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Home My WebLink About01 SOLID WASTE ADJ'S 07-07-03AGENDA REPORT Agenda Item Reviewed: City Manager Finance Director MEETING DATE: JULY 7, 2003 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: PUBLIC WORKS DEPARTMENT SUBJECT: APPROVAL Of RESIDENTIAL AND COMMERCIAL SOLID WASTE RATE ADJUSTMENTS, ADOPTION OF RESOLUTION NO. 03-80 PLACING ASSESSMENTS FOR SOLID WASTE COLLECTION ON THE 2003-2004 TAX ROLL AND, APPROVAL OF CONTRACT AMENDMENT #1 RELATED TO HAZARDOUS WASTE COLLECTION SERVICES SUMMARY In accordance with the current Franchise Agreement, Federal Disposal Service has requested approval of rate adjustments for all customers pursuant to an increase in the Producer Price Index along with an additional increase due to the extraordinary rate increase in workers compensation insurance. Federal Disposal's request will increase residential rates by 3.9% and commercial rates by 4.6%. Federal Disposal Service has also requested that the City lower the performance bond amount and approve a contract amendment to permit the collection of hazardous waste for a fee. Staff is recommending approval of these rate adjustments and the approval of a contract amendment for the collection of hazardous electronic waste for a fee. Staff is not recommending that the performance bond be lowered. RECOMMENDATION Staff recommends that the City Council, 1) approve the Producer Price Index and extraordinary rate adjustments for residential and commercial customers, 2) adopt Resolution No. 03-80 placing assessments for solid waste collection on the Tax Roll for fiscal year 2003-2004, and 3) approve a contract amendment with Federal Disposal Service to permit the collection of certain hazardous materials for a fee. FISCAL IMPACT Commercial customers pay a 2% Franchise Fee. increased franchise fees paid to the City. Increases in the commercial rates will result in BACKGROUND Pursuant to the Franchise Agreement for Integrated Waste Management Services, Federal Disposal Service (FDS) has requested City approval of residential and commercial rate adjustments (See attached Exhibit A). Approval of Residential and Commercial Solid Waste Rate Adjustments July 7, 2002 Page 2 All rates are regulated by the Franchise Agreement with Federal Disposal Service and are to be adjusted annually utilizing the Producer Price Index (PPI). Single-family residential and attached units up to three units and commercial can collection costs are placed on the property tax rolls. Commercial bin and roll off services are billed directly by Federal Disposal Service. The change in the PPI during the 2002 calendar year is the basis of the rate increase computation. The PPI is a family of indexes that measures the average change in the selling prices received by domestic producers of goods and services measures changes from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index that measures price change from the purchaser's perspective. Sellers' and purchasers' prices may differ due to government subsidies, sales and excise taxes, and distribution costs. The PPI utilized by the City and Federal Disposal Service is specific to the solid waste collection industry. Pursuant to the Franchise Agreement, the PPI is applied only to hauler service costs (labor, materials, fuel, insurance, etc.) and not to disposal costs. Disposal costs are fixed at $22 per ton by City's participation in the Orange County Solid Waste Flow Control Agreement. This approach results in a weighted application of the rate increase that is less than the full incremental change of the PPI. In 2002, the City granted FDS a 4.3% PPI increase in residential rates and a 10.3% increase for commercial customers which consisted of a 2.7% PPI adjustment and an 7.6% extraordinary increase for costs associated with a labor union contract. The tables below illustrate the original bid rates and the current City approved rates: Residential Service Original Bid Rate 2002 % Adjustment Current rates Automated Cart 12.17 4.3% 12.59 Rate Comparison for Commercial Service Pickups per week Container Size 2 Yard 3 Yard Bid Rate Current Bid Rate Current Bid Rate 4 Yard Current I 39.25 41.05 44.13 46.16 49.01 2 70.16 73.38 79.93 83.60 89.69 3 101.08 105.72 115.73 121.04 130.36 4 131.99 138.05 151.52 158.47 171.04 5 162.91 170.39 187.32 195.92 211.72 6 193.82 202.71 223.11 233.35 252.41 Roll Off Boxes (per pull) 87.23 I +25% 51.26 93.81 136.34 178.89 221.44 263.99 110.25 Approval of Residential and Commercial Solid Waste Rate Adjustments July 7, 2002 Page 3 DISCUSSION Federal Disposal Service has requested both Producer Price Index and extraordinary rate adjustments for 2003. The Franchise Agreement requires rate adjustments to be based on the preceding calendar year's PPI. The table below demonstrates the change during 2002 in the PPI utilized by FDS: PRODUCER PRICE INDEX Local trucking, Local trucking, waste collection waste collection as of 12-31-01 as of 12-31-02 ANNUAL CHANGE Incremental % Change Change 129.5 132.5 +3.0 +2.3% PROPOSED PPI ADJUSTMENT FOR RESIDENTIAL RATES The 2.3% PPI increase computes into a 1.9% weighted adjustment to residential rates. component of the rate adjustment is an increase of $.29 per month or $3.48 annually. The PPI PROPOSED PPI ADJUSTMENT FOR COMMERCIAL RATES Utilizing the same weighted methodology, the 2.3% PPI increase results in a 2% commercial rate increase. This increase will result in a $1.67 monthly increase for customers utilizing a three-yard bin that is collected twice a week. Roll off box rates would be increased by the full 2.3% because disposal costs are paid directly by the customer. REQUEST FOR AN EXTRAORDINARY RATE ADJUSTMENT The Solid Waste Franchise Agreement defines extraordinary costs as "unusual changes in the cost of providing service under this Agreement". Further, the Agreement states that "Such changes shall not include.., inaccurate estimates by the Company of its proposed cost of operations". FDS has requested an extraordinary rate adjustment of $87,136 to compensate for an increase in Workers Compensation insurance expenses which were unanticipated when the contract bids were submitted in early 2000. FDS has submitted insurance company billing information which supports this claim. Staff acknowledges that Workers Compensation rates are increasing for businesses all over the state and notes that numerous legislative proposals are pending to reform the State's Workers Compensation system. The requested extraordinary increase has been reviewed by staff and it has been determined that the request is consistent with the Integrated Solid Waste Management Services Franchise Agreement for the following reasons: Approval of Residential and Commercial Solid Waste Rate Adjustments July 7, 2002 Page 4 1. The Workers Compensation cost increase qualifies as an unusual cost increase that could not have been fully anticipated during the bid process. 2. The PPI adjustment method utilized by the City and FDS is not specific to California and does not take into full consideration the state's worker compensation system. 3. The City has the contractual discretion to approve or deny any extraordinary rate request. PROPOSED RESIDENTIAL RATES The 1.9% PPI residential rate adjustment is an increase of $.29 per month or $3.48 annually. The 2% extraordinary adjustment results in an additional $.20 per month charge. The total requested residential adjustment is shown in the following table. Current Adjusted Total Residential $ Monthly % Adjustment Adjustment Monthly annual Service Rate Rate assessment Automated Cart $12.59 3.9% $0.49 $13.08 156.96 MANUAL CAN SERVICE The Franchise Agreement requires all customers to utilize automated carts unless the customer demonstrates "the inability to store or, use Carts reasonably at the service location." Federal Disposal has successfully converted all commercial customers serviced with customer provided cans to automated cart collection and is entitled to proper compensation. These customers have been billed at the lower rate for the past two years. Therefore, approximately 733 customers who are now billed at manual can rates will experience a $5.32 increase per month or $63.84 annually as they are switch over to automated cart rates. PROPOSED COMMERCIAL RATES For commercial bin customers, the PPI adjustment is 2% and the extraordinary adjustment is 2.6% for a total increase of 4.6%. Roll off rates and other service rates will increase 2.3%. 2 yard 3 yard 4 yard Pickups per week 4.6% New 4.6% New 4.6% New Rate Increase Rate Increase Rate Increase 1 1.80 41.05 2.03 46.16 2.25 51.26 2 3.22 73.38 3.67 83.60 4.12 93.81 3 4.64 105.72 5.31 121.04 5.98 136.34 4 6.06 138.05 6.95 158.47 7.85 178.89 5 7.48 170.39 8.60 195.92 9.72 221.44 6 8.89 202.71 10.24 233.35 11.58 263.99 Roll Off Boxes (per pull) 110.25 +2.3% I 112.80 Approval of Residential and Commercial Solid Waste Rate Adjustments July 7, 2002 Page 5 Approval of the recommended PPI and extraordinary adjustments increases FDS' total annual residential and commercial compensation by a minimum of $165,000. The total annual value of the Franchise Agreement will be a more than $4.7 million. REQUEST FOR CONTRACT AMENDMENTS Federal Disposal Service has submitted two requests for contract changes: 1. Lower the Performance Bond amount required in Article 9.5 of the Franchise Agreement from $500,000 to $100,000. 2. Charge for the collection and disposal of electronic waste items considered hazardous waste by the State of California. BONDING REQUIREMENTS Article 9.5 of the Franchise Agreement requires a $500,000 Performance Bond to assure contractor performance and a cash remedy in the event of contractor default. Federal Disposal Service currently provides a cash certificate of deposit (CD) to satisfy the requirement. The use of a CD was approved by staff in 2002 pursuant to a request by FDS. FDS now states that this capital could be put to better use to improve recycling opportunities in Tustin. Staff has received no specific proposals in this regard. Further, FDS believes the reduction of the Performance Bond/CD is appropriate for the following reasons: · Reduced exposure to the City since the completion of start-up operations, and · Reduced bonding costs would help offset extraordinary rising costs of General and Vehicle Insurance. Performance bonding is a standard requirement for public works contracts. A typical bond costs the contractor 1% of the bond value on an annual basis. The Public Works Department typically requires a Material and Labor Bond and a Performance Bond, each for 100% of the value of the public works contract. Pursuant to a request by FDS, staff has already attempted to mitigate the cost to FDS by allowing the substitution of a certificate of deposit for the same amount. Staff does not agree that there is reduced exposure to the City because the contractor has completed contract start-up. The Performance Bond is the only security the City has required in the case of contract default. If FDS were to default on the contract, $500,000 would not likely cover City costs to assume service responsibility and retain another contractor. The tasks required after default are outlined below: Approval of Residential and Commercial Solid Waste Rate Adjustments July 7, 2002 Page 6 Hire an interim contractor- May require City subsidized service and rates for a period of time. (up to 6 months) Establish commercial billings and collection Advertise & hire new contractor per City ordinance o Prepare bid specifications-minimum 1 month o Advertise for bids- 1 month o Evaluate bids and award contract-minimum 1 month o Complete contract process- bonds, insurance- 1 month In accordance with standard City public works contract bonding practices and the need to maintain an adequate level of performance assurance, staff recommends that this request be denied. HAZARDOUS WASTE The Franchise Agreement excludes the exclusive collection of household hazardous waste (HHW) materials by the franchise hauler. A primary concern of the City and an impediment to providing this service relates to environmental liability. Residents currently dispose of typical household products at a County of Orange Household Hazardous Waste Facility. The facility closest to Tustin is in Irvine in the vicinity of I-5 and Sand Canyon Avenue. All waste haulers are required to conduct efforts to reduce and minimize the amount of hazardous material that is unintentionally collected and disposed in County landfills. These hazardous materials include paints and solvents, oils, household cleaners, batteries, and computer and various electronic components. Computer monitors and televisions contain picture tubes called cathode-ray tubes (CRT). Each CRT contains a significant amount of lead. In 2002, the State Department of Toxic Substance Control issued regulations that banned discarded CRT's and other electronic waste from landfill disposal. Federal Disposal Service is offering to provide a flat rate fee based collection service for electronic waste components. The following table demonstrates the proposed FDS rate and a cost comparison for the proposed service FDS estimates that residents would request this service two to five times a week. E-Waste Consumer Cost Comparison County HHW ITEMS Drop off CPU's $0 Ink Printers $0 Laser Printers $0 CRT's $0 Fax Machines $0 HP Dell FDS CR&R Express Express Curbside Curbside Shipping Shipping Proposed $21 $15 $30 $30 $17 $15 $30 $30 $34 $15 $30 $30 $29 $15 $30 $30 $30 $15 $30 $30 Approval of Residential and Commercial Solid Waste Rate Adjustments July 7, 2002 Page 7 Staff concurs with this request and the service charges with the condition that FDS not be considered the exclusive HHW service provider for City residents. Staff recommends that residents continue to have collection options with other companies that wish to offer this service in Tustin. In conclusion, staff recommends that the City Council, 1) approve the Producer Price Index and extraordinary rate adjustments identified in Exhibit A for residential and commercial customers 2) adopt Resolution No. 03-80 placing assessments for solid waste collection on the Tax Roll for fiscal year 2003-2004, and 3) approve contract amendment #1 with Federal Disposal Service to permit the collection of certain hazardous materials for a fee. Director'of Public Works/City Engineer TDS:JM:ccg:FDS Rate Adjustment 7-7-03.doc Attachments: Resolution 03-80 Exhibit A - FDS Rate Adjustment Request Exhibit B - Contract Amendment # 1 to the Franchise Agreement Adm~n~strabve Services Manager Public Works Department RESOLUTION NO. 03-80 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA ADOPTED PURSUANT TO THE PROVISIONS OF SECTION 5473 ET SEQ. OF THE HEALTH AND SAFETY CODE OF THE STATE OF CALIFORNIA, APPROVING AND ADOPTING A REPORT RELATIVE TO PARCELS OF REAL PROPERTY RECEIVING SOLID WASTE COLLECTION SERVICES, DETERMINING THE CHARGES FOR SOLID WASTE COLLECTION TO BE ASSESSED AGAINST THE RESPECTIVE LOTS OR PARCELS OF LAND AS THEY APPEAR ON THE CURRENT ASSESSMENT ROLL The City Council of the City of Tustin does hereby resolve as follows: I. That proceedings were duly instituted, conducted and completed pursuant to provisions of Section 5473 et seq. of the Health and Safety Code of the State of California. A. A written report dated July, 2003, containing a description of each parcel of real property receiving solid waste collection services and facilities and the amount of the charge proposed to be levied upon each parcel for the collection of solid waste for the fiscal year 2003-2004 was prepared and filed with the City Clerk of the City of Tustin on B. That a Public Hearing to hear and consider all objections or protests, if any, to the aforesaid report and proposed charges was duly set for June 16, 2003 at 7:00 o'clock p.m. in the Council Chamber of the City of Tustin at 300 Centennial Way, Tustin, California. C. Said hearing was duly noticed as required by law, by publication once each week for two successive weeks on June 5, 2003 and June 12, 2003 in the Tustin News, a newspaper of general circulation in the City of Tustin. D. Said Public Hearing was continued by the City Council at the June 16, 2003 City Council Meeting to July 7, 2003 at 7:00 o'clock p.m. in the Council Chamber of the City of Tustin at 300 Centennial Way, Tustin, California E. At the foresaid time and place the duly noticed hearing was held and all persons who were present were heard and all comments, objections, and protests to the aforesaid report and proposed charges were duly heard and considered by the City Council. Resolution No. 03-80 Page 2 F. The charges proposed in the aforesaid report are fair and reasonable, are commensurate with the services provided, and the charge therefore should properly be collected on the tax roll in the same manner, by the same persons and at the same time as, together with and not separately from, general taxes. II. The City Council hereby elects to have the charges set forth in the aforesaid report collected on the tax roll in the same manner, by the same persons, at the same time as, and together with and not separately from its general taxes, and hereby authorizes that such charges be collected on the tax roll, as all prescribed to the provisions of Health and Safety Code Section 5473 et seq. III. The Resolution shall be effective following its adoption by a two-thirds vote of the members of the City Council and shall remain in force and effect and said charges shall be collected in the manner as foresaid for the year 2003-2004 and for each subsequent year as authorized by the hereinabove referenced section of the Health and Safety Code. IV. The City Clerk is authorized and directed to forthwith file a certified copy of this Resolution with the Auditor of the County of Orange, together with a copy of the hereinabove described report, and a statement endorsed thereon over her signature that the said report has been finally adopted by the City Council of the City of Tustin. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin, California, held on the 7th day of July, 2003. Tracy Wills Worley, Mayor ATTEST: City Clerk RESOLUTION CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF TUSTIN ) RESOLUTION NO. 02- Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council is five; that the above and foregoing resolution was passed and adopted at a regular meeting of the City Council held on the day of , by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: Pamela Stoker, City Clerk EXHIBIT A FEDERAL DISPOSAL SERVICE RATE ADJUSTMENT REQUEST Federal Disposal Service EXHIBIT 5A Proposed Residential Rates- With PPI and Extraordinary Workers Comp. Adjustments Customers Billed By the City on Tax Roll Step One: Determine disposal expense, Wokers Comp and service revenue as a percent of actual rate revenue Revenue Component Single Family Rate Revenue Less:Single Family Refuse Disposal Expense Less:Single Family W/C Expense Single Family Service Revenue 2002 rate adj estimate Tonnage Report Annual Amount{a) $ 1,452,423 $ 237,820 $ 27,000 $ 1,187,603 Percent of Rate Revenue 100.0% 16.4% 1.9% 81.8%1 Step Two: Calculate percentage change in adjustment factors Adjustment Factor Old New Percent Chan~le Disposal Gate Fee per Ton $ 22.00 $ 22.00 0.0% Wokers Comp. $ 81,295.00 $ 168,434.00 107.2% Producer Price Index 129.5 132.5 2.3% Step Three: Calculate weighted percentage change in single family rates Components of Actual Revenue Component Wei~lht {b) Percent Change {c) Wei~lhted Rate Adjustment Refuse Disposal 16.4% 0.0% 0.0% Workers Comp 1.9% 107.2% 2.0% Service 81.8% 2.3% 1.9% Total 100.0% N/A 3.9% Step Four: Apply weighted percentage change to single family rates Service Current Monthly Rate (d) Wei~lhted Rate Adiustment (e) Adjusted Monthly Rate Single Family-Automated Cart $ 12.59 3.9% $13.08 Revised6/30/2003 Federal Disposal Service EXHIBIT 5B Proposed Commercial Rates- With PPI and Extraordinary Workers Comp. Adjustment Customer Billed By the Company (Except Rolloff) Step One: Deduct franchise fees from gross rate revenue Revenue Component (including Franchise Fees) Annual Amount (a) Percent of Rate Revenue Includin~l Franchise Fees Actual Gross Commercial and MFR Rate Revenue 2002 rate adj estimate $ 2,583,135 100.0% Actual Commercial and MFR Franchise Fees 2002 report $ 62,712 2.4% Actual Gross Commercial and MFR Rate Revenue Net of Franchise Fees $ 2,520,423 97.6% Step Two: Determine disposal expense, Wokers Comp. and service revenue percentage of total actual rate revenue Revenue Component (net of Franchise Fees) Annual Amount (a) Percent of Rate Revenue Net of Franchise Fees Actual Commercial and MFR Bin revenue Net of Franchise Fees 2002 rate adj estimate $ 2,520,423 100.0% Less: Actual Commercial and MFR Disposal Tonnage Report $ 249,854 9.9% Less: Workers Comp (Actual Cost) W/C Report $ 60,138 2.4% Actual Commercial and MFR Bin Service Revenue $ 2,210,431 87.7% Step Three: Calculated percentage change in adjustment factors Adiustment Factor Old New Percent Chan~le Disposal Gate Fee per Ton $ 22.00 $ 22.00 0.0% Workers Comp $ 81,295.00 $ 168,434.14 107.2% Producer Price Index $ 129.50 $ 132.50 2.3% Step Four: Calculated weight percentage change in commercial and MFR Bin rates Components of Actual Revenue Component Wei~lht (c) Percent Chan~le (d) Weighted Rate Adiustment Refuse Disposal 9.9% 0.0% 0.0% Service 87.7% 2.3% 2.0% Workers Comp 2.4% 107.2% 2.6% Total 100.0% N/A 4.6% Step Five: Applied weighted percentage change to commercial and MFR Bin rates Service Current Monthly Rate Weighted Rate Adjusted Monthly Rate (e) Adiustment (f) 1 ea. 2 yard Bin once per week $ 39.25 4.6% $41.05 I ea. 2 yard Bin twice per week $ 70.16 4.6% $73.38 1 ea. 2 yard Bin three times per week $ 101.08 4.6% $105.72 I ea. 2 yard Bin four times per week $ 131.99 4.6% $138.05 1 ea. 2 yard Bin five times per week $ 162.91 4.6% $170.39 1 ea. 2 yard Bin six times per week $ 193.82 4.6% $202.71 1 ea. 3 yard Bin once per week $ 44.13 4.6% $46.16 1 ea. 3 yard Bin twice per week $ 79.93 4.6% $83.60 I ea. 3 yard Bin three times per week $ 115.73 4.6% $121.04 1 ea. 3 yard Bin four times per week $ 151.52 4.6% $158.47 1 ea. 3 yard Bin five times per week $ 187.32 4.6% $195.92 1 ea. 3 yard Bin six times per week $ 223.11 4.6% $233.35 1 ea. 4 yard Bin once per week $ 49.01 4.6% $51.26 1 ea. 4 yard Bin twice per week $ 89.69 4.6% $93.81 1 ea. 4 yard Bin three times per week $ 130.36 4.6% $136.34 1 ea. 4 yard Bin four times per week $ 171.04 4.6% $178.89 1 ea. 4 yard Bin five times per week $ 211.72 4.6% $221.44 !1 ea. 4 yard Bin six times per week $ 252.41 4.6% $263.99 Revised6/30/2003 Federal Disposal Service EXHIBIT 5C Proposed Roll Off Rates and Other Services With PPI Rate Adjustment Step One: Calculate percentage change in Producer Price Index Adiustment Factor Old New Percent Chan~le Producer Price Index $ 129.50 $ 132.50 2.3% Step Two: Apply percentage change in Producer Price Index to Service Portion of rolloff rates Service Current Monthly Rate Adjustment Adjusted Rate Rate (a) Standard Rolloff charge per load (b) $ 110.25 2.3% $ 112.80 Compactor charge per load $ 161.61 2.3% $ 165.36 Delivery or relocation charge $ 78.20 2.3% $ 80.01 Temporary"Clean-Up" Bins $ 52.13 2.3% $ 53.34 Locking Bins $ 5.21 2.3% $ 5.33 On-Call Bin Cleaning Services (in excess of lx/yr) $ 36.49 2.3% $ 37.34 Bulky Item Pick up (in excess of 2x/yr) $ 20.85 2.3% $ 21.34 iSpecial Pick (in excess of 2x/yr) Auto Cart Cust $ 5.21 2.3% $ 5.33 ~CPU's Proposed new service $ 30.00 Ink Printers Proposed new service $ 30.00 Laser Printers Proposed new service $ 30.00 CRT's ( any size) Proposed new service $ 30.00 Fax Machines Proposed new service $ 30.00 Revised6/30/2003 Federal Disposal Service Proposed Rate Summary Dated 6~3O/2OO3 With PPI and Workers Comp Residential Multi-Family Cart Rates Original Quantity Row Service Proposed of Monthly Annual Billings Monthly Rate Service Units Billings 1 Automated Cart $13.08 9,173 $ 119,977 $ 1,439,723 3 Total Cart Billings $ 119,977 $ 1,439,723 Commercial and Multi-Family Bin Rates Pickups per Week Row Service 1 2 3 4 5 6 4 2 Cubic Yards $41.05 $73.38 $105.72 $138.05 $170.39 $202.71 5 3 Cubic Yards $46.16 $83.60 $121.04 $158.47 $195.92 $233.35 6 4 Cubic Yards $51.26 $93.81 $136.34 $178.89 $221.44 $263.99 Commercial and Multi-Family Bin Distribution Matrix - Number of Bins · Pickups per Week Row Service Total I 2 3 4 5 6 7 2 Cubic Yards 67 15 14 - 2 98 8 3 Cubic Yards 236 470 440 105 103 48 1,402 9 4 Cubic Yards 23 127 1 40 32 42 38 402 10 Total 326 612 594 137 147 86 1,902 Commercial and Multi-Family Bin Billinqs Pickups per Week Row Container Total Size 1 2 3 4 5 6 11 2 Cubic Yards $ 2,750 $ 1,101 $ 1,480 $ - $ 341 $ $ 5,672 12 3 Cubic Yards 10,893 39,291 53,258 16,640 20,179 11,201 151,462 13 4 Cubic Yards 1,179 11,91 3 19,088 5,724 9,300 10,032 57,237 14 Total Monthly Billings $ 14,822 $ 52,305 $ 73,826 $ 22,364 $ 29,821 $ 21,233 $ 214,371 15 Total Annual Billings $ 177,864 $ 627,663 $ 885,913 $ 268,370 $ 357,846 $ 254,790 $ 2,572,447 Roll-Off Box Billinqs Row Description Billing Unit Units per Proposed Estimated Year Rate Annual Billings 16 Pull Charge # of Pulls 3,002 $ 112.80 $ 338,638 17 Disposal/Processing Charge # of Tons 13,407 $ 28 375,396 18 Total 16,409 141 714,034 Summary of Projected Annual Billinqs Proposed Base Period Increase % Revenue 19 Residential Multi-Family and Commercial Cart Billings $ 1,439,723 $ 1,385,642 3.8% 30.46% 20 Commercial and Multi-Family Bin Service Billings 2,572,447 2,459,542 4.4% 54.43% 21 Roll-Off Box Billings 714,034 706,367 1.1% 15.11% 22 Total Projected Annual Billings $4,726,203 $4,551,551 3.7% Reconciliation ITotal Increase W/C PPI Variance $174,652 $87,136 $86,079 $173,215 $1,437 Revised6/30/2003 EXHIBIT B AMENDMENT #1 to the FRANCHISE AGREEMENT FOR INTEGRATED SOLID WASTE MANAGEMENT SERVICES AMENDMENT 1 TO THE FRANCHISE AGREEMENT BETWEEN CITY OF TUSTIN AND SHUBIN SERVICES, INC. D.B.A. FEDERAL DISPOSAL SERVICE FOR INTEGRATED SOLID WASTE MANAGEMENT SERVICES Dated RECITALS Whereas, the City of Tustin (City) and Shubin Services, Inc. doing business as Federal Disposal Service (Federal) entered into a Franchise Agreement for Integrated Solid Waste Management Services on June 5, 2000 ("Agreement"); and, Whereas Section 7.1 of the Agreement provides for a public hearing on or about the two year anniversary of the contract commencement and annually thereafter, to provide for, in part, a discussion and review of technological, economical, and regulatory changes in Collection, source reduction, Recycling, processing and Disposal to achieve a continuing, advanced Solid Waste Collection, source reduction and Recycling and Disposal System; and, Whereas a public hearing was held on March 17, 2003 wherein Federal recommended initiatives for new services in accordance with Article 7 of the Agreement; and 170697/1 1 Whereas, the City and Federal (Parties) hereto desire to amend the Agreement to allow for the changes described below. AMENDMENTS Now, therefore, in consideration of the premises above stated the Parties do hereby agree to amend and modify the Agreement as follows: o Revise Section 1.6 of Article I (Definitions) pertaining to Bulky Waste by deleting the references to electronic equipment, to read as follows: "Bulky Waste" means discarded furniture (including chairs, sofas, mattresses, and rugs); appliances (including refrigerators, ranges, washers, dryers, water heaters, dishwashers, plumbing, small household appliances and other similar items, commonly known as "white goods"); c!cctron!c ~TC~S ~R Ot~C~ ~;~;1~ ;~ ......... 1.. T.~O "~-o ....... ~""~' residential wastes (including wood waste, tree branches, scrap wood, debris from building remodeling, rocks, sod and earth, in the aggregate not exceeding one cubic yard per collection); clothing; and tires. Bulky Wastes do not include such things as car bodies or construction debris. 2. Add Section 1.19.5 to Article I (Definitions) following Section 1.19 to read as follows: 1.19.5 Electronic Waste "Electronic Waste" means discarded consumer electronic devices including cathode ray tube materials (CRT's), stereos, televisions, computers, VCR's, light bulbs, batteries, and other similar consumer electronic devices subject to the "Universal Waste" regulations of the California Department of Toxic Substances Control pursuant to Chapter 23 of Division 4.5 of Title 22 of the California Code of Regulations (commencing with Section 66273.1). Said regulations require Electronic 170697/1 2 Waste to be treated as hazardous wastes and require certain Electronic Waste such as CRT's to be recycled. As such, Electronic Waste is hazardous waste and/or recyclable material outside of the exclusive scope of the Franchise granted to the Company pursuant to Section 2.7 of this Agreement. 3. Add Section 4.1.13 to Article 4 (Direct Services) to read as follows: 4.1.13 On-Call Electronic Waste Pickup Company may provide non-exclusive Electronic Waste Pickup services to Single Family and Multi-Family Residential Customers and charge the amount approved by the City Council. Customers will provide the Company with 48 hours notice for collection. Collections shall be performed from curbside locations. 4. All other terms, conditions, covenants and agreements contained in the Agreement remain the same. IN WITNESS WHEREOF, the City and the Company have executed this Amendment 1 to the Franchise Agreement for Integrated Solid Waste Management Services, as of the day and year first above written. CITY OF TUSTIN ("City") Tracy Wills Worley ATTEST: By APPROVED AS TO FORM: MAYOR, CITY OF TUSTIN SHUBIN SERVICES, INC dba FEDERAL DISPOSAL SERVICE City Attorney Donald B. Shubin, President By¸ 170697/1 3