PREPARED BY: KARINEH SAMKIAN DATE OF MEETING: 05/20/19
SUBJECT:
TITLE
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO (1) AUTHORIZING THE CITY MANAGER TO EXECUTE THIS AND FUTURE INDEMNIFICATION AGREEMENTS RELATED TO DISBURSEMENT OF FUNDS FROM THE WEST CONTRA COSTA INTEGRATED WASTE MANAGEMENT AUTHORITY, AND (2) AUTHORIZING THE ADMINISTRATIVE SERVICES DIRECTOR TO RECORD THE DISBURSEMENT AS SPECIAL REVENUE IN FUND 209 EXPRESSLY FOR PROGRAMS THAT FURTHER THE PURPOSE OF THE AUTHORITY
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
Executing an indemnification agreement to accept reserve disbursement is an adopted policy item under Major Policy Goal: Enhance Community Resilience - 202 Develop Long-Term Environmental Stewardship Goals in the Fiscal Year 2019-21 Council Priority Workplan, effective March 1, 2019.
CEQA Compliance Statement
This action does not constitute a project and therefore does not require CEQA clearance.
BACKGROUND
The City of San Pablo is a member of the West Contra Costa Integrated Waste Management Authority (Authority and more recently referred to as RecycleMore) along with the cities of El Cerrito, Hercules, Pinole and Richmond. The unincorporated West Contra Costa County area is also served by the Authority and represented by a Contra Costa County Supervisor, who serves as an ex-officio member (non-voting). The Joint Powers Authority Agreement entered into by the member agencies authorized the construction and operation of an Integrated Resource Recovery Facility (IRRF), pledged waste stream control to the Authority, and placed certain municipal solid waste activities, including Assembly Bill 939 compliance, with the Authority.
From 1994 through 2013, the Authority was party to an IRRF Agreement that funded and built the IRRF. All Authority member agencies paid the debt service on the bonds that funded the IRRF over a twenty-year period via a portion of the monthly IRRF rates charged to solid waste ratepayers in each member agency. The IRRF Agreement also stipulated that a share of the revenues from the sale of recyclable materials processed at the IRRF be paid to the Authority.
The IRRF Agreement expired in 2013 and during the term of the Agreement, the Authority accumulated reserve funds totaling $6.6 million. On October 29, 2015, a majority of the Authority Board authorized the disbursement of a portion of the reserve funds to member agencies. The Authority retained $1.9 million in reserves for “one-time” projects and ongoing operational needs, making $4.7 million available for disbursement to member agencies. The allocation amounts were based on an allocation methodology determined by the Authority and member agencies to be fair and equitable. San Pablo’s disbursement share of the total allocation was $502,932. By Resolution 2016-144, the San Pablo City Council authorized the City Manager to execute an indemnification agreement with the Authority and authorized the Finance Director to record the disbursement as a special revenue in Fund 209.
In late 2017, a majority of the Board directed Authority staff to conduct a reserve study to determine the appropriate level of reserves. Municipal Resource Group was contracted to perform the study which was presented to the Authority Board for direction in early 2018. On June 14, 2018, the Authority Board adopted Resolution 18-02 which set forth a policy with reserve levels of 67% of annual budget for the Operating Reserve Fund and $662,000 for the Recycling Reserves Fund. The policy also allows for excess funds to be disbursed to member agencies. On November 8, 2018, a majority of the Authority Board authorized the disbursement of a portion of the excess Recycling Reserve Fund to member agencies (See Attachment 1 - Authority Resolution No. 18-05B).
Table 1 - Disbursement by Member Agency Disbursement to
|
Member Agency |
Available for Disbursement |
|
Contra Costa County |
$ 45,303 |
|
El Cerrito |
$ 36,645 |
|
Hercules |
$ 35,746 |
|
Pinole |
$ 45,603 |
|
Richmond |
$273,622 |
|
San Pablo |
$ 63,085 |
|
TOTAL |
$500,000 |
The Authority approved the disbursement on the condition that the member agencies use the disbursed monies for uses that further the purpose of the Authority. In addition, the City must enter into an Indemnification Agreement (Attachment 2), approved by the Authority’s General Counsel and City Attorney, that requires the City to indemnify the Authority and the other member agencies from any claim arising out of the City’s use of funds disbursed by the Authority.
The resolution also authorizes the City Manager to enter into future indemnity agreements to receive excess reserve disbursements.
FISCAL IMPACT
If approved, the $63,085 disbursement will be recorded as revenue in the special revenue fund (209 - Solid Waste Management) which was created in 2016 and currently has a balance of $502,932. Future expenditures from this fund will require City Council approval and appropriation to a spendable account. This fund will be earmarked to be used for City-authorized activities and programs that further the purpose of the Authority to meet State of CA regulatory compliance mandates, such as solid waste diversion, recycling, and rate stabilization.
ATTACHMENTS
Attachment 1 - Authority Resolution No. 18-05B
Attachment 2 - Indemnification Agreement