To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Tax-Exempt Revenue Bonds - Republic Services Inc.
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
ADOPT a resolution:
1. Approving the issuance of Tax-Exempt Revenue Bonds by California Municipal Finance Authority (CMFA) in an amount not to exceed $400,000,000 for the benefit of Republic Services Inc., a corporation duly organized and existing under the laws of the State of Delaware, and/or affiliates thereof (collectively, the “Borrower”) to provide for the purpose of financing and refinancing the acquisition, construction, installation, rehabilitation, improvement and/or equipping of solid waste disposal facilities. A portion of the Bonds, in a principal amount not expected to exceed $55,000,000, will be used to finance and/or refinance certain capital projects located in the territorial limits of the County of Contra Costa (the “County”) at Keller Canyon Landfill, 901 Bailey Road, Pittsburg, California (the “Project”), owned and/or operated by Keller Canyon Landfill Company. Such adoption is solely for the purposes of satisfying the requirements of Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), the Code and the California Government Code Section 6500 (and following).
2. Finding and declaring that the recitals contained in the proposed resolution are true and correct;
3. Acknowledging that such approval is solely for the purposes of satisfying the requirements of Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and Section 147(f) of the Internal Revenue code of 1986, as amended (the “Code”) to finance the costs of the acquisition, development, construction, or rehabilitation of the Project subject to Board of Supervisors approval of all documents related to the Bonds to which the County is a party;
4. Acknowledging that adoption of this resolution does not relieve or exempt the project sponsor from obtaining required permits or approvals, nor obligate the County to incur any obligation to provide financial assistance with respect to the Bonds or the Project; and
5. Authorizing and directing the Chair of the Board of Supervisors, the Vice-Chair of the Board of Supervisors, the County Administrator, the Director of the Department of Conservation and Development, the Assistant Deputy Director of the Department of Conservation and Development, County Counsel and the Clerk of the Board to take any and all actions and execute and deliver any and all certificates, agreements and other documents needed in connection with the Bonds.
FISCAL IMPACT:
No impact to the General Fund. The County will be reimbursed for any costs incurred in the process of conducting the TEFRA Hearing and obtaining Board of Supervisors’ approval. The issuance authorization is for the sole purpose of satisfying the provisions of the Code. No County funds are pledged to secure the Bonds. The CMFA will issue tax-exempt bonds on behalf of the Borrower. Repayment of the Bonds is solely the responsibility of the Borrower.
BACKGROUND:
California Municipal Finance Authority (CMFA), serving as the municipal issuer of the Bonds for Republic Services, Inc. has requested the County to conduct a Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) hearing for the issuance of Tax-Exempt Revenue Bonds in an amount not to exceed $400,000,000. A portion of the Bonds, in a principal amount not expected to exceed $55,000,000, will be used to finance and/or refinance certain capital projects located in the territorial limits of the County of Contra Costa (the “County”) at Keller Canyon Landfill, 901 Bailey Road, Pittsburg, California (the “Project”), owned and/or operated by Keller Canyon Landfill Company.
The main purpose of the proposed resolution is to acknowledge that a public hearing was held by the Department of Conservation and Development on February 13, 2024, where members of the community were given an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing for the Project, and to meet other bond issuance requirements which are specified in Section 147(f) of the Internal Revenue Code. No public comments were received. A notice of the hearing was published in the East County Times (proof of publication attached) on February 5, 2024.
The County’s only role in this transaction was to hold the TEFRA hearing and to grant the limited approval described above. Additional actions related to the bond issuance will be the responsibility of CMFA and the Borrower.
CONSEQUENCE OF NEGATIVE ACTION:
Negative action would prevent CMFA from providing tax-exempt financing for the Republic Services, Inc. projects in Contra Costa County.
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
and for Special Districts, Agencies and Authorities Governed by the Board
body
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA APPROVING A PLAN OF FINANCE FOR THE ISSUANCE OF CALIFORNIA MUNICIPAL FINANCE AUTHORITY SOLID WASTE DISPOSAL REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $400,000,000 FOR THE PURPOSE OF FINANCING AND REFINANCING THE ACQUISITION, CONSTRUCTION, INSTALLATION, REHABILITATION, IMPROVEMENT AND/OR EQUIPPING OF SOLID WASTE DISPOSAL FACILITIES BY REPUBLIC SERVICES, INC. AND CERTAIN AFFILIATES THEREOF, AND CERTAIN OTHER MATTERS RELATING THERETO
WHEREAS, Republic Services, Inc., a corporation duly organized and existing under the laws of the State of Delaware, and/or affiliates thereof (collectively, the “Borrower”), has requested that the California Municipal Finance Authority (the “Authority”) issue exempt facility bonds for qualified solid waste disposal facility projects pursuant to section 142(a)(6) of the Internal Revenue Code of 1986 (the “Code”) in one or more series from time to time in an aggregate principal amount not to exceed $400,000,000 (the “Bonds”); and
WHEREAS, a portion of the proceeds of the Bonds, in a principal amount not expected to exceed $55,000,000, will be used to finance and/or refinance certain capital projects located in the territorial limits of the County of Contra Costa (the “County”) at Keller Canyon Landfill, 901 Bailey Road, Pittsburg, CA 94565, owned and/or operated by Keller Canyon Landfill Company, an affiliate of Republic Services, Inc.; and
WHEREAS, the projects to be financed and/or refinanced at such location (collectively, the “Project”) include: (a) improvements to existing landfill facilities, including construction of new disposal cells and liners within currently permitted acreage, (b) additions and improvements to the leachate collection and treatment system, including leachate trenching, (c) additions and improvements to the methane gas systems, (d) installation of new liners for intermittent and final closure of completed sections of the landfill facilities, (e) site improvements, (f) acquisition of equipment to be used at the landfill facilities, and (g) acquisition of other equipment and assets necessary to support the foregoing improvements and to place them into service; and
WHEREAS, pursuant to Section 147(f) of Code, the issuance of the Bonds by the Authority must be approved by an “applicable elected representative” of the governmental unit in which the Project is situated; and
WHEREAS, the Board of Supervisors of the County (the “Board”) is the elected legislative body of the County and is an “applicable elected representative” for purposes of approving the issuance of the Bonds under Section 147(f) of the Code; and
WHEREAS, the Authority has requested that the Board approve the issuance of the Bonds by the Authority in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”), among certain local agencies, including the County; and
WHEREAS, the Authority has advised that the Bonds may be issued pursuant to a “plan of finance” and that, for purposes of this resolution, the plan of finance consists of a general plan of the Authority and the Borrower to monitor capital markets and the capital needs of the Borrower within the County and, if market conditions warrant, issue one or more series of Bonds in an aggregate principal amount not to exceed $55,000,000 to finance and/or refinance the Project within the three-year period commencing on the date of the issuance of the first series of Bonds pursuant to this resolution; and
WHEREAS, the Bonds may also finance and/or refinance projects of the Borrower located outside of the County but any such projects outside of the County would be required to be approved by the applicable elected representatives of the governmental units in which such projects are situated, pursuant to Section 147(f) of the Code; and
WHEREAS, pursuant to Section 147(f) of the Code and Section 6586.5 of the Government Code of the State of California, the Board has, following notice duly given, held a public hearing regarding the Project and the plan of finance for the issuance of the Bonds, and now desires to approve the Project and the plan of finance for the issuance of the Bonds by the Authority;
NOW, THEREFORE, BE IT RESOLVED, by the Board of Supervisors of the County of Contra Costa, as follows:
Section 1. The Board hereby finds and declares that the foregoing recitals are true and correct.
Section 2. The Board hereby approves the issuance of the Bonds for the purposes of Section 147(f) of the Code.
Section 3. The adoption of this Resolution does not (i) relieve or exempt the Borrower from obtaining any permits or approvals that are required by, or determined to be necessary from, the County in connection with the Project, nor (ii) obligate the County to incur any obligation or provide financial assistance with respect to the Bonds or the Project.
Section 4. All actions heretofore taken by the officers and agents of the County with respect to the financing of the Project and the issuance of Bonds are hereby approved, ratified and confirmed, and the Chair of the Board of Supervisors, the Vice-Chair of the Board of Supervisors, the County Administrator, the Director of the Department of Conservation and Development, the Assistant Deputy Director of the Department of Conservation and Development, the County Counsel and the Clerk of the Board are each hereby authorized and directed, for and in the name and on behalf of the County, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents needed in connection with the modifications to the documents for the Bonds so long as the modifications do not in any way increase the obligations or liability of the County under such documents.
Section 5. This Resolution shall take effect upon its adoption.
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