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HomeMy WebLinkAboutReso 014-93 OSC AltamontCostsRESOLUTION NO. 14 - 93 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING AGREEMENT FOR PROVISIONAL CHARGES FOR THE CLOSURE AND POST CLOSURE MAINTENANCE OF ALTAMONT SANITARY LANDFILL WHEREAS, Oakland Scavenger Company (OSC) is responsible for the collection and disposal of waste in the City of Dublin pursuant to a franchise agreement dated March 10, 1986 (as amended); and WHEREAS, the waste collected pursuant to this agreement is placed in the Altamont Landfill; and WHEREAS, the revenues collected by OSC are established pursuant to rate schedules approved by the City Council; and WHEREAS, the Joint Refuse Rate Review (JRRRC) reviews requests by OSC for inclusion of specified expenses through the rate structure; and WHEREAS, the JRRRC provides recommendations to the elected bodies of the member jurisdictions; and WHEREAS, OSC has requested ratepayer reimbursement of certain Landfill Closure/Post Closure (CPC) expenses as part of the 1993 Rate Application; and WHEREAS, the JRRRC recommends that the final determination of CPC costs shall be the subject of further negotiations with OSC; and WHEREAS, the JRRRC anticipates the use of a subcommittee to negotiate a model Final Closure Post Closure Agreement; and WHEREAS, the City Council will have an opportunity to review and adopt the final agreement; and WHEREAS, the JRRRC has developed'a "Provisional Agreement" (Exhibit A) attached hereto and by reference made a part hereof; and WHEREAS, the agreement specifies the issues which are to be negotiated between the parties and the handling of CPC funds collected during the negotiations and prior to execution of a Final Agreement; and WHEREAS, the 1993 JRRRC Rate Review Report dated December 10, 1992 already incorporates the CPC for 1993 into its recommendations. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Agreement for Provisional Charges for the Closure and Post Closure Maintenance of Altamont Sanitary Landfill (Exhibit A) and the Mayor is hereby authorized to execute said agreement on behalf of the City. BE IT FURTHER RESOLVED that the City Council acknowledges that the Joint Refuse Rate Review Committee will utilize a subcommittee to negotiate a Model Agreement for the final resolution of Closure/Post Closure costs. The Model Agreement shall be submitted to the City Council for its review and approval before becoming effective. PASSED, APPROVED AND ADOPTED this 11th day of January, 1993. AYES: Councilmembers Burton, Houston, Howard, Moffatt, and Mayor Snyder NOES: None ABSENT: None ATTEST~ a: resol4. agenda#11 AGREEMENT FOR PROVISIONAL CHARGES FOR THE CLOSURE AND POST-CLOSURE MAINTENANCE OF ALTAMONT SANITARY LANDFILL THIS AGREEMENT is made and entered into as of this llth day of January , 1993 between the City of Dublin ("City") and Oakland Scavenger Company, a California corporation ("OSC"). THE PARTIES AGREE AS FOLLOWS: 1. RECITALS This Agreement is entered into in light of the following facts and circumstances: A. City and OSC entered into an Agreement dated March 10, 1986 (the "Franchise Agreement") pursuant to which City granted OSC a franchise to collect and dispose of refuse from within City, and OSC undertook to collect and dispose of all refuse in accordance with law. B. Refuse collected by OSC from within City is disposed of at the Altamont Sanitary Landfill ("Altamont") operated by OSC and located in eastern Alameda County. C. OSC has disposed and now disposes at Altamont refuse from other communities besides City, located both within and outside of Alameda County. OSC states that the Alameda County communities whose refuse is now disposed of at Altamont are, including City, the City of Alameda, the City of Albany, Castro Valley Sanitary District, the City of Dublin, the City of. 76863.5 1 Emeryville, the City of Hayward, the City of Oakland, Oro Loma Sanitary District, and the City of Piedmont. D. Each of these nine agencies is a member of the Alameda County Joint Refuse Rate Review Committee ("Committee"). Pursuant to the Franchise Agreement, and to parallel provisions in the franchise agreements of the other member agencies, the Committee evaluates annual applications from OSCfor adjustments to the rates which it is authorized to charge to residents and businesses in the member agencies' jurisdictions who receive refuse collection service from OSC. City considers the Committee's report and recommendation and periodically takes action to adjust rates which OSC may charge residents and businesses ("ratepayers") in City. E. OSC is required by California law, including regulations of the California Integrated Waste Management Board ("CIWMB"), 14 California Code of Regulations Sections 17760- 17796, 18250-18277; and the State Water Resources Control Board, 23 California Code of Regulations Sections 2580-81, to develop, have approved, and then implement plans for the closure of Altamont and for its long term post-closure monitoring and maintenance. The CIWMB regulations also require OSC to comply with one or more methods of demonstrating financial responsibility for its closure and post-closure responsibilities (14 California Code of Regulations Sections 18280-18297). 76863.5 2 F. OSC contends that proper accrual for the costs of closure and compensation for compliance with State law are necessary and proper expenses relating to operation of Altamont. G. OSC has requested the Committee to recommend to its member agencies that OSC be authorized to increase rates charged to ratepayers to cover the costs of complying with these closure/post-closure requirements at Altamont. City states that the Committee has, through engineering and financial consultants, evaluated the feasibility and adequacy of OSC's closure and post- closure plans, and the reasonableness of OSC estimates of the costs thereof. It has also investigated a methodology by which the closure/post-closure expenses which would be paid for by ratepayers of Committee member agencies, including City, can be limited to their fair share based on their proportionate usage of Altamont. These investigations are substantially completed, but the Committee's findings as to these items have not been translated into definitive agreements between the member agencies and OSC. Moreover, there areissues associated with City's desire to insure that revenues paid by its ratepayers to OSC intended to cover closure/post-closure expenses are in fact utilized for those purposes, and these issues are related to the method of financial assurance which OSC intends to utilize and have approved by CIWMB. It is expected that the discussion and definitive resolution of these issues between City and OSC and between other Committee member agencies and OSC will require at least 10 months. 76863.5 3 H. City wishes to approve, on a provisional and non- precedential basis, an increase in the rates which OSC may charge, the additional revenues from which would be dedicated to closure/post-closure expenses. The purpose of this Agreement is to specify the issues which are to be further negotiated between the parties and the handling of funds generated by the provisional rate increase during the negotiations prior to execution of a definitive agreement. 2. NEGOTIATION OF AMENDMENT TO FRANCHISE AGREEMENT. (a) City and OSC agree to seek to negotiate in good faith an amendment to the Franchise Agreement (the "Amendment Agreement") that will address the following issues and such other matters as the parties may agree upon: (1) The method by which OSC will demonstrate the availability of financial resources to conduct closure and post- closure maintenance activities under Chapter 5, Article 3.5 of Title 14 of the California Code of Regulations with regard to Altamont, including, without limitation, the type and terms of financial assurance that OSC will provide; (2) The method by which OSC will seek to allocate closure and post-closure maintenance costs among all cities and other users (both within and outside Alameda County) who use or have used Altamont; (3) The portion of the closure and post-closure maintenance expenses for Altamont to be borne by ratepayers of City; 76863.5 4 (4) The amount, if any, that OSC may collect from ratepayers of City for the specific purposes of providing the required financial assurance described in Paragraph 2(a)(1) above and funding for the closure and post-closure expenses, and the period over which such amount would be collected; and (5) The method by which the provisional charges that are collected on an interim basis pursuant to Paragraph 3 below will be applied to payment of closure and post-closure maintenance expenses and for other purposes as described in Paragraph 4(c) below. (b) City may appoint the Committee as its representative in the negotiations contemplated by this Paragraph 2. Upon receiving written notice of such appointment, OSC shall recognize and deal with the Committee as the City's representative. Notwithstanding such appointment, however, the Amendment Agreement will not become effective unless and until it has been approved by City directly and signed by an authorized officer of City. (c) City and OSC will commence such negotiations promptly following execution of this agreement, and will seek to execute a definitive agreement amending the Franchise Agreement with respect to the matters described above no later than November 1, 1993 (the "Designated Amendment Completion Date.") (d) By agreeing to enter into such negotiations, City does not explicitly or implicitly agree or acknowledge that it or the ratepayers in City are in any way responsible for closure or 76863.5 5 post-closure maintenance expenses at Altamont or for providing funds for such expenses. By agreeing to enter into such negotiations, OSC does not implicitly or explicitly agree that City or its ratepayers are not liable in full for such expenses ? or for providing funds. 3. PROVISIONAL CHARGES. (a) City will authorize OSC to charge ratepayers in City provisional charges in the amounts set forth in Schedule A attached hereto (the "Provisional Charges") for periods commencing on or after January l , 1993, and ending on or prior to the Designated Amendment Completion Date or on such other date as may be specified in the Amendment Agreement. City agrees to take whatever steps are necessary to amend its rate schedule to include the Provisional Charges. The schedule of Provisional Charges has been designed to yield OSC with an amount of approximately One Dollar and Sixty-Six Cents ($1.66)/ton of refuse collected from ratepayers in City during the term of this Agreement. The preceding amount has been selected by City without reference to the amount of rate increase, if any, that may ultimately be agreed upon by the parties. OSC may collect the Provisional Charges in addition to the charges that it is otherwise permitted to collect under the Franchise Agreement. The amounts collected as Provisional Charges shall be held separately and used by OSC only in accordance with the provisions of this agreement. 76S63.5 6 (b) OSC agrees and acknowledges that City's authorization of the collection of the Provisional Charges at this time is for a limited purpose. OSC further acknowledges that City's authorization of such collections is not an express or implied admission or agreement of City that its ratepayers are responsible for closure or post-closure maintenance expenses or must contribute to such expenses. The City acknowledges that OSC's agreement to collection of the Provisional Charges as provided for in this Agreement is not an express or implied admission or agreement by OSC that the City and its ratepayers are not liable in full for closure or post-closure maintenance expenses and contribution for such expenses. 4. ESCROW ACCOUNT. (a) OSC shall establish and maintain throughout the period required by this Agreement a separate interest bearing account with Union Bank or with such other bank as may be approved in writing by City in its discretion (the "Bank") into which shall be deposited all Provisional Charges collected by OSC (the "Escrow Account"). All funds and other property rights held in the Escrow Account, including earnings thereon, are referred to hereinafter as the "Escrow Funds." The Escrow Account shall be a passbook savings account or a time deposit with the Bank with a maturity not later than twelve (12) months from the date of deposit. OsC shall seek to secure the highest available interest offered by the Bank on the Escrow Account within the confines of the preceding sentence. All Provisional Charges 76863.5 7 collected in a month shall be deposited in the Escrow Account not later than ten (10) days following the end of the month. No later than the time the Escrow Account is opened, OSC will secure the agreement of the Bank that said account may not be amended, terminated or modified without the written agreement of City. OSC shall provide a copy of this Agreement to the Bank. City shall not be subject to any claim or liability to OSC or any other person as a result of its approval or disapproval of any bank with which OSC seeks to establish the Escrow Account. (b) Escrow Funds, and any part thereof, may be withdrawn or disbursed from the Escrow Account only upon the joint signatures and at the joint direction of an authorized representative of each of City and OSC. Until changed by written notice from the naming party to the other, the authorized representative of each shall be the individual holding the position named in paragraph 5(d) hereof. (c) All Escrow Funds shall be the property of OSC, but shall be used only for payment of closure and post-closure maintenance expenses for Altamont as specified in the Amendment Agreement, if any. If no Amendment Agreement is entered into between City and OSC by the Designated Amendment Completion Date, or if such agreement does not expressly deal with the disposition of the Escrow Funds, said funds shall be disposed of as follows: (1) If at the time the Escrow Funds .are to be distributed OSC has established a trust for performance of closure and post-closure maintenance obligations at Altamont 76863.5 8 pursuant to the rules and regulations of the CIWMB, the Escrow Funds shall be distributed to said trust promptly following the Designated Amendment Completion Date. Any cash, funds or property so contributed shall be considered to have been paid toward satisfaction of any amounts theretofore or thereafter required to be contributed by City's ratepayers for closure and post-closure expenses, to the extent of the Escrow Funds so distributed. (2) In the event that no trust fund has been established as described in subparagraph (1) above, the Escrow Funds shall be released to OSC promptly following the Designated Amendment Completion Date. In that event, the aggregate amount permitted to be collected by OSC from ratepayers for the fiscal year of the Franchise Agreement that next commences after the date of distribution shall be reduced by the amount of the distributed Escrow Funds (including interest earned), and said reduction shall be implemented by an appropriate proportionate reduction in the rates that would otherwise be authorized for said period. (d) OSC shall keep accurate records with respect to all Provisional Charges and funds held in the Escrow Account, including records with respect to earnings thereon. Monthly, while the Escrow Account is maintained, and within thirty (30) days following the closing of said account, OSC shall render a written accounting to City of the funds collected and held in the 76863.5 9 account and transactions in said account since the last accounting. (e) Except as expressly set forth in Section 4(c) of this Agreement, OSC shall have no right, power or authority to assign, transfer, alienate, encumber, or hypothecate its interest in the Escrow Account in any manner, nor shall its interest be subject to claims of OSC's creditors or liable to attachment, execution or process of law, it being the agreement of the parties that the funds held in the Escrow Account have been collected and can be used for only closure or post-closure maintenance expenses for Altamont and for such other purposes as are permitted by this agreement. 5. GENERAL. (a) This agreement shall be binding on the parties hereto, and the successors and assigns of each. (b) Except as specifically provided herein, the Franchise Agreement remains in full force and effect and unmodified hereby. (c) In the event either party commences any legal action to enforce its rights hereunder, the prevailing party in such action shall be entitled to recover from the other its costs and expenses, including reasonable attorneys fees, incurred in connection with such action. (d) Any notice or other communication required or permitted by this agreement to be delivered to or served on any party to this agreement shall be deemed properly delivered to, 76863.5 10 served on, and received by the party when personally delivered to the party, or, in lieu of such personal service, three (3) days after the notice or communication has been deposited in the U.S. mail, postage prepaid, addressed to the party at the following address: Oakland Scavenger Company 2000 Embarcadero, Suite 300 Oakland, CA 94606 Attention: City of Dublin 100 Civic Plaza (P.O. Box 2340) Dublin, CA 94568 Attention: City Manager IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. ~Y '~ , Peter W. Snyder~~ Its: Mayor OAKLA/~D SCAVENGER COMPANY Its: ~~/~ 76863.5 11 Schedule A Provision_n] Charges The provisional. charges shown below have been calculated by dividing the Agency's projected 1993 franchised tons (including allocated public tons) by the total projected 1993 franchised' tons and multiplying the quotient by the projected 1993 closure and post-closure expense included in OSC's 1993 rate application. The result is the Agency's proportionate share of the projected 1993 closure and post-closure expense, which is equivalent to $1.66 per projected ton of solid waste disposed in 1993. The Agency's proportionate share of the projected 1993 closure and post-closure expense is then divided by the projected 1993 gross collection revenues at current rates before any 1993 rate adjustment. The quotient is the estimated percentage of projected 1993 gross collection revenues that are required for 1993 closure and post-closure expense. The Agency's actual 1993 closure and post-closure expense will be calculated by OSC on a monthly basis by multiplying the Agency's actual tonnage for the preceding month by $1.66 per ton. OSC will deposit $1.66 per ton into the Agency's Escrow Account referred to in Section 4 of this Agreement. Agency: Dublin Projected Proportionate Projected 1993 Closure and 1993 Tonnage Post-Closure Expense Revenue Closure and Post-closure Expense As % of Revenue 25,347 $41,955 $2,357,000 1.78%