201 N. Civic Drive, Suite 230 City of Monte Sereno MEETING AGENDA

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1 Executive Director WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY Member Agencies Marva M. Sheehan, CPA City of Campbell HF&H Consultants, LLC Town of Los Gatos 201 N. Civic Drive, Suite 230 City of Monte Sereno Walnut Creek, CA City of Saratoga Telephone (925) Facsimile (925) MEETING AGENDA May 3, 2018 Monte Sereno City Hall Saratoga-Los Gatos Road Monte Sereno, CA :00 p.m. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL ORAL COMMUNICATIONS FROM THE PUBLIC WRITTEN COMMUNICATIONS None OLD BUSINESS 1. Receive an oral report and product demonstration from West Valley Collection & Recycling to update the Board on its progress towards meeting the June 30, 2018 commitment to add GPS tracking and reporting capabilities to all route trucks. NEW BUSINESS 2. Consider Board Meeting Schedule for FY 2018/ Accept report for the Executive Director and Authority Counsel contracts. 4. Approve Resolution adopting the FY budget and work plan. In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Board Clerk (925) Notification 48 hours prior to the meeting will enable the Authority to make reasonable arrangements to ensure accessibility to this meeting. 28CFR ADA

2 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA Page 2 May 3, Receive a report on recent regulatory changes and program updates. PUBLIC HEARINGS 6. Approve Resolution ratifying the Guadalupe Landfill contractual disposal proprietary rate increase of 2.65% effective July 1, Approve Resolution ratifying the West Valley Collection & Recycling contractual collection rate increase effective July 1, CONSENT CALENDAR 8. Receive and file the Executive Director financial report for the 9 months ended March 31, Receive and file a report on the West Valley Solid Waste Management Authority s FY Audited Financial Statements. 10. Approve Minutes of the February 1, 2018 Board Meeting. FUTURE AGENDA ITEMS BOARD MEMBER REPORTS ADJOURNMENT Next Regular Meeting: September 6, 2018, 5:00 p.m. ADDRESSING THE BOARD Any person shall have the right to address the Board during consideration of any item on the Board s agenda or during the time for oral communication if not on the agenda but pertaining to subject matter within the jurisdiction of the Board. Any person wishing to address the Board should stand or raise the hand and wait to be recognized by the Chairperson. Please stand at the podium, if able, state your name and address for the record, and proceed to address the Board. All remarks and questions should be addressed to the Board through the Chairperson and not to any member thereof or to the public. No question should be asked a Board member or a member of Authority staff without first obtaining permission of the Chairperson.

3 AGENDA ITEM NO. 1 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director WVC&R Update and demonstration GPS Tracking and Reporting Software RECOMMENDED ACTION Receive an oral report and product demonstration from West Valley Collection & Recycling to update the Board on the progress towards meeting its June 30, 2018 commitment to add GPS tracking and reporting capabilities to all route trucks. DISCUSSION At the November 2, 2017 Board Meeting, WVC&R committed to have fully functioning GPS tracking and reporting capabilities on all of its route trucks by June 30, The system proposed by WVC&R highlighted the following benefits: Integration with Customer Information/Billing System Route Manager. Ability to note locations where cans are not set out. Built-in camera-utilizing time date stamp as well as geotagging. Near real-time transmittal of route data to Route Book Manager (Web App/Middleware) and end of day upload into Route Manager. Allows live dispatching of new work orders to tablets throughout the work day. Allows driver to enter custom notes or select from dropdowns. Integration with Route Optimization Tool to ensure routes are complete in the safest most efficient order. WVC&R has reported that the system will be implemented by the end of April 2018 and was requested to present a final update and product demonstration for the Board.

4 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 2 May 3, 2018 FISCAL IMPACT None DOCUMENTS ATTACHED None Marva M. Sheehan Executive Director

5 AGENDA ITEM NO. 2 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director Board Meeting Calendar RECOMMENDED ACTION Consider Board Meeting Schedule for FY DISCUSSION FY Board Meeting Schedule The attached schedule reflects the regularly scheduled meetings for FY Certain items must be addressed at specific meetings during the year due to procedural or contractual commitments. For example, the Authority must ratify the collection rates no later than the May meeting in order for the rates to be effective July 1 in accordance with the agreement with WVC&R. Also, new Board officers must be elected at the first meeting of the calendar year. These items are shown in bold type in the attached schedule. The schedule for other items is more flexible; these are shown in normal type. The attached schedule is meant to be a guide, not a rigid schedule. Regular meetings may be cancelled and special meetings may be scheduled as needed. Board Members, the Authority Attorney, or the Executive Director may add agenda items, accelerate or delay items, or delete items from the schedule. Agendas will continue to be published prior to each meeting with the items to be discussed at that particular meeting.

6 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 2 May 3, 2018 RECOMMENDED ACTION The Board should review the attached schedule and provide feedback to staff regarding needed changes to the proposed schedule. DOCUMENTS ATTACHED Proposed Schedule of Meetings FISCAL IMPACT None Marva M. Sheehan Executive Director

7 West Valley Solid Waste Management Authority FY Proposed Schedule of Meetings Meeting Date September 6, 2018 November 1, 2018 Discussion Items Receive and file annual CalRecycle Annual Reports Closed Session annual evaluations of Authority Attorney and Executive Director Consider a report on WVC&R s prior Fiscal Year Complaints/Liquidated Damages February 7, 2019 Elect new officers Review of Collection and Disposal contracts Review Executive Director and Authority Counsel contracts Accept Audited Financial Statements May 2, 2019 Board meeting schedule Ratify Guadalupe Landfill disposal contractual rate adjustment Ratify WVC&R contractual collection rate adjustment Approve Authority budget Review Executive Director and Authority Counsel contracts Recurring Meeting Agenda Items o Approval of prior meeting minutes o Receive and file the Executive Director financial report o Regulatory and program updates

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9 AGENDA ITEM NO. 3 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director Review of Executive Director and Authority Attorney Contracts RECOMMENDED ACTION Accept report on key points of the Executive Director and Authority Attorney contracts. DISCUSSION Executive Director Contract Company HF&H Consultants, LLC Marva Sheehan, named Executive Director Term Effective Date September 5, 2013 Continues until terminated by either party with a 15-day written notice of termination Scope of Services See attached Exhibit A Annual Contract Amount Determined as part of the Authority s annual Budget process FY $87,258 (approved by the Board on 5/4/17) FY $130,985: o $98,625 for base scope of services o $32,360 for disposal contract negotiations or procurement Paid based on time and materials, in accordance with the Scope of Services, not to exceed the approved budget amount without approval from the Board.

10 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 2 May 3, 2018 Authority Attorney Contract Company Logan and Powell, LLP Kirsten Powell, named Authority Attorney Assistant Authority Attorney shall be designated by Authority Attorney Term Effective Date April 2, 1998; 1 st Amendment June 17, 1999; 2 nd Amendment March 16, 2000; and, 3 rd Amendment March 15, 2001 Continues until terminated by either party Scope of Services See attached Exhibit B Annual Contract Amount Determined as part of the Authority s annual Budget process FY $9,332 (approved by the Board on 5/4/17) FY $16,597: o $9,597 for base services o $7,000 for disposal contract negotiations or procurement Paid based on time and materials in accordance with the Scope of Services not to exceed the approved budget amount without approval from the Board. FISCAL IMPACT $147,582 for FY DOCUMENTS ATTACHED Exhibit A Executive Director Scope of Services Exhibit B Authority Attorney Scope of Services Marva M. Sheehan Executive Director

11 West Valley Solid Waste Management Authority Attachment A - Scope of Services Proposal for Executive Director Services SCOPE OF SERVICES The tasks that HF&H will perform include, but are not limited to, the following: Task 1: Contract Administration 1a Verify, on an annual basis, that the rate adjustment calculations are prepared by WVC&R and Guadalupe in accordance with the agreements. 1b 1c 1d 1e 1f 1g Ensure that WVC&R and Guadalupe comply with requirements to furnish certificates of insurance and performance bonds in accordance with the agreements. Review the companies operational performance and calculate the amount of liquidated damages, if any, under the agreements. Manage the revision of these contracts for implementation of new programs, changes to recyclable materials, or other changes as directed by the Board. Work with the companies to respond to complaints and inquiries from Member Agencies residents and businesses regarding services provided under the agreements. Enforce the collection franchise agreement provisions and respond to violations (e.g., rogue dumpsters). Support, either directly or through the management of a procurement consultant, any future solid waste collection and /or disposal procurement contract(s). Task 2: AB 939 and Other Regulatory Compliance 2a Assist Member Agency s with compliance for SB 1383 and AB b 2c 2d 2e Provide periodic reports on the status of federal and state legislation impacting the Member Agencies refuse and recycling programs at regularly scheduled Board Meetings. Provide information on industry trends. Represent the Authority at County TAC meetings and other relevant regional and statewide meetings as needed and as directed by the Member Agencies staff and/or Board. Prepare and submit miscellaneous reports requested by local agencies related to the Authority s solid waste and recycling collection and disposal programs. These include, for example, Santa Clara County s recycling hotline and HHW program and collection rate surveys. Prepare and submit the Member Agencies Annual Reports to CalRecycle on behalf of each Member Agency. This includes accompanying the CalRecycle representative on site visits in the Authority jurisdictions. Additionally, we will respond to CalRecycle questions related to the annual reports and site visits. May 3, 2018 Page 1 HF&H Consultants, LLC

12 West Valley Solid Waste Management Authority Attachment A - Scope of Services Proposal for Executive Director Services Task 3: Facilitate Board Meetings 3a Prepare for and conduct quarterly Board Meetings. This task includes preparing the public notices, agendas, agenda reports, resolutions, Board Member agenda packets, public meeting binders, and meeting minutes. In addition, prepare for and conduct agency review meetings with Member Agency staff prior to regularly scheduled Board Meetings or special Board Meetings. 3b 3c 3d Prepare a financial report of the Authority s activities for each quarter, showing actual expenditures against the approved budget. These reports are presented at the next regularly scheduled Board Meeting following the close of each quarter. Present status reports on each of the Authority projects or activities at regularly scheduled Board Meetings, as needed. Follow-up on action items from the Board Meeting, including maintaining a record of all Authority actions. Task 4: Authority Administration 4a Conduct conference calls with Member Agencies staff on an as needed basis (at least quarterly) to report on issues and receive direction from staff between Board Meetings, including special Board Meetings. This task includes preparing the agenda and agenda materials. There are times when topics require face-to-face meetings. We will discuss the options with the Member Agencies staff and will schedule the appropriate time and place for the meeting(s). 4b 4c 4d 4e 4f 4g 4h 4i Respond to inquiries from Member Agencies residents and businesses regarding the Authority s solid waste and recycling services in a timely manner. Manage the procurement of legal services, liability insurance and other services and supplies required for the conduct of the Authority s business. Manage the submission of Fair Political Practices Commission forms (Form 700) by the Executive Director, Legal Counsel, and Board Members. Prepare the annual Authority budget for approval by the Board. Prepare and provide orientation materials (including copies of the collection and disposal agreements, Rules of Conduct, and Joint Powers Authority agreement) to new Board members as needed. Meet with the Member Agencies Councils as requested for Council workshops to review changes to solid waste and recycling collection programs. Work with the City of Campbell auditors to complete the annual financial audit of the Authority s financial statements. This includes preparing the financial statements, reviewing the footnotes, preparing the management letter, and responding to inquiries from the auditors. Lead in the maintenance of the Authority s website. We collaborate with WVC&R and the Member Agencies staff to maintain the website. May 3, 2018 Page 2 HF&H Consultants, LLC

13 West Valley Solid Waste Management Authority Attachment A - Scope of Services Proposal for Executive Director Services 4j Review public education material provided by WVC&R for proper content prior to final publication. Task 5: Disposal/Processing Agreement Negotiations (Process will stagger two rate years) 5a 5b 5c 5d 5e Review existing Authority and Member Agency documents and plans to effectively develop the scope of disposal/processing services, key terms, and conditions to be met. Review disposal/ processing agreement(s) with Executive Director and agency staff; draft disposal/processing agreement(s). Compile current contract arrangements, including fees, rights, and obligations, to identify alternative disposal/processing sites (including transfer stations) to act as best alternatives. Prepare for and manage RFP process, if necessary, or proceed with sole-source negotiations as directed by the Authority (1 st and 2 nd Year). Prepare, assemble, and present final agreement for Board approval (2 nd Year). Summary of Executive Director Budget for FY18-19 Task Number Task Description Total Hours Proposed Cost 1 Contract Administration 120 $27,975 2 SB 1383, AB 1826 and Other Regulatory Compliance Monitoring and Review 133 $28,405 3 Facilitate Board Meetings 109 $22,300 4 JPA Administration 76 $16,825 5 Disposal Negotiations 142 $30,070 Engagement Management (Tasks 1-5) Total Project Out-of-Pocket Expenses Total Budget 10 $4, $130,185 $800 $130,985 May 3, 2018 Page 3 HF&H Consultants, LLC

14 West Valley Solid Waste Management Authority Attachment B - Scope of Services Authority Attorney Services SCOPE OF SERVICES The tasks that Logan & Powell will perform include, but are not limited to, the following: A. Attend Authority quarterly meetings and advise the Executive Director and the Board on issues and procedures. B. Provide the Board with an annual update of procedural requirements such as the Brown Act. C. Advise the Executive Director and the Board on the powers of the Authority to act. D. Interpret contracts and other legal documents. E. Advise the Authority on legislation relative to the collection, disposal and recycling of solid waste. This includes any new developments in the applicability or interpretation of Proposition 218. F. Monitor activities of any Special Counsel directly retained by the Authority. G. Negotiate contracts and/or contract negotiations and revisions if the Authority determines to amend the recycling and yard waste agreements to comply with the collection and disposal agreements. H. Review the legality of any cost adjustment proposals by either WVC&R or Guadalupe. I. Prepare any contracts necessary for the operations of the Authority. J. Research legal issues as requested by the Executive Director or by a majority vote of the Board. K. Represent the Authority in the administration of all claims and actions filed against it, or filing of claims and/or actions on behalf of the Authority as deemed appropriate by the Board. L. Represent the Authority in negotiations and/or procurement of a new disposal agreement. May 3, 2018 Page 1 HF&H Consultants, LLC

15 AGENDA ITEM NO. 4 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director FY Budget RECOMMENDED ACTION Approve Resolution adopting the FY budget. DISCUSSION Background Article 5 of the Joint Powers Agreement defines how the Authority s activities are to be funded. Paragraph B states that the Authority must adopt a budget for each fiscal year beginning on July 1 and ending on June 30 of the following calendar year. Paragraph A specifies that the requisite funds are to be allocated among the Member Agencies in amounts equal to each Member Agency s percentage share of the total population of all Member Agencies. The budget is being presented now so that the Member Agencies have time to incorporate the assessment amounts into their Agency budgets. In 2012, the Agencies elected to include their respective assessed amounts in the collection rates. FY Proposed Budget The attached budget shows the actual results for the previous five years by major expenditure category, the approved FY budget, and the proposed FY budget. In total, the proposed FY budget of $176,245 (net of the WVC&R Annual Payment expenditure of $450,000) is $51,521 more than the FY budget.

16 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 4 May 3, 2018 Executive Director This expenditure is for services provided by HF&H Consultants, LLC including management of the Authority s refuse, recycling, yard waste, and disposal contracts; management of the Authority s efforts to achieve its AB 939 targets; SB 1383 and AB 1826 compliance; preparation for and facilitation of the Authority Board meetings; and, other administrative tasks assigned by the Board. The budgeted amount has been increased by 13.03% from the approved FY budget. The increase is based on the following: An increase by CPI of 2.94% or $2,567 in base services from the FY budget. An increase of 2.83% or $2,470 for future SB 1383 and AB 1826 compliance. An increase of 3.82% or $3,330 for additional time needed to address and respond to ongoing service issues and complaints. An increase of 3.44% or $3,000 for the commencement of disposal contract negotiations. An additional amount of $32,360 has been included in the budget for FY and $35,000 in FY under the category of Contract Negotiations. This is in anticipation of beginning a new disposal procurement process and / or disposal contract negotiations through the HF&H Contract Services Team. The forecasted budget includes an estimated $80,000 in FY to perform a detailed rate review for WVC&R. The forecasted budgets for FY and FY include an estimated $50,000 each year to perform a RFP and collections contract procurement. Consistent with past practice, it is anticipated the selected contractor will reimburse the Authority for the consulting and legal fees associated with the procurement process. Legal Services This expenditure is for the services of Logan and Powell, LLP to provide advice on Authority legal matters, including the conduct of meetings in accordance with the provisions of the Brown Act; to perform legal research as needed; to prepare legal notices as needed; and, to assist with other legal matters as directed by the Board. The base amount has been increased by 2.94% from the approved FY budget. In addition to the base services, an additional $7,000 was budget for legal matters associated with the commencement of a disposal negotiations and/or procurement. WVC&R Annual Payment - As part of the new franchise agreement with WVC&R that began March 1, 2014, the Authority will receive a payment of $450,000 annually ($4,500,000 over the term of the agreement). Consistent with FY , the payment will be disbursed to each Member Agency proportionally based on population.

17 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 3 of 4 May 3, 2018 Accounting and Bookkeeping This expenditure is for the services of the City of Campbell s Finance Department staff for accounting and bookkeeping support. The budgeted amount has been increased by 2.94% for FY compared to FY Liability Insurance This expenditure is for general liability and public officials errors and omissions insurance. This amount reflects an expected 2.94% increase in the premium for FY compared to FY Countywide Program Support This expenditure is to provide program funding for County or regional activities that meet the Authority s objectives. The budgeted amount is the same as prior years budgets. Mileage and Meeting Expense This expenditure is for Board Member attendance at relevant industry conferences during the year. The budgeted amount is to be used to provide for increased attendance by Board Members to allow them to become more familiar with solid waste issues as the end of the WVC&R contract term approaches. The budgeted amount is the same as prior years budgets. Website Administration This expenditure is for maintaining the Authority s website ( The budget includes registration fees as well as other services required to maintain the website. The budgeted amount was increased by 2.94% for FY compared to FY Professional Services This expenditure is for other professional services or studies (e.g., engineering consulting services and/or litigation services) authorized by the Board. The budgeted amount is the same as prior years budgets. Audit Services This expenditure is for audit services required by Article 5.B of the Joint Powers Agreement. The budgeted amount was increased by 2.94% for FY compared to FY Fund Balance The Board established a policy to maintain in its fund balance an operating reserve of $100,000 and a rate stabilization reserve of $100,000. The budgeted fund balance is $200,000 in accordance with the Board s policy. Projected Member Agency Assessments The following table shows the Member Agencies projected five-year assessments under various scenarios related to the extension of the current agreement:

18 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 4 of 4 May 3, 2018 Projected Five- Year Assessment by Member Agency Agency Campbell Los Gatos Monte Sereno Saratoga Approved Proposed Proposed Proposed Proposed Proposed Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year $ 49,336 $ 69,653 $ 72,248 $ 55,979 $ 91,098 $ 65,852 $ 36,351 $ 51,049 $ 52,951 $ 41,028 $ 66,766 $ 48,263 $ 4,026 $ 5,707 $ 5,920 $ 4,587 $ 7,465 $ 5,396 $ 35,011 $ 49,835 $ 51,691 $ 40,051 $ 65,177 $ 47,115 DOCUMENTS ATTACHED Resolution FY Proposed Budget FISCAL IMPACT The attached FY proposed budget shows the expected assessment for each Member Agency resulting from the proposed budget. Marva M. Sheehan Executive Director

19 RESOLUTION NO RESOLUTION OF THE BOARD OF DIRECTORS OF THE WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY APPROVING THE BUDGET FOR FISCAL YEAR BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY that the document entitled Fiscal Year Budget a copy of which is attached hereto and incorporated herein by reference is hereby approved. This resolution was passed and adopted by the Board of Directors of the West Valley Solid Waste Management Authority at a regularly scheduled meeting on the 3rd day of May 2018, by the following vote: AYES: NOES: ABSENT: Approved: Mary-Lynne Bernald, Chairperson Attest: Marva M. Sheehan, Executive Director

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21 WVSWMA FY Proposed Budget Expenditures Actual Actual Actual Actual Actual Approved Proposed Proposed Proposed Proposed Proposed Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Services and Supplies Consultant - Executive Director: - General Services 86,942 83,520 78,623 76,465 84,332 87,258 98, , , , ,726 - Detailed Rate Review (FY21-22) , Performance Review (FY12-13) 11, Contract Negotiations (Sole Source) 35,081 40, Contract Negotiations (RFP Process) ,360 35,000-50,000 50,000 Legal Services 19,692 14,400 9,184 2, ,322 16,597 17,085 10,382 10,688 18,002 WVC&R Annual Payment to Agencies - 150, , , , , , , , , ,001 Accounting & Bookkeeping 7,094 7,549 7,718 7,958 9,411 8,501 8,751 9,009 9,274 9,547 9,828 Liability Insurance 2,283 2,511 1,081 1,156 2,787 2,479 2,552 2,627 2,705 2,784 2,866 Consumable Supplies & Postage Countywide Program Support ,000 1,000 1,000 1,000 1,000 1,000 Mileage & Meeting Expense ,000 4,000 4,000 4,000 4,000 4,000 Website Administration ,068 1,100 1,132 1,165 1,200 1,235 Professional Services ,535-5,000 5,000 5,000 5,000 5,000 5,000 Audit Services 4,860 2,500 2,500 2,565 2,630 5,595 5,760 5,930 6,104 6,284 6,469 Total Expenditures $ 167,830 $ 300,480 $ 549,106 $ 546,759 $ 549,980 $ 574,724 $ 626,245 $ 632,810 $ 591,645 $ 730,505 $ 666,626 Revenues Campbell $ 44,644 $ 42,989 $ 45,096 $ 45,302 $ 46,613 $ 49,336 $ 69,653 $ 72,248 $ 55,979 $ 91,098 $ 65,852 Los Gatos 33,372 32,134 33,759 33,914 34,895 36,351 51,049 52,951 41,028 66,766 48,263 Monte Sereno 3,791 3,650 3,817 3,835 3,946 4,026 5,707 5,920 4,587 7,465 5,396 Saratoga 33,954 32,695 34,272 34,429 35,425 35,011 49,835 51,691 40,051 65,177 47,115 Other - Reimb. of Contract Negotiations - 42, ,000 50,000 Other - Reimb of Performance Review 11, Other - Reimb of Detailed Rate Review Annual Payment to Authority - 150, , , , , , , , , ,001 Receivable from WVC&R ,200 1, Interest 1,183 1,116 1, , Total Revenues $ 129,004 $ 305,084 $ 568,070 $ 575,679 $ 574,390 $ 574,724 $ 626,245 $ 632,810 $ 591,645 $ 730,505 $ 666,626 Excess (deficiency) of revenues over (under) expenditures $ (38,826) $ 4,604 $ 18,964 $ 28,920 $ 24,410 $ - $ - $ - $ - $ - $ - Beginning Fund Balance $ 215,894 $ 177,068 $ 181,672 $ 200,636 $ 229,556 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 Ending Fund Balance $ 177,068 $ 181,672 $ 200,636 $ 229,556 $ 253,966 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000

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23 AGENDA ITEM NO. 5 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director Recent Regulatory Changes and Program Updates RECOMMENDED ACTION Receive a report on the recent regulatory changes and program updates. DISCUSSION Legislation No new laws were adopted by the State of California or Federal Government related to recycling, composting or waste reduction since our last meeting. Updates China s National Sword The policy went into effect on March 1, The policy bans the import of mixed paper and post-consumer plastics, including plastics 3 through 7. The policy also requires a 0.5% contamination standard for each bale of recyclable material that arrives at China s ports. Most MRF s are currently at a 3-10% contamination level. Few MRF s, if any, can meet the standard without significant increases in labor costs and/or capital investment. Enforcement of the National Sword ban is being called Blue Sky 2018 and is expected to run from March of 2018 to December of AB 3178 In response to the National Sword/Blue Sky 2018 policy, AB 3178 was introduced in February of The bill would allow jurisdictions, under certain conditions, to

24 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 6 May 3, 2018 temporarily dispose of recyclable materials without facing penalties. Key arguments in favor of the bill include safeguarding public health and the lack of available markets for recyclable material. From an initial assessment, some cities appear to support the measure, but are expressing concern that AB 3178 could lead to less regulatory control over processors and haulers. Santa Clara County s Technical Advisory Committee (TAC) is requesting that cities support AB They are distributing a letter-of-support template for cities to sign and send to the State Assembly. The letter is included as an attachment. Some jurisdictions have already been landfilling processed mixed paper and plastics due to the lack of available markets. AB 319 / AB 2779 AB 319 would require that every plastic bottle sold in California has a cap that is connected to its bottle by By requiring connected caps, this bill would prevent bottle cap pollution in our environment, save bottle manufacturers money, and provide additional material for recyclers to recover. AB 319 died during the third reading in the State Assembly on February 1, A similar bill, AB 2779, was introduced on February 16, This bill would prohibit a retailer from selling single-use plastic beverage containers with caps that are not tethered to the container. AB 2779 passed a second reading in the House on April 11, 2018 and is now ordered for a third reading. AB 1884 AB 1884 was introduced on January 17, This bill would prohibit a food facility from providing single-use plastic straws to consumers unless specifically requested. This bill would allow non-compliant food facilities to be fined $25 a day after two warnings, each day the facility is in violation. The bill passed the Natural Resources Committee on April 23, 2018, and has been sent to the Committee on Appropriations.

25 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 3 of 6 May 3, 2018 Ongoing SB 1383 SB 1383 Short-Lived Climate Pollutants was approved in The law establishes emission reduction targets for short-lived climate pollutants, including methane. We are now awaiting final regulations from CalRecycle. Key components of SB 1383 include: 50% reduction in organic waste disposal by 2020 (baseline year is 2014) 75% reduction in organic waste disposal by 2025 (baseline year is 2014) 20% recovery of landfill-bound edible food for human consumption by 2025 (from currently disposed levels) Future Milestones for SB 1383 include: April Second draft of regulations expected from CalRecycle Early 2019 Final regulations expected from CalRecycle January 1, 2022 enforcement of SB 1383 by CalRecycle takes effect Potential Impacts to Authority In order to fully meet the requirements of SB 1383, the Authority will need to begin planning for a food waste collection program for residential customers and begin exploring other opportunities such as food rescue. Agencies must have a program in place by January 1, 2022 when SB 1383 enforcement takes effect. Future Considerations The agreement with WVC&R expires in o A competitive procurement process or sole source negotiations should commence no later than 2022 in order to successfully comply with the 2025 AB 1383 milestone of 75% reduction in organics disposal. o The new agreement will need to include language to meet the legislative requirements. The disposal agreement with Waste Management expires in A competitive procurement process or sole source negotiations are expected to start in Waste Management currently processes the yard waste material. o A new disposal agreement, or agreements with multiple companies, will need to include capacity for processing all WVSWMA s organics material, not just the current yard waste material. To comply with SB 1383, the Authority will need to begin considering options to meet organics diversion requirements. Considerations include determining whether to utilize

26 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 4 of 6 May 3, 2018 current programs (adding food scraps to existing yard waste carts) or instituting new program such as a split-cart system. For any change to an existing program or to implement a new program, there is likely to be an increase to customer rates once implemented. The regulations are expected to take effect prior to the end of the current collections agreement. The most cost effective solution would likely be a modification to the current program whereby food scraps would be added to the residential yard waste carts or some alternative collection method. Under this scenario we have identified two options with the least programmatic impact to ratepayers: 1) The current collections program continues as is with the inclusion of food scraps in the yard waste carts. Material would be delivered to Guadalupe Landfill for transfer and processing would occur offsite. Currently, yard waste is delivered to Guadalupe Landfill and transferred to Keith Day Trucking for composting. Waste Management is in the process of determining if it is permitted to accept and transfer food waste from the facility and whether Keith Day Trucking is permitted to process the material. 2) The current collections program can be modified to combine co-collection of organics with recyclables to be processed at GreenWaste Recovery s facility in San Jose. Currently, WVC&R collects recyclables in a single body truck and delivers the material to the facility in San Jose for processing. Solid waste and yard waste is collected in split-body trucks and processed at Guadalupe Landfill. This option will require discussions with WVC&R to determine the operational cost impact, if any. A third option would be to add a new program such as a split-body cart system to cocollect the food scraps with solid waste, similar to the City of Sunnyvale s program. This option would require an additional truck on each route because this type of collection system would require a split-body truck to keep the materials separate. Additionally, this option would require a large investment for new trucks and additional personnel. Given the short length of time between the regulations taking effect and the end of the current collections agreement, this option may be cost prohibitive in the short-term. Options 1 and 2 primarily affect the material processing cost with minimal interruption to the current collections process. The cost of processing mixed organic material is substantially more than the cost of processing just yard waste. AB 1826 AB 1826 continues to be phased in, with generators of organic materials (4 cubic yards or greater of weekly volumes) required to subscribe to organic material collection

27 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 5 of 6 May 3, 2018 effective January 1, Beginning in July of 2017, WVC&R expanded commercial organics routes and outreach to all commercial customers. However, the Bill does not include enforcement provisions compelling customer participation. Many cities or jurisdictions have successfully implemented mandatory recycling ordinances to enforce adherence to legislation. We are currently researching cities that have such ordinances and will work with staff to implement locally. Future Milestones for AB 1826 include: January 1, Businesses and Multi-Family (5+ units) with 4 cubic yards or more of weekly solid waste are required to participate in organics collection services. January 1, Businesses with 2 cubic yards or more of weekly solid waste are required to participate in organics collection services if CalRecycle determines on that date that organics waste has not been reduced by 50% of 2014 levels. Other Bay Area Programs Sunnyvale Food Scraps Collection In December of 2017, the City of Sunnyvale completed the rollout of its food scraps collection program to approximately 29,000 customers. The City is using a split-cart system for garbage and food scraps collection. According to City staff, initial observations indicate: 55% of participating households had food scraps inside the food-side of the cart. Carts with food were 20% full. 17 tons of food scraps per day were diverted from the landfill. Estimated 4,400 tons per year, which will result in an 18% diversion of organic material to landfill. This exceeds the City s expectation of 4,000 tons. The food scraps are delivered to Sustainable Alternative Feed Enterprises (SAFE) in Santa Clara and processed into animal feed products. SAFE has indicated to the City the material delivered has been relatively clean and easy to process. NOTE: Initial observations presented by City of Sunnyvale staff in March of 2018; corresponding PowerPoint is attached.

28 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 6 of 6 May 3, 2018 City of Santa Clara Food Scraps Pilot Program In anticipation of SB 1383, the City of Santa Clara launched a four-year food scraps recycling pilot program for residential customers. It began in October of Split-carts were delivered to 4,800 households, representing 25% of cart-service customers. No rate change was implemented for participants. According to an initial survey conducted by City staff: 85% of participating households used the food scrap side of the split-cart. 43% of participating households reported not experiencing a shortage of trash space. 53% of participating households reported that they were satisfied or somewhat satisfied with the program. From October 2017 to February 2018, the average collection of food scraps collected per week per customer was 6.87 lbs. City staff plan on conducting a second survey in June of FISCAL IMPACT None DOCUMENTS ATTACHED City of Sunnyvale Presentation AB 3178 Letter-of-Support Template as distributed by Santa Clara County s TAC Marva M. Sheehan Executive Director

29 FoodCycle Update Mark Bowers Solid Waste Division Sustainability Commission Meeting March 19, 2018

30 Rollout details: Carts exchanged to 29,000+ single family and mobile home households Rollout over 12 weeks (mid-sept through mid-dec) First full month of data, January 2018 City of Sunnyvale FoodCycle Update March

31 Data collection efforts: Lid flipping at 700 randomly selected carts Initial observations: Quality is good Garbage fits Mostly food in food side of carts City of Sunnyvale FoodCycle Update March

32 Data points FOOD SIDE OF CART: 55% of households had food in food side of cart The carts with food were 20% full 27% of households had an empty food side of cart (82% compliance) GARBAGE SIDE OF CART: Average across households was 75% full 27% of households were 100% full, but not overflowing 9% of carts were overfull (overfull=lid halfway or higher) RECYCLING CART: Lots of contamination of some kind (75% of bins) NO sign of garbage bags being placed in recycling cart City of Sunnyvale FoodCycle Update March

33 February Data 17 tons per day at full rollout Equivalent to tons per year (Assumed 4000 ton capture rate) 55 percent of available food scraps (Assumed 50%) 18% reduction in garbage to landfill City of Sunnyvale FoodCycle Update March

34 Ongoing outreach efforts: Sunnyvale Sun, digital, social Recycling guide mailed to 60,000 households in January Tabling at events (Living Green Fair, SOC, Fit & Fun) Green Living Library and Senior Center Reporting success to community City of Sunnyvale FoodCycle Update March

35 Questions: City of Sunnyvale FoodCycle Update March

36 Contact info: Mark Bowers: Karen Gissibl: For more information or to watch our award winning video go to Sunnyvale.ca.gov and search FoodCycle. City of Sunnyvale FoodCycle Update March

37 <YOUR LETTERHEAD> <INSERT TODAYS DATE> The Honorable Blanca Rubio Assembly Member, District 48 State Capitol, Room 5175 Sacramento, CA Re: AB 3178 (Rubio) NOTICE OF SUPPORT Dear Assemblywoman Rubio: On behalf of <the City of >, I am pleased to offer this letter in support of AB Residents and businesses in our community have enthusiastically embraced the waste diversion and recycling programs offered here. We enjoy a very high participation rate, and through the joint efforts of our staff and our service provider, we fully expect to see further progress. The recent import policy adopted by China is, however, a cause for much concern. We are not alone. Like nearly every other local jurisdiction in California, and the entire West Coast, we have been relying on the continued availability of overseas markets for our recyclables, because domestic market development has been more or less nonexistent. When foreign markets collapse through no fault of our own, we do not believe it is appropriate that we are made to bear the burden. In hindsight, it is clear that California s landmark recycling law, AB 939, was seriously flawed to the degree it presumed that markets would always be there if we would only do our part by ensuring recyclable materials are recovered. Recent events make clear this was overly optimistic. We have done our part. We have authorized the right programs, and have required our service provider to process the materials. We will continue to operate those programs, and process those materials. However, until the markets recover, or suitable replacements are found, the state must (i) acknowledge that we are powerless to assure markets for certain materials, and (ii) do more to encourage sustainable, domestic market development. The importance of your AB 3178 is that it finally places in law the necessary link between adequate markets and successful recycling. Under your bill, CalRecycle must consider markets in making good faith effort determinations, and in deciding whether to issue a compliance order. Most importantly, AB 3178 provides that where it becomes necessary in order to safeguard public health, excess recyclables may be landfilled without subjecting the jurisdiction of origin to civil penalties. Sincerely, <INSERT YOUR NAME/TITLE>

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39 AGENDA ITEM NO. 6 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director Guadalupe Landfill Disposal Rate Increase RECOMMENDED ACTION Approve Resolution ratifying the Guadalupe Landfill contractual disposal rate increase effective July 1, DISCUSSION Background On January 1, 2006, the Waste Disposal, Organic Waste and Construction and Demolition Debris Processing Agreement between Guadalupe Rubbish and Disposal Company, Inc. (Waste Management) and the West Valley Solid Waste Management Authority established rates for the disposal of solid waste and the processing of yard waste and construction and demolition debris (C&D). The agreement calls for CPI-based adjustments to be made effective July 1 of each year. The Agreement ends on December 31, Proposed Adjustment On March 28, 2018, Waste Management presented its calculation of the allowed adjustment based on the December 2017 to December 2018 change in the Consumer Price Index of 2.94%. The overall disposal or processing rates are composed of two elements: the proprietary rate; and, per-ton governmental fees. The agreement allows an annual adjustment to the proprietary disposal rate, yard waste processing rate, and C&D processing rate equal to 90% of the change in CPI, or 2.65%. The proprietary disposal rate and the C&D processing rate increase by 2.65% as per the agreement.

40 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 3 May 3, 2018 Table 1 compares the July 1, 2017 proprietary rates to the July 1, 2018 proprietary rates. Table 1 Guadalupe Landfill Proprietary Rates Rate July 1, 2017 July 1, 2018 % Change Disposal $ $ % Yard Waste $ $ % Construction & Demolition Debris $ $ % The current and anticipated governmental fee portion of the disposal rate is shown below in Table 2. For Disposal, all fees in Table 2 are added to the Proprietary Rate. For Yard Waste and C&D Debris, only the City of SJ SW Enforcement Fee is added. Table 2 Guadalupe Landfill Governmental Fees Fee July 1, 2017 July 1, 2018 % Change State AB 1220 Fee $ 1.40 $ % SCC AB 939 Fee % SCC Solid Waste Planning Fee % City of SJ Business Tax % City of SJ SW Enforcement Fee % Total Fees $ $ % Recommendation I have reviewed Waste Management s calculation of the contractual rate adjustment and find that it was calculated in accordance with the terms of the agreement. I recommend that the Board approve Resolution ratifying the Guadalupe Landfill contractual disposal rate increase effective July 1, 2018.

41 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 3 of 3 May 3, 2018 DOCUMENTS ATTACHED Resolution FISCAL IMPACT The disposal rate increases are reflected in the proposed rates calculated by WVC&R as shown in Agenda Item #7. Marva M. Sheehan Executive Director

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43 RESOLUTION NO RESOLUTION OF THE BOARD OF DIRECTORS OF THE WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY RATIFYING FY RATES FOR THE DISPOSAL OF SOLID WASTE AND THE PROCESSING OF YARD WASTE AND CONSTRUCTION AND DEMOLITION DEBRIS WHEREAS, the West Valley Solid Waste Management Authority ("Authority") is an agency created pursuant to Government Code section 6500 et seq. to manage and oversee the collection, disposal and recycling of solid waste originating in the Cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos ("Member Agencies"); and WHEREAS, the Authority entered into the Waste Disposal, Organic Waste and Construction and Demolition Debris Processing Agreement between Guadalupe Rubbish and Disposal Company, Inc. (The Company ) and the West Valley Solid Waste Management Authority, which established rates for the disposal of solid waste and the processing of yard waste and construction and demolition debris from January 1, 2006, through June 30, 2007; and WHEREAS, the Agreement provides for the rates to be increased by the Consumers Price Index on July 1 of each year; and WHEREAS, the Companies submitted the rate adjustment calculations in accordance with the agreements for Fiscal Year 18-19; and WHEREAS, the Executive Director has reviewed the calculations and determined they are consistent with the terms of the Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY that: 1. The Authority finds that the rates contained in the attached rate schedules have been calculated in accordance with the Agreement. 2. The attached rates are hereby ratified and effective July 1,

44 This resolution was passed and adopted by the Board of Directors of the West Valley Solid Waste Management Authority at a regular scheduled meeting on the 3rd day of May, 2018, by the following vote: AYES: NOES: ABSENT: Approved: Mary-Lynne Bernald, Chairperson Attest: Marva M. Sheehan, Executive Director 2

45 FY RATES FOR THE DISPOSAL OF SOLID WASTE AND THE PROCESSING OF YARD WASTE AND CONSTRUCTION AND DEMOLITION DEBRIS Guadalupe Landfill Proprietary Rates per Ton Rate FY Disposal $26.99 Yard Waste Construction & Demolition Debris Guadalupe Landfill Governmental Fees per Ton Fee FY State AB 1220 Fee $1.40 SCC AB 939 Fee 4.10 SCC Solid Waste Planning Fee 0.78 City of SJ Business Tax City of SJ SW Enforcement Fee.55 Total Fees $

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47 AGENDA ITEM NO. 7 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: West Valley Solid Waste Management Authority Board Executive Director Subject: Proposed Rates Effective July 1, 2018 RECOMMENDED ACTION Approve Resolution ratifying the West Valley Collection & Recycling, LLC (WVC&R) contractual collection rate increase effective July 1, DISCUSSION Background At its meeting on May 4, 2017, the Board ratified rates for basic collection services under its contract with WVC&R effective July 1, The ratified residential rates are shown in Table 1. Table 1 Residential Collection Rates Effective July 1, 2017 Campbell Los Gatos Monte Sereno Saratoga 20-gallon $ $ $ $ gallon $ $ $ $ gallon $ $ $ $ gallon $ $ $ $ 88.63

48 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 2 of 5 May 3, 2018 Contractual Rate Adjustment The contract calls for CPI-based adjustments to be made effective July 1 of each year. On February 16, 2018, WVC&R presented its calculation of the allowed adjustment based on the December 2016 to December 2017 change in the Consumer Price Index of 2.94%. The agreement allows an adjustment to the collection rates equal to 80% of the change in the CPI, or 2.35%. In addition, there are other factors that impact the rates, as discussed below. Disposal Rate Adjustment As discussed in Agenda Item #6, the proprietary rate portion of the disposal rate is $26.29 and is increasing by 2.65% per ton effective July 1, 2018 to $ The current total governmental fees charged on each ton disposed is $19.81 and is increasing to $19.83 per ton effective July 1, The total disposal rate changes from $46.10 to $46.82, or an overall 1.54%, in FY Disposal fees are considered a pass-through expense under the collection contract. Thus, the collection rates must be adjusted for the approved disposal rate. Composting Rate Adjustment The yard waste composting rate changes from $39.47 per ton to $40.52 per ton effective July 1, 2018 and is included in the proposed FY rates. Street Sweeping and Sanitation, HHW, and JPA fees Adjustments At its May 3, 2012 meeting, the Board discussed the inclusion of street sweeping and sanitation costs, HHW collection costs, and the administrative costs of the Authority to the collection rates. Agency staff provided the current street sweeping and sanitation costs from the respective jurisdictions. The HHW fees were provided from the County of Santa Clara as part of the annual AB 939 and HHW agreement process. Beginning in FY , the City of Campbell and the Town of Los Gatos elected to increase JPA fees to administer the Authority to include agency staff time and other related costs. Beginning in FY , Town of Los Gatos and the City of Campbell have elected to include, as a part of the Street Sweeping fee, the costs of tree trimming along the agencies streets (to prevent damage from WVC&R s trucks) of $20,000 and $10,000, respectively. The cost for the City of Campbell has been adjusted by CPI for the interim

49 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 3 of 5 May 3, 2018 rates adjustments. For FY , the City increased the fees by $111,444 based on advice from the agency staff. For Los Gatos, the fees were increased by CPI for the rate adjustments between FY and FY , and again in FY For FY , the fees were increased by $200,000 based on advice from agency staff. For FY , all four agencies have elected to adjust their HHW fees based on the data provided by the County of Santa Clara. All four agencies adjusted the JPA administrative costs based on the new JPA budget. Table 2 shows the additional costs for FY The percentage increase does not include the 19% franchise fee. Therefore, franchise fees will not be paid on the additional agency fees. Vehicle Impact Fee Adjustment A vehicle impact fee on WVC&R to provide funds to mitigate the damage caused by heavy collection vehicles on the Member Agencies streets has been included in WVC&R s calculation of FY rates. The fee for the Town of Los Gatos was increased by $120,000 for FY based on advice from agency staff. The Cities of Campbell and Saratoga are fully funded based on recent Vehicle Impact Studies and did not increase the fee for FY The City of Monte Sereno completed a Vehicle Impact Study in FY but has elected to not collect the vehicle impact fee in FY WVC&R allocates the increase in the vehicle impact fees across all lines of business.

50 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 4 of 5 May 3, 2018 Proposed Rate Increase before Fee Increases Table 2 Summary of Additional Costs and Rate Impact Effective July 1, 2018 Costs Campbell Los Gatos Monte Sereno Saratoga % Increase Costs % Increase Costs % Increase Costs % Increase 1.98% 1.94% 2.17% 2.00% Street Sweeping Fees $111, % $11, % $0 0.00% $0 0.00% HHW Fees $4, % $8, % $ % $4, % JPA Administrative Fee $21, % $15, % $1, % $14, % Vehicle Impact Fee $0 0.00% $120, % $0 0.00% $0 0.00% Subtotal $137,173 $155,735 $2,581 $19,481 Total 3.31% 4.48% 2.60% 2.34% The following table summarizes the agency fees that are included in the rates. WVC&R collects the fees from the customers and remits the fees to each agency. Street Sweeping Fees HHW Fees JPA Administrative Fee Vehicle Impact Fee Table 3 Summary of Agency Fees Campbell Los Gatos Monte Sereno Saratoga Current $137,461 $400,445 $0 $100,000 Proposed $248,905 $412,230 $0 $100,000 Current $21,661 $49,613 $10,386 $37,618 Proposed $26,104 $57,896 $11,285 $42,276 Current $82,239 $69,254 $4,026 $35,011 Proposed $103,524 $84,920 $5,707 $49,835 Current $477,600 $373,429 $0 $351,300 Proposed $477,600 $493,429 $0 $351,300 Franchise Fees The attached rates reflect the approved franchise fee of 19%. Total Rate Adjustment Table 4 shows the calculated rates for a 35-gallon residential customer, including all of the relevant adjustments discussed above.

51 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Page 5 of 5 May 3, 2018 Table 4 35-Gallon Cart Comparison Proposed vs. Current Current Rate July 1, 2018 Proposed Rate $ Difference % Difference Campbell $27.15 $ $ % Los Gatos $27.47 $ $ % Monte Sereno $31.12 $ $ % Saratoga $29.54 $ $ % Exhibit 1, attached to this report, shows the rates for all service categories. Recommendation I recommend that the Board approve Resolution ratifying the calculated rates effective July 1, DOCUMENTS ATTACHED Resolution Exhibit 1 - Proposed Rates FISCAL IMPACT None Marva M. Sheehan Executive Director

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53 RESOLUTION NO RESOLUTION OF THE BOARD OF DIRECTORS OF THE WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY RATIFYING FY RATES FOR THE COLLECTION OF SOLID WASTE, RECYCLABLE MATERIALS, GREEN WASTE, FOOD WASTE, AND CONSTRUCTION AND DEMOLITION DEBRIS WHEREAS, the West Valley Solid Waste Management Authority ("Authority") is an agency created pursuant to Government Code section 6500 et seq. to manage and oversee the collection, disposal and recycling of solid waste originating in the cities of Campbell, Monte Sereno, Saratoga, and the Town of Los Gatos ("Member Agencies"); and WHEREAS, the Authority entered into the Agreement between West Valley Solid Waste Management Authority and West Valley Collection & Recycling, LLC (the Company ) for the Collection of Solid Waste, Recyclable Materials, Green Waste, Food Scraps, and Construction and Demolition Debris, the Transportation of Such Materials to Appropriate Places of Processing, Recycling, Composting, and/or Disposal and the Processing of Recyclable Materials (the Agreement ), which established rates for the collection and disposal of solid waste, green waste, recyclable materials and construction and demolition debris; and WHEREAS, the Agreement provides for the rates to be increased by the Consumer Price Index on July 1 of each year; and WHEREAS, the Company submitted the rate adjustment calculations in accordance with the agreements for Fiscal Year ; and WHEREAS, the Executive Director has reviewed the calculations and determined that they are consistent with the terms of the Agreement; and WHEREAS, pursuant to the Agreement, the Company is entitled to include in the rate calculations various costs associated or created by the collection of solid waste, recyclable materials, green waste, and construction and demolition debris; and WHEREAS, California law requires jurisdictions to provide household hazardous waste collection and disposal services to their residents and the County of Santa Clara fulfills this requirement for the Member Agencies by operating a household hazardous waste program and facility to provide waste generators the opportunity to divert household hazardous waste materials from the solid waste stream in accordance with State law. This program has been funded by a landfill tipping fee but, due to the decline in tonnage delivered to the landfills, revenues have declined and, with increasing volumes of household hazardous waste delivered to the County facilities, expenses have increased; and 1

54 WHEREAS, a Municipal Regional Stormwater NPDES Permit ( MRP ) was adopted by the San Francisco Bay Regional Water Quality Board ( Water Board ) on October 14, 2009, and covers stormwater discharges from municipalities and local agencies in Alameda, Contra Costa, San Mateo, and Santa Clara counties, and the cities of Fairfield, Suisun City, and Vallejo. Under the MRP, the Member Agencies must eliminate all solid waste from their stormwater system by 2022 with an interim milestone target of reducing the current level to 70% or more before In order to meet this standard, the amount of litter on the streets must be reduced before it enters the storm drain system and is discharged into the Bay. A significant amount of litter in the streets is a direct result of solid waste generator behavior (i.e., improper and/or illegal discard of waste materials, leaving solid waste and recycling container lids open, failing to utilize public litter containers, spilling materials during collection from containers without immediately cleaning the area, and failing to properly place materials and/or containers for collection). The cumulative impact of these behaviors results in trash load (i.e., litter and debris) in the City s stormwater system which must be reduced, and ultimately eliminated, in order to fulfill the MRP requirements. This can be reduced by street sweeping programs that collect material from streets and gutters, thereby preventing such debris and litter from entering the stormwater collection system; and WHEREAS, the Public Resources Code requires cities to make adequate provisions for Solid Waste, Recyclable Materials, Green Waste, and Construction and Demolition Debris handling. The Cities through their Joint Exercise of Powers Agreement delegated to the JPA this obligation. The JPA has the authority and obligation to adopt annually, by July 1 of each fiscal year, a budget setting forth all administrative, operational and capital expense for the Authority, together with the apportionment of such expenses by levy against each Member Agency to the extent necessary. The expenses of the JPA for regulatory monitoring and compliance and contract management are directly related to the collection of solid waste, recyclable materials, green waste and construction and demolition debris. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY THAT: 1. The Authority finds that the rates contained in the attached rate schedules have been calculated in accordance with the Agreement. 2. The attached rates are hereby ratified and effective July 1,

55 This resolution was passed and adopted by the Board of Directors of the West Valley Solid Waste Management Authority at a regularly scheduled meeting on the 3rd day of May, 2018, by the following vote: AYES: NOES: ABSENT: Approved: Mary-Lynne Bernald, Chairperson Attest: Marva M. Sheehan, Executive Director 3

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57 West Valley Collection & Recycling West Valley Cities Rates Rates Effective 7/1/2018 Campbell Los Gatos Monte Sereno Saratoga Residential Regular: 20-gallon $ $ $ $ gallon $ $ $ $ gallon $ $ $ $ gallon $ $ $ $ Sr. Citizen: 20-gallon $ $ - $ - $ - 35-gallon $ $ - $ - $ - Low Income: 20-gallon $ - $ $ - $ - 35-gallon $ - $ $ - $ - Commercial Commercial-1.5 Yards 1 p/u per week $ $ $ $ p/u per week $ $ $ $ p/u per week $ $ $ $ p/u per week $ $ $ $ p/u per week $ $ $ $ 1, p/u per week $ $ 1, $ 1, $ 1, Extra Dump $ $ $ $ Saturday Dump $ $ $ $ Commercial-2 Yards 1 p/u per week $ $ $ $ p/u per week $ $ $ $ p/u per week $ $ $ $ p/u per week $ $ $ 1, $ 1, p/u per week $ $ 1, $ 1, $ 1, p/u per week $ 1, $ 1, $ 1, $ 1, Extra Dump $ $ $ $ Saturday Dump $ $ $ $ Commercial-3 Yards 1 p/u per week $ $ $ $ p/u per week $ $ $ $ p/u per week $ $ 1, $ 1, $ 1, p/u per week $ 1, $ 1, $ 1, $ 1, p/u per week $ 1, $ 1, $ 1, $ 2, p/u per week $ 1, $ 2, $ 2, $ 2, Extra Dump $ $ $ $ Saturday Dump $ $ $ $ Commercial-4 Yards 1 p/u per week $ $ $ $ p/u per week $ $ $ 1, $ 1, p/u per week $ 1, $ 1, $ 1, $ 1, p/u per week $ 1, $ 1, $ 2, $ 2, p/u per week $ 1, $ 2, $ 2, $ 2, p/u per week $ 2, $ 2, $ 3, $ 3, Extra Dump $ $ $ $ Saturday Dump $ $ $ $

58 West Valley Collection & Recycling West Valley Cities Rates Rates Effective 7/1/2018 Campbell Los Gatos Monte Sereno Saratoga Commercial-6 Yards 1 p/u per week $ $ $ $ p/u per week $ 1, $ 1, $ 1, $ 1, p/u per week $ 1, $ 2, $ 2, $ 2, p/u per week $ 2, $ 2, $ 3, $ 3, p/u per week $ 2, $ 3, $ 3, $ 4, p/u per week $ 3, $ 4, $ 4, $ 4, Extra Dump $ $ $ $ Saturday Dump $ $ $ $ Commercial-Cans 1 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1, $ 1, Debris Box (cu. yds.) 8* $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Special - Woodwast $ $ $ $ *plus actual disposal charge Compactor (cu. yds.) 10 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ - $ $ $ $ $ $ 1, $ 1, $ $ 1, $ 1, $ 1, $ $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, $ 1, FEL 2CY Compactor 1 p/u per week $ $ $ - $ - 2 p/u per week $ $ $ - $ - 3 p/u per week $ $ $ - $ - 4 p/u per week $ - $ 1, $ - $ - 5 p/u per week $ 1, $ 1, $ - $ - 6 p/u per week $ 1, $ 1, $ - $ -

59 West Valley Collection & Recycling West Valley Cities Rates Rates Effective 7/1/2018 Campbell Los Gatos Monte Sereno Saratoga FEL 3CY Compactor 1 p/u per week $ $ $ - $ p/u per week $ $ $ - $ 1, p/u per week $ 1, $ 1, $ - $ 1, p/u per week $ - $ 1, $ - $ - 5 p/u per week $ 1, $ - $ - $ - 6 p/u per week $ 2, $ - $ - $ - FEL 4CY Compactor 1 p/u per week $ $ $ - $ p/u per week $ $ 1, $ - $ 1, p/u per week $ 1, $ 1, $ - $ 2, p/u per week $ 2, Yard Waste Box 20 $ $ $ - $ - 40 $ $ - $ - $ -

60 West Valley Collection & Recycling EFFECTIVE JULY 1, 2018 MISCELLANEOUS RESIDENTIAL CHARGES CHARGE AMOUNT EXTRA Y/W CART (PER MONTH, UP TO 95-GALLONS, IN EXCESS OF THREE 95-GALLON CARTS) $12.72 START/STOP CHARGE (1 MONTH MINIMUM) $12.40 FIRST TIME SPECIAL PICK-UP (up to 3 items, limited to approved items) ( RESIDENTIAL Customers $20.00 Only) SPECIAL PICK-UP (UP TO 3 ITEMS; LIMITED TO APPROVED ITEMS) $97.85 Extra Stickers $6.80 AUTOMATIC BILL PAY NO CHARGE 3-YARD RENT-ME SERVICE 4-YARD RENT-ME SERVICE $ $ MISCELLANEOUS COMMERCIAL CHARGES KEY/PUSH-OUT** FREQUENCY PER WEEK DIST IN FT extra P/U 0-25 (LOCKS) $23.22 $46.45 $69.66 $92.88 $ $ $46.45 $92.88 $ $ $ $ $69.66 $ $ $ $ $ $92.88 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $ ** ALL ARE MONTHLY CHARGES EXCEPT THE EXTRA P/U CHARGES CHARGE SMALL COMPACTOR CHARGE (COMMERCIAL COMPACTED BINS SERVICED BY A FRONT- LOAD VEHICLE) LOCK INSTALLATION/REMOVAL RELOCATE CHARGE (MOVE A DEBRIS BOX WITHOUT A DUMP) DRY RUN CHARGE (REGULAR SERVICE BOX EMPTY) AMOUNT REGULAR BIN RATE + DISPOSAL CHARGE X ( ) $ $ $ R/O Over Limit Tonnage $76.05 DEBRIS BOX RENTAL (PER DAY; IN EXCESS OF 7 DAYS) $13.05

61 AGENDA ITEM NO. 8 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director YTD Financial Report RECOMMENDED ACTION Accept report on the Authority s FY financial status. DISCUSSION The report titled Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual shows the approved budget, the year to date actual amounts, and the preliminary fund balance through March for FY With 75% of the fiscal year passed, the report shows that the Authority expended $363,146 or 63% of the approved FY budget. In February 2011, the Board adopted a policy that requires it to maintain an operating reserve of $100,000 and a rate stabilization reserve of $100,000. The preliminary fund balance of $172,139 is less than the $200,000 and a decrease of $88,810 from the July 1, 2017 starting balance. The decrease in the reserve balance is primarily the result of a timing difference between the Annual Franchise Agreement payment distributed to Member Agencies and the Annual Fee received from WVC&R. Timing differences are normal and are expected to balance at the end of FY FISCAL IMPACT None DOCUMENTS ATTACHED Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual March 31, Marva M. Sheehan Executive Director

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63 West Valley Solid Waste Management Authority Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual March 31, 2018 Acct # Description JPA Budget FY Year to Date Actual Balance YTD % Revenues 4410 Interest $ - $ - $ - N/A 4970 City of Campbell 49,336 49, % 4970 Town of Los Gatos 36,351-36,351 0% 4970 City of Monte Sereno 4,026-4,026 0% 4970 City of Saratoga 35,011-35,011 0% 4975 Franchise Agreement WVC&R 450, , ,000 50% 4965 Other N/A Total Revenues $ 574,724 $ 274,336 $ 300,388 48% Expenditures: Services and Supplies: 7424 Office Expense $ 500 $ - $ 500 0% 7427 Special Departmental Exp. (Legal Services) 9, ,482 9% 7430 Prof. & Special Services (Executive Director) 87,259 67,386 19,873 77% 7430 Prof. & Special Services (Other) 5,000-5,000 0% 7432 Other Contractual Services (Countywide Support) 1,000 2,200 (1,200) 220% 7432 Other Contractual Services (Website Administration) 1,068-1,068 0% 7432 Other Contractual Services (Audit Svcs.) 5,595-5,595 0% 7433 Insurance (Liability) 2,479 1,299 1,180 52% 7435 Travel/Conf. & Meetings 4,000-4,000 0% 7438 Other Charges (Accounting & Bookkeeping) 8,501-8,501 0% 7675 JPA Solid Waste Distribution 450, , ,579 65% Total Expenditures $ 574,724 $ 363,146 $ 211,578 63% Excess (deficiency) of revenues over (under) expenditures - (88,810) (88,810) Beginning Fund Balance 7/1/17 $ 200,000 $ 260,949 Ending Fund Balance $ 200,000 $ 172,139

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65 AGENDA ITEM NO. 9 MEETING DATE: MAY 3, 2018 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY AGENDA REPORT Date: May 3, 2018 To: From: Subject: West Valley Solid Waste Management Authority Board Executive Director Fiscal Year Audited Financial Statements RECOMMENDED ACTION Receive and File a report on the West Valley Solid Waste Management Authority s FY Audited Financial Statements. DISCUSSION The City of Campbell (City) provides financial services (general ledger, bookkeeping, etc.) to the Authority. The City, on behalf of the Authority, hired White, Nelson, Diehl, Evans, LLP to perform the annual audit of the Authority s financial statements. The Authority s FY Financial Audit is presented to the board to receive and file. In the Auditor s opinion, the financial statements present fairly, in all material respects, the financial position of the Authority as of June 30, 2017, and the changes in financial position and cash flows for the year ended in accordance with accounting principles generally accepted in the United States of America. FISCAL IMPACT None DOCUMENTS ATTACHED West Valley Solid Waste Management Authority s FY Audited Financial Statements. Marva M. Sheehan Executive Director

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67 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY BASIC FINANCIAL STATEMENTS WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS JUNE 30, 2017

68 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY TABLE OF CONTENTS June 30, 2017 Page Number Board Members and Staff i Independent Auditors Report 1 Management s Discussion and Analysis (Required Supplementary Information) 4 Basic Financial Statements: Statement of Net Position 7 Statement of Revenues, Expenses, and Changes in Net Position 8 Statement of Cash Flows 9 Notes to the Basic Financial Statements 10 Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 15

69 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY BOARD MEMBERS AND STAFF June 30, 2017 BOARD MEMBERS Paul Resnikoff, City of Campbell, Chair Mary-Lynne Bernald, City of Saratoga, Vice Chair Steve Leonardis, Town of Los Gatos, Member Curtis Rogers, City of Monte Sereno, Member STAFF Marva Sheehan, Executive Director - i -

70 Board of Directors West Valley Solid Waste Management Authority Campbell, California Report on the Financial Statements INDEPENDENT AUDITORS REPORT We have audited the accompanying financial statements of the West Valley Solid Waste Management Authority (the Authority) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Authority s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Authority s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion Michelle Drive, Suite 300, Irvine, CA Tel: Fax: Offices located in Orange and San Diego Counties

71 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the West Valley Solid Waste Management Authority as of June 30, 2017, and the changes in financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Partial Prior-Year Comparative Information The financial statements include partial prior-year comparative information. Such information does not include all of the information required to constitute a presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Authority s financial statements for the year ended June 30, 2016, from which such partial information was derived. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Authority s basic financial statements. The board members and staff schedule is presented for purposes of additional analysis and is not a required part of the basic financial statements. The board members and staff schedule has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it

72 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 21, 2018, on our consideration of the Authority s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority s internal control over financial reporting and compliance. Irvine, California February 21,

73 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY MANAGEMENT S DISCUSSION AND ANALYSIS June 30, 2017 This section of the Authority s financial statements, referred to as management s discussion and analysis, provides a narrative introduction, overview, and analysis of the Authority s financial statements that follow. Fiscal Year Financial Highlights The primary revenue source for the Authority comes from each member agency based upon the estimated expenses for the upcoming year and a franchise agreement with West Valley Collection and Recycling that provides revenues of $450,000 annually for the Authority. Total revenues for the fiscal year ended June 30, 2017, were $574,390 compared to expenses of $549,980, resulting in an increase in net position of $24,410 for the fiscal year. Ending net position was $253,966, consisting of cash and investments in the amount of $285,596 and accounts payable and other liabilities of $31,630. Overview of the Financial Statements This discussion and analysis serve as an introduction to the Authority s basic financial statements. These basic financial statements are designed to provide readers with a broad overview of the Authority s finances in a manner similar to a private sector business. They consist of the statement of net position, the statement of revenues, expenses, and changes in net position, the statement of cash flows, and the related notes. The statement of net position includes all of the Authority s investments in resources (assets and deferred outflows of resources) and the obligations to creditors (liabilities and deferred inflows of resources). It also provides the basis for computing rate of return, evaluating the capital structure of the Authority, and assessing the liquidity and financial flexibility of the Authority. All of the current year s revenues and expenses are accounted for in the statement of revenues, expenses, and changes in net position. This statement measures the success of the Authority s operations over the past year and can be used to determine whether the Authority has successfully recovered all of its costs through its assessments, fees and other charges, profitability, and creditworthiness. The final required financial statement is the statement of cash flows. The primary purpose of this statement is to provide information about the Authority s cash receipts and cash payments during the reporting period. The statement reports cash receipts, cash payments, and net changes in cash resulting from operating, investing, and financing activities and provides answers to such questions as where did cash come from, what was cash used for, and what was the change in cash balance during the reporting period. The notes to the basic financial statements provide additional information that is essential to a full understanding of the data provided in the basic financial statements. They can be found immediately following the financial statements

74 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY MANAGEMENT S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017 Financial Analysis of the Authority This analysis focuses on the net position and changes in net position at the Authority-wide level as presented in the statement of net position and the statement of revenues, expenses, and changes in net position. Net position for the Authority is summarized below and analysis follows: Statement of Net Position Fiscal Fiscal Year Year Cash and investments $ 285,596 $ 266,144 Accounts payable and other liabilities (31,630) (36,588) Net Position, Unrestricted $ 253,966 $ 229,556 Total assets increased $19,452 (7.31%) from the prior year as a result of the excess revenues over expenses due to favorable budget variances. Total liabilities remained relatively consistent and primarily consist of one month of franchise fee distributions to member agencies. Below is a summary of components that resulted in the changes in net position. Statement of Revenues, Expenses, and Changes in Net Position Fiscal Year Fiscal Year Operating Revenues: Member assessments $ 120,879 $ 117,480 Annual fee payment 450, ,000 Investment income 2, Other 1,200 7,200 Total operating revenues 574, ,679 Operating Expenses: Solid waste 99,980 96,759 Distributions to member agencies 450, ,000 Total operating expenses 549, ,759 Operating income 22,099 27,921 Nonoperating Revenue: Investment income 2, Changes in Net Position $ 24,410 $ 28,

75 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY MANAGEMENT S DISCUSSION AND ANALYSIS (CONTINUED) June 30, 2017 Financial Analysis of the Authority (Continued) Revenues and expenses remained relatively consistent with the prior year. Budgetary Highlights There were no material variances between the current-year budget and actual results. Economic Factors and Next Year s Budget Next year s budget is based on current-year actual results with a modest inflation factor of less than 4%. Requests for Information This financial report is designed to provide a general overview of the West Valley Solid Waste Management Authority s finances for residents, taxpayers, creditors and any other interested parties. Questions about this report can be directed to the Authority s Finance Department at 70 North First Street, Campbell, CA

76 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY STATEMENT OF NET POSITION June 30, 2017 (With comparative totals at June 30, 2016) ASSETS: CURRENT ASSETS: Cash and investments $ 285,596 $ 266,144 TOTAL ASSETS 285, ,144 LIABILITIES: Accounts payable and other liabilities 31,630 36,588 TOTAL LIABILITIES 31,630 36,588 NET POSITION: Unrestricted 253, ,556 TOTAL NET POSITION $ 253,966 $ 229,556 See accompanying notes to the basic financial statements

77 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the year ended June 30, 2017 (With comparative totals for the year ended June 30, 2016) OPERATING REVENUES: Member assessments: City of Campbell $ 46,613 $ 45,302 Town of Los Gatos 34,895 33,914 City of Monte Sereno 3,946 3,835 City of Saratoga 35,425 34,429 Total member assessments 120, ,480 Reimbursement from collection service provider 1,200 7,200 Annual fee payment 450, ,000 TOTAL OPERATING REVENUES 572, ,680 OPERATING EXPENSES: Distributions to member agencies 450, ,000 Professional and special services 84,332 83,000 Legal 820 2,080 Insurance 2,787 1,156 Audit 2,630 2,565 Other expenses 9,411 7,958 TOTAL OPERATING EXPENSES 549, ,759 OPERATING INCOME 22,099 27,921 NONOPERATING REVENUE: Investment income 2, CHANGES IN NET POSITION 24,410 28,920 NET POSITION AT BEGINNING OF YEAR 229, ,636 NET POSITION AT END OF YEAR $ 253,966 $ 229,556 See accompanying notes to the basic financial statements

78 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY STATEMENT OF CASH FLOWS For the year ended June 30, 2017 (With comparative totals for the year ended June 30, 2016) CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from member agencies $ 120,879 $ 117,480 Cash received from service providers 451, ,700 Cash paid to members (450,000) (473,040) Cash paid to suppliers for goods and services (104,938) (94,575) NET CASH PROVIDED BY OPERATING ACTIVITIES 17,141 44,565 CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 2, NET INCREASE IN CASH AND CASH EQUIVALENTS 19,452 45,564 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 266, ,580 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 285,596 $ 266,144 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income $ 22,099 $ 27,921 Changes in assets and liabilities: (Increase) decrease in accounts receivable - 37,500 Decrease in accounts payable and other liabilities (4,958) (20,856) NET CASH PROVIDED BY OPERATING ACTIVITIES $ 17,141 $ 44,565 See accompanying notes to the basic financial statements

79 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Reporting Entity: The West Valley Solid Waste Management Authority (the Authority) was formed on October 1, 1997, to implement and administer the West Valley Solid Waste Management Plan, manage rate studies, and negotiate the related contracts for member entities. The Authority is the only entity included in these financial statements. The Authority includes the Cities of Campbell, Monte Sereno, and Saratoga and the Town of Los Gatos. The City of Campbell (the City) maintains the financial records and provides accounting services for the Authority. b. Measurement Focus and Basis of Accounting: The Authority is accounted for as an enterprise fund (proprietary fund type). A fund is an accounting entity with a self-balancing set of accounts established to record the financial position and results of operations of a specific governmental activity. The activities of enterprise funds closely resemble those of ongoing businesses in which the purpose is to conserve and add to basic resources while meeting operating expenses from current revenues. Enterprise funds account for operations that provide services on a continuous basis and are substantially financed by revenues derived from user charges. The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured, such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The Authority s financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows

80 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. New Accounting Pronouncements: Current-Year Standards Governmental Accounting Standards Board (GASB) 73 - Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68, contains provisions that address employer and governmental nonemployer contributing entities for pensions that are not within the scope of GASB 68, effective for periods beginning after June 15, 2016, and did not impact the Authority. GASB 74 - Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, effective for periods beginning after June 15, 2016, and did not impact the Authority. GASB 77 - Tax Abatement Disclosure, effective for periods beginning after December 15, 2015, and did not impact the Authority. GASB 78 - Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, effective for periods beginning after December 15, 2015, and did not impact the Authority. GASB 79 - Certain External Investment Pools and Pool Participants, contains certain provisions on portfolio quality, custodial credit risk, and shadow pricing, effective for periods beginning after December 15, 2015, and did not impact the Authority. GASB 80 - Blending Requirements for Certain Component Units, effective for periods beginning after June 15, 2016, and did not impact the Authority. Pending Accounting Standards GASB has issued the following statements, which may impact the Authority s financial reporting requirements in the future: GASB 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, effective for periods beginning after June 15, GASB 81 - Irrevocable Split-Interest Agreements, effective for periods beginning after December 15, GASB 82 - Pension Issues, effective for periods beginning after June 15, 2016, except for certain provisions on selection of assumptions, which are effective in the first reporting period in which the measurement date of the pension liability is on or after June 15,

81 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. New Accounting Pronouncements (Continued): Pending Accounting Standards GASB 83 - Certain Asset Retirement Obligations, effective for periods beginning after June 15, GASB 84 - Fiduciary Activities, effective for periods beginning after December 15, GASB 85 - Omnibus 2017, effective for periods beginning after June 15, GASB 86 - Certain Debt Extinguishment Issues, effective for periods beginning after June 15, GASB 87 - Leases, effective for periods beginning after December 15, d. Cash and Cash Equivalents: For the purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates and have an original maturity date of three months or less. e. Fair Value Measurements: The Authority categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The hierarchy is based on the relative inputs used to measure the fair value of the investments. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs. The Authority s investment in the City of Campbell investment pool is not subject to the fair value hierarchy. f. Classification of Revenues: Operating revenues consist of charges to member agencies, franchise fees, and reimbursements charged to West Valley Collection and Recycling. Nonoperating revenues consist of investment income

82 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): g. Net Position Flow Assumption: When both restricted and unrestricted resources are available for use, it is the Authority s policy to use unrestricted resources first and then use restricted resources as they are needed. h. Prior-Year Data: Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Authority s prior-year financial statements from which this selected financial data was derived. i. Use of Estimates: The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from the estimates. 2. CASH AND INVESTMENTS: The Authority pools its cash with the City s portfolio of investments. Investments are stated at fair value. The table presented in the City s financial statements provides the credit ratings of the issuers that are acceptable to the Authority and approved percentages and maturities that are not to be exceeded. Information regarding the City s investments can be obtained in the City s Comprehensive Annual Financial Report available from the Finance Department located at 70 North First Street, Campbell, CA FRANCHISE AGREEMENT: On March 1, 2014, the Authority entered into a franchise agreement with West Valley Collection and Recycling. Under this agreement, the Authority will receive a payment of $450,000 annually for the right to continue to hold the franchise for the collection of solid waste, recyclable materials, green waste, food scraps, and construction and demolition debris within the Authority; the transportation of such material to appropriate places of processing, recycling, composting, and/or disposal; and the processing of recyclable materials and food scraps for a period of 10 years ending February 28, The Authority has recorded the fee revenues of $450,000 from this agreement in the accompanying statement of revenues, expenses, and changes in net position

83 WEST VALLEY SOLID WASTE MANAGEMENT AUTHORITY NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED) June 30, FRANCHISE AGREEMENT (CONTINUED): On May 1, 2014, the Authority agreed that the proceeds from the franchise agreements would be distributed to each member agency based on the population. Accordingly, the Authority has recorded distributions to member agencies of $450,000 in operating expenses in the accompanying statement of revenues, expenses, and changes in net position. At June 30, 2017, the total balance due to these member agencies included in accounts payable was $23, SUBSEQUENT EVENTS: Events occurring after June 30, 2017, have been evaluated for possible adjustments to the financial statements or disclosure as of February 21, 2018, which is the date these financial statements were available to be issued

84 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors West Valley Solid Waste Management Authority Campbell, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of West Valley Solid Waste Management Authority (the Authority) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Authority s basic financial statements, and have issued our report thereon dated February 21, Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Authority s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Authority s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weakness. However, material weaknesses may exist that have not been identified Michelle Drive, Suite 300, Irvine, CA Tel: Fax: Offices located in Orange and San Diego Counties