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HomeMy WebLinkAboutBOARD MINUTES 07-27-95 126 MINUTES OF THE ADJOURNED REGULAR BOARD MEETING OF THE DISTRICT BOARD OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT HELD ON JULY 27, 1995 The District Board of the Central Contra Costa Sanitary District convened in an adjourned regular session at the Assistance League of Diablo Valley, 1850 Second Avenue, Walnut Creek, County of Contra Costa, State of California, at 9:08 a.m. on July 27, 1995. President Hockett called the meeting to order and requested that the Secretary call roll. 1. ROLL CALL PRESENT: Members: Menesini, Rainey, Boneysteele, Hockett ABSENT: Members: Dalton Member Dalton entered the meeting at the hour of 9:35 a.m. Others present included: Central Contra Costa Sanitary District: Kenton L. Aim, Roger J. Dolan, Elaine Jacobs, Paul Morsen, Joyce E. Murphy, Debbie Ratcliff Contra Costa County: Val Alexeeff, Mary Fleming, Avon Wilson Town of Danville: Mike Shimansky, Dick Waldo, Dave Anderson, Joe Calabrigo City of Lafayette: Judy Garvens, Bob Adams, Steve Falk Town of Moraga: James Sweeny, Cherie Grant, Karen Stein City of Orinda: Laura Abrams, Gregg Wheatland, Bill Lindsay, Kelly Sills City of Walnut Creek: Gene Wolfe, Janet Schneider Hilton Farnkopf & Hobson: Robert Hilton Valley Waste Management: Dan Borges, Harriette Heibel Members of the Public: Hank Gates 2. PUBLIC COMMENTS None 3. SOLID WASTE SOLID WASTE RATE-SETTING WORKSHOP a. Mr. Roger J. Dolan, General Manager-Chief Engineer, provided an overview of the solid waste rate-setting workshop process to be followed and background on solid waste franchising, the formation of the Central Contra Costa Solid Waste Authority (CCCSWA) and its relation to the Cities of Lafayette and Orinda and Towns of Danville and Moraga for which Central Contra Costa Sanitary District (CCCSD) franchises, and a history of solid waste issues as they relate to the current situation. Mr. Dolan stated that CCCSD is the largest solid waste regulator/franchiser in the County. The City of Concord is the second largest. In response to ever-increasing landfill disposal costs and as a result of favorable Court decisions, CCCSD and CCCSWA negotiated for lower cost landfill disposal at Altamont Landfill in Alameda County, reducing rates for Central County ratepayers by approximately 20 percent. AB 939 mandated a solid waste diversion goal of 25 percent 07 27 95 127 by 1996 and 50 percent by the year 2000. In the late 1980's, CCCSD set rates for second and third cans equal to the first can to encourage recycling in an effort to meet these diversion goals. CCCSD then began looking at how to introduce competitive forces into the regulated solid waste monopoly to encourage even lower, more competitive rates for the ratepayers. In 1993, CCCSWA, a joint powers authority made up of the CCCSD and the Cities of San Ramon and Walnut Creek, hired Hilton Farnkopf & Hobson (HFH) to look at alternatives and conduct a feasibility study. The recommendation from the feasibility study was to do what is now being done, to solicit competitive proposals for solid waste, green waste, and recycling collection and disposal services. Mr. Dolan stated that in 1991, CCCSD thought that cooperating with neighboring agencies was a good idea. A workshop was conducted with the Cities and Town for which CCCSD franchises. Memoranda of Understanding (MOUs) between CCCSD and each of the four Cities and Towns were negotiated for AB 939 implementation. CCCSD has managed solid waste for the Cities and Towns since that time. These issues were revisited in 1 994 after the HFH feasibility study was completed because it appeared that new technologies that would lower rates would be available, and in some communities the idea of implementing automated collection might be something that would have to be worked through. This was done with individual meetings with representatives from each of the four Cities and Towns. The feedback received from the Cities and Towns was that automated technology would be an acceptable concept as long as backyard service would be available, and that CCCSD was doing a good job managing solid waste activities and should continue to represent the Cities and Towns. Member Dalton entered the meeting at the hour of 9:35 a.m. Mr. Dolan then proceeded to discuss the current situation. The competitive marketplace has the potential of delivering to our customers a 20 to 30 percent price cut. New technology is being implemented and competitive forces were sharp. That price cut will be added to a 20 percent price cut that took place in 1994 as a result of renegotiation of solid waste disposal rates. The solid waste industry in Contra Costa County doesn't care much for this process. Rates will be a little more than half of what they were two years ago. Mr. Dolan asked that everyone be aware that this is something CCCSD and CCCSWA Board and staff believe to be very good news but there are those who do not think this is a good idea because of the significantly lower rates and the impact on the solid waste companies. Mr. Dolan stated that the two lowest cost proposals received in the competitive process were from Browning-Ferris Industries (BFI) for solid waste collection and disposal services and Valley Waste Management (VWM) for recycling and green waste collection and disposal services. The sum total of the costs for solid waste during the eight years of the proposed franchises is $35.7 million. Mr. Dolan stated that there are a number of issues to be resolved. Those issues fall into three categories. 1 ) Institutional issues relating to Contra Costa County/CCCSD agreement on transfer of franchising authority for the unincorporated areas now franchised by CCCSD, County membership in CCCSWA, transfer of franchising authority to CCCSWA by member agencies (CCCSD, County, and Walnut Creek), revisions to CCCSWA bylaws, and ultimately the issue of whether the Cities and Towns for which CCCSD now franchises (Danville, Lafayette, Moraga, and Orinda) will join CCCSWA; 2) Contract issues relating to the terms of agreement between CCCSWA and BFI and CCCSWA and VWM; and 3) Rate-setting issues and involvement of the four Cities and Towns for which CCCSD franchises to ensure that rates for the $35.7 million revenue requirement over the next two years are set in a way that is fair and equitable and encourage waste diversion. The purpose of this series of workshops is to address the third category, rate-setting issues. Mr. Dolan indicated that the City of Walnut Creek is proceeding with a process similar to this workshop process but it is far less complicated because only one set of rates is involved rather than four set. At the end of this workshop process it is hoped that 07 27 95 128 CCCSD and the four Cities and Towns will reach a consensus on an acceptable set of rates. The CCCSD Board of Directors will act on those rates and CCCSD Board representatives to CCCSW A, Susan McNulty Rainey and Barbara D. Hockett, will take that decision to CCCSW A. CCCSW A will then set the rates. Mr. Dolan stated that the County will have responsibility for rates in the unincorporated areas. The County has indicated this workshop process now underway is acceptable to them and they will participate in it to develop rates for the unincorporated areas for submission to CCCSWA for action. Mr. Dolan showed a map and described the CCCSWA solid waste service area, showing the number of customers, reporting the progress made to date towards AB 939 diversion goals, and providing a comparison of current collection rates in the various areas. Mr. Dolan described the rate-setting process, stating that it is an iterative process with opportunities to go through it more than one time. Mr. Dolan highlighted the rate issue decision process which will be used. Mr. Robert Hilton, of Hilton Farnkopf & Hobson (HFH), described the refuse service included in the competitive Request for Proposals (RFP) issued by CCCSWA. The refuse services include: . Weekly, curbside cart collection (including "mini-can" service) . Hard-to-service collection . Three annual "clean-ups" (scheduled or on-call) . Optional "backyard" service . Commercial/multi-family bin service . Debris box service Mr. Hilton stated that most of the communities have met the 25 percent diversion goal mandated by AB 939, but there will be a real challenge to meet the 50 percent diversion goal. VWM is in a position to do that. Mr. Hilton reviewed the recycling service program submitted by VWM to meet the 50 percent diversion goal, including: . Weekly, automated curbside collection (same day as refuse) using split rolling carts . Additional materials collection including mixed paper, junk mail, corrugated, waste oil, and additional plastics Mr. Hilton described the green waste service program which will be an important part of achieving the diversion goals. The green waste service program will include: . Weekly, automated curbside collection (same day as refuse) . 64-gallon carts Mr. Hilton stated that achieving the 50 percent diversion goal is made more difficult by the Rancho Mirage court case which says that if someone sets aside and is paid for recyclables, then franchisers have no right to franchise those materials. Mr. Hilton described the post 1996 solid waste collection system, discussing the rate-setting complexities including route calculations and hard-to-service areas. These calculations are being done by the companies now. Good information is available from VWM because they are currently performing the functions for much of the service area. BFI is going through a very detailed process to determine this calculation. The total revenue requirement will be determined using this information and the rates will be set. Discussion followed with regard to geographic conditions which might restrict the use of automated collection equipment. At 10: 13 a.m., President Hockett declared a recess, reconvening at the hour of 10:30 a.m. with all parties present as previously designated. 07 27 9;) 129 Mr. Dolan began discussion of the rate issue decisions as set forth in the overheads and handouts provided to each attendee. The following comments were made or subjects were discussed with regard to Rate Issue 1, Area-Wide or Jurisdictional Rates: 8 Uncertain route projections 8 Uniform rate cut for Lamorinda . Allocation of cost among Cities and Towns 8 Better numbers to be available in early August 8 Keep both options open 8 Uniform level of service . Level of franchise fees 8 Duration of cost basis 8 Amount of commercial subsidy Following discussion, the initial rate calculation consensus with regard to Rate Issue 1, Area-Wide or Jurisdictional Rates, was as follows: 8 Obtain best jurisdictional data 8 May be advantages to area-wide rates -- Lamorinda 8 Lamorinda: consider uniform rate reduction The following comments were made or subjects were discussed with regard to Rate Issue 2, Sector Rate Setting: 8 Residential 8 Commercial: 8 Uniform residential/commercial cost of service 8 How to spread cost of recycling/green waste 8 Rate incentive for commercial recycling . Impact on commercial rates 8 Move toward increasing rate structure Following discussion, the initial rate calculation consensus with regard to Rate Issue 2, Sector Rate Setting: 8 Residential 8 Commercial, was as follows: 8 Volume based rates across residential/commercial 8 Jurisdictional based rates The following comments were made and subjects were discussed with regard to Rate Issue 3, Area-Wide and Jurisdictional Rates for DroD Box: . Fixed costs with unstable generation of revenues 8 Maintain reasonable rates 8 Can jurisdictional rates be set with uniform, area-wide drop box rates? 07 27 95 130 Following discussion, the initial rate calculation consensus with regard to Rate Issue 3, Area-Wide and Jurisdictional Rates for DroD Box, was as follows: . Area-wide rates . Allocate revenues/expenses to jurisdictions At this time, due to the lateness of the hour, Mr. Dolan proceeded to Rate Issue 6. The following comments were made with regard to Rate Issue 6, Municipal Service: . Rate implication of free municipal service? . Free service for future municipal facilities? Following discussion, the initial rate calculation consensus with regard to Rate Issue 6, Municipal Service, was as follows: . Free "normal" municipal services (existing facilities) -- all four Cities and Towns and County . Cities and Towns pay for extraordinary service (disaster cleanup, etc.) Ms. Judy Garvens, Lafayette City Councilmember, stated that the workshop was extremely helpful and she appreciated the opportunity to go through the process. 4. ANNOUNCEMENTS None 5. ADJOURNMENT There being no further business to come before the Board, President Hockett adjourned the meeting at the hour of 11 :56 a.m. to reconvene at 2:00 p.m., on Tuesday, August 8, 1995, at the Assistance League of Diablo Valley, 1850 Second Avenue, Walnut Creek, California, for the second in the series of workshops at which the Board of Directors will consider various rate-setting issues and decide on preferred rate-setting methodologies. jd . ~' ! /U \, ~ President of the Board of Directors, Central Contra Costa Sanitary District, County of Contra Costa, State of California COUNTERSIGNED: 07 27 95