HomeMy WebLinkAbout2001-07-17 City CouncilTO:
City of Palo Alto
City Manager’s Report
HONORABLE CITY COUNCIL
ATTN:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE:JULY 17, 2001 CMR:297:01
SUBJECT:IMPLEMENTATION OF AN ENVIRONMENTAL SERVICES CENTER
AND INITIATE SALE OF THE FORMER LOS ALTOS TREATMENT
PLANT SITE
REPORT IN BRIEF
This report discusses discontinuing the Los Altos Treatment Plant (LATP) site development
project, selling the property and implementing a more comprehensive Environmental
Services Center (ESC) at the City of Palo Alto landfill. The report discusses how an ESC
provides the City with more control over waste reduction programs and would provide
convenient disposal services for residents, City contractors and City crews. This report also
discusses the financial advantages of constructing an ESC at the City landfill to consolidate
all solid waste activities.
CMR:297:01 Page 1 of 5
RECOMMENDATION
Staff requests the Finance Committee recommend that Council:
1.Approve in concept the implementation of an Environmental Services Center (ESC).
2.Direct staff to initiate the sale of the Los Altos Treatment Plant (LATP) site.
BACKGROUND
On August 10, 1984, the City of Palo Alto and the City of Los Altos entered into a
lease/purchase agreement for the former LATP site with the intent of developing a Solid
Waste Facility (CMR: 146:84). The agreement gave the City of Palo Alto control of the site
and decision on the property’s use or disposal. The agreement also provided that if no
development of the propel"(y occurred within fifteen years of the date of the agreement, then
Los Altos could elect to convey its one-half ownership interest of the site to Palo
Alto. Palo Alto would then be obligated to pay an amount equal to one-half of the mutually
agreed upon appraised price. Los Altos has sent notice of its desire to dispose of the property
and does not desire to purchase Palo Alto’s interest in the property. Net proceeds from the
rent or sale of the property are to be distributed equally between Palo Alto and Los Altos.
Several studies have been conducted to determine appropriate uses of the site. In FY 1996-
97, Council adopted CIP Project 9701 Los Altos Treatment-Plant Site Development
Project. In accordance with California Environmental Quality Act (CEQA) an initial study
was conducted in August 1996. The fifidings indicated that the project could have potential
for significant environmental impacts and an environmental impact report (EIR) should be
prepared. A contract was signed in December 1996 with CH2M Hill to develop a project,
which included a refuse collection vehicle and storage facility, a permanent household
hazardous waste facility, and a utilities construction storage/staging yard.
On January 14, 1998 the Palo Alt0 Planning Commission held public hearings to review the
draft EIR. Due to the potential visual impacts and impacts to site wetlands, the scope of the
project was reduced by eliminating the utilities construction and storage yard, which was
considered the environmentally superior alternative as stated in the draft EIR page (5-16).
In March 2000, the final EIR was certified by the Council, (CMR: 161:00), and the Council
approved the application for annexation, a comprehensive plan map amendment, a mitigation
and monitoring plan, and pre-zoning to allow wetlands restoration.
Costs for acquisition of the remaining one-half interest of the LATP site from Los Altos and
proceeding with the construction of the proposed LATP project are extremely high. The
appraisal estimates the property to be worth $9.71 million. If the LATP project proceeds,
then the Refuse Fund would need to pay the City of Los Altos $4.855 million for acquisition;
and would need to invest an additional $4.65 million required for the cost of construction,
permitting, mitigation and contingency. The Refuse Fund purchased one-half interest in the
CMR:297:01 Page 2 of 5
LATP site in 1984 for $2.25 million and has spent over $ .5 million to-date on costs for
environmental studies and land use feasibility studies. The total cost of the LATP project
would thus equal $12.26 million.
DISCUSSION
Because funding for the construction and acquisition of the remaining one-half interest in the
LATP site would have to come solely from the Refuse Fund with no participation from other
Utility Funds (as originally planned), staff began looking into other options that would
consolidate all solid waste activities and provide an adequate refuse collection and hauling
facility on existing city property.
On April 8, 1999 Brown, Vence & Associates, Inc. (BVA) prepared a conceptual design and
cost-benefit analysis for development of a permanent recycling center and transfer
station. The primary objective was to assess options to handle waste after closure of the
City’s landfill. The preferred BVA option allows Palo Alto to consolidate its solid waste
operations, upgrade the public drop-off and curbside processing facilities, continue to
increase diversion of waste from disposal, and efficiently transfer non-recyclable waste to
a disposal facility. The results of the cost-benefit analysis indicate that the construction and
operation of a transfer station and material recovery facility in Palo Alto is less expensive
than relying on Sunnyvale Materials and Recovery Transfer (SMART) Station to handle all
refuse and recyclables. The total annual system cost for delivering 100 percent of waste and
recyclables to SMART Station is $7.7 million versus the $6.7 million annual cost for 100
percent of waste and recyclables delivered tO Palo Alto. Currently, the City of Palo Alto uses
revenue from the sale of curbside recyclables collected and processed at its recycling center
to offset expenses with the Palo Alto Sanitation Company (PASCO). The City would have
to share revenues with the operator of the SMART Station for any recyclables delivered to
the SMART Station. In addition, transportation costs significantly increase with the added
distance to Sunnyvale.
On June 11,2001, City Council adopted the FY 2001-03 Refuse Fund budget which included
amending the Los Altos Treatment Plant Site Development Project (LATP) CIP Project 9701
and implementing an Environmental Services Center (ESC) in Byxbee Park, located at the
City of Palo Alto landfill.
Further refinement of the conceptual ESC facility design is currently being done.
Preliminary results indicate that sixteen acres will be required to accommodate a permanent
composting facility, a recycling center, a permanent household hazardous waste facility, a
material recovery facility (MRF)/transfer station, and an inert solids recycling, area. In
addition, the ESC facility will also provide an area where PASCO can store and repair debris
boxes and bins and potentially combine PASCO’s administrative and customer service
functions, if the Geng Road site is determined to be insufficient. Staff met with Waste
Management and the PASCO General Manager and requested that Waste Management
CMR:297:01 Page 3 of 5
evaluate potential improvements to the Geng Road facility and determine if rebuilding that
facility or combining administrative or customer service activities into a design with the
proposed ESC is feasible. PASCO is working to prepare submittals for staff review.
Benefits of constructing the ESC also include providing residents with the convenience of
a local disposal site and avoiding the need for both City staff and City contractors to haul
waste to the SMART Station. Because Palo Alto is a partner with two other cities (Mountain
View and Sunnyvale) at the SMART Station, the City ofPalo Alto’s flexibility and control
over how programs can be implemented and/or changed is restricted. Having local control
over all of the City’s solid waste programs is not only beneficial in determining how
programs are implemented, but also, gives the City unique opportunities in negotiating long
term contracts, such as the SMART Station contract, Kirby Canyon contract, etc. In addition,
operating transfers to the General Fund would exceed $1.6 million, with the ESC paying rent
on the 16 acres occupied within Byxbee Park. In addition, the City would have control over
the revenues collected at the tollbooth from the delivery of waste to the ESC.
RESOURCE IMPACTS
Three potential scenarios for the LATP are shown below:
Land Acquisition and Construction Cost for LATP:
1984 Acquisition
Environmental studies and land use studies
Land purchase (remaining 1/2 interest)
Construction:
Construction inflation and contingency (25%)
Permitting
Mitigation
Total:
$2.250 million
$.500 million
$4.855 million
$3.000 million
$.750 million
$.400 million
$.500 million
$12.255 million
(The construction costs do not include CPI increases since the time of
estimation prepared in 1998).
Selling LATP site: Land has been appraised at $9.710 million; the City of Palo Alto
will share half of the sale revenue with the City of Los Altos, which is $4.855 million.
ESC Construction cost:
From BVA consulting firm (1999 estimation)
(Less City’s share from sale of LATP site)
Total capital costs for ESC
$11.413 million
($4.855 million)
$6.558 million
CMR:297:01 Page 4 of 5
ENVIRONMENTAL ASSESSMENT
Environmental review and studies are completed for the LATP site. Requirements for
environmental review for ESC will be determined after the initial study is completed and
reviewed by City of Palo Alto planning staff.
PREPARED BY: Michael Jackson, Deputy Director of Public Works/Operations
DEPARTMENT HEAD R~"~
GLENN S.
CITY MANAGER APPROVAL:~blic Works
FRANK BENEST
City Manager
CMR:297:01 Page 5 of 5