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Transcript of California Integrated Waste Management Board Workshop July 9, 2009 AB 2296 Consulting Group...
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California Integrated Waste Management Board
WorkshopJuly 9, 2009
AB 2296 Consulting Group
Financial Assurances Phase
II Rulemaking1
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Sankofa Bird
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Agenda Introductions and General Overview Options to Address the May 2009 Board
Direction for Phase II Regulations on Closed/Closing Facilities Postclosure Maintenance Financial Assurances Corrective Action Financial Assurances
Lunch Break Continuity of Financial Assurances During
Transfer of Ownership Wrap Up and Next Steps
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Overview of Operating, Closing, and Closed
LandfillsWhat is the impact of establishing
a rolling 30X level of financial assurance on current landfill operators?Cash-type and Non cash-type
demonstrationsHow many facilities are impacted?
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Landfills Years Into Postclosure Maintenance
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What is the impact of establishing a rolling 30X level of financial assurance on current landfill operators?Adjusted Annual Cost Estimate for
Inflation Since ClosureCompared to Current Amount of
Demonstration6 of 20 Have Received
DisbursementsReturning to 30X Would Impact
6 Closed Landfills with Cash Mechanisms
Cost an Estimated $2.3 million6
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Options to Address Postclosure Maintenance
Closing/Closed1. 30X the PCM estimate
a) Same as Operating – including criteria allowing step-down
b) Allow build up period for cash mechanisms2. Not require increase (to 30X) above
current demonstration level, no less than 15X
3. Perform Evaluation to set level(options to determine level?)
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1.a) Same as Operating – including criteria allowing step-down
Pros: More Protective Minimal System
Impact Equity Ease of Administration May Be Eligible for
Step-down
Cons: Increased Early
Defaults Increased Enforcement Inability for Some to
Raise Additional Funds Fairness – already
closed and imposing additional financial demonstration requirement
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1.b) Allow Build Up Period for Cash MechanismsPros: Reduces Impact Flexibility Opportunity to Step-
down Reduced Enforcement
Cons: Equity for cash vs.
non-cash mechanisms
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2. Not require increase (to 30X) above current demonstration level, no less than 15X
Pros: Mitigates Impact on
Individual Landfills Fairness
Cons: Increase Exposure to
State Equity for operating vs
closing/closed and for cash vs non-cash
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3. Perform Evaluation to Set Level – Not Less Than 15XPros: Better Match
Likelihood of Default and Level of Assurance
Cons: High Transaction
Costs for Operator and Board
Criteria outside existing Mechanisms/program difficult to develop
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What is the impact of the Corrective Action Direction?
Effective July 1, 1991267 of 282 Landfills are subject125 landfills are currently in
compliance with Water Board Requirements (47%)
Final cover replacement is more expensive 93% of the time (based on in place levels of FA demonstrations) 12
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Corrective Action – Estimated Financial
Exposure
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*This amount includes $677 million for Eagle Mountain landfill
Total Dollar Amounts for all Facilities of Difference from Water Quality CA Estimate to Cap Replacement Estimate – in Millions of Dollars
Public Private Total
Active $489.5 $945.1* $1,434.5
Closing $26.2 $23.3 $49.5
Closed $45.8 $46.1 $91.9
Total $561.4 $1,014.5 $1,575.9
Percentage of Total Facilities by type and activity In Compliance Public Private Total
Active 51% 70% 57%Closing 46% 33% 44%Closed 33% 32% 33%Total 44% 55% 47%
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Corrective Action – Estimated Financial
Exposure
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*This amount includes $677 million for Eagle Mountain landfill
Total Dollar Amounts for All Facilities to Achieve Compliance (based on Cap Replacement divided by Compliance Ratio – Millions of Dollars)
Public Private TotalActive $959.7 $1,063.7* $2,023.4Closing $56.7 $69.9 $126.6Closed $139.3 $145.0 $284.3Total $1,155.8 $1,278.6 $2,603.5
These exposure estimates represent the extrapolated values calculated from the exposure (based on May 2009 Board direction) for each landfill category (i.e., Active-Public, Active-Private, etc.) divided by the current percentage of compliance within each category to identify the estimated exposure calculated for 100% of each type landfill reaching compliance.
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Options to Address Corrective Action
Closing/Closed1. Same as Active/Operating
a) Immediatelyb) Allow Build Up Period
2. Original Phase II Proposal – Broaden Use of Water Board Financial Assurance
3. Delay Effective Date For Final Cover Replacement
4. Site Specific Corrective Action Plan5. Include Costs in Pooled Fund
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1.a) Same as Active/Operating
Pros: More Protective Minimal System
Impact Equity Ease of Administration
Cons: Increased Early
Defaults Increased Enforcement Inability for Some to
Raise Additional Funds Fairness – already
closed and imposing additional financial demonstration requirement
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1.b) Allow Build Up Period
Pros: May work well in
Combination w/ Option 2 (next slide)
Reduces Impact Flexibility Reduced Enforcement
Cons: Equity for cash vs.
non-cash mechanisms
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2. Original Phase II Proposal – Broaden Use of Water Board Financial AssurancePros: Simple to Implement Minimal Financial
Impact Equity Fairness
Cons: Might not provide
enough financial assurance to cover the exposure
Doesn’t address Major Maintenance
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3. Delay Effective Date For Final Cover ReplacementPros:
Note: This option would not require closed landfills to comply with the cover replacement estimate, but would require compliance with the original Phase II proposal (using Water Board corrective action estimate for financial assurance purposes).
Cons: Might not provide enough
financial assurance to cover the exposure
Doesn’t address Major Maintenance
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Incentivizes Closing landfills to be certified Closed (SD-4.2)
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4. Site Specific Corrective Action PlanPros: Recognizes potential
for Major Maintenance Fairness
Cons: Monetary Expense to
Develop Plan Workload to Review
Plans Equity Issue (unless
also imposed on operating landfills)
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5. Include Costs in Mandatory Pooled FundPros: Would reduce the
amount required for individual financial assurances
Cons: There is no Pooled
Fund(s) yet
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Continuity of Financial Assurances During Transfer
of OwnershipStay at current landfill financial
assurance requirementAutomatically step-up to 30XAlternative “X” level
5X incrementsBased on what criteria?
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Phase II Rulemaking Timeline
Aug 2009 – Additional Board Direction on Closed/Closing Landfills
Aug-Oct 2009 – 45-day comment periodNov-Dec 2009 – 15-day comment periodDec 2009 – Board adoptionJan 2010 – Prepare Formal Response to
Comments and Final Statement of Reasons
Feb 10 – Legal ReviewFeb 27, 2010 – Submit to OAL
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