California Integrated Waste Management Board January 12, 2009 Long-Term Postclosure Maintenance And Corrective Action AB 2296 Consulting Group Workshop Long-Term Postclosure Maintenance And Corrective Action AB 2296 Consulting Group Workshop

AGENDA 9:00 - 9:15Introductions and General Overview 9:15 – 10:15Pooled Fund Options Basic (backstop for defaults only) Combined (public and private) Split (public/private) Enhanced (backstop for defaults and divestiture) 10:15– 11:00Dealing with Divestiture Regulatory Statutory 11:00 – 11:50Follow-up on Other Pending Stakeholder Issues Indemnification of Locals Sierra Club letter 11:50-12:00Wrap Up and Next Steps 9:00 - 9:15Introductions and General Overview 9:15 – 10:15Pooled Fund Options Basic (backstop for defaults only) Combined (public and private) Split (public/private) Enhanced (backstop for defaults and divestiture) 10:15– 11:00Dealing with Divestiture Regulatory Statutory 11:00 – 11:50Follow-up on Other Pending Stakeholder Issues Indemnification of Locals Sierra Club letter 11:50-12:00Wrap Up and Next Steps

Additional Staff Analysis Corrective Action Defaults Divestiture Impacts Pooled Fund Options (i.e. Split Fund) Corrective Action Defaults Divestiture Impacts Pooled Fund Options (i.e. Split Fund)

Managing Long-Term PCM Risk of Landfill System ScenarioAssuredRiskUnassuredRiskStdRuralPublicsSglPvtDefaultsDivest-ituresTotal 43X$5,5900$11$26$263$ X4,562$1, X2,9722, X2,1532, $ Status Quo 1,8223, $ in Millions over 100 years

Proposed Regulation Effective Multiplier Likelihood to Step-down No Corrective Actions During 5-year Period Participate in Enhanced Monitoring Program During 5-year Period Type of Financial Demonstration Likelihood to Step-down No Corrective Actions During 5-year Period Participate in Enhanced Monitoring Program During 5-year Period Type of Financial Demonstration

Proposed Regulation Impact Defaults/Divestitures ScenarioDefaultsDivestituresTotals PCM$209$433$642 Corrective Action Total $ in Millions over 100 years

Dealing with $542 Million Divestiture Exposure Statutory  Enhanced Pooled Fund (defaults + divestiture)  Make Former Owners and Operators Liable Regulatory  Add 5X Step-up provision for lack of continued performance  Return to 15X for new owners  Change to minimum 15X without Pooled Fund Statutory  Enhanced Pooled Fund (defaults + divestiture)  Make Former Owners and Operators Liable Regulatory  Add 5X Step-up provision for lack of continued performance  Return to 15X for new owners  Change to minimum 15X without Pooled Fund

Divestiture – Statutory Water Board-like Make Former Site Owners and Operators liable DTSC-like Generators, transporters also liable Water Board-like Make Former Site Owners and Operators liable DTSC-like Generators, transporters also liable

Divestiture – Regulatory What? Change to Min. 15X without Pooled Fund Add 5X Step-up provision for lack of continued performance Return to 15X for new owners When? Now in Phase II Regulations, OR Include in Phase III Regulations What? Change to Min. 15X without Pooled Fund Add 5X Step-up provision for lack of continued performance Return to 15X for new owners When? Now in Phase II Regulations, OR Include in Phase III Regulations

Pooled Fund Options Basic (backstop for defaults only) Combined (public and private) Split (public/private) Enhanced (backstop for defaults and divestiture) Single fee Private up-charge Basic (backstop for defaults only) Combined (public and private) Split (public/private) Enhanced (backstop for defaults and divestiture) Single fee Private up-charge

Landfill Trends Public/Private

Basic Combined Pooled Fund Estimated Fee: $0.09 per ton Cap: $80 million Estimated Fee: $0.09 per ton Cap: $80 million

Basic Split Pooled Fund Public Fee - $0.09 / ton Cap - $30 million Private Fee - $0.13 / ton Cap - $50 million Public Fee - $0.09 / ton Cap - $30 million Private Fee - $0.13 / ton Cap - $50 million

Hybrid Split Pooled Fund Public Fee - $0.13 / ton Cap - $30 million Use of Excess Revenue Private Fee - $0.13 / ton Cap - $50 million Public Fee - $0.13 / ton Cap - $30 million Use of Excess Revenue Private Fee - $0.13 / ton Cap - $50 million

Enhanced Combined Pooled Fund Estimated Fee: $0.18 per ton Cap: $275 million Estimated Fee: $0.18 per ton Cap: $275 million

Enhanced Split Pooled Fund Public Fee - $0.09 per ton Cap - $30 million Private Fee - $0.34 per ton Cap - $245 million Public Fee - $0.09 per ton Cap - $30 million Private Fee - $0.34 per ton Cap - $245 million

Split Pooled Fund Key Considerations Definition of public/private Changes over time Use of any excess funds Transfers between funds Fair share Key Considerations Definition of public/private Changes over time Use of any excess funds Transfers between funds Fair share

Split Pooled Fund Definition of Public/Private Landowner Permitted Operator Not Contract Operator Definition of Public/Private Landowner Permitted Operator Not Contract Operator

Split Fund Considerations Changes Over Time Public  Private How to Shift during operation after ceasing accepting waste Effect of Shifts on Each Fund Condition Changes Over Time Public  Private How to Shift during operation after ceasing accepting waste Effect of Shifts on Each Fund Condition

Split Fund Considerations Funds Available Above Imposed Cap Use of Excess Funds 2136 Cleanups Closure Loans Pre-1988 Disposal Sites Illegal Dumping Funds Available Above Imposed Cap Use of Excess Funds 2136 Cleanups Closure Loans Pre-1988 Disposal Sites Illegal Dumping

Split Fund Considerations Transfers Between Funds Timely pay back Limitations Transfers Between Funds Timely pay back Limitations

Split Fund Considerations Fair Share Over half of the 282 landfills have ceased accepting waste Jurisdictions with closed landfills that are currently shipping waste out of state would benefit without paying fee Broader issue 1/08/ doc 1/08/ doc Fair Share Over half of the 282 landfills have ceased accepting waste Jurisdictions with closed landfills that are currently shipping waste out of state would benefit without paying fee Broader issue 1/08/ doc 1/08/ doc

Landfills Years Into Postclosure Maintenance

Split Fund Considerations Differential Administrative Costs Two funds versus one BOE CIWMB Others Differential Administrative Costs Two funds versus one BOE CIWMB Others

Follow-up on Other Pending Stakeholder Issues Indemnification of Locals Sierra Club Letter Indemnification of Locals Sierra Club Letter

Indemnification of Locals As Applies to Local Government that has responsibility to arrange for solid waste management (i.e., generator, transporter, permitting authority) What would local government get from a pooled fund that they are not already on the hook for? Under what laws is indemnification sought? As Applies to Local Government that has responsibility to arrange for solid waste management (i.e., generator, transporter, permitting authority) What would local government get from a pooled fund that they are not already on the hook for? Under what laws is indemnification sought?

Indemnification of Locals Layers of Assurance Operator (Personal Responsibility) Individual Financial Demonstrations Pooled Fund * ??? * If a pooled fund is established by legislation. Layers of Assurance Operator (Personal Responsibility) Individual Financial Demonstrations Pooled Fund * ??? * If a pooled fund is established by legislation.

Sierra Club Letter Dated November 12, 2008 Require min. 15X until a Pooled Fund is established Previous issues: Major maintenance Real risk of default Realistic assessment of site failure Inadequacy of financial means test Dated November 12, 2008 Require min. 15X until a Pooled Fund is established Previous issues: Major maintenance Real risk of default Realistic assessment of site failure Inadequacy of financial means test