AG 20-073 - WASTE MANAGEMENT OF WA RETURN TO: PW ADMIN EXT: 2700 ID#: '2)'7 L 3
CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM
ORIGINATING DEPT/DIv: PUBLIC WORKS/SOLID WASTE&RECYCLING
ORIGINATING STAFF PERSON:ROB VAN ORSOW EXT:2770 3. DATE REQ.BN,: _
�. TYPE OF DOCUMENT(CHECK ONE):
❑ CONTRACTOR SELECTION DOCUMENT(E.G.,RFB,RFP,RFQ)
❑ PUBLIC WORKS CONTRACT ❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT
❑ PROFESSIONAL SERVICE AGREEMENT ❑ MAINTENANCE AGREEMENT
❑ GOODS AND SERVICE AGREEMENT ❑ HUMAN SERVICES/CDBG
❑ REAL ESTATE DOCUMENT ❑ SECURITY DOCUMENT(E.G.BOND RELATED DOCUMENTS)
❑ ORDINANCE ❑ RESOLUTION
❑ CONTRACT AMENDMENT(AG#): 0 INTERLOCALFe'OTHER: MEMORANDUM OF UNDERSTANDING
G. PROJECT NAME:COMMODITY ADJUSTMENT PROCEDURES
i. NAME OF CONTRACTOR:WASTE MANAGEMENT OF WASHINGTON
ADDRESS:720 4TH AVE-SUITE 400,KIRKLAND,WA 98033 TELEPHONE:
E-MAIL: FAX:
SIGNATURE NAME:JASON ROSE TITLE:PRESIDENT
i. EXHIBITS AND ATTACHMENTS:❑ SCOPE,WORK OR SERVICES ❑ COMPENSATION ❑ INSURANCE REQUIREMENTS/CERTIFICATE ❑ ALL OTHER
REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN ❑ REQUIRED LICENSES ❑ PRIOR CONTRACT/AMENDMENTS
CFW LICENSE# BL,EXP. 12/31/ UBI# EXP.
TERM: COMMENCEMENT DATE:8/5/2019 COMPLETION DATE:8/31/2030
i. TOTAL COMPENSATION:$ N/A (INCLUDE EXPENSES AND SALES TAX,IF ANY)
(IF CALCULATED ON HOURLY LABOR CHARGE-ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES)
REIMBURSABLE EXPENSE: ❑YES ❑NO IF YES,MAXIMUM DOLLAR AMOUNT: $
IS SALES TAX OWED: ❑YES ❑NO IF YES,$ PAID BY: ❑CONTRACTOR ❑CITY
RETAINAGE: RETAINAGE AMOUNT: ❑RETAINAGE AGREEMENT(SEE CONTRACT) OR ❑RETAINAGE BOND PROVIDED
❑ PURCHASING: PLEASE CHARGE TO:
F. DOCUMENT/CONTRACT REVIEW INITIAL/DATE REVIEWED INITIAL/DATE APPROVED
❑ PROJECT MANAGER
VISION MANAGER o '_0 40
EPUTY DIRECTOR
DIRECTOR i
q SK MANAGEMENT (IF APPLICABLE)
BEd LAW DEPT Vz7 Zd
0. COUNCIL APPROVAL(IF APPLICABLE) SCHEDULED COMMITTEE DATE: COMMITTEE APPROVAL DATE:
SCHEDULED COUNCIL DATE: COUNCIL APPROVAL DATE:
1. CONTRACT SIGNATURE ROUTING
❑ SENT TO VENDOR/CONTRACTOR DATE SENT: DATE REC'D:
❑ ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE,LICENSES,EXHIBITS
❑ CREATE ELECTRONIC REMINDER/NOTIFICATION FOR I MONTH PRIOR TO EXPIRATION DATE
(INCLUDE DEPT.SUPPORT STAFF IF NECESSARY AND FEEL FREE TO SET NOTIFICATION MORE THAN A MONTH IN ADVANCE IF COUNCIL APPROVAL IS NEEDED.)
INITIAL/DATE SIGNED
❑ FINANCE DEPARTMENT
❑ LAW DEPT --am glidtom
p.�%I+�TORY(MAYOR OR DIRECTOR)
❑ CITY CLERK 0 hcq,
❑ ASSIGNED AG# AGOZ
❑ SIGNED COPY RETURNED DATE SENT:
;OMMENTS:
:XECUTE ORIGINALS
MEMORANDUM OF UNDERSTANDING
BETWEEN
WASTE MANAGEMENT OF WASHINGTON,INC.
AND
THE CITY OF FEDERAL WAY,WASHINGTON
THIS MEMORANDUM OF UNDERSTANDING (`MOU'D is made this day of
2020 by and between the City of Federal Way("City"),a Washington municipal corporation,and Waste
Management of Washington, Inc. ("WM ), a Delaware corporation, together referenced herein as the
"Parties."
WHEREAS,The Parties executed a Comprehensive Garbage,Recyclables,and Compostables Collection
Services Contract on August 5,2019("Contract'D;and
WHEREAS,Section 5.3.4 of that Contract specified that the value of recyclables commodities collected
from customers shall be credited to or debited from customers;and
W11EREAS, Section 5.3.4 of that Contract directed that "...the Parties shall develop a credit/debit
adjustment procedure to return the value of collected Recyclable commodities to Customers in a manner
consistent with the[Contract-specified]framework'"and
WHEREAS,The initial calculated commodity value of aggregate recyclables($54.07 per ton,equivalent
to$1.00 per single-family customer per month)represents the market value proposed by the Contractor as
existed at the time of execution of this Contract,as reflected in the initial Contractor Rates and Section
5.3.4 of this Contract;and
WBEREAS,The City has determined that the proposed$54.07/ton is a reasonable approximation of the
post-processing market value of recyclables at the time of execution of this Contract and that using a
third-party market value index during the term of the Contract is a reasonable approach to maximize value
to ratepayers;and
WHEREAS,The$54.07 per ton value shall be carried forward in the initial Contractor Rates regardless
of actual recycling volumes,composition,or commodity value while the City and Contractor engage in
procedures consistent with this MOU to confirm recycling volumes and composition;and
WIMREAS,Actual values for recycling volumes, composition,and commodity value shall be used to
determine Customer commodity credit/debit amounts for incorporation into Contract rates effective as of
January 1,2022,and in each following year,consistent with this MOU,and
WHEREAS, This MOU establishes procedures to acquire data necessary to annually calculate future
commodity value of aggregated recyclables based on: an independent commodity value source, the
weight and relative mix of recyclables collected under this Contract, and the observed quantity of
recyclables collected from customers on aggregate,which in combination will corroborate future changes
to commodity value;and
WIEEREAS,This MOU,including attachments,outlines the specific procedures to be used to gather the
necessary data to calculate the resulting commodity credit/debit,thereby supplanting the initial calculated
commodity value of aggregate recyclables;
NOW, THEREFORE, in consideration of the mutual agreements and covenants contained herein,the
receipt and sufficiency of which are hereby acknowledged,it is mutually agreed and covenanted,by and
between the parties to this MOU,as follows:
1. MOU INTERPRETATION: This MOU further refines and applies the intention of Contract Section
5.3.4. Both Parties recognize and accept that changes in the industry,recycling markets,or other events
may necessitate a revision of this MOU from time to time.
2. COMMODITY VALUE PUBLICATION: The Parties have further investigated sources of
independently published market values of recyclable commodities and determined that
"RecyclingMarkets.net"provides the most suitable approximation of the markets and grades of materials
collected in Federal Way. Therefore, "RecyclingMarkets.net" shall be used as the source of market
reporting instead of the"Mill Trade Journal Pacific Northwest/West Regional Market Report"specified
by Section 5.3.4 of the Contract. In the event that the publication of this replacement reference is
unavailable,unreliable,or otherwise deemed unsuitable,the Parties shall mutually select an alternative as
appropriate.
3.FRAMEWORK TABLE(ATTACHMENT A):The attached framework table provides a summary of
the various aspects of the commodity credit/debit,including the composition of single stream recycling,
the market price reference,collection tonnages by sector,and the basis for the calculation of the monthly
credit/debit for customers. The summary references the specific procedures for determining composition
and the credit/debit calculation,which are addressed in greater detail in Attachments 13.1,13.2,and C of
this MOU.
4. PROCEDURES FOR COMPOSITION TESTS (ATTACHMENTS B.1 and B.2):
Attachment B.1 contains a detailed protocol for developing a statistically significant sampling program to
determine the composition percentage of marketed materials collected from Federal Way customers.
Attachment 13.2 contains a sampling sheet indicating the commodity categories to be used for the
sampling. The sampling shall be conducted quarterly during 2020 and early 2021 to determine the
composition used for the first commodity value adjustment to be effective January 1,2022. WM shall
provide sorting services in-house and shall separately contract with a Third Party Observer (TPO)
approved by the City to monitor the initial round of six(6)sorts.WM's payment to the City's Third Party
Observer for the initial sampling sorts shall be limited to no greater than$30,000. Any work requested of
the Third Party Observer in excess of that amount shall be arranged and funded by the City.
5. CREDIT/DEBIT CALCULATION(ATTACHMENT C):Attachment C contains examples
of how customer credits/debits are calculated, based on composition, commodity value, and collected
tonnage by sector. The spreadsheet provides the calculation of the credits to be provided to customers at
the start of the contract,as well as a hypothetical example of a future calculation.
6. CHANGES TO PROCEDURES: Composition Retest:
Retests may be conducted if a change in composition,perceived by either Party,has sufficient impact to
the current credit/debit value due to circumstances outside either Party's control such as the following:
market availability or categorization; the list of acceptable materials; state or local laws including
container redemption laws; consumer product containerization; or any other change that is suspected to
materially affect recyclables composition.
The results of the retest shall be used to calculate average commodity value for the following year,
provided that either party may request an additional test if they believe the first test is inaccurate,in which
case the results shall be averaged and then used to calculate average commodity value for the following
year.
Prior to future retests being initiated by either Party, the Parties agree to coordinate on scheduling,
targeted commodities, TPO participation, and data analysis. All future composition retests shall be
conducted at WM's JIM recycling facility. The Party requesting the composition retest shall be
responsible for the cost of the TPO assigned to oversee a given composition retest. The requesting Party
shall also be responsible for the cost of sampling and data collection at the JMK facility,conducted in
accordance with the procedures set forth herein. It is impractical to itemize costs for use of the JMK
facility for composition retests, therefore the Parties agree that the rate charged to the City for
participation of JMK audit staff and use of related equipment shall be no more than$150 per hour for all
future composition retests requested by the City.This hourly charge shall accrue based on the actual time
the TPO is physically stationed at the JMK facility and engaged in observing that composition retest.
Allocation of Credit/Debit:In the event that the City wishes to change how credits/debits are allocated to
customers,the City may revise Attachment C accordingly,provided that the underlying calculations of
composition and market value are retained,such that the total dollar amount of credit/debit is unchanged,
and only the allocation of the credit/debit shall be modified.WM shall adjust the credit/debit included on
future invoices,in conjunction with Section 5.3.1 of the Contract.
7. ENTIRETY: This MOU contains all of the agreements of the City and WM with respect to
any matter covered or mentioned in this MOU,subject to the terms and conditions of the Contract.
8. ATTACHMENTS: The following attachments are part of this MOU: (A)Framework Table;
(13.1) Procedures For Composition Tests; (B.2) Composition Sort Categories; (C) Credit/Debit
Calculation.
IN WITNESS WHEREOF,the City and WM have executed this Memorandum of Understanding as of
the day and year first written above by their duly authorized representatives.
[signature page follows]
CITY OF FEDERAL WAY:
r
By:
. r
Jim Ferrell,Mayor
33325 8th Ave S
Federal Way,WA 98003
APPROVED AS TO FORM:
By: 1
J.Ryan Call,City Attorney
WASTE MANAGEMENT OF WASHINGTON,
INC.:
By
c!i�t Ros;:. 1"C 1d�kkY
720 4 Avernke.Suite 400
Kirkland,WA 98033
STATE OF WASHINGTON )
ss.
COUNTY OF �� )
v
On this day personally appeared before me �' S 11n 5 to me known to be the
of Waste Management of Washinat.on. Lw- that executed the
foregoing instrument,and acknowledged the said instrument to be the free and voluntary act and
deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that
he/she was authorized to execute said instrument and that the seal affixed,if any,is the corporate
seal of said corporation.
Gti
GIVEN my hand and official seal this 'L � day of i 20 Z c-�
w jj'��•.�� / �/J /
Notary's signature t�-✓+!fr YJ �/ C'�'
Notary's printed
4ti�tit'�"ait11 V I V i f
name C_Q I /3 0 � _S Uh �-S' e;3 H. 0, 1lr�l
Notary PulslIc iii and for the State of Washington. !`-
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My m
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ssion expires U 6— G_i lasn '
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120827 �s
ATTACHMENT A %r ' +,, `�-i F0_
Federal Way Recycling Commodity Adjustment Framework Table I �`
Aspect Initial Value Adjustment Adjustment Tuning Notes
Reference
Composition of NSA RecyclingMarkets.net One week of daily Sorted residual not
Marketed published commodity (Monday through conforming to specified
Recyclables categories. Friday)sorts of categories in MOU
single-family Attachment B.2 is excluded
residential routes per from composition
calendar quarter. percentages used to
Five Quarters of calculate commodity value,
samples shall be as this is a commodity
sorted,starting with adjustment for marketed
Ql,2020. commodities.
The initial results Sorting methodology is
shall be used until outlined in a separate
either party requests document titled
a resampling and "Procedures For
reset of commodity Composition Tests",
composition. provided as Attachments
B.1 and B.2 of this
Memorandum of
Understanding.
The composition results
from the single-family
sorts shall be used to
calculate market value for
all sectors(single-family,
multifamily,and cart-based
commercial recycling)
unless both parties
determine that significant
variances justify applying a
substantially similar sorting
process to each collection
sector,in which case those
sector-specific results shall
be used to determine
separate composition
values for each sector for
the purposes of calculating
market value.For these
additional sector-specific
tests,the requesting party
shall be responsible for
TPO costs,and WM shall
be responsible for sampling
and sorting costs.
Market Value of The initial Reported individual Adjusted annually. Calculation of average per-
each ton of contract
year commodity values per Rolling monthly ton commodity value for
average g RecyclingMarkets.net, each year will be based on
material. value per ton based on material average of October 1 the most recent
shall be categories used in the —September 30 composition values(as
$54.07 per "Procedures For values for following may be changed from time
ton. Composition Tests", January adjustment, to time,as described
provided as based on last above),and the reported
Attachments B.1 and reported data for material values,per the
B.2 of this each month. examples provided in
Memorandum of Attachment C of this
Understanding. Memorandum of
Understanding.
Tonnage 6,271 tons To be based on total Adjusted annually. Annual recyclables
initial tonnage tons of all collected Sum of recycling material tonnage will be
recyclables loads, tons for October 1— based on the actual scale
delivered to the September 30, weights of Federal Way
Contractor's recycling divided by 12 tons of recyclables
processor. months to determine delivered to WMI's
the amount of the processing facility(ies),as
monthly credit/debit reported for single-family
for following year residential,multifamily and
starting in 2022. commercial cart sectors,
subject to audit.
If the City believes that the
reported tonnages for any
collection sector are
inaccurate or inconsistent,
the City may audit one or
more recycling routes to
confirm the tonnage
delivered to the
Contractor's recycling
facility and the number of
garbage customer drive-bys
performed by that route.
The City and Contractor
will work to resolve the
discrepancy and make
adjustments to the reported
tonnage as needed to
ensure accuracy.
Revenue to be $339,069 Calculated. Adjusted annually Single-family:Calculated
Credited/Debited initial value. effective January 1, from the Commodity
2022. Market Value.Collected
For Single Family Tonnage,and monthly
Residential weight of recyclables per
customers the customer.
credit/debit shall Multi-family:Calculated
appear on their first per the Commodity Market
invoice,regardless Value,Collected Tonnage,
of the month service and Cubic Yards of service.
begins.The monthly Commercial Carts:
credit/debit shall be Calculated per the
prorated similar to Commodity Market Value,
other rate Collected Tonnage,and
components. Cubic Yards of service.
Commercial and
Multi-family
accounts shall have
credit/debit posted
to the"parent"
Garbage account.
However, the City
may elect to apply
credit value to
enhanced technical
assistance or
promotion,or may
offset a debit value
via the
Administrative Fee.
ATTACHMENT B.I.
Procedures for City of Federal Way Recycling Composition Tests
INTRODUCTION
These procedures are intended to be used to determine the composition of recyclables collected
in the City. These tests are intended to provide data that will be used for the revenue-sharing
formula that is part of the Contract between the Parties. These procedures are intended primarily
for testing single-family residential recyclables but are also applicable to cart-based collections
of commercial recyclables(commercial recyclables collected from dumpsters may not work well
with these procedures due to the presence of larger items that would not be sampled well by this
method).
As a result of discussions and a tour of WM's JMK recycling facility (one of the processing
facilities WM uses for recyclables collected in the City)on December 9,2019,which included
representatives of the Parties and independent consultants,the Parties agreed to use Waste
Management's typical audit procedures and staff for these tests with oversight by a Third-Party
Observer(TPO). The following is based on this approach,and any significant changes in the
following approach shall be discussed and mutually agreed to before such changes are
implemented.
LOADS TO BE SAMPLED
It is anticipated that testing of the single-family residential recyclables will be conducted daily
for one week each quarter for five quarters. This will result in a total of 25 samples over a 15-
month period. A sixth sampling shall be conducted of Cart-based commercial recyclables during
a multi-day period that coincides with weekly service routes for this customer type during the
15-month period. Care will be taken to avoid testing recyclables generated during the major
holidays(Super Bowl weekend,Memorial Day,Labor Day,July 4`h,Thanksgiving,Christmas
and New Year's Eve). The first four quarters of single-family residential samples shall alternate
between the A and B weeks,and between the first and second loads of each route(this assumes
that there are two loads from each route,but the first and only load can be taken if there is only
one load). The fifth quarter shall repeat the same loads that were sampled in the first quarter,
which will provide an opportunity to compare the results of the same routes one year apart
(bearing in mind that the number of samples involved are too small to draw any firm
conclusions). For example,the following schedule could be used(or some variation on this):
Quarter 1:Week A,first loads
Quarter 2:Week B,first loads
Quarter 3:Week A,second loads
Quarter 4:Week B,second loads
Quarter 5:Week A,fust loads
For the target load,WM shall inform the driver that he/she will take that load directly to JMK
(instead of taking it to the Auburn RNW facility). Communication with the driver,JMK staff
and the TPO will be critical to ensure that:
•The load is delivered to JMK.
• JMK personnel are prepared to pull a sample of it when it arrives.
•The TPO is on-site when the truck arrives in order to be able to observe sampling and
sorting activities.
The driver shall be informed before leaving to start collections that the load must be brought to
JMK. The driver shall:
• Confirm that the truck is empty before beginning collections.
•Tally the total number of customers on the sampled route(total customers,not setouts)that
make up the load to be sampled.
•Provide notice to supervisor when the truck is about an hour from being ready to drive to
JMK.
•Notify JMK personnel upon arrival that this load is to be sampled.
•Notify JMK,TPO,and audit staff if there are any problems or unusual aspects of the load
(such as materials from multi-family or commercial sector carts being included in it).
•For each load,according to its route segment(s),provide TPO/audit staff:the total number
of garbage customers passed by,the number of set outs that make-up that load,and the
load's weight.
The load should be tipped in the normal receiving area,in a relatively clean area(not on top of
other recyclables)and sampled immediately.
The load shall be sampled in the same manner as the method normally used for audits,which is
using the sorting table as a sampling scoop. The sample shall be taken in such a way to try to
include materials from the center of the pile(generally by pushing into the pile about midway
along the length). It is understood that this method results in sample sizes of about 200 pounds.
If it turns out this leads to lower sample sizes,where more than 10%of the samples are under
150 pounds,then this approach shall be revised to sample more materials from a load. An
occasional sample under 150 pounds is acceptable,provided this shall not exceed 10%of the
samples. The full sorting table/sampling scoop shall be carried directly to the audit area for
manual sorting to take place.
If a load is missed(for example,the driver forgets to bring it to JMK,mechanical problems with
the truck,or the load is rejected due to contamination by commercial carts or excessive levels of
residuals,etc.),then that route shall be sampled two weeks later instead.All costs related to
missed sampling shall be paid for by WM.
SORTING METHODS
Standard sorting methods shall be used for the sample,using the definitions developed for the
City(see the Sample Data Form for Federal Way). To summarize the sorting method:
■Materials shall be separated into cans or other containers,placing each type of material into
a separate container.
• Sorting shall continue until only pieces less than 2"in size remain. Materials under 2"will
be placed in the Residuals/Garbage category.
• When sorting a sample has been completed,the containers shall be weighed and the
weights recorded on the Sample Data Form. The tare weights of the containers shall also
be noted,and then net weight calculated and recorded at that time or later.
• The TPO shall be provided with a copy of the data form and WM shall retain the original.
•Data shall be entered later into redundant spreadsheets by both the WM auditor and TPO.
DATA MANAGEMENT AND RESULTS
The weights of each sample shall be entered into a spreadsheet and the composition(in terms of
percentages by weight)calculated for each sample. A simple average of the percentages of all
samples will be the primary result,and will be used in the future along with commodity values to
determine revenue-sharing amounts.
For example,using theoretical data from the first week:
%,I, 103A1
%;r,L-a r."P A..pw_f OCC AJ CwI& AI FW Tin C.rls KII.W1 OLu+tl PET N HDPE 37 Qr>b*,. M 1,1,it 1
-.4 111 11
+1 lIIY� I 411 I N i- 1_ 11 12 12 -- I'as
1 4, 1 '/ i] 1: 11 1_ 1: tN I'Jr
r^_113: ai 2 » N - .. l I] 111 11 114 ] _`II _14
1 4N n 1 el :, I. Ie It, 4
In this example,the percentages for each sample(disregarding the amounts of Aseptics and
Residuals/Garbage)and the average of those percentages are:
Average of
Date 51412020 Sd5J2020 51612020 51712020 S18,r2020 First Qtr_
W eKot 186.0 190.0 197.0 214.0 204.0 198.2
K"P 27-4% 30.5% 29.8% 19.31/6 25.3% 26.5%
OCC 21.31% 24.0% 25.3% 28.6% 25.8% 25.0%
Al Cans 2.4% 3.0% 2.8% 4.290 3.2% 3.1%
Al Fol! 1.2% 0.6% 0.6% 1.01% 0.5% 0.8%
Tan Cana 3.7% 4.8% 5-1% 6.3% 5.9% 6-1%
Metal 3.0;0 1.2% 1.1% 1.6% 1.1% 1.6%
Glass 6.1% 7.2% 8.4% 18.2% 12.4% 10.5%
PET 9.1% 7.2% 6.7% 5.2% 6.5% 6.9%
N FDPE 9.1% 7.2% 6.7% 7.8% 8.6% 7.9%
C HDPE 9.1% 72% 6.7% 5.2% 8.6% 7.4%
3-7 7.31/ 72% 6.7% 2.6% 2.2% 5.2°/
TOTAL 100.0% 100.0% 100.0% 100.0916 100.0% 10410%
In this example,the far right column is only the average for the fust quarter,but after five
quarters the average of 25 samples will be calculated and these figures will be used to determine
the market value of the recyclables collected in the City.
INTERPRETATION OF DATA AND PROCESS
The statistical certainty of the results shall be calculated by both the TPO and the auditor after
the fourth quarter data has been collected,and provided to the City within two weeks of the
completion of the fourth quarter sort. Adjustments may be made to the fifth quarter sampling if
mutually agreed to be the City and WM. Sampling modifications may include steps such as
examining the results to determine if specific areas or routes were creating real-life differences
(and hence greater variability)in the composition of the recyclables collected. Statistical
certainty shall be expressed using confidence intervals. Confidence intervals are the range of
values for which one can be confident(to a given degree,such as 90%confident)that the true
value falls within. The confidence limits are sometimes shown as a"plus or minus value",such
as"25%mixed waste paper+/-3%." For this study,a confidence interval of 90%shall be
applied,so that in this example one would be 90%confident that the true value for mixed waste
paper falls between 22%and 28%.
The calculation of confidence intervals for this study shall be determined by first calculating the
standard deviation of the results(percentages)for each material and for all samples. The
standard deviation is then converted to the standard error of the mean(SEM)by dividing the
standard dei ,_I itlon by the square root of the number of samples. The SEM's are multiplied by a
factor of 1.64 to create a"plus or minus figure"that is then added or subtracted from the average
composition values to derive the upper and lower confidence limits,respectively. The factor of
1.64 is determined by the choice of a 90%confidence interval.
ATTACEMMNT B.2.
Composition Sort Categories
Sainle Data Form-Rei y clip r Com asitinn Test
Sample#: Route/Area:
Date:
Total#of Customers: Load weight: Time:
MATERIALS WEIGHTS TARES COMMENTS
Mixed Paper(grade PS 54)
Aseptics(PS 52)
Corrugated Containers(PS
11)
Metals,Aluminum Cans
(Baled, picked up)
Metals,Aluminum Foil
Metals, Steel Cans,Scrap
Metal (ferrous and non-
ferrous) (Baled,picked up)
Glass(3 Mix)
Plastics, PET (Baled,
picked up)
Plastics, Natural HDPE
(Baled, picked up)
Plastics, Colored HDPE
(Baled, picked up)
Plastics, Commingled#3-7
(Baled, picked up)
Residuals/Garbage
Definitions
Mixed Paper=newspaper, office paper, computer paper, magazines,junk mail,
telephone books, paperboard boxes,egg cartons, gift wrap without foil, catalogues,
advertising supplements, kraft paper and paper bags, and all other types of
recyclable paper.
Aseptics= milk cartons, drink or juice boxes and frozen food packaging. (These will be
counted as a residual, but sorting data will be maintained in case market capacity
develops)
Cardboard =all non-waxed corrugated cardboard boxes, unless wet or food-stained.
Metals,Aluminum Cans =aluminum cans.
Metals,Steel Cans and Ferrous and Non-Ferrous Scrap Metal= clean tin food cans
and tin lids 3"or larger.All ferrous and non-ferrous scrap metal,free of wood, rubber
and other contaminants(must be at least 90% metal).All clean aluminum trays, pie tins
and other food containers. Dirty aluminum foil and trays should go into residuals.
Glass =all colors of glass bottles.
Plastics, PET=all types of PET bottles, including colored, and PET tubs.
Plastics, HDPE natural =all types of non-colored HDPE bottles and tubs.
Plastics,HDPE colored =all types of colored HDPE bottles and tubs.
Plastics,#3-7=bottles and tubs made from plastic types 3-7.
Residuals/Garbage=film plastic and plastic bags, shredded paper, all materials under
2", paper cups,automotive fluids bottles, other empty containers for hazardous material,
clothing, diapers,tires and other rubber products, carpet, construction and demolition
wastes,furniture, mixed materials,window glass, glassware, ceramics, all aerosol cans
and propane bottles, all bagged materials,wet or food-stained cardboard and other
paper,waxed cardboard,tin cans with food(where food is greater than 50%by weight
of the emptied container), plastic bottles with food or beverage (where contents are
greater than 50%by weight of the empty container), etc.
Note: These definitions strive to be as inclusive as practical, based on existing
conditions and declared MRF sorting capabilities.These definitions may be refined from
time to time with the approval of the City, based on changes to MRF sorting capabilities,
manual sorting capabilities, changes in recyclables feedstock(packaging), as well as
changes in commodity markets and the industry standards regarding commodity
specifications.
ATTACHMENT C
Credit or Debit Calculation
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ATTACHMENT C(CONTINUED)
Applying Composition and Commodity Value Data to Customer Rates
This example illustrates how the composition data and commodity values are applied to
customer rates,using the single-family sector as an illustration. Application to multifamily and
commercial sectors will be similar,except that values will be applied on the basis of recycling
container volume.
The composition data shall be determined through procedures that have been developed for this
process.In summary,the composition of single-family residential recyclables shall be
determined by sorting samples from different areas and routes within the City. Each sample is
sorted into the agreed-upon marketable commodities,with weights recorded on approved fomes
and the data then entered into a spreadsheet to calculate the percentage breakdown for each
sample and the averages for all samples. The end result of this step will be a simple average for
each material for all samples taken together. "Simple average"means no special weight or
preference is given to any one sample for the averaging process. Table 1 illustrates this process.
Data from samples#5-23 are not shown for the sake of brevity.Results for Residuals and
Aseptics are disregarded in the Adjusted Average column.
Table 1
Sample Results dlusted
MATERIALS Average verage
1 2 3 4 F.tc, 24 25
Mixed Paper(PS 54) 2 .9°fi?4.5°%,28-6P4,32-3% ... l7-9%29.20 26.2% 31.2%
Aseptics(PS 52) 1.0%10.5% 0.891 0.5° 0.8% 1.1% 0.8% NA
ComrgatedContainers 23.5 c 30.10%17.90%17.9% ... 33.4°%,27.6%25.2% 30.0%
Aluminum Cans and Foil 1.8% 1.5% 1.69% LIOX 1.6% 1.8% 1.6% 1.9%
Steel Cans 2.1% 1.9% 3.2% 1.70A, .. 1.9% 3.5% 2.406 2.8%
Scrap Metal 1.0% 0.8% 0.5%1 0.8%J 0.5% 1.0% 0.8% 0.90/0
Glass-3 Mix 17.7%,16.30/n13%15.2% . . 15.69%.14.6°40 16.8% 20.0%
Plastics,PET 4.5% 3.00%J3.7% 5.3% 5.1% 2.4% 4.0% 4.8%
Plastics,Natural BL---- 3.5%12.5% 3.4% 3.7% . 3.6% 2.7°.6 3.2% 3.8%
Plastics,Colored HDPE 1.5° 1.61.5% 1.7% 1.7% 1.3% 1.6% 1.8%
Plastics,Commingled#3-7 2.5% 2.42.5% 2.5% 2.8% 1.2% 2.3% 2.89%i
Residuals/Garbage 15.0%14.95.0%17.3% . . 15.194.13.6 15.20/6 NA
In Table 2,the calculation of a weighted average results from multiplying the market value for a
specific material by the percentage that it contributes to the total to arrive at a dollar amount.
Then those amounts are summed to arrive at the average total value per ton. For example,the
market value for mixed paper($5.00 per ton)is multiplied by the percentage that it contributes
(expressed as a decimal 0.312)to calculate its portion of the overall total value per ton of mixed
recyclables(or$1.56/ton).
Table 2
Adjusted Market Contribution to Total
MATERIALS Average Value/ton Value
Mixed Paper(PS 54) 31.2% $5.00 $1.56
Corrugated Containers 30.0% $120.00 $36.00
Aluminum Cans and Foil 1.9% $1,300.00 $24.70
Steel Cans 2.8% $70.00 $1.96
Scrap Metal 0.9% $200.00 $1.80
Glass-3 Mix 20.0% $15.00 $3.00
Plastics.PET 4.8% $300.00 $14.40
Plastics,Natural HDPE 3.8% $300.00 $11.40
Plastics.Colored HDPE 1.8% $300.00 $5.40
Plastics 3-7 2.8% $50.00 $1.40
Total Value $101.62
Market Values shall be updated annually,while the composition figures generated through
sampling in 2020 and 2021 shall be used until superseded by future sampling data.
Once the sample data and market data are compiled,the following two factors shall be applied to
calculate the impact to rates.
1.Conversion of the tonnage to a monthly weight.For example,single-family residential
customers with every-other-week service would have the aggregate sample weight
multiplied by a factor of 2.17(4.33 weeks/month divided by 2=2.17)to calculate the
monthly weight per account.The single-family customer count on the last date of each
August shall be used to distribute the credit/debit,to coincide with the annual rate
adjustment process.
2.Calculating the per customer(or per cubic yard)factor to allow the aggregate commodity
value to apply to customers in a given sector.This is based on the total number of
customer accounts that generated the samples,allowing the process to also serve as a
check on the aggregate reported total tonnage of recyclables collected per sector. Cubic
yards will be based on account data on the last date of each August,to coincide with the
annual rate adjustment process.
For a hypothetical and simplified application of these factors(using rounded numbers):assume a
total of 10 tons of collected materials are delivered to the recycling processing facility for
sampling.These 10 tons were collected from route segments that have a total of 1,000 garbage
accounts(recycling cart set-out rate does not figure into this calculation).
The overall sample/sort test results show that:
• 85%of the items were sorted into marketable recyclables
• 5% was sorted into non-marketable and/or non-contract items(such as milk cartons and
aseptics)
• 10%was residual
In this example,non-marketable items total 15%by weight.Therefore,the commodity
adjustment for this sector is based on 8.5 tons(or 17,000 pounds)of marketable recyclables.
The calculated value based on the average market price data is then applied back to the 1,000
garbage customer accounts that were the source of the recyclables.
First,the weight of recyclables per account has to be converted to a monthly total.In this
example for the single-family residential sector,the 17,000 pounds divided by 1,000 customers
equals 17 pounds per collection cycle per garbage account.To calculate a monthly total,this
figure is multiplied by a factor of 2.17 which equals 36.89 pounds of marketable recyclables per
garbage account per month.
Following are two examples showing how the per account credit/debit shall be calculated for the
commodity adjustment:
If the net value per ton of recyclables is a positive value:
$100(or$0.05/pound):36.89 pounds x$0.05=$1.84"credited"to each garbage
customer every month
If the net value per ton of recyclables is a negative value:
-$100(or-$0.05/pound): 36.89 pounds x-$0.05=-$1.84"debited"from each garbage
customer every month
For single-family residential accounts,the monthly commodity adjustment figure is then
multiplied by three to determine a quarterly amount,which then appears on the quarterly invoice.
The overall methodology is similar for applying commodity value to single-family residential,
multi-family,or commercial sectors,as long as the full value(credit or debit)of each sector's
recyclables is distributed to that customer base.
The credit or debit per single-family residential account and per cubic yard of multi-family or
commercial recycling service shall be calculated annually.The calculated debit or credit shall be
applied to customer accounts even if the number of accounts or the cubic yards of service have
changed since the credit or debit was calculated.
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