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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Department Of Public Works
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DATE:
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June 10, 2010
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BOARD MEETING DATE:
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June 22, 2010
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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James C. Porter, Director of Public Works
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SUBJECT:
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Interest Earnings on the AB 939 Funds
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RECOMMENDATION:
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Adopt a Resolution authorizing and directing the Controller to deposit interest earnings on fund balances of the AB 939 Fund into the AB 939 Fund.
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BACKGROUND:
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In 1976, the Board adopted Resolution No. 36749, which established a per-ton surcharge to be collected on all solid waste material disposed of at the Ox Mountain Landfill, pursuant to agreements between the County and the landfill operators. This revenue was used to support waste reduction, recycling and composting, landfill diversion, and solid waste management activities. Since inception, the surcharge revenue collected from the Ox Mountain Landfill operator was deposited into the Solid Waste Fund (Fund) and any interest earnings on the fund balance remained within the Fund.
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On December 31, 2009, the agreement between the County and current Ox Mountain Landfill operator expired. In preparation for the expiration of the agreement, the County determined and established an AB 939 Fee on January 1, 2010 to sustain funding for existing eligible waste management programs. As with the former surcharge-based revenue, AB 939 fees are collected on each ton of material disposed of at landfills located in the County. The AB 939 fee-based revenue provides funding for Solid Waste Management and Diversion programs, Household Hazardous Waste Management, and Local Enforcement Agency permitting activities.
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DISCUSSION:
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The Solid Waste Management and Diversion portion of the AB 939 Fee will be used to support waste diversion programs managed by the Department of Public Works. Revenue received from AB 939 fees is more restrictive and must be specifically used to support activities outlined in the Countywide Integrated Waste Management Plan. Furthermore, the programs supported by the Solid Waste Management and Diversion portion of the AB 939 Fee have countywide impact and, as such, the Department will be reporting to the cities regarding these programs and AB 939 funding on a regular basis.
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The AB 939 Fee was determined based on eligible program expenses and we do not anticipate there will be a significant fund balance in the AB 939 Fund at any given time. Payments to the AB 939 Fund will be received quarterly from the operator of the Ox Mountain Landfill, currently the only operating landfill in the County. The Department has established a special revenue fund, where the Solid Waste Management portion of the AB 939 Fee revenue is being deposited to more easily provide program management and fiscal accountability.
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The County has historically deposited interest earnings on fund balances held in trust funds and special revenue funds in the General Fund, unless there is legislation or Board approval that specifies otherwise. We are not aware of legislation that requires special handling of interest earnings related to the AB 939 Fund and are instead seeking Board approval that the interest earnings on AB 939 funds be deposited into the AB 939 Fund.
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County Counsel has reviewed and approved the Resolution as to form.
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Approval of this action contributes to the Shared Vision 2025 outcome of a Collaborative Community by ensuring that interest derived from the AB 939 Fee continues to support regional efforts for waste diversion.
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FISCAL IMPACT:
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The AB 939 revenue projection for the Solid Waste Management and Diversion portion of the Fee was estimated to be approximately $2,813,850 for FY 2010-11. However, the recent disposal tonnage has been lower than projected, and will result in less revenue. We do not anticipate the fund balance for the AB 939 Fund to be significant since the Solid Waste Management and Diversion portion of the AB 939 Fee was based on the anticipated program expenses and will be needed to pay for the program costs. Based on the current County Investment Pool interest rate of one percent (1%), we anticipate that the interest earnings on the AB 939 Fund will be minimal.
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