Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: AMENDMENT TO THE SONOMA COUNTY WASTE
MANAGEMENT AUTHORITY JOINT POWERS AGREEMENT
FOR DEVELOPMENT OF THE NEW HOUSEHOLD
HAZARDOUS WASTE FACILITY AND AMENDMENT TO
THE CENTRAL DISPOSAL SITE AND FORMER LANDFILLS
SETTLEMENT AGREEMENT
Date: July 28, 2026
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council adopt a resolution approving (1) the First Amendment to the Amended and Restated Joint Exercise of Powers Agreement for the Sonoma County Waste Management Agency and (2) the First Amendment to the Central Disposal Site and Former Landfills Settlement Agreement; and authorizing execution of these amendments in substantially the attached forms, with minor, non-substantive revisions as may be approved by the City Attorney .to permit development of a new household hazardous waste (HHW) facility.
Background
The Sonoma County Waste Management Agency (Agency) was created through a Joint Exercise of Powers Act (Government Code section 6500 et seq.) agreement effective September 9, 1992 as a countywide government agency focusing on solid waste related issues, initially compliance with AB 939, but later including other California solid waste laws. The Agency is more commonly referred to and engages the public as Zero Waste Sonoma.
All Sonoma County cities and the County of Sonoma are members of and are represented by a Board member on the Agency Board of Directors. There were minor amendments to the Joint Powers Authority agreement approved by all members on January 24, 1996 and again on March 27, 2014. A more substantive ”Amended and Restated“ Joint Exercise of Powers Agreement for the Agency was approved by all members on March 1, 2017. The Amended and Restated Agreement authorizes member jurisdictions, following approval by their governing bodies, to amend the Agreement by unanimous consent.
Collection of Household Hazardous Waste
Household hazardous waste (HHW) collection in Sonoma County is currently handled through a single dedicated drop off location at the Central Landfill on Mecham Road. The intent of HHW collection is to divert this waste to avoid contamination and worker exposure in the general municipal waste stream and also to reduce or eliminate the disposal of unpermitted waste at the Central Landfill. While the existing HHW facility is relatively convenient for the south county area, it is not close enough to the northern county to be a viable option for most residents.
Therefore, having more options for north county residents has been a long-standing goal of the Agency. Currently, to try to better serve north county residents, the Agency operates an HHW Rover program that can pick up HHW at the customers' home, by appointment and with a fee.
Each week, the HHW Rover serves a different region of Sonoma County.
Landfill Settlement Agreement
In 2015, the County of Sonoma (County) was looking to divest itself from the operations and liability of the Central Landfill. After a search for partners to assume operations and liability, the County contracted with Republic Services to operate the landfill and assume the future closure and post closure liability. Under this assumption of liability for the Central Landfill, Republic provided guarantees, both from the local corporation and the parent company, which is also backstopped with bonds to ensure funding is available to properly close and maintain the landfill after closure. This also resulted in a number of other agreements, including Waste Delivery Agreements committing all jurisdictions in Sonoma County (except Petaluma) to waste disposal at the Central Landfill for 25 years, the Central Disposal Site and Former Landfills Settlement Agreement (2015 Settlement Agreement) establishing various funds to address potential closure and post-closure liabilities at the Central Landfill as well as various old closed ”urban” landfills around Sonoma County. This includes unused funds from the Central Landfill site that became available when Republic assumed this responsibility, as well as funds for the former Sonoma and Healdsburg landfills, plus a contingent liability reserve fund for each City (except Petaluma) and the County, as another potential source of funding.
Analysis/Discussion
To meet the long-term goal of a north county HHW facility, the Agency has acquired a property located at 5885 Pruit Avenue in Windsor and is proceeding with development of the property to collect and package household hazardous waste (HHW) for proper disposal elsewhere. To date, the purchase of the property and design process has been completely funded by Zero Waste Sonoma. However, full development of the HHW facility will require construction phase funding beyond Zero Waste Sonoma’s current ability to provide without external financing.
Through the development process, Zero Waste Sonoma staff has discussed potential financing of the HHW facility with the County. The County has offered the Central Disposal Site and Formal Landfills Settlement between the County of Sonoma and the Committed Cities as a lower cost funding source for construction of the HHW facility. The Agency would repay that loan over a period of 24 years from the issuance of a certificate of occupancy for the HHW facility. The County has offered this potential source of constructing funding as there are no near-term plans to utilize these funds. However, in order to provide the clear contractual authority for the proposed revolving line of credit, the Amended and Restated Joint Exercise of Powers Agreement for Sonoma County Waste Management Agency and the 2015 Settlement Agreement both need to be amended.
Amended and Restated Joint Exercise of Powers Agreement for Sonoma County Waste Management Agency
The State Joint Exercise of Powers Act provides that member agencies of a joint powers authority (such as the County, in this instance), are allowed to make “advances” to a JPA in furtherance of the purposes set forth in the joint powers agreement, with the advances repaid according to the terms of the joint powers agreement. (Gov’t Code section 6504.) While the JPA Agreement does allow generally that the Agency may incur debts, liabilities and obligations (See attached JPA Agreement, Section 3(b)(vi)), it does not expressly provide that the member agencies may make loans or advances to the Agency, as allowed by Gov’t Code section 6504.
In order to make clear that the Agency is authorized to borrow money from the County for the development of the HHW Facility, and that the County is authorized to make the contemplated loan to the Agency, Agency staff prepared a proposed First Amendment to the Amended and Restated Joint Exercise of Powers Agreement for Sonoma County Waste Management Agency (First Amendment) to expressly authorize contributions, payments, or advances from the member agencies to the Agency, with any advances to be repaid pursuant to terms set forth in a written agreement between the Agency and the member agency making such an advance. 2015 Settlement Agreement
The proposed amendment to the 2015 Settlement Agreement would permit the County to use the County Contingent Liability Reserve Fund, Central Disposal Site Leak Fund, Sonoma Leak Fund, and Healdsburg Leak Fund as a revolving line of credit for the Agency. The amendment states that these funds are supplemental to the Former Urban Landfill Fund and had a combined balance of approximately $21.17 million as of October 31, 2025.
The amendment also recognizes that repayment may extend beyond the expiration of the Waste Delivery Agreements and provides that unpaid amounts due from the Agency will not be liquid to meet any unexpected Settlement Agreement liabilities during the repayment period. All other Settlement Agreement provisions remain in effect. The amendment becomes effective only when fully executed by all parties.
Summary
If approved, the First Amendment to the JPA and First Amendment to the 2015 Settlement Agreement would expressly allow for the contemplated line of credit to be made from the County to the Agency.
In order to take effect, the both amended agreements must be approved by all of the governing boards of the member agencies, including the City of Cotati.
Financial Considerations
There are no financial impacts to the City by approving the First Amendment to the JPA or the First Amendment to the 2015 Settlement Agreement. While the First Amendment to the JPA explicitly allows members to provide financing, no funds from the City of Cotati are requested or required for the development and construction of the 5885 Pruitt Avenue facility. No other potential lending arrangements between the City of Cotati and the Agency have been proposed or envisioned at this time.
The Agency is primarily funded through landfill ”tipping fees”. Tipping fees are the charge to dispose of waste at the Central Landfill or one of the transfer stations. The Agency receives a component of the total fee for every landfill user to dispose of waste. However, this revenue is not adequate to cash fund the capital expenditure for the HHW facility. Therefore, the Agency and the County have developed the proposed financing mechanism from funds that are not expected to be needed during the loan term and that are viewed as very low risk (due to the Republic guarantees, backstopped by bonds and the contingent liability reserve funds).
Assuming the Agency Board proceeds with awarding construction of the HHW facility and utilizes the lower cost capital available from the County, it should ultimately reduce the cost to the public compared to the alternatives, which are commercially available funds with a higher interest rate and less flexible terms.
Current Financing Terms - Informational Only
Current draft term Description
Maximum commitment $16 million
Interest 4% per year before maturity; 8% default rate
Draw period Until certificate of occupancy, but no later than a date in 2030 to be completed in the final agreement
Repayment Quarterly payments based on annual debt service of $900,000 in years 1-5, $1.0 million in years 6-10, $1.1 million in years 11-15, $1.2 million in years 16-20, and full amortization in years 21-24 Security Agency Waste Management Agency Fee
The City is not being asked to approve these terms. The attached Credit Agreement is included only to explain the contemplated transaction and remains subject to County and Agency approval and legal completion.
Environmental Issues
The proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(4), in that, approving this action does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment, and because this is an administrative activity of governments that will not result in direct or indirect physical changes in the environment.