California Integrated Waste Management Board Workshop July 9, 2009

1. AB 2296 Consulting Group Financial Assurances Phase II Rulemaking California Integrated Waste Management BoardWorkshopJuly 9, 2009

2. Sankofa Bird

3. Agenda • Introductions and General Overview • Options to Address the May 2009 Board Direction for Phase II Regulations on Closed/Closing Facilities • Postclosure Maintenance Financial Assurances • Corrective Action Financial Assurances • Lunch Break • Continuity of Financial Assurances During Transfer of Ownership • Wrap Up and Next Steps

4. Overview of Operating, Closing, and Closed Landfills • What is the impact of establishing a rolling 30X level of financial assurance on current landfill operators? • Cash-type and Non cash-type demonstrations • How many facilities are impacted?

5. Landfills Years Into Postclosure Maintenance

6. What is the impact of establishing a rolling 30X level of financial assurance on current landfill operators? • Adjusted Annual Cost Estimate for Inflation Since Closure • Compared to Current Amount of Demonstration • 6 of 20 Have Received Disbursements • Returning to 30X Would Impact • 6 Closed Landfills with Cash Mechanisms • Cost an Estimated $2.3 million 6

7. Options to Address Postclosure Maintenance Closing/Closed • 30X the PCM estimate • Same as Operating – including criteria allowing step-down • Allow build up period for cash mechanisms • Not require increase (to 30X) above current demonstration level, no less than 15X • Perform Evaluation to set level(options to determine level?)

8. 1.a) Same as Operating – including criteria allowing step-down Pros: Cons: Increased Early Defaults Increased Enforcement Inability for Some to Raise Additional Funds Fairness – already closed and imposing additional financial demonstration requirement • More Protective • Minimal System Impact • Equity • Ease of Administration • May Be Eligible for Step-down

9. 1.b) Allow Build Up Period for Cash Mechanisms Pros: Cons: Equity for cash vs. non-cash mechanisms • Reduces Impact • Flexibility • Opportunity to Step-down • Reduced Enforcement

10. 2. Not require increase (to 30X) above current demonstration level, no less than 15X Pros: Cons: Increase Exposure to State Equity for operating vs closing/closed and for cash vs non-cash • Mitigates Impact on Individual Landfills • Fairness

11. 3. Perform Evaluation to Set Level – Not Less Than 15X Pros: Cons: High Transaction Costs for Operator and Board Criteria outside existing Mechanisms/program difficult to develop • Better Match Likelihood of Default and Level of Assurance

12. What is the impact of the Corrective Action Direction? • Effective July 1, 1991 • 267 of 282 Landfills are subject • 125 landfills are currently in compliance with Water Board Requirements (47%) • Final cover replacement is more expensive 93% of the time (based on in place levels of FA demonstrations)

13. Corrective Action – Estimated Financial Exposure *This amount includes $677 million for Eagle Mountain landfill

14. Corrective Action – Estimated Financial Exposure *This amount includes $677 million for Eagle Mountain landfill

15. Options to Address Corrective Action Closing/Closed • Same as Active/Operating • Immediately • Allow Build Up Period • Original Phase II Proposal – Broaden Use of Water Board Financial Assurance • Delay Effective Date For Final Cover Replacement • Site Specific Corrective Action Plan • Include Costs in Pooled Fund

16. 1.a) Same as Active/Operating Pros: Cons: Increased Early Defaults Increased Enforcement Inability for Some to Raise Additional Funds Fairness – already closed and imposing additional financial demonstration requirement • More Protective • Minimal System Impact • Equity • Ease of Administration

17. 1.b) Allow Build Up Period Pros: Cons: Equity for cash vs. non-cash mechanisms • May work well in Combination w/ Option 2 (next slide) • Reduces Impact • Flexibility • Reduced Enforcement

18. 2. Original Phase II Proposal – Broaden Use of Water Board Financial Assurance Pros: Cons: Might not provide enough financial assurance to cover the exposure Doesn’t address Major Maintenance • Simple to Implement • Minimal Financial Impact • Equity • Fairness

19. 3. Delay Effective Date For Final Cover Replacement Pros: Cons: Might not provide enough financial assurance to cover the exposure Doesn’t address Major Maintenance Note: This option would not require closed landfills to comply with the cover replacement estimate, but would require compliance with the original Phase II proposal (using Water Board corrective action estimate for financial assurance purposes). • Incentivizes Closing landfills to be certified Closed (SD-4.2)

20. 4. Site Specific Corrective Action Plan Pros: Cons: Monetary Expense to Develop Plan Workload to Review Plans Equity Issue (unless also imposed on operating landfills) • Recognizes potential for Major Maintenance • Fairness

21. 5. Include Costs in Mandatory Pooled Fund Pros: Cons: There is no Pooled Fund(s) yet • Would reduce the amount required for individual financial assurances

22. Continuity of Financial Assurances During Transfer of Ownership • Stay at current landfill financial assurance requirement • Automatically step-up to 30X • Alternative “X” level • 5X increments • Based on what criteria?

23. Phase II Rulemaking Timeline Aug 2009 – Additional Board Direction on Closed/Closing Landfills Aug-Oct 2009 – 45-day comment period Nov-Dec 2009 – 15-day comment period Dec 2009 – Board adoption Jan 2010 – Prepare Formal Response to Comments and Final Statement of Reasons Feb 10 – Legal Review Feb 27, 2010 – Submit to OAL