Local Enforcement Agency (LEA) Central

2007 Financial Assurances Contracted Study:
Draft Report Comments--Los Angeles County Environmental Programs Division

Thank you for the opportunity to review and comment on the Draft report for the Financial Assurance Study. The following comments are provided:

Task 2, Section 2.2 Evaluation

• Pledge of Revenue

Pledge of Revenue is a financial mechanism successfully used by many local governments in California. The idea that the fund lacks certainty since the amount of the fund is not guaranteed and there may be legal or regulatory restrictions on the ability of local governments to raise the fund when needed is incorrect.

Exhibit 2-1, Overview of Evaluation, displays the summary ratings assigned by ICF to each mechanism for the four criteria. The assignment of “Low” ratings and the analysis and rationale provided in Section 2.2.6.4 appears inaccurate and misguided. Please revise accordingly.

Task 3: Analysis of State Fund

• Section 3.3.3.3 how ICF Simulated Performance Defaults in Fund Working Model

The definition of “default” is overly broad and may allow an entity to simply declare a financial distress and stop performing its PCM and/or CA obligation. This definition places public entities at a disadvantage as they cannot simply walk away, create shell or separate corporate entities to protect their assets. Furthermore, the definition would allow a private entity to simply walk away by filing bankruptcy or declaring insolvent for any reason, while such a privilege is not applicable to public entities. We recommend that the key questions for modeling performance defaults should define what constitutes “an entity in financial distress” to be considered for performance default .

• Section 3.3: working Model of Statewide Default Fund for Assurance of PCM and CA

PCM cost estimate must be estimated as close as to the cost of the Final PCM and not on the basis of the cost of preliminary PCM Plan. Furthermore, the ICF projected cost used for analysis fails to include the potential cost for post-30 PCM Plan. (see pg 3-49)

Task 5: Risk Screening Methodology

Evaluation factors for the Risk Screening should be expanded to include proximity of a facility to surface water (i.e. reservoirs, river, etc.)

Martins Aiyetiwa, P.E.
County of Los Angeles Department of Public Works
Environmental Programs Division
(626) 458-3553
maiyet@dpw.lacounty.gov

Draft Report Comments | Consultant Comments | Study Home