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THE CITY OF CARLSBAD V. COUNTY DEPT. HD- OF SAN DIEGO AND NCRRA INCINERATOR COMPETITIVE BIDDING An
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C17( OF CARLSBAD - AGENU BILL
ITEM EXPLANATION The City of Carlsbad, in conjunction with the cities of Encinitas
and Escondido, sought a petition for a writ of mandate against the Board of Supervisors of San Diego County seeking an order that the county could not exempt the incinerator from bidding in reliance on the statutory exception for trash service contracts. The matter was heard before the Honorable Jeffrey T. Miller on July
13, 1990 and he has issued an order denying our petition. A copy is attached for your information.
The City Council has two options. First, recognizing that this case is not central to our ongoing efforts to oppose the incinerator, the Council could let it stand. Even if we had prevailed on the trash service exception, the Board of Supervisors could have proceeded by making findings that some other exception applied such as sole source or no useful purpose. A trial court decision is not binding precedent on any future cases and we could focus our energy on the 11 other ongoing judicial and administrative processes we have brought to oppose the plant.
Second, the Council could direct us to file an appeal. That is my recommendation. The incinerator will be built to county standards on county land to provide a county service which will be paid for by county imposed trash fees with the county assuming the environmental risk, the regulatory risk, the ash disposal risk, and the responsibility for financing. It remains my opinion that
it should be impossible to construct a $300 million facility with the economic reality of a public works project on the basis of private negotiations. I will have difficulty accepting that until
we have exhausted our judicial remedies. Judge Miller, who gave
us a full and fair hearing, recognized the facility was ''imbued
with the public interest'' but focused on the draft revised
agreement; in particular the provision that NCRRA would remain
fully responsible for financingthe facility if it were abandoned,
to conclude that it was a private project. NCRRA's attorneys represented to the court that it would be financed by the developer who would assume the major risk for its success or failure. That may not be true and an appeal would preserve the possibility of a remand to the trial court if the county accepts
responsibility for financing. I think the focus on the draft
agreement was misplaced for two reasons. One, it has been carefully doctored by the developer's attorneys with indices of
Agenda Bill # /0/8/5 September 4, 1990 Page 2
ownership and the matter should not have been decided on those self sewing statements. Second, the agreement doesn't deal with the fundamental economic reality of the project nor does the opinion, which ignores the facts that it will be constructed on county land and paid for with county imposed fees. Our case is really about fundamental public policies and an appellate court has more flexibility in making those judgments. The developerls
argument would allow the county, under the guise of a service contract, to construct any kind of public facility withoutbidding and I think that is contrary to the public interest.
The court also rejected our statutory construction argument concluding that it was not the courtls function to create a legislative mandate for bidding. I think that misses the point. The legislative mandate for public bidding already exists. At issue, was the construction of an exception. The court has expanded the exception to remove all aspects of AB 939 facilities from public bidding. We think that ignores the extensive legislative history which demonstrates the exception was for trash pick-up and not for the construction of major industrial facilities like the incinerator. The appeal would involve only
nominal filing fee costs and I will continue to personally
represent the City.
The Council should consider the options and direct us as you deem appropriate.
EXHIBIT Order After Hearing Denying Petition for Writ of Mandate to Compel Compliance with Competitive Bidding Law
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RECEIVED
CITY OF CARLSBAO CITY ATTORNEY
SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN DIEGO
CITY OF ENCINITAS, a municipal
corporation, the CITY OF CARLSBAD, )
a municipal corporation, and the )
CITY OF ESCONDIDO, a municipal
corporation, 1
Plaintiffs and 1
Petitioners, 1 1 vs . 1
COUNTY OF SAN DIEGO, BOARD OF 1
SUPERVISORS OF THE COUNTY OF 1
SAN DIEGO, and DOES 1 through 1
10, inclusive, 1
Defendants and
Respondents.
i NORTH COUNTY RESOURCE RECOVERY
ASSOCIATES, and DOES 11 through 1
2 0, inclusive, 1 1 Real Parties in Interest. )
CASE NO: 604424
ORDER AFTER HEARING DENYING PETITION FOR WRIT OF MANDATE TO COMPEL COMPLIANCE WITH COMPETITIVE BIDDING LAW
The petition of plaintiffs and petitioners (petitioners)
for a writ of mandate to compel compliance with competitive
bidding law came on regularly for hearing on July 13, 1990,
in Department 32 of the above-entitled Court before the
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Honorable Jeffrey T. Miller, judge presidirrg. Petitioner
City of Encinitas was represented by the law offices of D.
Dwight Worden, by D. Dwight Worden. Petitioner City of
Carlsbad was represented by City Attorney Vincent F. Biondo,
Jr.; Petitioner City of Escondido was represented by City
Attorney David R. Chapman, by Jeffrey Epp, Assistant City
Attorney. Defendant and respondent County of San Diego
County was represented by County Counsel Lloyd M. Harmon,
Jr., by Deputy County Counsel Leonard W. Pollard, 111. Real
Party In Interest North County Resource Recovery Associates
(NCRRA) was represented by Pillsbury, Madison & Sutro, by
Ronald E. Van Buskirk. Following oral argument, the matter
was submitted on July 13, 1990.
Following consideration of all pleadings filed in
connection with the hearing on the petition, and oral
argument, and for good cause, the Court hereby denies the
pet it ion.
Introduction
The present action is of many lawsuits concerning a
proposed waste to energy facility (facility) to be
constructed and operated at the site of a landfill in the
City of San Marcos.
In 1982, County entered into a contract with NCRRA's
predecessor, the Herzog Contracting Corporation for the
design, construction and operation of the proposed facility.
Shortly thereafter, Herzog assigned its rights under the
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Contract to NCRRA, a joint venture.
In December, 1985, County reviewed and approved an
amendment to the contract (the "Amended and Restated
Agreement to Provide a Waste-To-Energy Service on the County
Landfill at San Marcos") . In light of changing economic
conditions and delays, NCRRA and County are currently
negotiating a Restated Services Agreement (RSA) setting forth
the terms upon which NCRRA is to provide to County solid
waste disposal services by means of the recycling and energy
production facility at the existing San Marcos landfill.
Essentially, petitioners assert County has a legal duty to
proceed with the RSA in compliance with statutory competitive
bidding requirements (Public Contracts Code Section 20121),.
and seek a writ of mandate precluding any further action by
County concerning the facility without compliance with the
competitive bidding requirements. In effect, petitioners
seek to have this Court compel the County Board of
Supervisors to apply competitive bidding requirements to the
RSA (See Reply Trial Brief of Petitioners, page 2). County
and NCRU submit the competitive bidding requirements do not
apply to the RSA and, further, the RSA is exempted from the
competitive bidding requirements by Public Resources Code
Section 40059(a) (2).
Discussion
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All parties represented at oral argument the single issue
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remaining for the Court's determination in connection with
the complaint/petition filed herein is whether the RSA is
subject to competitive bidding requirements. Parenthetically,
the position of County, as manifested by an August 10, 1988,
directive to staff to commence negotiations with NCRRA which
resulted in the RSA, is reviewable by "traditional mandamus''
under Code of Civil Procedure Section 1085. While NCRRA and
County argue the County is presumed to have correctly
performed its legal duty (See, e.g., Trial Brief of NCRRA,
page 10) resolution of the leaal issue presented must be
predicated upon application of relevant statutory law to the
RSA without presuming the propriety of County's action. The
final preliminary consideration is whether petitioners have
brought this action prematurely. Although the RSA is not yet
-complete and is subject to further modification, the parties
assured the Court, in oral argument, the matter is fully ripe
with respect to the legal issue presented.
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The threshold issue is whether the RSA is subject to the
competitive bidding requirements of Public Contracts Code
Section 20121. Resolution turns on whether the facility is
public or private. Although the project is imbued with the
public interest, based upon the RSA, the facility is private.
NCRRA is the sole owner of the facility which will be used
by NCRRA to provide solid waste disposal services to County
(Exhibit 3 at 92-93). NCRRA is responsible for the design
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and construction of the facility (Exhibit 3 at 31-32). NCRRA
may sell its services to third parties (Exhibit 3 at 100).
Abandonment of the facility by NCRRA will result in severe
financial consequences for NCRRA, including continued full
responsibility for the financing of the facility (Exhibit 3
at 100-101).
Petitioners, particularly the City of Enchitas, urge the
Court to rule the facility is public because the County is
ggentangledgg in the project and maintains substantial
"oversightgg authority. The mere fact, however, that County
may site inspect and review construction progress does not
convert the facility from private to public. Indeed, the RSA
even imposes limitations upon County's access and visitation
rights by, for example, requiring reasonable notice by County
-prior to visitation in order to monitor compliance with
contract terms (Exhibit 3 at 68). Neither County
ggentanglementgg with the project nor the 'goversightg' function
transforms the facility from private to public, hence, the
competitive bidding requirements of Public Contracts Code
Section 20121 do not apply to the MA.
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Petitioners argue certain Government Code sections impose
public bidding requirements. The first of these is
Government Code Section 25515.2. The RSA does not fall
within this section as its purpose is not the sale or lease
of county land in order to create additional revenue for the
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County (Government Code Section 25515).
Government Code Section 25549.1, et seq., also mandating
public bidding, do not apply to the RSA since the County and
NCRRA will not be jointly occupying the facility. The RSA
provides for the exclusive occupancy of the facility by NCRRA
with access by County upon advance notice (Exhibit 3 at 68).
The bidding requirements for the lease of land
(Government Code Sections 25521-25539.10) do not apply.
Although the RSA refers to a ground lease whereby NCRRA will
lease the land for the facility, public bidding for the lease
would require County to select its provider for solid waste
handling services based on the lowest bid for the ground
lease, a bizarre result.
IV
Since the RSA's facility construction provisions are not
subject to any public bidding requirements, it would appear
unnecessary to determine whether the RSA is a service
contract, as opposedto a construction contract, for purposes
of the exemption to the public bidding requirements provided
by the California Integrated Waste Management Act of 1989
(Public Resources Code Section 40050, et seq.).
Proceeding to that issue, however, it appears clear that
the RSA provides for solid waste handling services which are
of local concern and exempt from competitive bidding under
Public Resources Code Section 40059(a)(2). Petitioners argue
solid waste handling is activity oriented and does not
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include facilities. Such a position ignores the statutory
definition (Public Resources code Section 40195) of "solid
waste handling" to include processinq of solid wastes which
in turn is defined to include "reduction separation,
recovery, conversion or recyclingtg of such waste (Public
Resources Code Section 40172). It seems inconceivable such
processes could take place without fqfacilities@l, and that a
statutory scheme could so easily contain the seeds of its own
destruction for its stated purpose.
Petitioners further argue what we have in this case is
the conversion of solid waste to energy which constitutes
gltransformationll which is separately defined (Public
Resources Code Section 40201) to include "incineration1I which
is what the subject facility will ultimately do. The
-argument proceeds because Vransformationgl is not included
in the definition of solid waste handling (Public Resources
Code Section 40195), it in turn is exempt from the exemption
from competitive bidding. This argument ignores the broad
mandate of the act and the clear legislative intent to allow
local governmental agencies to control all aspects of solid
waste handling of local concern (Public Resources Code
Section 40059 (a) (1) ) .
Moreover, and more fundamentally, the argument does not
address the notion the California Integrated Waste Management
Act does not contain as its stated purpose a mandate for
competitive bidding for an^ solid waste management service.
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This Court does not perceive its function to include creation
of such a legislative mandate through the process of negative
implication.
V
The petition for writ of mandate is denied, as the County
has not proceeded in excess of its jurisdiction, or in
violation of any duty or contrary to law as claimed in the
petition.
The Court determines the RSA may be entered into without
compliance with competitive bidding law.
Dated:
8
I COURT USE ONLY
PtAINTIFF(S)
CITY OF ENCINITAS; et al.,
C9UNTY OF SAN DIEGO, et al. OEf ENOANT(S)
CLERKS CERTIFICATE OF SERVICE BY MAIL (CCP 1013(4))
AUG 10 1990
L. CARVAJAL DEPUTY
By:
CASE NUMBER .-’ . . 604424
I, KENNETH E. MARTONE, Clerk of the Superior Court of the State of California, for the County of San Diego, do
hereby certify that: I am not a party to the cause referred to herein; On the date shown below, I placed a true copy of:
ORDER AFTER HEABING DENYSNG PETITIQN F09 %IT OF YAWDATE T9 C3MDEL
COMPLIANCE WITH COMPETITIVE SIVDING LAY
in a separate envelope, addressed to each addressee shown below; each envelope was then sealed and, with postage
thereon fully pre-paid, was deposited in the United States Postal Service at:
San Diego. California 0 Vista, California 0 El Cajon, California
NAME -
Vincent F. Rionodo
Office of the City Attorney
1200 Elm Avenue
Carlsbad, CA 92008
ADORESS
D. Dwight !Vorden Law Qffices of D. Dwight FYorden
740 Lomas Santa Fe Dr., PCl92
Solana Seach, CA 92075
Jeffrey Epp
Qffice of the City Attorney
210 N. Broadway
Escondido, CA 92025
Leonard TV. Pollard, I1
County Counsel
1600 Pacific Hwy, Rrrl 355
San Diego, CA 92101
Ronal’d E. Van Buskirk
Pillsbury , Xadison & Sutro
225 Bush Street P.O. Box 7880
San Francisco, CA 94120
KENNETH E. MARTONE Clerk of the Superior Court
CLERK’S CERTIFICATE OF SERVICE BY MAIL (CCP 1013(4)) SUPCT-286 (Rw. 2-90)