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HomeMy WebLinkAboutMINUTES - 06211994 - 2.1 2.1 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA Adopted this Order on_June 21, 1994 by the following vote: AYES: Supervisors Smith, Bishop, DeSaulnier,Toriakson, Powers NOES: None ABSENT: None ABSTAIN: None SUBJECT: Solid Waste Disposal Rates The Board considered the solid waste disposal rates at the Acme Transfer Station and Keller Landfill, and the status of Acme litigation (No. 91-4268 SBA and No. C93-02532). Reports were received from County Counsel, and the County Administrator on the subject with an oral presentation made by the Director of the Growth Management and Economic Development Agency. The following persons spoke: s William Brockett, City of Concord and Concord Disposal Service, 2000 Powell Street, Suite 875, Emeryville, California; Frank Aiello, Citizens United, 1734 Bridgeview Street, Pittsburg; Michael Woods, City Attorney, City of Pittsburg, 2020 Railroad Avenue, Pittsburg; Richard Norris, Potrero Hills Landfill, Inc., 3260 Blume Drive, Suite 200, Richmond; Lance J. Dow, 2232 Concord Drive, Pittsburg; and Tom Bruen, (no address given). All persons desiring to speak were heard. The Board discussed the issues expressed in the testimony presented. There was consensus to defer action on the solid waste disposal rates for one week. Therefore, IT IS BY THE BOARD ORDERED that further consideration of the solid waste disposal rates at the Acme Transfer Station and Keller Landfill is DEFERRED to June 28, 1994. FURTHER,the Board DETERMINED not to accept a proposed settlement agreement for the Acme cleanup litigation. HEREBY CERTIFY THAT THIS IS A TRUE A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. ATTESTED: _June 21, 1994 Phil Batchelor,Clerk of the Board of Supervisors and County Administrator By (�. Deputy Cc: County Administrator County Counsel Director, GMEDA k Citizens United 2232 Concord Dr. Pittsburg, CA 94565 (510)458-4419 Citizens dedicated to the environment and dealing with environmental health issues June 15, 1994 Honorable Mayors and City Council Members of Contra Costa County: On behalf of the Citizens, ratepayers, and taxpayers of Contra Costa County, Mr. Lance Dow and myself and the organization we lead, Citizens United have devoted the better part of 7 years of fighting for an equitable and environmentally safe solution for waste disposal for Contra Costans. The recent Supreme Court rulings allowing for the free flow of wastes from state to state and county to county has finally opened the door for market driven solutions to solid waste disposal instead of the previous county sanctioned monopoly known as ACME/KELLER. Citizens United first and foremost has represented the families and property owners living adjacent and downwind of the Keller Canyon Dump. The facility is alledged in several class action lawsuits, and in lawsuits pending in State Court at this very moment,'to have violated and continues to violate State Minimum Standards for the operation of the facility as well as numerous violations of their permits, Franchise Agreement, and State and Federal laws having the combined effect of injuring the health of persons and the environment in it's vicinity as well as the taking of properties of those living and working in it's vicinity contrary to the U.S. Constitution and rights granted thereunder. The facility in a recent "Notice of Intent to Sue" filed with the U.S. and California EPA respectively ,which is a prelude to the actual filing of the suit alledges the Keller Dump is an IMMINENT HAZARD to those living in it's vicinity and to the environment. Mr..Dow and myself will shortly be filing the action in the Federal Courts. The action allows us as citizens to name the facility operators and any waste generators using the Keller Facility as being participants in those hazards alledged. That includes past, present, and future users of the facility. All Cities using the Keller facility are considered waste generators and have been notified. Irregardless of those actions Citizens United is once again trying to inform Cities of Contra Costa as to the choices they now have for solid waste disposal. The Keller Canyon Dump we believe because of the serious issues regarding the operations of the facility and it's effect on human beings and the environment, combined with its costs is not a prudent choice for waste disposal by your City. The present ACME/KELLER offer to lower rates for guaranteed waste streams is an option your City, Contra Costa County's unincorporated areas, rate payers and taxpayers should, not only not succumb to, but the fact is if your City does, your residents.may pay and in fact all taxpayers will pay for it in higher gargage rates and taxes in the future. We are sure all City Councils and City Managers are familiar with the statements - Bait and Switch, and A Sucker Born Every Minute. There is a reason those sayings came into our American heritage. Guaranteeing your City's wastestream to Keller.could be financial suicide and it will surely limit your City's waste disposal options for many years to come. These are times for well thought out and informed decision-making regarding solid waste. e These are the facts your City and your citizens should know about Keller/Acme and they are the facts we will get out to your residents, ratepayers, and all Contra Costa taxpayers. The offer by ACME/KELLER to Central County Cities, etc. to lower rates for guarantees of wastes streams combined with the settlement of the CERCLA suits surrounding the ACME Landfill brings up numerous facts and points of law regarding the constitutionality of that course of action by Acme and those cities agreeing to the offer. Before that can take place the Board of Supervisors must hold complete and genuine rate hearings before the public and follow the findings and recommendations of the Contra Costa County Grand Jury- as detailed in their report 9407. As shown in the enclosed letters between the County and BFI, the true cost of Keller and the combined Keller/Acme cost which would include a Permanent Acme Transfer Station have been withheld from the public and have not come under public scrutiny. This can also be verified by the fact that 9 amendments extending the interim rate at Keller have been granted. Another is required on June 30, 1994. The recent Contra Costa County Grand Jury`Report was the out come of testimony and information supplied by knowledgeable persons about such lack of information and public scrutiny and various other issues concerning Keller Canyon Dump and the ties to Acme Fill Transfer Corp and the Acme Dump. We have been told by County staff that only an interim rate has existed at Keller for over 2 years and that an actual rate cannot be set until many outstanding issues are settled. One of the main reasons an actual rate has not been set by the Board is that it would trigger a full audit of Keller's true costs, along with all of the;public scrutiny and public furor over those costs. Hence the County and BFI's game of hide and seek. As the letters enclosed clearly indicate, the present interim rate has been kept low. However the Board's own order (enclosed) also clearly stipulates that the present interim rate is the lowest rate possible without being ,confiscatory in nature. That means if the rate is arbitrarily lowered it could immediately become confiscatory and BFI can sue to recover those losses. The letters between BFI and the County also verify that the present interim rate not only does not include the costs of the finishing of the initial construction of Keller and the small temporary waste cell, but does not include the larger 5-7 year cell. These costs are to be considered in "Future Anticipated Costs"., and some costs will be put into "Unusual and Unanticipated Costs" , such as those related to more stringent water monitoring requirements and new State and federal environmental requirements that have come on line since Keller opened. Legal fees to cover the endless lawsuits surrrounding Keller can also be placed in that category . Cities must remember that in 5-7 years another module or cell will be required to be added at Keller and each cell construction costs will be added to "Future Anticipated Costs". The Gas'Collection and Toxic'Emmissions Systems and Storage Facilities are due to be constructed in about one year at millions in additional.costs. All of those costs have to be reflected( added to the present rates) in the rates and set in a rate that is not confiscatory. RECEI`>'' � JUN i CLERK BOARD OF SUPERVISORS CONTRA COSTA CO. t The other large component making up the rate at the Keller Dump is Operations and Maintenance. The letters clearly show that O & M has had the guaranteed CPI increases defered. These O & M increases can be defered indefinitely making the rate appear low. The increase is a liability that users of the dump however must eventually pay as per the City of Brentwood and Brentwood Disposal Co. situation. And with interest it can be a ticking time bomb if not added to the rates every year. Why have these increases been deferred? Another large looming cost to be added to the Cost of Keller Dump is the compensation to property owners living adjacent to the dump. That compensation is covered in Special Condition of Approval 35.3 of the Land Use Permit. The County and BFI act as if this liability doesn't even exist. The facts are substantial property losses have taken place and if the study that is now being carried out , with the results scheduled tp come out in August does not reflect losses, then an immediate challenge(lawsuit) by property owners will ensue. And if Cities don't think the property owners will prevail they are simply wrong. Cities should note, when the interim rate was set and accepted by BFI for the Keller Dump, BFI stated they were giving up some serious rights when agreeing to the rate. The facts are BFI did not give up any rights, but retained all of the rights granted in the Franchise Agreement the Land Use Permit and other documents governing the Keller Dump. The fact is the Board of Supervisors though they may wish to, cannot arbitrarily set a lower rate(s) than those already set. Nor can they tell BFI set the rate yourself thru negotiations with a group of Cities which is what they appear to have done. Their recent action in that regard appears to be illegal, and an act of negligence, and malfeseanse on their part. Nor can the Board of Supervisors arbitrarily remove the Mitigation feeS requested by the dump operators and various Cities without shifting the costs of services and repairs to Contra Costa's infrastructure tied to those Mitigation Trust fees from the USERS of the dump ONTO the general citizenry in the form of taxes. That will take a vote of the Citizens of Contra Costa County. Maybe it will be called "The Subsidy for Multibillion Dollar Corporation and Toxic Waste Generators Special Assesment Tax". The fact is these fees and trust funds have never been legally challenged by any City or Waste Generator because they are acceptable and reasonable and every other juristiction requires them. If the Board wants to remove them then they must simultaneously enact legislation that will assure that TAXES will be raised to cover the loss of revenues from the users of*the Keller Dump. Also enclosed are Citizens United estimates as to the reals costs of the Keller Canyon Dump. These are only economics. Unfortunately the human costs can not be calculated. Remember real families of hardworking men, women, and children live next to this Class 11 Toxic Dump. Would you want to live next to Keller? We could be you. Thank you for letting us present our case on behalf of all Contra Costans. Sincerely, Frank R. Aiello, Chair WHAT ARE THE REAL COSTS OF KELLER DUMP? DO YOUR MATH! (some costs are best guess estimates related by landfill experts) and need to be verified thru complete audit, and analysis by landfill experts per Contra Costa County Grand Jury Report No. 9407 Of May 25, 1994) Initial Site Aquisition and Development - $66,0001000 (See Rate Workshop/Setting Handouts) (does not include all of Phase 1 A, nor the First 5-7 Year Cell - Phase 1 B) Future Anticipated Costs - $10,000,000 (More Phase 1 A, Phase 1 B) Future Anticipated Costs - $7,000,000 (Toxic Gas Emmissions Collection Due to Start approx. 1 Year Storage, Facilities and Burn Stack) Future Anticipated Costs - Estimated - $25,000,000 (Property Losses to Homeowners Living Adjacent to Dump per Special Condition of Approval 35.3 of Keller Land Use Permit New 5 - 7 Year Cell Due to start 5 years - $8,000,000 (Future Anticipated Costs) Unusual and Unanticipated Legal, expenses lawsuits, etc. $ 21000,000 Costs (catch all category) Increase Regulatory Construction Costs Estimated costs associated with Keller Dump - $1181000,000 over next 5 - 7 years Additional Costs tied to Keller Operations and Maintenance 'Defered CPI Increases ? (O & M makes up almost half of Keller Rate) O & M Increase Additional Water Monitoring ? Requirements per RWQCB O & M Increase. Toxic Gas Emmissions Monitoring ? Storage and Burn Stack Maintenance Additional Costs tied to Keller ACME Permanent Transfer Station - $30,000,000 (Relates into approx. $15.00 Per Ton) ACME DUMP Closure Costs $5.50 Per Ton ***Final Note Because Keller Canyon Dump was over Constructed - Class II instead of a less expensive alternative, Class III facility that would.have satisfied the .needs of all Contra.Costa Cities' Municipal Solid Wastes Disposal requirements - Keller will always be more expensive. The facts appear that Contra Costa Municipalities are subsidizing Toxic Waste generators not only from within Contra Costa County but outside our borders. Those Toxic..waste generators pay less to dump their waste thru the ACME/KELLER option than Contra Costa's own municipalities. This Class II designation will make Keller more expensive for cities for the life of the landfill. The facts are these Toxic Wastes represent approximately only 40 -.60 tons per day at Keller Canyon but the potential is 1100 tons per day per a recent Board authorization. The other fact is Toxic Generators operate under a seperate rate structure than the Municipal Waste Generators. Municipalities have the liability and burden to pay for all of the aquisition, development, and construction costs, and all of the operations and maintenance costs of Keller Dump while Toxic Generators bear none of theses costs and burdens. . For them it is strictly cash and carry. For Keller operators it appears these revenues are almost 100% profit. A off, %�` Contra TO: BOARD OF SUPERVISORS o; .•,;rlmn _ ' 'z -Costa FROM: Sara M. Hoffman ��•^ y�o CoU' "y Senior Deputy County Administrator °STA C6 DATE: August 11, 1992 SUBJECT: Rates for Keller Canyon Landfill SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. CONSIDER testimony and letters received from the cities and franchising agencies on the Keller Canyon Landfill rate proposal. 2. ACKNOWLEDGE that the rate set for the Keller Canyon Landfill legally cannot be confiscatory, but should be fair to both the ratepayer and.the company. 3. ACKNOWLEDGE the testimony of Browning Ferris industries on the acceptability of the recommended rate for the Keller Canyon Landfill. ACCEPT the ana ys s an recommendations of t e ounty's consultant, Deloitte 8� Touche, on the Keller �, Canyon Landfill rate proposal. 5.' DIRECT County Counsel to prepare the necessary amendments to the Keller Canyon Landfill Franchise Agreement to implement the recommended rate effective August 5, 1992, including, but not limited to: • base rate of $38.48 and gate rate of $49.08; • requirement for a complete audit to verify all site acquisition and development costs within 6 months and adjustment of the initial gate rate as appropriate; • automatic sunset of the site acquisition and site development components of the rate 25 years from their effective date. 6. AUTHORIZE the Chair, Board of Supervisors,to execute the Keller Canyon Landfill Franchise Agreement Amendments. CONTINUED ON ATTACHMENT: YES SIGNATURE: ;7L .r _RECOMMENDATION OF COUNTY ADMINISTRATOR _RE kiMENDATiON OF BOARD COMMITTEE _APPROVE OTHER e SIGNATURE(S): ACTION OF BOARD ON Au Su s t ,.1 A 9 2 APPROVED AS RECOMMENDED,)L OTHER See attached Addendum A for Board of Supervisors approvals and votes . The City of orinda inaicatea that it couia not respona cue w pitu it iuu vcwduviI vi UIC %..,Ly I IIQ %,,,y V, Pittsburg stated it did not control wastestream. The other cities and Central Sanitary District declined to take action to reduce the volume risk of the landfill, which would allow the Board of Supervisors to reduce the risk premium of the landfill. Similarly, all declined to consider indemnification.of the County if the County disallowed the 2.6% risk premium absent a wastestream commitment. As requested by the Board of Supervisors, Deloitte & Touche has performed a sensitivity analysis of various levels of risk premium on the base rate. Excluding BFI's Payment of Variable Royalty Targeted Risk Return on Base Difference From Premium E ui (1) Rate D&T Recomm 0.06/0 16.8% $35.53 $2.95 1.0% 17.8% $36.62 $1.87 1.5% 18.3% $37.21 $1.27 2.0% 18.8% $37.79 $0.70 Recommended - 2.6% 19.4% $38.48 $0.00 1. ignores the impact upon BFI's return on equity of its commitment to pay the 14% variable. royalty. including BFi's Payment of Variable. Royalty Implied T-oc,,E jaAs c { �n Risk Base Return on A V0LuM6 OF 5'12 000 Ior�= Premium Rate Equity (2) /C/L Ir<4 . 0.0% $35.53 1.1.7% tpW C.VN AN`;114t't1G L-C-S-5 T 1.0% $36.62 12.6% T#-4tS gA7F- tar- Lt-64UYZI E, 1.5% $37.21 13.1% A X4Sw "Fc c-Q-�,D n4*,-cry A 2.0% $37.79 13.5% t'bl�Fc ETA tV /S/uEr;r`<c Recommended 2.6% $38.48 14.1% 2. Includes the impact upon BFI's return on equiry of its commitment to pay the 14%variable. Deloitte&Touche has performed a detailed analysis of the Keller Capon Landfill Rate Proposal, including cash flow analyses and valuation studies of acquisition costs.LTn'"staffs opinionl Deloitte&Touche's recommendation gIves the County a legally defensible rate that meets our Taal ob11 ation tto establish a rate which is not onfiscatory to the company, but Is fair to both the ratepayer and the company.. An article In the Contra Costa Times on Sunday, August 9, 1992 noted that disposal rates are in the "low twenties" per ton in Sacramento County and "$16.27" per ton In San Jose. Obviously, these rates are much lower than proposed for Contra Costa County. However,.It should be remembered that Keller Canyon Landfill was built as a Class ii landfill with a double liner system. Many of the other, older landfills were built without this level, of environmental. protection. In fact, San Jose's landfill has been reported to be leaking into the groundwater. Another factor affecting cost is age. A house built today costs more than the house built and purchased 10 or 20 years..ago. The same Is true for landfills. Contra Costa will realize lower real costs for the landfill over time (site development and site acquisition portions of the.rate remain the same for 25 years). Contra Costa needs Its own disposal capacity. Interim export capacity was not easily obtained. The Board may recall that the City of San Jose rejected Contra Costa's request for interim disposal capacity. Both Solano County and Alameda County, while permitting export„ Imposed numerous restrictions and mitigation fees. the Solano Agreement was for three years only. The Alameda Agreement was renegotiated beyond the initial 2 years but only for 6 months (unless landfill litigation Is resolved). The cost of export was also high. A may 5, 1992 report to the Board of Supervisors showed that export to Alameda County would cost$50.14/ton(including new mitigation fees and other Alameda County charges and assuming historic tonnage levels). This compares to a proposed $49.08/ton for Keller Canyon Landfill. Recycled paper 0* BROWNING-FERRIS INDUSTRIES PACIFIC REGION to September 29, 1993 Mr. Val Alexeeff County Administration Bldg. 651 Pine Street, 11th Floor Martinez, CA 94553 Dear Mr. Alexeeff: In.accordance with Section 6.4 of the Franchise Agreement for Keller Canyon Landfill, this letter indicates our reservation of our right to the inflation adjustment described therein. A calculation of the adjustment is attached to this letter. This adjustment would become effective January 1, 1994. Also, it may be pertinent for the Keller Canyon Landfill Company" to defer the inflation adjustment described herein. We will notify you of this deferral, if made, on or before November 30, 1993. Of course, we reserve the right to extend this November 30, 1993 response date. Sincerely, Diana McVey Regional Accounting Controller cc: Steve Uthoff Tom Bruen Tim Cox Brett Frazier Dayid Cecil 150 ALMADEN BOULEVARD, SUITE 900 • SAN JOSE, CALIFORNIA 95113''•(40 8)298-1112 * TELEFAX: (408)993-0434 Keller Canyon Landfill Keller Canyon Landfill Company Rate Inflation Adjustment Effective Date: January 1, 1994 CPI Index 1982 - 1984 = 100 Citty August '93 Auzust 92 %Change San Francisco - Bay Area 146.2 142.7 2.4527% Rate Impact Cost CategM Site O&M Beginning $12.76 1993 Inflation Adjustment* .33 2.58$% 1994 Inflation.Adjustment** 32 2.4527% Ending 13 41 Adjusted Base Rate Site Acquisition $15.18 Site Development 10.25 Site O&M 13.41 New Regulatory. 00.00. Unusual & Unanticipated 00.00 Future Anticipated 00.00 Site Closure/Post Closure 00.29 Adj BFI Revenue Rate 39.13 Add County Taxes (10% + 6.75) 10.66 49.79 * See Attached ** See Above HILTON FARNXOPF&HOBSON Advisory Services to Municipal Management 39350 Civic Center Drive,Suite 100 Fremont Fremont,California 94538.2331 NewportBeach Telephone:510/713-3270 Fax:510/713-3294 March 11, 1993 Mr. Donald A. Blubaugh City Manager City of Walnut Creek ek 1666 North Main Street City HAMT.O. Box 8039 Walnut Creek, CA 94596 Dear Don: I am transmitting with this letter a copy of a report that we prepared for the City of Ojai in Ventura County containing the results of our financial analysis of the proposed Weldon Canyon Landfill. You may find portions of the report interest- ing, particularly as they relate to the Keller Canyon Landfill. Ventura County staff hired Deloitte & Touche (D&T) to evaluate the reasonable- ness of the negotiated profit for the Weldon Canyon Landfill. In doing so, D&T used the methodology employed at the Keller Canyon Landfill as a standard of reasonableness. Part of our review involved an analysis of D&T's methodology, as documented in their Keller Canyon,report, "Landfill Rate Analysis - Presentation to the Board of Supervisors" dated July 28, 1992. As explained in our report beginning on page 5 under the heading "Standard of Reasonableness for Profit", we found that the methodology used by D&T to deter- mine an appropnate profit for the Keller Canyon Landfill is inappropriate for use in a regulated environment, according to authoritative texts on rate regulation. (For your information, the County staff's response to our criticism of the method- ology used was that they ". . . stand behind the experience and reputation of Deloitte & Touche . . ." Also, we received a call from D&T several weeks ago which we returned, but they have not contacted us since.) Further, although not mentioned in the text of our report because it was not rele- vant to the Weldon Canyon analysis,,we found that the Reller Canyon rate, as cal- culated in'the D&T report, apparently double counts the site acquisition and site development costs (once,as principal repayment and once as amortization expense) in the final gate rate. Based on our calculations, this amounts to approximately$4.20 per ton of the gate rate of$49.08. 4 locyclod LlPOW m / Recycled paper y*' BROWNING-FERRIS INDUSTRIES PACIFIC REGION SEP 7IQ93 August 31, 1993 Mr.'Val Alexeeff County Administration Building 651 Pine Street, 11 th Floor Martinez, CA 94553 Dear Val: The purpose of this letter is to tell you of"Future Anticipated Costs" III the form of incurred and expected capital additions subsequent to May 28, 1992, which was the capital expenditure cutoff used on our amended rate application which the Board of Supervisors considered on August 11, 1992. These ongoing capital expenditures include activities such as construction of the Phase 1 B waste disposal area, additional work on the toe berm which is also part of the Phase 1 B work, and costs incurred as the result of various mitigation measures (Lawlor Creek restoration work, wetlaiids mitigation, Bailey Road improvements, etc.). In addition, some retention items and miscellaneous exoend* ures for completion of the Phase IA work have been paid since the May 28, 1992 submittal. Construction of the Phase 1B waste disposal area was completed by July 1993. We also estimate that O&M costs.far ground water monitoring will increase'due to the additional monitoring required by the water board order. We believe you will agree, after review by you and/or Deloitte& Touche, that these expenditures will constitute "Future Anticipated Costs" pursuant to Section 6.13 of the Franchise Agreement. Obviously, we understand that these "Future. Anticipated Costs" will not be included in the current interim rate, but'will be considered by.the County for inclusion in future rates pursuant to Section 6.3 and 6.13 of,the Franchise Agreement. ' An analysis of the effect of these "Future Anticipated Costs" on the overall rate is not provided, given that certain key sections of the,Franchise Agreement are under review. Once the amendments are finalized and agreed to, we will work closely with staff and Deloitte & Touche to devise an 'equitable return. 150 ALMADEN BOULEVARD, SUITE 900 +SAN JOSE,CALIFORNIA 95113 0(408)298-1112 9 TELEFAX: (dog)993-0434 SEP 28 '93 04:04PMVBFI EQUIP SVCS P•3i4 Keller Canyon Landfill Company Rato Inflation Adjustment Effeotive Date. 06nuary 1 , 1993 CONSUMER PRICE INDEX 1982 -- 3.984 100 August August City 1992 3991 X Change ---------------- Can Francisco BeLy Area 142..7 1.39. 1 2. 688% RATE IMPACT Inflation- Inflation Catagory Beginning AdJust % Adsuot s Ending Site O & M Rate Ads $12.78 2.588% 0. 33 $13.09 ADJUSTED BASLE RATE: Site Aoquisition 15. 18 Site D©velopmont 10.26 Site 0 & M 1.3.09 Now Regulatory 0 Unusual & Unanticipated 0 Future Anticipated 0 Site Closure/Post Cloture 0.29 Adsueted Base Rate (BFI Revenue Rabe) 38.81 County $urcha.xge ( 10%) 3.88 County Feeo 6.76 - Landfill Tip Yoe 49. 44 COUNTY COUNSEVS OFFICE [CLERK ECEIVED CONTRA COSTA COUNTY MARTINEZ,CALIFORNIA JUN I Q 1994 Date: June 13 1 4 BOARD OF SUPERVISORSgg ONTRA COSTA CO,�n ... To: Board of Supervisors From: Victor J. Westman, County Counsel By: Lillian T. Fujii, Deputy County ounsel Re: Keller Canyon Fees On June 7, 1994 the Board of Supervisors asked this office to report on the mitigation fees charged at the Keller Canyon Landfill, as well as on related issues involving the "import fee" charged by Alameda County at the Altamont Landfill. A. KELLER FEES. The mitigation and other fees levied by the County at the Keller Canyon Landfill are set forth and discussed. 1. Transportation System Impact Fee. This fee is $2.00 per ton on all solid waste. It is levied pursuant to Section 35.1 of the LUP to "mitigate the general impacts of the Landfill-generated traffic on the County's road system." Comment: Since this fee is levied as a condition of approval of the LUP, the LUP would have to be amended pursuant to the procedures in the County Ordinance Code on LUP amendments for any reduction of this fee to be legally accomplished. 2. Open Space and Agricultural Preserve Fee. This fee is $2.00 per ton on all solid waste received at the landfill. It is levied pursuant to Section 35.2 of the LUP to "mitigate the general impacts of the Landfill on open space, existing and proposed recreational facilities, and agriculture." Comment: See comment on Transportation System Impact Fee. 3. Local Host Community Mitigation Fee. This fee is $2.00 per ton on all solid waste received at the landfill, and is levied pursuant to Amendment No. 1 to the Franchise Agreement and has been continued by subsequent amendments to the Board of Supervisors June 13, 1994 Page 2 Franchise Agreement. Comment: This fee can be reduced by further amendments to the Franchise Agreement. 4. Franchise Fee. This fee is currently $3.85 per ton on all solid waste received at the landfill. The $3.85 per ton franchise fee was first established by Amendment No. 3 to the Franchise Agreement, and has been continued by subsequent amendments to the Franchise Agreement. Comment: Like the local host community mitigation fee, this fee can be reduced by further amendments to the Franchise Agreement. The Board also asked for an analysis on the feasibility of adjusting fees in a manner that will sustain the appropriate level of mitigation cash flow while not diminishing the overall commitment embodied in the original fees. It appears to this office that the same "overall commitment embodied in the original fees" could be attained even if per ton fees are decreased provided tonnages received at Keller are in excess if tonnages contemplated when the fees were set. B. ALANEDA COUNTY REQUIREMENTS. The Board further requested that this office provide comments on the,possible illegality of an "import fee" in the amount of$4.53 per ton that Alameda County may impose on Contra Costa County waste deposited at the Altamont Landfill in Alameda County but not similarly imposed on that County's own generated waste deposited at Altamont. We understand that this fee is imposed by the Alameda County Waste Management Authority ("Authority"). However, we caution that this office has not been provided with any official documentation on this issue, and that there have been suggestions that this fee may be privately imposed by the operators of the Altamont Landfill on a negotiated or voluntary basis. If the "import fee" is a privately imposed fee, the fee would not appear to be susceptible to challenge under a Commerce Clause theory. However, if the fee is imposed pursuant to any official public County or Authority action (to the extent that the Authority may act only pursuant to powers it derives from its member cities and county), such fee would be suspect as a fee that discriminates against interstate Board of Supervisors June 13, 1994 Page 3 commerce in violation of the Commerce Clause of the United States Constitution. {Chemical Waste Management, Inc. v. Hunt [1992] 119 L.Ed.2d 121; Fort Gratiot Sanitary Landfill, Inc. v. Michigan Department of Natural Resource [1992] 119 L.Ed. 2d 139.) LTF 5a:\kcicBd6.94