Innovative Funding

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INNOVATIVE FUNDING

Moderator: Michael Huls, R.E.A.

Financing AB 939

Mike Mohajer, L.A. County Department of Public Works

As the most populous County in the nation, we generate 30% of the waste in California. County DPW is responsible for waste reduction for the unincorporated areas and for County-wide programs.

Funding AB 939 programs has been and continues to be a challenge for the County of Los Angeles. Similar to the cities, the County is required to prepare a Source Reduction and Recycling Element (SRRE), a Household Hazardous Waste Element (HHWE), a Non-Disposal Facility Element (NDFE) and to ensure compliance with the 50% disposal reduction by 2000 for the County unincorporated areas.

Unlike the cities, the County must prepare the Integrated Waste Management Plan, address the Countywide disposal needs for the waste portion that remains after we conduct our diversion activities, and provide the staffing needs for the Integrated Waste Management Task Force. To obtain funding for accomplishing the tasks, the County has established various funding mechanisms.

The AB 939 programs benefiting residents in the County unincorporated areas are funded by a Solid Waste Generation Service Charge This service charge is assessed on every parcel in the unincorporated areas and varies based on the Assessor Land Use Code. This fee is collected as a direct assessment with the property's tax bill, and therefore provides a steady and predictable flow of funds.

The AB 939 programs benefiting residents Countywide are funded by a "Solid Waste Management Fee" imposed on each ton of solid waste that is landfilled or transported in or out of the County. This fee is collected from the solid waste facility operators in L.A. County and those transfer station operators that ship waste out of the County for disposal.

The County supplements local funding by obtaining grants from Federal and State agencies, private foundations, and other similar sources. The County continually seeks potential grants to fund new and existing programs. The Used Oil Recycling Program and the Rubberized Asphalt Concrete Technology Center are two of the County programs which have benefited substantially from grants.

The County has also been able to minimize costs through the formation of partnerships with local agencies. Through the formation of partnerships in 1991, the County and the Cities were able to minimize the costs of preparing the SRREs, HHWEs and NDFEs.

Another example of a successful partnership among local agencies is the Los Angeles County Recycling Market Development Zone which encompasses all unincorporated areas and 14 Cities in the metropolitan area.

Public and private partnerships have also been very successful. Through the partnership with the private sector, the County formalized the Household Hazardous waste Program.

More recently, the Mow Down Pollution Partnership, consisting of over 30 agencies and private companies, formed to promote grass cycling and reduce air pollution through the use of electrical lawn mowers. The financial and technical resources of the partnership were combined to make the program successful.

Some believe the year 2000 will be the end of AB 939, but there are a number of Legislative draft plans which carry AB 939 beyond the year 2000. Regardless, AB 939 is here to stay for the foreseeable future.

We are the most wasteful society in the world and waste reduction makes sense. Therefore, continued funding is required.

Public Private Partnerships

Constance Hornig esq, municipal waste contract consultant

Suggestions for diversion cost savings strategies include:

I. Municipal tax exempt bond financing and public facility ownership:

1. Tax exempt financing is less expensive than private sector taxable bonds because of lower interest costs.

2. Public facility ownership provides negotiation leverage at term's end: hire another operator, secure fee reductions, or gain service improvements.

II. Competitive service procurement may enable you to get more services for the same price, such as:

1. Service contract administration fee paid by contractor.

2. Collection from municipal buildings, recycling drop-off centers (libraries) as a part of the rate (reducing general fund expenses).

3. Specified educational programs and budgets.

4. Annual community cleanups, etc.

5. Special roll outs for the disabled and elderly.

6. Bulky waste pickup program.

7. Customer satisfaction survey.

8. Audited financials.

III. No deadbeats: reduce customer fee delinquencies to reduce costs (because contractors include delinquencies in their rate).

1. Use municipal collection of fees and impose municipal liens if necessary.

2. Have contractor-noticed delinquencies reported and impose municipal liens.

IV. Diversion or financial performance incentives such as:

1. Stated term extension if the hauler out-performs minimum criteria.

2. a. Diversion bonus if processing out-performs minimum criteria.

b. Sharing benefits of avoided disposal costs. (Share savings in variable not fixed costs).

3. Revenue sharing from sales of recyclables.

4. Weighted pricing can provide incentives, especially if the hauler is also doing the marketing of the recyclables.

I have presentation papers with suggested contract language for these incentives.

Cost Recovery & Cost Savings

Nancy Hicks, HDL, Inc., consultant

We support city departments to maximize revenue from a variety of sources. Use your data bases for cost recovery, to figure who should pay what, without violating Prop 218. Look at what it really costs, who was the beneficiary, and assess how much each client used or benefited from the service.

First analyze your existing data bases and then find additional data bases. Use a computer mapping system, if possible. Open computer architecture allows cross indexing.

Look at property taxes, building permits, business licenses, sales records, etc. Find out what is happening to property now and forecast what will happen in future. Look at business licenses: find information on number of employees, location (link to APN) and type of business. Using the SIC (standard industrial class), or NAIC (North American Industrial Classification) codes allows you to compare to similar businesses and see changes in the business mix.

Other data sets include sales tax records, utility data, telephone directories (av