TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

FROM: DIRECTOR OF PUBLIC WORKS

DATE: OCTOBER 1, 2002

SUBJECT: LOS ANGELES AREA REGIONAL AGENCY JOINT POWERS AGREEMENT

Staff Coordinator: Lauren Ramezani, Sr. Administrative Analyst

RECOMMENDATION

Authorize the Mayor and City Clerk to execute a Joint Powers Agreement with the City of Los Angeles and other interested cities for establishing the Los Angeles Area Integrated Waste Management Authority for AB 939 diversion and disposal reporting purposes.

BACKGROUND

On May 15, 2002, the California Integrated Waste Management Board (CIWMB) approved the City's 1999/2000 biennial review, with a diversion rate of 31% for 1999 and 47% for 2000. Although the City did not meet the 50% diversion mandate, the CIWMB recognized the City's recycling and waste reduction programs and approved the City's diversion based on "Good Faith Effort". This means that the CIWMB views the City in much the same manner they would have if the City had achieved the goal of 50% and that the City therefore, is not required to prepare a SB 1066, Time Extension Request. However, like all cities we must continue implementing various recycling and waste reduction programs, prepare annual reports and receive approval during future biennial reviews. The City's 2001 annual report is not due yet. However, it is anticipated that the City's 2001 diversion rate would be approximately 47%.

The City of Los Angeles (LA) has submitted a year 2000 Base Year Study to the CIWMB. If approved, the City of LA will have a diversion rate of 60%. In January 2002, the City of LA took initial steps toward the formation of a Los Angeles Area Integrated Waste Management Authority (Regional Agency) for AB 939 diversion and disposal reporting purposes. All the cities in Los Angeles County, including Rancho Palos Verdes, were invited to attend meetings and consider joining the Regional Agency. In Northern California, cities and counties have banded together to form a total of 22 regional agencies. No regional agency currently exists in Southern California.

DISCUSSION

On June 12, 2002, the City Council authorized staff to begin the process of joining the Regional Agency. The purpose of forming a Regional Agency is to report AB 939 diversion and disposal as one entity rather than by individual jurisdictions. Therefore, instead of 40 cities with 40 different annual reports and diversion rates, there will be one Regional Agency with one annual report and one diversion rate. This simplifies the annual AB 939 reporting process by averaging the diversion among participating jurisdictions. This is helpful for cities such as RPV that have not reached 50%. Through this Regional Agency, the City of LA is inviting other cities to benefit from LA's excess diversion and reach, or exceed 50% when one combined Regional Agency annual report is prepared. At this time it is estimated that the Regional Agency's year 2000 diversion for all the participants will be approximately 53%. There are additional advantages to joining the Agency that are listed below.

The mechanism to form a Regional Agency is a Joint Powers Agreement (JPA). This gives the Regional Agency the permission to put together the information for those jurisdictions, and submit a joint annual report each year. After the JPA is approved by all participating jurisdictions, the agreement will be taken to the CIWMB for approval. A draft agreement was prepared and submitted to interested cities. The City Attorney reviewed the attached final JPA document and has provided some comments and concerns that have been noted in this report.

Currently there are approximately 30 cities considering joining as Charter members of the Regional Agency and intend to sign the JPA. The majority of these cities have a diversion rate below 50%; however, a few cities such as the Cities of Los Angeles and Santa Monica have a diversion rate above 50%. In the future, other cities may also join the Regional Agency, after giving the proper notice of intent to join.

Advantages to Joining a Regional Agency:

• A Regional Agency would have more influence at the State level than any single jurisdiction, and better negotiation power.
• CIWMB staff has stated that it is more efficient to serve cities collectively rather than attend individual city's meetings.
• Share costs and conduct new "regional level" base year studies, if required by proposed legislation.
• Small cities will not be as affected by fluctuations in the Disposal Reporting System (DRS). It reduces "bean counting" and worrying if the numbers will add up to a 50% diversion.
• The cities can voluntarily withdraw from this Regional Agency by filing with the Regional Agency a 180 day written notice of intent to withdraw.

Disadvantages to Joining the Regional Agency:

• Although annual costs are allocated on the basis of each ton of trash that is disposed of at landfills, any civil penalties incurred pursuant to AB 939 and imposed by the CIWMB will be divided equally among the members (Section 8.3). This benefits the larger cities like LA since they will pay the same penalty amount as a smaller City, and also cities that are not making progress toward their diversion requirement and would expect to be fined anyway. One possible way to address this issue is to withdraw from the JPA if the overall diversion rate looks like it will fall beneath the 50% level before any penalties are imposed.
• If the JPA is terminated and any civil penalties are assessed, it says individual jurisdictions will assume responsibility for a share of any civil penalties incurred by the Agency during the term of the jurisdictions as a member, but it does not say how (Section 13). The Staff from the City of Los Angeles who have been dealing with this matter have stated that this issue will be addressed in the by-laws. It is anticipated that the by-laws will be drafted by the Agency's charter members starting in November. Again, if that issue is not resolved to the City’s satisfaction, the City could withdraw from the JPA after giving the proper notice of intent to terminate.

Effect on RPV:

• The City currently is still responsible for the 2001 annual report. However, for the 2002 annual report, the City will no longer submit an individualized annual report. The Regional Agency will submit an annual report on behalf of all the members. The City's diversion rate will be the same as the Regional Agency's diversion rate. This will reduce the time and expense of the City's consultant for this task in future years.
• For comparison purposes, the City can still calculate its own individual annual diversion rate each year (without having to submit it to the CIWMB) and compare it to the Agency's diversion rate.
• The City's diversion rate will not fluctuate as much as before. In the past, any large construction project in the City, or misreporting of neighboring cities' activities shifted the City's reported disposal tonnage and therefore our diversion rate significantly. The City's approved diversions for 1995 through 2000 show a lot of fluctuations. The diversion rates were: 28%, 20%, 38%, 44%, 31% and 47% respectively.
• Each city will still be responsible for implementing programs outlined in its CIWMB approved Source Reduction and Recycling Element (SRRE). Joining the Agency does not mean a city can slack off and not worry about its recycling programs.
• The City will still be responsible for managing its own solid waste and recycling hauling contracts and programs. There will be no change.
• In case of new laws or mandates, the City will be in a stronger position to meet them and implement needed programs. Being a member of the Agency is like having an insurance policy.

Annual Cost:

• There is a fee of $.15 per ton based on each city's landfill disposal tonnage. RPV's annual cost is estimated at less than $10,000. The Solid Waste Fund would fund this expenditure. It is anticipated that once the Regional Agency is set up, the cost will be lower in future years. Additionally, the City will save approximately $3,000 a year in City consultant costs related to the preparation of annual reports.
• The City of LA will pay the $150,000 startup costs of the agency and will provide existing staff and resources for the operation of the agency and a new base year study totaling approximately $400,000 per year to the Agency.

Structure of the Regional Agency:

• Each member will have one representative on the board for policy decisions, review and approval of budgets, etc.
• Initially City of LA will employ the manager who will be the Chief Administrative Officer of the Agency.
• Officers of the board will elect a Chair, Vice-Chair and a Treasurer by majority vote of members.
• The Agency will provide members annual financial statements and full accounting.

CONCLUSION

If the staff recommendation is approved, the City will join the Los Angeles Area Regional Agency. However, the CIWMB will have to approve the formation of the Regional Agency. It is projected that the item will be heard by the CIWMB in early 2003. The City will continue to implement programs in its approved SRRE, however, after joining the Regional Agency, the City's reported annual diversion would be the same as the Regional Agency.

FISCAL IMPACT

After the JPA is approved by the CIWMB, the City will then be responsible for its share of the Agency's annual administrative cost, which is estimated not to exceed $10,000 a year. At that time staff will also request budget appropriation for the City's share of FY 02-03 annual costs related to the administration of the Regional Agency. Additionally, there will be an annual saving of approximately $3,000 in City consultant costs related to the preparation of annual reports. The Solid Waste Fund is the funding source, which has projected June 30, 2002 ending fund balance of $760,500.

Respectfully Submitted:
Dean E. Allison, Director of Public Works

Reviewed by:
Les Evans, City Manager

Attachment: JPA