HomeMy WebLinkAbout06 AMENDMENT TO AGREEMENT WITH CR&RAgenda Item. 6
AGENDA REPORT Reviewea
City Manager
0
Finance Director
MEETING DATE: AUGUST 5, 2014
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: DOUGLAS S. STACK, DIRECTOR OF PUBLIC WORKS /CITY ENGINEER
SUBJECT: EXTENSION OF CONTRACT WITH CR &R INCORPORATED FOR SOLID
WASTE AND RECYCLING SERVICES
SUMMARY
CR &R Incorporated (CR &R) is the City's exclusive provider for solid waste and recycling
services. The initial term of the contract was for seven (7) years, with three (3) optional
one -year extensions. CR &R has provided consistent service with reputable customer
satisfaction and has partnered with the City to implement programs to provide additional
recycling opportunities to the community. City staff and representatives from CR &R have
discussed various extension options and have agreed to new contract terms and
conditions to be incorporated into a three -year extension.
RECOMMENDATION
That the City Council approve the Second Amendment to the Contract for the Collection,
Transportation and Disposal of Municipal .Solid Waste and for the Collection,
Transportation, Processing and Diversion of Recyclable Materials and authorize the
Mayor and City Clerk to execute the amendment on behalf of the City.
FISCAL IMPACT
The proposed action will:
1. Eliminate all CR &R rate increases for Tustin residents and businesses for one
year.
2. Provide an additional $28,000 in revenue per year of the contract for enhanced
diversion programs, technical consulting assistance, and regulatory compliance
activities.
CORRELATION TO THE STRATEGIC PLAN
This item contributes to the fulfillment of the City's Strategic Plan Goal C, Financial
Strength, specifically addressing Strategy 1b, by expanding the outsourcing of trash
collection in the community to include bus stops.
BACKGROUND
The City entered into a contract with CR &R on June 13, 2007 for solid waste and
recycling services. The initial term of the contract was for seven (7) years and is set to
expire on September 30, 2014. Three (3) additional one -year terms are available and
CR &R Incorporated Contract Extension
August 5, 2014
Page 2
may be granted annually or at one time. The City was required to provide CR &R with
notice of extension no later than March 30, 2014. The required notice was provided to
CR &R on March 28, 2014, extending the contract one (1) year through September 30,
2015.
On June 13, 2014, the City and CR &R executed a letter agreement confirming new terms
and conditions, including a contract extension of three (3) years. The terms are as
follows:
1. Extend the contract three (3) years to September 30, 2017.
2. A complete rate freeze through July 1, 2015 with no ability to retroactively
capture lost revenue to CR &R.
3. CR &R to collect twenty eight (28) bus stop receptacles in addition to the twenty
two (22) bus stop receptacles already collected.
4. Annual payment of $10,000 to assist the City with AB 341 compliance. This
amount will be adjusted annually for inflation.
5. Annual payment of $18,000 for consulting assistance to increase diversion
programs and for regulatory compliance. This amount will be adjusted annually
for inflation.
The attached amendment incorporates these terms as well as other operational changes
that have evolved since the commencement of the contract. Most notable is the
collection of solid waste at bus stops and use of a "split bin" to accommodate recycling at
commercial and multifamily locations with insufficient space for both a trash and recycling
bin.
The total savings from the one -year rate freeze is approximately $280,000 per year or
$840,000 over the course of the extension. In years two and three of the extension, the
contractual annual rate adjustments will apply, but the savings realized in year one will
continue. Those annual adjustments take into consideration rate, disposal, and diversion
incentive; factoring in Producer Price Index for Natural Gas, fuel cost, Producer Price
Index for Finished Goods Less Food and Energy, country landfill disposal fee, and
diversion attainment.
Staff is recommending the attached amendment to CR &R's contract be approved.
Stack, P.E.
Public Works /City Engineer
Attachment: Second Amendment to Contract for the Collection, Transportation and Disposal of Municipal Solid Waste and for the
Collection, Transportation Processing and Diversion of Recyclable Materials
S: \City Council Items\2014 Council Items \08 -05- 2014 \CRR Contract Extension 080514.docx
SECOND AMENDMENT TO
CONTRACT FOR THE COLLECTION, TRANSPORTATION AND DISPOSAL
OF MUNICIPAL SOLID WASTE AND FOR THE COLLECTION,
TRANSPORTATION, PROCESSING AND DIVERSION OF RECYCLABLE
MATERIALS
THIS SECOND AMENDMENT is entered into as of the _ day of August,
2014, by and between the CITY OF TUSTIN, a municipal corporation (hereinafter
referred to as the "City ") and CR &R INCORPORATED, a California corporation
(hereinafter referred to as "Contractor").
RECITALS
1. The City and Contractor entered into a contract for Collection, Transportation,
and Disposal of Municipal Solid Waste and for the Collection, Transportation,
Processing and Diversion of Recyclable Materials on June 13, 2007
(hereinafter referred to as "Contract ").
2. The parties executed the First Amendment to the Contract on April 6, 2010 to
delete the requirement for Contractor to establish a Buy -Back recycling center
and to add services to be provided by Contractor including: provision of ten
(10) compact fluorescent light and battery collection points, one (1) annual
household hazardous, Electronic and Universal Waste collection event, two
(2) free yard mulch distribution events per year plus printing and mailing of
certain legal notices of proposed annual rate adjustments.
3 The original Contract was for a Term of seven (7) years and included the
unilateral right for the City to extend the Term on the same terms and
conditions for up to three (3) additional years.
4. In 2013 the City and Contractor entered into discussions concerning a
possible extension of the Term that would include new and different terms
and conditions.
5. On March 28, 2014 the City sent a letter to Contractor invoking the City's right
under Section 3.03 of the Contract to extend the Term under the existing
terms and conditions for one (1) additional year, to September 30, 2015.
6. During April and May 2014 the City and Contractor continued discussions
concerning a longer extension of the Term, including some new terms and
conditions, and the parties arrived at a list of mutually agreeable terms for an
extension of the Term to September 30, 2017.
7. The purpose of this Second Amendment is to incorporate the agreed -upon
changes into the Contract and to document the parties' agreements on
operational changes that have evolved since the commencement of the
Contract.
NOW, THEREFORE, in consideration of the mutual promises contained in
this SECOND AMENDMENT, and for other good and valuable consideration, the
parties agree as follows:
Section 1. Section 3.02 "Term" is amended to read as follows:
"3.02 Term. The Term of this Contract shall commence on the Effective
Date and shall end at midnight on September 30, 2017, unless earlier
terminated. Contractor's obligation to collect Municipal Solid Waste and
Recyclable Materials shall begin on October 1, 2007 at 12:01 a.m."
Section 2. Section 3.03 of the Contract is deleted.
Section 3. Section 12.03 of the Contract is deleted and replaced in its entirety
with the following:
"12.03 Annual Rate Adjustments. The rates for service as set forth in
Attachment D shall be adjusted as of July 1, 2009, and as of July 1 for each
ensuing year in accordance with Attachment J, except that there shall be no such
annual adjustment for the period July 1, 2014 through June 30, 2015. Annual
adjustments shall re- commence July 1, 2015. The annual adjustment for the
Period July 1, 2015 through June 30, 2016 shall be based upon the change in
the indexes described in Attachment J for the period January 1, 2014 through
December 31, 2014 and shall not take into account any change in the indexes for
the period January 1, 2013 through December 31, 2013. Contractor shall bear
the cost increase to the change in the indexes for the period January 1, 2013
through December 31, 2013 for the remainder of the Term and agrees not to
seek any rate adjustment or any other form of additional compensation from City
for this cost increase."
Section 4. Section 12.04 of the Contract is deleted and replaced in its entirety
with the following:
"12.04 Disposal Charge (Tip Fee Adjustments). If the tip fee charged at
Orange County Landfills (or whatever City- designated Disposal Site is then in
use) is changed (increased or decreased) for whatever reason, including, but not
limited to, new or increased taxes or regulatory fees, the Disposal portion of the
rates shall be adjusted as described in Attachment J (with the exception of
changes that become effective during the period July 1, 2014 through June 30,
2015 described herein). Disposal Charges are a pass- through cost and
Contractor shall not be entitled to receive or charge any profit, markup, overhead
or administrative costs on Disposal Charges.
The Disposal Charge in effect for the period July 1, 2013 through June 30, 2014
was thirty -two dollars and five cents ($32.05) per Ton. Effective July 1, 2014 the
Disposal Charge was increased by the County of Orange by thirty -one cents
($0.31) per Ton to thirty two dollars and thirty six cents ($32.36) per Ton. The
parties agree that no adjustment of the Disposal portion of the rates will be made
for this increase of thirty-one cents ($0.31) per Ton; and Contractor shall bear the
full cost of this increase for the remainder of the Term. In the event any additional
Disposal Charge increase(s) becomes effective during the period July 1, 2014
through June 30, 2015, no adjustment of the Disposal portion of the rates will be
made and Contractor agrees to bear the full cost of any such increase(s) for the
remainder of the Term. Contractor agrees not to seek a rate increase or any
other form of additional compensation for any Disposal Charge increase(s) that
becomes effective during the period July 1, 2014 through June 30, 2015. In the
event that a Disposal Charge decrease becomes effective during the period July
1, 2014 through June 30, 2015, the rates will be decreased accordingly as
described in Attachment J, Section 1, Subpart C. The parties further agree that
rates shall be adjusted for any change in the Disposal Charge effective on or
after July 1, 2015, as described in Attachment J."
Section 5. Section 12.06 "Payment of City AB 939 Fee" is deleted and replaced
in its entirety with the following:
"12.06 Payment of City AB 939 Fee. For the period November 1, 2007
through October 31, 2014 Contractor shall pay City seventy -five thousand dollars
($75,000), as adjusted for inflation per the Contract, on an annual basis for costs
of complying with the Act including, but not limited to, additional public education
on Diversion programs, technical consulting assistance on solid waste, recycling
and related issues, preparation of any studies required by the City or by
CalRecycle related to compliance with the Act, provision of additional Diversion
programs, preparation of required reports under the Act and any other City costs
related to compliance with the Act. Contractor shall remit to City one -forth of the
AB 939 Fee in the amount of eighteen thousand seven hundred fifty dollars
($18,750) each quarter beginning November 1, 2007. Contractor shall make
additional quarterly payments on or before February 1, May 1, and August 1 of
the Term.
Effective September 1, 2014 the parties agree that the annual AB 939 Fee
shall be increased to one - hundred nine thousand nine hundred eighty seven
dollars and thirty -nine cents ($109,987.39). The AB 939 Fee shall be paid by
Contractor to City as follows: One payment of $18,000 on September 1 of each
year, commencing September 1, 2014; and quarterly payments in the amount of
twenty -two thousand nine hundred ninety -six dollars and eighty five cents
($22,996.85) paid on November 1, February 1, May 1, and August 1 of each
year, beginning November 1, 2014. The parties further agree that no increase in
the rates set forth in Attachment D will be made due to this increase in the AB
939 Fee nor shall Contractor request or receive any other form of additional
compensation due to this increase in the Fee for the remainder of the Term.
The AB 939 Fee shall be adjusted annually on July 1, based upon the
percentage change in the PPI and shall be calculated as shown in Attachment J,
"B. Adjustment for Processing Component of Annual Rate Based on PPI." In
addition, City may, in its sole discretion, increase the AB 939 Fee at any time
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during the Term, by approving a commensurate increase in the rates set forth in
Attachment D that is over and above the increases described in Section 12.03,
12.04, 12.05 and 6.09. If City chooses to increase the AB 939 Fee in this manner
City shall notify Contractor in writing of the amount of the change, the amount of
the new quarterly payments to be remitted to City, and the effective date of the
change."
Section 6. Section 6.09 "Diversion Incentive" is amended as follows
The first paragraph of Section 6.09 is amended to read as follows
"With the exception of the Annual Diversion rate achieved by Contractor in
calendar year 2013, in any calendar year that the Annual Diversion rate exceeds
fifty percent (50 %), Contractor shall be entitled to receive a one percent (1 %) rate
increase effective July 1 of the following year (i.e. if the contractor's Annual
Diversion rate for 2008 is 52% the Contractor will receive a 1% rate increase
effective July 1, 2009). The Diversion rate increase shall be in addition to the
annual rate adjustment described in Section 12.03 and any Disposal Charge (Tip
Fee) Adjustments (if applicable) described in Section 12.04."
The following new paragraph is added at the end of Section 6.09:
"The parties agree that there shall be no Diversion Incentive payment for the
annual Diversion rate achieved by Contractor in calendar year 2013. The parties
further agree that Contractor shall not request or receive any other form of
additional compensation concerning or related to the annual Diversion rate
achieved in calendar year 2013."
Section 7. Attachment B "Detailed Scope of Work' is amended to add new
Section 4.8 "Collection at Bus Shelters and Bus Stops" to read as follows:
"4.8 Collection at Bus Stops and Bus Shelters
Effective October 1, 2012 Contractor shall collect MSW from all the existing
MSW receptacles at bus shelters and bus stops listed on Attachment AA at least
one (1) time per week. Contractor shall purchase and distribute twenty -three (23)
Toter -brand MSW receptacles (Model #860BA with the automatic gravity release
feature in the color "Brownstone ") to the bus shelters listed on Attachment AA on
or before May 1, 2013. The receptacles to be provided are shown in Attachment
BB.
On or before November 1, 2014 Contractor shall commence collection of MSW
from all MSW receptacles at bus shelters and bus stops listed on Attachment CC
at least one (1) time per week. On or before November 1, 2014 Contractor shall
purchase and distribute twenty -eight (28) Toter -brand MSW receptacles (Model
#860BA with the automatic gravity release feature in the color "Brownstone" as
shown in Attachment BB) to the bus shelters listed on Attachment CC.
Contractor shall steam clean all Toter receptacles deployed at bus shelters as
needed such that the receptacles are clean and odor -free at all times. Contractor
shall maintain the receptacles in good working order. Contractor shall repair all
damaged receptacles, clean or paint out all graffiti and replace stolen receptacles
within ten (10) working days of Contractor's observation, or of notification by the
City. Contractor shall maintain ownership of said receptacles. At the end of the
Term City may elect to purchase the receptacles from Contractor at the
depreciated book value, or to have Contractor remove the receptacles.
Contractor may combine the collection of MSW from bus shelters and bus stops
within City with collection of MSW from bus shelters in the City of Orange
provided however, that Contractor must prepare and submit a quarterly report
listing the number of tons of MSW collected, the mathematical calculation used to
allocate City's MSW tons from those of the City of Orange, and a discussion of
Toter receptacles repaired, replaced, cleaned and otherwise maintained during
the quarter. Said quarterly reports shall be provided at the same time as the
other quarterly reports listed in Attachment K. The first quarterly report shall be
submitted for the quarter ended June 30, 2013.
At City's request Contractor shall increase the frequency of collection of MSW at
bus shelters and bus stops listed in Attachments AA and CC to up to three (3)
times per week for each bus shelter and bus stop. If the City so requests,
Contractor shall increase the frequency of collection within fifteen (15) days of
notification from the City."
New Attachment AA "List of Initial Bus Shelters for MSW Collection ", new
Attachment BB "Toter Receptacles To Be Provided ", and new Attachment CC
"List of Additional Bus Shelters for MSW Collection" are attached hereto and
incorporated herein as Exhibits 1, 2 and 3, respectively.
Section 8. Attachment J of the Contract is deleted and replaced in its entirety
with revised Attachment J. Revised Attachment J "Annual Rate, Disposal and
Incentive Cost Adjustment Method" Is attached hereto and incorporated herein
as Exhibit 4.
Section 9. Attachment B "Detailed Scope of Work" is amended to add the
provision of four (4) cubic yard Split Bins by Contractor to Customers as follows.
The third sentence in Section 1.04.3 of Attachment B "Containers for Commercial
and Business Establishments and City Facilities" is amended to read as follows:
"Contractor shall also furnish three (3) cubic yard, four (4) cubic yard, and six (6)
cubic yard bins; four (4) cubic yard Split Bins; ten (10) cubic yard, twenty (20)
cubic yard, thirty (30) cubic yard and forty (40) cubic yard Roll Off Boxes; and
shall provide Compactor pull service for Commercial and Business
Establishments and City Facilities, except that Customers located at any of the
above Premises may, at their sole discretion, lease and /or purchase Compactors
from any Person, company, manufacturer, or distributor, including but not limited
to, Contractor for use at their Premises."
The third sentence in Section 2.02.3 of Attachment B "Multi- family Service" is
amended to read as follows:
"Contractor shall provide separate Bin(s), wheeled Carts (as identified in
Attachment E) and four (4) cubic yard Split Bins for Collection of Single Stream
or Source Separated Recyclables."
The eighth sentence in Section 2.02.3 of Attachment B "Multi- family Service" is
amended to read as follows:
"Contractor shall provide two (2) cubic yard, three (3) cubic yard, four (4) cubic
yard, and six (6) cubic yard Bins; three (3) cubic yard and four (4) cubic yard
Compactors; and four (4) cubic yard Split Bins for storage of MSW."
The third paragraph in Section 3.2 of Attachment B "MSW Collection" is
amended to read as follows:
"Contractor shall provide thirty -five (35) gallon Carts, sixty -five (65) gallon Carts,
ninety -five (95) gallon Carts, three (3) cubic yard Bins, four (4) cubic yard Bins,
six (6) cubic yard Bins, four (4) cubic yard Split Bins, as well as four (4) and six
(6) cubic yard Compactors to Commercial and Business Establishments for
storage and Collection of MSW at the rates in Attachment D."
The second sentence in Section 3.03.1 of Attachment B "Single Stream
Recyclable Materials" is amended to read as follows:
"Contractor shall provide thirty -five (35) gallon Carts, sixty -five (65) gallon Carts,
ninety -five (95) gallon Carts, three (3) cubic yard Bins, four (4) cubic yard Bins,
six (6) cubic yard Bins and four (4) cubic yard Split Bins to said Establishments
for storage and Collection of Recyclable Materials at the rates in Attachment D."
The second sentence in Section 3.03.2 of Attachment B "Source Separated
Recyclable Materials" is amended to read as follows:
"Contractor shall provide thirty -five (35) gallon Carts, sixty -five (65) gallon Carts,
ninety -five (95) gallon Carts, three (3) cubic yard Bins, four (4) cubic yard Bins,
six (6) cubic yard Bins and four (4) cubic yard Split Bins to said Establishments
for storage and Collection of Recyclable Materials at the rates in Attachment D."
Section 10. The following definition is added to Attachment A "Definitions ":
"Split Bins: "Split Bins means Bins that have a divider down the middle, dividing
the Bin into two separate compartments. Such Bins have separate locking lids for
each side of the Bin that allows the Bin to be emptied one side at a time. The lid
on the side of the Bin that is for storage of Recyclable Materials is designed such
that it allows for the placement of Recyclable Materials in the Bin without
unlocking or opening the lid, and yet does not allow Recyclable Materials to spill
out when the lid is closed and locked for the emptying of the MSW stored on the
opposite side of the Bin."
Section 11. All references in the Contract to the "California Integrated Waste
Management Board" are hereby changed to "CafRecycle ". In the event
CalRecycfe is replaced by a successor agency, all references to CalReycle shall
refer to said successor agency.
Section 12. Except as expressly modified by this Second Amendment, all terms
and conditions contained in the Contract dated June 13, 2007 as amended on
April 6, 2010, shall remain in full force and effect.
IN WITNESS WHEREOF, City and Contractor have executed this Second
Amendment as of the day and year first above written.
CONTRACT
By:
Clifford Ronnenberg
Chairman and Chief Executive Officer
CITY OF TUSTIN
0
Elwyn A. Murray, Mayor
ATTEST:
CITY CLERK
By:
Jeffrey C. Parker, City Clerk
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Exhibit 4
ATTACHMENT
Annual Rate, Disposal, and Incentive Cost Adjustment Method
The original "Collection ", "Processing ", and "Disposal" components of rates are
identified in Attachment D and each component shall be adjusted according to the
following procedures. No Adjustments will be made to any rate component that was
proposed as "0" upon the effective date of the Contract.
The Following Rounding Protocol Shall be Used In the Calculations DescNbed
Heroin: For the calculation of the percentage change in all indexes described in this
Attachment J, the calculations shall be rounded to one decimal place. (Example: 2.3 or
0.2.) The numbers 1, 2, 3 and 4 in the calculation shall be rounded down. (Example: if
the result of the calculation were 7.344, the final figure would be 7.3.) The numbers 5,
6, 7, 8 and 9 in the calculation shall be rounded up. (Example: If the result of the
calculation were 4.278, the final figure would be 4.3.)
For the calculation of all rates described in this Attachment J, the calculations shall be
rounded to two decimal places. (Example: $16.23 or $32.02.) The numbers 1, 2, 3 and
4 in the calculation shall be rounded down. (Example: if the result of the calculation
were $16.3442, the final figure would be $16.34.) The numbers 5, 6, 7, 8 and 9 in the
calculation shall be rounded up. (Example: If the result of the calculation were $3.468,
the final figure would be $3.47.)
The above - described rounding protocol shall be used for the calculation of the rates to
become effective July 1, 2011 and for the remainder of the Contract Term.
ANNUAL RATE ADJUSTMENT METHOD AND DISPOSAL COST
ADJUSTMENT METHOD
A. ADJUSTMENT FOR COLLECTION COMPONENT OF ANNUAL RATE BASED
ON PPI
Perform the following calculations of the most current adjusted Collection component of
the rate. The initial adjustment shall be applied to the Collection component of the rate
as identified in Attachment D beginning July 2009.
Step One. Calculate the percentage change in the Producer Price Index for Natural
Gas (Series ID WPU0531). The first adjustment to be made in July 2009 shall be
calculated using the Natural Gas PPI percentage change from October 31, 2008 to
December 31, 2008. Thereafter, the annual adjustment will be based upon the change
in the index for a twelve -month period ending on December 31 of every year of the
Term (with the exception of the period July 1, 2014 through June 30, 2015 as described
in Contract Section 12.03). Commencing with the calculations for calendar year 2012
and through the end of the Term, the "final' version of the index, published by the U. S.
Bureau of Labor Statistics ( "BLS ") in approximately May of each year, shall be used,
and the "preliminary" version of the index published by the BLS earlier in the calendar
Attachment J
Page 1 of 6
Exhibit 4
ATTACHMENT J
Annual Rate, Disposal, and Incentive Cost Adjustment Method
year, shall not be used. Thus, the adjustment that will become effective July 2010 will
be based upon the change in the index for the twelve -month period ending December
31, 2009.
Step Two. Calculate the fuel costs by subtracting the portion of the Collection
component of the rate attributed to fuel by multiplying Collection by 15 %.
Step Three. Multiply the fuel cost (15% of Collection) by 1 plus the percentage change
in PPI for Natural Gas. If the PPI percentage change is negative, then 15% of
Collection will be adjusted downward; and if the PPI percentage change is positive, then
15% of Collection shall be adjusted upward. The percentage change shall not exceed
25% for a percentage increase, or -25% for a percentage decrease, per annum.
Step Four. Calculate the percentage change in the Producer Price Index for Finished
Goods Less Food and Energy (Series ID WPLISOP3500). The first adjustment to be
made in July 2009 shall be calculated using the Finished Goods Less Food and Energy
PPI percentage change from October 31, 2008 to December 31, 2008. Thereafter, the
annual adjustment will be based upon the change in the index for a twelve -month period
ending on December 31 of each year of the Term (with the exception of the period July
1, 2014 through June 30, 2015 as described in Contract Section 12.03). Thus, the
adjustment that will become effective July 2010 will be based upon the change in the
index for the twelve -month period ending December 31, 2009. The percentage change
shall not exceed four percent (4 %) per annum. In the event the calculated percentage
change in the PPI is negative, the rate adjustment shall be zero (0).
Step Five. Multiply the Collection component of the rate by 85% to calculate the
Collection fee less fuel costs.
Step Six. Multiply the Collection fee, less fuel costs (85% of Collection) by 1 plus the
percentage change in PPI for Finished Goods similar to the calculation shown in Step
Four above.
Step Seven. Add the Collection component adjusted for fuel costs (15% of Collection)
to the Collection component less fuel costs (85% of Collection) for the total adjusted
Collection component of the rate.
Sample Rate Adjustment Calculation for Change in PPI
(All numbers are examples only and are used here for illustration purposes).
Example Assumptions
PPI for Finished Goods (old)
140.00
PPI for Finished Goods (new)
144.00
PPI for Natural Gas (old)
237.4
PPI for Natural Gas (new)
270.7
Attachment J
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Current Residential Recycling Cart Collection Rate $ .91
Current Commingled 3 yd bin Collection Rate $32.28
Step One. Calculate percentage change in PPI for Natural Gas.
237.4 - 270.7 = (33.3/237.4) 100 = 14%
Step Two. Calculate percentage of Collection attributable to fuel costs (= 15 %).
Residential Collection Rate: $.91 X.15 = $.14
3 yd. Bin Collection Rate: $32.28 X.15 = $4.84
Step Three. Apply percentage change of PPI for Natural Gas to fuel costs calculated in
Step Two.
Residential Collection Rate: $.14 X 1.14 = $.16
3 yd. Bin Collection Rate: $4.84 X 1.14 = $5.52
Step Four. Calculate percentage change in PPI for Finished Goods.
144 - 140 = (4/140) 100 = 2.8%
Step Five. Calculate Collection less fuel costs (= 85 %).
Residential Collection Rate: $.91 X.85 = $.77
3 yd. Bin Collection Rate: $32.28 X.85 = $27.43
Step Six. Apply percentage change of PPI for Finished Goods to Collection fee less
fuel costs calculated in Step Five.
Residential Collection Rate: $.77 X 1.028 = $.79
3 yd. Bin Collection Rate: $27.43 X 1.028 = $28.21
Step Seven. Add the rates calculated in step three and step six to calculate the total
adjusted Collection rate.
New Residential Collection Rate: $.16 + $39 = $.95
New 3 yd. Bin Collection Rate: $5.52 + $28.21 = $33.73
B. ADJUSTMENT FOR PROCESSING COMPONENT OF ANNUAL RATE BASED
ON PPI
Perform the following calculations of the most current adjusted Processing component
of the rate. The initial adjustment shall be applied to the Processing component of the
rate as identified in Attachment D beginning July 2009.
Attachment J
Page 3 of 6
Step One. Calculate the percentage change in the Producer Price Index for Finished
Goods Less Food and Energy (Series ID WPUSOP3500). The first adjustment to be
made in July 2009 shall be calculated using the percentage change in the index from
October 31, 2008 to December 31, 2008. Thereafter, the annual adjustment will be
based upon the change in the index for a twelve -month period ending on December 31
of every year of the Term (with the exception of the period July 1, 2014 through June
30, 2015 as described in Contract Section 12.03). Thus, the adjustment that will
become effective July 2010 will be based upon the change in the index for the twelve-
month period ending December 31, 2009. The percentage change shall not exceed
four percent (4 %) per annum.
Step Two. Multiply the Processing component of the rate by 1 plus the percentage
change in the PPI for Finished Goods Less Food and Energy.
Step Three. In the event the calculated percentage change in the PPI is negative, the
rate adjustment shall be zero (0).
Sample Rate Adjustment Calculation for Change in PPI
(All numbers are examples only and are used here for illustration purposes).
Example Assumptions:
PPI (old) 140.00
PPI (new) 144.00
Current Residential Recycling Cart Processing Rate $ 2.48
Current Commingled 3 yd bin Processing Rate $18.16
Step One. Calculate percentage change in PPI.
144 -140 = (4/140) 100 = 2.8%
Step Two. Apply percent change to Processing component of rate
Residential Processing Rate: $2.48 X 1.028 = $2.55
3 yd. Bin Processing Rate: $18.16 X 1.028 = $18.67
C. ADJUSTMENT FOR CHANGE IN DISPOSAL CHARGE (TIP FEES) APPLIES
ONLY WHEN TIPPING FEE ACTUALLY CHANGES (INCREASES OR
DECREASES))
Step One. Calculate the percentage change in the Disposal Charge per ton, based
upon the change between the most recent tipping fee on which rates are based, and the
new tipping fee. Note: Pursuant to Contract Section 12.04 there will be no adjustment
for any increase in the Disposal Charge that becomes effective during the period July 1,
2014 through June 30, 2015. In the event the Disposal Charge decreases during this
period, the adjustment shall be made in the rates.
Attachment J
Page 4 of 6
Step Two. Apply the resulting percentage change to the most current Disposal
component of rate by multiplying the Disposal component by 1 plus the percentage
change. If the percentage change is negative, then the Disposal Charge will be adjusted
downward; and if the percentage change is positive, then Disposal Charge shall be
adjusted upward.
Sample Rate Adjustment Calculation for Change in Disposal Charge
(All numbers are examples only and are used here for illustration purposes)
Example Assumptions
Disposal Tip Fee (old) $30.00 /ton
Disposal Tip Fee (new) $35.00 /ton
Current Disposal Charge
Component of Residential MSW Cart rate $ .11
Current Disposal Charge
Component of 3 yd bin rate $1.01
Step One. Calculate percentage change in Tip Fee.
$35.00 - $30.00 = ($5/$30.00) 100 = 16.6%
Step Two. Apply percent change to Disposal Charge component of existing
rates.
Residential Disposal rate: $.11 x 1.166 = $.13
3 yd bin Disposal rate: $1.01 x 1.166 = $1.18
D. CALCULATE TOTAL ANNUAL RATE
Step One. Add the Collection Component of the Rate (as adjusted in A. above), the
Processing Component of the Rate (as adjusted in B. above), and the
Disposal Component of Rate (as adjusted in C. above) to calculate total
rate for service. (Note: the Disposal Component of Rate will not be
adjusted up or down if the tipping fee has not changed).
Example:
Adjusted Residential Rate: $.94 + $2.55 + $.13 = $3.62
Adjusted 3 yd. Bin Rate: $33.37 + $18.67 + $1.18 = $53.22
2. ADJUSTMENT FOR DIVERSION INCENTIVE
Attachment J
Page 5 of 6
If the diversion requirements as described in Sections 6.06, 6.07 and 6.09, of the
contract are satisfied, a 1% rate increase will be added to the rates as shown in the
following example.
Sample Rate Adjustment Calculation for Diversion Incentive
(All numbers are examples only and are used here for illustration purposes).
Example Assumptions:
Current Residential Recycling Cart Collection Rate $ .91
Current Commingled 3 yd bin Collection Rate $32.28
Current Residential Recycling Cart Processing Rate $ 2.48
Current Commingled 3 yd bin Processing Rate $18.16
Step One. Multiply the current Residential Collection Cart rate by 0.01
0.01 x $0.91 = $0.01
Step Two. Multiply the current Residential Processing rate by 0.01
0.01 x $2.48 = $0.02
Step Three. Add each of the 1 % increases to the Adjusted Residential Rate calculated
in 1 D.
Residential Collection Rate: $3.62 + $0.01 + $0.02 = $3.65
Step Four. Multiply the current 3 yd bin Collection Rate by 0.01.
0.01 x $32.28 = $0.32
Step Five. Multiply the current 3 yd bin Processing rate by 0.01.
0.01 x$18.16 =$0.18
Step Six. Add each of the 1 % increases to the Adjusted 3 yd bin Rate calculated in
1 D.
3 yd. Bin Collection Rate: $53.22 + $0.32 + $0.18 = $53.72
Attachment J
Page 6 of 6