HomeMy WebLinkAbout07 APPROVE SECOND AMENDMENT TO_AGREEMENT_WITH_CR&RDocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 Agenda Item 7 AGENDA REPORT Reviewed: Ew" s 05City Manager Finance Director N/A MEETING DATE: FEBRUARY 6, 2024 TO: NICOLE BERNARD, ACTING CITY MANAGER FROM: MICHAEL GRISSO, ACTING DIRECTOR OF PUBLIC WORKS SUBJECT: SECOND AMENDMENT TO CONTRACT WITH CR&R INCORPORATED SUMMARY CR&R Incorporated (CR&R) is the City's exclusive provider for solid waste and recycling services. The Contract between the City and CR&R allows for annual rate increases to offset increases in the cost to provide the service. To ensure Proposition 218 compliance the City will be updating the annual rate adjustment process after a public hearing in June 2024. Contractually, annual rate increases have been adjusted using the Producer Price Index (PPI) for the prior calendar year. In an effort to meet the timeline and public notification requirements of Prop 218, staff and CR&R have agreed to amend the contract to use the October PPI to determine the rate adjustment that will take effect on July 1, 2024, and annually thereafter. RECOMMENDATION Staff recommends the City Council approve the Second Amendment to Agreement for the Collection, Transportation, Processing and Diversion of Recyclable Materials, Food Scraps, Yard Trimmings, Wood, Construction and Demolition Debris and Other Materials and for the Collection, Transportation and Disposal of Municipal Solid Waste; and authorize the City Clerk and Mayor to execute the Second Amendment. FISCAL IMPACT The proposed action has no fiscal impact to the City. CORRELATION TO THE STRATEGIC PLAN This item contributes to the fulfillment of the City's Strategic Plan Goal D, Strong Community and Regional Relationships, specifically addressing Strategy 2, by collaborating with a private entity to advance services of mutual interest. BACKGROUND In 2018, the City and CR&R entered into a Solid Waste and Recycling Contract (Contract). Under the terms of the Contract, customer rates are adjusted annually in accordance with a formula established in the Contract, which has four components: Collection, Processing, Disposal, and State -Mandated Regulatory Compliance Cost. The Collection and Processing components are calculated based on variables in the PPI, specifically, Natural Gas and Finished Goods Less Food and Energy. The Disposal component is calculated based on the actual change in the "tipping fee" at Orange County landfills. The State - Mandated Regulatory Compliance Cost is a fee that CR&R pays the City to ensure financial DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 Second Amendment to Contract with CR&R Incorporated February 6, 2024 Page 2 resources are available to meet a variety of California recycling regulations and has not been adjusted over the term of the agreement. Proposition 218 allows for approval of five-year rate cycles after a public hearing, and the 2018 hearing covered the period from 2019 through 2023. This year, the City is required to conduct a public hearing in accordance with Proposition 218 prior to approving future rate adjustments. As part of the notification process, the City must send each affected property owner a written notice that states the proposed rates and the date of the public hearing. This notice must be mailed at least 45 days prior to the date of the public hearing. Per the Contract, the average annual PPI from the prior year is to be used to calculate the annual rate adjustment. The 2023 PPI data will not be finalized until May 12, 2024, which will delay the public hearing until mid -July 2024. City staff and CR&R believe the best course of action is to amend the Contract to allow for the use of the October PPI to calculate the rate adjustments in this year and moving forward. Staff has analyzed the preliminary impacts using the October 2023 PPI and determined rate adjustments are consistent with the historical increases and decreases as defined in the Contract. Micha I risso, Acting Director of Public Works Attachment: Second Amendment to Agreement for the Collection, Transportation, Processing and Diversion of Recyclable Materials, Food Scraps, Yard Trimmings, Wood, Construction and Demolition Debris and Other Materials and for the Collection, Transportation and Disposal of Municipal Solid Waste DocuSign Envelope ID: D991 E165-F97E-49A4-82C3-64B73530AC06 SECOND AMENDMENT TO AGREEMENT FOR THE COLLECTION, TRANSPORTATION, PROCESSING AND DIVERSION OF RECYCLABLE MATERIALS, FOOD SCRAPS, YARD TRIMMINGS, WOOD, CONSTRUCTION AND DEMOLITION DEBRIS AND OTHER MATERIALS AND FOR THE COLLECTION, TRANSPORTATION AND DISPOSAL OF MUNICIPAL SOLID WASTE This SECOND AMENDMENT is entered into as of the day of February 2024, 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. City and Contractor entered into an Agreement for the Collection, Transportation, Processing and Diversion of Recyclable Materials, Food Scraps, Yard Trimmings, Wood, Construction and Demolition Debris and Other Materials and for the Collection, Transportation and Disposal of Municipal Solid Waste on October 2, 2018 (hereinafter referred to as "(Agreement"). 2. City and Contractor executed the First Amendment to the Agreement on June 1, 2021 to extend the timeframe for Contractor to complete implementation of AB 341 and AB 1826 programs at a minimum of seventy-five percent (75%) of the state -required businesses and Multi -Family properties to September 30, 2021. 3. The purpose of this Second Amendment is to change the date for the final indexes used to calculate adjustments to Contractor's compensation. NOW, THEREFORE, in consideration of the mutual promises contained in this SECOND AMENDMENT, and for other good and valuable consideration, the parties agree to amend the Agreement as follows: Section 1. Change in Date for Final Indexes Used to Calculate Adjustments to Contractor's Compensation. Attachment J "Annual Rate and Disposal Cost Adjustments" is hereby deleted and replaced in its entirety by revised Attachment J attached hereto and incorporated herein as Exhibit 1. Section 2. All Other Provisions of the Agreement Remain Unchanged and in Full Force and Effect. Except as specifically modified by this Second Amendment, all provisions of the Agreement dated October 2, 2018 and amended on June 1, 2021 shall remain unchanged and in full force and effect. Page 1 of 2 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 IN WITNESS WHEREOF, City and Contractor have executed this Second Amendment as of the day and year first above written. CONTRACTOR 0 CITY OF TUSTIN Clifford Ronnenberg By: Chairman and Chief Executive Officer Austin Lumbard, Mayor ATTEST: CITY CLERK Erica N. Yasuda, City Clerk APPROVED AS TO FORM 92 David E. Kendig, City Attorney Page 2 of 2 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments 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" or as a negative value rate component upon the Effective Date of the Agreement. The following rounding protocol shall be used in the calculations described herein: 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%). For calculation of all rates and rate components described in this Attachment J, the calculations shall be rounded to two decimal places. (Example: $2.39). The numbers 1, 2, 3, and 4 in all calculations 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 all calculations shall be rounded up. (Example: If the result of the calculation were $3.468, the final figure would be $3.47). In the event that the standard reference base period for any index used herein is revised, the calculations will be performed using the officially released data published by the Bureau of Labor Statistics. If an index used herein is discontinued, the successor index with which it is replaced, will be used for subsequent calculations. If no successor index is identified by the Bureau of Labor Statistics, the government index which is most comparable will be used. 1. 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 1, 2020. Step One. Calculate the percentage change in the Producer Price Index for Natural Gas (Series ID WPU0531). The first adjustment to be made on July 1, 2020 shall be calculated by: 1) Calculate the value of the annual average change in the `Natural Gas' PPI for the twelve-month period spanning January 2018 through December 2018. The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. Attachment J Page 1 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments 2) The 2019 annual average value shall then be calculated for the period January 2019 through December 2019. The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 3) Next, the percentage change for the final Natural Gas PPI shall be determined by calculating the annual change between the 2018 to 2019 values. The annual change shall be calculated by taking the difference between the 2019 and 2018 annual averages and dividing this by the 2018 annual average. For example, if the 2018 annual average was 100 and the 2019 annual average was 110, the change in these values would be 10% ((110-100)/100). This same calculation shall be performed by comparing the average of the prior twelve-month period ending on December 31 for every rate adjustment through July 1, 2023. Commencing with the rate adjustment that will become effective July 1, 2024, the calculation shall be based upon the change in the final index for the twelve-month period November 1 through October 31. This methodology shall be used for all rate adjustments to become effective from July 1, 2024 through the end of the Term. Example: Using the revised timeframe for calculating the annual averages, Step One of the calculations to adjust the rates to become effective July 1, 2024 shall be completed as follows: Step One. Calculate the percentage change in the Producer Price Index for Natural Gas (Series ID WPU0531). 1) Calculate the value of the annual average change in the `Natural Gas' PPI for the twelve-month period spanning November 1, 2021 through October 31, 2022 (the 2022 annual average). The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 2) The 2023 annual average value shall then be calculated for the period November 1, 2022 through October 31, 2023 (the 2023 annual average). The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 3) Next, the percentage change for the final Natural Gas PPI shall be determined by calculating the annual change between the 2022 and the 2023 values. The annual change shall be calculated by taking the difference between the 2022 and 2023 annual averages and dividing this by the 2022 annual average. For example, if the 2022 annual average was 100 and the 2023 annual average was 110, the change in these values would be 10% ((110-100)/100). Attachment J Page 2 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments 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 the 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 using the annual average value of the Producer Price Index for `Final Demand - Finished Goods Less Food and Energy' (Bureau of Labor Statistics Series ID WPUFD4131). The first adjustment to be made on July 1, 2020 shall be calculated by: 1) Calculate the value of the annual average change in the `Final Demand - Finished Goods Less Food and Energy' PPI for the twelve-month period spanning January 2018 through December 2018. The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 2) The 2019 annual average value shall then be calculated for the period January 2019 through December 2019. The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 3) Next, the percentage change for the final Finished Goods Less Food and Energy PPI shall be determined by calculating the annual change between the 2018 to 2019 values. The annual change shall be calculated by taking the difference between the 2019 and 2018 annual averages and dividing this by the 2018 annual average. For example, if the 2018 annual average was 100 and the 2019 annual average was 110, the change in these values would be 10% ((110-100)/100). This same calculation shall be performed by comparing the average of the prior twelve-month period ending on December 31 for every year of the Term. The percentage change shall not exceed 4% per annum. In the event the calculated average percentage change in the PPI is negative, the rate adjustment shall be zero (0). Commencing with the calculations for the rate adjustment to become effective July 1, 2024, the annual adjustment shall be based upon the change in the index for the twelve-month period from November 1 through October 31. This methodology Attachment J Page 3 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments shall be used for all rate adjustments to become effective from July 1, 2024 through the end of the Term. Example: Using the revised timeframe for calculating the annual averages, Step Four of the calculations to adjust the rates to become effective July 1, 2024 shall be completed as follows: Step Four. Calculate the percentage change using the annual average value of the Producer Price Index for `Final Demand - Finished Goods Less Food and Energy' (Bureau of Labor Statistics Series ID WPUFD4131). 1) Calculate the value of the annual average change in the `Final Demand - Finished Goods Less Food and Energy' PPI for the twelve-month period spanning November 1, 2021 through October 31, 2022 (the 2022 annual average). The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 2) The 2023 annual average value shall then be calculated for the period November 1, 2022 through October 31, 2023 (the 2023 annual average). The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 3) Next, the percentage change for the final Finished Goods Less Food and Energy PPI shall be determined by calculating the annual change between the 2022 and the 2023 values. The annual change shall be calculated by taking the difference between the 2022 and 2023 annual averages and dividing this by the 2022 annual average. For example, if the 2022 annual average was 100 and the 2023 annual average was 110, the change in these values would be 10% ((110-100)/100). 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 as calculated in Step 3) to the Collection component less fuel costs (85% of Collection as calculated in Step 6) for the total adjusted Collection component of the rate. Sample Rate Adjustment Calculation for Change in PPI Attachment J Page 4 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments (All numbers are examples only and are used here for illustration purposes). Example Assumptions: Final Annual Average PPI for Finished Goods (old) 140.00 Final Annual Average PPI for Finished Goods (new) 144.00 Final Annual Average PPI for Natural Gas (old) 237.4 Final Annual Average PPI for Natural Gas (new) 270.7 Current Residential Recycling Cart Collection Rate $ 0.91 Current Commingled 3-yd bin Collection Rate $32.28 Step One. Calculate average annual percentage change in PPI for Natural Gas. 270.7 - 237.4 = (33.3/237.4) X 100 = 14.0% Step Two. Calculate average annual 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 annual 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 average annual percentage change in PPI for Finished Goods. 144 - 140 = (4/140) 100 = 2.9% Step Five. Calculate Collection less fuel costs (= 85%). Residential Collection Rate: $.91 X .85 = $.77 3 yd. Bin Collection Rate: $32.28 X .85 = $27.44 Step Six. Apply annual percentage change of PPI for Finished Goods to Collection fee less fuel costs calculated in Step Five. Residential Collection Rate: $.77 X 1.029 = $.79 3 yd. Bin Collection Rate: $27.44 X 1.029 = $28.24 Step Seven. Add the rates calculated in step three and step six to calculate the total adjusted Collection rate. Attachment J Page 5 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments New Residential Collection Rate: $.16 + $.79 = $.95 New 3 yd. Bin Collection Rate: $5.52 + $28.24 = $33.76 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 1, 2020. Step One. Calculate the percentage change in the `Final Demand - Finished Goods Less Food and Energy' (Bureau of Labor Statistics Series ID WPUFD4131). The change in the PPI shall be the average of the twelve-month period ending on December 31 as compared to the prior year's average percentage change during the 12-month period ending on December 31. The change allowed shall not exceed 4% per annum. In the event the percentage change in the PPI is negative, the adjustment for the Processing component of the rate shall be zero. Commencing with the calculations for the rate adjustment to become effective July 1, 2024, the annual adjustment shall be based upon the change in the index for the twelve-month period from November 1 through October 31. This methodology shall be used for all rate adjustments to become effective from July 1, 2024 through the end of the Term. Example: Using the revised timeframe for calculating the annual averages, Step One of the calculations to adjust the rates to become effective July 1, 2024 shall be completed as follows: Step One. Calculate the percentage change in the'Final Demand - Finished Goods Less Food and Energy' (Bureau of Labor Statistics Series ID WPUFD4131). 1) Calculate the value of the annual average change in the `Final Demand - Finished Goods Less Food and Energy' PPI for the twelve-month period spanning November 1, 2021 through October 31, 2022 (the 2022 annual average). The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 2) The 2023 annual average value shall then be calculated for the period November 1, 2022 through October 31, 2023 (the 2023 annual average). The annual average of these indices is calculated by taking the sum of all 12 monthly indices and then dividing that number by 12. 3) Next, the percentage change for the final Finished Goods Less Food and Energy PPI shall be determined by calculating the annual change between the 2022 and the 2023 values. The annual change shall be calculated by taking the difference between the 2022 and 2023 annual averages and Attachment J Page 6 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments dividing this by the 2022 annual average. For example, if the 2022 annual average was 100 and the 2023 annual average was 110, the change in these values would be 10% ((110-100)/100). The percentage change shall not exceed four percent (4%) per annum. In the event the percentage change in the PPI is negative, the adjustment for the Processing component of the rate shall be zero. Step Two. Multiply the Processing component of the rate by 1 plus the percentage change in the annual average PPI. 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: Final Annual Average PPI for Finished Goods (old) 140.00 Final Annual Average PPI for Finished Goods (new) 144.00 Current Residential Recycling Cart Processing Rate $ 2.48 Current Single -Stream 3 yd. Bin Processing Rate $18.16 Step One. Calculate percentage change in PPI 144-140 = (4/140) 100 = 2.9% Step Two. Apply percent change to Processing component of rate. Residential Processing Rate: $2.48 X 1.029 = $2.55 3 yd. Bin Processing Rate: $18.16 X 1.029 = $18.69 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. 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 Attachment J Page 7 of 11 DocuSign Envelope ID: D991 E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments 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 $ 0.11 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 = 16.7% Step Two. Apply percent change to Disposal Charge component of existing rates. Residential Disposal rate: $.11 x 1.167 = $.13 3 yard Bin Disposal rate: $1.01 x 1.167 = $1.18 D. ADJUSTMENT FOR CHANGE IN STATE -MANDATED REGULATORY COMPLIANCE COST (SMRCC) — (APPLIES ONLY WHEN SMRCC INCREASES OR DECREASES) Step 1: Calculate the delta between the old State -Mandated Regulatory Compliance Costs (SMRCC) and the new State -Mandated Regulatory Compliance Costs. For annual adjustments to the SMRCC, determine the annual change in the fee. Per Contract Section 12.05, the SMRCC may be increased or decreased based on the actual costs incurred by the City to comply with state regulations. If a non -annualized change in the SMRCC is made, the same calculation process as described below will apply. Example assuming an increase in the SMRCC: Old SMRCC = $210,000 per year New SMRCC = $330,000 per year Attachment J Page 8 of 11 DocuSign Envelope ID: D991 E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments Change in SMRCC = $120,000 per year Example assuming a decrease in the SMRCC: Old SMRCC = $210,000 per year New SMRCC = $90,000 per year Change in SMRCC = ($120,000) per year Step 2: Divide the change in the SMRCC fee by the total aggregate annual revenue for the preceding 12-month period. Example assuming an increase in the SMRCC: Annual aggregate rate revenue (all rate revenue) _ $12,000,000 per year Annual change in the SMRCC = $120,000 Divide the $120,000 per year change in the SMRCC by the annual aggregate rate revenue of $12,000,000 to determine the needed rate adjustment (1 % in this example) Example assuming a decrease in the SMRCC: Annual aggregate rate revenue (all rate revenue) _ $12,000,000 per year Annual change in the SMRCC = ($120,000) Divide the ($120,000) per year change in the SMRCC by the annual aggregate rate revenue of $12,000,000 to determine the needed rate adjustment (-1 % in this example) Step 3: Apply the rate adjustment (increase or decrease) to the rates. Example assuming an increase in rates: If the residential rate is $15/month, multiply $15 by 1.01 to calculate the adjusted rate ($15.15/month). If the commercial 3-yard bin 1x/week rate is $100 per month, multiply $100 by 1.01 to calculate the adjusted rate ($101/month). Attachment J Page 9 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments Example assuming a decrease in rates: If the residential rate is $15/month, multiply $15 by 0.99 to calculate the adjusted rate ($14.85/month). If the commercial 3-yard bin 1x/week rate is $100 per month, multiply $100 by 0.99 to calculate the adjusted rate ($99/month). Attachment J Page 10 of 11 DocuSign Envelope ID: D991E165-F97E-49A4-82C3-64B73530AC06 ATTACHMENT J Annual Rate and Disposal Cost Adjustments E. 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). Multiply the adjusted rate by the percentage adjustment resultant from the change in the SMRCC. Example (assuming an increase in the SMRCC): Adjusted Residential Rate: $.95 + $2.55 + $.13 = $3.63 x 1.01 = $3.67 Adjusted 3 yd. Bin Rate: $33.76 + $18.69 + $1.18 = $53.62 x 1.01 = $54.16 Example (assuming a decrease in the SMRCC): Adjusted Residential Rate: $.95 + $2.55 + $.13 = $3.63 x 0.99 = $3.59 Adjusted 3 yd. Bin Rate: $33.76 + $18.69 + $1.18 = $53.62 x 0.99 = $53.08 Attachment J Page 11 of 11