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CITY COUNCIL AGENDA ITEM NO. 7

Meeting Date: August 23, 2005

Subject/Title: Adopt a Resolution declaring official intent to reimburse certain expenditures for the Solid Waste Transfer Station in an amount not to exceed $7.5 million from proceeds of the Solid Waste Revenue Bond.

Prepared by: Brian Kelleher, Accountant II

Submitted by: Pamela Ehler, Director of Finance and Information Systems

RECOMMENDATION
Adopt a Resolution declaring official intent to reimburse certain expenditures for the Solid Waste Transfer Station in amount not to exceed $7.5 million from proceeds of the Solid Waste Revenue Bond.

PREVIOUS ACTION
On May 25, 2004, by Resolution No. 2004-113, City Council approved the 2004/05-2008/09 CIP Program that includes the Solid Waste Transfer Station Improvements – Phase III, CIP # 542-5402, as part of the program.

On July 12, 2005, by Resolution No. 2005-166, City Council approved a contract with Carlton Engineering for design development services.

On July 12, 2005, by Resolution No. 2005-167, City Council approved a contract with Concept Design for construction management services.

BACKGROUND
In 1994, when the City began collecting its own solid waste, the solid waste had to be hauled directly to a landfill or a processing facility from Brentwood. Most routes were about 6-8 hours of collection time, plus 2-3 hours of travel time to and from the disposal facilities located in Vacaville, Livermore, Stockton or Pittsburg.

In 1998, the City built an interim solid waste transfer station that significantly improved the operation’s efficiency and has contributed greatly to the City’s ability to offer its residents and businesses collection services at very competitive rates.

In a continuing effort to improve the operational efficiency of the City’s Solid Waste Transfer Station and to improve our ability to allow for limited public access, staff has been working to make significant changes to the site. Most notably, the operation will move under roof, an aboveground loading process will be constructed as well as expanding the footprint of the dump pad to accommodate the expected growth in solid waste volumes through build-out for the City.

Without these significant operational improvements, the City’s transfer station will have a very difficult time efficiently processing the growing volumes of material expected through build-out. The City would have to consider alternatives such as going back to direct hauling to other facilities. Direct haul can cost approximately 5 times more to haul compared to transferring. For example, one transfer load cost approximately $160 per haul of 21 tons compared to hauling 3 smaller, 7 ton collection truckloads to remote sites at an estimated cost of nearly $600.

Another alternative to accommodate the increased volumes would be to expand our operating hours and our route times to spread out the rate that materials are processed at our facility.

Either of the above options would significantly impact operational efficiency. With the requested improvements, the City of Brentwood will meet the needs of our City through build-out and allow for limited public access. The City would also be able to offer access to other franchised haulers, landscapers and construction and demolition haulers looking for closer dumping facilities. All other dumping facilities are currently about 50 minutes away, roundtrip. Offering this access to high volume haulers would give the City a potential revenue stream to help offset transfer station capital costs. This potential revenue stream could range from $2,000 to $20,000 per month, depending on committed volumes and pricing points.

In March 2004, the City completed a 5-year rate study and a master plan that provided us with a preliminary cost estimate of $4.8 million for the needed transfer station improvements. This figure did not include project soft costs such as plan check fees, design, public art fees or potential mitigation fees.

In early 2005, staff contracted with Carlton Engineering and Concept Design to prepare a schematic design and an engineer’s estimate. The geological studies came back and determined that significant soil densification work would be required to provide the proper foundation to the concrete floor structure. This unknown geological work is estimated to add approximately $700,000 bringing the project’s estimated hard cost to about 6.1 million. When the soft costs mentioned above are added to the project, the total projects costs come to $7.0 million.

FISCAL IMPACT
The bond issuance will not occur until January 2006. Therefore, the City will pay for current costs and be reimbursed when the bond is issued. Fiscal Year 2005/06 expenditures are anticipated to be $2.2 million. This resolution is required in order to allow the City to reimburse itself for any expenditures incurred between passage of this resolution and issuance of the bond.

Attachment:
• Resolution

RESOLUTION NO.

ADOPT A RESOLUTION DECLARING OFFICIAL INTENT TO REIMBURSE CERTAIN EXPENDITURES FOR THE SOLID WASTE TRANSFER STATION IN AN AMOUNT NOT TO EXCEED $7.5 MILLION FROM PROCEEEDS OF THE SOLID WASTE REVENUE BOND.

WHEREAS, On May 25, 2004, by Resolution No. 2004-113, City Council approved the 2004/05-2008/09 CIP Program that includes the Solid Waste Transfer Station Improvements – Phase III, CIP # 542-5402, as part of the program; and

WHEREAS, the City of Brentwood (the "City") intends to finance the acquisition and/or construction of solid waste transfer and processing facilities (the “Project”); and

WHEREAS, the City expects to pay certain expenditures (the "Reimbursement Expenditures") in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project on a long-term basis; and

WHEREAS, the City reasonably expects that debt obligations in an amount not expected to exceed $7,500,000 will be issued and that certain of the proceeds of such debt obligations will be used to reimburse the Reimbursement Expenditures.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood hereby finds, determines and resolves as follows:
Section 1. The foregoing recitals are true and correct, and this City Council so finds and determines.
Section 2. This declaration is made solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the United States Treasury Regulations. This declaration does not bind the City to make any expenditure, incur any indebtedness, or proceed with the Project.
Section 3. The City hereby declares its official intent to use proceeds of indebtedness to reimburse itself for Reimbursement Expenditures.
Section 4. This resolution shall take effect from and after its adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 23rd day of August, 2005, by the following vote:

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