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HomeMy WebLinkAbout2016-03 CC Reso - Establishing Funding Closure - Ukiah Solid Waste Disposal Site1 1 1 RESOLUTION NO. 2016-03 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH ESTABLISHING FINANCIAL MECHANISM FOR FUNDING CLOSURE, POST - CLOSURE MAINTENANCE, AND CORRECTIVE ACTION PLAN FOR CITY OF UKIAH SOLID WASTE DISPOSAL SITE WHEREAS: 1. The City of Ukiah solid waste disposal site ( "Landfill ") located at 3100 Vichy Springs Road, Mendocino County Assessor Parcel No. 178- 130 -01), consisting of a landfill footprint of approximately 40 acres, ceased operations and accepting solid waste in September 2001; and 2. Since September 2001, the City has maintained the Landfill, including monitoring wells surrounding the perimeter of the property and a leachate collection system that captures and disposes of leachate through the City's sewer system; and 3. Under applicable provisions of the California Public Resources Code and in Title 27 of the California Code of Regulations ( "CCR "), the City is required to adopt a plan for the closure, post - closure maintenance, and corrective actions required for the Landfill; and 4. Pursuant to 27 CCR 21180(a), the City must provide post - closure maintenance and a corrective action plan reserve ( "CAP ") for a thirty -year period after closure; and 5. The cash collected by the City to provide for Closure, Post - Closure Maintenance, and the CAP reserve are reflected in the City's financial statements as a net position of the disposal site proprietary fund; and 6. The City is scheduled to complete the closure of the landfill ( "Closure ") in accordance with its approved closure plan in 2016; and 7. Recently, new and more costly regulatory requirements relating to Closure have been imposed by the California state agencies with jurisdiction over the Closure. These additional requirements, including installation of a methane gas collection system, would have been imposed, even if the Closure had occurred prior to the imposition of these new requirements; and 8. The most recent engineer's estimates for Closure, including the gas collection system and other additional requirements, indicate that the net proprietary fund for the Landfill is not sufficient to cover all of the costs of Closure, Post - Closure Maintenance, and to establish a CAP reserve; and 9. The City must provide the funding for Closure, Post - Closure Maintenance, and the CAP reserve; and 10. On January 1, 2017, pursuant to the Amended and Restated Transfer Station Agreement ( "Transfer Station Agreement ") between the City of Ukiah and Solid Waste Systems, Inc. ( "SWS "), dated December 12, 2011, the City is entitled to acquire legal title to the Transfer Station (Transfer Station) located at 3151 Taylor Drive, Ukiah, California, and the City and SWS are obligated to enter a lease under which SWS will continue to operate the transfer station and pay rent ( "Transfer Station Rent ") to the City for the use of the Transfer Station; and 1 10. Dedicating Transfer Station Rent to fund Closure, Post - Closure Maintenance, and the Cap Reserve as further provided herein will provide a source of revenue to fund those obligations which exceed the disposal site proprietary fund; and 11. Commencing on January 1, 2012, the City adopted a City Surcharge on the Gate Fee at the Transfer Station ( "Surcharge ") to provide a source of revenue in the Landfill /Solid Waste Enterprise Fund for Closure and Post - Closure Maintenance, and the CAP reserve. The Surcharge is currently $2.00 per ton of Solid Waste received at the Transfer Station. The Surcharge is collected by SWS and remitted to the City, where it is recorded as revenue in the Landfill /Solid Waste Enterprise Fund as Closure and Post - Closure Reserve; and 12. Committing the Surcharge at its current level or any future level approved by the City Council will stabilize the Landfill /Solid Waste Enterprise Fund, provide a dedicated source of revenue to comply with the City's Closure and Post - Closure Maintenance costs, and the establishment and replenishment of the Cap Reserve; and 13. The combination of the disposal site proprietary fund, Transfer Station Rent, and the Surcharge will provide adequate funding for City's Closure and Post - Closure Maintenance costs, and the establishment and replenishment of the Cap Reserve, provided however, that an increase in the Surcharge may be necessary once the final Closure costs and the method of financing the City's obligations is determined; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Ukiah as follows: 1. Transfer Station Rent is hereby committed to any unfunded Closure costs, Post - Closure Maintenance costs, and the establishment and replenishment of the CAP reserve. 2. There is hereby established a Transfer Station Rents Special Revenue Fund (Special Revenue Fund) for all Transfer Station Rent revenue which fund is established and dedicated to pay for any Closure costs, Post - Closure Maintenance costs, and the establishment and replenishment of the CAP reserve. 3. Revenue recorded in the Special Reserve Fund shall be given first preference over other revenue sources, other than grants, in funding Closure and Post - Closure Maintenance expenses and CAP reserve requirements that are not funded by the disposal site proprietary fund. 4. Any Closure and Post - Closure Maintenance expenses and CAP reserve requirements not funded by grants, the disposal site proprietary fund, and the Special Revenue Fund shall be funded by the Surcharge. 5. The City Finance Director is hereby directed to prepare for City Council the approval a Financial Plan (Plan) to extinguish in fifteen years the estimated unfunded Closure and thirty - year Post - Closure Maintenance costs, and the CAP reserve requirements, and present the Surcharge to be applied to the Transfer Station Gate Fee commencing on January 1, 2017. The revised Surcharge shall be submitted to the City Council for approval no later than October 2016. Thereafter, in September of each year, the City Finance Director shall prepare an update of the Plan to fund Closure, Post - Closure Maintenance, and CAP requirements. Any recommended increase or decrease in the Surcharge resulting from the annual update of the Plan shall be presented to the City Council for approval in October, and if approved, will be applied to the Transfer Station Gate Fee immediately following January 1st. 2 1 1 1 1 1 1 PASSED AND ADOPTED this 6th day of January 2016, by the following roll call vote: AYES: Councilmember Crane, Mulheren, Doble, Brown, and Scalmanini. NOES: None ABSTAIN: None ABSENT: None ATTEST: Kristine Lawler, City Clerk Stephen G. Scalmanini, Mayor