Assembly Bill 2136 (enacted October 1993) added Article 2.5, Solid Waste Disposal and Codisposal Site Cleanup Program, to Chapter 2 of Part 7 of Division 30 of the Public Resources Code. The bill requires the California Integrated Waste Management Board (the "Board") on January 1, 1994, to initiate a program for the cleanup of solid waste disposal sites where the responsible party either cannot be identified or is unable or unwilling to pay for timely remediation, and where cleanup is needed to protect public health and safety or the environment. The Board may expend funds directly for cleanup, provide loans to responsible parties who demonstrate the ability to repay state funds, and provide matching grants to local governments to assist in site cleanup. The Board may also provide grants to certified local enforcement agencies for abatement of illegal disposal sites. This guide addresses procedures and instructions for providing loans to local governments.
2. Board Contact
For further information on the AB 2136 program or additional copies of the application and program information package, contact:
Wes Mindermann, AB 2136 Program Manager
Closure and Remediation Branch
California Integrated Waste Management Board
1001 I Street
PO Box 4025
Sacramento, CA 95812-4025
Phone: (916) 341-6314
3. Eligible Applicants
Eligible applicants for the Loans to Local Government Program for site cleanup are limited to local governments (cities, counties, joint power authorities consisting of several cities and/or counties, or other local governmental agencies deemed eligible by the Board) who provide adequate documentation of financial need for assistance for site cleanup needed to protect public health and safety and the environment, and demonstrate ability to repay the loan and pay for costs of site cleanup that exceed the loan amount.
The source of funds for loans is the Solid Waste Disposal Site Cleanup Trust Fund (Trust Fund). The Board may approve loans from the Trust Fund for eligible site cleanup costs for prioritized sites ranked high enough to be eligible for available funds. In prioritizing sites for cleanup, the Board shall consider the degree of risk to public health and safety and the environment posed by conditions at a site, the ability of the site owner to clean up the site without monetary assistance, the ability to adequately clean up the site with available funds, and other factors as determined by the Board. Local governments must fund all site cleanup costs that exceed the loan amount, and identify the source or sources of loan repayment. Loans shall not exceed maximum amounts or program limitations that may be established by the Board.
a. Eligible costs:
(1) Eligible site cleanup costs include, but are not limited to: waste removal and disposal; fencing or barriers; signage; grading and cover; slope and foundation stabilization; slope protection and erosion control; drainage systems; gas and leachate control and monitoring systems; extinguishing underground landfill fires; field and laboratory testing; and other work deemed eligible by the Board.
(2) Engineering design and contract inspection costs are eligible up to 12 percent of the above site cleanup and testing costs.
b. Ineligible costs:
Ineligible costs include, but are not limited to: costs of closure, except where determined by the Board to be required to correct health and safety or environmental deficiencies; groundwater remediation; operation and maintenance of leachate, surface water, or vadose zone monitoring systems; improvements to property for postclosure land uses; closure or postclosure maintenance plans; postclosure maintenance services; and other projects deemed ineligible by the Board.
Funds shall not be used for the removal, abatement, cleanup or otherwise handling in any manner of hazardous substances, as defined in 42 U.S.C. section 9601 (14), CERCLA.
5. Application Deadline
Currently, there is no application deadline for this program. Project applications will be reviewed and evaluated on a continuous basis until further notice. Each site will be prioritized for cleanup considering the degree of risk posed to public health and safety and the environment, solvency of the site owner, ability of the local government to adequately clean up the site with available funds, and other factors as determined by the Board.
6. Application Requirements
Each applicant must submit a loan application on Board forms, together with the following documentation:
a. A copy of the grant deed with legal description. Applicant must be owner or co-owner of the site, or the Sponsor (e.g. Redevelopment Agency) of eligible cleanup of privately owned or leased lands within their jurisdiction.
b. Substantiation of threat to public health and safety or the environment. Attach applicable regulatory agency investigations or enforcement orders, solid waste assessment test (SWAT) reports, or certified environmental assessment reports.
c. A detailed Scope of Work and Cost Estimate prepared by a registered civil engineer. Cost of eligible and ineligible work items must be itemized separately. If local government resources are proposed for site cleanup, costs shall be determined in accordance with procedures in State Department of Transportation Standard Specifications Section 9-1.03, Force Account Payment, except that overhead and profit markups to direct cost of labor, materials, equipment or subcontractors will not be allowed.
d. Compliance with the California Environmental Quality Act (e.g. Notice of Exemption, Initial Study/Negative Declaration, Environmental Impact Report).
e. Financial information:
(1) Demonstrate the need for requested loan funds. Attach applicant's annual financial operating statements for the last three years and interim (within 90 days), independent audits, and other evidence of financial condition. Each statement must be certified by the original signature of the person completing this application.
(2) Explain other methods of financing attempted and evidence of reasonable efforts made to raise funds for cleanup (e.g. increasing tipping fees above State average, assessing parcel fees).
(3) Identify and provide evidence of sources of funds to repay the loan and pay for site cleanup costs that exceed the loan amount, certified by the original signature of the person completing this application. In lieu of collateral, the applicant must identify a guaranteed revenue source which will be dedicated to repay the loan.
Note: It shall be the responsibility of local government to immediately notify the Board of any change in financial condition that would make them: financially able to perform site cleanup without Trust Funds; unable to repay the loan, or; unable to pay for site cleanup costs that exceed the loan amount. This notification shall be required both during the application process and after the Loan Agreement has been signed. Such conditions may negate local government's eligibility for use of Trust Funds.
f. A copy of the approved resolution from the governing board or council authorizing submittal of the application, certifying availability of local funds needed to complete the cleanup, and the naming title of the individual authorized to execute any agreements, contracts, etc. This authorized individual will be the only person whose signature the Board will recognize. A sample resolution is included in this package.
Applications from joint power authorities consisting of several cities and/or counties must include a signed copy of a written agreement between the governing bodies authorizing the loan applicant to act on their behalf.
7. Application Review and Loan Agreement
a. The application is reviewed by Board staff for adequacy and eligibility, and additional information or clarification requested, if necessary. Upon determination that applicant is eligible, the site is investigated and project priority determined using the Board's Solid Waste Ranking System (SWRS). Board staff submits applications meeting AB 2136 Program requirements to the Board for approval.
b. The Board approves loans based on site priority, financial status of applicant, verification of guaranteed revenue source for repayment of loan, and availability of Trust Funds. When approved, a Loan Agreement is prepared and sent to the applicant for signature and return to the Board. Authorized Board staff sign the Agreement and a fully executed copy is returned to the Borrower.
8. Management of Site Cleanup.
The Borrower shall comply fully with all applicable federal, state, and local laws, ordinances, regulations and permits in the procurement and management of consultant services and cleanup contracts.
a. Design and Project Inspection. Borrower shall:
(1) Procure a licensed consultant for preparation of plans and specifications and inspection of site cleanup activities. An approved project design and a full time inspector during site cleanup is mandatory whether site cleanup is accomplished by contractor or local government resources.
(2) Submit two copies of preliminary project plans and specifications to Board staff for review. Board staff will return one copy of documents with comments and recommendations for each submittal.
(3) Submit two copies of final plans and specifications for Board approval. One copy of documents marked "Approved" will be returned to Borrower. Site cleanup must be accomplished using approved plans and specifications.
(4) Allow ten (10) calendar days for each Board staff review and approval action.
b. Contracting. Borrower shall:
(1) Advertise for the site cleanup contract using Board approved plans and specifications.
(2) After opening of bids, submit the name of contractor recommended for award of the contract to Board staff. Attach a summary of contractor's experience and qualifications and an extract of bids. If Borrower proposes to award contract to other than low bidder, include the reasons.
(3) After award of the contract by the Borrower, notify Board staff of: date of contract award; date, time, and location of preconstruction conference; and name, address, and phone number of the project inspector.
c. Board staff and the local enforcement agency (LEA) may conduct field management reviews during the project to verify compliance with the approved plans and specifications and terms of the Loan Agreement. Final inspection and acceptance by Board staff is required following project completion before final payment can be made.
d. Site Cleanup Project Records Management
Records shall be maintained by the Borrower in accordance with accepted government accounting standards, and shall include as a minimum:
(1) A special cleanup account for all project receipts and disbursements.
(2) Accurate and complete accounting of all project financial transactions.
(3) Supporting documents showing source of receipts and to whom payments were made.
(4) Control and accountability for all project funds, property, and other assets including assurance that all funds were used solely for authorized purposes.
(5) Procedures to ensure prompt disbursements of accounts payable.
(6) Procedures to determine and segregate allowable costs.
(7) The Borrower shall allow the Board, the State Controller's Office, and the State Auditor General's Office, or their designated representatives, absolute right of access to all of Borrower's records pertaining to the Loan Agreement to conduct reviews and audits. Borrower's records pertaining to the Agreement, or any part thereof requested, shall be made available to the designated auditors upon request. Records shall be retained for at least three (3) years after expiration of the Agreement, or until completion of actions and resolution of all issues which may arise as a result of any litigation, claim, negotiation or audit, whichever is later.
9. Loan Servicing and Restrictions.
a. Loan Disbursement shall be made in one lump sum amount after the Loan Agreement has been fully executed and all contracts for the site cleanup have been awarded, or as otherwise specified in the Loan Agreement.
(1) Loans for site cleanup shall be repayable over a period not to exceed twenty years. Payments shall be made annually commencing one full year from the date of the Loan Agreement. Annual payments shall consist of a minimum of one-twentieth of the total loan principal amount, together with all interest due as of the date of the payment. Interest will be computed on a thirty day month, three hundred sixty day year basis. Loans repayments shall be from a guaranteed revenue source approved by the Board.
(2) Repayment may be made, either in full or in part, in advance of any due date, provided that when such advance payment is made, the interest due as of the date of such payment shall be included.
(3) The Board may require other collateral and/or covenants from Borrower to assure repayment of the loan.
c. Loan rate is currently based on the annual Surplus Money Investment Fund (SMIF) rate. However, this basis for loan rates may be changed by the Board without notice prior to execution of the Loan Agreement.
d. A special site cleanup account shall be established by Borrower into which all loan amounts received shall be deposited. Expenditures from the special site cleanup account shall be made only for eligible project costs as defined in these guidelines or otherwise approved by the Board. All funds remaining in the account after final payment of eligible site cleanup costs by Borrower shall be held in trust for repayment of the loan and interest due until such time as the loan shall have been paid in full.