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CITY COUNCIL AGENDA ITEM NO. 6

Meeting Date: April 8, 2008

Subject/Title: Adopt a Resolution authorizing the City Manager or designee to execute Amendment No. 1 to the Agreement between Contra Costa County, Ironhouse Sanitary District, the Cities of Antioch, Brentwood & Pittsburg, and Delta Diablo Sanitation District for Household Hazardous Waste Collection Services and authorize the payoff of the original agreement in an amount not to exceed $71,848.

Prepared by: Jon Carlson, Solid Waste Manager
Chris Ehlers, Deputy Director of Public Works

Submitted by: Bailey Grewal, Director of Public Works/City Engineer

RECOMMENDATION
Adopt a Resolution authorizing the City Manager or designee to execute Amendment No. 1 to the Agreement between Contra Costa County, Ironhouse Sanitary District, the Cities of Antioch, Brentwood & Pittsburg, and Delta Diablo Sanitation District for Household Hazardous Waste Collection Services and authorize the payoff of the original agreement in an amount not to exceed $71,848.

PREVIOUS ACTION
On July 23, 2002 Council approved Resolution 2615, Item 4, authorizing the City Manager to execute an agreement between Contra Costa County, Ironhouse Sanitary District, the Cities of Antioch, Brentwood & Pittsburg, and Delta Diablo Sanitation District for Household Hazardous Waste Collection Services.

On June 13, 2006 Council approved Resolution 2006-131, Item 6, in support of and authorizing submittal of a Regional Application to the California Integrated Waste Management Board for a Local Government Household Hazardous Waste Grant – Fifteenth Cycle by the Delta Diablo Sanitation District on behalf of itself and Contra Costa County, Ironhouse Sanitary District, and the Cities of Antioch, Brentwood & Pittsburg for expansion of the Delta Household Hazardous Waste Collection Facility (DHHWCF).

On July 24, 2007, Council approved Resolution No. 2007-155, Item 5, authorizing the City Manager or designee to execute Public Works purchase orders and/or agreements, after approval as to form by the City Attorney with the vendors and for the not-to-exceed dollar amounts detailed which included Delta Diablo Sanitation District in the amount of $105,000.

BACKGROUND
In 2002 an agreement was executed for a joint venture between Delta Diablo Sanitation District and Contra Costa County, Ironhouse Sanitary District, the Cities of Antioch, Brentwood & Pittsburg (“Subscribers”), which outlines constructing the operation and expenditures of the Delta Household Hazardous Waste Collection Facility (DHHHWCF). The DHHWCF has provided east Contra Costa County residents a cost-effective, convenient location to drop-off hazardous material since its inception. In addition, mobile collection events have been held annually in east county communities, including Brentwood, to provide residents a more accessible and convenient location to dispose of Household Hazardous Waste (HHW). These events have been very well attended and help keep these hazards out of landfills, streets, sewer systems, and storm drains. Usage of this service has increased since the inception of universal waste collection i.e. electronic waste (e-waste), batteries, pesticides, and mercury-containing equipment such as thermostats and fluorescent fixtures. Also, on February 9, 2006, universal waste was banned from public landfills, making it illegal for California households to dispose of all forms of universal waste in the mainstream garbage. The same regulations were also applied to small businesses qualifying as Conditionally Exempt Small Quantity Generator(s).

In response to the change in regulations, Delta Diablo Sanitation District and its Subscribers submitted a regional grant application to fund an expansion of the existing facility. The facility expansion was to provide additional storage area for the collection of universal waste, particularly e-waste. The facility expansion was also to include other miscellaneous improvements such as the addition of a permanent reuse room (where participants can take items for reuse such as paint, cleaners, or pesticides dropped off by other participants), increased visual screening, a new entrance gate, and site landscaping.

On August 15, 2006, Delta Diablo Sanitation District was awarded the California Integrated Waste Management Board Household Hazardous Waste Grant – Fifteenth Cycle in the amount of $300,000 for the expansion of the DHHWCF.

Since the opening of the permanent DHHWCF in the 2002/03 fiscal year, participation in the HHW program has increased by 88%. The facility has expanded operating days from Saturdays only 9:00 a.m. – 1:00 p.m. to Thursday-Saturday 9:00 a.m. – 4:00 p.m. and also expanded the types of waste collected including sharps, cooking oil, and e-waste. The expansion of DHHWCF is planned to commence this spring with an anticipated completion date of Spring 2009.

Amendment No. 1 includes changes to the hours of operation, scope of work, and budget/expenses. The estimated cost of the expansion to Subscribers is $450,000 plus $300,000 in grant funds for a total of $750,000. Subscribers have the ability to pay installments over 25 years and the capital portions of the project are divided on a per capita basis. All other conditions of the original agreement will remain in effect.

Staff recommends approval of Amendment No. 1 in order to improve existing service levels and to provide a safe, cost-effective hazardous waste drop-off service to east Contra Costa County residents, including City of Brentwood residents.

FISCAL IMPACT

Original Agreement
Each fiscal year, the City’s Solid Waste Enterprise budgets for processing costs of hazardous wastes. Annually, it spends approximately $80,000-$90,000 on hazardous waste processing and disposal with Delta Diablo Sanitation District (per the 2002 Council approved agreement), depending on usage by its residents. A total amount of $9,400 per year of that annual figure is for the capital portion of the original agreement.

However, upon Council’s approval, City staff recommends the Solid Waste Enterprise pay off the remaining one-time only capital portion of the original 15-year agreement in fiscal year 2007/08 that is at a 6% interest rate. This will reduce the annual operational expenditure by $9,400. The remaining one-time payoff figure is estimated at $71,848, as of June 30, 2008, with 10 years remaining on the payment schedule. This amount is available in the approved 2007/08 Solid Waste Enterprise Operating Budget. This payoff will also save the City from paying 6% interest over the remaining 10 years of the payment schedule.

Council authorized a total amount not to exceed $105,000 with Delta Diablo Sanitation District July 24, 2007 for fiscal year 2007/08. This amount originally only incorporated annual processing and capital expense installments budgeted through the Solid Waste Enterprise. Per staff’s recommendation a payoff of the original agreement would require an additional $71,848 to be added to the current purchase order for a new total not to exceed amount of $176,848.

Agreement Amendment No. 1
The planned expansion and the related additional capital expenditures to the City of Brentwood Solid Waste Enterprise are estimated to add approximately $73,350 to the City’s current total capital expense. Amendment No. 1 includes an annual payment option for this new capital expense. The payment option spreads the cost over a 25-year period at 6% interest and is estimated to be $5,684 per year.

Upon Council approval, staff recommends paying off this one-time expansion capital expense as soon as the construction is completed by mid-2009, when the final construction figure is agreed upon by all parties. This one-time payoff figure is estimated to be $73,350; therefore, the final construction-related figure will be budgeted for in the fiscal year 2009/10 Solid Waste Enterprise Operating Budget.

In summary the following is a schedule of capital costs:

• Fiscal Year 2007/08 - $71,848
o One-time payoff of capital costs in original agreement

• Fiscal Year 2009/10 - estimated $73,350
o One-time payoff capital costs of facility expansion in Amendment No. 1

With all capital expenses paid for, the Solid Waste Enterprise will only incur the annual operational costs. Future operating costs are expected to increase due to additional usage, but are not expected to grow more than 5% annually. Operating costs will continue to be billed based on the percentage of actual users, not a predetermined percentage, as with the capital expenses. The current annual Solid Waste Enterprise operating expenses of $80,000-$90,000 are budgeted in the 2007/08 and 2008/09 Solid Waste Enterprise Operating Budgets. This agreement amendment will not increase current solid waste user rates.

Attachments:
• Resolution
• Agreement
• Agreement Amendment No. 1

RESOLUTION NO.

ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE AMENDMENT NO. 1 TO THE AGREEMENT BETWEEN CONTRA COSTA COUNTY, IRONHOUSE SANITARY DISTRICT, THE CITIES OF ANTIOCH, BRENTWOOD & PITTSBURG, AND DELTA DIABLO SANITATION DISTRICT FOR HOUSEHOLD HAZARDOUS WASTE COLLECTION SERVICES AND AUTHORIZE THE PAYOFF OF THE ORIGINAL AGREEMENT IN AN AMOUNT NOT TO EXCEED $71,848.

WHEREAS, on July 23, 2002 Council approved Resolution 2615, Item 4, authorizing the City Manager to execute an agreement between Contra Costa County, Ironhouse Sanitary District, the Cities of Antioch, Brentwood & Pittsburg (“Subscribers”), and Delta Diablo Sanitation District for Household Hazardous Waste Collection Services; and

WHEREAS, the DHHWCF, has provided the east Contra Costa County residents a cost-effective, convenient location to drop-off hazardous material since its inception; and

WHEREAS, on July 24, 2007, Council approved Resolution No. 2007-155, Item 5, authorizing the City Manager or designee to execute Public Works purchase orders and/or agreements, after approval as to form by the City Attorney with the vendors and for the not-to-exceed dollar amounts detailed which included Delta Diablo Sanitation District in an amount of $105,000; and

WHEREAS, this amount originally only incorporated annual processing and capital expense installments budgeted through the Solid Waste Enterprise; and

WHEREAS, staff recommends a payoff of the original agreement for a one-time payoff of remaining capital costs estimated at $71,848, as of June 30, 2008; and

WHEREAS, this remaining payoff amount would require an additional $71,848 to be added to the current purchase order of $105,000 for a new total not to exceed amount of $176,848; and

WHEREAS, the amount of $71,848 is available in the approved 2007/08 Solid Waste Enterprise Operating Budget; and

WHEREAS, amending the existing agreement maintains and improves the existing service levels and continues to provide a safe, cost-effective hazardous waste drop-off service to east Contra Costa County residents, including City of Brentwood residents; and

WHEREAS, on June 13, 2006 Council approved Resolution 2006-131, Item 6, in support of and authorizing submittal of a Regional Application to the California Integrated Waste Management Board for a Local Government Household Hazardous Waste Grant – Fifteenth Cycle by the Delta Diablo Sanitation District on behalf of itself and Contra Costa County, Ironhouse Sanitary District, and the Cities of Antioch, Brentwood & Pittsburg for expansion of the Delta Household Hazardous Waste Collection Facility (DHHWCF); and

WHEREAS, in response to the change in disposal regulations regarding universal wastes, Delta Diablo Sanitation District and its Subscribers submitted a regional grant application to fund an expansion of the existing facility; and

WHEREAS, on August 15, 2006, Delta Diablo Sanitation District was awarded the California Integrated Waste Management Board Household Hazardous Waste Grant – Fifteenth Cycle in the amount of $300,000 for the expansion of the DHHWCF; and

WHEREAS, the City of Brentwood Solid Waste Enterprise would incur a one-time, capital expenditure of approximately $73,350 for the facility expansion in fiscal year 2009/10; and

WHEREAS, staff will budget the amount of $73,350 during the next two-year budget cycle commencing in fiscal year 2009/10.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby authorize the City Manager or designee to:

1) Execute Amendment No. 1 to the Agreement between Contra Costa County, Ironhouse Sanitary District, the Cities of Antioch, Brentwood & Pittsburg, and Delta Diablo Sanitation District for Household Hazardous Waste Collection Services in an amount not to exceed $73,350; and

2) Authorize the payoff of the original agreement in the amount not to exceed $71,848.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 8th of April 2008 by the following vote:

 
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