LOCAL GOVERNMENT SUPPORT AGREEMENT

 

AMONG

 

THE CITY OF CHARLOTTESVILLE

 

THE COUNTY OF ALBEMARLE

 

AND

 

THE RIVANNA SOLID WASTE AUTHORITY

 

 

This Local Government Support Agreement (this “Agreement”) is made this ___day of ___________, 2007 by and among the City of Charlottesville, Virginia (the “City”), the County of Albemarle, Virginia (the “County”) and the Rivanna Solid Waste Authority (the “Authority”), together referred to as the “Parties.”

 

WHEREAS,     on November 20, 1990, the City and the County entered into a certain Solid Waste Organizational Agreement for the purpose of forming the Authority to operate the Ivy Landfill (the “Landfill”) and provide other waste management services for the City and County;

 

WHEREAS,     the Landfill operated continuously from 1968 until the closure of Cell 2 in 2001; however the Authority continues to provide waste management services to the City and County and has continuing obligations with respect to the closure, remediation and monitoring of the Landfill;

 

WHEREAS,     the Authority owns a transfer station at the Landfill site (the “Ivy Transfer Station”) currently operated by the Authority, with transportation and disposal of the compacted waste provided by Waste Management, Inc. (formerly Atlantic Waste Disposal, Inc.) pursuant to a contract with the Authority (the “Waste Management Contract”);

 

WHEREAS,     Allied Waste Industries, Inc. (formerly BFI) constructed, owns and operates a transfer station at Zion Crossroads (the “Zion Crossroads Transfer Station”) available for use by the citizens of the City and County pursuant to a contract with the Authority (the “Allied Waste Contract”);

 

WHEREAS,     a component of the standard tipping fees set by the Authority for its customers at the Ivy Transfer Station and the Zion Crossroads Transfer Station is a “service contribution fee” for providing waste management services to the Charlottesville/Albemarle community over and above the transportation and disposal fees charged by Waste Management, Inc. and Allied Waste, Inc. to the Authority pursuant to the Waste Management Contract and the Allied Waste Contract, respectively;

 

WHEREAS,     pursuant to the Allied Waste Contract, all residential waste contracted for collection by the City is considered waste controlled by the Authority and billed by the Authority at the standard tipping fee (which includes the service contribution fee) when taken to the Zion Crossroads Transfer Station, irrespective of the hauler;

 

WHEREAS,     direct customers of Allied Waste, Inc. are not subject to the service contribution fee charged by the Authority to the Authority’s customers;

 

WHEREAS,     since 2001 the City has withheld from the Authority payment of the service contribution fee component of the standard tipping fee on waste taken to the Zion Crossroads Transfer Station by the City’s contracted collector until such time as an equitable cost sharing agreement could be negotiated;

 

WHEREAS,     the City, the County, the Authority and the University of Virginia entered into a Memorandum of Understanding dated January 10, 2005 with respect to the sharing of costs related to the closure, remediation and monitoring of the Landfill (the “Environmental Expenses MOU”);

 

WHEREAS,     since 2001 the City has through direct subsidy payments contributed $750,000.00, and the County has through direct subsidy payments contributed $1,000,000, to the ongoing operational costs of the Authority; and,

 

WHEREAS,     the Parties desire to enter into this Agreement to provide for local government contributions to the Authority by the City and the County to fund their proportional share of the Authority’s administration and operating expenses over and above the revenues received under, and the costs covered by, the Environmental Expenses MOU and the other revenues received by the Authority.

 

            NOW, THEREFORE, the Parties agree as follows:

 

1.         City Payment of Retained Service Contribution Fees

 

            The City agrees to pay to the Authority all remaining service contribution fees incurred by the City prior to July 1, 2007.  The Authority acknowledges receipt of $400,000 on June 25, 2007 as partial payment of these service contribution fees  The balance of these service contribution fees shall be paid to the Authority within thirty (30) days of the execution of this Agreement by each of the parties.  In view of the necessarily imprecise nature of allocation of actual costs based upon population, the Authority agrees that it shall not impose any penalty or interest on such service contribution fees if paid by the City in accordance with this paragraph.  The City agrees that there shall be no restriction on the use of such funds, and that the Authority may use such funds for operating expenses, reserves, environmental costs even though otherwise covered by the Environmental Expenses MOU, or any other expense.  The Authority agrees to repay to the County the $250,000 that the County paid to the Authority in July, 2005 within thirty (30) days of the execution of this Agreement.

 

2.         Rates and Charges for City Collected Solid Waste during and after FY 2008

            For the Authority’s fiscal year 2008, beginning July 1, 2007, and thereafter except as specifically provided in paragraph 3 below, the City agrees to pay the Authority the standard tipping fee (including the service contribution fee component of such fee) of $62 per ton on all solid waste collected or contracted for collection by the City and taken to the Zion Crossroads Transfer Station and the standard tipping fee then in effect on all solid waste collected or contracted for collection by the City and taken to the Ivy Transfer Station.  The Authority agrees not to increase such fees for the City for the balance of FY08.  On and after July 1, 2008, any increases to the standard tipping fee imposed by the Authority and charged to the City shall not exceed $62 per ton at the Zion Crossroads Transfer Station and the amount of the standard tipping fee in effect as of June 30, 2008 at the Ivy Transfer Station, in each case, adjusted for inflation using the the Consumer Price Index published by the Department of Labor, Bureau of Labor Statistics, All Urban Consumers (CPI-U), U.S. City Average, All Items, 1982-84 =100.

 

3.         Rates and Charges for City Residential Curbside Collected Solid Waste

 

            The City may award a new residential curbside solid waste collection contract, effective July 1, 2008 (the “New City Curbside Contract”).  The Authority agrees that if a New City Curbside Contract is awarded to Allied Waste, Inc. and the solid waste is taken to the Zion Crossroads Transfer Station it shall diligently pursue an amendment to the Allied Waste Contract to exclude such waste, effective upon the latter of July 1, 2008 or the effective date of the New City Curbside Contract with Allied Waste, Inc., from the definition of “Rivanna Service Area MSW” and coverage under Section 3.5 of the Allied Waste Contract pursuant to which the Authority currently imposes the service contribution fee.  The Authority agrees that if a New City Curbside Contract is awarded to Waste Management, Inc., the Authority shall waive, effective upon the latter of July 1, 2008 or the effective date of the New City Curbside Contract with Waste Management, Inc., the restriction imposed upon Waste Management, Inc. in the Waste Management Contract obligating Waste Management, Inc. to deliver such waste to the Ivy Transfer Station.  In view of the existing limit on the average daily tonnage under the Authority’s permit for the Ivy Transfer Station, the City agrees to include a requirement in any New City Curbside Contract that such collected waste will not be delivered to the Ivy Transfer Station.  The Authority further agrees that effective upon the latter of July 1, 2008 or the effective date of the New City Curbside Contract, the Authority shall not impose the service contribution fee on any residential curbside solid waste collected or contracted for collection by the City and delivered to the Zion Crossroads Transfer Station.  In the event that the City does not award a New City Curbside Contract in 2008 and continues under its current contract with Waste Management, Inc., the parties agree that effective July 1, 2008 (i) the City will continue to require that solid waste collected under the existing contract be taken to the Zion Crossroads Transfer Station; and (ii) the Authority shall not impose the service contribution fee on any such waste.  In lieu of payment of the service contribution fees as provided in this paragraph 3, the City agrees to make certain payments to the Authority pursuant to paragraphs 4 and 5 below.  In addition, the City and County agree not to oppose any exercise by the Authority of options to extend the terms of the Allied Waste Contract or the Waste Management Contract.

 

4.         City’s and County’s Proportional Funding of Authority’s Service Contribution Fee Revenues

            Beginning in fiscal year 2008 and continuing during each fiscal year that this paragraph 4 is in effect, the Authority shall determine the total amount of service contribution fees billed for solid waste taken to the Ivy Transfer Station and the Zion Crossroads Transfer Station, and the percentage of the total that is attributable to waste generated within the City and the County and provide the City and the County with such information.  The parties acknowledge that there is no means to guarantee the accuracy of those determinations, as they will be based on the declarations of individual trash haulers as well as records maintained by the operator of the Zion Crossroads Transfer Station.  If the percentage of service contribution fees billed for solid waste generated within either the City or the County is less than its proportionate share of the service area’s population, as calculated pursuant to paragraph 5 below, it shall contribute to the Authority or to the other jurisdiction, on the date of the next quarterly deficit payment as provided in paragraph 6 below, an amount which will cause its percentage share of the service contribution fee to equal its proportionate percentage of the service area population.  Alternatively, the Authority, at its election, may refund to the other jurisdiction the amount which is in excess of its share, or give such jurisdiction a credit in such amount against any future obligation it may have to the Authority pursuant to paragraph 5 of this Agreement.  The provisions of this paragraph 4 shall terminate upon the first to occur of (i) full implementation of the Authority’s strategic plan referenced in paragraph 8 below, or (ii) June 30, 2010.  The calculations to be made by the Authority and payments, refunds or credits to be made or received by the City and County shall be done in a manner consistent with the hypothetical example set forth on Exhibit 1 attached hereto.

 

5.         City’s and County’s Proportional Funding of Authority’s Projected Annual Operating Deficit

 

            If the Authority determines that despite any payment by either the City or the County pursuant to paragraph 4 above and all reasonable efforts to fund the operating expenses of the Authority that an operating deficit will exist, it shall prepare and adopt a budget, including reasonable reserves, balanced by using revenue to be contributed by the City and the County.  The amount of revenue to be contributed by the City and the County shall be determined on the basis of population at the time the budget is adopted by the Authority as reported for the most recent year by the University of Virginia’s Weldon Cooper Center for Public Service, rounded to the nearest tenth (1/10) of a percent.  The percentage of each of the City’s and County’s portion of the revenue to be contributed will be calculated by dividing its population by the combined population of the City and County.  For purposes of the budget for the Authority’s fiscal year beginning July 1, 2007, the percentage of the City’s portion of the revenue to be contributed shall be thirty percent (30%) and the County’s portion of the revenue to be contributed shall be seventy percent (70%).  An example of the calculations required by paragraph 4 above and this paragraph 5 is set forth in Exhibit 1 attached hereto, and such calculations shall be made by the Authority in a manner consistent with the example in Exhibit 1.

 

6.         Quarterly Deficit Payments

 

            If the Authority’s proposed annual budget shows an operating deficit, the City’s and County’s payment to the Authority pursuant to paragraph 5 above shall be made quarterly on the first day of July, October, January, and April of such fiscal year of the Authority, subject to the provisions of paragraphs 9 and 10 below.

 

7.         Increase or Decrease in the Authority’s Operating Deficit

            Payments by the City and the County to the Authority for any particular fiscal quarter shall be increased or decreased, as appropriate to take into account any extraordinary increases or reductions in expenses and/or reductions or increases in revenue not anticipated by the adopted budget for such year upon the Authority’s submission of an amended budget approved by the Authority’s Board of Directors to the City and the County at least 30 days prior to the due date of the next payment.  Upon completion of the audited financial statements of the Authority for the prior fiscal year, the City’s and County’s payments to the Authority shall be increased or decreased, as appropriate, to take into account increases or decreases in actual expenses and/or reductions or increases in actual revenues of the Authority from those anticipated by the adopted budget as shown by such financial statement, and such adjustments shall be determined by using the City’s and County’s percentages as set forth in paragraph 5 above, as may be adjusted as provided in such paragraph, for such audited fiscal year as an adjustment to the next payments due from the City and County to the Authority; provided, however, that any such increase or decrease shall take into account any increase or decrease in payments for such year pursuant to the most recently adopted amended budget of the Authority for such year, if any.  In the event the amount of service contribution fees and local government support payments exceed the percentage of revenues needed by the Authority, including reasonable reserves, pursuant to paragraph 5 above, the Authority shall either remit such excess to the City and County or carry such excess over to the next fiscal year giving the City and County credit during such year for such excess.

 

8.         Development of an Authority Strategic Plan

 

The Authority agrees to promptly commence and complete the development of a strategic plan involving the examination of types and levels of services needed and desired by the community, including a conceptual development of options by which the Authority may obtain a level of revenue necessary to fully fund the costs of such services, so that the Authority will be financially self-sufficient as originally contemplated by the Solid Waste Organizational Agreement.  It is the  expectation of the parties to this Agreement that the Authority will complete and implement the strategic plan by no later than June 30, 2010.

 

9.         Solid Waste Organizational Agreement

 

The parties enter this Agreement notwithstanding any provisions in the Solid Waste Organizational Agreement conflicting with this Agreement, and agree that in the event of any such conflicting provisions, this Agreement shall control.

 

10.       Voluntary City and County Funding

 

            Nothing in this Agreement shall be construed as creating a claim, cause of action, or right of recovery against either the City or the County by the Authority or by any creditor or claimant of the Authority.  The Authority acknowledges that neither the City nor the County is under any legal or equitable obligation to provide funding to the Authority, but that each has voluntarily chosen to do so for the sole reason of insuring the continuation of a certain level of solid waste disposal and recycling services being provided by the Authority, and the City and County each acknowledges that in the event such funding is not made available to the Authority, the Authority will necessarily have to curtail those services.

 

11.       Non-Appropriation

            This Agreement is subject to the approval, ratification, and annual appropriations by the Charlottesville City Council and the Albemarle County Board of Supervisors of the necessary money to fund this Agreement for this and any succeeding fiscal years.  Should the City or the County fail to appropriate the necessary funding, it shall give prompt written notice to the Authority and the other party of such non-appropriation, and this Agreement shall automatically terminate without further notice by or to any Party.

 

12.       Amendment

 

Any amendment to this Agreement must be made in writing and signed by the Parties.

 

 

13.       Governing Law

 

This Agreement shall be governed in all respects by the laws of the Commonwealth of Virginia.

 

14.       Notices

 

Any notice, invoice, statement, instructions, or direction required or permitted by this Agreement shall be addressed as follows:

 

            a.         To the City:                  Office of the City Manager

                                                            P.O. Box 911

                                                            Charlottesville, VA  22902

 

            b.         To the County:  Office of the County Executive

                                                            401 McIntire Road

                                                            Charlottesville, VA  22902

 

            c.         To the Authority:           Office of the Executive Director

Rivanna Solid Waste Authority

P.O. Box 979

Charlottesville, Virginia  22902-0979

 

or to such other address or addresses as shall at any time or from time to time be specified by any Party by written notice to the other Parties.

 

15.       Integration Clause

 

This Agreement, and any amendment or modification that may hereafter be agreed to in accordance with the provisions herein, constitutes the entire understanding between the Parties with respect to the matters addressed, and supersedes any and all prior understandings and agreements, oral or written, relating hereto, except for the Environmental Expenses MOU.

 

16.       Execution

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

WHEREAS these terms are agreeable to the City of Charlottesville, the County of Albemarle and the Rivanna Solid Waste Authority, and each Party offers its signature as of the date below.

 

 

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