landfill decomposition time (yrs) anaerobic bioreactor landfill dry tomb landfill (dry site)...

Landfill Decomposition

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Time (yrs)

Anaerobic Bioreactor Landfill

Dry Tomb Landfill (dry site)

Containment FailureG

as/L

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ate

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erat

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Longer-term Longer-term MaintenanceMaintenance

• Current requirements are for PCM Current requirements are for PCM activities for a minimum of 30 years activities for a minimum of 30 years after closure and until the waste no after closure and until the waste no longer poses a threat. longer poses a threat. • FA demonstrations are only required FA demonstrations are only required for the first 30 years of PCM. for the first 30 years of PCM.


• List of consensus items from working group List of consensus items from working group meetingsmeetings

– Operators acknowledge responsibility for closed Operators acknowledge responsibility for closed landfill continues until facility no longer poses a landfill continues until facility no longer poses a threat;threat;

– Operators with trust funds, enterprise funds, Operators with trust funds, enterprise funds, insurance policies fully expect to access the insurance policies fully expect to access the funds;funds;

– Recent construction cost inflation and increased Recent construction cost inflation and increased competition for contractors has resulted in competition for contractors has resulted in significant increases in costs, and;significant increases in costs, and;

– Corrective Action costs and PCM Costs are Corrective Action costs and PCM Costs are sometimes interchanged resulting in difficult FA sometimes interchanged resulting in difficult FA demonstration situations. demonstration situations.


• 282 solid waste landfill facilities within 282 solid waste landfill facilities within the State subject to FA requirements the State subject to FA requirements

• Longer-term PCM costs were analyzed Longer-term PCM costs were analyzed to determine aggregate potential to determine aggregate potential liability for “normal” PCM. liability for “normal” PCM. – 116 landfills already in PCM116 landfills already in PCM– By 2021 the first landfill will exhaust its By 2021 the first landfill will exhaust its

required PCM fundrequired PCM fund– By 2040 all 116 funds will have been By 2040 all 116 funds will have been

exhausted exhausted

Distribution of California Landfills Entering Post-Closure Period

0 5 10 15 20 25 30

Post Closure

1-5 Years

6-10 Years

11 - 15 Years

16 - 20 Years

21+ Years

Percent of Landfills Going Into Post-Closure


• Net Present Value (NPV) of Net Present Value (NPV) of unfunded PCM liability for these 116 unfunded PCM liability for these 116 sites by 2040 is $150 million ~ 85% sites by 2040 is $150 million ~ 85% publicly operated sites publicly operated sites

• By 2054 the NPV of unfunded PCM By 2054 the NPV of unfunded PCM costs for all sites in postclosure is costs for all sites in postclosure is more than $600 million ~ 77% more than $600 million ~ 77% publicly operated sitespublicly operated sites

Assured (red) and Unassured (blue) Annual Post-Closure Liabilities (all sites)

$0$20$40$60$80

$100$120$140$160$180$200

Mill

ion

s


• Unfunded costs only represent the Unfunded costs only represent the regular and expected annual PCM costs regular and expected annual PCM costs

• Unexpected costs - earthquakes, floods Unexpected costs - earthquakes, floods or flooding rains not represented or flooding rains not represented

• Also not represented are the longer-Also not represented are the longer-term (post 30-year) repair and term (post 30-year) repair and replacement costs of the landfill replacement costs of the landfill environmental control systems in place. environmental control systems in place. – These costs expected to outpace current These costs expected to outpace current

PCM for closed landfills PCM for closed landfills

Lessons Learned from Lessons Learned from BKKBKK

• Because of need to expend Board funds and Because of need to expend Board funds and to redesign closure project, several issues to redesign closure project, several issues arose that, if addressed, could potentially arose that, if addressed, could potentially limit probability of similar occurrence limit probability of similar occurrence – Strengthen Board oversight over closure and Strengthen Board oversight over closure and

PCM plansPCM plans– Apply more Board focus and resources to review Apply more Board focus and resources to review

and approval of final closure projects tied to and approval of final closure projects tied to land use change and redevelopment land use change and redevelopment

– Consider allowing Solid Waste Disposal and Co-Consider allowing Solid Waste Disposal and Co-disposal Site (AB 2136) Program use for landfill disposal Site (AB 2136) Program use for landfill closure activities closure activities

Lessons Learned from Lessons Learned from BKKBKK

– Clarify and strengthen existing Clarify and strengthen existing insurance FA mechanisminsurance FA mechanism

– Clarify and strengthen requirements for Clarify and strengthen requirements for updating cost estimates, including: updating cost estimates, including: • better third-party cost estimates to include better third-party cost estimates to include

prevailing wages which would be required if prevailing wages which would be required if the State implemented closure and PCMthe State implemented closure and PCM

• consider use of different closure and PCM consider use of different closure and PCM cost escalators cost escalators

Proposed RulemakingProposed Rulemaking

• Should FA for PCM be extended > Should FA for PCM be extended > 30 years?30 years?

• If FA is required for greater than If FA is required for greater than 30 years of PCM, what forms 30 years of PCM, what forms should it take?should it take?

• What else should be included in What else should be included in cost estimates for PCM and cost estimates for PCM and Corrective Action Plans?Corrective Action Plans?


• Should FA for PCM be extended beyond Should FA for PCM be extended beyond 30 years?30 years?– Clarify FA requirements are for minimum of Clarify FA requirements are for minimum of

30 years and must be maintained until 30 years and must be maintained until waste no longer poses a threat. waste no longer poses a threat.

– Expand regulations to require preparation Expand regulations to require preparation and submittal of known or reasonably and submittal of known or reasonably foreseeable corrective action plans for all foreseeable corrective action plans for all landfillslandfills• specify necessary elements, such as repair or specify necessary elements, such as repair or

replacement of major environmental control replacement of major environmental control systems.systems.


– Clarify that closure, PCM, and Clarify that closure, PCM, and corrective action cost estimates be corrective action cost estimates be based on costs State may incurbased on costs State may incur

– Clarify that FA demonstrations for PCM Clarify that FA demonstrations for PCM must assure that funds are fully must assure that funds are fully available upon request of Board, available upon request of Board, regardless of side-agreementsregardless of side-agreements

– Address other issues such as need for Address other issues such as need for better inflation factors and better inflation factors and contingencies on cost estimatescontingencies on cost estimates


• If FA is required for greater than 30 If FA is required for greater than 30 years of PCM, what forms should it years of PCM, what forms should it take?take?– Minor modifications to current FA Minor modifications to current FA

demonstrations like Trust Funds, demonstrations like Trust Funds, Enterprise Funds, Pledges of RevenueEnterprise Funds, Pledges of Revenue

– Minor modifications to Financial Means Minor modifications to Financial Means TestsTests

– More extensive changes to Postclosure More extensive changes to Postclosure Maintenance InsuranceMaintenance Insurance


• Trust Fund type FA demonstrationsTrust Fund type FA demonstrations– Board has earned an average of 4.59% Board has earned an average of 4.59%

return on the Surplus Money Investment return on the Surplus Money Investment Fund (SMIF) since 1990Fund (SMIF) since 1990

– Calculated inflation rate over the same time-Calculated inflation rate over the same time-period has been an average of 2.46% period has been an average of 2.46%

– These two simple calculations leave an These two simple calculations leave an average net earning to the Board of only average net earning to the Board of only 2.13% 2.13% • Not sufficient to provide maintenance of the Not sufficient to provide maintenance of the

facility well beyond 30 years facility well beyond 30 years

Postclosure Maintenace and Beyond

-$2,000,000

-$1,000,000

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

YEAR

2008

2011

2014

2017

2020

2023

2026

2029

2032

2035

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Fund

Val

ue

YEAR Fund Value Annual Expenses


• Additional potential financial Additional potential financial demonstrations are possible demonstrations are possible – Annuities Annuities – Insurance (Guaranteed Income Insurance (Guaranteed Income

Contract) Contract) – Combinations of mechanismsCombinations of mechanisms


• Existing mechanisms (such as insurance, trust Existing mechanisms (such as insurance, trust fund, means test, etc.) need further fund, means test, etc.) need further clarificationclarification

• Procedures for payment of premiums and Procedures for payment of premiums and payments from insurance policies need payments from insurance policies need strengtheningstrengthening

• Current cost estimate inflation requirements Current cost estimate inflation requirements need to better address current construction need to better address current construction cost increasescost increases

• Closure and PCM cost estimates should be Closure and PCM cost estimates should be based on prevailing wage estimatesbased on prevailing wage estimates


• PCM cost estimate calculation should be PCM cost estimate calculation should be amended to identify complete costs of PCM amended to identify complete costs of PCM associated with actual operating facilityassociated with actual operating facility

• Releases from FA demonstrations during Releases from FA demonstrations during PCM should be based on true expendituresPCM should be based on true expenditures

• PCM cost estimates should include PCM cost estimates should include contingency similar to closure cost estimatecontingency similar to closure cost estimate

• Board should obtain “as built” costs from Board should obtain “as built” costs from operators to assist in evaluating adequacy operators to assist in evaluating adequacy of submitted estimatesof submitted estimates

Proposed StudyProposed Study

• Proposed Study of FA Mechanisms for Proposed Study of FA Mechanisms for Corrective ActionsCorrective Actions– A statewide requirement that all operators A statewide requirement that all operators

contribute to a pooled fund to provide for the contribute to a pooled fund to provide for the longer-term care and/or corrective actions longer-term care and/or corrective actions faced at closed facilities.faced at closed facilities.

– A statewide requirement that all operators A statewide requirement that all operators purchase insurance coverage for any costs purchase insurance coverage for any costs faced at the closed facility that are not faced at the closed facility that are not already identified and otherwise insured to already identified and otherwise insured to the State.the State.

landfill decomposition time (yrs) anaerobic bioreactor landfill dry tomb landfill (dry site)...

Documents

closed landfill

hills landfill

years of pcm

pcm activities

normal pcm

required pcm fundby

disposal site2015estimated2001

andcorrective action