TO: Board of Supervisors
FROM: Thomas C. Zeleny, Chief Deputy County Counsel
REPORT BY: Thomas C. Zeleny, Chief Deputy County Counsel
SUBJECT: Napa-Vallejo Waste Management Authority’s New Construction & Demolition Facility
RECOMMENDATION
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Adopt a Resolution approving the Napa-Vallejo Waste Management Authority’s financing of its new Construction and Demolition Facility and finding significant public benefits associated with such financing. (No Fiscal Impact)
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BACKGROUND
The Napa-Vallejo Waste Management Authority (“Authority”) is a joint powers agency with membership consisting of Napa County and the Cities of American Canyon, Napa, and Vallejo. The Authority maintains the closed American Canyon Landfill and operates the Devlin Road Transfer Station.
At the Devlin Road Transfer Station, the Authority receives construction debris from both new construction and demolition of existing structures. The material is sorted and recyclable material diverted to minimize the material that is sent to a landfill for disposal. Most of this activity is conducted outdoors, where stockpiled material is exposed to the wind and rain. A photograph of the existing outdoor process is attached.
The Authority is preparing to start construction of a new 130,000 square foot building to house its construction and demolition debris operations (“Project”). The Project will allow the Authority to move the activity indoors, reducing dust that could be carried by winds and protecting most of the material from rain that could otherwise wash pollutants from the material into the storm drain system. The total cost of the Project, including design, construction management and contingencies, is estimated to cost $38 million. The Authority has $18 million in cash to dedicate to the Project, with the remaining $20 million to be financed through a loan with a bank or other financial institution. The Authority issued a Request for Proposals for the loan, seeking proposals for both ten and fifteen year terms, with a deadline of September 8, 2025 for responses. The Authority opened 10 bids on August 26, 2025, to construct the project, which are currently being evaluated, but the lowest bid received was for $30.2 million.
Before the Authority can obtain financing for the Project, the Joint Exercise of Powers Act (“Act”) in Government Code sections 6500 et seq. requires the Authority to seek approval to finance the Project from a local agency within whose boundaries the Project is located. The Project is located both within Napa County and the City of American Canyon, and the Authority chose to seek approval from Napa County. Napa County will not incur any obligations with respect to the Authority’s loan. This is simply a procedural step imposed by the Act before a joint powers agency can finance a capital improvement project.
The Act also requires the local agency to make a finding of “significant public benefit” to financing the capital improvement project. Government Code section 6586 defines significant public benefit as any of the following:
(a) Demonstrable savings in effective interest rate, bond preparation, bond underwriting, or bond issuance costs.
(b) Significant reductions in effective user charges levied by a local agency.
(c) Employment benefits from undertaking the project in a timely fashion.
(d) More efficient delivery of local agency services to residential and commercial development.
Although only one of these four public benefits is required, this Project satisfies three of them. First under subsection (b), the financing will allow the Authority to spread the cost of the Project over a longer period of time, thereby mitigating increases to the tipping and other fees the Authority charges its customers from what would otherwise be necessary if the Authority were to cash-fund the entire Project. Second under subsection (c), the financing will allow the Authority to construct the Project now, providing well-paying prevailing wage jobs during a period when work is becoming harder to find, as evidenced by the 10 bids the Authority received on August 26, 2025, to construct the Project. Third under subsection (d), the Project will provide a large indoor space where the Authority can more efficiently divert and recycle construction and demolition debris from residential and commercial development, possibly increasing diversion by up to 25%, while reducing dust and the risk of pollutants entering the stormwater system during rainy weather. These findings are included in the proposed Resolution presented to the Board with this item.
Procedural Requirements:
1. Open Public Hearing
2. Staff Report
3. Public Comment
4. Close Public Hearing
5. Motion, second, discussion, and vote on the item
Recommended Action:
Adopt the Resolution approving the Authority’s financing of its new Construction and Demolition Facility and finding significant public benefits associated with such financing.
FISCAL IMPACT
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Is there a Fiscal Impact? |
No |
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Is it currently budgeted? |
No |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
The Authority’s financing will allow the cost of the Project to be spread out over a longer period of time, mitigating the increase in tipping fees for customers. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
None |
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Consequences if not approved: |
The Authority will not be able to finance the Project. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: This proposed activity is not subject to CEQA pursuant to CEQA Guidelines section 15060(c)(3) because the activity is not a project pursuant to section 15378, and because it will not result in a direct or reasonably foreseeable indirect physical change in the environment pursuant to section 15060(c)(2).