The URL can be used to link to this page

Home My WebLink About1966-02-14phone: (714) 962-2411 mailing address: P.O. Box 8127 Fountain Valley, CA 92728-8127 street address: 1 0844 Ellis Avenue Fountain Valley. CA 92708-7018 Member Agencies • Citi es Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Huntington Beach Irvine Ls Habra Ls Palma Los Alamitos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park Yorba Linda County of Orange Sa nitary Di st r icts Costa Mesa Garden Grove Midway City Water Dis tricts Irvine Ranch COUNT Y S ANITATIO N DISTRICTS OF OR ANGE CO UN TY, CALI FO RNIA February 8, 1996 NOTICE OF SPECIAL MEETING JOINT BOARDS OF DIRECTORS COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA WEDNESDAY. FEBRUARY 14, 1996 -7:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 Ellis Avenue Fountain Valley, California 92708 The Special Meeting of the Joint Boards of Directors of Co un t y Sanitation Districts Nos. 1, 2 , 3, 5 , 6 , 7 , 11 , 13 and 14 of Orange County , California , will be held at the above location , time a nd date. ~~ A Public Wastewater and Environmental Management Agency Committed to Protecting the Environment Since 1954 AGENDA BOARDS OF DIRECTORS COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92708 SPECIAL MEETING FEBRUARY 14, 1996 -7:30 P.M. ; ~.=iii;~~~~i•f }:i~i~ii~i~~~i~iiE~~~~iEi~ii~c~=~~~fri:;~~i:~i;iiiif j~~: I In the event any matter not listed on this agenda is proposed to be submitted to the Boards fo r discussion and/or action , it will be done in compliance with Section 54954 .2 (b) as an eme rg ency item or that there is a need to ta ke immediate action which need came to the attention of the Districts subsequent to the posting of the agenda, or as set forth on a supplementa l agenda posted not less than 72 hours prior to the meeting date . i .......................................................................................................................................................................................................................... i (1) P ledge of A llegian ce and In v ocation (2 ) Roll call (3) Appointment o f Cha ir pro tern , if necessary (4) Cons id eratio n of motion to receive and fil e minute excerpts of member agencies relating to appointme nt of Directors , if any. (See listing in Board Meeting fo lders) (5) Publ ic Comments : A ll persons wishing to address the Boards o n spe cifi c agenda items or matters o f gen eral interest should do so at this time . As determined by the Cha ir, s peakers may be deferred u ntil the specifi c item is taken for dis c uss ion and remarks m ay be limited t o fi v e minutes. Matters of interest addre ssed by a member of the public and not li sted on this agenda ca nnot have action tak en by the Boards of Directors except as authorized by Section 54954 .2(b). 02/14/96 (6) ALL DISTRICTS Consideration of motion to receive and file draft minutes of the Ad Hoc Committee re Landfill Issues held on January 31 , 1996, and consideration of motion to concur in the actions of the Ad Hoc Committee re Landfill Issues to consider a Term Sheet at a Special Meeting on February 14 , 1996. (7) ALL DISTRICTS Consideration of motion to receive and file letter dated January 31, 1996, from Vicki Wilson of the Integrated Waste Management Department, County of Orange, regarding the proposed Resolution of Application to the Local Agency Formation Commission (LAFCO). (8) ALL DISTRICTS Consideration of the following actions re proposed acquisition of County of Orange Integrated Waste Management System: (a) Consideration of motion to receive and file Staff Report dated February 7 , 1996, regarding proposed acquisition of County of Orange Solid Waste Management System . (b) Consideration of motion approving a Memorandum of Understanding Re Proposed Terms and Conditions for Acquisition and Sale of County of Orange Solid Waste Management System and Facilities to include the following : (1) Offer to acquire all existing assets and liabilities of the five (5) operating and twenty (20) closed landfills owned and operated by the Integrated Waste Management Department of the County of Orange to include cash reserves of approxi mately $114 million, an environmental fund of approximately $28 million, and debts of approximately $82 million ; and , (2) Provide acquisition terms of $300,000 ,000 .00 payable in forty (40) semi-annual installments of $7 ,500,000 .00 , for 20 years ; and , (3 ) Conditions the offer upon the Sanitation Districts receiving waste flow control agreements from the c iti es and sanitary districts representing 90 % of the solid waste generated within Orange County by the closing date of the offer; and , (4) Establishes a closing date of June 30 , 1996, or sixty (60) days following acceptance and approva l by the Board of Supervisors, whichever is later; and , (5) Other technical terms and conditions . (c) Consideration of motion authorizing the General Manager to submit to the County Board of Supervisors a Memorandum of Understanding Proposing Terms and Conditions for Acquisition and Sale of County of Orange Solid Waste Management System and Facilities in form approved by General Counsel. -2- ... .• 02/14/96 (d) Consideration of motion authorizing the General Manager to prepare a comprehensive Request for Proposals from qualified firms for providi ng contract operational services for all on-site operational , maintenance and field engineering· activities at the five (5) operating landfills, and to provi de said Request for Proposals to the Joint Boards at a future meeting for approval prior to issuance. (9) ALL DISTRICTS r·····················································································································································································1 , CLOSED SESSION: During the course of conducting the business set forth on , this agenda as a regular meeting of the Boards, the Chair may convene the Boards in closed session to consider matters of pending real estate negotiations , pending or potential litigation , or personnel matters , pursuant to Government Code Sections 54956.8 , 54956.9 , 54957 or 54957.6, as noted . Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation ; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Publi c Records Act, may be reviewed by the Boards during a permitted closed session and are not available for public inspection . At such time as final actions are taken by the Boards on any of these subjects, th e minutes will reflect all required disclosures of informati on . ........................................................................................................................................................................................ (a) Convene in closed session , if necessary (b) Reconvene in regular session (c) Consideration of action, if any, on matters considered in closed session (10) ALL DISTRICTS Other business and communications or supplemental agenda items, if any (11) ALL DISTRICTS Matters which a Director would like staff to report on at a subsequent meeting (12) ALL DISTRICTS Matters which a Director may wish to place on a future agenda for acti on and staff report (13) DISTRICT 1 Other business and communications or supplemental agenda items , if any (14) DISTRICT 1 Consideration of motion to adjourn (15) DISTRICT 2 Other business and communications or supplemental agenda items, if any (16) DISTRICT 2 Consideration of motion to adjourn -3- ...... 02/14/96 (17) DISTRICT 3 Other business and communications or supplemental agenda items, if any (18) DISTRICT 3 Consideration of motion to adjourn (19) DISTRICT 5 Other business and communications or supplemental agenda items, if any (20) DISTRICT 5 Consideration of motion to adjourn (21) DISTRICT 6 Other business and communications or supplemental agenda items, if any (22) DISTRICT 6 Consideration of motion to adjourn (23) DISTRICT 7 Other business and communications or supplemental agenda items , if any (24) DISTRICT 7 Consideration of motion to adjourn (25) DISTRICT 11 Other business and communications or supplemental agenda items, if any (26) DISTRICT 11 Consideration of motion to adjourn (27) DISTRICT 13 Other business and communications or supplemental agenda items , if any (28) DISTRICT 13 Consideration of motion to adjourn (29) DISTRICT 14 Other business and communications or supplemental agenda items, if any (30) DISTRICT 14 Consideration of motion to adjourn -4- 02/14/96 r ··~~~;·~~··~~··~;~·~~~~·~~·:····~~··~;~~~··i·~~~~··~~·-~·~~··~~~~·~~··;~;·~~~··~~~·~;~;·~~~~~·~~··~~·~·~~··············J i Joint Boards, Directors shall submit items to the Board Secretary not later than the close of i i business 14 days preceding the Joint Board meeting . The Board Secretary shall include on i j the agenda all items submitted by Directors , the General Manager and General Counsel and j l all formal communications . j i Board Secretary: Penny Kyle (714) 962-2411 , ext. 2026 i i Secr etary: Patricia L . Jank (714) 962-2411 , ext. 2029 i !...~~.~~~.~~.~: ............................................................. ~.~~~.~ .. ~.· .. ~~~.:. .................... ~.:..:.~~ .. ~.~.~~~.~.~.:.: .. ~.~~.· .. ~~~.:. .................... ..! J IWPDOCIBSIAG96\FEB96\A 0 2A -5- \_ I j ''y JOINT BOARDS OF DIRECTORS SPECIAL MEETING Agenda Item (6): Summary AGENDA FOR FEBRUARY 14, 1996 Consideration of motion to receive and file draft minutes of the Ad Hoc Committee Re Landfill Issues held January 31, 1996; and consideration of motion to concur in the actions of the Ad Hoc Committee Re Landfill Issues to consider a Term Sheet at a Special Board Meeting on February 14, 1996. Attached are the draft minutes of the Ad Hoc Committee re Landfill Issues held on January 31, 1996. Recommendation Consideration of motion to receive and file draft minutes of the Ad Hoc Committee re Landfill Issues held on January 31, 1996, and consideration of motion to concur in the actions of the Ad Hoc Committee Re Landfill Issues to consider a Term Sheet at a Special Board Meeting on February 14, 1996. J:\WPOOC\BS\AG95\FEB96\AOHOC-LF.MIN ' " \ County Sanitation Districts of Orange County, California P.O. Box8127•10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 DRAFT MINUTES OF THE AD HOC COMMITTEE RE LANDFILL ISSUES Wednesday, January 31, 1996 at 5:30 p.m. A meeting of the Ad Hoc Committee re Landfill Issues of the County Sanitation Districts Nos. 1, 2, 3 1 5, 6, 7, 11, 13 and 14 of Orange County, California was held on January 31, 1996 at 5:30 p.m., at the Districts' Administrative Office. (1) The roll was called and a quorum declared present, as follows: AD HOC COMMITTEE: Present: John Cox, Joint Chair Peer Swan, Vice Joint Chair Pat McGuigan, Chair, District 1 John Collins, Chair, District 2 Sal Sapien, Chair, District 3 Don Griffin, Past Joint Chair George Brown, Chair, FAHR Committee Sheldon Singer, Chair pro tern, PDC Committee Absent: John Gullixson, Chair, District 13 (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS OTHERS PRESENT: Thomas L. Woodruff, General Counsel Jon Schatz, Saybrook Capital Rebecca Casey, Saybrook Capital Michael Ozawa, Price Waterhouse Bernie Burke, Price Waterhouse Sara Anderson, Planning Solutions Chip Clements, Clements Environmental STAFF PRESENT: Don Mcintyre, General Manager Blake Anderson, Chief Operations Officer Judy Wilson, Chief Administrative Officer Steve Kozak, Financial Manager Michelle Tuchman, Communications Director Jean Tappan, Committee Secretary Greg Mathews, Administrative Analyst Gary Streed, Director of Finance There were no comments by any member of the public. Minutes of the Ad Hoc Committee re Land Fill Issues Page2 January 31, 1996 (4) APPROVAL OF MINUTES The minutes of the Ad Hoc Committee re Landfill Issues held on January 17, 1996 were approved as drafted. · (5) REPORTS OF THE COMMITTEE CHAIR. GENERAL MANAGER AND GENERAL COUNSEL (a) There was no report by the Committee Chair. (b) The General Manager, Don Mcintyre, passed out a copy of AB 2109, known as "The Pringle Bill". He has discussed this bill with Janet Huston, Executive Director of the OC Division of the League of California Cities, and the talk is that this is being put out to try to make something happen. CalLAFCO will be opposing this bill, as will CASA. (c) There was no report by General Counsel. (6) DISCUSSION OF LANDFILL ISSUES Don reviewed staffs activities since the January 17 meeting. It appears that there is a pattern of increasing confidence that this is a doable deal. Additional due diligence needs to be done on the liability issue. It also appears that there are more opportunities for savings through changes in operations than originally anticipated. Last week, Don and Blake Anderson met Jan Mittermeier and with four of the five supervisors and Don met with the fifth supervisor to go over our plan of action. Don's read is that Supervisor Steiner agrees with our proposal and will probably support an offer of $15 million per year for twenty years. Supervisor Stanton was non-responsive; however, he has been in favor of the Sanitation Districts acquiring the system for a long time, even prior to the bankruptcy. They are both opposed to the sale to a private firm. Supervisor Saltarelli appeared to be very enthusiastic for us to do the deal, but feels that our number is too low. He would privatize operatoin of the entire system if we can not come to terms. Supervisor Silva still feels that the value is higher than we are offering. Supervisor Bergeson has said all along that the landfills should go through the bidding process to determine a true market value. It also is evident that three of the five supervisors do not want to sell this asset. Blake also mentioned that the supervisors have received limited briefing and facts on the valuation of the system priot to the meetings with Don and him. The Ernst & Young valuation numbers have not been presented, as far as we know. For this reason there is a need to educate the supervisors and IWMD staff that the Districts' offer is prudent and sensible and fairly represents what is economically and politically doable. Director Sapien stated that before we make a decision, we must know Ernst & Young numbers. Director Collins said that it is important to know these numbers in order to determine if the numbers we are discussing are 'fair market value' numbers. Any offer will have to be justifiable to the supervisors. ·' .. i .. Minutes of the Ad Hoc Committee re Land Fill Issues Page 3 January 31, 1996 Director Brown asked for a scenario if the County goes out for bids on the landfill system. The general consensus of the people expressing opinions is that if that happens, they will probably not get any bidders. There does not appear to be any other serious private sector firm interested at this time in acquiring all of the assets and liabilities of the system. The County is still targeting June as the date for finalizing this discussion because of the payments that are due in July. A presentation and discussion of the proposed fact sheet and determination of net present value followed, including public policy issues, what would be acquired, the proposed governance for the new sanitation district, and the base case assumptions used to develop the value. Liability for the closed landfills is still being determined. Five of the eleven sites have been tested and the results have indicated that there is a potential problem with gas as well as some potential groundwater contamination. As a result, the liability number has risen from $20 million to $30 million. A County representative has been present during the testing and so they are aware of our results. After an extensive discussion, the consultants were directed to revise the term sheet before distributing it. One concern expressed by the Committee is the ability of the sanitation district, through the cities, in attaining county-wide flow control. General Counsel indicated that the intent was to get flow control MOUs signed by the cities by the end of February or the first part of March. The Committee expressed doubts that this was achievable. Staff was directed to continue meeting with the cities to get support, as well as providing separate question and answer sheets for city managers and mayors, as their concerns are different--political v. economical. Because flow control has such an important influence on the valuation of the system, the term sheet will have a qualification within specifying a threshold level of flow control that must be achieved during the 60 days after the Board of Supervisors have accepted the term sheet. It was.moved, seconded and passed to recommend consideration of a term sheet by the Joint Boards at a Special Board Meeting on February 14, 1996. (7) CLOSED SESSION There was no closed session. (8) OTHER BUSINESS There was no other business discussed. (9) MATTERS TO BE REPORTED ON AT A SUBSEQUENT MEETING There were no other matters to be reported on at a subsequent meeting. (10) MATTERS ON A FUTURE AGENDA FOR ACTION AND A STAFF REPORT. There were no matters addressed. Minutes of the Ad Hoc Committee re Land Fill Issues Page4 January 31, 1996 (11) CONSIDERATION OF UPCOMING MEETING No meeting of the Ad Hoc Committee was scheduled. (12) ADJOURNMENT The Ad Hoc Committee adjourned at 7:37 p.m. Submitted by: 9p.da~ J:\WPOOC\GM\L.ANDFILL\AOHOC\96\JAN\013196.MIN t phone: (714) 962-2411 mailing address: P.O. Box 8 1 27 Fountain Valley. CA 927 28-8127 street ad dress: 10844 Ellis Avenue Fountain Valley, CA 9270 8-7018 M ember A gencies • Cities Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Huntington Beach Irvine La Habr a La Palma Los Alami tos N ewport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park Yorba Linda County of Orange Sanitary Di stricts Costa Mes a Garden Grove Mi dway City W ater Districts Irvine Ranch COU NTY SANI TATION D IS TR ICT S OF ORANGE COUNTY, CALIFO RNIA February 8, 1996 To the Chair and Members of the Joint Boards of Directors Subject: Board Letter Enclosed are copies of three articles that have appeared in the newspapers in the past week that are very timely. Chair Cox's response is to a letter from the Mayor of Garden Grove, Bruce Broadwater. If you have any questions on these articles , please give me a call. ~/d?./£ Donald F. Mcintyre " / - General Manager DFM :jt J:IWPDOC\GMIOFMIBOARD.L TR\96\021496. A Public Wastewater and Environmental M anagement Agency Committed to Protecti ng the Environment Since 1954 UHANut: <;UUNTY SANITATION DISTRICTS Name of Paper lA Ti>n-c J NEWSPAPER CLIPPINGS Section ~51L .r •:-";,· i. ' Page Date Subject ~ -(;;-9i ~and f,'//S '.LOS ANGELES~ nJESDAY, FEBRUARY 6, 1996 BS R . Sanitation Districts May Bid on Landfills • Revenue: Sale of the system, estimated at $200 million to $300 million, would provide the county. with much-needed cash. '·· By SHELBY GRAD SPECIAL TO THE TIMES ·:,F.OUNT AIN VALLEY-The Oninge County Sanitation Districts is poised next week to submit a formal bid to purchase the county's lucrative landfill system, which is estimated to be worth $200 million to $300 million, agency officials said Monday. · .The sale could provide a signifi- cant boos~ to the county by supply- ing cash needed for bankruptcy recovery efforts. It would also nµuok by far the largest sale of county assets since the Dec. 6, . 1994, bankruptcy. . The sanitation districts' Board of . Directors is scheduled to vote on a bid proposal next Monday, more than two months after it entered into exclusive negotiations with the county, said Blake Anderson, the sanitation agency's chief op- erations officer. If a bid is made, ..the Board of Supervisors would likely vote on the matter in late February or early March. .The system, which consists of five operating landfills and about 20 closed sites, is considered one of the county's most valuable assets be- cause of the revenue it generates. . Details of the districts' proposal .are still being worked out, but the -.· purchase price will likely be in the range of $300 million, Anderson said. . In documents filed in U.S. Bank- ruptcy Court, the county estimated that the landfill system could gen- erate $15 million a year over 20 years for bankruptcy recovery, or $300 million, Anderson said. . Last year, a League of Califomia Cities report estimated the value of the landfills at about $250 million. If the deal goes through, Ander- son said, the sanitation districts will streamline operations by com- bining the county's Inte~ated Waste Management Department with the districts• own Staff. Money saved by merging the two entities could result in a reduc- tion in landfill dumping fees, An- derson added. "We think we can render some important operational efficiencies," he said The sanitation agency, which handles sewer operations, would finance the deal by either borrowing against future landfill revenue or paying the collllty in ~ents. r Some county supervisors raised concerns in November when the county entered into exclusive talks with the sanitation districts, saying ·they would prefer for the private sector to silbmit bids as well . But most supervisors said they : 1doubted that a private company . would be willing to buy both the : profitable operating landfills as ·well as the closed-.O~· . w.hich .require costly maintenance. They ; also said it makes sense for one · ; government entity to handle both . ! solid and liquid waste. . .. \ ' ORANGE COUNTY SANITATION DISTRICTS NEWSPAPER CLIPPINGS E (afie- Name of Paper Section Page Date o. C... R.t_a,i s.fef It --5 42,-y_,t;~ -----... -· ........ +AS"I -. Benefits of joint wastewater, landfill districts G arden Grove Mayor Bruce Broadwater made many statements about the Coun-. ty Sanitation Districts in his letter, "Perhaps it's time to trash the county sanitation districts" [Commentary, Jan. 14). Unfortunate- ly, much of what Mayor Broadwater wrote was factually incorrect. The County Sanitation Districts cur- rently operate two wastewater-treat- ment facilities. Their interest in oper-. ating the solid-waste disposal system · dates back to last summer when the county first proposed divesting the landfill system as part of bankruptcy- recovery efforts. Proponents of a consolidated solid- waste disposal/wastewater-treatment system operated by a public agency, . like the County Sanitation Districts, cite numerous operational advantages, -including the benefits of economies of scale. Cities also benefit, as a public agency-operated system offers indem- nification, guarantees long-term ac- cess to a reliable system, and ensures competitive rates. In December, the County Sanitation Districts were granted a 75-day exclu- sive right to negotiate with the county for the landfill system. If the Districts . do offer to acquire the landfill system and that off er is accepted by the board of supervisors, a new sanitation dis- trict would be formed under the Coun- ty Sanitation District Act, which al- lows cities to operate both wastewater treatment and landfill operations. The new sanitation district would be governed by a board of elected city and sanitary district officials ~ho are directly answerable to the residents of Orange County. Self-governance by participating cities would also promote . greater sensitivity to specific local ' needs, including the needs of "host" cities where landfills are located. Subject lefle4 ID -Hte EdtftJr +rDM Ji,Jtn Cox Transfer of ownership would be fi- nanced through a bond issue. The ex- isting wastewater Sanitation Districts would not fund the landfill acquisition nor do they have "excess cash" on hand to do so. The dedicated fund bal- ances on hand are the Districts' waste- water operating, self-insurance, and· capital funds, and represent approxi- mately 12 months' operating and capi- tal requirements. The County Sanitation Districts would operate the solid-waste disposal system with the same commitment to efficiency and cost-savings as their wastewater-treatment operation has now. The Districts treat an average of 243 million gallons of wastewater and their comprehensive user fees are 40 percent below the California average, according to a study by Black & . Veatch, an independent engineering and consulting firm. The Districts have been recognized by the Environmental Protection Agen- cy with the National Award for Out- standing Operations and Maintenance, and have been named "Plant of the Year" four times by the California Wa- ter Environment Association. '. Like all of us who live or work in 1 Orange County, the County Sanitation ; Districts want our county to grQw and ; prosper, and our record speaks for it-; self. We work with business and indus-~ try to safeguard the public's health, ' protect the environment, and ensure regulatory compliance and economic vitality. Our planning efforts include input from members of the environ- mental, business, local government, and residential communities. We be- lieve planning for the future is a team effort that will ultimately benefit the entire community. It's unfortunate that no one from Garden Grove attended either the City Managers' meeting on Jan. 3 or the Orange County Division of the League of California Cities meeting on Jan. 11 to hear the above information. (Al- though Garden Grove chooses not to be a member of the Orange County , League of Cities, the meeting was open to all interested individuals and nu- merous non-members did attend.) Should Mayor Broadwater w~nt addi-. tional information about our mterest m operating the solid-waste disposa~ sys- tem, members of the County Samta- tion Districts staff and I would be more than happy to meet with him. John C. Cox Jr. Fountain Valley Mr. Cox is joint chairman of the County Sani- tation Districts of Orange County. I J - ORANGE COUNTY SANffATION DISTRlt.; I~ Name of Paper LA. Tiwtt!5 -o.e,. NEWSPAPER CLl.PPINGS Bl~ Section B Date Page Subject (p 2-'-I-'~ le:Her-1-o -fhe_ U/lor from.JOJ.11. l'OJC Sanitation Plan Suits Local Needs • In his Jan. 14 letter, Mayor Bruce A. Broadwater of Garden Grove made numer- ous statements regarding the County Sani- tation Districts, its philosophy of op- erations and its desire to acquire the • county's solid-waste disposal system. Un- fortunately, much of what Broadwater wrote was factually incorrect. . The County Sanitation Districts cur-' rently operates two waste-water treat- ment facilities, one in Fountain Valley, the other in Huntington Beach. Its interest in operating. the solid-waste disposal system dates back to last summer when the county first proposed divesting the landfill system as part of bankruptcy recovery efforts. If the districts does off er to acquire the landfill system and that offer is accepted by : the Board of Supervisors, a new sanitation : district would be formed. The new district would be governed by a board of elected city and sanitary district officials who represent and are directly answerable to the residents of Orange County. Self-governance by par- ticipating cities would also promote greater sensitivity to specific local needs. Transfer of ownership would be financed through a bond issue. The existing waste- water Sanitation Districts would not fund the landfill acquisition nor does it have "excess cash" on hand to do so. The dedicated fund balances· on hand are the districts' waste-water operating, self- insurance and capital funds, and represent approximately 12 months' operating and capital requirements. The County Sanitation Districts would operate the solid-waste disposal system . with the same commitment to efficiency and cost savings as its waste-water treat- ment operation is now. Districts' user fees are 40% below the California average, according to an independent study. Like all of us who live or work in Orange County, the County Sanitation Districts wants our county to grow and prosper. Should Broadwater want additional in- formation about our interest in operating the solid-waste disposal system, members of the County Sanitation Districts staff and I would be more than happy to meet with him. JOHN C. COX JR. Joint chair County Sanitation Districts of O.C. . .. ll' JOINT BOARDS OF DIRECTORS SPECIAL MEETING Agenda Item (7): Summary AGENDA FOR FEBRUARY 14, 1996 Consideration of motion to receive and file letter dated January 31, 1996, from Vicki Wilson of the Integrated Waste Management Department, County of Orange, regarding the proposed Resolution of Application to the Local Agency Formation Commission (LAFCO). A letter dated January 31, 1996, was received from Vicki Wilson, Integrated Waste Management Department, County of Orange, regarding the proposed Resolution of Application to the Local Agency Formation Commission (LAFCO), related to the proposal to form a · Countywide Solid Waste Management Sanitation District. Recommendation Receive and file letter dated January 31, 1996, from Vicki Wilson of the Integrated Waste Management Department, County of Orange. J:\WPDOC\BS\AG96\FEB96\ITEM7. C>F INTEGRATED WASTE MANAGEMENT DEPARTMENT 320 N. Flower Street, Suite 400 Santa Ana , California 92703 Jan uary 3 1, 1996 Mr. Blake Anderso n C hief Operating Officer County San it atio n Districts of Orange County P.O. Box 8 127 Fountain Va ll ey, CA 92728-8 127 Dear B lake: (714) 834-4000 FAX (7 14) 834-4001 VICKI L. WILSON Director I am w ri ting to co nfirm the receipt of the proposed Resolution of Application to the Loca l Agency Formation Comm ission (LAFCO) w hi ch is required to initiate the process of forming a County-w ide Sanitation District for so lid waste. The Reso lution was drafted by CSDOC General Counsel Thomas L. Woodruff for consideration by the Orange Cou nty Board of Supervisors. Mr. Woodruff a lso included Joint Resolution No. 96-1 5 of the ex istin g Count y Sanitation Districts , u rging the Board of Supervisors to favorably consider and enact a Resolutio n at the earliest possible date. The County w is hes to cooperate with CSDOC and present the LAFCO Resoluti o n to the Board of Supervisors at the most optimum t im e. We believe the best opportun ity for the Board of S u perv isors to hear the LAFCO Resolution is on the same agenda that th e purchase proposal and Term Sheet is conside red. I nclusion of th e LAFCO Resolution as part of the compre hens iv e CSDOC acq ui sitio n proposal will enable a nd e ns ure that the Board of Supervisors hears and considers a ll of th e acq ui sition related ite ms at the same pub li c meeting. EMA /IWMD w ill work w it h the Ch ief Execut ive Officer and Coun ty Counsel to coord inate with Mr. Woodruffs office rega rding t he processing of th e Reso luti on. We are very appreciative of Mr. Woodruffs efforts i n preparation of th e document, and thank yo u as well for you r staffs on-goi ng activ it ies in the development of the LAFCO application. We will cont inue to cooperate and contribute an y and all information necessary for the timely compl etion of the app li cation package. Shou ld yo u or yo ur staff have any qu est ion s reg arding the Resolution or any other issues, please don't hes itate to contact us . 7~~~ Vick i L. Wil s on, D irecto r EMA/Integ rated Was te Management Department cc: Jan ice Mittermeir, CEO Don ald F. Mci ntyre, CSDOC Thomas L. Woodruff, CSDOC General Counsel Geoffrey K. Hunt, County Coun se l 1037JG 1/3 1/96 Jud ith A. Wilson, CSDOC St eve Kozak, CSDOC Dana Smith , LA FCO S u percisor Roger Stanton Supervisor William S te in er -~ '• •" Prtr.tec ori recycied paper ... Agenda Item (Ba): Summary JOINT BOARDS AGENDA FOR FEBRUARY 14, 1996 SPECIAL MEETING Consideration of motion to receive and file Staff Report dated February 7, 1996, regarding proposed acquisition of County of Orange Solid Waste Management System On November 15, 1995, the Joint Boards authorized the General Manager to submit a Letter of Intent to the Orange County Board of Supervisors to acquire the County's Solid Waste Management System. The Letter of Intent was accepted by letter of County's Chief Executive Officer dated December 12, 1995, pursuant to authorization approved by the Board of Supervisors on December 5, 1995. Since December, staff and consultants have achieved considerable progress in determining valuation of the County's Solid Waste Management System. Valuation models and their underlying assumptions have been reviewed by the Sanitation Districts' Ad Hoc Committee Re Landfill Issues in December and January. On January 31, the Ad Hoc Committee met to consider the latest valuation model and to consider a draft of the major features that would constitute a "term sheet" for acquisition of the County's Solid Waste Management System. The Term Sheet is presented in the form of a Memorandum of Understanding (MOU). The Ad Hoc Committee approved the basic terms of a draft MOU that offers to acquire all existing assets and liabilities of the five active and twenty-one closed landfills which are part of the County System. The acquisition price of $300 million would be paid in installments for 20 years. The draft term sheet is conditional in that the Sanitation Districts have until the end of the 60-day closing period to receive waste flow control agreements from the cities and sanitary districts representing 90% of the solid waste generated within Orange County. Staff Recommendation Staff recommends that the Joint Boards receive and file the attached staff report regarding acquisition of the County of Orange Solid Waste Management System. J:\WPDOC\GM\BANDERSO\BR00214.AGN • q. February 7, 1996 STAFF REPORT Proposed Acquisition of County of Orange Solid Waste Management System Valuation On December 19, Ernst & Young, Price Waterhouse, Saybrook Capital, IWMD staff, and the Sanitation Districts' staff met to kick off the formal valuation process. We initially received assurances that the County would provide all of the information that is developed by Ernst & Young in their valuation efforts. We had agreed that this would be the most constructive way to achieve a timely valuation of the system, necessary for meeting the 75-day deadline for providing a term sheet to the County. In mid-January, the County first informed us that the valuation from Ernst & Young would be delayed a week so they could finish their work. A week later the County informed us that they would not provide the Ernst & Young valuation at all because they felt it would place them in a difficult bargaining position. Other than this set back, there has been excellent cooperation and openness on both sides during the last two months. Technical information has been forthcoming from both sides and we have had easy access to various members of the IWMD staff for help in answering our questions. In addition to this, Sanitation Districts staff and consultants have been working on establishing the amount of system liability, costs to operate the system, and the cities' willingness to participate in waste flow control agreements. An offer would be conditional upon these threshold amounts, or, assuming they were not achieved, then adjustments to the offer would be made by the Sanitation Districts. Price Waterhouse has provided us with several valuation models of the system. Saybrook Capital has provided financial advise and assistance in developing strategies and conveying information to our Ad Hoc Committee and others. Clements Environmental has been conducting field investigations at the closed sites and has conducted surveys of other landfills in Southern California to develop operating costs. The current estimate of environmental liability for the 21 closed sites is $30 million. This is based on the field test results so far collected by Clements Environmental. They are scheduled to complete their site assessment efforts on February 12th or 13th. Their efforts have been slowed by their difficulty in receiving access permission from some of the owners of the closed sites. At the February 14 meeting, staff will provide an oral report to the Boards of Directors regarding any new findings that materially effect the estimated liability amount. CSDOC • P.O. Box 8127 • Fountain Vallev. CA 92728-8127 • (714) 962-2411 Staff Report Page2 February 7, 1996 Depending upon the set of assumptions used, the valuation of the system shows a considerable swing. We have established a "base case" which has a set of assumptions which include achieving 90% solid waste flow control, an initial tipping fee of $30 per ton (down from the current $35 per ton), and continuation of solid waste importation for twenty years. Given these assumptions and others dealing with interest rates, inflation and certain operating efficiencies, the system is affordable at an acquisition price of $15 million for 20 years. This is equivalent to the County's proposed commitment of landfill revenues which is contained in the bankruptcy Plan of Adjustment which they filed in December. Governance and the Local Agency Formation Commission (LAFCO) Sanitation Districts' staff has met with LAFCO on several occasions and is completing an application for forming a new sanitation district with the help of the consulting firm, Planning Solutions. On January 24, 1996, the Joint Boards of Directors adopted Resolution No. 96-15 urging the Board of Supervisors to submit a Resolution of Application to LAFCO for the formation of a new County-wide sanitation district for solid waste management. According to state law, the Board of Supervisors must be the entity that submits the application. Sanitation Districts' staff and consultants will be providing a majority of the effort to complete the application and participate in the hearing ·process. We have been informed by LAFCO staff that they will be willing to work closely with us to expedite the process. Sanitation Districts' staff are moving the application forward, hoping for a March submittal to LAFCO, assuming that our staff and consultants and the County can work together effectively to do so. The minimum time period for LAFCO to process an application, according to statute, is 90 days; although actual projects usually require more time. Official formation of the new Solid Waste Management Sanitation District, call of the first meeting and election of officers, would occur sometime after LAFCO certification. We have been informed by County staff that it is the County's intention to place the LAFCO Resolution of Application on the agenda for the same Board of Supervisor's meeting that our proposed acquisition MOU is considered. Currently, this is scheduled to occur on February 27, 1996. City. Sanitary District. and Wastehauler Outreach/Reaction Sanitation Districts' staff has met with various representatives of the cities, sanitary districts and wastehaulers. Generally speaking, the reaction to the formation of a new sanitation district and the concept of flow control remains favorable. Staff met with the city managers on January 3, 10, 29, and February 7. The Sanitation Districts' Joint Chairman provided a formal presentation to the Orange County League of Cities at their Staff Report Page3 February 7, 1996 regular evening meeting of January 11. The Brea City Manager, representing the city managers and Ron Hosterey, Chairman of the County's Waste Management Advisory Commission, also spoke in favor of the Sanitation Districts' acquisition of the landfill system. Districts' staff also presented information on the proposed acquisition of the system on two occasions to the South County Mayors, most recently on February 1st. In addition to these formal meetings, staff and our consultants have had numerous meetings and phone calls with various cities and wastehaulers during the last two months. While support for the proposed landfill system acquisition is generally favorable, efforts continue on the part of La Paz, Arizona, and other out-of-County landfill operators to develop interest in using its landfill as an out-of-county waste disposal alternative. It should be noted that flow control and a predictable revenue stream will be important for investment grade financing alternatives and for developing confidence in the long-term value of the proposed County-wide system. We have sent letters to all of the cities and sanitary districts asking that they delay taking any action with respect to out-of-county contracts until we have had an opportunity to fully describe our proposal and its long- term benefits to the cities and the haulers. We subsequently sent them all model flow control agreements. The city managers received an extensive package of materials during the week of February 5th. On February 7, the General Manager and General Counsel met with the city managers at their regular monthly meeting. Outreach will be very important to the success of the acquisition process. At this point, we have no formal buy-in from any city council. Staff anticipates that this is obtainable, through the model flow control agreements, during the time between now and mid- March. Until the actual term sheet has been conveyed to the Board of Supervisors, the city managers have been reluctant to move the issue to their City Council agendas. They simply haven't had all the information necessary to describe the deal. This will change in February when we present the final Term Sheet to the cities and sanitary districts. Staffing Transition Plan and Contract Operations IWMD presently uses its own staff, contractors, and other County departments to manage and operate the landfill system. After the acquisition, some of these functions will be met by existing IWMD staff, some with Sanitation Districts' staff, some with existing or new outsourcing, and some with short-term contracts with the County. Activities that we are now beginning to evaluate include landfill operations, environmental and regulatory compliance, human resources, finance and accounting, legal counsel, information technology and office needs. Obviously some of our approaches will be transitional, based on the practicality and priority of how the two Staff Report Page4 February 7, 1996 organizations will be melded into one. IWMD's administrative and operational costs appear to be substantially higher than other equivalently-sized systems here in California. While it is difficult to accurately estimate the savings we ultimately can achieve, we have made some estimates of initial savings that can be made. These are included in the valuation model discussed above in the valuation section of this report. Based on our research, we do believe that contract operations of the active landfill sites themselves appear to be a readily available alternative to quickly reduce the operating costs of the landfill system over and above what is used in our model. San Bernardino and San Diego Counties have privatized their landfills and have had favorable cost reduction records while maintaining quality of service and environmental compliance. Contract operation would include all on-site activities at the active landfills including push and cover operations, maintenance, surveying and field engineering of the sites. Staff recommends that the Boards of Directors authorize the General Manager to prepare an RFP for contract services for on-site operations of all active landfills. Staff would issue the RFP after it has been approved by the Districts' Boards of Directors at a future meeting. Importance of the Acquisition to the Bankruptcy The County has obligated itself to repay the losses incurred by the various County Administered Accounts held for schools, municipalities and other categories in the Plan of Adjustment it filed in December, 1995, and in the associated Disclosure Statement it filed in January, 1996. Referred to as "holders of Class B-11, B-12 and B-13 Claims" they amount to approximately $235 million. The Plan of Adjustment proposes using revenues from the IWMD through the out-of-County trash importation contracts to fund a portion of the refunding of the losses. The formula for the payback is not stated within the Disclosure Statement. However, the Disclosure Statement, page 234 states that: " ... The (County Administered Account repayment) Projections, however, include reliance on fees from out-of-County assets for distributions over 20 years to holders of Class B-11, B-12 and B-13 Claims. There can be no assurance, however, that the County will be able to execute contracts for the entire twenty- year duration. If the County is unable to do so, Available Cash would be diminished or delayed, and distribution over time to holders of Class B-11, B-12 and B-13 Claims may be diminished or delayed accordingly." In other words, the County has some uncertainty about its ability to repay, over time, the losses to the County Administered Accounts that were held for the schools, i Staff Report Page5 February 7, 1996 municipalities and others. For this reason, acquisition of the landfill system for $15 million per year for 20 years is, in effect, a method of assuring that those members of the OCIP that had County Administered Accounts will be paid. Supporting Attachments For the convenience of the Directors, staff has included the following attachments which provide an overview of the various issues surrounding the acquisition of the landfill system: 1) LAFCO Justification Proposal -Formation of Solid Waste Management Sanitation District. (Draft February 6, 1996) 2) Summary of Advantages and Disadvantages -Landfill System Ownership and Operation Options. (Revised February 6, 1996) 3) Q&A -Why is the Sanitation Districts proposing to acquire the County's Solid Waste Management System? (Draft February 2, 1996) 4) Executive Summary -Solid Waste Disposal Commitment -"Flow Control" Agreement. (February 2, 1996) 5) Flow Control Agreement. (Draft February 2, 1996) 6) Summary of Draft Proposed Memorandum of Understanding("MOU") -Term Sheet between the County Sanitation Districts of Orange County and the County of Orange. 7) Resolution No. 96-15 -Directing a request to the Orange County Board of Supervisors to file a resolution of application with the Orange County Local Agency Formation Commission. 8) Procedures for formation of County-wide Sanitation District for acquisition, operation and maintenance of landfills. (December 27, 1995) 9) Memorandum; Employment of Orange County's Integrated Waste Management Employees. Authority of Districts to determine the Initial Terms and Conditions of Employment. (January 16, 1996) 1 O) Meeting Minutes -City Managers Working Group. (January 10, 1996) Staff Report Page6 February 7, 1996 11) Meeting Minutes -City Managers Working Group. {January 29, 1996) Staff Recommendation Staff recommends that the Joint Boards receive and file this staff report. BPA:cmc J:\WPDOC\GM\BANDERSO\BRD0214.RPT Draft: February 6, 1996 LAFCO Justification Proposal Formation of Solid Waste Management Sanitation District The County Sanitation Districts of Orange County is proposing the formation of a county-wide solid waste management sanitation district to assume the solid waste authority for waste disposal and landfill management now governed by the County of Orange. The goal is to increase local control of the waste management system by establishing direct local governance by the customers of the waste d.isposal system. The new district would be formed under California Health and Safety Code ~ 700 et seq, and would be governed by a 33 member board representing local cities and sanitary districts. By restructuring governance of the system, the communities using the local disposal system would control the operations, management, finances and liability of these disposal facilities. The new district would be called the Solid Waste Management Sanitation District of Orange County. What is the Orange County Waste Disposal System? In Orange County there are five active and 21 closed landfills operated by the County of Orange. These landfills act as a regional network of disposal facilities governed by a common set of laws, ordinances and regulations. Treating the landfills as a portion of a comprehensive disposal system has allowed the County to maximize both disposal capacity and economies of scale. It has also promoted uniform responsibility in regulatory compliance, environmental monitoring, disposal reporting and operational safety. Under statute, the landfill operator is charged with the development and operations of these active landfills, as well as their closure and 30-year postclosure maintenance. The system is also responsible for the monitoring, maintenance and financial obligations of the 21 closed landfills that were owned or operated by the County of Orange since the inception of its waste program in 1946. Additionally, the waste disposal system is charged with the management of the Household Hazardous Waste Collection Program which is comprised of four regional household hazardous waste collection centers. The system also has responsibility for certain planning and administrative elements of the California Integrated Waste Management Act, commonly referred to as AB 939. How is solid waste handled in Orange County? There are three steps in handling of Orange County solid waste; collection, Draft: February 6, 1996 processing/transfer and disposal. Cities and sanitary districts have individual exclusive franchise agreements with local haulers for collection of residential and commercial solid waste. Once the trash has been collected, some of it (approximately 30 percent) is directly hauled to the landfills. The remainder, (approximately 70 percent) is taken to a materials recovery facility or transfer station to be processed for removal of recyclables and transferred into consolidated loads. Finally, the waste is disposed of in the Orange County waste disposal system. What facilities make up the waste disposal system? The disposal facilities ~nclude the following as depicted in Exhibit A (Map of System): A. Five Class-3 Sanitary Landfills 1.&2. Olinda/Olinda Alpha Sanitary Landfill -Actually two landfills, Olinda and Olinda/Alpha have 678 acres total. They act as one disposal facility and are located at the north end of Valencia Avenue near the City of Brea. The major cross street is Lambert/Carbon Capyon Road. The landfill is scheduled to close in 2013. 3. Santiago Canyon Sanitary Landfill --Opened in 1968 with 185 acres. As of July 1, 1993, it operates at a significantly reduced capacity and is, for practical purposes, closed for public and commercial use. Permanent closure is planned subsequent to 2000. The landfill is located off Santiago Canyon Road, west of Irvine Lake. 4. Frank R. Bowerman Sanitary Landfill --Opened in 1990 and has 725 acres. Bowerman accepts only waste delivered by commercial vehicles; residential vehicles are directed to the other landfills. It is located at the eastern end of Sand Canyon Avenue adjacent to the City of Irvine. The major cross street is Irvine Blvd. 5. Prima Deshecha Canada Sanitary Landfill --Opened in 1976 with 1,500 acres total, and is located at the southern end of La Pata Avenue at Ortega Hwy. near San Juan Capistrano. B. Four Household Hazardous Waste Collection Centers The Orange County Household Hazardous Waste Collection Program has developed four Regional Collection Centers located in Anaheim, Huntington Beach, lrvine·and San Juan Capistrano·; lhese·faeHities are leased sites where residents can bring household hazardous waste for Page2 Draft: February 6 1 1996 proper disposal at no charge. The waste is then packaged and transported to remote locations for disposal. Orange County is one of the few counties in Southern California to have permanent household hazardous waste collection centers. The program is supported by the landfill gate fee. C. 21 Closed Landfills There are 21 closed landfills that were owned and/or operated on leaseholds by the County of Orange. Coyote Canyon Landfill was closed in 1990 and is the largest landfill in California to be closed under the federal Subtitle D regulations. Subtitle D was introduced in the early 1990s and dramatically increased regulations governing landfill operations and closure. The remaining 20 sites have been closed for 18 or more years. The size and geological conditions of the sites vary. To the best of the County's knowledge, these sites were closed in concurrence with, or in excess of, legal requirements existing at the time of their closure. Who governs the current system? The Orange County Board of Supervisors is the governing body responsible for establishing the administrative and operating policies that regulate the system, as well as setting rates for use. The Board of Supervisors is assisted in the management of solid waste by a nineteen-member advisory Waste Management Commission. Commissioners are appointed by the Board and the Orange County Division of the League of California Cities, and membership must include at least five city council members. The County Waste Management Commission is also designated by the Board of Supervisors and the cities as the Local Task Force (LTF) for recycling and reuse planning (AB 939). Daily administration and operations of waste management activities are the responsibility of the Integrated Waste Management Department (IWMD), a function of the County's Environmental Management Agency {EMA). IWMD is funded solely from gate fees collected at the landfills. Although organized as a part of EMA, IWMD's funding remains separate, secured in an enterprise fund. Enterprise fund revenues can be used only for the solid waste system. What challenges are facing the current system? Change is being recommended as a result of the challenges confronting the waste system. In recent years, the County has endeavored to manage-the·waste system in the face of declining tonnages and the increasing costs of regulatory compliance. Page 3 Draft: February 6, 1996 In 1989, environmental regulations governing California's waste management practices dramatically changed and ·transformed the way the County managed its solid waste. The biggest impact felt was from AB 939, California's Integrated Waste Management Act. AB 939 not only calls for a 50% reduction in waste by the year 2000, it also dramatically increased the regulatory compliance mandates with which a landfilling operation must comply. As a result of AB 939, the recent decline in the construction industry and the lack of projected population growth, County landfill tonnages have decreased over 29 percent since 1989. This trend translates into a revenue loss of over $87.7 million to County waste management revenues. Tonnage levels will continue to decrease over the next five year period as recycling programs continue to successfully meet AB 939 goals of 50 percent reduction in disposal by 2000. The cities within the County intend to achieve the AB 939 goals, however, the potential impact to the County's waste disposal system will be a 50 percent reduction in revenues over a 10-year period. At the same time that the County is experiencing a significant decline in tonnage, new environmental regulations have added millions of dollars in costs to landfill operations. New federal landfill requirements are expected to cost $60 million over the next five years. These requirements come at a time when it is also necessary to financially plan for the County's potential liability for closed landfill sites. Adequate reserves must be set aside to cover any potential County liability, as well as costs that may be incurred as a result of the complex nature of environmental litigation. In addition to the industry related challenges facing the waste disposal system, the system has been affected by the County's declaration of bankruptcy in December, 1994. The bankruptcy's impact on the landfill system was two-fold, being apparent in both the initial fiscal impact and the developing County strategy of using the landfill system as an asset to assist in bankruptcy recovery. The County's solid waste management revenues invested in the OCIP, were subject to the same 23 percent loss that other pool participants experienced. The more significant bankruptcy impact, however, was the onset of the County using the solid waste system as an asset and a tool in the bankruptcy recovery effort. While the system's enterprise fund remains dedicated to solid waste activities, the County's Bankruptcy Recovery Plan requires a revenue stream from solid waste management activities of $15 million annually for 20 years. The County is pursuing both importation of non-Orange County waste and sale of the disposal,. system as means to meet this funding commitment. Page4 Draft: February 6, 1996 Adding to the complexity of Orange County's solid waste system is the growing competition for trash within the region and throughout the entire southwestern United States. Solid waste tonnages are falling across the State of California due to AB 939 and the economic recession. This has placed most county disposal systems in a similar situation where decreasing tonnages have lowered revenues while new regulatory requirements have increased costs, both forcing major tipping fee increase in recent years. The result has been the beginning of long haul and disposal of trash in other counties where lower tipping fees can be negotiated. Representatives of landfills in the states of Washington, Utah, Nevada and Arizona are marketing their sites to California cities, soliciting trash with attractive, low price tipping fees coupled with long haul trucking or rail transportation. Even with long distance hauls of hundreds of miles, some of these system costs appear competitive with local landfilling rates in the $30 per ton range. These factors combine for a difficult situation facing waste management officials and the customers of the system. The conflict of decreasing revenues and increasing regulatory costs must be addressed swiftly to prudently control gate fee costs, ensure long term disposal capacity and to provide for the future needs of the waste management system. In a similar respect, the system's role in the County's bankruptcy recovery effort must be clearly defined to determine what impact that will have on the system's rates, capacity and ongoing development. If not met promptly, these forces will increase the gate fee to a level higher than the current $35 per ton, encouraging local cities to take their waste to other, out-of-county landfills for less expensive disposal. Declining city participation in the local disposal system will further reduce the tonnages and revenues of the system, ultimately increasing gate fees and impairing the system's ability to help with the bankruptcy recovery. What alternatives were considered? Several alternatives have been considered in determining the best method to provide the citizens of Orange County with solid waste disposal services. These include • Maintaining the status quo (i.e. continued operation by the County) • Forming a new county-wide sanitation district • Forming one (or more) Joint Powers Authority • Private ownership • Out-of-county alternatives ... ,. ..... ' .. Page 5 Draft: February 6, 1996 The formation of a new Sanitation District is being proposed as the preferred alternative because it best meets the criteria of providing local representation and accountability. Considering the other alternatives, it is felt that maintaining the status quo serves only to continue the trend of decreasing tonnages and· revenues with no wastestream commitments. While forming a JPA would allow for local representation, the JPA's separately negotiated agreements would not necessarily guarantee equitable representation on the governing board. Also, a JPA would require more time to establish due to negotiations of the final agreement. Ultimately, a JPA might not prove to be a stable form of governance, as its viability is contingent on continued consent of the participating member agencies. · Private ownership, which is discussed in more detailed later in this application, decreases local control over the wastes disposal system and provides cities/sanitary districts less representation in setting rates, controlling budgets and preserving disposal capacity. Finally, out-of-county alternatives are largely considered to be short-term response to economic pressures. This, coupled with the concern regarding stability of the remote facility, speaks against the attractiveness of the initial low rates being offered. What are the benefits of creating a new district? The benefits of creating a new district can be summarized as follows: • Governance of the system, • Control of the rate setting process to ensure a competitive gate fee, • Stable and committed wastestream, • Guaranteed long term disposal capacity, • Joint management of/protection against superfund liability, and • Control of budget process. · Currently the system is owned and operated by the County with the Board of Supervisors directing the administration of· the system. Although advised by a commission of city and community representatives, the Board governance structure does not provide for direct representation of the customer cities most affected by the decisions made. The concept of the new district is predicated upon the system being governed by direct representatives of the the residents who use and pay for its services. Although not required by statute to commit their wastestreams, cities and sanitary districts have been asked as part of the district formation to enter into·waste··ftow"agreementS'·to· take their waste exclusively to the Orange County System. The cities and sanitary districts Pages .. Draft: February 6, 1996 controlling the wastesheds {as specified by statute), in tum, would be in control of rate setting, budgeting, landfill operations and liability management/protection, while being assured of a guaranteed flow of waste and a stable revenue stream. The new district's formation assumes that 90 percent flow control is necessary to assure a reliable revenue stream. This means that, of all the residential and commercial solid waste collected in Orange County, 90 percent of it would be committed to be sent to the local landfill system. In some instances, existing franchise agreements would have to be modified. Creating a new district would preserve the system as public infrastructure while allowing the governance to shift from the County to the customer cities and sanitary districts. Maintaining public ownership of the disposal facilities ensures that the landfills are being managed with local residents in mind and with an eye to the future of waste needs in Orange County. Special consideration would be given to preservation of landfill capacity for today's local residents and environmental stewardship for future Orange County generations. Public administration of the landfills establishes that the costs of the systems will be controlled through public review and that the rates may not exceed the amount to operate the system as provided for by Proposition 13. The new district intends to carefully evaluate the feasibility of privatizing any or all aspects of the operations in order to provide the most effective system. Another advantage of forming a new solid waste district is local control of management of the closed sites and their associated liability. The new district would allow the cities and sanitary districts to centralize their potential Superfund liability in one organization, and to build an environmental fund as a self-insurance mechanism. Control of the landfill operations and dedication of a primary liability funding mechanism could protect the cities' and sanitary districts' General Funds and individual liability. Formation of a new district would also provide for a consolidated legal defense for the cities and sanitary districts. Would this benefit the cities? The new district would provide cities with benefits currently unavailable: • Governance of the system, • Control of the rate setting process to ensure a competitive gate fee, • Stable and committed wastestream, • Guaranteed long term disposal capacity, • Joint management of/protection" from; superfunct· liabittty·; and • Control of the budget process. Page7 Draft: February 6, 1996 In addition to these advantages, cities would be directly responsible for all decisions regarding both the collection and disposal of their wastestream. By managing their entire waste process cities would be able to benefit from economies related to the size and control of the waste stream. Finally, by committing to the Orange County system, cities collectively would ensure a guaranteed waste stream to the local landfills, which establishes a predictable revenue stream to plan for system improvements and operations. This assurance of a stable wastestream would allow the system to continue to realize economies from acting as a network of regional facilities and would allow the rate to be set at the most competitive level possible. It will also provide the lowest cost long-term debt financing, when required to be issued. Are there benefits to the rate payer? The· rate payer would benefit in three primary ways: • Commitment of Wastestream: The new district would have the commitment of the local wastestream and would be able to manage and control the costs passed along to the resident. Cost savings would also be recognized from the economies of scale resulting from managing such a large wastestream. This management could include agreements to send a portion of the County's wastestream to distant landfills, if this became economically beneficial for the system • Disposal Capacity: Formation of a new district would ensure long term disposal capacity for current Orange County residents and future generations to come. • Accountability: There would be a higher leve,I of accountability to the rate payers, if the wastestream were managed by a new district composed of city and sanitary district members. Every rate payer would be represented by a member familiar with that resident's local concerns, demographic interests and waste collection needs. What would the new district do? The new district would be responsible for development, operations, maintenance, closure and post-closure maintenance of the solid waste management system in Orange County. This system includes five active landfills, four Household Hazardous Waste Collection Centers and 21 closed landfills. All functions, responsibilities, assets, liabilities, revenues and obligations of the current"IWME>·woulct·be·,shiftectto the new··· district. Page8 Draft: February 6, 1996 It is important to note that the new district would focus on the needs and responsibilities of solid waste disposal from a county-wide perspective. Unlike the existing Sanitation Districts of Orange County which are responsible for waste water treatment in only 23 northern Orange County cities, the new solid waste district would cover all territory within the County of Orange boundaries. The new District would serve all needs currently being met by the County program plus any additional "system management" needs called for in today's competitive market place. In addition, the new District would provide joint liability management for all system participants. What would be the statutory authority forming the new district? The new district would be created pursuant to the Cortese-Knox Local Government Reorganization Act of 1985, commencing with Section 56000 of the California Government Code for the formation of a county sanitation district pursuant to California Health and Safety Code Section 4700 et seq. How would the system be transferred to the new District? Provide overview of financing system acquisition and transfer. Who would govern it? The new district would be governed by a 33-member board comprised of system customers as provided for by Health and Safety Code Section 4730. The board would be made up of a city council member from each of the Orange County cities, except those whose sewage system lies completely within a sanitary district. This condition applies to Costa Mesa, Garden Grove and Westminster. The board would also include a board member from each of the four sanitary districts and a County Board of Supervisors' representative. Dana Point would have a representative from both the city and sanitary district due to the nature and location of their sewage system. Although the new district would not govern sewage or waste water management, sewage system location is the determining principle in the statute for membership of a sanitation district board. Exhibit 2 is a complete listing of the member agencies. To avoid duplication, every effort would be made to enlist the same board members on both the Sanitation District Board and the solid waste district board. The solid waste district board, however, would include additional members to represent south County residents which are not in the service area of the current wastewater sanitation district. By creating a structure in which the cities and sanitary districts govern the disposal of their own waste, the new district will actually be increasing··loca~control·,of'·sotid·waste management and decreasing the layers of bureaucracy. The new district would rectify Page9 Draft: February 6, 1996 the current situation in which city interests are represented solely on an advisory basis through the recommendations of the Waste Management Commission, a body whose membership represents only the basic geographical regions of the County not the specific wastesheds. Under the proposed new district, those policies would be set by the customers that they directly impact, providing more responsive representation at the local level. How would the two sanitation districts be related? Fundamentally, the current nine County Sanitation Districts of Orange County and the new solid waste district would be independent special districts, and would be separate and distinct from each other. Once formed, the new Solid Waste Management Sanitation District would act as an autonomous district, governing solely the issues related to solid waste management and disposal. While the goal would be to have a common representative serving a city's interests on both boards, there is IlQ intent to add any purview to the authority or scope of responsibilities of the current Sanitation Districts Boards or to increase the geographic boundaries of its wastewater treatment system. In order that the enterprise funds of both districts be clearly delineated, the accounting and finances of the districts would be strictly differentiated. This also would provide protection to each district's bond ratings. The districts would, however, share a common administrative and support staff as defined by a Joint Operating Agreement. This joint core staff would provide services to both districts, reducing overhead costs to the greatest extent possible and increasing organizational efficiencies. Sharing a joint core staff would allow the districts to avoid duplication of work efforts and to make the most of staff specialists required by both agencies. What are the environmental impacts? An additional benefit to the rate payer is the range of programs afforded by the current waste disposal system. Although the primary charge of the system is waste disposal, there are a range of programs supported by the gate fee that benefit local residents. As part of the daily landfill operatioRs, the gate fee supports a host of environmental safeguards that ensure environmental safety at every stage of disposal. Programs are in place to screen the waste before it is accepted, inspect the waste as it is being unloaded, reclaim any salvageable material or resource, and ultimately guarantee that the landfilled waste does not impact the surrounding environment···· In· addition to this; the gate fee supports full and complete engineering closure of the landfills once they Page 10 Draft: February 6, 1996 have reached their ultimate capacity and 30-years of postclosure monitoring and maintenance. The gate fee also supports the Household Hazardous Waste Collection Centers so local residents have a safe and convenient way to dispose of their hazardous waste. In addition to control of landfill operations, the new district would guide development of these programs and their service to the community. As part of its due diligence effort, the Sanitation District has made every effort to identify any and all environmental problems at the closed landfill sites, thus ensuring that adequate monitoring and remedial actions are taken. The Districts are also interested in this review to ensure that proper reserves are set aside by the new Solid Waste Management Sanitation District to fully fund future incidents. The District's research has identified problems previously unknown to the County. Why not just privatize the landfills? To some degree, the waste system is already taking advantage of private sector efficiencies. __ percent of County IWMD's budget, or_ million dollars, is spent in contracts with private sector firms for engineering, construction and operational services. IWMD's ·philosophy has been to maintain the core staff necessary for engineering review and daily landfill operations, with most other services being privatized or provided by other County agencies. This approach has afforded the County the benefit of continuity of staff oversight, with the economies of a flexible project-specific work force. Likewise, the management of the existing Sanitation Districts has utilized the private sector as a key tool in administering an effective and efficient wastewater operation. Formation of a new district would aggressively continue this trend towards privatization, seeking every economy possible to assist in controlling costs. It does not, however, make sense to privatize ownership of the disposal system. Private ownership of the landfills would decrease the control each city and sanitary district has over its waste disposal practices. There would be no assurance of long term disposal capacity and the disposal rate structure would be driven by market forces, exceeding the costs of operations to ensure private sector profit margin. Private ownership would focus development of the landfill on the needs of the parent company rather than the interests of the local rate payer; local concerns would not be directly represented in the decision making process. A private firm would have no legal obligation to provide for local waste disposal needs, potentially driving local cities to seek distant disposal destinations. Finally, it is·· likety· that a· ·private sector landfill operator would not offer the range of programs currently supported by the waste Page 11 '• Draft: ·February 6, 1996 disposal system that act to guard and protect the local environment for future generations, nor would they be willing to carry the liability of the 21 closed landfills sites. The formation of a new regional solid waste district would blend highly privatized operations with public ownership and governance. This combination would afford the lowest costs of operations with the highest control of the future of the waste management system. Page 12 I ... County Operation (Status Quo) Tipping fee currently not competitive Future unknown * Cannot guarantee future rates* Possible rate increase to compensate for lower trash tonnages Deficit spending adds uncertainty to long-term viability Unknown liability for every city Administrative and operational costs and overhead higher than other Southern California landfills Out-of-County trash reduces capacity of Orange County landfills* * Can be said of each alternative. Summary of Advantages and Disadvantages Landfill System Ownership and Operation Options Disadvantages New County-wide JPA Privately Owned Sanitation District (one or more) Predicated on 90o/o+ Unknown liability for each Cities lose control of landfill wastestream flow control city system operations completely which is uncertain until the cities actually agree Longer time period needed for Unknown future costs and formation ability to receive conununity's Large governing board wastestream vulnerable to criticism by Potential for unequal some political constituencies representation among System assets sold piecemeal participants to highest bidders with citizens retaining liability for closed Less of an influence in sites regional market than county- wide organization Private interests determine future of an essential public Direct competition with other service in-County JP As No ability to fund existing Uncertain ability to assure non-landfill programs open competition among waste haulers Unknown liability for every city No corporate stake in providing stewardship Uncertain ability to assure open competition among waste haulers Page 2 of2 Out of County Alternatives New future environmental liabilities are added and all are out-of-county No control over landfilling practices (i.e. environmental risks) Adverse budget affect on non- landfill programs Retain liability for trash disposed in out-of-County landfill Impacted by legal requirements of other state if landfill is outside of California Transportation costs generally higher than in- County alternatives Increased air pollution caused by increased transportation miles County Operation (Status Quo) Known entity Government ownership Good relationship with regulators Complying with requirements Summary of Advantages and Disadvantages Landfill System Ownership and Operation Options Advantages New County-wide JPA Privately Owned Sanitation District (one or more) All commwlities represented on Increase city influence (vs. Market and profit detennine new governing board existing structure) landfill rates and fees Stable, long-term disposal capacity Depending upon charter of Ability to bring competitive JP A, ability to privatize operating techniques to all Ability and openness to privatize operations aspects of system operations Excellent compliance, budgeting Quick decision making and planning track record Flexibility in uncertain times Cities control landfill costs and tipping fees Provides all cities with liability coverage Environmental & public health stewardship for open and closed landfills Unified legal strategy Large market force for regional disposal opportunities Ability to use out-of-County alternatives if market forces make it advantageous Continuation of non-landfill programs (AB939, Household Hazardous Waste Program, maintenance of the closed landfills) Page 1 of2 Prepared January 30, 1996 Revised February 6, 1996 . Out of Codnty Alternatiites Possible lower short tenn disposal co~ts ~ Conserves capacity of in-County landfills \ WHY IS (ARE) THE SANITATION DISTRICT(S) PROPOSING TO ACQUIRE·THE COUNTY'S SOLID WASTE MANAGEMENT SYSTEM? FIRST: SECOND: THIRD: FOURTH: FIFTH: SIXTH: The existing nine (9) Sanitation Districts are not proposing to acquire the System as simply an expanded operation of their present mission. The existing Districts are presently engaged solely in wastewater collection, treatment and disposal. They will continue to operate in that manner in the future. At the early stage of the County bankruptcy, the Orange County Division of the League of California Cities recommended (by a vote of 30-1) that that County sell the Solid Waste Management System in order to raise cash to aid in developing a Recovery Plan. It further recommended that the System be sold and transferred to a new local agency governed by the Cities in order to insure lower rates and a more cost-effective operation. The existing Sanitation Districts, with 30 local agency elected officials on their Boards, took the lead and authorized the necessary expenditures to negotiate an agreement to transfer with the County and to file an application with LAFCO to form a new Sanitation District. Several alternate forms of govemance were considered, including annexation to an existing Sanitation District, forming a Joint Powers Authority, a special Act of the State Legislature, and formation of a new Sanitation District. The new Sanitation District was selected as the obvious best choice (see, Attachment 1, attached). Trash is generated in every City, and the residential service rates are very sensitive and important to every elected official. The new Sanitation District will have one elected official from 28 Cities, 4 Sanitary Districts, and the Board of Supervisors to govern its activities, and this broad base of local officials can best address rate issues. At the same time as the new Sanitation District ("SWMSD-99) is formed and the System is acquired, a Joint Administrative Organization Agreement ("JAO") will be entered into between SWMSD-99 and the existing nine (9) Sanitation Districts. 1 This will be essentially the same as the JAO under which the existing Districts have operated since 1951. It will be the legal vehicle under which a single management and administration will be in place to control financial, operations, maintenance, human resources, planning, engineering, regulatory compliance, technical services, information services, communications and legal services. 1Totally separate from this project, the Sanitation Districts have commenced a study to consolidate the nine Districts into one Sanitation District for cost-saving purposes. That proceeding will have no impact on this project. If completed prior to formation of SWMSD-99, the JAO Agreement will be between SWMSD-99 and the one consolidated Sanitation District. TLW:pj:Oraft 2:02/02/96 6 This is designed for and most assuredly will yield the lowest and most cost-effective management of the two major missions of wastewater and solid waste operations. SEVENTH: The new District, through its inclusive Board of Directors, will present an open forum for the building of consensus positions among the agencies on important topics including: • • • • • • • • • • • • TLW:pj:Draft 2:02/02/96 Revenue generation and collection, whether through tipping fees or otherwise. Operating and capital improvement planning . The scope of general and environmental indemnification . The equitable distribution of resources for programs such as household hazardous waste disposal. The protection of the landfills from unauthorized hazardous waste disposal. Advisory positions on franchise agreements and local flow enforcement programs. Positions on the defense of any local City faced with a challenge to its franchising authority. Matters related to the compliance by haulers with the operating rules, regulations and guidelines of the District. Data management and other methods available to support Cities in meeting their recycling and landfill diversion requirements. The opportunities available to offer the system's customers designated disposal locations, including out-of-county/state short- term low cost sites. Matters related to trash importation . Mechanisms to provide for dispute resolution between parties, among other issues. 7 ,, .. (24276) TLW:pj:Draft 2:02/02196 It is the position of the Districts that each of these issues is better resolved and determined through the governance structure, authority and , action of SWMSD-99, rather than by attempting to negotiate a highly detailed and complex agreement of terms and conditions applicable to 33 individual agencies. 8 FORM ONE SINGLE COUNTY SANITATION DISTRICT (ENTIRE COUNTY AREA) Formed pursuant to Health & Safety Code Section 4730: Board = 28 Cities 4 Sanitary Districts --1 County 33 Formed pursuant to Health & Safety Code Section 4730.1: Board PROS: = 28 Cities 4 Sanitary Districts 1 O Water Districts _1.County 43 Easier administration and accounting; Easier legal structure; Less expensive administratively, i.e., financial records; Strong bond/credit rating; Health & Safety Code Section 4741 would allow a District to operate the system (only within a District); but can contract to dispose of solid waste outside the District at a site owned by others; The Board of Directors shall be the same for all purposes (Section 4741.4); Can segregate duties and powers between wastewater and solid waste; Provides voice and vote to 11 other cities; Same organization as existing County Sanitation Districts; experience. CONS: FORMATION OF DISTRICT NO. 99 (Continued) If formed per Section 4730: IRWD out; If formed per Section 4730.1: 10 Water Districts in; If formed per Section 4730.1: 11 Cities and 9 Water Districts with no wastewater interest will have voice and vote on wastewater issues; If formed per Section 4730: The 4 Cities and 4 overlapping Sanitary Districts will have competing, as well as dual representation. Very large number of Directors when combined with existing Districts; If autonomous from wastewater, several monthly Committee and Board Meetings; Likely to be different individuals as Directors from wastewater district. :.i I. PROS: CONS: FORM JOINT POWERS AUTHORITY (NINE EXISTING CSD'S INTO JPA WITH 11 CITIES AND COUNTY) Quickest implementation. Legal authority for governance: confusing and conflicting if not CSD; Lesser quality for credit rating; Legal issues become more complex, i.e., existing CSD has to put its credit on the line, even though it is wastewater-based; Nine County Sanitation Districts and 11 Cities: vote issues; Existing 20 Cities would have no direct vote; Health & Safety Code Section 47 41 would NOT allow the existing CSD to operate the system outside the District, i.e., Prima Descheca. PROS: CONS: FORM AGENCY AS SPECIAL ACT OF LEGISLATURE (HAVE BILL INTRODUCED TO SET GOVERNANCE AT 32 DIRECTORS) Very quick implementation jf simple; Gets County out of bankruptcy; Forms streamlined local government; Lots of political credits; Specify the powers as needed: cf -Health & Safety Code Section 47 41 ambiguous; Avoids LAFCO (possibly); Deletes Sanitary Districts (except GGSD, MCSD and CMSD?); Avoids Water Districts; Minimum number of Directors while still giving representation to all cities; Specific authority to operate system. 5-7-9-11 Directors vis-a-vis 33 Directors; Might be used as a political football or weapon. ~, ' . . ·'" PROS: CONS: EXISTING COUNTY SANITATION DISTRICTS ENTER INTO SERVICE AGREEMENTS WITH 11 CITIES (NO NEW AGENCY FORMED) Keeps Directors at 29; Rapid implementation vis-a-vis formation of new District. Eleven non-member Cities: no voice/no vote; Long-term relationships: uncertain; Difficult to negotiate terms of contract up front: delay in implementation; Liabilities shared only by CSD members and no contract members. I EXECUTIVE SUMMARY SOLID WASTE DISPOSAL COMMITMENT "FLOW CONTROL" AGREEMENT WHY A FLOW CONTROL AGREEMENT? Based on recent court decisions, including a significant ruling by the U.S. Supreme Court <Carbone v. Town of Clarkston), programs controlling the flow of solid waste to designated disposal sites by the enactment and enforcement of regulatory measures, are no longer valid. However, while not totally certain, it appears, based on several decisions of Appeals Courts, that flow control can be validly implemented by contract between the parties. In light of the above, the Management and Directors of the existing SanHation Districts, acting as the facilitator to form a new, independent, locally-controlled agency to acquire, own and operate the entire County Solid Waste Management System, have undertaken detailed financial, technical and legal studies to determine the feasibility of acquiring the System. The studies at this time have reached several conclusions, including that for the acquisition to be fiscally and economically viable, a guaranteed inflow stream of the solid waste to the System equal to 90% of the total solid waste originating within the County. Therefore, the Sanitation Districts, in order to continue with their studies and negotiation of a Purchase Agreement with the County of Orange, need to obtain a commitment from each of the Cities. In the absence of these commitments, the program to acquire the County System and have it controlled by the Cities (through the new Sanitation District) will not proceed forward. The creation of Solid Waste Management Sanitation District No. 99 ("SWMSD-99'i, with its mission to continue providing in-County waste disposal options, will change the nature of the Cities' and Sanitary Districts'· relationship to the regional landfill system by giving these entities the effective ownership and control of the system. Accordingly, the Disposal Commitment Agreement memorializes in writing the obligation the agencies will assume with their participation in the newly-formed SWMSD-99, namely: the support of the regional landfill system through a commitment to deliver a continuous solid waste stream. The Disposal Commitment Agreement does not provide a detailed contractual relationship between the parties, principally because each agency, being a part of the governance of SWMSD-99, s_hould make such details unnecessary. The District will consider the policies and procedures that will govern the District's relationships to its Member Agencies, as well as the rules and regulations that will control the actual operation of the District. It the future, the District may, with its Agency participants, choose additional contractual mechanisms to achieve the goals of the District as they are defined and developed. llW:pj:Oraft 2:02/02J96 1 The proposed Agreement implements the critical first step in the formation of SWMSO-- 99 by evidencing the binding promise of the Agencies to deliver 100% of the non-recyclable municipal solid waste generated within their jurisdictions to the regional landfills. Of course, the interest of each of the Agencies and their haulers in recycling programs and revenue from recyclable materials is protected, along with the rights of individuals to self-haul their waste to any destination. An additional promise from the Agencies is their pledge of full cooperation in making the actual delivery of trash to the landfills a reality through franchise agreement amendments and other means if necessary. SWMSD-99's responsibility to provide reliable long-term disposal capacity, either within or outside the County, to the users of the regional landfill system is set forth in the Agreement. The Agency, as a member of SWMSD-99's governing board, will participate in decisions made on key administrative issues such as the mechanisms necessary to insure the collection of the tipping fees from the haulers, or the most effective approach to monitoring compliance with the waste disposal commitments. An important element in support of the SWMSD-99's efforts will be the Agencies' obligations under the Agreement to utilize the power and authority of municipal governance to supplement, where appropriate, SWMSD-99's statutory ability to regulate. TLW:p];Draft 2:02/02/96 2 \ MAJOR ISSUES The following major issues are not addressed by the Commitment Agreement because they are in the nature of policy, administrative or operational issues that will be addressed in the normal course of business of the new District: FISCAL • REVENUE GENERATION AND COLLECTION. • RATE SETTING, INCLUDING TIPPING FEES OR OTHERWISE. • EXPENDITURE -BUDGETARY CONTROL. Landfill operation is only part of the full story. AB 939, groundwater protection and household hazardous waste collection sites are examples of very important (and expensive) programs conducted and funded by "the system". The new District's Management and Board will study and adopt the best available programs and procedures to reduce expenditures to reach the lowest cost- effective level. The District may also consider other available methods for truly·. equitable funding of the System, such as fees for the necessary programs that are not directly related to disposal in the landfills. OPERATIONAL PLANNING AND CAPITAL IMPROVEMENT PLANNING The proposed (but never adopted) 1992 County-City Waste Disposal Agreements contemplated the creation of a Commission having approval rights over County planning. The existence of the District would improve this concept by directly involving the represented Cities in all governance aspects of System operation, including capital and operating planning. EQUITABLE DISTRIBUTION OF RESOURCES Funding for the service programs operated by the District, such as the Household Hazardous Waste Disposal Program and post-closure monitoring and maintenance, must be equitable, such that each Member Agency has access to its proportionate share of such programs. Further, commitments, such as designated disposal locations, may be considered by the District with a viewpoint towards satisfying the concerns of its Member Agencies. PROTECTION OF THE LANDFILLS FROM UNAUTHORIZED HAZARDOUS WASTE DISPOSAL AND HAULER COMPLIANCE WITH OPERATING RULES The District will consider the development of protection programs on par with the enforcement programs in place to protect the wastewater treatment facilities in the County. The District's regulatory powers will be of substantial assistance in controlling hazardous waste and obtaining compliance from the haulers with operating rules and procedures. TLW:pj:Dratt 2:02/02l96 3 ADVISORY POSITIONS ON FRANCHISE AGREEMENTS AND LOCAL FLOW ENFORCEMENT PROGRAMS The final form of Franchise Agreements and franchise ordinance enforcement are matters for final local agency decision, but the Member Agencies of the District should work as a team to develop an advisory approach, leading to a high degree of uniformity. As a precursor to the new District, existing District General Counsel and Staff can provide assistance. FBANCHISE AUTHORITY PROTECTION The District may consider formulating a position in support of any local City faced with a challenge to its franchising authority. Ultimately, a challenge against any City is a challenge against the structure that supports the District. DATA MANAGEMENT The District will have an interest in supporting the Cities in meeting their recycling and landfill diversion requirements per AB 939. TRASH IMPORTATION The District will have control and authority in determining the advisability of trash importation as a revenue-raising measure. The three existing Agreements entered into by the County will be fully evaluated. DISPUTE RESOLUTION BETWEEN PARTIES The District will have an interest in considering a process of dispute resolution. TLW:pj:Draft 2:02/02/96 4 SUMMARY • City commits to have its franchise hauler deliver all of its trash to the System. • City obtains full indemnification for any claim, loss or damage arising out of the ownership and operation of the solid waste System (not just the landfill facilities}. • District will absorb all costs and expenses related to defending and resolving any claims or litigation arising out of System operations. • The flow control will continue until the new District debt financing for the acquisition of the System is paid off (20 years}. • For lowest cost of operations, District may elect to use out-of-county/state landfill sites and "mothball'' one or more of the System Facilities. • The Agreement is intentionally limited in detailed provisions because the governing . body of the new District is representatives of each City/Sanitary District agreeing to flow control. TLW:pj:Draft 2:02/02196 5 1 intentional misconduct of the City. 2 TERM 3 This Agreement shall be in full force and effect and legally binding on the parties 4 hereto from the Effective Date and until the earlier of the date of final payment of any debt 5 instruments issued by SWMSD-99 issued to fund the initial System acquisition and near term 6 capital improvements; or the date of dissolution of the District No. 1. 7 MISCELLANEOUS 8 City acknowledges that Distrid No. 1 is authorized to enter into this agreement but that 9 upon completion of the formation of Distrid No. 99, District No. 1 will not exercise any legally 10 authorized powers relating to solid waste disposal nor any powers or rights set forth in this 11 Agreement, nor shall District No. 1 be otherwise responsible for meeting the obligations of 12 this Agreement. District No. 1 shall assign this agreement and all rights, duties and 13 obligations hereunder to SWMSD-99, to be effective immediately upon the formation of 14 SWMSD-99. City agrees that the provisions contained herein relating to liability and 15 indemnification shall apply solely to SWMSD-99 and shall not be binding upon District No. 16 1. 17 This Agreement may be executed in counterparts and the provisions hereof shall be 18 govemed by Califomia law. This Agreement may be modified by the mutual agreement of 19 the parties reduced to writing and signed by both parties. 20 IT IS AGREED, this_ day of , 1996 by the City Council of the City of 21 , by the following vote: 22 AYES: 23 24 25 NOES: ATTEST: City Clerk 26 ACCEPTED AND AGREED: 27 28 District's Authorized Representative ROURJCE, WOODR.Un AIPRADLIN ATTORMEYSAT &AW ORANGE 20Q0.00031 23070_1 Authorized Representative City of _________ _ -6- '> -~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ROUJUCE, WOODJltJn A SPRADLIN ATTORHEYS AT lAW ORANG£ the adopted policies, rules, regulations, guidelines and decisions of SWMSD-99. If necessary to achieve the measures approved by SWMSD-99, the .City agrees to use its power and authority of municipal governance to supplement SWMSD-99's statutory authority to enact ordinances and adopt resolutions governing solid waste matters. LIABILITY SWMSD-99 shall be a separate legal entity formed as a County Sanitation District in accordance with the provisions of Califomia law (Health & Safety Code Section 4700 et seq.), and neither City nor any other member entity shall, solely by virtue of being a member on the goveming board of SWMSD-99, incur liability by reason of any lawsuit or other action, and none of the debts, obligations or liabilities of SWMSD-99 shall be the debts, obligations or liabilities of City or its general fund. . SWMSD-99 shall protect, defend, indemnify and hold harmless City in each and every respect from any loss, damage, expense or liability, including reasonable attorneys' fees, if the same is incurred or may be incurred by City by reason of any action, administrative or otherwise, or the levy of any fine or civil penalty by any administrative agency under State or Federal law, where the same arises out of the operation, management or control by SWMSD- 99 of the Facilities or System. This indemnification in favor of the City and as against SWMSD-99 is effective for any occurrence related to the Facilities or the System, and the City's right to indemnification hereunder shall include SWMSD-99's obligation to defend City, upon receipt by SWMSD-99 of notification of claim and request for defense, from and against any and all liabilities, claims, penalties, forfeitures, suits, costs, and expenses incident hereto (including reasonable attomey's fees), which City may incur, become responsible for, or pay as a result of the death or bodily injury to any person, and/or the destruction or damage to any property, contamination of, or other adverse effect on the environment, including costs of response to and/or penalties for violation of laws, regulations or orders. resulting from or due to the release of hazardous substances; provided, however, that the above indemnification shall not be provided to City where the act, omission to act or event that is the subject matter of the indemnification is the result of the gross negligence, or willful or 2000-00031 23070_1 -5- 1 terminate or revise its agreements, franchises, permits or licenses to effect such change as 2 will allow City to meet its disposal commitment. 3 To the extent that City or its waste hauler utilizes a transfer station prior to the point 4 of final disposal, and Solid Waste is commingled through processing at the transfer station, 5 then the City shall implement the disposal commitment in accordance with this Agreement 6 by directing that the tonnage equivalent of City's Solid Waste shall be delivered from the 7 transfer station to the System. 8 In the event that any change in State or Federal law or the decision of any court of 9 competent jurisdidion restricts the ability of the City to act in accordance with this Agreement, 10 then the City agrees to cooperate with SWMSD-99 in determining the best available options 11 for meeting the disposal commitment, and the City agrees to exercise its best efforts to 12 implement such options. 13 SYSTEM OPERATION 14 SWMSD-99 agrees to operate and maintain the System in a manner that provides 15 reliable long-term disposal capacity to the City and the other member cities and entities of 16 SWMSD-99, either in the Facilities or by disposal in out-of-county landfills pursuant to 17 contract with other public or privately-owned landfills. 18 SWMSD-99 shall adopt policies for the management and operation of the System that 19 promote sound environmental management, economic efficiency, public service and the 20 equitable distribution of resources. SWMSD-99 shall adopt rules, regulations and guidelines, 21 whether by resolution, ordinance or otherwise, governing the System and the use of the 22 Facilities. SWMSD-99's governing board will consider and address all administrative matters, 23 including but not limited to the establishment of rates, fees and charges and the collection 24 thereof, adoption of budgets; approval and implementation of capital projects; the manner of 25 monitoring and enforcement of the disposal commitment; recommendations regarding 26 franchise agreements; and the scope and extent of household hazardous waste programs. 27 The City shall have the opportunity to participate in the actions and decision making 28 of SWMSD-99 as a member of SWMSD-99's governing board, and the City agrees to support ROURICI:. WOODRtJn ASPRADUJll ATTOflNEYSAT UW ORN«IE 20Q0.00031 23070_1 -4- ...... ·1· ' 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ROURXI'. WOODRUn ASPRADUR ATTOllHEYS AT LAW ORMGE within its jurisdiction to the System in accordance with the terms of this Agreement, . - NOW, THEREFORE, in consideration of the benefits and obligations accruing to each, the parties agree as follows: DEFINITIONS The capitalized terms used in this Agreement shall have the meanings stated in either the Recitals above, or as set forth below: "Solid Waste" shall mean garbage, refuse, waste and other materials acceptable for disposal at Class Ill landfills pursuant to applicable laws and regulations, excepting only recyclable materials, self-hauled wastes and solid waste generated by state or federal govemmental agencies unless the City has exercised control over such waste and chooses to directly deliver to the Facilities. The term "Solid Waste" shall also include waste residue that is not diverted to useful purpose as a result of "recycling" as defined in Public Resources Code Section 40180. "Facilities" shall mean the Class Ill landfills located within the County of Orange and other waste disposal facilities and services owned or under contract by SWMSD-99 for the handling of municipal solid waste. "System" shall mean the facilities and all equipment, personnel, contracts and permits to own, operate and provide a solid waste disposal service to the residents and industrial- commercial community. DISPOSAL COMMITMENT To the extent allowed by law, City agrees to cause the delivery to the System of 100% of the Solid Waste generated within its jurisdiction and collected from residential, commercial, industrial or other sources. City agrees to carry out its disposal commitment utilizing all means available to it under ttie law, including but not limited to exercising its rights under current agreements, franchises, permits or licenses with solid waste haulers to direct that Solid Waste originating in and to be delivered to the System. As of the date of execution of this Agreement, if City does not have the right under its current contracts, permits or licenses to direct the disposal of Solid Waste, then City shall at the earliest practicable time amend, 2Q00.00031 23070_1 -3- 1 WHEREAS, District No. 1 has undertaken financial, engineering and technical studies 2 to evaluate the feasibility of transferring the System to a new agency and has entered into 3 an agreement with County leading to the purchase. sale and transfer of the System from 4 County to SWMSD-99; and 5 WHEREAS. SWMSD-99 will be formed by the adion of the Orange County Local 6 Agency Formation Commission and the Board of Supervisors of Orange County for the 7 purpose of accepting the ownership, operation and control of the County of Orange System, 8 including numerous landfills and other solid waste disposal facilities and services previously 9 owned, operated and made available for public use, and 1 O WHEREAS, pursuant to the statutory authority creating SWMSD-99, the City will be 11 represented on the governing board of SWMSD-99, and 12 WHEREAS, it is a matter of County-wide concern that the System continue to be 13 operated and maintained in a manner that meets the requirements of State and Federal law, 14 and 15 WHEREAS, the City's participation in SWMSD-99 will assure that the System 16 continues to be publicly owned, customer oriented, environmentally sound and capable of 17 providing a cost competitive tip fee that is sensitive to the market rate in the waste disposal 18 industry, 19 WHEREAS, the City has the authority pursuant to its general police powers and under 20 the California Integrated Waste Management Act to determine aspects of solid waste 21 handling which are of local concern, including the extent of solid waste handling services 22 within the City and whether the same shall be conducted under franchise, agreement, 23 license. permit or otherwise, and 24 WHEREAS, SWMSD-99 and the City have determined that the public health, safety 25 and welfare of the residents of the City and throughout the County will be served best by the 26 support of the System through (i) the commitment of SWMSD-99 to provide predictable and 27 reliable long-term disposal capacity to the member cities and sanitary districts of SWMSD-99; 28 and (ii) the commitment of the City to cause the delivery of municipal solid waste generated ROURKE, WOODRUFr A SPRADLIN ATT'ORHEYS AT lM ORANGE 2CJ00.00031 23070_1 -2- I' ... ·j ~ f 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ROURICI!, WOODlltJ1T A SPRADLIN ATTORNEYS AT LM ORANGE AGREEMENT RE SOLID WASTE DISPOSAL COMMITMENT DRAFT -1/10/96 2/02/96 This Agreement is entered into by and between County Sanitation District No. 1 of . Orange County for itself and as agent for County Sanitation Districts Nos. 2, 3, 5, 6, 7, 11 • 13, and 14 (hereinafter "District No. 1"), and in its capacity as a lead agency for the initiation of proceedings to authorize the formation of a new County Sanitation District pursuant to the provisions of the County Sanitation District Act (Califomia Health & Safety Code Sections 4700 et. seq.). upon formation to be known as Solid Waste Management Sanitation District No. 99 (hereinafter "SWMSD-99") and the City of_______ ("City") and is effective ttJe _day of _____ , 1996 (the "Effective Date"). WHEREAS, the County of Orange("hereinafter ucounty") is the present owner, and its Integrated Waste Management Department is the operator, of a Solid Waste Disposal Management System, including landfill facilities, to accept solid waste originating within and without the County; and WHEREAS, County filed a Petition for Bankruptcy on December 6, 1994, and as part of its overall financial recovery has entered into a Comprehensive Settlement Agreement and a Joint Agreement (Supplement Settlement) with the Depositors in the County Treasury. Said Agreements are a part of County's Plan of Adjustment filed with the Bankruptcy Court, which provides, in part, for County to receive financial assistance through various means in order to achieve final resolution; and WHEREAS, County, in the identification and evaluation of its assets for the bankruptcy proceeding, has determined that its Solid Waste Management System ("System") could provide a viable means of raising necessary revenue over a period of years by the sale and transfer of its assets and liabilities; and WHEREAS, the Cities of Orange County have recommended that County transfer the Solid Waste Management System to a new, independent public agency to be governed by representatives of the Cities so as to insure local control over budgeting and rate setting; and SUMMARY OF DRAFT PROPOSED MEMORANDUM OF.UNDERSTANDING ("MOU") (TERM SHEET) BETWEEN THE COUNTY SANITATION DISTRICTS OF ORANGE COUNTY AND COUNTY OF ORANGE The Districts are required, by the terms of its Letter of Intent to the County, to purchase the Solid Waste Management System, and to submit a detailed "Term Sheet" setting forth all of the terms and conditions constituting the Districts' offer to purchase. The Term Sheet is due to the County before the end of February, and it is approximately 85% complete. The Ad Hoc Committee of the County Sanitation Districts' Boards of Directors, on January 31, 1996, approved the basis and most important terms and have passed it to the Joint Boards, with a recommendation to approve it at the Joint Boards Meeting of February 14, 1996. The following is a summary of the Memorandum of Understanding provisions: Numerous recitals to fully set forth all of the underlying facts surrounding the reasons for pursuing this project. Pledge to create a new Sanitation District, governed by one elected official from 28 Cities (Costa Mesa, Garden Grove and Westminster excluded), 4 Sanitary Districts, and the County Board of Supervisors. Regulatory Permits from South Coast Air Quality Management District, California Integrated Waste Management Board and others to be transferred to District. Obtain LAFCO approval of a new District. District will acquire all assets of the County Integrated Waste Management Department. All real property interests. All personal property interests, including equipment, materials, machinery, supplies, furniture and fixtures. All liquid assets, including bank deposits, investments, notes and accounts receivables. This includes all cash reserves held by County. 2000-00031 24289_1 District will assume all liabilities, express and contingent, of the County Integrated Waste Management Department as of the date of the MOU, , including environmental monitoring and clean-up of closed landfill sites. County will assign and District will assume all outstanding, legally- enforceable contracts. General administrative support services of other County agencies/departments will be evaluated and assumed at the sole discretion of District. All management and operations of the entire system will be done by District. District will accept transfer of County's Integrated Waste Management Department personnel solely as determined by District. Each employee of the IWMD will be evaluated on the basis of need for the position and qualifications of the individual. District will honor the host city (Brea, Irvine and San Juan Capistrano) MOU's. District will take over all AB 939 responsibilities. The MOU is contingent upon having flow control agreements with Cities for 90% of the flow. Payment of $300 million cash to County on the basis of $15 million per year for 20 years. Closing for the acquisition is set for June 30, 1996 or 60 days after approval of the MOU by County, whichever is later. 2 f LIST OF EXHIBITS FOR MEMORANDUM OF UNDERSTANDING EXHIBIT"A" "' EXHIBIT "B" -EXHIBIT "C" ~ EXHIBIT "D" -EXHIBIT "E" EXHIBIT"F" · EXHIBIT "G" EXHIBIT "H" EXHIBIT "I'' Identification of 26 landfill sites. Audited list of all personal property. Audited list of all liquid assets. Audited list of all liabilities, express and contingent, to be assumed by Distrid. · Audited list of all contrads in full force and effed. List of current service provided to IWMD by other County agencies and department. Five-year financial projections of revenues and expenditures. Discounted income approach methodology re purchase price payment. Reports of Distrid's financial advisors re funding the acquisition. NOW, THEREFORE, the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That these Districts hereby request, pursuant to Health and Safety Code Section 4710, that the Orange County Board of Supervisors file a resolution of application with LAFCO initiating proceedings for the formation of County Sanitation District No. 99. Section 2: That these Districts each hereby consent to the inclusion of their respective Districts within the district to be formed, and request approval of the proposed formation of County Sanitation Distrid No. 99 by LAFCO. Sedion 3: That the General Manager, General Counsel, and their designees of the County Sanitation Districts are hereby authorized and directed to assist and cooperate with the County and LAFCO in the formation of County Sanitation District No. 99 as soon as possible, and to take all further necessary appropriate actions to obtain the approval of LAFCO and the formation of county Sanitation District No. 99. PASSED AND ADOPTED at a regular meeting held--------' 1996. J:\WPDOC\BS\RES\RES96\96-15 RESOLUTION NO. 96-15 DIRECTING THAT THE ORANGE COUNTY BOARD OF SUPERVISORS BE REQUESTED TO FILE A RESOLUTION OF APPLICATION WITH THE ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION INITIATING PROCEEDINGS RELATIVE TO PROPOSED FORMATION OF COUNTY SANITATION DISTRICT NO. 99 FOR ACQUISITION. MAINTENANCE. AND OPERATION OF A LANDFILL AND REFUSE DISPOSAL SYSTEM A JOINT RESOLUTION OF THE BOARDS OF· DIRECTORS OF COUNTY SANITATION DISTRICTS NOS.1, 2, 3, 5, 6, 7, 11, 13AND14 OF ORANGE COUNTY, CALIFORNIA DIRECTING THAT THE ORANGE COUNTY BOARD OF SUPERVISORS BE REQUESTED TO FILE A RESOLUTION OF APPLICATION WITH THE ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION INITIATING REVIEW PROCEEDINGS RELATIVE TO PROPOSED FORMATION OF COUNTY SANITATION DISTRICT NO. 99 FOR ACQUISITION, MAINTENANCE, AND OPERATION OF A LANDFILL AND REFUSE DISPOSAL SYSTEM ******************** WHEREAS, the County Sanitation Districts of Orange County, California and the County of Orange have entered into negotiations for the purchase, sale and transfer of County landfill operations; and, WHEREAS, the Boards of Directors of the County Sanitation Districts of Orange County, California have considered the feasibility of a new county-wide Sanitation District, which would be empowered to acquire, operate and maintain a county-wide, locally controlled refuse disposal system; and, WHEREAS, California health and Safety Code Section 4710 provides, in pertinent part, that formation of a County Sanitation District shall be initiated pursuant to resolution of the Board of Supervisors of Orange County, California; and, WHEREAS, California Government Code Sections 56000 et seq. provide, in pertinent part, that the Orange County Local Agency Formation Commission C'LAFCO") shall have the opportunity to review and approve or disapprove the proposed formation of a special district prior to LAFCO's initiation of further proceedings necessary to accomplish the formation of said special district. Plan for providing ••rvic•• •Wmitted with reaolution of application Proposal made by petition1 petition contents ·. 56653. (a) Whenever a local agency submits a resolution of application for a change of organization or reorganization pursuant to this part, the local agency shall submit with the resolution of application a plan for providing services within the .affected territory. (b) The plan for providing services shall include all of the following information and any additional information required by the cormnission or the executive officer: (1) An enumeration and description of the services to be extended to the affected territory. (2) The level and range of those ·services. (3) An indication of when those services can feasibly be extended to the affected territory. (4) An indication of any improvement or upgrading of structures, roads, sewer or water facilities, or other conditions the local agency would impose or requir.e .withi~ the affected territory if the change of .; . organization or reorganization is .completed. (5) Information with respect to how .those services will be financed. 56654. (Repealed by Stats. 1989, Ch. 323.) 56655. (Repealed by Stats. 1989, Ch. 323.) CBAPTBR 2. PORM, PXLING, ARD CBRTXPXCATXOH OP PBTXTXOH 56700. A proposal for a change of organization or a reorganization may be made by petition. The petition shall do all of the following: (a) State that the proposal is made pursuant to this part. (b) State the nature of the proposal and list all proposed changes of organization. (c) Set forth a description of the boundaries of the affected territory accompanied by a map showing the boundaries. ·:.·. (d) Set forth any proposed terms and -:t ~ conditions. ~ (e) State the reason or reasons for the proposal. 4 (f) State whether the petition is signed bY .. 'l«D registered voters or owners of land. ..:·- ( g) Designate not to exceed three persons chief petitioners, setting forth their names -82 - Pactors to he considered in review of proposal r ~ ,.. 0 ' • • r ,,_~ • • • • ..,_ • •r ~ incorporation of substantially the same territory shall be initiated for one year. In the absence of a resolution of objection from a city or county, the commission may approve the proposal only if it imposes as a condition thereto that the newly incorporated city may not adopt any regulation or policy which would have a negative fiscal impact on any contract existing at the time of the incorporation which is related to the publicly owned land. This section shall not preclude the completion of proceedings to incor.porate territory which is the subject of incorporation proceedings filed with the executive officer of the commission prior to February 15, 1986. 1 (Added by Stats. 1986, Ch. 248.) 56841. Factors to be considered in the review of a proposal shall include, but not be limited to, all of the following: (a} Population, population density; land area and land use; per capita assessed valuation; topography, natural boundaries, and drainage basins; proximity to other populated areas; the likelihood of significant growth in the area, and in adjacent incorporated and unincorporated areas, during the next 10 years. (b} Need for organized community services; the present cost and adequacy of governmental services and controls in the area; probable future needs for those services and controls; probable effect of the proposed incorporation, formation, annexation, or exclusion and of alternative courses of action on the cost and adequacy of services and controls in the area and adjacent areas. "Services," as used in this subdivision, refers to governmental services whether or not the services are services which would be provided by local agencies subject to this division, and includes the public facilities necessary to provide those services. (c} The effect of the proposed action and of alternative actions, on adjacent areas, on mutual social and economic interests, and on the local governmental structure of the county. (d) The conformity of both the proposal and its anticipated effects with both the adopted commission policies on providing planned, orderly, efficient patterns of urban -104 I , . I I development, and the policies and priorities set forth in Section 56377. (e) The effect of the proposal on maintaining the physical and economic integrity of agricultural lands, as defined by Section 56016. (f) The definiteness and certainty of the boundaries of the territory, the nonconformance of proposed boundaries with lines of assessment or ownership, the creation of islands or corridors of unincorporated territory, and other similar matters affecting the proposed boundaries. (g) Consistency with city or county general and specific plans. (h) The sphere of influence of any local agency which may be applicable to the proposal being reviewed. {i) The comments of any affected local agency. :: ' •I .i . .. :a ·; ~ ii j 1. • f CORTESE-KNOX LOCAL GOVERNMENT REORGANIZATION ACT GUIDE TO PROCEDURES The procedures listed below follow those reQuired by State law, Government Code Sections 56000, et seQ., and include several steps reQuired by the California Environmental Quality Act <CEQA) and the Revenue and Taxation Code (Sections 99 and 99.1 ). APPiication Procedures for Initiation of Cpmmission Proceedings 1 . Proponent reviews proposal with the LAFCO Executive Officer. 2. Proponent prepares application material for proposal. If the proponent is to be the lead agency for CEOA, an enviionmental review is conducted and one of the following determinations is made: A. The project is exempt and a Notice of Exemption is prepared. 8. The initial study completed and a Negative Declaration filed. Consult with Executive Officer in the process. C. The initial study is completed and the EIR is prepared. Consult with Executive Officer .in the process. 3. Proponent at least 20 days prior gives mailed notice of intention to adopt a resolution of application to each •interested" (Section 56047.5) and •subject• (Section 56077) agency, unless 100% consent. The notice must generally describe the proposal and territory <Section 56800(b). This notice may be combined with the notice of environmental review consultation. Proponent obtains registered voter count from El~ctions off ice as of date of initiation to determine whether proposal is uninhabited (less than 12 registered voters) or inhabited. An alternative process is for this notice to be provided by LAFCo. Initiation of Commission Proceedings 4. Proponent prepares and city adopts a resolution of application by the affected agency; or if initiated by petition, proponent circulates proper petition for the reQuired signatures. Proper resolution and petitions must include: A. A statement that the proposal is made pursuant to this part. 8. The nature of the proposal and a list of all proposed changes of organization. C. A map and description of the boundaries of the affected territory. D. Any proposed terms and conditions. E. The reason for the proposal. F. An indication of whether it is signed by registered voters or owners of land (petition onlyJ. -199 - .. i "' =I ... ~ :\ '! : , ~ I t 'i G. Designation of three chief petitioners and their addresses. H. A statement as to whether or not the proposal is consistent with the affected citv or district sphere of influence. J. A request that proceedings be taken pursuant to this part. 5. Proponent delivers to the Executive Officer a complete application, including the application questionnaire, resolution or petition, environmental document CCEQA), map and description of affected area, applicable fees, agency service plan, and any other information required (Section 56652). Commission Proceedings 6. Executive Officer determines if: A. The petition is sufficient as required by law and issues a determination on its sufficiency within 10 days of petition submittal, if the proposal is by petition. 8. LAFCO is to be the lead agency. If it is, the environmental review process in No. 2 must be followed. C. Master property tax agreements are applicable or if separate property tax exchange resolutions are needed. If needed, or if an incorporation or formation is proposed. notice is sent to the County Assessor and Auditor for property tax information. Refer to Revenue and Taxation Code Sections 99 and 99.1 (Section 56706). D. A notice to interested and subject agencies has been sent by initiating agency (see step 3), or 100% consent has been given. If not, the Executive Officer must give such notice at ieast 20 days before issuing a certificate of filing (Section 56828(b). 7. The Executive Officer reviews the proposal and within 30 days of receipt either: -· A. Determines that the application is complete and that all property tax agreements .. ...are on file and issues certificate of filing, setting the Commission hearing within 90 days. 8. Determines that the application is not complete and notifies the proponent (Section 56828). 8. The Executive Officer reQuests review of any information for the proposal from affected county departments, affected agencies, and other affected counties' LAFCOs (Section 56738>. 9. The Executive Officer, at least 15 days prior to date s~t for hearing, gives notice by: · A. Publication in a newspaper of general circulation. 8. Posting near the door of hearing room. -200 - C. Mailing to each affected agency which contains territory or whose sphere of influence contains territory within the proposal, chief petitioner, persons reQuesting notice, each city within 3 miles, ind the county in the case of incorporation or formation. Note: Some Commission actions can be made without notice and hearing, such as annexations and detachments with written consent of all landowners. Notice and opponunity to request public hearing must be given to agencies whose boundaries are affected (Sections 56834, 56835). 10. The Executive Officer reviews the application and any comments received and prepares the wrinen repon and recommendation. The report reviews peninent factors and policies. sphere of influence, and general and specific plans. 1 1 • The E>tecutive Officer mails the report at least five days prior to the hearing to each Commissioner, each person named in the application to receive a report, each affected local agency reQuesting a repon, each agency whose boundaries or sphere of infiuence will be changed, and the Executive Officer of any other affected county (Section 56833). 12. The Commission hears the proposal on the noticed date and time. The hearing may be continued for up to 70 days. The Commission must consider a number of factors and policies in compliance with State law. Actions to be taken include: A. Approve or deny with or without conditions or revisions to the proposal. If denied, no new proposal can be made for one year. 8. Determine the exchange of property tax for incorporation or formation. C. Determine if the territory is inhabited or uninhabited (Section 56046). D. Designate the conducting authority. E. Assign a shon-term designation. F. Authorize proceedings without notice, hearing, or an election, if there is 100% consent (Sections 56375, 56852). 1 3. The Commission may waive the conducting authority proceedings and order the change of organization or reorganization if all of the following criteria are met: A. The area is uninhabited (less than 12 registered voters) B. The change has consent ·of all landowners C. All annexing agencies have consented to the waiver The conducting authority steps (step 15 • 18) are then bypassed. The executive officer then requests from the proponent the necessary State Board fees and evidence of compliance with any conditions in the Commission Resolution, and proceeds to step , 9. -201 - i· . J. ,. li I!. F. ~ ~ R ft 11 d ii i "' ,. ~J ~· .. 14. The Executive Officer sends the Commission resolution by cenified mail to the chief petitioners, each agency whose boundaries will be changed, •nd to the conducting - authority (Section 56853). Condueting Authority Proceedings fgr Changes pf Organizatign gr Reorganization 15. The clerk of conducting authority sets the proposal for hearing within 35 days of the Commission's resolution date and gives notice. If •uthorized by the Commission, the conducting authority may approve the proposal without notice and hearing. Notice must be given by the clerk at least 15 days prior to hearing date, and shall include: A. Publication in a newspaper of general circulation. B. Posting near the hearing room door. C. Mailing to each affected agency which contains territory or whose sphere of influence contains territory within the proposal, the Executive Officer, chief . petitioners, and persons requesting notice (Sections 57002, 57025, 57026). D. In the case of a proposed annexation to a city of affected territory consisting of 75 acres or less. that city shall mail to each landowner within the affected territory notice of the conducting authority hearing on the proposed annexation <Section 56161 ). 16. The conducting authority hears the proposal at the noticed time and date.• The hearing may be continued up to 60 days. Any written protests must be filed prior to the conclusion of hearing with the clerk and must be signed, have the signature date, and address or location of the propeny. The value of written protests must be determined <Section 57050). • Exceptions would be where a timely reQuest for LAFCo reconsideration has been filed. Notice of any reQuest will be given by the Executive Officer to the conducting authority. 1 7. The conductin_a.authority shall adopt a resolution doing one of the following: A. Ordering the change if the area is uninhabited and if no majority land value protest -is received: or if it is inhabited and less than 25% .voter or landowner protest is received. B. Ordering the change subject to election if the land is inhabited and 25 % to 50% . of the registered voters or landowners protest. A resolution calling for an election on the question is adopted and forwarded to the Elections Clerk and Executive Officer. · If the conducting authority has called for an election, the Executive Officer shall prepare an impanial analysis on the question for Commission approval. If it is approved by the voters, within 30 days of the canvass of returns of the election a resolutiQn ordering the change is adopted; if it is denied,. a resolution ordering the change to be terminated is adopted. C. Terminating proceedings if a wrinen protest is received from landowners having a majority of the land value in uninhabited territory; or from registered voters in inhabited territory. -202 - A city detachment or district annexation may be terminated by the conducting authority. If a proposal is terminated, 1 new proposal must wait one year (Section 57075, 57100). Conducting authority proceedings and resolutions for changes of organization other* than annexations and detachments may. vary from the procedures described above. The applicable sections of law for the conducting authority should be consulted. Completion and EffeeJive pate pf Change pf Organization pr Reorganization 1 B. The Clerk of conducting authority shall immediately file a certified copy of the conducting authority resolution approving, denying, or calling for election with the Executive Officer. If the proposal is approved, the clerk must also submit fees for State Board of EQualization with LAFCO, along with any evidence necessary for assuring compliance with the Commission resolution (Sections 57200, 54902.5). 19. The Executive Officer shall within 30 days of receiving the conducting authority resolution determine compliance with the Commission resolution. If it is in compliance, the Executive Officer issues a cenificate of completion which completes the proceedings. If it is not in compliance, the conducting authority and applicant are notified of noncompliance. The cenificate is recorded with the County Recorder. If no effective date is specified in the Commission resolution, the recordation date is the effective date. A statement of boundary change or creation is issued by the Executive Officer and filed with appropriate fees with the State Board of Equalization, County Auditor, and County Assessor. The State Board is the clearinghouse for State offices for City boundary changes. Propeny tax resolutions, if any, are forwarded to County Auditor for property tax transfer (Section 57200). Note: If the Commission has waived the conducting authority proceedings in Step • 13, the Executive Officer may be advised to either not issue a C~nificate of Completion until completion of the 30 days following Commission action to provide for any requests for reconsideration under Section 56857, or provide for an effective date 30 days after Commission approval. 20. The Executive Officer gives the notice of completion and effective date to the conducting authority, agencies whose boundaries are affected, affected county departments. and proponent. 2 1 . The affected agencies recognize completion of the jurisdictional change: propeny and sales tax transfers, police and fire protection responsibilities, planning and inspection controls, etc. 1 /94 (Revised) -203 - SEE SECTION 57007. It i I • t .. ·1L ,. !:! ~ .}~:. City Manager's Working Group Waste Management System Meeting Minutes January 10, 1996 The meeting of the City Managers' Working Group (CMWG) was convened at 1 :30 p.m. by Frank Benest, Brea City Manager and Chair of the CMWG. The purpose of the CMWG meetings is to discuss city issues regarding the Orange County Landfill System. Topics for the January 10, 1996 meeting included: city manager and hauler concerns regarding flow control; model flow control language for amending city franchise agreements; information on the January 11 , 1996 County Sanitation Districts of Orange County (CSDOC) presentation to the Orange County Division of the League of California Cities; and public policy input into the management and operations of the landfill system in the event it is sold to private interests. Representatives of the CSDOC and the Orange County Integrated Waste Management Department (EMA/IWMD) were present to provide input and respond to questions. Attendees: Blake Anderson Frank Benest Rick Bishop Sue Gordon Les Jones Dan Keen Pat Mccarron Don Mcintyre Ken Montgomery Kevin Murphy David E. Niederhaus Don Noble Doris Roush Vicki Wilson Tom Wood Tom Woodruff CS DOC City of Brea Orange County League of Cities EMA/IWMD · City of Huntington Beach City of La Palma City of Brea CS DOC City of Laguna Niguel City of Newport Beach City of Newport Beach City of Huntington Beach City of Anaheim EMA/IWMD City of Anaheim General Counsel, CSDOC I. Review of Minutes of the December 19, 1995 CMWG Meeting Minutes of the December 19, 1995 meeting were approved as written. II. FLOW CONTROL A. City Manager Concerns Flow control, the commitment of city non-recyclable solid waste to the landfill system, is vital for CSDOC in order to issue debt to purchase the system· and to fund capital improvement projects. Some cities already hav.e the ability to City Managers Working Group Minutes of January 10, 1996 Page 2 direct the flow of waste through their contracts with refuse haulers. Other cities would have to reopen their contracts or wait until the contracts expire to include flow control authority. Nevertheless, whenever that occurs, cities can choose where to direct the waste. If cities agree to commit their non-recyclable solid waste to the Orange County system, there must be benefits afforded them such as: assured long-term landfill system capacity, competitively priced gate fees, CERCLA (Superfund) indemnification, and strong local control over governance of the system. The term of theCSDOC Disposal Commitment Agreement (discussed on page 3) would match the term of the bond to purchase the system, approximately 25 to 30 years. City waste commitments would enable CSDOC to issue debt to realize greater cost efficiencies. 8. Hauler Concerns Haulers also have interests regarding the Orange County Landfill System. Their interests, however, would be articulated at the point when the city contract with the hauler is amended. As a result of reopening contracts, haulers could possibly bring forward other issues in addition to flow control. CSDOC counsel, Tom Woodruff, explained that the proposed language in the draft Disposal Commitment Agreement (discussed below) allows cities the flexibility to amend, revise, or revoke their contracts at the earliest practicable time which could be when the contract. expires. C. Model Flow Control Language for City Franchise Agreements Tom Woodruff, General Counsel for CSDOC, passed out draft language for a Disposal Commitment Agreement between each city and the CSDOC. The draft agreement is designed to be short, basic and easily understood. The agreement does not construct a detailed contractual relationship between the parties because each city will be a partner in the governance of the newly formed solid waste Sanitation District 99, making such details unnecessary. There will be benefit to the cities in forming and joining the new District 99. In exchange for agreement to deliver 100 percent of non-recyclable waste to the landfill system, cities will participate in the governance of the system, and the CSDOC commits to provide long-term disposal capacity. It is also expected that cities will agree to exercise the power and authority of municipal government to supplement, where appropriate, the CSDOC' s statutory ability to regulate. The District would be a separate legal entity; cities would be indemnified against any District loss, damage, expense, liability, or solely for being a member of the governing board. Cities would also have CERCLA (Superfund) indemnification. A copy of the draft agreement will be sent to all city managers at the reque~t of the CMWG. City Managers Working Group Minutes of January 10, 1996 Page 3 The following are various time frames concerning the purcf'.lase of the system: • January 24. 1996 -The CSDOC Board of Directors will consider the draft term sheet for purchase of the system. • Februarv 14, 1996 -City comments regarding the Waste Commitment Agreement are to be submitted to CSDOC. • February 14. 1 996 -The CSDOC Board of Directors will consider the final term sheet for purchase of the system. • February 18. 1996 -Negotiations for purchase of the system conclude. After February 18, 1996, CSDOC will be more certain of a firm date for . finalizing agreements; meanwhile, cities will be briefed on the draft agreement. If the County accepts CS DOC' s offer to purchase the system, it would be conditional upon commitment of 90% of the non-recyclable waste and completion of due diligence of the closed dump sites in the County. Upon County acceptance of the offer, the 60 day time frame begins to resolve term sheet and other issues. The LAFCO process for creation of District 99 would be winding down at that time. Pending no unexpected issues arising, CSDOC expects District 99 to be organized between July 1, and October 1, 1996. There was concern among some cities as to the economics of the system purchase and its value to the cities given debt service, a current gate fee of $35.00 per ton, and unknown liability of the 21 closed dump sites. CSDOC expects the value of the system to be based upon how quickly the gate fee can be lowered but that until the term sheet is approved, it is premature to discuss how much it will be lowered and what potential inflationary increases would be. Emphasis was on moving quickly with the process to constrain costs, identifying and resolving any issues, and getting city agreement. Ill. Other City Issues Regarding the Sanitation Districts Proposal to Acquire the Landfill System The issue of public education regarding the sale of the systeni was presented. Citizens have been asking questions about why the CSDOC is purchasing the system. By purchasing the system, money will be generated towards bankruptcy recovery. The quicker the County moves out of bankruptcy, the quicker cities will regain the funds they lost. By selling to private interests, cities would have less control over the system which could· result in increased disposal costs to its citizen~. City Managers Working Group Minutes of January 10, 1996 Page 4 Discussion then moved to how large a role cities would play in the new solid waste sanitation district. It was suggested that more votes be given to larger cities since they generate more waste. Under existing law, each member city is allowed one vote, with the exception of those 3 cities who are also part of sanitary districts. It was suggested that cities generating large amounts of refuse and those that host landfill facilities be represented on the new District 99 Executive Board. The current CSDOC Board, though large, has been successful in responding to the interests of both large and small cities' interests by resolving differences in committee prior to being brought to a vote before the full Board. Other topics addressed were system capacity, system efficiencies realized as a result of city/CSDOC partnership, and alternatives to disposal. Northern Orange County cities utilize the Olinda/Olinda Alpha Landfill (0/0A) which is planned to close in 2013 as per the Memorandum of Understanding (MOU) between the city of Brea and the County. At issue is the increased cost realized by the system and cities when O/OA closes before its capacity is fully utilized. If O/OA is closed in 2013, north county citizens will bear the increased costs of hauling refuse longer distances for disposal. As partners in the new district, the cities and CSDOC can negotiate to resolve differences, including any closure or capacity issues, and seize opportunities to improve the system. CSDOC currently has a good working relationship with Fountain Valley and Huntington Beach and expects the same level of cooperative relationships with member cities of the new district. Cities want to be assured of long term disposal capacity and expect CSDOC to review options and take whatever action is required to support that goal. If needed, other alternatives will be explored, such as landbanking or railhauling, to provide long-term capacity at competitive prices. According to Vicki Wilson, Director of EMA/IWMD, the Orange County Landfill System has over 50 years combined regional capacity. The use of alternative daily cover (ADC) is another option that could help realize cost-efficiencies. EMA/IWMD is currently planning to implement a demonstration project using shredded green waste as ADC to assist cities and the County to meet AB 939 mandates. Also, geosynthetic blankets are another type of ADC that will be used to reduce costs and save landfill capacity. Vicki Wilson handed out a pie chart that portrays the value of the gate fee. The gate fee is a good value to citizens as it purchases a regional landfill· system with a regional disposal capacity in excess of 50 years, closed site monitoring -. City Managers Working Group Minutes of January 10, 1996 Page 5 and remediation, an environmental fund for liability management, a Household Hazardous Materials Collection Program, financial assurance for landfill closure, state surcharge,and debt servicing. This distribution of the gate fee assures cities that both active and closed sites are managed in the most cost-effective and environmentally sound manner as possible. As an example, an expert review of closed landfill sites has found that due to the diligent and proactive environmental monitoring and maintenance conducted by EMA/IWMD, potential liability of the system has been minimized. Additionally, EMA/IWMD staff have returned to the 1996/97 budget to make another round of substantial cuts with the goal of making the gate fee more competitive. The results of this budget review will be made public soon. IV. January 11, 1996 CSDOC Presentation to the Orange County Division of the League of California Cities Membership Meeting. CSDOC' s presentation to the Orange County Division of the League of California Cities membership meeting will include three speakers. Frank Benest will identify the city issues; and Ron Hoesterey, Chair of the Orange County Waste Management Commission and Local Task Force (WMC/L TF), will address issues from a WMC/L TF perspective; and John Cox, Chairman of CSDOC Governing Board, will talk about the major points of the proposal: • Maintaining environmental and regulatory compliance; • Becoming and maintaining a cost-effective system; • Utilizing innovative long-term solutions. V. Public Policy Input if the Landfill System is Sold to Private Interests Some cities expressed concern regarding their ability to provide public input into the management of the landfill system if it is sold to a private company. Any bid specifications for private sale should provide that contract language require public policy input, such as participation on an advisory board. Santa Clara County has ensured public input through its flow control and being the Local Enforcement Agency. Liability was another concern of the cities. It has been observed that if the system was purchased by the private sector, it could be split into two corporations; one corporation for active landfills, the other for closed landfills. Closed sites don't generate income, so if any closed site required expensive remediation, the corporation could declare bankruptcy ,.leaving the cities and the county with the liability. If the system were purchased by the private sector, cities could also take their refuse where prices were more competitive such as City Managers Working ~roup Minutes of January 10, 1996 Page 6 the La Paz Landfill in Arizona. Huntington Beach suggested writing a position paper evaluating 4 alternatives: selling the system to the CSDOC; selling the system to the private sector; using an alternative landfill system; and finally, maintaining the status quo. Some cities wondered if the County intended to sell the system as a whole or landfill by landfill. Vicki Wilson, Director of EMA/IWMD, emphasized that the system was inten~ed to be sold as a whole, both assets and liabilities. VI. Other Issues CSDOC representative were asked questions about any plans to use the landfills to dispose of CSDOC bio-solids. CSDOC recycles most bio-solids generated, and is considering pumping them via a pipeline to the Central Valley, as a cost- effective measure. VI. Follow-Up • The presentation to elected officials at the League of California City meeting is on January 11, 1996. • CSDOC will send draft Disposal Commitment Agreements to city managers and city managers will review it with counsel. • Vicki Wilson announced that the WMC Finance Committee will be meeting in approximately 2 weeks to discuss the 1996/97 budget and reduction of the gate fee. ~-. . . -· ,/ 1 \ • '-~ CITY MANAGERS WORKING GROUP WASTE MANAGEMENT SYSTEM MEETING Meeting Minutes January 29, 1996 The City Managers Working Group (CMWG) was convened at 2:10 p.m. by Frank Benest, Brea City Manager and Chair of the CMWG. The purpose of CMWG meetings is to discuss city issues regarding the Orange County Landfill System. Topics for the January 29, 1996, meeting included a status report on negotiations between the County and the County Sanitation Districts of Orange County (CSDOC) regarding acquisition of the landfill system, a review of CSDOC's draft flow control agreement, and discussion of a potential sale of the system to the private sector. The Chairman indicated that additional meetings could be called if deemed necessary, but none were planned at the present time. I. Status of Negotiations with County Sanitation Districts of Orange County Don Mcintyre, Director of CSDOC, and Blake Anderson, COO of CSDOC, reported on individual meetings with the County's CEO and members of the Board of Supervisors to discuss in a preliminary way, the terms, conditions and purchase price they anticipate offering to acquire the system. While the Supervisors expressed support in general for the CSDOC acquisition, they also had concerns over the price being considered. The District and the CEO jointly agreed not to make public their independent evaluations of the system's worth at this time. The CSDOC team believes that the Supervisors may be overly optimistic about the prospects for obtaining a higher price for the system from other potential buyers. The Districts are preparing their purchase offer and term sheet, working with staff on the LAFCO application, and making regional presentations to cities on their proposal. CSDOC's Ad Hoc Committee regarding Landfill Issues will meet on January 31. II. Review of Flow Control Agreements 1036JG 1/31/96 CSDOC Counsel Tom Woodruff asked for City Managers' input on the draft flow control agreement, and the executive summary which were distributed to the cities. CS DOC needs agreements for 90 % of the waste in order complete the acquisition. Cities that do not presently have flow control can pledge to obtain it when they renegotiate their hauler agreements. City Managers offered the following comments: • • • • • • • • Agreements should include a term, perhaps tied to the tenure of the debt . Flow control should dedicate waste to the system not limited to OC landfills . To be effective, transfer station operators should agree to flow control. CERCLA indemnification includes future liability and a unified legal strategy . The executive summary should identify public ownership as the key issue . City governance means city control of rate setting and budgetary authority . CSDOC should emphasize that CSDOC can operate the landfills more cost- effectively than county can. CSDOC presentations and reports should convey that private ownership means loss of control of the landfill system. 1 A re-draft of the flow control agreement was requested to be sent to City Managers by February 7, 1996. City Managers indicated that they would bring the flow control agreements to their respective City Councils after the Term Sheet is available and CS DOC and the Orange County Board of Supervisors act on the offer. CSDOC Boards , will meet on February 14, 1996, to consider the purchase offer and Term Sheet that will be forwarded to the Orange County Board of Supervisors. The Board of Supervisors should consider the offer by its meeting of March 5, 1996. It was further suggested that the Executive Committee of the League of Cities consider a support position for the CSDOC acquisition at their meeting the end of February. Ill. Discussion of Sale to Private Sector The following points were brought out in the discussion: • The term privatization has more than one meaning. The difference between privatization of operations and private ownership should be clearly defined in all discussions and reports. • CSDOC should communicate its commitment for privatization of operations before submitting the Term Sheet to the County. CSDOC should include in its Term Sheet that upon assuming ownership of the Orange County landfill system CSDOC will issue an RFP to privatize any or all of its operations. This will help clarify to the decision-makers that CSDOC is serious about effecting a real change. • Cities should be aware that some members of the Orange County legislative delegation favor private ownership of one or all of the landfills to foster competition and can be expected to lobby the City Council Members. • Research should be conducted to determine the positive and negative experiences of cities where landfills have gone from public to private ownership. Recommended Actions: l036JG 1131196 1. 2. 3. 4. 5. 6. Frank Benest will provide an update at the League of Cities meeting. Tom Woodruff will provide a re-draft of the flow control agreement to City Managers by February 7, 1996, for the City Managers meeting .. The CSDOC Management Team will augment the Executive Summary to incorporate the reasons for continued public ownership and the benefits of CSDOC acquisition to the cities. The Executive Committee of the League of Cities should consider an endorsement of the CS DOC acquisition at their late February meeting. CSDOC and County staff should agree to the greatest extent possible on the assumptions and methodology of valuation of the system and their respective values of the system. County staff will conduct research to determine the experiences of cities where landfills have been acquired by private interests. 2 ,,i .. "VI. J ~ Attendees Blake Anderson Frank Benest Rick Bishop Teri Cable Sue Gordon Jan Goss Will Hayes Janet Huston Dan Joseph Don Mcintyre Ken Montgomery Jim Sankey George Scarborough Eileen Walsh Tom Woodruff 1036JG 1131/96 O.C. Sanitation District Brea 0.C. League of Cities Santa Ana IWMD IWMD Santa Ana O.C. League of Cities Mission Viejo 0. C. Sanitation District Laguna Niguel Huntington Beach San Juan Capistrano IWMD 0. C. Sanitation District 3 , . SUPPLEMENTAL AGENDA JOINT BOARDS OF DIRECTORS COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 ADJOURNED REGULAR MEETING FEBRUARY 14, 1996 -7:30 P.M. (7) ALL DISTRICTS (a) Consideration of motion to receive and file letter dated January 31, 1996, from Vicki Wilson of the Integrated Waste Management Department, County of Orange, regarding the proposed Resolution of Application to the Local Agency Formation Commission (LAFCO). (b) Consideration of motion to receive and file letter dated February 13, 1996, from Director Bob Zemel, requesting that the acquisition of the County of Orange Integrated Waste Management System be continued until the Joint Boards have had adequate time for analysis . (9) ALL DISTRICTS (a) Convene in closed session, if necessary (b) Consideration of motion authorizing consideration of Item (9)(b)(1) listed below which need came to the attention of the District subsequent to the posting of the agenda and which requires immediate action at this time pursuant to authority of Government Code Section 54954 .2(b)(2). (1) Confer with Special Counsel re status of litigation , S. Serrantino v . County Sanitation Districts of Orange County, Orange County Superior Court Case No. 737044 (Government Code Section 54956 .9(a). (c) Reconvene in regular session (d) Consideration of action , if any, on matters considered in closed session J :\WPDOC\BSIAG96\SA.02A -· ~:;;..--·----.;:: .... "..;:: ',. ,' 'l. ,-·~ -··.~-.:~-:·· I i ' ·~:~-. ,i -~ ..... . • ....'!: • ··!--___ _ February 13, 1996 Mr. Don Mcintyre General Manager CITY OF ANAHEIM. CAllFOR>.iV\ Office or the City Council County Sanitation Districts of Orange County p_ 0. Bo" 8127 Fountain Valley, CA 92728-8127 Dear Mcintyre: TOM 0At. V, Msyct l.OU LoPEZ. MSyot' Pro T8"' FRANK FEl..DHAUS , CounOI Mc:m:oct ISO!! ZZSl.CEL Council ~r -- 1l10MAS TAIT, Council ~t Thank you for the presentation today regarding the Orange County Landfill acquisition process. As we discussed, I will be unable to attend tomorrow night 's special meeting_ You advised that you will be presenting the "numbers" to the full Board and requesting that we vote at this meeting. In order to give the details the attention they deserve and to not jump to judgment on this very important issue, I am formally requesting that this item be continued until the full Board bas had adequate time for analysis. 3'.!J'a'd Thank you for your consideration. Sin~,~ /·~~ Bobzem;C/ Council Member 200 South Anaheim Boulevard. Anaheim, California 92805 (71 4) 254·5247 liilf1! Fax (714) 254-5164 v91S vs~ vll 'Ol ·~sw h,1J-m1a4eu'a' JO h,tJ •wo~~ £t •e 0 ss-vt -B3'.~ 1>~ Wtt:~ --J~Lr ~. . ping the dumps .:~~ mv~m~e cciliiit.Y~. ~~~ -~~"···ior privatimtlon bas ffi ·a1s ki grown as supervisors prepare to 0 Cl are ta ng a slash $40 mllllon from next year's look at aettinn out of budget, after a S20 mllllon cut this " ....... AO year. the landfill business. For four years, Gerald Trogdon bas climbed on a bulldmer to spread waste dumped at Riverside county 1andn11s. In another gilur years, he may not be doing it anymore -at least not for the county. Hundreds of jobs and mDllons of dollan are on tbe line as coumy olldals consider getting out of tbe dump business. After more tban a year of cUscusmon by county super- VisolS on turning over some gov- ernment services to the private sector to save money, this Is tbe 1llst operation ordered to study · whether lt makes sense. .. 1bere's deflnitely some aml- ety," said Trogdon, 31, of Hemet · "A year ago it was just a nunor, but now there's documentation going · before our Board of Supemsors. So this Is real." The theory beblnd farmlDg out government operations,,or prtvatl- mtlon, is that private 1lrms can do lt for less· money. Unllke govern- ment, the thinking goes, proflt- motlvated companies are more e11ldenl The private sector also Is not subJeci to publlc labor and contract laWs. ~Yin .. challenged 1be county already fanns out mUJlonsof dollars of work a year to Inns that audit books, ax comput- ms and build roads. But some supervisors are talking about shut- ting . down whole divisions and llvlDg to the private sector work now "done by county employees. Supervlson have talked about eontrac:tillg for building lnspec- Uons and veblcle maintenance. Tile county Is negotiating With a Inn to nm six county airports.. "Ifs going to bappeD; cbange Is imminent In Riverside County," said Supervisor Jobn Tavagllone, Who along with Supervisor Tom Mullen Is pushing privatization. The county's biggest employee union maintains that prtvatlzation Is an unproven cost-cutting strate- gy. A series of articles In the union newsletter argues that workers are being sacrUlced because of man- agement's mistakes and their bloated salaries. Union o:fllclals warn that government loses over- sight and puts public safety at risk when it fanns out work. Trogdon,:_or one, says the sav- ings associated With private COD· '' (Privatizati.on is) going to happen; change is imminent in Ri,verside Count:r.'' John Tavagllone County supervisor tracts are overrated. .. It's just like a salesman trying to sell you a car," Trogdon said. "They say they C:an do it cheaper, but when you get out the door ifs Just as much as when you started." Bob Nelson, head of the county's Waste Resources Management District, said he Is being open minded as he.and.his std gather data on whether it makes sense to farm out lancUlll operations. The report Is due March 19. .. rm not going tO lean one way or another until I get my stu1f togeth- er," Nelson said •. Be did say an all-out sale of -c county landfllls appears unlikely because of the expense in closing landfllls.· Experience nearby . One place Nelson wW look for• dues Is San Bernardino County, where the S::lervisors turnedY¥er Please see DUMP, Backpage Continued from A·l iand1lll operations to a private 8rm on Nov. 1, 1995. Orange County Is considering the sale of its land1Uls to a public sanitation cUstrict, while Los Angeles County owns and oper- ates about half of its landfllls. San Diego County colltracW out a por- tion of bs landfill operations. · In sm1 BemarcUno County, Nor- cal Waste Systea of San Francis- co said lt could do the job for Sll.1 mllllon less than san Bernardlno County. After Norcal's prott and the county's cost to ~.the con- tract, county o11lclals estimate the eounty ls saving S1 mllllon a year. : 1be san Bemardlno County Waste Management Department Wis shut down last year and ft-· named· tbe Waste System Division. Of ue ·employees. 14 remain to admtDlster the contract and keep 1lp with various regulatory permits. Norcal hired 26, other county agendes hired 49, one worker retired and 29 were put out of work. 1be county still owns the Jand- llls, controls the cash low and sets polldes covering dump operations. But Norcal I"UU the day-to-day show out of local omces. Norcal's contract. based on how much waste is dumped at landfllls, Is estimated at $25.6 mWlon tbis year. Nelson acknowledged 5an Ber· nardlno and Rlverslde.countles are comparable enough lnstze; popula- tion and waste generated to make meaningful comparisons on poten- tial savinp. But Ne1son noted $1.7 mlDlon of San Bernardino County'~ prQjeded savings comes from delaying con- struction. Preaurea to privatize · · San Bernardino County dtles protested that savtnp from the Norcal deal aren't being reinvest- ed In the waste SJStem to reduce dumplog fees and encourage baul- en to reduce their customers• bllls. · ID Rlvendde County, where dty residents produce about 70 percent of the waste going to landtllls, the same concerm could arise. DMmping landfills Some of the same conditions tbat drove San Bernardino County to privatize Its dumps also are bur- dening Riverside and other urban counties. Federal laws enacted ln the past ave years to protect groundwater from decomposing waste have driven up costs. At the same time, state recycling laws have trimmed the trash reacblng landfllls, there- by cutting Into the revenue needed to pay for Improvements and cover liabWties. Riverside County is studying whether to sell portions of itS waste management system to a private ftnn, or contract out some of the work. In San Bernardino County, officials expect to free up SI million by paying a private firm to run landfills anc other parts of the system. At 'flrst, Riverside and other counties increased dumping fees to raise revenue. But dties started negotiating with haulers to take trash wherever It could be dis- posed of most inexpensively. In response, many Southern cat- lfomia counties, including River- side and San Bernardino, bave reduced their dumping fees in the past year to stay competitive. .. There's no reason for us to operate the dumps," Supervisor Mullen said ... Our role should be to ensure integrity of dumps, to pro- tect the groundwater. Other than that, I don't know what role gov- ernment bas any longer in that busines." But before contracting for land- fill operations, Riverside County supervisors said they want some sign of potential savtnp. ·Trogdon said ;tt~VIE -good that . . San Bernardino County Waste Management Landfills: 21 open, 23 dosed Annual volume: 1.39 million tons of waste county cost estimate ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• $34.2 million Contract With Norcal/5an Bemardino ....................................... 25.6 mtHlon Estimated savings ••••••••••••••••••••••••••••••••••••••••• ·-······················ 8.6 mUUor County contract administration cost ........................................ ( t.6 million· Available for general fund.~...................................................... $ 7 .O mfflior *Savings indudes $1.7 miUion in deferred construction. Effect on county employees September 1995 ••••••••••••••••••• ••• 119 Current ••••••••••••••••••••••••••••••••.•••• ~ Laid off•• .•••••••••••••••••••••••••••••... 105 ••Includes: 49 reassigned to other county county jobs. 26 hired by Norca!, 29 not hi by Norcat or reassigned. 1 retirement. Riverside County Waste Management Landfills: 11 open, 27 Closed. 1 privately run Annual volume: 1.25 million tons Employees: 196 Annual budget: $49 mtllion S1•rcea: Rtt1rsti1 Cea•ty Waite RHIUCH Mautlllnt District, Sa ....... Cl A'ml1l1trat111 otftc1 ••• SH ltnarflH C1nty Waat1 Spbm Dtwtsm that supervisors are asking for evidence. But he said any proof would be hard to swallow if it costs him his job. The Preas-Enr "We're all people and tJ chines are all tbe same.·· T said of private firms. "The do it anv hPrtPr th$1n wo ~ ~-i/ u'-1 ~ar~b' .'---/11~~ 4;-r~ .:211v If~ The News Pipeline " . Co~nty Sanitati~n Districts of Orange County . _ Protecting the Pubhc Health and Environment Through Excellence in Wastewater Systems" Volume 3, No. 3 Don Mcintyre's Quarterly Report to Management General Manager Don Mcintyre held his second Quarterly Report to Management last week and met twice with managers, supervisors and professional staff to discuss several important issues facing the Districts. The following is a brief overview of the main topics of those meetings. Privatization Don began by emphasizing that there are no current plans to privatize the Districts, and that if he had given that impression at earlier meetings, he wanted to clear up that misconception. He stressed that the agency was already operating very efficiently, and that while he felt there was still room for improvement and cost reductions, we are already among the most cost-effective wastewater management agencies in California and the nation. He pointed out, however, that the existing political environment in California demands that we pay attention to how state issues affect us locally. Specifically, AB 2109, written by Assembly Speaker Curt Pringle of Garden Grove and published last week, seeks consolidation of all sewer and water districts in Orange County into one large agency. Our movement toward consolidating the nine districts into one district, which began last fall, is one example of how we are taking proactive measures to address such concerns about government efficiency. Don went on to speak about the increased scrutiny being placed on public agencies and financial managers since the bankruptcy. A recent visit by the 1996 Orange County Grand Jury was indicative of the need to improve external communications and educate community leaders about our programs and mission. Many people today are suspicious, even hostile about government, and we need to be aware of how we can help stem this tide of distrust. He concluded his introductory remarks by thanking the managers and supervisors for helping keep our second quarter benchmark numbers for "cost per million gallons treated" at $556, well below the FY 95-96 budget target of $599. He said that he expected the final fiscal-year numbers to be around $570. 1 February 14, 1996 Landfill Acquisition Update Don announced that the Ad Hoc Committee on Landfill Acquisition will be making a recommendation to the Joint Boards at their special meeting tonight to approve the transfer of ownership and operation of the Orange County landfill system from the county to the Districts, and that a new sanitation district (No. 99) be created. The Ad Hoc Committee will also recommend that the Board approve an offer of $300 million, paid over 20 years to acquire the landfill system. The funds for th~ acquisition would come from a capital financing program that would be secured by revenues generated by the waste management system. No CSDOC funds would be used in acquiring the system. Don cited several reasons why transferring the landfill system was a good idea. First, it would help the county recover from the bankruptcy and stabilize the waste management system assets under one agency. Second, it would give the cities of Orange County control of the system, something they do not have under the current program. He reminded everyone that these recommendations were just "first steps" and that two major hurdles had to be overcome before a deal could become final. The first is the issue of flow control. Orange County cities must commit to bringing at least 90 percent of the current volume of solid waste to the landfill system for the next 20 years. This will provide the long-term stability upon which the new district can make economic projections and future debt payments. The second is getting the Board of Supervisors to agree to the proposed terms and conditions of the transfer. The earliest that the supervisors could consider the Joint Boards' recommendation would be at their Feb. 27 meeting. Executive Team Retreat The Executive Management Team, which includes Don Mcintyre, Judy Wilson, Blake Anderson, and the eight department heads, took part in an off-site retreat on Feb. 1 and 2. Don summarized some of the main outcomes of the retreat. In the communications area, he said there was a reaffirmation not to make promises we can't keep, and that we should be clear in our commitments and communications to employees. The Districts may be including an Upward Feedback Appraisal system in the leadership training program as a tool to assist supervisors and managers in improving communications with their employees. Don said that during the next few months, the Districts would also be developing a communi~tions plan for labor negotiations to keep employees apprised during the process. Turning to the upcoming FY 96-97 budget process, Don said that during the retreat, he challenged the Executive Team to 11 examine every program and activity, and its worth to the organization, eliminating those programs and activities that don't contribute to our mission, and provide training to impacted employees to the greatest extent possible for new job opportunities within the organization." He added that training and cross-training would increase the versatility of the work force, help us remain competitive, and is necessary to keep up with changes in technology and advancements in the industry. Don also said that leadership training that many first-line supervisors have just completed will enhance their knowledge and skills and improve the Districts' overall communication efforts. Don announced that there will be a budget preparation workshop on Feb. 14 for all principal budget monitors. In this first-of-its-kind workshop, Controller Mike White, Principal Administrative Analyst Greg Mathews, and Principal Financial Analyst Brad Cagle will provide training in how to prepare department and division budgets, and how to use the budget as a financial control and performance-tracking document. Management Performance Review Plan Senior Human Resources Analyst Dawn McKinley presented a detailed review of the new Management Performance Review Plan for professional, supervisory and management employees that has been under review for several months by a 13-member employee committee. The highlights of the plan include the development of new criteria for the system, a revised performance management process, a completely revamped evaluation form, and two recommendations for distributing the 5% merit pool fund included the FY 95-96 budget. Don indicated that he was in favor of the merit recommendation that distributes 3% of the 5% merit pool as a lump-sum merit bonus based on an employee's performance. The merit bonus would not be base-building, which means that any increase would not be added to an employee's base salary. The other 2% would be distributed to employees who are eligible for equity adjustments to their base salary. Adjustments would be based on a formula that considers the position of an employee's salary relative to their performance rating, compression 2 that occurs between the pay of supervisors and their -t subordinates, and management recommendations. · • The committee presented its recommendations . .-. to the Executive Management Team on Feb. 5. Don ~. thanked them for their hard work and said that he felt comfortable bringing their recommendations to the Joint Boards for approval. Please contact Dawn, ext. 2108, if you have any questions or would like a detailed copy of the performance review plan recommendation. Safety Committee Update Safety Committee chairperson Anne Marie Feery and committee member Don Baldwin spoke about the Employee Safety Committee, and Anne Marie thanked all of the 23 committee members for their efforts this past year. Some of the major safety projects to come out of the committee include replacing unsafe handrails, updating fading and weather-worn signs, upgrading emergency safety showers, and relabeling and painting pipes and electrical conduits. The Safety Committee was formed in 1992 as the Operations and Maintenance Safety Committee, but was later expanded to include all departments. The committee's purpose is to identify health and safety issues in accordance with all regulations and requirements in employee-group MOUs, to facilitate a safe and healthy work environment in an advisory capacity, to develop and maintain a strong working relationship with management to effectively communicate and resolve health and safety issues, and to provide a vehicle for all employees to communicate their health and safety concerns. Meetings are held monthly on the Thursday following the second payday of each month and are held alternately at both plants. Core Values Committee Update Supervising Construction Inspector Chuck Lee talked about the results of the Core Values survey conducted last December. He thanked the 160 employees who took time to fill out the survey, especially those who provided written responses. Survey results indicate that trust and confidence in the work environment can only exist if supervisors and employees alike believe in and act on our core values, that there be no hidden agendas, and that there be no retaliation for speaking out. The results of the survey will be published in an upcoming issue of The News Pipeline. Chuck also gave an update on the development of the Districts' Core Values statement, which now includes our mission statement and a brief description of who we are and what we do. Employees recommended that our core values statement be called our Guiding Principles rather than our Credo. The final version was approved by the Core Values subcommittee on Feb. 7, and will ... ~ be presented to the full committee at their next -.· meeting on Feb. 15. The final version will be -.. distributed to all employees and posted on bulletin boards throughout both plants. Bob Ooten on Competitiveness The final speaker at the management quarterly meetings was Director of Operations Bob Ooten, who urged the group to continue our record of excellence and efficiency in controlling costs, but cautioned that we need to make additional improvements and find new tools that will make us even more competitive. Bob said, "Our Directors and the public want rate stability and lower costs. It's our responsibility to do what we can to make this happen." To show how we measure up, Bob pointed to an Association of Metropolitan Sewerage Agency (AMSA) survey that listed us in the lowest 15% of 100 agencies nationwide in cost per million gallons treated. Comparisons to other sanitation districts and cities in Southern California also show that our costs and fees compare favorably or are well below those of our neighbors. Bob said that areas where we can improve include providing better training and more cross- training throughout the agency, using benchmarking effectively to measure cost trends over time, and identifying areas where we can use automation. He emphasized that we are already contracting out many of our non core-competency jobs and several other specialized tasks, the costs of which represent about 21 % of our joint operating budget. He mentioned several areas where we are making strides to improve efficiency, citing new authority in the Engineering Department to process small change orders and minor projects more quickly. He concluded by emphasizing that we need new paradigms so that we can be even more competitive in the future. He specifically mentioned that we have to reassess staff needs and make sure that employees are trained to do a variety of jobs. He mentioned how the Districts have already made progress moving from corrective to preventive maintenance, and improved our maintenance tracking effort through our computerized maintenance monitoring syster:n. We will continue moving from attended to non-attended facilities, noting that all of our 21 pump stations are automated, and that by the year 2000, we should have a more versatile and well-trained work force than today. Bob added that we need to use technology to our benefit and develop a Competitiveness Plan that will ensure that we will be ready to compete in the twenty-first century. 3 Hauser and Schwab Wed • • ~ Doug Hauser and ., ·.··""· :0~~ Yvonne Schwab have .i:. Wll ·""' ... .,, · ~~··"·~,-~,, announced their marriage in • "· • :. ~:~";'.'.'..:'T;"~" a private ceremony last Dec. ~ 21. Doug and Yvonne met In a Wastewater Technology class at Orange Coast College in 1981. During the course of the two-year program, they started dating, and 13 years later decided to tie the knot. Yvonne said, "We didn't want to rush into anything." Yvonne, now an Environmentalist II in Division 3410, started working at the Districts in Oct. 1983, and Doug, a Senior Plant Operator at Plant No. 2, came on board a year later almost to the day. They both share the responsibilities of raising a special- needs daughter, Cherish. Yvonne said, "We spent a wonderfully romantic Christmas honeymoon in San Diego with the highlight being a horse-drawn carriage ride through the Gas Lamp district on Christmas Eve." Drivers Urged to Slow Down/I Have you ever gone faster than 15 MAXIMUM mph when you're on Districts' 15 property? To be perfectly honest, we all probably have at one time or another. Well, the Safety and Emergency Response Division wants to remind i11ii!1i;!ii1•;~n;i•ill everyone !h~t the n:-ax!mum s.~':ed lll.-•-"""'11m •• li1 ---•-•· allowed w1thm the D1stncts' fac1ht1es is 15 miles per hour. Even so, the basic speed-limit rules also apply. This means that no one should operate a vehicle within the Districts' facilities at a speed greater than is reasonable or prudent. Your speed may need to be adjusted because of the weather, visibility, traffic, presence of pedestrians or road conditions. You should never travel at a speed that endangers people or property. If you are unsure about any of the Districts' other traffic and parking regulations, you can find them in Section 111-14 of the Administrative Standards and Procedures Guidelines. If you have a specific question you don't know the answer to, call Jeff Reed, ext. 2109. Orange County Hazardous Materials Strike Force In cooperation with the Orange County District Attorney's office, Source Control field staff recently participated in an Orange County Hazardous Materials Strike Force enforcement action on a company in Anaheim. The District Attorney used data from samples collected in sewers downstream from the company that showed that they had repeatedly violated their pH and copper discharge limits. Source Control staff used the Strike Force as a final enforcement action after months of working with the company to get them to achieve compliance with their permit. The owners settled out of court and were sentenced to three years of supervised probation, were fined $10,000 and ordered to pay $20,000 for the costs of the investigation by the DA's office, the Orange County Health Department and the Districts. This type of investigation, as well as many others like it, has helped the Source Control Division achieve a steady decline in influent heavy metal concentrations over the last 18 years. This has improved our biosolids quality and reduced heavy metal discharges to the ocean. What's Happening? Stork News/ I A belated congratulations to Jim Herberg and his wife, Shauna, on the birth of their first child, a baby girl named Natalie Anne Marie, who joined the Herberg household on Dec. 22. Natalie weighed 8 lbs, 1 oz, and was 20 inches long. Jim is an Engineer in the Operations Administration Division at Plant No. 2, and said that, "Shauna and Natalie are doing fine, but I'm really tired." Congratulations to Kevin and Nancy Hadden on the birth of their son, Maxwell James, who arrived on Jan. 26, weighed 8 lbs, 1 % oz and was 21 % inches long. Kevin is a Supervisor in the Air Quality Section of the Environmental Management Division of the Technical Services Department. Kevin said, "Nancy and Maxwell are happy and healthy, but things sure are different having a baby in the house!" Maxwell is the Hadden's first child. Daffodil Days In your paycheck today you will I find a brochure and order form from ~~~ the American Cancer Society all ~ SOCIE'rr about their annual Daffodil Days fundraiser. Lynn Elliott of the Design Engineering Division is the Districts' contact person this year. This is a wonderful way to support the fight against cancer. Please send your orders to Lynn before March 1. Make all checks payable to the American Cancer Society. Call Lynn, ext. 5079, if you have any questions. Lef s see if we can top last year's total of $745.00. 4 Operator Certification Prep Classes ·.~ The Santa Ana River ~ ew_. .... .....:=.:=':-O-Basin Section (SARBS) of the I. -~ California Water Environment - Association (CWEA) will be holding several operator certification prep "Classes during the next few months. Prep classes for Grades I and II will be taught by Jim Phillips and held on March 5 from 8 a.m. to 4:30 p.m. at the Santa Margarita Water District. The Grade 111 prep class will be taught by Doug Hauser and held on Feb. 28 from 8 a.m. to 4 p.m. at CSDOC Plant No. 2. Plans are still tentative for the Grades IV and V prep classes. The preregistration deadline is Feb. 21. Classes are $20 each if you pay in advance. An additional $5.00 is required if you pay at the door. Send your name, employer, address, day phone and whic~ class you want to take to: Dorianne Capparelli, P.O. Box 2279, Mission Viejo, CA 92675. Make checks payable to: "SARBS-CWPCA-PDA, Inc." Please call Dorianne at (714) 493-5225 for more information. 0 Service A yvards ·e The following employees celebrated their service anniversaries during the last pay period. Congratulations I Dean Karels Fifteen Years Operations Ten Years Regina Sabino Operations Laurie von Winckelmann Source Control Sergio Araneta Michael Bock Arnold Chavez David Medellin John Weingarden Five Years Maintenance Collections Inspection Technical Services Warehouse Accounting *New Employees* The following new employee joined the agency since the last pay period. Welcome to the Districts! • Debra Lecuna -Design Engineering Part-time Senior Clerk ;~~~~~~i!~t~l~1111 1 ·.·:Qii:edo~::of the:oi'ang~::pouofy::sanifi.iti9ij'.:Dl!itr.ict•i::rrn'-::deS.~li!'.I~',::: ·:tor submitting:riews.:itE)ms·:·ls:)he :·Wettnesdri :!befo~ ::payd.ijv1·) ••Contributions are,welc:Omel . · . .<':.'., . '': · · .. . . ' •· .. E~ltoriu ... ~ ..••.. ~ ............. Patrlck::McNelly MEETING DATE: 02/14/96 TIME: 7:30 P.M. DISTRICT 1 CMORENOI • • • • • • • • • • • MC GUIGAN • • • • • • • • """- CPERRYI •••••••••••• FERRYMAN •••••••• -,;r CCOONlZ) • • • • • • • • • • • MURPHY ••••••••.• ~ CPOTrSI • • • • • • • • • • • • SALTARELLI • • • • • • • • ~ (STEINER) • • • • • • • • • • • STANTON • • • • • • • • • _£, DISTRICT2 (SCOTTI • • • • • • • • • • • • COLLINS • • • • • • • • • • t/. (GULLIXSON) • • • • • • • • • h 1!1!911 • • • • • • • • • • • ""'7" CBELU •••••••••••••• DENES •••••••••••• ~ (PARKER) • • • • • • • • • • • DUNLAP ••••••••••• ~71". (DOWNEY ) • • • • • • • • • • ECKENRODE •••••••• (ANDERSON) ••••••••• FLORA •••••••••••• ~ (MORENO) • • • • • • • • • • • MCGUIGAN • • • • • • • • tJ1' (COONlZ) ••••••••••• MURPHY • • • • • • • • • • a,..-. CBANKHEAD) ••••••••• NORBY •••••••••••• ~ (ZLAKETI • • • • • • • • • • • • SINGER ••••••••••• (STEINER) • • • • • • • • • • • STANTON ••••••••• (DALY) • • • • • • • • • • • • • ZEMEL • • • • • • • • • • • • 1'Attf! DISTRICT3 (DOTSON) • • • • • • • • • • • SAPIEN • • • • • • • • • • • _fl!'_ (PARKER) • • • • • • • • • • • DUNLAP • • • • • • • • • • • -,;r (KERRY) • • • • • • • • • • • • BOWMAN •••••••••• (HASTINGS) • • • • • • • • • • BROWN .•••••••••• (SCOTTI • • • • • • • • • • • • COLLINS •••••••••• (ANDERSON) • • • • • . • • • FLORA •••••.•••••• (MARSHALL) • • • • • • • • • GRIFFIN ••••••••••• CBAUER) • • • • • • • • • • • • LEIPZIG ••••••••••• (MINER) . • • • • • • • • • • • LINN ••••••••••••• (MORENO) • . • • • • • • • • • MCGUIGAN ••••••.• (BANKHEAD) • • • • • • • • • NORBY •••••••••..• (EVANS ) • • • • • • • • • • • • RICE ••••••••••••• (ZLAKETI • • • • • • • • • • • • SINGER ••••••••••• (STEINER) • • • • • • • • • • • STANTON ••••••••• (WAHLSmOM) ••••••• SYLVIA ••••••••••• (DALY) ••••••••••••• ZEMEL •••••••••••• ~ ::'.~~ •••••••••• DEBAY ............ (, (STANTON) •••••••••• STEINER ••••••••••• ~ CDEBAY) •••••••••••• COX ••••••••••••• ~ DISTRICTS (PERRY) •••••••••••• FERRYMAN ••••••••. ~ (COX) • • • • • • • • • • • • • • DEBAY ••••••.••.•• (STANTON) •••••••••• STEINER •••••.••••• · :~:~c~ ~. . . . . . . . . . HAMMOND • • • • • • • . • L (POTTS) •••••••••••• SALTARELLI •••••••• ...l/M!! (COX) •••••••••••••• DEBAY •••••••••••• ~ (PERRY) • • • • • • • • • • • • FERRYMAN • • • • • • • • • ---:-7' (MORENO) • • • • • • • • • • • MCGUIGAN • • • • • • • • __ I' CCOONlZ) ••••••••••• MURPHY •••••••••• ~ (STANTON) • • • • • • • • • • STEINER • • • • • • • • . • . -;}' __ DISTRICT 11 (BAUER) •••••••••••• LEIPZIG •••••••••.• ~ (BAUER) • • • • • • • • • • • • DEffiOFF •••••••.• (STEINER) ••••••••••• STANTON .•••••••• DISTRICT 13 (WELCH) • • • • • • . • • • • • GULLIXSON • • • • • • • • .L. __ (DALY) ••••••••••••• ZEMEL •••••••••••• ~ __ (PARKER) • • • • • • • • • • • DUNLAP • • • • • • • • • • • -;;;;"' __ (COONlZ) ••••••••••• MURPHY • • • • • • • • • • ~ (STANTON) • • • • • • • • • • STEINER • • • • • • • • • • • __ DISTRICT 14 (POTTS) •••••••••••• SALTARELLI • • • • • • • • C\..-' (COONlZ) • • • • • • • • • • • MURPHY .••••••••• ~ (WARD) • • • • • • • • • • • • HAMMOND • • • • • • • • • ~ (STANTON) •••••••••• STEINER ••••••••••• ~ (MILLER) ••••••.••••• SWAN •••••••••••• DISTRICTS: 1,2.3,5.6.7,11.13 & 14 ~ o~ .,..($ JOINT BOARDS flt;/) (HASTINGS) • • • • • • • • • • • BROWN • • • • • • • • • == f (KERRY) • • • • • • • • • • • • • BOWMAN ••••••• (SCOTTI • • • • • • • • • • • • • COLLINS •••••••• CDEBAY)· • • • • • • • • • • • • • COX • • • • • • • • • • • -- (COX) ••••••••••••••• DEBAY ••••••••••• t --n (BELL) • • • • • • • • • • • • • • • DENES • • • • • • • • • • • ~ CBAUERJ • • • • • • • • • • • • • DETTLOFF ••••••••• (PARKER) •••••••••••• DUNLAP •••••••••• (DOWNEY) • • • • • • • • • • • • ECKENRODE • • • • • • • 11 i (PERRY) • • • • • • • • • • • • • FERRYMAN • • • • • • • • 1:: (ANDERSON) • • • • • • • • • • FLORA ••••••••••• ~ (MARSHALL) • • • • • • • • • • GRIFFIN ••••••••••• (WELCH) • • • • • • • • • • • • • GUUIXSON •••••••• C\YARD) ••••••••••••• HAMMOND •••••••• ~ (BAUER) • • • • • • • • • • • • • LEIPZIG • • • • • • • • • • • -:zc._ (MINER) • • • • • • • • • • • • • LINN • • • • • • • • • • • • • ~ (MORENO) • • • • • • • • • • • • MC GUIGAN • • • • • • • • 1-_ (COONlZ) • • • • • • • • • • • • MURPHY • • • • • • • • • • -a;; CBANKHEADJ • • • • • • • • • • NORBY • • • • • • • • • • • -Y (EVANS) • • • • • • • • • • • • • RICE • • • • • • • • • • • • • -Y (POTTS) ••••••••••••• SALTARELLI •••••••• ~ (DOTSON) • • • • • • • • • • • • SAPIEN • • • • • • • • • • • -Y (ZLAKET) • • • • • • • • • • • • • SINGER • • • • • • • • • • • -.,,- STEINER) • • • • • • • • • • • • • STANTON • • • • • • • • • t (STANTON) • • • • • • • • • • • STEINER •••••••••• (MILLER} • • • • • • • • • • • • • SWAN •••••••••••• CWAHLsmoM) •••••••• SYLVIA ••••••••••• . (GULLIXSON) • • . • • . • • • • ~ ••.•••••••• ~ (DAL YJ • • • • • • • • . • • • • • ZEMEL . • . • • • • • • • • .f'At!! ill.EE ANDERSON • GRAY ••••• HASENSTAB HODGES ••• HOVEY •••• JONK ••••• KYLE ••••• LINDER •••• LUDWIN ••• MCINTYRE •• MCNELLY •• OOTEN •••• STREED ••• TUCHMAN •• WHEATLEY • WILSON ••• WINSOR ••• :J../ -1{ OTHERS WOODRUFF •• 1_ ANDRUS •••• DEMIR ••••• LEE •••••••• LINDSTROM •• NIXON •••••• SHAW •••••• STONE ••••• J:\WPDOC\BS\DIRECTOR\DLI02. 01/24/96 . -- CSDOC Landfill Acquisition Joint CSDOC Board Meeting February 14, 1996 • County Sanitation Dtstdct9 of Orange Comty The Solid Waste Management System • All current and ongoing assets and llabllltfes of the Orange County Waste Dlsposal System, Including the following facilltfes: -6 active landfills -21 cloeecl landfills -4 Regional Household Hazardoua Waste Collection Cement Orange Countr Waate Management s,.tem .......... ....... .-c=...-:= :~::;: ... __........, ............. ......., ·====-- + Notes: Page 1 What Are the Options? • New county-wide aanitation district • JPA (one or more) • Privately owned • Out-of-county altemativee • County operation -8tatua quo Why is CSDOC Involved? • Beet public policy: publio-privaie partnerehip • CSDOC is only a facilitator -The new District and CSDOC would be aeoarately governed and financed, but with a •hared staff • The landfill• are loeing money with inefficient County operating structure • The landfills are a eource of revenue for the bankruptcy workout Why is CSDOC Involved? • Sanitation Districts do run landfills Q.e. Loa Angelee and Ventura) • Thia is a time for efficiency, stewardship and home rule • County reeidenta and buei~ need a well run ey.tem Notes: Page2 f Benefits to Bankruptcy Recovery • The County haa oblgated llllelf to contribute $15 mll lon per year from the aold-waal& ayatem In the Bankruptcy Plan of Adjustment • Thia money wll go dlrectty to paying clalma • Tranafer Of the landftD wtll enaure thla rwenue from aolld-waate ayatem Existing Importation Contracts Are Not Equivalent to $15 Million Annually • Of the three Importation contracta, one con1rllet la tor 5 ylllll'll the othen are tor t8ny9111'11 cs~-----~ • None axtend br the IUll 20 year period • CEOA would be required to extend the contracta • The contracta can be lllmllnat.ed for convenience, at any time, tor a fee s:zo e ! S111 l S10 ! IS . . . . . . . . . . . What Are Benefits of Transferring the System? • .Achlwe ftow control • control the tipping fee and budget proceea • Governance of the Syatem • Makltllin long-tenn dlapoeal capacity e 6mble and committed WBSl&streem tor regional mall< et • Jolntmanagementol/protectlon agaklst environmental llablUty Notes: Page 3 How Will Lower Rates Be Achieved? • Flow control at wmtestreem • Aggreeaive operational strategies • Major regional force in the marketplace -Better out-of-county deals -Economlee of llC8le County $35/ton Tipping Fee Hshldttaz Waste$1.W CIC>Md Sltes$5.15 Env r.ttlgatlon $3.55 New District Tipping Fee -$30/ton • Aeaumptiona made: -lnttlally reduced County overhead by 25% -Cepl!al axpendlturae tnanced -90% flow conll'OI Al:Clw : --$17 A3 EnvMI $5.111 Notes: Page4 We Can Achieve A Tipping Fee Under $30/Ton • Our •base-cue" aaaumptione uee the County's operating costs • Other Califomia landfills operate at lea coet • Contract opemtion8 can further lower coete Contract Opportunities • Ytlhy? -Rlflid gain In operslanll 9flc:Mncy -11ghtcomolwlthdmiled RFP -ComP91111an...,,.·Conlnidoperan vsylrar.atedln~ • What7 ~ NqtCenncgd • Pwh,&p.mMdCDwr •M1•M.U1 . ......._ ·~ ·~ ·~ • Flllcl Ervi-trv • C-...ProJedMll~ Flow Control • 90% commitment of waatestream ia needed • Member agencies contractually commit wasteetl'9ametothe ayetem • Flow control provides: -Pl8dlc:table rwarue -Economlaeofecale -Managementotlong-tann dlsposat capacity -Powerful playa' In the raglonal ma:ket Notes: Pages Governance and Policy Making Translerolthe Solid Waste Management System will create a new regional govanlng body providing theoppor11.raltylor better public accountabUlty and slrong city control by: • Adopting amual budg&tll • Setllng rates • Allocating rlMll'lue • Establlllhlng and Implementing policy 33Member Regional Board One repmscntative from: • 28 Cities All 31 &ll"'f" c-. Me.a, OudonQ..,...- • 4 Sanitary Districts lndodN c-. "'-. Dam Poinl, Gudm Q..,..., ..tMidwayCily • I County Supervisor Indemnification and Liability • Indemnify individual citiee • Reeervee and ineurance •Technical planning and mitigation • Unified legal strategy Why Not Just Sell to a Private Firm? • Necesaary selVlc&11 lnvolvlng pubic health are beet provided by ellcJent local government • PT!vate compankle wlll not take on the llablUty for entire ayatam without the ablUty 1D lncr- tlpplng fee (pubic paya the price) • £Very $100 mlllon In price equals $5/100 tipping lee Notes: Page6 What Does the Term Sheet State? • $300 Million ($15 million annually for 20 ye8J8) • Requires 90% flow control • Gives new District authority to operate ey8tem • Tnmafera only nece111my County pereonnel • AeeumeaAB 939 regional reaponaibllitiea • Anumea host-city MOU righte/obligaliona • Ende County control of W&lte management ey8tem and operation Landfill System Due Diligence Issues • Operating and capital budgets • Importation contract.e • Environmental liabDitiee • Annual tonnage Gstimatee and population growth •MOU review • A8939 Base-Case Assumption • 90% flow control • CapltaJ Expenditure Rnanclng Program • Reductions In operating costs • Importation contracts for 20 years • Sensitivity analyses Notes: Page7 Why Should the County Accept Our Offer? • Meem the stated cuh need contained In the County Bankruptcy Plan of Adjuetment • 8y9tem ramalna under public control • LowertlpplngfBM • County'• Importation comram will notdallver$15 mllllon annually for 20 )18819 • thl9 deal doea. • Offer I• In kwplng with the County'• stmad Intent of IWbucturtng lt9elf • Pl'M9Ml8 long tann abiflly to achieYe 181lable, COit effectiw and aafe aolld wute eymm objectivee • Tramactlon can becomplebld quicJcly Why Should the Cities Support the Offer? • Control of the tipping fee & budget proce88 • Local gowmance of the Syetem • Guaranteed long-term diepoeal capacity • Joint management and protection of environment • Indemnification and liability management • Control of 1'8V8nue allocation What's Next? -_ JUMI • Feb\my1 .. , ... C I I C8DOCCIOnllcMla Tmn8'111t I ~ I • Feb\my18,1Dll8 I l • I I Tmn .... -.ibmlllldtoCIDuntJ • Feb\my27,1Dll8 Bmrdof8upervlilCncionmdllaT.-mm....nctLAFCORl9oMICll'lof ..... • llllah22.1Dll8 r-..waw.eowCICllftl~ ......... , ... for..., MOUcloelngdlr~mrtllntlnm..Soondlllon9lncludlng..,.ftllwca9'ol • Augull1808 lNCO~ofoe.tc:&FClmlllllon, ..... ~1, 1D88 . ..,,.....,,.., Fhtlnlllnllof IWM8D Notes: Pages COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA MINUTES ADJOURNED MEETING FEBRUARY 14, 1996 ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 ROLL CALL An adjourned meeting of the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, was held on February 14, 1996, at 7:30 p.m., in the Districts' Administrative Offices. Following the Pledge of Allegiance and invocation the roll was called and the Secretary reponed a quorum present for Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13, and 14 as follows: DISTRICT NO. 1: DISTRICT NO. 2: DISTRICT NO. 3: DISTRICT NO. 5: DISTRICT NO. 6: DISTRICT NO. 7: DISTRICT NO. 11: DISTRICT NO. 13: DISTRICT NO. 14: ACTIVE DIRECTORS --L.. Pat McGuigan, Chair --L.. James M. Ferryman, Chair pro tem _a_ Mark A. Murphy _1_ Thomas R. Saltarelli --L.. Roger Stanton _x_ John Collins, Chair __ Daniel T. Welch, Chair pro tem _x_ Barry Denes _x_ Burnie Dunlap _x_ Norman z. Eckenrode _x_ James H. Flora _x_ Pat McGulgan _i_ Mark A. Murphy _x_ Chris Norby _x_ Sheldon Singer _x_ Roger Stanton _1_ Bob Zemel _x_ Sal A. Sapien, Chair _x_ Burnie Dunlap, Chair pro tem ___x._ Walter Bowman _x_ George Brown --L.. John Collins _x_ James H. Flora ___x._ Don R. Griffin _x_ Victor Leipzig ___x._ Wally Linn _x_ Pat McGuigan --L.. Chris Norby --L.. Margie L. Rice ___x._ Sheldon Singer _x_ Roger Stanton --L.. Charles Sylvia _1_ Bob Zemel _x_ Jan Debay, Chair --L.. William G. Steiner, Chair pro tem --L.. John C. Cox, Jr. _x_ James M. Ferryman, Chair --L.. Jan Debay, Chair pro tem _x_ William G. Steiner _x_ Barry Hammond, Chair _1_ Thomas R. Saltarelli, Chair pro tem _x_ Jan Debay _x_ James M. Ferryman _x_ Pat McGuigan _1_ Mark A. Murphy _x_ William G. Steiner _x_ Victor Leipzig, Chair --L.. Shirley Dettloff, Chair pro tem _x_ Roger Stanton _x_ John M. Gullixson, Chair _1_ Bob Zemel, Chair pro tem _x_ Burnie Dunlap _1_ Mark A. Murphy _x_ William G. Steiner _a_ Thomas R. Saltarelli, Chair _a_ Mark A. Murphy _x_ Barry Hammond, Chair pro tem ___x._ William G. Steiner _x_ Peer A. Swan -2- ALTERNATE DIRECTORS __ Ted R. Moreno __ Arthur Perry __ Joanne Coontz __ Jim Potts __ William G. Steiner __ George Scott --L.. John M. Gullixson __ Bob Bell __ Glenn Parker __ Carol Downey __ Steve Anderson __ Ted R. Moreno __ Joanne Coontz __ Don Banlchead __ George L. Zlaket __ William G. Steiner __ Tom Daly __ Harry M. Dotson __ Glenn Parker __ Gail Kerry __ Marilyn Bruce Hastings __ George Scott __ Steve Anderson __ Patsy Marshall __ Ralph Bauer __ Eva G. Miner __ Ted R. Moreno __ Don Banlchead __ James V. Evans __ George L. Zlaket __ William G. Steiner __ Robert Wahlstrom __ Tom Daly __ John C. Cox, Jr. __ Roger Stanton __ Jan Debay __ Arthur Perry __ John C. Cox, Jr. __ Roger Stanton __ MikeWard __ Jim Potts __ John C. Cox, Jr. __ Arthur Perry __ Ted R. Moreno __ Joanne Coontz __ Roger Stanton __ Ralph Bauer __ Ralph Bauer __ William G. Steiner __ Daniel T. Welch __ Tom Daly __ Glenn Parker __ Joanne Coontz __ Roger Stanton __ Jim Potts __ Joanne Coontz __ MikeWard __ Roger Stanton __ Darryl Miller 2/14/96 STAFF MEMBERS PRESENT: Don Mcintyre, General Manager, Blake P. Anderson, Assistant General Manager-Operations, Judith A. Wilson, Assistant General Manager-Administration, Penny Kyle, Board Secretary, Cymantha Atkinson, Janet Gray, Gary Hasenstab, Irwin Haydock, Ed Hodges, Terri Josway, Steve Kozak, Greg Mathews, Pat McNelly, Mike Moore, Bob Ooten, Mike Peterman, Gary Streed, Jean Tappan, Michelle Tuchman,· Nancy Wheatley, Mike White OTHERS PRESENT: Thomas L. Woodruff, General Counsel, Chip Clements, Michael Ozawa, Jon Schatz, George Zlaket, Alt. Director DISTRICT 14 Appointment of Chair pro tern In the absence of Chair Thomas R. Saltarelli and Chair pro tern Mark A. Murphy, Director Barry Hammond was appointed Chair pro tern of District No. 14. ALL DISTRICTS Receive and file draft minutes of the Ad Hoc Committee re Landfill Issues Moved, seconded, and duly carried: That the draft minutes of the Ad Hoc Committee re Landfill Issues meeting held on January 31, 1996, be, and are hereby, received and filed; and, FURTHER MOVED: That the Boards of Directors concur with the actions of the Ad Hoc Committee re Landfill Issues to consider a Term Sheet at an Adjourned Meeting on February 14, 1996. ALL DISTRICTS Receive and file letter from Vicki Wilson of Integrated Waste Management Department. County of Orange. dated January 31 . 1996 Moved, seconded, and duly carried: That the letter dated January 31, 1996, from Vicki Wilson of the Integrated Waste Management Department, County of Orange, regarding the proposed Resolution of Application to the Local Agency Formation Commission (LAFCO), be, and is hereby, received and ordered filed. -3- ALL DISTRICTS Receive and file letter from Director Bob Zemel dated February 13. 1996 Moved, seconded, and duly carried: 2/14/96 That the letter dated February 13, 1996, from Director Bob Zemel, requesting that the acquisition of the County of Orange Integrated Waste Management System be continued until the Joint Boards have had adequate time for analysis, be, and is hereby, received and ordered filed. ALL DISTRICTS Actions re proposed acguisition of County of Orange Integrated Waste Management System Verbal report and presentation Blake Anderson, Assistant General Manager of Operations, with the use of slides reported in depth on the landfill acquisition. The floor was then opened for discussion. Receive and file Staff Report dated February 7. 1996 Moved, seconded, and duly carried: That the Staff Report dated February 7, 1996, regarding proposed acquisition of County of Orange Solid Waste Management System, be, and is hereby, received and ordered filed. Directors John M. Gullixson, Victor Leipzig, Norman Z. Eckenrode, and Jan Debay requested that their opposition to the motion be made a matter of record. -4- Approve a Memorandum of Understanding Re Proposed Terms and Conditions for Acquisition and Sale of County of Orange Solid Waste Management System and Facilities Moved, seconded, and duly carried: 2/14/96 That the Memorandum of Understanding Re Proposed Terms and Conditions for Acquisition and Sale of County of Orange Solid Waste Management System and Facilities, to include the following, be, and is hereby, approved: (1) Offer to acquire all existing assets and liabilities of the 5 operating and 20 closed landfills owned and operated by the Integrated Waste Management Department of the County of Orange to include cash reserves of approximately $114 million, an environmental fund of approximately $28 million, and debts of approximately $82 million; and, (2) Provide acquisition terms of $300 million payable in 40 semi-annual installments of $7.5 million, for 20 years; and, (3) Conditions the offer upon the Sanitation Districts receiving waste flow control agreements from the cities and sanitary districts representing 90% of the solid waste generated within Orange County by the closing date of the offer; and, ( 4) Establishes a closing date of June 30, 1996, or 60 days following acceptance and approval by the Board of Supervisors, whichever is later; and, ( 5) Other technical terms and conditions. Directors John M. Gullixson, Victor Leipzig, Norman Z. Eckenrode, and Jan Debay requested that their opposition to the motion be made a matter of record. -5- Authorizing the General Manager to submit to the County Board of Supervisors a Memorandum of Understanding Proposing Terms and Conditions for Acguisition and Sale of County of Orange Solid Waste Management System and Facilities Moved, seconded, and duly carried: 2/14/96 That the General Manager be, and is hereby, authorized to submit to the County Board of Supervisors a Memorandum of Understanding Proposing Terms and Conditions for Acquisition and Sale of County of Orange Solid Waste Management System and Facilities, in form approved by General Counsel. Directors John M. Gullixson, Victor Leipzig, Norman Z. Eckenrode, and Jan Debay requested that their opposition to the motion be made a matter of record. Authorizing the General Manger to prepare a comprehensive Reguest for Proposals to provide contract operational services Moved, seconded, and duly carried: That the General Manager be, and is hereby, authorized to prepare a comprehensive Request for Proposals from qualified firms for providing contract operational services for all on-site operational, maintenance and field engineering activities at the five operating landfills, and to provide said Request for Proposals to the Joint Boards at a future meeting for approval prior to issuance. Directors John M. Gullixson, Norman Z. Eckenrode, and Jan Debay requested that their opposition to the motion be made a matter of record. ALL DISTRICTS General Counsel's comments Prior to Closed Session General Counsel reported to the Directors the need for a closed session and to add one item needing immediate action that arose subsequent to the publication of the agenda. He reported that additional items could be added pursuant to Government Code Section 54954.2(b) upon a two-thirds vote of the Directors. No other items would be discussed or acted upon. -6- 2/14/96 ALL DISTRICTS Add Item to Closed Session Agenda Moved, seconded, and duly carried: That Item No. 9(b )( 1 ) be added to the agenda to consider a report from General Counsel in connection with the litigation entitled Sebastiano Serrantino v. County Sanitation Districts of Orange County, Orange County Superior Court Case No. 737044 (Government Code Section 54956.9[a]). ALL DISTRICTS Convene in Closed Session pursuant to Government Code Section 54956. 9 The Boards convened in closed session at 9: 18 p.m. pursuant to Government Code Section 54956.9. Confidential Minutes of the Closed Session held by the Boards of Directors have been prepared in accordance with California Government Code Section 54957 .2 and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of actions taken will be publicly reported at the time the approved action becomes final re Agenda Item 9(b )( 1 ). ALL DISTRICTS Reconvene in regular session At 9:45 p.m., the Boards reconvened in regular session. DISTRICT 1 Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 1 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. DISTRICT2 Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 2 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. -7- DISTRICT3 Adjournment Moved, seconded, and duly carried: 2/14/96 That this meeting of the Board of Directors of County Sanitation District No. 3 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. DISTRICT 5 Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 5 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. DISTRICTS Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 6 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. DISTRICT? Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 7 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. DISTRICT 11 Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 11 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. -8- DISTRICT 13 Adjournment Moved, seconded, and duly carried: 2/14/96 That this meeting of the Board of Directors of County Sanitation District No. 13 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. DISTRICT 14 Adjournment Moved, seconded, and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 14 be adjourned. The Chair then declared the meeting so adjourned at 9:45 p.m. of Directors atio stricts ,6,7,11,13&14 -9- t· STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and Agenda for the Adjourned Regular Board Meeting of Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 held on February 14, 1996, was duly posted for public inspection in the main lobby of the Districts' offices on February 8, 1996. IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of February, 1996. J:\WPDOC\BS\FORMS\96\F27B.01 Penny Kyle, S Boards of Dire rs f aunty Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 & 14 of Orange County, California