AMENDMENT TO WASTE DISPOSAL AGREEMENT
Between
THE COUNTY OF ORANGE, CALIFORNIA
and the
CITY OF HUNTINGTON BEACH
�\?Q32016
\
County Amendment Authorization Date:
____ ,2016
County Notice Address:
Director
OC Waste and Recycling
300 N. Flower, Suite 400
Santa Ana, CA 92703
2016 Amendment to Waste Disposal Agreement
16-5092/130974
City Amendment Authorization Date:
ng4 /6_,2016
City Notice Address
Director of Public Works
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
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:
2016 Amendment to Waste Disposal Agreement
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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 2016 Amendment to Waste Disposal Agreement
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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 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." 2016 Amendment to Waste Disposal Agreement
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(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:
"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.
(1) 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 the County and 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, 2016, this Amendment shall be automatically terminated and the County shall have no obligation to make the Amendment Payment. 2016 Amendment to Waste Disposal Agreement
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Date ;2_1/6
Date 21/6 /2_0
By
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
APPROVED AS TO FORM:
COUNTY COUNSEL
ORANGE COUTY, CALIFORNIA
2016 Amendment to Waste Disposal Agreement
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APPROVED AS TO FORM:
CITY ATTORNEY
HUNTINGTOLL CALIFORNIA
AliA/Iichael E. Gates, City Attorney
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
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APPENDIX 5
PARTICIPATING CITY ALLOCATION PURSUANT TO SECTION 3.6
g_q
Anaheim
Aliso Viejo
Buena Park
Brea
Costa Mesa
Costa Mesa Sanitary District
Cypress
Dana Point
Fullerton
Fountain Valley
Garden Grove/
GG Sanitary District
Huntington Beach
Irvine
Laguna Beach
Laguna Hills
Laguna Niguel
Laguna Woods
La Habra
Lake Forest
La Palma
Los Alamitos
Mission Viejo
Newport Beach
Orange
Placentia
Rancho Santa Margarita
Santa Ana
San Clemente
San Juan Capistrano
Seal Beach
Stanton
Tustin
Villa Park
Midway City Sanitary
District (Westminster)
Yorba Linda
County Unincorporated
Totals
Allocation Percentage for
Purposes of Section 3.6
13.18%
0.67 2.34
2.28 2.18
1.48 2.56
0.99 4.10
1.76 7.17
6.13 8.22
1.14 0.74
1.36 0.41
1.69 2.45
0.32 0.58
2.42 3.68
4.90 1.58
1.11 10.60
1.40 1.23
0.82 1.62
1.42 0.21
2.13 1.78
3.35 100%
Allocation of
Initial Payment
$711,509
36,416
126,275
123,085
117,936
79,976
138,115
53,278
221,271
95,217
387,197
330,807
444,036
61,796
40,098
73,341
22,274
91,431
132,214
17,325
31,362
130,902
198,946
264,468
85,116
60,009
572,184
75,728
66,420
44,292
87,287
76,648
11,081
114,893
96,344
180,723
$5,400,000
2016 Amendment to Waste Disposal Agreement
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MEETING DATE:
SUBMITTED TO:
SUBMITTED BY:
PREPARED BY:
SUBJECT:
Dept ID PW 16-010 Page 1 of 2
Meeting Date 2116/2016
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
2/16/2016
Honorable Mayor and City Council Members
Fred A Wilson, City Manager
Travis K Hopkins, PE, Director of Public Works
Approve and authorize execution of a revised Amendment to the 2009 Waste Disposal Agreement between City of Huntington Beach and County of Orange with a revised effective date of June 30, 2016
Statement of Issue
On April 20, 2015, City Council approved an Amendment to the 2009 Waste Disposal Agreement as negotiated by a committee of City Managers to allow continued importation of waste at County landfills, to provide revenue sharing between County and cities, and to extend the term of the agreement to June 30, 2025 It is necessary to re-approve the amendment changing the Amendment effective date to June 30, 2016, to provide additional time for all Orange County cities to approve the amendment
Financial Impact
By September 30, 2016 and annually thereafter, the City will receive a 6 13% allocation of net importation revenue from County of Orange For Fiscal Year 15/16, new revenue in the amount of $303,807 will be deposited into the General Fund
Recommended Action
Approve and authorize the Mayor and City Clerk to execute the revised "Amendment to Waste Disposal Agreement Between the County of Orange, California and the City of Huntington Beach" with the new Amendment effective date of June 30, 2016
Alternative Action(s)
Do not approve the revised amendment to the County of Orange Waste Disposal Agreement This action will result in the loss of the proposed importation revenue share, loss of competitive landfill disposal rates, and a substantial increase in trash collection rates for Huntington Beach residential and commercial customers as the city's waste will have to be exported out of County Analysis
The disposal of municipal solid waste at Orange County landfills is governed by the 2009 Solid Waste Disposal Agreement (WDA) by which Huntington Beach and other cities in the County have agreed to deposit their municipal solid waste at the County's three landfill facilities in return for low disposal rates and guaranteed capacity The term of the existing WDA began July 1, 2010, and runs through June 30, 2020 The importation of waste from outside the County at County landfills is also provided in the agreement and is set to expire on June 30, 2016 The original amendment was unanimously approved by City Council on April 20, 2015 It was negotiated by OC Waste & Recycling (OCWR) with a committee of City Managers representing Item 8. - I HB -86-
Dept ID PW 16-010 Page 2 of 2
Meeting Date 2/16/2016
Orange County cities in order to address a reduction in County disposal revenues and to ensure rate stabilization for local residents and businesses by extending importation of waste from outside the County by an additional nine years beyond the current June 30, 2016, expiration date The amendment, which required approval by all 34 participating Orange County cities, was expected to go into effect no later than June 30, 2015, and was subsequently extended to September 30, 2015 Unfortunately, not all cities were able to come to terms with OCWR prior to September 30, 2015, which triggered the expiration of the original amendment All outstanding issues have now been resolved, and OCWR is requesting that all 34 participating cities approve the revised amendment with a new effective date of June 30, 2016 All other terms and conditions that were previously negotiated - including the City's 6 13% revenue share - remain unchanged Staff recommends approval of this revised amendment to the WDA Approval of this amendment allows the city to continue to utilize local OC landfills at preferential rates, to ensure stable trash collection rates for residents and businesses, to receive a share of the County's importation revenue, and to maintain a partnership with the County Upon receiving approval of the 34 participating cities, the amendment will be presented to the Orange County Board of Supervisors for adoption
Public Works Commission Action
Not required
Environmental Status Not applicable
Strategic Plan Goal
Strengthen economic and financial stability
Attachment(s)
1 "Amendment to Waste Disposal Agreement Between the County of Orange, California and the City of Huntington Beach"
2 April 20, 2015 Request for City Council Action PW 15-017 )
HB -87- Item 8. - 2