.8560 939 ELLIS STREET SAN FRANCISCO. CALIFORNIA 94109 9 (413) 771.6000 • FAX (413) 9284560 05/23/95 14:34 BAAMM 002 Bay Area Air Quality Management District 05/23/95 For period (01Jan92 - 22May95) Page 1 » COMPLAINTS RECEIVED AGAINST << Plant Keller Canyon Landfill Company 4618 901 Bailey Road Fittsburg, CA 94565 Complainant -------------------------------------------------------- 17261 -------------------------- -----_--- -..-17261 Dust "GRATING DUST" Cnfrm Rec 19Aug92 (10:54) Contct 19Aug92 IDI 8093 Occd 19Aug92 ( 8:45) Report 20Au992 Dspd 29Aug92 (11 :n2) Update 28Aug92 Contact In Person 1552 (11:24) 17587 Dust Uncnf Rec 04Sep92 (16:14) Contct 04Sep92 IDI 8351 Occd 04Sep92 ( 5:00) Report 10Sep92 Dapd 04Sep92 (16:27) Update 118ap92 Contact In Person 3557 (16:31) 17680 Dust 11EXCESSIVE" Uncnf Rec i1Sep92 ( 8:02) Contct 115ep92 IDI 6470 Occd 116ep92 ( 7:55) Report 11Sep92 Dspd llSep92 ( 8:41) Update 18Sep92 Contact Tn Person 1552 ( 9:00) 17743 Dust Uncnf Rec 15Sep92 (15:22) Contct 15Sep92 IDI 8328 Occd 15Sep92 (12:00) Report 16Sep92 Dspd 153ep92 (10:19) Update 253op92 Contact None Requested 1552 (16:30) 17760 Dust "EXCESSIVE" Uncnf ` Rec 163ep92 (10:25) Contct 155ep92 IDI 8545 Ovcd 165ep92 (10:25) Report 15Sep92 Dspd 16Sep92 (10:38) Update 25Sep92 Contact In Person I552 (10:40) 17766 Dust Cnfrm Rec 16Sep92 (13:30) Contct 16Sep92 IDI 6551 Ovvd 168ep92 (13:10) Report 07OCt92 Dspd 16Sep92 (13:42) Update 080Ct92 Contact In Person 1550 (13:56) 17885 Dust Cnfrm Rec 223ep92 (14:22) Contct 225ep92 IDI 8662 Occd 22Sep92 ( 9:00) Report 235ep92 Dspd 223ep92 (14:41) Update 255ep92 Contact In Person I552 (14:47) 17951 Dust "EXCESSIVE" Cnfrm Rac 24S*p92 (13:16) Contct 24Sep92 IDI 8720 Occd 245ep92 (13:00) Report 220Ct92 Dspd 24Sep92 (13:35) Update 04NOV92 Contact In Person lbbO (13:44) i 05/23/95 14:35 HAFilrriD 003 Bay Area Air Quality Management District 05/23/95 For period (01Jan92 - 22May95) page 2 » COMPLAINTS RECEIVED AGAINST << Plant Keller Canyon Landfill Company # 4618 901 Bailey Road Pittsburg, CA 94565 Complainant ---------------------------------------------- ------- 28399 Dust „EXCESSIVE" Unonf Rec 120ot92 (13:21) Contct 130Ct92 ID# 9131 Occd 120ct92 (13:21) Report 130ct92 Dspd 130Gt92 (10:38) Update 09NOV92 Contact In Person 1552 (15:20) 18608 Dust Cnfrm Rec 190ct92 (14:03) Contct 190ct9a zDf 9319 Oced 190ct92 (10:00) Report 20OCt92 Dapd 190ct92 (14:11) Update 18Nov92 Contact In Person 1552 (14:30) 18939 Dust Cnfrm Rec 02Nov92 (13:38) Contct 02NOV92 IDI 9614 Occd 02Nov92 (13:15) Report 07Dec92 Dspd 02Nov92 (13:44) Update 09DOC92 Contact In Person 1557 (14:01) 18956 Dust "EXCESSIVE" Cnfrm Reo 03Nov92 (11:30) Contct 03NOV92 ZD# 9630 Occd 03Nov92 ( R:30) Report 03Nov92 Dspd 03Nov92 (11:50) Update 09NOV92 Contact In Person I552 (11:49) 18958 Dust "EXCESSIVE" Cnfrm Rec 03Nov92 (11:42) Contct 03NOV92 IDI 9632 Occd 03Nov92 (11:30) Report 03Nov92 Dspd 03Nov92 (11:51) Update 09NOV92 Contact In Person I552 (12:58) 19125 Dust "EXCESSIVE" Cnfrm Rec 09Nov92 (10:48) Contct 09NOV92 IDI 9785 Occd 09Nov92 (10:20) Report IONOV92 Dspd 09Nov92 (10:57) Update 18NOV92 Contact In Person I552 (11:23) 19132 Dust Cnfrm Rec 09Nov92 (13:51) Cvntut 09Nov92 IDI 9791 Ocod 09Nov92 (10:00) Report IONOV92 Dspd 09Nov92 (13:58) Update 18Nov92 Contact In Person 1552 (14:42) 19155 Dust Cnfrm Rao 10Nov92 (15:07) Contct 10Nov92 IDI 9812 Ocod 10Nov92 (15:00) Report 08DOC92 Dspd 10Nov92 (15:18) UPdats 160OC92 Contact Message 1557 (16:37) {75/c'3/zJ5 14:35 J**4LJFW �µ Say Area Air Quality Management District 05/23/95 For period (01Jan92 - 22May95) Page 3 >> COMPLAINTS RECEIVED AGAINST <K Plant Keller Canyon Landfill Company 4616 901 Bailey Road Pittsburg, CA 94565 complainant ---------------------------------------------------------------------- 19543 Dust Uncnf Rec 30Nov92 (14:13) Contct 30Nov92 SDI 10169 Occd 30Nov92 (13:00) Report 17Dec92 Dapd 30Nov92 (14:18) Update 22Dec92 Contact In Parson I557 (14:37) 19545 Dust Uncnf Rec 30Nov92 (15:03) Contct 30Nov92 IDI 10171 Occd 30Nov92 (14:50) Report 17Deo92 Dspd 3nNov92 (13:18) Updata 22Dau92 Contact In Person 1557 (15:32) 19546 Dust "EXCESSIVE" Uncnf Rec 30Nov92 (15:07) Contct 30Nov92 IDI 10172 Occd 30Nov92 (13:30) Report 17Dec92 Dspd 30Nov92 (15:21) Update 22Dec92 Contact In Person I557 (15:07) 19547 Dust Uncnt Rec 30Nov92 (15:18) Contct 30Nov92 IDI 10173 Occd 30Nov92 (13:30) Report 17Dec92 Dspd 30Nov92 (15:21) Update 22Dec92 Contact Message 1557 (15:47) 19913 Dust Cntrm Rae 2lDec92 (15:15) Contct 21Dec92 IDI 10490 Occd 21De v92 (15:00) Report 21Dfac92 Dspd 2lDec92 (15:20) Update 28Deic92 Contact In Person 1552 (15:35) 20315 Dust "EXCESSIVE" Cntrtn Rac 26Jan93 (13:45) Contct 26Jan93 IDI 10859 Wed 26Jan93 (13:00) Report 18reb93 Dspd 26Jan93 (14:03) Update 24reb93 Contact In Person 1550 (14:17) 20432 Dust Cnfrm Rec 29Jan93 (13:55) Contct 29Jan93 IDI 10969 Occd 29Jan93 (13:30) Report iereb93 Dspd 29Jan93 (14:15) Update; 249'eb93 Contact In Person 1550 (14:34) 22723 Dust Uncnf Rec 06May93 (15:17) Contct 06May93 IDE 13138 Occd 06May93 (15:10) Report 06May93 Dspd 06May93 (15:21) Update 11May93 Contact Phone T552. (15:23) 05/23/95 14:36 BAAQMD 005 Hay Area Air Quality Management District 05/23/95 For period (01Jan92 - 22May95) Page 4 >> COMPLAINTS RECEIVED AGAINST << Plant Keller Canyon Landfill Company 4616 901 Bailey Road Pittsburg, CA 94565 Complainant ------------------------------------------------------ 23350 Smoke Unent Rec 14Jun93 (14:54) Contct 14Jun93 IDI 13709 Occd 14JUn93 (14:47) Report 14Jun93 DSpd 14Jun93 (15:37) Update 16Jun93 Contact In Person 1552 (15:47) 32585 Odor "GARBAGE" Uncnf Rec 13Sep93 (17:05) Contct 13Sep93 IDI 15522 goad 138ep93 (17:00) Report 13Sep93 DSpd 135ap93 (17:11) Update 213op93 Contact Phone I552 (17:30) 25326 Dust "DEBRIS" Uncnf Rec 305ep93 (16:00) Contct 30Sep93 ID# 16016 Occd 29sep93 (16:00) Report 30Sep93 Dspd 30Sep93 (16:14) Update 040ct93 Contact Phone 1552 (16:20) 25736 Smoke Uncnf Rec 200ct93 (21:36) Contct 210ct93 IDI 16418 OCCd 200ct93 (21:36) Report 210ct93 D:pd 210ct93 ( 9:07) Update 280ct93 Contact In Porous) I552 ( 9:40) 28679 Odor "RAW SEWAGE" Uncnf Rec 07Apr94 (15:06) Contct 07Apr94 ID/ 19109 Occd 07Apr94 (14:30) Report 08Apr94 Dspd 07Apr94 (15:33) Update 12Apr94 Contact In Person 1552 (16:30) 26680 Odor "GARBAGE" Uncnf Roc 07Apr94 (15:15) Contct U?Apr94 IDf 19110 oced 07Apr94 ( 9:00) Report 08Apr94 Dspd 07Apr94 (15:34) Update 12Apr94 Contact In Person 1552 (16:40) 28739 Odor "STINKS" Uncnf Rec ilApr94 (21:29) Contct ilApr94 iDf 19172 occd 11Apr94 (21:29) Report ilApr94 uspd 11Apr94 (22:29) Update 10May94 Contact Phone 1363 (22:30) 29369 Dust "EXCESSIVE" Uncnf Rec 27May94 (13:26) Contct 27May94 ID1 19747 Occd 27May94 (12:30) Report 27May94 Dspd 27May94 (14:11) Update 01Aug94 Contact Phone 2550 (14:29) b5/�3/95 14:3b bHHL W Iub Hay Area Air Quality Management District 05/23/D5 For period (01Jan92 - 22May95) Page 5 >> COMPLAINTS RECEIVED AGAINST -c< Plant Keller Canyon Landfill Company # 4618 901 Hailey Road ' Pittsburg, CA 94565 Complainant i�aF --1--------r---w---------------------------albl------ 2546 Odor "TERRIBLE" Unonf Rec 03Apr95 (19:46) Contest 04Apr95 SD/ 2396 OCCd 03Apr95 (17:00) Report 04Apr95 Dapd 04Apr95 ( 8:49) update 06Apr95 Contact Phone 1552 (15:42) 3003 Odor "PAPERMILL" Uncnf Roo 02May95 (17:53) Contct 03May95 ZD# 2817 Occd 02May95 (12:00) Report 04May95 Dapd 03MAy95 ( 8:48) Update 16May95 Contact Phone 1552 ( 9:25) 05/23/95 14:37 BAAffM 007 s day Area Air Quality Management District 05/23/95 For period (01Jan92 - 22May95) page 6 >> COMPLAINTS RECEIVED AGAINST << Plant Keller Canyon Landfill Company f 4618 901 Bailey Road Pittsburg, CA 94565 Complainant --------•------------------------------------------------------------- s=�==Wwww.w!!! S U M M A R Y Complaints Confirmed. . . . . . .14 Unconfirmed. . . . .20 Pending. . . . . . . . .0 Total. . . . . . . . . . .34 Violation Notices Total. . . . . . . . . . .0 tiiiM--- .----iii�Gd!!is!!!!si!!!!!!!!!!r!!!!!M! Send output to Screen (S)<dwfault>, or system Printer (P) , or Exit(E) ? *6LM rvi&rc�_ E. 05-30-1995 09:03AM CCC ENVIRONMENTL HLTH Contra Health Services Department Costa ENVIRONMENTAL HEALTH DWISON CountyfitMartiMartinez.Gelffornia 94553-1352 ' (610)60-2521 DATE: May 30, 1995 TO: Deidra Dingman, Planner Community Development Department FROM: Rebecca Ng, Senior Environmental Health Specialist Environmental Health Division-General Programs SUBJECT: Keller Canyon Landfill Complaints This is in response to your request for information on Keller Canyon lAndfillcomp laints. Approximately 85 operational complaints on Keller Canyon Landfill have been reciived by this Division since December 1991. Only 2 of the 85 complaints were substantiated by the LEA staff. Both of the substantiated complaints occurred before May 1992 during the construction of the landfill. One I complaint was of excessive dust being generated and the other complaint was regarding noise from earth moving equipment. In both instances, the landfill operators immediately corrected the problems upon verbal notification. Additionally, approximately 52 calls on the Keller Canyon Hotline were received from May-November 1992, complaining that Keller Canyon was not opened to the public. RN:slt AMA (10/921, TOTAL P.02 SONOMA STATE UNIVERSITY Cs1'1VVM.* '�^CQ worM�Gan.Gulpmia 9a9a'936(.9 De "wmit6 f Environmental Swiss ono Planning May 30, 1995 Board of Supervisors Contra Costa County Community Development Department Administration Building 651 Pine Street, 4th Floor,North Wing Martinez, CA 94553 Contra Costa County Board of Supervisors: This letter is in response to issues raised by members of the audience during the May 4, 1995, meeting of the Contra Costa County Board of Supervisors, Ad Hoc Solid Waste Committee. Each issue raised at the meeting is listed below followed by our response. Issue 4 actually consists of several issues that all require the same response and are therefore grouped together. Issue 1: Several members of the audience brought up the subject of the new BART station along Bailey Road. The BART station was supposed to have a positive effect on property values,but this has not yet been experienced by the property owners in the area. They say that this is because of the negative impacts of the landfill. Further, the property valuation study did not include the relationship between the new BART station and property values. Response: BART can be expected to affect all of the surrounding neighborhoods, including the neighborhoods that were included in the Keller Canyon Landfill study. Any effects of the BART station are accounted in the sales data collected for the study neighborhoods. We did not separate out the impact of BART on property values. The model did consider the general appreciation and depreciation of property values over the time period January 1979 to May 1994. Property value appreciation resulting from the anticipation of a BART station at Bailey Road is automatically included in our Average Price variable (AP) which was calculated annually. The impact of BART should have affected all neighborhoods in the vicinity and not just those in close proximity to the landfill. The California State university 7 Board of Supervisors 5/30/95 2 t Issue 2: It is unfair that the report suggests that the residents have generated negative press, when the landfill also has generated negative press. Response: There can be two kinds of negative press, that which is generated by the residents and that which is a result of the landfill's activities. The loss of premium occurred in the neighborhood that had the most concerned and vocal residents. This also is the neighborhood which is closest to the landfill and the neighborhood that has the greatest view of the landfill. Any effect of negative press generated solely by the landfill might have=in ted neighborhoods B and C,but no property value impacts were these other neighborhoods. Issue 3: What is the potential impact to homeowners from the "expectation of appreciation"? Response: The resident's responses to the questions in the Community Survey regarding the value of their homes indicated that they were not generally familiar with the housing market. The survey found that they over-estimated the actual value of their homes. Their expressed concerns suggest they have failed to recognize that real estate values depreciated throughout the county, region, and state during the early 1990's. Issue(s)4: Some residents expressed the view that they were unable to refinance their homes and therefore are loosing$200 to $300 per month due to higher interest rates. Issues that the speakers also felt were not addressed in the study included: the impact of neighborhood homes becoming rentals; the impact on the value of the homes which remain on the market for long periods of time; crime statistics in the comparable neighborhoods versus the primary neighborhoods; the "pool" of buyers for the study area neighborhoods versus other neighborhoods because of having to"disclose" the landfill; and the impact of"kickbacks" on property values which are not included in the officially recorded sales prices. Response: These issues were not part of the original study, nor were they raised during the original design phase of the study. Both the Local Advisory Committee and Ad Hoc Committee had input during this process. Consequently, we do not have data upon which to address these issues. While it is tempting to engage in speculation and rely on anecdotal evidence,it is our position that only a thorough analysis will provide accurate answers. A thorough analysis of these issues would require direction from the Board of Supervisors, additional time, and a new budget contract. A response to the report of James Chalmers, the economist representing BFI, can not be provided until the Board of Supervisors meeting on June 6, Board of Supervisors 500/95 3 1995. His report was not received by ICPA until May 24, 1995. The report itself lacks substantial documentation to permit us to give a through response. Nonetheless, Dr. Lewis will be prepared to comment on this report at the meeting. A brief written response to the letter by Mr. Claude Gruen, dated May 25, 1995, will be provided to staff at the Community Development Department, before the June 6th meeting. Sincerely, �6�- Steven C. 4rlick, Ph.D. Professor and ICPA Director c.c. Deidra Dingman 1# 1 a , Cooper* t Lybrand L.L.P. 2901 North Cental Avenue taNPhWW (sot) 260-IWD Cao rs a�•si�f$own firm Suite 1000&Ly rand .Armee+.L5012-2765 facsimile (602) 2841999 It ftv,.h Coopers it Lybrand L.L.P.has been asked by BFT to provide commentary on the Keller Canyon Landfill Property Valuation Study prepared by the Institute for Community Planning Assistance at Sonoma State University. 1. INTRODUCTION The homes surrounding the Keller Canyon Landfill(the'Landfill")are alleged to have suffered adverse value impacts from the presence of the Landfill.To analyze this claim,the prices of homes with and without the presence of the Landfill need to be determined. The prices of the homes with the presence of the Landfill can readily be observed from the market The difficult judgment is to estianate the value of homes in the absence of the Landfill. The only way this can be done is to go outside the neighborhoods close to the landfill("subject"neighborhoods)and identify neighborhoods that are comparable Ccomparable"neighborhoods). Rather than analyzing the sales individually,the most reliable way to estimate the value of homes In the absence of the Landfill is to compare values between the subject and the comparable neighborhoods by looking at a large number of sales using statistical analysis. Ona it is determined,through statistical analysis,that there is a value impact,the value impacts on individual homes can be determined through the use of appraisals. The process to determine if the Landfill is having an impact on the value of residential housing in the surrounding area is outlined in the folloazng graph: Process to Determine Value Impacts of the Keller Carryon Landfill L , Ann TAao vale a M#acb9 Wirt t.atiaMd VW f✓?!rw a O(sarareenal #No'chborlow Elva vow rnpa�s� .Wx!are ow Yat #tasarroo ENaa #Srona Imry�an 11. ARE THERE VALUE IMPACTS? NEIGHBORHOOD EFFECT: The first step in this process was to determine if Neighborhood Effect existed. Sonoma State investigated whether any systematic difference existed between the neighborhoods that are close to the Landfill and comparable neighborhoods that are distant from the Landfill. The Keller Canyon Landfill Study(the"Study")performed this test using a statistical procedure referred to as regression analysis. The results of the Study from this test can be found on page 50 of the Study. CQOWs b Lybtand L.L.P.,a registered bmte0 habdtiy partnership.4 4 member Iran Of Coopers 8 Lybrana onle+tteu0 w) A regression analysis is simply a method for measuring relationships between variables. When many variables and .- relationships exist,a regression analysis enables one to examine the relationship between two of the variables while bolding all of the other relationships constant. In this instance,the regression analysis allowed a comparison of being in different neighborhoods while holding the size,age,and other attributes of the house constant. The Study found that of the throe subject neighborhoods,only Hillsdale showed any sign of a Neighborhood Effect. Hillsdale was compared with two other neighborhoods,Hillsdale D and Country Club. A map showing the relationship between the subject neighborhood(Hillsdale)and the comparable neighborhoods(Hillsdale II and Country Club)can be seen in the Appendix A. Sonoma State's estimate of the Neighborhood Effect for Hillsdale can be seen in Figure I. In the year 1981, Sonoma State's calculation estimated a premium of$8,400 for Hillsdale over the combination of Hillsdale A and Country Club. This means that holding all of the other variables constant,Sonoma State found that a home in Hillsdale sold in 1981 for approximately$8,400 more than a comparable home in either Hillsdale U or Country Club. The amount of the premium is measured on the left hand side of the graph.The$8400 also has a reliability measure associated with it that was obtained while doing the regression. The reliability measure is shown by the tone of each bar. The darkest bar shows a 95%level of confidence. This can be interpreted as a"reliable"premium estimate. The medium bar shows a level of confidence between 90% and 95%. This can be interpreted as a"marginally reliable"premium estimate. The white bar shows below a 90% level of confidence. This can be interpreted as an"unreliable"premium estimate. Pulling all of these notions together,Sonoma State estimated that a premium existed for Hillsdale over the combination of Hillsdale lI and Country Club from 1979- 1990(excluding 1980)and that the premium disappeared after 1990. On this basis, Sonoma State concluded that Hillsdale homes had been diminished in value. (See Figure 1). Figure 1 Sonoma State Estimate on Hillsdale Premium Relative to Hillsdale 11 and Country Club s1s. Pre-Keller Siting Approved s1o. 95,ODC so (><5'000 70 e0 81 82 93 84 05 W 67 U W 90 91 02 93 94 1r..R ■.-95%m Sox-95*M<cox DISTANCE EFFECT: Since Hillsdale was the only neighborhood with an effect,a closer examination was merited Sonoma State performed a second test which is a more refined test than the fits[. The neighborhoods being examined are relatively large and vary considerably in their relationship to the Landfill. The Distance Effect test was designed by Sonoma State to determine if proximity to the Landfill had a significant impact on property values. Again,a regression analysis was used to determine whether proximity to the Landfill within Hillsdale affected property value,other things being equal. The Study found that there was no systematic effect arising from proximity to the Landfill in Hillsdale. This suggests that there is no decrease in value due to the Landfill. This can be found on page 52 of the Study. Page 2 M,H,_TEE CONFLICT' %Uz wt were analyzing the Study,the apparent conflict between the findings of the Neighborhood Effect (decrease in value)and Distance Effect(no decrease in value)indicated that further analysis was required. On examination of the data it became evident that these three neighborhoods had different numbers of sales. Over the 1S year period,Hillsdale had 1231 sales,ii Msdale D had 898 sales and Country Club had 383 sales. In the Study,the average tales price was one of the im haat variables used in the regression analysis,but Sonoma po Smss Ys , State's calculation of the average sales price variable did not recognize the unequal number of sales in each of the neighborhoods. We found that this failure to use a true"weighted'average in determining the average sales price for the combined three neighborhoods introduced a bias into the analysis. Ise addition,the Study states on page 49,"Since the price history experiences for composite neighborhoods an different,each is considered separately.' This obsen2tion,in conjunction with a site visit, prompted a consideration of comparing Hillsdale with Hillsdale 13 and Hillsdale with Country Club separately. The Hillsdale Il and Country Club neighborhoods are quite different and we suspected that pooling of'the two blurred the effects of each in comparison to Hillsdale. NEIGHBORHOOD EFFECT REVISITED The conflict,therefore, arose from two problems; 1)the calculation of the average sales price and 2)the effect of combining two dissimilar neighborhoods—Hillsdale II and Country Club. A simple analogy of the method employed by the Study in the calculation of the average sales price variable is the computation of a grade point avenge(GPA). Suppose a student received an A in a 1 hour PIE class and a C in a 4 hour Math class. Employing the method used in the Study,the student's GPA is a B. This,however,ignores the relative number of hours of each class. A true GPA takes into account the different number of hours in each of the two classes and wtighu them accordingly. The tare GPA for the student would be a C+. In modifying the regression performed in the Neighborhood Effort test,a true average price was calculated for the composite neighborhood for each year. After correcting for the average sales price variable,we compared Hillsdale to Hillsdale Il independently and we compared Hillsdale to Country Club independently to determine if a Neighborhood Effect wally existed in the Hillsdale neighborhood. Page 3 Comparing the Hillsdale and Hillsdale II n6gbborhoods,using the correct average sale price,pve a di8'utut ans%vt with respect to the Hillsdale premium. Figure 2 shows that 9 of the 13 variables were'U= able* premium estimates. (only 1982, 1983, 198314 1987 were*reliable'). A prtnn=for Hillsdale existed in 1982, 1983 and 1987,but a discount existed in 1983. This demonstrates that Hillsdale has not bad a consistent premium aa-cr Hillsdale D over the time period. Contrary to the Sonoma State conclusion,there is no evidence of any dwre*se in the value of the Hillsdale neighborhood dtte to the Landfill. Figure Z Hillsdale Premium Relative to Hillsdale 11 $15 Pro-Keller Siting Approved s1a. ti5,00 so $0 81 82 93$4$186•7 as ai 90 81 82 83 84 burs ■►•85%69 80%•8510 4190% Comparing the Hillsdale and Country Club neighborhoods,using the correct average sales price,contradicts the Sonoma State conclusion as well. Figure 3 shows 13 of IS variables are*reliable*premium estimates(only 1980 & 1985 were"unreliable"). This demonstrates that Hillsdale has consistently had a premium over Country Club and that the premium continues to be strongly present since Keller Canyon was built. Again,contrary to the Sonoma State conclusion,there is no evidence of any dwrcasc in the value of the Hillsdale neighborhood due to the Landfill. Figure 3 Hillsdale Premium Relative to Country Club s16. Pro-Keller Stone Approved IMOCK so 9 91 a2 63 N 85 65 57 a5 alt 80 81 82 113 et Yrn sr86%2 W%.8610 ao% 1 Page 4 Appendix A Map of the Subject and Comparable Neighborhoods The Sonoma State Study concluded that the Hillsdale neighborhood suffered a decrease in value on the basis of a premium that disappeared after 1990. This conclusion is incorrect due to two factors—1)the method of calculating the average sales price variable and 2)the combination of two dissimilar neighborhoods. By using an average sales price variable that was a true average and separating Hillsdale 11 and Country Club,our ,analysis showed that there never was a premium for Hillsdale above Hillsdale II and that the premium for Hillsdale above Country Club has existed over time and continues to be strongly present. The results of our analysis of Hillsdale were the same as Sonoma State found in the other subject neighborhoods,namely—there was no t evidence,by either test,of property value diminution due to the landfill. The foregoing represents the work performed by James A. Chalmers,Ph.D.of Coopers&Lybrand L.L.P. Dr. # Chalmers'Statement of Qualifications is attached as Appendix B. } Coopers&Lybrand L. . . Page 5 R a 0 + �• � . a .Q U LM • tt) ' C2. /f ' C' Z r i .._ * 4= i t3 E Lij m .° ;,;.f All L) m IS !� • fid{�� sm 1v • %/A:� tt3 •�-+ CO • ! � �_ a ..............`•• i •I c • ! O 1 1 • f i t i i I Appendix B Statement of Qualifications for James A. Chalmers, Ph.D. JAMES A. CHALMERS PAGE 1 POSITION Principal,Financial Advisory Services,Coopers&Lybrand L.L.P. EDUCATION Ph.D. -Economics,University of Michigan B.A. -Economics,University of Wyoming EXPERIENCE I. ECONOMICS Broad range of experience in quantitative economic analysis and problem solving applied to regional and urban growth issues, public planning, economic modeling, fiscal analysis, industn, economics and socioeconomic impact assessment. Selected engagements are described below: Regional/Urban Economics • City of Phoenix. Economic and residential development strategies for newly annexed peripheral areas. Maricopa Association of Governments. Official population, employment and land use projections for Metropolitan Phoenix at the traffic analysis zone(1300 zones) level of analysis. • Arizona Department of Economic Security. Demographic and employment projections for each county in Arizona, adopted as the State's official planning projections. • U.S. Bureau of Reclamation. Effect on California's Central Valley economy of limiting water rights to farms no larger than 160 acres. Economic Developmen&Site Selection Governor's Blue Ribbon Task Force. Assisted the State of Arizona in preparing a proposal to site the U.S.West Advanced Technology cone research facility in Arizona. Clark County,NV. Market studies of heavy industry demand, land absorption projections, and implementation program for APEX Heavy Industry Park outside Las Vegas. Greater Phoenix Economic Council. Competitive airy operating cost comparisons for six different industrial sectors. Impact Assessment Colorado Cumulative Impact Task Force. Project director for consortium of energy companies and local governments to establish database, standards for impact analysis, and common analytic tools for assessing socioeconomic and fiscal impacts of oil shale projects in six-county, western Colorado region. • U.S. Bureau of Lead Management. Economic and fiscal impacts of coal development in 40 county region of eastern Montana and western North Dakota. JAMES A. CHALMERS PAGE 2 • U.S. Nuclear Regulatory Commission. Case studies of the impacts of 12 nuclear power plants on their host communities across the United States. 1 Litigation Services • Shughart, Thomson & Kilroy, Kansas City, M0. Prepared testimony with respect to redevelopment of Union Station in Kansas City,Missouri. • Clifford Chance, London. Provided expert testimony with respect to market conditions in the interdealer broker industry in the late 1980's. II. REAL ESTATE Experienced in applying economic and financial analysis together with relevant market data to real estate development, investment counseling, asset management, and real property valuation. Projects include large, urban, mixed-use projects, single use projects of all types, and large master-planned community studies. Selected engagements include the following: Development Consulting • Belmont Corporation. Designed and managed research to investigate feasibility of master-planned community in western Maricopa County. • Evans-Withycombe. Carried out, market and feasibility analyses for proposed high-density residential developments. • National Golf Foundation. Advised with respect to market forces affecting participation and frequency of play. • Summa Corporation. Advised with respect to timing and market positioning of commercial and industrial development in Las Vegas,Nevada. • Symington Company. Evaluated commercial office market conditions for purposes of evaluating both proposed and existing projects. Investment Counseling • Bay State Milling. Provided ongoing counseling with respect to the redevelopment options for the Hayden Flour Mill property in downtown Tempe,Arizona. • Arizona State University -West Campus. Evaluated market conditions relative to privatization _ of 70 acres of the ASU West Campus. • Banning-Lewis Ranch. Evaluated and provided development. counseling for 25,000 acre property in Colorado Springs. • Scottsdale School District. Advised the Scottsdale School Board regarding alternative scenarios for disposition of the 38-acre Scottsdale High School site located in downtown Scottsdale. Workout/Disposition Counseling • Cole Equities. Evaluated loan restructuring options for large office complex. • Kidder Peabody Prepared due diligence for securitization of 5250 million apartment portfolio. • Demo, Ltd. Developed and analyzed repositioning strategies for 1,300 acre, golf-oriented master planned community. I JAMES A. CHALMERS PAGE 3 • Resolution Trust Corporation. Developed asset management alternatives for 2,500 acre mixed-use commercial and master planned residential community in Mesa,Arizona. Litigation Services • Baker & Botts, Houston. Provided an analysis of overall trends in values of office, industrial, multi-family,hotel and raw land properties in several Arizona markets. • Lewis & Roca, Phoenix. Analyzed distribution of benefits from a proposed special improvement district. • Bodman, Longley & Dahling, Detroit. Produced evidence on alternative development concepts for a golf course community in Michigan. • Mariscal, Weeks, McIntyre and Friedlander, Phoenix. Provided testimony with respect to 1 appropriate due diligence procedures in a commercial real estate fraud case. Morrison & Foerster, San Francisco. Developed evidence with respect to evolution of multi-family market conditions in the southwestern United States since 1980. III. REAL PROPERTY VALUATIONIDAMAGES QUANTIFICATION Have applied real estate and economics background to litigation oriented engagements focused on the value of real property in the context of eminent domain, valuation of contaminated property, and valuation of property affected by hazard or risk. Selected engagements include: Eminent Domain U.S. Attorney's Office, Phoenix. Analyzed highest and best use for lands surrounding Lake Pleasant, north of Phoenix. fr0 C Burch & Craceiolo, Phoenix. Provided testimony on behalf of landownerwhose property was o p p taken for a city hall expansion. - City of Chandler. Provided testimony with'respect to highest and best use and market value of a small office building in the redevelopment area of Chandler,Arizona. • Fadem & Douglas, Los Angeles. Provided evidence with respect to master-planned community from which land was taken for a recreation area and reservoir. • Nevada Attorney General. Prepared evidence relating to the highest and best use of a large commercial parcel that was partially taken for purposes of highway improvement. • Fadem & Douglas, Los Angeles. Valued abandoned railroad ROW id Manhattan Beach, California in the context of inverse condemnation action. • Lewis, Babcock & Hawkins, Columbia, S.C. Prepared testimony with respect to master planned community on Hilton Head Island impacted by freeway alignment. • U.S. Attorney's Office, Salt Lake City. Prepared market, financial feasibility and highest and best use evidence in several cases stemming from the creation of the Jordanelle reservoir. • Arizona Attorney General. Provided testimony with respect to development timing and highest and best use on lands impacted by fraway development. • Michigan Department of Transportation. Prepared evidence to support litigations in the M-59 corridor,northeast of Detroit. JAMES A. CHALMERS PAGE 4 Valuation of Contaminated Property • FauUmer, Banfield, Doogan & Holmes, Anchorage, AK. Defense of major oil company N%ith respect to property value diminution claims associated with storage of heavy industrial equipment. • Aspey, Watkins & Diesel, Flagstaff, AZ. Quantified damages to property owners stemming from the malfunction of a lake in a master-planned community in northern Arizona. • Holme Roberts & Owen,Denver, CO. Assessment for a major oil company of damages to real property from groundwater contamination. • Streich Lang, Phoenix, AZ. Quantification of damages to building supply business stemming from property contamination by a previous owner. • Coffield Ungaretti & Harris, Chicago, E.,. Damage assessment for midwestern manufacturing client with respect to groundwater contamination claim by an adjacent property ov.-ner. • Morgan, Lewis & Bockius, Los Angeles, CA. Quantified damages to an industrial property from ground water contamination from an adjacent property. • Dickstein, Shapiro & Morin, Washington, D.C. Quantified damages to industrial land developer from lost sale due to soil and groundwater contamination from adjacent industrial facility. • Shughart, Thomson & Kilroy, Kansas City, MO. Estimate diminution of value to large, industrial property due to smelter tailings and lead paint related contamination. Paul, Weiss, Rifkind, Wharton & Garrison, New York. Review documents pertaining to diminution of value to resort property affected by petroleum spill. • Arnold & Porter. Los Angeles, CA. Evaluated diminution of value claims for an industrial property-in the Long Beach arca. • McCarter & English, Newark, NJ. Quantified damages to industrial property due to soil contamination. • Graham & James, Los Angeles, CA. Quantified damages to a property in Los Angeles resulting from a leaking UST. • Powell, Goldstein, Frazer & Murphy, Atlanta, GA. Evaluated diminution of value claims for industrial property in South Carolina. • Smith, Gill, Fisher & Butts, Kansas City, MO., and Whitman, Breed,•Abbott & Morgan, Newark,NJ. Evaluated diminution of value claims for residential property in the Midwest. • Jackson, DeMarco & Peckenpaugh, Irvine, CA. Evaluated diminution of value claims for industrial property in Southern California. • Shaw, Pittman, Potts & Trowbridge, Washington, DC. Evaluated diminution of value claims for industrial property in Colorado. • Day, Berry & Howard, Hartford, CT. Evaluated diminution of value claims for industrial property in Connecticut. • Howrey & Simon,Washington, DC. Quantified damages to a property in Virginia due to soil and groundwater contamination. JAMES A.CHALMERS PAGE S r r. • Paul, Hastings, Janofsky & Walker, Washington, DC. Quantified damages to a property in Orange County,California. • Jones,Day,Reavis&Pogue,Los Angeles,CA. Analyzed property value diminution due to soil contamination at a manufacturing and warehousing facility in central Los Angeles. • McClintock, Weston, Bensboof, Rocbefort, Rubalcava & MacCuish, Los Angeles, CA. Analyzed residential market conditions relative to a damages claim at a large mixed-use property in Riverside County,CA. • McClintock, Weston, Bensbool7 Rochefort, Rubalcava & MacCuish, Los Angeles, CA. Analyzed property value diminution claims for an officelindustrial property in Sunnyvale. CA affected by petroleum and VOC contamination. • Union Pacific Railroad Company. Investigated diminution in value claims associated with commercial property in Riverside County,CA affected by lead contamination. Valuation of Hazard Irrrpacted Property • U.S. Nuclear Regulatory Commission. Assessed the full range of economic damages associated with the accident at Three Mile Island. • Latham &Watkins and Fadem & Douglas,Los Angeles, CA. Produced evidence for Howard Hughes Properties with respect to damages stemming from proximity to a major,high-pressure, interstate gas transmission line. • Nevada Nuclear Waste Project Office. Project director for the State of Nevada for a five year, 58 million study of the effects of a proposed high levet nuclear waste repository on the State of Nevada. PROFESSIONAL AND BUSINESS HISTORY Coopers& Lybrand L.L.P. Principal,Financial Advisory Services. 1990 to present. Mountain West: 1974 to 1989. President and Economic Consultant. Arizona State University: 1972 to 1979. Faculty of Economics,College of Business. Rockefeller Foundation: 1970 to 1972. Special field staff at Thomasatt University, Bangkok, Thailand. Amherst College 1956 to 1470. Faculty of Economics. PROFESSIONAL AND BUSINESSAFFILIATIONS American Society of Real Estate Counselors Urban Land Institute Lambda Alpha,National Land Economics Honorary,Phoenix Chapter,Past President(1988). East Valley Partnership, Board and Past President Pension Real Estate Association JAMES A. CHALMERS PAGE 6 PUBLICATIONS Books Published Economic Principles: Macroeconomic Theory and Policy (with Fred R. Leonard) MacMillan (1971). Selected Aides Published "Valuation Issues - Assessing Value of Environmentally Impaired Properties" (with Jeffre Beatty and Robert Ecker), forthcoming as a chapter in Environmental Aspects of Real Estate Transactions, to be published by the ABA Section of Natural Resources, Energy and Environmental Law. "Supporting Appropriate Adjustments in Large Scale Condemnation Actions" (with Daniel Sorrells), The Appraisal Journal,October 1994. "Property Value Diminution: Residential and Commercial Cases Demand Different Approaches" (with Jere B. Beatty).Environmental Compliance&Litigation Stratem,February 1994,4-7. "Valuation of Property Affected by Contamination or Hazard" (with Jeffre B. Beatty)forthcoming as a chapter in Environmental Risk Management_ a Desk Reference. Second Edition to be published by RTM Communications,Inc. in Spring 1995. "Issues in the Valuation of Contaminated Property" (with Scott A. Roehr), The Appraisal Journal, Vol.61,No.1,January 1993;28-41. "Importance of Valuing Contaminated Property" and "Choosing Valuation Method Depends on Needs, Facts" (with Dale R. Hurd, Ph.D.).Hazardous Waste and Toxic Torts,Vol.8,Nos. 1 & 2, 1992. "Perceived Risk, Stigma, and Potential Economic Impacts of a High-Level Nuclear Waste Repository in Nevada"(with Paul Slovic et al),Risk Analysis.Vol. II,No.4, 1991,- 683-696. "A Methodology for Valuing Contaminated Property"(with Steve Pritulsky, Scott Roehr,and Dan Sorrells),Land Rights New, ,November 1991. "Contributions of Real Estate Economics to Right-of-Way Acquisition and Valuation" (with S. Pritulsky and D. Sorrells), Ri t-of-W y,June 1991; 8-13. "Impacts of Nuclear Generating Plants on Local Areas" (with D. Pijawka), Economic Geo¢ranhy. Vol. 59,No. 1,January 1983;66-80. "Evaluation of Undcrutilized Resources in Water Resource Development" (with J.R. Threadgill), Water Resources Research 1981. "Integrating Planning and Assessment througb Public Involvement" (with James L. Creighton and Kristi Branch), Environmental ImRact Assessment Review,Vol. 1,No.4;349-353,April 1981. "An Empirical Madel of Spatial Interaction in Sparsely Populated Regions" (with E.J. Anderson, T. Beckhelm,and W. Hannigan), International Regional Science Review.Vol. 3,No. 1,Fall 1978. "Some Thoughts on the Rural to Urban Migration Turnaround" (with M.J. Greenwood), International Regional Science Review.Vol.2,No.2,Spring 1978. 'The Role of Spatial Relationships in Assessing Social and Economic Impacts of Large-Scale Construction Projects,"National Resources Journal,Vol. 17,249.2.22,April 1977. JAMES A. CHALMERS PAGE 7 "Shift and Share and the Theory of industrial Location" (with T. Beckhelm), Regional Studies. Vol. 10, 15-23, 1976. TESTIMONY California Energy Commission Nevada Commission on Nuclear Projects United States District Court Anchorage,Alaska Baltimore,Maryland Charleston, South Carolina Las Vegas,Nevada Salt Lake City,Utah Arizona Superior Court Coconino Count}, Maricopa County Missouri Circuit Court Jackson County Virginia Circuit Court Loudoun County England. High Court of Justice, Queen's Bench Division CERTIFICATIONS Arizona: General Real Estate Appraiser#30487 California: Certified General Appraiser#AG 024655 Michigan: Certified Appraiser#1201003624 Missouri: General Real Estate Appraiser#002753 Nevada: General Real Estate Appraiser#00542 Appraisal Institute, Candidate#M91-0426 1 _ . MAY-25-1995 16:05 FROM Gruen Gruen + Associates. TO May 25, 1995 Valentin Alexeeff, Director Growth Management & Economic Development Agency 651 Pine Street, Second Floor North Wing Martinez, CA 94553.0095 SENT VIA FAX: 510 646-7309 Dear Val: Ms. Yolanda Lopez, the Assistant City Manager for the City of Pittsburgh, asked me to sit in on the May 4th presentation of the value study, and questions by Dr. James Chalmers. She has also asked that I review a copy of the study itself, and be prepared to make comments at the September 6th meeting of the Board of Supervisors. But when I told Yolanda that I had some questions for Dr. Stephen D. Lewis at the Institute for Community Planning Assistance at Sonoma State University, the told me that he was not responding directly to questions. She told me that what 1 should do is write my questions down and submit them to you. I have done so below and hope that you will forward them quickly to Dr. Lewis. As I think you will see when you look at the questions, I have tried to phrase them so as to minimize Dr. Lewis' time by asking most of them in a form that would permit him to simply mark yes or no on a copy of this letter or an attachment. However, if he would tike to expand on any answers, or give me a call, please tell him to do so. Your willingness to expedite these questions to Dr. Lewis, and his willingness to respond to them quickly are much appreciated. 1. As I read your report your Hedonic Regression Price Model indicated that property values in Oak Hills (neighborhood NS) were found to incLOAUe with distance from the landfill. Am 1 right about that? Incidentally, 1 do understand that you interpret the distance premium to reflect proximity to commercial area and transportation rather than distance from the landfill. Am I correct on this point? 2. As I read your report, property values In Hillsdale (neighborhood NA) were also found to climb with distance from the landfill until the 1993.1994 period when the 'distance premiums" were insignificant. In the light of your Hedonic Regression Price Model finding that Hillsdale's former neighborhood-wide price premium had disappeared by 1994, Is It not reasonable to assume that by the time Keller actually went into full operation, the distance effect of the prospect of the landfill had been swamped by the reality of the landfill's effect on the whole neighborhood? 1 ask this long question after reading in a Coopers & cogGruen Gruen+Associates 564 Howard Street San Francisco,CA 94105-3002 Tel:(415)433-7598 FAX: (415)989-4224 MAY-25-1995 1605 FROM Gruen Gruen + Associates. 70 15106461309 P.03 Val Alexeeff May 25. 1095 Page 2 Lybrand commentary written by Dr. James Chalmers that your study had, `found that there was no systematic effect arising from proximity to the landfill in Hillsdale.' Isn't Mr. Chalmers' interpretation of your work just plain wrong? 3. Did you select the three Pittsburgh neighborhoods as primary, or potentially impacted areas only because they were within one and 1/4 miles of the prlr6ary waste placement area? If this was not the only factor considered in selecting the neighborhoods labeled NA, NS, and NC as 'primary,' could you list the other factors you considered in picking them as potentially impacted? 4. How far from the primary waste placement ores were the 15 Pittsburgh neighborhoods you considered as potential 'comparable" neighborhoods? 5. How for were the five Pittsburgh neighborhoods you found to be close matches with your primary neighborhoods? 6. On page 2 of your report you note that there are four Pittsburgh neighborhoods within one and 1/4 miles of the primary waste placement area. Was the fourth area you did not study as a primary or potentially impacted area the Baily Road area (NE) which you did not consider because of a lack of historic sales data? 7. Am I correct that distance premiums were also found for Oakhills (NB)? In fact, weren't the distance premiums found for this relatively new neighborhood the biggest distance related premium found? 8. Was Woodside (neighborhood NCI the only one where the distance variable (DFILL) was found to be insignificant or even negative with respect to value? 9. Did you delete any of the comparables suggested as good matches by your 'sun ray analysis" due to construction date differences? 10. Were any socio-economic variables considered in your search for comparable neighborhoods and construction of the composite neighborhoods? 11. Were any of the Antioch neighborhoods treated as comparables within one and 1/4 miles of the recently dosed landfill in Antioch? 12. Were any socio-economic characteristics Involved in the HRPM analysis or selection of Antioch neighborhoods? Gruen Gruen+Associates r MAY-25-1995 1606 FROM Gruen Gruen + Associates. TO 15106461305 P.04 Val Alexeeff s May 25, 1995 Page 3 13. Did the screening of Antioch neighborhoods for •comparable' status also consider construction dates? 13. Am I Correct that in your comparison of the three primary Pittsburgh neighborhoods with the Antioch neighborhoods you found comparable, provided only one significant result which was that: The Pittsburgh neighborhood (Hillsdale) was at s premium over the Antioch neighborhood from the beginning of the data series until 1989, the year the Keller site selection was made, but that thereafter the premium disappeared? Sincerely, Claude Gruen Principal Economist CG:j9 cc: Yolanda Lopez, City of Pittsburgh Gruen Gruen +Associates TOTAL P.04 • . Attachment A2 • JAMES R. LEARY 1! LA MKSA LN. WA{.Hu'f COMM CAt;1IrORMIA'9AiiF � r G - 1 9s S5 JUH -5 PH 4: 27 Dr=VELUi'*;.`,ciT DEPT 0 �,c� a�� . i�'f'r J33 � co. W. OoL ds. d"A 10009-/ M4a llr�.Z� 'V Y • -�,46,4 J • Y ' } JAMES R. LEAFY FY I t {t LA VAX&^ LN, WALNUT CREEK. CALIFORNIA 04898 2+kt�vL � CRIC BRUEN & GORDON A PROFESSIONAL CORPORATION 1990 NORTH CALIFORNIA BOULEVARD SUITE 940 WALNUT CREEK, CALIFORNIA 94596 (510) 295-3131 FAX (510) 295-3132 December 7, 1995 Chairman Gayle Bishop &Members of the Board of Supervisors Contra Costa County 651 Pine Street Martinez, CA 94553 Re: Keller Canyon Landfill Property Valuation Study Dear Chairman Bishop and Members of the Board: In an effort to assist the Board in its deliberations on December 12 regarding the Sonoma State University Property Valuation Study and the Coopers&Lybrand critique of that study, we have asked Dr. Gordon C. Rausser, Dean of the College of Natural Resources at the University of California at Berkeley, to conduct an independent review of both the Sonoma State study and the Coopers& Lybrand report. As you can see from Dr. Rausser's report, he too concludes that the Sonoma State University Property Valuation Study is fundamentally flawed, and does not provide any evidence of property diminution in the vicinity of the Keller Canyon Landfill. We request that this additional study be made a part of the administrative record for purposes of the Board's consideration of this matter on December 12. I am also enclosing a copy of our letter dated November 22, 1995 to Val Alexeeff outlining a number of legal issues and procedural requests that we ask be considered by County Counsel and the Board of Supervisors in connection with this agenda item. Very truly yours, Thomas M. Bruen TMB:jcf Enclosure cc: Val Alexeeff, Director GMEDA Vic Westman, Esq., County Counsel BRUEN & GORDON A PROFESSIONAL CORPORATION 1990 NORTH CALIFORNIA BOULEVARD SUITE 940 WALNUT CREEK. CALIFORNIA 94590 (510) 295-3131 FAX(510) 295-3132 November 22, 1995 VIA FACSRVIILE&U.S. MAIL Mr. Val Alexeeff, Director GMEDA Contra Costa County 651 Pine Street 2nd Floor,North Wing Martinez, CA 94553 Re: Keller Canyon Landfill Property Valuation Study Dear Val: At the October 17th hearing before the Board of Supervisors on the Keller Canyon Property Valuation Study, the Board directed staff to prepare for its consideration a list of alternative courses of action and procedures to be followed in evaluating the Study and in determining whether to award compensation to property owners near the Keller Canyon landfill. We are writing to you on behalf of the Keller Canyon Landfill Company("Keller Canyon")to set forth our views on this subject. There are two threshold issues which need to be addressed by the Board of Supervisors: (1)whether the Board has the legal authority to require that Keller Canyon pay compensation to local property owners based on the Sonoma State Study; and (2)what are the hearing and pre- hearing procedural rights of Keller Canyon given this potential Board action? We believe that both issues involve important questions of law which need to be resolved prior to the next Board hearing on the Sonoma State Study. The purpose of this letter, therefore, is to give you our view of the applicable legal authority on both of these isAues. r . Mr. Val Alexeeff November 22, 1995 Page 2 I. The County Lacks Authority to Impose a Property Value Compensation Fee Based Upon the Keller Canyon Landfill Property Valuation Study. A. Land Use Permit Condition 35.3 Authorizes Compensation for Physical Impacts Only. And the Keller Canyon Landfill Property Valuation Study Identified No Significant Physical Impacts.. Condition 35.3 of the Keller Canyon Landfill conditional use permit provides in its entirety as follows(emphasis added): Property Value Compensation Program. The [Keller Canyon] Landfill operator shall provide funding for the preparation of a property value compensation program study when requested by the County of Contra Costa. The study will address the means of determining the extent of property value losses or reductions attributable to Landfill impacts, such as aesthetics, noise, traffic, or pollution, and the means of compensating property owners for said losses or reductions. When a compensation program is adopted by the Board of Supervisors, the Landfill developer shall fund it in the manner specified by the Board. If the Board of Supervisors determines that progress on the implementation of a compensation program is not proceeding in a timely manner, the Board may require the use of a facilitator and/or an arbitrator. The fee shall be considered to be a pass-through business cost for the purposes of rate setting. Thus, the compensation program authorized by Condition 35.3 is clearly limited to"losses or reductions attributable to Landfill impacts, such as aesthetics, noise, traffic, or pollution"--all of which are physical impacts. Condition 35.3's limitation to physical impacts was expressly affirmed by the County in the course of the permit condition negotiations. The Keller Canyon Landfill Property Valuation Study provides no evidence that the Keller Canyon facility has had any significant physical impacts on surrounding communities. The Study, which was commissioned by the County and prepared by Sonoma State University, concludes.that noise affected only 10% of one of the three neighborhoods studied--and this impact was found to have gone away by the time of the third field survey, which occurred after the Landfill had disabled the back-up beepers on its trucks. Property Valuation Study, pp. 65-6. 'Imdfill- generated dust, odor and wind-carried trash were not found to affect any of the primary neighborhoods." Id., at p.7. In sum, the Study does not document any significant physical impacts of the Landfill on local properties.' 'The absence of physical impacts also precludes the County from claiming mitigation authority under the California Environmental Quality Act ("CEQA"). CEQA authority does not extend to the mitigation of purely economic impacts. Pub. Res. Code §§ 21004, 21068, 21060.5; Mr. Val Alexeeff November 22, 1995 Page 3 B. In Addition to Being Unauthorized By Condition 35.3. Fees for Purported "Psychological"Effects Cannot be Assessed Because Such Effects Are Illusory. As discussed above, the Property Valuation Study concludes that the Keller Canyon facility creates no significant physical impacts in the neighborhoods studied. Apparently, the authors of the Study believe the purported loss of property value"premiums" identified by the Study in one neighborhood is the result of some psychological"stigma" which may be caused by the(unfounded) statements of local Landfill opponents. Not only are such impacts unrelated to the conduct of the Landfill operations, the Sonoma State Study contains critical flaws which render it unusable as reliable evidence of any cause and effect whatsoever. These flaws are discussed in the Coopers&Lybrand report filed with your office on November 16th. The errors in the preparation of the Property Valuation Study have so skewed the results that the Study cannot provide any reliable evidence of property value diminution, even as the result of alleged psychological factors. Moreover, applying the use permit condition to require compensation for alleged "psychological" property value effects occurring before the landfill commenced operations in May, 1992 violates the basic tenet of statutory and constitutional construction prohibiting the retroactive application of governmental enactments and impositions. C. Keller Canyon Landfill Was Not Provided with Effective Notice of the Fees It Was Expected to Pay. Imposition of the contemplated compensation fees at this point in time would violate Keller Canyon's procedural due process rights. Due process mandates that developers such as Keller Canyon be afforded"effective notice of the fees they will be expected to pay." Kaufman& Broad Central Valley, Inc. v. Citgo Modesto, 25 Cal.AppAth 1577, 1589 (1994). As the Court stated: "A developer about to commit substantial time and resources to a project should be able to predict with at least some degree of assurance what the fee will be when the time comes to pay it." Ick at 1589. In addition to being expressly limited to physical impacts, condition 35.3 clearly indicates that any resulting fee"shall be considered to be a pass-through business cost for the purposes of rate setting." Thus, at the time condition 35.3 was included in the use permit, Keller Canyon believed that any compensation fee would be limited to physical impacts and that funding for the compensation was to be"passed-through"to rate-payers under rates set by the Board of Supervisors-- and thus not to be paid out of the Company's proprietary revenues or profits. 14 Cal.Code Reg. §§ 15040(b), 15041(a), 15382. Mr. Val Alexeeff November 22, 1995 Page 4 Instead, Keller Canyon is now faced with a proposed property compensation fee of several million dollars for alleged non-physical effects, which fee can no longer be recovered from ratepayers. ' Clearly, this fee is far different than, and far exceeds, the fee Keller Canyon was notified of upon issuance of the conditional use permit.' D. The Compensation Fee Would be a Violation of the 5th Amendment Takings Clause. Because the Keller Canyon facility does not result in significant physical impacts, there is no"essential nexus" between the compensation fee now being considered by the County and a "legitimate state interest."` Nollan v. California Coastal Comm'n, 483 U.S. 825, 837 (1987). Nor is there a"rough proportionality'between the fee and the facility's alleged impact. Dolan v. City of Tigard, _U.S. ___; 114 S.Ct. 2309, 2319(1994) (condition must be related"both in nature and extent"to impact of development). Accordingly, the fee would constitute a taking under the Fifth Amendment to the United States Constitution. 'Recent United State Supreme Court cases have interpreted the Commerce Clause in the United State Constitution as prohibiting certain local government restrictions on the flow of solid waste within states. These rulings, in turn, have resulted in neighboring counties relaxing their restrictions on the export of Contra Costa waste into landfills in these counties, causing competition for landfill disposal to increase dramatically. Recognizing that rate controls over Keller Canyon's disposal fees were no longer needed or effective, the Board of Supervisors removed these controls on Keller Canyon's rates last June. Also, Keller Canyon has been forced to greatly decrease its disposal fees to remain competitive, and to commit to commit to these lower fees in long term disposal contracts with several jurisdictions. The County itself is a party to one such contract. Therefore, it is no longer feasible for the Board to order compensation fees be added onto Keller Canyon's rates as a"pass-through"cost, and Keller Canyon would be unable to pass such fees onto its customers. 'As indicated above, the Keller Canyon facility was constructed in reliance on the County's assurances that any compensation fee would only apply to physical impacts and that it could be passed-through to ratepayers. Accordingly, the County is now estopped from denying that condition 35.3 refers only to physical impacts and fees that can be"passed-through." See City of Long Beach v. Mansell, 3 Cal.3d 462 (1970). "It also does not appear that the County's imposition of a fee to enrich select landowners reflects a"legitimate state interest." Thus, the imposition of the fee may be in excess of the County's"police power" authority. Mr. Val Alexeeff November 22, 1995 Page 5 E. The Compensation Fee Would Be Invalid Under the Government Code and Proposition 13. The compensation fee now being considered by the County exceeds the reasonable cost of providing the service for which it is being imposed, because the proposed compensation payment would not be in exchange for a service being provided to the developer--i.e., Keller Canyon. The `compensation fee thus violates Government Code section 66005 which limits fees imposed on development projects'to the"reasonable cost of providing the service or facility for which the fee. or exaction is imposed." Gov. Code § 66005(a). In addition, the amount of the compensation fee allocated to Keller Canyon would not bear a fair and reasonable relation to Keller Canyon's benefit from the fee, since Keller Canyon would receive no benefit from the proposed fee. Thus, the fee would also be invalid under Proposition 13 as a special tax imposed without voter approval. Bixel Associates v City of Los Angeles, 216 Cal.App.3d 1208 (1989). F. The Compensation Fee Would Violate Keller Canyon's Substantive Due Process and Equal Protection Rights. The County has previously approved several other industrial and waste handling facilities without imposing fees for property value compensation. Thus, the County's imposition of a fee here is arbitrary and irrational in violation of the substantive due process and equal protection guarantees of the California and federal Constitutions. See, e.g., Herrington v. County of Sonoma, 834 F.2d 1488 (9th Cir. 1987). H. Keller Canyon Must be Granted Full Due Process Rights Prior to the Imposition of Any Compensation Fee. A Full Due Process Rights are Required by the Constitution and the Government Code. Because nonpayment of the proposed compensation fee could result in revocation of Keller Canyon's conditional use permit, and given the magnitude of the potential fee, the imposition of this fee would impact a significant property interest. Goat Hill Tavern v. City of Costa Mesa, 6 Cal.AppAth 1519, 1529(1992) ("the right to continue operating an established business in which [the owner] has made a substantial investment" is a"fundamental vested right" and subject to court review under the"independent judgment" standard). Thus, constitutional due process requires that Keller Canyon be provided a fair hearing prior to the deprivation of this interest. Horn v. County of Ventura, 24 Cal. 3d 605 (1979). '"Development project" is broadly defined as"any project undertaken for the purpose of development." Gov. Code § 66000(a). Mr. Val Alexeeff November 22, 1995 Page 6 B. Keller Canyon Must be Granted Full Discovery and Hearing Rights. Because a significant property interest will be affected, Keller Canyon must be provided with the right to subpoena relevant documents and statements(Shively v. Stewart, 65 Cal.2d 475 (1966)), depose witnesses for evidentiary material within their possession or control (Everett v. Gordon, 266 Cal.App.2d 667, 672-73 (1968)), and pose interrogatories(Romero v. Hem, 276 Cal.App.2d 787 (1969)). Keller Canyon must also be granted subpoenas requiring witnesses to attend the hearing and be subject to cross-examination. McLeod v Board of Pension Commissioners, 14 Ca1.App.3d 23, 28 (1970)(right to cross-examine witnesses in administrative proceedings is fundamental element of due process). In this proceeding, Keller Canyon should be allowed to subpoena representatives of Sonoma State and any relevant County staff and public witnesses to attend and testify at the hearing, and be allowed to cross-examine adverse witnesses. Keller Canyon should also have the right to conduct reasonable pre-hearing depositions of the Sonoma State representatives regarding the issues raised in the Coopers& Lybrand report and the declaration of Dwight Duncan. Please consider this letter our formal request for such pre-hearing discovery. * s * * * As you can see, the County's proposed action raises numerous significant concerns. Keller Canyon will continue to comment on these issues as proceedings progress and hopes that a balanced process, giving due regard to Keller Canyon's substantive and procedural rights, is adopted. Very truly yours, Thomas M. Bruen TMB:jcf cc: Victor I Westman, County Counsel x/ The Keller Canyon Landfill: A Review of Statistical Studies Examining Property Value Diminution Prepared by Gordon C. Rausser, Ph. D. Dean, College of Natural Resources University of California at Berkeley with the assistance of Law & Economics Consulting Group, Inc. December 7, 1995 LECG t j Table of Contents. Executive Summary.............................................................................................................1 LIntroduction....................................................................................................................2 Description of This Study......................................................................................................2 Summary of Conclusions......................................................................................................3 ILThe ICPA Study.............................................................................................................3 General Comments and Observations......................................................................................3 A Preliminary Review of the ICPA Study...................................................................................3 Specific Examples of Oversights..............................................................................................4 Conclusion.........................................................................................................................4 Testing Conclusions Drawn from the ICPA Study......................................................................5 Selection of the Appropriate Distance from the Landfill................................................................5 Real Estate Trends in California and Neighborhoods in the City of Pittsburg.....................................6 Nuisance Factors Not Related to the Keller Canyon Landfill..........................................................7 Interpretation of the Neighborhood Premium is Incorrect.........................................................................7 Proximity to the Landfill Does Not Confirm argument for Property Value Diminution........................9 Overall.the ICPA Results Are Inconclusive.............................................................................10 A Technical Review of the ICPA Study's Statistical Model........................................................10 The Selection of Neighborhood Comparables............................................................................10 Multicollinear(Closely Related)Variables Appear in the ICPA Regression Model............................11 Inconsistent Model Specifications Across Neighborhood ...........................................................11 Regression Coefficients Are Counter-Intuitive..........................................................................12 ICPA's AP Variable Introduces Simultaneous Variables into the Model..........................................12 LECG Year Built Housing Variable Should Be Changed to Age of Home.................................................13 Yearly Dummy Variables Do Not Compare Data as ICPA Had Intended.........................................14 An Appropriate Functional Form Should Have Been Selected for the Regression Model.....................15 Conclusion.......................................................................................................................16 III. The Coopers&Lybrand Study......................................................................................16 General Comments and Observations....................................................................................16 Flaws in the ICPA Database.................................................................................................17 ICPA's Average Price Calculation..........................................................................................17 Hillsdale Premium Relative to Comparable Neighborhoods.......... ............................................17 Omission of Important Factors Affecting Home Prices................................................................18 Conclusion.......................................................................................................................18 IV.Suggested Improvements to the ICPA Model....................................................................19 Selection of Comparables.....................................................................................................19 The Statistical Regression Model...........................................................................................19 LECG Executive Summary This report reviews and critiques two studies which examine the issue of residential property value diminution in three neighborhoods located in the City of Pittsburg whose boundaries lie partially within a 1.25 mile radius of the Keller Canyon Landfill. The first study, carried out by the Institute for Community Planning Assistance (ICPA) at Sonoma State Study, concluded that there was some evidence of diminution in property value in one neighborhood. The second study, performed by Coopers& Lybrand, reviewed the findings by Sonoma State and concluded that there was no evidence to support a case for property value diminution and also identified statistical flaws in the ICPA Study. This report presents findings of an independent review of the two studies, as well as a review of the data set and statistical models employed by ICPA. Despite the many hours spent in the design and implementation of the ICPA Study, there are instances where statements or conclusions of the study are negated by gaps in methodologies and/or miscalculations in the statistical model. Many of these gaps were appropriately identified in the Coopers&Lybrand Study. The criticisms of the ICPA Study in this report may be grouped into three major areas: 1) Data/Methodology, 2) Design of the Model, and 3) Interpretation of Results (statistical robustness). Data/Methodology A review of the data set which provided the foundation for the ICPA Study suggests that quality control of the data points needs improvement. Ninety-seven instances of duplicate entries were located. In addition, the methods used to identify primary neighborhoods and select comparable neighborhoods raise questions; several neighborhoods that appeared suitable as comparables were discarded, and one neighborhood that was selected did not pass all of the tests for comparability. Design of Model The ICPA Study did not accomplish what it had hoped. The statistical model was not designed to predict changes in neighborhood premiums correctly. The hedonic pricing equation contains several errors and consequently, the statistical results are incorrect. Interpretation of Results The conclusions advanced by the ICPA Study are inconsistent and lead to inconclusive results. Even if one accepts the ICPA model as statistically sound, the output generated by the model does not provide evidence to support a case for property value diminution in any of the three primary neighborhoods. The question of diminution of property value in the areas surrounding Keller Canyon Landfill merits additional study. However, time ponstraints and the scope of this assignment prevent presentation of a new statistical model to test for possible diminution of property value. In a new study, specific areas to target include 1) selection of comparables, 2)variables in the hedonic equation, 3) functional form of the regression equation, and 4) proper use of discrete variables to measure desired effects. LECG f � I. Introduction Description of This Study I have been asked by Browning Ferris Industries to examine the issue of alleged property value diminution resulting from the siting, construction, and operation of the Keller Canyon Landfill located in Eastern Contra Costa County near the city of Pittsburg. To accomplish this task, I have reviewed two studies on the subject. The first, entitled "Keller Canyon Landfill Property Valuation Study," was performed by the Institute for Community Planning Assistance (ICPA) at Sonoma State University.under the direction of Dr. Steven C. Orlick and Dr. Stephen D. Lewis and was released on November 30, 1994. The second, entitled"Analysis of the Sonoma State University Property Valuation Study," was performed by Coopers&Lybrand and recently released on November 15, 1995. Because the Coopers& Lybrand study was predicated on conclusions drawn in the Sonoma State study, I focused the majority of my attention on the material presented by Orlick and Lewis. After reviewing the materials included in the studies, I requested a copy of the data used in the Sonoma State study. Coopers& Lybrand's Phoenix office provided a duplicate of the data set used by Dr. Orlick and Dr. Lewis to construct their statistical model. As a result, I was able to test and verify, independently, the conclusions drawn in both the Sonoma State and Coopers & Lybrand studies. In the past, I have worked on property value diminution cases with issues very similar to those of the Keller Canyon Landfill. Therefore, my conclusions reflect not only my impressions of the Sonoma State and Coopers&Lybrand reports, but also contain insights gained over the years from similar situations in other parts of California and the United States. During my academic career, a significant portion of my research and subsequent publications has been in the area of applied statistics. Therefore, I am well qualified to offer judgments on the validity of statistical models and the conclusions drawn from them. I was named as a fellow to the American Statistical Association in 1991. My curriculum vitae is attached to this report as Attachment A. Staff of Law&Economics Consulting Group (LECG) assisted me in this effort. The following pages describe the analyses performed under my direct supervision and summarize my conclusions. The primary materials used in the preparation of this report were the two reports and data set described above. In addition, my staff and I consulted published literature and visited the residential area near the Keller Canyon Landfill. LECG r � Summary of Conclusions After reviewing the two reports and the original data sets used by Sonoma State, I have concluded that there are several major flaws in the statistical modeling and subsequent interpretation as reported in the Sonoma State study. Many of my independent findings corroborate those presented in the Coopers&Lybrand report, although time constraints did not allow me to test all of the statistical reviews presented therein. Unfortunately, the underlying flaws in the Sonoma State study cast serious doubt on the conclusions drawn by its authors. Staff at LECG were able to replicate the majority of the statistical results presented by Sonoma State and in this manner have been able to pinpoint areas where the model should be modified to properly analyze the residential housing data. This report presents a review of both the Sonoma State and Coopers&Lybrand studies, including a more detailed discussion of specific areas of concern. Because there are many problems with the model advanced by Sonoma State, I believe that the question of diminution of property value in the areas surrounding Keller Canyon Landfill merits additional study. At the end of this report, I include several recommendations for how a subsequent study and statistical model might be more appropriately structured. H. The ICPA Study General Comments and Observations A Preliminary Review of the ICPA Study Upon initial review of the study performed by professors and students at Sonoma State (henceforth referred to as the"ICPA Study"), one immediately notes the amount of time and effort that was put into the research, data gathering, and statistical modeling preceding the publication of the November 30, 1994 report. The chronological description of events leading up to the construction and operation of the landfill is important in achieving a more complete understanding of the basis for the alleged property value diminution, as well as essential in the interpretation of the ICPA Study results. In addition, a substantial effort was made in an attempt to explain the conclusions of the statistical modeling in a way that would make sense to the layperson unfamiliar with regression analysis and other statistical procedures. Sources of noise, dust, and traffic not related to the Keller Canyon Landfill were also investigated as possible sources of irritation for residents of the primary neighborhoods. Questionnaires, interviews, and on-site visits were compared with the conclusions drawn from the statistical research. Despite the many hours spent in the design and implementation of the ICPA Study, there are instances where statements or conclusions of the study are negated by oversights in methodologies and/or miscalculations in the statistical model. These could not be overlooked, even during a preliminary review of the ICPA Study. LECG Specific Examples of Oversights In the selection of comparable neighborhoods, the ICPA used local real estate professionals familiar with the area to help identify and delineate potentially comparable areas. After targeting these potential comparables, the ICPA team then performed several tests to ensure that the areas were actually comparable to the primary neighborhoods, including ratio analyses of average housing characteristics and statistical testing of these same averages. However, despite this testing, the ICPA ignored at least one of its own statistical tests which showed that the Country Club neighborhood had'significantly different growth rates than Hillsdale, the primary neighborhood it was supposed to match. Site visits of the comparable areas carried out by the ICPA staff should have explored reasons why the statistical test failed before accepting the Country Club neighborhood as a satisfactory comparable to the Hillsdale neighborhood. Following the statistical modeling of the primary and comparable neighborhoods, the ICPA team selected another set of comparable neighborhoods outside of Pittsburg. Logically, the directors of the study were concerned that the a much larger part of Pittsburg could have been effected by the Keller Canyon Landfill. Although unlikely, they reasoned that if the effects of the landfill were felt throughout the entire city of Pittsburg, then their comparable neighborhoods might also have been affected, thereby introducing additional bias' into the statistical model. Selection and statistical modeling of neighborhoods in the city of Antioch satisfied the ICPA staff that their original set of comparables was unaffected by the landfill. Unfortunately, though, this method of double checking was performed with an unsound model (to be discussed later in the report). A separate, non-statistical study was also performed by the ICPA team. This study combined a series of neighborhood participation studies, anonymous telephone interviews with local real estate and banking officials, and an exhaustive on-site study of the primary neighborhoods to verify alleged nuisance factors emanating from the landfill. The ICPA Study presents its investigative methodologies and conclusions in Chapters 6, 7, and 8 of its report. These efforts revealed little or no evidence of negative impacts from the Keller Canyon Landfill in any of the three primary neighborhoods. However, despite conflicting results between the statistical and survey/on-site studies, the ICPA team did not attempt to reconcile its findings. Conclusion While many portions of the ICPA Study were well designed and appropriate measures were taken to test selected methodologies, oversights point to elements of the study which need to be reviewed more critically. Unfortunately, most of these elements comprise the very crux of the statistical argument advanced by the study. Many of the more technical issues are discussed in detail later in the report. First though, a review of the general issues and conclusions of the ICPA Study is appropriate. ' A model is dubbed"biased" if the mean or expected mean is not equal to the true value. LECG 4 Testing Conclusions-Drawn from the ICPA Study In general, a statistical study should be reviewed from two different perspectives. One involves a review of the model's validity; is the theory logical and does the model properly formulate the questions that one wants to answer? The second is the interpretation of results; does the statistical output point to one or more clear conclusions, or does the output suggest mixed or inconclusive results? Therefore, any conclusions drawn from the ICPA model are dependent upon the statistical accuracy and underlying design of the model. As mentioned above, questionable aspects of the ICPA model do exist and need to be examined further. However, for the purposes of the discussion in this section of the report, I have assumed that the statistical model presented in the ICPA Study is satisfactory, i.e. the model-is assumed to be valid. Even after accepting the ICPA model as statistically valid, the interpretation of the results by the ICPA team is also questionable. There are a variety of general observations that present a serious challenge to the ICPA Study's conclusion that property value diminution may have occurred in the Hillsdale neighborhood as a result of the Keller Canyon Landfill. Some of these observations are related to the statistical tests performed by ICPA, however, all can be explained from an intuitive perspective. Selection of the Appropriate Distance from the Landfill The first observation relates to the one and one quarter mile radius from the Keller Canyon Landfill that was selected to pinpoint possible areas of property value diminution. The ICPA Study admits that the selection of this radius was 1/4 of a mile greater than what has been traditionally used in similar studies of landfill effects. Looking at a map of the area(see p. 29 of the ICPA Study), a one mile radius measured from the center of the landfill would have excluded all neighborhoods from the study. If a one mile radius had been used from the tip of the landfill, only the southern portion of the Hillsdale neighborhood would have been considered in the study for property value diminution. Clearly, an additional 1/4 mile measured from the northernmost point of the Keller Canyon Landfill was needed to bring the other three neighborhoods (Oak Hills, Woodside, and Bailey Road) into consideration. Even with the 1/4 mile radius addition, only the lower half of each neighborhood (in the direction pointing directly towards the northernmost tip of the landfill) should be eligible for the study. The ICPA Study used the one and one quarter mile radius measured from the northernmost tip of the landfill. The study then considered all sections of the neighborhoods as potentially affected, rather than splitting up the neighborhoods into sections inside and outside of the 1.25 mile radius. There is no reason why only the southern portion of each neighborhood could not have been defined as a primary neighborhood in the study. However, ICPA probably realized that including the northern parts of the neighborhoods would provide substantially more data points to use in its model, regardless of whether or not there was any reason to suspect diminution in property value for these additional residential areas. 5 LECG r � The selection of the one and one quarter mile radius from the landfill suggests that the ICPA Study team had already decided which neighborhoods it wanted to include in the study before applying a standard methodology. Perhaps this was a result of the political pressures at the,time. Complaints from angry homeowners may have encouraged ICPA to include additional neighborhoods in the study, even though there was no clear evidence to support the complaints of residents. Without further explanation by ICPA for its decision to use the 1.25 mile radius, it is reasonable to conclude that additional bias was introduced into the study even before the statistical modeling began. Real Estate Trends in California and Neighborhoods in the City of Pittsburg A second observation relates to the real estate trends of the Bay Area and California over the period 1979 to 1994. The 1980s marked a period of substantial appreciation in residential housing prices in California. The market peaked in mid- to late-1989 and then declined appreciably. The ICPA Study illustrates this trend quite clearly on page 31 of its report. The chronology of events for the approval, construction, and operation of the Keller Canyon Landfill (summarized in Table 1 on pp. 21 and 22 of the ICPA report) coincides with the general decline in California real estate which began in 1990. Of course, there is no causal relationship between the approval of the Keller Canyon Landfill and the real estate decline in California. As the ICPA Study points out, the Pittsburg real estate market follows California real estate trends. A statistical model for property value diminution should filter out the effects of a downturn in local real estate prices. When prices increase for a time and then decrease, as in this case, the statistical model employed should capture this trend. As discussed more fully later in this report, ICPA's linear model may not adequately capture the effects of a downturn in the market, thereby introducing additional uncertainty into the statistical results. Nuisance Factors Not Related to the Keller Canyon Landfill Another general observation concerns the proximity of the primary neighborhoods to additional sources of noise, traffic, dust, and other nuisance factors. Looking at a map (such as the one on p. 29 of the ICPA Study) and locating the primary neighborhoods, one can see that Highway 4 is in close proximity to the northern boundaries of Hillsdale, Oak Hills, and, to a lesser degree, Woodside. In fact, Highway 4 is much closer to most homes in the neighborhoods than is the northernmost point of the Keller County Landfill. The ICPA Study does not overlook Highway 4 as a source of nuisance factors. The construction of anew BART station, parking lot, and train tracks along Highway 4 is mentioned several times throughout the report as a source of noise, traffic, and dust. "There were also several sources of noise observed in the study area neighborhoods (especially NB) that could falsely be attributed to,the landfill by residents. ,2 ICPA staff personally observed that the"ongoing construction and renovation on Highway 4 was 2 ICPA(Institute for Community Planning Assistance) Sonoma State University,"Keller Canyon Landfill Property Valuation Study",November 30, 1994,p. 65. 6 LECG a � very noisy"' and that"there was extensive noise, unrelated to the landfill, coming from the nearby BART construction. A In addition, the ICPA Study said, "The extensive construction in the immediate area not related to the landfill, along with the wind and the topography of the area, made it difficult to determine the source of much of the noise."' Although it presents sources of nuisances other than the landfill, the ICPA report fails to highlight the obvious reason for this phenomena. The primary neighborhoods are actually closer to Highway 4 (and the construction and renovation associated with the freeway) than they are to Keller Canyon Landfill. With the growth of Eastern Contra Costa County over the past 10 years, Highway 4 has seen a significant increase in traffic, thereby necessitating expansion and construction. Since the construction and operation of the landfill has been contemporaneous with the construction of the BART station and construction and increased traffic on Highway 4, any effects of the BART station and/or Highway 4 would be impossible to distinguish from the effects of the landfill. It is plausible that owners of homes in primary neighborhoods who once viewed quick access to Highway 4 as an asset are now selling their homes at a discount because the same proximity to the expanded highway is now viewed as a liability by prospective buyers. Interpretation of the Neighborhood Premium is Incorrect Another general concern is how ICPA interprets its own results relating to the alleged diminution of property values in Hillsdale. The ICPA Study would have one believe that there is clear evidence of diminution by comparing the period before the landfill to the period after the landfill was constructed. However, the analysis is not quite as simple as the ICPA Study implies. There are several yearly differences in the housing premium that the ICPA conclusions fail to interpret. The ICPA Study focuses on the loss property of premiums between 1990 and 1991 in Hillsdale.6 Landfill construction did not begin at Keller Canyon until late October 1991. Therdfore, it would be reasonable to expect that, in the event of any diminution of property value, the greatest decrease in premiums would be felt in 1992. This logical hypothesis is not supported by the ICPA Study; the premium drops in 1991, one year too early. An examination of the housing sales for Hillsdale in 1991 reveals that 86% (5 1) of the total housing transactions occurred before October 1, 1991. Any possible nuisance effects from landfill construction would not be felt until after October 1991. Therefore, the drop in premium for 1991 could very likely be caused by some other factor unrelated to construction of the Keller Canyon Landfill. The ICPA Study focuses on a loss of property premiums of approximately $5,000 in 1991. Historically, however, changes in premiums of this magnitude are not uncommon. Between 1979 and 1981, the premium paid for hpmes in Hillsdale relative to comparable 3 ICPA report p. 65. 4 ICPA report p. 66. 5 ICPA report p. 65. 6 ICPA report p. 50. 7 LECG ' r neighborhoods rose by nearly $5,500. The ICPA's model indicates that premiums paid for homes in Hillsdale relative to comparable neighborhoods have been declining since this peak in 1981. Between 1982 and 1985, the Hillsdale premium dropped by more than $5,000, only to recover by $3,000 two years later. Moreover, the trend in the Hillsdale premium has been downward since 1981, prior to any discussion about the Keller Canyon Landfill. There is no reason to believe that the premium would not have reversed its downward trend, with or without the addition of the landfill. The figure below illustrates the trend in NA premium: Premiums for the NA Relative to NAJK 510,000 $9,000 58,000 57,000 $6,000 E 0 S $5,000 A. 54,000 53,000 11 52,000 --------- S1,000 ._-_-. 51,000 50 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 Year The years 1990 and 1991 are also highlighted in the ICPA report because, according to the statistical output, premiums become statistically insignificant in 1991. In fact, the premiums do not completely disappear as the ICPA Study encourages one to believe, but rather the magnitude of the premiums are not great enough to be distinguishable from zero in a statistical sense. In the graph above, statistically significant premiums are marked with Xs. Statistically insignificant premiums are not marked. Statistically significant premiums for sequential years are connected with bold lines; dashed lines connect statistically insignificant data points. The ICPA Study hastily concludes that the $5,000 drop in premium can be directly attributed to the Keller Canyon Landfill, but fails to investigate the reasons for similar fluctuations in the premium shifts in previous years. One could just as easily conclude from the ICPA results that the apparent loss of premium in 1991 to 1993 is another downturn in the historically cyclical nature of the Hillsdale premium. LECG 8 Proximity to the Landfill Does Not Confirm Argument for Property Value Diminution The relative distance from the landfill within each primary neighborhood also merits closer scrutiny. If the Keller Canyon Landfill had caused primary neighborhood property values to diminish, then one would logically expect those homes closer to the landfill to experience a greater loss than those farther away from the landfill. In other words, a "distance premium" could be seen because buyers would pay more for homes farther away from the landfill relative to those close to the landfill. The ICPA Study does not support this hypothesis. In Hillsdale(NA), the distance premium(the additional property value due to increased distance from the landfill) fluctuated throughout time, often disappearing completely for a period of one or two consecutive years. If the landfill had caused a diminution in property values, the homes closest to the landfill should have experienced the most severe effects in the years 1992 to 1994. In fact, the ICPA statistical model failed to show that there was any significant distance premium for three years of that five year period. This result indicates that after the construction of the landfill, homes in Hillsdale near the landfill actually increased in value relative to homes located farther away from the landfill. Another interesting pattern can be gleaned from the ICPA's statistical output on the distance premium.' In the 11 years before the landfill received approval for construction, the statistical model indicates that residents paid a premium for homes farther away from Keller Canyon (then without the landfill) in all but two years. Perhaps the homes in northern portions of Hillsdale were simply more attractive to buyers for other reasons not studied in the model. In Oak Hills (NB), the distance premium for homes farther from the landfill decreased from 1989 to 1994. This means that although home buyers were willing to pay more for a home situated farther from the landfill in 1989, they were much less willing to do so in 1993. Logically, if the Keller Canyon Landfill were creating any sort of nuisances for homeowners in Oak Hills, one would expect that this distance premium would have increased once the landfill actually became operational. In other words, the real estate market would have recognized the higher value of properties situated farther from the landfill and paid accordingly. There is no evidence of this happening. Woodside (NC) offers the most unexpected results when tested to see if a distance premium was paid for homes located farther from the landfill. Even throughout the landfill construction, opening, and beginning operation periods (1991 and 1992), buyers paid a premium for homes located closer to the landfill. These findings strongly counter any hypothesis that diminution of property value occurred as a result of the landfill. Examined individually, the distance premium does not support a conclusion of property value diminution in any primary neighborhood. However, taken in combination, the interpretation of the distance premium is even more powerful. If any diminution in value ICPA report p. 52. LECG 9 i J occurred, it would be logical that all neighborhoods would have seen at least some distance premium effect. Hillsdale experienced varying distance premiums not at all related to operations of the landfill. Oak Hills experienced a declining distance premium for the landfill years in question. Finally, Woodside experienced the opposite of what one would logically expect in the property value diminution scenario -- people appeared to have paid a premium to live closer to the landfill. These results do not present any systematic pattern normally found when there has been diminution of property values. In fact, the lack of similar results between the three primary neighborhoods defies logical expectations. Overall, the ICPA Results Are Inconclusive Even if one accepts, for the time being, that the ICPA model is statistically sound, the output generated by the model does not provide evidence to support a case for property value diminution in any of the three primary neighborhoods. The paragraphs above, which highlight areas of concern from a general viewpoint, pose questions that seriously challenge ICPA's conclusions drawn from the results of its statistical model. None of the points made in this section of the report requires a detailed knowledge of statistical modeling techniques; common sense is more than sufficient. The following section examines the statistical model generated by ICPA from a more technical perspective. A Technical Review of the ICPA Study's Statistical Model As mentioned earlier, several aspects of the ICPA statistical model beg for serious examination. It is important to recognize that a statistical model does not simply become unreliable all of a sudden; questionable elements may enter the model at any time during its design. It is the combination of these uncertainties that casts doubt on the model and the results it generates. This section of the report attempts to trace the pattern of uncertainties that were added to the ICPA statistical model during the course of the study. The Selection of Neighborhood Comparables The"sun-ray" method of comparing potentially comparable neighborhoods employed by the ICPA is appealing from a visual standpoint. However, the method of constructing these plots could have been dramatically improved. ICPA staff used the average values for lot square feet, total square feet of the home, number of bathrooms, number of bedrooms, and sales price to construct their five-sided polygons. It is unclear whether the ICPA staff considered constructing their plots with median values instead of mean values. If the distribution of housing characteristics in a given neighborhood were uniformly distributed, then using the median instead of the mean would have yielded very similar plots. If, however, the neighborhood characteristics were skewed, a test of the median values compared to mean values would have made this fact clear. The ICPA Study did not indicate that such a study was performed. ' More important than the construction of the sun-ray plots is the manner in which they were used to select comparables. Page 27 of the ICPA Study shows the plots for various 10 LECG r � neighborhoods in Pittsburg. Neighborhoods NJ and NK were selected as comparables for Hillsdale (NA). From the figures, it appears that NN and NP should also have been considered in the selection of comparables. Similarly, neighborhoods NF and NM were selected as comparables for Woodside(NC). Again, NP appears to be a satisfactory visual match, as does NN. NM clearly is much"larger" than NC, which indicates that the majority of the average housing characteristics are higher than those for Woodside(NC). The ICPA Study does not explain the reasons why these additional possible comparable neighborhoods were immediately excluded from further consideration, thereby possibly omitting comparables that could have been used in the study and possibly given different results. Given the mixed and contradictory results, the inclusion of additional comparable neighborhoods should be considered. Multicollinear(Closely Related) Variables Appear in the ICPA Regression Model The ICPA Study lists household characteristics that were used in its statistical analysis on page 44 of its report. Many of these variables measure the size of a home, whether in total square feet, total number of rooms, number of bedrooms, or number of bathrooms. Generally, as one examines larger homes(with more square feet), the number of rooms increases, as do the number of bedrooms and bathrooms. Since all of these variables are closely related, the ICPA model does not need to include all of them in its regression. Two variables related to property size, LOTACRES and LOTSQFT immediately jump out at the reader as potential problems. A hedonic pricing equation should attempt to predict prices with a set of distinct characteristics. The size of the lot in acres and size of the lot in square feet measure the very same characteristic; only the scale differs. This is the classic example of two variables being closely related (multicollinear), differing only by the fact that 1 acre equals 43,560 square feet. These explanatory variables are highly correlated with one another which has the effect of lowering the reliability and-precision of statistical results. Attempts to replicate the ICPA statistical model indicate that these variables were eventually dropped from the regression model altogether. While this step effectively eliminates the multicollinearity problem, it leads the reader to question whether the ICPA staff checked its model for multicollinearity at all, or instead began dropping variables from the statistical model to create a better"fit". Nonetheless, it is surprising that such a fundamental error (multicollinearity)would not have been caught during the conceptual design of the model. Inconsistent Model Specifications Across Neighborhoods A review of the statistical output on pages 50 and 52 of the ICPA report reveals that the statistical model used by the ICPA staff was inconsistent in its application, depending upon the neighborhood regression conducted. A)though the ICPA report lists 10 explanatory variables (excluding dummy NHD variables), the regression output for each neighborhood does not contain the same explanatory variables. For example, on page 50, the regression output for NAJK/NHD lists coefficients for AP, YEARBLT, TOTALSF, TOTALRMS, BEDROOMS, and POOLX. The NB/NHD regression drops YEARBLT, LECG � 1 BEDROOMS, and POOLX and adds LOTSQFT. The HCFM/NHD regression is similar to the NAJK/NHD regression, except that TOTALRMS and POOLX are omitted while BATHTOT is added. Similar inconsistencies can be seen on page 52 of the ICPA report. If the ICPA team truly believes that they have achieved the optimal hedonic pricing equation to predict residential property prices, then they should apply the model equally across all neighborhoods. Leaving out certain variables because the model's description of the data points improves in their absence defeats the whole purpose of a strategic design for the hedonic equation. This is an improper statistical approach. If a particular housing characteristic(such as the number of bedrooms or the presence of a pool) is important in determining the value of a home in a neighborhood, it should be important in all similar neighborhoods. This sort of"cherry picking" indicates that the ICPA team was willing to sacrifice consistency in the application of its model in order to obtain more dramatic results. More importantly, the inconsistent application of the model means that the conclusions drawn from the output cannot be compared across neighborhoods. Regression Coefficients Are Counter-Intuitive One way to judge the effectiveness of a statistical model is to review the signs of the variables' coefficients to see if they make sense from an intuitive point. The ICPA model fails this test. For example, the ICPA model predicts that for neighborhood NA, an additional room will drop the price of the home by $1,329.8 That is, the model says that everything else equal, a three bedroom home is more valuable than a four bedroom home. This is illogical, but could possibly be rationalized under a specific set of circumstances. The output for the combined neighborhood NAJK regression is completely different. In this case, the addition of an additional room added $843 to the price of a home. This trend seems much more logical than the result for NA. However, it is unimaginable that the composite neighborhood, of which NA is a part, could change the magnitude of the TOTALRMS coefficient to such a great degree. A similar effect can be seen with BEDROOMS.9 These coefficients provide clear examples of how the statistical model is flawed. ICPA's AP Variable Introduces Simultaneous Variables into the Model The ICPA model includes an average price (AP)variable to account for the fact that not all of the data points are time series in nature. In other words, for some particular homes which were sold several times during the study period, a good chronological record of price variation exists (time series data). Other homes sold only once, so the study period only includes a"snapshot" of the value of these homes at one particular point in time (cross-sectional data). The ICPA wanted to be able to combine these two types of data points into one chronological set of data for modeling. ICPA staff reasoned that if they calculated the average price for each neighborhopd and added that as an explanatory variable to the hedonic equation, they would be able to capture the effects of growth and 8 ICPA report p. 50. 91CPA report p. 50. LECG 12 t ! ' recession periods over time. Although well-intended, the creation of the AP variable only introduced additional imprecision and bias into the ICPA model. Average prices and the AP variable are not independent of the price of a particular house. With the introduction of AP as an independent variable, the dependent variable, housing price, is being modeled as a function of a variable(AP) that is itself influenced by housing price. In the simple equation y=f(x) [read"y equals a function of x"], where x=g(y) ["x is equal to some function of y"], then y=f(g(y)) ["y is a function of a function of y"]. In other words, y(which represents price) appears on both the left and right sides of the equality. The hedonic equation now contains an average price variable calculated from the pricing data that is being modeled. Not surprisingly, the coefficient for AP approaches 1 in ICPA's regression model. This simply means that the price of a house is explained in a large part by the average price of housing for that particular year. This information is what one would expect and adds no valuable information to the hedonic pricing equation. In fact, the introduction of such"simultaneous equation bias" is universally acknowledged to lead to biased statistical results.10 The methodology employed by ICPA has an additional unintended effect. Because the AP variable is included in the regression model, any alleged diminution in value would be partially measured by the AP variable. In other words, the coefficient on the AP variable essentially competes with the NHD dummy variable to measure any decrease in neighborhood premium. Not only is the dummy variable affected, but the addition of AP into the regression model also masks the predictive effect of the other housing variables. The ICPA Study mentions that the AP variable is a"new explanatory variable which does not seem to have been employed in the literature."11 This type of simultaneous variable does not appear in the literature for good reason-- it is statistically incorrect. Year Built Housing Variable Should Be Changed to Age of Home The ICPA Study uses the year that a home was built as an explanatory variable in its regression analysis. The implication is that sales prices are affected by age of a home. This hypothesis is entirely reasonable. However, using the year built does not approximate the age of a home properly. Consider the case where a home is sold in 1984, four years after it was built in 1980. The negotiated sales price could be explained in part by the fact that it was built in 1980. However, if the same house is sold again in 1989, the coefficient for the year the house was built should change because the house is now'nine years old. The regression model as specified in the ICPA model effectively takes an average of the coefficients for these two transactions, even though the age of the home was different in each transaction. Therefore, the meaning of the coefficient is decrgased. A better way to measure the effect that age has on the price of a home is to take the difference between the transaction date 10 Pindyck and Rubinfeld,Econometric Models&Economic Forecasts,McGraw-Hill, Inc. 1991,pp. 303- 304. " ICPA report p. 46. LECG 13 and the year built. This new variable then would actually measure the age of the home and accurately capture information related to multiple sales of the same property over time. Yearly Dummy Variables Do Not Compare Data as ICPA Had Intended The ICPA's report cites the statistical output listed on page 50 of its report as justification for its argument that the Hillsdale neighborhood may have suffered some diminution in property value. However, the coefficients for the interactive NHD dummy variables for each year were defined incorrectly in ICPA's statistical model. Therefore, the yearly coefficients cannot be interpreted in the manner suggested by ICPA. ICPA wanted to perform a year by year comparison of the primary neighborhoods to the comparable neighborhoods. The manner in which ICPA built and ran its model, however, compares the sales in primary neighborhoods for a given year to sales in comparable neighborhoods.for all years, 1979 to 1994. The ICPA staff overlooked this flaw in their modeling, saying"Dummy variable NHD was expanded to allow comparison of primary versus comparable sales in a particular year." With this mistake, the NHD dummy variables actually compare the sales in a primary neighborhood with an average sales price for all sixteen years in the comparable neighborhoods. An example of what the ICPA Study said it measured and what it actually measured would be helpful. Assume that the relationship in average housing prices between two neighborhoods, NA and NJ is illustrated in the table below: Year NA NJ Premium = Premium % _ (NA-NJ) (NA-NJ)/NJ Yrl $100,000 $80,000 $20,000 25% Yr2 $ 90,000 $72,000 $18,000 25% Yr3 $ 81,000 $64,800 $16,200 25% Homes in NA sell for more than homes in NJ. Due to a declining real estate market, both decrease at the rate of 10% per year. If one simply looks at the yearly premium for NA relative to NJ, it moves from$20,000 in Yrl to $16,200 in Yr3. It is tempting to conclude that the neighborhood premium for NA is shrinking. The ICPA Study would have one believe that this is what its study measures and that property value diminution has, in fact occurred. However, because the rate of decline in the two neighborhoods is the same (10%), the premium as a percentage remains constant at 25%. (Premium percentage defined as (NA-NJ)/(NJ) for each year.) The ICPA Study fails to compare the neighborhoods on a year to year basis. The table below uses the same figures as above to illustrate what the ICPA Study actually measures: 14 LECG Year NA NJ Premium above average _ (NA-(avg {NJ)) Yrl $100,000 $80,000 $27,733 Yr2 $ 90,000 $72,000 $17,733 Yr3 $ 81,000 $64,800 $ 8,733 Average $72,267 The ICPA Study actually compares the housing prices in neighborhood NA with the average housing prices in NJ for all years. Therefore, the premium for NA relative to NJ under this methodology is inflated to $27,733 in the first year and drops dramatically to $8,733 in Yr. 3. The ICPA Study encourages one to believe that nearly a$20,000 loss of premium has occurred from Yrl to Yr3. By comparing these results to the first table presented above, it is obvious from this simple example that the conclusions drawn by ICPA would be completely incorrect. The neighborhood premium for NA relative to NJ has decreased in absolute terms but remained constant in percentage terms. The ICPA Study is not designed to recognize and measure the possibility that this relationship between neighborhoods might actually occur. Therein lies a serious flaw of the ICPA Study. In summary, the ICPA Study did not accomplish what it set out to model. The coefficient on the dummy variable does not measure the specific price difference between the primary and comparable neighborhoods for that year. Rather, the coefficient in this variable measures the difference between the average price in the primary neighborhood for that year with the average selling price for all years in the comparable neighborhood. Therefore, interpreting these coefficients as a measure of how the neighborhood premium changes over time is misleading. The ICPA Study failed in its attempt to track and measure property diminution. Therefore, there is no statistical evidence upon which the ICPA Study may base its conclusions. i An Appropriate Functional Form Should Have Been Selected for the Regression Model After gathering the residential housing data for both primary and comparable neighborhoods, the ICPA Study selected a linear regression model to explain the relationship between sales price and the housing characteristics. "It is recognized that alternate specifications, such as a log-linear model, might be utilized instead, but the linear specification has been selected because of its popularity, success in application, and ease of interpretation."12 Although the explanation of linear regression models to general audiences is much simpler, the ICPA staff was familiar with regression techniques and should have considered non-linear models in the design phase of the study. I I i 12 ICPA report p. 44. LECG 15 i Figures 6, 7, and 8 of the ICPA Study13 illustrate the non-linear nature of the data sets. At first observation, it seems as if a second degree variable could help to explain the housing prices. There is no indication in the ICPA Study that such an observation was noted, much I less considered for additional study. There are also logical reasons to expect that non-linear relationships would more accurately describe the way additional housing characteristics affect home prices. For instance, consider the effect of an additional bedroom when comparing one house to another. The addition of a third bedroom to a two bedroom house is probably more valuable, in absolute terms, than-the addition of a fifth bedroom to a four bedroom house. A similar argument can be made for additional bathrooms. Home buyers would pay a significant amount for a home with two bathrooms rather than one; they would be less likely to invest the same lump sum of cash for a home with four bathrooms instead of three. The coefficient of a logarithmic variable (such as number of bedrooms, number of bathrooms, or total living space)would measure the relative change in price per additional unit of space such that the dollar amount would be different for 1 unit to 2 units than from 2 units to 3 units. In this way, the linear regression model used in the ICPA Study could be improved to measure the relationship described above. i Conclusion It is fair to criticize the ICPA Study on several levels. First, the design of the study is questionable beginning from the selection of some comparable neighborhoods. Secondly, the statistical model is not designed to predict changes in neighborhood premiums correctly. In addition, the model is not consistently applied to all neighborhoods. Therefore, it is not possible to compare results across neighborhoods. I The study does not accomplish what it had hoped; much of the statistical output is inadequate and leaves questions of property value diminution unanswered. Finally, even if the ICPA Study had properly addressed the issue of diminution in its model, its conclusions are inconsistent and lead to inconclusive results. In summary, a new and improved study is needed. i III. The Coopers & Lybrand Study General Comments and Observations The Coopers& Lybrand Study(henceforth referred to as the"C&L Study") reviews the ICPA Study and identifies many of the same areas of concern that have already been advanced in previous pages of this report. These points of agreement concerning the inadequacy of the ICPA statistical model, the improper application of the model, and the inconclusive nature of ICPA's findings overall need not be repeated in this section of this report. 13 ICPA report,pp. 31, 37,and 38 respectively. LECG 16 i I o It was obvious that C&L personnel spent a considerable amount of time verifying ICPA's data points and statistical output with the aid of computer programs and field inspections. Time constraints of this project did not allow for a"step by step" review of the C&L methodology. However, the subsequent conclusions advanced by C&L Study were examined and, when possible, replicated. The following sections discuss these findings. Flaws in the ICPA Database C&L concludes that there are over 79 obvious instances where the same sale was entered twice or more in the ICPA database.14 With one pass through the data, LECG staff were able to pinpoint a total of 97 duplicates within the ICPA database for the primary and comparable neighborhoods. Thirty-two were exact duplicates (same document date, same housing price, etc.), and the remaining 65 were matches where the document date for a duplicate entry was off by one day or more. These duplicate observations skew the regression results because they overstate the distinct number of observations and ultimately affects the critical values with which one tests variables for statistical significance. Therefore, the regression results will be inefficient15 and biased. Although agreement was not reached on the exact number of duplicates, relative magnitude of the duplicates located by LECG is sufficient to corroborate claims made in the C&L Study. It is unfortunate that the cooperative effort between C&L and Dr. Lewis of Sonoma State University had to be abandoned early in the C&L Study. If some agreement had first been obtained on the validity of the data set, then other regression models could have been attempted by C&L. Since this was not the case, it is entirely understandable that C&L hesitated to give much credence to the ICPA database. ICPA's Average Price Calculation The C&L Study points out a flaw in the ICPA's method of calculating average prices for each neighborhood. As mentioned earlier in this report, the AP variable is inappropriate and introduces additional uncertainty into the ICPA statistical model. However, in the process of verifying the regression output generated in the ICPA Study, C&L discovered that the AP variable had itself been calculated incorrectly. LECG staff were able to confirm C&L's assertion that ICPA had miscalculated the AP variable. Hillsdale Premium Relative to Comparable Neighborhoods The C&L Study uses the ICPA model to test if there was a loss in neighborhood premium for Hillsdale. The C&L regression corrects the mathematical"mistake" in ICPA's calculation of the AP variable and then performs the statistical regression one year at a time. C&L also elects to compare Hillsdale with each comparable neighborhood individually. With these modifications, C&L has not introduced a new regression model. Instead, they follow the ICPA methodology but correct some of its major flaws. Figures 4 14 Coopers&Lybrand L.L.P.,"Analysis of the Sonoma State University Property'Valuation Study", November 15, 1995,p. iii.. '5 Efficiency is usually measured in relative terms. One would describe a term as"efficient"if for a given sample size,the variance of the estimator is smaller than the variance of any other unbiased estimators. 17 LECG 1 and 5 in the C&L Study illustrate that the ICPA model fails to present any evidence of property value diminution for Hillsdale. Omission of Important Factors Affecting Home Prices The C&L Study claims that the ICPA Study should have gathered additional information to explain how much a buyer would pay for a home in a primary neighborhood. Certainly, when conducting any study, more information is always preferable to less information. However, it is often impractical to gather such information. For example, the C&L Study suggests the inclusion of variables to describe Landscaping, Shape of Lot, General Up- keep, and Color of the House. The subjective nature of many of these housing characteristics also make them difficult to quantify for inclusion into a hedonic model. The C&L Study also presents pictures of pairs of similar homes in the Hillsdale neighborhood. Within the database of information created by the ICPA staff, these homes are indistinguishable and should then sell for comparable amounts. Photographs proving that the homes are, in actuality, easily distinguishable combined with actual sales data support C&L's claim that ICPA did not consider many important housing characteristics in its study. In any statistical study, variances from the norm will always exist. The C&L Study was correct to highlight these differences, but the more important fact to consider is whether the photographs represent a majority or minority of the homes in the database. One would expect that most of the homes can be reasonably described by the housing characteristics used in the ICPA Study, such that irregularities would be"averaged out" overall. However, if discrepancies similar to those illustrated in the C&L Study are systematic, then the data may need to be re-examined. The photographs presented in the C&L Study do provide strong evidence that an additional variable should be considered for addition into the ICPA model, regardless of the extra effort required to do so. Several homes are extremely close to high-voltage power transmission lines and their support structures. With all of the health-related concerns over these types of electrical lines and their prevalence in the Hillsdale neighborhood, it would not be surprising if home buyers' decisions were affected by them. Similarly, another"location" variable that should also be considered is one measuring distance from Highway 4, as discussed previously in this report. Conclusion The C&L Study addresses many of the same points as are contained within this report. However, the C&L Study primarily focuses on the technical issues surrounding the ICPA statistical model. Coopers&Lybrand studied the ICPA database much more closely than time permitted in this study. In addition, C&L rg-created the ICPA regression model and performed numerous tests with it. Staff at LECG had access to ICPA's raw data(in the form it was provided to C&L) and was able to confirm the majority of conclusions presented in the C&L report. Staff at C&L also spent a considerable amount of time on site visits to corroborate their findings. While the conclusions from the field studies 18 LECG V 1 generally agreed with those in the ICPA report, neither the C&L or ICPA field methodologies were reviewed in this report. IV. Suggested Improvements to the ICPA Model Time constraints and the scope of this assignment prevent presentation of a new statistical model to test for possible diminution of property value resulting from the construction and operation of the Keller Canyon Landfill. Unfortunately, it would be nearly impossible to "fix" the ICPA Study. One would need to start with data collection and move forward with the design of the new model. However, if one were to begin a new study, there are specific areas to target such that errors similar to those in the ICPA methodologies would be eliminated. Selection of Comparables In selecting comparable neighborhoods, one should consider other neighborhoods that appear to be good matches for the primary neighborhoods. Neighborhoods NN, NO, and NP were discarded early on in the-ICPA Study, but appeared to be good potential matches for the primary areas of the study. Given the inconsistent and counter-intuitive results of the ICPA Study, the expansion of the data set is warranted. The Statistical Regression Model The regression model could be improved in many ways. A log-linear model with dummy variables would be more appropriate than a linear model with the same dummy variables. This functional form would allow one to measure the percentage diminution in property value rather than the absolute value of any diminution. As with any statistical modeling, it is important to first determine the form of the model and the variables to be included in the regression equation prior to conducting the regression and reviewing the statistical output. The model should not be modified simply to improve its performance. A new set of variables in the regression should also be considered. For example, a variable DAYS, the number of days between an arbitrary date and the date sold, could be used as a time variable. The arbitrary date would have to be before any sales transactions took place. The difference in days between the sales date and the arbitrary date would allow for comparisons of property over time. DAYS squared could also be added to allow for a non-linear time trend in property variables. The addition of one of these variables would accomplish what the ICPA Study set out to do by including the AP variable. However, the DAYS variable would not introduce bias into the statistical model. One or two size variables are sufficient to model the impact of size on price. To account for the size of the yard, one could use the log of the lot size in square feet or acres, but certainly not both. The interior space could be modeled with the log of total living space in square feet or the total number of rooms. Although this method would not allow one to see how the addition of a bedroom or bathroom would affect the price of a home in a LECG 19 particular neighborhood, it would capture the general effect of increased size (be it through an additional bathroom, bedroom, or simply larger rooms) on housing price. Using fifteen dummy variables to measure the yearly change in neighborhood premium is unnecessary. Two dummy variables could achieve nearly the same effect as that intended by the ICPA model. One dummy variable would be assigned a value of 1 for the primary neighborhood properties, and 0 for the comparables. The second dummy variable would be assigned a value of 1 for all primary properties sold after a specific date and a 0 for all other properties. This specific date would delineate the"before" and"after" for the construction/operation of the landfill (e.g. November 1, 1991). The first dummy variable would quantify an average premium(positive or negative) for properties in the primary neighborhood relative to the comparable neighborhood. The second dummy variable would measure the average diminution or appreciation of properties in the primary neighborhood after the landfill. This combination of dummy variables would create the "but for" analysis that is often used in analysis of property value diminution. The suggestions presented above will improve the statistical model developed in the ICPA Study. A new study to measure any property value diminution near the Keller Canyon Landfill should consider these points. With additional time and study, modifications to the suggestions above could be warranted. However, these modifications should be made prior to conducting the regression analysis. Ll�tS.�t/ Gordon C. Rausser, Ph.D. LECG 20 l 1 Attachment A LECG 21 GORDON C. RAUSSER Law and Economics Consulting Group, Inc. Universitv of California 2000 Powell Street, Suite 600 207 Giannini Hall Emeryville, CA 94608 Berkeley, CA 94720 Tel. (510) 653-9800 Tel. (5 10) 642-6591 Fax (510) 653-9898 Fax (510) 642-8260 PRESENT POSITION UNIVERSITY OF CALIFORNIA, Berkeley, CA, 1994 -present. Dean, College of Natural Resources. UNIVERSITY OF CALIFORNIA, Berkeley, CA, 1986 -present. Robert Gordon Sproul Distinguished Professor. Department of Agricultural ar_� Resource Economics. INSTITUTE FOR POLICY REFORM, Washington, DC, 1990 -present. President. LAW & ECONOMICS CONSULTING GROUP, INC., 1989 -present. Principal. EDUCATION Postdoctoral Fellowship, UNIVERSITY OF CHICAGO, Chicago, IL, 1972 - 1973. Departments of Economics and Statistics Ph.D., UNIVERSITY OF CALIFORNL-k, Davis, CA, 1971. Highest Honors, Agricultural Economics M.S., UNIVERSITY OF CALIFORNIA, Davis, CA, 1968. Highest Honors, Agricultural Economics B.S., CALIFORNIA STATE UNIVERSITY, Fresno, CA, 1965. Summa Cum Laude, Agriculture and Statistics AWARDS AND HONORS WAEA Outstanding Published Research Award of 1994 for"Price Distorting Compensation Serving the Consumer and Taxpayer Interest," published in Public Choice, Vol. 77,No. 2, October 1993. AAEA Publication of Enduring Quality Award for contributions to environmental economics, statistical economics, statistical decision theory, and natural resource analysis, 1993. LECG Gordon C. Rau_-er P-3e AAEA Outstar.;:ing Journal Article Award Finc:ist ("Productive and Predatory Public Policia Research Esp .::ditures and Producer Subsidies :n Agriculture"), 1992. AAEA Distina::ished Policv Contribution Avard for econometric analysis of public policies. :X92 and 1993. Member, Board for International Development Studies, Fletcher School of Law and Diplomat-. Tufts University. 1992 -present. Fellow of the American Association for the Advancement of Science, 1994. Fellow of the American Statistical Association. 1991. Agency for International Development, Superior Unit Citation Award, 1990. Fellow of the American Agricultural Economic: Association, 1990. Special Recognition, "Outstanding Professional Research Contributions,"Agricultural Econw-ics and Agribusiness, 3rd edition, Gail L. Cramer and Clarence W. Jones, John Wiley and Sons. 1990. AAEA Outstanding Journal Article Award Finalist ("Incomplete Markets and Government Policy"), 1989. Member, Economic Discipline Board, Fulbright Scholarship Awards, 1989 -present. Chairman, Intergovernmental Consultative Group on Indonesia. The Hague, June 1989. Cofounder of the Institute for Policy Reform, Washington, D.C., 1989. Founder of the Agency for International Development Research Fellow Program, 1989. Chief Economist, Agency for International Development, 1988 - 1990. Editor,Agricultural Management and Economics, Springer-Verlag, 1988 -present. Chairman, Berkeley Department of Economics and All Economic Programs Evaluation Committee, 1987 - 1988. Teaching and course materials in agriculture policy selected for publication in Economics Reading Lists, Courses. Outlines, Erams, Puzzles, and Problems, compiled by Edward Tower, Duke University, July 1981, July 1988, Vol. 22,Agricultural Economics. Fulbright Scholar, Australia, 1987. LECG Gordon C. Rausser Page Robert Gordon Spro::; Distin;_uisiied Professor. Univ.-sity of California. Berkeley. CA, 1986 - present. Senior Staff Econon:at. Council of Economic Advisors. 1986 - 1987. AAEA Award for Best Published Research ("Macroeconomic Linkages, Taxes, and Subsidies in the U.S. Agricultural Sector"), 1956. Senior Resident Fellow. Resources for the Future, National Center for Food and Agricultural Policy, 1984 - 1985. Editor,American Joll.rnal of Agricultural Economics. 1983 - 1986. AREA Award for Best Journal Article ("Commodity Price Forecasting With Large-Scale Econometric Models and the Futures Markets"). 1982. AAEA Honorable Mention Award for Best Published Research ("Dynamics of Agricultural Svstems: Economic Prediction and Control"), 1980. Director: AAEA, university, and departmental Outstanding Dissertations Awards (9), 1979 - present. AAEA Outstanding Journal Article Award Finalist ("Active Learning, Control Theory, and Policy"), 1978. WAEA Award for Best Published Research ("Firm Grovlh Policies Under Different Pollution Abatement, Producticn, and Financial Structures"), 1978. Faculty Excellence in Teaching Award, Harvard University, 1978. Associate Editor,Journal of Economic Dynamics and Control, 1978 - 1982. Editorial Board,Amen-can Journal orAgricultural Economics, 1977 - 1980. AAEA Award for Best Published Research ("Stochastic Control of Environmental Externalities"), 1976. Associate Book ReOew Editor,Journal of the American Statistical Association, 1974 - 1982. Associate Editor,Journal of the American Statistical Association, 1973 - 1977. Commissioned by the American Agricultural Economics Association to prepare a monograph, "Systems Analysis and Simulation Techniques," 1973. Ford Foundation Visiting Scholar, Argentina, 1972. Doctoral Dissertation.award for Best Thesis, University of California, Davis, 1971. LECG Gordon C. Rausser Pare 4 Other Awards: Member of Alpha Zeta; Phi Beta Kappa: Blue Key: National Defense and Education Act Fellowship Grant; Blue Ke%-Award for Outstanding Graduate; Greek Man of the Year Award-, Alpha Zeta Alumni Award to the Outstanding Graduating Senior; College Outstanding Leadership Award; Alpha Zeta President; Alpha Gamma Rho President: Agricultural Executive Council President; Senior Class President. Listed in: Who's Who in America Who's Who Internationally Who's Who in the West Who's Who in California Who's Who in Technolo,�, Who's Who in Finance an, Industry Who's Who in American Colleges and Universities Who's Who in American E2:lcatia7 American Men and Women ol*Science The Directory of Distingu,,Shed Americans Men of Achievement Personalities ofAmerica Dictionary oflnternationa Biographv Community Leaders of the IVorld ACADEMIC AND GOVERNMENT POSITIONS UNIIVERSITY OF CALIFORNIA, Berkeley, CA. Dean. College of"Natural Resources, 1994 -present. Chairman Department of Agricultural and Resource Economics, 1993 - 1994. Robert Gordon Sproul Distinguished Professor. Department of Agricultural and Resource Economics, 1986 -present. Chairman Department of Agricultural and Resource Economics, 1979 - 1985. Chairman. Executive Committee. Giannini Foundation. 1982 - 1984. AGENCY FOR INTERNATIONAL DEVELOPMENT,Washington, DC. Chief Economist, 1988 - 1990. LECG Gordon C. Rausser Pave COUNCIL OF ECONO\1IC ADVISORS, Executive Office c:the President. Washington, DC. Special Consultant and Senior Staff Economist. 1986 - 1987. RESOURCES FOR THE FUTURE. Washington, DC. Senior Resident Fellow. 1984 - 1985. VISITING FACULTY APPOINTMENTS University of Chicago, Chicago, IL, 1972 University of Illinois. 1974. Hebrew University, 1978. Ben Gurion University, 1980. Australian National University, 1987. Monash University, Australia. 1987. HARVARD UNIVERSITY, Cambri"4ae, MA. Professor of Managerial Economics and Statistics, 1975 - 1978. IOWA STATE UNIVERSITY. Professor of Economics and Statistics, 1974 - 1975. UNIVERSITY OF CALIFORNIA. Davis, CA. Full Professor(offered), 197". Associate Professor. 1972. Assistant Professor of Agricultural Economics, 1971. FIELDS OF INTEREST Agricultural economics Industrial organization and antitrust analysis Applied econometrics Natural resource and environmental economics Futures markets Public policy and economic regulation Development economics Statistical decision theory MEMBERSHIP IN PROFESSIONAL SOCIETIES American Academy of Arts and Sciences American Academy of Political and Social Science American Agricultural Economics Association American Association for the Advancement of Science LECG Gordon C. Rausser Page 6 American Economics Association American Statistical Association Econometric Societe Institute of Management Science International Agribusiness Management Association International Agricultural Economics Association Mathematical Association of America Operations Research Societe Western Agricultural Economics Association PUBLICATIONS Journal Articles (Refereed) "The Existence of Broiler Cycles: An Application of Spectral Analysis." with Thomas F. Cargill, American Journal of'Agricultural Economics. Vol. 52, No. 1, Februan•, 1970. pp. 109-121. "The Demand for Fertilizer, 1949-1969: An.analysis of Coefficients from Periodic Cross Sections," with T. F. Moriak,Agricultural Economics Research, Vol. 22,No. 2, April, 1970, pp. 45-56. "Effects of Misspecifications of Log-Linear Functions When Sample Values .are Zero or Negative," with S. R. Johnson,American Journal of Agricultural Economics, Vol. 53,No. 1, February, 1971, pp. 120-124. "On the Measurement of Price Elasticity of Demand," with S. H. Logan and R. A. Oliveira, American Journal of Agricultural Economics, Vol. 53,No. l;Februan•, 1971. pp. 112-115. "Effects of Misspecification of Linear Functions When Sample Values Are Zero or Negative--A Reply,"with S. R. Johnson,American Journal ofAgricultural Economics, Vol. 53, No. 4, November, 197 1. .3 673-674. "Time and Frequency Domain Representations of Future Prices as a Stochastic Process," with Thomas F. Cargill,Journal of the American Statistical Association, Vol. 67, No. 337, March, 1972, pp. 23-30. "Approximate Distribution of Parameters in Distributed Lag Models," with Theodore P. Lianos, Journal of the American Statistical Association, Vol. 67,No. 337, March, 1972,pp. 64-67. "Learning External Benefits and Subsidies in Water Desalination," with C. Willis and P. Frick, Water Resources Research, Vol. 8,No. 6, December, 1972, pp. 1385-1400. "Investment Sequencing Recognizing Externalities in Water Desalting," with C. Willis, Water Resource Bulletin, Vol. 9,No. 1, February, 1973, pp. 54-72. LECG Gordon C. Rausser Paae . "T,e Validity and Verification of Complex System Iodcls." .4mcrican Journal o7'.4 aricultural E.onomics, Vol. -55. No. 2. Mav, 1973, pp. 273-279. "Sufficient Conditions for Aggregation in Linear Programming Models," with Quirino Paris, American Journal of Agricultural Economics, %'ol. », No. 4, November, 1973, pp. 177-203. "Approximate Adaptive Control Solutions to U.S. Beef Trade Policy," with J. W. Freebairn, Annals of Economic and Social Measurement, Vol. 3, No. 1, January, 1974, pp. 177-203. "Updating Parameter Estimates: A Least Squares Approach with an Illustrative Application to the Inventory of Beef Cows,"with J. W. Freebairn. Review of Marketing and Agricultural Economics. Vol. 42, No. 2, June, 1974, pp. 83-89. "Alternative Econometric Forms."Journal of Economics. Vol. 2, October. 1974, pp. 27-.3 "Estimation of Policy Preference Functions: An Application to U.S. Beef Import Policy," with J. W. Freebairn. Review of Economics and.Statistics. Vol. 56, No. 4, November, 1974, pp. 437-449. "An Adaptive Control Approach to Agricultural Police." with J. W. Freebairn,-Australian Journal ofAgricultural Economics, Vol. 18. No. 3. December. 1974. pp. 208-220. "Technological Change. Production. and Investment in Natural Resource Industries."American Economic Review, Vol. 64, No. 6, December, 1974, pp. 1049-1059. "Discrete Variations Across Subsets of Parameters in Simultaneous Equation Models," with S. R. Johnson,Metroeconomica, Vol. 26, January-December, 1974; pp. 226-244. "Stochastic Control of Envirorunental Externalities," with R. Howitt,Annals of Economic and Social Measurement, Vol. 4,No. 2, Spring, 1975, pp. 271-292. "The Limitations of Simulation in Model Evaluation and Decision Analysis," with S. R. Johnson, Simulation and Games, Vol. 6,No. 2, June, 1975, pp. 115-150. "Temporal Price Behavior in Commodity Futures Markets," with T. F. Cargill,Journal of Finance. Vol. 30,No. 4, September, 1975, pp. 1043-103. "Technical Progress and Environmental Tradeoffs in Natural Resource Industries,"Journal of Economics and Business. Vol. 28, October, 197-5. pp. 1-14. "Effects and Changes in the Level of U. S. Becf Imports."with J. W. Freebairn,American Journal of Agricultural Economics, Vol. 57,No. 4, November, 1975, pp. 676-688. "Stochastic Control Theory and Economic Policy: An Application," with J. W. Freebairn, Australian Economic Papers, Vol. 14, No. 25, December, 1975, pp. 216-230. "Econometric Policy Model Construction: The Post-Bayesian Approach." with A. Faden,Annals of Economic and Social Measurement, Vol. 5, Spring, 1976, pp. 349-362. LECG Gordon C. Rausser Page S "The Smbility of the Demand for Money in Canada." with P. Laumas,Journal ofAknerary Econom:cs, Vol. 2, Summer, 1976. pp. 367-380. "An Eccnomic Analysis of Wilderness Area Use." with Ronald A. Oliveira,Journal o_f the American Statistical Association, Vol. 71. No. 354, June, 1976, pp. 276-28-5. "Investment Sequencing, Allocation, and Learning in the Design of Water Resource Systems: An Empirical Application," with C. Willis, Water Resources Research, Vol. 12, June, 1976. pp. 317- 330. "The Economic Impact of EPA Sulfur Standards on the U.S. Coal Industry," with R. A. Levins, M. D. Boehlje, and J. A. Otte, SIE Transactions, Vol. 262, March. 1977, pp. 65-74. "Daily Fluctuations in Campground Use: An Economic Analysis," with Ronald A. Oliveira, America;t Journal o{Agricultural ECO170ntics, Vol. 59. No. 2, May, 1977, pp. 283-293. "Adaptive Control: Survey of Methods and Applications," with Dov Pekelman,Management Science. Vol. 9, 1978, pp. 89-120. "Active Learning, Control Theory, and Agricultural Policy,"American Journal of Agricultural Economics, Vol. 60, No. 3, August, 1978, pp. 476-490. "Public Intervention and Producer Supply Response," %tith D. Peter Stonehouse,American Journal ofAgric-ultural Economics. Vol. 60, No. 5, December. 1978. pp. 885-890. "Natural Resources. Goods, Bads. and Alternative Institutional Frameworks." with Harvey Lapan, Resources and EnerD,, Vol. 2.No. 4, 1979. pp. 293-324. "Hedging and Joint Production. Theory and Illustrations,"Journal of Finance. Vol. 35,No. 2, May, 1980, pp. 448-301. "A Dynamic Economic Frame-work for Soil Conservation,"American Journal ol'Agriculrural Economies, Vol. 62,No. 5, December. 1980, pp. 109=-1094. "Commodity Price Forecasting with Large-Scale Econometric Models and the Futures Market," with Richard E. Just,American Journal of Agricultural Economics,Vol. 63, No. 2, May, 1981, pp. 197-1-15. "Multiarribute Utility Analysis: The Case of Filipino Rice Policy,"with Joseph Yassour, American Journal ofAgrieultural Economics, Vol. 63.No. 3, August, 1981, pp. 484-494. "Optimal Choices Among Alternative Technologies with Stochastic Yields," with Josep Yassour and DaNid Zilberman,American Journal of Agricultural Economics, Vol. 63,No. 4, November, 1981, pp. 718-723. LECG Gordon C. Rausser Paae 9 "Political Ece.-omic Markets: PEST: and PERTs in Food and Agriculture."American Jour:.::of Agricultural Economics, Vol. 64, No. 5. December. 1982, pp. 821-833. "Systems Science and Natural Resource Economics," with Stanlev R. Johnson and Cleve Willis. International Journal ofSvstems Science, Vol. 14,No. 8, 1983, pp. 829-858. "Efficient Asset Portfolios and a Theory of Normal Backwardation," with Colin Carter and Andrew Schmitz,Journal of Political Economy, Vol. 91,No. 2, April, 1983, pp. 319-331. "The Effect of Asxmmetrically Held Information and Market Power in Agricultural Markets." with Jeffrev M. Perloff;American Journal'ofAgricultural Economics. Vol. 65,No. 2, May. 1983. pp. 366-371. "Futures Market Efficiency in the Soybean Complex," with Colin Carter, Review of Economics and Statistics. Vol. 65, No. 3, August. 1983, pp. 469-478. "Country Hedging for Real Income Stabilization: A Case Stud-of South Korea and EaN t," with Kathryn M. Gordon.Journal of Futures Markets, Vol. 4, No. 4, Winter, 1984, pp. 449464. "The Distributional Effects of Land Controls in Agriculture." with David Zilberman and Richard E. Just, Western Journal of'Agricuhural Economics. Vol. 9, No. 2, December, 1984, pp. 215-232. "Some Political Economy Aspects of Macroeconomic Linkages with Agriculture," with Margaret S. Andrews,American Journal of Agricultural Economics. Vol. 68, No. 2, May, 1986, pp. 413- 417. "Macroeconomic Linkages, Taxes, and Subsidies in the U.S. Agricultural Sector," with James A. Chalfant, H. Alan Love, and Kostas G. Stamoulis,American Journal of Agricultural Economics, Vol. 68,No. 2. Mav, 1986, pp. 399-412. "INIodeling the Effects of Policy on Farmers in Developing Agriculture," with Richard E. Just and David Zilberman, International Jounuil 61'Development Planning Literature, Vol. 1, No. 3. July- September, 1956. pp. 287-300. "Managing Farm Supply: Kick the Habit. But Make Other Reforms, Too." with William E. Foster, Choices, 3rd Quarter, 1987, pp. 18-21. "The Political Economy of Agricultural Policy Reform," with Douglas A. Irwin,European Review of Agricultural Economics, 1989, pp. 349-366. "Interest Rates and Commodity Prices,"with John Kitchen,Journal of Agricultural Economics Research,Vol. 41.No. 2. Spring, 1989, pp. 5-11. "Incomplete Markets and Government Agricultural Policy," %,.ith Robert D. Innes,American Journal of Agricultural Economics, Vol. 71, No. 4, November, 1989, pp. 915-931. LECG Gordon C. Rausser Page 1,j "An Assessment of the Agricultural Economics Profession," Richard E. Just.American Journal q,'Agricui'tziral Economics, Vol. 1. No. 5. December. 89. pp. 1171`-1190. "Looking Ahead: Agricultural Policy in the 1990s," with Davl` Nielson, U C. Davis Low Reviei,. Vol. 12, No. 3, Spring 1990, pp. 415-430. "A New Paradigm for Policv Reform and Economic Developme:-.c."American Journal o Agricultural Economics, Vol, 72, No. 3, August, 1990, -826. pp, 82 1 "Political Preference Functions and Public Policy Reform," with William E. Foster,American Journal ofAgricultural Economics. Vol. 72, No, 3,August, 19�0, pp. 642-652. "Link-ages Among Commodity Futures Markets and Dynamic Welfare Analysis," with Nicholas Walraven.Review of Economics and Statistics, Vol. 72, No. 4. November, 1990, pp. 6')l-639. "Market Politics and Foreign Assistance.." with Scott Thomas. --evelopment Policy Review, Vol. 8. December. 1990. - . pp. 365-381. "Implications of Structural Adjustment: Experience in Develop::-,,, World for Eastern Europe," American Journal ofAgricultural Economics, Vol. 72. No. 5, D-.cember, 1990, pp. 1252-1256. "Farmer Behavior Under Risk of Failure," with William E. Fos-,.-r,American Journal of Agricultural Economics, Vol. 73, No, 2. May, 1991, pp, 276--I �8, "The Political Economv of Commoditv and Public Good Policies- in Agriculture: Implications for Policy Reform." NN'th Harry de Gorter' European Review,ofAar cultural Economics, Vol. 18, 1991, pp. 481-504. "Food Security, Price Uncertainty, and Country Hedging: A Case Study of China,"with Jianmin Liu, The Review ofEutures Markets. Vol. 10, No. 2, 1991, pp. 357-371 "Preconditions for the Emergence of East European Market Ecc-noniies," Current Politics and Economics of Europe, Vol. I, No. 3/4 {1991), pp, 347-361. "Productive and Predatory Public Policies: Research Expendiruns and Producer Subsidies in Agriculture," with Harry de Gorter and David J. Nielson,Amer.,:On Journal ofAgricultural Economics. Vol. 74, No. 1, Februan,, 1992, pp. 27-37. "Political Preference Functions and Public Policy'Reform: A R:ply," with William E. Foster, American Journal ofAgricultural Economics, Vol. 74, No. 1, F-.bruarv. 1992, pp. 227-230. "Public Policy: Explanation and Constitutional Prescription," \\-,th Pinhas Zusman,American Journal ofAgricultural Economics, Vol. 74, No. 2, May, 1992.pp. 247-257. "Predaton-Versus Productive Governments: The Case of U. S. Agricultural Policy,"Journal of Economic Perspectives,Vol. 6,No. 3. Summer, 1992. pp. 13:-:57. LECG Gordon C. Rausser Page 11 "Environmental and Agricu neral Police Linkages and Reforms in the United States Under the GATT," with Richard Just..4merican Journal ofAgricultural Economics. Vol. 74, No. 3, August. 1992, pp. 766-774. "State-Market-Civil Institutions: The Case of Eastern Europe," with S.R. Johnson, World Development, Vol. 21, No. 4, April, 1993, pp. 675-689. "Price Distorting Compensation Serving the Consumer and Taxpayer Interest," with William E. Foster,Public Choice, Vol. 77,No. 2, October, 1993, pp. 275-291. "Nutrient Demand and the allocation of Time: Evidence from Guam," with Glynis Ga«m, Robert Innes, and David Zilberman.Applied Economics, Vol. 25, 1993, pp. 811-830. "Natural Resource Damages: Knowledge of Valuation Techniques Useful. as Liability Exposure Grows," with Andre Fargeix. Environmental Compliance and Litigation Strategy, Vol. 9,No. 8, Januar`- 1994. "Intraorganizational Influence Relations and the Optimality of Collective Action," with Pinhas Zusman,Journal of Economic Behavior and Organization, Vol. 24, No. 1, June, 1994, pp. 1-22. "Wheat Preference Functions Analysis," with Alan Love.Journal ofPolic,.—jWodelling, forthcoming, 1994. "Government Agricultural Policv, the United States," The Encyclopedia ofAgricultural Sciences, Charles J. Arntzen (ed.), Academic Press. San Diego, CA, forthcoming, 1994. "The Governance Structure of Agricultural Science and Agricultural Economics: A Call to Arms," with Richard E. Just,American Journal ofAgricultural Economics, forthcoming, 1994. Papers Submitted for Refereed Journal Publication "The Role of Taxes and Zoning in the Effective Control of Pollution," with Oded Hochman, Journal of Environmental Economics and Management. "Governance Structures and the Durability of Reforms: Evidence from Inflation Stabilizations," with Richard Ball,Economic Journal. "A Noncooperative Model of Collective Decision Making: A Multilateral Bargaining Approach," With Leo K. Simon,Econometrica. "Input and Output Price Distortions Facilitating the Provision of Public Goods," vdth William E. Foster,Journal ofPublic Economics. "The Political Economics of Alliances: Structure and Performance," with Leo K. Simon, American Political Science Revietiv. LECG G�rdon C. Rausser Pale 12 "`,lodelling Natural Rescurce Ne _-tiations: An Application to California Wale: Policy," with C:eaory D. Adams and Leo K. Simon,American Journal ofAgricultural Economics. " reedoms and Economic Growth." with John McMillan and Stan Johnson, Rei iztiv of Economics a>:d Statistics. "U.S. Agriculture in the 21st Cen:jry: Stagnation or Evolution," Choices. "Resource Mobility, Diversification of Ownership, and Political Rent Seeking Incentives," with R chard Gray and William Foster.Economics and Politics. "Contaminant D%mamics, lrreverS:Jility, and the Costs of Compliance with Drinking Water Standards." with David Sunding. David Zilbernian, and Alan Marco.Journal or Environmental E.onOn7iCs and Management. Books an;. %lonoaraphs A Survey of Agricultural Econon::cs Literature: Quantitative Methods, with G G. Judge, R. Div, S. R. Johnson, and Lee Mar-n. University of Minnesota Press, i�iinneapol , MN, 1977, 473p. Urban Malnutrition: Problem A__essment and Intervention Guidelines, with J. Austin, Johanna Dw­ver, et al.,World Bank Monograph, 1977. Dynamics of Agricultural Systems: Economic Prediction and Control, with E. Hochman,North- Holland Publishing Co., Amsterdam, 1979, 364p. New Directions in Econometric Modeling and Forecasting in U. S. Agriculture. Gordon C. Rausser (ed.). Elsevier North-Holland, Inc.. New York, NY, 1982. A:rernative Agricultural and Food Policies and the 1985 Farm Bill, Gordon C. Rausser and Kenneth R. Farrell (eds.), Giannim Foundation of Agricultural Economics. Univ ersity of California, Berkeley, CA: and RI-ources for the Future, Washington, DC, Blaco Publishers, San Leandro, CA, 1984. Macroeconomic Environment for U.S. Agricultural Policy, American Enterprise Institute for Public Policy Research. Occasional Paper on U.S. Agricultural Policy, Washington, DC, 1985. "Toward Agricultural Policy Reform,"Economic Report of the President, U.S. Council of Economic Advisors, 1987, Chapter 5, pp. 147-178. Development and the National Inrerest(one of man-,T collaborators), Agency for International Development Monograph, March. 1989. Tre Emergence of Market Economies in Eastern Europe, Gordon C. Rausser and C. Clague (eds.), Blackwell Publishers, Cambridge, MA, 1992. LECG • Gordon C. Rausser Page 13 Econonnc Groicth, Political and Civil Lr-c-ries, with John McMillan and Stanley R. Johnson, Occasional Paper, No..53 Institute for Cc.:emporary Studies, San Francisco, forthcoming. GATT A,egotiations and the Political Ecor..:mry of Policy Reform, with associates, Springer- Verlag, Berlin, Heidelberg,New York, for-_-.coming. Political-Lconomic Analysis: Explanation. and Prescription, with P. Zusman, University of Cambridge Press, in progress. Chapters in Books and Proceeding Issues of Journa:_ "A Time Series Analysis of the U.S. Hog I-uustry_ ," Western Agricultural Economics Association Proceedings, July. 1969. "Futures Price Behavior as a Stochastic Pr,c�-ss." Nyith T. F. Cargill,American Statistical Associarion Proceedings, Business and E,::nomic Statistics Section, August, 1969. "A General Framework for Aggregation in ;Linear Progranuning Models," with Quirino Paris, Western Agricultural Eeonotnies Assoeioron Proceedings, July. 1970. "Forecasting Weekly Lemon Prices by a D,_tributed Lag Model with Fourier Transform Methods," with Dean Chen,American Statistical Assc.,iation Proceedings, Business and Economic Statistics Section, December, 1970. "An Appendix on Water Resource Decision Making Under Conditions of Uncertainty," with G. W. Dean, California Water: A Study in Resot.rce Management, D. Seckler(ed.). University of California Press, Berkeley, CA, 1971, pp. :10-344. "Uncertainty and Decision-Making in Water Resources," with G. W. Dean, California Water: A Studv in Resource Management. D. Seckler(ed.), University of California Press, Berkeley, CA, 1971, Chapter 12, pp. 233-250. "Normalization Rules, Approximate Small Sample Properties and the TSLS Estimator," with S. R. Johnson,.-American Statistical Association Proceedings, Business and Economic Statistics Section, December, 1972, pp. 420-425. Book Review of The Computation of General Equilibria (by Herbert Scarf), with Quirino Paris, Journal of the American Statistical As.soc::,tion, Vol. 70, No. 350, June, 1975, pp. 485-386. "An Estimating Method for Models with Stochastic, Time Varying Parameters,"with S. R. Johnson,American Statistical Association Proceedings, Business and Economic Statistics Section, September, 1975, pp. 356-361. LECG Gordon C. RaL;sser Pare 14 "Economic F�:-=tasting: The Case of Australian Agriculture," with J. W. Freebairn,Americo,?: Sionstical AS::,ia110t1 Proceedings. Business and Economic Section, September, 1976, pp.54S. "Environmen-- Impacts on Electricity Systems Growth." with A. S. Cohen and G. Fishelson. Environmentc:Pollutants and the Urban Economy, G. S. Tolley and A. S. Cohen (eds.), University of Chicago, Center for Urban Studies. Chicago, IL, 1976. "Environment:i Policies for Power Plants," with G. Fishelson and A. S. Cohen, Environmenrul Pollutants an.:the Urban Economy, G. S. Tolley and A. S. Cohen (eds.), University of Chicago, Center for Urban Studies, Chicago, IL, 1976. "Firm Growth Policies Under Different Pollution Abatement, Production, and Financial Structures," w::h E. Hodunan, Economic Gros:rh of the Agricultural Firm, C. Baker and R. Bam- (eds.), V�'ashington State University Pres_. WRCC-16 Research Committee, 1977, Charter 12. "A Survev of-systems Analysis and Simulation in Agricultural Economics," with S. R. Johnson, Ouantitative 4,2rhods in Agricultural Econom. s. 1940s to 1970s, G. G. Judge et al. (eds.). Universitv of Minnesota Press, Minneapolis, 1977, Chapter 3, pp. 156-301. "Models of the U.S. Corn System,"Agribusiness Management for Developing CountriesO Southeast Asic Corn Systems. R. A. Goldberg et al. (eds.). Ballinger Publishing Co., Boston, NIA, 1979, pp. 576-0'26. "Futures vers::_ Commercial Econometric Models," with Richard E. Just, Futures Trading Seminar, Ann: Peck (ed.), Vol. 6, Board of Trade of the City of Chicago. Chicago, IL, 1980. "Prospects an;: Limitations of Operations Research Applications in Agriculture and Agricultural Policy," with Richard E. Just and David Zilberman, Operations Research in Agriculture and Water Resour.es, Dan Yaron and Charles Tapiero (eds.),North-Holland Publishing Co., Amsterdam, 1980, Chapter 2, pp. 17-40. "The Israeli P--ultry Marketing Board: Price Production and Inventory Controls," with Eithan Hochman and Eliahu Comay,Applied Stochastic Control in Econometrics and Management Science, A. B:asoussan, P. Kliendorfer, and C. S. Tapiero (eds.), North-Holland Publishing Co., Amsterdam, 180, Chapter 1, pp. 1-38. "A Putty-Clay Approach to the Distributional Effects of New Technology Under Risk," with Richard E. Jus:and David Zilberman, Operations Research in Agriculture and Water Resources, Dan Yaron and Charles Tapiero (eds.),North-Holland Publishing Co., Amsterdam, 1980, Chapter 6, pp. 97-121. "Policy: Alternatives and Consequences of Conservation Technology on Agricultural Land," Soil and Water Resources: Research Priorities for the Nation, W. E. Larsen, L. M. Walsh, B. A. Stewart, and Don H. Boelter (eds.). Soil Science Society of America. Madison, WI, 1981, pp. 83- 102. LECG Gordon C. Rausser Pace 1 "Principal Issues in t::e Evaluation of Public Research :a agriculture," with Alain de Janvrn•, Andrew Schmitz, an_` David Zilberman,Merhodologr.•.,r Evaluation of Agriculture Research, Walter L. Fishel, G. W. Norton, A. Paulsen, and W. B::rt Sunquist (eds.), University of Minnesota, Agricultural Experiment Station, Minneape:is, MN, 1981, Miscellaneous Publication No. 8. "Food Grain Policv in Bangladesh."Planning and Decision in Agribusiness: Principles and Experiences, C. H. Hanf and G. W. Schiefer(eds.), E1_,-vier Scientific Publishing Company,New York, NY, 19827 pp. '41-262. "New Conceptual De%elopments and Measurements for Modeling the U.S. Agricultural Sector," New Directions in Econometric Modeling and Forecasting in U.S. Agriculture, Gordon C. Rausser (ed.), Else-i:r North-Holland, Inc., New York. NY, 1982, Chapter 1. "Simple Quantitative Models for Integrative Planning Frameworks,"Planning and Decision in Agribusiness: PrinC:Jles and Experiences, C. H. Hari and G. W. Schiefer (eds.), Elsevier Scientific Pubiishin2 Company, New York, IVB', 19827 rp. 333-369. "Consumer Demand. Grades. Brands, and Margin Rel:::ionships," with Peter Berck,New Directions in Econometric Modeling and Forecasting :n U.S. Agriculture, Gordon C. Rausser (ed.), Elsevier North-Holland, Inc.,New York, NY, 1982, Chapter 4. "Food and Agricultur.- Sector Linkages to the International and Domestic Macroeconomies," NvIth John W. Freebairn and Harr-de Gorter,New Directio?:s in Econometric Modeling and Forecasting in U.S. .7griculttrre Gordon C. Rausser (ed.), Elsevier North-Holland, Inc.,New York,NY, 1982, Chapter 17. "Composite Forecasting in Conu»odity Systems." with,Stanlev R. Johnson,New Directions in Econometric Modeling and Forecasting in U S. Agricalttrre, Gordon C. Rausser (ed.), Elsevier North-Holland, Inc.. New York, NY, 1982, Chapter 21. "Institutionalizing a Large Scale Econometric Model: The Case of Agricultural Canada," with Stanley R. Johnson and Bruce Huff,New Directions in Econometric Modeling and Forecasting in U. S. Agriculture, Gordon C. Rausser (ed.), Elsevier North-Holland, Inc., New York,NY, 1982, Chapter 23. "Principles of Policy Modeling in Agriculture," with Richard E. Just,Modeling Agriculture for Policy Analvsis in the 1980s, Federal Reserve Bank of Kansas City, Kansas City, September, 19817 pp. 139-174. also in New Directions in Econometric Modeling and Forecasting in U.S. Agriculture, Elsevier North-Holland, Inc.,New York.NY, 1982, pp. 763-800.. "Developments in Theory and Empirical Applications of Endogenous.Governmental Behavior," with Erik Lichtenberg and Ralph Lattimore,New Directions in Econometric Modeling and Forecasting in US. .l;riculture, Gordon C. Rausser (ed.). Elsevier North-Holland, Inc., New York, NY, 1982, Chapter 18. LECG Gordon C. Rausser Page 16 "Structural Change, Upda:.- _. and Forecasting," with Yair \1,:ndlak and Stanley R. Johnson,New Directions in Econometric'.lodeling and Forecasting in U.S. Agriculture. Gordon C. Rausser (ed.), Elsevier North-Holla.:,:. Inc., New York, NY, 1982, Chapter 20. "Price Supports and Dema:.,: in Commodity Market Modeling." with Chris Riboud,New Directions in EconometricModeling and Forecasting in U.S. Agriculture, Gordon C. Rausser (ed.), Elsevier North-Holla.4 Inc.,New York, NY, 1982, Chapter 11. "The Distributional Impact. of Agricultural Programs." with David Zilberman and Richard E. Just,Proceedings from Per;7eetives on Food and Agricultural Policy Research Workshop, The Farm Foundation, Oak Brock-. IL, 1982, pp. 33-60. "Lead-Lag Price Relationsl--ps Between Thinly and Heavily Traded Commodity Futures Markets," with Colin A. Carter,ApphcJ Commodiry Price Analysis. Forecasting, and Market Risk Management: Proceeding_ )(the NCR-134 Conference, DesMoines, loira. 1983, Iowa State University, Department of A zricultural Economics. Ames. IA. 1983, pp. 241-251. "Commodity Price Foreca_:.-u with Large-Scale Econometric Models and the Futures Market." Reprinted in Readings and sutures Markets, Vol. X. Selected Writings on Futures Markets: Research Directions in Co >nodiry Markets. 1970-1982, Chicago Board of Trade, 1983. "Expectation and Intertemperal Pricing in Commodity Futures and Spot Markets," with Richard E. Just,Applied Commodity P-:ce Analysis. Forecasting. and Market Risk Management: Proceedings of the NCR-1.= Conference. Des Moines. lova. 1983, Iowa State University, Department of Agricultural Economics, Ames, IA, 1983. pp, 2_52-279. "Modeling Equity and Effic::ncy in Agricultural Production Systems," with Richard E. Just and David Zilberman, Grovvth a,'d Equity in Agricultural Development;Proceedings, 18th International Conference c'.4gricultural Economics. Jakarta. Indonesia. 1982, A. Maunder and K. Ohkawa(eds.), Gower, A:dershot, 1983; and Oxford Uniy;rsity Press, Oxford, 1983, pp. 120- 135. "Implications of United Stases Experience for Water Resource Planning in Egypt," with Margriet F. Caswell, The Economic Challenges of Peace: Agriculture and Economic Transition in Egvpt, Proceedings of a Conference. Alexandria. Egypt, 1980, S. R. Johnson, John R. Moore, and Martin Wannanen (eds.). Universir. of Missouri, Department of Agricultural Economics, Columbia, MO, 1983, pp 48-64. "A Proper Perspective for Considering Adaptive Economics." with David Zilberman,Modeling Farm Decisionsfor Policy analysis, Kenneth H. Baum and Lyle P. Schertz (eds.),Westview Press, Boulder, CO, 1983, Fp. 56-60, Agricultural Policy: A Srtr aesis of Major Studies and Options for 198.5, with William E. Foster, National Conference on Food. Agriculture, and Resources. Resources for the Future,Washington, DC, 1984, 120p. LECG Gordon C. Rausser Page 1 "Review and Assessment of Agricultural Police PropoSz'.s." with Linda S. Calvin and William E. Foster,Alternative A--:,:zdtural and Food P0l1C4;es ata :to 1981 Farm Bill, Gordon C. Rausser and Kenneth R. Farrc : :eds.), Giannini Foundation of A-,,ricultural Economics, University of California, Berkcic\. CA; and Resources for the Future. Washington, DC., Blaco Publishers, San Leandro, CA, 19a-. Chapter 7, pp. 143-182. "Summar•and Conclusions," witl- Kenneth R. Farrell,Alternative.agricultural and Food Policies and the 1985 Farm Bill. Gordon C. Rausser and Kenneth R. Farrell (eds.), Giannini Foundation of Agricultural Economics, Universi;%-of California, Berkeley, CA; and Resources for the Future, Washington, DC, Blaco Publishers. San Leandro, CA, 1984, Chapter 1, pp. 1-8. "Monetan• Policy and U. S. Agric::iture," with John W. Freebairn and Harry de Gorter, International Agricultural Trade: Advanced Readings in Price Formation, Market Structure, and Price Instability, Andrew Sc'---titz, and Alexander H. Sarris (eds.), Westview Press, Boulder, CO, 1984, pp. 99-123. "Uncertain Economic Enviro►tine::_ and Conditional Policies," wvith Richard E. Just,Alternative Agricultural and Food Policies a,-.i the 1985 Farm Bill, Gordon C. Rausser and Kenneth R. Farrell (eds.), Giannini Foundatic::of Agricultural Economics, Uni%-rsity of California, Berkeley, CA; and Resources for the Futur;. %Vashington, DC, Blaco Publishers, San Leandro, CA, 1984, Chapter 6, pp. 101-132. "Macroeconomics and U.S. Agric::itural Policy," U.S. Agricultural Policy: 198-Farm Legislation, Bnice L. Gardner (ec.). American Enterprise Institute for Public Policy Research, Washington, DC, 1986, pp. 207--'4.2. "A Synthesis of Major Studies ani Options for 1984," with William E. Foster, The Dilemmas of Choice, Kent A. Price (ed.), The National Center for Food and Agricultural Policv: Resources for the Future, 1986, Chapter 7, pp. -2)1-246. "Instability in Agricultural Markey: The U.S. Experience," Math Jarnes A. Chalfant and Kostas G. Stamoulis,Agriculture in a Turb:::ent World, A. Maunder and U. Renborg (eds.), Oxford University Press, Oxford, 1986, C:.apter 6, pp. 696-604. "Modeling Alternative Trade and Macroeconomic Scenarios: Implications for U. S. Agriculture," with Kostas G. Stamoulis, H. Alan Love, and James A. Chalfant,Impacts of Farm Policy and Technological Change on U. S. anal California Agriculture. Harold 0. Carter(ed.), University of California, Agricultural Issues Cc-ter, Davis, CA, 19867 pp. 91-136. "The Food Marketing System: Th: Relevance of Economic Efficiency Measures,"with Jeffrey M. Perloff and Pinhas Zusman, Economic E f ciency in Agricultural and Food Marketing, Richard L. Kilmer and Walter J. Armbruster(eds.), Iowa State Universitv Press. Ames, IA, 1987, Chapter 1, pp. 3-31. "Developments in Economics of Importance to Agricultural Economics: A Discussion," Agriculture and Rural Areas Approaching the 21st Centum,R. J. Hildreth et al. (eds.), Iowa State University Press, Ames, IA. 1988, pp. 267-264. LECG Gordon C. Rausser Page 18 "The Macroeconomics of Agriculture in Ru--- America,"Agriculn.re and R;.r.a Areas Approaching the 21st Century, R. J. Hildre. et al. (eds.). Iotiva State Univers .-v Press, Ames, IA, 1988, pp, 38=4-395. "Stability Issues and Policy Analysis,"Agric..ltural Stability and Farm Programs, Dan Sumner (eds.), Westview Press, Boulder, CO. Febru Zrv. 1988, pp. 143-170. "Overshooting of Agricultural Prices," with hostas G. Stamoulis.Macroeconomics. Agriculture, and Exchange Rates, Robert G. Chambers and P. L. Paarlbers (eds.). International Agricultural Trade Research Consortium, Westview Pres_. Boulder, CO, 1988, pp. 163-189. "A Coherent Policy for U.S. Agriculture," uah William E. Foster, Food, Polic. and Politics: A Perspective on Agriculture and Developmer... George Horwich and Gerald J. Lynch (eds.), Westview Press, Boulder, CO, 1989, pp. 191-237. "Alternative Strategies for Trade Policy Refe-m," with Brian D. Wright, Polic.•Coordination in World Agriculture. Harald von X\'itzke, C. Ford Runge, and Brian Job (eds.). University of Minnesota Press, Minneapolis, I\IN, 1989. p . 117-159. "The Impacts of Economic Reform for Agric;ulturaI and Food Policy," with William E. Foster, World Food Ststem: Hunger in the Midst o-'Plenry Volume I, John W. Helmuth and Stanlev R. Johnson (eds.). Iowa State University Press. Acnes, IA, 1989, pp. 95-99. "The Macroeconomic Dimension of Agriculr,:ral and Food Policy Reform," World Food System: Hunger in the Midst of Plenty, Volume II, Jolie W. Helmuth and Stanley R. Johnson, Iowa State University Press,Ames, IA. 1989, pp, 90-169. "Endogenizing Police in Modcls of Agricultu-al Markets," with Harry de Gorier,Agriculture and Governments in an Interdependent World, Allen Maunder and Alberto Valdes (eds.), Proceedings of the Twentieth International Conference of agricultural Economists, Buenos Aires, August, 1988; International Association of Agricultural Economists, University of Oxford, 1989, pp. 259- 274. "Dynamic Welfare Analysis and Commodity Futures Markets Overshooting,"with Nicholas Walraven,International Commodity Market Modelling: Advances in Methodology and Applications, O. Guvenen,W.C. Labys, and J.B. Lesourd(eds.), Chapman and Hall Book Publishing Co., 1991, Chapter 11, pp. 211-_.2. "World Commodity Prices: The Role of External Debt and Industrial Country Policies," %\ith M.G. Rose and D.A. Irwin,Agricultural Trade Liberalization, Ian Goldin and Odin Knudsen (eds.), Organization for Economic Cooperation and Development, Paris; and The World Bank, Washington, DC, 1990, Chapter 15. pp. 414—445. "The Politics of Economic Policy Reform," \\ith E. Scott Thomas, Development Issues, 1990, Ronald Roskens (ed.), Chairman of Development Coordination Committee, U.S. Government Printing Office,Washington, DC, 1990, pp. 4-19. Chapter 2. LECG ` Gordon C. Rausser Page 19 "Empirical Pricing Measures for Futures Markets." with Nicholas Walraven. Commodity Futures a;:d Financial:tforkets, Louis Phlips (ed.), KluN\er Academic Publishers,NONvreil, MA, 1990. pp. 179-203, Chapter 7. "The Evolution and Coordination of U. S. Conunodity and Resource Policies," With William E. Foster, Commodity and Resource Policies in Agricultural Systems, Richard E. Just and Nancy Bockstael (eds.), Springer-Verlag, Berlin, Heidelberg,New York, 1991, pp. 17-45. "Organizational Failure and the Political Economy of Water Resources Management," with Pinhas Zusman, The Economics and Management of 4 rater and Drainage in Agriculture, Ariel Dinar -.7d David Zilberman (eds.), Kluwer Publishers. Boston, MA, 1991, pp. 735-758. Chapter 37. "Public Research in Agriculture: An Alternative Institutional Framework." with David Zilberman, F.onomic Afodels. Estimation, and Socioec01701771C Si-stems: Essays in Honor of Karl Fox, Tej K. Kaul and Jati K. Sengupta (eds.). Elsevier Science Publishers, Amsterdam, 1991, pp. 33-53. "The Political Economy of Agriculture in the United States," The Political Economy of North America Agricultural Policies and Trade, Hans Michelmann, Jack Stabler, and Gary Storey, (:.s.),Westview Press, Boulder, CO. 1991, pp. 57-91, Chapter 3. ".art Assessment of the Agricultural Economics Profession,"Socinl Science Agricultural Agendas and Strategies, J. Loehr (ed.), Michigan State University Press. East Lansing. 1991. "The Political Economy of Transition in Eastern Europe: Packaging Enterprises for Privatization," with Leo Simon, The Emergence ofIviarket Economies in Eastern Europe, Christopher Clague and Gordon Rausser (eds.), Blackwell Publisher:. Cambridge, MA, 1992, Chapter 14. "Lessons for Emerging Market Economies in Eastern Europe," The Emergence of,Llarket Economies in Eastern Europe, Christopher Clague and Gordon Rausser(eds.), Blackwell P::blishers, Cambridge, NIA, 1992, Chapter 19. "Environmental and Agricultural Policy Linkages and Reforms in the United States under the GATT," with Richard Just and David Zilberman. Improving Agricultural Trade Performance under the GATT, T. Becker, R. Gray. and A. Schmitz (eds.), Wissenschaftsyerlag Vauk Kiel KG, 1992, Chapter 18. "The Structure of Research and Transfer Policies in International Agriculture, with David R. Lee, Issues in Agricultural Development, Sustainabiiiny and Cooperation, Margot Bellamy and Bruce Greenshields (eds.), International Association of Agricultural Economists Occasional Paper No. 6, 1992,pp. 3442. "Modeling the Effects of Policy,on Farmers in Developing Agriculture," With Richard E. Just and David Zilberman. Chapter published in Theoretical Foundations of Development Planning, S.B. D:hiya(ed.), foreword by Professor Jan Tinbergen, Nobel Laureate, Vedams Books International, Concept Publishing Company, Delhi, India, 1992. (Originally appeared in International Journal o;'Development Planning Literature Vol. 1,No. 3, Jule-September, 1986, pp. 287-300.. LECG Gordon C. Rausser Pa-e 10 "An Framework for Economic DcN clopnicni: A LDC Pcrspecti%e."lnjzsma.'?ojjcj�jbr -:.,,e in the Global Ecojonw- S,R. Johnson and S A. Martin (eds.). lowa State Universitv Aloricui, - - I Press, IA. Chapter I.I. pp, 229-245. "The U17-2uay Round and the GATT Negotiations," GA 7T Negotiations and the Political EconO177-.'qfPolicy Reform, Gordon C. Rausser(ed.), Springer-Verlag, Berlin, Heidelberg,New York, forthcoming, Chapter I "Compensation and Political Feasibility: Facilitating Welfare Improving Policies," with Richard E. Just and David Zilberman. GATT Negotiations and the :1 y Political Economy ofPolicv Relbrm, J Gordon C. Rausser(ed.), Springer-Verlag, Berlin, Heid berg, Ne\N-York,'forthcoming, Chapter 3. "The Pcl:,Ical Economv of Redistributive Policies and the Provision of Public Goods in Agricul-,,.:re," with Harry de Goner and David J. Nielsol-1. GATT Negotiations and the Po;'itical Econon7.�.-ofPoliclv Re>brni, Gordon C. Rausser(ed.), Springer-Verlag, Berlin, Heidelbe72-, New York, fo,—,hcoming, Chapter 4. "Coalitic—i Breaking and Policy Reform," with William E. Foster, G.4 TTNegotiarions arJ the Politica."Economv ofPolicY Re;�brni, Gordon C. Rausser (ed.). Springer-Verlag. Berlin. Heidelberg, New York. forthcoming. Chapter 5 "Public Goods and Welfare Transfer Tradcoffs," with William E. Foster, GATT Negotiations and the Poh,-cal Economv qfPo1ic,y Reform. Gordon C. R--,:sser(ed.). Springer-Verlag. Berlin, Heidelberg, New York, forthcoming, Chapter 6. "Mobillry, Diversification and Sustainability of Trade Reform," with William E. Foster and Richard Gray, GA 7T Negotiations and the Political Economv ofPolicy Reform, Gordon C. Rausser(ed.). Springer-Verlag; Berlin, Heidelberg, New York forthcoming, Chapter 7. "*\-/1odeli,-,sz Pollcv Reform in the U.S. Wheat and Feed Grain Sectors." with Richard E. Just and David Z.1ben-nan, GA TTVegoriations and the Political;Economy ofPolicv Reform, Gordon C. Rausser(,-d.), Springer-Verlag. Berlin. Heidelberg, Nest YorkI , forthcoming, Chapter 8, "The Determination of Teclinoloev and Commodity Policy in the U.S. Dairy Industry,"with Harry de Gorter and David Nielson. GATT Negotiations and the Political Economy of Policy Reform, Gordon C. Rausser(ed.). Springer-Verlag, Berlin,Heidelberg, New York, forthcoming, Chapter 9. "Modeling Phased Reductions of Distortionary Policies in the U.S. Wheat Market under Alternative Macroeconomic Environments," with Steve Labson, GATT Negotiations and the Political Economy ofPolic'y Reform, Gordon C. Rausser(ed.), Springer-Verlag, Berlin, Heidelberg, New York, forthcoming, Chapter 10. "Alternative Subsidy Reduction Paths: The Role of Fiscal and Monetary Policy Linkages,"with Pier-Giorgio Ardeni, GATT Negotiations and the Political Economy o . fPolicy Reform, Gordon C. Rausser (ed.), Springer-Verlag, Berlin. Heidelberg, New York, forthcoming, 'Chapter 11. LECG • Gordon C. Raus�er Paae '_I "The Design e Policy Reform in Soviet Agriculture," with St_,ley R. Johnson, Soviet Union Economic and 7 jlitical Reibrm, Go\�er Publishing Company England and Vermont. forthcom Mg. "State-Market-Civil Institutions: The Case of Eastern Europe." with Stanley R. Johnson. State. Marker. and C:••:l Organi_ations, MacMillan Press, forthcoming. "Productive anc Predatory Publication Policies: Research Expenditures and Producer Subsidies in Agricultural Economics," G.H. Peters (ed.). reprinted in Cheltenham, England: Edward Elgar Publishers, Lin:aed. forthcoming, 1994. Commissioned Papers Governmental Reports. and Working Papers "A Dynamic Econometric Model of the California-Arizona Orange Industry," unpublished Ph.D. dissertation. University of California. Davis. CA, 1971. "Learning, Pro.::iction, and Investment in Natural Resource Industries," University of Chicago. Center for Mat.ematical Studies in Business and Economics. Report No. 7336, Chicago, IL, 1973. "Approximate_adaptive Control Solutions to the U.S. Beef Trade Policy Problem," with J. W. Freebairn, Uni%.rsity of Chicago. Center for Mathematical Studies in Business and Economics. Report No. 73-7. Chicago, IL, 1973. "Enforcement. Transaction Costs, and Monitoring of Pollution" with G. Fishelson, University of Chicago, Urban Economic Report, Chicago, IL, 1974. "Taxes as Solu ons to Externalities," with R. Zerbe, University of Chicago, Urban Economics Report. Chicago. IL, 1974. "Environmental Effects of Altering the Existing Commonwealth Edison System," with G. Fishelson, Unity ersity of Chicago, Urban Economics Report. Chicago, IL, 1975. "Environmental Impacts of an Electrical Energy Systems Gro«ih." with G. Fishelson, University of Chicago, Urcan Economics Report, Chicago, IL, 1975. "The Commonwealth Edison System," with G. Fishelson, University of Chicago, Urban Economics Report_ Chicago, IL, 1975). "The Feasibility of Mining Coal in Iowa: An Economic Evaluation," with R. A. Levins and M. D. Boehlje, Iowa State University, Energy and Mineral Resources Research Institute Report No. IS- ICP=6,Ames, La, 1975. "Development of Iowa Coal: A Systems Analytical Approach." with R. Levins and A. Pagoulatos, Iowa State University, Energy and Mineral Resources Research Institute Report No. IS-ICP-9, Ames,IA, 1975. LECG Gordon C. Rausser Pate 22 "Construction of Dec:s,on Support System for the National Grains Authorit of the Philippines: Part II," with Joseph Yassour. AID Contract No. AID'DS AN-C-00%j 1. Washington, DC, 1979. "Construction of Decision Support Systems for Agricultural Marketing Boards and Other Public Agencies in Less Developed Countries: Part I." with Joseph Yassour. AID Contract No. AID/DSAN-C-0001, Washington. DC, 1979. "An Optimal D\mamic Hedging Model for Grains," with Ray Nelson and Andrew Schmitz, University of California, Department of Agricultural and Resource Economics, unpublished manuscript, Berkeley. CA, 1981. "Post-Bayesian Statistical Inference," with Arnold Faden. Universit of California, Department of Agricultural and Resource Economics, unpublished manuscript, Berkeley, CA, 1982. "The Efficiency and Equity Implications of Police Alternatives in Agricultural Systems of LDCs," Nyith Richard E. Just and David Zilberntan, University of California. Department of Agricultural and Resource Econonnics, unpublished manuscript, Berkeley. CA, 1982. "Real Income Stabiliz-tion and Food Securit-v for LDC's," with Kathnm M. Gordon, University of California, Department of Agricultural and Resource Economics, unpublished manuscript, Berkeley, CA, 1984. "Lead-Lag Price Relationships Among Commodity Futures Markets." with Colin A. Carter, 'University of California, Department of Agricultural and Resource Economics, unpublished manuscript, Berkelev. CA, 198-5. "Exchange Rates: Back-yard Linkage on U.S. AgricultureOThe Case of Japan," With Yasuo Nishiyama, Universit, of California, Department of Agricultural and Resource Economics Working Paper No. 389, Berkeley, CA, 1985. "Information, Risk Allocation, Transaction, and Linkage Efficiencies in Futures Markets,"with William E. Foster, Dermot Haves. and Nicholas Walraven, University of California, Department of Agricultural and R.-source Economics, unpublished manuscript, Berkeley. CA, 1986. "Multiple Effects of Exchange Rates on Import Demand: The Case of U.S. Agricultural Trade with Japan," with Yasuo Nishivama. University of California, Department of Agricultural and Resource Economics, unpublished manuscript. Berkeley. CA, 1986. "Effects of Dollar Value Changes," Report to the Conference on Pacific Rim: Issues and Opportunities, California Agricultural Trade Seminars, 1986. "Sources of Misery in California and U.S. Agriculture," Report presented to the California League of Women Voters, Los Angeles, CA, 1986. "The Effects of Monetary Policy on U.S. Agriculture," with James A. Chalfant,H. Alan Love, and Kostas G. Stamoulis, University of California, Department of Agricultural and Resource Economics Working Paper No. 409, Berkeley, CA. 1986. LECG Gordon C. Rausser Page 23 "Political Failure and the Desig:: of U.S. Agricultural Police." The Science w".:griculture and Natural Resources Forrn&,::on fbr the Future, DIN ision of Agricultural ara Natural Resources, University of Califcm la. Berkeley, CA, 1986. "Macroeconomics, Overshooti::g. and the U.S. Agriculture Sector," with Yasuo Nishiyama and Kostas G. Stamoulis, Universir, of California, Department of Agricultural and Resource Economics Working Paper No. 4 10, Berkeley, CA, 1986. "Futures Market and Efficienc\." with Nicholas A. Walraven, University of California, Department of Agricultural an: Resource Economics Working Paper No. 411. Berkeley, CA, 1986. "Monetary Policy and Relative Farm Prices." with James A. Chalfant and Koszas G. Stamoulis, University of California. Depa-.-nent of Agricultural and Resource Economics Working Paper No. 413, Berkeley, CA. "Political Failure and the Design of U.S. Agricultural Policy," Torn Hall Coi:-ornia Reporter, March/April. 1987, pp. : and ; "Agriculture Research: The InzAence of Burden in the Public and Private Sector," Confidential Report to the Agriculture Rese--:ch Service, U.S. Department of Agriculture. 1987. "GATT Negotiations and Agriculture: Alternative Measures of Govenunent Intervention," Confidential Report presented the U.S. Trade Representative,Washington, DC, 1987. "Necessary and Sufficient Conditions for Policy Reform," Report to the Agency for International Development,Washington, DC. 1987. "Political Failure and the Reform of Agricultural Policy," Paper presented to the Australian Society of Agricultural Econon--Ics, Adelaide, Australia. February, 1987. "The Design and Implementatic-n of Public Policy Reform." Report to the Agency for International Development,Washington, DC. 1987. "The Environmental Effects of U.S. Agriculture and Food Policies: The Case of Water Quality and Quantity," Confidential R.-:Wt presented to the Environmental Protection Agency, Washington, DC, 1987. "The Effects of U.S. Macro and Micro Policies on LDC Debtors: Measuring Commodity Price Linkages," with Marjorie Rose. Report presented to the International Monetary Fund,Washington, DC, 1987. "Restructuring the Farm Credit System," with Susan Woodyard, Confidential Report to the Farm Credit Administration. Washininon, DC, 1987. LECG Gordon C. Rausser Page '_4 "ALL-cultural Police in Econc:•:ies wi;'.: Uncertainty and Incomplete Markets." with Robert D. Innc_. University of California. Depa-:nent of Agricultural and Resource Economics Working Pap.-No. 4-57, Berkeley, CA. 1987. "Det.--mination of the Predominance of Various Expectation Patterns in Commodity Future and Spot Markets," Nvith Richard E. Just. University of California, Department of Agricuiniral and Resource Economics, unpublished manuscript, Berkeley. CA, 1988. "Flexible Public Policv: The Case of the United States Wheat Sector," with H. Alan Love, Oregon State Universitv, Department of Agricultural and Resource Economics, unpublished manLscript, Con-allis, OR, 1988. "The Costa Rica Mission and Economic Anal,rtical Support," Confidential Report to the Adm'.-iistrator. Agencv for International Development,November, 1988. "The El Salvador Mission and Econen;ic Analytical Support," Confidential Report to the Administrator. Agency for Inte-nation--1 Development, November, 1988. "Go,,-mment Credibility, Partial Compensation, and the Market for Policy Reform." Report to the Inte,-ational Agricultural Tra. Consortium, August. 1988. "The Guatemala Mission and Economic Analytical Support," Confidential Report to the Adrr.inistrator, Agency for Int.rnational Development, November, 1988. "The Honduras Mission and Economic Analytical Support." Confidential Report to the Adn-.irtistrator, Agencv for International Development, November, 1988. "Toward a Framework for the Design of Internal Agricultural Policv Reform." Report presented to the Economic Research Service. U. S. Department of Agriculture, 1988. "Flexible Public Policv: The Case of the United States Wheat Sector," with H. Alan Love, Deprtment of Agricultural and Resource Management Working Paper No. 494, University of Cali:ornia, Berkeley, 1988. "Endogenizing U.S. Milk Price Supports, with Harm de Gorter, Department of Agricultural and Resource Management Working Paper No. 504, University of California, Berkeley, 1989. "An A.I.D. Economic Research Associate and Fellowship Program," Position paper to the Administrator, Agency for International Development, unpublished, January, 1989. "An Economic Development Consortium," Position paper to the Administrator, Agency for Inter:iational Development, unpublished, January, 1989. "An Institute for Policv Reform." Position paper to the Administrator, Agency for International Development, unpublished, January, 1989. LECG • Gordon C. Rausser Pa,e 25 "Third Wc...; Debt and A.I.D.'s Position." Ccnfidential Report to the Administrator, Agenc- for Iniernation_. Development, Januan. 1989. "1711e Afgh-.istan Mission and Econo, 1 .�11_ ytical Support," Confidential Report to the Administr::.r, Agency for International Deve:opnnent, March, 1989. "The Bang:=.iesh Mission and Economic Analytical Support," Confidential Report to the Administra::r. Agency for International Development, March, 1989. "The Indon is Mission and Economic Anal%-Lica] Support," Confidential Report to the Administra:or, Agency for International Development, March, 1989. "Major Economic Constraints, Challenges an Objectives of the U. S. Foreign Assistance Program," Position paper to the Administrator. Agency for hnternational Development, unpublishe::. March, 1919. "The Pak-15--in Mission and Economic Anal%ti:al Support." Confidential Report to the Administm:or, Agency for International Development, March. 1989. "The Phili-sines Mission and Economic Analytical Support," Confidential Report to the Administrator, Agency for hnternational Development, March, 1989. "The Thail-.d Mission and Economic Analytical Support," Confidential Report to the Administra r, Agency for International Deve'.opment, March, 1989. "Privatizat :n and the Provision of Social Sen-ices," Confidential Report to the Administrator. Agency for international Development, April. 1989. "A New AY:)roach to Country Development Strategy Statements," Report to the Administrator. Agency for international Development, May. 1989. "The Struc :re of the Intergovernmental Group on Indonesia," unpublished report to the 32nd Meeting of e Intergovernmental Group on Indonesia. The Hague_ Netherlands, June, 1989. "United Sties Pledging Statement." report to the 32nd Meeting of the Intergovernmental Group on Indonesia, The Hague,The Netherlands, June. 1989. "Professional Relationships and the Role of Increasing Sophistication: Agricultural Economics and Economics.' with Richard E. Just. University of California, Department of Agricultural and Resource E.:onomics, unpublished manuscript. Berkeley, CA, August, 1989. "Urban Labor Markets and Economic Policy/Institutional Reform: Summary of a Workshop," (one of mary collaborators), Development Discussion Paper No. 329 (Economic Policy Series), Harvard In-dtute for International Development, Cambridge, MA, April, 1990. LECG Gordon C. RausSZ- Page "Endovenous Poli;, Theory: Th, Political S:-L►ctur. and Police Formation." with Pinhas Zusmar.. «'orking Paper No. 537. Department of ALr::ultural and Resource Economics. University of California, Berkeley, CA, 1990. "The Role of Instigations and Policy Reform in U.S. Foreign Assistance,"Working Paper No. 522. Department of Agricultural and Resource Economics. University of California, Berkelev, CA, 1990. "Futures Market Performance and Behavior." Report prepared for the Managed Futures Symposium,New fork, NY, Mav 1-3, 1991. "International Policy Reform: Opportunities and Obstacles," prepared for Plenary Presentation at the Summer 1991 ,leeting of the Business-Higher Education Forum, University of California, Santa Barbara, Jur: 27-29, 1991. "Multidisciplinary Problem-Solving and Issue-Oriented Work with the PC/TC Approach," prepared for the multidisciplinary workshop en "Strategies and Agendas for the Rural Social Sciences," the Social Science Agricultural A_mda Project sponsored by The American Agricultural Economics Association, the Ru ml Sociological Society, the Agricultural History Societv. and others. Kansas Cite. NIO. AuLTust 1-4. 1991. CASE STUDIES Harvard Universitv Graduate School of Business Administration Simulation Models in Agribusiness, Spring. 1974. Survev and Use of Decision Support Systems. Spring, 1974. Don Gingrev, Spring, 1975. JBar Ranch, Spring, 1975. John Duckworth, Spring, 1975. Note on Commodin?Future Price.Behm•ior and EffeientMarkets, Spring, 1975. Unique Features of Dynamic Agriculturai S-.-stems, Spring, 1975. The U.S. Corn Si-stem, Spring, 1975. U.S. Reserve Stocks in International Trade. Spring, 1975. Chase Econometric Associates. Inc., Spring. 1976. Chemical Bank(a), Spring, 1976. Chemical Bank(b), Spring, 1976. Common Commodiry Future Market Fund. Spring. 1976. Data Resources. Inc., Spring, 1976. Design and Implementation of Decision Models, Spring, 1976. Florida Department of Citrus. Spring, 1976. Food Grain Import Policies in Bangladesh (a), Spring, 1976. Food Grain Import Policies in Bangladesh (b). Spring, 1976. Hedging and Pure Speculation, Spring, 1976. Israel Poultry Marketing Board, Spring, 1976. Rancho Matilija, Spring, 1976. LECG • Gordon C. Rausser Page 27 Star:.�rcalDecision Theor•, =rnn:ellorks. Spring'. 1976. Thonnre and Company. Spr.ng,. 1976. Choosing Among Risk Pro. es, Fall, 1976. Importance of a Good Fors_asting System, Fall, 1976. Agricultural Chemical International, Spring, 1977. Contractual Relationships :%n the Turkei,Industry. Spring, 1977. Contractual Relationships in the Beet Sugar Industry, Spring. 1977. Fed-Rite Food Distribution. Spring. 1977. Forecasting in the Food Freezing Sector. Spring, 1977. High Fructose Corn Syrup_Manufacturing(a), Spring, 1977. High Fructose Corn Syrup Monufacturing(b), Spring, 1977. Note on Risk Management Framex-orks, Spring, 1977. Proposals for Grain Resern-es, Spring, 1977. Spreckels Sugar Division (a). Spring, 1977. Spreckels Sugar Division (b). Spring. 1977. U.S. Feed Grain Reserve Po;icy, Spring, 1977. Biogas of Colorado,.Spring. 1978. Biotechnology and Agribus:ness, Spring, 1978. Costs and Benefits ofModeis and Their Use in the Food Sector, Spring, 1978. Cro+n Zellerbach and the klanagennent ofNatural Resources, Spring, 1978. DRI Commodiny Managetneru C0I7S111tants, Spring, 1978. Effective Management and Utilization of Information Systems, Spring, 1978. Food Conglomerate. Inc., Spring. 1978. Macintosh Chocolate Compirmy(a), Spring. 1978. Macintosh Chocolate Con�vany (b). Spring, 1978. Macintosh Chocolate Company(c). Spring. 1978. Macintosh Chocolate Con;nat y (d), Spring, 1978. Manual for Designing, Constructing, and Using a Decision Support System, Spring, 1978. Note on Agricultural Sector Forecasts and Policy Evaluations, Spring, 1978. Note on Market Risk in Agribusiness, Spring, 1978. Note on Strategic Policy Evaluations, Spring, 1978. The Philippines National Rice and Grain Authority, Spring, 1978. Tari f and Nontariff Trade Barriers, Spring, 1978. The 4Yorld Bank and Agriculture in Less Developed Countries, Spring, 1978. SELECTED KEYNOTE OR PLENARY SESSION PRESENTATIONS Political Economic Processes and Collective Decision Making, presented at XXII International Conference of Agricultural Economists, Harare, Zimbabwe, August 22-30, 1994. Passive versus Active Natural Resource Damages, presented at the University of Chicago, June 2, 1994. Political Interest Groups. Compensation. and the GATT Negotiation Process, presented at the conference "The Impact of the Uruguay Round on International Trade," Washington, D.C., June 15, 1994. LECG Gordon C. Rausser Page 2s The Political Economti•gf,Vatur . "Iesources nttd the Environment. Seminar for the College of Natural Resources. University of California, Berkeley, Mav 3. 1994. Alternative Framework for Evoh..:ring Natural Resource Damages, presented at the University of California. Los Angeles, April 7. :994. GATT Agricultural Policy Refor?:: A United States Perspective, major address to Regional Counsel on Strategies and Perspe::ives on Agricultural Policies, presented at the conference "Agricultural Markets: Mechani--:s, Failures, Regulations." Institute D'Economie Industrielle, Toulouse, France, October 12-13. 1993. The Political Economy ol'Agricu;::.rokEtrvirattrttetnta/Policy Reform, presented at the conference "Agricultural Markets: hlcchanisn:s, Failures. Regulations," Institute D'Economie Industrielle, Toulouse, France, October 12-13. 1993. The Political Economy o1'Technc,;:)yv and Commodity Policv in the U.S. Dairy Industry, presented at the conference "Agriz::itural Markets: Mechanisms, Failures, Regulations," Institute D'Economie Industrielle. Toulouse. France, October 12-13, 1993. Transition to a Market Econonn-: The Case of Russia, Keynote address to U.S. Fund for Democracy and Development. h-1ar:h, 1993. Recent Advances on Futures Mar.':.is Performance and Behavior, presented at the Fourth Annual Managed Futures Symposium, "1\lartaged Futures as an Institutional Investment," Chicago, September 30 through October 2. :992. An Emerging Framework for Eco-.omic Development: An LDC Perspective, Keynote address at the conference, "Industrial Police or Agriculture in the Global Economy," Iowa State University, Ames, IA, September 16 and 17, 1992. New Frameworks for Designing Compatible Incentives for Policv Reform, Invited address to the U.S. Agency for International Dc',eiopment, September, 1992. Internal Versus Externa/Agriculmral Policv Reform: GATT Negotiations in the Uruguay Round, Invited Paper for the Ame-can Political Science Association, Chicago, IL, September, 1992. A Noncooperative Model of Collecnve Decisionmaking: A Multilateral Bargaining Approach, presented at the American Politic-nil Science Association meetings, Chicago, IL, September, 1992. A Collective Choice Model for Conflict Resolution in Water Resource Systems, presented at the conference, "Water Quantity_/Qua!iry Disputes and the Resolution,"Washington, DC, May 2 &3, 1992. LECG Gordon C. Rausser Page 29 Stare-A,forket-Civillnstitu kw-3. Thi• _.ase ofE•astern Europe. Major ln%aed address at the conference. "State, Market and Civil institutions: New Theories. NeN\ Practices, and Their Implications for Rural Development." Cornell University, New Fork, December 13 and 14, 1991. Liberties and Economic Groff,th, Ke\r,ote address presented at the Worl. Conference on Economic Development, Raleigh-Durham, NC,November 19-21.. 1991. Multidisciplinary Problem-Solving ai.d Issue-Oriented Work Kith the PC'TC Approach, Keynote address at the multidisciplinan-workshop on "Strategies and Agendas fcr the Rural Social Sciences" under the auspices of the Social Science Agricultural Agenda Project sponsored by The American Agricultural Economics Association, the Rural Sociological Society, the Agricultural History Society, and others, Kansas Cite, MO, August 1-4, 1991. International Policy Reform: Opporr:Xities and Obstacles, Plenarypr entation at the Summer 1991 Meeting of the Business-Higher Education Forum, University_, of California, Santa Barbara, June 27-29, 1991. The Political Economy of l rotsttton :-r Eastern Europe: Pack.-,ging El::erprises for Privatization. Paper presented at the Institute of International Saidies, university of California. Berkelev, CA, flay, 1991. Futures Market Performance and Bcravior, Keynote address at the Managed Futures Symposium, New York, NY, May 1-3, 1991. The Political Economy of Transition m Eastern Europe: Packaging Enterprises for Privatization, Paper presented at Simon Fraser University, British Columbia, Canada, April, 1991. The Political Economy of Transition 'n Eastern Europe: Packaging Enterprises for Privatization, Paper presented at the Institute of Policy Reform Conference on Institutions and the Transition to a Market Economy, Prague, Czechoslovakia, March, 1991. Agricultural Reforms in the USSR: .4 Scientist's Attitude, Paper presented at the Soviet:American Symposium, Moscov,, October, 1990. The Political Economy of the European Community's Agricultural Pohc. Keynote address to the European Agricultural Economics Association, The Hague, September, 1990. Market Politics and Alternative Transition Paths, Paper presented at the conference on Rural Reform in Socialist Countries: Dilemmas and Strategies, sponsored by the World Bank and the National Bank of Hungan•, Budapest. .august/Septcmber, 1990. The Agency for International Development Paradigm on Police-Reform and Economic Development, Major invited address to the Allied Social Science meetings, Atlanta, GA, December, 1989. Agricultural Policy Alternatives for the 1990s, Ke%note address to the American Agricultural Law Association, San Francisco, CA,November, 1989. LECG ` Gordon C. Rausser Page 30 A Netiv Paradigm for ECOnomiC Deve/npment. keynote address at the Economic D.velopment C.nsortium, November, 1989. A?-Assessment of the Agricultural Economics Prolession, Major invited address to the American A ricultural Economics Association meetings, Baton Rouge, LA, August. 1989. .Ncc, v Institutional Economics and Public Polici•. Major invited address to the Development Studies Program, Institute for International Research, The American University, July, 1989. Tre Evolution and Coordination of U.S. Commodity and Resource Policies, Keynote address at t' e CARP Symposium. Universitv of Maryland. College Park, MD, May. 1989. S:.pporting Coalitions for Policy Reform and Institutional Change, Invited Plenary presentation to the Indonesian Economic Association. Thaila,-.d Economic Association. Pakistan Economic Association, Bangladesh Economic Association. Egyptian Economic Association. February, 1989. T%:e Market for Public Policy Reform, Invited Penary address to the 33rd.-annual Conference of the Australian Agricultural Economics Society.New Zealand, February, 1989. D..namic Welfare Analysis in Commodity F-utures Markets, Major invited address to the L.ternational Conference of the Applied Econometrics Association, Washington, DC, October, 1988. FDidogenizing Policy in Models of Agricultural.ilarkets. Major invited address presented at the P:.-nary Session of the International Association of Agricultural Economists, Buenos Aires, Argentina, August, 1988. Trade Negotiations. Institutional Changes, and Policy Reform, Major invited address to the International Agricultural Trade Consortium, Washington, DC, August, 1988. Tse Macroeconomic Dimension ofAgricultural Policy Reform, Major imited address at the World Food Conference, Ames, IA. June, 1988. Tne Design and Implementation of Public Policy Reform, Keynote address at the Conference on Agricultural Economic Policy Reform in Egi-pt. Cairo, Egypt, July, 1987. Stability Issues in Policy Analysis, Major invited address at the Conference on Agricultural Stability in Farm Programs: Concepts. Evidence. and Implications,North Carolina State University, Raleigh,NC, May, 1987. A:ternative U.S. Agricultural Trade Policy, Major address to the Benjamin E. Lippincott Symposium on Policy Coordination in World Agriculture, University of Minnesota, St. Paul, AiN, April, 1987. Macroeconomic Linkages in U.S. Agriculture, keynote address at the First Rod F. Ziemer Symposium, University of Georgia. Athens, GA. March, 1987. LECG Gordon C. Rausser Page 31 Political Failure and the Re orm ol'.-lgricultural Pohl... Keynote address to the Australian Agricultural Economics Socictn. Adelaide. Febnary. 1-87. Public Policy in U.S. Agriculture, Major invited addre-ss to the School of Agriculture,the University of Western Australia, Perth, February, 1987. The Formulation of Agricultural Policy in the United States: Circa, 1987, Invited Plenary address to the Australian Agricultural Economics Socll—y and Bureau of Agricultural Economics, Canberra, Australia, February, 1987. A Coherent Policy for U.S. Agriculture, Major addres-s at the Conference on Food Policy and Politics: A Perspective on Agriculture and Developn«jzt, Purdue University_ , 'Nest Lafayette, IN, May, 1986. Macroeconomics. Overshooting. and the Design of P:,71ic Policy, Major invited address to the Midwest Economic Association, Chicago, IL, 1986. The Food Marketing System: Relevance oj'Econontic E f ciencv Measures, Major invited address at the Conference on Economic E•f ciencv and Agricu:rare and Food Marketing, sponsored by the t;niversiry of Florida, Farm Foundation and the Agricultural Marketing Service, U.S. Department of Agriculture: Arlington, VA, October, 1985. Instability in Agricultural Markets: The U. S. Experience, Major invited address to the International Association of Agricultural Economists, 'Malaga, Spain, August, 1985. The Design of U.S. Food and Agricultural Policy, Major invited address to the U.S. Congressional Conference, Urban-American Stake in r;:e National Farm Crisis,Washington, DC, April, 1985. Afacroeconomics and Farm Policv. Major address to the American Enterprise Institute, NVashinaton, DC, January, 1985. A Synthesis of Major Evaluations oJ'Alternative Proposals.for the 1985 Food Security Act, Major invited address presented at the National Center for Food and Agricultural Policy and National Agricultural Forum Conference,Policy Choices. 1985, Washington, DC, December, 1984. Regulation in Commodity Futures Markets, Major invited address to the American Enterprise Institute, Washington, DC, January, 1984. Equity and Efficiency in Agricultural Production Systems, Major invited address to the Plenary Session of the International Association of Agricultural Economists, Jakarta, Indonesia, 1982. Political Economic Markets: PERTs and PES'Ts in Food and Agriculture, Keynote address to the American Agricultural Economics Association Annual Meetings, Logan, UT, 1982. LECG A Gordcn C. Rausser Pa_e 3'_ AfoN�rina A, a/tore for Poiici,An,,llsis in the 1980s. Ing,.;ed major address at a special symposium _:onsored by the Federal Reserve Bank of Kansa; Cite. September. 1981. Aar;culture. . ood, and the Government. Invited address to the American Economics .association Annual Meet ::a. New York. NY, 1981. Prospects an::Limitations ofOperotions Research in Agricultural Policy Investigations, Major invited addre_s at the Plenary Session of the International Operations Research Conference, Jerusalem, Israel, 1979. Natural Resource Economics and Policv. Keynote address to the Farm Foundation Research Workshop,A'.;ntral Resource Econatrtics and Policv. University of Massachusetts, Amherst, NIA, 1976. OTHER INVITED SEMINAR PRESENTATIONS Agency for In::rnational Development (27)1. Agricultural Dewclopment Council (4): American Agricultural Economics Association (34): American Agricultural Lary Association (1); American Economics A_sociation (11); American Enterprise institute (2); American Finance Association (5); American Sh:ep Industry (2); American Statistical Association (9); American Water Resource Association (3); Applied Econometric Association Conference (2); Argentina Universities (7).- Australian 7);Australian Aricultural Economics Society (5); Australian National University (3); Brown University (1); California Agricultural Trade Seminars (1); California Women for Agriculture, Los Angeles (2); Chicago Board of Trade (6); Citizens for a Sound Economy Foundation (2); Columbia University (2); Commodity Futures Trading Division of Economic Analysis (1); Commonwealth Club (2): Conference on Agricultural Economic Policy Reform in Egypt (I).- Conference 1);Conference of EconomwNvide Effects of Developed Countn_•Agricultural Trade Policies (1); Econometric Society (North American, European,World) (11). Economics Branch, Agriculture Canada (15); European Agricultural Economics Association (1); Farm Credit Council (2); The Ford Foundation(6); Harvard Institute of Development (2); Harvard University (12); Heritage Foundation, Washington, D.C. (2); Illinois Agricultural Leadership Foundation (1); Institute of Electronics a:-,d Electronics Engineers Decision and Control Conferences (2); International Association of Agricultural Economists (6); International NIonetan• Fund (4); Iowa State University (9). League of Women Voters (Berkeley and Washington, DC) (5); London School of Economics (:); Massachusetts Institute of Technology (4); 'Melbourne University (3); Michigan State University (2); Midwest Economic Association (2): Monash Universitv (1); National Bureau of Economic Research (7); National Cotton Council of America(2); New York Pension Fund Association (2); North Carolina State Universitv (6). Northern Illinois University (3); Oklahoma State University (1); Operations Research Society (5); Organization of Professional Employees (3); Princeton University (2); Purdue Universitv (6); Regional Research Strategy Committees (9); Rotary Club of Berkeley (1); Soviet-American Symposium (1); Stanford University(4); State University of New York (2). Texas A&M University (2); The Institute of Management Sciences (4); Town Hall of California. Los Angeles (1); Trade Policy Research Center, United Kingdom (3); 1 Number of presentations LECG ` Gordon C. Rsusser Pale 33 Universit% f Adcla.-J-� (I).- Univ ersity of California at Berkelc% :3); Universiv% of Califom..a. Davis (9); Univers;:, of California. Los Anueles (4); Universit" of California. Santa Barbara (2): Universit% cf Chica__o (9); University of Florida (2); University -:Georgia (1): University of Heidelberg t 1), Uni%ersity of Illinois (3): University of%Iarvlan, (1). University of Massachusetts. Amherst (2): Univ:rsity of Minnesota (5): University of.Iissour, (3); University of Nebraska (1); University of New England (3); University of North Carolina (1): University of Pennsylvania(3); University of Prague (1); University of Rhode Island (1); Universit} of Salsberg (1); University of Saskatchewan (1); university of Svdney (1); Universitv of Western Australia (2); U.S. Department of Agriculture (15): Washington, DC, Economists Club (3); Western Economics Association (7); World Affairs Council (2); World Perspective Seminar(I); The World Bank (9);Yale University (3); Institute for Policy Reform (12). PROFESSIONAL. UNIVERSITY AND PUBLIC SERVICE Agricultural and FcQd Marketing Consortium Planning Committee. 1993 -present. Member, Capital Campaign 2001. Knowledge for the Future. SLbgroup: Environment, Resources. and Ecology, 1993. Member, Board for International Development Studies. Fletcher School of Law and Diplomacy, Tugs University, 1992 - present. Berkelev Division. Academic Senate. Committee on University Extension, 1992 -present. College of Natural Resources, Committee to Form International Institute for Natural Resource Systems. University of California. Berkeley. CA. 1991 - 1992. College of Natural Resources Internal Re%iew Committee, University of California, Berkeley, CA, 1990 - 1992. Agricultural Acade;ny of Science-Soviet Union Delegation, 1990. Cofounder of the Institute for Police Reform, Washington. DC, 1989. Founder of the Agency for International Development Research Fellow Program, 1989. Dean's Selection Committee for College of Natural Resources Technical Advisory Committee, 1989. Member, Economic Discipline Board, Fulbright Scholarship A%vards, 1989 -present. University of California Systemwide Energy Research Advison- Committee, 1988 -present. Editor.Agr:culturr..'Management and Economics, Springer-Ver:ag, 1988 - 1992. Chairman and Member, Berkeley Campusv%ide Committee to Evaluate the Department of Economics and Related Economics Programs, 1988 - 1989. Board of Directors. Universimvide Energy Research Center, 1988 - 1992. Resources for the Future, National Center for Food and Agricultural Policy Task Force on Multilateral Trade Negotiations, 1988. U.S. Department of Agriculture, Task Force on Analytical Research Supporting the Trade Representatives Office, 1988. Advisory Committee. Environmental Protection Agency, Evaluation of Environmental Regulations on Agriculture. 1987 - 1989. Member, Advisory Committee. Government Accounting Office on U.S. Agricultural Export Strategies. 19S7 - 1988. Departmental Faculty/Extension Coordination Committee. University of California, Berkeley, CA, 1987 - 1988. Chairman. Political Economy of Natural Resources Panel. 1987 - 1988. LECG Gordon C. Rausser Page 34 United States �._,otiatier_ Team for the OECD Communique on Agricu]-iral Reform, May, 1987. United States Senate Par. i on "1983 Farm Bill Revisited: Competitive Views," March, 1987. Council for For:i_m Relations Task Force on Trade Police Options for&-e United States, 1987. General Accountin_= Offcce Task Force on Alternative Public/Private INLrketing Mechanisms for U. S. Food and Agriculture. 1987. U.S. Government Task Force on U.S. Agricultural Policy and Position in GATT Negotiations, 1987 - 1988. U. S. Government Task Force on the Farm Credit System, 1987. Member, Evaluation of EPA Regulation on U.S. Agricultural Sector Committee, 1987-88. Chairman and Member. School of Business Administration Planning Committee, University of California. Berkeley. CA. 1986 - 1987. Editor,American Journa;ol'Agricultural Economics, 1983 - 1986. Organizational Conumittez for Farm Policy-Technology Conference, Agricultural Issues Center, University of California at Davis. CA, 1986. American Agricultural Economics Association Committee on Journal Publishing, 1986. Member, Search and Sel;ction Committee for Vice President of Agriculrsre and Natural Resources. Uniwersit% of California Systemwide, 1985 - 1986. Chairman, Strategic Rev;ew of Giannini Foundation, 198 - 1986. Member, Agricultural Policy Planning Committee, American Agricultural Economics Association. 1984 - 1986'. Member, Planning Conunittee for Agriculture and Food Policy Evaluation, Resources for the Future. 1984 - 1985. Departmental Food and A_Tricultural Act Symposium Committee, University of California at Berkeley. 19S4 - 19S6. The American Aaricultural Economics Association Board of Directors, ex officio, 1984 - 1986. Member, Advisory Committee for the design of the Agricultural Issues Center, University of California Systemwide. 1984 - 1985. Chairman, American Agricultural Economics Association, Outstanding Journal Article Committee, 1983 - 1986. Member and Director, Agriculture Study Group, Commonwealth Club, 1983 - 1985. Chairman, Western Agricultural Economics Research Council, 1982 - 1983. Vice Chairman, Western Agricultural Economics Research Council, 1981 - 1982. American Agricultural Ezonomics Association Publication of Enduring Quality Award Conunittee, 1981 - 1982. Western Nutrition Center Planning Committee, 1980 - 1982. Western Nutrition Center Coordinating Committee, 1980 - 1981. Secretary, Western Agricultural Economics Research Council, 1980 - 1981. Member, Planning Committee, Berkeley Food Cooperative, 1980 - 1983. Evaluation of World Bank Research Proposals (14 evaluations), 1979 - 1992. Member, Board of Directors, Giannini Foundation of Agricultural Economics, 1979 - 1986. Executive Committee, Giannini Foundation, 1979 - 1986. Chairman, Departmental Endowment Committee, University of California, Berkeley, CA, 1979 - 1984. Joint Land Grant University/U.S. Department of Agriculture Committee on New Research Directions. 1979 - 1982. Coordination Board, Giannini Foundation, 1979 - 1982. LECG Gordon C. Rausser Page 3-4 Chairman, Joint Univer;it, Go% -nmental Symposium on Agricultural Sector Forecasting and Policy Evaluations. Washin'cton. DC. 1979. Arab-American Council for Cultural and Economic Exchange, Egyptian Agricultural Development Committee, 1979 - 1980. Associate Editor,Journal of'Drnamics and Control, 1978 - 1982. Chairman. Research Evaluation Committee for Desert Research Institute, Israel, 1978. Academic Representative to U.S.-U.S.S.R. Agreement on Cooperation in Agricultural Economic Research and Information, 1977. Editorial Board,American Journal of Agricultural Economics, 1977 - 1980. Member,World Bank Committer on Research Quality Control, 1976 - 1977. Harvard University Executive Education Program Instructor, 1975 - 1977. Agricultural Development Council Workshop Participant, 1974 - 1977. Associate Book Review Editor.Journal of the American Statistical Association, 1974 - 1982. Member, Outstanding Ph.D. Dissertation Committee, American Agricultural Economics Association. 1974 - 1976. National Bureau of Economic R.scarch «'orkshop Participant, 1974 - 1979. Associate Editor.Jourl%,l of*th,'.4merican .Statistical Association, 1973 - 197 i. Agricultural Econometric todcling and Forecasting Symposium Participant, 1973 - 1980. Ford Foundation VisitinL, Professor, Argentina, 1972. Numerous Departmental and College-Level Committees, 1970 - present. College Union Board of Directors. 1966 - 1972. Interfraternity Council Board. 1961 - 1967. Universitv of California at Berkeley, Ad Hoc RevieNy Committee for Tenure Appointments (17 appointments, 8 as Chairman). EDITORIAL COLLABORATIONS American Economic Review-, 1976 -present. American Journal ofAgricultural Economics, 1970 -present. Annals of Economic and Social Afeasurement, 1974 - 1977. Australian Journal ofAariculn,ral Economics, 1977 -present. Decision Sciences. 1977 -present. Econometrica, 1974 - present. Economic Development and Cultural Change, 1985 -present. Economic Journal, 1986 -present. IEEE Transactions on Automatic Control, 1977 -present. Journal of the American Statistical Association, 1971 -present. Journal of Development Economics, 1982 -present. Journal of Econometrics. 1973 -present. Journal of Economic DYnamics and Control, 1978 -present. Journal of Economic Theon. 1985 -present. LECG Gordon C. Rausser Pagge 36 Jouri:,,l ofEconomics and Business, '1977 - present. Jour:,-,I of Environmental ECOn70MiC and/llanagelnewt 1981 - present. Journal of'Finance, 1975 -present. Journal of Futures Markets, 1986 -present. Journal of Monetary Economics, 1984 -present. Journal of Political Econotm, 1973 -present. Management Science. 1977 -present. Quarterly Journal ofEconamics, 1976 -present. Resources and Energy, 1978 -present. Review of Agricultural Economics, 1990 -present. Revie-ly of Economic Studies, 1987 - present. Review of Economics and Statistics, 1974 -present. Review of Futures Markets, 1986 - present. Sprirgr-Verlag, 1988 -present. Western Journal ofAgricultural Economics, 1977 - present. AD HOC REVIEWING Giannini Foundation Monograph Series, 1971 -present. National Science Foundation, 1976 - present. World Bank, 1979 - present. American Enterprise Institute, 1981 -present. U.S. General Accounting Office, 198: -present. Agriculture Canada, 1978 - 1982, 1991 -present. U.S. Congressional Budget Office, 1982 -present. United States-Israeli Binational Agricultural Research and Development Fund (BARD), 1980 - present. U.S. Council of Economic Advisors, 1986 -present. Club of Paris, various governmental consulting groups, 1988 -present. Intergovernmental Consulting Group on Indonesia, The Hague, 1989 - 1990. Ph.D.DIRECTORSHIPS Sixty-one Ph.D. theses in the areas of Natural Resource Damages. Agricultural Economics and Police: Industrial Organization and Antitrust Analysis;Water Resources; Human Capital; LECG Gordon C. Rausser Paae 37 Recreation::: Economics: Environmental Economics.- Energy Policy. Public Policy; Managerial Economics: _Adaptive Control; Econometrics: international Trade; Commodity Markets and Models; Gc-,-mmental Food and Nutrition Po;icies; Operational Designs of Decision Support Svstems; U.S. Livestock Feed Grain Sector; _agricultural Cycles; Futures Markets. Terms of Trade; Agricultural Land Prices and Agrarian Structure; Land Quality and Soil Conservation; Agricultural Credit Markets; New Institution--i Economics and Transaction Costs; Political Economy; Multilateral Negotiations: Design of Governance Structures; Industrial Organization of Food Industry. and Transitional Economics. RESEARCH GR.-k\TS Agency for International Development, U.S. State Department (numerous) Agriculture Cooperative Service, U.S. Depar.nent of Agriculture Agriculture Research Service, U.S. Department of Agriculture (numerous) Center for_agricultural and Rural Development (numerous) Chicago BoZrd of Trade Chicago Mercantile Exchange Consortium of U.S. Commodity Futures Exc:-nges Economic Research Service, U.S. Department of Agriculture (numerous) Economics Branch, Agriculture Canada (numerous) Ford Foundation Giannini Foundation (numerous) Harvard University Research Institute International Monetary Fund National Center for Food and Agricultural Policy (numerous) National Science Foundation OECD. France State of lo\%a Coal Project U.S. Trade Representatives Office (numcrous� University of California Water Resource Center Western Human Nutrition Center, U.S. Depanment of Agriculture «'orld Bank GOVERNMENT CONSULTING AND NONACADEMIC POSITIONS Board of Directors, Duke and Co., 1993 -present. Board of Directors,Wolffer's Auctions, Inc., 1993 -present. President and Board of Directors, Institute for Policy Reform,Washington, DC, 1990 -present. Nathan Associates, Inc.,Washington, DC, 1990 - 1991. Chief Economist, Agency for International Development, Washington, DC, 1988 - 1990. Chairman and Board of Directors,TriColor Line, Ltd., 1990-present. LECG Gordon C. Rausser Pace 38 Principal, Corporate S.crctar-,- and Board of Directors. Law and Economics Consulting Group. Inc., 1990 -prcsl-illr, Board of Directors, Source for Automation, Inc... 198S -present. Ministry of Agriculture: England. 1987 - 1988. Senior Staff Economist and Special Consultant to the Council of Economic Advisors, 1986 - 1987, Bureau of Agricultural Economics, Australia. 1986 - 1987. Farm Credit Administration, 1986 - 1987. U.S. Department of State, 1986 - 1990. U.S. Office of Management and Budget, 1986 - 1987. Ministry of Aariculture. Spain, 1985. Chicago Board of Trade, 1982 - 1986. Chicago Mercantile Exchange, 1980 - 1981. Oakridge National Laboratories, Energy Division, Oak,-;J,CYc, Tennessee, 1978 - 1981. President, Agripac, 1978 -present. Economics Branch, Agriculture Canada, 1977 - 1980. U.S. Department of Agriculture, 1975 -present. World Bank, 1975 - 1976 and 1983 - 1988. U.S. Bureau of Mines. 1974 - 1976. U.S. Office of Saline Water, 1973 - 1976. National Science Foundation Environmental Project, University of Chicago, 1973 - 1975. Manager, California Dairy and Truck Crop Farm, 1967 - 1973. INDUSTRY CONSULTING AND LITIGATION EXPERIENCE Extensive consulting experience in complex litigation, class certification analysis, antitrust, regulated industries, measurement of economic damages, economic feasibility studies, market analysis, econometric modeling, hedonic modeling, environmental damages, natural resource valuation, development of portfolio investment models, securities, and the assessment of risk management frameworks. Econometric market analysis model (Sunkist Growers-. 1972-1974). Risk management models for California Water Resources (Office of Saline Water; 1973-1976). Econometric model for pollution monitoring and measurement of environmental damages (Commonwealth Edison.- 1974-1976). An economic and environmental evaluation of Midwestern Coal Mining (Energy & Mineral Resources Research Institute: 1974-1977). LECG Gordon C. Rausser Noe 39 A portfolio analvsIs of water desalination plant constrictions and their investment sequencing (U.S. Department of Interior-, 1975-1977). A coal industry analysis of EPA Sulfur Standards (Environmental Protection Agency; 1976-1979). Feasibility analysis of soybean processing in Indonesia(Price Waterhouse.- 1977-1978). Econometric market analysis and risk management computer simulation model (Hershey Foods; 1977-1980). Commodity futures market analysis involving breach of contract, fraud, monopolization, and market manipulation (The Commodity Futures Trading Commission and individual investors, 1977-1981). Attempted monopolization analysis In the U.S. citrus Industry(Federal Trade Commission; 1978- 1979). Design of commodity market risk management models (Conti Commodity: 1978-1980). Computerized simulation model for the assessment of environmental impacts (City of Boca Raton, 1979-1981). Merger in the market for fluid milk and fresh orange juice markets (Federal Trade Commission.- 1980-1981). Econometric models for determining solid waste, water quality and air quality environmental impacts (Stanford Research Institute, 1981-1983). Determination of market power in relevant peanut oil and meal markets (Hansell & Post; 1983- 1984). Economic damages resulting from breach of contract (Leland. Parachini. Steinberg, Flynn, Matzger&Melnick; 1984-1985). Economic damages resulting from crop pesticide applications (Jory, Peterson & Sagaser; 1984- 1985). Economic damages resulting from chemical applications to lettuce crop (Titchell, Maltzman, Mark, Bass, Ohlever& Mishel; 1984-1985). Analvsis of water rights and water quality damages (Brewer. Partridge, Morrison & Gibson; 1985- 1986). Competitive practices in the food Industry(U.S, Department of Justice: 1985-1986). LECG Gordon C. Rausser Page 40 Economic damages resulting from zioncultural chemical applic_z:lons (Brewer. Partridge. Morris Gibson.- 1985-1986). Economic damages resulting from chemical applications in the ,ineyard industry (McCormick, Barstow, Sheppard, Wayte & Carruth: 1985-1986). Economic damages,resulting from veterinarian diagnosis in the dairy industry (Sandell, Young St. Louis, 1985-1986). Economic damages suffered from worker strikes (Borton, Petrini & Conron; 1985-1986). Economic damages resulting from breach of loan commitment to acquire Getty agricultural properties (N[cConnick, Barstow, Sheppard, Wayte& Carruth.- 1985-1986). Economic feasibility analysis in the Latin America fruits and v,-yetables Industry(Produce Marketing Association: 1985-1986). Future market hedging frameworks for the airline industry (Ne%N York Mercantile Exchange, Flying Tiger Airlines,. and United Airlines.- 1985-1986). Merger in the market for processed meats (Federal Trade Commission: 1985-1986). Pricing and competition in the soft drink industry (Coca Cola: 1985-1986). Predatory pricing in the market for fresh mushrooms (McCutchen. Doyle, Brown & Enersen. 1985-1986). Economic damages resulting from fire and earthquake (Fireman's Fund.- 1985-1988). Econometric analysis of alternative aluminum contract provisions with the Government of Ghana (Kaiser Aluminum; 1987-1988). Feasibility anal%-sis of investments in the Argentinean and Urualliavan sheep and wool industry (American Sheep &Wool Growers Associations; 1987-1988). Merger in the fresh and concentrated orange juice industry(Coudert Brothers; 1987-1988). Merger in the market for fresh and processed almonds (O'Melveny& Myers; 1987-1988). Alleged price fixing by marketers and distributors of hops to brewers (HoNvrey & Simon; 1987- 1988). Contract versus competitive spot pricing in agricultural markets (McCutchen, Doyle, Brown & Enersen-. 1987-1988- 1990-1991), Alleged price fixing by major supermarket chains in the carcass beef market (Morrison&Foerster.- King&Green.- 1987-1990). LECG Gordon C. Rausser Paae 41 Measuring environment damages from non oint source Nater contamination (Hall, Byers. Hanson, Steil &Weinberger: 1988). Market efficiency analysis of dual trading on conumodity future markets (consortium of Chicago Board of Trade, Chicago Mercantile Exchange, New York Mercantile Exchange, et al.; 1990). Design of sampling methodology for measuring the degree of market dumping (Howrey & Simon, 1990-1991). Economic damages resulting from faulty accounting audits in the raisin industry(Baker. Manock &Jensen; 1990-1991). . Economic evaluation of managed futures as an asset class (Mt. Lucas. Refco: 1990-1991). Economic damages resulting from faulty accounting audits in the Nyalnut industry (Dewey & Ballantine; 1990-1991). Relevant markets, market power, and predatory pricing in poultry and turkey markets (Morrison & Foerster; 1990-1991). Feasibilitv analysis of investment in Poland telecommunication system (Crowley Cellular Telecommunications: 1990-1991). Class action certification analysis in the food industry (McCutchen, Doyle, Brown & Enersen; 1990-1992). Alleged price fixing in the macadamia nut market(McCutchen, Doyle, Brown & Enersen; 1990- 1992). Economic damages resulting from alleged fraud and imprudence of board of directors in the computer industry (McCormick, Barstow. Sheppard. Wayte & Carruth; 1991). Analysis of competitive pricing in the California nut industry and breach of contract (Kimble, MacMichael & Upton: 1991). Economic damages resulting from alleged fraud and imprudence of board of directors in the banking industry (McCormick, Barstow. Sheppard, Waite & Carruth; 1991). Economic damages resulting from alleged fraud and breach of contract in sale of company assets (McCutchen, Doyle, Brown &Enersen; 1991). Economic damages resulting from chemical applications to strawberry crop (Borton, Petrini & Conron;,1991). Intellectual property damage analysis in the hybrid seed industry (Clifford, Jenkins, and Brown; 1991-1992). LECG G_)rdon C. Rausser Pave 4= _.nalvsis ofticr pricing in California water ma-:,ts (National Heritage Institute. 1991-1992). Environmental impacts of contaminated animal products (Clifford. Jenkins & Brown; 1991-1992). Contaminated waste disposal, loss of use and diminution of value (McCutchen, Doyle, Brown & Enersen; 1991-1992). Agricultural trade analysis for support of the U.S. Trade Representative(Iowa State University of Science &Technology; 1991-1990. Environmental damages, drinking water standards and dynamic analysis of contaminated plumes (Hardin, Cook, Loper. Engel & Bergez. 1992). Environmental impacts of chemical applications (Graham. Cone. McKinney, Roberts & Jackson.- 1992). ackson:1992). nalvsis of futures markets and options as an asset class (Chicago Mercantile Exchange; 1992). .; Predatory pricing in the Oregon food industry (Irell and Manella; 1992). Trademark infringement and intellectual propcm-damage analysis (Arnold and Porter; 1992). Analvsis of real estate contracts: economic evaluation of breach of contract in the real estate industry (Miller, Starr& Regalia: 1992). Analysis of economic dumping of foreign agriculture (independent farms: 1992). Analysis of tier pricing by water agencies (National Heritage Institute; 1992). Forecasting future demand and development of marketing strategies in the poultry industry (National Broiler Council; 1992). Environmental damages and diminution of property values in a toxic tort case involving the aerospace industry (McCutchen, Doyle, Brown & Enersen; 1992-1993). Countervailing duties against Canadian lumber imports (Steptoe and Johnson; 1992-1993). Environmental dispute resolution among principal responsible parties; hedonic analysis of contaminated soil at a Superfund site (Munger. Tolles, and Olson; 1992-1993). Economic damages and lender liability in the citrus processing industry(Dorsey &Whitney; 1992- 1993). Environmental damages, diminution of property values, and spillover stigma impacts in a toxic tort case(Munger, Tolles, and Olson; 1992-1993). LECG Gordon C. Rausser Page 43 Ezonomic _Jamage analysis, breach of contract and terminated distributorship in the Califomia induS-n' (Damrell, Nelson, Schrimp, et al.; 1992-1993). E:v ironn,.ntal damages and water quality contamination (Munger, Tolles & Olson; 1992-'993). Economic damage analysis of breach of contract (McCormick, Barstow, Sheppard, Wayte Carruth; 1992-1993). Analvsis of environmental and punitive damages, agglomeration, and noncooperation among principal responsible parties (Munger, Tolles & Olson; 1992-1993). Antitrust analysis, price fixing and class certification in the U.S. Food Industry (McGrath, North, Mullin, and Kratz; 1992-1993). Antitrust analysis and price fixing in a class-action case indirect purchasers (McGrath,Nor-.h, hfallin & Kratz; 1992-1994). A:.alysis of alternative technologies. drinking water standards, and contaminated ground Nester quality (Hardin, Cook, Loper, Engel & Bergez; Sedgwick, Detert, Moran & Arnold and Landels, Riple}' & Diamond; 1992-1996). Environnental and economic damages from chemical waste disposal (Orrick, Herrington & Sutcliffe: 1993). . Economic damages under CERCLA, negligence and determination of noncooperation punitive damages (Righetti; 1993). Evaluation of environmental impacts of Miller-Bradley Bill legislation on Central Valley Project (Bureau of Reclamation; 1993). Diminution of firm value and resulting economic damages (McCormick, Barstow, Sheppard, Wa\-te and Carruth; 1993). A,.ah-sis of Natural Resource Damage (Borton , Petrini & Conron; 1993). Assessment of natural resource damages and environmental waste; economic evaluation of toxic by-products (Orrick, Herrington & Sutcliffe: 1993). Causes of action for contribution and indemnity,trespass, nuisance, interference with prospective business advantage, fraud and promissory estoppel. (McCutchen, Doyle, Brown & Enersen; 1993). Economic damages under CERCLA, breach of contract, negligence and determination on non- cooperation (Righetti; 1993). Evaluation of class action involving contaminated groundwater (Stamell, Tabacco & Schager; 1993). LECG ' Gordon C. Fausser Paae 44 Analysis res ding vertical restraint and price-fixing (McGrath ;Forth; 1993). Analysis of.ivironmental contamination and economic damages: determination of responsic :. parties (Munger, Tolles & Olson; 1993). Non-cooperative analysis at a Superfund site (lounger, Tolles & Olson; 1993). Analysis of damages resulting from patent infringement (Townsend &Toy%msend Khourie & Crew; 1993). Evaluation of environmental damages, stigma value, and diminution of property values (Munger, Tolles & 01=Un; 1993). Evaluation cf potential future performance and damages resulting from innacurate economic condition data provided by large accounting firm audit (Gordon & Rees: 1993). Burden allocation and design of environmental dispute model among Pus (Munger, Tolles Olson: 1993). Evaluation of indictment stemming from federal probe of the insolvent Cosmopolitan National Bank (Coopers & Lybrand; 1993). Evaluation of class certification; analysis of economic damages (McGrath,North, Mullin & Kratz, P.C.; 1993). Analysis of agricultural crop loss due to farm chemicals (Borton, Petrim & Conron; 1993). Analvsis of economic damages resulting form breach of contract (Howrey & Simon: 1993). Evaluation of causes of action for contribution and indemnity, trespass, nuisance, interference with prospective business advantage, fraud and promissory estoppel (McCutchen, Doyle, Brown Enersen; 1993). Analysis of relevant markets for specific agricultural crops: pricing and economic damage analysis (Kimble, MacMichael & Upton; 1993). Patent infrineement, unjust enrichment (Pennie & Edmonds. 1993). Analysis of environmental damages resulting from contaminated externalities from landfill (Lieff, Cabraser&Heimann: 1993). Analysis of damage of agricultural production caused by pesticides (Hardin, Cook, Loper, Engel & Bergez; 1993). Anal%-sis of class certification, antitrust market definition, and price fixing in U.S. peanut industry -(Alston & Bird; 1993). LECG Gordon C. Rausser Pace 45 Damage calc,_:!ation and public police anak sis of brokerage contracts (Gorelick & Gorelick: 1993). Evaluation of legal settlement involving contamination of real estate propem• (Reed, Elliott, Cre:ch & Roth, 199--). Evaluation of potential future performance and damages resulting from inaccurate accounting analysis (Gordon & Rees; 1993-1994). Rate analysis of environmental and%eater quality services offered by private firm (Norris &Norris; 1993-1994). Analysis of crop loss due to pesticide use (Borton, Petrini & Conron; 1993-1994). Evaluation of legal and regulator\- infrastructure for electrical power, water, and transport in Costa Rica, Jamaica and Columbia (Inter-American Development Bank. 1993-1994). Construction of Monte Carlo decision theoretic model for remediation of lead base paint; evaluation of environmental regulation, health hazards and environmental damages. Assessment of benefits and costs of alternative options. (ATC Environmental, Inc.. 1993-1994) Analysis of statute imposing new labeling requirements (bell & Manella; 1993-1994). Evaluation of proposed plans in a bankruptcy case (Steefel, Levitt &Weiss; 1993-1994). Analysis of damages from loss of property tax and sales tax revenues (Skadden, Arps, Slate, Meagher & Flom. 1993-1994). Analysis of contractual obligation and breach of contract; analysis of economic damages (McCormick. Barstow. Sheppard. Wayte & Carruth; 1993-1994). Financial security analysis, stochastic processes underlying alternative investment funds (Jenner & Block; 1993-1990. Analysis of price-fixing by carbon dioxide suppliers (Burke,Weaver& Prell; 1993-1990. Analysis of agricultural damages from use of fungicide (Goodsill, Anderson, Quinn & Stifel; 1993- 1995). Environmental damages, diminution of value and assessment of stigma values (Folger& Levin and Latham &Watkins; 1993-1990. Burden allocation and use of environmental dispute model among PRP on a clean-up of water contamination (Munger, Tolles & Olson; 1994). Statistical analysis of the Business & Professions Code §§ 17206(c) and 17536(c) (McCutchen, Doyle, Brovm & Enersen, 1994). LECG r Gordon C. Rausse- Pale 46 Stratesic statistical studio: of envirojimental damages (Crowell & Morin_. 1994). Evaluation of California �:onoamy and its implications for the quality toot market for the years 1989 through 1993 (Buck:n: ham. Doolittle & Burroughs: 1994). Critique of economic bene:a analysis for an oil refiner\- (Landels, Ripley & Diamond; 1994). Diminution of property values; class certification analysis and economic damage analysis involving hedonic modeling (Hardin. Cook, Loper, Engel & Bergez; 1994). Analvsis of issues relating w allocation of remediation expenses at Superfund site (Munger, Tolles & Olson; 1994). Valuation of conservation easements and restrictive development covenants (independent land owner: 1994). Cost allocation at contain::ated commercial site. hedonic analysis of economic damages resulting from land and groundwater contamination: determination of equitable sharing of remediation costs: quantification of ex post 1.d ex ante benefit and cost profiles (Munger, Tolles & Olson; 1994). Determine applied discount rates for state versus private sector in Stringfellow(Superfund site) environmental remediation (Coopers R Lybrand; 1994). Hedonic analysis of econcmIc damages to cattle feedlot operator (Pillsbun•, Madison & Sutro; 1994). Analysis of product market and geographic market definition for various canned fruits; valuation of entry costs (Boutin, La_sner, Gibson & Delehant: 1994). Analysis of alleged breach of contract between winery and grape grower (Borton, Petrini & Conron; 1994). Analysis of hedonic and economic damages resulting from loss of life (Katten, Muchin, Zavis & Dombroff; 1994). Analysis of class action suit filed against several asbestos manufacturers. (Cozen & O'Connor; 1994-1995). Analysis of methodology used by center for claims resolution in allocating shares to member companies; assessment of validity of forecasting methodology and econometric analysis; estimation of future liability for asbestos claims under the tort system (Wiley, Rein & Fielding; 1994-1990. Evaluation of proposed class settlement (Saiber, Schlesinger, Satz &Goldstein; 1994-1990. Strategic planning of liquid waste management program and treatment technologies; analysis of U.S. liquid waste treatment industry (Browning Ferris Industries: 1994-1990. LECG Gordon C. Rausser Noe 47 Analysis of soil and uroundwatercontam'nai- I ion caused by negligence.- analysis of property values (Orrick, Herrington & Sutcliffe-. 1994-1990. Development of econometric =601 for price negotiations and strategic anak-sis (independent marketing and production company; 1994). Analysis of unjust enrichment resulting from use of proprietary and confidential information in the electronic components industry (Brobeck, Phleger& Harrison- 1994-1995). Analysis of class action suit involving alleged violation of the federal securities laws (Alston & Bird, 1994-1995). Analysis of economic damages resulting froze breach of lease, continuing trespass, public nuisance, and environmental waste (Graham &James: 1994-1990. Evaluation of collateral. letters of credit, and guarantees in loan to lender transactions structure; evaluation of project viability. analysis of market value of five large real estate properties and alternative restructuring strategies (Steefel, Levitt &Weiss; 1994-1990, Analysis of potential anti-competitive effects in the Oregon fresh chicken market (Irell & Manella; 1994). Patent infringement and antitrust (monopolization and/or attempted monopolization), RICO, and unfair trade practices counterclaims. involving cattle feed products (Rumen Bypass Fats) (Knobbe, Martens, Olson & Bear, 1994-1995). Class certification analysis; commonality of impact; price-fixing and antitrust issues; feasibility of estimating damages by a common formula (Meredith & Cohen and Keller Rohrback; 1994-1995). Evaluation of labeling regulations; analysis of economic damages resulting from country of I origin labeling of prepackaged, mixed, frozen fruit and vegetables (Pillsbury, Madison & I — Sutro; 1994-1995). Evaluation of institutional rules of imports of narcotic controlled substances, i.e.,gum opium, CPS, or poppy straw (Hyman, Phelps & McNamara, P.C.; 1994-1995). Analysis of property damage claims resulting from contamination of air and water from toxic waste(Munger,Tolles & Olson.- 1995). A9 ovemment taking analysis, assess and estimate the value of forests previously owned by a private company and subsequently taken by the U.S. government (Steefel, Levitt &Weiss; 1995). Strategic analysis and development of econometric model for industry distribution (independent marketing and production company; 1995). LECG Gordon C. hausser Paze 48 Analysis of damages to national forest cause--; 'Dv forest fire (Thompson & Heller; 1995). Analysis of damages related to breach of cor.mct in food industry (Kimble. MacMichael & Upton; 1995). Class action regarding violations of the cominodity exchange act, fraud and breach of fiduciary duties (Honigman, Miller, Schwartz and Cohr.- 1995). Evaluation of the effect of contamination on property values (Munger, Tolles & Olson; 1990. Allocation of hazardous waste remediation cows (Morrison & Foerster; 1995). A private cost discovery matter involving cor.=mination over a period of 150 years at a Superfund site OVinston& Stra«n; 1995). Economic damage and contingent valuation s-L�ryey study of insurance carrier discrimination between minoritv and Caucasian communities (National Fair Housing Alliance; 1995). Analysis of environmental sustainability and resilience of water basin resource; statistical analysis of landfill and groundwater cont::,-nination (Brobeck, Phleger& Harrison; 1995). Evaluating alternative methodologies for allowtion of burden on remediation of,landfill site (Superfund site) (Inman Flynn & Biesterfeld. ?.C.; 1995). Economic damage analysis and liability (S:haffer & Lax; 1995). Class certification analysis and damage analysis in a securities case (The Mills Firm; 1995). Environmental damages and liability assessme:it in a case involving Fuji Apple crops (McCormick, Barstow, Sheppard, Wayte & Carruth; 1995). Economic analysis of breach of representation in acquisition (Pillsbury, Madison & Sutro; 1995). Statistical analysis of grain elevator inventory records (McCrath,North, Mullin&Kratz, P.C.; 1995). Statistical analysis of process performance ars control (Gray, Cary,Ware& Freidenrich; 1995). Analvsis of securities market issues: Factual sham, economic sham and profit motive determinations in four markets; evaluating derivative futures and options markets and assessing seasonality and use of markets for tax management vs. hedging vs. speculation(de Castro,West, Chodorow &Burns, Inc. and Zapruder& Odell and Jeffer, Mangels, Butler&Marmaro; 1995). Estimation of environmental damages and ana:ysis of economic benefits in the mining industry (Beveridge & Diamond; 1995). LECG • + Gordon C. Rausser Pace 49 Nulaid Foods is seeking declaratory relief in order to continue using a processes to produce ultrapasteurized liquid whole eggs which Michael Foods contends infringes its process used for the same purpose (Pettit & Martin; 1995). Class certification and merit analysis (Steefel, Levitt & Weiss; 1995). Analysis of the marketability and/or"finance-ability"of a contaminated property (Cooley Godward Castro Huddleson &Tatum; 1995). Damages resulting from a defective automated material handling system (Brobeck, Phleger & Harrison; 1995). Analysis of prix ate cost recovery under CERCLA (Folger & Levin and Latham &Watkins; 1995). Estimation of environmental damages and remediation costs (Ness, Motley, Loadholq Richardson & Poole; 1995). Evaluation of environmental damages (McCutchen, Doyle, Brown & Enersen; 1995). Evaluation of plans for reorganization in a bankruptcy court; forecasting prices of Fuji and Gala apples (Law Office of William H. Parish; 1995). Determination of economic damages resulting from environmental damages (Popham, Haik, Schnobrich & Kaufinan, Ltd.; 1995). Damage analysis of alleged damage caused by use of fungicide(Glen, Cella &Lange; 1995). Analysis of lost profits resulting from use of pharmaceutical drugs (Sidley &Austin; 1995). Analysis of lost profits from the alleged breach of contract of a laser tag franchise(Brobeck, Phleger&Harrison; 1995). August 199; LECG City Of Pittsburg Civic Center • P.O. Box 1518 • Pittsburg, California 94565 OFFICE OF THE MAYOR RECEIVE® December 12, 1995 DEC 1 2 W5 The Honorable Gayle Bishop, Chair Contra Costa County Board of Supervisors qS 651 Pine Street Martinez, California 94553 RE: AGENDA ITEM D.7: KELLER CANYON LANDFILL PROPERTY VALUATION STUDY Dear Supervisor Bishop and Members of The Board: The City of Pittsburg urges the Board of Supervisors to find that compensation of property owners identified in the Keller Canyon Landfill Property Valuation Study is warranted, and asks that you move expeditiously forward in determining the means and method of the compensation. While such an action will not address the separate and significant issue of the Landfill's negative economic impacts on the entire City, it will provide relatively immediate and long-overdue relief to those property owners nearest the dump. As you know, the requirement to study Keller's impact on neighboring property values dates back to the facility's 1990 Land Use Permit, and development of the actual Study began in 1992. In fact, the Study before you today was submitted to County staff over one-year ago; on November 30, 1994. Yet, it took almost an additional year to accept the Study as complete, which this Board did on October 17, 1995. We are amazed that the County is still considering how to address the Study and associated challenges a year after its publication. After nearly six years, it is more than a little disconcerting that the Board of Supervisors is being advised to delay compensation and employ an arbitrator or peer economists to evaluate challenges to a conclusion that even a layperson would say is common sense: LANDFILLS DIMINISH SURROUNDING PROPERTY VALUES. The City's position regarding the Keller Canyon Property Valuation Study was previously detailed in my letter and testimony of October 17, 1995, and in Dr. Claude Gruen's subsequent correspondence of November 15, 1995 (which was transmitted to the Growth Management and Economic Development Agency via facsimile on November 16, 1995). As stated by Dr. Gruen: California Healthy Cities Project ^11A, National Center for Public Productivity Exemplary Award - 1993 City of New Horizons The Honorable Gayle Bishop, Letter December 12, 1995 Page Two While we agree with the fundamental finding of ICPA's study that the landfill has had a negative impact on the surrounding area's property values, the full amount of diminution both now and in the future has not been captured. Should the Board decide to forego the City's request to immediately develop a means and method to compensate affected property owners, we ask that any further evaluation of the Study address two key shortcomings identified by Dr. Gruen: 1) The study failed to provide a full assessment of the damages to values in the Oak Hills and Woodside neighborhoods partly because the methodology omitted socioeconomic variables and the identification of comparable neighborhoods was questionable. 2) The study ignored the larger economic impacts to the City of Pittsburg, including the .landfill's impacts on the dynamics of residential development in Pittsburg. Had these issues been fully analyzed in the Keller Canyon Landfill Property Valuation Study, we are confident that the amount and scope of damages to the neighborhoods surrounding Keller would be significantly higher than have been indicated, and that economic damage to the City of Pittsburg, to date unrecognized, would be substantial. Thank you very much for your time and consideration. As always, we remain committed to working with the County and Keller Canyon Landfill Company to address these issues in a timely and equitable manner. Sincerely, J,?ephyCaanciamilla Mayor cc: Pittsburg City Council Michael R. Woods, Interim City Manager Dr. Claude Gruen, Gruen Gruen & Associates City of Pittsburg Civic Center • P.O. Box 1518 • Pittsburg, California 94565 OFFICE OF THE MAYOR December 12, 1995 The Honorable Gayle Bishop, Chair Contra Costa County Board of Supervisors 651 Pine Street Martinez, California 94553 RE: AGENDA ITEM D.7: KELLER CANYON LANDFILL PROPERTY VALUATION STUDY Dear Supervisor Bishop and Members of The Board: The City of Pittsburg urges the Board of Supervisors to find that compensation of property owners identified in the Keller Canyon Landfill Property Valuation Study is warranted, and asks that you move expeditiously forward in determining the means and method of the compensation. While such an action will not address the separate and significant issue of the Landfill's negative economic impacts on the entire City, it will provide relatively immediate and long-overdue relief to those property owners nearest the dump. As you know, the requirement to study Keller's impact on neighboring property values dates back to the facility's 1990 Land Use Permit, and development of the actual Study began in 1992. In fact, the Study before you today was submitted to County staff over one-year ago; on November 30, 1994. Yet, it took almost an additional year to accept the Study as complete, which this Board did on October 17, 1995. We are amazed that the County is still considering how to address the Study and associated challenges a year after its publication. After nearly six years, it is more than a little disconcerting that the Board of Supervisors is being advised to delay compensation and employ an arbitrator or peer economists to evaluate challenges to a conclusion that even a layperson would say is common sense: LANDFILLS DIMINISH SURROUNDING PROPERTY VALUES. The City's position regarding the Keller Canyon Property Valuation Study was previously detailed in my letter and testimony of October 17, 1995, and in Dr. Claude Gruen's subsequent correspondence of November 15, 1995 (which was transmitted to the Growth Management and Economic Development Agency,via facsimile on November 16, 1995). As stated by Dr. Gruen: California Healthy Cities Project ^,kA' National Center for Public Productivity Exemplary Award - 1993 City of New Horizons The Honorable Gayle Bishop, Letter December 12, 1995 Page Two While we agree with the fundamental finding of ICPA's study that the landfill has had a negative impact on the surrounding area's property values, the full amount of diminution both now and in the future has not been captured. Should the Board decide to forego the City's request to immediately develop a means and method to compensate affected property owners, we ask that any further evaluation of the Study address two key shortcomings identified by Dr. Gruen: 1) The study failed to provide a full assessment of the damages to values in the Oak Hills and Woodside neighborhoods partly because the methodology omitted socioeconomic variables and the identification of comparable neighborhoods was questionable. 2) The study ignored the larger economic impacts to the City of Pittsburg, including the landfill's impacts on the dynamics of residential development in Pittsburg. Had these issues been fully analyzed in the Keller Canyon Landfill Property Valuation Study, we are confident that the amount and scope of damages to the neighborhoods surrounding Keller would be significantly higher than have been indicated, and that economic damage to the City of Pittsburg, to date unrecognized, would be substantial. Thank you very much for your time and consideration. As always, we remain committed to working with the County and Keller Canyon Landfill Company to address these issues in a timely and equitable manner. Sincerely, J_ eph Canciamilla Mayor cc: Pittsburg City Council Michael R. Woods, Interim City Manager Dr. Claude Gruen, Gruen Gruen & Associates