HomeMy WebLinkAboutReso 74-1978 RESOLUTION NO. 74-78
A RESOLUTION RECOMMENDING THAT THE OPERATION
Al'OX MOUN/AiN~SANITARY LANDFI~LL.'. REMAIN AND
CONTINUE UNDER PRIYAIE OWNERSHIP '
WHEREAS, the City council h'as duly revi'ewed and considered the
Staff Report dated June 7, 1978, Subject: Public or Private Ownership
of Ox Mountain Sanitary Landfill, tOgether with the attachments thereto
including a letter fr6m the County of San Mateo dated April 6, 1978, to
each City Manager, same subject', and inter-departmental correspondence
dated March 21, 1978, to the Director'of Public Works from the Director
of Parks and Recreation', and excerpts from the 'report by Hornblower, Weeks,
Noyes and Trask, Inc., including the IntrOdUction and Summary, Conclu-
sions and Recommendations~ copies of which are attached as Exhibit "A"'
WHEREAS, the City council desires~ to 'recommend to the San Mateo
County Board of Supervisors that the operatiOn at Ox Mountain Sanitary
Landfill remain and-continue under private ownershiP;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
South San Francisco that this Council recommends to the San Mateo County
Board of Supervisors that the operation at Ox Mountain Sanitary Landfill
remain and continue under private ownership.
I hereby certify that the foregoing Resolution .was regularly intro-
duced and adopted by the CitY Council of the City of South San Francisco
at an adjou~ngd reqular meeting held on the 12th day of June ,
,
1978,
AYES;:
NOES'
ABSENT:
ABsTAIN:
~by the following vote:
Councilmen Ronald G. ;:costa, Emanuele N. Damonte and
Terry J. Mirri~' coUncilwoman Roberta Cerri Teglia
None
None
William A. Borba
ATTEST: ~/ '
o
City Clerk Pro Tempore~
,.lune 7, 1978
EXHIBIT "A" TO RESOLUTION NO. 74-78
ADOPTED June 12, 1978
To: The Honorable City Council
Subject: Public or Private Ownership of Ox Mountain Sanitary Landfill.
ACTION: Resolution
RECOMMENDATION: '
It is recommended that the City Council adopt a Resolution recommending to the'
San Mateo County Board of Supervisors that operations.at the Ox Mountain Land-
fill remain and continue under private ownership.
DISCUSSION'
During. the past year the San Mateo County Solid Waste Advisory Committee in con-
sortium with the County Department of Public Works has been reviewing the merits
of public ownership versus private ownership of the' Ox Mountain garbage disposal
'site with the intent of submitting a recommendation to the San Mateo County Board.
of Supervisors.
.
A recommendation was made in April 1977 to the Board of Supervisors that the
services of a recognized financial consultant be utilized to review the economics
of the issue. The Director of Public Services, as.a member of the Solid Waste
Advisory Committee,-was selected and served, on a subcommitee for criteria ~
development, consultant proposal review.and final 'selection of the firm of
Hornblower, Weeks, Noyes & Trask, Inc., who was retained to do the study.- 'The
study Was completed by the .consultant.in December 1977. ..
At the. Solid Waste Advisory Committee meeting on January 26, 1978, the committee
considered the report and referred it to the San Mateo County Planning and Parks
& Recreation Comm. ission for a recommendation. On March 30, 1978 the Advisory
Committee voted to refer the matter, to each City Council in San Mateo County for
advice. The committee at that' time felt that the question of public versus private
ownership was of significance and warranted consideration by each agency within.
the County.
Copies of the final report are available in the office of the Director of Public
Services and can be reviewed by the City Council should they desire..For the
Council's perusal, attached to this Staff Report are the pertinent'pages of the
report, Which include (1) Introduction and Summary, (2) Conclusions and (3) '
Recommendations.
It is the staff's contention that private ownership would be the most viable
alternative for the following reasons'
page. 1 of Exhibit "A"
·
Public or Private Ownership of Ox Mountain Sanitary Landfill
Page 2
a)' Property taxes are paid.
b) Private enterprise responds quickly to enforcement needs.
c) Privat~ operations are invariably more flexible and more cost.
effective.
d) Experience with private owners and operators has been good....
e) Public ownership and operation.makes enforcement more difficult.
In sun,nary, private enterprise would be more receptive to keep abreast of new
methods and trends relating to resource .recovery systems in-the future, The
Director of Public Services will be prepared to respond to any.questions raised
at this meeting. - .
C. Walter Birkelo
City Manager
Director of Public Services
FJA/ep
Attch: Letter dated 4/6/78
Pages .1-5 of Report
Page 2 of Exhibit "A"
D'Spa tlT ent of P JLa'lc Works
COUNTY O SAN
COUNTY GOVERNMENT CENTER REDWOOD CITY ° CALIFORNIA 94063
BOARD OF SUPERVISORS
EDWARD J. BACCIOCCO. JR.
JAMES V. FITZGERALD
FRED LYON
WILLIAM H. ROYER
JOHN M. WARD
8. H. Cantwell, Jr.
DIRECTOR
R. L Sans
ASSISTANT DIRECTOR
(415) 364...5600
·
April 6, 1978
TO: EACH CITY M~NAGER
SUBJECT: PUBLIC OR PRIVATE OWNERSHIP OF OX MOUNTAIN SANITARY L/hNDFILL
. .
In October, 1976, the San Mateo County Board of Supervisors requested the
Department of Public Works to develop comparative cost data of public ownership
versus private ownership of the Ox Mountain garbage disposal site and to submit
--%he report to the Board following review b~ the Solid Waste Advisory Committee
~nd/or the Regional Plannipg Committee. In April, 1977, the Board accepted my
recormendation that in order to eliminate any question of objectivity, the
services of a recognized financial consultant be utilized to review the
economics of the issue. The firm of Hornblower, Weeks, Noyes and Trask, Inc.
was retained to do the study, which was completed in December, 1977. The Board
of Supervisors in January of this year accepted the report as complete, but
deferred consideration of the findings pendipg a report from the. San Hateo
County Solid Waste Advisory Committee.
At its meeting of January 26, 1978, the Committee considered, the report
and referred it to the San Mateo County Planning and the Parks and Recreation
Divisions for a recommendation. Although the Committee, at its meeting of
March 50, 1978, had the enclosed report from the County Department of Environ-
mental Management, it did not reach a decision on the issue, but voted to.refer
the matter to each city council for advice. The Committee felt that the question
of public o%.mership is of great enqugh significance to warrant consideration
by each agency before the Con~ittee's next meeting, which will possibly take
place late'in May. Therefore, on behalf of the Committee, I respectfully
request your council's recommendation on public or private ownership of Ox
b~untain Ranch as soon as possible so that the Advisory Committee can fulfill
the request of the Board of Supervisors.
Each Committee member was given a copy of the consultant's report, which
·
--'~s now out of print. However, if additional copies are needed by any city
Page 3 of Exhibit "A"
PAGE Tt~O
council, we can prepare photocopies. ~e may also be able to provide some.
staff representation at meetipgs to anm~er questions on this topic.
Thank Mou for your cooperation in this matter.
Very tmly yours,
SHC:Gl~L:edd
Enclosure
cc: EachCommittee Member
S. zH. CANTI~ELL, JR. -~
DIRECTOR OF PUBLIC I~ORKS
Page )1 of Exhibit "A"
(, (
COUNTY OF SAN MATEO
INTER.DEPARTNIENTAL CORRESPONDENCE
z,^~'z 17
Director. Public Works '~~( ~
Attention: Georae Laakso.
Duane Mattison. Director. Parks and Recreatio
~ch Perry. Assistant Director. PlanniEnvi~enta] Manaoement
H. Colman. Director. Department of
OX MOUNTAIN
1. 1978
The Plannina Commission considered the Ox Mountain Question and
determined that the issue of public versus private ownership is an
implementation procedure and not a land use question. Therefore,
the Commission and staff do not feel it is appropriate to take a
position.
The Parks and.Recreation Commission and staff considered the'
question at their regular meeting held March 2, 1978, and determined
that they were not interested in acquisition of the total site from
park funds. The Commission and staff are interested in having the
Trails Committee study the possibility of a trail easement across
the property as a part of the County-wide trails system Master Plan.
The trail determination would be finalized with completion of the
Trails Master Plan within the next year.
I trust this information will suffice. If not, please feel free to
call on us.
DM' RP: bl
[4AR g 1 1978
Page 5 of Exhibit "A"
INTRODUCTION AND SUMb~RY
The San Mateo County solid waste management plan, preparation
of which was mandated by State legislation, was completed and
adopted by resolution of the San Mateo County Board of
Supervisors in November 1975. .
ExhausTive consideration was given in this report to the
question of disposal of solid wastes. With anticipated
closings of most of the existing sanitary landfill sites within
the County' in the~near futur~, the plan reviewed carefully the
z~o!e to be played by the Ox Mountain Ranch proper~y comprising
approximately 2,183 acres under ownership of B~ow~ing-Ferris
IndUstries, Incorporated. This property was viewed as the
primary in-county disposal facility for solid waste to be
generated in the years to come.
In 1976 a letter from the to~ of Atherton was suSmitted to the
Board of Supervisors of the County raising the issue of public
versus private ownership of the Ox Mountain Ranch facility.
While ~his was not the first occasion on which this point was
raised, the Atherton letter, dated May 23, 1976, made the
direct proposal to the Coun%y, namely, .,~ the County (or
district) acquire the Ox Mountain 'DUmp Site through issuance of
.revenue 5onds. (Site would be operated by private company under
contract).
This proposal, one of several, was based in essence on three
arguments which are paraphrased below:
_~.ha governmental agencies can command~lowem_borrowing-rates
'~nd pass savings along to the public users of government
facilities;
zhat rental payments paid indirectly but ultimately by the
consumer t° the current owners of the Ox Mountain .Ranch
Sanitary Landfill are greater than would be necessary with
public ownership; ~.
.
that ultimate use of the filled disposal size as a public park
or recreation facility would necessitate purchase of that '
site and that earlier purchase would save ulzlmate expense.
by-tke-Counzy Engineer, it did not directly deal wi~h the advisability
of public acquisition of the Ox Mountain facility except to mention
~his as one of the alternates included within the Final Regort,
Solid Waste Management Plan, San Mateo County. The reply referred
·
to Alterna%e B on Page X-iT, Table X-3 cf the plan:
Page 6 of Exhibit "A"
Facility o= Actlv~y
ASS=~Dtion
* .
· ·
Type of
Financing
Method
~.,oun ~=zn Landfills
including Corinda los
Trancos Car:yon and
Apano!io C=--nyon (subjecz
to approval of a
Disposal Permit)
:.~.ivate
Ownership and
Operation.
Frivate
A!~e~n. ate B.
Public
O~ershiD
.
(Coun~j).
Public
NoTe: According to the Park and Op.-eh
.
Space element of the general plan,
eventual acquisition of the Two
Ox Mountain canyons is sho~ for par~
and open space uses.
Advance financing of
capital investments by
private ~mem. Recovery
of investment-and
opera~ing costs ~hrough
disposal chamges except
- for land amor~izatlon.
· Disposal c,ha~ges to be
~eflected in collection
· fees for fm~anchise-
collected refuse. --
Capital investment for
si~e acquisition to
~nc!ude'Apano!io Canyon
Xo be publicly financed
'by'the County undeP the
following alternatives:
· .
a ) "Pay-as-you-go"
flnancLng from
s,'~charges on the
disposal cha~ge at the
Corinda los T~ancos
operation.
-'- - -b) Revenue shaming funds.' ": '
.
c) park ac~:ai_si~ion funds. -
. . .
-' ~' ~- d)'Coun%-y general fund.
e) Revenue bonds.
The Board of Supervisors, however, included within The. 1977/78 budget
of Ihe Co~.Ty Public Works Depar~r...en~, an item to finance a limited
study zo shed addiuiona! light on ~he implicalions 'of-acquiring Ox
......... Moun_.~ain .Ranch_ as__~_u_~g~S~_.t~d_,_ _~hi.s_ _s~.f~y_,~_C.Qv.._er.i.n_g_a.___t:~.o__-_mon~h_p~iod~., ....
was ,~.ndertaken in AuEust, 1977. The ~asks to be performed =_re set
........... forth in 'Exhibit-A-i.n' The Appendix of t~his document and are summarized
b.~; ~--~,, below:
survey extent of p,&blic ownership and experience wi.-_h solid
waste disposal sites in the San Francisco Bay Area;
discuss zhe financial implications'of public versus
private ownership of Ox Mountain Ranch, particularly as
regards costs over the anticipated life of the facility
to:
rate Payers,
County government,
other loCal agencies deriving revenue from the property
taxes levied on this property;
evaluate whether public or private ownership would provide To
a g-r_eater degree a desirable method of control of operations;
identify sources and availability of public funds and select
the best method of undertaking acquisition of the site;
. summarize findings regarding the desirability of public
o~ership of Ox Mountain Ranch.
·
.
CONCLUSIONS
A survey of San Francisco Bay A~ea disposal sites indicates that
most sites ate privately owned, but ample precedent also exists
for public ownership and public operation. Opinion is divided on
The--desirabi-li~y-of- pu-~l~c--versus'Trivate ~ownership. - Such -a
selection would aooear ~o deoend more on local circumstances and
history than itwou!d on general ~i~6iples."-W{t~ emerging szate
and county prog?ams to more tight!~ control solid was%e disposal,
and with the a!rea~v strong controls established in San Mateo
County, public ownership does not appear to offer a significantly
~eateP or more desirable method of control of operations.
If it is decided ~o acquire Ox Mountain Ranch for the public, there
appear to be three viable financing options. From the s~=ndpo~n~
of pure economics, general obligation bond financing would be the
least exoensive alternasive. Revenue =~
. ~_om the operation of OMR
would be used to meet deb~ service, but if for any ~eason that
:-~ ~=~ lent in any given '/ear an annual maximum tax
revenue 'gas ~.,su~ =_c
~at~ of ~ess ~han-%-~wou!d-=be~?eq~i~ed~o-m6et-pri~cipa~and ~n~e~es~-- ....
payments· _The major disadvantage to general obligation bonds is
two-thirds county-wide vote requirement which could conceivably
involve delays and high election expenses.
Pa~L~ O_o_f Exhibit "~"
To avoid delays and expenses of an e!eczion ~ampaign, we would
recommend lease-revenue bonds issued by a Nonprofit Corporation.
The Nonprofit Corporation would have a lease' with The County
~ = ~ts general revenues to bond
whereby the County would p~ed=e ~
pa}~.en~s and other stipulated costs. The County, in turn, would
enter into an opera,inE sublease with the disposal site
su.~c..nt payments to meet ihe
operator which would reguire ==: ¢=
County's obligations with normal foreclosure remedies available
~o the County if ever a default occurred. The Basic security
of the bonds, however, would Be the lease between the co~,unty
and the Nonprofi~ Corporation. . .... 1~
·
To avoid any obligation of County ~enera! fUnds or bondin~ capaci~],
~he County could ente~ into an installment-purchase agreement
with the owne~ of O~R. Payments to the owner would come
exclusively from operating uevenue of ~he disposal site.. Although
.
the owne~ has indicated a re!uct=_nce to enter into such an agreement
at the present tL~e, it is conceivable ~hat The County ccu!d make
~his financ~n~ option sufficiently attractive rom conside~atlon
by the o~er. . ..........
The attractiveness of public c~ership of Ox Mountain .Ranch
depends upon the eventual purchase price negotiated with the owner
and upon the use envisaged for the site once its capacizy for
!~ndfil! is exhausted. A policydecision by the Board of Supervlsoms
re~arding ultimate use of the.area may be needed to resolve ~he
question of use. A higher purchase price than otherwise economically
competitive may be justified once the final use of the property.
is decided. Currently, it appears that the site-~s not being
considered = ~
~o~ eventual use as a park or othe? direct use providing
--pub!~c-benefit-~---The ~conomicel~y-attrac~ive-=erms-fo~-p,~chase, - -..
Therefore, are directly tied to the'current lease pa},-nents being
made by the operating Cdmpany '~ ~e ~wn~r. '-~n-o~de~-to-~e
·
economically competitive, the purdhase price, LncludinE financing
costs, would have to approximate ;ko aEgr_e~ate of annual lease
pa}~ents over th~ amortization term. Assumin~'a 2'5-year amortization
period and current in;eres~ ra~es, a pu_~chase price rang!n§ from $750,000
~o $1,375,000, depending on The financing method selected, would
result in annual costs that would apprOxlmat~ the current lease pa)nnen%s
of $!1~,000. Estimates of annual costs reiated to the various
financing options available and various estimated purchase prices are
presented later in this report.
.
.
.
·
;~ny decision re§ardin§ public o~,mersh!p o~ Ox Mountain Ranch is
indepen~en~-..o.~.-any=-consf~e.arion~of-pub~ic--~i.,vozvemen~-~in-=_sour_~ ......
recovery.operDticDs. The decision to participate in thaz activity,
and, if so, the selection of financing options available ~o the .
fu.~ne, analysis
county at tha~ time, would be the subject of ~+' ~
Page 9 of Exhibit "A"
Under current market conditions and :~=~ -
cons~u~_n~ the tax-exempt
n,=h~ financing of such'a
feature of municipally-issued bonds, ~ ....
projecT, generating p,ub!ic benefit, would be less expensive and
would result in lower rates than securing capizal through private
funding.
.~COMMENDATIONS
It is mecommended, as a result of this review: ..
· that a determination be made as to the most desirable use of
OMR after the landfill opera,ion has been completed;.
%hat, if it is determined that ptfolic o~,~ership of OMR is
desirable, nego~ia=ions with o~ers of the property be
initiated to establish a purchase price;
that,-if the negotiated purchase price is grea~er than the
amount the then current lease pa~3~en= will amortize, a policy
determination be made as to the maximum amount, if any, of
additional funds to be committed to the acquisition of 0MR;
· ·
that the County obi'aim up-To,date information from Browming-
Ferris Industmies on quamterly =~--
· _:~=nc___ activities at
Ox Mountain ,Ranch, including capital outlays which have
been omitted from 1977 reports to dare;,
that a review of rates be initiazed at Ox Mountain Ranch
when sufficien~ opera~ing experience permits;
that surcharges be.reviewed so zhar-.a policy may_be_set, which_.
Will generate sufficienz revenue to meet County administrative
expenses plus any additional income deemed appropriate;
that Browning-Ferris industries be required to define the
·
components of the lease pa}~ent to OMR Corporation before
~his amount is considered for inc!6sion in an allowable
base for future rare setuing;
· that since OMR now is available for county-wide use, the
$1,1g0,000 paid by San Ma~eo County Scavenger Company rate
payers over 10 years should be rei~ursed in part (B3% of this
amount or $~90,200 should be charged ~o the porrion~ of
...... possible, a--differenTia! rate or ozher mechanism should be
established so that the rebate or credit is received by the
rate payers, rather ~han SMCSC.
Page 10 of Exhibit "A"