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AGENDA FOR THE REGULAR MEETINGALAMEDA COUNTY WASTE MANAGEMENT AUTHORITYFebruary 27, 2008, Wednesday, 3:00 p.m.1537 Webster StreetOakland, Ca. 94612(510) 891-6500andTeleconference:Dona Spring1636 Channing Way, Berkeley CA510-649-0330Meeting is wheelchair accessible. Sign language interpreter may be available upon five (5)days notice by calling 510-891-6500. Members of the public wanting to add an item to a futureagenda may contact 510-891-6500.I. CALL TO ORDERII.III.ROLL CALLANNOUNCEMENTS BY THE PRESIDENTPage IV. CONSENT CALENDAR1 1. Approval of Minutes of January 23, 2008 Motion7 2. Annual Audit for FY 2006/2007 MotionRecommendation to the Waste ManagementAuthority Board for review and filing45 3. Local Preference Purchasing Policy ResolutionRecommendation from the A&O Committeeto adopt PolicyV. OPEN PUBLIC DISCUSSIONAn opportunity is provided for any member of the public wishing to speak on anymatter within the jurisdiction of the Authority, but not listed on the agenda. Total timelimit of 30 minutes with each speaker limited to three minutes.g/data/boards/wma bd/02/27/08

VI. REGULAR CALENDAR1. Committee Minutes Information53 a. A&O Committee of February 6, 200857 b. Programs/Planning Committee of February 12, 200863 2. Composting Facility Development Project-East Co. Preferred Sites ResolutionRecommendation to award contracts for biological assessment,water study and meteorology data collection3. Amendment to MinutesRequest from Board member Landis that minutes reflectabsent Board membersMotion4. Interim appointment(s) to the Recycling Board for WMA Motionappointee unable to attend future Board Meeting(s)VII.COMMUNICATIONS/MEMBER COMMENTSVIII. OPEN PUBLIC DISCUSSIONAn opportunity is provided for any member of the public wishing to speak on anymatter within the jurisdiction of the Authority, but not listed on the agenda. Total timelimit of 30 minutes will be provided if necessary with each speaker limited to threeminutes or as adjusted at the discretion of the presiding officer.IX.ADJOURNMENTg/data/boards/wma bd/02/27/08

DRAFTMINUTES OF THE REGULAR MEETING OF THEALAMEDA COUNTY WASTE MANAGEMENT AUTHORITYJanuary 23, 2008, Wednesday, 3:00 p.m.1537 Webster StreetOakland, CA 94612510-891-6500andTeleconference:Dona Spring1636 Channing Way, Berkeley CA510-649-0330I. CALL TO ORDERPresident Waespi called the meeting to order at 3:05 p.m.II. ROLL CALLCounty of Alameda Keith CarsonCity of AlbanyRobert LieberCity of Berkeley Dona Spring (teleconference – arrived 3:10 p.m.)Castro Valley San. Dist. Dennis WaespiCity of Emeryville Ken BukowskiCity of FremontBob WassermanCity of HaywardOlden HensonCity of Livermore Marjorie LeiderCity of NewarkLuis FreitasCity of Oakland Jean Quan (arrived 3:15 p.m.)Oro Loma San. Dist. Laython LandisCity of PiedmontGarrett KeatingCity of Pleasanton Matt SullivanCity of San Leandro Diana SouzaCity of Union City Mark GreenStaff Participating:Karen SmithTamara Galanter, Authority CounselOthers Present:Peter Deibler, HF&FLou Filipovichg/data/support/minutes/wma bd/01-23-08 1

DRAFTIII. ANNOUNCEMENTS BY THE PRESIDENTPresident Waespi had no announcements.IV. CONSENT CALENDAR1. Approval of the WMA Minutes of December 19, 2007 MotionMr. Carson moved the consent calendar and Mr. Lieber seconded.Mr. Landis asked if the minutes could reflect the members that are not present at the meetings.President Waespi asked if that is the will of the Board.Mr. Landis noted that since there is no objection lets start doing this.President Waespi asked for a motion to include in the minutes the names of the Board Memberswho are not present at the Board Meetings.Ms. Galanter pointed out that the item needs to be agendized first. Staff can be asked to add it toan agenda.President Waespi asked Mr. Landis if he would like to see that done. It was agreed that the itemwould be on the next agenda.President Waespi asked if any member of the public wished to speak on the consent calendar.No one wished to speak. He called for the vote. Motion approved (14-0, Ms. Spring and Ms.Quan absent).V. OPEN PUBLIC DISCUSSIONMr. Filipovich of San Leandro indicated he wished to speak. He stated he wants to deliversomething that the Board is not aware of. He wants the Board to pay close attention and he willalso leave some documentation.He asked why the San Lorenzo Unified School District, the Oro Loma Sanitary District and theCity of San Leandro and the City Council elected Board Members that who obviously havefailed to address the needs of seniors, including all other taxpayers and stakeholders who payeducational cost for the public school system. He discussed the document he was leaving, thepresidential elections and that state legislature or government in the upper level is needed toenact legislation to create the election process. It is totally fouled up. He stated a classicexample is that he is probably the only person at the meeting who is on the Republican side andeverybody else is either Democratic or decline to state or one of the other parties He went on tostate that he has no representation at all within Alameda County except on the Board ofSupervisors. He stated no one had to agree with him but he was providing information that heknows no one is aware of and he stated that the Board has information that he is not aware of Hesaid we are not sharing that information.Mr. Filipovich thanked the Board for their time and President Waespi thanked Mr. Filipovich.g/data/support/minutes/wma bd/01-23-08 2

DRAFTVI. REGULAR CALENDAR1. Committee Minutes Informationa. Programs/Planning Committee of January 8, 2008No comments.2. Five Year Program Assessment – Final Report InformationMs. Smith reminded the members that the Recycling Board once every five years is required byMeasure D to conduct a financial and programmatic audit. The financial audit was previouslycompleted and accepted by the Recycling Board. This is the Programmatic Audit and itevaluates the Agency’s programs and provides recommendations. The Recycling Board alongwith some of the Authority members of the Recycling Board asked for a number of other itemsto be studied. Follow up will take place with the Recycling Board on the issues and some of thefollow up issues with take place with the Programs/Planning Committee. Ms. Smith indicatedthis presentation will be a general overview of the program assessment.Mr. Deibler stated he first wants to give acknowledgement to agency staff members and his teammembers in preparing the study. He also congratulated staffs from all the member agencies asthey put in a lot of time and effort.Mr. Deibler discussed member agency programs key findings stating that core programs aremostly in place. Organic programs are largely in place with 13 programs that combine yarddebris and food scraps and several others in the planning phase. C&D Debris Recycling has 13ordinances in place. Residential programs are performing relatively well. There areopportunities to enhance programs. Maximizing availability of service is needed for businessesand for multifamily along with making it convenient for the customers.Data collection and reporting have a number of aspects. Data is needed to be able to monitorprograms. Participation rates in the food scrap program along with capture rates will increase.Long term funding was reviewed looking at the major funding sources which are disposal based.The Board has been successful in reducing disposal along with reducing funding. Diversionperformance was reviewed and it was determined it would be best to stay with the currentmeasurement. Member agencies can assist in market support by purchasing materials made fromrecovered materials and products. Mandatory programs and bans are needed. It is viewed asbeing the responsibility of member agencies to adopt mandatory recycling ordinances forresidents and businesses. It is the Agency’s role to help in developing model ordinances andbans.Mr. Carson asked on overall purchases where would the member agencies be on a scale of one toten. Mr. Deibler stated they did not focus specifically on that area. Ms. Smith pointed out that isan area of follow up with the Recycling Board on how the member agencies can make purchasesthat help to close the loop.Ms. Quan announced that the Recycling Board has asked staff to come back with a schedule ofpossible joint meetings to look at some of the materials that should be considered for a ban, suchas cardboard. She recalled a meeting on the different types of plastics and still believes thatlegislation is needed to narrow down the types of plastics used.g/data/support/minutes/wma bd/01-23-08 3

DRAFTMs. Quan asked if the Authority Board wants to have a couple of joint meetings with theRecycling Board. Ms. Smith reported that the Programs/Planning Committee in February will bediscussing landfill bans and mandatory recycling ordinances in more depth. Ms. Smith statedthey want to have the Seattle and San Diego people come and put on a mini-workshop.President Waespi thanked Mr. Deibler for his presentation.3. Interim appointment(s) to the Recycling Board for WMA appointees Motionunable to attend future Board Meeting(s)Ms. Smith noted the next meeting of the Recycling Board meeting will be February 14 and askedif anyone needed an appointment. There was none.VII. COMMUNICATIONS/MEMBER COMMENTSMr. Bukowski asked about having staff dedicated and trained for LEED Certification. He statedhe believes it would be less expensive if it was done in-house. He also asked about the GreenBusiness Programs.Ms. Smith stated that the Agency pays ABAG for the Green Business Program. LEEDCertification is provided by US Green Building Council and she believes it would actually costmore to have staff provide the certification within the county.Ms. Leider stated on Livermore’s staff there are some people who are certified to rate a greenbuilding.Ms. Leider added that her city staff was asked to find out what to do with pharmaceuticals. Itturns out that the DEA is the hang-up. What they say is unless you have a program in place likeSan Mateo’s in association with the police all you can do is wrap it up in kitty littler or coffeegrounds and throw it in the landfill. Ms. Leider will give the information to staff.Ms. Spring stated on the Berkeley city council agenda is the right to protest to the AlamedaCounty Board of Supervisors about all the birds being killed in the Altamont Pass by the windturbines. She asked to have a future agenda item regarding the birds on the agenda. Ms. Smithstated there has not been a status report on that subject in a while and there are major issuesgoing on. She stated she would ask for a status report from the County.VIII. OPEN PUBLIC DISCUSSIONThere was none.IX. CLOSED SESSION(Pursuant to Government Code Section 54957) Public Employee Appointment(Authority Counsel)The Board went in to closed session at 3:30 p.m. and reconvened.President Waespi announced that the Board directed the Executive Director to issue an RFP forAuthority Counsel.g/data/support/minutes/wma bd/01-23-08 4

DRAFTX. ADJOURNMENTThe meeting was adjourned at 4:15 p.m.g/data/support/minutes/wma bd/01-23-08 5

_______________________________________________________________________February 14, 2008TO:FROM:Authority BoardPat Cabrera, Administrative Services DirectorGina Peters, Finance OfficerSUBJECT: Annual Audit for Fiscal Year 2006/07The firm of Mann Urrutia Nelson CPAs & Associates has completed the attached audit of theAgency’s financial records for fiscal year 2006/07. This is the first year that this firm hasconducted the Agency’s annual audit, which gives the Agency the opportunity to receive a freshoverview of its financial operations and internal controls. Although the audit is shown as onereport, the Waste Management Authority and Recycling Board are separate legal entities and arelisted as such in the combining financial statements.The required annual report was submitted to the State Controller’s Office - Department of LocalGovernment Fiscal Affairs by the specified deadline.There are no audit exceptions related to fiscal year 2006/07.The report includes a Management’s Discussion and Analysis (MD&A) (pages 4-7) and shouldbe read in conjunction with the audited financial statements. The audit report also includes a totalAgency (WMA and Recycling Board) Statement of Net Assets (page 8); total Statement ofRevenues, Expenses and Changes in Net Assets (page 9); and total Statement of Cash Flows(page 10). On pages 21, 22, 23 and 24, the report shows the Statement of Net Assets and theStatement of Revenues, Expenses and Changes in Net Assets by fund and by Board.Although this report discusses the financial activity for the prior fiscal year, the information isparticularly meaningful in terms of beginning fund balances and ongoing revenue for the currentfiscal year. As discussed in greater detail below, the Agency received a much higher level oftonnage related revenue in fiscal year 06/07. However, the increase was due primarily to onetime circumstances. Current year revenues have shown a decline in both in county and moresignificantly in out of country tonnages which will be discussed at the mid year review nextmonth.REVENUE & EXPENSESTotal revenues for the 2007 fiscal year amounted to $18,954,062, a 3% increase over budgetedmid-year revenues. The increase in revenues adds to the Agency’s fund balances. Tonnage fees,the largest source of revenues, represented 95% of the total operating revenues. Compared to theData/admin/audits/audit2007wma 7

mid-year estimates, actual tonnages from the landfills were as follows: Altamont 96%, Tri-Cities97%, San Francisco Sanitary 102% and Vasco 109%. The increased tonnage from the Vascolandfill was due to higher than usual out-of-county waste disposal. Specifically, there was alandfill closure in Sonoma County in the last couple of years with Vasco receivingapproximately 16,000 tons in 2007. Furthermore, the Vasco landfill reported an additional30,000 tons coming from a customer who normally disposed refuse at the Potrero Hills landfill(in Solano County) and who has since returned to Potrero Hills. Therefore, there was a one timeboost in revenues in 2007 that will not occur in 2008 which are confirmed by receipts to date.Bin sales were 113% of mid-year estimates and property income ended the year at 108% ofbudget. Interest income was 113% of estimates as a result of higher average interest rate thanwas projected.Total operating expenses were $17,336,912 a reduction of 14% over mid-year budget estimates.The decrease in expenses and the increased revenues as mentioned above adds to the Agencyfund balances, hence the positive variances in fund balance as shown by the comparison ofestimated fund balance and actual (audited) fund balance.REVOLVING LOANLoans issued during the year amounted to $222,025 and total collection from the revolving loanswas $337,015 bringing the balance of loans receivable to $1,295,080.FUND BALANCES AVAILABLEFund balance in a typical governmental fund is the difference between assets and liabilities.The Agency functions as an Enterprise Fund and, as such, the difference between assets andliabilities is commonly known as “Total Net Assets”. For purposes of the discussion below, the“Total Net Assets” as shown in the audit report, is referred to as “Fund Balance.The Authority’s fund balance as of June 30, 2007 was $37,886,334 consisting of $14,471,551reserved for specific purposes by the Board; $3,836,900 for outstanding contracts; $15,089,876in capital assets; and $4,488,007 was unreserved and undesignated. The fund balance iscomprised of 56% cash, 40% invested in capital assets and 4% other assets, specificallyreceivables.The Recycling Board’s total fund balance (excluding revolving loans) as of June 30, 2007 was$6,209,270 consisting of $784,906 in reserves; $1,879,373 for outstanding contracts; and$3,544,991 was unreserved and undesignated. The fund balance is comprised of 100% cash.The revolving loan fund balance as of June 30, 2007 was $2,326,109 consisting of $1,295,080 inloan receivables; $38,600 for outstanding contracts; and $992,429 designated for issuing loansand for other related expenses. The fund balance comprised of 43% cash, 56% loan receivablesand 1% other receivables, primarily interest receivables.The unreserved and undesignated portion of the fund balance for both the Authority and theRecycling Board represents available funds and are the amounts used to compare with theestimated balances derived at mid-year. The purpose of this comparison is to determine howaccurate our estimates were, what if any were the reasons for any substantive variances, and howData/admin/audits/audit2007wma 8

much flexibility we may have for funding one-time or limited term projects in subsequent fiscalyears.FUND BALANCE COMPARISONACTUAL VS MIDYEAR ESTIMATE (in $ thousands)FUND Name ACTUAL ESTIMATED VARIANCEAuthority: WMAFacility Operators FeeMitigationAuthority Total1,6372,8514,4881,4691,4182,8871681,4331,601Recycling Board:RBRB Administration260307(47)RB Discretionary 957 715 242RB Grants to Non-Profits 913 658 255RB Source Reduction 554 489 65RB Market Development 617 495 122RB Recycled Product Price223 141 82PreferenceRB Municipalities Allocation ___21 ____0 __21Recycling Board Total 3,545 2,805 740RB Revolving Loan Fund 992 488 504NOTE ABOUT THE VARIANCEThe Facility, Mitigation, Recycling Board and RB-Revolving loan fund balances will be reducedby approximately $90,000, $90,000, $118,000 and $2,000 respectively and transferred to theLand Acquisition and Transportation Improvement Fund (TIP) reserves ($150,000 each) toreflect the annual reimbursement of monies borrowed for the purchase and renovation of theAgency’s office. In addition, a total of $12,000 of unspent incentives monies from the Facilityand Mitigation Funds will be returned to the Incentives reserve as will a return of $287,000 ofunspent MRF allocation to the CD/MRF reserve. The remaining fund balances of $223,000 inRB Recycled Product Price and $21,000 in the RB Municipalities Allocation fund will bedisbursed to the member agencies. As such the disbursements and transfers to reserves resultedin revised fund balances as follows: Facility fund $1.5 million; Mitigation fund $2.5 million;Recycling Board $3.2 million and Revolving loan $989,000.MANAGEMENT LETTERAlso attached is the auditor’s management letter which recommends areas that could beimproved in terms of internal control and/or operational efficiencies. As stated in the report theData/admin/audits/audit2007wma 9

auditors did not find any deficiencies that they would consider a material weakness. They didhowever, comment on the inefficiency of our current accounting system which necessitatessignificant manual journal entries at fiscal year end and recommended that the Agency upgradeor replace the system to accommodate accrual based financial reporting. We will review ouroptions with respect to this recommendation and determine if it is feasible to upgrade orimplement a new accounting system.RECOMMENDATIONThe audit report was presented to the Administration and Organization Committee for review atits February 6, 2008 meeting. Staff recommends that the Authority Board review, accept and filethe fiscal year 2006/07 audit report.Data/admin/audits/audit2007wma 10

ROSEVILLE OFFICESACRAMENTO OFFICE2901 Douglas Boulevard, Suite 290 2515 Venture Oaks Way, Suite 135Roseville, CA 95661 Sacramento, CA 95833TEL 916 774-4208 TEL 916 929-0540FAX 916 774-4230 FAX 916 929-0541September 27, 2007To the Board of TrusteesAlameda County Waste Management Authority andAlameda County Source Reduction and Recycling BoardOakland, CaliforniaWe have audited the financial statements of Alameda County Waste Management Authority and AlamedaCounty Source Reduction and Recycling Board for the year ended June 30, 2007, and have issued ourreport thereon dated September 27, 2007. Professional standards require that we provide you with thefollowing information related to our audit.Our Responsibility under U.S. Generally Accepted Auditing StandardsAs stated in our engagement letter dated June 19, 2007, our responsibility, as described by professionalstandards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that thefinancial statements are free of material misstatement and are fairly presented in accordance with U.S.generally accepted accounting principles. Because an audit is designed to provide reasonable, but notabsolute assurance and because we did not perform a detailed examination of all transactions, there is arisk that material misstatements may exist and not be detected by us.As part of our audit, we considered the internal control of Alameda County Waste Management Authorityand Alameda County Source Reduction and Recycling Board. Such considerations were solely for thepurpose of determining our audit procedures and not to provide any assurance concerning such internalcontrol.Significant Accounting PoliciesManagement is responsible for the selection and use of appropriate accounting policies. In accordancewith the terms of our engagement letter, we will advise management about the appropriateness ofaccounting policies and their application. The significant accounting policies used by Alameda CountyWaste Management Authority and Alameda County Source Reduction and Recycling Board aredescribed in Note 1 to the financial statements. No new accounting policies were adopted and theapplication of existing policies was not changed during 2007. We noted no transactions entered into byAlameda County Waste Management Authority and Alameda County Source Reduction and RecyclingBoard during the year that were both significant and unusual, and of which, under professional standards,we are required to inform you, or transactions for which there is a lack of authoritative guidance orconsensus.Accounting EstimatesAccounting estimates are an integral part of the financial statements prepared by management and arebased on management’s knowledge and experience about past and current events and assumptionsabout future events. Certain accounting estimates are particularly sensitive because of their significanceto the financial statements and because of the possibility that future events affecting them may differsignificantly from those expected. The most sensitive estimate affecting the financial statements wasdepreciation:Management’s estimate of depreciation is based on the straight line method of calculating deprecation.We evaluated the key factors and assumptions used to develop the depreciation estimate in determiningthat it is reasonable in relation to the financial statements taken as a whole.PRINCIPALSChris A. Mann, CPA , CFP ♦ John R. Urrutia, CPA ♦ Michelle O. Nelson, CPA, CFE, CVA ♦ Christine L. Collins, EA ♦ Kriss Ann Mann, CPA, CCPS11

Audit AdjustmentsFor purposes of this letter, professional standards define an audit adjustment as a proposed correction of thefinancial statements that, in our judgment, may not have been detected except through our auditing procedures.An audit adjustment may or may not indicate matters that could have a significant effect on the Alameda CountyWaste Management Authority and Alameda County Source Reduction and Recycling Board’s financial reportingprocess (that is, cause future financial statements to be materially misstated). In our judgment, none of theadjustments we proposed, whether recorded or unrecorded by the Alameda County Waste Management Authorityand Alameda County Source Reduction and Recycling Board, either individually or in the aggregate, indicatematters that could have a significant effect on the Alameda County Waste Management Authority and AlamedaCounty Source Reduction and Recycling Board’s financial reporting process.Disagreements with ManagementFor purposes of this letter, professional standards define a disagreement with management as a matter, whetheror not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could besignificant to the financial statements or the auditor’s report. We are pleased to report that no such disagreementsarose during the course of our audit.Consultations with Other Independent AccountantsIn some cases, management may decide to consult with other accountants about auditing and accounting matters,similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accountingprinciple to the governmental unit’s financial statements or a determination of the type of auditor’s opinion thatmay be expressed on those statements, our professional standards require the consulting accountant to checkwith us to determine that the consultant has all the relevant facts. To our knowledge, there were no suchconsultations with other accountants.Issues Discussed Prior to Retention of Independent AuditorsWe generally discuss a variety of matters, including the application of accounting principles and auditingstandards, with management each year prior to retention as the Alameda County Waste Management Authorityand Alameda County Source Reduction and Recycling Board’s auditors. However, these discussions occurred inthe normal course of our professional relationship and our responses were not a condition to our retention.Difficulties Encountered in Performing the AuditWe encountered no significant difficulties in dealing with management in performing and completing our audit.This information is intended solely for the use of the Board of Trustees and management of Alameda CountyWaste Management Authority and Alameda County Source Reduction and Recycling Board and is not intended tobe and should not be used by anyone other than these specified parties.Very truly yours,Mann, Urrutia, Nelson CPAs12

Alameda County Waste Management AuthorityAndAlameda County Source Reductionand Recycling BoardFinancial StatementsAndSupplementary InformationWithIndependent Auditor’s ReportJune 30, 200713

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLINGBOARDFOR THE YEAR ENDED JUNE 30, 2007TABLE OF CONTENTSPageBoard of Directors 1 - 2Independent Auditor's Report on Financial Statements 3Management's Discussion and Analysis 4 - 7Financial Statements:Statement of Net Assets 8Statement of Revenues, Expenses and Changes in Net Assets 9Statement of Cash Flows 10Notes to Financial Statements 11 - 19Supplementary Information:Combining Statement of Net Assets 21 - 22Combining Statement of Revenues, Expenses, and Changes in Net Assets 23 - 24Other Reports:Report on Internal Control Over Financial Reporting and on Compliance andOther Matters Based on an Audit of Financial Statements Performed inAccordance with Government Auditing Standards 25 - 2614

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITYBOARD OF DIRECTORSJUNE 30, 2007AgencyAlamedaAlameda CountyAlbanyBerkeleyDublinEmeryvilleFremontHaywardLivermoreNewarkOaklandPiedmontPleasantonSan LeandroUnion CityCastry Valley Sanity DistrictOro Loma Sanitary DistrictRepresentativeBeverly Johnson, MayorKeith Carson, SupervisorRobert Lieber, MayorDona Spring, City Council MemberJanet Lockhart, MayorKen Bukowski, City Council MemberBob Wasserman, MayorOlden Henson, City Council MemberMarjorie Leider, Vice MayorLuis Freitas, Vice MayorJean Quan, City Council MemberNancy McEnroe, Vice MayorMatt Sullivan, Council MemberSurlene Grant, Council MemberMark Green, MayorDennis Waespi, Board MemberLaython Landis, Board Member15

ALAMEDA COUNTY SOURCE REDUCTION AND RECYCLING BOARDBOARD OF DIRECTORSJUNE 30, 2007Martin BourqueRecycling Program OperationsOlden HensonCouncil Member, City of HaywardDebbie JefferySource Reduction EngineerMarjorie LeiderVice Mayor, City of LivermoreNancy McEnroeCouncil Member, City of PiedmontJean QuanCouncil Member, City of OaklandTodd StortiWaste Hauling IndustryMatt SullivanCouncil Member, City of PleasantonChad WilsonRecyclable Materials Processing IndustryArthur BooneEnvironmental OrganizationMark SpencerEnvironmental Educator16

ROSEVILLE OFFICESACRAMENTO OFFICE2901 Douglas Boulevard, Suite 290 2515 Venture Oaks Way, Suite 135Roseville, CA 95661 Sacramento, CA 95833TEL 916 774-4208 TEL 916 929-0540FAX 916 774-4230 FAX 916 929-0541INDEPENDENT AUDITORS' REPORTTo the Board of DirectorsAlameda County Waste Management Authority andAlameda County Source Reduction and Recycling BoardOakland, CaliforniaWe have audited the accompanying basic financial statements of Alameda County Waste ManagementAuthority and Alameda County Source Reduction and Recycling Board as of and for the year ended June30, 2007 as listed in the table of contents. These financial statements are the responsibility of theAlameda County Waste Management Authority and Alameda County Source Reduction and RecyclingBoard's management. Our responsibility is to express an opinion on these financial statements based onour audit.We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica, the State Controller's Minimum Audit Requirements for California Special Districts and thestandards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States. Those standards require that we plan and perform the auditsto obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. Webelieve that our audits provide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the Alameda County Waste Management Authority and Alameda County SourceReduction and Recycling Board, as of June 30, 2007 and the changes in its financial position for theyears then ended in conformity with accounting principles generally accepted in the United States ofAmerica as well as accounting systems prescribed by the State Controller's Office and state regulationsgoverning special districts.In accordance with Government Auditing Standards, we have also issued our report dated September 27,2007, on our consideration of the Alameda County Waste Management Authority and Alameda CountySource Reduction and Recycling Board's internal control over financial reporting and our tests of itscompliance with certain provisions of laws, regulations, contracts and grants. That report is an integralpart of an audit performed in accordance with Government Auditing Standards and should be read inconjunction with this report in considering the results of our audits.The management’s discussion and analysis on pages 4 through 7 is not a required part of the basicfinancial statements but is supplementary information required by accounting principles generallyaccepted in the United States of America. We have applied certain limited procedures, which consistedprincipally of inquiries of management regarding the methods of measurement and presentation of therequired supplementary information. However, we did not audit the information and express no opinion on it.The combining statements presented in the supplementary information is presented for purposes ofadditional analysis and is not a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basic financial statements and, inour opinion, is fairly stated in all material respects in relation to the basic financial statements taken as awhole.Sacramento, CASeptember 27, 2007PRINCIPALSChris A. Mann, CPA , CFP ♦ John R. Urrutia, CPA ♦ Michelle O. Nelson, CPA, CFE, CVA ♦ Christine L. Collins, EA ♦ Kriss Ann Mann, CPA, CCPS17

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLINGBOARDMANAGEMENT'S DISCUSSION AND ANALYSISFOR THE YEAR ENDED JUNE 30, 2007The following discussion and analysis of the financial activities of Alameda County Waste ManagementAuthority and Alameda County Source Reduction and Recycling Board (Agency) is intended to serve asan introduction to the audited financial statements of the Agency for the year ended June 30, 2007. Thisdiscussion, prepared by management, should be read in conjunction with the financial statement and thenotes thereto, which follow this section.Financial Highlights• The assets of the Agency exceeded its liabilities by $46,421,713 (reported as net assets)as of June 30, 2007. Authority’s net assets represent 82% and the Recycling Board 18%.• Cash and short-term investments balance at June 30, 2007 totaled $30,110,281 of which71% represents Authority cash and 29% Recycling Board cash.• Tonnage fees from the landfills amounted to $16,534,208 or 95% of operating revenues.Authority’s tonnage fees totaled $6,302,986 and Recycling Board fees totaled$10,231,222.• The Agency earned $1,523,080 in interest on its investments. Of the interest earned,Authority’s portion was $1,153,323 and Recycling Board was $369,757.• Operating expenses totaled $17,336,912. Authority’s portion was $7,401,297 or 43% andthe Recycling Board’s portion, which includes $5,141,813 distribution to themunicipalities, was $9,935,615 or 57%.• Capital assets additions totaled $3,134,982 ($2,991,919 added to buildings and$143,063 to furnishings).• Salaries and benefits represent 24% of total operating expenses.Required Financial StatementsThe financial statements report information about the Agency using the accrual basis of accountingsimilar to those found in the private sector. Revenues are recorded when earned and expenses recordedat the time liabilities are incurred, regardless of when cash is received or paid. The Agency’s financialreport includes the three basic financial statements: the Statement of Net Assets, the Statement ofRevenues, Expenses and Changes in Net Assets and the Statement of Cash Flows.The Statement of Net Assets presents information on all of the Agency’s assets and liabilities, with assetsless liabilities reported as net assets. The statement provides information about the nature and theamounts of investments in resources (assets) and obligations (liabilities). Over time, increases ordecreases in net assets may serve as a useful indicator of whether the financial position of the Agency isimproving or deteriorating. There are two sections to the Statement of Net Assets: Invested in Capitalassets and Unrestricted.The Statement of Revenues, Expenses and Changes in Net Assets present the results of the Agency’soperations over the course of the fiscal year and information as to how the net assets changed during theyear. All of the fiscal year’s revenues and expenses are accounted for in this statement.418

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLINGBOARDMANAGEMENT'S DISCUSSION AND ANALYSISFOR THE YEAR ENDED JUNE 30, 2007The final required financial statement is the Statement of Cash Flows. This statement providesinformation about the Agency’s cash receipts, cash payments, and net changes in cash resulting fromoperations, investing and financing activities. The statement shows what the sources and uses of cashwere and what the change in the cash balance was during the fiscal year.Financial AnalysisStatement of Net AssetsA comparison of the Agency’s Statements of Net Assets as of June 30, 2007 and 2006 is as follows:Table 1Condensed Summary of Net Assets at June 30, 2007 and 2006Increase(Decrease)AmountIncrease(Decrease)Percentage2007 2006Current assets $ 34,032,316 $ 35,387,461 $ (1,355,145) (4) %Capital assets 15,089,876 12,007,019 3,082,857 26 %Total Assets $ 49,122,192 $ 47,394,480 $ 1,727,712 4 %Current liabilities 2,367,665 2,290,592 77,073 3 %Non-Current liabilities 332,814 299,325 33,489 11 %Total Liabilities 2,700,479 2,589,917 110,562 4 %Net Assets:Invested in capital assets 15,089,876 12,007,019 3,082,857 26 %Unrestricted 31,331,837 32,797,544 (1,465,707) (4) %Total Net Assets $ 46,421,713 $ 44,804,563 $ 1,617,150 4 %As stated previously, over time, increases or decreases in net assets may serve as a useful indicator ofwhether the Agency’s financial health is improving or deteriorating. For the year ended June 30, 2007, theAgency’s net assets increased by $1,617,150. The largest portion of the Agency’s net assets,$31,331,837 (67%) of the total net assets is unrestricted and represents resources that may be used tomeet any of the Agency’s ongoing obligations. The Board has designated $15,256,462 (47%) of theunrestricted net assets for specific purposes. The Agency has no restricted net assets, which are assetssubject to externally imposed stipulations on how they may be used.As of the end of fiscal year 2007, the Agency’s investment in capital assets (net of accumulateddepreciation) increased by $3,082,857. The addition is due to the renovation/construction of the officebuilding in Oakland.519

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLINGBOARDMANAGEMENT'S DISCUSSION AND ANALYSISFOR THE YEAR ENDED JUNE 30, 2007Statement of Revenues, Expenses and Change in Net AssetsThe following table provides a summary of the Agency’s operations for the fiscal years 2007 and 2006.Table 2Condensed Statement of Revenues, Expenses,and Changes in Net Assets at June 30, 2007 and 2006Increase(Decrease)AmountIncrease(Decrease)Percentage2007 2006Operating revenue $ 17,430,982 $ 16,545,806 $ 885,176 5 %Non-operating revenue 1,523,080 1,175,068 348,012 30 %Total Revenues $ 18,954,062 $ 17,720,874 $ 1,233,188 7 %Operating expenses 17,284,787 17,161,482 123,305 1 %Depreciation 52,125 13,729 38,396 280 %Total expenses 17,336,912 17,175,211 161,701 1 %Net Income (loss) 1,617,150 545,663 1,071,487 196 %Beginning net assets 44,804,563 44,258,900 545,663 1 %Ending net assets $ 46,421,713 $ 44,804,563 $ 1,617,150 4 %The Statements of Revenues, Expenses, and Changes in Net Assets show the results of operationsduring the course of the year. As the table above shows, operating revenues, which consist mainly oftonnage fees from the landfills, increased by $885,176 or 5% over fiscal year 2006. The increase wasdue to higher tonnage from Vasco landfill and an increase in the Measure D fee which is indexed to theConsumer price Index. Tonnage fees account for 95% of operating revenues and the remaining 5% froma variety of sources including wind/property, bin sales, used oil, household hazardous waste and bay rocjunk mail campaign.Non-operating revenue, primarily interest income, increased in 2007 compared to 2006 by $348,012 or30% as a result of higher interest rates on Investments.Total operating expenses for fiscal year 2007 increased by $161,701 or 1% over 2006 due to higherMeasure D distribution to municipalities and general wage/benefits increase approved by the Board.620

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLINGBOARDMANAGEMENT'S DISCUSSION AND ANALYSISFOR THE YEAR ENDED JUNE 30, 2007Capital AssetsThe Agency’s investment in capital assets as of June 30, 2007 (net of accumulated depreciation)amounted to $15,089,876. This investment in capital assets includes land, buildings, furnishings andequipment. Assets totaling $3,134,982 were added during the year and assets amounting to $459,806donated to various non-profit organizations as a result of the move from San Leandro to Oakland weredeleted.Details of the capital assets, net of accumulated depreciation, as of June 30, 2007 and 2006 are asfollows:Table 3Schedule of Capital Assets at June 30, 2007 and 2006Increase(Decrease)AmountIncrease(Decrease)Percentage2007 2006Land (Altamont & Webster Street) $ 9,230,922 $ 9,230,922 $ - - %Buildings (Webster Street &Education Center) 5,766,387 2,774,468 2,991,919 108 %Furniture & Equipment 159,240 475,983 (316,743) (67)Less: Accumulated Depreciation (66,673) (474,354) 407,681 (86) %Ending net assets $ 15,089,876 $ 12,007,019 $ 3,082,857 26 %Additional information on the Agency’s capital assets can be found in note 4 of this report.Request for informationThis financial report is designed to provide a general overview of the Agency’s finances for those with aninterest in the Agency’s finances. Questions concerning any of the information provided in this report orrequests for additional financial information should be addressed to the Finance Officer, Alameda CountyWaste Management Authority and Recycling Board (Stopwaste.Org), 1537 Webster Street, Oakland CA94612721

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLINGBOARDSTATEMENT OF NET ASSETSJUNE 30, 2007ASSETSCurrent AssetsCash and cash equivalents (Note 2) $ 30,110,281Accounts receivable 2,168,040Interest receivable 421,613Loans receivable (Note 3) 1,295,080Prepaid expenses 37,302Total Current Assets 34,032,316Capital assets - net of accumulated depreciation (Note 4) 15,089,876Total Assets $ 49,122,192LIABILITIES AND NET ASSETSCurrent LiabilitiesAccounts payable $ 1,100,076Deferred revenue 4,500Due to other governmental agencies (Note 5) 1,263,089Total Current Liabilities 2,367,665Non-Current LiabilitiesAccrued vacation (Note 1) 332,814Total Liabilities 2,700,479NET ASSETSInvested in capital assets, net of related debt $ 15,089,876Unrestricted 31,331,837Total Net Assets $ 46,421,713See accompanying notes to the basic financial statements.822

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLING BOARDSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETSFOR THE YEAR ENDED JUNE 30, 2007OPERATING REVENUESFees $ 16,534,208Sales 79,070Other 817,704Total Operating Revenue 17,430,982OPERATING EXPENSESSalaries and benefits 4,187,515Program expenses 12,708,953Legal and accounting 115,999Board expenses 64,450Depreciation 52,125Rent 116,957Administrative and other 90,913Total Operating Expenses 17,336,912Operating income 94,070NON-OPERATING REVENUEInterest income 1,523,080NET INCOME 1,617,150NET ASSETS AS OF JUNE 30, 2006 44,804,563NET ASSETS AS OF JUNE 30, 2007 $ 46,421,713See accompanying notes to the basic financial statements.923

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLING BOARDSTATEMENT OF CASH FLOWSFOR THE YEAR ENDED JUNE 30, 2007CASH FLOWS FROM OPERATING ACTIVITIESCash received from customers and users $ 17,541,436Cash payments to suppliers (12,975,926)Cash payments to employees for wages and benefits (4,154,026)Net Cash Flows from Operating Activities 411,484CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESAcquisition of capital assets (3,134,982)CASH FLOWS FROM INVESTING ACTIVITIESInterest income 1,469,143NET DECREASE IN CASH (1,254,355)CASH AND CASH EQUIVALENTS JULY 1, 2006 31,364,636CASH AND CASH EQUIVALENTS JUNE 30, 2007 $ 30,110,281RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROMOPERATING ACTIVITIESOperating income $ 94,070Adjustments to Reconcile Operating Income to Net Cash Flows from OperatingActivities:Depreciation 52,125(Increase) Decrease in Assets:Accounts receivable (9,036)Loans receivable 114,990Prepaid expenses 48,773Increase (Decrease) in Liabilities:Accounts payable 129,690Due to other governments (57,117)Deferred revenue 4,500Accrued vacation 33,489Net Cash Flows from Operating Activities $ 411,484See accompanying notes to the basic financial statements.1024

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESA - Description of the Reporting EntityThe Alameda County Waste Management AuthorityThe Alameda County Waste Management Authority (Authority) is a public agency formed in 1976 by aJoint Exercise of Powers Agreement among the County of Alameda, each of the fourteen cities within thecounty, and two sanitary districts that provide refuse and recycling collection services. The Authority hasa seventeen-member board composed of elected officials appointed by each member agency.The Authority is responsible for preparation of the Alameda County Integrated Waste Management Planand Alameda County Hazardous Waste Management Plan. It manages a long-range program fordevelopment of solid waste facilities and offers a wide variety of other programs in the areas of sourcereduction and recycling, market development, technical assistance and public education. Funding isprovided by per ton disposal and waste import mitigation fees.The Alameda County Source Reduction and Recycling BoardThe Alameda County Source Reduction and Recycling Board (Recycling Board) was created in 1990 bythe voters of Alameda County through a ballot initiative, "Measure D". The eleven-member board includessix citizen experts appointed by the Alameda County Board of Supervisors and five elected officials fromthe Alameda County Waste Management Authority.The Recycling Board is responsible for programs that promote source reduction, residential andcommercial recycling, recycled product procurement and market development. Program funding isprovided from a per ton disposal surcharge at the Altamont and Vasco Road landfills.B - Basis of PresentationThe Agency's basic financial statements are prepared in conformity with accounting principals generallyaccepted in the United States of America. The Government Accounting Standards Board is theacknowledged standard setting body for establishing accounting and financial reporting standardsfollowed by governmental entities in the U.S.A.The Agency's only fund, the Enterprise Fund, is accounted for by providing a set of self-balancingaccounts that constitute its assets, liabilities, net assets, revenues and expenses. Enterprise funds areused to account for business-like activities provided to the general public. These activities are financedprimarily by user charges and the measurement of financial activity focuses on net income measurementsimilar to the private sector.The supplementary combining statements provided in these financial statements are presented in aneffort by management to highlight the sources and uses of revenues that have been designated forspecific purposes and do not represent separate funds, as prescribed by generally accepted accountingprinciples as applicable to government agencies.1125

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)C - Measurement Focus and Basis of AccountingMeasurement focus is a term used to describe which transactions are recorded within the variousfinancial statements. Basis of accounting refers to when revenues and expenses are recognized in theaccounts and reported in the financial statements regardless of measurement focus applied.Measurement FocusThe Statement of Net Assets and the Statement of Revenues, Expenses, and Changes in Net Assets,are presented using the economic resources measurement focus as defined below.All Enterprise funds utilize an economic resources measurement focus. The accounting objectives of thismeasurement focus are the determination of operating income, changes in net assets, financial position,and cash flows. All assets and liabilities (whether current or noncurrent) associated with the operation ofthese funds are reported. Enterprise fund equity is classified as net assets.Basis of AccountingIn the Statement of Net Assets and the Statements of Revenues, Expenses, and Changes in Net Assets,business-like activities are presented using the accrual basis of accounting. Under the accrual basis ofaccounting, revenues are recognized when earned and expenses are recorded when the liability isincurred of the economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resultingfrom exchange and exchange-like transactions are recognized when the exchange takes place.The Agency follows Statement and Interpretations of the Financial Accounting Standards Board and itspredecessors that were issued on or before November 30, 1989, in accounting for its business-typeactivities, which do not conflict with Government Accounting Standards Board pronouncements.D - Cash and InvestmentsCash includes amounts in demand deposits as well as short-term investments in the Alameda CountyInvestment Pool and the State of California Local Agency Investment Fund (LAIF). Investments arestated at fair value and are estimated based on quoted market prices at year end. All highly liquidinvestments with original maturities of three months of less are considered to be cash equivalents.E - Accounts ReceivableAccounts receivable consists mainly of tonnage fees received from landfills. These fees are collectable,therefore there is no allowance for uncollectible receivables.1226

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)F - Capital AssetsIn the statement of net assets, fixed assets with a historical cost over $5,000 are accounted for as capitalassets. All fixed assets are valued at historical cost, or estimated historical cost if actual is unavailable.Donated fixed assets are valued at their estimated fair market value on the date received. Depreciation iscomputed for financial statement purposes using the straight-line method. The estimated useful lives forthese depreciated assets are as follows:Building and improvementsVehicles, furniture, and equipment25 to 50 years5 to10 yearsG - Compensated AbsencesVested or accumulated vacation leave that is expected to be liquidated with expendable availablefinancial resources is reported as an expense and a liability. Generally, earned vacation may beaccumulated up to a maximum of 400 hours by all personnel. Agency employees do not receivecompensation for accumulated sick leave. Accordingly, no sick leave has been accrued.The total estimated liability for vacation at June 30, 2007 was $332,814.H - Post-Employment BenefitsThe Agency provides post-retirement health care benefits to eligible retirees. For all employee groups,eligible employees retiring at or after age 50 with a minimum of 5 years of service credit may opt tocontinue health care coverage, including spouse and dependents, with a monthly premium paid for by theAgency. Contribution expense for the post-retirement health care benefit is recognized when paid.As of June 30, 2007, six retirees were eligible and currently receiving this benefit. Post-retirementmedical care benefit expense for the year ended June 30, 2007 was $65,546.I - Equity ClassificationsNet assets are the excess of the Agency's assets over all of its liabilities. Net Assets are divided intothree categories. These categories are described below:a. Invested in capital assets, net of related debt - Consists of capital assets including restrictedcapital assets, net of accumulated depreciation and reduced by the outstanding balance of anybonds, mortgage, notes, or other borrowings that are attributable to the acquisition, construction,or improvements of those assets.b. Restricted net assets - Consists of net assets with constraints placed on the use either by (1)external groups such as creditors, grantors, contributors, grants, or law or regulations of othergovernments; or (2) law through constitutional provisions or enabling legislation.c. Unrestricted net assets - All other net assets that do not meet the definition of "invested incapital assets, net of related debt," or "restricted."1327

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)J - EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts on revenues and expenses during the reportingperiod. Actual results could differ from those estimates.NOTE 2 - CASH AND CASH EQUIVALENTSCash at June 30, 2007 consisted of the following:Cash on hand and in banks $ 49,546Investment pools 30,060,735Total Cash and cash equivalents $ 30,110,281Policies and PracticesUnder provision of the Agency's investment policy, and in accordance with section 53601 of the CaliforniaGovernment Code, the Agency is authorized to make direct investments in the State of California LocalAgency Investment Fund (LAIF) and the Alameda County Investment Pool. The Agency shall administerthe Recycling Fund in accordance with the provisions of Measure D.The Agency's investments were in compliance with the above provision as of and for the year endedJune 30, 2007.Interest Rate RiskInterest rate risk is the risk that changes in market interest rates will adversely affect the fair value of aninvestment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair valueto changes in market interest rates. The Agency manages its exposure to interest rate risk by purchasingonly shorter term investments as necessary to provide cash flow and liquidity needed for operations.Investment TypeFair ValueAlameda County Investment Pool $ 15,024,415State Investment Pool 15,036,320$ 30,060,735Credit RiskCredit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of theinvestment. This is measured by the assignment of a rating by a nationally recognized statistical ratingorganization. The state and county pools are not rated.1428

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 2 - CASH AND CASH EQUIVALENTS (Continued)Custodial Credit Risk - DepositsThis is the risk that, in the event of the failure of a depository financial institution, the Agency will not beable to recover its deposits or collateral securities that are in the possession of an outside party. TheAgency does not have a policy for custodial credit risk for deposits. However, the California GovernmentCode requires that a financial institution secure deposits made by state or local governmental units bypledging securities in an undivided collateral pool held by a depository regulated under state law (unlessso waived by the governmental unit). The market value of the pledged securities in the collateral poolmust equal at least 110% of the total amount deposited by the public agencies. California law also allowsfinancial institutions to secure public deposits by pledging first trust deed mortgage notes having a valueof 150% of the secured public deposits and letters of credit issued by the Federal Home Loan Bank ofSan Francisco having a value of 105% of the secured deposits. As of June 30, 2007, the Agency's bankbalance of $104,103 was fully insured by the FDIC.Custodial Credit Risk - InvestmentsThis is the risk that, in the event of the failure of the counter party, the Agency will not be able to recoverthe value of its investments or collateral securities that are in the possession of an outside party. TheCalifornia Government Code and the Agency's investment policy do not contain legal or policyrequirement that would limit the exposure to custodial credit risk for investments.Investment in County Treasury - The Agency is considered to be a voluntary participant in an externalinvestment pool. The fair value of the Agency's investment in the pool is reported in the financialstatements at amounts based upon the Agency's pro-rata share of the fair value provided by the CountyTreasurer for the entire portfolio (in relation to the amortized cost of that portfolio). The balance availablefor withdrawal is based on the accounting records maintained by the County Treasurer, which is recordedon the amortized cost basis.Investment in State Investment Pool - The Agency is a voluntary participant in the Local AgencyInvestment Fund (LAIF) that is regulated by California government code Section 16429 under theoversight of the Treasurer of the State of California. The fair value of the Agency's investment in the poolis reported in the accompanying financial statements at amounts based upon the Agency's pro-rata shareof the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of thatportfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF,which is recorded on the amortized cost basis.1529

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 3 - LOANS RECEIVABLEThe Agency lends monies out to businesses to improve their recycling and waste management programs.The Revolving Loan Fund is designed to encourage businesses to reduce the amount of waste going toAlameda County landfills by providing low interest loans for source reduction, recycling, composting,processing or recycled market development efforts. Loan funds are available to existing and start upbusinesses with projects that reduce waste disposed in Alameda County landfills. To be eligible,businesses must be located in Alameda or an adjacent county, or relocating to Alameda County. Thefund is administered by the Oakland Business Development Corporation on behalf of the AlamedaCounty Source Reduction and Recycling Board. Loans are available from $10,000 to $250,000 withinterest rates as low as 5%. Loan terms do not exceed 5 years. As of June 30, 2007, outstanding loanstotaled $1,295,080.NOTE 4 - CAPITAL ASSETSChanges in the Agency's capital assets and accumulated depreciation for the year ended June 30, 2007are summarized as follows:July 1, 2006 Additions Deletions June 30, 2007Capital Assets not being depreciated:Land 9,230,922 - - 9,230,922Construction in Progress 1,248,187 - (1,248,187) -Total 10,479,109 - (1,248,187) 9,230,922Capital Assets being depreciated:Buildings and Improvements 1,526,281 4,240,106 - 5,766,387Furniture and equipment 475,983 143,063 (459,806) 159,240Total 2,002,264 4,383,169 (459,806) 5,925,627Less Accumulated Depreciation for:Building (10,810) (49,206) - (60,016)Furniture and equipment (463,544) (2,919) 459,806 (6,657)Total (474,354) (52,125) 459,806 (66,673)Total Capital Assets being depreciated, net 1,527,910 4,331,044 - 5,858,954Total Capital Assets, net $ 12,007,019 $ 4,331,044 $(1,248,187) $ 15,089,876The costs of normal maintenance and repairs that do not add to the value of the asset or materiallyextend asset lives are not capitalized. Total depreciation expense for the year ended June 30, 2007 was$52,125.1630

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 5 - DUE TO OTHER GOVERNMENTAL AGENCIESThe Agency provides direct funding to member agencies through the mandated allocation of funds tomunicipalities. Measure D requires the Agency to disburse 50% of Measure D fees on a per capita basisto municipalities for the continuation and expansion of municipal recycling programs. At June 30 2007,$1,263,089 represented the last quarter Measure D fees that had not yet been remitted.NOTE 6 - EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PENSION PLAN)Plan DescriptionThe Agency contributes to the California Public Employees Retirement System (CalPERS), an agentmultiple-employer public employee defined benefit pension plan that acts as a common investment andadministrative agent for participating public entities within the State of California. CalPERS providesretirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan membersand beneficiaries. Benefit provisions and all other requirements are established by state statue and theAgency ordinance. Copies of CalPERS annual financial reports may be obtained from the executive officeat 400 P Street, Sacramento, CA 95814.Funding PolicyActive plan members in The Alameda County Waste Management Authority defined benefit pension planare required to contribute 8% of their annual covered salary. The Agency is required to contribute theactuarially determined remaining amounts necessary to fund the benefits for its members.The actuarial methods and assumptions used are those adopted by the CalPERS Board ofAdministration. The required employer contribution rate for the year ended June 30, 2007 was 14.631%.The contribution requirements of the plan members are established by State statute and the employercontribution rate is established and may be amended by CalPERS.Annual PensionThe Agency's annual pension cost was $619,280. The Agency funded 100% of the cost. The requiredcontribution for the year ended June 30, 2007 was determined as part of the June 30, 2006 actuarialvaluation using the entry age normal actuarial cost method with the contributions determined as a percentof pay. The actuarial assumptions included a (a) 7.75% investment rate of return (net of administrativeexpenses); (b) projected salary increases of 3.25% to 14.45% depending on age service, and type ofemployment; and (c) 3.25% cost-of-living adjustment. Both (a) and (b) include an inflation component of3.0%. The actuarial value of the Agency's defined benefit pension plan's unfunded actuarial liability (orexcess assets) is being amortized as a level percentage of project payroll on a closed basis.1731

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 6 - EMPLOYEES RETIREMENT PLAN (DEFINED BENEFIT PENSION PLAN) (Continued)Three Year Trend Information for PERSAnnualPension Cost(APC)Percentage ofAPCContributedNet PensionObligationFiscal Year2004-05 475,399 100% -2005-06 536,238 100% -2006-07 619,280 100% -Three Year Analysis of Funding Progress(dollars in thousands)(2) Entry AgeActuarialAccruedLiability(3)FundedRatio(1) / (2)(4)UnfundedActuarialAccruedLiability(2) - (1)(5)CoveredPayroll(6)UnfundedActuarialLiability as apercentageof CoveredPayroll(4) / (5)(1) ActuarialFiscal Year Asset Value2003-04 379,807,592 434,267,445 87.5% 54,459,853 97,227,479 56.0%2004-05 500,388,523 579,276,103 86.4% 78,887,580 129,379,492 62.5%2005-06 787,758,909 912,988,585 86.3% 25,229,676 200,320,145 62.5%NOTE 7 - LEASE ARRANGEMENTSThe Agency maintains equipment under long-term operating leases. Future minimum rental paymentsrequired under operating leases that have an initial or remaining nonrenewable lease term in excess ofone year, as of June 30, 2007 are as follows:Year Ending June 30, 2008 $ 34,769Total rent expense for the year ended June 30, 2007 totaled $116,957.In addition, the Agency leases land to private parties. The amount of lease activity is not considered asignificant part of the Agency's business activities in terms of revenue, net income, or assets.1832

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCEREDUCTION AND RECYCLING BOARDNOTES TO BASIC FINANCIAL STATEMENTSJUNE 30, 2007NOTE 8 - RISK MANAGEMENTThe Agency is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors and omissions; injuries to employees and natural disaster. The Agency carries commercialinsurance coverage for its general, liability, property damage, and workers' compensation insurance. TheAgency also carries public officials and employee liability insurance, as well as employee dishonesty andforgery/alteration insurance, for those employees who have check signing authority, as well as thoseemployees who handle funds in any manner.NOTE 9 - NEW ACCOUNTING PRONOUNCEMENTThe GASB issued Statement No. 45, Accounting and Financial Reporting by Employers forPostemployment Benefits Other than Pensions. The basic premise of the statement is that OtherPostemployment Benefits (OPEB) are earned by employees and should be recognized by the employeras the employee provides services. GASB 45 requires employers to account for and report the annualcost of OPEB and the outstanding obligations and commitments related to them in the same manner asthey currently do for pensions. All of the Agency's retirees continue to receive their health insurancebenefits at various percentages of the Agency's cost. Currently, the Agency is financing OPEB on a payas-you-gobasis. Accounting for OPEB under GASB No. 45 will result in the Agency reporting asignificant actuarially-based liability for benefits. The Agency will be required to implement GASB No. 45in the fiscal year ending June 30, 2009. The Agency has retained the services of an actuary to prepare anactuarial valuation of the retiree health benefits program.1933

SUPPLEMENTARY INFORMATION34

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLING BOARDCOMBINING STATEMENT OF NET ASSETS - WASTE MANAGEMENTJUNE 30, 2007ASSETSSolid WasteMitigationFeesTotalWasteManagementCurrent Assets:Cash and short term investments $ 3,738,962 $ 17,608,175 $ 21,347,137Accounts receivable 416,884 607,974 1,024,858Interest receivable 64,412 222,135 286,547Due from other funds 718,970 594,240 1,313,210Prepaid expenses 37,302 - 37,302Total Current Assets 4,976,530 19,032,524 24,009,054Capital assets, net of accumulateddepreciation 349,235 14,740,641 15,089,876Total Assets $ 5,325,765 $ 33,773,165 $ 39,098,930LIABILITIES AND NET ASSETSCurrent Liabilities:Accounts payable $ 292,640 $ 477,949 $ 770,589Deferred revenue 4,500 - 4,500Due to other funds 83,139 21,554 104,693Total Current Liabilities 380,279 499,503 879,782Non-Current LiabilitiesAccrued vacation 332,814 - 332,814Total Liabilities 713,093 499,503 1,212,596Net AssetsInvested in capital assets $ 349,235 $ 14,740,641 $ 15,089,876Unrestricted 4,263,437 18,533,021 22,796,458Total Net Assets $ 4,612,672 $ 33,273,662 $ 37,886,3342135

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCE REDUCTION ANDRECYCLING BOARDCOMBINING STATEMENT OF NET ASSETS - RECYCLING BOARDJUNE 30, 2007ASSETSMunicipalityAllocationRevolvingLoan FundPre-March1995AdministrationDiscretionaryGrants toNon-ProfitsSourceReductionMarketDevelopmentRecycledProductPriceTotalRecyclingBoardCurrent Assets:Cash and short terminvestments $ 702,921 $ 1,006,609 $784,905 $ 293,741 $2,154,333 $1,748,318 $ 969,442 $ 817,516 $ 285,359 $ 8,763,144Accounts receivable 571,266 650 - 34,276 137,104 114,253 114,253 114,253 57,127 1,143,182Interest receivable 10,442 29,163 - - 95,461 - - - - 135,066Loans receivable - 1,295,080 - - - - - - - 1,295,080Due from other funds - - - - - - 846,673 - - 846,673Total Current Assets $1,284,629 $ 2,331,502 $784,905 $ 328,017 $2,386,898 $1,862,571 $ 1,930,368 $ 931,769 $ 342,486 $12,183,145LIABILITIES AND NETASSETSCurrent Liabilities:Accounts payable $ - $ - $ - $ 10,913 $ 90,920 $ 57,500 $ 45,193 $ 51,081 $ 73,880 $ 329,487Due to other funds - 5,393 - 22,211 923,271 26,072 957,281 80,440 40,522 2,055,190Due to other government 1,263,089 - - - - - - - - 1,263,089Total Current Liabilities 1,263,089 5,393 - 33,124 1,014,191 83,572 1,002,474 131,521 114,402 3,647,766Net AssetsUnrestricted 21,540 2,326,109 784,905 294,893 1,372,707 1,778,999 927,894 800,248 228,084 8,535,379Total Net Assets $ 21,540 $ 2,326,109 $784,905 $ 294,893 $1,372,707 $1,778,999 $ 927,894 $ 800,248 $ 228,084 $ 8,535,37922 36

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY ANDALAMEDA COUNTY SOURCE REDUCTION AND RECYCLING BOARDCOMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETSWASTE MANAGEMENTJUNE 30, 2007Solid WasteMitigationFeesTotalWasteManagementOPERATING REVENUESFees $ 2,497,672 $ 3,805,314 $ 6,302,986Sales 79,070 - 79,070Other 260,960 485,545 746,505Total Operating Revenues 2,837,702 4,290,859 7,128,561OPERATING EXPENSESSalaries and benefits 931,103 1,511,970 2,443,073Program expenses 1,612,219 2,980,643 4,592,862Legal and accounting 70,740 28,335 99,075Board expenses 52,950 - 52,950Depreciation 16,207 35,918 52,125Rent 116,310 129 116,439Administrative and other 44,773 - 44,773Total Operating Expenses 2,844,302 4,556,995 7,401,297Operating loss (6,600) (266,136) (272,736)NON-OPERATING REVENUEInterest income 192,606 960,717 1,153,323Income before operating transfers 186,006 694,581 880,587Operating transfers in - 67,209 67,209Operating transfers out (71,163) - (71,163)(71,163) 67,209 (3,954)NET INCOME 114,843 761,790 876,633NET ASSETS AS OF JUNE 30, 2006 4,497,829 32,511,872 37,009,701NET ASSETS AS OF JUNE 30, 2007 $ 4,612,672 $ 33,273,662 $ 37,886,3342337

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY AND ALAMEDA COUNTY SOURCE REDUCTION ANDRECYCLING BOARDCOMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS - RECYCLING BOARDJUNE 30, 2007MunicipalityAllocationRevolvingLoan FundPre-March1995AdministrationDiscretionaryGrants toNon-ProfitsSourceReductionMarketDevelopmentRecycledProductPriceTotalRecyclingBoardOPERATING REVENUESFees $ 5,115,611 $ - $ - $ 306,936 $ 1,227,746 $ 1,023,122 $1,023,123 $ 1,023,123 $ 511,561 $10,231,222Other - 71,199 - - - - - - - 71,199Total Operating Revenues 5,115,611 71,199 - 306,936 1,227,746 1,023,122 1,023,123 1,023,123 511,561 10,302,421OPERATING EXPENSESSalaries and benefits - 24,085 - 140,969 433,133 58,088 679,445 367,896 40,826 1,744,442Program expenses 5,141,813 27,846 - 61,722 740,608 669,134 553,766 460,998 460,204 8,116,091Legal and accounting - 861 - 16,063 - - - - - 16,924Board expenses - - - 11,500 - - - - - 11,500Rent - - - - - - 518 - - 518Administrative and other - - - 46,140 - - - - - 46,140Total Operating Expenses 5,141,813 52,792 - 276,394 1,173,741 727,222 1,233,729 828,894 501,030 9,935,615Operating income (loss) (26,202) 18,407 - 30,542 54,005 295,900 (210,606) 194,229 10,531 366,806NON-OPERATING REVENUEInterest income 34,040 40,623 - - 295,094 - - - - 369,757Income (loss) before operatingtransfers 7,838 59,030 - 30,542 349,099 295,900 (210,606) 194,229 10,531 736,563Operating transfers in - - - - - - 3,954 - - 3,954NET INCOME (LOSS) 7,838 59,030 - 30,542 349,099 295,900 (206,652) 194,229 10,531 740,517NET ASSETS AS OF JUNE 30, 2006 13,702 2,267,079 784,905 264,351 1,023,608 1,483,099 1,134,546 606,019 217,553 7,794,862NET ASSETS AS OF JUNE 30, 2007 $ 21,540 $2,326,109 $ 784,905 $ 294,893 $ 1,372,707 $ 1,778,999 $ 927,894 $ 800,248 $ 228,084 $ 8,535,37924 38

ROSEVILLE OFFICESACRAMENTO OFFICE2901 Douglas Boulevard, Suite 290 2515 Venture Oaks Way, Suite 135Roseville, CA 95661 Sacramento, CA 95833TEL 916 774-4208 TEL 916 929-0540FAX 916 774-4230 FAX 916 929-0541REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHERMATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDSThe Board of DirectorsAlameda County Waste Management Authority andAlameda County Source Reduction and Recycling BoardOakland, CaliforniaWe have audited the financial statements of the Alameda County Waste Management Authority andAlameda County Source Reduction and Recycling Board (the "Agency") as of and for the year endedJune 30, 2007. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.Internal Control Over Financial ReportingIn planning and performing our audit, we considered Agency's internal control over financial reporting as abasis for designing our auditing procedures for the purpose of expressing our opinion on the financialstatements, but not for the purposes of expressing an opinion on the effectiveness of the Agency'sinternal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe Agency's internal control over financial reporting.A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detectmisstatements on a timely basis. A significant deficiency is a control deficiency , or combination of controldeficiencies, that adversely affects the Agency's ability to initiate, authorize, record, process, or reportfinancial data reliably in accordance with generally accepted accounting principles such that there is morethan a remote likelihood that a misstatement of the Agency's financial statements that is more thaninconsequential will not be prevented or detected by the Agency's internal control.A material weakness is a significant deficiency, or combination of significant deficiencies, that results inmore than a remote likelihood that a material misstatement of the financial statements will not beprevented or detected by the Agency's internal control.Our consideration of internal control over financial reporting was for the limited purpose described in thefirst paragraph of this section and would not necessarily identify all deficiencies in internal control thatmight be significant deficiencies or material weaknesses. We did not identify any deficiencies in internalcontrol over financial reporting that we consider to be material weaknesses, as defined above.Compliance and Other MattersAs part of obtaining reasonable assurance about whether the Agency's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements, noncompliance with which could have a direct and material effect onthe determination of financial statement amounts. However, providing an opinion on compliance withthose provisions was not an objective of our audit, and accordingly, we do not express such an opinion.The results of our tests disclosed no instances of noncompliance or other matters that are required to bereported under Government Auditing Standards.PRINCIPALSChris A. Mann, CPA , CFP ♦ John R. Urrutia, CPA ♦ Michelle O. Nelson, CPA, CFE, CVA ♦ Christine L. Collins, EA ♦ Kriss Ann Mann, CPA, CCPS39

We noted certain matters that we reported to management of the Agency in a separate letter datedSeptember 27, 2007.This report is intended solely for the information and use of management and the Board of Directors andis not intended to be and should not be used by anyone other than these parties.Sacramento, CaliforniaSeptember 27, 200740

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITYMANAGEMENT REPORTFOR THE YEAR ENDEDJUNE 30, 2007MANN, URRUTIA, NELSON, CPAS & ASSOCIATES, LLP2515 VENTURE OAKS WAY, SUITE 135SACRAMENTO, CA 9583341

ROSEVILLE OFFICESACRAMENTO OFFICE2901 Douglas Boulevard, Suite 290 2515 Venture Oaks Way, Suite 135Roseville, CA 95661 Sacramento, CA 95833TEL 916 774-4208 TEL 916 929-0540FAX 916 774-4230 FAX 916 929-0541MANAGEMENT REPORTTo the Board of DirectorsAlameda County Waste Management AuthorityOakland, CaliforniaIn planning and performing our audit of the consolidated financial statements of the Alameda CountyWaste Management Authority & Source Reduction and Recycling Board (the “Agency”) for the yearended June 30, 2007, we considered the Agency’s internal control structure to determine our auditingprocedures for the purpose of expressing an opinion on the consolidated financial statements and not toprovide assurance on the internal control structure.A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detect financialstatement misstatements on a timely basis. A deficiency in design exists when a control necessary tomeet the control objective is missing, or when an existing control is not properly designed so that even ifthe control operates as designed, the control objective is not always met. A deficiency in operation existswhen a properly designed control does not operate as designed or when the person performing thecontrol does not possess the necessary authority or qualifications to perform the control effectively.A significant deficiency is a control deficiency, or a combination of control deficiencies, that adverselyaffect the entity’s ability to authorize, initiate, record, process or report financial data reliably inaccordance with generally accepted accounting principles such that there is more than a remotelikelihood that a misstatement of the entity’s financial statements that is more than inconsequential will notbe prevented or detected.A material weakness is a significant deficiency, or a combination of significant deficiencies, that results inmore that a remote likelihood that a material misstatement of the financial statements will not beprevented or detected.Our consideration of internal control was for the limited purpose described in the first paragraph andwould not necessarily identify all deficiencies in internal control that might be significant deficiencies ormaterial weaknesses. We did not identify any deficiencies in internal control that we consider to bematerial weaknesses, as defined above.However, during our audit we became aware of a few matters that are opportunities for strengtheninginternal controls and operating efficiency. The schedules below summarize our comments andsuggestions concerning those matters.We wish to thank Gina Peters and the Finance Department for their support and assistance during ouraudit.Sacramento, CaliforniaSeptember 27, 2007PRINCIPALSChris A. Mann, CPA , CFP ♦ John R. Urrutia, CPA ♦ Michelle O. Nelson, CPA, CFE, CVA ♦ Christine L. Collins, EA ♦ Kriss Ann Mann, CPA, CCPS42

CURRENT YEAR FINDINGSAccounting Information SystemThe ACWMA accounting information system is not operated on a full accrual accounting method inaccordance with GAAP (generally accepted accounting principles). The Finance Officer therefore makessignificant entries and reclassifications at the end of the fiscal year in order to produce accrual-basedfinancial records acceptable for the audit. The accounting system does not create an aging analysis ofaccounts receivable balances. The Finance Officer is required to manually create an accounts receivablelisting. We recommend that ACWMA should review its current accounting information system anddetermine what options are available to the agency in order to make the changes necessary to thesystem so that it will support accrual-based financial reporting along with the other reporting needs of theauthority.43

PRIOR YEAR FINDINGSJournal Entries and Bank ReconciliationsJournal entries and bank reconciliations are prepared and adjustments entered into the accountingsystem by the same person without review or approval by another individual. Internal control bestpractices dictate that the functions of authorization, recordkeeping, and custody of assets be segregatedamong different departments or, at the very least, among individuals within the same department. Werecommend that an employee other than the preparer be designated to review all journal entries andbank reconciliations. Segregating these functions will increase the effectiveness of internal controls.Status: Not implemented. Management has addressed the finding in the 07-08 fiscal year.Compensated AbsencesACWMA Board policy states, no employee will be allowed to accrue vacation leave in excess of 176hours. All vacation time which would normally accrue after having attained this amount shall be scheduledby the manager. If, due to an unusual work load, the taking of a vacation would result in hardship to theAuthority, an exception may be granted. Such a request shall be transmitted to the Executive Director inwriting, stating the circumstances, and designating an estimated period for which the excess accrual is tobe allowed. No such deferral shall exceed six months in any twelve-month period and shall be approvedby the Executive Director.o This Board policy is not being adhered to. As of June 30, 2006, fourteen employees haveaccrued vacation hours in excess of the 176-hour limit. Total hours in excess of the limit are3,403 and represent a liability of $136,962 or 45.76 percent of the total compensated absencesliability of $299,325.o When an employee in a key control position is not required to take a vacation, the risk of fraudincreases because no one has an opportunity to perform the duties and functions of theemployee’s position.We understand that the Agency is in the process of revising its policy on the maximum allowable vacationhours than an employee may accrue. We recommend that the ACWMA attempt to resolve this issue assoon as possible.Status: Recommendation implemented.Accounting Information SystemThe ACWMA accounting information system is not operated on a full accrual accounting method inaccordance with GAAP (generally accepted accounting principles). The Finance Officer is thereforerequired to make significant entries and reclassifications at the end of the fiscal year in order to preparethe financial records for the audit. We recommend the ACWMA should review its current accountinginformation system and determine what options are available to the agency in order to make the changesnecessary to the system so that it will support accrual-based financial reporting along with the otherreporting needs of the authority.Status: Not implemented, see current year finding.44

________________________________________________________________________February 12, 2008To:From:Subject:Authority BoardPat CabreraAdministrative Services DirectorLocal Preference Purchasing PolicyBackgroundAt the request of Board member Lieber, staff has researched the feasibility of adopting a formallocal preference policy for goods and services, which is discussed below.DiscussionStaff surveyed the member agencies to ascertain if individual jurisdictions gave a local vendorpreference for goods and services and if so at what level. As shown in attachment 1 about 59%of the member agencies give some type of preference for goods and materials which ranges froma very minimal adjustment for sales tax to a maximum of 10% for local and small and emergingbusinesses. However, only 23.5% give preferences for professional services.In determining the applicability of a local preference policy for Authority purchases,implementing a local preference for goods, materials and general services is reasonable assumingthat the vendors comply with the requirements set forth in the EPP policy. However,maintaining a best qualified approach for professional services which includes factors such ascost, experience, expertise, etc. would continue to ensure that the Agency receive proposals fromthe best qualified firms or individuals in the environmental or other professional industries. Inaddition, comparable to the comprehensive outreach the Agency conducts when hiring staff,adopting a similar outreach philosophy, such as referring to the County’s local vendor databasewhen soliciting all bids would also ensure that local vendors and consultants are aware and havethe opportunity to respond to requests for proposals and/or qualifications.Administration & Organization (A&O) Committee RecommendationThis information was presented to the A&O Committee at its February 6, 2008 meeting. TheCommittee unanimously recommended that the Authority board to adopt as outlined in theattached resolution, a local preference policy for goods, materials and “general services” (e.g.,printers, janitorial services, gardeners, etc.). The preference is as follows: 2.5% for local and2.5% for small and emerging business based on Alameda County’s certified vendors list for apossible combined preference of 5.0%, provided that the goods and materials are consistent withthe requirements set forth in the Agency’s environmental purchasing policy. The business mustverify that it has been in operation in Alameda County for at least six months to be eligible forthe local preference. The Agency will still maintain a best qualified approach for professionalservices and pursue outreach of Alameda County contractors using the County’s list whenissuing a RFP or RFQ.g/data/admin/ea/letter&memos/WMA local preference policy final 45

ALAMEDA COUNTY WASTE MANAGEMENT AUTHORITYRESOLUTION WMA 2008-MOVED:SECONDED:AT THE MEETING HELD FEBRUARY 27, 2008ADOPTION OF THE AGENCY’S LOCAL PREFERENCE POLICYWHEREAS, the Agency currently does not have a formal local preference policy for goods,materials and general services, andWHEREAS, the Agency wishes to support businesses in Alameda County, andWHEREAS, a local preference of 2.5% for a local business and a 2.5% preference for small oremerging business for goods, materials and general services is a reasonable means ofdemonstrating support and encouraging participation of local businesses in the Agency’s requestfor bids and/or qualifications, andWHEREAS, at the February 6, 2008 Administration and Organization Committee meeting, theCommittee recommended that the Authority adopt a local preference policy for goods, materialsand general services.NOW THEREFORE, BE IT RESOLVED, that the Waste Management Authority Boardhereby:1. Approves the attached Local Preference Policy effective July 1, 2008. This Policy will beused in conjunction with the Agency’s Purchasing Approval Policy and the Agency’sEnvironmentally Preferable Purchasing (EPP) policy.ADOPTED BY THE FOLLOWING VOTE:AYES:NOES:ABSTAIN:ABSENT:____________________________Karen Smith, Executive DirectorG:\DATA\Boards\Resolutions\WMA-Resol\WMA Resol-2008\2008- Local Preference Policy.doc 49

Alameda County Waste Management AuthorityLocal Preference Purchasing PolicyI. The Agency will give a 2.5% vendor bid preference to a local business for goods,materials and general services provided that the goods, materials and/or general servicesmeet the standards set forth in the Agency’s Environmentally Preferable PurchasingPolicy (EPP). The Agency will give an additional 2.5% vendor bid preference to a localbusiness that is also a certified small or emerging business for goods, materials andgeneral services provided that the goods, materials and/or general services meet thestandards set forth in the Agency’s Environmentally Preferable Purchasing Policy (EPP).A. General services are defined as basic operational services such as printers,gardeners, janitors, etc. General services differ from professional services, withprofessional services requiring a specialized expertise or skill set. Example, agardener is considered general services, whereas a landscape designer would fallunder professional services. The Executive Director, Administrative Director ordesignee will determine whether a contractor falls under the general services orprofessional services category.B. A small or emerging business must be certified by the Alameda County SmallLocal & Emerging Business Program (SLEB).C. A local business must be in operation in Alameda County for at least six (6)months to qualify for the local preference.1. The business must have a verifiable address in Alameda County and mustbe able to prove that the business has been in operation in AlamedaCounty for at least six months.2. The business must have a valid business license with the localjurisdiction in which the business resides.II. The Agency will calculate the bid preference as follows:A. The local vendor’s bid will be reduced by 2.5% when comparing to other bids.Assuming all elements of the bid are equal (e.g., quality, timeliness of delivery,adherence to the EPP, etc) upon calculation of the 2.5% preference, if the localvendor has the lowest bid, it will receive the contract subject to the ExecutiveDirector’s or, if over $15,000, the Board’s approval.B. The local and certified small and emerging vendor’s bid will be reduced by 5.0%when comparing to other bids. Assuming all elements of the bid are equal (e.g.,quality of goods, timeliness of delivery, adherence to the EPP, etc) uponcalculation of the 5.0 % preference, if the local and small or emerging vendor hasthe lowest bid, it will receive the contract subject to the Executive Director’s or, ifover $15,000, the Board’s approval.III. The Executive Director or designee may waive this preference and the bid process as awhole in the event of an emergency or if the operational effectiveness of the Agencywould be seriously threatened if the purchase of goods or services was not madeimmediately.g/data/admin/ea/letter&memos/ local preference policy 51

IV. Professional services contracts are exempt from the local vendor preference. However,when issuing a RFP or RFQ the Agency will pursue outreach of Alameda Countycontractors using available vendor information such as the Alameda County’s vendor list.g/data/admin/ea/letter&memos/ local preference policy 52

DraftALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY& RECYCLING BOARDADMINISTRATION & ORGANIZATION COMMITTEEMINUTESFebruary 6, 2008, Wednesday, 10:00 a.m.1537 Webster StreetOakland, Ca. 94612(510) 891-6500Present:Staff Present:Ken Bukowski, ChairKeith CarsonMarjorie LeiderDebra JefferyLaython LandisTony SantosTodd StortiDennis WaespiKaren Smith, Executive DirectorPat CabreraRoberta MillerGina PetersOthers Present:Michelle Nelson, Partner, Mann Urrutia, Nelson CPA’s & AssociatesKatie Williams, Manager, Mann Urrutia, Nelson CPA’s & Associates1. Convene the MeetingThe meeting was convened at 10:02 am.2. Open Public DiscussionNone.3. Approval of Minutes of December 5, 2007 MotionMr. Landis made the motion to approve the minutes of the December 5, 2007 committeemeeting. Ms. Leider seconded the motion and it was carried 6-0 (Carson and Storti absent).1 53

Draft4. Annual Audit for FY 2006/2007 ActionRecommendation to forward to the Waste Management Authority andRecycling Boards for review and filingMs. Cabrera presented the FY audit 2006/2007. This audit is the first prepared under the newservices contract with Mann Urrutia Nelson CPA and Associates. No irregularities or exceptionswere found by the auditors. One recommendation for improvement was made, which was toinvestigate computer software programs that would accommodate accrual accounting.Revenues were higher than originally predicted by 3%, largely due to one time increases in themitigation fund. Those increases along with year surpluses increase the fund balance availableby $1.5 million. Staff has also noticed a sharp decrease in tonnages for this current year whichmakes the surplus a positive development.Mr. Landis asked what the cash balances at the end of the year for both boards. Ms. Cabrerastated that the WMA had $21 million and the Recycling Board had $8.7 million in the bank onJune 30, 2007. Ms. Smith noted that some of those funds (approximately $5.7 million) werecommitted in contracts. Ms. Cabrera noted that $15.1 million is tied up in capital costs. Ms.Smith added that another $4 million is in the uncommitted fund balance for the WMA and $3.0million for the RB which has slowly been reduced over the past few years.Ms. Cabrera also noted that the current year will have significantly reduced revenue.Mr. Santos asked about the cost of employee retirements. Ms. Cabrera stated that CalPERSdetermines the liabilities for each employee and adjusts rates accordingly to secure the fundsneeded each year to cover future retirees.Mr. Santos asked if adequate funds were being set aside for employee retirement. Ms. Nelsonfrom the auditing firm of Mann Urrutia, Nelson CPA’s & Associates noted that the informationin the audit report is a pooled amount for CalPERS and future liability following GASPreporting protocols. The figure noted in the Audit report is not solely StopWaste’s liability butthat of the pool of smaller entities. Ms. Cabrera noted that there is more information about thison the previous page of the Audit report.Mr. Bukowski asked if staff had looked at PARS and the cost for employee coverage. Ms.Cabrera stated that PARS is often used as a supplement to PERS and not generally as asubstitution.Ms. Leider thanked Ms. Cabrera and the auditors for the easy to read and understandable auditreport.Mr. Landis made the motion to forward the audit report to the Waste Management Authority andRecycling Board for review and filing. Ms. Leider seconded and the motion was carried 7 – 0(Storti abstain).2 54

Draft5. Reappointment to the Recycling Board ActionRecommendation to the Authority Board to reappoint Ms. MarjorieLeider to the Recycling BoardMr. Santos made the motion to recommend the Authority Board reappoint Ms. Marjorie Leiderto the Recycling Board. Ms. Jeffrey seconded and the motion was carried 8-0.6. Local Preference Purchasing Policy Information/ActionMs. Cabrera presented the results of staff research on local preference purchasing policies.StopWaste currently has an Environmentally Preferable Purchasing Policy in addition of otherpurchasing specifications. Staff surveyed member agencies to determine individual jurisdictionpolicies, with over half providing some type of local preference for goods and materials and lessthan a quarter providing local preference for professional services. The recommendation is toadopt a local preference policy for goods, materials and “general services” such as printers,janitorial services, gardeners, etc, at 2.5 % for local and 2.5% for small and emerging businessesbased on Alameda County’s certified vendors list for a possible combined preference of 5%,provided that goods and materials are consistent with the requirements set forth in the Agency’senvironmental purchasing policy. Staff further recommends that the Agency maintain a bestqualified approach for professional services and pursue outreach to Alameda County contractorsusing the County’s list when issuing an RFP or RFQ.Mr. Carson suggested that staff add a restriction for a time limit that businesses are required tobe residing in the county and that the list of appropriate contractors are reevaluated periodicallyto ascertain that they still qualify.Ms. Cabrera agreed and suggested that a six month business residency requirement be added tothe recommendation.Mr. Santos made the motion to approve the staff recommendation with the added six monthrequirement for businesses to be in operation in the County to receive the local preference. Ms.Jeffrey seconded and the motion was carried 8-0.7. Member CommentsNone8. AdjournmentThe meeting was adjourned at 10:30 am.3 55

DRAFTALAMEDA COUNTY WASTE MANAGEMENT AUTHORITYPROGRAM/PLANNING COMMITTEEMINUTESFebruary 12, 2008, Tuesday, 10:00 a.m.1537 Webster StreetOakland, Ca. 94612(510) 891-6500Present:Staff Present:Beverly Johnson, City of AlamedaJoanne Wile, City of AlbanyDennis Waespi, Castro Valley Sanitary DistrictJanet Lockhart, City of DublinBob Wasserman, City of FremontOlden Henson, City of HaywardLuis Freitas, City of NewarkJean Quan, City of OaklandMatt Sullivan, City of PleasantonMark Green, City of Union CityKaren Smith, Executive DirectorTom PadiaRory BakkeRachel BalsleyRoberta Miller1. Convene MeetingMr. Waespi called the meeting to order at 10:04.2. Public CommentThere were no comments from the public.3. Approval of Minutes of January 8, 2008 MotionMr. Freitas made the motion to approve the minutes of January 8, 2008. Mr. Green secondedand the motion was approved 8-0 (Johnson and Quan absent).4. Mandatory Recycling Ordinances and Landfill Bans- InformationFollow upMr. Padia presented the staff report. As a recommendation from the Ad Hoc committee lastyear, more aggressive options to reach 75% diversion were approved by both Boards. Oneconclusion was to recommend adoption of Mandatory Recycling Ordinances and Landfill Bans.57

DRAFTAs part of the recently completed 5 Year Audit, the consultants included research resultsregarding mandatory ordinances and landfill bans. San Diego is the most recent large city inCalifornia to adopt mandatory recycling ordinances. Seattle has done it and has a couple ofyears of enforcement experience. Cities in Alameda County will need to decide what materialsthey wish their ordinances to cover as well as any potential landfill bans. The Recycling Boardwants to have a joint meeting with the Authority Board to discuss with city staff fromjurisdictions that have implemented mandatory ordinances and bans.Another point of consideration is the development of model ordinances that would allowparticipating cities to choose appropriate threshold services levels. Staff estimates a 20% rise indiversion from both residential and commercial collections. San Francisco is also investigatingmandatory recycling ordinances that could be implemented as early as this year.Ms. Smith noted that cities might be able to use funding incentives for ordinance enforcementand implementation.Mr. Green asked if every jurisdiction implements mandatory recycling ordinances would theCounty reach 75%. Mr. Padia stated that mandatory ordinances alone would not get us to 75%.Staff estimates that it would increase the county-wide rate by at least 2%. Mr. Padia stated that ifboth residential and commercial sectors participate, there could be a 4 or 5% increase. However,mandatory recycling ordinances are only one tool in the toolkit. Ms. Smith noted that countywidelandfill bans would also have a diversion rate.Mr. Henson asked if there other actions that could get more diversion. Mr. Padia noted thatlandfill bans on yardwaste and corrugated cardboard could increase diversion. Ms. Smith statedthat a total ban on organics at the landfill would get an increase of 10%. Bottle and can recyclingis easy due to the existing infrastructure. To divert that much new organics would requireadditional infrastructure.Ms. Johnson asked if staff was talking about collection of materials from restaurants andresidents. Mr. Padia affirmed both sectors. Ms. Johnson asked if schools were included. Mr.Padia was not certain if local solid waste ordinances would apply to public school districts andwould find out. He further added that jurisdictions would identify which groups they wanted tocover.Mr. Sullivan asked for a chart which identified what actions would result in estimated diversion.Mr. Padia noted that the 2000 Waste Characterization Study indicated about 25% of theresidential and commercial waste stream consisted of recyclable paper and yard waste. If onlyhalf of that amount was recovered, the County would be in good shape.Mr. Wasserman asked what needed to be done to reach 75%. Ms. Smith noted that banningorganics from the landfill would increase diversion significantly. Mr. Padia noted that Fremontalready has a code on the books that states all city residents will put materials in the propercollection container. One way to get to 75% diversion is to increase participation and capturereates in the large number of existing programs already in place. He noted that there are ag/data/boards/WMA/Programs&Planning/2008 minutes/2-12-08 min.doc258

DRAFTsignificant number of factors over which we have no control such as C&D, residential andcommercial organics, wastes from large employers, curbside recycling, etc.Ms. Lockhart noted that perhaps with a year to educate residents and businesses, this might beaccomplished. Big stores and multifamily buildings are a big challenge. Mr. Padia noted thatthe new waste characterization study has just begun so new data would be available in a year.Mr. Henson asked when the joint meeting would take place. Ms. Smith indicated the meetingwould take place in April during the regularly scheduled Programs and Planning Committeemeeting. Ms. Lockhart asked if the meeting could start at 9am instead of 10. The groupconcurred.Mr. Henson asked if the committee would meet with staff from cities where such bans are inplace. Ms. Smith affirmed.Mr. Henson noted that some ordinances he has read have been weak regarding multifamilybuildings. It is important to have enforcement of any ordinances or bans. Mr. Padia stated thatSeattle staff would be invited. Mr. Wasserman asked if Seattle staff could also discuss themechanics of their program. Mr. Sullivan also asked if Seattle staff could discuss publicparticipation and acceptance.Ms. Smith noted that if the board were to move towards mandatory ordinances, we’d need toinclude “carrots” for cities to participate and in time create a “stick” for participation.Mr. Green asked if, in order to reach 75%, we worked with current programs would that beenough. Mr. Padia stated that it was possible to reach 75% but more infrastructure was needed.Mr. Green asked if needed infrastructure included a compost facility. Ms. Smith affirmed.Ms. Wile asked what staffing would be needed to implement mandatory recycling ordinancesand landfill bans. Mr. Padia said that the amount of staff time needed depended on the amountof enforcement. Cities could choose the level and involve haulers to identify egregiousoffenders. Material markets are strong at the present time and are expected to remain so for theforeseeable future.Ms. Johnson noted that “carrots” are a good idea. Alameda Unified School District hasexpressed concern about the cost of implementing recycling. Ms. Smith noted that recyclingimplementation is not very costly.Ms. Quan asked if presenters at the April meeting could address the material types that increasedin collection, especially different types of plastics.Mr. Waespi affirmed that the Committee was interested in a joint meeting which would bescheduled for April 8, 2008 from 9 to 11 am.5. StopWaste Business Partnership-Program Update Informationg/data/boards/WMA/Programs&Planning/2008 minutes/2-12-08 min.doc359

DRAFTMs. Bakke presented the program overview. The StopWaste Partnership provides technical andfinancial assistance to businesses and institutions to reduce waste and operating costs. Mediumand large businesses with over 20 cubic yards of materials are the main target of outreach but theprogram works collaboratively with smaller businesses. The program maintains thousands oftons of recycling per year and seeks to gain new tonnage from recycling and waste preventiontargets. PG&E, EBMUD and East Bay EDA are participating program partners to assist withenergy, water and waste water efficiency. The main materials targeted by the program are paper,cardboard, food scraps, plastic and beverage containers.Ms. Balsley presented the Partnership services. Businesses can receive: site-specific assessmentswith recommendations, Cost-benefit analysis, funding, employee education and training,assistance with finding material markets, supply chain management, tracking and measuringsuccess and public recognition. New program offerings include the Reusables Campaign, specialevents best practices guide, award winner ads, Compost at Work, web-based compostablefoodservice ware information and upcoming Paper Less XPress.During the last ten years, the StopWaste Partnership Program has reached over 550 clients, in 45different industries and diverted 215,000 tons. The program annual goals are to reach 7,500 totaltons diverted, including 5,000 new tons. In FY 06/07, 44,000 tons were diverted including 5,300new tons, with 165 clients diverting materials.In FY 06/07, 16 mini-grants were funded, 4 Incentives payments/waste prevention projects. Forthe current year, 8 mini-grants have been submitted. Since the program start, 73 mini-grantshave been received, 15 incentives and 9 waste prevention projects. Marketing highlightsinclude: advertisements for award winners, e-news to clients and partners, promotion ofReusable containers and case studies.Ms. Bakke highlighted the Reusables Campaign. The goals are to increase awareness andadoption of the value of reusable pallets and containers; provide technical assistance; and drivebusinesses to suppliers of reusables. By partnering with an industry trade group, the programreceives expertise. Reusable packaging is defined as reusable pallets, containers and racks madefrom plastic, metal and wood. Often, reusable packaging includes services such as pooling,logistics, cleaning and asset tracking. The benefits of reusables to customers are reduced costs;improved efficiency, product protection and worker safety; longer useful packaging life; andmany others. Ms. Bakke provided the committee with examples of marketing and outreachmaterials. Future endeavors in the StopWaste Partnership will include broader reach with largestgenerators, higher capture rates, maximizing waste prevention and influencing supply chains.Ms. Bakke provided the Committee with client lists, a listing of funding recipients, awardees andsample ads. She also noted that it had been helpful in the past to have board members reach outto businesses via letters of encouragement.Ms. Wile asked how Committee members could help with the project. Ms. Bakke stated thatstaff was very interested in working with committee members in any way they find appropriate,be it meetings, letters or other ways. She responded that several approaches at the same timeseem to be very effective at reaching a company or institution.g/data/boards/WMA/Programs&Planning/2008 minutes/2-12-08 min.doc460

DRAFTMs. Johnson asked for a separate list of participating public agencies, as they need to lead byexample. Perhaps, the next step would be to put a list of public agencies that are notparticipating on a website. Ms. Bakke noted that the Recycling Board had asked staff to trackwork the public agencies year ago.Ms. Johnson stated that residents would be shocked to find out that public agencies are not in theforefront of waste reduction and recycling. Ms. Smith noted that staff had sent a letter with thisinformation and has met with EBRPD to discuss funding. However, until EBRPD, BART, theOakland Coliseum and AC Transit adopt EPP and implement recycling programs, no funds willbe available.Ms. Quan asked how a level one client was defined. Ms. Balsley stated that a level one clientfell below the 20 cubic yard garbage threshold but that they could still qualify for $3,000 minigrantfunds and virtual assistance. Being a level one client was a positive indication.Mr. Sullivan asked what the term “remarket” meant. Ms. Balsley noted that a new championwas needed at that company, often meaning that the previous contact had moved on to anotherposition.Mr. Henson stated that there was a need to increase participation in the program by businessesand public agencies. He noted that he would be happy to sign letters. Ms. Wile asked for asample letter.Mr. Waespi thanked staff for the presentation.6. Member CommentsNone7. AdjournmentThe meeting was adjourned at 11:12 am.g/data/boards/WMA/Programs&Planning/2008 minutes/2-12-08 min.doc561

________________________________________________________________________February 15, 2008TO:FROM:BY:RE:Waste Management Authority BoardKaren Smith, Executive DirectorBrian Mathews, Senior Program ManagerComposting Facility Development Project- East Co. Preferred SitesThis memo updates the Authority Board on the most recent activities of the compost facilitydevelopment project in Eastern Alameda County.Action by the Board is recommended in this memo.Background on Eastern Alameda County proposals.The following is a chronology of Actions to date on the Eastern Alameda County sites.• January 2007 Board receives presentations from proposers.• February 2007 the Programs/Planning committee finalized criteria for evaluatingproposals.• March 2007 the Programs/Planning Committee solicited information from the proposersand recommended splitting the proposals into three tracks, EBMUD Digester, EasternAlameda County composting sites and West Alameda Co. out of county transfer options.• April 2007 the Authority Board approved the three tracks for the proposals received anddecided to hold a public hearing on the Eastern Alameda Co. proposals in June inLivermore.• June 2007 the Authority held a public hearing in Livermore on Eastern Alameda Co.proposals.• July 2007 the Authority identified the Jess Ranch property and the North Flynn Propertyas preferred sites to do preliminary water, meteorology and biological assessments.• September 2007 the Authority approved the contract with LSA Associates to perform apreliminary biological assessment and approved the procurement of two meteorologicaltowers and monitoring services from Western Weather Group.• November 2007 the Authority received the formal withdrawal of Biosolids RecyclingInc. from the Authority compost facility development process and approved the releaseof the Water Supply RFP.This memo reports on the activities related to the Board’s direction and recommends action.63

DiscussionBiological Site AssessmentAt the September ’07 meeting of the Authority Board, the Board authorized a contract with LSAAssociates to conduct a preliminary biological site assessment as part of the preferred siteinvestigations. The purpose of the preliminary site assessment was to identify biological issuesat the preferred sites and identify further studies to either include or exclude species-of-concernand delineate their habitat. The number of sites to be studies was reduced from two to one whenBiosolids Recycling Inc. withdrew their Jess Ranch proposal from the Authority process.A biologist and botanist from LSA Associates visited the North Flynn Rd. site in January ’08.Their reconnaissance of the site identified terrain and habitat that could potentially supportCalifornia Red Legged Frog (CRLF), California Tiger Salamander (CTS), and San Joaquin KitFox (SJKF). It also identified conditions that could potentially support several special statusplant species.Based upon the preliminary site assessment, three additional tasks are needed to understand theimplications of developing a compost facility at this location (see Exhibit A attached). The tasksare a formal site assessment for CTS, CRLF and SJKF, a special status plant survey, and ajurisdictional delineation.The formal site assessment for CTS, CRLF and SJKF would be prepared for submittal to USFish and Wildlife Service and California Department of Fish and Game. This will result in aconsultation on the sites ability to provide habitat for the three identified special status animalspecies. This approach assumes the species are present because the habitat is present. Ifregulators accept the report findings, then the Board will know what mitigation would berequired for the three species in order to develop a composting facility. The alternative is toconduct protocol level surveys to either include or exclude each special status species as beingpresent or absent on the site. A typical protocol level CTS survey can take as much as threeyears to accomplish at a cost of approximately $300,000.The rare plant survey would specifically determine the presence or absence of special statusplants. The jurisdictional delineation would specifically identify areas that could be subject toregulations under the Clean Water Act and/or California Porter Cologne Water Quality ControlAct. These two studies are timely because this it the time of year that rare plant species bloomand when seasonal wetlands form. The cost of these additional tasks is $42,000.Staff recommends the Authority Board authorize the Executive Director to amend the contractwith LSA Associates in the amount of $42,000 and add the tasks described above.Meteorology Data CollectionIn December 2007, staff met with Bay Area Air Quality Management District (BAAQMD) staffat the property owned by the Authority off of North Flynn Rd. The purpose of the BAAQMDsite visit was to assist with the siting of the meteorological tower.After Dick Duker (BAAQMD staff Meteorologist) and Greg Long (BAAQMD Supervising AirQuality Engineer) toured the site, the BAAQMD suggested we model the site using screeningmeteorology before siting the meteorology tower. District staff believes that because of thePage 2 of 464

complexity of the terrain, with both ridgelines and valleys, a single tower may not adequatelycharacterize the meteorological conditions at the site. As a first alternative, the District suggestsmodeling the proposed facility(s) using screening meteorology in the ISCST-3 air dispersionmodeling program (see Exhibit B attached) before siting one or more meteorological towers.The ISCST-3 screening meteorology is sufficiently conservative that if no impacts are observed,it may not be necessary to site a meteorological tower at all. On the other hand, if impacts areobserved, the modeling could aid in the siting of one or more towers.Staff released a Request for Proposals for Air Dispersion Modeling and five (5) proposals werereceived. The RFP posted to the Authority Website and distributed to consulting firmsspecializing in air dispersion modeling. Staff and two outside consultants with expertise in airdispersion modeling reviewed the five proposals. The key review criterion was to identify theproject team most qualified and experienced. Three firms were interviewed by phone basedupon their qualifications, experience, and their understanding of the scope of services beingrequested. The review team felt that all proposers met the minimum qualification requirements,however, one proposal stood out among the rest as having experience with modeling emissionsfrom composting. The bids ranged from $40,331 to $87,660 with the median bid being $64,165.The team from Environmental Resources Management (ERM) was determined to be mostqualified and they offered the second lowest bid $52,900. The proposal reviewers found ERM tobe most qualified to meet the goals and objectives of the Authority project. The ERM projectteam includes Larry Hottenstein, a managing partner at ERM, who recently directed an extensiveodor characterization using flux chamber surface isolation to assess emission fluctuations.Staff recommends the Authority Board authorize the Executive Director to enter into a contractwith Environmental Resource Management for $52,900 to conduct the Air Dispersion ModelingStudy.Water Supply StudyAt the June 2007 Authority Board meeting in Livermore, there was some discussion about theavailability of water at the proposed composting locations. The concern expressed by some ofthe community members present and Board members was that if the projects relied solely onground water resources (as was being proposed), the facility water needs could exceed theground water supply and/or over pumping could deplete the ground water resource used bysurrounding neighbors, who rely solely on ground water for domestic and agricultural needs.In November 2007 the Authority Board approved the release of an RFP for Water Supply Study.The RFP was posted to the Authority website and distributed to consulting firms specializing iswater supply engineering. Five (5) proposals were received and reviewed by two outsideconsulting civil engineers and a hydro-geologist. Three firms were invited to interview basedupon their qualifications and experience, and their understanding of the scope of services beingrequested. The review team felt that all proposers were well qualified, however, one bidder,Schaff & Wheeler, stood out among the rest as having demonstrated experience with the size ofwater system being investigated and their hydrogeologist has unique and focused experience inthe Altamont hills and the Tri Valley area. The bids ranged from $53,388 to $179,817 with themedian bid being $76,489. The team from Schaaf & Wheeler was determined to be mostqualified and they offered the lowest bid at $53,388.Page 3 of 465

The Water Supply Study will evaluate the availability of groundwater resources at the NorthFlynn Rd site and evaluate the impact on neighboring wells if developed. The study will alsoevaluate the availability of off site water resources to serve a composting facility.Staff recommends the Authority Board authorize the Executive Director to enter into a contractwith Schaaf & Wheeler, Consulting Civil Engineers for $53,388 to the Water Supply Study.Recommendation:It is recommended the Alameda County Waste Management Authority Board;• Authorize the Executive Director to amend the contract with LSA Associates for theamount of $42,000 and add the tasks listed in the memo, and,• Authorize the Executive Director to enter into a contract with Environmental ResourcesManagement (ERM) for the amount of $52,900 to conduct an Air Dispersion ModelingStudy, and• Authorize the Executive Director to enter into a contract with Schaaf & Wheeler for theamount of $53,388 to conduct a Water Supply Study, and,• Approve amendment of the Fiscal Year 2007-08 Authority Budget by the allocation of$148,288 from fund balance to the Organics Processing Development Project (7019).Page 4 of 466

Exhibit CALAMEDA COUNTY WASTE MANAGEMENT AUTHORITY BOARDRESOLUTION #WMA 2008-MOVED:SECONDED:AT THE MEETING HELD FEBRUARY 27, 2008RESOLUTION AUTHORIZING CONTRACTS WITH ERM AND SCHAFF &WHEELER, AND AMENDMENT OF THE CONTRACT WITH LSA ASSOCIATESWHEREAS, Alameda County jurisdictions need to divert increased quantities of organicmaterials including foodwaste, greenwaste and contaminated paper to meet state and localdiversion goals, andWHEREAS, it is the Mission of the Authority is to: Initiate innovative programs and facilities tomaximize waste prevention, recycling and economic development opportunities and; Partnerwith organizations with compatible goals, and,WHEREAS, the Authority adopted the Alameda County Source Reduction and Recycling PlanJanuary 2006 with a approach to Organics which includes: The Agency is working to developlow-cost, long-term, high-quality compost processing in Alameda County, and, with the specificobjective of: An organics processing facility in Alameda County with adequate capacity for, andcommitments from, member agencies, and,WHEREAS, the Authority asked for and received proposals to site facilities in eastern AlamedaCounty, held a public work session in June 2007, and received comments from members of thecommunity present, and identified two preferred sites, Jess Ranch and North Flynn Rd. todevelop further information on in the areas of Air Quality, Biological Resources and Water, and,WHEREAS, in November ’07, Biosolids Recycling Inc. withdrew their proposal for acomposting facility at Jess Ranch from the Authority Compost Facility Development Process,and,WHEREAS, the Authority directed the Executive Director to enter into a contract with LSAAssociates to perform a preliminary biological assessment to identify biological issues at thepreferred sites and identify further studies to either include or exclude species-of-concern anddelineate their habitat andWHEREAS, LSA Associates has done a preliminary biological site assessment andrecommends three tasks including formal site assessments for CTS, CRLF and SJKF, rare plantsurvey and jurisdictional delineation, and,WHEREAS, Environmental Resources Management (ERM) Inc. responded to the Request forProposals for Air Dispersion Modeling and a review team found their project team to be mostqualified and experienced to meet the needs of the Authority project, and,WHEREAS, Schaaf & Wheeler, Consulting Civil Engineers, responded to Request forProposals for Water Supply Study and a review team found their project team to be mostqualified and experienced to meet the needs of the Authority project, and,2-08 OPD budget amendment resolution.doc71

Exhibit CWHEREAS, the FY 07-08 Budget for the Organics Processing Development Project (7019) didnot include funding for the above described tasks,NOW, THEREFORE, BE IT RESOLVED,1. The Alameda County Waste Management Authority Board Authorizes the ExecutiveDirector to amend the contract with LSA Associates for the amount of $42,000 and addthe tasks outlined in the memo, and,2. Authorizes the Executive Director, to enter into a contract with Environmental ResourcesManagement (ERM) Inc. for $52,900, to conduct an Air Dispersion Modeling Study, and,3. Authorizes the Executive Director to enter into a contract with Schaaf & Wheeler,Consulting Civil Engineers for $53,388, to conduct a Water Supply Study, and,4. Amends the 2007-08 Fiscal Year Budget by a transfer of $148,288 from fund balance tothe Organics Processing Development Project (7019) to fund the above tasks.ADOPTED BY THE FOLLOWING VOTE:AYES:NOES:ABSENT:ABSTAINED:______________________________________Karen SmithExecutive Director2-08 OPD budget amendment resolution.doc72