20260616_4_CRR — Laguna Niguel City Council, June 16, 2026

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CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM -- • i;;x~_,, ,,,.

To:

FROM:

Honorable Mayor and Council Members
Justin J. Martin, Assistant City Manager
June 16, 2026 DATE:

SUBJECT: Amendment No. 2 to the Franchise Agreement for Municipal Solid Waste Collection Between the City of Laguna Niguel and CR&R Incorporated

RECOMMENDATION
Staff recommends that the City Council:

1. Approve Amendment No. 2 to the 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 Between the City of Laguna Niguel and CR&R Incorporated; and,

2. Authorize the City Manager to execute Amendment No. 2 to the 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 Between the City of Laguna Niguel and CR&R Incorporated, subject to the City Attorney making non-substantive changes.

BACKGROUND
Since 2000, the City has had an exclusive Franchise Agreement with CR&R Inc., (CR&R) to provide solid waste collection services to residents and businesses throughout the City.

On November 20, 2018, the City entered into a new Franchise Agreement with CR&R to continue to meet the State of California mandates regarding the diversion of solid waste from landfills.

On June 18, 2024, the City entered into Amendment No. 1 to the Franchise Amendment for Municipal Solid Waste Collection between the City of Laguna Niguel and CR&R Incorporated. Amendment No. 1 provided additional services to residents, increased accountability, and a Senior Rate discount. Furthermore, Amendment No. 1 provided for additional clarifying language regarding compliance with Senate Bill 1383 organic waste disposal regulations.

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WISE Agreement
The County of Orange, through Orange County Waste & Recycling (OCWR), operates the County-owned landfill system, including three active landfills and approximately 20 inactive sites. Since 1997, Orange County cities have participated in the Waste Disposal Agreement (WDA), which provided guaranteed landfill capacity and disposal rates of at least 10% below noncontract customers. The WDA is set to expire on June 30, 2026, and only provides for limited annual rate increases tied to CPI and does not account for rising operational, regulatory, and environmental compliance costs.

As a result, OCWR developed the Waste Infrastructure System Enterprise (WISE) Agreement as the successor agreement, which provides for a phased increase in disposal cost at OCWR landfills over the next three years before an annual CPI increase takes effect. The WISE Agreement accounts for the rising operational, regulatory, and environmental compliance costs associated with operating the County-owned landfill system. To continue receiving guaranteed landfill capacity and disposal rates at least 10% below those for noncontract customers, the City Council approved the WISE Agreement on April 21, 2026.

ANALYSIS
Amendment No. 2 to the Franchise Agreement between the City of Laguna Niguel and CR&R identifies efficiencies and improvements to enhance service levels, better align the City with finalized and adopted Senate Bill 1383 Regulations, provides cost savings to partially offset the increased costs of the WISE Agreement, and aids in the City's goal of implementing state mandates regarding the diversion of solid waste from landfills (Attachment A). Updates incorporated into Amendment No. 2 of the City's Franchise Agreement with CR&R include:

Delay Rate Increase
• To help offset the increased costs associated with the WISE Agreement, all rate increases originally set to take effect on July 1, 2026, have been delayed one month until August 1, 2026.
• Separately, the City identified cost-saving strategies resulting in residential rate increases being significantly reduced, saving on average between 6.0% and 7.3% per month, as shown in the table below.
$24.81 $27.51 $2.70
$27.25 $30.64 $3.39
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Procurement and Regulatory Compliance
• As part of SB 1383 regulations, the City is required to procure a specific quantity of products produced from the diversion of food scraps and yard trimmings, commonly found in the form of compost and mulch. To meet this state requirement, Amendment No. 2 provides a regulatory compliance fee totaling $76,650 paid to the City by CR&R to cover compliance and regulatory costs. This annual lump sum payment has no impact on the rates charged to Laguna Niguel ratepayers.

Additional Services
• Provides up to two (2) Households Hazardous Waste (HHW), curbside collections for each single-family residence per year at no charge, which includes sharps disposal.
• Increases the number of free Community Shred Events held each calendar year from two (2) to four (4) events. Events will be held on a mutually agreed-upon date and at a mutually agreed-upon location and will be free for all residents.

Term of Agreement
• CR&R previously earned the first of two possible one-year extensions, with the Franchise Agreement currently set to expire on December 31, 2029. CR&R failed to meet the requirement to earn the second one-year contract extension, which was tied to contamination monitoring based on draft SB 1383 regulations. With these draft regulations no longer applicable under the final SB 1383 regulations, Amendment No. 2 provides CR&R with the second one-year extension. • Furthermore, Amendment No. 2 provides for an additional six months to the term of the agreement, extending the Franchise Amendment to June 30, 2031.

Extending the term to June 30, 2031, ensures continuity of services and aligns the Franchise Agreement with the fiscal year end.

The changes incorporated in Amendment No. 2 to the Franchise Agreement between the City of Laguna Niguel and CR&R Incorporated will improve service delivery for the community and continue to position the City well with State of California mandates regarding the diversion of solid waste from landfills.

ALTERNATIVE CONSIDERED
The City Council may decide not to adopt Amendment No. 2 to the Franchise Agreement between the City of Laguna Niguel and CR&R Incorporated. Staff does not recommend this alternative, as failure to adopt Amendment No. 2 will result in additional services not being provided, increasing costs to the rate payer.

FISCAL REVIEW
All rate changes reflected in this report are the result of the previously approved WISE Agreement with OCW&R, which was adopted by the City Council on April 21, 2026, as well as the existing Franchise Agreement provisions tied to increases in the Consumer Price Index (CPI). Amendment No. 2 to the Franchise Agreement between the City of Laguna Niguel and CR&R Incorporated does not add any additional costs to ratepayers or the City.

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LEGAL REVIEW
The City Attorney's Office has reviewed Amendment No. 2 to the Franchise Agreement between the City of Laguna Niguel and CR&R Incorporated, and this report, and has approved both as to form.

CONCLUSION
Staff recommends that the City Council:

Tamara S. Letourneau
City Manager
Scott C. Smith
City Attorney
Attachment:
anager
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Kevin X. O'Connor
Assistant to the City Manager
A. Amendment No. 2 to the Franchise Agreement for Municipal Solid Waste Collection between the City of Laguna Niguel and CR&R Incorporated Page5

ATTACHMENT A
Amendment No. 2 to the Franchise Agreement for Municipal Solid Waste Collection between the City of Laguna Niguel and CR&R Incorporated AMENDMENT NO. 2

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 BETWEEN THE CITY OF LAGUNA NIGUEL AND

CR&RINCORPORATED
1 THIS AMENDMENT No. 2 ("Second Amendment") to the above captioned agreement is made and entered into this _________ ("Effective Date"), by and between the CITY OF LAGUNA NIGEL, a general law city and municipal corporation ("City"), and CR&R INCORPORATEO, a California corporation ("Contractor").

RECITALS
A. City granted an exclusive solid waste services franchise to Contractor by entering into that certain 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 ("Agreement"), dated November 2018.

B. Contractor earned a one-year extension on August 5, 2022, as outlined in Section 6.08.A of the Franchise Agreement.

C. City and Contractor entered into Amendment No. 1 to the Agreement on June 20, 2024.

D. City and Contractor wish to amend the Agreement as set forth in this Second Amendment.

AGREEMENT
NOW THEREFORE, in consideration of the mutual promises contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

SECTION 1. Section 3.02 is hereby amended to read in full as follows:
"3.02 Term. The Term of this Agreement shall commence on the Effective Date and Contractor's obligation to collect Recyclable Materials, Yard Trimmings, Wood, Food Scraps, Construction and Demolition Debris, other materials and Municipal Solid Waste shall begin on January 1, 2019, at 12:01 a.m. This Agreement shall remain in full force and effect until June 30, 2031, unless earlier terminated." 2 SECTION 2. Section 3.03 is hereby removed and previously read in full as follows. "3.03 Extensions of Term Related to Achievement of Required P."'Og. .. am Implementation and Diversion ofMaterials From Disposal. In the event Contractor achieves tho required metrics and earns one (1) or two (2) one year oxtonsion(s) of tho Torm as described in Section 6.08 the Torm will be extended accordingly." SECTION 3. Section 4.07.D is hereby amended to read in full as follows:
"Section 4.07.D Community Shred Events. Contractor shall advertise and conduct four (4) shred events each calendar year during the Term. Contractor shall conduct two events no later than June 30th and conduct the remaining two events no later than December 14th of each year. Event dates and locations shall be mutually agreed upon by the City and the Contractor. Contractor shall provide the location for the Community Shred Events at the Contractor's expense. Contractor shall advertise the events through billing inserts, direct mailings, and other public outreach methods.

During each shredding event, Single-family and Multi-Family Residential Customers of City may bring an unlimited quantity of paper for shredding. Contractor shall provide all required labor, equipment, traffic control and other needed elements for such events. Contractor shall ensure that all paper delivered by Customers to the community shredding events is properly shredded and Recycled. Contractor shall provide a report to the City within thirty (30) days after each event listing the number of participants and the quantity of paper received, shredded, and Recycled, as well as the name of the subcontractor used for the shredding/secured destruction and recycling of the paper. The number of Customers dropping off materials during the shred event, the quantity, in tons, of paper dropped off during the event shall also be included in Contractor's Monthly Report for the month the community shred event was held as described in Attachment K. Contractor shall provide the community shredding events at no additional cost to the City or to Customers. Contractor may provide the Community Shred Events in conjunction with the Household Hazardous Waste, Universal Waste, and Electronic Waste Collection Events as outlined in Section

4.07.C."
SECTION 4. Section 6.08.B is hereby removed and previously read in full as follows:
"6.08.8 Second Extension Opportunity. If Contractor meets the implementation requirements listed belmv and Contractor is in full compliance with all requirements of this Agreement, City will extend the Term of the Agreement by one (1) year. In order to qualify for the second one year extension, Contractor must have achieved all of the follmving by December 31, 2026: (a) has continued full implementation of all AB 341 and AB 1826 programs at all Customers required by PRC 42649 et seq. and PRC 42649.8 et seq. to have such programs; (b) has fully implemented an SB 1383 Food Scrap Collection program at one hundred percent (100%) of the Multi Family complexes and Gated Dm(elopmonts/HOA's 1Nith Centralized Bin/Cart Collection Service (as described in Attachment B) that are required to have this service per SB 1383 (PRC Section 42652 et seq.); and (c) has not exceeded the Contamination caps 3 for Residential, Commercial and Multi Family Customers as follmvs: fifteen percent (15%) by weight for Single Stream Recyclable Materials, fifteen percent (15%) by 'Neight for Food Scraps and fifteen percent (15%) by 'Neight for MSW, as described in Section 3.3.6 (xi) of Attachment B. [Note, the 5% source separated Food Scraps Contamination cap described in Section 3.3.6(xi) is based on a visual inspection of the Container. A 5% contamination rate, assessed visually, is the maximum level of Contamination for a Source separated Food Scrap program for the purposes of considering a program 'fully implemented' per the definition in Attachment B. The 15% maximum contamination level for Source separated Food Scraps described herein is a weight based metric and will be used for assessment of Contractor's attainment of the second extension opportunity.] In the event City has directed the implementation of a program for Co Collection of Food Scraps with Yard Trimmings for any stream (e.g. Residential, Multi Family, Gated Developments with Centralized Bin/Cart Collection Service, and/or Commercial) Contractor shall not ha•1e exceeded the Contamination cap of fifteen percent (15%) for the Co Collected materials from such Customers. (Note: VVith regard to Source Separated Food Scraps Collected from any stream, Contractor must not ha•1e exceeded fifteen percent (15%) Contamination or the greater percent allowed by the Food Scrap Processing Facility used for Food Scraps [as described in Section 3.3.6 (xi) of Attachment B] provided that Contractor has utilized said Food Scrap Processing Facility for a minimum of twelve (12) months prior to December 31, 2024 and the Contamination percentage allowed by said Food Scrap Processing Facility has been the same for that entire tv.ielve (12) month period.) If Contractor meets the Diversion requirements for the second extension, the City will extend the Term of the Agreement for one (1) year such that the termination date shall be December 31, 2029 (if Contractor failed to earn the first one year extension) or December 31, 2030 (if Contractor earned the first one year Extension). During the period January 1, 2027, through June 30, 2027, City will assess Contractor's performance as follo•Ns:

1. Continued Full Implementation of AB 341 and AB 1826 Programs. City shall conduct a survey of all Customers required to have an AB 341 program (PRC 42649 et seq.) and all Customers required to have an AB 1826 program (PRC 42649.8 et seq.) in City. City will determine if Contractor has continued full implementation of said programs at one hundred percent (100%) of all the Customers required to have AB 341 and AB 1826 programs. City \Viii utilize the criteria and methodology in Attachment N, Section 3 (b) 3 in making said determinations. Customers on the List of Non Compliant Customers Referred to City for Enforcement Action Under Mandatory Ordinance" on January 1, 2027, shi::!:11 not count against Contractor in determining 'Nhether Contractor has achieved the requirements to earn the Second Extension. However, if City identifies any Customer required by either PRC 42649 et seq. or PRC 42649.8 et seq. to have a fully implemented AB 341 or AB_ 1826 program, that does not have a fully implemented program and is not on the list of "Non Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" in Attachment K, Monthly Reports, Item #8, then Contractor fails to earn the Second one year Extension.
4 2. Mu/ti Family/Gated Deve/-opment/HOA Food SGFap Program Implementation.

City shall sondust a survey of all Multi Family Customers and all Gated Developments/HOA's i..vith centralized Cart and/or Bin Collection service in City.

City will determine if Contraster has fully implemented an SB 1383 Food Scrap Collection program at one hundred percent (100%) of all the SB 1383 Customers required to have such a program pursuant to PRC Section 42652 et seq. City 1.vill utilize the criteria and methodology in Attachment N, Section 3 (b) 1 in making said determinations. Multi Family and Gated Development/HOA Customers on the List of Non Compliant Customers Referred to City for Enforcement Action Under Mandatory Ordinance" as of January 1, 2027, shall not count against Contraster in determining 1.vhether Contraster has achieved the metrics to earn the second extension. HO'.vever, if City identifies any Customer required by PRC 42652 et seq. to have a fully implemented AB 1383 program, that does not have a fully implemented program and is not on the list of "Non Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" in Attachment K, Monthly Reports, Item #8, then Contraster fails to earn the Second one year Extension.

3. AGhie-,.rement of Contamination Caps for Residential, Commercial, Multi Family, Gated Deve/-opments, HOA 's and Mobile Home Parks. As described in Attachment N, Contraster shall sondust special sharasterization studies during January 2027 to determine whether or not the required Contamination saps have been met. Special sharasterization studies shall be performed for each of the follO'.ving streams: Residential, Multi Family, and Commercial, and for each of the follO'.ving components contained in each stream: Single Stream Resyslable Materials/Single Material Resyslables, Food Scraps and MSVV, as described in Attachment N. For any component where the sharasterization study sho1Ns that the Contamination sap was exceeded, the Contractor may, at Contractor's sole expense, sondust one (1 ) additional sharasterization study for each of the failed components. All subsequent sharasterization studies for those somponent(s) exceeding the Contamination sap(s) must be oompleted on or before March 15, 2027, and the results submitted to City on or before March 25, 2027."

4. "Contamination Caps for On Going Performance. In addition, Contraster, until March 31, 2026, shall not exceed the Contamination saps for Residential, Commercial, and Multi Family Customers as follows: twenty five percent (25%) by weight for Single Stream Resyslable Materials, t\venty five percent (25%) by weight for Food Scraps and t\venty five percent (25%) by weight for MSVV, as described in Section 3.3.6 (xi) of Attachment B. [Note, the 5% source separated Food Scraps Contamination cap described in Section 3.3.6(xi) is based on a visual inspection of the Container. A 5% contamination rate, assessed visually, is the maximum level of Contamination for a Source separated Food Scrap program for the purposes of considering a program 'fully implemented' per the definition in Attachment B. The 15% maximum contamination level for Source separated Food Scraps described herein is a weight based metric and 'Nill be used for assessment of Contractor's attainment of the on going performance standards.] In the event City has directed the implementation of a program for Co Collection of Food 5 Scraps v,ith Yard Trimmings for any stream (e.g. Residential, Multi Family, Gated Developments with Centralized Bin/Cart Collection Service, and/or Commercial) Contractor shall not have exceeded the Contamination cap of twenty five percent (25%) for the Co Collected materials from such Customers. (Note: VVith regard to Source Separated Food Scraps Collected from any stream, Contractor must not have exceeded five percent (5%) Contamination or the greater percent allowed by the Food Scrap Processing Facility used for Food Scraps [as described in Section

3.3.6 (xi) of l\-ttachment B] provided that Contractor has utilized said Food Scrap Processing Facility for a minimum of twelve (12) months prior to December 31, 2024, and the Contamination percentage allowed by said Food Scrap Processing Facility has been the same for that entire twelve (12) month period.) In addition, Contractor, effective April 1, 2026, during this Agreement, shall not exceed the Contamination caps for Residential, Commercial and Multi Family Customers as follmvs: fifteen percent (15%) by weight for Single Stream Recyclable Materials, fifteen percent (15%) by weight for Food Scraps and fifteen percent (15%) by weight for MS\/'/, as described in Section 3.3.6 (xi) of Attachment B. [Note, the 5% source separated Food Scraps Contamination cap described in • Section 3.3.6(xi) is based on a visual inspection of the Container. /\ 5% contamination rate, assessed visually, is the maximum level of Contamination for a Source separated Food Scrap program for the purposes of considering a program 'fully implemented' per the definition in Attachment B. The 15% maximum contamination lmml for Source separated Food Scraps described herein is a weight based metric and \Viii be used for assessment of Contractor's attainment of the on going performance standards.] In the mtent City has directed the implementation of a program for Co Collection of Food Scraps with Yard ·., Trimmings for any stream (e.g. Residential, Multi Family, Gated Developments with Centralized Bin/Cart Collection Service, and/or Commercial) Contractor shall not have exceeded the Contamination cap of fifteen percent (15%) for the Co Collected materials from such Customers. (Note: VVith regard to Source Separated Food Scraps Collected from any stream, Contractor must not have exceeded five percent (5%) Contamination or the greater percent allowed by the Food Scrap Processing Facility used for Food Scraps [as described in Section 3.3.6 (xi) of Attachment B] provided that Contractor has utilized said Food· Scrap Processing Facility for a minimum of twelve (12) months prior to December 31, 2024, and the Contamination percentage allm\1ed by said Food Scrap Processing Facility has been the same for that entire twelve (12) month period.)" SECTION 5. Section 6.08.C is hereby removed and previously read in full as follows:
"6.08.C Failure to Achieve First or Second Extension Requirements. In the event Contractor meets all of the extension requirements for both the first and second extensions, the Term will be extended to December 31, 2030. If Contractor fails to meet the requirements for the first one year extension, such failure will not preclude Contractor from earning a one year extension of the Agreement under the second extension opportunity. If Contractor fails to meet the requirements for the first one 6 year extension by the deadline in Section 6.08A herein, but meets the extension requirements for both the first and second one year extensions by December 31, 2026, City will extend the Term by one (1) year, and the ne'N termination date shall be December 31, 2029."
SECTION 6. Section 6.08.D is hereby removed and previously read in full as follows:
"6.08.D Notioe to Contraotor of Extension or Failure to Earn an Extension. The City will evaluate Contractor's performance 1Nith regard to the first extension opportunity during April 1 June 30, 2022. City will notify Contractor in v,riting on or before August 31, 2022, as to whether or not Contractor has earned the first one year extension of the Term. The City will evaluate Contractor's performance with regard to the second extension opportunity during January 1 June 30, 2027. City 'Nill notify Contractor in writing on or before July 1, 2027, as to whether or not Contractor has earned the second potential one year extension of the Term. The decisions of the City shall be final."
SECTION 7. Section 9.07.A is hereby amended to read in full as follows:
"9.07.A Characterization Studies. Contractor shall conduct characterization studies of the streams of materials being delivered to each Processing Facility using the protocols and at the frequencies described in Attachment N. The first Processing Facility characterization studies shall be conducted during 2019 as described in Attachment N. The characterization study reports shall include the items listed in Attachment N and be submitted to City at the frequencies described therein. City shall have the right to have City staff or City's representatives present during any of the studies. Contractor shall give City a minimum of fifteen (15) calendar days written notice of the date and time Contractor shall conduct each study. The characterization studies and the reports on results shall be performed and prepared at Contractor's sole expense.

The results of the characterization study shall be put into use the first day of the month following submittal of the report to the City and approval of the report and allocation method by City, and shall be used to report Tons Diverted and Disposed by each Processing Facility for the City of Laguna Niguel in the monthly reports submitted to City pursuant to Attachment K. Such results shall be used to report Tons Diverted and Disposed by each Processing Facility for the City of Laguna Niguel until the results of the next characterization study are approved by City. If and when Contractor is required to report to CalRecycle or any other agency, jurisdiction-specific Tons Diverted and Tons of Residue for each Processing Facility used by Contractor to process City's materials, Contractor shall report to CalRecycle figures that are consistent with the results of the Processing Facility characterization studies described herein.

The waste characterizations required by Attachment N shall not exceed fifteen percent (15%) contamination beginning April 1, 2026 and through the Term of the Agreement 7 and subsequent Amendment(s). Failure to meet this 15% Contamination cap, measured by the Waste Characterization studies performed by Contractor for each stream, outlined in Attachment N, shall result in the assessment of the tiered liquidated damages outlined in Article 13.09.1.

Additionally, on or before October 1, 2026, and annually on October 1 thereafter and through the Term, the City shall notify the Contractor, in writing, of the waste characterization results from the previous one-year period of July 1 to June 30. The notification will include the aggregated results of the required Attachment N waste characterizations conducted on the Residential, Commercial, and Multi-Family streams, showing the total annual composite Contamination levels for each stream.

If Contractor has not achieved the contamination requirements of this section, City, at .its sole discretion, may direct the Contractor to pay the cost for City's Agents to reduce Contamination levels until the Container Contamination caps described in Section

3.3.6 of Attachment B are met at all Residential, Commercial, Multi-Family, Gated Developments, HOA's and Mobile Home Parks in City. [Note: this means Contractor shall pay the cost for City's Agents until the following Container Contamination caps are achieved: fifteen percent (15%) by weight for Single Stream Recyclable Materials, fifteen percent (15%) by weight for Food Scraps and fifteen percent (15%) by weight for MSW. In the event City has directed the implementation of a program for Co Collection of Food Scraps with Yard Trimmings for any stream (e.g. Residential, Multi Family, Gated Developments with Centralized Bin/Cart Collection Service, and/or Commercial) Contractor shall not have exceeded the Contamination cap of fifteen percent (15%) for the Co-Collected materials from such Customers. (Note: With regard to Source Separated Food Scraps Collected from any stream, Contractor must not have exceeded fifteen percent (15%) Contamination or the greater percent allowed by the Food Scrap Processing Facility used for Food Scraps [as described in Section 3.3.6 (xi) of Attachment B] so long as Contractor has utilized said Food Scrap Processing Fqcility for a continuous period corresponding to the period of time that the City and/or City's Agents are correcting the deficiency(ies) and the Contamination percentage allowed by said Food Scrap Processing Facility has remained the same for that entire period.)
If Contractor has not achieved the requirements of Section 14 .11.B.3, Contractor shall pay the cost for City's Agents to implement the required AB 341 and/or AB 1826 Diversion programs until one hundred percent (100%) of the Customers required to have AB 341 and/or AB 1826 programs have fully implemented programs.

Contractor shall reimburse City on a monthly basis for the work performed by City's Agents to implement the Diversion programs and/or reduce Container Contamination levels. City will invoice Contractor for this expense and Contractor shall pay said invoices within thirty (30) days of receipt. Contractor shall cooperate with City and City's Agents to implement Diversion programs and reduce Contamination (as applicable). Such cooperation shall include sharing information and data on Customers with City and its Agents, cooperating with City's Agents including ride- 8 alongs on Collection vehicles, providing Containers for Divertible Materials in a timely manner as described in the Agreement including Attachment B, Collecting Containers of Divertible Materials on the schedule agreed upon with the Customer and City and/or City's Agents, and processing the Collected Divertible Materials at the City-approved Processing Facility(ies) described in Articles 5 and 6. Contractor shall not impair, impede or in any way frustrate or otherwise interfere with the actions or efforts of City and/or City's Agents to sussessfully somplete all steps to fully implement the required AB 341, AB 1826 and/or SB 1383 Diversion programs as dessribed herein and to reduce Container Contamination to within the following levels: fifteen percent (15%) by weight for Single Stream Recyclable Materials, fifteen percent (15%) by weight for Food Scraps and fifteen percent (15%) by weight for MSW.

As Diversion programs are implemented by City's Agents, City's Agents i.vill monitor and troubleshoot said programs and provide additional training, edusation, and site visits for the initial ninety (90) day period following program startup. At the end of the ninety (90) day period, City's agents 1,vill transfer responsibility for all aspests of the fully implemented program to Contraster. Contraster shall fully maintain eash fully implemented program at the Customer's Premises from that point forv1ard, insluding sompleting any and all applisable steps dessribed in Sestion 3.3.6 of Attashment B.

With regard to reducing Container Contamination levels, a similar protocol shall be followed with City's Agents transferring responsibility to Contractor ninety (90) days after the required Container Contamination levels have been achieved at a Customer's Premises.

Contractor shall continue to pay for the work of City's Agents until all of the following conditions have been met: (a) The City's Agents have implemented the remaining AB 341, AB 1826 and/or SB 1383 Diversion programs at one hundred persent (100%) of all Customers, (a) The City's Agents have achieved the required Container Contamination caps as described herein, (b) City's Agents have transferred responsibility for all aspests of eash implemented program (insluding reduced Container Contamination levels, as applisable) to Contractor, and (c) Contractor is fully maintaining eash implemented program as dessribed in Sestion 3.3.6 of l\ttashment B and is insluding continuing to meet the required Container Contamination caps in Section 3.3.6 of Attachment B. At such point, City shall notify Contractor in writing and shall submit any final invoice(s) for the work of City's Agents to Contractor for payment."
SECTION 8. Section 12.03 is hereby amended to read in full as follows:
"Section 12.03 Annual Rate Adjustment. The rates for services provided from July 1, 2019 through June 30, 2020 shall be the rates in Attachment D-2, adjusted in accordance with Attachment J. Such rates shall become effective following completion of City Council approval and the proceedings required under Article XIIID, Section 6 of the California Constitution, and contingent upon the City not receiving a majority protest against the rate increase as part of such proceedings. 9 Annually, as of July 1 for each ensuing year of the Term, the rates shall be adjusted in accordance with Attachment J, following completion of the proceedings required under Article XIIID, Section 6 of the California Constitution, and contingent upon the City not receiving a majority protest against the rate increase as part of such proceedings. In 2026, the rate adjustment will not occur until August 1. During that one-month delay in the rate adjustment, all rates will remain unchanged, and the Contractor forfeits the ability to receive any rate adjustment until August 1. The annual rate adjustment will continue to take effect on July 1 for each ensuing year of the term in accordance with Attachment J, and following the completion of the proceedings required under Article XIIID, Section 6 of the California Constitution, if deemed necessary or advisable by City, and contingent upon the City not receiving a majority protest against the rate increase as part of such proceedings.
f
The parties recognize that rates established under this Contract may be considered fees or charges for property-related services pursuant to California Constitution Article XIIID. The City intends to comply with the requirements of that Article when adjusting rates, including but not limited to, those rates set forth in Attachments D-1 and D-2. If a proposed rate adjustment may not be enacted as a result of a protest pursuant to Article XIII.D, Section 6, or if rates in effect are reduced as a result of an initiative measure authorized by Article XIIID, Section 3, the City's inability to increase or maintain the rates as contemplated shall not constitute a breach of this Agreement.

Contractor shall be responsible for printing and distribution by first-class mail of any and all required legal notices of proposed annual rate adjustments including, but not limited to the following: an annual notice of rate increase; a notice of rate setting for a five (5) year period and each annual notice of rate increase thereafter as described in Government Code Section 53755 as it may be amended in the future. Notices shall be mailed to all Customers and property owners in City, with Contractor utilizing its best efforts to avoid duplication of mailings to the same Person or Commercial and Business Establishment, but when in doubt, erring on the side of mailing such that all Customers and property owners are notified of the proposed rate adjustments.

Content of the notices shall be submitted to City for approval at least seven (7) days prior to mailing, or City may choose to provide the content and layout of the notice to Contractor. In that event, Contractor shall promptly have the notice set up for final printing, proofed, printed and mailed within fifteen (15) day of receipt of the notice content from City. If City provides the content for the notice, Contractor shall utilize the content of such notices as provided by City. City shall make the determination as to whether or not such notice may be included on or with Contractor's regular bills to Customers and if not, City may require that Contractor prepare and send a separate mailing. The decision of the City shall be final.
10 SECTION 9. Section 12.10 is hereby added to read in full as follows:
"Section 12.10 Procurement and Regulatory Compliance Costs. SB 1383 requires the City to purchase a specific quantity of products produced from the Diversion of Food Scraps and Yard Trimmings. The City must procure a minimum of five thousand two hundred thirteen (5,213) tons of Compost and/or mulch annually to comply with this requirement. Note: The City's SB 1383 procurement target will be adjusted on January 1, 2027, by Cal Recycle per SB 1383 regulations. Additionally, the City may reduce its procurement target using the pathways included in AB 2346 prior to January 1, 2027. Any reduction, or increase, in the City's procurement target shall not result in adjustments to the Procurement and Regulatory Compliance Costs described herein. Further, the City is required to meet state-mandated requirements for Diversion and program implementation including, but not limited to, planning, monitoring and implementation of additional Diversion programs, additional public education on Diversion programs, technical consulting assistance on solid waste, recycling and other related issues, preparation of any studies required by the City or by CalRecycle related to compliance with the Act, preparation of required reports, documentation as well as creation and maintenance of the Implementation Record required by the Act and by SB 1383, monitoring of Contractor's performance under this Agreement, and any other City costs related to compliance with the Act.

Contractor shall pay to City a total of seventy-six thousand six-hundred fifty dollars ($76,650) per year for Procurement and Compliance Costs. Commencing July 1, 2026, and every July 1 thereafter through Term of the Agreement, Contractor shall remit a lump sum payment to the City within thirty (30) days." SECTION 10. Section 13.09.1 is hereby amended to read in full as follows:
"13.09.1 Interim Contamination Caps for Ongoing Performance. Each failure to meet the Contamination caps set forth in Section 9.07.A, measured by the Waste Characterization studies performed by Contractor for each waste stream, outlined in Attachment N, results in the following tiered liquidated damages structure using a base rate of $19,500. To align with the 25% maximum contamination rates in 9.07.A, the following liquidated damages shall be in full force and effect for any waste characterizations conducted between January 1, 2025 and March 31, 2026:

1. For each Waste Characterization study where the contamination rates are found to be between twenty-five percent (25%) and thirty-five percent (35% ), a prorated rate of fifty (50%) of the maximum liquidated damage of $19,500 will be assessed: .... $9,750.

2. For each Waste Characterization study where the contamination rates are between thirty-five percent (35%) and forty-five percent (45%), a prorated rate of seventy-five (75%) of the maximum liquidated damage of $19,500 will be assessed: ............ $14,625.
11 3. For each Waste Characterization study where the contamination rates are found to be in excess of forty-five percent (45%), the full maximum liquidated damage of $19,500 will be assessed: ........................ $19,500.

Contractor will be assessed liquidated damages for each waste stream where the contamination cap is exceeded per the schedule included above. For example, if a waste characterization found the residential MSW contamination rate is found to be 46%, the Contractor would be assessed liquidated damages in the amount of $19,500.

If a waste characterization found the if the residential recycling contamination rate to be 29%, the Contractor would be assessed liquidated damages in the amount of $9,750. The City will assess liquidated damages for regularly scheduled waste characterizations (as described in Section 1 of Attachment N) that exceed the maximum contamination caps of 25% per stream.

SECTION 11. Section 13.09.J is hereby amended to read in full as follows:
"13.09.J Contamination Caps for Ongoing Performance. Each failure to meet the Contamination caps set forth in Section 9.07.A, measured by the Waste Characterization studies performed by Contractor for each waste stream, outlined in Attachment N, results in the following tiered liquidated damages structure using a base rate of $19,500. To align with the 15% maximum contamination rates in 9.07A, the following liquidated damages shall be in full force and effect for any waste characterizations conducted between April 1, 2026, and June 30, 2031:

1. For each Waste Characterization study where the contamination rates are found to be between fifteen percent (15%) and twenty-five percent (25%), a prorated rate of twenty-five (25%) of the maximum liquidated damage of $19,500 will be assessed: $4,875.

2. For each Waste Characterization study where the contamination rates are found to be between twenty-five percent (25%) and thirty-five percent (35% ), a prorated rate of fifty (50%) of the maximum liquidated damage of $19,500 will be assessed: ...... $9,750.

3. For each Waste Characterization study where the contamination rates are between thirty-five percent (35%) and forty-five percent (45%), a prorated rate of seventy-five (75%) of the maximum liquidated damage of $19,500 will be assessed: ............ $14,625.

4. For each Waste Characterization study where the contamination rates are found to be in excess of forty-five percent (45%), the full maximum liquidated damage of $19,500 will be assessed: ............................... $19,500.

Contractor will be assessed liquidated damages for each waste stream where the contamination cap is exceeded per the schedule included above. For example, if a waste characterization found the residential MSW contamination rate is found to be 12 46%, the Contractor would be assessed liquidated damages in the amount of $19,500.

If a waste characterization found the If the residential recycling contamination rate to be 29%, the Contractor would be assessed liquidated damages in the amount of $9,750. If a waste characterization found the residential co-collected food scraps and yard trimmings contamination rate to be 17%, the Contractor would be assessed liquidated damages in the amount of $4,875. The City will assess liquidated damages for regularly scheduled waste characterizations (as described in Section 1 of Attachment N) that exceed the maximum contamination caps of 15% per stream." SECTION 12. Section 14.11.B is hereby removed and previously read in full as follows:
"Sestion 14.11.8 Minimum Level of Diversion Program Implementation Required by March 31, 2026. If Contractor fails to achieve the minimum level of program implementation as described herein, (a) Contractor forfeits its opportunity to earn the Second Extension of the Agreement described in Section 6.08 B of the Agreement, and (b) Contractor shall pay the City's costs of hiring one or more third parties including but not limited to, consultants, part time employees, and/or other Persons (City's Agents) as determined by City to implement said programs.

The minimum required level of program implementation that must be completed by Contractor on or before March 31, 2026, includes all of the following:

1. SB 1383 Multi Family Food Scrap Diversion Program. Contractor must have fully implemented an SB 1383 Multi Family Food Scrap Diversion program at a minimum of seventy five percent (75%) of (a) all Multi Family complexes (as the Multi Family Food Scrap program is described in Sections 2.3.5.3 and 2.3.5.4 of Attachment B), and (b) at a minimum of seventy five percent (75%) of all Gated Developments, HOA's and Mobile Home Parks 1.vith centralized Bin/Cart/Compactor/Roll Off service (as described in Sections 2.3.6 and 2.3.6.1 of Attachment B). [Note: if City has directed Contractor not to implement the SB 1383 Food Scrap program at Multi Family complexes and at all Gated Developments, HOA's and Mobile Home Parks 1.vith centralized Bin/Cart/Compactor/Roll Off service, this requirement shall not apply.]

2. Contractor Has Not Exceeded Interim Container Contamination Caps. Contractor must have achieved a level of Container Contamination that is at or below the following interim Contamination caps for all Residential, Commercial, Multi Family, Gated Developments, HOA's and Mobile Home Parks within City: r.venty five percent (25%) by weight for Single Stream Recyclable Materials, r.venty five percent (25%) by weight for Food Scraps and twenty five percent (25%) by weight for MSVV. In the event City has directed implementation of a Co Collection program for Food Scraps and Yard Trimmings for any sector(s) of Customers (e.g.

Residential, Multi Family, Gated Developments with Centralized Bin/Cart Collection and/or Commercial), Contractor must have achieved a level of 13 Container Contamination that is at or belmv r.venty five percent (25%) for such Co Collected materials. Contractor agrees to pay to City (as liquidated damages and not as a penalty) for the failure to achieve Interim Container Contamination Caps as outlined in Section 13.09.1.

3. Contractor Has Maintained Full Implementation of All AB 341 and AB 1826 Diversion Programs. Contractor must have implemented and maintained AB 341 and AB 1826 Diversion Programs at "full implementation" (including having performed all the tasks listed in Section

3.3.6 of Attachment B) at one hundred percent (100%) of all Customers required to have such programs as described in Attachment B. [Note: if Contractor did not achieve the minimum level of AB 341 and AB 1826 program implementation required by Section 14 .11.A and Contractor paid for City's Agents to implement such programs; and one hundred percent (100%) of such programs are no1N operating at "full implementation" levels, Contractor shall be considered to be in compliance with this requirement to fully maintain one hundred percent (100%) of the AB 341 and AB 1826 programs.]
During the period January 1 through June 30, 2026, City will evaluate Contractor's performance to determine 1.vhether or not the minimum level of SB 1383 Multi Family Food Scrap Diversion program implementation has been achieved, 1.vhether the above listed interim Container Contamination caps have been met, and whether AB 341 and AB 1826 programs have been maintained at "full implementation" at one hundred percent (100%) of all Customers required to have such programs. In order to make a determination concerning implementation of the SB 1383 Food Scrap Diversion program and the AB 341 and AB 1826 programs, City will revie1.v the Red/Green Tracking Spreadsheets, time and \Nork logs of the Recycling Coordinators, all the Monthly, Quarterly, and Annual Reports listed in Attachment K, submitted by Contractor up to and including the Monthly Report for March 2026. City may also conduct site visits at Commercial and Business Establishments, Multi Family, Gated Developments, HOA's and Mobile Home Park Customers' Premises to determine

1.vhether Contractor has achieved the minimum required Diversion program implementation.

In order to make a determination concerning Contractor's performance 'Nith regard to the interim Container Contamination caps, City will utilize the results of the Characterization studies performed at all Processing Facilities and for the MSVV being delivered for Disposal. The methodology for the studies is described in Attachment N.

The City \Nill review the study results for all characterizations performed during the Term, up to and including the following: Source Separated Recyclable Materials performed in the first quarter of 2026; Food Scraps performed in the first quarter of 2026; Co Collected Yard Trimmings and Food Scraps (if implementation of this program has been directed by City for any sector) performed in the first quarter of 2026; and the MS\IV 'Naste characterization performed in the second quarter of 2025. 14 Customers that are required to have an AB 341 Diversion program and/or an AB 1826 Diversion program, and Customers that are required to have a Multi Family SB 1383 Food Scrap program (including Gated Developments, HO/\'s and Mobile Home Parks i.Nith centralized Bin/Cart/Roll Off/compactor service) that, as of January 1, 2024, are on the list of "Non Compliant Customers Referred to City f.or Compliance Action Under Mandatory Ordinance" in Attachment K, Monthly Reports, Item #8, shall not count against Contractor in City's determination as to \vhether the requirements of this Section 14.11.B have been met.

On or bef.ore July 1, 2026, City will notify Contractor as to whether or not Contractor has achieved the minimum required level of SB 1383 Food Scrap Diversion Program implementation, the required interim Container Contamination caps at all Residential, Commercial, Multi Family, Gated Developments, HO/\'s and Mobile Home Parks in City, and full implementation of all AB 341 and AB 1826 programs in City. In the event Contractor has not met one, two or all three of these requirements, City may retain the services of one or more Persons as described herein, to complete implementation and/or reduce Contamination le'olels as follows.

If Contractor has not achieved the requirements of Section 14.11.8.1, Contractor shall pay the cost f.or City's Agents to implement the required SB 1383 Multi Family Food Scrap Diversion programs until one hundred percent of the SB 1383 Food Scrap Diversion Programs are fully implemented at all Multi Family complexes and at all Gated Developments, HOA's and Mobile Home Parks with centralized Bin/Cart/Roll Off/compactor service in City.

If Contractor has not achieved the requirements of Section 14 .11.8.2, Contractor shall pay the cost for City's Agents to reduce Contamination levels until the Container Contamination caps described in Section 3.3.6 of Attachment B are met at all Residential, Commercial, Multi Family, Gated Developments, HOA's and Mobile Home Parks in City. [Note: this means Contractor shall pay the cost f.or City's Agents until the follmving Container Contamination saps are achieved: fifteen percent (15%) by weight for Single Stream Recyclable Materials, fifteen percent (15%) by weight for Food Scraps and fifteen percent (15%) by 'Neight f.or MSVV. In the event City has directed the implementation of a program f.or Co Collection of Food Scraps with Yard Trimmings for any stream (e.g. Residential, Multi Family, Gated Developments with Centralized Bin/Cart Collection Service, and/or Commercial) Contractor shall not have exceeded the Contamination cap of fifteen percent (15%) f.or the Co Collected materials from such Customers. (Note: VVith regard to Source Separated Food Scraps Collected from any stream, Contractor must not have exceeded fifteen percent (15%) Contamination or the greater percent allov'led by the Food Scrap Processing Facility used for Food Scraps [as described in Section 3.3.6 (xi) of Attachment B] so long as Contractor has utilized said Food Scrap Processing Facility f.or a continuous period corresponding to the period of time that the City and/or City's Agents are correcting the deficiency(ies) and the Contamination percentage allowed by said Food Scrap Processing Facility has remained the same for that entire period.) [NOTE: The o Conlrastor a~d s;~;1ng rodused Genta· 1b1lily for all , ~ 7 or is f mer Co~t~mination ammg each 16 implemented program as described in Section 3.3.6 of Attachment B and is including continuing to meet the required Container Contamination caps in Section 3.3.6 of Attachment B. At such point, City shall notify Contractor in writing and shall submit any final invoioe(s) for the work of City's Agents to Contractor for payment." SECTION 13. Section 2.3.5.5 from Attachment B Scope of Work is hereby amended to read in full as follows:
"2.3.5.5 Monitoring of Multi-Family Programs._Contractor shall monitor the Multi family MSW Collection, the Multi-family Single Stream/Single Material Recycling programs, the Multi-family Yard Trimmings/wood Collection program, the Multi-family Source Separated Food Scrap program (or the co-collected Yard Trimmings/Food Scraps program if implemented) for both participation and contamination at the frequencies and using the procedures described in Attachment N. When Contractor finds Contamination (as described in Section 5.7 of this Attachment B and in Attachment N) Contractor shall follow the procedures described in Attachment N.

On or before October 1, 2026, and annually on October 1 thereafter and through the Term, the City shall notify the Contractor, in writing, of the percentage of compliant Multi-Family diversion programs based on its evaluation. City may conduct a survey of all Multi-Family Customers and all Gated Developments/HOA's with centralized Cart and/or Bin Collection service in City. City will determine if Contractor has fully implemented an SB 1383 Food Scrap Collection program at one-hundred percent (100%) of all the SB 1383 Customers required to have such a program pursuant to PRC Section 42652 et seq. In order for a Customer's program to be found to be "fully implemented", Contractor must have completed all steps for Food Scrap program implementation listed in Section 3.3.6 of Attachment B to the satisfaction of City.

Contractor must have "fully implemented" a Multi-Family Food Scrap Collection program (or a co-collected Food Scraps and Yard Trimmings/Wood program) at all Multi-Family complexes in City. Customers on the list of "Non-Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" shall not count against Contractor as a City-identified non-compliant account.

In the event that Contractor fails to "fully implement" all required Diversion Programs at a Multi-Family property, City will provide written notice to Contractor and Contractor shall have thirty (30) days to "fully Implement" all required Diversion Programs. City may conduct rotating audits throughout the Term to confirm that these performance standards are achieved and maintained. The City has the right to conduct such SB 1383 compliance assessments at any time.

In the notification, the City will identify the number of accounts that were identified as non-compliant. In order to make a determination concerning full implementation of SB 1383 Diversion programs, City will review the Red/Green Tracking Spreadsheets, time and work logs of the Recycling Coordinators, all the Monthly, Quarterly, and Annual Reports listed in Attachment K, submitted by Contractor. City may also conduct site visits at Multi-Family, Gated Developments, HOA's and Mobile Home Park Customers' 17 Premises to determine whether Contractor has achieved the minimum required Diversion program implementation. After thirty (30) days from City notification, if Contractor has not "Fully implemented" all required Diversion Programs at the Multi Family property the City may seek additional staffing, at the Contractor's expense, to achieve "fully implemented" diversion programs as described in Section 3.3.6 of Attachment B.

Contractor shall reimburse City on a monthly basis for the work performed by City's Agents to implement the Diversion programs. City will invoice Contractor for this expense and Contractor shall pay said invoices within thirty (30) days of receipt.

Contractor shall cooperate with City and City's Agents to implement Diversion programs (as applicable). Such cooperation shall include sharing information and data on Customers with City and its Agents, cooperating with City's Agents including ride alongs on Collection vehicles, providing Containers for Divertible Materials in a timely manner as described in the Agreement including Attachment B, Collecting Containers of Divertible Materials on the schedule agreed upon with the Customer and City and/or City's Agents, and processing the Collected Divertible Materials at the City-approved Processing Facility(ies) described in Articles 5 and 6. Contractor' shall not impair, impede or in any way frustrate or otherwise interfere with the actions or efforts of City and/or City's Agents to successfully complete all steps to fully implement the required Diversion programs as described herein.

As Diversion programs are implemented by City's Agents, City's Agents will monitor and troubleshoot said programs and provide additional training, education, and site visits for the initial ninety (90) day period following program startup. At the end of the ninety (90) day period, City's agents will transfer responsibility for all aspects of the fully implemented program to Contractor. Contractor shall fully maintain each fully implemented program at the Customer's Premises from that point forward, including completing any and all applicable steps described in Section 3.3.6 of Attachment B.

Contractor shall continue to pay for the work of City's Agents until all of the following conditions have been met: (a) The City's Agents have implemented the remaining SB 1383 Diversion programs at one-hundred percent (100%) of all Customers, (b) City's Agents have transferred responsibility for all aspects of each implemented program to Contractor, and (c) Contractor is fully maintaining each implemented program as described in Section 3.3.6 of Attachment B. At such point, City shall notify Contractor in writing and shall submit any final invoice(s) for the work of City's Agents to Contractor for payment."
SECTION 14. Section 3.3.6 (xi) from Attachment B Scope of Work is hereby amended to read in full as follows:
"(xi) Within ninety (90) days after implementation of each Diversion program at the Premises of the Customer, Contractor shall ensure that the program is operating effectively such that the MSW Container(s) at the Premises contain no more than fifteen percent (15%) Recyclable Materials and Food Scraps (combined), and the Recyclable Materials Container(s) contain no more than fifteen percent (15%) MSW, 18 which includes Food Scraps if the Customer generates Food Scraps. If the Premises is participating in the Source-Separated Commercial Food Scrap Collection Program, the Food Scrap Container(s) shall contain no more than five percent (5%) of any non food item(s). In the event the percentage of non-food item contamination allowed at the City-approved Food Scrap processing facility is greater than five percent (5%), the percentage of non-food item(s) in the Food Scrap Container(s) shall not exceed that percent. If these performance standards are not being achieved, Contractor shall work with the Business owner(s), manager(s) and employees as needed to re-train, troubleshoot and otherwise provide technical assistance to ensure the standards are being met. City shall conduct rotating quarterly audits throughout the Term to confirm that these performance standards are achieved and maintained." SECTION 15. Section 3.3.6 (xv) is added to Section 3 Commercial and Business Establishment Services in Attachment 8 Scope of Work to read in full as follows:
"(xv) In the event that Contractor fails to "fully implement" all required Diversion Programs at a Commercial and Business Establishment's Premises, City will provide written notice to Contractor and Contractor shall have thirty (30) days to "fully Implement" all required Diversion Programs. City may conduct rotating audits throughout the Term to confirm that these performance standards are achieved and maintained. The City has the right to conduct such SB 1383 compliance assessments at any time. On or before October 1, 2026, and annually on October 1 thereafter and through the Term, the City shall notify the Contractor, in writing, of the percentage of compliant Commercial and Business Establishment diversion programs based on its evaluation. In the notification, the City will identify the number of accounts that were identified as non-compliant. In order to make a determination concerning full implementation of SB 1383 Diversion programs, City will review the Red/Green Tracking Spreadsheets, time and work logs of the Recycling Coordinators, all the Monthly, Quarterly, and Annual Reports listed in Attachment K, submitted by Contractor. City may also conduct site visits at Commercial and Business Establishments, Multi-Family, Gated Developments, HOA's and Mobile Home Park Customers' Premises to determine whether Contractor has achieved the minimum required Diversion program implementation. Customers on the list of "Non-Compliant Customers Referred to the City for Compliance Action Under Mandatory Ordinance" shall not count against Contractor as a City-identified non-compliant account. After thirty (30) days from City notification, if Contractor has not "Fully implemented" all required Diversion Programs at the Commercial Business Establishment the City may seek additional staffing, at the Contractor's expense, to achieve "fully implemented" diversion programs as described in Section 3 of Attachment B.

Contractor shall cooperate with City and City's Agents to implement Diversion programs (as applicable). Such cooperation shall include sharing information and data on Customers with City and its Agents, cooperating with City's Agents including ride- 19 alongs on Collection vehicles, providing Containers for Divertible Materials in a timely manner as described in the Agreement including Attachment B, Collecting Containers of Divertible Materials on the schedule agreed upon with the Customer and City and/or City's Agents, and processing the Collected Divertible Materials at the City-approved Processing Facility(ies) described in Articles 5 and 6. Contractor shall not impair, impede or in any way frustrate or otherwise interfere with the actions or efforts of City and/or -City's Agents to successfully complete all steps to fully implement the required Diversion programs as described herein.

For purposes of this Agreement, HHW includes all types of material listed in the definition of HHW in Attachment A. A Single Family Dwelling Customer or the City may request Collection of Household Hazardous Waste by scheduling an appointment with Contractor a minimum of five (5) business days in advance. Contractor shall collect the HHW on the Single Family Dwelling Customer's next regularly scheduled MSW Collection day. Contractor shall provide the Single Family Dwelling Customer with instructions for properly preparing the HHW for Collection, and shall arrange with the Single Family Dwelling Customer for a proper, safe, and secure location from which the HHW is to be Collected. Contractor shall only collect HHW when there is an adult present at the Single Family Dwelling Premises or in the absence of an adult at the Single Family Dwelling Premises, when there is a safe and secure location in 20 which the HHW can be placed (i.e., a side or back yard). Contractor shall instruct Single Family Dwelling Customers not to place HHW for Collection in alleys or at curbside. Contractor shall deliver or mail any bags or other materials or containers necessary for the Single Family Dwelling Customer to use to properly and safely package and place the HHW for Collection. Contractor shall provide special assistance when collecting HHW materials from Disabled Persons.

Eligible HHW materials for Collection shall include, but are not limited to, the following:

Cleaning products: ammonia, floor stripper, oven cleaners, rug, upholstery and floor cleaners, tile and shower cleaners, furniture polish, drain cleaners, rust remover, naval jelly and solvents.

Automobile maintenance products: car waxes and polishes, starting fluids, solvent cleaners, antifreeze, repair products, vehicle batteries, brake fluid, transmission fluid, windshield washer fluid, hydraulic fluid, motor oil, oil filters, and gasoline and diesel fuel. Gasoline and diesel fuel must be placed in containers designed and sold for the containment and transportation of fuel; maximum of ten (10) gallons.] Home maintenance and improvement products: oil -based stains, and paints, liquid latex paint, caulking, varnish, paint thinners, chemical strippers, spray paint, artist paint, insect repellants, insecticides, pesticides, poisons, rat poison, kerosene, lighter fluid, and pool chemicals, pool acid and chlorine (tablets or liquid), hobby glue, driveway sealer maximum of five (5) gallons].

Personal care items: nail polish and remover, hair color.

Sharps, such as needles, lancets and syringes. [Sharps must be placed into a rigid sealed, puncture resistant container for Collection.]
Pharmaceutical wastes shall be included if and when state law has been revised to permit Collection of these materials under this type of collection program, and Contractor is directed by City to include pharmaceutical wastes.

Ineligible materials for the HHW Collection Program include, but are not limited to, the following: biological waste, ammunition and explosives, appliances, asbestos, commercial chemicals, construction related materials, containers over five (5) gallons with the exception of fuel described above), fire extinguishers, Food Scraps, cooking oil and grease, gas cylinders/ pressurized cylinder, liquid mercury/ elemental mercury and broken items that contain mercury, materials improperly packaged for Collection and transportation, materials in leaking containers, radioactive materials, tires, MSW, Bulky Items, unknown or unlabeled materials.

In the event of a dispute between Contractor and a Single Family Dwelling Customer as to whether a material is eligible for Collection by the HHW Collection program, the decision of the City shall be final.
21 Contractor shall participate in the Orange County PaintCare program by diverting Paint to the County's program when Paint is picked up in the HHW Collection program.

Contractor shall Divert a minimum of eighty percent (80%) of all Collected HHW from Disposal by use of in- house resources (if Contractor is fully licensed and holds all required permits to do so) and/ or use of third parties that are properly licensed and possess all required permits under local, state and federal law and regulations for Recycling, treating, and otherwise handling HHW to Divert it from Disposal. Contractor shall Dispose of any non-Divertible HHW in accordance with all local, state and federal regulations and only at properly permitted HHW Disposal facilities operating in accordance with all applicable local, state, and federal laws and regulations.

Contractor shall maintain records of the Single Family Dwelling Customers requesting HHW Collections, the number of Collections requested by each Single Family Dwelling Customer, the number of Collections provided by Contractor, addresses of each Collection, the number, types, and quantities of HHW delivered for Diversion, the third-party Persons or organizations where HHW was delivered for Diversion, and the quantities and types of HHW Disposed, including the licensed and permitted Disposal sites where HHW was Disposed. The number of Collections, types of HHW, quantity of each type of HHW, and the total quantity of HHW Collected, Diverted, and Disposed shall be reported semi-annually with the Contractor's Quarter 2 and Quarter 4 Reports so that they align with State reporting requirements (i.e., Form 303, Electronic Annual Report). The HHW report due with the Quarter 2 Report on July 30 will include the HHW details included in this section for the time period of the previous fiscal year (e.g. HHW report due July 30, 2026 will include data from time period of July 1, 2025 to June 30, 2026). The HHW report due with the Quarter 4 Report on January 30 will include the HHW details included in this section for the time period of the previous calendar year (e.g. HHW report due January 30, 2027 will include data from time period of January 1, 2026 to December 31, 2026). Contractor shall submit additional records to the City upon request. Contractor shall create and maintain all transportation manifests, records, lists and all other documentation for HHW Collection, transportation and Disposal that are required by local, federal and state laws and regulations. Contractor shall provide pollution control insurance as described in Article 11 of the Agreement. Contractor shall provide the HHW Collection Program at no additional cost to the City or to Single Family Dwelling Customers.

SECTION 17. The Parties wish to formally amend the Agreement to include the updated Attachment K as set forth as Exhibit 1 to this Amendment. Future changes to processes and methodologies may be approved by the City in its sole discretion set forth in Article

9.09 of the Agreement.

SECTION 18. The Parties wish to formally amend the Agreement to include the updated Attachment N as set forth as Exhibit 2 to this Amendment. Future changes to processes and methodologies may be approved by the City in its sole discretion set forth in Article

9.09 of the Agreement.
22 SECTION 19. Except as modified by this Second Amendment, all other terms and conditions of the Agreement and Amendment No. 1 remain the same.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment on the Effective Date as set forth above.

CITY OF LAGUNA NIGUEL
By:

Tamara S. Letourneau
City Manager
ATTEST:

CITY CLERK
By:

Marissa Asistin
City Clerk

CR&R INCORPORATED
By:

David Ronnenberg
President
23 EXHIBIT 1-ATTACHMENT K

ATTACHMENT K
Reports to be Submitted to City
The reports listed in this Attachment K are required at a minimum. The City has the right to request additional reports, to direct Contractor to modify format and layout, and to require that Contractor use existing City report formats. All report formats shall be approved by City and shall be submitted electronically (i.e. via e-mail attachment). Paper copies shall be made available upon request by the City. The reporting year shall be the Calendar Year (i.e. January 1st through December 31). City will work with Contractor during the first year of the Franchise Agreement to tailor and refine reporting formats to the City's desired level of detail.

Contractor shall provide, for all monthly, quarterly, and annual reports, a certification statement, under penalty of perjury, signed by the responsible corporate official, that the reports are true and correct.

Monthly Reports
Monthly reports shall include a Year-To-Date summary. Monthly reports shall be submitted within twenty-five (25) calendar days after the end of each month for information on preceding months, beginning with the report for January 2019, which shall be submitted no later than February 25, 2019. The information listed may be combined into one or several reports and shall be the minimum reported:

1. Diversion Program(s) tonnage and goal summary listed by program and DPS Code.

2. Calculation of the Diversion rate achieved year-to-date.

3. Tons Collected and Diverted by Sector: Tons Collected and the Tons Diverted in the City using the characterization study-derived Diversion and Residue percentages as described in Attachment N. Tons Collected and Diverted shall be grouped by class of Customer (e.g. Commercial, Multi-family, Residential, Roll Off and Compactor Service, etc.) and also by each type of Collection service for each class of Customer, as described below:
• Single Materials Recyclables Tons Collected and Diverted from Commercial, Multi-family, and Roll-off Customers
• Single Stream Recyclable Materials Tons Collected and Diverted from Commercial, Multi-family, Roll-off, and Residential Customers • Food Scrap Tons collected from Commercial, Roll-off, and, if directed by the City, Multi-family and Residential Customers
• Yard Trimmings Tons Collected and Diverted from Commercial, Multi-family, Roll-off, and Residential Customers
• Co-collected Food Scraps and Yard Trimmings Tons Collected and Diverted from Commercial, Multi-family, Roll-off, and Residential Customers (if directed by the City)
• MSW Tons Collected from Commercial, Multi-family, Roll-off, and Residential Customers

4. Tons Delivered to, and Diverted by, Processing Facilities: Report shall list the number of Tons that were delivered to, and Diverted by, each Compost Facility, Clean MRF, Construction and Demolition Debris Processing Facility, Anaerobic Digestion Facility, Bioengineered Feedstock Facility, and all other Processing Facilities used. Diversion Attachment K Page 1 of 6

ATTACHMENT K
Reports to be Submitted to City
rates shall be based upon the results of the characterization studies described in Attachment N.

5. All Materials Diverted by Contractor. Statement showing types of materials and quantities sold (in Tons).

6. Number of Tons of MSW Disposed during the month from both Contractor's Collection routes and Tons of Residue Disposed from each Processing Facility used by Contractor to process Recyclable Materials, Yard Trimmings, Food Scraps, Construction and Demolition Debris and all other materials Collected in City. The report shall include backup documentation showing how the Tons of Residue from each Facility were calculated. and allocated to City. The report shall also include the name, telephone number and e-mail address of the contact person at each Processing Facility that the City can contact with questions about the allocations and/or reported Residue percentages and/or the number of Tons processed from City.

7. Narrative summary of problems encountered including scavenging, incidents of Contamination found during on-site field Container Contamination audits, including a listing of specific location addresses for each and actions taken with recommendations for the City, as appropriate.

8. An on-going listing of "Non-Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" who, despite the Recycling Coordinators' adherence to the required implementation steps included in Attachment B, Section 3.3.6, still refuse to implement a State-mandated Diversion program. The listing shall include detailed information on all interactions with, and attempts to bring the Customer into compliance with state laws by implementing a Diversion program.

9. Summary of service complaints, with a description of the nature of the complaint and how it was resolved.

10. Summary, and type, of Customers that implemented Diversion services the previous month and/or cancelled service. The reasons for cancelled service must be provided with the report.

11. Recycling Coordinators' activity, tracked in a color-coded Red/Green Tracking Spreadsheet (Customers are shaded red to indicate non-compliance and shaded green to indicate compliance), showing individual interactions with businesses, including the date, a description of, and the nature of each outreach/contact effort; status of program implementation or educational efforts; issues with recycling such as Contamination or overflow; objections to implementing Diversion programs; individual compliance status with AB 341, AB 1826 and SB 1383; the Customer type (i.e. Commercial, Multi-family, Gated Development/HOA/Mobile Home Park with Centralized Bin Service, Food Service Establishment, City Account); and other information as directed by the City. The results from most recent on-site field Container Contamination audits, as described in Attachment N, shall also be included in the Red/Green Tracking Spreadsheet for each account and for each line of service used by each account. An example is included as Exhibit K.1. If the City directs the Contractor to use a third-party to assist with program implementation due to non-attainment of minimum implementation levels as described in Attachment K Page 2 of 6
Article 14.11 of the Franchise Agreement, accounts that receive technical assistance from the third-party shall be tracked and color-coded as directed by the City. Accounts that are listed as "Non-Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" shall also be color-coded accordingly.

If implementation of a Residential source-separated Food Scrap program or of a Residential Co-Collection program for Yard Trimmings and Food Scraps is directed by City, Contractor shall record and report all the activities performed by the Recycling Coordinators to implement and maintain said Residential programs. All such activities shall be recorded and reported in the red/green tracking spreadsheets in a format approved by City.

12. The number of warning notices issued to Customers for Contamination and the account information associated with these notices pursuant to Section 5.7 of Attachment B.

13. Number of Commercial and Residential accounts for whom E-Waste and U-Waste pick ups were provided.

14. Number of Commercial, Multi-Family, Residential, and public right-of-way Bulky Goods pick-ups.

15. A listing of all accounts, in Excel format, including:
a. Customer number
b. Customer name
c. Account type (Commercial, Multi-family, Gated Development/HOA/Mobile Home Park with Centralized Bin Service, Food Service Establishment, City Account) d. Street address
e. Billing address
f. All service information, including
i. Line of service (i.e. MSW, Food Scraps, Recyclable Materials) ii. Container inventory
iii. Container size
iv. Frequency of collection
v. Collection days
vi. Monthly rate collected
g. Service Contact name
h. Service Contact number
i. Billing Contact Name
j. Billing Contact Number

16. Number of Customers participating in Diversion programs provided by Contractor (i.e.

Single Material Recyclables Collection Program, Single Stream Recyclable Materials Collection Program, Food Scraps Diversion Program, Composting Program, Anaerobic Digestion, Co-digestion, etc.). This section of the report must also include the total number of Containers (Bin, Carts, Split Bins, etc.) in use for Single Material Recycling, Single Stream Recyclables, Food Scrap Diversion, Composting, Anaerobic Digestion, Co-digestion, and MSW Collection/Disposal service.

17. Number of Residential accounts with Extra MSW pick-ups.

Attachment K Page 3 of 6

18. Number of Residential accounts participating in residential 'valet' service (i.e. back yard/side-yard residential wheel-out service).

19. Inventory of Residential curbside Containers by size and stream

20. A summary table of AB 341, AB 1826 and SB 1383 compliance information by Customer type and by compliance tier, including the following items:
a. Total number of AB 341, AB 1826 and SB 1383 Customers serviced by the Contractor broken out by Customer type (i.e. Commercial, Multi-family, Gated Development/HOA's/Mobile Home Park with Centralized Bin service, Food Service Establishment, City accounts).
b. The total number of Customers that have a Single Stream and/or Single Material Recycling Program, Food Scrap Diversion Program, and/or Yard Trimmings/Wood Recycling provided by Contractor broken out by Customer type (i.e. Residential, Commercial, Multi-family, Gated Development/HOA/Mobile Home Park with Centralized Bin Service, Food Service Establishment, City Account).
c. The number of Customers with Contractor-documented internal Diversion programs that comply with AB 1826, AB 341 and SB 1383 broken out by Customer type (i.e. of Commercial, Multi-family, Gated Development/HOA/Mobile Home Park with Centralized Bin Service, Food Service Establishment, City Account).
d. The number of Customers that do not have an AB 341 and/or AB 1826 and/or SB 1383-compliant Diversion program(s) broken out by Customer type (i.e.

Residential, Commercial, Multi-family, Gated Development/HOA/Mobile Home Park with Centralized Bin Service, Food Service Establishment, City Account). e. The number of Customers that have refused service and have been placed on the listing of "Non-Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance".

21. For the months when there is an HHW, Electronic Waste, Universal Waste drop-off event, information re: tonnage collected, participation levels, materials diverted, etc. The data shall be broken out in a manner that can be easily entered into CalRecycle's annual Form 303 online interface.

22. For the months when there is a community shred event, information re: tonnage collected, participation levels, materials diverted, etc.

Quarterly Reports
Within 30 days after the completion of each quarter of the Calendar Year, Contractor shall submit a Quarterly Report, beginning with submittal of the Quarterly Report for the first quarter of 2019 on or before April 30, 2019. The report shall provide a quarterly summary of the monthly reports in addition to the following at a minimum:

1. Report of any Characterization Studies completed during the reporting quarter as described in Attachment N.

2. Copies of promotional and public education materials sent during the quarter.

Attachment K Page 4 of 6

3. A narrative description of problems encountered and actions taken, including efforts to deter and prevent Scavenging and Contamination of Recyclable Materials, Yard Trimmings/Wood, Food Scraps, and Construction and Demolition Debris. The narrative is to include a description of Tons rejected for sale after processing (type of material, tonnage), reason for rejection, Contractor's actions taken to re-process the material and to locate alternative market(s) for the rejected materials, including information on the current location and status of the rejected materials.

4. Recycling sales revenue by type of material marketed on a gross and net basis.

5. Tons into each composting facility, Tons of final product sold and end-users/markets for finished compost.

6. Tons delivered to, and processed by the Anaerobic Digestion facility and Tons of Anaerobic Digestate produced; tons of Digestate composted and specific Tons delivered to which Composting Facility(ies) and end-uses and end-users of all Compost produced; disposition of Digestate at third party Composting Facility(ies) and end-uses and end users of all Compost Produced; if approved by the City, the disposition of Digestate as land application, including Tons, locations, dates of delivery, depth of applications, and lab results for metals, pathogens, and all other required parameters per Title 14 CCR Section 17852(a)(24.5)(A) et seq. and per CDFA and USDA laws and regulations; and any other handling practices and/or destinations (e.g. small parcel land application, other, etc.) including tons where digestate was delivered.

7. A list and narrative description of monthly trainings held on prevention of spills of fluids from Collection vehicles, including employee group(s) trained, the trainer that presented each training and the topics covered.

8. Results of quarterly Residential, Multi-Family and Commercial Route Density Audits described in Attachment H.

9. Results of semi-annual Multi-Family and Commercial Sector-Specific Density On Service Audits as described in Attachment H (if applicable).

10. For the Quarter 2 and Quarter 4 reports, information re: the household hazardous waste collection program for Single-Family Residential Premises as detailed in Attachment B.

This information includes the tonnage collected; number of collections requested by each household; the number of Collections provided by Contractor; addresses of each Collection; the number, types, and quantities of HHW delivered for Diversion; the third party Persons or organizations where HHW was delivered for Diversion; and the quantities and types of HHW Disposed, including the licensed and permitted Disposal sites where HHW was Disposed.

Annual Reports
On or before March 15, 2020, and on or before the same date in all subsequent years of the Term, Contractor shall submit to the City a written year-end Annual Report, in a form approved by the City. The annual report shall include information as to timely compliance with Contractor's Diversion obligations and MSW Collection and the following information for the Calendar Year then ending:

Attachment K Page 5 of6

1. Annual Diversion Rate Achieved as identified in Article 6 of the Contract.

2. Annual AB 341, AB 1826 and SB 1383 compliance status report, with a detailed work plan to meet minimum performance standards in Section 14.11 of the Franchise Agreement and for earning of extension(s) set forth in Article 6 of the Agreement.

3. A report of the previous Calendar Year's activities in the City, including a cumulative summary of the Monthly and Quarterly Reports, and information and statistics with respect to City's compliance with the Act.

4. A complete inventory of equipment used to provide all services (including vehicles and Containers by size and material or waste stream type).

5. Number of routes, type of route, and route hours per day.

6. Number of accounts and Cart and Bin information as requested in the Monthly reports.

7. Changes in Solid Waste management and Recycling/Diversion efforts, including projections and proposed implementation dates and costs, recommended by Contractor and recommended amendments to the City's Source Reduction and Recycling Element based on developments in technology or additional Diversion opportunities identified by Contractor. Contractor's recommendations with respect to compliance with the Act and other Diversion requirements shall state the specific requirement that the implementation of the recommendation(s) is intended to satisfy.

8. Total number of Customers that used special collection programs, including number of Residential, Commercial, Multi-family, and City Customers that requested Bulky item Collection, E-Waste Collection, U-Waste Collection, and Freon Collection.

Exhibit K.1. Example of Red/Green Tracking Spreadsheet Accou_nt Listing Attachment K
IQTY MW; II O"V YDS/WUJI Kl-t<i ACCINOTU/Sol ll VISITOATU

Page 6 of 6 ends

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24 EXHIBIT 2 - ATTACHMENT N
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
In order to measure attainment of performance metrics during the course of the Term, the Contractor shall conduct periodic Processing Facility characterizations and field Contamination audits to determine the levels of Contamination in the MSW, Recyclable Materials, Food Scrap, and Yard Trimmings/Wood streams. The following table provides a summary of the studies and audits required to monitor performance. The specific protocols that shall be used to conduct the studies and audits are also included in this section.

Table of Contents

1. Processing Facility Characterization Protocols ............................................................. 3 1 a. Characterization Protocol for Single-Stream/Single-Material Recyclables Delivered to Clean MRF ...................................................... ......................................... 3 1 b. Characterization Protocol for Yard Trimmings and/or Food Scraps Delivered to Processing Facilities .................................................. ................................................... 5 1 c. Characterization Protocol for MSW Delivered to Disposal Site ............................... 7 1 d. Characterization Methodology for C&D Processing Facilities ................................. 9

2. On-site Field Container Contamination Audits ........................................................... 10 2a. Residential Curbside Field Contamination Audits ........................................ ..... .... 10 2b. Commercial/Multi-family In-Field Container Contamination Audits ....................... 11

3. Third-Party Assessment of Phase 1 Performance Metrics ......................................... 13

3.a. Assessment of First Extension Opportunity Performance Metrics ....................... 13 Attachment N Page 1 of 18
Sector
Residential
Commercial
and Multi-
family
C&D
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
Required Frequency of Studies Field and Facility Performance Requirements & Audits Diversion Programs Processing On-site Field Minimum Notes by Sectors Facility Container Facility On-site Minimum Avg. Cart Characterization Contamination diversion Contamination Material Capacity Study Audit rate Rate density Utilization
Residential Single Less than
2x/year 2x/year 90%+ 10% non- NA NA Stream Recycling recyclable Residential Curbside Less than
2x/year 2x/year 90%+ 10% non-yard NA NA Yard Trimmings trimmings Residential Curbside Less than Additional facility and in-field 10% non-yard Co-collected Yard 2x/year 2x/year 90%+ trimmings/food NA NA audits triggered by less than Trimmings/Organics scraps 35% residential participation Less than Residential Curbside 10% non-yard Source-Separated 2x/year 2x/year 90%+ trimmings/food NA NA Organics scraps
Less than
20%
Residential Curbside 2x/year 2x/year NA recyclables NA NA MSW and food scraps by April
1, 2025
Commercial/Multi- Less than
10% non-family Single-stream 2x/year On-going 90%+ recyclable by 30 lbs.ICY 50% Recycling April 1, 2025
Commercial/Multi- Less than
10% non-yard family Source- 2x/year On-going 90%+ trimmings/food 500 lbs.ICY 50% separated Food scraps by April Scraps 1,2025 Commercial/Multi- Less than
10% non-yard family Co-collected 2x/year On-going 90%+ trimmings/food 200 lbs.ICY 50% Yard Trimmings and scraps by April Food Scraps 1, 2025 Less than
Commercial/Multi- 10% non-yard
family Yard Trimmings 2x/year On-going 90%+ trimmings/food 150 lbs.ICY 50% scraps by April
1, 2025
Less than
Commercial/Multi- 10%
family MSW On-going NA recyclables NA NA and food 2x/year scraps by April 1,2025
C&D diversion requirement will
be pegged to CALGreen
Construction and 2x/year 65%+ NA NA NA diversion requirement which Demolition - will may updated on January
1, 2020 and tri-annually going
forward
Attachment N Page 2 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols

1. Processing Facility Characterization Protocols
Note: As used herein, "stream" refers to Residential , Commercial or Multi-Family "streams". Residential includes Gated Developments, HOA's and Mobile Home Parks with individual Cart service. Multi-Family includes Gated Developments, HOA's and Mobile Home Parks with centralized Bin/Cart service. "Component" refers to the type of material: Single Stream Recyclable Materials, Yard Trimmings/Wood, Food Scraps, Co collected Yard Trimmings/Wood and Food Scraps or Construction and Demolition Debris. 1 a. Characterization Protocol for Single-Stream /Single-Materia l Recyclables Delivered to Clean MRF
The following protocol will be used to conduct characterizations at the Clean MRF(s) where the following material components are processed:
• Residential Stream - Single-Stream Recyclable Materials component • Commercial Stream - Single-Stream Recyclable Materials component • Multi-Family Stream - Single-Stream Recyclable Materials component Timing: Characterization studies shall be conducted two (2) times each calendar year for each of the above-listed streams and components with the first two (2) characterizations taking place beginning June 2019 and November 2019. The timing for when the characterization studies are conducted shall be staggered so that after two (2) years, one (1) characterization will have taken place during each calendar quarter. For example, for contract year 2 (1/1/2020 - 12/31/2020), the Contractor shall conduct one characterization study of each stream in February 2020 (Calendar Quarter 1) and July 2020 (Calendar Quarter 3). In Contract Year 3 (1/1/2021 - 12/31/2021), the Contractor shall conduct one characterization study of each stream in June 2021 (Calendar Quarter 2) and November 2021 (Calendar Quarter 4). Please see Exhibit N.1. for an example schedule of characterization studies that will be conducted over the course of the contract.

Methodology: For each characterization study, loads shall be sampled only from the specified stream (sector of origin). For example, a load sampled from the Commercial Single-Stream Recycling shall not contain any Multi-Family Single Stream Materials.

Each characterization shall be done by hand (i.e. a manual sort not a mechanized sort) and total load weights shall be established for each load sampled. A five-day sampling for each component of each stream shall be conducted to account for changes in the specified stream's component over a week's time.

A total of four (4) samples per load shall be manually sorted separately each day of the five (5) day characterization study. Materials shall be collected using a grid method and shall be hand collected . The grid method assigns an imaginary XY axis over the load Attachment N Page 3 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
after it is dumped on the tipping floor. Four random number pairings between 0-20 (for the long dimension of the load i.e. length) and 0-10 (for the shorter dimension of the load i.e. width) shall be generated to identify the location of the samples on the load. Each sample shall weigh at least 50 lbs. and shall be collected by hand in a 60- to 90- gallon container. Next, materials shall be sorted by commodity type and the results shall be weighed. The Residue shall also be separated manually and weighed. The results of the five (5) daily samples shall then be averaged to produce a characterization that shall be used to establish the percentage Diversion and the amount of Residue for the City's Clean MRF routes. This characterization process shall be repeated twice annually to establish the next six-months' tonnage allocation (e.g. percent Diverted and percent that is Residue) to account for seasonal fluctuations that will be included in the tonnage reports described in Attachment K.

The recyclable commodities sampled during this process shall be paper, cardboard, newsprint, mixed paper, plastics (#s 1 &2), mixed plastics, non-ferrous metals, tin, aluminum, Wood, Yard Trimmings, and other Recyclable materials as directed by the City.

Exhibit N.2 includes an example of the characterization data collection sheet that shall be used during the characterization.

Calculating Density on Service: For purposes of determining the average densities of components Collected, and as a metric to evaluate collection efficiencies and Container capacity utilization, the Contractor shall perform the following calculation:

For each stream sampled, the net tonnage of the materials Collected in the sampled trucks shall be calculated by dividing by the total tons Collected of the Recyclable Materials component by the total on-service cubic yards Collected to calculate a density for each of the streams and their components included in the audit.

For example, if five (5) loads sampled weighed a total of 50 Tons and were Collected from 1,000 cubic yards on service, the average "material on service density" for this stream would be 100 lbs. per cubic yard. Cubic yards on service shall be calculated using actual route data (i.e. if one route sampled collected 100 3-yard bins, the yards on service for that route would be 300 cubic yards).

Reporting: Contractor shall submit a written report to the City semi-annually beginning July 2019. The report will summarize the results of the characterization study, including a summary of all five (5) days of characterization results; the measured weights for each commodity; the percent of each commodity found in each sample and in aggregate; a description and photographs of the types of Residue materials found during the characterization study; the average density on-service for the materials sampled (i.e. load weights divided by yards collected); and any other data requested by the City. Upon approval by the City, the results of the characterization study shall be applied to the Tons delivered to the Clean MRF and Tons of Residue delivered to the Landfill from the Clean MRF in subsequent monthly reports and shall be in effect until the results of the next characterization study are approved by the City.

Attachment N Page 4 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
1 b. Characterization Protocol for Yard Trimmings and/or Food Scraps Delivered to Processing Facilities
The following protocol shall be used to conduct characterizations at the Processing Facilities where the following material components are processed:
• Residential stream - curbside Yard Trimmings component • Residential stream - curbside co-collected Yard Trimmings and Food Scraps component (if directed by City)
• Residential stream - curbside source-separated Food Scraps component (if directed by City)
• Commercial stream - Co-collected Food Scraps and Yard Trimmings component (if directed by City)
• Commercial stream - Source separated Food Scraps component • Commercial stream - Yard Trimmings component
• Multi-Family stream - Co-collected Food Scraps and Yard Trimmings component (if directed by City)
• Multi-Family stream - Source separated Food Scraps component (if directed by City)
• Multi-Family stream - Yard Trimmings component
If separate Processing Facilities are utilized for Food Scraps and Yard Trimmings, then separate characterization studies shall be conducted at each facility using the following protocol.

Timing: Characterization studies shall be conducted two (2) times each calendar year for each of the above-listed streams and components beginning July 2019 and December 2019. The timing for when the waste characterizations are conducted shall be staggered so that after two (2) years, one (1) characterization shall have taken place during each calendar quarter. For example, for contract year 2 (January 1 - December 31 , 2020), the Contractor shall conduct one characterization study of each stream from each sector in March 2020 (Calendar Quarter 1) and October 2020 (Calendar Quarter 4 ). In Contract Year 3 (January 1 - December 31 , 2021 ), the Contractor shall conduct one characterization of each stream from each sector in July 2021 (Calendar Quarter 3) and December 2020 (Calendar Quarter 4 ). Please see Exhibit N .1. for an example schedule of characterization studies that will be conducted over the course of the contract.

Methodology: For each characterization study, loads shall be sampled only from the specified stream (sector of origin). For example, a load sampled from Commercial Food Scraps route(s) shall not contain any Multi-Family Food Scraps.

Each characterization shall be done by hand (i.e. a manual sort not a mechanized sort) and total load weights shall be established for each load sampled. A five (5) day Attachment N Page 5 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
sampling for each component from each stream shall be conducted to account for changes in the material stream over a week's time.

A total of four (4) samples per load shall be manually sorted separately for each day.

Materials shall be collected using a grid method and shall be hand collected. The grid method assigns an imaginary XY axis over the load after it is dumped on the tipping floor.

Four (4) random number pairings between 0-20 (for the long dimension of the load i.e. length) and 0-10 (for the shorter dimension of the load i.e. width) shall be generated to identify the location of the samples on the load. Each sample shall weigh at least 50 lbs. and shall be collected by hand in a 60- to 90-gallon container. Next, materials shall be sorted into two categories by recoverability (below) and shall be weighed:

Processing Facility Category 1 - Materials Accepted at the Processing Facility:

Materials acceptable by the Processing Facility
Processing Facility Category 2 - Contamination: Materials that are considered Contamination and that are not accepted by the Processing Facility The Category 2 non-accepted materials shall also be separated manually and weighed.

Each non-recoverable material type shall be carefully photo-documented and included in the Contractor's report to the City. These daily samples shall then be averaged to produce a characterization that shall be used to establish the percentage Diversion and the percentage of Residue the City's Food Scrap and Yard Trimmings routes. This characterization process shall be repeated twice annually to establish the next 6- month's allocation to capture seasonal fluctuations. In the event of a significant rain event, characterizations of Yard Trimmings shall be delayed until dry conditions have returned for a one (1) week period.

Category 1 acceptable materials are dependent on the stream sampled but may include:

Food Scraps, Food Soiled Paper, Yard Trimmings, prunings, etc. Category 2 non acceptable materials types depend on the stream sampled and which Diversion programs are being provided by the Contractor, but may include: MSW, Recyclable Materials, glass, plastics, etc. Exhibit N-3 includes an example of the characterization data collection sheet that shall be used during these characterization studies.

Calculating Density on Service: For purposes of determining the average densities of components Collected, and as a metric to evaluate Collection efficiencies and Container capacity utilization, the Contractor shall perform the following calculation:

For each stream sampled, the net tonnage of the materials Collected in the sampled trucks shall be calculated by dividing by the total tons Collected of the Food Scraps component by the total on-service cubic yards Collected to calculate a density for each of the streams and their components included in the audit.

For example, if five (5) loads sampled weighed a total of 50 Tons and were Collected from 1,000 cubic yards on service, the average "material on service Attachment N Page 6 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
density" for this stream would be 100 lbs. per cubic yard. Cubic yards on service shall be calculated using actual route data (i.e. if one route sampled collected 100 3-yard bins, the yards on service for that route would be 300 cubic yards).

Reporting: Contractor shall submit a written report to the City semi-annually beginning September 2019. The report will summarize the results of the characterization study, including a summary of all five (5) days of characterization results; the measured weights for each commodity or category; the percent of each commodity/category found in each sample and in aggregate; a description and photographs of the types of Residue materials found during the characterization study; the average density on- service for the materials sampled (i.e. load weights divided by yards serviced); and any other data requested by the City. Upon approval by the City, the results of the characterization study shall be applied to the Tons delivered to the Food Scrap and Yard Trimmings Processing Facility(ies) and Tons of Residue delivered to the Landfill from Food Scraps and Yard Trimmings Processing Facility(ies) in subsequent monthly reports and shall be in effect until the results of the next characterization study are approved by the City. 1 c. Characterization Protocol for MSW Delivered to Disposal Site The following protocol will be used to conduct waste characterization studies at the City designated Disposal Site for the MSW component of the following streams:
• Residential stream - Curbside MSW component
• Commercial stream - MSW component
• Multi-Family stream - MSW component
Timing: Waste characterizations shall be conducted two (2) times each calendar year for each of the above-listed MSW streams with the first waste characterizations taking place beginning June 2019. The timing for when the waste characterizations are conducted shall be staggered and occur on a seasonal schedule so that each waste characterization includes all four seasons over a two-year period (e.g., Summer/Winter 2024; Spring/Fall 2025). CR&R will provide the City with a mutually agreed schedule for all future Waste Characterizations which will be reflected in Exhibit N-1 . Please see Exhibit N-1 for an example schedule of characterization studies that will be conducted over the course of the contract.

Sample Selection Methodology - Residential Curbside, Commercial and Multi family MSW: For each characterization , loads shall be sampled only from the specified stream (sector of origin). For example, a load sampled from Commercial MSW route(s) shall not contain any Multi-family MSW.

Methodology: Each waste characterization shall be done by hand (i.e. a manual sort not a mechanized sort) and total load weights shall be established for each load sampled.

The sampling period shall be five (5) consecutive days for MSW from each stream for account for changes in the stream's MSW over a week's time (e.g. one load of MSW from each targeted stream, sampled each day for five days).

Attachment N Page 7 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
A total of (four) 4 samples per load shall be manually sorted separately each day.

Materials shall be collected using a grid method and shall be hand collected. The grid method assigns an imaginary XY axis over the load after it is dumped on the tipping floor.

Four (4) random number pairings between 0-20 (for the long dimension of the load i.e. length) and 0-10 (for the shorter dimension of the load i.e. width) shall be generated to identify the location of the samples on the load. Each sample shall weigh at least 50 lbs. and shall be collected by hand in a 60- to 90-gallon container. Next, materials shall be sorted into the following four (4) categories by recoverability and weighed:

Category 1: Food Scrap or Yard Trimming materials accepted in Contractor provided Diversion programs
Category 2: Recyclable Materials accepted in Contractor-provided Recycling program
Category 3: MSW materials that are not accepted in any Contractor-provided Diversion program
Category 4: HHW, E-waste, U-waste materials that should not be thrown into the trash
These daily samples shall then be averaged to produce a characterization that shall be used to establish the percentage of Contamination for the City's MSW routes. This characterization process shall be repeated once annually to assess progress towards attainment of meeting performance metrics including Contamination caps.

For each stream sampled, the net tonnage of the materials Collected in the sampled trucks shall be calculated by dividing by the total tons Collected of the MSW component .by the total on-service cubic yards Collected to calculate a density for each of the streams and their components included in the audit.

Exhibit N-4 includes an example of the waste characterization data collection sheet that shall be used during these waste characterization studies.

Reporting: Contractor shall submit a written report to the City annually beginning October 2019. The report will summarize the results of the characterization study, including a summary of all five (5) days of characterization results; the measured weights for each commodity or category; the percent of each commodity/category found in each sample and in aggregate; a description and photographs of the types of Residue materials found during the characterization study; the average on-service Attachment N Page 8 of 18
Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
density for the materials sampled (i.e. load weights divided by yards serviced); and any other data requested by the City.
1d. Characterization Methodology for C&D Processing Facilities Twice annually beginning July 2019 and December 2019, Contractor shall report facility wide Diversion rates for all C&D Processing Facilities used by the Contractor. The Contractor shall provide facility-wide Diversion rate data and a written explanation , including calculations , of how the Diversion rate was calculated . The City may request source documentation supporting the facility-wide Diversion rate. Upon request by the City, the Contractor shall conduct a weight-based characterization study for materials Collected by Contractor in City and delivered to the Contractor's C&D Processing Facility over the course of a five (5) day period. The Contractor shall manually sort the contents of each of the C&D loads originating in the City by commodity types (including, at a minimum, Wood, concrete, asphalt, drywall/gypsum , bricks, metals, dirt, Yard Trimmings, and grubbing material) and weigh the separated commodities to calculate the Diversion rate.

Reporting: Contractor shall submit a written report to the City semi-annually beginning October 2019. The report shall summarize the results of the characterization study, including a roll-up of all five (5) days of characterization results; the measured weights for each commodity or category; the percent of each commodity/category found in each sample and in aggregate; a description and photographs of the types of Residue materials found during the characterization study; the average on-service density for the materials sampled (i.e. load weights divided by yards serviced); and any other data requested by the City. Upon approval by the City, the results of the characterization study shall be applied to the Tons delivered to the C&D Processing Facility and Tons of Residue delivered to the Landfill in subsequent monthly reports and shall be in effect until the results of the next characterization study are approved by the City.

Attachment N Page 9 of 18
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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols

2. On-site Field Container Contamination Audits
2a . Residential Curbside Field Contamination Audits
The following methodology shall be used to conduct on-site field Contamination audits of the following Residential curbside programs:
• Single-Stream Recycling
• Yard Trimmings/Wood
• Source-Separated Food Scraps (if directed by City)
• Co-collected Yard Trimmings and Food Scraps (if directed by City) • MSW
Timing: On-site field Contamination audits shall be conducted two (2) times each calendar year for each of above-listed programs. The timing for when the field Contamination audits are conducted shall be staggered so that after two (2) years, one (1) field Contamination audit shall have taken place during each calendar quarter with the first audit occurring June 2019. For example, for contract year 1 (1/1/2019-12/31/2019), the Contractor shall conduct one field Contamination audit of each stream in June 2019 (Calendar Quarter 2) and November 2019 (Calendar Quarter 4 ). In Contract Year 2 (1/1/2020 - 12/31/2020), the Contractor shall conduct one field Contamination audit of each stream in February 2020 (Calendar Quarter 1) and July 2020 (Calendar Quarter 3).

Methodology: Before the on-site field Contamination audits are conducted, the Contractor shall coordinate with the City to target specific Residential neighborhoods throughout the City. Each semi-annual on-site field Contamination audit shall target a minimum of two percent (2%) of the residences served by the Contractor in the City (approximately 250 accounts per audit) and shall take place over five (5) consecutive service days with each daily audit targeting a separate Residential route (e.g. approximately 50 accounts shall be audited per service day). The audits shall be conducted on all Containers placed at curbside by the resident for Collection (e.g. MSW, Recyclable Materials, and Yard Trimmings) before the Containers are Collected, in order to observe full Containers. Contractor shall open all bags encountered during the field audits. During the audits, the Contractor shall note all the following attributes on a City approved data collection form (see Exhibit N-3 for an example of this form):
• Fullness of each of the Carts set out for Collection (percent full - by volume) • Percentage, by volume, of observed Contamination in each of the Carts set out for Collection (i.e. MSW or Food Scraps in Containers for Recyclable Materials; Recyclable Materials, Food Scraps, and/or Yard Trimmings in MSW Container; Recyclable Materials or MSW in Yard Trimmings Container; Recyclable Materials and MSW in a Co-collected Yard Trimmings and Food Scraps Container) • Participation of residents in co-collection program, if applicable (i.e. the presence of Food Scraps in Yard Trimmings/Food Scrap cart)
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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
• Curbside placement rates (i.e. the absence of a Recyclable Materials or Yard Trimmings Container when an MSW Container is present at the curb) • The presence of bagged materials in Recyclable Materials, Food Scrap and Yard Trimmings Containers
• Total weight of each Cart for at least 20% of those sampled (weigh using portable scale)
If there is observed Contamination in excess of ten percent (10%) in any Cart, the Contractor shall place a hang-tag on the Cart notifying the Customer of the Contamination incident and how to correct it. The City shall approve of the hang-tag before it is placed into use. The Contamination items and quantities shall be noted and photographed. The photo number and Contamination item(s) shall be noted in the field data collection sheet.

Reporting: Contractor shall submit a written report to the City semi-annually beginning in October 2019. The report will summarize the results of the monitoring program, the number of households monitored, the number of non-participants , Contamination incidents for each six-month period, the average fullness levels of each Residential component, the average weights of each component , the average observed Contamination levels for each component, specific Contaminants found in each component , photos supporting the findings , and an action plan to reduce Contamination if observed levels exceed ten percent (10%).
2b . Commercial /Multi-family In-Field Container Contamination Audits The following methodology shall be used to conduct on-site field Contamination audits of the following Commercial and Multi-Family programs:
• Single-Stream and Single-Material Recyclables
• Source separated Food Scraps
• Yard Trimmings
• Co-collected Yard Trimmings and Food Scraps (if directed by City) • MSW
Purpose: To quantify the volume of Divertible materials (i.e. Recyclable Materials, Yard Trimmings and Food Scraps) in Commercial MSW Containers in order to measure the efficacy of Source-Separated Recycling and Food Scrap Collection programs; and the data gathered from the on-site field Container Contamination audits will help the City to determine the following :
1) If there are Divertible materials still being deposited in the MSW Bins/Carts after a Single Stream and/or Single Material Recycling program and a Food Scrap Collection program have been implemented.
2) The levels of Contamination in Single-Stream Recycling and Food Scrap Collection Bins as well as in MSW Bins/Carts.

Attachment N Page 11 of 18
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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
3) The types, weights, volumes, and densities of materials being placed into the MSW Bin/Cart after a Single Stream and/or Single Material Recycling program and a Food Scrap Collection program have been implemented.
4) Identify specific Customers where additional outreach, education and training is needed.

Timing: On-site field Contamination audits shall be conducted on an on-going basis and incorporated into the Recycling Coordinators' daily site work so that annually all Commercial and Multi-Family Customers in the City will receive at least two (2) field Contamination audits of all of the above-listed components. Audits shall commence in January 2019 and continue throughout the Term.

Methodology: Using a field data sheet collaboratively developed and approved of by the City, Contractor shall note the following attributes for all Bins and/or Carts present at each Customer:
• Capacity utilization (i.e. Bin/Cart percent full by volume) • Percentage, by volume, of Recyclable Materials and Food Scraps found in each Bin/Cart
• Percentage, by volume, of MSW found in the Single Stream Recyclables and/or Food Scrap and/or Yard Trimmings Bin/Cart(s)
• Percentage, by volume, of Divertible Food Scraps and of Recyclable Materials found in the MSW Bin/Cart (percentage of each material) • Percent fullness of each Bin/Cart associated with the account • Serial numbers or bar code numbers on the Bins/Carts
• Weight of a minimum of ten percent (10%) of the Food Scrap Carts audited • Date of site visit
• Photo number(s)
• Discrepancies between field inventories and account service database (i.e. what equipment the Customer has compared to what that Customer is being billed for) • Any other notable observations.

The on-site field Contamination audits shall be conducted as close as possible to the regular Collection day and time for the Bins/Carts in order to obtain an accurate assessment of the Bin/Cart contents at the time of routine Collection. All field observations shall be photo-documented and photo numbers tracked on the field data collection sheet.

Reporting: Contamination field audit data shall be tracked in a shared document, updated daily and accessible at any time by both the City and the Contractor, via a cloud-based server such as Dropbox or Box.net. This field Contamination audit data shall be incorporated into the account interaction tracking document (Red Green Tracking Spreadsheet) described in Attachment K. Twice annually, in March and in September, (beginning March 2019 and September 2019) the Contractor shall submit a Attachment N Page 12 of 18
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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
summary report with all year-to-date data aggregated and analyzed. Key metrics in the report shall include:
• Average Bin/Cart capacity utilization by stream and component • Average Contamination percentage levels, by volume, by stream, by component and by Contamination types
• Material densities by stream and by component, accounting for capacity utilization
• Any disparities between field observations and service discrepancies • Photos and descriptions of common Contaminants encountered • If Contamination exceeds ten percent (10%) by component, an action plan to reduce Contamination
• Actions taken to reduce Contamination during the reporting period • Other notable data

3. Third-Party Assessment of Performance Metrics For Earning First Contract Extension
In order to determine whether Contractor has earned the First Extension Opportunity described in Article 6 of the Agreement , the City will utilize the assessments described below.

3.a. Assessment of Phase 1 Performance Metrics

1. AB 341 Commercial and Multi-family Single Stream & Single Material Collection Program Implementation.

Attachment N
a. The City or its representative will conduct site surveys of all AB 341 accounts as determined by City in its sole discretion. The site surveys will determine whether the programs are in place, whether the Customer is fully participating in the program, whether or not the program exceeds the maximum Contamination levels described in Attachment B, Section 3.3.6, and whether the Customer is in compliance with the requirements of AB 341. In order for a Customer's program to be found to be "fully implemented", Contractor must have completed all steps for program implementation listed in Section 3.3.6 of Attachment B to the satisfaction of City. In order to earn the first one-year extension, Contractor must have "fully implemented" an AB 341 program at all Customers required to have a program as set forth in PRC Section 42649 et seq. Customers on the list of "Non-Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" shall not count against Contractor with regard to earning the First Extension Opportunity as described in Section

6.08A of the Agreement.

Page 13 of 18 ends

Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols

2. AB 1826 Food Scrap Program implementation
Attachment N
a. The City or its· representative will conduct site surveys of all AB 1826 accounts, as determined by City in its sole discretion. The site surveys will determine whether the programs are in place, whether the Customer is fully participating in the program, whether or not the program exceeds the maximum Contamination levels described in Attachment B, Section 3.3.6, and whether the Customer is in compliance with the requirements of AB 1826. In order for a Customer's program to be found to be "fully implemented", Contractor must have completed all steps for program implementation listed in Section 3.3.6 of Attachment B to the satisfaction of City. In order to earn the first one-year extension, Contractor must have "fully implemented" an AB 1826 program at all Customers required to have a program as set forth in PRC Section 42649.8 et seq. Customers on the list of "Non-Compliant Customers Referred to City for Compliance Action Under Mandatory Ordinance" shall not count against Contractor with regard to earning the first one-year extension as described in Section 6.09 of the Agreement.

Note: In order to earn the first one-year extension, Contractor must have completed all the implementation steps contained in Section 3.3.6 of Attachment B. The City will be monitoring results of the characterizations and the audits to determine the levels of Contamination in Single Stream Recyclable Materials, Single Material Recyclables and Food Scraps. If Contractor fails to achieve the Contamination limits contained in Attachment B, Section 3.3.6, (xi) Contractor must be working with the business owners, managers and employees to re-train, troubleshoot and otherwise provide technical assistance to reduce the Contamination.

Those efforts are required in order to earn the First Extension. However, failure to actually achieve the Contamination limits at 100% of all AB 341 and AB 1826 Customers is not required in order to earn the First Extension, and will not count against Contractor for purposes of earning the First Extension.

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Attachment N
Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
Exhibit N-1: Sample Schedule of Characterization Studies to be Conducted During the Course of the Contract
Contract YR 1 YR 2 YR 3 YR 4 YRS Year-+
Calendar
Years* -+
Stream, 2019 2020 2021 2022 2023
Com ponent J,
::0 SS/SM 6/19, 2/20, 6/21, 2/22, 6/23,
m RECYC 11/19 7/20 11/21 7/22 11/23
(f)
7/19, 3/20, 7/21, 3/22, 7/23, 0 YT m 12/19 10/20 12/21 10/22 12/23 z 7/19, 3/20, 7/21, 3/22, 7/23, ---1 YT/FS ♦ )> 12/19 10/20 12/21 10/22 12/23 r MSW 6/19 9/20 12/21 2/22 6/23
SS/SM 6/19, 2/20, 6/21, 2/22, 6/23,
RECYC 11/19 7120 11/21 7/22 11/23 ()
7/21, 3/22, 7/23, 0 FS 7/19, 3/20,
s:: 12/19 10/20 12/21 10/22 12/23 s:: m YT 7/19, 3/20, 7/21, 3/22, 7/23, ::0 12/19 10/20 12/21 10/22 12/23 ()
)>
FS/YT ♦
7/19, 3/20, 7/21, 3/22, 7/23, r 12/19 10/20 12/21 10/22 12/23 MSW 6/19 9/20 12/21 2/22 6/23
Key
SS = Source-Separated Recyclable Materials
SM = Single-Materials Recyclable Materials
YT= Yard Trimmings
YR 6 YR 7
2024 2025
2/24, 6/25,
7/24 11/25
3/24, 7/25,
10/24 12/25
3/24, 7/25,
10/24 12/25
9/24 12/25
2/24, 6/25,
7/24 11/25
3/24, 7/25,
10/24 12/25
3/24, 7/25,
10/24 12/25
3/24, 7/25,
10/24 12/25
9/24 12/25
YT/FS = Co-collected Yard Trimmings and Food Scraps
MSW = Municipal Solid Waste
YR 8 YR9 YR YR
10 11
2026 2027 2028 2029
2/26, 6/27, 2/28, 6/29,
7/26 11/27 7/28 11/29
3/26, 7/27, 3/28, 7/29,
10/26 12/27 10/28 12/29
3/26, 7/27, 3/28, 7/29,
10/26 12/27 10/28 12/29
2/26 6/27 9/28 6/29
2/26, 6/27, 2/28, 6/29,
7/26 11/27 7/28 11/29
3/26, 7127, 3/28, 7/29,
10/26 12/27 10/28 12/29
3/26, 7/27, 3/28, 7/29,
10/26 12/27 10/28 12/29
3/26, 7/27, 3/28, 7/29,
10/26 12/27 10/28 12/29
2/26 6/27 9/28 6/29
YR
12 2030
2/30,
7/30
3/30,
10/30
3/30,
10/30
9/30
2/30,
7/30
3/30,
10/30
3/30,
10/30
3/30,
10/30
9/30
*For the purposes of this table, calendar years begin January 1 and end December 31 . Symbol indicates that these programs will be characterized if directed by the City Attachment N Page 15of18
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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
Exhibit N-2: Characterization Form for Single-Stream/Single-Material Being Delivered to Clean MRF
City
Day
Date
Time
Route
Origin
Truck Numbe r
Total Sample Weight
Total Load Weight

A B C D
Tota l Weig ht Conta iner Weight Net Weight (A-B=C) Percenta ge Alum inum -
Tin -
PET( # l ) -
HOPE ( # 2) -
Mixed Plastic ( 3- 7) -
Glass -
Newspaper -
Mixed Paper -
Cardboard -
Metal -
Texti les -
Film Plastic -
Total Recyclables - -
Residue -
Tota l - -
Load Diversion Percentage
Notes :

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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
Exhibit N-3: Characterization Form for Food Scraps and Yard Trimmings/Wood Being Delivered to Processing Facility
City
Day
Date
Time
Route
Origin
Truck Number
Total Sample Weight
Total Load Weight

A B C D
Total Weight Container Weight Net Weight (A-B=C) Percentage Category 1: Food Scraps
Category 1: Yard
Trimmings
Category 1: Food Soiled
Paper
Total Category 1
Organics
Category 2: MSW I tems
-
Category 2: Recyclable
Item s -
Total Category 2
Contamination
Total (Cat 1 + Cat 2)
- - -
Load Diversion
Percentage -
Notes/ Notas:

Attachment N Page17of18
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Processing Facility Characterizations and Onsite Field Container Contamination Audit Protocols
Exhibit N-4: Characterization Form for MSW
City
Day
Date
Time
Route
Ori gin
Truck Number
Tota l Samp le Weight
Total Load Weight

A B C D
Total Weioht Container Weioht Net Weioht (A-B=C) Percentaoe Category 1: Food Scraps
Category 1: Yard
Trimm ings
Category 1: Food Soiled
Paper
Total Category 1
Organ ics
Category 2: Recyclable
Fibers
Category 2: Recyclable
Plastics
Category 2: Recyclable
Metals
Category 2: Recyclable
Glass
Total Category 2
Recyclables
Total Category 3 MSW
Total (Cat 1 + Cat 2 +
Cat 3) - - -
Load Recoverability
Percentage -
Notes:

Attachment N Page18of18

Laguna Niguel City CouncilJune 16, 2026

Laguna Niguel City Council
June 16, 2026