HomeMy WebLinkAbout05-13-2013 - Supplemental Materials - Solid Waste Interlocal AgreementDepartment of Natural Resources and Parks
2010-2012: ILA Drafting Committee updates ILA
incorporating MSWMAC recommendations;
Negotiations stalled over environmental liability
July 2012: RPC briefed on status
• August 15, 2012: SCA adopts liability principles
• October 2012: City/County team convenes to
restart discussions
December 2012: ILA drafting complete;
Amended and Restated ILA transmitted to Cities
for review and approval
SCA Principles:
Environmental
Liabilit
Principles on liability were adopted by the SCA Board on August 15, 2012:
• SCA believes that solid waste system costs, which includes liability, should be funded by the utility;
• The solid waste interlocal agreement (ILA) between King County and participating cities should
fairly allocate risk between both the cities and the county and should, to the greatest extent
possible, protect both the county's general fund and cities' general funds against liability for
cleanup claims arising at Cedar Hills Landfill;
• Neither party should receive priority in terms of the use of grant funds, insurance proceeds,
reserve funds, or disposal rates to satisfy environmental liability;
• The ILA should establish that grant funding, if available, and disposal rates shall be used to set up a
line of first defense to protect both the county's general fund, and the cities' general fund.
• The ILA should provide that:
• The county will purchase and maintain liability insurance using disposal rates to cover liability
arising out of the Cedar Hills Landfill, if such insurance is available under commercially
reasonable terms and conditions. Said insurance shall cover both the county, and the cities;
• The county will establish and maintain a reserve fund from disposal rates to cover both the city
and the county for liability not covered by insurance. The county shall consult with the
Metropolitan Solid Waste Management Advisory Committee (MSWMAC) as to the amount of
the reserve fund;
• In the event that liability for cleanup exceeds the funds available through the insurance and
reserve fund, disposal rates should be used to cover both county and city liability to the fullest
extent legal and feasible.
Key Improvements Over Current ILA
a Extends the ILA 12.5 years, through December 2040,
allowing long-term financing to keep rates lower and
providing long-term stability
Updates liability section guided by principles from Sound
Cities Association (SCA) to protect City and County general
funds from long-term liability
• Expands City role in System planning
• Adds new mitigation section guided by principles from SCA
• Adds new dispute resolution section
Updated to be consistent with current conditions and laws
Key Improvements Over Current ILA:
Environmental
ility
.•
• Nothing in the agreement creates new environmental liability
or releases any third party from environmental liability
• Establishes a protocol for setting aside funds to pay for
environmental liability and, if necessary, afair and equitable
process for distributing those funds
e Explicitly recognizes the intent of the parties to protect City
and County general funds to the extent possible from
environmental liability, including:
® Purchasing insurance
® Establishing an environmental reserve fund
® Pursuing grants to cover costs
® Developing a financial plan, including a rate schedule to cover costs
Key
Improvements
Over
Current
Governance
• Metropolitan Solid Waste Advisory Committee (MSWAC)
memorialized in ILA
e Maintains consistency with role of the RPC as provided
by the King County Charter
Increased City role in System planning, including a
framework for reviewing financial policies and long-term
disposal options
Dispute resolution provisions
The
Transfer
System
e ILA recognizes the need for transfer system improvements
Extension of the ILA will facilitate long-term financing of
those improvements while mitigating rate impacts —
longer -term bonds will keep rates lower
o Recognizes that the Plan can be modified
• Parties to the revised ILA will benefit from longer term bonds
and estimated rate savings of $7 to $9 per ton on debt
• System -wide savings of about $4 million in the 2013/14 rate
period and over $8 million per year by 2019
Provides long-term protection for City and County general funds
from environmental liability
® Expanded City role in system planning, including financial
policies and long-term disposal options — ILA allows for full
range of future disposal options to be considered through
Comprehensive Plan process
City mitigation for transfer facilities
Long-term stability in planning and financing of solid waste
system for residents and businesses
• County requests anon -binding statement of interest
in signing the new ILA by January 31, 2013
In order to have sufficient time to develop, in
collaboration with MSWAC, financial policies that
will affect the next rate study, the County needs
each City to act on the ILA by April 30, 2013