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1. Introduction
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.
4. Funding
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.
b. Repayment.
(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.
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