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Item 12 - Solid Waste Participation Agreement _ DISTR'BlJIED 1l1~:J3/7:7? if 'AGENDA REPORT 0" >" CITY OF POW A Y TO: Honorable Mayor and Members of the City Council FROM: James L. Bowersox, City Man~ \ stephen M. ECkis, City Atto~ DATE: March 23, 1993 SUBJECT: Solid Waste Participation Agreement BACKGROUND On February 23, 1993, the City Council reviewed a staff report pertaining to the San Diego County proposed Solid Waste Participation Agreement. This agreement provides that cities must commit the flow of all solid waste generated within their boundaries for a minimum of 20 years. The guarantee of this waste stream would then be used as security for County issued revenue bonds. These bonds would be presumably used to construct new landfills and make other improvements to the solid waste management system. In exchange for the commitment of the solid waste flow, the County would create a Solid Waste Commission which would give cities a voice in the process. Implementation is tentatively scheduled for May 3l, 1993, with those cities failing to sign the agreement to be required to pay 150 percent of the tipping fee. In order to identify many of the policy issues related to the consideration of the Solid Waste Participation Agreement, the San Diego County City Attorneys' Association prepared a joint informational memorandum. This memorandum was distributed to the city Council on February 23, 1993 (Exhibit A). Following the discussion on February 23, 1993, the City Council authorized the Mayor to express concerns about the proposed flow agreement at the February 26, 1993 meeting of SANDAG (Exhibit B). This letter suggested that the agreement should provide for less than a total commitment of the Waste Stream, have a term of less than 20 years, and include a better means for sharing decision making which included fee setting and facility siting. Following a brief discussion at SANDAG, it was decided that the in depth hearing would be held on March 26, 1993 at what has been termed a "Trash Summit." ACTION: \l 1 of 10 MAR 231993 ITEM I~, I -- -.---- Agenda Report Solid Waste Participation Agreement March 23, 1993 Page 2 On March 18, 1993, the City Managers and City Attorneys of San Diego County met and agreed to recommend to their respective City Councils a common assessment of issues pertaining to the proposed Participation Agreement. FINDINGS Attached for City Council review is a copy of the recommendations of the San Diego City/County Managers Association and the San Diego County City Attorneys Association regarding Solid Waste Participation Agreement Issues (Exhibit C). Among the significant matters identified are the following: 1- cities are not prepared to enter into an agreement that commits the entire flow at this time. 2. cities are concerned about legal constraints in fully guaranteeing waste flow to the County. 3. Flow control should be coordinated with long term plans, not with only resol ving short term problems with the San Marcos Landfill expansion. 4. The Solid Waste Commission should include shared decision and rate setting authority. 5. There should be a mutual commitment to waste facility siting and/or other technologies which will be environmentally safe and cost efficient. In summary, it is the recommendation of the City Managers and City Attorneys that the only way to achieve a meaningful role in the management of solid waste handling is that cities remain collectively firm with the position that changes as noted above must be made in the Solid Waste Participation Agreements. FISCAL IMPACT There is no fiscal impact. ENVIRONMENTAL IMPACT REVIEW Not applicable. MAR 2 3 1993 ITEM /;)-! 2 of 10 - ~ - . \ Agenda Report Solid Waste Participation Agreement March 23, 1993 Page 3 PUBLIC NOTIFICATION AND CORRESPONDENCE Standard Distribution. RECOMMENDATION It is recommended that the City Council reaffirm its position with respect to the Solid Waste Participation Agreement of February 23, 1993 by confirming the recommendations of the San Diego County City Managers and city Attorneys as noted in Exhibit C. Attachments: A Informational Memo from city Attorney dated 2/23/93 B Letter to SANDAG dated 2/25/93 C Memorandum to San Diego County City Managers and City - Attorneys dated 3/l9/93 JLB:cb (RPT\SLDWSTE.JLB) - 3 of 10 lIAR 2 3 1993 ITI~" /.?.j . EXHIBIT "A" . . - MEMORANDUl CITY OF POW A Y TO: lames L Bowersox, City Manager FROM: Stephen M. Eckis, City Atto~ DATE: February 23, 1993 RE: Solid Waste ParticioatiOD Ab~,eDt At its spring seminar held on February 19 the San Diego County City Attorneys' Association discussed, at great length, the above referenced agreement. It was the consensus of the City Attorneys in attendance (all cities except San Marcos, Vista, Santee and Lemon Grove) that, despite the efforts of the Chula Vista City Attorney and City Manager representatives who have been working closely with the County Staff to obtain an acceptable draft agreement, the current proposal may be illusory in that it fails to sufficiently commit the County to specific performance requirements or contains conditions precedent or subsequent which allow the County to escape its obligations. The City Attorneys identified the following items on which you and the City Council may wish to provide policy direction before the agreement is presented to the City Council for final consideration. These items, not listed in any particular order of priority, are as follows: A. Any agreement relating to solid waste disposal should include all of the following: L A clear service covenant (duty to serve) with reasonable guarantees of performance by the service provider. 2. Secure rate protection and, because multiple jurisdictions are involved, rate equity. 3. Appropriate apportionment of liability risks, including but not limited to CERCLA liability risks. 4. A clear obligation to locate and develop disposal sites (preferably local) at the lowest possible cost and with the greatest protection to the environment, coupled with a clear, significant remedy for failure by the County to perform. ~ 4 of 10 MAR 2 3 1993 ITEM I~,l , MEMORANDUM CITY OF POW AY - Febl'Wll')' 23, 1993 Page Two B. Decision-making authority on all critical aspects of the entire system should be equitably apportioned among all participating members. C. The enterprise operation and capital improvement contracts should be subject to a system which assures public cost accountability; including, for example, open, fair and competitive bidding for service and improvement contracts. If you and the City Council find that the current proposal adequately addresses the issues identified in items A, B, and C, above, then the current structure may be implemented with certain modifications to the existing contract. These modifications are too detailed to address in this memorandum. If long term financing is contemplated by the County, then a requirement that the County commence a validation action should be considered. The following questions must also be resolved to the satisfaction of the City Council: D. Does the currently proposed County commission structure for implementation of the "Participation Agreement" best serve the interests of the City? Has full consideration been given to other choices for provision of solid waste handling? For example, have the following been given consideration: formation of a joint powers agency without the County; formation of a joint powers agency to enter into an agreement with the County; establishment of a special act district? E. Have the cities received adequate technical assistance concerning the current proposal and available options? Should the cities retain independent technical assistance to aid the cities in reviewing the various issues involved with the current proposal and the available options? III 5 of 10 MAR231993 ITEM 21 ---~ - EXHIBIT "B" ~ " POWA) -' .. 'vITY OF DON HIGGINSON. Mayor BOB EMERY, Deputy Mayor B. TONY SNESKO, Councilmember SUSAN CALLERY, Councilmember MICKEY CAFAGNA. Councilmember February 25, 1993 Board of Directors San Diego Association of Governments 401 B Street, Suite 800 San Diego, CA 92101 Dear Board Members: At their meeting of February 23, 1993, the Poway City Council considered the most recent draft of the proposed solid waste "Participation Agreement", After discussing this matter, the City Council expressed their opposition to the Agreement in its present form and instructed me to send a letter to the SANDAG Board indicating our concerns that it does not meet the needs of San Diego County cities and our residents. Extraordinary efforts have been made by representatives of our city managers and city attorneys to negotiate changes in the Agreement which would resolve or mitigate city concerns. Many such suggestions have been incorporated into the draft, but many critical changes have been rejected by County staff. The draft Agreement would have cities commit 100% of the waste flow to the County system for at least twenty years (and, realistically, forever) . Such a commitment will preclude our residents from benefitting from other less expensive alternatives should they become available, At stake are hundreds of millions of dollars of waste flow. Yet, the draft Agreement does not adequately provide, in the alternative or otherwise, for the fOllowing: 1. An alternative to commit less than all flow to the County system. (We understand that presently needed bonding does not require a 100% flow commitment.) 2. An alternative for flow commitment for less than the proposed twenty year "evergreen" term. 3. A true joint powers authority or other mechanism to share all important decisionmaking, including fee setting and facility siting. City Hall Located at 13325 Civic Center Drive J ( 6 of 10 Iress: P,O, Box 789, Poway, California 92074-0789 . (619) 748-6600, 695-1400 MAR 2 3 1993 "EM /~,I -- . . SANDAG Board of Directors - Solid Waste Participation Agreement February 24, 1993 Page 2 4. Assurances that disposal sites will be located and developed and the system will be operated at the lowest possible cost; and, if this is to be done by the County, that there be a specific remedy (such as the right to withdraw) for failure of the County to perform. A system of cost accountability should be in place to assure lowest possible cost to the public. Poway is prepared to assist the County with the financial crisis in solid waste disposal precipitated by past operation and management of the current system, However, we are as yet unconvinced the draft Agreement is in the best interest of Poway and the other cities in the County, Full and public discussion amongst the cities is needed. Sincerely, ~ ++u."1- - Don Higginson Mayor - (PRTAGMNT . DH ) 7 of 10 MAR 2 3 1993 ITEM 12,/ -- --- .-.-----.. ,:',\,~,;..:;'.. , " an CITY OF ESCONDIDO . . I. Memorandum RECEIVE' MAR 2 2 1993 CITY OF POWAY CITY MANAGERS OFFIC March 19, 2993 TO:~) . San Diego County City Managers and City Attorneys FRO. , , l.'~k Anderson, Deputy City Manager J '; City of Escondido SUB d Summary of Issues, March 18, 1993 Meeting on Solid Waste Participation Agreements .. The attached information represents a summary of our discussion yesterday. The information was reviewed by Ron Ball & David Chapman; I believe it fairly represents the consensus perspective of the attendees. Ron and I will share the information with David Janssen and Lari Sheehan on Wednesday, March 24. The information will be presented at the SANDAG Workshop on March 26. Please brief your council representatives prior to the meeting. If you have questions, please call Ron Ball at 434-2891 or me at 741-4631. Attachment FM\2OI (Rev. 1.112) 8 of 10 MAR 2 3 1993 ITEM I-;{,' -, March 18, 1993 - ,- '1- . . ~~; , - San Diego City/County Managers Association . - ' " San Diego County City Attorney's Association. !;....:-. ~ ..-" Participation Agreement Issues . ~ -. ". . :: I..'. < ._~ . The City Managers and City Attorneys met jointly to discuss key points of concern relating to the proposed Participation Agreement_ The meeting was an effort.to reach concensus' on issues surrounding the draft proposal, and possible solutions that would be acceptable to the Cities. Although recognizing the monumental effort that has resulted in the draft agreement, the Cities raised the following issues: * Flow Control * The cities are not prepared to enter into an agreement which commits their entire waste stream at this time for a landfill expansion project which requires only a small percentage of system waste. * The Cities concur with the need for expansion of the San Marcos Landfill, and are anxious to work with the County in identifying alternatives that will provide effective capital financing solutions. * The Cities are concerned about possible legal constraints in fully guaranteeing waste flow in light of recent court decisions. * The Cities believe flow control should be considered only in connection with discussions regarding a long-term solution to solid waste disposal. Resolving the long-term problem will require extensive additional negotiations which should be conducted only after the short-term San Marcos Landfill Expansion is resolved, * Commission Orianizational Structure The Cities recognize the inherent value in working closely with the County. Solutions to our mutual issues must be regionally cost-effective and provide equitable authority, appropriate control, and responsibility. Any agreement, whether modeled on the proposed Participation Agreement or otherwise, must include the following: * A clear, equitable apportionment of decision-making authority, * A service covenant that requires a mutual commitment and responsibility by all parties. 9 of 10 MAR 2 3 1993 ITEM !J:.1 * Rate setting authority that is equitable distributed among all participants. * Equitable distribution of liability and risk. * A mutual commitment for Waste Facility siting and/or determination of waste handling technologies that will provide environmentally safe, cost-efficient waste processing/handling and disposal for the participants. * Operational and capital facility planning/financing that assures public cost accountability, Summary The Cities are commined to ensuring the availability of a long the, environmentally safe, cost-efficient Solid Waste Handling System. We recognize the County's long-term role in providing solid waste disposal, and affirm the need to create and maintain a strong, equitable partnership for the future. The issues identified will allow a shon term solution to the San Marcos Land Fill expansion need, while ensuring an equitable long term partnership for the future. (J~) 10 of 10 MAR 2 3 1993 ITEM /2., /