COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

February 11, 2009

BOARD MEETING DATE:

March 3, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

EXECUTIVE SUMMARY – IN THE CAPACITY AS A MEMBER AGENCY OF THE SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY (SBWMA), APPROVE THE SALE OF BONDS BY THE SBWMA TO FINANCE RECONSTRUCTION OF THE SHOREWAY FACILITY, AND APPROVE THE REFUND OF THE BONDS ISSUED IN 2000

RECOMMENDATION:

Adopt a resolution:

1.

Approving the issuance and sale of bonds by the South Bayside Waste Management Authority (SBWMA), in a principal amount not to exceed $65,455,000;

2.

Approving the refund by the SBWMA of its Series 2000 Bonds;

3.

Agreeing that the County shall not rescind this approval unless it is withdrawing from the Joint Powers Authority (JPA) Agreement, and pays its proportionate share of all existing debts of the Authority including the Obligations, any Refunding Obligations and the 2000 Bonds as required by the JPA Agreement; and

4.

Authorizing and directing County officers and staff, to execute and deliver any and all documents necessary to effectuate the purposes of this Resolution, and ratifying any and all such actions previously taken by such Authorized Officers or staff members.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government.

Goal 22: County and local governments effectively communicate, collaborate and develop strategic approaches to issues affecting the entire County.

This action endorses the the improvements of a major regional solid waste management facility in the County in order to provide the most cost effective service to the ratepayers, while maximizing the amount of material that is diverted from landfills through recycling and other programs.

DISCUSSION:

Section 7.1.1.d of the SBWMA JPA requires approval of two-thirds of the SBWMA member agencies for the issuance of bonds or notes. At the time of the writing of this report, five of the twelve member agencies have approved the sale of bonds.

The revised cost estimate for the Shoreway master plan improvements, including a new building with single stream recycling equipment, is $59.152 million. This figure includes a 10% contingency on top of the estimated project costs. The updated cost estimates for site work, transfer station building retrofit and Material Recovery Facility (MRF) building are based on engineering plans that are 100% complete, in contrast with the June 2008 estimates, which were based engineering plans that were 40% complete. Overall, the January 2009 total project cost estimate is about $206,000 less than the June 2008 estimate. The SBWMA will utilize $18.96 Million of its capital reserves towards the total project costs and redeem the 2000 bonds.

Although the SBWMA selection committee did recommend a facility operator for the Materials Recycling Facility, the recommendation was conditioned on the resolution of several issues. It may be premature to commit to financing an entirely new facility until those issues are satisfactorily resolved and the facility operator has been selected. Your Board may want to consider continuing this item until the March 31, 2009 Board of Supervisors meeting, as SBWMA is expected to consider the selection of a Facility operations contractor at the March 26, 2009 meeting of the SBWMA Board.

FISCAL IMPACT:

The sale of bonds will increase debt service obligations of the SBWMA. All debt issued by the SBWMA will be secured solely by the net revenues of the SBWMA (total revenues less operating expenses exclusive of debt service and depreciation). Annual debt service for the SBWMA will increase after 2010 by an estimated $3.235 million. The estimated one-time collection rate impact associated with the new debt service is ranging between 4.42% to 4.89% on 2008 revenue depending upon the assumed plan of finance.

Under the terms of the existing JPA Agreement, a member agency may not withdraw from the JPA without paying off its respective share of any outstanding SBWMA debt. Each member’s pro rata share of the SBWMA’s outstanding debt will increase once the 2009 notes and 2009 bonds are issued.