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HomeMy WebLinkAbout1994-12-13; City Council; 12954; Solid waste management updateL AB # /$,qsY TITLE: D DEPT. @‘ C C MTG’ 2/13/94 SOLID WASTE MANAGEMENT UPDATE E 4 0 2 Fo z 0 F 0 a g z 3 0 0 RECOMMENDED ACTION: Receive report and instruct Council representatives and staff as appropriate. ITEM EXPLANATION Staff will provide an update on solid waste issues. Palomar Transfer Station An appraisal of the Palomar Transfer Station and adjacent property has bee completed. Based on the appraisal, an offer has been made to the County San Diego to purchase the site. A letter was sent to the County on Noveml 17, 1994 and no response as been received as yet. Coast Waste Management has filed a suit in Federal Court challenging the County’s Notice of Eviction. The City of Carlsbad has sent a letter to the County asking that the eviction of Coast Waste Management be rescinded that the County consider a long-term lease to Coast Waste Management or City for the property. NORTH COUNTY SOLID WASTE MANAGEMENT AGENCY The proposed agreement between the Agency and Coast Waste Managerr for transfer, transportation and disposal services is essentially complete. 1 agreement would provide services to Carlsbad and Escondido up to the permitted capacity of the transfer station. Due to permit limitations, only 4( tons of trash could be processed through the plant daily. All of Carlsbad’: trash could be transferred but only a portion of Escondido’s trash. The Cii Escondido has received a proposal from its trash hauler, EDI, to build a transfer station in Escondido. Escondido is currently evaluating this propc The Escondido City Council will review the alternatives available to it at its meeting on December 21, 1994. Any further action on the proposed conti between the North County Solid Waste Management Agency and Coast v\ will be postponed pending a decision by the City of Escondido. AB No. 12, ,e 4 e Page 2 SAN DIEGO SOLID WASTE MANAGEMENT AUTHORITY The San Diego Solid Waste Management Authority and the San Diego Counl Board of Supervisors held a joint meeting on November 29, 1994. The purpose of the meeting was to conduct a hearing on the proposed Land Ust Fee to fund the solid waste system. After a considerable amount of testimor the Board of Supervisors continued the matter to 10:30 a.m. on December 1 1994. In order to impose the proposed fee, four Supervisors must vote for il It was made clear at the joint meeting by members of the Solid Waste Authority, that if the Board did not impose the fee, it was unlikely that the Sc Waste Authority would continue in existence and the County System would face revenue financial problems because of the declining tonnage going intc the system, It was further indicated by a Solid Waste Authority representath that the Swiss Bank will not allow transfer of assets from the County to the Solid Waste Authority unless the Bank is provided adequate collateral. The Land Use Fee would solve this problem and secure the Swiss Banks positic CADRE LITIGATION The lawsuit by the non-member cities (CADRE) continues to move forward. The lawsuit seeks to: A) B) C) Invalidate the Authority’s split-tipping fee structure. Obtain a court declaration that CADRE cities are not liak for NCRRA. Obtain a court declaration that CADRE cities are not lial for post-closure costs in addition to what they have pair past tipping fees, and in addition to what they will pay i future tipping fees if they use the system. A court declaration that selective closure of Otay is illes D) DISPOSAL OF CARLSBAD TRASH Coast Waste Management is continuing to use the Cocopah Landfill near Yuma. City staff has reviewed the permitting and operation of the facility a feels that it is satisfactory. The City of Yuma has been a long time user of facility, and the Winterhaven area in California also makes use of this facilit Coast Waste Management has also had discussions with the La Paz Landi Parker, Arizona as a potential landfill site. This is a new landfill that is built accordance with current Federal regulations. Test loads have been taken ABNo. jX,.1, ,e a Page 3 - the site and Coast Waste is continuing to discuss use of this facility with BFI, the landfill operator. The City continues to receive communications from futu landfill operators such as, Campo and Gregory Canyon, soliciting the City’s business. City staff, as well as Coast Waste Management, continues to monitor the evolving disposal marketplace in order to identify and ultimately Select the best disposal alternatives in order to meet the Ciy’s needs for cos effective, reliable and environmentally safe disposal of solid waste. PROPOSED AGREEMENT BETWEEN THE CITIES OF CHULA VISTA ANC $AN DlEGO The City Councils of the respective Cities, will be considering a proposed agreement to allow Chula Vista interim use of the City of San Diego’s Miram Landfill until the City of Chula Vista is able to develop a transfer station in Chula Vista. The transfer station would then be available not only to Chula Vista, but to the southern City of San Diego area. EXHIBITS 1. 2. 3. 4. 5. Letter from Mayor to Board of Supervisors dated November 28, 1994, Letter from Dwight Worden to Board of Supervisors dated November 1994. Board of Supervisors Agenda item dated November 29, 1994. Analysis of proposed Land Use Fee by Dwight Worden dated Noven 17, 1994. City of San Diego Manager’s Report dated November 30, 1994. November 28, 1994 County Board of Supervisors Chair Pam Slater County Administration Center 1600 Pacific Highway San Diego, CA 92101 SOLID WASTE MANAGEMENT LAND USE FEES Dear Supervisor Slater: On behalf of the City of Carlsbad, I would like to express our objections to the proposed imposition of the proposed Land Use Fee at your meeting on Novem 29, 1994. Not only is the City very concerned with the policy change represent this proposed fee, but we also object to the hasty way this proposal was put to and the subsequent lack of deliberations. If a proposal such as this is to have possibility of success in today’s political climate it must be supported by a stro political consensus. Not only has our City Council not had an opportunity to re this issue, we have not been provided with a final copy of the benefit unit break which apparently has changed since this item was put on the Board of Supervi agenda. The proposed funding of the Solid Waste Management System by means of a use fee is a significant change in policy from the traditional approach of fundin! based on user fees. The use of user fees is an appropriate way to fund solid v services and by shifting from a user fee basis to a land use fee, certain classes property will be unfairly burdened and penalized, particularly those who have undertaken major recycling efforts. For example, in the City of Carlsbad the PI: Camino Real Shopping Center has reduced the amount of trash put into landfil over 50% through an aggressive recycling program. To burden such a busine! over $16,000 per year in land use fee assessment is not only counterproductivt as recycling is concerned, but might appear to be anti-business. The use of the proposed land use fee to pay for landfill closure, post-closure a NCRRA plant costs is inappropriate and inconsistent with previous County actic 1200 Carlsbad Village Drive Carlsbad, CA 92008-1989 (619) 434-2830 6 FAX (619) 7 e 0 November 28, 1994 County Board of Supervisors Chair Pam Slater Page 2 The risk involved in the development of the NCRRA plant has never been an obligation of the County general fund, the general fund of any city in this Couni property tax payers of this County. The risk of development and operation of tl project is a risk for a private sector bank and the investors who undertook to fir it. It is inappropriate and unfair to now attempt to burden the property owners County, particularly those of the cities who vigorously opposed the developmer the NCRRA plant with the costs of salvaging a project that never should have k built in the first place. It also appears to be inappropriate to leave the City of San Diego out of any pi to fund deficits in the solid waste system since the City of San Diego was the I single city user of this system for a number of years. The City of San Diego CI has as much responsibility as any other city, if not more, for its share of the Nc debt and inactive and active landfill closure costs. On behalf of the City of Carlsbad I hereby respectfully request that the Board c Supervisors take no action on this proposal. Sincerely, HL Mayor LAUDE . "BUD" LEWIS m hs c: City Council San Diego County Board of Supervisors Chair of Solid Waste Authority City Manager City Attorney 4 e 0 - PROPOSED SOLID WASTE LAND USE FEE 0 PROPOSAL HAS BEEN HASTILY CONCEIVED - WITH NO OPPORTUNI FOR INPUT ON FINAL PROPOSAL SIGNIFICANT SHIFT IN POLICY FRO\ USER FEE SYSTEM TO A PROPERTY SYSTEM. 0 0 CITY OF SAN DIEGO SHOULD BE INCLUDED SINCE IT WAS A MAJOR USER OF THE SYSTEM. 0 MAJOR IMPACT ON BUSINESS SUC SHOPPING CENTERS, HOTELS AND AUTO DEALERS. 0 NOT GOOD POLICY - TAKE NO ACT1 -. 0 a THE LAW OFFICES OF D DWlGHTV TRACY R RIC JAMES H CRYSTAL CW MICHAEL S HA81 D. DWIGHT WORDEN w SCOTTW A P R 0 F ESS IO NAL COR PO RAT1 0 N 462 STEVENS AVENUE. SUITE 102 SOIANA BEACH, CALIFORNIA 92075 (6191 755-6604 - [619] 459-7979 FAX [619] 755-5198 November 28, 1994 San Diego County Board of Supervisors 1600 Pacific Highway San Diego, California 92101 Re: Solid Waste Land Use Fee; Agenda Item 27 11\29\94 Dear Members of the Board: As you know this office represents ten cities' in the pending litigation against the County and the Solid Waste Authority over the higher tip fees charged to non-Authority members, liability for NCRRA, past closure/post-closure obligations and related matters. Because the proposed Land Fee Ordinance ( l'LUF1l) appears inconsistent with the ten citj litigation position they have asked me to write this letter indicating they cannot endorse the concept at this time.2 between the first public airing of this proposal (November 1994) and its proposed adoption by first reading (November 1994)3, our ten cities have been unable to undertake the stz Moreover, because of the extremely short time provided - IIrnperial Beach, Chula Vista, La Mesa, El Cajon, Santec Coronado, Escondido, Carlsbad, Oceanside and San Marcos. Authority member tip fees are illegal, that the ten cities not liable for any of the NCRRA financial obligations, and they are not liable for past closure/post-closure costs bey what they have already paid through tipping fees and what t will pay through tipping fees if they continue to use the I To the extent that the LUF would impose NCRRA costs and pas closure/post-closure costs on the parcel owners of the ten whether or not they use the county system the LUF is incons with our litigation position. 21n the litigation our cities contend that the higher ' 3The short time is aggravated by the intervening Thanksgiving holiday. F:\CLIENTS\FEDTRD\LETTERS\DRLTBOS1.28 0 e San Diego County Board of Supervisors November 28, 1994 Page 2 analysis, consideration at public hearings, and formulation of official positions that would be necessary to fully evaluate the proposal and communicate a well considered position formally adopted by our cities.4 In the interests of protecting our right to challenge the LUF should it be adopted notwithstanding the lack of time for proper review, we register the following concerns for the record. 1. Thins and Notice. We express concerns for the following reasons with regard to A. The item is not listed on the agenda in a manner to give reasonable notice to the public of what is proposed. It simply states: lfImposition and collection of solid waste management land use fee". It does not alert a reader that a substantial parcel fee is proposed to be enacted against all parcels in the County except in the City of San Diego, nor does it advise of the amount, means of collection, or other important information. To add to the confusion, the Board agenda does not list the item as a joint meeting with the Authority, but the Authority agenda does list it in this manner, and the Authority agenda contains a different textual description. the noticing and timing on the proposed LUF Ordinance: B. The Notice published in the newspaper does not give reasonable notice of what is proposed. The Notice says only that the Board will consider "imposing and providing for the collection of Solid Waste Service Program Chargest1. This does not disclose, for example, that a substantial new parcel assessment is proposed on all property except in the City of San Diego. A reader of both the agenda listing and the published Notice could easily conclude the proposal is for some type of tip fee or gate fee charge, that it applies only to commercial haulers, that it affects ratepayers/users and not parcel owners, etc. 4No formal position of opposition has been adopted by the ten litigation cities as a group. Rather, the ten cities'group position is, as stated, neutrality with the notation that the LUF appears to be inconsistent with our litigation position and there has been inadequate time for further review. The ten cities are governed by a committee of the whole with a representative of each of the ten cities serving as a member and by an executive committee comprised of the managers of five of the cities, with the elected bodies of each of the ten cities retaining the final decision authority on all issues. Under the short time provided we have only been able to review the proposed LUF at the executive committee level. F:\CLIENTS\FEDTRD\LETTERS\DRLTBOS1.28 -.. e e San Diego County Board of Supervi Pa Likewise, neither the Notice nor the agenda discloses the amc of the charges, how they will be collected, or other importan information. In short, the agenda and the notice do not give reasonable notice of what is actually proposed. Because the backup was not available until the last minute (see below) tk was no ability for the public to find out what this proposal really is or how it will affect them. November 28, We also note that notice of the estimated individual pal assessments as required by County Board Policy F-14 was not c as req~ired.~ C. The final version of the proposed LUF Ordinance was available to the public until Wednesday November 23, 1994 -- day before the Thanksgiving holiday break -- leaving only onc working day before proposed action. Likewise, the staff rep( and backup were not available in final form until Wednesday, leaving only one day for review. We are not aware of any legal reason why the timing on 1 matter was so short. We do not believe that the impending cl in membership of the Board of Supervisors warrants shortchanc our cities or the public of a fair opportunity to review thii important proposal, particularly in light of the fact that tl fee is not proposed to be collected for many months and it w1 appear to be feasible to delay the action until more notice < involvement on the part of the cities and the public can be accommodated. 6 D. Because the LUF Ordinance and the backup have chang since they were endorsed by the Authority7 we believe they nc 'The proposed LUF would be subject to the majority prott and notice provisions of the Special Assessment Investigatio Limitation and Majority Protest Act of 1931, unless exempted Article 16, Section 19 of the state constitution. In turn, Section 19 requires "reasonable noticef1 which your Board pol defines as notice to every parcel owner subject to the fee indicating the estimated amount of the fee. 6My staff received a copy of the proposed LUF and backu: they existed at the time of the Authority consideration ther but was unable to obtain the final products, as changed, unt Wednesday in spite of an effort to get them from the Clerk c Board on Tuesday. 7Textual provisions have been added since the Authority action, e.g., a IfsunsetI1 provision has been added to the ordinance, and among other changes the proposed amounts of t fees have changed significantly. Instead of the $27 per F:\CLIENTS\FEDTRD\LETTERS\DRLTBOS1.28 w 0 San Diego County Board of Supervisors November 28, 1994 Page 4 to be sent back to the Authority befosre your Board can act. E. The short timing has precluded us from undertaking our own work and analysis and presenting it for the record at your hearing. additional documentation and analysis on a number of issues including but not limited to: If time permitted we would undertake and present (1) Appraisal and other work to verify whether the llbenefitll identified in the staff report is llrealll. (2) Investigation of the success, or lack thereof, of LUF programs in other counties, including but not limited to those identified in the staff report. (3) Financial analysis of (a) the validity of the methodology assigning the LUF versus the tip fee (b) the legitimacy of the basis upon which the LUF proposes to spread its costs (c) the legitimacy and equity of the financial impacts to our ten cities and their parcel owners and ratepayers versus the impacts to Authority members, the county and other system users including the City of San Diego (d) whether a legally cognizable net financial benefit accrues to anyone if the LUF is adopted, or if costs are simply shifted, or if benefits accrue to some at the expense of others, and (e) whether the LUF is consistent with the County's legal obligations to NCRRA under the existing NCRRA contracts and agreements and whether the LUF would improperly transfer NCRRA contractual obligations to others. legal authority for the proposed LUF in the form in which it is proposed'. (4) A complete analysis as to whether or not there is We question the legality of using the Health and - residential parcel proposed in the Authority endorsed draft, the latest version proposes $20.56 per residential parcel. Other numbers have also changed and it is impossible, at the last minute, to even figure out what is being proposed from a financial perspective and whether the approach is sound. *It is noted that if the LUF is characterized as a Ifspecial tax," and it has many attributes of a lltax,ll it is in violation of Prop 13 because no 2\3 vote of the electorate has occurred. If characterized as a "benefit assessment," the notice and majority protest requirements of statfe law and County policy have not been met. different authorized by the case of Kern County Farm Bureau v Countv of Kern under the Health and Safety Code it is noted that there are significant differences between this LUF and the facts and fees in Kern. there were no tipping fees and the fees applied county wide with If the claim is that the LUF is something For example, as reported in the Kern case, F:\CLIENTS\FEDTRD\LETTERS\DRLTBOSl.28 -. 0 0 San Diego County Board of Supervi Pa November 28, Safety provisions to refinance debt as proposed for services are provided in a vibrant private market. Code provisions are for financing sewer, water and similar PC facilities where there is no private market. The Health and Saf (5) Conduct a series of interactions with the Cour and the Authority regarding the proposed LUF similar to the process that has been used in the past when fees are proposec In light of the inadequate time to undertake these impoi activities the ten cities ask that no action be taken until 1 questions and concerns can be answered. 2. EQUITY AMONG CITIES AND USERS. We note that there are apparent inequities in the propo LUF. For example, the City of Oceanside for many years had own landfill used by its residents and ratepayers. Oceansid sent little trash to the County system during this time. Oceanside is now paying its own closure and post-closure COS for its landfill. The City of San Diego, although it also h its own disposal system, nevertheless, sends about 100,000 t per year to the County system, yet Oceanside parcels are pro to pay the full LUF while San Diego parcels are exempted. There are also apparent inequities between Authority me cities and non-Authority member cities, including those who left the system and those who will soon leave. These non-mE cities were not, and are not, obligated for any of the NCRRF obligations. Once out of the County system, those who depar seek no further service from the system, yet they are propos be subjected to the LUF nonetheless, thus forcing them to pz NCRRA and to pay closure/post-closure costs. There does not appear to be a llnexusll for the fees, nor does it appear that 1600 requirements are met. In effect the LUF eliminates the economic benefits o no equivalent to the proposed exemption of the City of San 'For example, the cities and the County underwent a lei and productive process of cooperation and coordination rega the proposed assessment for the Vector Control Assessment b imposition of fees was acted upon. While it is acknowledge representatives of the Authority met with representatives c ten cities Executive Committee and their counsel informally discuss the LUF on November 15 and 18, 1994, this is not a substitute for the type of open, public process involving c elected officials and staff. F : \CL IENTS\FEDTRD\LETTERS\DRLTBOSl .28 W 0 San Diego County Board of Supervisors November 28, 1994 Page 6 option of leaving the system since parcels in the departing cities will pay for NCRRA and closure/post-closure whether or not they leave and whether or not they use the county system. this manner it appears that the LUF henefits the County and NCRRA (Therm0 Electron and the Swiss bank) by transferring the financial commitments the County made and the economic risks taken by Thermo and the Swiss bank to parcels in the cities who did not make the commitments or assume the risks, and by providing additional security to Thermo Electron and the Swiss bank beyond all current commitments. In We are concerned that the LUF is an infringement on the due process and equal protection rights of the ten cities and their parcel owners and ratepayers and that it appears to violate the Commerce Clause of the U.S. Constitution by having the effect, if not the intent, of economic protectionism. The LUF could be viewed as just another facet of a concerted effort to use economic protectionism as a means to try and force cities to join the Authority and/or to continue to use the county system even though it is not cost effective. We also note apparent inequities between land owners. A newly developed property will pay the same fee as a long developed property even though the history of trash generation and use of the system by these two classes is dramatically different. have contributed waste generating the need for closure/post- closure actions, new property owners will pay the entire fee while those who generated the trash will not if they have sold their property. And, without further research we cannot accept the validity of the EDU computations or the assigned fee amounts based on the limited survey information provided. Although staff informed us that government and publicly owned parcels were not intended to be charged, we note that the proposed ordinance will charge schools, hospitals, and other public lands. obligation without complying with Government Code sections 65401- 402 and without some effort to meet and confer with these other public agencies, including member and non-member cities, before imposing the fees. And, we question whether the County has the legal authority to require one government agency to divert its tax funds to the solid waste system in this manner. Likewise, although prior owners are the ones who may We question imposing such an intergovernmental 3. CEOA We question the propriety of the claim of exemption from CEQA. The LUF will, in effect, I1refinance1I NCRRA which was and is a capital expansion project, and the LUF will in part finance future closure/post-closure projects, presumably of a capital nature. Literally read, the proposed ordinance itself is even F:\CLIENTS\FEDTRD\LETTERS\DRLTBOS1.28 -. e 0 " San Diego County Board of Supervi Pa broader in scope. And, the LUF will free up Authority/County bonding capability which we understand will be used to undert capital and expansion projects. impacts of the LUF must be considered, and they indicate the proposal is not CEQA exempt. Without belaboring the point, i seems obvious that the LUF will have environmental impacts as public and private markets adjust operations to this signific new fee. These environmental ripple effects, their costs and commitment to the project is made. November 28, These direct and indirect potential mitigation measures, should all be addressed bef on 4. DELEGATION AND CONTROL OF THE FEES. We question the propriety of the County's enactment of i program to extend for 22 years when the County has already delegated solid waste fee setting power to the Authority and in the process of transitioning all system assets and liabil. to the Authority. After the transition is complete next yea; system will be the responsibility of the Authority, yet the County will, apparently, retain control of the LUF. We quesi the propriety of divorcing control of the finances from the control of the system in this manner. Moreover, if the County can enact this LUF now without individual notice to parcel owners, without a public vote, without undertaking a process involving the cities and other affected public agencies, without majority protest rights in landowners being assessed, and without any environmental rev the County could at any time raise or lower the fees in the manner. The Authority, and the parcel owners in member and member cities, have no real assurance as to the future under set up. It is also noted that the final prop-osed version of the relies exclusively on an "after the fact" protest procedure parcel owners, with the County I1Directort1 and then the Execc Director of the Authority deciding whose fees will be *ladjus and whose will not. The grounds for protest are very limit€ We question the legality and equity of this approach. There no opportunity for protest on the key issues of whether or r the fee violates Prop 13, is a benefit assessment requiring majority protest and individual notice to land owners, etc. the proposed amendment to the fee-setting delegation resolu' would make clear that the County is not delegating authorit] these fees to the Authority, yet after transition the only i and fee adjustment power resides in the Authority's Executi7 Director--an apparent inconsistency. The staff report indicates that the LUF will be used f NCRRA debt, past closure and post-closure costs and some fu closure/post-closure costs. The ordinance itself, however, F:\CLIENTS\FEDTRD\LETTERS\DRLTBOSl-~8 W e San Diego County Board of Supervisors November 28, 1994 Page 8 much broader. ItSolid Waste Program Costs", which includes recycling, construction, financing, and a variety of other activities, including capital facilities projects and expansions. Ordinance appears to be inconsistent with both the staff report and the claim of CEQA exemption in this regard. It allows the monies collected to be spent on any The 5. NO DEBT REDUCTION. There is nothing in the proposal indicating that the pain of refinancing the NCRRA commitments is to be I1sharedii equitably, rather it appears that the entire debt will be paid by parcel owners with no guarantee of debt reduction by Thermo Electron or the Swiss Bank. There is no assurance that the County or the Authority will share this lvpainll, only that the parcel owners will be assessed the full amount--some $500,000,000 plus by the end of the 22 years --to ensure that the private parties who, we were assured, "took the risk" are fully paid by the taxpayers.'' Everyone agrees that the prior County Board's approval of the NCRRA project was, in hindsight, a bad decision. If the parcel owners/taxpayers are to be asked to bail out the County from this bad decision, at minimum, there should be a guaranteed, up front debt reduction on the part of Thermo, the Swiss bank and any other partners in the project with the parcel owner/taxpayers underwriting only the reduced balance. We also question the propriety of imposing this new fee on landowners as opposed to ratepayers using the system. landowners may not use the system and will derive no benefit therefrom. This is true as to landowners in the ten cities which have left, or will leave, the system. These non-users should not be charged. Many - 6. FAULTY AND QUESTIONABLE ASSUMPTIONS. It appears that there are a number of faulty and/or questionable assumptions in the staff report that merit, at minimum, further analysis and revision as necessary. These include : ''We cannot help but note that Thermo Electron in its most recent quarterly report indicated to its hsare holders that it had increased profits from the start up of its NCRRA facility, and that in Thermo's most recent llnews" release dated November 9, 1994, it reported to its hsareholders "record third quarter profits". We see no reason why the parcel owners/taxpayers should endure the proposed LUF for Thermo's benefit without an equal contribution from Thermo. F:\CLIENTS\FEDTRD\LETTERS\DRLTBOS1.28 ..L e 0 San Diego County Board of Supervi Pa November 28, A. Flow Assumption. The assumption that there will be million tons in the system is questionable. Currently, there significantly less flow and more cities are planning to leaw system. If less than 1.25 million tons is available, the al: tlcost savings" between the combined LUF and tip fees will qu: evaporate to a negative as tip fees rise to cover costs. assuring that the alleged "savingsF1 will exist for 22 years f that they will be passed on to ratepayers. Whether this occi or not depends upon the contracts between the cities and the haulers and their rate ordinances and a number of other variables. At minimum the County should have met with all o cities to study this point and devise a means to assure that savings are realized by the ratepayers. We also note, again the inequity of requiring landowners to pay, but passing sav to ratepayers. B. Savinss will Pass to Ratepayers. There is nothing C. Historical Statements. There are a number of state in the staff report that we believe are not correct historic For example, the history of NCRRA and related matters are no complete or correct. And, it is not true that a of the ci approved the COSWMP, or that the COSWMP called for NCRRA. G time and the opportunity we would gladly go through the rep0 detail noting the necessary corrections. D. Ratepayer Impacts. The staff report assumes that t LUF in combination with a reduced tip fee of $39 per ton wil neutral in its impact to the ratepayers. In the limited tir available we have only done preliminary sample testing of tl assumption, but it appears to be incorrect. For example, a residential property in Oceanside will pay $61.51 per year i the LUF and the $39 tip fee, using the staff report figure c 1.05 tons generated per year per residence. Using the same per year figure, the same Oceanside residence pays only $50, cents in the absence of the LUF and utilizing Oceansidets c' non-county option. These residences will face an increase 1 $11.11 per year, not a neutral impact, from the LUF. We be similar impacts are likely in other cities even if the othe staff assumptions prove correct. We are unable to determine from the staff work provide1 whether non-residential properties will receive a net incre neutral impact, or a net decrease in costs. It appears tha least some of the non-residential categories will receive a increase. Likewise, the charges to public property--school districts, public hospitals, etc. do not appear to be ltrevE neutral", to these public agencies, although again no analy presented in the staff work and time has not allowed us to undertake our own analysis. F :\CLlENTS\FEDTRD\LETTERS\DRLTBOS1.28 0 0 San Diego County Board of Supervisors November 28, 1994 Page 10 4. CONCLUSION The ten cities have not had time to review the proposed Land Use Fee Ordinance in the detail necessary to formulate an official position. taken on the proposal at this time. upon we note for the record that it appears to be inconsistent with the ten cities litigation position and that we cannot endorse it at this time for that reason. We also note our objections and raise our concerns for the record, to the extent we are able to in the short time available, to protect our rights in the event the ordinance is adopted in spite of our request for more time for study. issues and to submit further evidence and argument as our research continues. Accordingly, we request that no action be If the proposal is acted We reserve the right to raise further We appreciate your attention to our comments. - Sincerely, LAW OFFICES OF D. DWIGHT WORDEN A Professional Corporation Q.aeeLt4Gf4 D. Dwight Worden c: Clients Board of Supervisors Clerk of the Board of Supervisors Solid Waste Authority County Counsel CAO Rourke & Spradlin County Department of Public Works F:\CLIENTS\FEDTRD\LETTERS\DRLTBOS1.28 i .COUNTY OF SAN DIB);S BOARD0 CHIEF ADMINISTRATIVE OFFICE Brian AGENDA ITEM Oiann Pam s Leon John Joint ST;A/Board o 11/29/94 item : DATE : November 29, 1994 TO: Board of Supervisors SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) SUMMARY: - Issue Should the Board adopt an Ordinance to collect a Land Ust Fee for the Solid Waste Management Program? The charges imposed by this Ordinance will be collected on the tax r( in the same manner with the general taxes. The charges 1 been determined by the average amounts of solid waste generated by each economic activity identified (commercii residential, industrial agricultural, institutional and recreational) in the assessment roll. Recommendation On behalf of the Solid Waste Authority, the Chief Administrat Officer is forwarding the following recommendations for the B of supervisors) cansideration? 1. Find, in accordance with Section 15273 of the California Environmental Quality Act (CEQA) Guideli that CEQA does not apply to this project because it the approval of a service charge by a public agency fund portions of an existing solid waste system, an specifically for the purpose of meeting operating expenses, purchasing or leasing supplies, meeting financial reserve needs and requirements, obtaining funds for capital projects necessary to maintain service within existing service areas, within the meaning of Guidelines Section 15273(c). Waive Board Policy A-117 which specifics that no ne fees shall be proposed, because the use fee should result in no net fiscal impact to ratepayers. 2. 3. Read title and waive further reading of ordinance PROVIDING FOR THE COLLECTION OF SOLID WASTE SERVICI PROGRAM CHARGES. Introduce ordinance for further consideration and adoption on December 6, 1994. (4 votes required) entitled (unanimous vote): AN ORDINANCE IMPOSING AI! 4. L e 0 SUBJECT: Imposition and collection of solid Waste Management Land Use Fee (All Districts) 5- Amend the June 28, 1994, RESOLUTION DELEGATING TO 'I SAN DIEGO SOLID WASTE MANAGEMENT AUTHORITY THE SETT OF SOLID WASTE DISPOSAL FEES AND ESTABLISHING THE FUNDAMENTAL POLICY AND STANDARDS UNDER WHICH SUCH DELEGATION SHALL BE EXERCISED, to state specificall that setting of solid waste service program charges pursuant to Health and Safety Code section 5470 et is not a power delegated to the San Diego Solid Was Management Authority. Controller to issue revenue anticipation notes or 1 initiate a treasurer's loan against the anticipate( revenue. 6. Direct the Chief Financial Officer, Auditor and FISCAL IMPACT The use fee should result in no net fiscal impact to ratepayers, If approved, this request will result in a meth for funding the Solid Waste Enterprise Fund, as a partial alternative to tipping fees. For single family residences, tipping fee will be reduced to the extent of the use fees; t reduction should be passed through by Cities and franchised haulers to ratepayers. For other land uses (commercial, industrial, agricultural, institutional and recreational) th intent of this proposal is to have 85% of the Land Use Fee directly off-set by the reduction in the tipping fee, as pas on from haulers. The remaining 15% will be off-set indirect decreasing the tipping fee for waste not tied to a specific use, such as construction and demolition debris. This decrc Will be passed on to commercial and industrial ratepayers tk reduction in the cost of doing business with construction 6r demolition type companies. If the use fee is not approved, Solid Waste Enterprise Fund will have to be subsidized by tf County General Fund, or the Solid Waste Enterprise Fund coul face insolvency. SOLID WASTE AUTHORITY On November 10, 1994, the Solid Waste Authority reviewed th proposal and recommended that the Board of Supervisors adop Land Use Fee. All members present voted in the affirmative except Authority Member Pam Slater, who abstained. BACKGROUND : ORDINANCE SUMMARY 2 c. 0 0 e BUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) The proposal before you is the adoption of a Land Use Fee to collect funds to offset some of the County/Solid Waste Author system costs. Funds generated by the ordinance would finance components of the solid waste system associated with historic financial responsibilities of the solid waste system. The resulting Land Use Fee for a single family residence would be $20.56 annually. The Land Use Fee for other categories of residential parcels, commercial, industrial, agricultural, institutional and recreational parcels will be proportional t the amounts of solid waste generated by that land use, The remaining solid waste system would be financed by a mixed was tipping fee of approximately $39 per ton. I. WASTE DISPOSAL IN THE COUNTY OF SAN DIEGO For decades, the incorporated Cities in the county other thai City of San Diego (the "Citiestt) relied on the County to proi waste disposal facilities, The Cities were charged a tippin( that was set to cover all operating costs of the landfills lo at the time the fees were charged. Until the early 1980s, tl tipping fees were set at less than $10 per ton. By assuming responsibility for providing landfills, the County relieved ' Cities of a substantial burden for many years. A. Legal Changes Affecting Landfilling Recently, changes in state and federal law have dramatically increased the costs of maintaining waste disposal sites (bot active and inactive), of expanding capacity at existing acti sites, and of locating new waste disposal facilities. Summa of some of these laws follow: AB 3525 -- Solid Waste Assessment Testing 1, In 1984, the legislature passed the Solid Waste Assessn Testing requirements under the Water Code section 1327: These require all operators of active and inactive site determine whether hazardous wastes are leaking and/or affecting the water supply. 2. AB 2448 -- Closure and Postclosure Maintenance In 1987, the legislature enacted a requirement that la] operators submit closure and post closure maintenance and to set aside sufficient funds to implement the pla 3 e 0 * SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) 3. AB 939 -- Recycling In 1989, the legislature passed a requirement that count adopt ((integrated waste management plans, '1 describing ho 25% of the solid waste stream will be recycled, reduced composted by 1995 and 50% by 2000. In 1986 all the Citi in the region and the County approved the County Solid W Management Plan (CoSWMP), which included the constructio a waste-to-energy facility at the San Marcos Landfill. major component of that facility was a recycling plant. During September 1991, consistent with the CoSWMP and AI 939, the Board of Supervisors approved the Restated Sen Agreement, which then allowed construction of the NCRRA recycling facility. Other components of the CoSWMP that have been implement€ the County Solid Waste Division include the green waste program; the demolition and construction debris diversic businesses that recycle those material; funding for the provision of programs to inform the general public, including businesses, about less expensive recycliny alternatives to disposal; and the partial funding of bo private and public recycling programs which have enable( County to presently be at the 302~40% reduction level s 1989/90. 4. Subtitle D In October 1993, new federal regulations came into effe requiring composite (clay plus plastic) bottom liners a landfills and under lateral landfill expansions. These requirements could require the County to spend from $30 $50 million on existing landfills to improve areas, SUC Canyon #3 of the Otay Annex landfill, that otherwise we fully permitted. These rules are fully applicable des€ the climatic and geological conditions that make Southe California a relatively safe place for landfills. 5. Removed some of the flexibility allowed by Subtitle D L adopting more stringent requirements related to alternc liner systems. Adopted 1993. Reqional Water Quality Control Board Order 93-86 4 0 0 SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) 6. Flow Control On May 16, 1994, the United States Supreme Court invalid "flow Control" regulation as violative of the federal constitution's interstate commerce clause, in its decisi in C & A Carbone v. Town of Cnarkstown (1994) 511 U.S. - 128 L.Ed. 2d 399. This ruling essentially made it impossible for counties or cities to use their regulator power to direct private entities to dispose of trash (ar pay tipping fees) at designated facilities. The increased costs and decisions mandated by these regulatic were not foreseeable and could not have been anticipated at 1 time the tipping fees were charged to the Cities using the 0: closed sites. The County is now obligated to pay for these increased costs by state and federal law even though the Coui operated and closed the facilities consistent with the accep' industry standards at the time. B. Efforts At Regional Cooperation And Planning In the early 1990s, the Cities began to express concern abou' escalating costs for solid waste disposal and management- T County, facing increasing investments for solid waste projec and in light of its investment in NCRRA, sought some certain to the amounts of trash it should expect to handle in the fu Beginning in 1992, the County and the Cities began a two-yea effort to give the Cities a greater voice in solid waste decision-making in exchange for a commitment of waste flow f each of the Cities. This *tflowlt commitment was necessary sc the system could make plans for capital investments that wou necessary to handle the trash, to enhance the system's finar options, and to insure that the NCRRA ttput-or-paytt trash commitment was met. In 1993, the County and 17 Cities form€ Interim Solid Waste Commission, with flow commitments lastir until May 1994 or until the end of the term of any bonds is$ for solid waste purposes. However, the Interim Solid Waste Commission consistently voted to recommend to the Board of would operate on a "pay-as-you-gon basis with the tipping ft to recover all capital and operating costs. Effective June 1, 1994 the Solid Waste Authority (the I1Authority") was formed by the County and Cities of Del Mar Enchitas, Lemon Grove, National City, Poway, Solana Beach Vista. The remainder of the Cities have chosen not to join Supervisors that no bonds would be issued, and that the sysl 5 a e SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) Authority, as they search for what they believe to be less-co waste disposal options. C. Current Solid Waste System Economics 1. Pay As You Go Tipping Fees Now Exceed Private, Disposal-Only, Prices Until 1992, the tipping fee at County landfills was $28 ton. During the life of the Interim Commission, the til rate suggested by the Interim Waste Commission as well i the Ernst & Young audit of the solid waste system. Thi: rate assumed long term bonds would be issued to fund the expansion of the San Marcos landfill and other projects. However, that report also indicated that $65 per ton wa: proper 9tpay-as-you-go1t rate, in the absence of bonding. During the term of the Interim Commission, a North Counl Joint Powers Authority (JPA) solicited outside private 1 for the disposal of solid wastes. These bids, which generally provided disposal only,* showed that outside disposal options were generally available for approxima $52 per ton. During June 1994, the Board of ,Supervisors delegated th responsibility for setting the tipping fee to the Solid Waste Authority. Also in June, the Board of Supervisor the tipping fee at $55 per ton. Having accepted the responsibility, the Authority set the tipping fee at $5 ton and offered non-members various contract options on August 11, 1994. On September 15, 1994 the Authority adopted a fee sched increasing the tipping fee to $55 per ton for member Ci fee was set at $43 per ton.' The $43 per ton rate was t The cities of Escondido, Oceanside, Carlsbad and C 1 Vista, which did not initially join the Interim Commission, charged a rate of $62 per ton until they finally joined the Interim Commission late in 1993, but later were refunded thc differential rate. For instance, the bidders did not agree to pay fol maintenance of existing inactive landfill sites in San Diegc County nor did they assume liability for site cleanup resull from impacts caused by the cities' refuse. 2 6 W w SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) and $74 per ton for nonmember Cities effective October 1 1994. Nonmember Cities were also offered agreements whe they would pay disposal fees close to the member rates i exchange for shorter-term waste commitments. However, n nonmember Cities have accepted such arrangements. 2. Trash And Income Are Leaving The County In Response Higher Tipping Fees Since the formation of the Authority on June 1, 1994, th nonmember Cities have actively sought alternatives to Co disposal options, The Cities of El Cajon and Oceanside each voted to enter into franchise arrangements with Was Management Inc.! whereby their waste would be hauled to disposal sites in Los Angeles County for a fee in the re of $45 per ton.3 Other Cities, including Carlsbad and Escondido, are also contemplating sending their waste OL county for disposal, The Cities claim that the tipping charged at County facilities is too high to be competitj with other options, They also disclaim any responsibilj for sharing the costs of inactive sites where their citizens' waste was previously disposed, or for bearing costs of the NCRRA facility, although that facility is available to all Cities' haulers and citizens. 3. Tipping Fees Cannot Economically Recover The Costs Providing Solid Waste Management Services Under these circumstances, an escalating tipping fee is an acceptable method of funding the solid waste system i currently exists. As El Cajon, Oceanside and Carlsbad i their trash to be taken out of the County, with other C. contemplating the same future action, the burden to pay fixed system costs must be shifted to the remaining mem Cities. tonnages, the tipping fee escalates, and tonnage decrea As these costs are spread across decreasing further, thereby exacerbating the problem. If the fee-generated portion of the solid waste budget borne by the citizens of the unincorporated area and th Authority's member Cities, the tipping fee would have t However a significant portion of El Cajon's waste 3 is still being delivered to the system by commercial and sel haulers. 7 0 0 BWJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) set at $132 per tone4 If the budget were borne solely b: the citizens of the unincorporated area, the tipping fee would have to be $231.' These numbers are obviously economically unrealistic. Once trash disposal dips below certain levels and income falls, the County is at risk of default under its NCRRA obligations, an event that would seriously damage the County's credit rating and could have profound impacts ( the County's ability to provide services of all types region-wide, Moreover, as rates skyrocket, illegal dum] will increase. The Cities leaving the system are ostensibly leaving to achieve cost savings by using out-of-County facilities. However, because the Authority's tipping fee must cover cost of active and inactive sites, NCRRA recycling, and other programs with regional benefit (e.g. household hazardous waste programs and recycling programs) there presently no equal basis for comparing between the Authority's fee and other alternatives. The out of Coui the Authority's fee and which should be equitably borne the nonmember Cities. The proposal before you is the adoption of an ordinance collect funds to offset some of the costs of the County/Solid Waste Authority solid waste management sys All amounts collected will be placed in the Solid Waste Enterprise Fund. set at a level that is competitive with outside entitie Beginning December 1, 1995, the Solid Waste Authority i scheduled to own and control all assets, liabilities ar obligations of the solid waste system now operated by t County. If the Board approves this ordinance, by the t funds are available, the solid waste system will be the responsibility of the Solid Waste Authority and all alternatives do not include the costs that are included This would enable the tipping fee to Assuming full flow control, with households bearii 4 full cost of the system, this would result in an increase 0. about $15 per household per month, or $180 per year. Assuming full flow control, with households beari: full cost of the system, this would result in an increase o about $36 per household per month or $432 per year. 5 8 w w SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) additional funding for the system will be their responsibility. 11. STRATEGIES IN OTHER COUNTIES The use of benefit fees for the funding of solid waste manage activities has been applied in various California counties fc least 20 years. A recent suwey was conducted by the Depart1 of Public Works Solid Waste Division concerning the utilizat: of ].and use fees by other counties within California. Of tht counties that responded to the survey, 15 utilized a land US( to fund a portion or all of their solid waste system. Ninetf counties used the tipping fee exclusively to fund their solic waste system, and nine did not operate a landfill. A summaq the survey is attached as Attachment P. Counties use of a similar land use fee follows: A. The County of Kern instituted solid waste land use fees 1989. Kern County now charges tipping fees only for agricultural, commercial and industrial wastes; residen wastes are not charged at the gate. The use of the fee! were to partially fund the costs of compliance with new state and federal environmental regulations which great increased the capital costs of existing landfills as we the closure costs of both active and nearly-completed landfills, The Kern County land use fees apply to both incorporated and unincorporated areas, just as the prop San Diego County fees. These fees and charges survived various legal challenges in Kern Cauntv Farm Bureau V. County of Kern (1993) 19 Cal.App.4th 1416. The County of Los Angeles has been applying solid waste use fees on the unincorporated territory of the County 1991, funding its services and facilities related to th preparation, adoption and administration of the County' Household Hazardous Waste Element (HHWE) and the Source Reduction and Recycling Element (SRRE) of the Integrate Waste Management Plan. They use a landfill tipping fee fund the waste management operations of the County. C. In 1994, Nevada County began collecting solid waste la1 fees in addition to their tipping fees. The tipping €e are used to cover the operations costs of transporting refuse out of the county, while the land use fees cove] the other costs of the solid waste system and closure/] closure costs. Details of three B. 9 w w SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) 111. RECOMMENDED STRATEGY Staff recommends that approximately 33% of the solid waste management budget be funded through land use fees, and the remainder through tipping fees. Under these circumstances, tipping fees would be set at approximately $39 per ton, low enough to keep wastes from being exported out of the County. A. Proposed Ordinance Funds generated by the ordinance would finance several compor of the solid waste system: the debt service for the NCRRA pl the closure and maintenance of the inactive landfill sites, 1 closure and maintenance of portions of active landfills and 1 repayment of funds borrowed from the Closure Reserve Fund, The annual cost for these services will be approximately $24,600,000. Based on this amount, the resulting Land Use FI would vary for different land use categories (commercial, residential, industrial agricultural, institutional and recreational), but for a single family residence the Fee wou $20.56 annually. The debt service for the NCRRA plant, the maintenance of the inactive landfill sites and the system wide programs are recommended to be financed by the Land Use Fee since the cos these programs are relatively fixed and are not related to t volume of solid waste taken in by the system. The remaining solid waste system (the active landfills, and operation and maintenance of the NCFtRA facility) would be financed by a mixed waste tipping fee of approximately $39 E ton, based on 1,250,000 system-wide tons. The following table lists the estimated future annual costs, funding method, for the major components of the solid waste system. The estimated dollar amount for each component incl required capital improvements, staffing and administration c 10 W SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) TABLE 1 PROGRAMS TO BE FUNDED BY THE MIXED WASTE TIPPING FEE ACTIVE LANDFILLS $ 35,500,000 NCRRA OPERATIONS AND MAINTENANCE $ 13,500,000 Mixed Waste Tipping Fee Total $ 49,000,000 PROGRAMS TO BE FUNDED BY THE LAND USE FEE NCRRA DEBT SERVICE $ 13,300,000 INACTIVE LANDFILL CLOSURE AND MAINTENANCE $ 9,600,000 PORTIONS OF ACTIVE LANDFILLS CLOSURE AND MAINTENANCE, AND CLOSURE RESERVE FUND REPAYMENT $ 1,700,000 Land Use Fee Total $ 24,600,000 - Total $73,600,000 - B. Ordinance Details The attached ordinance (Attachment 2) contains a summary tal entitled "BENEFIT UNIT BREAKDOWN1'. Within this table are tl parcel types and an assigned Itbenefit units per dwelling un: upon which the proposed solid waste land use fees are based These benefit units have been determined by the average amoi of solid waste generated by each economic activity identifit (commercial, residential, industrial agricultural, institut. and recreational) in the assessment role. The base unit is equivalent dwelling unit (EDU) which is assigned to a singlc family residence. All other assignments of EDUs are ayeragc multiples of this base single family residence. The assign- Sari Diego County landfills and associated EDU assignments g by Los Angeles County, Kern County and Nevada County. of EDUs have been based on the distribution of waste receiv 11 w W SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) The proposed ordinance would include all parcels within San D County with the exception of those within the City of San Die which has operated and maintained its solid waste management system separate from the County system. The charges will be imposed, in the same manner with the gene taxes, each year commencing with the fiscal year 1995-1996 up each parcel of real property to which this Ordinance applies. Any person may pay such charges under protest by filing a Not of Payment Under Protest with the Director prior to the date first installment of general property taxes is delinquent. (December 10 or the first business day thereafter if December 10th is on Saturday or Sunday.) The grounds for protest are limited to the following: (1) the parcel is incorrectly classified, or (2) the charge is not correctly computed under provisions of this Ordinance. Protest shall set forth the grounds for the protest and shall made on a form supplied by the Director. determines that the parcel was not correctly classified or tl the charge was not correctly computed under the provisions oJ this Ordinance, the Director shall modify the charge. The decision of the Director shall be final. The General Manage1 the Solid Waste Authority shall assume the role of the Direct when the Solid Waste Authority assumes the system. The proposed ordinance will have a sunset expiration date of C. Single Family Residence Trash Bill Impact All Notices of Payment Under If the Director 30, 2017. The proposed land use fee for a sinqle family residence will $20.56 annually or $1.71 per month. This proposal also incl reducing the tipping fee to $39/ton. The land use fee will raise $24,600,000 in revenues for the system. would be raised by $19,68/tOn. A typical residence generates about 175 pounds per month, allowing for a reduction of $1.71 per month (175/2000 = .087 tons per month: -0875 tons/month x $19.68/tOn tipping fee = $1.7l/month in savings). This savings can be passed back to homeowners by the cities and the haulers, who will enjoy a reduced tipping fee. The $1.71/ month savings, or $20,56/ye equivlant to the $20.56 annual land use fee. If this were raised by tipping fees, the per ton ra 12 m w SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) Using information recently gathered from six randomly chosen Cities within San Diego County, the following estimate was ma( on the impact this proposal would have on the trash bill for l single family residence. Last July, an average bill in the s Cities sampled increased from approximately $15.45 per month $17.25 per month. adjustments for hauling companies and the increase in tipping fees at system landfills, It is expected that there will be decrease from this average $17.25 to an average of $15.54 (a reduction of $1.71). IV. ALTERNATIVES A. The increase was due to cost of living Attempt Continued Operations Through ttPay-As-You-Golt TiF Fees The County and the Authority could continue to attempt to fur the solid waste system through tipping fees set at a level adequate to cover system costs, This would require a tippin5 of between $65 and $80 depending upon the amount of solid was entering the system. However, it is already clear that at these rates, Cities wilj continue to seek disposal-only options outside the system. 7 keep Cities in the system, it would be necessary to set tipp: fees in the range of $30 to $40 per ton, Therefore, it is nc longer feasible to recover the costs of providing the solid management system through tipping fees alone. B. Subsidize Solid Waste Enterprise Fund With General Fund Tipping fees could be set at a level to encourage trash to assessing a land use fees. However, this would require gene fund subsidies to avoid insolvency. If the tipping fees wer at a competitive level of $40, for example, with no land USE at 1,250,000 tons/years, there would be a deficit of approximately $30 million per year. General Fund augmentati would be required to avoid insolvency. C. Fund Entire System Through Land Use Fees The entire budget of the solid waste system could be funded through land use fees, charging no tipping fees at all. Thj would result in an annual benefit fee of approximately $62 r basic unit. However, this unfairly removes all burden from continue to be disposed of in County facilities, without 13 e SUBJECT: Imposition and Collection of Solid Waste Management Land Use Fee (All Districts) persons actually using the landfills and removes an important economic incentive for recycling. V. OTHER FINDINGS A. CEQA Determination Section 15273 of the CEQA Guidelines requires that the public agency using this exception shall incorporate written finding the record of any proceed in which an exemption under this section is claimed, setting forth specificity the basis for t claim of exemption. The money collected from the land use assessment will be used the NCRRA debt service, inactive landfill closure and maintenance, portions of active landfills closure and the maintenance and closure reserve fund repayment. B. Delegation of Rate Setting Authority On June 28, 1994, the Board adopted a RESOLUTION DELEGATING 9 THE SAN DIEGO SOLID WASTE MANAGEMENT AUTHORITY THE SETTING 01 SOLID WASTE DISPOSAL FEES AND ESTABLISHING THE FUNDAMENTAL PC AND STANDARDS UNDER WHICH SUCH DEIXGATION SHALL BE EXERCISED, County Staff and the Authority understand that this delegatit was intended to cover the setting of tipping fees only, not use fees for the solid waste management program. The propost amendment (Attachment 3) reflects and clarifies that understanding. C. Waive Board Policy A-117 Board Policy A-117 specifies that no new or revised regulati or no new fees or taxes that will have a significant impact business shall be proposed, While this land use fee is a new fee it should result in no fiscal impact to ratepayers, The landfill tipping fee will reduced to the extent of the use fees; that reduction should passed through by Cities and franchised haulers to ratepayer D. Because of the time involved in the tax roll process, reveni from the use fee would not be collected until December 1995 Borrowing Against Future Collection Of Revenues 14 P SUBJECT: Imposition and Collection of Solid Waste Managemen Land Use Fee (All Districts) However, since they would be required before then, the Audit and Controller should be authorized to issue revenue anticiF notes or to initiate a treasurer's loan against the anticipa revenue. The Chief Administrative Officer submits this letter upon tk recommendation and on behalf of the Solid Waste Authority, r+ endorsed the land use fee on November 10, 1994. Forwarding item for your consideration is also consistent with the Memorandum Of Understanding between the County and the Authc approved by your Board in August 1994. 15 0 0 BOARD OF SUPERVISORS AGENDA ITEM INFORMATION SHEET SUBJECT: Imposition and Collection of Solid Waste Managemen Land Use Fee (All Districts) SWPV DIST: All COUNTY COUNSEL APPROVAL: Form and Lega ( ) Standard Form (X) Ordinance ( ) Resolution AUDITOR IPPROVAL! (X) NJA ( 1 Ye&/ OTES: (X) Yes ( FINANCIAL MANAGEMENT REVIEW: ( ) Yes (X) No CONTRACT REVIEW PANEL: ( ) Approved (X) N, CONTRACT NUMBER (S) : N/A PREVIOUS RELEVAN'I! BOARD ACTION: BOARD POLICIES APPLICABLE: Board Policy No. A-117 CONCURRENCES: ATTACHMENTS: #1 Land Use Fee Survey Results, #2 Ordinance, Fist Amendment to Solid Waste Authority Resolution ORIGINATING DEPARTMENT: Public Works CONTACT PERSON: John A. Miller (JTR) 759/974-2607 (0383) (\ (: ci ql!-*.,/: LC,- November 29, : AUTHORIZED REPRESENTATIVE MEETING DATE DPW/Solid Waste Division Telephone Survey October 1994 MeMod d CoWctiOn lip Fee or Land Use Fee 0 BOVI' Icommerds JcwntyName NoGountyLsndM TipFeeOnl LandUseFeeW Bovl TtFee CandVseFce TipFee LandUseFee 1 Ahmeda 1 (>oesnotownoroperate~ 2Amadoc 1 $9.00 18/ron GeoeralFundS18non 3 8Une 1 517.00 1 flSO/yc/du SlSWyT. Residents hetm 4 Cahvecas 5 Wvsa 1 $44.67 7 DelNofle 1 $16.00 9 Humtmt 1. Does not own or opwate I 10 lnyo 1 0.5% Sales tax 11 Kern 1 $29.00 f57tyrldu Both Gate Fee and Land 12 Kings 1 s45.00 13 L&e ' 1 22/DuNr ByVehkletype+S22D+ 14 Lassen 1 S11.25 35/du47 Charged bydweaii unit 15 Mariposa 1 s59.00 Landtill and transfer static 16 Mendocino I $22.00 17 Mer4 1 $24.25 510 forpwarps 18 Modac 1 Does down or opefate, 19 Mono 1 SKI/Yr/du s2u.00 Subsidized &General R 20 Monteray 1 2: Nap 1 $60.27 22 Nevada 1 563.50 Billed 23 Orange 1 522.75 24 Plms 1 527.00 25 Riverside 1 538.50 26 Sauamento 1 $21.00 Use tax on prop. tax bill II 27 SantaBarbara 1 $53.60 Does no! own woperate 20 SantaBenilo 1 29 SantaClaca 1 Does not own or operate 30 San!aCruz 31 SanBenadino 32 San Joaquin 1 521.51 34 San Mateo 1 Dxs not o~n or operate 35 Shasta 1 $27.00 Gty BMded 6316~ char@ per resident uni 1 530.00 1 526.50 Power Revenue Trash to 37 Sonom 38 Stmisics 39 Tehama 1 $14.00 S13.501yrIdu Prop Fee Assessment tx 40 Trinity 1 Slm/du Charged per DU 531.00 41 Tulare 1 42 Tuolumne 1 43 'fOl0 1 $36.00 6ContraCosta I DDes not CAW or operate 1 8 Fresno 1 $28.80 1 $39.50 S62fyrldu 1 535.00 33 Sa:, Leis Obispo I Does not cum oc operate 36 Siskiyuu 1 kes not own or operate 1 ~~~~~ ~~~ I ,To:rUkveraae 9 , 19 4 1 il 32.2817 _28.8611 0 0 Attachment 2 AN ORDINANCE IMPOSING AND PROVIDING FOR THE COLLECTION OF SOLID WASTE SERVICE PROGRAM CHARGES The Board of Supervisors of the County of San Diego ordains as follows: Section 1. Article XI (commencing with Section 68.591) is added to Chapter 5 of Division 8 of t San Diego County Code of Regulatory Ordinances to read as follows: SEC. 68.591. TITLE. This Article may be referred to as the Solid Waste Program Service Char SEC. 68.592. APPLICABILITY. This Ordinance shall apply to all territory within the unincorpor; the County of San Diego, and to all territory within the boundaries of cities, except that it shall not apply within the boundaries of the City of San Diego. SEC. 68.593. AUTHORITY. The charges established by this Ordinance are adopted pursuant t SEC. 68.594. SOLID WASTE PROGRAM COSTS. "Solid Waste Program Costs" means the ( disposing of, processing and recycling solid waste, including but not limited to, the cost of acquiring, COI financing, operating, closing and monitoring landfills whether open or closed, payments under any contr solid waste and administration of the solid waste program. 5470 and 5471 of the Health and Safety Code. SEC. 68.595. IMPOSITION OF CHARGES. The following charges are imposed each fiscal yc commencing with the fiscal year 1995-1996 upon each parcel of real property to which this Ordinance i follows: A C D E Parcel Type Benefit Units Benefit Cost Unit Per EDU Charge Per Unit Per Unit Residential Per Dwelling Unit Timeshare 0.04 20.56 $0.82 Mobilehome 1 .oo 20.56 $20.56 Vacant Residential 0.00 20.56 $0.00 Single Family Residence 1 .oo 20.56 $20.56 Duplex or Double 1 .oo 20.56 $20.56 Res. 2-4 Units/2 Houses 1 .oo 20.56 $20.56 Res. 5-15 Units 1 .oo 20.56 $20 56 Res. 16-60 Units 1 .oo 20.56 $20.56 Res. 61 Units & Up 1 .oo 20.56 $20.56 Condominium 1 .oo 20.56 $20.56 co-op 1 .oo 20.56 $20.56 Misc. Residential 1 .oo 20.56 $20.56 Commercial Per Parcel Vacant commercial 0.00 20.56 $0.00 1-3 Story Misc. Store Bldgs. 22.00 20.56 $452.32 Regional Shopping Ctr.(per ctr.) 0.00 20.56 $0.00 4 Story + Office/Stores 726.00 20.56 S 14,926.56 Com'n'ty shpng ctr (per ctr.) 440.00 20.56 $9,046.40 Neighborhood Shop Ctr.(per ctr.) 176.00 20.56 $3,618.56 Hotel 726.00 20.56 $14.926.56 i 0 e * Cont'd Mote1 44.00 20.56 $904.64 Service Station 22.00 20.56 $452.32 Med. Dental, Animal Hosp. 22.00 20.56 $452.32 $1.356.96 Conv. Hosp. Rest Home 66.00 20.56 office Condominiums 44.00 20.56 $904.64 Parking Lot, Gar., Used Cars 22.00 20.56 $452.32 Trailer Park &,**' 0.79 20.56 $16.28 Theater 66.00 20.56 $1,356.96 Bowling Alley 66.00 20.56 $1,356.96 Restaurant 66.00 20.56 $1,356.96 Car Wash 44.00 20.56 $904.64 Large Chain Grocery/Drug 330.00 20.56 $6,784.80 Auto SalesIService Agency 33.00 20.56 $678.48 Misc. Comm., Radio Station, Bank 11.00 20.56 $226.16 Industrial Per Parcel Vacant Industrial 0.00 20.56 $0.00 Factory - Light Manual 1 10.00 20.56 $2.26 1.60 Factory - Heavy Manual 594.00 20.56 $12,212.64 Bulk Storage (Tanks, etc.) 22.00 20.56 $452.32 Extractive and Mining 22.00 20.56 $452.32 Small Automotive Garage 22.00 20.56 $452.32 Industrial Condos 22.00 20.56 $452.32 $1.356.96 Warehouse - ProcesdStarage 66.00 20.56 Spec./Misc. Industrial 44.00 20.56 $904.64 Agricultural Per Dwelling Unit Vacant Irrigated 0.00 20.56 $0.00 Cibus 4.40 20.56 $90.46 Avocados 4.40 20.56 $90.46 Vines 4.40 20.56 $90.46 Misc. Trees 4.40 20.56 $90.46 Livestock 4.40 20.56 $90.46 Poultry 4.40 20.56 $90.46 Misc. Irrigated Crops 4.40 20.56 $90.46 Growing Houses 22.00 20.56 $452.32 SpeciaVMisc. Irrigated 4.40 20.56 $90.46 Non-lnigated 1-10 AC 4.40 20.56 $90.46 Non-Irrigated 11 -40 AC 4.40 20.56 $90.46 Non-lmgated 41-160 AC 4.40 20.56 $90.46 Non-Irrigated 161-360 AC 4.40 20.56 $90.46 Non-irrigated 361 AC on up 4.40 20.56 $90.46 Institutional Per Parcel Vacant Institutional 0.00 20.56 $O.M Church 22.00 20.56 $452.32 Church ParldnglRelated 2.20 20.56 $45.23 Mausoleum 22.00 20.56 $452.32 Mortuary 22.00 20.56 $452.32 Hospital 594.00 20.56 $1 2,212.64 Spec./Misc. Institutional 22.00 20.56 $452.32 Recreational Per Paroel Vacant Recreational 0.00 20.56 $0.00 Meeting Hall, Gym 22.00 20.56 $452.32 Golf Course Cemetery" Formula 20.56 $ 0.00 Public Bldg. (Fire, School, Library) 44.00 20.56 $904.64 I)**. 20.56 ...* W 0 . Cont'd Manna Dock 0.50 20.56 $10.28 Recreational Camps Non-Tax Recreational 0.00 20.56 $0.00 Open Space Easements 0.00 20.56 $0.00 tt.. 20.56 .m Agr. Preserve (No Contract) 2.20 20.56 $45.23 Agr. Preserve (Contract) 2.20 20.56 $45.23 SpecJMisc. Recreational 22.00 20.56 $452.32 Vacant Tax Govt Prop. 0.00 20.56 $0.00 Impr. Tax. Govt Prop. 0.00 20.56 $0.00 Formula: C D = E DU: Dwelling Unit Per Dwelling Unit PCL: Parcel ** Force Exempt Cemeteries to 0 *** Includes some manual counts **** Formula for golf courses and recreational camps is: 1 EDU if 1-10 acres 2 EDU if 11-20 aaes 3 EDU if more than X) acres SEC. 68.596. USE OF REVENUE. Revenue raised from the imposition of the charges imposed Costs of the County or any entity designated by the County as SUCCeSSOr in interest to the County's solid program. Section 68.595 shall be placed in the Solid Waste Enterprise Fund and used only for payment of Solid W SEC. 68.597. ELECTION TO HAVE FEES AND CHARGES COLLECTED WITH TAXES. The cl imposed by this Ordinance shall be collected on the tax roll in the same manner and together with the ge the County pursuant to Section 5473 through 5473.9, inclusive, of the Health and Safety Code. Property I roll will be billed separately by the Director. SEC. 68.598. GROUNDS AND PROCEDURE FOR APPEAL. Any person may pay such charge protest by filing a Notice of Payment Under Protest with the Director prior to the date the first instaWnent ( property taxes is delinquent (December 10 or the first business day thereafter if December 10th is on Sat1 Sunday.) The grounds for protest are limited to the following: (1) the parcel is incorrectly classified, or (2) not correctly computed under the provisions of this Ordinance. AI1 Notices of Payment Under Protest sha grounds for the protest and shall be made on a form supplied by the Director. If the Director determines 1 was not correctly classified or that the charge was not correctly computed under the provisions of this Or Director shall modify the charge. The decision of the Director shall be final. SEC. 68.599. SUNSET PROVISION. Notwithstanding any other provision of this Code, this Orc Section 2. Findinqs and Statement of Intent. The Board of Supervisors finds that the revenue ra Ordinance combined with other sources of revenue to the solid waste program, such as tipping fees, will I reasonable costs of the solid waste program. It is the intent of the Board that this Ordinance shall contini the event a County designated successor in interest assumes responsibility for the County's solid waste p that the revenue raised by this Ordinance be available to such successor in interest to pay for Solid Wastt costs. expire and be of no further force and effect on June 30, 2017. @& - A /--#*A - Attachment 3 w 0 I FIRST AMENDMENT TO RESOLUTION DELEGATING TO THE SAN DIEGO SOLID WASTE MANAGFSllENT AUTHORITY THE SETTING OF SOLID WASTE DISPOSAL FEES AND ESTABLISHING THE FUNDAMENTAL POLICY AND STANDARDS UNDER WHICH SUCH DELEGATION SHALL BE EXERCISED WHEREAS, on June 28, 1994, this Board of Supervisors adop its RESOLUTION DELEGATING TO THE SAN DIEGO SOLID WASTE WAGEM AUTHORITY THE SETTING OF SOLID WASTE DISPOSAL FEES AND ESTABLISHING THE FUNDAMENTAL POLICY AND STANDARDS UNDER WHICH SUCH DELEGATION SHALL BE EXERCISED, (*lResolution*l) ; and WHEREAS, this Board of Supervisors intends to impose soli waste program service charges by ordinance pursuant to Health Safety Code sections 5470 et seq. and to provide for the collection of such charges on the tax roll; and WHERE?S, it is therefore necessary to amend the Resolutio dated June 28, 1994, to state specifically that setting of sol waste service program charges pursuant to Health and Safety Co section 5470 et seq. is not a power delegated to the San Diego Solid Waste Management Authority ( "Authority1* ) . NOW THEREFORE BE IT RESOLVED AS FOLLOWS: 1. The Resolution is amended by adding the following sentence to the end of Section 1: The County specifically doe not delegate to Authority the power to set solid waste program service charges pursuant to Health and Safety Code section 547 et seq. 2. This First Amendment to the Resolution shall be effective immediately and shall remain in effect until further amendment or repeal. -, i' I' 6 kJ I (hhi,q X9TICE OF EXEMPTION 0 0 TO: - Office of Planning and Research FROM: County of San Diego 1400 Tenth Street, Room 121 Sacramento, CA 9581 4 A45 v Clerk of the Board of Supervisors - X RecorderKounty Clerk (A331 County of San Diego Ordinance to collect a Land Use Fee for the Solid Waste Manaaement Proaram All of San Dieao Counw except the Citv of San Dieno Project Title: Project Location-Specific: Project Location - Ciw: Countv of San Dieao Description of Project: Manaoement Proaram Name of Public Agency Approving Project: DeDartment of Public Works. Solid Waste Division Name of Person or Agency Carrying Out Project: Project Location - County: SAN D ImDosition and Collection of Solid Waste Manaaement Land Use Fee for the So John A. Miller Exempt Statcs: (check one) 1 1 Categorical Exemption. State type and section number: [ 1 Section 15061 (b)( 1 } - ActiM'ty is exempt from CEQA because it is not a project as defined in Section 15378. ( XI Section 15273(c) - CEQA does not apply to the establishment of charges by public agendas where the funds are u: existing system. Reasons why project is exempt: This oroiect is the amroval of a service charae bv a Dublic aaencv to portions of an existina solid waste svstern. and smcificallv for the omose Of meetina OOeratina eXm purchasina or leasina sumlies, meetina financial reserve needs and reauirements. obtaining funds for c pr.oiects necessarv to maintain service within existino service areas, within the meanina of Guidelines S -. 15273k). Lead Agency Contact Person: Jon Rollin If filed by applicant: Area Codeflelephone/Extension: {SI 9) 974-2709 1. Attach certified document of exemption finding. 2. Has a notice of exemption been filed by the public agency approving the project? [ I Yes [ 1 P Signature : 9% I- !d)k Area CodeTTelephonefExtension: [ 1 Signed by Lead Agency 1 I Signed by Applicant Date received for filing at OPR: - FOR USE OF THE CLERK OF THE BOARD OF SUPERVISORS ONLY On , Board Order No. the Board of Supervisors of the County of San Die00 project and made the above environmental determinations regarding the above described project. THOMAS J. PASTUSZKA Clerk of the Board of Supervisors BY cc: Department of Planning and Land Use (0650) Department of Public Works (0383) Revised c. P II) THE LAW OFFICES OF D DWIGHT D. A PR DWIGHT 0 F E S S IO NAL C WORDEN 0 R PO RAT1 0 N 462 STEVENS AVENUE SUITE 102 SOIANA BEACH. CALIFORNIA 92075 [6191 755-6604 * [619] 459-7979 TRACY R RI w SCOTT JAMES I CRYSTAL CF MICHAELS HA1 -vv FAX I6191 755-5198 MEMORANDUM w TO: Executive Committee FROM: D. Dwight Worden, Esq. DATE : November 17, 1994 RE: Federal Trash Litiga'tion: Analysis of Proposed La Use Fee: Outline of Pros and Cons As a follow up to my prior memos, I hope the following helpful. I have not endeavored to put everythinq in writing since that would take 30 pages; rather, I have attempted to identify key points and arguments, pro and con. I have also provided a brief summary of our legal position in the pendin lawsuit so that you can evaluate how your position on the la use fee compares. My staff and I will, of course, be happy discuss any of this with you further or to provide further i I. SUMMARY OF CADRE LITIGATION POSITION. The CADRE federal lawsuit (as amended) seeks to: A. Invalidate the Authority's split tipping fee struc B. Obtain a court declaration that the CADRE cities a not liable for NCRRA; C. Obtain a court declaration that the CADRE cities a not liable for back closure/post-closure costs in addition to what they paid in past tipping fees ar: addition to what they will pay in future tipping f if they use the system: and D. A court declaration that the selective closure of Overall, we contend that the Authority/County is engage try and force our cities to use the County/Authority system is illegal. an anti-competitive, economically coercive course of conduct F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 L 0 0 e Executive Commi November 17, P? though it is not cost competitive. employed include the split fee schedule, the attempt to back charge for NCRRA and CPC, and the discriminatory selective ac to Otay, violation of the Commerce Clause, equal protection and due process provisions of law, not authorized by CERCLA or RCRA, in violation of CEQA. We also claim the County improperly delegated fee setting power to the Authority. 11. SUMMARY OF THE LAND USE FEE PROPOSAL. The ordinance proposes to impose a charge on each parce real estate in the County except parcels in the City of San Diego. The charge will be collected in the same manner as rl property taxes and is imposed pursuant to Health and Safety 1 sections 5470 and 5471. All funds will be placed in the Sol Waste Enterprise Fund and their use restricted for solid was system costs. use ranging from a low of $1.08 per unit for a timeshare uni a high of $16,200 per year for a regional shopping center, w the base charge being $27 per year for a single family dwell The ordinance is estimated to raise approximately $24,600,00 year and the fees would remain in effect for 22 years. 1994, by the Board of Supervisors with the second reading an adoption occurring on December 6, 1994. required. proposal is going forward based on a claim of exemption2. The coercive measures Specifically, we charge that these actions are in The fee per parcel will depend upon the type The ordinance is proposed to be introduced on November A four-fifths vote No environmental review has been conducted: the 111. ARGUMENTS IN FAVOR OF THE LAND USE FEE3. A. Summarv. NCRRA was a bad decision but we are stuck with it. If 'See, chart entitled "Benefit Unit Breakdowntt attached proposed ordinance and County staff report. 2This memorandum is prepared based upon the November 10 1994, draft staff report and ordinance as endorsed by the Sc Waste Authority. A revised draft is being released by the ( as of November 17, 1994, which has not been reviewed, althoi Deputy County Counsel, Scott Peters, indicates that only mil revisions have been made. 3This argument is a distillation of the I1besttt argument have heard from the County and the Authority, together with I have identified that they could make. F:\CLIENTS\FEDTRD\LETTERS\FEDTRO35 .lo3 0 0 Executive Commi November 17, PZ not find a way to pay off or t9compromise1t the NCRRA obligatic the system will face bankruptcy. Because bankruptcy of the system would damage the County's credit rating for at least 3 years and because it would prevent the County from undertakir financings for new jails, courts, libraries, parks, etc. bankruptcy is unacceptable. Accordingly, the County will, 01 necessity, do anvthinq to avoid bankruptcy -- they will find way to pass the NCRRA costs on to everyone in the region in * form of the land use fee, sales taxes, by pledging the generi fund -- whatever it takes. They will & let the ship go do1 while they are in the wheelhouse! NCRRA, but what is the least painful way to pay for NCRRA. ' land use fee meets this test. It spreads the costs fairly 0- everyone in the region, removes the burden of the NCRRA debt allows the system to be run competitively in the open market based on tipping fees, thereby luring departing cities back * the system and unifying the region in one, cost competitive, publicly owned and controlled, solid waste disposal system fc the long-term. The net effect to users of this system will I cost savings -- a homeowner who pays the $27 land use fee anc $39 tip fee will save 30 cents a month. We simply must join together and support this alternati Accordingly, the choice is not can we avoid paying for avoid bankruptcy which hurts all of us for the long-term. B. Specific Arsuments in Favor, 1. The land use fee will be the kev link in nesotiatina a reduction of the NCRRA oblicrati - Annual debt service for NCRRA is about $13 million the annual O&M for NCRRA is also about $13 million. If the obligation to the Union Bank of Switzerland is secured by th land use fee, as proposed, the County/Authority can then negotiate with Thermo to reduce the $13 million O&M charge b threatening to close the plant. fee guaranteeing payment on the debt side, threatening, or closing, the plant would not work since it would place the C in default on the debt resulting in foreclosure by the bank. In the absence of the land 2. The land use fee will unify the reaion. All of US used the system historically and all of have an obligation for closure/post-closure. For better or worse, the County approved a number of facilities as part oj regional system -- NCRRA, the Otay Landfill, etc. These art part of the regional system and we all have an obligation fc them. The land use fee recognizes this and makes everyone I F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 0 0 ~ Executive Comm: Pl November 17, their fair share, thus removing any incentive for leaving thl system and thereby re-unifying the County. 3. Timing. While it is unfortunate that more time is not avai to study the land use fee proposal, it is essential that the be adopted by the outgoing Board. Adoption by the incoming Boardmembers is simply not realistic. Because the new fee w not go into effect for at least six months, and because ther a built-in appeal process for individual owners during that the process is fair and all concerns can be heard and consid The fee ordinance can be modified, as necessary, during this period before it goes into effect. If adopted on December 6' the County could even threaten to repeal the ordinance beforl goes into effect in order to gain bargaining leverage with U. Bank and Thermo. 4. Overall the land use fee will save money. Because the land use fee proposal will unify the s and generate 1.25 million tons in the system, the combined c to system users of the land use fee and tipping fees at $39 less will, overall, be a net reduction. estimated to be 30 cents per month for a single family homeo and could be more if the tip fee comes down to the low $30~ expected. The reduction is 5. The City of San Diego does not receive AB 939 bene from NCRRA and was not a participant in the approval of NCRR Therefore, there is no I1benefitt1 basis to charge San Diego landowners for NCRRA. Moreover, although San Diego has ship about 100,000 tons per year to County facilities, the County shipped more than that amount per year to City facilities. reflects a I1washt1 and was done for convenience on an inter- jurisdictional, cooperative basis. functional equivalent of San Diego being a non-user of the C system -- it could have kept its own trash and made the Coun keep its own trash. IV. It is fair and amrom5ate to exclude the Cit San Dieqo. This situation is the ARGUMENTS AGAINST THE LAND USE FEE PROPOSAL4. 4These arguments are a distillation of input from the and my Executive Committee, Waste Management!s attorneys, office's analysis. F :\CLIEUTS\FEDTRD\LEITERS\FEDTRD35.103 0 0 Executive Commi November 17, Pa A. Summan. The County, and the County alone, approved NCRRA. In f; the County approved NCRRA over the objection of many cities. NCRRA contract documents and the public record clearly and sector was taking the risk on NCRRA -- it was the letter of credit banks, Thermo-Electron, and the Solid Waste Enterprisc Fund only that were at risk. The cities were not at risk, nc was the County general fund or the taxpayers. Now, the Coun trying to shift the risk that the private sector accepted on the public by underwriting the NCRRA obligation with a new t This new tax will not provide any new service -- it will sim be used to pay money to Thermo-Electron and Union Bank of Switzerland for a project that never should have been approv NCRRA is a turkey that would fill the largest of unambiguously reflect that it was promised that the private Thanksgiving tables! It is a $100 per ton transfer station $25 per ton market, or a $400-$500 per ton recycling facilit a $100 per ton market. It loses money every day it operates Under no scenario is it a benefit. The County should close facility, allow the Union Bank to foreclose on the facility, what is owed out of the Solid Waste Enterprise Fund, and sta firm on the contracts to guard the general fund and protect cities and the taxpayers. While this may cause some pain, t pain is trivial compared to the 22 year pain imposed by the payment of this new tax. For years the County asked the cities to sign flow coni commitments to underwrite NCRRA. The cities refused. The I Supreme Court has held that cities have a right to use dispc alternatives in the free market unfettered by artificial constraints. Cities that did not endorse or commit to NCRRi a riaht not to pay for this bad decision, and they have a r: to leave the system. The land use fee is nothing more than back door attempt to force these cities who had the foresigl good judgment not to become entangled with NCRRA to pay for NCRRA . B. SDecific Arauments Aaainst the Land Use Fee. 1. The land use fee does nothins more than shuf The land use fee is set to pay off the entire NCR debt -- there is no promise of debt reduction by even one p on the part of the Swiss bank. Likewise, the tipping fee i to pay off the entire operation and-maintenance expense to Thermo-Electron -- there is no commitment for an O&M reduct one penny. Instead of demanding a substantial debt reducti chairs on the deck of a sinkina shir>- F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 0 0 Executive Comm -vv November 17, P from the Swiss bank and a substantial commitment to 0&M redu from Therm0 as a pre-condition to the land use fee, the County/Authority has once again done it backwards! They pro to adopt the land use fee guaranteeing full payment, and the to negotiate reductions. This is like the robber who points gun to his own head and says, "Give me all your money or I ~i to Itshare the paint1 for the bad NCRRA decision must impose tI sharing" on Thermo, the Swiss bank, the County and the Authc as well. private landowners. shoot myself.Il Any proposal that asks property owners and c This proposal unfairly shifts all of the pain to 2. The Drocess is unfair. The County/Authority first publicly unveiled its proposed $26 million plus per year tax on November 10, 1994. Less than three weeks later, with an intervening Thanksgivin holiday, the County/Authority proposes to act on the proposa individual notice to property owners being assessed, - no vote requirement on this new lttax,ll no environmental review, no process of consultation with the cities, no input from other affected governments like schoolsp and no opportunity for critical dialogue. The only excuse for cramming this down t throats of taxpayers and a fee exasperated public on such SI notice is the excuse that it must be presented to the lame c Supervisors before they leave office. Being polite, this is hardly a legitimate defense of the process. In the interim there will be no majority protest opportunity 3. The land use fee is questionable leaallv. Proposition 13 requires a two-thirds vote incidenl all new 13special taxes. I' "Benefit assessments" typically rt individualized notice to properties being assessed and a ma; protest opportunity. The County/Authority claims, on the bz of one case5 that this new Itfee" is not a "special tax18 so t requiring a majority protest hearing. Rather it is somethir different -- a "land use feel! which can be imposed by four-j vote of the Board. This argument is a transparent attempt t circumvent well established law designed to protect taxpayel from exactly this type of abusive government fees. The Keri Countv case supported a system where there were no tipping 1 and which recognized that the fees charged per parcel in thz case were justified by an identifiable benefit to each parcc and the fees in Kern applied to all parcels in the County. no vote 1s required, nor is it a traditional "benefit assess 'Kern County Farm Bureau v. Countv of Kern 23 Cal.Rptr. (1993) . F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 a e Executive Commj November 17, -vv PZ of these circumstances exists in our case. In our case, NCRRA conveys no benefit to anyone, el Thermo and the Swiss banks yet it is the primary basis for tI fees. All property in the County is equally benefitted by pi old closure/post-closure costs (can it really be argued that properly closing an old 1950s burn site in Borrego, for exam1 benefits property in Escondido but not in San Diego?) proposal cannot meet the benefit test of Kern since it does I convey any real benefit to those who will pay beyond what everyone in the region receives. This 4. The DroDosal unfairly discriminates in favor c San Dieao. San Diego would get a "free pass1@ from this new fee The fact is, however, that San Diego has shipped about 100,0( tons per year to County landfills. tipping fees for this privilege as other users, yet the othei users are told they must now pay a land use fee because they "underpaid" the closure/post-closure obligations. No such obligation is proposed for San Diego. The real reason for exempting San Diego is politics, not benefit or fairness. TI argument that the County and the City of San Diego exchanged trash and it was a l1washlv is transparent. First, no one can document the accuracy of the lswas argument in terms of historical tons. Second, although the 1 use fee proposes to give the City of San Diego a "free pass" to any further closure/post-closure obligation for its use oj County facilities, there is no similar commitment from the Cj closure/post-closure obligations at Miramar if it so chooses. San Diego paid the same - the City retains its right to come after the County for fut Moreover, Oceanside also had its own landfill and, historically, sent most of its trash to its own landfill. Oceanside is now, alone, paying closure/post-closure costs or that landfill. Nevertheless, Oceanside will be charged the s land use fee as all others while San Diego will be exempt. 7 inequity in this situation simply reveals that the boundariez assessments are proposed based on politics, not fairness or equity. 5. The land use fee rewires CEQA review. The County claims that the land use fee is exempt i CEQA review because it is just a "change in fees" and that tk fees are not proposed to be used for capital facility expansj The real reason for the claim of exemption is the politicallq perceived need to obtain action by November 29th -- there sin F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 a e Executive Comm: November 17, *vv Pi is no time for the required environmental review. In realit the $26 million per year will be used for capital facilities expansion within the meaning of CEQA and environmental reviei required. At minimum, the land use fee will 'Yefinancet1 NCN debt, thereby enabling the County/Authority to sell bonds fo: capital facilities projects, CEQA clearly requires consider; of this type of indirect effect. 6. The Prmosal incorrectly assumed that 1.25 mi El Cajon and Oceanside have already left the systei contract. Carlsbad has left the system, at least for the shc term, and other cities are preparing to follow. It is unrealistic to assume, as the proposal does, that the entire regional flow will be in the system. If the actual flow is . then the tipping fees will have to go up and the 30 cents pe: house saving per year will quickly turn into a negative. tons will be in the svstem. 7. Will non-residential landowners save money? The County staff report carefully reveals that residential landowners will save 30 cents per month based on flow of 1.25 million. It is silent, however, as to the impac non-residential landowners. Since neither the NCRRA debt no: other costs are proposed to be reduced, the logical assumptic balance the budget. This will include small, medium, and la: business and apartment owners, all of whom will be forced to these costs on to their tenants and customers. 8. The rsrorsosal assumes that the reduced tirsrsina that commercial and industrial landowners will pay more to savinas will be rsassed on to customers. Whether or not the proposed reduction in tipping fc will be passed through in reductions on individuals' monthly service bills is a function of the individual contracts betwc cities and their haulers. There is no suarantee that the as! cost savings will actually pass through to the end user. At minimum, the County should have consulted with each of the c. and worked with the cities to ensure that these cost savings would be passed through under their franchises and hauler contracts. 9. The land use fee would applv to sovernment ow parcels. School districts, city park land, universities, anc ' other publicly owned parcels would be subject to this fee. would cause a reallocation of tax dollars, e.g., tax monies F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 e e Executive Comm: November 17, *vv Pi appropriated for school purposes would be diverted to solid i purposes. And, the proposal ignores concepts of preemption i existing law governing when one government can charge anothe: guarantees that schools and other special districts already strapped for money cannot afford these new fees. There is n indication that the County/Authority made any effort to invo these other agencies in the development of this proposal. 10. Fees will have to increase to meet future cax, There is nothing in the proposal to pay for future capital needs of the solid waste system. If the system need new transfer station, landfill, etc., tipping fees, the land fee, or both will have to be raised. It is not realistic to expect that the current tipping fee and land use fee will re the same throughout the 22 year life of the program. 11. The County could chancre the land use fee at a government this type of a fee. As written, the proposal needs. time, - If the County is right that it can adopt this fee the first instance without public vote, majority protest, no to owners, or environmental review, it follows that the Coun could increase the fee at any time by another four-fifths vc A dangerous situation is created where, in about one year, t County will have transferred all assets and liabilities of t solid waste system to the Authority, yet the County will ret the power to change the fee. The County will have a death g on the Authority's finances while having relieved itself of responsibilitv for the debts or operations of the system. q cannot be good government.- 12. The Countv's scare tactics about insolvencv a not credible. The NCRRA contracts are clear -- the private sectc took the risk. The sky will not fall if the County recogniz can foreclose on the plant and sell it for scrap value, and retrieve the special monies in the Solid Waste Enterprise FL The County general fund, the taxpayers, and the cities cannc touched. Why is the County voluntarily proposing to, now, s this burden to the taxpayer when the original agreement so carefully protected the taxpayer? reality and defaults on its NCRRA obligations. The Swiss b: F:\CLIENTS\FEDTRD\LETTERS\FEDTRD35.103 4 e 0 Executive Corn November 17, Pa 13. The land use fee treats DroDerties unecruallv. A property that developed years ago and has, for y delivered trash to the County landfills will pay the same fe a vacant parcel that just develops. Parcels in Oceanside wh used their own landfill will pay the same fee as similar par in other cities that used the County system. The whole proF is rife with inequities. 14. The County approved NCRRA, over the objection of t cities, yet the County now wants the cities to share equally cleaning up the mess. At minimum, any land use fee proposal should be on a graded scale to account for the differing deg of responsibility for creation of the problem. *w The proposal does not account for differinq desrees of responsibilitv for NCRRA. Sincerely, LAW OFFICES OF D. DWIGHT WORDE A Pro essional Corporation Q8& La- D. Dwight Worden DDW : dl c: Michael S. Haberkorn, Esq. Felicia Brechtel - F I \CLIENTS\FEDTRD\LETTERS\FEDTRD35,103 aAi;iz*;s - -- __ - - ___ ___ . - __ - __- -I_ CI DATE ISSUED: November: 30 f 1994 'REPORT NO,: 94-397 ATTENTION : Honorable Mayor and City Council Agenda of December 5, 1994 ME$l3FGSDUM OF UNDERSTANDING FOR TWSH DISPOSAL SUBJECT i SUMMAIiY Xssue: Should the City *enter into a Memorandum of Understanding (MOU) with the City of Chula Vista to accept Chula Vista trash for disposal in the City's Miramar Landfill for a period of two years? Manaqer's Recommendstion: Authorize the City Manager to execute an MOU with the City o€ Chula Vista to accept Chula Vista trash for disposal in the City's Mirarnar Landfill for a period o€ two years, Other Recommendations: None. Fiscal Imtsact: Under the proposed MOU;' the City of San Diego would receive a minimum of $10,400,000 in fees from the City of Chula Vista over che two year term of the agreement. Of this amount, $5,120,000 would be allocated to the General Fund and $5,280,000 to the Waste Management Enterprise mnd. / BACKGROUND Until June 1, 1994, the County of San Diego operated a solid waste disposal system that was relied upon and served the disposal needs of all cities, except the City of San Diego, and the unicorporated areas of the County. On June 1, 1994, this responsibility was Waste Management Authority. However, only seven cities and the County have joined the new Authority and ter- cities are seeking alternative means to manage and dispose of the wastes generated within their jurisdictions. -On November 10, 1994, the Authority determined that non-members' wastes would n01; be accepted at Lthe Otay Landfill after January I., 1995, and directed all non-memher- transferred to a new Joint Powers Authority, the San. Diego Solid' 4 - a - 0 ..- xsers to divert their wastes to the Sycamore Canyon Landfill if they desired to continue using the Authority's disposal facilities. The City of Chula Vista, one of the teh cities that declined to join the Authority, is developing a transfer station which will allow Chulc?. Vista maximum flexibility and local control in deciding how, where and the costs of disposing of its solid waste. Since it scation, the-City of Chula Vista has requested Diego accept its wastes at the Miramar Landfill for up to two years during the development of its transfer station. ?3 6-> - 3 .-.-.-l-'~-,, L.- > -1- , * will t-~ke ~c7n--T\--;n~+c=1~- . --.---_ .-.> c: -s~-c-r L&Lz LL&lLL>=y at: the city of Sari DISCUSSION The proposed MOU with the City of Chula Vista provides for the acceptance of a maximum of 180,000 tons of waste during its two year term commencing January 2, 1995, or when the first RCRA Subtitle D module. is ready to receive wastes, whichever is later. Chula Vista guarantees to provide a minimum of 160,000 tons wastes during the term of the MOU or pay the full dispos,al fee for the difference betwee'n the amount of waste actually delivered and the guaranteed minimum tonnage. The MOU provides for termination by either party on 60 days written notice or immediately by'the City of San Diego in the event of an operational emergency, Chula Vista will pay the City's current landfill disposal fee, currently $33 pe~ ton, plus a surcharge of $32 per ton for each ton of it.s wastes disposed of in the Miramar Landfi.11. The $32 per ton surcharge will go directly to the General Fund, with $10 per ton allocated to the Refuse Collector Business Tax and $22 per ton allocated as a host fee/surcharge. Based ~n the tonnages and fees described above, the revenues to be received by the City under this MOU would be: Maximum Tonnaqe (180,000 tons) 1 Fiscal Year 1995 . 1996 199.7 Total General Fund $1,200,000 $2,880,00~ $.1,680,000 $ 5,760,000 Enterprise md. $1,233.50g $2,970,000 $d,732,500 $ 5,940,000 I Total $2,437,500 $5,850,000 $3,412,500 $11,7OO,OOO Minimum Tannase (160,000) / Fiscal Year 1995 - 1996 1997 Total General Fund $1,066,667 $2,560,000 $1,493,333 $ 5tX?'J,oOO Enterprise Fund $1,100,000 S2,640,000 $1,540,000 5 5,280,000 Total $2,166,667 $5,200,000 $3,033,333 $10,400,000 Exchanqe of Disnosal Capacity A key provision of the proposed MOU is the exchange of disposal capacity so that the short-term acceptance of Chula Vista's wastes will not impact the City's long-term disposal capacity. If Chula 2 L_ c I) .- .- j Vhta is successful in developing its transfer station, it will aicept the same tonnage of City waste at its transfer station as the tonnage of Chula Vista waste disposed of at the Miramar' Landfill. The disposal fee to be charged to the City will be the City's then current landfill disposal fee plus $5 per ton. This additional cost will be mitigated by the reduced transportation COStS by the City's Swth Sm Piep cd.lection vehicles not; having to travel. to the Mframar Landfill. + c T\n+ ,LeLk GJ~LL ZXXX:~~ LL: ail LLLernzre aisposal site acceptable to the City or pay the CiLy an additional $9 per ton for the City's lost disposal capacity. This could be an additional $1.6 million. If the transfer ,Ct3,t4011 _.. 1- -.-, .1 --- ~ 1, -._-__ Other Considerations AS a result of the Acthority's .decision to no longer accept non- member wastes at the Otay Landfill after January 1, 1995, the City of Chula Vista's wastes will be imported into the City of Sac Diego for disposal regardless of the action taken on this proposed MOU. For the last two years the City has been seeking to receive host fees for wastes disposed of at the Sycamore Canyon Landfill at the same rate as host fe~s zre paid to the City of San Marcos for wastes disposed of in the San Xarcos Landfill,. However, due to the financial crisis caused by the NCRRA facility and the formation of the Authority, this matter has not been resolved and approximately $2 million in expected host fees have not been received. CONCLUSIONS Since Chula Vista's wastes will be imported into the city of sa Dieyo for disposal fox aggroximately two years' it is prudent to' have a voice in the rnanegement of those wastes and to receive a financial benefit from its disposal within our jurisdiction. 15 Chula Vista's wastes are disposed of at the Sycamore Canyon Landfill, it would be at a raFe of $74. per ton and the City of San Diego would not share in those revenues. ALTEWATIVXS Do not enter into the MOU with the City of Chula Vista for the acceptance of Chula Vista's waste at the Miramar Landfill for two years. This is not recommended because Chula Vista's wastes would still be imported into the City for disposal until its trans€er station was operational, and the City' wouldlnot share in the revenues generated by its disposal at the Sycamore Canyon Landfill. .f espe tfully submitted, uCk McGrory 9 City Manager CONRAD/HAY s / RAE 3