HomeMy WebLinkAbout11 AMENDMENT OF WASTE DISPOSAL AGREEMENT G01( O Agenda Item 11
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MEETING DATE: MAY 5, 2015
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: JEFFREY C. PARKER, CITY MANAGER
SUBJECT: AMENDMENT OF WASTE DISPOSAL AGREEMENT
SUMMARY:
The City, along with other public agencies in the County, have collectively reached
agreement for an amendment to the Waste Disposal Agreement (WDA) to provide for
continuation of importation at the County landfills, City allocation of future importation
revenues, and to extend terms of the WDA through June 30, 2025. This action will
maintain stable disposal rates and continuity of service for residents and businesses while
ensuring continued partnership between cities and the county.
RECOMMENDATION:
Adopt Resolution No. 15-25 amending the Waste Disposal Agreement (WDA) between
the County of Orange and City of Tustin to allow for the continued importation of waste at
the County's three landfills and to extend the terms of the WDA through June 30, 2025.
FISCAL IMPACT:
The agreement will have a positive impact to the fiscal fund of a minimum of $76,648. The
amendment provides future importation revenue to the City of Tustin.
CORRELATION TO THE STRATEGIC PLAN:
This agreement contributes to the fulfillment of the City's Strategic Plan, Goal C: evaluate
all City services and identify ways to improve cost neutrality, specifically by conducting a
comprehensive fee analysis and determine appropriate levels of cost recovery.
Additionally, this agreement contributes to the fulfillment of the City's Strategic Plan, Goal
D: stay active in the region by providing leadership for and maintaining a strong presence
in regional planning and transportation issues.
BACKGROUND:
The disposal of solid waste at Orange County landfills is governed by a 2009 Waste
Disposal Agreement in which cities in the County have agreed to deposit their solid waste
at the County's three landfill facilities in return for low, stable disposal rates. The term of
the current WDA began on July 1, 2010 and runs through June 30, 2020 with importation
of waste from outside the County at County landfills set to expire on June 30, 2016.
The WDA is a great example of County and cities working in collaboration and
strategically leveraging a countywide asset. The solid waste revenues are utilized by the
County: to maintain the landfill system; to preserve funds for landfill closure costs; to
address post-closure maintenance; and to mitigate long-term risk and environmental
liabilities. The cities in the County benefit from additional services provided by the County
which include permanent household hazardous waste collection facilities, green waste
acceptance at no charge to cities to assist with compliance with state recycling mandates,
and support of city programs to meet state diversion requirements.
With the success of waste diversion and recycling in recent years combined with slow
recovery from the Great Recession, the resulting effect has caused in-County waste
generation to dramatically decrease which, in turn, have created reduction in revenues. A
committee of City Managers representing Orange County cities participated with the
County in preparing a framework to address the reduction in revenues and to ensure rate
stabilization for local residents and businesses. The proposed Amendment to the WDA
sets forth the continuation of future importation to offset the revenue reduction and
establishes a fair-share allocation of net importation revenues to cities. An in-depth review
of County resources concluded the amount of imported waste combined with in-County
waste will remain below total disposal tonnage projections contemplated in the current
WDA. The proposed 5-year extension of the WDA to 2025 will provide additional stability
to the system in light of more stringent legislative and regulatory requirements such as AB
1826, AB 1594, and the 75% recycling target of AB 341 .
It is recommended that the City Council approve the Amendment to the WDA to provide
stable rates for residents and businesses, continued service levels, ensure long term
capacity, maintain long-term partnerships between the City and County, and share net
importation revenues with cities. Upon approvals by the Orange County cities, the
proposed Amendment will be considered by the Board of Supervisors at their earliest
available meeting.
Attachments: Resolution No. 15-25
Amendment to Waste Disposal Agreement
RESOLUTION NO. 15-25
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF TUSTIN, CALIFORNIA APPROVING AN
AMENDMENT TO THE 2009 WASTE DISPOSAL
AGREEMENT WITH THE COUNTY OF ORANGE.
WHEREAS, the City has an existing Waste Disposal Agreement (the Waste Disposal
Agreement) with the County of Orange (the “County”) which requires the City to dispose of all
specified solid waste generated within the City to County landfills and for the County to accept all
such waste at a price agreed upon by the City and County; and
WHEREAS, the Waste Disposal Agreement became effective on or about July 23, 2009,
and by its term is set to expire on June 30, 2020; and
WHEREAS, the Waste Disposal Agreement provides that the County will not accept
waste imported from outside the County at County landfills after June 30, 2016; and
WHEREAS, an Amendment to the Waste Disposal Agreement (the “Amendment”) has
been negotiated between the County and various cities throughout Orange County to provide
for continuation of importation of waste from outside the County at County landfills in
exchange for allocation to the cities of a portion of future importation revenues and to extend
the terms of this activity within the Waste Disposal Agreement to June 30, 2025; and
WHEREAS, the City Council desires to ensure that solid waste generated within the
City can be disposed of in an environmentally safe manner and at a reasonable cost for the
near future; and
WHEREAS, the proposed Amendment furthers these goals by, among other things,
ensuring that solid waste generated within the City can be disposed of at County landfills
through June 30, 2025; that the landfills will be operated in an environmentally safe and
reliable manner; and that the cost of disposing of solid waste at County landfills will be
reasonable.
NOW, THEREFORE, the City Council of the City of Tustin resolves, finds and
determines, on the basis of the facts set forth in the agenda report presented to it and any
testimony received at the meeting at which this matter was considered, as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The City Council hereby finds and determines that the proposed
Amendment to the Waste Disposal Agreement between the County of Orange and the City of
Orange (“Amendment”) furthers the public health, safety and welfare.
Section 3. The City Council hereby finds and determines that the terms and
provisions of the Amendment, in the form as submitted by the City Manager, are approved and
that the Mayor is authorized to execute, and the City Clerk to attest, the Amendment on behalf
of the City.
Section 4. The officers and employees of the City are authorized and directed,
jointly and severally, to do any and all things necessary or advisable in order to effectuate the
purposes of this Resolution and to administer the City's obligations, responsibilities and duties
to be performed.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin
held on the 5th day of May, 2015.
CHARLES E. PUCKETT,
Mayor
ATTEST:
______________________
JEFFREY C. PARKER,
City Clerk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Jeffrey C. Parker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council is five;
that the above and foregoing Resolution No. 15-25 was duly and regularly passed and
adopted at a regular meeting of the City Council held on the 5th day of May, 2015 by the
following vote:
COUNCILMEMBER AYES: _________________________________
COUNCILMEMBER NOES: _________________________________
COUNCILMEMBER ABSTAINED: _________________________________
COUNCILMEMBER ABSENT: _________________________________
____________________________
JEFFREY C. PARKER,
City Clerk
AMENDMENT TO WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
and the
CITY OF ______________
_______ __, 2015
County Amendment Authorization Date: City Amendment Authorization Date:
________ __, 2015 ______ __, 2015
County Notice Address: City Notice Address
Director __________________
OC Waste and Recycling City of ____________
300 N. Flower, Suite 400 __________________
Santa Ana, CA 92703 __________________
2015 Amendment to Waste Disposal Agreement
AMENDMENT TO WASTE DISPOSAL AGREEMENT
THIS AMENDMENT TO WASTE DISPOSAL AGREEMENT (the “Amendment”) is made
and dated as of the date indicated on the cover page hereof between the County of Orange, a political
subdivision of the State of California (the “County”), and the City designated on the cover page of this
Amendment, a general law or charter city and political subdivision of the State of California (the
“City”).
RECITALS
The County owns, manages and operates a sanitary landfill system for the disposal of
municipal solid waste generated by the cities and the unincorporated area within the County (the
“Disposal System”). The Disposal System includes three active landfills and four regional household
hazardous waste collection centers.
The Disposal System is used for the disposal of municipal solid waste which is not reused,
recycled or otherwise diverted from landfill disposal, pursuant to the California Integrated Waste
Management Act of 1989 (Division 30 of the California Public Resources Code) (the “Act”).
The County has entered into waste disposal agreements in 2009 (the “Original Waste Disposal
Agreements”) with all of the cities in the County, including the City, as well as certain sanitary districts
located in the County (the “Participating Cities”), pursuant to which the County agreed to provide
disposal capacity for waste generated in or under the control of the Participating Cities, and the
Participating Cities agreed to deliver or cause the delivery of waste generated in or under the control of
the Participating Cities to the Disposal System, as more specifically set forth in, and subject to the
terms and conditions of, the Original Waste Disposal Agreements.
The City has determined that the execution of this Amendment by the City is in the best interest
of the City and will serve the public health, safety and welfare by providing greater disposal rate
stability, more predictable and reliable long-term disposal service, and sound environmental
management.
The County has determined that the execution by the County of this Amendment will serve the
public health, safety and welfare by providing a more stable, predictable and reliable supply of
municipal solid waste and the resulting service payment revenue to the Disposal System, thereby
enabling the County to plan, manage, operate and finance improvements to the Disposal System on a
more prudent and sound long term, businesslike basis consistent with its obligations to the State and
the holders of obligations secured by its Disposal System.
Official action approving this Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the County on the County authorization date
indicated on the cover page hereof.
Official action approving this Amendment and determining it to be in the public interest and
authorizing its execution and delivery was duly taken by the City on the City authorization date
indicated on the cover page hereof.
It is, therefore, agreed as follows:
2015 Amendment to Waste Disposal Agreement
Section 1. Amendment to Original Waste Disposal Agreement.
(a) Sections 3.6(C) and 3.6(E) of the Original Waste Disposal Agreement are deleted and
replaced in their entirety, as set forth below:
“(C) Receipt of Imported Acceptable Waste on a Contract Basis. Throughout the Term
hereof, the County shall have the right to enter into a contract or other agreement with any
municipal or private non-County entity for the delivery of Imported Acceptable Waste on
terms and conditions that the County determines to be necessary to ensure and enhance the
viability of the Disposal System for the benefit of the County and the Participating Cities and to
generate Net Import Revenues. The County certifies that in its good faith judgment the contract
or other agreement for the delivery of such waste will not materially and adversely affect the
ability of the County to receive and dispose of Acceptable Waste from the Participating Cities
in accordance with the applicable Disposal Agreements throughout the Term thereof. “
“(E) Application and Use of Revenues From Other Users. (1) Throughout the term
hereof, all revenues received by the County from the disposal of County Acceptable Waste by
the Disposal System, and all revenues received by the County from the disposal of Imported
Acceptable Waste by the Disposal System (including amounts received by the County as a
result of the failure of contract counterparties to deliver minimum required amounts of
Imported Acceptable Waste) , shall be deposited by the County in the County OC Waste &
Recycling Enterprise Fund and shall constitute revenues of the Disposal System. Pursuant to
the County’s Plan of Adjustment, the County is entitled to receive net revenues (after payment
of all costs attributable to the acceptance of such Imported Acceptable Waste at the Disposal
System) (“Net Import Revenues”) from the disposal of Imported Acceptable Waste by the
Disposal System. Costs attributable to the disposal of Imported Acceptable Waste include
deposits to the Environmental Fund, deposits to closure and postclosure reserves, City host
fees (if applicable), operating costs (such as manpower expenditures, equipment, services and
supplies expenditures), state surcharges, and a pro rata share of capital project costs. Net
Import Revenues shall be used for the payment of bankruptcy related obligations until payment
in full of such bankruptcy related obligations required to be paid from such Net Import
Revenues pursuant to the Plan of Adjustment. It is estimated that payment in full of such
bankruptcy related obligations required to be paid from such Net Import Revenues pursuant to
the Plan of Adjustment will occur by the end of Fiscal Year 2017-18.
(2) Until the County’s obligation to apply Net Import Revenues for the payment of
bankruptcy related obligations in accordance with the Plan of Adjustment has been satisfied in
full, Net Import Revenues shall be calculated as provided in Section (3.6)(E)(1). For any
period after the County’s obligation to apply Net Import Revenues for the payment of
bankruptcy related obligations in accordance with the Plan of Adjustment has been satisfied in
full, Net Import Revenues shall be calculated as follows:
(i) in Fiscal Year 2017-18, Net Import Revenues for each ton of Imported Acceptable
Waste received shall be equal to the revenues received for the disposal of such ton of Imported
Acceptable Waste (excluding any newly established per-ton fees or increases to existing
per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory
agencies or cities in which facilities in the Disposal System are located) in excess of $17.57 per
ton;
(ii) in Fiscal Year 2018-19, Net Import Revenues for each ton of Imported Acceptable
Waste received shall be equal to the revenues received for the disposal of such ton of Imported
2015 Amendment to Waste Disposal Agreement
Acceptable Waste (excluding any newly established per-ton fees or increases to existing
per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory
agencies or cities in which facilities in the Disposal System are located) in excess of $18.01 per
ton;
(iii) in Fiscal Year 2019-20, Net Import Revenues for each ton of Imported Acceptable
Waste received shall be equal to the revenues received for the disposal of such ton of Imported
Acceptable Waste (excluding any newly established per-ton fees or increases to existing
per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory
agencies or cities in which facilities in the Disposal System are located) in excess in excess of
$18.46 per ton; and
(iv) thereafter, Net Import Revenues shall be equal to 30% of the revenues received by
the County from the disposal of Imported Acceptable Waste (excluding any newly established
per-ton fees or increases to existing per-ton fees with respect to Imported Acceptable Waste
payable to the State, other regulatory agencies or cities in which facilities in the Disposal
System are located).
(3) After the County’s obligation to apply Net Import Revenues for the payment of
bankruptcy related obligations in accordance with the Plan of Adjustment has been satisfied in
full (i) 50% of any Net Import Revenues (as calculated pursuant to Section 3.6(E)(2)) shall be
paid to the County General Fund; and (ii) 50% of such Net Import Revenues shall be paid to the
Participating Cities (and to the County, with respect to the unincorporated area) listed in
Appendix 5 for use for any purpose by the Participating City, including but not limited to state
mandated solid waste programs. Payments of such amounts to the County General Fund and
the Participating Cities shall be made by the County within 90 days after the end of each fiscal
year. The portion of Net Import Revenues specified above payable to the Participating Cities
shall be apportioned in the percentages set forth in Appendix 5.
(4) The percentages set forth in Appendix 5 with respect to each Participating City will
be adjusted at the end of Fiscal Year 2019-20 to reflect the percentage of actual deliveries of
Acceptable Waste from each Participating City as compared to the total amount of actual
deliveries from all of the Participating Cities during Fiscal Years 2017-18, 2018-19, and
2019-20. The County shall notify each Participating City of the revised percentages in
Appendix 5 within 120 days after the end of Fiscal Year 2019-20. The revised percentages will
be used for the allocation of Net Import Revenues generated during Fiscal Year 2020-21 and
thereafter.
(b) Section 4.2(A)(z) is added to the Original Waste Disposal Agreement (immediately
following Section 4.2(A)(y)) as follows:
“(z) decrease the amount of Net Import Revenues otherwise payable to the County
General Fund and the Participating Cities pursuant to Section 3.6(E)(2) and Section 3.6(E)(3)
and use the amount of such decrease to pay costs of the Disposal System.”
(c) Section 6.1(A) and Section 6.1(B) of the Original Waste Disposal Agreement are deleted
and replaced in their entirety with the following:
2015 Amendment to Waste Disposal Agreement
“SECTION 6.1 EFFECTIVE DATE AND TERM.
(A) Initial Term. This Agreement shall continue in full force and effect until June
30, 2025, unless earlier terminated in accordance with its terms, in which event the Term shall
be deemed to have expired as of the date of such termination.
(B) Option to Renew. This Agreement shall be subject to renewal by mutual
agreement of the parties, on or before June 30, 2023, for an additional term of ten years (the
“Renewal Term”) on the same terms and conditions as are applicable during the Initial Term
hereof. The City shall give the County written notice of its irrevocable election to renew this
Agreement on or before June 30, 2022. If the parties do not renew this Agreement by June 30,
2023, the Agreement shall expire on June 30, 2025.”
(d) The first sentence of Section 6.1(C) of the Original Waste Disposal Agreement is deleted in
its entirety and replaced with the following:
“In connection with the parties’ right to renew this Agreement for an additional ten-year term
pursuant to Section 6.1(B), the parties shall, on or before June 30, 2023, negotiate an applicable
change in the Contract Rate for such renewal term.”
(e) Appendix 2 of the Original Waste Disposal Agreement is deleted in its entirety and
replaced with the form attached hereto.
(f) Appendix 5 shall be added to the Original Waste Disposal Agreement as a new appendix, in
the form attached hereto.
(g) All other terms and conditions of the Original Waste Disposal Agreement shall remain in
full force and effect.
Section 2. Initial Payment. As consideration for the execution of this Amendment by all of the
Participating Cities, and subject to the occurrence of the Amendment Effective Date pursuant
to Section 3, the County agrees to pay, from the County OC Waste & Recycling Enterprise
Fund, the Amendment Payment to the Participating Cities listed in Appendix 5. The aggregate
,
Amendment Payment shall be $5,400,000 and shall be distributed to the individual
Participating Cities (including the City) in the percentages set forth in Appendix 5 by
September 30, 2016.
Section 3. Effectiveness of Amendment. The provisions of this Amendment shall not become
effective unless and until the Amendment has been executed by the County and all of the
Participating Cities. The date on which all of the Participating Cities have executed the
Amendment shall be the “Amendment Effective Date.” The County shall give written notice of
the Amendment Effective Date to the City. In the event that the Amendment Effective Date
does not occur by June 30, 2015, this Amendment shall be automatically terminated and the
County shall have no obligation to make the Amendment Payment; provided, however that the
County Board of Supervisors may extend such automatic termination date to a date no later
than September 30, 2015.
2015 Amendment to Waste Disposal Agreement
Section 4. REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each of the
parties to this Amendment represent and warrant that it is a political subdivision of the State of
California validly existing under the Constitution and laws of the State and (ii) it has duly
authorized the execution and delivery of this Amendment, and has duly executed and delivered
the Amendment.
All other terms and conditions of the 2009 Original Waste Disposal Agreement not specifically
changed by this Amendment, shall remain in full force and effect.
IN WITNESS WHEREOF, COUNTY and CITY have caused this Amendment to be executed
by their duly authorized officers or representatives as of the day and year first above written.
COUNTY OF ORANGE
Date __________________________ By _________________________________
Director, OC Waste & Recycling
Date __________________________ By _________________________________
\[NAME\]
City Representative
City of \[CITY\]
Date __________________________ By _________________________________
\[NAME\]
City Representative
City of \[CITY\]
APPROVED AS TO FORM:
COUNTY COUNSEL
ORANGE COUNTY, CALIFORNIA
By _____________________________
Date ____________________________
2015 Amendment to Waste Disposal Agreement
APPENDIX 2
County Acceptable Waste Tonnage Target to be Used
for Purposes of Section 4.2(b)
Fiscal Year Tonnage Cumulative
FY 2015-16 2,724,250 2,724,250
FY 2016-17 2,681,153 5,405,403
FY 2017-18 2,638,746 8,044,149
FY 2018-19 2,597,017 10,641,166
FY 2019-20 2,558,522 13,199,688
FY 2020-21 2,520,605 15,720,293
FY 2021-22 2,483,256 18,203,549
FY 2022-23 2,483,256 20,686,805
FY 2023-24 2,483,256 23,170,061
FY 2024-25 2,483,256 25,653,317
2015 Amendment to Waste Disposal Agreement
APPENDIX 5
PARTICIPATING CITY ALLOCATION PURSUANT TO SECTION 3.6
Allocation Percentage for Allocation of
City
Purposes of Section 3.6 Initial Payment
Anaheim 13.18% $711,509
Aliso Viejo
0.67 36,416
Buena Park 2.34 126,275
Brea 2.28 123,085
Costa Mesa 2.18 117,936
Costa Mesa Sanitary District 1.48 79,976
Cypress 2.56 138,115
Dana Point 0.99 53,278
Fullerton 4.10 221,271
Fountain Valley
1.76 95,217
Garden Grove/
GG Sanitary District 7.17 387,197
Huntington Beach 6.13 330,807
Irvine 8.22 444,036
Laguna Beach 1.14 61,796
Laguna Hills 0.74 40,098
Laguna Niguel 1.36 73,341
Laguna Woods 0.41 22,274
La Habra 1.69 91,431
Lake Forest
2.45 132,214
La Palma 0.32 17,325
Los Alamitos
0.58 31,362
Mission Viejo 2.42 130,902
Newport Beach 3.68 198,946
Orange 4.90 264,468
Placentia 1.58 85,116
Rancho Santa Margarita 1.11 60,009
Santa Ana 10.60 572,184
San Clemente 1.40 75,728
San Juan Capistrano
1.23 66,420
Seal Beach 0.82 44,292
Stanton 1.62 87,287
Tustin 1.42 76,648
Villa Park 0.21 11,081
Midway City Sanitary
District (Westminster) 2.13 114,893
Yorba Linda
1.78 96,344
County Unincorporated
3.35 180,723
Totals 100% $5,400,000
2015 Amendment to Waste Disposal Agreement