Heavy equipment spreads and compresses garbage at the Sonoma County Landfill, on the highest portion of the property, Friday April 5, 2013 near Petaluma. (Kent Porter / Press Democrat) 2013

Cities could OK Sonoma County landfill deal soon

KEVIN MCCALLUM
THE PRESS DEMOCRAT

Negotiations that could determine whether cities in Sonoma County agree to send their garbage to the county's central landfill for the next 20 years are making significant progress and could result in a deal being struck soon.

Representatives of both the county and its affected cities expressed confidence this week that an agreement over liability for the central site and four of the seven former dumps across the county can be resolved soon enough to allow the landfill's private operator, Arizona-based Republic Services, to begin a needed expansion this summer.

"I'm hearing from both sides that we have come to agreement on all the major points," said Susan Klassen, the county's transportation and public works director.

At issue is who should bear the long-term liability associated with the central landfill in the event Republic should go out of business - the county, which owns the 400-acre site west of Cotati, or the cities, which have been dumping their garbage in it for two decades. A second but related issue involves how much it will cost to maintain and monitor the closed dump sites and who shoulder that burden.

Klassen said she is hopeful that the issues can be resolved in time to allow Republic to soon begin an expansion needed to keep the county from running out of room at the central landfill, which she said she expects to happen by the fall.

Further delay could push the expansion into 2015 and force the county to haul, at significant expense, 100 percent of its garbage out of the county. Today, about half of the county's 240,000 tons of waste is trucked to other Bay Area landfills.

Republic remains hopeful a deal can be finalized soon enough to have the bulk if not all of the expansion work done before rains return in the fall, said Rick Downey, the company's Sonoma County operations manager.

The company has been operating the landfill on an interim basis since 2010. It is set to permanently take over management under a 20-year deal worth an estimated $547 million.

The county, which will retain ownership of the landfill, approved the outsourcing deal last year, but cities have yet to sign on by committing their garbage. Downey said it has been frustrating to watch the negotiations drag on, but he said he's optimistic now that the cities and the county have reached what he called a "tentative agreement."

"All of the T's have been crossed and the I's dotted from my perspective," Downey said.

City representatives confirmed significant progress has been made but cautioned that some issues remain unresolved. Elected leaders of various cities have yet to be formally briefed on the latest progress.

"I think the discussions are progressing, but I need to make sure that all of other cities are on board with the direction the negotiations are going," said Caroline Fowler, Santa Rosa's city attorney and point person representing the cities in the negotiations. "I think we've moved forward on some of the major issues, but there are some details to be resolved."

Santa Rosa has taken a leadership role in the negotiations because it is by far the largest source of garbage sent to the central landfill and because it is the city with the largest in-house legal department.

Fowler said the latest negotiations have taken nearly a year because of the complexity of the liability issues, the number of different cities involved and last year's legal and political wrangling to establish Sonoma Clean Power, the new public electricity provider.

Eight of the county's nine cities - all except Petaluma - are currently sending their garbage to the central landfill. They will need to sign off on the long-term deal with Republic and commit their waste streams to the landfill for the duration of the contract.

"I'm optimistic we can resolve this in the next 60 days," Fowler said.

Windsor Councilwoman Deb Fudge, one of the city leaders who provided input as part of the county-city Solid Waste Advisory Group, agreed that progress is being made but understands from legal staff that "sticking points" remain.

"We're further than we were a year ago, but we're not there yet," Fudge said.

Fowler and Fudge declined to detail the outstanding issues, citing the need to for various city councils to be briefed about the progress in closed session. Fowler is planning to discuss the deal with her City Council Tuesday.

Klassen said the estimated $40 million in liability for the closed dumps has been tentatively resolved. Of the seven former dumps, the county retains sole liability for three: Annapolis, Guerneville, and Occidental. The cities, meanwhile, share liability with the county for closed dumps in Sonoma, Healdsburg, on Roblar Road west of Cotati, and near the Sonoma County airport.

The recent negotiations have focused on how much money should be set aside for the possibility that Republic goes out of business someday and leaves the county – and the cities – holding the bag for long-term environmental costs related to the central landfill.

Republic has accepted all future liability for closing and monitoring the central landfill site, including $52 million in financial assurances required by the state. But as Klassen notes, "forever is a long time," and the county wants to make sure there is a "backstop" in the event Republic can't perform.

Klassen added that she thinks that scenario unlikely. The Arizona company is

the country's second-largest solid waste firm, with operations in 38 states.

"Republic is a very strong company and I believe there is minimal chance that they will just roll up the door and not exist in the future," she said.

How much today's ratepayers should contribute for an speculative liability decades in the future, how much each city should pay toward it, and what happens if the money isn't needed are all issues that have made the negotiations challenging, Klassen said.

The county has proposed a $9 per ton "concession fee" to fund the county's ongoing maintenance and monitoring of the four closed sites, Klassen said.

An additional fee is being discussed to establish an escrow account that could be tapped in the event of Republic's non-performance. That could add another $5 to the per-ton rate, according to sources familiar with that deal.

Tipping fees at the dump are currently $112 per ton, and the concession fees would be on top of that. Klassen said she fully expects the final cost to the average consumer will be "in the ballpark" of the 4 percent increase previously estimated.

For curbside service, that amounts to a monthly increase of about 50 cents for Santa Rosa residents and $1.16 for county residents, where garbage rates are higher, she said.

The question of what how much liability Petaluma should bear for landfill closure costs is a separate and ongoing discussion, Klassen said.

After years of using the central landfill, Petaluma began shipping its garbage to Redwood Landfill in Marin County in 2004. The move exacerbated a massive shortfall in the county fund established to close and monitor its dumps. The county, which argued the increases stemmed from more stringent state and federal regulations, claimed Petaluma was still responsible for its share of such costs, at one point threatening to sue the city. Petaluma officials in turn accused the county of "gross incompetence" for failing to collect sufficient fees to cover those costs.

Downey said he remains hopeful that Petaluma can be induced to return its waste stream to the central landfill.

While the liability issues appear closer to being resolved, a lawsuit by a group of neighbors and the county's largest labor union still seeks to overturn the county decision that approved the outsourcing deal with Republic.

The suit, filed in May, claims that the county's environmental review of the landfill's future does not account for several planned improvements, including a new sorting and recycling facility.

Downey said he is concerned the suit could further delay the project, but he remains optimistic it can be resolved.

"We're going to work through whatever comes from it," he said.

(You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @citybeater.)

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