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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"