On April 9, 2013, the Board of Supervisors directed staff from the Department of Conservation and Development to request that the County be provided a voting seat on the Authority Board of Directors in order to provide adequate representation for ratepayers in the unincorporated portion of the Authority's service area. This report provides additional background information regarding the role of the Authority, its governance and current relationship with the County, Exhibit A summarizes the changes necessary to existing agreements in order to allow the County to become a voting member.   
  
Creation of Authority  
  
The Authority was created April 2, 1991 as a joint powers agency by the cities of El Cerrito, Hercules, Pinole, Richmond and San Pablo (each, a Member). The primary purpose of the Authority is to achieve the Members’ waste diversion goals and arrange for the processing, transport and recovery or disposal of solid waste collected within their respective jurisdictional franchise areas. The Authority is also responsible for Members’ compliance with the requirements of the Integrated Waste Management Act (AB 939).   
  
Post-Collection Services Regulated by Authority  
  
Within its area of jurisdiction, the Authority enters into agreements with service providers for post-collection services. In negotiating and administering these agreements, the Authority establishes the prices customers pay for post-collection services. Those prices typically vary depending on the type of subscriber (i.e., whether the customer is a residential, commercial or industrial type of account). That portion of the customer’s bill that is allocable to the cost of post-collection services is the Post-Collection Surcharge. A portion of the Post-Collection Surcharge collected from customers is paid to the Authority and the remainder is retained by the post-collection service provider.   
  
The portion of the Post-Collection Surcharge that is paid to the Authority is used to pay for the cost of (i) carrying out waste reduction programs that divert solid waste from landfills to meet AB 939 requirements (including maximizing the flow of solid waste to resource and recovery facilities and away from landfills), and (ii) monitoring and satisfying the reporting requirements of AB 341 and AB 1826 pertaining to mandatory commercial recycling and organics programs. To comply with AB 939 requirements related to household hazardous waste, the Authority and its current post-collection service provider, Republic Services, currently fund and operate a household hazardous waste (HHW) program which includes a permanent drop-off facility.   
  
Collection Services Regulated by County in Unincorporated West County  
  
In other unincorporated franchise areas , the County has entered into franchise agreements with service providers that govern collection and post-collection services. The unincorporated West County area where collection services are provided under the County’s franchise agreement with Richmond Sanitary Service (RSS), is referred to as the County/RSS Franchise Area. In the County/RSS Franchise Area, the County only regulates collection services; the County has delegated the responsibility for regulating post-collection services to the Authority.  
  
The maximum amount that customers can be charged for routine services, pursuant to the County/RSS Franchise Area, is a combination of the Post-Collection Surcharge approved by the Authority, and the collection rate approved by the Board of Supervisors in accordance with the County's rate setting methodology manual.  
  
Relationship between Authority and County  
  
The County and the Authority entered into the Authority-County Contract in May 1993 to enable both Authority Members and the County to gain economies of scale in providing post-collection services to their respective jurisdictions as well as satisfy bond financing requirements. As part of the Authority-County Contract, the County has authorized the Authority to include the County/RSS Franchise Area in the area served pursuant to agreements awarded by the Authority to govern post-collection services.   
  
Authority Governance  
  
The Authority is governed by a seven-member Board of Directors comprised of three Richmond City Council members and one City Council member for each of the other four cities. One member of the County’s Board of Supervisors sits as an ex-officio non-voting member of the Authority’s Board of Directors.   
  
  
  
Proposed Transition to County as a Voting Member of Authority  
  
To ensure that customers in the County/RSS Franchise Area have adequate representation in the decisions made by the Authority’s Board of Directors regarding post-collection services and rates, the County needs to become a voting member of the Authority Board. To achieve that end, changes need to be made to the JEPA and the Authority-County Contract. The proposed changes are set forth on the attached Summary of Terms (Exhibit A). In short, the proposed are intended to ensure:

• Customers in the County/RSS Franchise Area have adequate representation in matters determined by the Authority.
• Any changes to the existing post-collection rate setting methodology used by the Authority would be subject to the approval of all Members.
• The County retains its regulatory authority and autonomy in the County/RSS Franchise Area.
• The County continues to be responsible for satisfying its own reporting requirements under AB 939, while the Authority continues to be responsible for demonstrating compliance with AB 341 and AB 1826.

If the County is not able to negotiate acceptable terms that would enable the County to become a voting member of the Authority, the County will have to consider alternative approaches to ensuring customers in the County/RSS Franchise Area are represented in the post-collection rate-setting process. This may require that the County terminate the Authority-County Contract and assume responsibility for regulating post-collection services and rates directly.