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Home My WebLink AboutMINUTES - 06141994 - 1.7 (2) Q - 1 .70 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA Adopted this Order on June 14, 1994, by the following vote: AYES: Supervisors Smith, DeSaulnier, Torlakson and Bishop NOES: None ABSENT: Supervisor Powers ABSTAIN: None ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ SUBJECT: Report No. 9407 of the 1993-1994 Contra Costa County Grand Jury IT IS BY THE BOARD ORDERED that Report No. 9407 of the 1993-1994 Contra Costa County Grand Jury on the Keller Canyon Landfill is REFERRED to the County Administrator and the Internal Operations Committee. 1 hereby Certify that this is a true and correctCOpyof an action taken andlo nt the on the date shown.tea of the Board of Supery ATTESTED: PHIL BAT ELOR,Clerk(ft the Board of Su and County AdmtnistretOr By Cc': County Administrator Internal Operations Committee v� 1. 70 .i A REPORT BY THE 1993-94 CONTRA COSTA COUNTY GRAND JURY 1020 Ward Street Martinez, CA 94553 (510) 646-2345 Report No. 9407 KELLER CANYON LANDFILL / CONTRA COSTA COUNTY'S CASH COW? �4�. RECEIVED :-.. � 3 I �9d4 CLERK BOARD OF SUPERVISORS CONTE;A COSTA CO. Approved by the Grand Jury: Date: ,Judit - M. Mullin Grand Jury Foreman Accepted for Filing: Date,z 0ard E. Arnason Judge of the Superior Court INTRODUCTION: The base rate for Keller Canyon Landfill was not set in the best interest of rate-payers and provides an exorbitant profit for Browning Ferris Industries-Keller Canyon Landfill Company (BFI- KCLC) . The Grand Jury further notes that current negotiations with BFI-KCLC to guarantee a long-term waste stream are ill-advised, until all waste disposal alternatives are explored and considered. FINDINGS: 1. Contra Costa County rate-payers are charged one of the highest per ton dumping or tipping rates in the State at $75.95 per ton, of which $49.08 is the base rate at Keller Canyon Landfill. The balance of the tipping fee goes to Acme Fill Corporation to operate the Acme Transfer Station. 2. Contra Costa County has responsibility for establishing tipping fees. The Board of Supervisors approved the current base rate of $49.08 for Keller Canyon Landfill on August 11, 1992. Of this amount, $38.48 goes directly to BFI-KCLC; $3.85, charged as 10% of the base rate, goes to the County as a surcharge; $6.00 goes to the County in mitigation fees; and $.75 goes to the State. (Table A lists all fees/charges assessed by all governmental entities at the transfer station and landfill. ) 3. Current tonnage for Keller Canyon Landfill is between 250, 000 to 300, 000 tons per year. 4. As stated in Grand Jury Report No. 9403: (1) Since its approval, several governmental entities have questioned the base rate as being excessive and have claimed that the rate's rationale is faulty; (2) The questioned amounts, if found to be improperly charged, could result in a substantial reduction to the tipping fee; and (3) Interested parties have repeatedly requested background documentation and working papers used to support the current rate. 5. Contrary to requirements of the Public Records Act, the County continues to stonewall release of certain background documentation, specifically, the work papers held at the rate- setting consultant's facilities (any reputable accounting consulting firm routinely prepares a set of work papers which supports its conclusions and recommendations; such work papers would include spreadsheets, calculations, documents, and correspondence) . 6. The reasonableness of the established rate is questionable in that among other factors: (1) it includes an accelerated formula for return of capital investment to BFI-KCLC; and, (2) it used a pricing model applicable to a competitive market place rather than to a lower-risk regulated environment. 1 7. Use of the Keller Canyon Landfill was considered, by those originally involved in setting the rate, to be primarily the County's only garbage solid waste option. There is currently no legal or binding obligation to use Keller Canyon Landfill. Other options have become known and are being seriously considered by other governmental entities within the County. 8. Recent U. S. Supreme Court decisions have ruled that waste is free to be transported from county to county and state to state. 9. The waste-by-rail-to-landfill option is actively pursued in other counties in the State. Rail-haul to neighboring states is considered viable and cost effective. 10. BFI-KCLC has made an offer to the County to lower its rate and to indemnify the County from the Acme Landfill closure lawsuit in return for a guaranteed waste stream. The County is currently negotiating with BFI-KCLC on such an arrangement. The current rate's questionable rationale, together with an uncertain estimate for the Acme closure lawsuit, are being used as the basis from which to negotiate with BFI-KCLC on the new rate and guaranteed waste stream. CONCLUSIONS: 1. Since the County has been remiss in releasing the rate-setting consultant's work papers that were paid for with taxpayers' money, it may be concluded that accusations of the rate being excessive are correct. 2. Because the County collects a 10% surcharge on the base rate, there is an incentive for the Board of Supervisors to approve a higher rate. The higher the base rate, the more dollars filling the County coffers with a hidden tax. 3. Agreement by the County to a guaranteed waste stream effectively removes all other disposal options which may be more cost effective to rate-payers. 4. It is inappropriate to negotiate away all competitive options by guaranteeing a long-term waste stream to Keller Canyon Landfill until a fair and reasonable basis for Keller Canyon Landfill base rate, and a reliable estimate for costs related to the Acme Landfill closure, can be established. RECOMMENDATIONS: The Grand Jury recommends that the Board of Supervisors: 1. Immediately provide to all requesting parties all documents related to the basis for establishing the current base rate, including those maintained at the rate-setting consultant's facilities. 2 2. Immediately seek expert advice and public input to determine the best available, viable, cost-effective options, including those involving shipping solid waste out of the County. 3. Immediately suspend all current negotiations with BFI-KCLC until Recommendation 12 above is accomplished. 4. Within sixty (60) days, develop a policy to eliminate possible improprieties whenever a County fee is assessed. Direct that it be done on the basis of a fixed dollar amount, rather than the standard practice of percentages. COMMENTS: Conflicts of interest abound in the County's handling of solid, waste management. The Board of Supervisors must carefully look at hidden motives and conflicts when it considers a fair and reason- able price for garbage disposal. For example, if one is paying $100 for a service when the fair and reasonable price is $50, a price reduction to $75 should not be considered a good "deal" . 3 TABLE A FEES/CHARGES PER TON CHARGED BY GOVERNMENTAL BNTITIES, AT KELLER CANYON LANDFILL AND ACME TRANSFER STATION AMOUNT GOVERNMENTAL ENTITY PURPOSE $3.85 Contra Costa County Surcharge (Franchise Fee) (charged as 10% of Keller Canyon Landfill base rate) $2. 12 Contra Costa County Household Hazardous Waste Fee (increased from $.41 on July' 1, 1993) $2.00 Contra Costa County Open Space and Agricultural Preservation Mitigation Fee $2.00 Contra Costa County Transportation Mitigation Fee $2. 00 Contra Costa County Host Community Mitigation Fee $1.00 Contra Costa County Local Enforcement Agency Fee $1. 00 Contra Costa County Resource Recovery Fee $.95 Contra Costa County/ AB 939 Fee--collected by the East and Central the County ($. 15 goes to the County Cities County; $.80 goes to East and Central County cities) $.75 State of California Solid Waste Disposal Site Cleanup and Maintenance Fee (Eastin Fee) --increases to $1.34 on July 1, 1994 $.45 Contra Costa County Rate Review Consultant Fee $.05 Contra Costa County County Landfill Development Coordinator. 4