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1997 05 27 CC Minutes/P LA QUINTA CITY COUNCIL MINUTES SPECIAL MEETING MAY 27, 1997 Special meeting of the La Quinta City Council was called to order at the hour of 1:30 p.m. by Mayor Holt, followed by the Pledge of Allegiance. PRESENT: Council Members Adolph, Henderson, Perkins, Sniff, Mayor Holt ABSENT: None PUBLIC COMMENT Audrey Ostrowsky, P.O. Box 351, said she was told at the last Council meeting, that $200,000 has been appropriated for infrastructure needs and she wished to know if it's specifically for The Village. Mr. Genovese, City Manager, advised that it was his understanding that the funds were designated for the remaining portion of the Cove Improvement Project, but no specific portion of it was specified. Mrs. Ostrowsky asked if public comments are limited to three minutes during study sessions to which Mayor Holt responded yes. STUDY SESSION 1. PRESENTATIONS BY BLT ENTERPRISES, INC., OTTOISEXTON-JOINT VENTURE, AND THE CITY OF COACHELLA REGARDING THE CONSTRUCTION OF A TRANSFER STATION. PRESENTATION BY BLT ENTERPRISES. INC. Dan Rosenthal, 2222 E. Washington Boulevard, Los Angeles, representing BLT Enterprises, Inc., presented a video which gave an overview of their services and advised that they are in the process of finalizing an EIR for a waste facility in the City of lndio. The EIR will cover three different sites in lndio and should be completed by June 30th. He advised that they are also one of the finalists in Coachella's RFP for an open-air facility at the Coachella landfill site. Bernie Huberman, President of BLT, Inc., pointed out the three sites under consideration on a map Avenue 45 across from the Valley Sanitation District, Dillon Road and Avenue 45, and Avenue 45, closer to Dillon Road) and showed a rendering of the facility which will handle both solid and household hazardous BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /PCity Council Minutes 2 May 27, 1997 waste and possibly include a recycling buy-back center. The 25,000 sq. ft. facility will have separate tipping areas for commercial trucks and self-haul. The facility's main purpose will be transferring waste, not diversion, therefore, they expect to only recover 5-10% of the recyclable materials and will consider expansion of the facility in the future. It will be located near the railroad which will allow them to transport the waste by rail in the future, instead of by truck to a two-way intermodal facility. Mr. Rosenthal pointed out that the area's need at the present time is a transfer station in order to have some flexibility in choosing a landfill and have some control of the costs. There is potential for recovering 65-70% of the recyclables, much like their Oxnard facility which processes 300 tpd, if the facility is expanded in the future. It will be centrally located, making it more efficient and cost effective for waste deliveries and be in an industrial area. They expect to be able to mitigate any traffic concerns. In response to Council Member Sniff, Mr. Rosenthal advised that the Del Norte facility is owned by the City of Oxnard and operated by BLT under a 1 5-year contract with an additional 10-yearoption. The facility could be operational within 9-10 months, once the permitting process and entitlements are received. Mr. Huberman advised that they are continuing to process the paperwork for the lndio project in the event that the Coachella project isn't approved, but they anticipate that one of the projects will move forward. Mr. Rosenthal advised that the lndio facility will be financed by BLT who will in turn, be asking for a commitment of the City's wastestream for 10-1 5 years. The cities will be allowed to participate in the landfill selection, but he didn't feel that a governing board is necessary, noting that BLT will fill the role of a consultant by investigating the landfill alternatives and based on their environmental soundness and cost, and propose one of the landfills to the cities. He felt one landfill would fill the need of all the cities in the valley and agreed that larger tonnages reduces the cost. The facility will handle up to 750 tpd and have expansion capabilities and the current waste flow for three cities and the unincorporated area is 400-500 tpd. He advised that the cities' rights would be spelled out in the contract, including approval of the landfill and evaluation of BLT's performance. He felt that a JPA was unnecessary and suggested the possibility of the cities working with BLT through an advisory board. Mr. Huberman stated they meet with the City of Oxnard every two weeks to discuss their issues. BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /P City Council Minutes 3 May 27, 1997 Mr. Rosenthal didn't anticipate that the facility would cause any tremendous change in the haulers or that any changes would have an impact on the facility, noting that hauler's rights are generally spelled out in their franchises. He advised that Western Waste's involvement is up to the City of Coachella, noting that their only participation at this time is as a potential customer. In response to Council Member Henderson, Mr. Rosenthal advised that construction would begin as soon as lndio approves the project because implicit in their approval, is a waste flow commitment which is sufficient for them to get started. They also anticipate receiving Coachella's waste commitment once the two cities agree on where the facility should be located which he felt would then make sense for La Quinta to come on board. In response to Council Member Adolph, Mr. Huberman advised that Oxnard is their second-largest facility and Los Angeles is the largest, handling 4,000 tpd. He recommended that the City contact both cities in regard to their relationship with BLT. He advised that they've been in the solid waste business in collection, recycling, and transfer station operations, for 25 years, but dropped the collection business due to conflicts with their transfer station operations. Mr. Rosenthal advised that they've focused mainly on designing, building, and operating transfer station/recycling facilities for the last ten years and their Oxnard facility, which he feels is very efficient, represents their latest version of a MRF/transfer station. Their intent has been to own the lndio facility, but have submitted an option for the jurisdictions to singularly or collectively, have the right of first refusal in order to protect the facility from being a key strategic asset and becoming the property of someone other than the ultimate users. He advised that their bid on the Coachella facility was based on the components of the RFP, but they have recommended that Coachella build an enclosed facility and feel that they're considering it. In response to Council Member Sniff, Mr. Rosenthal advised that they have no business relationship with the County and that the landfills they've considered so far are the badlands, the Orange County system, and landfills in the desert, with the exception of Eagle Mountain, that are available by truck and rail. In response to Council Member Sniff, Mr. Huberman advised that the facility, including land, buildings, and rolling stock, would cost slightly under $5 million which they are prepared to cover up-front and recoup through the debt-service * rate included in the tipping fee. The tipping fee is expected to be under $40 and somewhere in the range of $38 or $39. It will cover all of their capital costs and not be affected by long-distance hauling costs because the transfer and disposal costs will be combined into one component. The debt service will BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /PCity Council Minutes 4 May 27, 1997 be a small component of the tipping fee because it's spread over tons and time. He advised that the average tonnage for Coachella, Indio, La Quinta, Indian Wells, and Palm Desert is currently 549 tpd which their 750-tpd facility is capable of handling and their plan for future expansion is focused on increasing their recycling capabilities which will in turn increase the diversion percentage and reduce the amount of waste going to the landfill. Mr. Rosenthal advised that he would forward a copy of their draft contract to the City. In response to Council Member Adolph, Mr. Rosenthal advised that the average tonnage for the entire valley is approximately 1 200 tpd and that they're proposing to build a 7504pd facility in order to accommodate peak-tonnage days as well as future growth, pointing out that the facility can be easily doubled in size. In regard to the three sites, he felt the Van Buren site is best because of its rail access. In response to Mayor Holt, Mr. Rosenthal advised that they've exceeded their expectations in both their Oxnard and Los Angeles facilities. In Oxnard, they only budgeted for 657 tpd, but average 1100-1 200 tpd and their anticipated 1 5% diversion is now at 22%. In response to Council Member Henderson, Mr. Rosenthal confirmed that they didn't initially emphasize diversion because it's the most expensive part of the project to capitalize, but pointed out that recycling is already being done and that the initial need is for a transfer station. They will try to recover those recyclables that have economic value and once the facility is in operation and they've analyzed the waste, they'll work at increasing the efficiency of receiving dryer materials which will probably double the diversion percentage. Mr. Huberman advised that they have long-term, recycling contracts for cardboard, newspaper, and office-mix materials which protects them when the market is down and provides them with profits when the market is up. In response to Council Member Perkins, Mr. Huberman advised that the daily tonnages at their Oxnard facility are generated by the City of Oxnard, Port Huemene, the unincorporated areas of Ventura County, and 200-400 tpd of self-haul, which is important in preventing illegal dumping. Council Member Adolph asked if they have any plans to own and operate their own trash collection trucks to which Mr. Huberman responded no. BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /P City Council Minutes 5 May 27, 1997 PRESENTATION BY OTTO/SEXTON-JOINT VENTURE Carl Otto, P. 0. Box 2858, Sacramento, representing Otto/Sexton-Joint Venture, advised that they were one of two finalists in CVAG's RFP for a valley- wide transfer station and that they underwent almost two years of evaluation by CVAG*s task force. He stated that they're prepared to move forward with the same project, but as a private vendor, and are asking for the cities to commit their wastestream. The facility would be centrally located at Rio Del Sol and Varner Road, north of Interstate 1 0 on 1 2 acres, with an option for 20 additional acres. It will have MRF capabilities of processing 750 tpd, or with little expansion, 1 000 tpd. In absence of further negotiations with CVAG, they've continued to process the property for the necessary entitlements and the EIR and are confident that they can produce the facility with a tipping fee of $40 per ton which would include transfer and disposal costs. In response to Council Member Henderson, Mr. Otto advised that the project would cost approximately $9 million. In response to Council Member Adolph, Mr. Otto advised that they have a contract to purchase the property which is located in the County. They're asking the cities to commit their wastestream for a minimum of 7 years, at a premium cost, or up to 1 5 years which is closer to the ideal term for getting the best economy of scale. He advised that the contract would include their performance requirements and cost parameters and he felt that the concept of an advisory board is probably as close as the City would wish to get in regard to control without taking on financial risks. A 750-tpd facility is the minimum amount for economies of scale and he felt that a $40-per-ton tipping fee could probably be maintained even at 600 tpd, but noted that the two major costs are hauling and landfill costs. In response to Council Member Sniff, Mr. Otto advised that they need a minimum commitment of 600 tpd to build the facility and noted that Palm Springs is now looking at this facility as an alternative, having decided against the Bedminster project. It can easily be expanded to handle up to 1 500 tpd if they gain waste commitments from all the cities, and he advised that according to their analysis, one mid-valley facility would provide the best economies of scale. When asked how they would handle the higher transportation costs that some cities might experience, he stated that they would address it in the same way as the CVAG proposal. He advised that the $9 million facility would be operational within two years after receiving the needed waste commitments, noting that some of the County and EIR processes have already begun. He advised that the top three landfills they would consider at this time are La Paz, Badlands, and some of the County landfills. He further advised that they would BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /PCity Council Minutes 6 May 27, 1997 commit, to some degree, to some type of organization through which the cities would oversee the operation. In regard to Council Member Adolph's question about their background, Mr. Otto advised that Otto has built a MRF*transfer station in Placer County and has engineered and designed industrial facilities for 50 years. Sexton has built a transfer station in Chula Vista and has been in the business for 62 years out of Chicago, doing route hauling and transfer and disposal. Council Member Henderson questioned how they plan to have levelization of costs if the cities don't participate as a coalition and at what point they would expand the facility and would the cities be able to look at a reduction in the tipping fee. Mr. Otto advised that he hoped the cities would see the advantage of having only one facility and not argue about the advantages that one city might have over another, noting that the costs individually would be $60-$80 per ton. He advised that reduction of the tipping fee, as it relates to the expansion of the facility, could be addressed in the contract, but that the cost of operation itself is very insignificant and that the transfer and landfill costs, which have very little variance, are the largest part of the fee. Council Member Perkins asked if they would be involved in the collection of trash going to the transfer station to which Mr. Otto responded no. CITY OF COACHELLA Dick Macknicki, Mayor of Coachella, advised they feel that the valley needs two transfer stations in order to have a smaller radius and prevent illegal dumping. He advised that sometime ago they began negotiations with lndio on their proposed facility, but after it got bogged down in the environmental process, they starting looking at County Waste Management's proposed transfer station at the Coachella landfill site. The County later decided to drop their proposal and since the environmental process had already begun, Coachella began negotiating a lease with the County for the property adjacent to the landfill for the purpose of building an open-air facility with expansion capabilities for the eastern valley. He advised that the facility would cost approximately $2.8 million and that the EIR has now been approved and California Integrated Waste Management has permitted the site. However, they are still negotiating the lease with the County. He advised that the facility will have the capability of handling all of the eastern valley's trash and he invited La Quinta to join in its use, noting that lndio has indicated the possibility of using the facility BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /P City Council Minutes 7 May 27, 1997 themselves, and he advised that it should be operational within 60-90 days after the contract is signed. In regard to Council Member Perkins' question about their relationship with lndio, Mr. Macknicki advised that the two cities collectively, generate about 200 tpd and agreed to look at this issue jointly, with the understanding that alternate sites would be considered if Indlo's facility was delayed in the environmental process. Therefore, when lndio's project ran into stumbling blocks, they decided to go with the Coachella landfill site, primarily because it seemed the fastest way to go. In regard to the tipping fee, he advised that it would range from $38.50 to $40.00 per ton and that the facility, which will be on County property, will be operated privately. They've received two proposals for building and operating the facility, but are hesitant to deal with either one until the lease negotiations are completed. Council Member Adolph asked how they intended to keep the dust and paper from blowing in the wind and how much tonnage the facility could handle initially. Mr. Macknicki advised that it's down in a pit and somewhat protected from the wind. The reason they're proposing an open-air facility in the beginning is because of the need to have something operational in a short period of time, but their proposal includes an offer and costs for an enclosed facility in two to three years. In regard to tonnages, he advised that they would need a minimum of 200 tpd to make it work. Council Member Adolph felt that having one facility in the valley was the best way to go, but Mr. Macknicki pointed out that having a transfer station in each end of the valley would help prevent illegal dumping and he advised that they also plan to implement some special services to help that effort. In response to Council Member Henderson; Mr. Macknicki advised that the builder/operator will finance the facility, amortizing the costs over a period of time and Coachella will be the lessee and receive a portion of the tipping fees for management costs. He further advised that the initial capacity of the open- air facility will be 500 tpd, but noted that it's also conditioned to probably become an enclosed facility in the future. In response to Council Member Sniff, Mr. Macknicki advised that they received the second proposal for operation from Western Waste and that the County has acquired a deed from BLM for 600 acres, of which this property is included. The builder/operator will fund the project up-front and Coachella will control the facility through contracts. He advised that all cities using the facility will have BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02 /PCity Council Minutes 8 May 27, 1997 an element of control through some type of contract such as an MOU, but he didn't feel that a JPA was necessary and he confirmed that Coachella would receive a portion of the tipping fee as the host city to cover their street maintenance costs. Council Member Sniff advised that he didn't have any confidence that anything would happen at the landfill site very fast, noting that Coachella started looking at the site a year ago and nothing has been done yet. Furthermore, the County is concerned about landfill closure costs and is adamant about keeping the trash in the valley. In response to Council Member Henderson, Mr. Macknicki confirmed that the major difference between their proposal and CVAG's, is that under their proposal, the private operator will fund the capital costs and under CVAG's proposal, the JPA would be the funding agency. He wasn't sure why the County sought ownership of the BLM land. Council Member Sniff asked all three agencies to submit a summary of their comments, and any other pertinent information, to the Community Development Director. Council recessed to Closed Session. CLOSED SESSION 1 Conference with legal counsel concerning on-going litigation pursuant to Government Code Section 54956.9(a) Eminent Domain Case Tynberg Case No.088851. Council reconvened with no decision being made which requires reporting pursuant to Section 54957.1 of the Government Code Brown Act). There being no further business, the meeting was adjourned. Respec ully submitted, SA NDRA L. JUHOLA, City Clerk City of La Quinta, California BIB] 07-30-1997-U01 10:29:08AM-U01 ADMIN-U01 CCMIN-U02 05-U02 27-U02 1997-U02