HomeMy WebLinkAbout5.717 Original Contract Task Order
CONTRACT: Solid Waste Processing Facility, Development and Management Services Agreement Between
the City of Port Angeles, Washington and Waste Connections of Washington, Inc.
Task Order Number: TO -12 -001
Title: Material Screening
Location of Work: Decant Facility
Task Service:
1. Waste Connections Inc (Contractor) shall provide screening service for material at
Decant Facility. There are approximately 650 yards of material to be screened. The
Contractor shall screen material and remove debris large than 5/8 The Contractor
shall load debris in City of Port Angeles vehicle for City personnel to empty when full.
2. Work shall be performed in the Not to Exceed (NTE) amount of $5,837.00, sales tax
included. The amount will be paid as a lump sum payment following work completion
and invoicing. The price includes both labor and equipment.
Performance Period. The performance period for this task shall be completed no later than
August 31, 2012. The Contractor shall schedule commencing and completion of work
accordingly to prevent interference in daily operation of Transfer Station activities and existing
work of Co- compositing.
Waste Connections Inc: City of Port Angeles:
Z +46=,/enk rnsli Dan Mc nage f7�3�r� City Manager
Name and Title of Signer Name and Title of Signer
Signa ure Signature
V 60 4 e1
Date Date
Task Order
CONTRACT: Solid Waste Processing Facility, Development and Management Services Agreement Between
the City of Port Angeles, Washington and Waste Connections of Washington, Inc.
Task Order Number: TO -11 -001
Title: Material Screening
Location of Work: Decant Facility
Task Service:
1. Waste Connections Inc (Contractor) shall provide screening service for material at
Decant Facility. There are approximately 700 yards of material to be screened. The
Contractor shall screen material and remove debris large than 5/8 The Contractor
shall load debris in City of Port Angeles vehicle for City personnel to empty when full.
2. Work shall be performed in the Not to Exceed (NTE) amount of $6,287.20, sales tax
included. The amount will be paid as a lump sum payment following work completion
and invoicing. The price includes both labor and equipment.
Performance Period. The performance period for this task shall be completed no later than
November 10, 2011. The Contractor shall schedule commencing and completion of work
accordingly to prevent interference in daily operation of Transfer Station activities and existing
work of Co- compositing.
Waste Connections Inc:
ignatu`re 'SiXiature
WG/ 7/201,� 77/
Date bate
City of Port Angeles:
Kent Myers
Citv Manager
Name and Title of Signer
5: 7!`7
Legal Dept.08.25.11
AMENDMENT
TO
SOLID WASTE PROCESSING FACILITY DEVELOPMENT AND MANAGEMENT
SERVICES AGREEMENT
BETWEEN
THE CITY OF PORT ANGELES AND WASTE CONNECTIONS OF WASHINGTON, INC.
THIS AMENDMENT to the Solid Waste Processin,z Facility Development and Management
Services Agreement dated April 5, 2005 is made this apa of 2011, by and
between the City of Port Angeles, a Washington municipal corporation, h reinafter the "City and
Waste Connections of Washington, Inc., a Washington corporation, hereinafter the "Contractor
IN CONSIDERATION of the representations and the agreements set forth herein, the parties
agree that the Agreement shall be amended as follows:
REPRESENTATIONS:
1. On April 5, 2005, the City and Contractor entered into the Solid Waste Processing
Facility Development and Management Services Agreement. That Agreement is
incorporated herein by this reference and hereafter may be referred to as "the
Agreement
2. The parties agree that it is in their mutual benefit to amend Section 13.1(c) of the
Agreement to better express the mutual intent of the parties.
3. Except as expressly stated below, and as previously amended by written agreement,
the Agreement is ratified and confirmed
AGREEMENTS:
A. Section 13.1(c) of the Agreement dated April 5, 2005 is amended by changing the
language in the first paragraph of Section 13.1(c) as follows:
(c) The Contractor shall provide each and every Drop Box Facility Commercial
Hauler and Customer a serialized receipt for Disposal Charges at the Drop
Box Facility, with copies retained by the Contractor in accordance with the
Agreement, in order that the City may accomplish an audit of the
transactions. Within ten (10) business days following the end of each month,
the Contractor shall provide the City's Authorized Representative a written
list and electronic copy (in a format to be specified by the City's Authorized
Representative) of all serialized receipts and Disposal Charges collected by
5. 77
Legal Dept.08.25.11
AGREED TO BETWEEN THE PARTIES and effective on the last date written below.
WASTE CONNECTIONS OF WASHINGTON, INC.
By
Name:
Title:
ATTEST
CITY OF PORT ANGELES
By Kent M
City M. er
By. Janessa Hurd
City Clerk
the Contractor from Customers using the Drop Box Facility for the previous
month accompanied by Contractor payment to the City in the full amount of
said Disposal Charges. Each serialized receipt shall include the date and time
of service, net weight, payment method, waste type, and Disposal Charge.
G ILEGALta AGREEMENTS &CONTRACTS'2011 Agmds &Contracts\SOLID WASTE Amendment 08 18 11 wpd
2
1/.
Date
Date
APPROVED AS TO FORM
By:
q /a
W1i1iani.Bloor
City Attorney
5.7/7-;2.
FIRST AMENDMENT TO
SOLID WASTE PROCESSING FACILITY DEVELOPMENT AND MANAGEMENT
SERVICES AGREEMENT
BETWEEN
THE CITY OF PORT ANGELES AND WASTE CONNNECTIONS OF WASHINGTON,
INC.
THIS AMENDMENT to the Solid Waste Processing Facility Developme~
M~~:~tt~t Services Agreement is made at)~~ entered into in duplicate thi~ ay of
~ h___ , 2005 by and betwetln the City of Port Angeles, a Washington
municipal corporation, hereinafter the "City", 'and Waste Connnections of Washington,
Inc., a Washington corporation, hereinafter the "Contractor".
IN CONSIDERATION of the representations and the agreements set forth herein,
the parties agree that the Agreement shall be amended as follows:
REPRESENTATIONS
1. On April 5, 2005, the City and Contractor entered into the Solid Waste
Processing Facility Development And Management Services Agreement. That
Agreement is incorporated herein by this reference and hereafter may be referred to as
"the Agreement."
2. The parties agree that it is in their mutual benefit to amend the Agreement to
provide for Water Treatment Plant earthwork in accordance with the terms of Section 2.12
of the Agreement (Amendments to the Agreement) and the terms set forth below.
3. Except as expressly stated below, the Agreement is ratified and confirmed.
AGREEMENTS
A. Section 1 of the Agreement is amended by adding the following definition:
page 1
B. Section 17.4 of the Agreement is amended, in its entirety, to read as follows:
Section 17.4 Service Component I Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Transfer Station Service Fee in
accordance with this Section, as long as the Contractor is providing the services in
accordance with the requirements of the Agreement; provided, however, that in the event
of a dispute under the Agreement relating to such Fees, including an administrative
hearing under Section 7 or 8, the City shall pay any undisputed amounts to the Contractor
in accordance with the payment terms under the Agreement. Disputed amounts resolved
in the Contractor's favor shall be paid immediately upon resolution, and shall include a
finance charge in the amount of six percent (6%) per annum covering the period from the
original due date of such Fees through the date of payment upon such resolution.
(b) The Contractor's Transfer Station Service Fee will provide for monthly
payment to the Contractor in accordance with Exhibit A, which Service Fee shall be
adjusted annually as provided in Section 17.2. The Transfer Station Service Fee will
consist of the following:
. A fixed monthly fee for capital, financing, equipment and other fixed costs.
The fixed monthly fee shall be modified in accordance with Section 2.15 if
there is a difference between the Contractor's Transfer Station as-built site
plan specified in Section 1.7.7 of the Performance Specifications and the
City approved Transfer Station site plan and shall be based on the
Contractor's unit prices in accordance with the Technical and Cost
Proposal. The fixed monthly fee shall be modified in accordance with
Section 2.15 if there is a difference in cost between the City approved
design and construction documents for the card reader system and the card
reader system allowance in accordance with the Technical and Cost
Proposal. This fee shall not be adjusted in accordance with Section 17.2.
. A monthly fee for operation of the Transfer Station based on the actual tons
of Acceptable Waste (excluding Yard Waste, Biosolids, White Goods,
Recyclable Materials, Acceptable HHW, and Acceptable Moderate-Risk
Waste) received by the Contractor at the Transfer Station. The Contractor
shall be compensated according to the unit prices for the various tonnage
ranges shown in Exhibit A.
· The monthly fee for operation of the Transfer Station shall not include any
Acceptable Waste (excluding Yard Waste, Biosolids, White Goods,
Recyclable Materials, Acceptable HHW, and Acceptable Moderate-Risk
Waste) received by the Contractor on the annual benefit dump day, limited
to the Facility's capacity which shall be determined at the Contractor's
discretion. There shall be no reduction to the fixed monthly fee under
Service Component I on account of the annual benefit dump day.
. In the event the City or Clallam County retains a portion or all of the used
motor oil and the Contractor's cost to provide HHW service changes, the
page 2
Parties agree to negotiate mutually acceptable terms and conditions in
accordance with Section 2.15.
(c) Within thirty (30) days of City acceptance of the completed earthwork. the
City shall make a one-time Earthwork Payment representina payment in full for Water
Treatment Plant earthwork in accordance with Exhibit A and Form 7.1A contained therein.
The Earthwork Payment shall not exceed the amount of $329.498.00.
The Contractor's monthly Transfer Station Service Fee shall be calculated as
follows:
MSFI = FMF
+ AVF1 x (Actual tons up through 45,000 tons during a calendar year)
+ AVF2 x (Actual tons from 45,001 to 60,000 tons during a calendar year)
+ AVF3 x (Actual tons over 60,000 tons during a calendar year)
where:
A VF2 =
Total Monthly Service Fee for Service Component I.
Fixed Monthly Fee for the Transfer Station.
Adjusted unit price per ton for the first 45,000 tons during a calendar
year.
Adjusted unit price per ton for 45,001 to 60,000 tons during a
calendar year.
Adjusted unit price per ton for over 60,000 tons during a calendar
year.
Tons = Monthly tons received and handled.
NOTE: Tonnage shall be rounded up to the nearest ton.
MSFI =
FMF =
AVF1 =
A VF3 =
C. Section 4.6.2.8.2 of Exhibit A of the Agreement is amended, in its entirety, to read
as follows:
4.6.2.8.2 Topographic Conceptual Site Plan
The Site Plan is a general arrangement drawing showing the proposed locations of
buildings, structures, roadways, parking areas, and pavement elevations. The delineated
on-site roadways will be improved to accommodate anticipated traffic volumes and
vehicle types. Roadways (12-ft. lanes), parking, and maneuvering areas will be designed
with pavement thicknesses and subgrade materials meeting City Standards. Important
features designed into these improvements include sufficient road widths and curve radii
to accommodate tractor and chassis lengths in excess of 70-ft. In general, road grades
page 3
will not be steeper than 5 percent. P9 shows the off-site roadway (18th Street), as well as
the existing entrance road on the north part of the site, that will be improved by the City.
Grading of the transfer station site will be compatible with the grading requirements of the
water treatment plant and its vehicle entrance, and the existing site-entrance road after it
has improved to handle the transfer station traffic. The firing range berm will not be
relocated; its top and western face will remain unchanged, while grading/reshaping of the
eastern face will be minor. Earthwork for the Water Treatment Plant will be compatible
with the Qradina requirements of the Transfer Station.
See 4.6.2.8.4 for a discussion of transfer building's expandability to meet 100 percent of
the 20-year term waste loading. The large trailer yard north of the building provides
ample parking and maneuvering space for transfer trailers and containers on chassis.
The Information Kiosk, an 8-foot square structure next to the self-haul doors of the
transfer building, provides a convenient place for customers to obtain recycling and solid
waste fact sheets.
The site is subject to strong winds. Planting windbreaks and litter fences will be
incorporated to control wind-blown litter on the site, as well as operational controls such
as daily litter patrols. Bird wires may be used to discourage gulls from frequenting the
facility.
D. Section 1.6.2 of Exhibit B of the Agreement is amended, in its entirety, to read as
follows:
1.6.2 Submission, Review, and Approval of Design Documents
During design of the facilities, the Contractor's Authorized Representative shall make
available for the City's Authorized Representative review and approval, all plans,
drawings, calculations, construction materials, specifications, schedules, and other
documents related to the design and construction of the facilities. These documents shall
be provided with the 50 and 95% percent design, and 100% design submittals as
provided in Table B.1-1. The City's Authorized Representative will have final approval
authority for the design and construction documents. The design shall be based on the
Contractor's conceptual design. The design shall evaluate priorities, assumptions, if
spaces or functions can be shared or co-located, if Facility size is adequate, and to
optimize use of the site. The Contractor's Authorized Representative shall also provide
as-builts in accordance with the Project Construction Schedule. The City's Authorized
Representative review of the reference materials will be limited to determining whether
the design conforms to the requirements of the Performance Specifications and the
Service Agreement. The reviews and any comments made by the City's Authorized
Representative on the plans, specifications, drawings, schedules, and the like, shall not
relieve the Contractor from its obligations under the Service Agreement, and those
representations made in its Technical and Cost Proposal. The Contractor shall not
commence construction or operations until the City's Authorized Representative approves
the design and construction documents, and the Preliminary Operations Plan.
page 4
The Contractor's Authorized Representative shall submit for the City's Authorized
Representative review and approval, at a minimum, the following design documents:
. General Facility site layout (scale not smaller than 1 inch equals 50 feet).
. A site plan including a calculation of the excavation/cut, fill/compaction, and
haul excess material quantities based on the City provided site topographic
survey in accordance with the Technical and Cost Proposal. The site plan
shall identify where excess materials shall be stored on-site by the
Contractor at the time of excavation.
. An earthwork plan that coordinates cuttina and fillina activities in
accordance with the Statement Of Work under Task Aareement No. 1 of the
Cooperative Aareement between the United States of America. actina
throuah the Department of Interior. National Park Service. Olvmpic National
Park and the City and the Contractor's Technical and Cost Proposal.
. Building Plans: floor plans, sections, elevations, interior and exterior details,
finish schedules, and specifications.
. Electrical and mechanical drawings.
. Grading drainage utility drawings.
. On-site roadway improvements.
· General equipment arrangements and elevation drawings.
. Traffic control/traffic flow.
. Control system schematic and logic.
. Major equipment specifications.
. Status of construction permits.
. Status of equipment procurement.
. Assumptions.
· Materials to be used in construction, including brand name or model
number, copies of manufacturer's descriptive literature, or catalog cut-
sheets.
Within 15 days of receipt of all review documents, the City's Authorized
Representative will meet with the Contractor's Authorized Representative to discuss the
documents, and identify any required changes. In the event that the City's Authorized
Representative design review determines that the Facility design, construction
documents, or Preliminary Operations Plan are not consistent with the Technical and
Cost Proposal, the Performance Specifications, or the Service Agreement, the City's
Authorized Representative, will provide the Contractor's Authorized Representative with a
written notice of any required changes. The Contractor's Authorized Representative shall
promptly correct any changes required by the City's Authorized Representative.
The City's Authorized Representative review and approval of these design
materials will not constitute a determination as to the sufficiency or adequacy of the
page 5
design plans, specifications, or engineering or construction judgments made by the
Contractor, nor shall the review act as a waiver of liability or relieve the Contractor of any
obligation to design, construct, and operate the Facility in a manner which conforms to
the Performance Specifications and the Service Agreement.
Nothing in this section shall excuse the Contractor from proceeding with
performance of its obligations under the Service Agreement.
E. Section 1.7.4 of Exhibit B of the Agreement is amended, in its entirety, to read as
follows:
1.7.4 Facility Site Preparation
The Contractor shall be responsible for site preparation. All permit applications for
site preparation shall be the responsibility of the Contractor. The Contractor may Dispose
of unsuitable fill material excavated from the Transfer Station and Water Treatment Plant
site~ at the Port Angeles Landfill at no charge. Site preparation by the Contractor for the
Transfer Station and Water Treatment Plant includes but is not limited to:
. Site grading.
. Extending and connecting Utilities, including stormwater, sanitary sewer,
potable water, temporary provision of bottled water for potable purposes,
electrical, and telecommunications.
· Connecting the Co-Composting Facility's leachate collection system to the
sanitary sewer.
. Security improvements in accordance with the Contractor's Technical and
Cost Proposal.
. Improvement of on-site roads, including overlay, widening, and drainage
controls to accommodate the change in the on-site traffic circulation
resulting from the Transfer Station development. The Contractor shall
improve on-site roadways in a manner that provides access to the Transfer
Station, scale house, Co-Composting Facility, Moderate-Risk Waste Facility
(MRWF), and other site facilities, and maintains existing drainage and
stormwater controls.
· Cuttina and fillina activities at the Transfer Station and Water Treatment
Plant. relocatina a portion of the east berm of the firina ranae. preparina an
area that will support the Transfer Station main structure. and shapina the
area between the Transfer Station and Water Treatment Plant in
accordance with the Statement Of Work under Task Aareement NO.1 of the
Cooperative Aareement between the United States of America. actina
throuah the Department of Interior. National Park Service, Olvmpic National
Park and the City.
page 6
F. Section 1.7.7 of Exhibit B of the Agreement is amended, in its entirety, to read as
follows:
1.7.7 Completion of Construction
Upon notification by the Contractor's Authorized Representative, the City's
Authorized Representative shall inspect the Facility for completion and
conformance to the City's Authorized Representative's approved design and
construction documents, and any City approved modifications. Prior to Startup,
the Contractor's Authorized Representative shall provide the City's Authorized
Representative with as-built documentation for all Contractor-constructed features.
The as-built site plan for the Transfer Station and aradina plan for the Water
Treatment Plant shall include a separate calculation of the actual excavation/cut,
fill/compaction, and haul excess material quantities based on the City provided site
topographic survey.
The City's Authorized Representative will review the as-builts and, as appropriate,
notify the Contractor's Authorized Representative that construction is approved.
page 7
G. Itemized List F (page 3) of the Technical and Cost Proposal form 7.1A of Exhibit A of the
Agreement is amended, in its entirety, to read as follows:
FORM 7.1A
TECHNICAL AND COST PROPOSAL
OTHER BREAKDOWN
Itemized List F
7.1A# Description Quantity Unit Unit Cost TOTAL Comments
Site Improvement, Prep, Utilities $ 991 ,000 TOTAL
5 Total excavation/cut - TS 50,000 CY $ 332 $ 166,000 raise Transfer Bldg & Trailer Parking by
5 Fill/compaction - TS 15,000 CY $ 7.20 $ 108,000 -1 ft to reduce cuVfill
5 Structural fill/compaction - TS 5,000 CY $ 10.00 $ 50,000
5 Haul excess matenal 30,000 CY $ 1.20 $ 36,000
5 Dewatenng 1 LS $ 5,000 $ 5,000
5 Potable Water/Fire Main 1 LS $ 134,000 $ 134,000 pipe, hydrants, meters, backflow
5 Sanitary Sewer 1 LS $ 75,000 $ 75,000 2 11ft stations, pipe
5 Storm Drainage System 1 LS $ 134,000 $ 134,000 pipe, ditch, culvert
5 Curbs 200 LF $ 40 $ 8,000
5 Stnplng 1 LS $ 2,000 $ 2,000
5 Site Concrete -- sidewalks, etc 20 CY $ 300 $ 6,000
5 Litter Fence 1,000 LF $ 30 $ 30,000
5 Slgnage 1 LS $ 5,000 $ 5,000
5 Landscaping 1 LS $ 15,000 $ 15,000
5 Power Supply & dlstnbutlon 1 LS $ 126,000 $ 126,000
5 Site Lighting 1 LS $ 52,000 $ 52,000
5 2" condUits for City's telecomm 1 LS $ 39,000 $ 39,000
5 finng range berm - not relocated 0 CY $ 2.40 $ Included In TS excavation/cut. berm IS not
relocated, height & west are unchanged,
east slope IS regraded
Earthwork for areas impacted bv
Water Treatment Plant $ 329.498
~ Cleanna & tOPsoil stripPlna LS $2.000 00 $ 2.000
Water Treatment Plant excavation
~ (area A) 0 CY $3 32 $
Water Treatment Plant Enalneered Fill
~ (area A) 2.450 CY $1000 $ 24.500
~ Flnna ranae berm excavation (area B) 2.300 CY $2 40 $ 5.520
~ Flrina ranae berm fill (area B) 10.350 CY $720 $ 74.520
~ Facilltv excavation (area C) 6.900 CY $3 32 $ 22.908
~ Facllltv enalneered fill (area C) 19.505 CY $10 00 $ 195.050
~ EnQlneenna desian & speCifications 1 LS $5.000 00 $ 5.000
page 8
TECHNICAL AND COST PROPOSAL
OTHER BREAKDOWN
Itemized List D
1
2
21 Tarp Station
21 Pit Scales
21 Card Reader System Allowance
29 Sweeper
29 Pick Up Truck
1 Unit
$ 30,000
$ 40,000
$ 70,000
$ 140,000
$ 30,000
$ 20,000
$ 50,000
page 9
AGREED TO BETWEEN THE PARTIES and effective on the last date written below.
WA
By
Name
Chairman, Chief Executive Officer
Title
CITY OF PORT ANGELES
?1-L~.~
By
MARl< E-. MA~~N
Na~e
. I T V f./t..ANA(b~ f<-
Title
ATTEST:
.pO~~ .))ptoA
])E2J1-XY J'. [).pT 0 N
Name
City Clerk
Date
, 0 / z,.o I-z..oo~
Date
~A~TO~
By
W:/I/~rM J)/.(J{)r
Name
City Attorney
N IPWKSILIGHTlPOWMISWASTEIWC NEGOTlATIONlSOLlD WASTE SERVICE AGREEMENT AMENDMENT 1 093005 DOC
'-
page 10
~.<.I
DATE:
To:
FROM:
SUBJECT:
5.7J7~
c2 af,(M
~RTANGELES
WAS H I N G TON, U. S. A.
CITY COUNCIL MEMO
September 20, 2005
CITY COUNCIL
Glenn A. Cutler, Director of Public Works and Utilities
Solid Waste Services Agreement Amendment & National Park Service Agreement
Summary: The Water Treatment Plant (WTP) construction schedule has been delayed which
impacts construction of the Transfer Station (TS). Agreements have been negotiated with Waste
Connections and the National Park Service to complete the earthwork for the WTP to ensure that
construction of the TS is not delayed.
Recommendation: Authorize the City Manager to sign 1) the Agreement with the National
Park Service - Olympic National Park (NPS-ONP), and 2) the amendment to Solid Waste
Processing Facility Development and Management Services Agreement with Waste
Connections of Washington, Inc., and 3) authorize the City Manager to approve minor
chan es, if necessa , to the a reements.
Background/Analysis: On AprilS, 2005, the City Council approved the Solid Waste
Processing Facility Development and Management Services Agreement with Waste Connections
of Washington, Inc. A key component of the agreement includes construction ofthe TS, which
is needed as the City shifts to a waste export system.
The start of construction of the WTP has been delayed, which impacts the TS construction
schedule. It is imperative that construction of the TS not be delayed since the landfill is
anticipated to close by December 31, 2006. In cooperation with the National Park Service and
Waste Connections, staff negotiated an amendment to the agreement with Waste Connections for
Water Treatment Plant earthwork, the cost of which would be reimbursed to the City by
agreement with the National Park Service.
The proposed amendment to the Services Agreement includes City payment of a lump sum to
Waste Connections for earthwork (limited to areas agreed upon between Waste Connections,
NPS-ONP and the City). City payment to Waste Connections for a portion of the TS earthwork
is already covered in the Services Agreement. The proposed agreement with the NPS-ONP
includes reimbursement to the City for the additional work anticipated to be accomplished under
the WTP construction contract. The agreements between the NPS-ONP will make the City and
Waste Connections whole.
N \CCOUNCIL\CC2005\CC0920\WCWI & NPS Agreements re grading DOC
, "-
August 16, 2005 CIty Council
Re Electric Rate Adjustments
Page 2
Attached are the drafts of the agreements that are still being finalized. It is anticipated that if any
changes are necessary they will be minor. The agreement with NPS-ONP is in the amount of
$499,710.22 and the agreement amendment with Waste Connections will be in the not to exceed
amount of$329,498.00.
It is recommended that the Council authorize the City Manager to sign 1) the Agreement with the
National Park Service - Olympic National Park (NPS-ONP), and 2) the amendment to Solid
Waste Processing Facility Development and Management Services Agreement with Waste
Connections of Washington, Inc,. and 3) authorize the City Manager to approve minor changes,
if necessary, to the agreements.
Attachments: Cooperative Agreement NPS-ONP & City (Draft)
First Amendment to Waste Connections Agreement (Draft)
N \CCOUNCIL\CC2005\CC0920\WCWI & NPS Agreements re gradmg DOC
.
.
.~
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES AGREEMENT
between
CITY OF PORT ANGELES, WASHINGTON
and
WASTE CONNECTIONS OF WASHINGTON, INC.
dated
April 5, 2005
5.7/7
City of Porl Angeles
April 5, 2005
The City of Port Angeles Solid Waste Processing Facility Development and
Management Services Agreement (the "Service Agreement") consists of four
components. The following brief description of these four components is provided for
informational purposes only, and the entire document shall be considered for
determining terms, conditions, obligations, and requirements for the Project.
.
1. Contractual Provisions
The Service Agreement includes all contractual provisions relating to
design, construction, financing, and operation of the Project. Attached to
the Service Agreement are three (3) Exhibits that provide technical and
financial details of the Project and payment terms for facilities and
services. The term "the Agreement" refers collectively to the Service
Agreement and the Exhibits.
2. Contractor Technical and Cost Proposal
The Contractor's Technical and Cost Proposal is a document in which
Waste Connections of Washington, Inc. has described its approach for
Project development and operation under the Service Agreement. The
Contractor's Technical and Cost Proposal is attached to the Service
Agreement as Exhibit A.
3.
Performance Specifications
Most of the detailed technical requirements for the Project are located in
the Performance Specifications. The Performance Specifications provide
for a Project Development Plan and an Operations Plan for the Project.
The Performance Specifications are attached to the Service Agreement as
Exhibit B.
.
4. Amortization Schedule
Upon City termination of the Service Agreement prior to its Term and after
the Commercial Operations Date, the City will provide a Final Payment to
the Contractor for completion of the Fixed Transfer Facilities and the
Moderate-Risk Waste Facility. The Amortization Schedule is attached to
the Service Agreement as Exhibit C.
~
City of Port Angeles
April5,2005
.
.
.
TABLE OF CONTENTS
CONTRACTUAL PROVIS IONS ....... .... ........ .......... ............................. ............................1
DIVISION I RfGHTS AND DUTIES ..........................................................................1
SECTION 1 DEFINITIONS .................................................................................... 1
SECTION 2 GENERAL PROViSiONS................................................................. 12
Section 2.1 Law Applicable ...............................................................................12
Section 2.2 Entire and Complete Agreement .......................... ................... .......12
Section 2.3 Severability................................................................. .................... 12
Section 2.4 Time of the Essence, Waiver, Approvals........................................ 12
Section 2.5 Construction of Terms...... ........... ................... ....... .......... ...............13
Section 2.6 City Access ....................................................................................13
Section 2.7 Compliance With Law................. ........ .......... ......... ..... ....................13
Section 2.8 Third Party Beneficiaries and Liabilities.......................................... 14
Section 2.9 Representatives............................................................................. 14
Section 2.10 Notices..... ...... ................ ............... ........... ...... .......... ........ ............14
Section 2.11 Division, Section and Subsection References ..............................15
Section 2.12 Amendments to the Agreement.................................................... 15
Section 2.13 Contractor as Independent Contractor .........................................16
Section 2.14 Scheduling; Management; Quality of Performance ......................16
Section 2.15 Modifications to the Exhibits .........................................................16
Section 2.16 Service Area Waste Direction................. ........ .............................. 18
Section 2.17 Records, Reports and Plans by Contractor ..................................19
Section 2.18 Confidentiality and Public Records...............................................21
Section 2.19 Counterparts................................................................................. 22
Section 2.20 Contracts or Approvals................................................................. 22
Section 2.21 Limitation of Liability of the City ....................................................22
Section 2.22 Discrimination............................................................................... 22
Section 2.23 Staff.............................................................................................. 23
Section 2.24 Liens and Encumbrances; Property Rights ..................................23
Section 2.25 Use of Facilities for Out-of-County Waste ....................................24
Section 2.26 Notice of Reduction in Processing Capacity .................................24
Section 2.27 Accidents; Complaints ............. ......... .............. ...... ........................ 25
Section 2.28 Coordination Meetings.............. ........ ...... ....... ............ ...................25
Section 2.29 Fines and Civil Penalties ..............................................................25
Section 2.30 Taxes and Fees.......... ................. ................... ............. ....... ..... ..... 26
Section 2.31 Security .............. ................. ........ ...... ......... ............. ................ ..... 26
Section 2.32 Utilities.. ....... ............................ ........... ............. ..................... ........26
SECTION 3 REPRESENT A TlONS AND WARRANTIES ....................................26
Section 3.1 Representations and Warranties of the Contractor ........................26
Section 3.2 Representations and Warranties of the City ...................................28
SECTION 4 TERM................................................................................... ............30
City of Port Angeles
April 5, 2005
TABLE OF CONTENTS
Section 4.1 Term of the Agreement ..................................................................30
Section 4.2 City Termination of the Agreement for Convenience...................... 30
Section 4.3 City Final Payment for Facilities - Termination for Convenience ....32
SECTION 5 INSURANCE, INDEMNIFICATION AND BONDS............................ 32
Section 5.1 Insurance................................. .......... ............ .............. ..................32
Section 5.2 Delivery of Policies; Required Provisions .......................................34
Section 5.3 Indemnification....... ......... .......... ............................ .......... ...... ......... 35
Section 5.4 Performance Bonds and Financial Guarantee ...............................38
Section 5.5 Delivery of Bonds; Required Provisions .........................................40
SECTION 6 ASSIGNMENT, SUBCONTRACTING, CHANGE OF CONTROL.....40
Section 6.1 Contractor Assignment and Delegation..........................................40
Section 6.2 Contractor Subcontracts. ............... ................ ..... .......... ..................40
Section 6.3 Change In Control or Ownership....................................................41
Section 6.4 Binding Effect.......... ........ ...... ....... ................... ............ .................. .41
SECTION 7 CONTRACTOR VIOLA TlONS OF SERVICE COMPONENTS AFTER
COMMERCIAL OPERA TIONS DA TE ....................................................................41
Section 7.1 Violation Resolution Process..........................................................41
Section 7.2 Violation Cure Period Extension.....................................................42
Section 7.3 Violation Sanctions......................................................................... 42
Section 7.4 Violation Refutation ........................................................................42
Section 7.5 Liquidated Damages ...... ............................... ..... ........ ................... .43
SECTION 8 DEFAULT AND TERMINA TlON ...................................................... 44
Section 8.1 Contractor Events of Default ..........................................................44
Section 8.2 Right to Cure Contractor Event of Default......................................45
Section 8.3 Remedies for Contractor Event of Default.......................................46
Section 8.4 City Event of Default..... ......... ..... ....... .............. ........... ....................48
Section 8.5 City Final Payment for Facilities - Event of Default.........................48
Section 8.6 Remedies Cumulative, No Waiver..................................................49
SECTION 9 UNCONTROLLABLE CIRCUMSTANCES.......................................49
Section 9.1 "Uncontrollable Circumstance" Defined..........................................49
Section 9.2 Obligations In the Event of an Uncontrollable Circumstance........... 51
Section 9.3 Termination Due to Uncontrollable Circumstances ........................52
SECTION 10 ACCEPTANCE OF WASTE..........................................................53
Section 10.1 Acceptance of Acceptable Waste .................................................53
Section 10.2 Ownership of Acceptable Waste ..................................................53
Section 10.3 Ownership of Unacceptable Waste ..............................................53
Section 10.4 Unacceptable Waste and Hazardous Waste Procedures.............54
Section 10.5 Survival of Rights and Obligations for Unacceptable Waste.......... 54
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TABLE OF CONTENTS
DIVISION II SCOPE OF WORK/SERVICE COMPONENTS ..................................55
SECTION 11 SERVICE COMPONENT I TRANSFER STA TION
FA CILITY/OPERA TIONS ....................................................................................... 55
Section 11.1 GeneraL.. ................. ......... ................ .......... ........... ............... ........55
Section 11.2 Disposal Site Capacity.................................................................. 55
Section 11.3 Repair and Replacement of the Transfer Station .........................55
Section 11.4 Restoration of the Transfer Station............................................... 55
Section 11.5 Financing. ............... ...................................... .......... ........ .............. 56
Section 11.6 Contractor Use of Facilities.......................................................... 56
SECTION 12 SERVICE COMPONENT /I TRANSPORT AND DISPOSAL...........56
Section 12.1 General......................................................................................... 56
Section 12.2 Disposal Site Capacity.................................................................. 57
Section 12.3 Trailers... ...... .......... .......... .............. ............. ........................ ......... 57
SECTION 13 SERVICE COMPONENT 11/ BLUE MOUNTAIN OPERATIONS...... 57
Section 13.1 General.... ...... ....... ...... .......... ........ .................. ......................... ..... 57
Section 13.2 Repair of the Drop Box Facility..................................................... 58
SECTION 14 SERVICE COMPNENT IV RECYCLING OPERA T10NS .................58
Section 14.1 General... .............. ........................................................... ...... ....... 58
Section 14.2 Vehicles.. ..... .......... ................................ ....... .......... ............... .......59
Section 14.3 Repair of the Drop-Off Facilities ...................................................59
SECTION 15 SERVICE COMPONENT V CO-COMPOSTING OPERA T10NS ..... 59
Section 15.1 General......................................................................................... 59
Section 15.2 Repair of the Co-Composting Facility........................................... 59
SECTION 16 SERVICE COMPONENT VI MODER A TE-RISK WASTE
FACILITY/OPERA TIONS .....:. ...... .... ..... ......... ...... ............................ ...... ................59
Section 16.1 General......................................................................................... 59
Section 16.2 Disposal Site Capacity.................................................................. 60
Section 16.3 Repair and Replacement of the Moderate-Risk Waste Facility .....60
Section 16.4 Restoration of the Moderate-Risk Waste Facility ..........................60
Section 16.5 Financing................. ...... ......................... ................ ....... ......... ......60
Section 16.6 Contractor Use of Facility .............................................................61
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TABLE OF CONTENTS
DIVISION III' PAYMENT PROVISIONS ................................................................61
SECTION 17 DISPOSAL CHARGES AND SERVICE FEES............................... 61
Section 17.1 Disposal Charges to be Collected ................................................61
Section 17.2 Adjustment of Service Fees..........................................................62
Section 17.3 Adjustment of Liquidated Damages..............................................63
Section 17.4 Service Component I Service Fee ................................................64
Section 17.5 Service Component II Service Fee...............................................65
Section 17.6 Service Component III Service Fee..............................................67
Section 17.7 Service Component IV Service Fee..............................................67
Section 17.8 Service Component V Service Fee...............................................69
Section 17.9 Service Component VI Service Fee............................................ 70
Exhibit A: Contractor Technical and Cost Proposal
Exhibit B: Performance Specifications
Exhibit C: Amortization Schedule
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CONTRACTUAL PROVISIONS
This Agreement is made and entered into this fifth day of April, 2005, by and
between the City of Port Angeles, a non-charter code city of the State of Washington
("City"), and Waste Connections of Washington, Inc., a Washington corporation
("Contractor" and, collectively with the City, the "Parties"), for the purpose of the
Contractor providing the City with the following Service Components (I) constructing and
operating a Transfer Station, (II) transporting and disposing of Acceptable Waste
(excluding Yard Waste, Biosolids, White Goods, Recyclable Materials, and Acceptable
Moderate-Risk Waste) at a permitted Disposal Site located outside of Clallam County,
(III) operating the Blue Mountain Drop Box Facility, (IV) collecting and processing
Recyclable Materials, M operating a Co-Composting Facility, and (VI) constructing and
operating a Moderate-Risk Waste Facility and transporting and disposing of Acceptable
Moderate-Risk Waste.
DIVISION I RIGHTS AND DUTIES
SECTION 1 DEFINITIONS
Unless otherwise specified in this Service Agreement, words shall be given their
ordinary and usual meaning. The meanings shall be applicable to the singular, plural,
masculine, feminine and neuter or the words and terms.
As used in this Service Agreement and the Exhibits hereto, the following terms
shall have the following meanings set forth in this Section, unless another meaning is
expressly provided for a particular term in accordance with Section 2.5 or elsewhere in
the Agreement:
"Acceptable Household Hazardous Waste" includes only items described in
Technical and Cost Proposal Form 7.1B.
"Acceptable Moderate-Risk Waste" includes only items described in Technical
and Cost Proposal Form 7.7A.
"Acceptable Special Waste" includes only items described in Technical and
Cost Proposal Form 7.2A.
"Acceptable Waste" means all putrescible and nonputrescible waste, including
but not limited to garbage, rubbish, refuse, ashes, paper and cardboard; Yard Waste,
including plant, grass clippings and leaves and other organic yard trimmings;
commercial waste, demolition and construction wastes; wood waste; Acceptable
Special Waste; Acceptable Moderate-Risk Waste; Acceptable Household Hazardous
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Waste; Recyclable Materials, discarded home and commercial appliances; and manure, .
vegetable or animal solid and semisolid wastes. The term includes other materials and
substances that may in the future be included in the definition of "solid waste", or any
successor term, in Chapter 70.95 RCW and the Waste Acceptance Policy and
regulations promulgated thereunder, but the term does not include Unacceptable Waste
as defined in the Agreement.
"Acceptance Testing" means the activities conducted at the Transfer Station
and Moderate-Risk Waste Facility during Startup to demonstrate the operational ability
of the Facilities to handle and process Acceptable Waste and Acceptable Moderate-
Risk Waste respectively, in accordance with Exhibits A and B.
"Agreement" or "Service Agreement" or "Solid Waste Processing Facility
Development and Management Services Agreement" means the Contractual
Provisions and Exhibits A-C, as the same may be amended, modified, and
supplemented from time to time in accordance with the Agreement.
"Amortization Schedule" means Exhibit C.
"Applicable Law" means all federal, state, regional or local statutes, rules,
codes, regulations, resolutions and ordinances that apply to the Facilities or any of
Contractor's operations or obligations under the Agreement.
"Appurtenance" means fixtures, equipment, and accessories that are physically .
attached or connected to the Facilities.
"Asbestos" means asbestos or asbestos-containing waste materials as defined
under, and that are packaged in accordance with, regulations of the U.S. Environmental
Protection Agency at 40 C.F.R. Part 61.142 or other Applicable Law.
"Authorized Representative" means: (i) when used with respect to the City, the
Public Works and Utilities Director or other Person or Persons designated in writing
from time to time as the representative of the City with respect to the Agreement, which
notice is delivered to the Contractor's Authorized Representative; and (ii) when used
with respect to the Contractor, any Person or Persons designated from time to time by
the Contractor as the Contractor's Authorized Representative, but only if written notice
of that designation is delivered to the City's Authorized Representative. See also
Section 2.9.
"Bio-Medical Waste" means noninfectious and/or non-injurious waste or treated
and properly packaged infectious and/or injurious waste, which is generated in the
diagnosis, treatment or immunization of humans or animals, in research pertaining
thereto, or in the production or testing of biologicals and which may be deposited in the
general solid waste stream under federal, state and local laws and regulations, including
but not limited to the regulations of the local Health Department. The term does not
include infectious waste originating in a medical, veterinary or intermediate care facility .
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April 5, 2005
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that has not been treated and that may not be deposited in the general solid waste
stream under applicable federal, state or local laws or regulations, including but not
limited to, the local Health Department regulations. As used above, the term
"biologicals" means substances made from living organisms and byproducts of such
substances including but not limited to vaccines and cultures, intended for use in
diagnosing, treating or immunizing humans or animals or in research pertaining thereto.
"Biosolids" means municipal sewage sludge that is a primarily organic,
semisolid product resulting from the wastewater treatment process, which can be
beneficially recycled and meets all requirements under Chapter 70.95J RCW.
"City" means the City of Port Angeles, Washington, its successors and, to the
extent expressly permitted by the Agreement or otherwise required by law (whether now
existing or hereafter enacted), its assigns.
"City Attorney" means the City of Port Angeles City Attorney or his or her
designee.
"City Event of Default" means the occurrence of an event described in Section
8.4.
"City Property" means and includes all real property, the Facilities, the
Appurtenances, buildings, utility poles, conduits, and similar facilities owned by the City
and all property held in a proprietary capacity by the City.
"Co-Composting Facility" means the City of Port Angeles Co-Composting
Facility that is used for processing Biosolids and Yard Waste into a Class A compost
product for resale by the City to Customers in accordance with Exhibit B.
"Commencement Date" means with respect to the Project or to a Service
Component, the date designated by the City's Authorized Representative in writing as
the date the Contractor may proceed with the Project or the Service Components.
"Commercial Hauler" means any Person authorized to collect and transport
Acceptable Waste in the unincorporated areas of the County or in the City, pursuant to
a certificate of authority granted by the Washington Utilities and Transportation
Commission or any successor agency or pursuant to any other authorization required
under Applicable Law.
"Commercial Operations Date" for Service Components I and VI means the
first day that the Contractor is capable of processing Acceptable Waste at the Facilities,
provided that the first day of processing is (i) no earlier than June 1, 2006 and no later
than October 2, 2006, and (ii) the City has approved the completion of construction and
Acceptance Testing and the Contractor's Operations Plan as required by Exhibit 8 of
the Agreement for Service Components I and VI. For all other Service Components, the
Commercial Operations Date shall mean the first day that the Contractor begins to
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April 5, 2005
provide services under such Service Components.
.
"Compost Materials" means a Class A compost product produced at the Co-
Composting Facility.
"Comprehensive Solid Waste Management Plan" means the Clallam County
Comprehensive Solid Waste Management Plan adopted in accordance with Chapter
70.95 RCW, including any subsequent amendments to said Plan.
"Consumer Price Index" or "CPI" means the non-seasonally adjusted
Consumer Price Index - All Urban Consumers for the West Urban Area, Washington,
Standard Metropolitan Statistical Area, as published from time to time by the United
States Department of Labor, Bureau of Labor Statistics, or any other appropriate index
as may be mutually agreed upon in writing by the Parties.
"Contingency Plan" means the plans to be developed as part of and included
within the Project Development Plan and the Operations Plan, setting forth the
Contractor's back-up and alternative arrangements for processing Acceptable Waste in
the event that (i) the Transfer Station and/or Moderate-Risk Waste Facility Startup and
Acceptance Testing does not commence by July 3, 2006, or (ii) following the
Commercial Operations Date, if any circumstances should occur that limit or restrict the
ability of the Transfer Station, Moderate-Risk Waste Facility, Transport Facility, or
Disposal Site to process Acceptable Waste.
"Contractor" or "Successful Proposer" means Waste Connections of
Washington, Inc., and, to the extent permitted by the express terms of the Agreement,
its successors and assigns.
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"Contractor Event of Default" means the occurrence of anyone or more of the
events described in Section 8.1.
"Contractor Property" means and includes all equipment such as the loaders,
yard goats, trailers, vehicles, and lifts that are commonly referred to as "rolling stock"
including Transfer Station Equipment.
"Control" or "Controlling Interest" means actual working control in whatever
manner exercised.
"Cost Substantiation" means for the purposes of any adjustments to the
Service Fee(s), delivery to the City of a certificate signed by the Contractor's Authorized
Representative, stating the amount of that adjustment and the reason why that
adjustment is properly chargeable or credited to the City, and stating and documenting,
if applicable, that the adjustment is an arm's length and competitive price for the service
or materials supplied.
"County" means Clallam County, a political subdivision of the State of
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"Customer" means any Commercial Hauler, general public self-hauler, or
general public collection customer which is using the Facilities whether or not a fee is
paid.
"Default" means breach of the Agreement by either Party as defined in Section
8.
"Default Notice" means a written notice given by one Party to the other
pursuant to the provisions of Section 8 hereof.
"Delivery Hours" means the days and hours of operation as set forth in Exhibit
B.
"Dispose or Disposal" means all work, services or operations performed by the
Contractor pursuant to the Agreement after Acceptable Waste leaves the boundaries of
the Facilities pursuant to the Agreement.
"Disposal Charges" means charges paid by Customers based on Tip Fees
established by the City. '
"Disposal Site" means the Finley Buttes Regional Landfill, in Boardman,
Morrow County, Oregon, or any other similarly permitted disposal facility to be used by
the Contractor for the treatment, utilization, processing, and/or deposit of any
Acceptable Waste received under the Agreement, including all Contractor Property
used at that site for purposes of the Agreement.
"Drop-Box Facility" or "Drop-Box Station" means the drop-box station located
on Blue Mountain Road, between Sequim and Port Angeles, Washington for receiving
Acceptable Waste (excluding Yard Waste, Biosolids, White Goods, Acceptable Special
Waste, and Acceptable Moderate-Risk Waste).
"Drop-Off Facility" or "Drop-Off Station" means either of the drop-off stations
located at the Transfer Station and on Blue Mountain Road, between Sequim and Port
Angeles, Washington for Recyclable Materials (excluding Moderate-Risk Waste and
White Goods).
"Equipment Schedule" or "Transfer Station Equipment Schedule" means
the schedule of equipment used at the Transfer Station, including original purchase
price, manufacturer's estimated service life, and accumulated depreciation based on the
straight-line accounting method.
"Facility" or "Facilities" means the Transfer Station, Drop Box Facility, Drop-
Off Facilities, Co-Composting Facility, Moderate-Risk Waste Facility, and the Landfill, all
of which form the City's solid waste processing facility.
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April 5, 2005
"Facility Damages" means any damage to the Facilities and Appurtenances. .
Facility Damages include by ways of example but not limitation, inoperable appliances,
broken fixtures, torn or damaged floor coverings, and substandard repairs. Facility
Damages includes damage to Facilities and Appurtenances that result from any cause.
"Final Payment" means the amount due by the City to the Contractor upon City
termination of the Service Agreement prior to its twenty (20) year Term representing full
payment for completion of the Fixed Transfer Facilities and Moderate-Risk Waste
Facility in accordance with Sections 8.5(b) and 4.3 and Exhibit C. Subject to the
availability of a Department of Ecology grant for the MRWF, the City shall have a
prepayment privilege of the unpaid principal balance specified in Exhibit C without any
prepayment penalty.
"Fixed Transfer Facilities" means the Transfer Station main building, public
drop-off and receiving areas, staff areas and facilities, scale house and scales, scale
instrumentation and interface to the City's data network system, permanent pollution
prevention facilities, fixed (Le., non-mobile) compaction equipment, other fixed
equipment and the associated initial spare parts inventory, all of which are constructed
or provided by the Contractor for the performance of the Contractor's obligations under
the Agreement.
"Fuel Price Index" or "FPI" means an annual average of the "Weekly Retail On-
Highway Diesel Prices for the West Coast", as published from time to time by the United .
States Department of Energy, Energy Information Administration, or any other
appropriate index as may be mutually agreed upon in writing by the Parties. The FPI
shall apply toward the Contractor's unit price under Service Component II for transport
via short-haul road tractor from the Transfer Station to the Contractor's intermodal
facility (where containers will be placed on rail cars) and from the Contractor's
intermodal facility (where containers will removed from rail cars and placed on tractor
chassis) to the Disposal Site in accordance with Exhibit A. The FPI shall also apply
toward the Contractor's unit price under Service Component IV for curbside collection of
Recyclable Materials, Yard Debris, and Commercial Cardboard within Port Angeles.
"Hazardous Waste" means any waste, material or substance (other than
Asbestos and Moderate-Risk Waste), which is:
(a) Defined as hazardous by 40 CFR Part 261 and regulated as hazardous
waste by the United State Environmental Protection Agency under Subtitle C of the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. 99 6901, et seq
("RCRA"), as amended by the Hazardous and Solid Waste Amendments ("HSWA") of
1984; the Toxic Substances Control Act, 15 U.S. c. 92601 et seq.; the Comprehensive
Environmental Response Compensation and Liability Act, 42 U.S. 9 9601 et seq
("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act
("SARA") of 1986; or any other federal statute or regulation governing the treatment,
storage, handling, or disposal of waste, materials or substances, which imposes special .
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handling or disposal requirements similar to those required by Subtitle C of RCRA; or
b) Defined as dangerous or extremely hazardous by Chapters 173-303 or
173-340 WAC and regulated as dangerous waste or extremely hazardous waste by the
Washington Department of Ecology under the State Hazardous Waste Management
Act, Chapter 70.105 RCW, the Model T oxics Control Act, Chapter 70.1050 RCW, or
any other Washington State statute or regulation governing the treatment, storage,
handling or disposal of wastes, materials or substances, which imposes special
handling requirements similar to those required by Chapter 70.105 RCW.
Certain waste which is not as of the effective date of the Agreement included in this
definition, may after that date come within this definition's scope. Certain other waste
that is within the definition may cease to be so included. Accordingly, any waste,
material or substance may be deemed Hazardous Waste any given time, only so long
as and to the extent that it is included in the definition of Hazardous Waste set forth
above and as may be amended by the applicable governmental entity.
"Household Hazardous Waste" or "HHW" means any liquid, contained gas, or
sludge generated within a household that possesses any of the characteristics of a
hazardous or dangerous waste under state or federal regulations. The product
becomes a moderate-risk waste when it is discarded (pursuant to the Clallam County
Hazardous Waste Management Plan, October 1991).
"Interlocal Agreement" means the agreement between the City of Port Angeles
and Clallam County for a Regional Solid Waste Export and Transfer System dated July
27,2004.
"Landfill" means the City of Port Angeles municipal landfill.
"Liquidated Damages" means the requirements imposed on the Contractor to
pay specified, pre-calculated sums set forth in Section 7.5 hereof, rather than actual
costs, to the City as a result of violations of the Agreement identified herein.
"Mixed Municipal Solid Waste" or "Mixed MSW" means all Acceptable
Wastes received from Customers which includes Recyclable Materials, Yard Waste,
Acceptable Special Waste, Acceptable Household Hazardous Waste, and/or
Acceptable Moderate-Risk Waste. Mixed MSW shall not include Unacceptable Waste.
"Moderate-Risk Waste" or "MRW" means moderate-risk waste as that term is
defined in RCW 70.105.010(17), as that definition may be amended from time to time.
Special categories of Moderate-Risk Waste, including used oil, anti-freeze, and lead
acid batteries, are also considered to be Recyclable Materials in accordance with the
Waste Acceptance Policy.
"Moderate-Risk Waste Facility" or "MRWF" means the City owned Port
Angeles Moderate-Risk Waste Facility, real property, and Appurtenances used for the
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April 5, 2005
performance of the Contractor's obligations under the Agreement. The Moderate-Risk .
Waste Facility is an integral part of the solid waste processing facility that is located on
the same site as the Transfer Station.
"Municipal Solid Waste" or "MSW" means all Acceptable Waste excluding
Acceptable Special Waste, Acceptable Household Hazardous Waste, and Acceptable
Moderate-Risk Waste.
"Net Cost Reduction" means a Cost Substantiation with an adjustment that
reduces a Service Fee.
"Normal Operating Conditions" means conditions that are within the
commercially reasonable expectation of the Contractor. Conditions that are ordinarily
within the commercially reasonable expectation of the Contractor include but are not
limited to regular peak or seasonal demand periods and maintenance or replacement of
Transfer Station Equipment.
"Normal Wear And Tear" means deterioration resulting from ordinary day-to-
day use of the Facilities and Appurtenances, which results from use and the passage of
time.
"Operations Plan" means the Contractor's operations plan including a
Contingency Plan approved by the City prior to the Commercial Operations Date of .
each Service Component, as described in Exhibit B.
"Parties" means the City and the Contractor collectively.
"Performance Specifications" or "Specifications" means the detailed
requirements for each Service Component and any other written specifications agreed
to by the Contractor and the City as part of the Agreement. All of said Specifications
are included in Exhibit B.
"Person" means any natural person, partnership, joint venture, limited liability
company, corporation or other entity or organization, public or private, and any unit of
government or agency thereof.
"Petroleum-Contaminated Soils" means Hazardous Waste which has a
maximum Total Petroleum Hydrocarbon concentration of 30,000 parts per million or a
calculated Hazard Index of less than 1.0 in accordance with the City's Waste
Acceptance Policy.
"Project" means any and all matters and things that the Agreement requires to
be done, kept, performed and furnished by the Contractor.
"Project Construction Schedule" means the construction deliverables and .
completion dates specified in Table B.1-2 of Exhibit B.
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April 5, 2005
. , "Proj~ct Development Plan" means the financing, staffing, design
development, design and construction documents, and Operations Plan, which are
prepared by the Contractor and approved by the City in accordance with Exhibit B.
"Project Development Schedule" means the design development deliverables
and completion dates specified in Table B.1-1 of Exhibit B.
"Recyclable Material" means aluminum cans, tin cans, green brown, and clear
recyclable glass, number 1 and number 2 plastics, newsprint, cardboard, ledger paper,
computer paper, magazines, catalogues, telephone books, and common junk mail.
Excluded from this definition are any bottles, jars, and cans that contain any Hazardous
Materials. Special categories of Moderate-Risk Waste, including used oil, anti-freeze,
and lead-acid batteries, are considered Recyclable Material. White Goods that are
recyclable in accordance with Exhibit B are also considered to be Recyclable Materials.
"Request for Proposal" or "RFP" means the City's Request for Proposals
issued on July 25, 2004 (and as subsequently amended) for the project entitled "Solid
Waste Processing Facility Development and Management Services".
"Service Component" means any of the six (6) services provided by the
Contractor as specified in Sections 11 through 16 of the Agreement.
. "Service Fee" means the fee the City pays the Contractor for performance of its
Service Components under the Agreement as specified in Section 17.
"Service Fee Schedule" means the fixed monthly fees and unit prices included
in the Contractor's Technical and Cost Proposal for performing its obligations under the
Agreement, as set forth in Exhibit A and as adjusted annually pursuant to Section 17 of
the Service Agreement.
"Special Waste" means tires, White Goods, Bio-Medical Waste, Biosolids,
creosote treated railroad ties, Asbestos, Petroleum-Contaminated Soils, and any other
Acceptable Waste that in the City's Authorized Representative's determination requires
special handling.
"Startup" means a period of time, not to exceed 90 days, between completion of
the Transfer Station and the Moderate-Risk Waste Facility and the Commercial
Operation Date as described in Exhibit B.
"Subcontractor" means any Person with whom the Contractor contracts for the
purpose of having that Person provide labor, materials or services for the design,
construction, or operation of a Service Component and performance of any of
Contractor's obligations under the Agreement.
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"Surety" means the Person approved by the City Attorney to provide the bonds
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April 5, 2005
or other financial guarantee required under Section 5, guaranteeing, or providing the .
funds to guarantee, performance of the Contractor's obligations under the Agreement.
"Technical and Cost Proposal" or "Proposal" means the Contractor's
response to the City's RFP, including a description of the approach for development and
operation of each Service Component to be provided to the City under the Agreement
and including all costs associated with providing such services. The Technical and Cost
Proposal is part of the Agreement as Exhibit A.
"Term" means the term of the Agreement commencing on the date the
Agreement is executed by both Parties and termina~ing as provided in the Agreement.
"Tip Fees" means the prices per ton for Disposal Charges paid by Customers in
accordance with Section 17.1.
"Trailer" means a transfer trailer or intermodal shipping container used by the
Contractor for the transportation of Acceptable Waste for disposal.
"Transfer Station" means the City owned Port Angeles Transfer Station,
including City Property, Fixed Transfer Facilities, Transfer Station Equipment, ancillary
buildings, and other facilities and Appurtenances used for the performance of the
Contractor's obligations under the Agreement.
"Transfer Station Equipment" means equipment other than Appurtenances .
associated with the Port Angeles Transfer Station, including but not limited to item
descriptions 23-29 of Technical and Cost Proposal Form 7.1A.
"Transport" or "Transportation" means but is not limited to the transportation
of Trailers to and from the Transfer Station, Blue Mountain Drop Box Facility, and the
Disposal Site and includes the storage and handling of Trailers at any transfer facility
used by the Contractor to deliver waste to the Disposal Site.
"Transport Facility" or "Transportation. Facility" means tractors, Trailers, rail
lines, barges, public highways and all other Contractor Property owned, leased used or
furnished by Contractor in providing Transport of waste under the Agreement.
"Unacceptable Waste" means:
a) Regulated Hazardous Waste;
(b) Radioactive waste or materials;
(c)
All wastes requiring special handling to comply with applicable
federal, state or local law governing (i) pathological, infectious
(other than properly treated Bio-Medical Waste), or explosive
materials; (ii) oil sludge; (iii) cesspool or human waste;
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(d) Any item of waste either smoldering, on fire, at its kindling point, or
in the process of initiating combustion;
(e) Tires in quantities in excess of those normally collected from
residential units except as Contractor may elect to accept;
(f) Assuming the Facilities are properly operated and maintained, any
item posing a reasonable likelihood of damaging the Facilities, or
any item the processing of which would be likely to impose a threat
to health or safety in violation of any judicial decision, order, or
action of any federal, state or local government or any agency
thereof, or any other regulatory authority or Applicable Law;
(g) All waste not authorized for disposal at the Transfer Station in
accordance with the City's Waste Acceptance Policy or at the
Disposal Site in accordance with those governmental entities
having jurisdiction over the Disposal Site; and
(h) Any wastes that are not an Acceptable Waste or other wastes
which the City and the Contractor may at any time agree in writing
to designate as "Unacceptable Waste."
Unacceptable Waste shall not include any residential waste unless the exclusion of
residential waste from this definition is prohibited by a change in law that becomes
effective after the date of the Agreement.
"Uncontrollable Circumstance" means the events described in Section 9.1.
"Utilities" mean public or private utility services related to the Project, including
but not limited to electricity, natural gas, water, sanitary sewer, septic systems,
telecommunications, irrigation, fuel oil, diesel, and gasoline.
"Violation" means a Contractor violation of the Agreement identified in Section
7.
"Violation Notice" means a written notice given by the City's Authorized
Representative to the Contractor pursuant to the provisions of Section 7.
"Waste Acceptance Policy" means the City of Port Angeles Waste Acceptance
Policy as amended.
"White Goods" means residential appliances, including but not limited to stoves,
ovens, cook tops, refrigerators, dishwashers, washing machines, clothes dryers, and
water heaters. White Goods that are recyclable in accordance with the City's Waste
Acceptance Policy are also considered to be Recyclable Materials.
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"Yard Waste" or "Yard Debris" means all grass, leaves, brush, limbs, branches .
and other urban wood waste and organic material resulting from the landscaping and
maintenance of household and commercial grounds, yards and gardens. This definition
does not include pallets and other dimensional lumber type materials.
SECTION 2
GENERAL PROVISIONS
Section 2.1
Law Applicable
This Agreement is made in accordance with and shall be construed under the
laws of the State of Washington and the Port Angeles Municipal Code. In the event any
claim, dispute or action arising from or relating to this Agreement cannot be resolved as
provided in the Agreement, then it shall be commenced in the Clallam County Superior
Court or the United States District Court, Western District of Washington as appropriate.
The prevailing Party in any such action before the courts shall recover its costs of suit
and reasonable attorneys' fees from the other Party.
Section 2.2
Entire and Complete Agreement
This Agreement shall constitute the entire and complete agreement and final
expression of the Parties with respect to the Project, and this Agreement supersedes all
prior or contemporaneous agreements, understandings, arrangements, commitments
and representations, whether oral or written. In the event of any conflict between or
among the documents constituting the Agreement, the language and provisions set
forth in the Contractual Provisions shall prevail. In the event of any conflict among the
documents constituting Exhibit B, the most burdensome Contractor duty or requirement
set forth in Exhibit B shall prevail. In the event of a discrepancy or conflict in the
provisions of the Agreement as a whole, the most specific provision shall apply. Any
proposed or actual use of the Facilities or the provision of other services that are not
expressly provided for in the Agreement shall require an amendment to the Agreement.
.
Section 2.3
Severability
If any Agreement provision is determined by a court of competent jurisdiction to
be invalid, illegal or unenforceable under any Applicable Law, the remaining provisions
of the Agreement shall remain in effect and bind the Parties; however, the Parties shall
negotiate in good faith to amend the Agreement to effectuate the intent of any invalid,
illegal or unenforceable provision, if permissible under Applicable Law.
Section 2.4
Time of the Essence, Waiver, Approvals
(a) Time is of the essence under the Agreement.
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April 5, 2005
. (b) I The City's or Contractor's failure to object to a breach of any provision of
the Agreement is not and shall not be construed as a waiver of that provision. Payment
or acceptance of compensation subsequent to any breach is not and shall not be
deemed an acceptance of that breach. To be valid, any waiver of a breach of the
Agreement must be in a writing signed by the Parties.
(c) The Contractor shall be responsible for submitting requests and required
documentation to the City when written City approval is required in accordance with the
Agreement.
Section 2.5
Construction of Terms
Unless otherwise specified in the Agreement, words describing material or work
that have a well-known technical or trade meaning shall be construed in accordance
with the well-known meaning generally recognized by solid waste professionals,
engineers and trades.
Section 2.6
City Access
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The City shall have the right of unlimited access to inspect any or all of the
Contractor's and Subcontractors' operations, Facilities, or records related to
performance of Contractor's obligations under the Agreement; however, the City's
access to records under this Section shall be subject to the confidentiality provisions of
the Agreement. In addition to having unlimited access, the City shall have access to
monitor operations and inspect Facilities at any and all times during Delivery Hours or
when there is activity of any kind at those operations or Facilities, provided that the City
shall not interfere with Normal Operating Conditions. The Contractor may require any
person entering the Facilities to comply with its reasonable safety rules and regulations.
Section 2.7
Compliance With Law
(a) The Contractor shall satisfy all requirements of the Agreement and
Applicable Law unless those requirements cannot be met or complied with as a result of
a City Event of Default or an Uncontrollable Circumstance.
(b) The City shall have the right and be given access to inspect complete
copies of all correspondence, transactions, or any other documents sent to or received
by the Contractor or its Subcontractors related to the Contractor's compliance with any
Applicable Law or the requirements of the Agreement.
(c) The Contractor shall not be deemed to have breached its obligation to at
all times operate the Project in compliance with and to otherwise comply in all respects
with the requirements of Applicable Law if the Contractor is contesting the Applicable
Law in good faith by appropriate proceedings conducted with due diligence and the
Applicable Law permits continued operation pending a final resolution of such contest.
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City of Port Angeles
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(d) The Contractor shall pay all permit fees, penalties, fines and other .
payments related to the construction and operation of the Project except as specifically
excluded in Exhibit B.
Section 2.8
Third Party Beneficiaries and Liabilities
This Agreement is intended to create third party beneficiaries in accordance with
the City's Interlocal Agreement with Clallam County; however, the Agreement does not
create any third party liabilities.
Section 2.9
Representatives
(a) Unless the Contractor notifies the City's Authorized Representative
otherwise in writing, and as otherwise limited by law, the Contractor's Authorized
Representative shall be the Contractor's agent and shall represent the Contractor for all
purposes of the Agreement. The Contractor's Authorized Representative shall be in
charge of the Project at all times and shall have authority to act on behalf of the
Contractor.
(b) Unless the City notifies the Contractor's Authorized Representative
otherwise in writing, and as otherwise limited by law, the City's Authorized
Representative(s) shall represent the City for all purposes of the Agreement. All written
or oral directions, instructions or notices given by the Contractor to the City's Authorized .
Representative(s) and related to the subject matter of the Agreement shall be
considered to have been made to the City. The City's Authorized Representative(s)
shall be in charge of the Project at all times and shall have authority to act on behalf of
the City, subject to the provisions and limitations of this Agreement and subject to the
direction and authority of the City Manager and City Council.
(c) The City and the Contractor may change their respective Authorized
Representatives on five (5) days written notice to the other Party.
Section 2.10
Notices
(a) Except as otherwise expressly provided in the Agreement, all approvals,
requests, reports, Violation Notices, Default Notices, termination notices,
communications or other materials or information required or permitted to be made or
given by a Party to the other Party's Authorized Representative hereunder shall be
deemed to have been given or made only if the same is reduced to writing and
delivered either (i) personally or by means of the United States Postal Service, or (ii) via
facsimile, the transmission of which is confirmed by voice communication to the City's
Authorized Representative or the Contractor's Authorized Representative, as the case
may be, at their respective addresses as set forth below.
(b)
For all purposes of the Agreement, any such approval, request, report,
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April 5, 2005
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Violation Notices, Default Notices, Termination Notices, communication or other
material or information which is delivered by means of the United States Postal Service
as aforesaid'shall be deemed to have been delivered as of the third business day next
following the date of the postmark thereof, or on the date delivery is evidenced by
certified or express mail receipts, whichever is earlier.
(c) All approvals, requests, reports, Violation Notices, Default Notices,
Termination Notices, communications or other materials or information to either party
hereunder shall be in writing and shall be given to such party at the following address,
or such other address as such party may hereafter specify for the purpose of notice to
the other party:
If to the City:
Public Works and Utilities Department, 321 East 5th Street, P.O. Box 1150, Port
Angeles, WA 98362 Facsimile: (360) 417-4542 Phone: (360) 417-4800
Attention: Public Works and Utilities Director
If to the Contractor:
Waste Connections of Washington, Inc., P.O. Box 399, Puyallup, WA 98371-
0158 Facsimile: (253) 582-9561 Phone: (253) 414-0345
Attention: Division Vice President
With a copy to:
Waste Connections, Inc., 35 Iron Point Circle, Suite 200, Folsom, CA 95630
Facsimile: (916) 608-8291 Phone: (916) 608-8200
Attention: Legal Department
Section 2.11
Division, Section and Subsection References
Any divisions, sections or subsections mentioned in the Agreement by number
only (without reference to another document) refer to those divisions, sections or
subsections contained in this Service Agreement.
Section 2.12
Amendments to the Agreement
(a) Except as provided in Section 2.15, the Agreement may not be changed,
modified, amended or waived except by an amendment signed by both Parties. To be
valid and binding, any such amendment must be approved by the City Council and
signed by the City Council's designated signatory and by a duly authorized officer of the
Contractor.
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ApnI5.2005
(b) The City reserves the right to amend Chapter 5.8 (Public Utility Tax) and .
Chapter 13.52 (Solid Waste Utility), City Council change order policy as set forth in
Resolution No.7 -01, Chapter 13.56 (Sanitary Landfill) of the Port Angeles Municipal
Code or the City's Waste Acceptance Policy, and other municipal requirements,
provided that the Contractor is allowed a reasonable opportunity to comment prior to
City Council adoption of any amendments that affect the Contractor's rights or duties
under this Agreement.
Section 2.13
Contractor as Independent Contractor
(a) The Contractor shall perform all work under the Agreement as an
independent contractor. The Contractor is not and shall not be considered an employee,
agent, subagent or servant of the City for the Agreement or otherwise. The Contractor's
Subcontractors, employees or agents are not and shall not be considered employees,
agents, subagents or servants of the City for purposes of the Agreement or otherwise.
(b) The Contractor shall have the exclusive right to control the services and
work performed under the Agreement and the Persons performing those services and
work. The Contractor shall be solely responsible for the acts and omissions of its
officers, agents, employees, and Subcontractors. Nothing in the Agreement shall be
construed as creating a partnership or joint venture between the City and the
Contractor, or between the City the Contractor and Clallam County.
Section 2.14
Scheduling; Management; Quality of Performance
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The Contractor shall coordinate, schedule in an orderly manner, and manage all
work done by Contractor's officers, employees, Subcontractors and agents under the
Agreement. The Contractor and Subcontractors shall perform every act or service under
the Agreement in a skillful and competent manner in accordance with the highest
standards of the solid waste management industry. The Contractor shall be financially
liable and otherwise responsible to the City for any errors, deficiencies or failures on the
part of Contractor or any Subcontractor to perform under the Agreement. All Contractor
employees and Subcontractors shall be skilled in their trades. All Contractor employees
and Subcontractors shall be licensed or otherwise qualified as required by Applicable
Law. The Contractor shall furnish evidence of the skill and licenses of its officers,
employees, Subcontractors, agents and operators on the request of the City. The
Contractor shall at all times enforce strict discipline and good order among its
employees and all Subcontractors.
Section 2.15
Modifications to the Exhibits
(a) At any time either Party may request modifications to Exhibits A-C of the
Agreement in anyone or more of the following areas: (i) description of the Service
Components to be performed; (ii) the Project Development and Construction Schedules .
and the days and hours of performance of the Service Components; (iii) siting of
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April 5, 2005
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Facilities outside of the designated development area, and the place of performance or
delivery of th,e Service Components; (iv) the City approved Project Development Plan,
Operations Plan, and Waste Acceptance Policy; (v) Facility design criteria and the City
approved final design and construction documents; (vi) method of Transport and
compaction of MSW; and (vii) notwithstanding the restrictions on unit price adjustments
set forth in subparagraph (b) below, modifications to Service Fees to compensate the
Parties for changes in the rates of taxes, fees or surcharges that a Party is obligated to
pay pursuant to the Service Agreement, increases to the Contractor's costs associated
with the proper Disposal of cross-contaminated Acceptable HHW, and increases to the
Service Fees necessitated by the occurrence of an Uncontrollable Circumstance that
substantially increases the cost of Contractor's performance of the Project or the City's
performance of its obligations hereunder.
(b) Modifications to Service Component VI unit prices for transport and
disposal of Acceptable Moderate-Risk Waste may be made no earlier than one (1) year
following the date the Agreement is executed by both Parties and no more frequently
than annually thereafter. Modifications to Service Component I and III unit prices for
receiving, handling, transport and disposal of Acceptable HHW may be made no earlier
than one (1) year following the date the Agreement is executed by both Parties and no
more frequently than quarterly thereafter. Modifications to Service Component III unit
prices and Component IV unit price for the Blue Mountain Drop-Off Facility may be
made no earlier than one (1) year following the date the Agreement is executed by both
Parties and no more frequently than annually thereafter if the quantity of Acceptable
Waste received is less than 1,000 tons per year. Modifications to Service Component
IV unit prices for curbside recycling may be made no earlier than one (1) year following
the date the Agreement is executed by both Parties and no more frequently than
annually thereafter if the market for the resale of such recyclable materials changes
twenty-five percent (25%) or more from the prior year, if the number of recycling
containers delivered to Customers exceeds seventy percent (70%) of all eligible
Customers, or if the number of yard waste carts delivered to Customers exceeds fifty
percent (50%) of all eligible Customers. Modifications to Service Component I for
Transfer Station Operations and Component II unit prices may be made no earlier than
one (1) year following the date the Agreement is executed by both Parties and no more
frequently than annually thereafter if the annual quantity of Acceptable Waste is less
than 38,000 tons. Modifications to Service Component V unit prices may be made no
earlier than one (1) year following the date the Agreement is executed by both Parties
and no more frequently than annually thereafter if the annual quantity of Compost
Materials is less than 2,100 tons or more than 3,500 tons.
(c) The Parties may process a modification request in the following manner:
(i) In the event a Party desires a modification, the Party shall submit a
written proposal to the other Party's Authorized Representative. The Contractor shall
provide with any proposal it makes and in response to any proposal made by the City a
Cost Substantiation, a time schedule for such modification, and an equitable adjustment
to the Service Fees. The City's Authorized Representative shall not increase any
'City of Port Angeles
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April 5, 2005
Service Fee to reflect cost increases for providing alternate facilities if such facilities are .
required by the Agreement or as a result of any Contractor omission, error, violation,
default, or breach of the Agreement.
(ii) The Parties shall negotiate in good faith so that an equitable
adjustment to the applicable Service Fee(s) is made to reflect the changes to services
and/or the other modifications requested and agreed upon.
(d) Neither Party shall be entitled to an adjustment to a Service Fee or other
modification pursuant to a request under this Section 2.15 unless the other Party
consents thereto in writing, which consent shall not be unreasonably withheld; provided,
however, that the Parties agree that any adjustment to a Service Fee requested by a
Party pursuant to Section 2.15(a)(vii) shall be "passed through" to the City in the form of
a modified Service Fee, and any such request, when evidenced by the proper
documentation required by Section 2.15(c)(i), shall be deemed to be reasonable and
equitable and justify a modification to Service Fees that shall place the Parties in as
close to the same position as they were in prior to the events underlying the request as
is possible. Modifications to the Service Fee(s) made pursuant to Section 2.15(a)(vii)
shall not be subject to the restrictions on unit price adjustments set forth in Section
2.15(b).
(e) Net Cost Reductions resulting from modifications approved by the City's
Authorized Representative shall be equally shared between the Parties. The reduction .
to the Service Fee shall be based on fifty percent (50%) of the Net Cost Reduction. The
reduction to the Service Fee shall commence the month following the date the
modification is approved by the City's Authorized Representative and shall continue
through the Term of the Agreement, unless the Agreement is otherwise terminated
pursuant to the terms hereof.
(f) In the event the Facilities, Transport Facility or the Disposal Site shall be
unavailable for use by the Contractor or by the City and it shall be necessary to perform
the obligations under the Agreement by utilizing transfer or disposal equipment or
facilities other than the Facilities, Transport Facility or the Disposal Site, the additional
costs, if any, incurred in the use of such alternative facilities shall be the responsibility of
and shall be paid by the Party responsible for creating the circumstances that rendered
the Facilities, Transport Facility or Disposal Site to be unavailable for use. In the event
the circumstances that rendered the Facilities, Transport Facility or Disposal Site to be
unavailable were not the fault of either Party or were the shared fault of both Parties, the
Parties shall negotiate in good faith so that an equitable adjustment is made for the
changes to the services rendered. As a part of these negotiations, the Contractor shall
provide a Cost Substantiation for any requested Service Fee increase. In the event the
Facilities, Transport Facility or Disposal Site are unavailable as a result of
Uncontrollable Circumstances, the provisions of Section 9 shall apply.
Section 2.16
Service Area Waste Direction
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City of Port Angeles
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April 5, 2005
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The Parties acknowledge and agree that a significant and material purpose of
this Agreem~nt is to ensure that all Acceptable Waste (excluding Yard Waste, Biosolids,
White Goods, Recyclable Materials, and Acceptable Moderate-Risk Waste) generated
within the City and the unincorporated areas of Clallam County is delivered to the solid
waste handling system designated by the City and Clallam County pursuant to RCW
35.21.120 and 36.58.040 and thereby managed in a manner consistent with the
comprehensive solid waste management plan pursuant to RCW 35.21.154 and
36.58.040. To achieve that purpose, provided that the City has not terminated Service
Components I, II or IV, the Contractor agrees to deliver all Acceptable Waste (excluding
Yard Waste, Biosolids, White Goods, Recyclable Materials, and Acceptable Moderate-
Risk Waste) it hauls, collects, or receives within Clallam County during the Term to the
Transfer Station where such waste will be compressed into containers for Transport to
the Contractor's Disposal Site. This provision shall include but not be limited to the Blue
Mountain Drop-Box Facility and any hauling or collection service the Contractor
provides within Clallam County during the Term of this Agreement.
To the extent permitted by Applicable Law, the City shall maintain in force and
effect and enforce applicable ordinances to require Acceptable Waste within the City of
Port Angeles to be delivered to the Transfer Station or other designated facilities to the
same extent as of the effective date of this Agreement. Furthermore, the City shall use
its reasonable efforts to maintain the Interlocal Agreement with Clallam County.
Section 2.17
Records, Reports and Plans by Contractor
(a) The Contractor shall keep true and accurate books, records and accounts
of all transactions related to performance of its obligations under the Agreement,
including, but not limited to all correspondence and invoices, money received and
accounts receivable, accounts payable, and copies of weight tickets or receipts issued
or received under each Service Component. These records, books and accounts shall
be maintained separately for each Service Component and shall also be kept separate
from any books or accounts for the Contractor's services and business operations not
part of this Agreement.
(b) For purposes of enabling the City to verify the computation of the Service
Fee, the City shall have the right during Delivery Hours, from time to time, upon
reasonable advance notice to the Contractor, to examine, inspect, audit and copy all of
the Contractor's weight tickets, lock box receipts, scale reports and other documentation
related to performance of its obligations under the Agreement.
(c) All books, records and accounts related to the Agreement shall be
retained by the Contractor and the City for at least seven (7) years after the Agreement
has terminated.
(d) The City reserves the right to conduct annual inspections and audits of the
Contractor's weight tickets, lock box receipts, scale reports and other documentation
related to performance of its obligations under the Agreement at the Contractor's offICes
City of Port Angeles
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April 5, 2005
during Delivery Hours and upon reasonable advance notice. The Contractor shall .
refund to the City any amounts which any audit indicates are City overpayments to the
Contractor. Any such payments are to be made within thirty (30) days of the City's final
determination.
(e) The Contractor shall provide to the City a quarterly report summarizing
routine and extraordinary activities during the prior period and plans and schedules for
all new or revised future activities. The quarterly report shall be submitted to the City no
later than ten (10) days following the end of each quarter. The quarterly report shall
include but not be limited to the following:
(i) The condition of the Facilities including Normal Wear and Tear and
any Facility Damages that require maintenance, repair, restoration
or replacement;
(ii) The remaining capacity at the Disposal Site (this information need
only be reported on an annual basis);
(iii) Changes in the status and readiness of alternate facilities;
(iv) Any Customer complaints submitted to the Contractor and the
Contractor's response, if any;
(v) Any extraordinary occurrences the Contractor deems to have .
affected its performance, including but not limited to occurrences
affecting the Facilities, Transportation Facility, or the Disposal Site;
(vi) Documentation regarding Unacceptable Waste, if any, received,
gathered, produced and/or retained;
(vii) Identification of any commodities other than Acceptable Waste
received at or transported from the Facilities;
(viii) Certification that the Facilities comply with all requirements of the
Agreement, which certification need only be reported on the last
quarterly report of the year; and
(ix) Documentation regarding the Equipment Schedule, which need
only be reported on the last quarterly report of the year.
(x) To the extent applicable, documentation demonstrating the
Contractor's exclusive use of fuel for performance under the
Agreement. Such documentation shall meet the requirements of
the City and include but not be limited to: the number of trips; actual
distance in miles traveled per trip; actual distance in miles per .
month for curbside collection; fuel receipts including date, time, fuel
City of Port Angeles
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April 5, 2005
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type (e.g., gasoline, diesel), vehicle identification, actual odometer
readings, the quantity of fuel; and calculation of actual fuel
economy (miles-per-gallon).
(xi)
Documentation and manifest regarding Acceptable MRW received,
packaged, or Transported to the Disposal Site;
(f) The City or its agents may inspect Facilities on reasonable advance notice
during Delivery Hours and review quarterly reports during each year of operations under
the Agreement.
(g) Within forty-five (45) days following any review and Facility inspection, the
City's Authorized Representative may issue to the Contractor a summary of all findings
and recommendations, if any, for changes to the Contractor's operations and
maintenance of the Facilities. The review and inspection summary may identify any
repairs, damages, remediation or restoration to Facilities that must be corrected by the
Contractor. The Contractor shall be fully responsible for implementing directions and
recommendations that are identified in the summary within thirty (30) days of the
Contractor's receipt of the annual review and inspection summary. Notwithstanding the
annual review and inspection, the Contractor shall permit inspection of the Facilities by
the City, its agents, and all governmental authorities having jurisdiction over the site and
its operation, from time to time and upon reasonable advance notice during Delivery
Hours.
.
Section 2.18
Confidentiality and Public Records
The Parties shall maintain confidentiality of all customer related information
provided or made available by the Parties under this Agreement to the extent permitted
by law. Any copies of documents prepared by the Contractor, its agents,
Subcontractors or consultants that are delivered to the City or the City's Authorized
Representative may be considered public records under the Washington Public
Records Act, RCW 42.17.250 et seq., and as such may be subject to public disclosure.
The City recognizes that certain Contractor documents may contain proprietary
information exempt from disclosure under RCW 42.17.310(1)(h), may constitute trade
secrets as defined in RCW 19.108.010(4), or may include confidential information which
is otherwise subject to protection from misappropriation or disclosure. Should
documents prepared by the Contractor, its agents, Subcontractors or consultants that
are delivered to the City or the City's Authorized Representative become the subject of
a request for public disclosure, the City shall use its best efforts to immediately notify
Contractor of such request and the date by which it anticipates responding. Contractor
must then assert in writing to the City any claim that such records contain proprietary
information that is exempt from disclosure under RCW 42.17.310(1)(h) or is subject to
protection from disclosure pursuant to RCW 19.108 or other state law, so that the City
may consider such assertion in responding to the requester. If Contractor fails to make
such assertion at least eight (8) days prior to the date of the City's intended response
that was provided in the City's notice to the Contractor, the City may make such
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April 5, 2005
disclosure. If Contractor made a timely request for nondisclosure and the City in its
reasonable discretion believes Contractor has a valid claim that the records contain .
information that is exempt from disclosure, the City will deny the request for disclosure
of such records or, at Contractor's expense, seek judicial declaration of the rights of the
parties. If the City's denial of a request for disclosure of records is challenged in court
and the City agrees to a Contractor request to defend its position, Contractor agrees
that it will both assist the City in its defense and shall indemnify the City for any and all
damages and/or penalties assessed and costs incurred in such defense, including but
not limited to any attorneys' fees incurred by the City and any attorneys' fees assessed
against the City under RCW 42.17.340(4). If the City in its reasonable discretion
believes Contractor does not have a valid claim, the. City shall so notify Contractor.
Section 2.19
Counterparts
The Agreement may be executed in counterparts, each of which shall be deemed
an original, and all of which when executed and delivered shall together constitute one
and the same instrument.
Section 2.20
Contracts or Approvals
Except as otherwise expressly provided herein, in any instance in which the
consent or approval of the City or the Contractor is required hereunder, or under any
agreements in connection with any transaction contemplated hereby, such consent or
approval shall not be unreasonably withheld or delayed. .
Section 2.21
Limitation of Liability of the City
(a) Obligations of the City under the Agreement are limited obligations
payable solely from such amounts as may lawfully be paid by the City for services of the
type required to be rendered by the Contractor under the Agreement from the City's
Solid Waste Fund. The City shall maintain this Fund and regulate Tip Fees in such a
manner reasonably calculated to ensure funds sufficient to satisfy the City's obligations
under the Agreement.
(b) Execution and delivery of the Agreement by the City is not intended to and
shall not impose any personal liability on any public official, officers, employees or
agents of the City. No recourse shall be had by the Contractor for any claims based on
the Agreement against any public official, officer, employee or other agent of the City in
his or her official capacity. All such individual liability, if any, is expressly waived by the
Contractor by the Contractor's execution of the Agreement.
Section 2.22
Discrimination
The Contractor shall not discriminate against any employee or applicant for
employment because of race, religion, creed, color, sex, marital status, sexual
orientation, political ideology, ancestry, national origin or the presence of any sensory, .
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mental or physical handicap, unless based upon a bona fide occupational qualification.
The Contrac,or shall take affirmative action to ensure that applicants are employed, and
that employees are treated during employment, without regard to their creed, religion,
race, color, sex, marital status, sexual orientation, political ideology, ancestry, national
origin or presence of any sensory, mental or physical handicap, unless based on a bona
fide occupational qualification. The Contractor's action under this Section shall include,
but not be limited to the following: employment, upgrading, demotion or transfer,
recruitment or recruitment advertising, layoff or termination, rates of payor other forms
of compensation and selection for training, including apprenticeship. The Contractor
agrees to post in conspicuous places, available to employees and other applicants for
employment, notices setting forth the provisions of this non-discrimination Section.
The Contractor shall not discriminate against any Customer for access to the
Facilities or receiving services because of race, religion, creed, color, sex, marital
status, sexual orientation, political ideology, ancestry, national origin or the presence of
any sensory, or mental or physical handicap. The Contractor shall take affirmative
action to ensure that Customers are treated without regard to their creed, religion, race,
color, sex, marital status, sexual orientation, political ideology, ancestry, national origin
or presence of any sensory, mental or physical handicap.
Section 2.23 Staff
The Contractor shall, at its own expense, train and maintain staff sufficient to
carry out its obligations under the Agreement, which staff shall be responsible for all
aspects of the design, development, construction, equipment, Acceptance Testing,
Startup, and operation of the Project, Facilities, Transportation Facilities, and Disposal
Site, in accordance with the Agreement. Each individual on the staff shall have
appropriate knowledge, experience and training in the type of work he or she is to
perform. The Contractor shall consult with the City's Authorized Representative prior to
appointing or replacing the person responsible for management of the Project, in
accordance with Exhibit B.
Section 2.24
Liens and Encumbrances; Property Rights
(a) The Contractor shall, at its sole expense during the Term of the
Agreement or as a result of the Agreement:
(i) Discharge any valid liens of any sort that attach to the Facilities that
are asserted by Subcontractors or third parties that the Contractor has contracted with
in connection with the Agreement, except those liens approved by the City in writing;
(ii) Discharge of record, by bond or otherwise, any lien or
encumbrance that may be filed against the Facilities by Subcontractors or third parties
that the Contractor has contracted with in connection with the Agreement; and
(iii) Indemnify the City and its agents for any injury or expense,
City of Port Angeles
April 5, 2005
23
including reasonable attorneys' fees, incurred by the City due to the filing of any such .
lien or the Contractor's failure to have any such lien discharged.
Section 2.25
Use of Facilities for Out-of-County Waste
(a) The Parties agree that in some instances processing Acceptable Waste
generated outside Clallam County at the Facilities may provide mutual benefits to them,
both commercial and otherwise. To insure that such instances are consistent with City
policies in this regard, the Contractor shall not accept waste or other materials from, or
enter into agreements with, any Person other than the City for the processing at the
Facilities of Acceptable Waste generated outside Clallam County, except with the prior
written consent of the City's Authorized Representative, which consent may be withheld
in the City's sole discretion.
(b) The Parties agree that at such time as one of the Parties informs the other
of the opportunity for an agreement for the processing at the Facilities of Acceptable
Waste generated outside Clallam County, such information shall be held as confidential
until such time as the City provides or declines to provide its written consent. Any
revenues from processing Acceptable Waste generated outside Clallam County shall be
collected by the City, and the Contractor shall be compensated solely through Service
Fees paid in accordance with the Agreement.
Section 2.26
Notice of Reduction in Processing Capacity
.
(a) The Contractor shall immediately advise the City's Authorized
Representative by telephone, to be confirmed in writing within twenty-four (24) hours, of
any reduction in the capacity of the Facilities, Transportation Facilities or Disposal Site
to receive or process Acceptable Waste in accordance with the Agreement. Such
notice shall include:
hereunder;
(i) The effect on the Contractor's ability to perform its obligations
(ii) Whether, in the Contractor's opinion, the reduction in processing
capacity was caused by an Uncontrollable Circumstance, City Event of Default, or other
event;
(iii) The reduction's duration; and
(iv) A schedule of the amount of Acceptable Waste that the Facility is
capable of processing during the capacity reduction.
The Contractor shall use its best efforts to resume Normal Operating Conditions as
soon as reasonably possible.
(b)
In the event that, due to a reduction in processing capacity that is not due
.
City of Port Angeles
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April 5, 2005
.
.
.
to an Uncontrollable Circumstance or City Event of Default, the Contractor is unable to
proCE;!SS AccEfptable Waste delivered to the Facilities prior to the Contractor's giving the
required notice to City's Authorized Representative, Contractor shall at its sole expense
cause that Acceptable Waste to be transported to an alternative facility or disposal site
as identified and agreed to in the Contingency Plan.
(c) Contractor's compliance with the provisions of this Section shall not
reduce its obligations to pay applicable Liquidated Damages or other costs in
accordance with the Agreement or Applicable Law.
Section 2.27
Accidents; Complaints
(a) The Contractor shall be responsible for all injuries, damages, accidents
and other mishaps associated with its operations, except as set forth in Section 5.3. The
Contractor shall report to the City's Authorized Representative the complete details
(including witness statements) of any accidents resulting from the performance of the
Agreement. For purposes of this Section, "accident" shall include the death of any
person, any personal injury resulting in inpatient hospitalization or outpatient treatment
by a physician, or damage to any City or Contractor Property exceeding three-thousand
dollars ($3,000).
(b) The Contractor shall respond in a reasonable manner to all complaints,
charges and allegations related to Contractor's performance under the Agreement
within thirty (30) days of receipt of that complaint, charge or allegation. The Contractor
shall report to the City's Authorized Representative the details of all significant
complaints received, including but not limited to the name and address of the
complainant (if available), the substance of the complaint including the activity or
service at issue, and the action, if any, the Contractor has taken to investigate or
remedy the problem or an explanation of why no action has been taken, in the quarterly
report required under Section 2.17.
Section 2.28
Coordination Meetings
The City and the Contractor shall hold periodic coordination meetings no less
than once (1 time) every three (3) months to review the progress of the work and
ongoing operations and to discuss operations, problems and/or complaints. Either the
City's or the Contractor's Authorized Representative may organize, call and notify the
other Party of a coordination meeting.
Section 2.29
Fines and Civil Penalties
(a) The Contractor shall be liable for all fines or civil penalties that may be
imposed on Contractor or the Facilities or any operations of the Contractor by any
regulatory agency on account of violations by Contractor of permits, regulations or any
other Applicable Law committed during the Term of this Agreement. The City shall not
be liable for and shall not reimburse the Contractor for payment of those fines or civil
CIty of Port Angeles
25
April 5, 2005
penalties. The Contractor reserves the right to contest in good faith any fine in an
administrative hearing or in court.
.
(b) The Contractor shall pay all fines and civil penalties imposed on
Contractor and shall defend all suits relating thereto, and hold the City harmless from
any loss, resulting therefrom.
Section 2.30
Taxes and Fees
Except as specifically excluded in Exhibit B, the Contractor shall be responsible
and liable for payment of all federal, state and local taxes and fees, and surcharges of
every form, that apply to any and all Persons, property, income, equipment, materials,
supplies, structures or activities that are involved in its performance of the Agreement,
and the Contractor has included such taxes, fees and surcharges in its Technical and
Cost Proposal (Exhibit A). The Contractor shall be afforded a "pass-through"
adjustment to the Service Fee(s) for increases in the rates of taxes, fees or surcharges
as set forth in Section 2.15.
Section 2.31
Security
The Contractor shall maintain security at all Facilities during the Term of the
Agreement as necessary and reasonable to protect Contractor and City Property,
including buildings and equipment, in accordance with the Agreement.
Section 2.32
Utilities
.
(a) The Contractor shall be responsible and liable for payment of all Utilities,
including but not limited to non-recurring costs, utility connections, and all recurring
monthly service charges. The Contractor shall pay all costs and charges for said
Utilities except as may be specifically excluded in Exhibit B.
(b) The Contractor shall be obligated to protect all public and private Utilities
whether occupying public or private property. If Utilities are damaged by reason of the
Contractor's operations, the Contractor shall repair or replace the damaged Utility within
thirty (30) days of such damages.
SECTION 3
REPRESENTATIONS AND WARRANTIES
Section 3.1
Representations and Warranties of the Contractor
The Contractor hereby makes the following representations and warranties to
and for the benefit of the City:
(a) Contractor is duly organized and validly existing as a corporation in good .
standing under the laws of the State of Washington.
CIty of Port Angeles
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April 5, 2005
.
.
.
. (b) ; Contractor has full legal right, power and authority to execute and deliver,
and perform its obligations under the Agreement and has duly authorized the execution
and delivery of the Agreement by proper action of its governing body. The Agreement
has been duly executed and delivered by the Contractor and constitutes a legal, valid
and binding obligation of the Contractor enforceable against the Contractor in
accordance with its terms, except as may be limited to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
(c) To the best of the Contractor's knowledge, neither the execution nor
delivery by the Contractor of the Agreement, the performance by the Contractor of its
obligations hereunder, nor the fulfillment by the Contractor of the terms and conditions
hereof: (i) conflicts with, violates, or results in a breach of any Applicable Law; (ii)
conflicts with, violates or results in a breach of any term or condition of any judgment,
order or decree of any court, administrative agency or other governmental authority, or
any agreement or instrument, to which the Contractor is a party or by which the
Contractor or any of its properties or assets are bound, or constitutes a default
thereunder; or (iii) will result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of the
Contractor except as expressly provided herein or except as expressly approved by the
City in writing.
(d) Contractor has obtained, made, or received, as applicable, all approvals,
authorizations, licenses, permits, orders, or consents of, or declarations, registrations or
filings with, any governmental or administrative authority, commission, board, agency or
instrumentality required for the valid execution and delivery of the Agreement by the
Contractor, or the Contractor has given the City adequate assurance in the City's sole
discretion that all such approvals and declarations will be obtained or made before the
Commencement Date of services by the Contractor under the Agreement. However, the
City's acceptance of such assurance shall in no way relieve the Contractor from its full
responsibility of obtaining all the approvals, permits and other actions required
hereunder. Contractor shall maintain all such approvals, permits and licenses as are
needed throughout the term of the Agreement.
(e) There is no action, suit, proceeding or, to the best of the Contractor's
knowledge, investigation, at law or in equity, before or by any court or governmental
authority, commission, board, agency or instrumentality pending or, to the best of the
Contractor's knowledge, threatened, against the Contractor, wherein an unfavorable
decision, ruling or finding, in any single case or in the aggregate, would materially
adversely affect the performance by the Contractor of its obligations hereunder or in
connection with the transactions contemplated hereby, or which, in any way, would
adversely affect the validity or enforceability of the Agreement or any other agreement
or instrument entered into by the Contractor in connection with the transactions
contemplated hereby.
City of Port Angeles
27
Apnl 5, -2005
(f) There has been no material adverse change in the Contractor's financial
condition since the date of the financial statement submitted by the Contractor to the .
City in response to the City's RFP for this Project.
(g) The Contractor, its officers, employees, agents and Subcontractors shall
comply with all Applicable Laws in performing the Contractor's obligations under the
Agreement. The City shall have the right to inspect copies of all correspondence or any
other documents sent to or received from the Contractor or its Subcontractors related to
the Contractor's compliance with any Applicable Law related to the performance of the
Agreement.
(h) The Contractor has examined carefully, and acquainted itself with, the
Agreement and its Exhibits, the Project, site conditions, necessary facilities, and the
difficulties that may be encountered in performing its obligations under the Agreement
and all Applicable Laws and has made and shall make its own deductions and
conclusions as to any and all problems that may arise from Facility site conditions and
accepts full legal responsibility for performing its obligations under the Agreement under
those conditions.
(i) Contractor shall fulfill the conditions of any manufacturer's warranty for
material or equipment. Up to the date the Ag~~ement is terminated, Contractor shall
correct any defects in workmanship that exist prior to or during the period of any
guarantee and any damage caused by those defects or the repairing of those defects,
at its own expense and without cost to the City or interruption of the services provided .
under the Agreement. Guarantees and warranties described in this Section shall not be
construed to modify, limit or lessen in any way, any rights or remedies that the City may
otherwise have against the Contractor or the Surety.
Section 3.2
Representations and Warranties of the City
The City hereby makes the following representations and warranties to and for
the benefit of the Contractor:
(a) The City is a non-charter code city of the State of Washington duly
organized and validly existing under the Constitution and laws of the State of
Washington, with full legal right, power and authority to enter into and perform its
obligations under the Agreement.
(b) The City has duly authorized the execution and delivery of the Agreement,
and the Agreement has been duly executed and delivered by the City and constitutes a
legal, valid and binding obligation of the City enforceable against the City in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement
of creditors' rights generally.
(c)
To the best of the City's knowledge, neither the execution nor delivery by
.
CIty of Port Angeles
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April 5, 2005
.
.
.
the City of the Agreement, the City's performance of its obligations hereunder, nor its
fulfillment of the terms or conditions hereof: (i) conflicts with, violates or results in a
breach of any Applicable Law; or (ii) conflicts with, violates or results in a breach of any
term or condition of any judgment, order or decree of any court, administrative agency
or other governmental authority, or any agreement or instrument, to which the City is a
party or by which the City or any of its properties or assets are bound, or constitutes a
default thereunder.
(d) There is no action, suit, proceeding or, to the best of the City's knowledge,
investigation, at law or in equity, before or by any court or governmental or
administrative authority, commission, board, agency or instrumentality pending or, to the
best of the City's knowledge, threatened, against the City wherein an unfavorable
decision, ruling or finding, in any single case or in the aggregate, would materially
adversely affect the performance of the City's obligations hereunder or in connection
with the other transactions contemplated hereby or which, in any way, would adversely
affect the validity or enforceability of the Agreement or any agreement or instrument
entered into by the City in connection with the transactions contemplated hereby.
(e) The City does not warrant or admit the correctness of any investigation,
interpretation, deduction or conclusion of the Contractor relative to the condition or
conditions of any of the facilities, nor does the City warrant or admit the correctness of
any information included in the City's RFP issued in connection with the Agreement or
other documents associated with the RFP.
(f) Information provided by the City on current and projected future quantities
of Acceptable Waste is for reference only and is not a guarantee of a future quantity.
The City does not guarantee a minimum or future quantity or composition of Acceptable
Waste delivered to the Contractor, and such Acceptable Wastes are subject to daily,
seasonal and annual variations.
(g) The City will use reasonable efforts to cooperate with the Contractor and
to respond to the Contractor's reasonable requests for information and assistance,
consistent with the provisions of the Agreement. However, it is not the City's
responsibility to give the Contractor early notice of rejection of faulty work nor in any
way to supervise the Project, and in no event shall the Contractor be relieved of any
liability, responsibility or consequence for neglect, negligence, carelessness,
substandard or defective work, or for the use of substandard or defective materials or
equipment, by the Contractor, its officers, employees, Subcontractors or agents. The
City does not assume any liability as a result of reviews or inspections conducted of the
Project, and instructions, directions or suggestions given by the City's Authorized
Representative or a City inspector shall not relieve the Contractor of any responsibility
or liability associated with Contractor's performance under this Contract. The City
reserves the right to order the Contractor to cease construction of Facilities and
operation of the Project for substandard or defective work and services or use of
substandard or defective materials or equipment.
City of Port Angeles
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April 5. 2005
SECTION 4
TERM
.
Section 4.1
Term of the Agreement
The Agreement shall be in force and effect from and after the date the City signs
the Agreement and shall terminate on the twentieth anniversary of the Commercial
Operations Date of the Transfer Station, unless sooner terminated due to a Contractor
Event of Default, a City Event of Default, or City termination of Service Components of
the Agreement for convenience as provided herein.
During the Term of the Agreement, the City's Authorized Representative may
request the Transfer Station and/or Moderate-Risk Waste Facility and any affected
component thereof be expanded or upgraded. Upon acceptance by the City Council of
an amendment to expand or upgrade the Transfer Station and/or Moderate-Risk Waste
Facility, the Term of the Agreement may be extended by a period of at least five (5)
years beyond City acceptance of the completion of any expansion or upgrade or as
mutually agreed upon by the Parties.
The City's Authorized Representative may request that Transport and Disposal
Site services under Service Component II of this Agreement be expanded to provide
services to additional jurisdictions or solid waste generators. Upon acceptance by the
City Council of an amendment to integrate such services in accordance with Section .
12.1(e), the Term of the Agreement may be extended by a period of at least five (5)
years or as mutually agreed upon by the Parties.
Section 4.2
City Termination of the Agreement for Convenience
(a) The City, in its sole discretion, shall have the right to terminate Service
Components I, II, or IV of the Agreement for convenience on either the tenth or the
fifteenth anniversary of the Transfer Station Commercial Operations Date in accordance
with the notice requirements herein. The City, in its sole discretion, shall have the right
to terminate the remaining Service Components of the Agreement for convenience on
the fifth anniversary of the applicable Commercial Operations Date and on the same
date annually thereafter in accordance with the notice requirements herein.
(b) The City's Authorized Representative shall give the Contractor not less
than one hundred and eighty (180) days written notice of the City's intention to exercise
its option as set forth in this Section to terminate any Service Component of the
Agreement for convenience. Except as otherwise provided herein, upon termination of
a Service Component for convenience, the City shall discontinue payment of all
associated Service Fees to the Contractor. Upon receipt of such notice, unless
otherwise approved by the City's Authorized Representative, the Contractor shall place
no further orders or subcontracts for materials, services or Facilities and cancel or divert
applicable commitments covering personnel services that extend beyond the .
termination for convenience date, except as necessary to complete the continuing
City of Port Angeles
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April 5. 2005
.
Service Components, if any, of the Service Agreement.
(c) Within ninety (90) days of the receipt of written notice of the City's
intention to exercise its option to terminate any Service Component of the Agreement
for convenience, the parties shall begin negotiations in good faith for the purpose of
drafting and executing a termination agreement. The termination agreement shall
provide for, among other things, reimbursement of the Contractor by the City for
reasonable costs associated with and/or caused by the City's termination of any Service
Component of the Agreement for convenience prior to the expiration of the Term
thereof. By way of example, the termination agreement shall include reimbursement of
the Contractor by the City for fair and reasonable costs for: the actual work performed;
accounting, legal, clerical and other expenses reasonably necessary for the preparation
of the termination agreement; and the termination and settlement of subcontracts
(including the amounts of such settlements if reasonably approved by the City).
.
For purposes of that negotiation, the Contractor may submit to the City's
Authorized Representative a termination proposal including a Cost Substantiation for
costs associated with the termination excluding the Final Payment in accordance with
Section 4.3. If the Contractor fails to submit the termination proposal within the time
allowed, the Contractor shall provide to the City's Authorized Representative data and
information sufficient to allow the City's Authorized Representative to determine the
amount, if any, due the Contractor because of the termination. The Contractor shall
make all records related to the Agreement or any Service Component of the Agreement
available to the extent deemed necessary by the City's Authorized Representative.
Termination of one or more of the Service Components of the Agreement for
convenience shall not relieve the Contractor of any responsibilities under the Agreement
for work to be performed in accordance with continuing Service Components.
If within ninety (90) days of beginning negotiation the parties are unable to
negotiate a mutually acceptable termination agreement, either party then may submit
the termination agreement to binding arbitration in accordance with the rules and
procedures set forth in Chapter 7.04 RCW. The parties shall jointly select a single
arbitrator. If neither party requests arbitration within ninety (90) days, the right to
arbitration shall expire and the Service Components subject to the notice shall terminate
in accordance with Subsection 4.2(b).
Any Service Component of the Agreement subject to termination for convenience
shall not terminate so long as the parties are engaged in good faith negotiations relating
to a termination agreement or there is pending an arbitration proceeding relating to the
termination agreement.
(d) Upon termination of Service Components I or VI for convenience, a Final
Payment for the Transfer Station and Moderate-Risk Waste Facility shall be provided to
the Contractor pursuant to Section 4.3 and the City may elect either to assume
operation of the Facilities or to continue to contract for Facility operations with the
Contractor or with any other party.
.
City of Port Angeles
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AprilS, 2005
(e) Termination of the Agreement due to a Contractor or City Event of Default .
shall be in accordance with Section 8.
(f) Termination of the Agreement due to Uncontrollable Circumstances shall
be in accordance with Section 9.3.
Section 4.3
City Final Payment for Facilities - Termination for
Convenience
If the City exercises its right to terminate Service Components I or VI for
convenience, the City shall provide a Final Payment for the Fixed Transfer Facilities and
Moderate-Risk Waste Facility and may acquire the Contractor's Transfer Station
Equipment.
If the City decides to terminate Service Components I or VI for convenience under this
Section, it shall provide written notice to the Contractor at least one hundred and eighty
(180) days prior to the termination date specifying the termination date. Upon the
Contractor's compliance with Section 11.5, the City shall compensate the Contractor for
the Fixed Transfer Station Facilities and Moderate-Risk Waste Facility at the time of
termination, in the amount specified as the Final Payment in accordance with Exhibit C.
If the City decides to exercise its rights to terminate Service Components I or VI for
convenience, the Contractor shall provide the City a first right of refusal to purchase the .
Contractor's Transfer Station Equipment, as set forth in this Subsection. The Contractor
shall provide to the City's Authorized Representative a Transfer Station Equipment
Schedule at least ninety (90) days prior to the termination date. The Transfer Station
Equipment Schedule shall separately identify each piece of equipment, including its
original purchase price, manufacturer's service life, and accumulated depreciation
based on the straight-line method. The City will be allowed to purchase any piece of
equipment or the Contractor's equipment inventory on the basis of its depreciated value.
SECTION 5
INSURANCE, INDEMNIFICATION AND BONDS
Section 5.1
Insurance
(a) The Contractor shall obtain, maintain and pay for the insurance coverage
designated in this Section from generally recognized financially responsible insurers
that are approved by the City Attorney in his or her sole discretion and licensed in the
State of Washington and whose claims paying ability is rated not less than "A" by A.M.
Best Company, Inc. at all times during the Term of the Agreement. The insurance must
protect the City from claims, risks and losses in connection with activities performed by
Contractor as required by the Agreement.
(b)
In the event the Contractor fails to comply with any provision of this
.
City of Port Angeles
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April 5. 2005
All insurance shall state the City shall be named as an additional insured .
on said policies for all insurance coverage required or obtained under or in
connection with the Agreement.
In addition to the City, Clallam County and the Washington State
Department of Natural Resources shall be named as an additional insured
on said policy for Service Component III.
iv. Separation of Insured
The insurance shall be endorsed to include "cross liability," "severability of
interests," or "separation of insureds", indicating that "except with respect
to the limits of insurance and any rights or duties specifically assigned in
this coverage part to the first named insured, this insurance applies as if
each named insured were the only named insured and separately to each
insured against whom claim is made or suit is brought."
(e) The Contractor shall provide Workers Compensation or evidence of
participation in the Washington State Department of Labor and Industries program, or,
in lieu thereof, the Contractor may provide a self-insurance or alternate insurance
program if approved by the City in the City's sole discretion.
(f) Maintenance of insurance by the Contractor as specified in this Section
shall constitute the minimum coverage required and shall in no way lessen or limit the .
liability or responsibility of Contractor under the Agreement. Contractor may carry, at its
own expense, any additional insurance it deems necessary.
(g) The Contractor immediately shall increase the amounts of insurance
required to reflect any changes in state or federal law or other Applicable Law to ensure
that the insurance provided shall cover, at a minimum and in addition to the designated
insurance requirements listed in this Section, the maximum limits under any applicable
tort claims act.
(h) In the event that any of the insurance required by this Section becomes
unavailable, Contractor shall secure insurance with substitute provisions providing as
much protection to the City as is reasonably available in the insurance marketplace and
approved in writing by the City Attorney.
(i) If the Facility is damaged or destroyed due to events for which the
Contractor is obligated to carry insurance, the Contractor shall act diligently to promptly
collect and apply insurance proceeds to the repair or reconstruction of the Facility.
Section 5.2
Delivery of Policies; Required Provisions
The Contractor shall deliver to the City Attorney copies of all certificates of
insurance for required insurance and any policy amendments and policy renewals. A .
City of Port Angeles
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April 5, 2005
.
certified copy of the insurance policy will be provided to the City Attorney upon request.
All insuranc~ shall be subject to the City Attorney's approval of the company, terms and
coverages. Each policy must provide for 45 days prior written notice of termination or
cancellation, and of any change in coverage or deductibles, to be given by the insurer to
the City Attorney.
Section 5.3
Indemnification
(a) Subject only to the limitations set forth in Section 5.3(b), the Contractor
covenants and agrees that, to the maximum extent permitted by law, it shall defend,
indemnify and hold the City, its successors, assigns, officers, employees, and elected
officials harmless from and against any and all liabilities, actions, damages, claims,
demands, judgments, losses, costs, expenses, reasonable attorney fees, suits and
actions, relating to or resulting from:
(i) Any injury to or death of any Person or Persons, or loss of or
damage to property caused or alleged to be caused by the Contractor or any of
its officers, agents, employees, Subcontractors (or any officer, agent or employee
of any Subcontractor), or any person under the control of or alleged to be under
the control of or acting at the direction of the Contractor or any Subcontractor
arising in connection with or as a result of:
.
(A) The performance by the Contractor of its obligations under
the Agreement;
(8) The use or operation of the Facilities, the Trailers or the
loading area by the Contractor or by any other person;
(C) The condition of the Facilities, the Trailers, and loading area
after the Commencement Date and prior to the termination
of the Agreement;
(ii) Any condition of the Facilities caused by the Contractor relating to
hazardous or toxic substances or any other condition caused by the Contractor
that results in environmental liabilities at the Facilities, Transport Facility or
Disposal Site; and
(iii) An allegation of infringement, violation or conversion of any patent,
license, proprietary right, trade secret or other similar interest, in connection with
the operation of the Facilities by the Contractor or the design, technology,
processes, machinery or equipment used at the Facilities, Transport Facility or
Disposal Site by the Contractor.
.
Notwithstanding anything express or implied in the Agreement to the contrary
and in addition to the indemnity and hold harmless agreements of the Contractor set
forth above, but without regard to any express or implied limits on the Contractor's
City of Port Angeles
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April 5, 2005
Section, the City in its sole discretion may procure and maintain, at the Contractor's sole
expense, insurance to the extent the City deems proper. The Contractor shall reimburse
the City for the cost of that insurance within fifteen (15) days of receiving written notice
by the City Attorney to do so.
(c) Within thirty (30) days following the execution of the Agreement, the
Contractor at its sole expense shall obtain and file with the City Attorney a certificate of
insurance that includes the coverages required under this Section which coverage shall
take effect on the Commencement Date.
.
(d) All insurance policies obtained by the Contractor in connection with the
Agreement must provide the following:
.
.
i.
Coveraaes:
Extended Bodily Injury
Employees as Additional Insured
Premises/Operations Liability
Products and Completed Operations Liability
Blanket Contractual Liability
Broad form Property Damage Liability (including completed operations)
Personal Injury
Stop Gap or Employers Contingent Liability
Automobile Liability, including coverage for owned, non-owned leased or
hired vehicles
Earthquake
Explosion, Collapse, Underground damage (referred to as "X.C.U.")
Owners and Contractors Protective Liability
Railroad Protective Coverage
Pollution Liability, if available at commercially reasonable rates, as
determined by the City Attorney in his or her sole discretion. City
authorization to proceed with Service Component III shall be subject to the
Contractor obtaining Pollution Liability in order to satisfy lease agreement
requirements between Clallam County and the Washington State
Department of Natural Resources.
Minimum Limits for all Coveraaes:
ii.
$3,000,000 per occurrence;
$6,000,000 annual aggregate.
Providing insurance coverage under this Section shall not be construed to
relieve the Contractor from liability in excess of these limits. These limits
are subject to revision by the City Attorney to protect the interests of the
Contractor and the City.
iii.
Additional Insured:
City of Port Angeles
33
Apn15,2005
indemnity and hold harmless agreement set forth above, the Contractor shall defend,
indemnify and hold the City, its successors, assigns, officers, employees, and elected .
officials harmless from and against any and all penalties, fines and charges of any
federal, state or local government having jurisdiction over the Facilities, Transport
Facility or Disposal Site, or the operations at the Facilities, Transport Facility or Disposal
Site, arising from any violation or alleged violation of Applicable Law by the Contractor
in connection with or as a result of the operations at the Facilities, Transport Facility or
Disposal Site or otherwise relating to Contractor's performance of its obligations under
the Agreement.
(b) The Contractor is not required to indemnify the City, its successors,
assigns, officers, employees, or elected officials or hold the City, its successors,
assigns, officers, employees, or elected officials harmless pursuant to the provisions of
this Section for any loss, damage or claim caused solely or in the case of concurrent
negligence, to the extent caused by the negligence or willful misconduct of the City, its
successors, assigns, officers, employees, or elected officials.
(c) Subject only to the limitations set forth in Section 5.3(d), the City
covenants and agrees that, to the maximum extent permitted by law, it shall defend,
indemnify and hold the Contractor, its successors, assigns, officers, employees,
Subcontractors and agents harmless from and against any and all liabilities, actions,
damages, claims, demands, judgements, losses, costs, expenses, reasonable attorney
fees, suits and actions, relating to or resulting from:
(i) Any injury to or death of any Person or Persons, or loss of or
damage to property caused or alleged to be caused by the City or any of its
successors, assigns, officers, employees, agents, or elected officials, or any
Person under the control of or alleged to be under the control of or acting at the
direction of the City arising in connection with or as a result of:
.
(A) The City's performance of its obligations or exercise of its
rights under the Agreement;
(ii) Any condition of the Facilities caused by the City or its
predecessors relating to hazardous or toxic substances or any other condition
caused by the City or its predecessors that results in environmental liabilities at
the Facilities, Transport Facility or Disposal Site. The City shall be responsible
for all pre-existing conditions and shall provide for any environmental cleanup(s)
of the surface or subsurface at the City's sole expense.
Notwithstanding anything express or implied in the Agreement to the contrary
and in addition to the indemnity and hold harmless agreements of the City set forth
above, but without regard to any express or implied limits on the City's indemnity and
hold harmless agreement set forth above, the City shall defend, indemnify and hold the
Contractor, its successors, assigns, officers, employees, Subcontractors and agents
harmless from and against any and all penalties, fines and charges of any federal, state .
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April5,2005
.
.
.
or local government having jurisdiction over the Facilities, or the operations at the
Facilities, ari~ing from any violation or alleged violation of Applicable Law by the City or
any of its predecessors, successors, assigns, officers, employees, agents, or elected
officials in connection with or as a result of the operations at the Facilities, or otherwise
relating to City's performance of its obligations or exercise of its rights under the
Agreement.
(d) The City is not required to indemnify the Contractor, its successors,
assigns, officers, employees, Subcontractors or agents or hold the Contractor, its
successors, assigns, officers, employees, Subcontractors or agents harmless pursuant
to the provisions of this Section for any loss, damage or claim caused solely or, in the
case of concurrent negligence, to the extent caused by the negligence or willful
misconduct of the Contractor, its successors, assigns, officers, employees,
Subcontractors or agents.
(e) The indemnified party (either the City or the Contractor) shall timely notify
the indemnifying party following the indemnified party's receipt of written notice from any
third party of any act, omission or occurrence with respect to which the indemnified
party intends to seek indemnification in accordance with the Agreement and, if
requested by the indemnifying party, shall also supply the indemnifying party all records,
data, contracts and documents reasonably related to that third party claim to enable the
indemnifying party to evaluate that claim for purposes thereof. If the indemnifying party
replies in writing to the indemnified party within twenty (20) days from the date of such
notice that it will undertake the defense of the indemnified party and will hold such party
harmless with respect to such claims, then no additional attorneys' fees incurred by the
indemnified party in its own defense shall be compensable as a claim entitled to
indemnity, unless (a) the indemnifying party has agreed to pay such fees and expenses,
(b) the indemnifying party has failed to assume the defense of that claim or has failed to
employ counsel reasonably satisfactory to the indemnified party, or (c) the named
parties in any action or proceeding relating to that claim (including any impleaded
parties) include the Contractor and the City, and the indemnified party has been advised
by its counsel that the indemnified party has a conflicting interest with the indemnifying
party or that there may be one or more legal defenses available to the indemnified party
which are different from or additional to those available to the indemnifying party. The
indemnified party will reasonably cooperate in providing information and testimony to
assist in the defense of the matter, but all out-of-pocket costs thereof shall be a part of
the indemnified amounts for which the indemnifying party shall hold the indemnified
party harmless. Control of the defense of the claims shall be the right and responsibility
in this case of the indemnifying party, which shall have authority to contest, compromise
or settle the matter in its sole discretion.
If the indemnifying party replies to the indemnified party within twenty (20) days
from the date of such notice but denies its responsibility to indemnify and hold the
indemnified party harmless with respect to such claim, or if the indemnifying party does
not reply to the indemnified party within twenty (20) days from the date of such notice,
the indemnified party may designate its own attorney, whose reasonable fees shall be
City of Port Angeles
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April 5, 2005
compensable as an indemnified claim to the indemnified party to the extent such claim .
is ultimately allowed under the terms of this Agreement. Whether or not the
indemnifying party replies, each party shall reasonably cooperate in providing
information and testimony to assist in the defense of the matter, and the costs thereof
(including attorney fees and out-of-pocket expenses) shall be a part of any indemnified
amounts for which the indemnifying party is obligated to hold the indemnified party
harmless under the terms of this Agreement.
(f) The foregoing indemnification and hold harmless provisions are for the
sole and exclusive benefit and protection of the indemnified parties, and are not
intended, nor shall they be construed, to confer any rights or impose any liabilities on
any Person or Persons other than the indemnified parties, except to the extent such
benefit and protection inure to Clallam County under the terms of the Interlocal
Agreement.
(g) If a court of competent jurisdiction determines that the Agreement is
subject to RCW 4.24.115, then the Contractor's liability to indemnify the City for liability
for damages arising out of bodily injury to persons or damage to property caused by or
resulting from concurrent negligence of the Contractor and the City shall be limited to
the Contractor's negligence.
(h) It is further specifically and expressly understood that the indemnification
provided in this Section constitutes the Contractor's waiver of immunity under industrial .
insurance and Title 51 RCW solely for the purposes of this indemnification.
(i) If any claims indemnified against under this Section have the potential for
coverage under any insurance, then before pursuing recovery under this indemnity the
indemnified party may pursue all recovery for such claim from any third party insurance.
When the indemnified party has determined in its reasonable discretion that it has
exhausted all recovery under all such available insurance, the indemnifying party shall
pay only the amount of the loss, if any, that exceeds the total amount that all insurance
has paid for the loss. Nothing in the Agreement shall constitute a waiver or
relinquishment of any claims which the Parties may have against insurers, nor shall any
provision of the Agreement waive or relinquish any subrogation or contribution rights
that the Parties or their insurers may have against another insurer or potentially liable
party.
(j) Except as otherwise expressly stated herein, the Parties do not under this
Section waive or surrender indemnity available under any federal, state, regional or
local law. This Section shall survive termination or expiration of the Agreement.
Section 5.4
Performance Bonds and Financial Guarantee
(a) Prior to the commencement of construction of the Transfer Station and
Moderate-Risk Waste Facility, the Contractor shall provide the City Attorney with, and .
maintain during the construction period and two years following the Commercial
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.
.
.
Operations Date a performance bond from, a Surety in the principal amount equal to the
total development and fixed facilities price specified in Exhibit C, in favor of the City and
in compliance with Applicable Law with a surety company reasonably approved by the
City Attorney, to secure the Contractor's performance of its obligations and faithful
adherence to all requirements of the Agreement during the acquisition, construction,
installation and startup of the Transfer Station and Moderate-Risk Waste Facility. The
City may draw upon the performance bond in accordance with this Section.
Any Surety providing a performance bond must be licensed to conduct business in
Washington State and be included on the current list of Companies Holding Certificates
of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring
Companies, as published in Circular 570, as amended, by the Audit Staff Bureau of
Accounts, United States Treasury Department. The City may in its reasonable discretion
require additional performance bonds from time to time during construction, as
circumstances, including Uncontrollable Circumstances, may dictate. The Contractor
shall be compensated for the cost of providing any additional bonds required by the
City. The City may in its reasonable discretion permit the Contractor to substitute for the
performance bond a letter of credit from a bank acceptable to the City.
The performance bond shall provide that notwithstanding the termination of the
construction period, at any time within two (2) years after the date construction
terminates, the City may make a claim against the performance bond for the
Contractor's failure to perform its obligations under the Agreement. Contractor shall be
liable for all construction defects in the Transfer Station and Moderate-Risk Waste
Facility regardless of the termination of the performance bond.
(b) Within thirty (30) days following the execution of the Agreement, the
Contractor shall provide the City Attorney with, and shall maintain during the Term of
the Agreement a performance bond in favor of the City with a surety company
reasonably approved by the City Attorney, in the principal amount equal to the greater
of $100,000 or twenty-five percent (25%) of the total annual Service Fees to secure the
Contractor's performance of its obligations and faithful adherence to all requirements of
the Agreement, including payment of any liquidated damages required in Section 7.5.
(c) The performance bonds required under Sections 5.4 (a) and 5.4 (b) shall
contain the following endorsement: "It is hereby understood and agreed that this bond
may not be canceled by the surety nor any intention not to renew be exercised by the
surety until after thirty (30) days written notice to the City Attorney of such intention to
cancel or not to renew".
(d) For purposes of this subsection, the word "bond" shall mean any bond,
letter of credit, or other financial guarantee referred to in this Section and provided to
guarantee or provide the funds to guarantee the performance of the Contractor's
obligations under the Agreement. All bonds given under this Section that are signed by
the Surety's agent must be accompanied by a certified copy of that agent's authority to
act for the Surety at the time the bond is signed. The City Attorney must approve in
City of Port Angeles
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writing the Surety and the form and substance of all bonds. The Contractor may satisfy .
the bond obligations under this Section by providing bonds in a form acceptable to the
City Attorney in his or her sole discretion from one or more bonding companies meeting
the qualifications set forth in this Section.
(e) The rights reserved to the City with respect to the performance bonds are
in addition to all other rights of the City, whether reserved by the Agreement or
authorized by law, and no action, proceeding or exercise of a right with respect to such
bonds shall affect the City's rights to demand full and faithful performance under the
Agreement or limit Contractor's liability for damages.
Section 5.5
Delivery of Bonds; Required Provisions
The Contractor shall deliver to the City Attorney all bonds required by this
Agreement. A certified copy of the bonds will be provided to the City Attorney upon
request. All bonds shall be subject to the City Attorney's approval of the company, form,
terms and coverages. Each bond must provide for thirty (30) days prior written notice of
termination or cancellation or of any change in coverage or deductibles to be given by
the surety to the City Attorney.
SECTION 6
ASSIGNMENT, SUBCONTRACTING, CHANGE OF
CONTROL
.
Section 6.1
Contractor Assignment and Delegation
The Contractor shall not sell, assign, delegate, transfer or convey any rights or
obligations under or arising from this Agreement, either separately or collectively, to any
other person, firm or entity, without the prior written consent of the City, which consent
shall not be unreasonably withheld. Any attempt by the Contractor to sell, assign,
delegate, transfer or convey any rights or obligations under or arising from the
Agreement, without the City's prior written consent, shall be null and void and
unenforceable.
Section 6.2
Contractor Subcontracts
(a) During the Term of the Agreement, at the City's request the Contractor
shall supply the City's Authorized Representative with a list of all Subcontractors that
will be providing services on the Project. The City shall have the right to reject any or all
subcontracts of all or part of Contractor's obligations to perform the Project, if the City
reasonably believes that the Subcontractors involved either have not or will not
adequately perform the tasks assigned to them. Upon request by the Contractor, the
City shall provide to Contractor the basis for its rejection of any Subcontractor, and the
Parties will confer to determine whether the City's concerns may be addressed in any
manner other than rejection of that Subcontractor. In no event shall the Contractor's .
subcontracting or the City's failure to reject Contractor's subcontracting in any way
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.
.
relieve the Contractor of its responsibilities under the Agreement.
(b) Unless a reasonable dispute exists concerning payment, the Contractor
shall promptly pay all Subcontractors, materialmen, suppliers or laborers engaged for
purposes of the Agreement in accordance with the contract or agreement between that
Person and the Contractor.
Section 6.3
Change In Control or Ownership
Any direct or indirect change in Control or the transfer of a direct or indirect
Controlling Interest in the beneficial ownership of the Contractor shall constitute a
Contractor Event of Default under the terms of the Agreement, unless the City consents
in writing to that transfer in accordance with Section 6.1, which consent shall not be
unreasonably withheld. The "change in control" or "transfer of a direct or indirect
Controlling Interest" of Contractor shall include but is not limited to the transfer or
assignment of fifty-one percent (51 %) or more of the beneficial ownership of Contractor
to or from a single entity; however, intra-company transfers in the form of transfers
between different subsidiaries or branches of the Contractor's parent corporation shall
not be construed as a "change in Control" or "the transfer of a Controlling Interest" of
Contractor.
Section 6.4
Binding Effect
The Agreement shall bind and inure to the benefit of the successors or assigns of
the Parties hereto, whether by merger, consolidation, transfer of assets, change in
Control, or transfer of a direct or indirect Controlling Interest or ownership of the Party.
SECTION 7
CONTRACTOR VIOLATIONS OF SERVICE COMPONENTS
Section 7.1
Violation Resolution Process
If the City reasonably believes that the Contractor is in violation of the
Agreement, the City's Authorized Representative may notify the Contractor in writing of
the violation setting forth in detail the nature of such violation. Within thirty (30) days of
Contractor's receipt of such notice of Violation, or after a longer period specified by the
City, the Contractor shall (i) respond in writing that the violation has been cured, (ii)
provide a written cure plan and schedule that reasonably satisfies the City, (iii) provide
explanations in refutation or excuse with documentation to support that an alleged
violation did not occur, or, if applicable, (iv) refute the City's denial of the Contractor's
cure plan. Within thirty (30) days of City's receipt of a written cure plan from the
Contractor the City shall provide written acceptance or denial of Contractor's cure plan,
which acceptance shall not be unreasonably withheld or delayed. All notices given by
one of the Parties to the other pursuant to this Section shall be delivered in accordance
with Section 2.10.
City of Port Angeles
April 5, 2005
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Section 7.2
Violation Cure Period Extension
.
If the nature of the violation is such that it cannot be fully cured within thirty (30)
days due to Uncontrollable Circumstances or City Event of Default, the period of time in
which the Contractor must cure the violation shall be extended by the City in writing for
such additional time reasonably necessary to complete the cure, provided that (i) the
Contractor shall have promptly commenced to cure, and (ii) the Contractor is diligently
pursuing its efforts to cure in the City's reasonable judgment.
Section 7.3
Violation Sanctions
If the violation has not been cured within the time allowed under Sections 7.1 and
7.2 above, then the Contractor shall be liable for Liquidated Damages in accordance
with Section 7.5. If the Contractor fails to make full and complete Liquidated Damage
payments as required by this Service Agreement within thirty (30) days after receipt of a
City invoice, then the City may immediately take steps to withdraw without further notice
to Contractor the amount thereof from the Performance Bond maintained in accordance
with Section 5.4 or, at the City's sole option, to deduct the amount thereof from the
Service Fee in accordance with Section 18, except as subject to Section 7.4 below.
Liquidated Damages shall accrue from the date: (i) thirty (30) days after the City's notice
of Violation per Section 7.1, if no cure plan is submitted; (ii) the date of the City's denial
of the Contractor's cure plan; (iii) the date the City approved the cure plan if the
Contractor fails to complete the cure; or (iv) the date of the determination by the
administrative hearing examiner provided under Section 7.4, that either (a) there was a .
violation; or (b) the cure plan was not unreasonably denied. In the event of a dispute
under the Agreement relating to Liquidated Damages, including an administrative
hearing, the Contractor shall pay any Liquidated Damages resolved in the City's favor
immediately upon resolution, and shall include a finance charge in the amount of six
percent (6%) per annum covering the period from the original due date of such
Liquidated Damages through the date of payment upon such resolution.
Section 7.4
Violation Refutation
Notwithstanding any other provision of the Agreement, upon the Contractor's
request, the Contractor shall be afforded an opportunity to: (i) refute that a violation has
occurred or (ii) refute the City's denial of Contractor's cure plan. The City may not act
under Section 7.3 if an administrative hearing, as provided for herein, is requested in
writing by the Contractor and no determination has yet been made as to whether a
violation has occurred. This opportunity shall consist of an administrative hearing before
an impartial hearing examiner jointly designated by the City Attorney and the
Contractor's Authorized Representative within thirty (30) days of Contractor's written
request to the City Attorney. The Contractor waives its right to request an
administrative hearing if it fails to respond in writing in accordance with Section 7.1.
If, as a result of the administrative hearing, the hearing examiner determines that a .
violation has not occurred, the City shall pay all of the hearing expenses related to the
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April 5, 2005
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administrative hearing (including attorney fees). If the hearing examiner determines that
a violation h9s occurred, the Contractor shall pay the expenses (including attorney
fees). After the conclusion of the administrative hearing either party may seek any and
all remedies that it may have at law. In any such proceeding the non-substantially
prevailing party shall be required to pay the reasonable expenses incurred by the
substantially prevailing party in such suit and all damages and costs (including attorney
fees) .
Section 7.5
Liquidated Damages
If a violation has not been cured within the time allowed under Sections 7.1 and
7.2 above, then the Contractor shall be liable for Liquidated Damages as set forth in this
Section as accrued from the applicable time period set forth in Section 7.3. In any such
case, the City may, in its reasonable discretion, charge and draw from the Contractor's
performance bond or withhold from any Service Fees due to the Contractor or obtain
from the Contractor in some other manner, the following Liquidated Damages, which the
parties agree bear a reasonable relationship to the damages the City would actually
incur:
(a) In the event of a Contractor Violation which prevents Contractor from
being able to process Acceptable Waste at the Transfer Station, charge the Contractor
Liquidated Damages in the amount of $2,500 per day;
. (b) In the event of a Contractor Violation which prevents Contractor from
being able to Transport Acceptable Waste and/or dispose Acceptable Waste at a
permitted Disposal Site, charge the Contractor Liquidated Damages in the amount of
$5,500 and/or $3,000 per day respectively;
(c) In the event the Contractor fails to procure and maintain the insurance
required under Section 5.1 after the Commercial Operations Date, charge the
Contractor a per-day fee equal to twice the annual cost of obtaining insurance of the
type and in the amounts required on the day of the default divided by 365 (i.e., twice the
daily cost of the insurance). The payment of Liquidated Damages for the Contractor's
failure to procure and/or maintain insurance shall be paid notwithstanding Contractor's
reimbursement to the City of any cost incurred by the City to obtain or maintain
insurance coverage;
(d) In the event that the Contractor fails to procure and maintain the
performance bond required by Section 5.4(b), charge the Contractor Liquidated
Damages in the amount of $1,000 per day for the Contractor's failure to procure and/or
maintain such bond(s);
(e) In the event of a Contractor Violation which prevents the Contractor from
being able to process Acceptable Waste at the Blue Mountain Drop Box Facility, charge
the Contractor Liquidated Damages in the amount of $500 per day;
.
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April 5, 2005
(f) In the event that the Contractor fails to materially comply with any .
provision of the Agreement after the Commercial Operations Date not otherwise
specified in this Section, charge the Contractor Liquidated Damages in the amount of
$500 per day;
(g) In the event of a Contractor Violation which prevents the Contractor from
being able to process Acceptable Moderate-Risk Waste at the Moderate-Risk Waste
Facility, charge the Contractor Liquidated Damages in the amount of $500 per day;
(h) Any Contractor transaction or arrangement, which has the intent of
duplicating City payment of Service Fees, circumventing payment of Disposal Charges
and/or evasion of payment of Disposal Charges by non-collection, non-reporting of
revenues, bartering, or any other means that evade the actual collection of revenues by
the Contractor for services delivered, is prohibited, charge the Contractor Liquidated
Damages in the amount of $500 per day.
Liquidated Damage amounts under the Agreement shall be adjusted annually at
a rate equal to 80% of the CPI determined in accordance with Section 17.3.
SECTION 8
DEFAULT AND TERMINATION
Section 8.1
Contractor Events of Default
.
Each of the following shall constitute a Contractor Event of Default for purposes
of the Agreement (unless caused by an Uncontrollable Circumstance or a City Event of
Default):
(a) Any failure of the Contractor to reasonably satisfy the City in regards to
the Project Development Plan or the deliverables within the Project Development
Schedule and Project Construction Schedule by the completion dates required under
the Agreement;
(b) Any failure of the Facilities, Transportation Facilities, or the Disposal Site
to meet the requirements set forth in the Agreement and Applicable Law after the
Commercial Operations Date required under the Agreement and/or failure to begin
operations by the Commercial Operations Date;
(c) Any failure of the Contractor to comply with the requirements of the
Agreement that the City reasonably determines threatens public health or safety.
Notwithstanding the foregoing, the City may at the Contractor's expense use all
reasonable means to eliminate the threat to public health or safety, including but not
limited to assuming operations at the Facilities;
(d) Any failure of the Contractor to substantially provide the City with a
Service Component under the Agreement;
.
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April 5, 2005
. (e) I The Contractor's repeated and persistent violations of the Agreement
pursuant to Section 7 that result in the assessment of Liquidated Damages;
.
.
(f) The Contractor's failure to repair, restore, replace or remediate the
Facilities within three (3) months after the City's Authorized Representative gives the
Contractor a Violation Notice or Default Notice;
(g) There is entered, without the consent of the Contractor, a decree or order
under Title 11 of the United States Code or any other applicable bankruptcy, insolvency,
reorganization or similar law, or appointment of a receiver, liquidator, trustee or similar
official of Contractor or any substantial part of its properties, and such decree, order or
appointment shall remain in effect (and not be stayed) for 60 consecutive days;
(h) The Contractor shall file a petition, answer or consent seeking relief under
Title 11 of the United States Code or any other applicable bankruptcy, insolvency,
reorganization or other similar law, or shall consent to the institution of proceedings
thereunder or to the filing of that petition or to the appointment of a receiver, liquidator,
trustee or other similar official of the Contractor or of any substantial part of the
properties of the Contractor, or shall make a general assignment for the benefit of
creditors;
(i) An assignment or a change in Control, Controlling Interest or ownership of
the Contractor other than that expressly permitted under Section 6.3 of the Agreement;
0) The Contractor fails to procure and/or maintain the performance bond
required under Section 5.4(a) of this Service Agreement, provided that such failure shall
not constitute a Contractor Event of Default if the Contractor provides a new bond or
replacement security meeting the requirements of the Agreement at any time before the
expiration or termination of the existing security; or
(k) The Contractor fails to procure and maintain insurance in accordance with
Section 5.1 of this Service Agreement prior to the Commercial Operations Date,
provided that such failure shall not constitute a Contractor Event of Default if the
Contractor provides a new certificate of insurance meeting the requirements of the
Agreement at any time before the expiration or termination of the existing policy.
(I) The Contractor's cumulative increase to Service Fees at any time
becomes greater than twenty percent (20%), excluding all adjustments made pursuant
to Section 2.15(a)(vii) and all adjustments to the Service Fees made pursuant to Section
17.2.
Section 8.2
Right to Cure Contractor Event of Default
(a) Upon the occurrence of any Contractor Event of Default pursuant to
Section 8.1, the City's Authorized Representative shall provide the Contractor's
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April 5, 2005
Authorized Representative with a Default Notice specifying the Contractor Event of .
Default that has occurred. The Contractor shall be allowed thirty (30) days to cure a
Contractor Event of Default by taking appropriate steps to comply with the terms of the
Agreement and any other applicable lawful regulations. If the nature of the Contractor
Event of Default is such that it cannot be fully remedied within thirty (30) days due to
Uncontrollable Circumstances or City Event of Default, the period of time in which the
Contractor must remedy the Contractor Event of Default shall be extended by the City in
writing for such additional time reasonably necessary to complete the remedy, provided
that (i) the Contractor shall have promptly commenced to remedy the Contractor Event
of Default, and (ii) the Contractor is diligently pursuing its efforts to remedy the
Contractor Event of Default in the City's reasonablejudgment.
Section 8.3
Remedies for Contractor Event of Default
(a) Upon the occurrence of any Contractor Event of Default pursuant to
Section 8.1 and a failure to cure under Section 8.2, the City may, in its sole discretion:
(i) Be released from its obligations under the Agreement and use any
other method or Person to process Acceptable Waste including the
City itself;
(ii)
Seek the judicial remedy of specific performance;
.
(iii) Immediately take steps to terminate the Agreement and either
withdraw the City's actual cost to cure the Contractor's Event of
Default up to the principal amount of the applicable performance
bond required in Sections 5.4(a) or (b) or deduct the amount
thereof from the Service Fee in accordance with Section 18 and
Section 8.3(d);
(iv) In the event of a Contractor Event of Default described in Sections
8.1 (g) or (h), seek the appointment of a receiver for anyone or
more of the Facilities in the Superior Court of Clallam County,
Washington, such receiver to continue operations of anyone or
more of the Facilities under the direction of the court; or
(v) Pursue any combination of the foregoing or any other remedy,
including money damages, available at law, equity or under this
Service Agreement.
(b) In addition to actual damages, specific performance, and other applicable
remedies provided in this Section upon the occurrence of a Contractor Event of Default
and a corresponding failure to cure, the City shall have the right except as expressly
provided herein to terminate the Agreement:
.
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April 5, 2005
.
(i)
If any of the Contractor Events of Default referred to in Subsection
8.1 (a) or (i) shall occur and be continuing for 90 days beyond the
date that the Contractor receives the Default Notice; or
(ii) Immediately if any Contractor Event of Default referred to in
Subsections 8.1 (d) shall occur.
(c) If the Agreement is terminated by the City due to a Contractor Event of
Default, the Contractor shall, in a timely manner, permit the continued operation of the
Facilities by an assignee acceptable to the City in writing and in the City's sole
discretion, including the City itself, and the Contractor shall also:
(i) Supply the assignee any proprietary components needed for
continuing the operations of the Facilities;
(ii) Assist the assignee by providing training (at a reasonable cost) of
personnel as may be reasonably necessary to enable the assignee
to continue with operation of the Facilities;
.
(iii) Provide the assignee non-technical and technical design,
construction and Operations Plans, whether or not proprietary,
including Specifications and as-built plans of the Facilities and
assign to or provide the assignee any other license or consent
which is necessary for the operation, maintenance and repair of the
Facilities; and
(iv) Promptly convey the Transfer Station Equipment to the City for an
amount to be determined in accordance with the Agreement.
(d) In the event the City terminates the Agreement for a Contractor Event of
Default after the Commercial Operations Date, the Contractor shall be entitled to
payment of any Service Fee due prior to the date of termination of the Agreement, but
only to the extent that the Service Fee exceeds amounts owed to the City. The City
shall retain the right to pursue any cause of action or assert any claim or remedy it may
have against the Contractor.
.
(e) Notwithstanding any other provision of the Agreement, upon the
Contractor's request, the Contractor shall be afforded an opportunity to refute that a
Contractor Event of Default has occurred, and the City may not act under Section 8.3
until an administrative hearing, as provided for herein, is concluded and a determination
has been made as to whether a Contractor Event of Default has occurred. This
opportunity shall consist of an administrative hearing before an impartial hearing
examiner jointly designated by the City Attorney and Contractor within thirty (30) days of
the Contractor's written request to the City Attorney. If as a result of the administrative
hearing, the hearing examiner determines that a Contractor Event of Default has not
occurred, the City shall pay all of the expenses related to the administrative hearing
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April 5, 2005
(including attorney fees). If the hearing examiner determines that a Contractor Event of .
Default has occurred, the Contractor shall pay the hearing expenses (including attorney
fees). After the conclusion of the administrative hearing either Party may seek any and
all remedies that it may have at law.
(f) In the event the City terminates the Agreement for a Contractor Event of
Default, the City or Contractor may pursue any remedy available to it at law or in equity.
In any such proceeding the non-substantially prevailing party shall be required to pay
the reasonable expenses incurred by the substantially prevailing party in such suit and
all damages and costs (including attorney fees).
Section 8.4
City Event of Default
The following shall constitute a City Event of Default for purposes of the
Agreement:
(a) The repeated or persistent failure or refusal by the City to fulfill any of its
material obligations under the Agreement (unless that failure or refusal results from an
Uncontrollable Circumstance or Contractor Event of Default).
(b) Upon the occurrence of a City Event of Default, the Contractor's
Authorized Representative shall provide the City's Authorized Representative with a
Default Notice specifying the City Event of Default that has occurred. The City shall be .
allowed thirty (30) days to cure a City Event of Default by taking appropriate steps to
comply with the terms of the Agreement and any other applicable lawful regulations. If
the nature of the City Event of Default is such that it cannot be fully remedied within
thirty (30) days due to Uncontrollable Circumstances, the period of time in which the
City must remedy the City Event of Default shall be extended by the Contractor in
writing for such additional time reasonably necessary to complete the remedy, provided
that (i) the City shall have promptly commenced to remedy the City Event of Default,
and (ii) the City is diligently pursuing its efforts to remedy the City Event of Default in the
Contractor's reasonable judgment.
(c) If the City Event of Default has not been cured within the time allowed
above, then the Contractor may immediately take steps to terminate the Agreement. In
the event the Contractor terminates the Agreement for a City Event of Default, the
Contractor shall be released from its obligations under the Agreement. In addition, in
any such case, the Contractor shall retain the right to pursue any cause of action or
assert any claim or remedy it may have against the City, whether available at law, in
equity or under the Agreement, including breach of contract and specific performance.
Section 8.5
City Final Payment for Facilities - Event of Default
(a) In the event the City terminates the Agreement due to a Contractor Event
of Default related to the Transfer Station and/or Moderate-Risk Waste Facility in
accordance with the Agreement prior to the Commercial Operations Date, the City shall .
not be responsible either for payment of Service Fees to the Contractor in accordance
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April 5, 2005
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with Section 17 or for Final Payment for the Transfer Station and/or Moderate-Risk
Waste Facility.
(b) In the event the City or Contractor terminates the Agreement due to a
Contractor or City Event of Default or an Uncontrollable Circumstance after the Transfer
Station and/or Moderate-Risk Waste Facility Commercial Operations Date, the City shall
provide a Final Payment for the Fixed Transfer Facilities and Moderate-Risk Waste
Facility, and may acquire the Contractor's Transfer Station Equipment. The City shall
compensate the Contractor for the Fixed Transfer Station Facilities and Moderate-Risk
Waste Facility at the time of termination, in the amount specified as the Final Payment
in accordance with Exhibit C. The Final Payment may be reduced by any outstanding
Liquidated Damages and damages to the Facilities that have not been restored
pursuant to Section 11.5. The Contractor shall provide the City a right of first refusal to
purchase the Contractor's Transfer Station Equipment and shall provide to the City's
Authorized Representative a Transfer Station Equipment Schedule at least thirty (30)
days prior to the termination date. The Transfer Station Equipment Schedule shall
separately identify each piece of equipment, including its original purchase price,
manufacturer's service life, and accumulated depreciation based on the straight-line
method. The City will be allowed to purchase any piece of equipment or the
Contractor's equipment inventory on the basis of its depreciated value.
Section 8.6
Remedies Cumulative, No Waiver
. The rights and remedies granted by this Section and Section 7 are in addition to,
and not in limitation of, all rights and remedies available to the Parties at law and in
equity. All such rights and remedies are available to the Parties. Nothing in this
Section, and no actions taken pursuant to this Section, shall constitute a waiver or
surrender of any rights, remedies, claims or causes of action that either Party may have
against the other under any other provision of the Agreement or any provision of law.
SECTION 9
UNCONTROLLABLE CIRCUMSTANCES
Section 9.1
"Uncontrollable Circumstance" Defined
"Uncontrollable Circumstance" means any act, event or condition that has had or
may reasonably be expected to have a material adverse effect on the rights or
obligations of a Party to the Agreement, or a material adverse effect on the Facilities,
Transportation Facilities or Disposal Site, if that act, event or condition is beyond the
reasonable control of the Party relying thereon as justification for not performing an
obligation or complying with any condition required of that Party under the Agreement.
Those acts, events or conditions shall include only the following:
.
(a) An act of God (except normal weather conditions for the geographic
area of the Facility), including the following: hurricanes, tornadoes, epidemic, landslide,
lightning, earthquake, volcano eruption, nuclear radiation, fire or explosion, extreme
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April5,2005
flooding or other extreme and atypical weather condition, an act of public enemy, war, .
blockade, insurrection, terrorism, riot, general arrest, or restraint of government and
people, civil disturbance or similar occurrence, that directly affects the operation of the
Facility, a Transportation Facility or Disposal Site;
(b) Failure of any appropriate federal, state or local agency or public or
private utility having operational jurisdiction in the area of location of the Facilities to
provide and maintain and assure the maintenance of any necessary utility;
(c) Delays in securing permits necessary for the construction and/or
operation of the Facilities, Transportation Facilities or Disposal Site, including delays
that result from successful appeals by third parties of such permits, provided that the
Party claiming an Uncontrollable Circumstance has met all of its obligations under the
Service Agreement with respect to such permits and/or has diligently defended such
appeal;
(d) A change in Applicable Law after the effective date of this
Agreement that prohibits or substantially interferes with or substantially increases the
costs of the Contractor's performance of its obligations under the Agreement, including
but not limited to the application of RCW 35.21.156(8)'s prevailing wage and women
and minority business enterprise provisions to the Contractor's operation of the
Facilities after the Commercial Operations Date;
(e) For the Contractor, either a Contractor, non-Contractor or industry- .
wide strike which substantially impacts and makes it commercially unreasonable to
perform the Contractor's obligations under the Agreement;
(f) For the City, any strike or labor dispute which substantially impacts
and makes it commercially unreasonable to perform the City's obligations under the
Agreement;
(g) For the Contractor, delays caused by application of Federal or
State archaeological, historical, or environmental law required by conditions discovered
during the design or construction of the Facilities; or
(h) For the Contractor, delays caused by City remediation projects
necessitated by on-site activities that occurred prior to the execution of this Agreement.
It is expressly understood and agreed that, notwithstanding any other provision of
this definition, the following events or conditions, in and of themselves, shall not
constitute an Uncontrollable Circumstance:
(i) Adverse changes in the financial ability of either of the
Parties to perform its obligations under the Agreement;
(ii)
The consequences of errors of design, construction, Startup,
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operation or maintenance on the part of the Contractor or any of its employees, agents,
Subcontractors or affiliates;
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(iii) The failure of the Contractor to complete and submit to the
City's Authorized Representative applications to secure permits necessary to design,
construct, operate, or maintain the Facilities, Transportation Facilities or Disposal Site;
(iv) The lack of fitness for use, or the failure to comply with the
specifications or the design of any materials, equipment or parts constituting any part of
the Facilities, Transportation Facility or Disposal Site;
(v) The failure of any technology to perform;
(vi) Typical ice, snow and flood conditions, including those
resulting in road restrictions; and
(vii) Normal Operating Conditions.
Section 9.2 Obligations In the Event of an Uncontrollable Circumstance
.
(a) The Contractor's obligation to provide the services provided for in the
Agreement and the City's obligation to pay Service Fees under the Agreement may be
suspended or modified on account of Uncontrollable Circumstances that may prevent or
substantially increase the cost of Contractor's performance of the Project or the City's
performance of its obligations hereunder. Except as allowed under Section 9.2(c),
neither Party to the Agreement shall be liable to the other for any loss, damage, delay or
failure to perform any obligation under the Agreement to the extent it results from an
Uncontrollable Circumstance. No other events shall excuse nonperformance of the
obligations of the Parties.
(b) As soon as possible after the occurrence of an Uncontrollable
Circumstance, but in no event later than forty-eight hours following the time the
knowledgeable Party becomes aware that the Uncontrollable Circumstance is likely to
interfere with its ability to perform its obligations under the Agreement, such Party shall
notify the other Party by telephone call (in person, not via message or voice mail) to the
Party's Authorized Representative of the event. As promptly as possible, but not later
than two weeks, following such notice, the knowledgeable Party shall provide to the
other a written description of (i) the Uncontrollable Circumstance and the cause thereof
(to the extent known), (ii) the date the Uncontrollable Circumstance began, its estimated
duration, and the impact, if any, on the Commercial Operations Date, and (iii) its
estimated impact on the other obligations of such Party under the Agreement.
Each Party shall provide prompt written notice of the cessation of such Uncontrollable
Circumstance. Whenever such act, event or condition shall occur, the Party claiming to
be adversely affected thereby shall, as promptly and as reasonably as possible, use all
commercially reasonable efforts to eliminate the cause therefore, reduce costs and
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AprilS, 2005
resume performance under the Agreement. While the delay continues, the affected .
Party shall give notice to the other Party, before the first day of each succeeding month,
updating the information previously submitted. The affected Party shall furnish promptly
(if and to the extent available) any additional documents or other information relating to
the Uncontrollable Circumstance reasonably requested by the other Party's Authorized
Representative.
(c) If the occurrence of the Uncontrollable Circumstance requires the
Contractor to activate the Contingency Plan, the City shall increase Service Fees by the
total amount of the Contractor's reasonable actual increased costs of utilizing the
Contingency Plan, net of insurance proceeds or any other recoveries obtained by the
Contractor, which costs must be documented and substantiated to the satisfaction of
the City, plus a reasonable amount under the circumstances for overhead to be paid to
the Contractor. If the occurrence of the Uncontrollable Circumstance substantially
increases the cost of Contractor's performance of the Project or the City's performance
of its obligations hereunder, the Parties shall reasonably negotiate the necessary
modifications to the Exhibits to this Agreement and/or the Service Fees pursuant to
Section 2.15. The Contractor shall not receive a Service Fee increase or any other
additional compensation for the use of alternative facilities unless that use is
necessitated by the occurrence of an Uncontrollable Circumstance or as otherwise
provided for in the Agreement.
(d) If any of the facilities are damaged or destroyed by events for which the
Contractor is obligated to carry a performance bond or insurance, the Contractor shall .
act diligently to promptly collect and apply insurance proceeds to the correction or
reconstruction of those facilities.
Section 9.3
Termination Due to Uncontrollable Circumstances
(a) The City may, at its option, terminate the Agreement effective thirty (30)
days after the City's Authorized Representative gives the Contractor written notice of
termination upon the occurrence of any Uncontrollable Circumstance which:
(i) Prevents the Contractor from processing any Acceptable Waste for
a period of one-hundred and eighty (180) consecutive days after the Commercial
Operations Date or one-hundred and eighty (180) days (whether or not consecutive) out
of any two-hundred (200) day period after the Commercial Operations Date; or
(ii) Prevents or is reasonably expected to prevent the Contractor from
processing any Acceptable Waste at least at seventy-five percent (75%) of the normal
operational standard for at least eighteen (18) months; or
(b) If the City elects to terminate the Agreement as a result of an
Uncontrollable Circumstance, the City shall pay to the Contractor an amount intended to
fairly compensate the Contractor for the Contractor's performance of its duties under .
Section 9.2(c) of the Agreement in addition to Section 8.5(b).
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SECTION 10
ACCEPTANCE OF WASTE
Section 10.1
Acceptance of Acceptable Waste
(a) Beginning on the Commercial Operations Date and continuing at all times
throughout the Term of the Agreement, but subject to the provisions of this Section, the
Contractor shall accept and process all Acceptable Waste delivered to the Facilities in
accordance with the Agreement.
(b) The Contractor may refuse to process any Acceptable Waste delivered or
sought to be delivered to the Facilities only if and to the extent that the Facilities cannot
process and Transport the Acceptable Waste due to a City Event of Default or an
Uncontrollable Circumstance. In the event the Contractor does not process Acceptable
Waste due to a City Event of Default, the City shall pay the Contractor a monthly
Service Fee based on the amount that would be due the Contractor for processing the
amount of Acceptable Waste that was processed the month prior to the date on which
the event of the City Event of Default occurred.
Section 10.2
Ownership of Acceptable Waste
Title to and responsibility for processing Acceptable Waste shall pass to the
Contractor from the Commercial Haulers and Customers delivering such waste to the
Facilities as the Contractor accepts that waste, but in no event later than the moment
the Trailer is removed from the boundaries of the Facilities. The Contractor shall have
the right to recycle or reuse any material to which it receives title under this Section,
except as specifically excluded in Exhibit B. The Contractor may retain any payments it
receives for the sale of Recyclable Materials, Special Waste, and Moderate-Risk Waste
in accordance with the Agreement.
Section 10.3
Ownership of Unacceptable Waste
(a) The Contractor shall not be required to accept, and reserves the right to
reject or revoke acceptance of any waste brought to the Facilities that the Contractor, in
its sole discretion, considers to be or suspects may be Unacceptable Waste.
Notwithstanding any provisions of the Agreement to the contrary, title to any
Unacceptable Waste that is delivered to the Contractor at the Facilities shall pass to the
Contractor the moment the Contractor accepts that waste, unless the Contractor later
revokes its acceptance and identifies the Commercial Hauler, Customer, generator or
transporter that delivered the Unacceptable Waste.
(b) Title to any Unacceptable Waste that the Contractor either rejects or later
revokes after accepting shall remain with the Commercial Hauler, Customer, generator
or transporter so identified as the party that delivered such waste, and the Contractor
shall require such party to remove from the Facilities waste it has delivered which is
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April 5, 2005
subsequently determined or suspected by the Contractor to be Unacceptable Waste, If .
such waste ins not removed from the Contractor's possession by the party within a
reasonable time, not to exceed seven (7) days from the receipt of such waste, or from
notice that such waste has been subsequently determined or suspected of being
Unacceptable Waste, the Contractor shall dispose of that Unacceptable Waste in
accordance with Section 10.4.
(c) The City shall have access to the Facilities upon reasonable advance
notice, during Delivery Hours, for the purpose of inspecting for or testing Unacceptable
Waste or reviewing Contractor's procedures or observing Contractor's implementation
of those procedures for identifying Unacceptable Waste delivered to the Facilities and
for handling and disposing of that waste after it is identified.
(d) The Contractor may seek cost recovery from the Commercial Hauler,
Customer, generator or transporter of such Unacceptable Waste.
Section 10.4
Unacceptable Waste and Hazardous Waste Procedures
(a) The Parties recognize that title to Unacceptable Waste may pass to the
Contractor in accordance with Section 10.3. In that event, the Contractor shall take
immediate acti~n to minimize any environmental damage that may be caused by the
delivery of Unacceptable Waste to the Facilities and shall handle, transport and dispose
of that Unacceptable Waste in accordance with all Applicable Laws and the .
requirements of this Section.
(b) The Contractor shall make reasonable efforts to exclude deliveries to the
Facilities that the Contractor knows or has reason to know contain Unacceptable Waste.
The Contractor shall comply with all requirements of, and implement the waste
screening program required in, the Operations Plan. Nothing in the Agreement shall
create any liability of the City or the Contractor to any third party for the Contractor's
failure to detect Hazardous Waste.
(c) The Contractor agrees to bear the risk as between the City and the
Contractor for the possibility that despite the Contractor's efforts, materials which
constitute Unacceptable Waste may in fact be accepted by the Contractor at the
Facilities. The Contractor agrees to indemnify and hold harmless the City from any
claim or cause of action arising out of an occurrence in which any Unacceptable Waste
has knowingly or unknowingly been accepted by the Contractor at the Facilities. The
Contractor's assumption of risk and indemnifications provided to the City in this
Subsection (c) are expressly conditioned on the City and its employees, agents and
elected officials having no knowledge of and/or providing no authorization to make any
delivery of Unacceptable Waste to the Facility.
Section 10.5
Survival of Rights and Obligations for Unacceptable
Waste
.
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The rights and obligations of the Parties for Unacceptable Waste and any claims for
damages th~refore shall survive any termination of the Agreement.
DIVISION II SCOPE OF WORK/SERVICE COMPONENTS
SECTION 11 SERVICE COMPONENT I TRANSFER STATION
FACILITY/OPERATIONS
Section 11.1 General
(a) The Contractor shall design and construct the Transfer Station and shall
be solely responsible for the design, development, construction, financing, Startup and
operation of the Transfer Station in accordance with the Agreement. The Contractor
shall construct the Transfer Station on City Property located at 3501 West 18th Street,
Port Angeles, Washington in accordance with the Agreement. The Contractor's
responsibilities under Service Component I are described in detail in Exhibit B.
(b) The City is the sole owner of the Transfer Station and the Appurtenances.
The Contractor has and shall have no property rights in the Transfer Station and the
Appurtenances.
(c) The Contractor shall be responsible for acceptance and proper handling of
all Acceptable Waste delivered to the Transfer Station, in accordance with Applicable
Law, the Waste Acceptance Policy, and all other provisions of the Agreement.
Section 11.2
Disposal Site Capacity
The Contractor shall provide capacity at the Disposal Site sufficient for the
disposal of all Acceptable Waste delivered to the Transfer Station for the full twenty (20)
year Term of the Agreement, unless and until the Agreement is terminated prior to the
end of such Term.
Section 11.3
Repair and Replacement of the Transfer Station
The Contractor shall maintain the Transfer Station in conformance with industry
standards and in accordance with (i) Exhibits A and B, and (ii) Applicable Law. The City
may require the Contractor, at the Contractor's sole expense, to replace or repair any
Facility Damages that the City reasonably believes does not comply with the
Agreement.
Section 11.4
Restoration of the Transfer Station
The Parties intend and agree that upon termination of the Agreement the
Transfer Station shall in all respects comply with the requirements of Section 2.17 of the
Agreement and that the Contractor shall, at its sole expense, restore and remediate the
City of Port Angeles
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April 5, 2005
Transfer Station as required to comply with the Agreement, Normal Wear and Tear .
excepted.
Section 11.5
, Financing
The Contractor shall be solely responsible for obtaining financing for
development and construction of the Transfer Station. No such financing shall in any
way pledge or be deemed to pledge the credit or the taxing power of the City, the State
of Washington or any other subdivision or municipal corporation thereof.
The City shall make available to potential lenders information about the
Agreement and solid waste operations in the City. The City shall have no other
obligations with respect to any financing for the Transfer Station.
Section 11.6
Contractor Use of Facilities
The Contractor shall not use or operate the Transfer Station except as
specifically provided in the Agreement. No City Property shall be in any way used by
the Contractor as an intermodal or transfer facility or for the Contractor's own purposes
except as specifically provided in the Agreement.
SECTION 12
SERVICE COMPONENT II TRANSPORT AND
DISPOSAL
.
Section 12.1
General
(a) The Contractor shall provide Transportation from the Transfer Station to
the Disposal Site for all Acceptable Waste delivered to the Transfer Station. The
Contractor shall supply, operate, maintain, repair and replace the Transportation
Facilities (including but not limited to Trailers, chassis, and rolling stock, or other means
of conveyance) as necessary to ensure sealed and litter-free Transportation of the
waste to the Disposal Site. The Contractor's responsibilities under Service Component II
are described in detail in Exhibit B.
(b) The Contractor shall provide capacity at the Disposal Site for all
Acceptable Waste delivered to the Transfer Station and shall provide for the use of all
necessary facilities at the Disposal Site. The Disposal Site shall be operated,
maintained and closed according to Applicable Law, the terms of the Agreement, and
the description of the Contractor's disposal services set forth in Exhibit B.
(c) The Contractor shall own, operate and/or lease facilities necessary to
perform its Transport and Disposal obligations under the Agreement.
(d) The Contractor shall maintain a closure and post-closure trust fund or
alternative funding mechanism for the Disposal Site in accordance with its operating .
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April 5, 2005
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permit issued and administered by appropriate regulatory bodies, if required therein,
and shall be responsible for all closure and post-closure costs relating to the Disposal
Site.
(e) To the extent that an arrangement to integrate Transport and Disposal
Site services with additional jurisdictions or solid waste generators is or becomes
available, any resulting revision to the Service Fees and Term of the Agreement shall
be mutually agreed upon in accordance with Section 2.12. The City may enter into
Interlocal Agreements with additional jurisdictions to the extent required by law to
facilitate the integration of Transport and Disposal Site services.
Section 12.2
Disposal Site Capacity
The Contractor shall provide capacity at the Disposal Site sufficient for the
disposal of all Acceptable Waste delivered to the Transfer Station for the full twenty (20)
year Term of the Agreement, unless and until the Agreement is terminated prior to the
end of such Term.
Section 12.3
Trailers
The Contractor shall supply and maintain at all times throughout the term of the
Agreement a sufficient number of Trailers to accommodate the Transport of all
Acceptable Waste delivered to the Transfer Station to the Disposal Site in accordance
with the Agreement. This requirement shall include a sufficient number of Trailers for
loading at the Transfer Station, storage of loaded Trailers, and shipment of the Trailers
to and from the Disposal Site.
SECTION 13
SERVICE COMPONENT III BLUE MOUNTAIN
OPERATIONS
Section 13.1
General
(a) The Contractor shall be solely responsible for the operation of the Drop
Box Facility located at 1024 Blue Mountain Road, Port Angeles, Washington in
accordance with the Agreement.
(b) The Contractor shall be responsible for acceptance and handling of all
Acceptable Wastes delivered to the Drop Box Facility in accordance with Exhibit B.
(c) The Contractor shall provide each and every Drop Box Facility
Commercial Hauler and Customer a serialized receipt for Disposal Charges at the Drop
Box Facility, with copies retained by the Contractor in accordance with the Agreement,
in order that the City may accomplish an audit of the transactions. Within ten (10) days
following the end of each month, the Contractor shall provide the City's Authorized
Representative a written list and electronic copy (in a format to be specified by the City's
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Authorized Representative) of all serialized receipts and Disposal Charges collected by .
the Contractor from Customers using the Drop Box Facility for the previous month
accompanied by Contractor payment to the City in the full amount of said Disposal
Charges. Each serialized receipt shall include the date of service, Customer arrival
time, net weight, waste type and Disposal Charge.
All Customer Disposal Charges collected by the Contractor at the Drop Box
Facility shall be the property of the City. In the event that Contractor payment of such
fees is made after 5:00 P.M. on the date due, the Contractor shall pay a late payment
charge of the greater of (i) $100 or (ii) simple interest at twelve percent (12%) annual
percentage rate of the total amount past due. City acceptance of any payment shall not
be construed as an accord that the amount paid is the correct amount, nor shall such
acceptance be construed as a release of any claim the City may have for additional
sums payable under this Section. The Contractor shall comply with the cash handling
procedures in accordance with Exhibit A. Any Contractor accounts receivable for
Disposal Charges at the Drop Box Facility shall be the Contractor's responsibility to
collect and the Contractor shall remit full payment to the City for such accounts
receivable.
Section 13.2
Repair of the Drop Box Facility
The Contractor shall maintain the Drop Box Facility in conformance with industry
standards and in accordance with (i) Exhibit B, and (ii) Applicable Law. The City may .
require the Contractor, at the Contractor's sole expense, to replace or repair any Normal
Wear and Tear or Facility Damages that the City reasonably believes does not comply
with the Agreement.
SECTION 14
SERVICE COMPNENT
OPERATIONS
IV
RECYCLING
Section 14.1
General
(a) The Contractor shall be solely responsible for the collection, processing
and marketing of Recyclable Materials within the City in accordance with the
Agreement, as set forth in Exhibit B.
(b) The Contractor shall be solely responsible for providing and maintaining
collection containers for Recyclable Materials and collection carts for Yard Debris in
accordance with the Agreement.
(c) The Contractor shall be solely responsible for collection and processing of
Recyclable Materials from Drop-Off Facilities at the Transfer Station and Drop Box
Facility in accordance with the Agreement.
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Section 14.2
Vehicles
,
The Contractor shall supply and maintain at all times throughout the term of the
Agreement a sufficient number of vehicles to accommodate the curbside collection of all
Recyclable Materials and for servicing Drop-Off Facilities in accordance with the
Agreement.
Section 14.3
Repair of the Drop-Off Facilities
The Contractor shall maintain the Drop-Off Facilities in conformance with industry
standards and in accordance with (i) Exhibit Band (ii) Applicable Law. The City may
require the Contractor, at the Contractor's sole expense, to replace or repair any Normal
Wear and Tear or Facility Damages that the City reasonably believes does not comply
with the Agreement.
SECTION 15
SERVICE COMPONENT V CO-COMPOSTING
OPERATIONS
Section 15.1
General
(a) The Contractor shall be solely responsible for the operation of the Co-
Composting Facility in accordance with the Agreement, as set forth in Exhibit B.
(b) The Contractor shall be responsible for acceptance, handling, and
processing of Compost Materials manufactured at the Co-Composting Facility, in
accordance with Applicable Law.
Section 15.2
Repair of the Co-Composting Facility
The Contractor shall maintain the Co-Compost Facility in conformance with
industry standards and in accordance with (ii) Exhibit Band (iii) Applicable Law. The
City may require the Contractor, at the Contractor's sole expense, to replace or repair
any Normal Wear and Tear or Facility Damages that the City reasonably believes does
not comply with the Agreement.
SECTION 16
SERVICE COMPONENT VI MODERATE-RISK
WASTE FACILITY/OPERATIONS
Section 16.1
General
(a) The Contractor shall design and construct the Moderate-Risk Waste
Facility and shall be solely responsible for the design, development, construction, and
financing of the Moderate-Risk Waste Facility in accordance with the Agreement. The
Contractor shall construct the Moderate-Risk Waste Facility on City Property at 3501
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April 5, 2005
West 18th Street, Port Angeles, Washington in accordance with the Agreement.
.
(b) The City is the sole owner of the Moderate-Risk Waste Facility and the
Appurtenances. The Contractor has and shall have no property rights in the Moderate-
Risk Waste Facility and the Appurtenances.
(c) The Contractor shall be responsible for acceptance, proper handling,
transport and disposal of all Acceptable Moderate-Risk Waste delivered to the
Moderate-Risk Waste Facility, in accordance with Applicable Law, the Waste
Acceptance Policy, and all other provisions of the Agreement.
(d) The Contractor shall be responsible for payment of all charges at the
Disposal Site.
Section 16.2
Disposal Site Capacity
The Contractor shall provide capacity at the Disposal Site sufficient for the
disposal of all Acceptable Moderate-Risk Wastes delivered to the Moderate-Risk Waste
Facility for the full twenty (20) year Term of the Agreement, unless and until the
Agreement is terminated prior to the end of such Term.
Section 16.3
Repair and Replacement of the Moderate-Risk Waste
Facility
.
The Contractor shall maintain the Moderate-Risk Waste Facility in conformance
with industry standards and in accordance with (i) Exhibit S, and (ii) Applicable Law.
The City may require the Contractor, at the Contractor's sole expense, to replace or
repair any Facility Damages that the City reasonably believes does not comply with the
Agreement.
Section 16.4
Restoration of the Moderate-Risk Waste Facility
The Parties intend and agree that upon termination of the Agreement the
Moderate-Risk Waste Facility shall in all respects comply with the requirements of
Section 2.17 of the Agreement and that the Contractor shall, at its sole expense, restore
and remediate the Moderate-Risk Waste Facility as required to comply with the
Agreement, Normal Wear and Tear excepted.
Section 16.5
Financing
The Contractor shall be solely responsible for obtaining financing for
development and construction of the Moderate-Risk Waste Facility. No such financing
shall in any way pledge or be deemed to pledge the credit or the taxing power of the
City, the State of Washington or any other subdivision or municipal corporation thereof.
The City shall make available to potential lenders information about the
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Agreement and solid waste operations in the City. The City shall have no other
obligations ~ith respect to any financing for the Moderate-Risk Waste Facility.
Section 16.6
Contractor Use of Facility
The Contractor shall not use or operate the Moderate-Risk Waste Facility except
as specifically provided in the Agreement.
DIVISION III PAYMENT PROVISIONS
SECTION 17 DISPOSAL CHARGES AND SERVICE FEES
Section 17.1 Disposal Charges to be Collected
.
(a) The City may charge and collect from Commercial Haulers and Customers
a Disposal Charge including a minimum charge or a charge for each ton (or other unit of
measure as the City may deem appropriate) or portion thereof of Acceptable Waste
delivered to the Contractor at the Transfer Station in accordance with the Agreement.
Disposal Charges shall be based on Tip Fees.
(b) The Contractor shall charge and collect from Commercial Haulers and
Customers a Disposal Charge based on Tip Fees established by the City including a
minimum charge or a charge for each ton or portion thereof of Acceptable Waste
(excluding Yard Waste, Biosolids, White Goods, Recyclable Materials, Acceptable
Special Waste, and Acceptable Moderate-Risk Waste) that is delivered to the
Contractor at the Blue Mountain Drop Box Facility.
(c) The Tip Fees established in accordance with this Section shall provide for
but not be limited to (i) the Service Fee payments made to the Contractor, (ii) the cost of
activities identified in the Clallam County Comprehensive Solid Waste Management
Plan, and (iii) State and local taxes. These Tip Fees shall be determined and adjusted
by the City in its sole discretion (acting in accordance with the Interlocal Agreement).
The City may set Tip Fees at various amounts and in such units as the City deems
appropriate based on different types of Acceptable Waste, differences among the
Commercial Haulers or Customers delivering that waste, differences between the
facilities receiving that waste or for any other reason permitted by law. In the event the
City elects to adjust the Tip Fee, the Contractor shall implement the new Tip Fee under
Service Component III in accordance with the City's reasonable instructions after the
Contractor receives notice from the City's Authorized Representative to do so in
accordance with Section 2.10.
.
(d) City payment of Service Fees to the Contractor shall be based on weight
tickets issued by the City at the Transfer Station, unless otherwise specified in Exhibit B
or approved by the City's Authorized Representative.
City of Port Angeles
61
April 5, 2005
Section 17.2
Adjustment of Service Fees
.
Unit prices included in Exhibit A of this Service Agreement shall be adjusted for
CPI and FPI as follows:
(a) The unit prices included in Exhibit A of this Service Agreement that are
only subject to an adjustment for CPI shall be adjusted by the City annually effective
January 1 of each year following the Commercial Operations Date utilizing the following
formula:
AF
where:
AF
F
CPlx
CPIQ4
z
=
F x Z x ((CPlx I CPlo4) -1)
=
Adjustment to the Unit Price for year x.
=
Unit price stated in 2004 dollars, as set forth in Exhibit A.
=
CPI for year x, where x = the year in which the adjustment
will take place. For example, x = the annual CPI from
January 2005 through December 2005 that will become the
annual CPI adjustment effective on January 1, 2006. CPlx
will be determined by the City in accordance with the United
States Department of Labor Bureau of labor Statistics for
the West Urban Area.
.
=
The annual CPI for year 2004 from January 2004 through
December 2004. CPlo4 will be determined by the City in
accordance with the United States Department of Labor
Bureau of Labor Statistics for the West Urban Area.
=
Annual Unit Price Adjustment Factor for CPI for each
Service Component, expressed in percentage, as set forth in
the Exhibit A.
The Contractor will be paid its Service Fees that are subject to an adjustment
under this Section monthly (with an allowance of 30 days from the last day of the
preceding month before payment is received). Fixed Monthly Fees under
Service Components I and VI are not subject to an adjustment under this
Section.
The Contractor may submit a modification request to the City in accordance with
Section 2.15 for (i) changes in law that substantially impact the Contractor's
obligations under the Agreement and (ii) increases in the rates of taxes, fees or
surcharges that the Contractor is obligated to pay pursuant to the Service
Agreement.
.
City of Port Angeles
April 5, 2005
62
. (b) ,The unit prices included in Exhibit A of this Service Agreement that are
subject to an adjustment for CPI and FPI shall be adjusted by the City annually effective
January 1 of each year following the Commercial Operations Date utilizing the following
formula:
AF = (F x W x Z x ((CPlx I CPI04) -1)) + (F x X x Yx ((FPlx I FPI04) -1))
Where in addition to the terms defined in 17.2(a):
FPlx
FPI04
.
W
x
Z
=
FPI for year x, where x = the year in which the adjustment
will take place. For example, x = the average FPI from
January 2005 through December 2005 that will become the
annual FPI adjustment effective on January 1, 2006. FPlx
will be determined by the City in accordance with the United
States Department of Energy Weekly Retail On-Highway
Diesel Price Statistics for the West Coast.
=
FPI for year 2004 including the average FPI from January
2004 through December 2004. FPI04 will be determined by
the City in accordance with the United States Department of
Energy Weekly Retail On-Highway Diesel Price Statistics for
the West Coast.
=
The percentage of the unit price that is subject to the annual
unit price adjustment for CPI, as set forth in Exhibit A.
=
The percentage of the unit price that is subject to the annual
unit price adjustment for FPI, as set forth in Exhibit A.
=
Annual Unit Price Adjustment Factor for FPI for each Service
Component, expressed in percentage, as set forth in the
Exhibit A.
Service Components II and IV are subject to an adjustment under this Section,
as set forth in the Exhibit A.
Section 17.3
Adjustment of Liquidated Damages
Liquidated damages included in Section 7.5 of the Agreement shall be adjusted
by the City annually on January 1 of each year following the Commercial Operations
Date utilizing the following formula:
AD =
.
where:
D x (1 + (((CPlx I CPI04) -1) x 80%))
CIty of Port Angeles
63
April 5, 2005
AD
=
Adjusted Liquidated Damages.
.
D
=
,Liquidated Damages amount specified in Section 7.5 stated
in 2004 dollars.
Section 17.4
Service Component I Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Transfer Station Service Fee in
accordance with this Section, as long as the Contractor is providing the services in
accordance with the requirements of the Agreement; provided, however, that in the
event of a dispute under the Agreement relating to such Fees, including an
administrative hearing under Section 7 or 8, the City shall pay any undisputed amounts
to the Contractor in accordance with the payment terms under the Agreement.
Disputed amounts resolved in the Contractor's favor shall be paid immediately upon
resolution, and shall include a finance charge in the amount of six percent (6%) per
annum covering the period from the original due date of such Fees through the date of
payment upon such resolution.
(b) The Contractor's Transfer Station Service Fee will provide for monthly
payment to the Contractor in accordance with Exhibit A, which Service Fee shall be
adjusted annually as provided in Section 17.2. The Transfer Station Service Fee will .
consist of the following:
· A fixed monthly fee for capital, financing, equipment and other fixed costs.
The fixed monthly fee shall be modified in accordance with Section 2.15 if
there is a difference between the Contractor's as-built site plan specified in
Section 1.7.7 of the Performance Specifications and the City approved site
plan and shall based on the Contractor's unit prices in accordance with the
Technical and Cost Proposal. The fixed monthly fee shall be modified in
accordance with Section 2.15 if there is a difference in cost between the City
approved design and construction documents for the card reader system and
the card reader system allowance in accordance with the Technical and Cost
Proposal. This fee shall not be adjusted in accordance with Section 17.2.
· A monthly fee for operation of the Transfer Station based on the actual tons of
Acceptable Waste (excluding Yard Waste, Biosolids, White Goods,
Recyclable Materials, Acceptable HHW, and Acceptable Moderate-Risk
Waste) received by the Contractor at the Transfer Station. The Contractor
shall be compensated according to the unit prices for the various tonnage
ranges shown in Exhibit A.
. The monthly fee for operation of the Transfer Station shall not include any
Acceptable Waste (excluding Yard Waste, Biosolids, White Goods,
Recyclable Materials, Acceptable HHW, and Acceptable Moderate-Risk .
City of Port Angeles
64
April 5, 2005
Waste) received by the Contractor on the annual benefit dump day, limited to
the Facility's capacity which shall be determined at the Contractor's
discretion. There shall be no reduction to the fixed monthly fee under Service
Component I on account of the annual benefit dump day.
.
. In the event the City or Clallam County retains a portion or all of the used
motor oil and the Contractor's cost to provide HHW service changes, the
Parties agree to negotiate mutually acceptable terms and conditions in
accordance with Section 2.15.
The Contractor's monthly Transfer Station Service Fee shall be calculated as follows:
MSF, = FMF
+ AVF1 x (Actual tons up through 45,000 tons during a calendar year)
+ AVF2 x (Actual tons from 45,001 to 60,000 tons during a calendar year)
+ AVF3x (Actual tons over 60,000 tons during a calendar year)
where:
MSF, =
FMF =
. AVF1 =
AVF2 =
AVF3 =
Tons =
Total Monthly Service Fee for Service
Component I.
Fixed Monthly Fee for the Transfer Station.
Adjusted unit price per ton for the first 45,000
tons during a calendar year.
Adjusted unit price per ton for 45,001 to 60,000
tons during a calendar year.
Adjusted unit price per ton for over 60,000 tons
during a calendar year.
Monthly tons received and handled.
NOTE: Tonnage shall be rounded up to the nearest ton.
Section 17.5
Service Component II Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Transport and Disposal Service
Fee in accordance with this Section, as long as Contractor performs such services in
accordance with the Agreement; provided, however, that in the event of a dispute under
the Agreement relating to such Fees, including an administrative hearing under Section
7 or 8, the City shall pay any undisputed amounts to the Contractor in accordance with
the payment terms under the Agreement. Disputed amounts resolved in the
Contractor's favor shall be paid immediately upon resolution, and shall include a finance
charge in the amount of six percent (6%) per annum covering the period from the
original due date of such Fees through the date of payment upon such resolution.
.
(b) The Contractor's Transport and Disposal Service Fee will provide for
City of Port Angeles
65
April 5. 2005
monthly payment to the Contractor for all Transport and Disposal services rendered in .
accordance with Exhibit A, which Service Fee shall be adjusted annually as provided in
Section 17.2. The Transport and Disposal Service Fee will consist of the following:
· A monthly fee per ton of Acceptable Waste (excluding Yard Waste, Biosolids,
White Goods, Recyclable Materials, Acceptable Household Hazardous Waste,
Acceptable Special Waste, and Acceptable Moderate-Risk Waste) Transported
from the Facilities to the Disposal Site in accordance with the Agreement.
. A monthly fee per ton of Acceptable Waste (excluding Yard Waste, Biosolids,
White Goods, Recyclable Materials, Acceptable Household Hazardous Waste,
Acceptable Special Waste, and Acceptable Moderate-Risk Waste) Disposed at
the Disposal Site in accordance with the Agreement.
. A monthly fee based on the actual amount of each type of Acceptable Special
Waste Transported and Disposed of by the Contractor times the Contractor's unit
prices for the type of Acceptable Special Waste transported and disposed of, as
shown in Exhibit A.
. There shall be no reduction to the monthly fees under Service Component \I on
account of the annual benefit dump day.
The Contractor's monthly Component II Transport and Disposal Service Fee shall be .
calculated as follows:
MSFn=
+ ATF1 x (Actual tons up through 45,000 tons during a calendar year)
+ A TF2 x (Actual tons from 45,001 to 60,000 tons during a calendar year)
+ A TF3 x (Actual tons over 60,000 tons during a calendar year)
+ ADF1 x (Actual tons)
+ (sum of ASWFN x USWN)
where:
MSFII =
ATF1 =
ATF2 =
ATF3 =
ADF1 =
ASWFN =
USWN =
Total Monthly Service Fee for Service
Component II.
Adjusted unit price per ton for transport of the
first 45,000 tons during a calendar year.
Adjusted unit price per ton for transport of
45,001 to 60,000 tons during a calendar year.
Adjusted unit price per ton for transport of over
60,000 tons during a calendar year.
Adjusted unit price per ton for disposal.
Adjusted unit price specified in Exhibit A for
Acceptable Special Waste type "N". .
Actual monthly tons of Acceptable Special
City of Port Angeles
April 5, 2005
66
.
.
.
j
Tons
Waste type "N" received, handled, transported
and disposed.
Monthly tons transported and disposed.
=
NOTE: Acceptable Special Waste unit prices may differ for different types of
waste.
Section 17.6
Service Component III Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Blue Mountain Drop Box
Operations Service Fee in accordance with this Section as long as Contractor performs
such services in accordance with the requirements of the Agreement.
(b) The Contractor's Blue Mountain Drop Box Operations Service Fee will
provide for monthly payment to the Contractor for all such services rendered in
accordance with Exhibit A, which Service Fee shall be adjusted annually as provided in
Section 17.2. The Blue Mountain Drop Box Operations Service Fee will consist of the
following:
. A monthly fee per ton of Acceptable Waste including Mixed MSW (excluding
Biosolids, White Goods, Recyclable Materials under Service Component IV,)
received for operation of the Drop Box Facility.
. In the event the City or Clallam County retains a portion or all of the used motor
oil and the Contractor's cost to provide HHW service changes, the Parties agree
to negotiate mutually acceptable terms and conditions in accordance with
Section 2.15.
The Contractor's monthly Blue Mountain Drop Box Operations Service Fee shall be
calculated as follows:
MSFIII = (ADFT x Tons)
where:
MSFIII
Monthly Service Fee for Service Component
III.
Adjusted unit price per ton.
Monthly tons received at the Blue Mountain
Drop Box Facility and transported to the
Transfer Station.
=
ADFT
Tons
=
=
Section 17.7
Service Component IV Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Recycling Collection and
City of Port Angeles
67
April 5, 2005
Processing Service Fee in accordance with this Section, as long as Contractor performs .
such services in accordance with the requirements of the Agreement.
(b) The Contractor's Recyclable Collection and Processing Service Fee will
provide for monthly payment to the Contractor for all such services rendered in
accordance with Exhibit A, which Service Fee shall be adjusted annually as provided in
Section 17.2. The Recyclable Collection and Processing Service Fee will consist of the
sum of the following:
· A monthly fee for curbside collection, processing, transportation, marketing and
sales of Recyclable Materials based on the actual number of containers delivered
by the Contractor to Customers within the City.
· A monthly fee for curbside collection and processing of Yard Waste based on the
actual number of carts delivered by the Contractor to Customers within the City.
· A monthly fee for curbside collection, processing, transportation, marketing and
sales of cardboard based on the actual number of containers delivered by the
Contractor to Customers within the City.
· A monthly fee for collection, processing, transportation, marketing and sales of
Recyclable Materials collected from specified City and School District facilities.
· A monthly fee for collection, processing, transportation, marketing and sales of .
Recyclable Materials received from Customers at the Transfer Station Drop-Off
Facility.
· A monthly fee for collection, processing, transportation, marketing and sales of
Recyclable Materials received from Customers at the Blue Mountain Drop-Off
Facility.
The Contractor's monthly Component IV Recyclable Collection and Processing Service
Fee shall be calculated as follows:
MSFlv = (ARF1 x RC1) + (ARF2 x RC2) + (ARF3 x RC3) + (ARF4 x RC4) +ARFs
+ARFa
where:
MSF1v =
ARF1 =
RC1 =
ARF2 =
RC2 =
Total Monthly Service Fee for Service Component IV.
Adjusted unit price for curbside recycling.
Monthly number of recycling containers delivered to
Customers.
Adjusted unit price for curbside Yard Debris.
Monthly number of Yard Debris containers delivered .
to Customers.
CIty of Port Angeles
68
Apnl 5, 2005
. ARF3 =
RC3 =
,
ARF4 =
ARFs =
RC4 =
ARF6 =
Adjusted unit price for curbside cardboard.
Monthly number of cardboard containers delivered to
Customers.
Adjusted unit price for City and School District facility
recycling.
Adjusted unit price for Transfer Station Drop-Off
Facility recycling.
Monthly number of containers delivered to City and
School District facilities.
Adjusted unit price for Blue Mountain Drop-Off Facility
recycling.
The unit price for curbside collection of Recyclable Materials shall be based on the
actual number of recycling containers delivered to eligible Customers in accordance
with the Performance Specifications. The tier 1 unit price shall be for containers
provided to less than 60% of all eligible Customers and the tier 2 unit price shall be for
containers provided to 60% or more of all eligible Customers.
The unit price for curbside collection of Yard Waste shall be based on the actual
number of recycling carts delivered to eligible Customers in accordance with the
Contractor's Technical and Cost Proposal. The tier 1 unit price shall be for bi-weekly
curbside collection, the tier 2 unit price shall be for monthly curbside collection.
. The unit price for curbside collection of commercial cardboard shall be based on the
actual number of recycling containers delivered to eligible Customers in accordance
with the Performance Specifications. The tier 1 unit price shall be for containers
provided to less than 60% of all eligible Customers and the tier 2 unit price shall be for
containers provided to 60% or more of all eligible Customers.
(c) The City reserves the right to require the Contractor to correct Service
Fees if the City discovers an error in the Contractor's monthly or semi-annual report
related to the number of containers and/or carts provided to eligible Customers and the
Contractor is allowed a reasonable opportunity to comment on such error prior to such
correction.
Section 17.8
Service Component V Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Co-Composting Operations
Service Fee in accordance with this Section as long as Contractor performs such
services in accordance with the requirements of the Agreement.
(b) The Contractor's Co-Composting Operations Service Fee will provide for
monthly payment to the Contractor for all such services rendered in accordance with
Exhibit A, which Service Fee shall be adjusted annually as provided in Section 17.2.
The Co-Composting Operations Service Fee will consist of the following:
.
City of Port Angeles
69
April5,2005
. A monthly fee per-ton of finished Class A Co-Composting Operations in
accordance with the Agreement.
.
The Contractor's monthly Co-Composting Operations Service Fee shall be
calculated as follows:
MSFv= ACF x Tons
where:
MSFv
ACF
Tons
=
Monthly Service Fee for Service Component V.
Adjusted unit price per ton.
Tons of finished Class A Compost Material.
=
=
Section 17.9
Service Component VI Service Fee
(a) Commencing on the first day of the month following the Commercial
Operations Date, the City shall pay the Contractor the Moderate-Risk Waste Facility
Service Fee in accordance with this Section as long as the Contractor is providing the
services in accordance with the requirements of the Agreement.
(b) The Contractor's Moderate-Risk Waste Facility Service Fee will provide for .
monthly payment to the Contractor for all services rendered in accordance with Exhibit
A, which Service Fee shall be adjusted annually as provided in Section 17.2. The
Moderate-Risk Waste Facility Service Fee will consist of the following:
. A fixed monthly fee for capital, financing, equipment and other fixed costs.
This fee shall not be adjusted in accordance with Section 17.2.
. A monthly fee based on the actual amount of hours for operation of the
Moderate-Risk Waste Facility times the Contractor's unit price for operations,
as shown in Exhibit A.
. A monthly fee based on the actual amount of each type of Acceptable
Moderate-Risk Waste Transported and Disposed of by the Contractor times
the Contractor's unit prices for the type of Acceptable Moderate-Risk Waste
Transported and Disposed of, as shown in Exhibit A.
The Contractor's monthly Moderate-Risk Waste Facility Service Fee shall be calculated
as follows:
MRWFv1 = FMF
+ MRWF1 X Hours
+ sum of (MRWFN X UMRWN)
.
City of Port Angeles
70
April 5, 2005
.
.
.
where:
MRWFv1
FMF
MRWF1
MRWFN
UMRWN
Hours
=
Total Monthly Service Fee for Service
Component VI.
Fixed Monthly Fee for the MRWF.
Adjusted unit price for operation of the
Moderate-Risk Waste Facility under Service
Component VI.
Adjusted unit price for Acceptable MRW type
=
=
=
UN".
=
Actual monthly units of Acceptable MRW type
UN".
=
Actual monthly hours of operation.
NOTE: Acceptable Moderate-Risk Waste unit prices may differ for different types
of waste.
. ,
. I
City of Port Angeles
April 5, 2005
71
IN WITNESS WHEREOF, the Parties have caused the Agreement to be executed and
delivered as of the date first set forth above.
.
By
/G-v/t't.- () , #6!r ~ 7-
Namr It
~. ~,/ Fk:J"('u,h"vc 0 elf
Title .
~~
By'
RIt!J-IAR-t> A, HEADRI L}(
Name
M~YDfL
Title
ATTEST:
hd~J.>~ ul.)otoA
5 7
!f.,eHi J LJ prON
N~~e ~;Jf ~
CitY~
, INC.
4/l1/ I dtJOS-
Date -'
APR-'L 5 ~OD5
Date '
~1t;A~_TO~
By W:/fl1tU1 ~/~z?r
N~r C/;ttnJ,
t ^41
Ci Y At~ey 4"
.
.
CIty of Port Angeles
Apn15,2005
72
American Disposal .
American Portable Storage
DM Disposal
DM Recyclmg
Lakeside DIsposal
.
Murrey's Disposal
Olympic Disposal
Superior Refuse Removal
Tacoma Recycling
Vashon Island Disposal
WASTE CONNECTIONS INC.
Connect with the Future
Northern Washington Division
P.O. Box 399 . Puyallup, WA 98371-0158
(253) 414-0345 . Fax (253) 582-9561
April 5, 2005
Mr. Glenn Cutler
Public Works and Utilities Director
City of Port Angeles
P. O. Box 1150
Port Angeles, W A 98362
Re: Request for Proposal: Solid Waste Processing Facility Development and Management Services
Dear Mr. Cutter,
\
Thank you for providing Waste Connections of Washington, Inc., the opportunity to submit this proposal.
.
Waste Connections of Washington operates as a local company. We take pride in the fact that we.are truly
connected to the communities we serve. The local companies that make up the WCWI team are
established members of the region and claim the same roots in the Puget Sound area as the City of Port
Angel~s. At the same time we are part of a thriving national organization with deep resources that equip
us to meet any challenge. We gladly offer you oJr support: services, experience, equipment... whatever
is needed and appropriate t9 help the City meet its solid waste management goals.
WCWI has assembled a team with a base of knowledge and experience unrivaled in the solid waste
industry. We are committed to putting our knowledge and experience to work to support the City of Port
Angeles in developing a state-of-the-art solid waste system that will serve your citizens for the next
decade and beyond. .
Per my conversation with Mr. Larry Dunbar, RFP Project Manager for the City of Port Angeles, we have
enclosed our fully executed bid bond and Form 5.4, signed and dated as discussed.
Again, thank you for giving WCWI the opportunity to submit this proposal. We would consider it a
privilege to be part of/the City of Port Angeles' future. If you should have any questions, please contact
me at (253) 414-0349 or by email at eddiew@wcnx.org.
SIt:P~
.
Edward L. Westmoreland
Division Vice President
City of Port Angeles
.
TABLE OF CONTENTS
4.6 COMPONENT 1- TRANSFER STATION DEVELOPMENT...........................................4.6-1
.
4.6.1 INTRODUCTION.................... ............................................................................. .4.6-1
4.6.2 COMPONENT I (TRANSFER STATION DEVELOPMENT) .................................4.6-1
4.6.2.1 Estimates of Wastes.................................................................................. .4.6-2
4.6.2.2 Description of the Contingency Plan......................................................... ..4.6-2
4.6.2.3 Description of Separate Handling and Storage Facilities for Yard Waste
and Co-composting Products.................................................................... .4.6-2
4.6.2.4 Description of Separate Public Drop-off Facilities for Recyclables ..............4.6-2
4.6.2.5 Description of Public Drop-off Facilities for Tires, White Goods, and HHW.4.6-2
4.6.2.6 Descriptions of Facilities for Separate Handling of Special Wastes.............4.6-3
4.6.2.7 Description of Waste Screening Plan ................................... .................... ..4.6-3
4.6.2.8 Processing Facility Conceptual Design Plans........................ .................... .4.6-4
4.6.2.9 Description of the Proposer's Approach to the Operations Plan ...............4.6-13
4.6.2.10 Description of the Proposer's Approach to the Contingency Plan ...........4.6-14
4.6.2.11 Description of How the Overall Technical and Cost Proposal is
Consistent with the Goals and Policies in the County's SWMP ..............4.6-14
4.6.3 PERSONNEL TRANSITION PLAN .................................................................. ..4.6-15
4.6.3.1 City Employee Retention Plan ..................................................................4.6-15
4.6.3.2 Communication Plan for City Employees............................................ ..... .4.6-16
4.6.3.3 Summary of the Proposer's Human Resource Benefits ............................4.6-16
4.6.4 PROPOSED EXCEPTIONS (deleted)
4.6.5 PROPOSED SCHEDULE................................................................................. .4.6-18
4.7 COMPONENT 11- WASTE TRANSPORT AND DISPOSAL ..........................................4.7-1
4.7.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS....................................4.7-1
4.7.2 COMPONENT II (WASTE TRANSPORT AND DISPOSAL) .................................4.7-1
4.7.2.1 Disposal Site............................................................................................. .4.7-1
4.7.2.2 Transportation........................................................................................... .4.7-3
4.7.2.3 Integrate Additional Waste Streams........ ....................................................4. 7-7
4.7.2.4 Contingency Plans.....................................................................................4. 7-7
4.8 COMPONENT 111- BLUE MOUNTAIN DROP-BOX OPERATIONS...............................4.8-1
4.8.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS....................................4.8-1
4.8.2 COMPONENT III (BLUE MOUNTAIN DROP-BOX OPERATIONS)......................4.8-1
4.8.2.1 Description of the Proposer's Approach to the Operations Plan .................4.8-1
4.8.2.2 Description of Proposer's Approach to the Contingency Plan .....................4.8-4
4.8.3 Operate Existing Blue Mountain Facility ...............................................................4.8-4
4.9 COMPONENT IV - RECYCLABLE COLLECTION AND PROCESSING........................4.9-1
.
4.9.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS....................................4.9-1
4.9.2 COMPONENT IV (RECYCLABLE COLLECTION AND PROCESSING) ..............4.9-1
April 5, 2005
Waste ConnectlOns of .h.
Washington, Inc. "'.""
City of Port Angeles
4.9.2.1 Description of the Proposer's Approach to the Operations Plan .................4.9-1 .
4.9.2.2 Description of the Proposer's Approach to the Contingency Plans .............4.9-5
4.10 COMPONENT V - CO-COMPOSTING OPERATIONS..............................................4.1 0-1
4.10.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS................................4.10-1
4.10.2 APPROACH TO OPERATIONS PLAN.............................................................4.10-1
4.10.2.1 Management and Staffing...................................................................... .4.10-2
4.10.2.2 Proposed' Equipment............................................................................. .4.10-2
4.10.2.3 Facility Operations................................................................................. .4.10-2
4.10.2.4 Storage and Space Requirements ..........................................................4.10-5
4.10.2.5 Approach to Contingency Plans.............................................................. 4.10-5
4.11 COMPONENT VII - MRWF DEVELOPMENT ............................................................4.11-1
4.11.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS................................4.11-1
4.11.2 APPROACH TO OPERATIONS PLAN.............................................................4.11-1
4.11 .2.1 Management Oversight and Staffing...................................................... .4.11-1
4.11.2.2 Facility Layout....................................................................................... .4.11-2
4.11 .2.3 Operational Requirements...................................................................... 4.11-2
4.11.2.4 Health and Safety Plan ............... ................. .........................................4.11-3
4.11.2.5 Transportation and Dlsposal...................................................................4.11-4
4.11.2.6 Contingency Plan................................................................................... 4.11-4
5.0 PROPOSAL FORMS................................. ................................................................ Tab 5.0
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6.0 QUALI FICA TIONS ................................ ......................................................................... 6.1-1
6.1 GENERAL INFORMATION ABOUT PROPOSED FIRM ................................................6.1-1
6.2 PROPOSER'S SOLID WASTE TRANSFER STATION EXPERIENCE ..........................6.2-1
Hidden Valley Transfer Station......... .................... ........................................................6.2-1
Wichita Transfer Station................................................................................................. 6.2-2
West Vancouver Material Recovery Facility................................................................... 6.2-3
6.3 PROPOSER'S SOLID WASTE LONG-HAUL TRANSPORT AND DISPOSAL
EXPERI ENCE................................................................................................................ 6.3-1
Finley Buttes Regional Landfill- Boardman, OR ...........................................................6.3-1
Wasco County Landfill - The Dalles, OR ....................................................................... 6.3-1
6.4 PROPOSER'S RECYCLABLE MATERIALS COLLECTION AND PROCESSING
EXPERI ENCE................................................................................................................ 6.4-1
Location Of Recycling Experience................................................................................. 6.4-1
Name Of Facility And Ownership Information................................................................. 6.4-1 .
Description Of Recycling Materials Processed, including Quantity and Type .................6.4-1
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Years Of Operation........................................................................................................ 6.4-1
Market For Disposition Of Recyclable Materials............................................................. 6.4-1
6.5 PROPOSER'S CO-COMPOSTING EXPERI ENCE ........... ......... ....................... .............6.5-1
LRI Compost Factory..................................................................................................... 6.5-1
6.6 PROPOSER'S POST-CLOSURE LANDFILL EXPERIENCE
Section reserved. Services not included in negotiated scope of work.
6.7 PROPOSER'S MRWF EXPERI ENCE........................................ ..................... ...............6.7-1
Clark County, Washington............................................................. ................................6.7-1
Wasco, Sherman, And Hood River Counties, Oregon.................................................... 6.7-1
Pierce County, Washington..................... ...................................................................... .6.7-1
6.8 RESUMES OF KEY OFFICERS AND PROJECT TEAM LEADERS .............................6.8-1
6.9 ORGAN IZA TION CHART... ................... ............................ ........... ............ .....................6.9-1
6.10 FI NANCIAL QUALIFiCATIONS..... ........................... .............. ...................................6.10.1
7.0 TECHNICAL AND COST PROPOSAL FORMS .........................................................Tab 7.0
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. 4.6 COMPONENT 1- TRANSFER STATION DEVELOPMENT
4.6.1 INTRODUCTION
Section 4.6 describes Waste Connections of Washington, Inc.'s (WCWn proposed approach for
processing facility development and operation. A significant portion of costs in this component is the
design and constructIOn of the transfer station facility. WCWI will staff the operation with the existing
five (5) City of Port Angeles personnel, who will be WCWI employees with full benefits. Operating
expenses will occur in the normal course of business as described below. WCWI will also properly bond
and insure the project and operations as required. See also Cost Proposal Forms 7.IA, 7.1B, and 7.1C.
This section includes ten drawings (attached at the end of this section) and detailed text describing the
proposed facility. The drawings and text are complementary and should be viewed alongside one another
to allow a more complete understanding ofWCWI's proposal. The drawings include:
Site Transfer Station Site Plan
PI Transfer Building Floor Plan
P2 Transfer Building Exterior Elevations-l
P3 Transfer Building Exterior Elevations-2
P4 Staff Facilities Plan & Elevations
P5 Scalehouse Plan & Elevations
. P6 Moderate Risk Waste (MRW) Facility
P7 Electrical One-Line Diagram
P8 Site Utilities
P9 Roadways & Paving
For this proposal, the following names have been assigned for the onsite roadways:
West Road: the existing north-south road running along the west edge of the site from the entrance road
to the co-composting building. In the future, it will be extended to access the water treatment plant and
the transfer building.
East Road: a new road running north-south along the east side of the transfer station development area,
allowing vehicles to exit from the transfer building.
Cross Road: the existing east-west gravel road separating the landfill from the transfer station
development area will be paved to serve as an exit road from the transfer buildmg and an access road to
both the MRWF and the metals/hazardous/recycle (MHR) area.
4.6.2 COMPONENT I (TRANSFER STATION DEVELOPMENT)
WCWI hereby incorporates by reference all requirements as set forth in the transfer station performance
specifications contained in Appendix B.l of the RFP.
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4.6.2.1 Estimates of Wastes
WCWI reviewed the waste tonnage estimates and yearly projections provided in Appendix F of the RFP.
WCWI concurs with the projections and has therefore utilized Appendix F information as the basis for our
proposed pricing and in the development of other aspects of proposed site and operations.
4.6.2.2 Description of the Contingency Plan
In the event that the City decides that the active landfill can no longer accept waste, and waste disposal at
the landfill is halted prior to complete construction of the transfer station, a contingency plan would be
implemented to enable waste to be transported and disposed off-site. The plan would use existing site
infrastructure, including the Z-wall, to accomplish waste transfer and off-site transport and disposal.
Details of the plan depend greatly on how far along construction of the transfer station is when t)1e landfill
closes. Options to minimize traffic problems include restricting the hours and days for both self-haulers
and commercial haulers (to minimize overlap) and the use of additional spotters to direct traffic.
Depending on construction progress, it may be possible to send small numbers of haulers to the partially-
finished transfer building to unload directly into open-top trailers/containers. The Z-wall may be
modified to allow packer trucks to tip on the ground and a loader push the waste into the trailers.
4.6.2.3 Description of Separate Handling and Storage Facilities for Yard Waste and Co-
composting Products
.
WCWI proposes to utilize the existing co-compo sting facility without significant modification. An
asphalt-paved yard waste staging area will be constructed east of the existing facility to better facilitate
vehicle unloading and yard waste staging (see drawing P9). Self-haulers and commercial haulers will
unload yard waste onto the paved receiving area. A rubber-tire loader will move yard waste either to a
shredder or directly into the composting bays. Biosolids are received directly in one of the co-compo sting
storage bays.
4.6.2.4 Description of Separate Public Drop-off Facilities for Recyclables
As shown on the Site Plan, self-haul recyclers wIll drop off their recyclable materials at a vehicle turnout
area on the right-hand side of West Road (the main road), north of the scale plaza. This is a flat, paved
area with rolloff containers for at least the nine types of recyclables required by the RFP (three colors of
glass, steel cans, aluminum, newspaper, cardboard, and two types of plastic). For space efficiency, some
containers will handle more than one material, since the recyclables will be sorted later at a materials
recovery facilIty. In the future, containers for addItional recyclable materials may be added in response to
changing market conditions.
For safety, vehicles maneuvering in the recycle area are isolated from the main traffic waiting at the
inbound scales. Parking space is provided for vehicles during unloading. Because self-haulers unload
their recyclables prior to crossing the scales, they are not charged for recycling and their recyclables are
not weighed. However, an accumulated total of self-hauler recycling is obtained when containers of self-
hauled recyclables are weighed on the commercial scale as they are shipped to market.
4.6.2.5 Description of Public Drop-off Facilities for Tires, White Goods, and HHW
.
The metals/hazardous/recycle (MHR) area will receive tires, white goods, and HHW. This 10,000 sq ft
asphalt-paved area is located on the south side of Cross Way (see Site Plan). Self-haulers weigh in on the
lane 3 scale and then turn left (east) onto Cross Road to access the MHR area; they weigh out on the lane
4 scale.
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Tires will be stored in uncovered bunkers formed by concrete "ecology" blocks stacked 2-3 units high on
the asphalt pavement. Station staff will also retrieve tires that were mixed in with solid waste tipped in
the transfer building and periodically move them to the MHR.
White goods (refrigerators and other large metal appliances) are received and stored in the MHR. Freon
refrigerants will be removed prior to shipment to recycling markets.
Acceptable HHW (defined as used motor oil, antifreeze, and automobile batteries) will be received in the
MHR area. Customers will pour oil and antifreeze into double-walled (spill-contained) steel tanks. The
contents will be pumped out periodically for transport to recycling markets. Car batteries will be received
and stored on plastic spill-containment pallets prior to shipment to recycling markets.
The MHR area has a 40 ft by 40 ft area covered by a canopy roof that provides protection from the rain
for water-sensitive materials and miscellaneous operations. This canopy reduces the possibility of
contaminating storm water collected from the paved MHR area. Catch basins in the MHR drain to an
oil/water separator prior to discharging to the stormwater pond.
The MHR is also available to receive larger quantities of recyclables brought in by commercial recyclers
Depending on the type and volume of materials, these recyclables may be stored in either rolloff
containers or ecology block bunkers.
4.6.2.6 Descriptions of Facilities for Separate Handling of Special Wastes
.
The MHR area is also available to receive Acceptable Special Wastes including contaminated soil, bulky
waste (e.g. furniture), asbestos, coal ash, white goods (appliances), self-haul tires, processed wood waste,
treated (e.g. creosoted or painted) timber, and dredged soils. Other materials mentioned in the RFP
include televisions and computer monitors, and non-ferrous and ferrous metals other than cans.
Depending on the quantity and handling characteristics, these materials will be stored on the ground, in
bunkers, or in rolloff containers. Materials with a high potential for contaminating stormwater runoff will
be stored under tarps or other cover. Stormwater from the paved area flows through an oil-water
separator prior to discharge.
Under some conditions, it would be more efficient to accept certain special wastes in the transfer building.
See subsection 4.6.2.8.4 for a detailed discussion of the advantages.
4.6.2.7 Description of Waste Screening Plan
WCWI will develop and implement a Waste Screening Program to prevent the disposal of hazardous or
unauthorized waste at the transfer station. The program will have a written plan based on experience at
other WCWI facilities. The plan will describe a systematic, ongoing program to check incoming waste
loads and screen for unacceptable wastes. The Waste Screening program will identify the prohibited
wastes and inspectIon procedures. Inspections will be conducted at a designated location and on a random
basis. The Waste Screening Plan will identify personnel responsible for completing inspections,
inspection documentation, and procedures and notifications to be followed if hazardous or unauthorized
wastes are found.
Scale attendants will screen waste load as they arrive at the scales by visual inspection and by asking what
the load contains and where it came from. The attendant may use a mirror to verify the contents of open-
top vehicles. The attendant will inform haulers and generators of prohibited wastes about their options for
. disposal.
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Three general types of material are sought in the waste screening. Suspected Asbestos Contaminated
Material (SACM), Suspected Dangerous or Hazardous Waste (SDHW), and Suspected Infectious Waste
(SIW). The screening process for these materials is as follows.
1. A station attendant will inquire of the driver of incoming vehicles if he or she is aware of any
asbestos, fuel containers, paint containers, solvents or other material in the vehicle. The driver
will also be asked if there are any large barrels or drums, or other containers commonly used to
store or move dangerous or hazardous materials. If the answer to any part of the inquiry is
affirmative, the attendant will contact the Lead Operator by radio. The Lead Operator will instruct
where to direct the vehicle. The material must be located and removed separately from the
remainder of the load. This will be accomplished by isolating the vehicle at the extreme end of
the unloading area and unloading will be done carefully to ensure the waste accepted for disposal
is consistent with allowable waste for the facility. Drivers will retain possession of any possible
problem items and be informed by the station attendant of their options for proper disposal.
2. At the unloading area, prior to unloading, a station attendant will visually inspect the load before
it is allowed to be unloaded. If any suspect material is identified, it must be unloaded separately
and handled according to procedures set forth in the Operations Plan (e.g., returned to the driver).
After the load is discharged, station attendants will examine the discharged load. They will look
for containers with warning labels, sealed drums, leaking containers, wastes with strong and
unusual odors, sludge and burning or smoldering wastes. They will be instructed to follow the
safety procedures of the Operations Plan prior to closely inspecting any suspicious wastes. After
the attendant approves the waste, the driver is then released to pay the fees due.
. 4.6.2.8 Processing Facility Conceptual Design Plans
Ten drawings have been prepared to illustrate development of the proposed solid waste facility. To obtain
a more complete understanding of the proposed facility, please view these drawings in coni unction with
the text of sub-section 4.6.2.8. Note that the drawings were numbered in the normal order for
construction drawings; however, this does not always coincide with the order of the items requested on p.
4-4 and 4-5 of the RFP.
4.6.2.8. 1 Definition of Limits and Areas
Facility development will take place within the required limits and areas shown in Figure 5 of the RFP.
WCWI's Site Plan shows that the buildings, waste and recyclables areas, roadways, and parking are
located within the area-development limits.
4.6.2.8.2 Topographic Conceptual Site Plan
The Site Plan is a general arrangement drawing showing the proposed locations of buildings, structures,
roadways, parking areas, and pavement elevations. The delineated on-site roadways will be improved to
accommodate anticipated traffic volumes and vehicle types. Roadways (12-ft. lanes), parking, and
maneuvering areas will be designed with pavement thicknesses and subgrade materials meeting City
Standards. Important features designed into these improvements include sufficient road widths and curve
radii to accommodate tractor and chassis lengths in excess of 70-ft. In general, road grades will not be
steeper than 5 percent. P9 shows the off-site roadway (18th Street), as well as the existing entrance road
on the north part of the site, that will be improved by the City.
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Grading of the transfer station site will be compatible with the grading requirements of the water treat-
ment plant and its vehicle entrance, and the existing site-entrance road after it has improved to handle the
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transfer station traffic. The firing range berm will not be relocated; its top and western face will remain
unchanged, while grading/reshaping of the eastern face will be minor.
See 4.6.2.8.4 for a discussion of transfer building's expandability to meet 100 percent of the 20-year term
waste loading. The large trailer yard north of the building provides ample parking and maneuvering space
for transfer trailers and containers on chassis.
The Information Kiosk, an 8-foot square structure next to the self-haul doors of the transfer building,
provides a convenient place for customers to obtain recycling and solid waste fact sheets.
The site is subject to strong winds. Planting windbreaks and litter fences will be incorporated to control
wind-blown litter on the site, as well as operational controls such as daily litter patrols. Bird wires may be
used to discourage gulls from frequenting the facility.
4.6.2.8.3 Conceptual Site Utilities Plan
P8 is a conceptual site utility plan showing the following utility systems including approximate sizes and
materials. Connections to existing utilities will be made at the locations directed by Figure 5 of the RFP.
. Potable water/fire mains - piping and hydrants.
. Sanitary sewer - manholes, gravity sewers and force mains.
. Storm water - piping, ditches, and oIl/water separator.
. Power - conduit, transformer.
. Telecommunication - conduit; future installation of cables by others.
. Fiber optic - conduit; future installation of cables by others.
Water: The entire transfer station site will draw its potable and fire protection water from a new 8-inch
tap on the 24-inch outlet in the southeast corner of the new water treatment plant. A new 8~inch fire
protection loop supplies water to hydrants around the site and fire sprinklers in the transfer building and
employee facility. It will also serve yard hydrants for watering the landscaping, as well as washdown
hose blbs in the MHR area and the transfer building. Potable water will be drawn from the fire loop to
serve the transfer building, employee facility, scalehouse, and MRWF. Code-required backflow
prevention will protect the water system from cross-contamination.
Flre protection will consist of a dry-pipe water sprinkler system in the transfer building and staff facility;
a dry chemical system in the MRWF; hydrants located around the site; and portable fire extinguishers.
Sanitary Sewer: (See Figure 8). Plumbing fixtures in the employee facility and floor/trench drains in the
transfer building will drain by gravity to a packaged lift station just south of the MRWF, as will drainage
from the MRWF restroom. (MRWF lab waste and eyewash/shower waste flow to the spill containment
sumps at the MRWF and do not enter the sanitary sewer system.) The lift station will pump sewage to a
manhole in Cross Road, where it will combine with a force main carrying a small amount of sewage from
the scalehouse lift station. From the manhole, the sewage will flow by gravity to the point of connection
northeast of the water plant, as directed by Figure 5 of the RFP.
It is possible that the City may desire a different POCo Alternate POC locations that have been mentioned
include Pump Station #1 (near the current yard waste collectIOn area) or Pump Station #2 (near the current
leachate aeration ponds). While it appears feasible to extend the transfer station sewer to either of these
points, system hydraulics may preclude the use of gravity flow to the POC (as assumed in SCWI's
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original bid proposal) and require a sewage lift station. After WCWI receives the City's final POC
location, It will modify the transfer station sewer system design to meet that POC. Depending on the
location and system hydraulics, this may involve a cost adjustment to compensate for a longer or larger
pipeline, and the possible addition of another sewage pump.
Storm Dramage: Storm drainage ditches exist on both sides of West Road, but relocating the firing range
berm to build the scale plaza could disrupt their historical flow patterns. The western ditch will be
regraded to direct water from the recycling area south to a culvert, under West Road, then north into the
eastern ditch. This eastern ditch also receives stormwater from an oil/water separator serving paved areas
around the transfer building, trailer yard, MRWF, and MHR area. It discharges to the stormwater pond in
the northwest corner of the landfill site.
Power: Electric power is aVaIlable in the Milwaukee Road corridor. A new transformer and electrical
service will be added to serve the transfer building, employee facility, MRWF, metals/hazardous/recycle
area, scale facility, and site lighting. The largest electrical load comes from the 200:!:. hp of motors on the
compactor hydraulic power pack.
TelecommunicatIOn: Telecommunication cable is available in the landfill office near the site entrance and
will be extended to the scale house, transfer buildmg, employee facility, MRWF, and MHR area.
Fiberoptics: Fiberoptic cable presently available in the landfill office will be extended to the scalehouse
and employee facility. In addition, WCWI will provide two spare 2-inch conduits running between the
transfer building, MRWF, recycling area, scalehouse, and compost facility, to allow the City to install its
telephone, fiberoptics, and/or communications cables.]
. 4.6.2.8.4 Conceptual Floor Plans
Pi is the general arrangement drawing for the transfer building, a 15,000 sq. ft (lOO-ft. by 150-ft.), pre-
engineered metal building. The building size was chosen to accommodate the peak arrival rate of both
the commercial and self-haul public vehicles, as supported by the calculations shown below. To promote
vehicle safety, it will have separate commercial and self-haul doorways and tipping areas located on
opposite sides of the building. This separation also allows the wheel loader to handle waste more
efficiently. The building orientation reduces the effects of prevailing wind blowing through the doors.
There are two load-out chutes for waste transfer. Waste drops through the southwest chute into a pre-load
compactor and is rear-loaded into an ISO shipping container on a chassis. Occasionally the compactor
may be used to densify newspaper, cardboard, mixed waste paper, plastic, or metal cans. In the northeast
chute, waste is top-loaded into a transfer trailer. The compactor is included in the design to maximize the
payload per container (30:1: tons) and minimize vehicle trips. It is sized to handle the peak daily MSW
throughput. The top-load bay would be utIlized for a variety of waste materials to suit daily operations,
and as a back-up to the compactor. A fixed-base knuckleboom crane (brand name "Grizzly") will be used
to tamp and reposition materials in top-loaded trailers, improve net payloads of materials, and to remove
oversize materials inadvertently dropped into the trailers.
Building design parameters are as follows:
.
· Daily waste throughput: varies from about 51,000 TPY in 2004 up to 69,000 TPY in 2026.
Assuming a six-day operation (with the majority of commercial vehicles arriving in five
weekdays), the daily rates will vary from 190::1: TPD in 2004 up to 260::1: TPD in 2026.
· Based on data supplied in the RFP, the peak hourly arrival rate for commercial vehicles is 16
vehicles per hour (VPH), and 51 VPH for self-haul public vehicles. While these rates seem a
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little high for the daily tonnages listed above, we have used them as the basis for our estimate of
required unloading stalls and building size.
. The RFP requires emergency storage capacity of two days' worth of waste within the transfer
building. Using the 2026 forecast of 68,684 tons received in 52 6-day weeks, two days' storage
equates to 440 tons.
Tipping Stall Calculations
Service time considers the time that a vehicle spends at the scale house and in an unloading stall, and is
calculated as shown below; it does not include transit time as the vehicle moves around the site.
Commercial Vehicles:
Time at scale house
Time to maneuver, unload and exit building
Miscellaneous delays
Service Time
2.0 minutes
8.0 minutes
1.0 minutes
11.0 minutes
That is, one unloading stall can accommodate up to 60 -'- 10 = 6 VPH. For 16 VPH, 16 -;- 6 = 2.67 stalls
are required. A total of 3 commercial stalls are provided (see drawing PI).
Self-Haul Public Vehicles:
Time at scale houselbooth
Service Time
1.0 minutes
12.0 minutes
Time to maneuver, unload and exit building
Miscellaneous delays
1.0 minutes
14.0 minutes
That is, one unloading stall can accommodate up to 60 -'- 14 = 4.3 VPH. For 51 VPH, 51 - 4.3 = 12 stalls
are required. There are 8 stalls dedicated to self-haulers. Since the peak self-haul vehicle traffic occurs
on weekends when there are no commercial haulers, the west doors (equivalent to 4 stalls) can also be
used, thus providing the equivalent of 12 stalls.
Emergency and Contingency Storage Capacity
The RFP requires emergency storage capacity of two days' worth of waste ( 440 tons) be provided. This
requires a floor area of about 6,290 sq ft, assuming a lO-ft high cube of waste with a density of 14 lb/cu
ft. The 11 bays designated for emergency storage (see PI) have a net area of 6,390 sq ft including a
deduction for the area occupied by the push walls. A 10ft high cube of waste spread over this area will
weigh approximately 447 tons. Additional waste would be stored in the side slopes (about 1:1) of the
cube that would form in the bays in front of some doorways. Thus, the available emergency storage
exceeds the RFP requirement by at least 10 percent. With 400-plus tons on the tipping floor, commercial
and self-haul public vehicles could still enter the building and unload. During normal operations, the 11
bays designated for emergency storage would also provide surge capacity for temporary storage of waste.
The four bays (H-J, 1-4) on the south end of the building can be used as contingent storage of waste such
as unacceptable waste that was inadvertently unloaded in the building. Stacking waste against the push
walls will keep the piles from interfering with unloading vehicles and the wheeled loader. If necessary,
contingent/unacceptable waste can be relocated to the MHR to avoid disrupting MSW operations.
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In summary, the bUIlding has been adequately sized to accommodate the peak arrival rates and provide up
to two days of waste storage. However, it should be understood that some queuing (waiting) prior to the
scales will occur due to the random arrival of vehicles within the peak hour. By utilizing the queumg
theory for multiple channels as presented in the Transportation Handbook, a 95% probability of the
maximum queue length has been estimated to be negligible for commercial vehicles, and up to 10 self-
haul vehicles (about 350 feet of roadway). Unlike most transfer stations, Port Angeles has the luxury of
having over 2,000 ft of roadway "upstream" of the scales, making off-site queuing highly unlikely.
Furthermore, having a separate outbound scale and exit road from the transfer building for commercial
and self-haul vehicles also serves to minimize on-site queuing as well.
Handling Special Wastes
If not actively storing contingency or emergency wastes, the area "reserved" for these wastes could be
used instead to temporarily store special wastes (e.g. creosoted lumber or demolition debris) that arrive
during the day. These could be stockpiled against the pushwalls in the southwest corner of the building
until after the MSW is cleared from the tIpping floor, when the special wastes can be top-loaded into
trailers or containers using the northeast chute. This is more efficient than unloading special wastes on
the pavement in the MHR area, then picking it up again to load a trailer. WCWI proposes to schedule the
delivery of special wastes during off-hours when the floor is not occupied with self-haulers and packers
delivering MSW. If special waste were accepted during normal station hours, the staff would ensure that
MSW handling is not interrupted and. that there is no commingling of solid waste and special waste.
Facility Expansion Capability
The proposed layout has the flexibility to expand the building in the future, allowing more unloading
stalls to be added as waste volumes and vehicle arrival rates increase. There is room to add two bays to
the west wall (southwest corner) and/or add four bays to the south wall. Visitor parking could be
relocated to an area west of the building and the commercial vehicle maneuvering space would be
reconfigured.
Bird Control
Birds have historically been a problem at this site. Techniques used to discourage birds include clear
plastic curtains on the doorways (also reduces wind penetration) and spike strips on horizontal beams.
4.6.2.8.5 Conceptual Building Architectural Elevations and Materials
P2 and P3 present the transfer building elevations and cross sections, including the loadout areas for both
the compactor and direct top-load bays. The building will be a pre-engineered steel buildmg with 100-ft.
clear span rigid frames on 25-ft. centers. The roof deck and siding will be fluted steel panels colored per
the City's approval. Translucent panels in the siding and roof provide day lighting to minimize the use of
electric lights. Motor-operated rollup doors for self-haul and commercial vehicles provide the ability to
completely close-off the building. The floors will be concrete slab-on-grade construction. Concrete
retaining walls will be used at he compactor tunnel and the adjacent staff facility building. The electrical
room on the trailer parking level will be constructed of concrete block.
P4 shows a conceptual plan and elevations of the staff facility that includes a reception area, combination
toilet-locker rooms, lunchroom, two offices, conference room, and utility room/janitor's closet. The
supervisor's office in the northwest corner allows observation of the recycling area, scale plaza, inbound
and outbound traffic, and the trailer yard. Walls will be concrete block and the roof deck will match the
transfer building. Other building materials are listed in the drawing notes. The use of landfill gas or
waste oil to heat the staff facility will be investigated during final design. If possible within the footprint
of the proposed staff facIlity, WCWI will include I) a window to allow visitors to view tipping floor
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operations from the safety of the staff facility; and 2) an interior door opening directly into the Transfer
Building.
P5 shows a conceptual plan and elevations of the scalehouse that includes a restroom, counter space for
the scale computer equipment, an under-counter safe, and kitchen equipment. The roof deck and siding
will be fluted steel panels matching the transfer building.
P6 shows the significant components of the MRWF including spill containment sumps, emergency
eyewash and shower, worktables and storage shelves, and a small laboratory. The office and restroom are
located in a separate structure to avoid the higher cost of electrical equipment for hazardous locations.
The roof deck and siding will be fluted steel panels matching the transfer building.
4.6.2.8.6 Conceptual Demolition and Restoration Plan
Planned demolition and restoration work is relatively minor; therefore no drawing has been prepared for
this submittal. After demolishing the existing scale house and scales, the area will be backfilled and
paved over. The existing scalehouse will be demolished, the utilities abandoned, and the area repaved as
necessary. Recyclables containers will be removed from the existing recycling area and it will be repaved
as necessary.
Site earthwork and grading will prepare the site for construction of the new buildings and to match the
grades of ISth Street and the water treatment plant. Portions of the site that do not become roads or
parking will be restored through landscaping. Landscaping will consist of trees, shrubs and groundcover
chosen to provide an attractive setting that screens and buffers waste handling operations, yet is low-
maintenance, drought-resistant, and does not harbor vectors.
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4.6.2.8.7 Scale Specifications, Hardware and Software
The scales and scalehouse are shown on the Site Plan and detailed on P5. General specifications include:
. New scales: above ground design, low profile; SO-foot long by 10 ft wide concrete/steel deck;
100-ton capacity; fully electronic, Sensortronics shear beam load cells; fully compatible with
Wasteworks software, existing scales, and existing telemetry; NTEP certified. Scale package by
Unitec, supplier of the existing scales. Concrete foundations by Contractor.
. Axle scales: located beneath the northeast loading chute in the traIler tunnel; used to prevent
over-loading of trailers; similar to other Unitec scales used elsewhere on-site.
. Card reader system: card readers, antennas, wiring, software, and vehicle ill tags. The allowance
for this system is presented in the Cost Proposal.
4.6.2.8.8 Transfer Building Cross Sections
P2 and P3 show transfer building cross sections taken perpendicular to the loadout bays. The northeast
bay allows top-loading of transfer trailers and open-top containers on chassis, while the southwest bay has
a 6 ft. by 10ft. compactor feed chute. The sections and elevations also show typical dimensions, building
materials, and foundations.
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4.6.2.8. 9 Electrical Diagram for Power Distribution
P7 is a conceptual electrical single-line drawing of the power distribution system, including significant
electrical demands.
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4.6.2.8.10 List of Specifications for Transfer Station Equipment
. HV AC equipment: packaged heat pump (heating and cooling) umts for staff facility and
scalehouse; propeller exhaust fans for transfer bUIlding; explosion proof centrifugal exhaust
fan(s) for MRWF and baseboard heaters for MRWF office and restroom
. Waste compaction: pre-load compactor with hydraulically actuated ram; capacity sufficient to
process peak day waste tonnage within 10-hour working day; Hams or Shredding Systems Inc.
. Mobile waste compaction: backhoe for tamping and leveling waste in top-loaded trailers, as
needed to optimize payloads.
. Scale telemetry: compatible with existing and providing additional capacity as reqUIred for new
scales.
. Other equipment: see list provided in Section 4.6.2.13.
4.6.2.8.11 Value Engineering Approach
URS's lead design team personnel (Bob Carn, PE and Terrill Chang, PE) assigned to this project have
over 50 years of experience planning and deSIgning more than 90 transfer stations. This station will
utilize equipment and technologies that have been proven at dozens of other facilities on the West Coast
and around the world. Representatives from the applicable disciplines (e.g. civil, structural, sanitary,
mechanical, electrical, instrumentation, geotechnical, and architecture) will be involved in the design.
WCWI's value engineering approach is to design the station so that it can be constructed and operated
within the cost parameters negotiated between WCWI and the City, while meeting the conditions and
performance specifications of the contract.
. 4.6.2.8. 12 Narrative Description of Proposed Facility
The following facility description is organized by waste stream and discusses traffic flow/vehicle
circulation, access to each waste-handling area, and the general features of each waste area.
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Traffic Entrance/Egress
Vehicles enter the site through the existing gate on the northeast comer of the site, proceed west, and then
turn south to the scale plaza. The roadway approaching the scale plaza from the north is divided into six
lanes, numbered 1 through 6 from west to east. West Road is the primary access for all vehicles going to
the transfer building, co-composting building, and water treatment plant. East Road is the exit road for
self-haul vehicles leaving the transfer building. Cross Road serves as an access road to both the MRWF
and the MHR area, as well as an eXIt road for self-haul vehicles leaving the transfer building. For safety
reasons, commercial and self-haul vehicles use separate roadways, to the extent possible.
Solid Waste
Solid waste is received in the Transfer Building, a pre-engineered metal building with a flat floor tipping
area and two waste chutes. The southwest chute feeds a pre-load compactor to rear-load an intermodal
shipping container carried on a multi-axle chassis. The northeast chute will be used to load various non-
MSW wastes and/or recyclables into a variety of transfer vehicles. It will also serve as a backup for
MSW when the compactor is not operating.
Commercial haulers will bring solid waste onto the site in packer trucks, rolloffs, dump trucks, panel
vans, pickup trucks, trailers and similar large vehicles. They will weIgh in at the outside (western-most)
inbound scale in lane 2 before proceeding to the transfer building. Commercial vehicles enter the
maneuvering area on the west side of the transfer building and then back into the building through rollup
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doors. After unloading their waste on the tipping floor near the top-loading chutes, the commercial
vehicles drive out the door, turn right, and proceed north to the commercial outbound scale (lane 5). If
the vehicle has a tare weight on record, it can bypass the scale and leave more quickly via bypass lane 6.
Self-haulers typically use cars, pickup trucks, and small trailers to transport solid waste. They will weigh
in at the second inbound scale (lane 3). Its proximity to the scalehouse allows the attendant to answer
customers' questions. Self-haulers then proceed around the transfer building in a counter-clockwise
direction and back into the doorways on the east side to unload. Self-haulers exit on the north-bound
ramp, turn left onto the access road, weigh out on the lane 4 scale, and pay the scale attendant.
Transfer vehIcles include transfer trailers, intermodal shipping containers on chassis, and dump trailers.
Because they return to the site empty, these vehicles bypass the inbound scales using lane 1 and turn left
into the trailer yard located just north of the transfer building. To prevent over-loading, vehicles being
filled are weighed on axle scales in the trailer tunnel beneath the loading chutes in the transfer building.
Outbound transfer vehicles are weighed by the City in lane 5. They will be re-weighed at the raIlhead or
at the disposal site, as applicable. Open-top transfer vehicles will be tarped using a mobile tarping station
in the trailer parking area north of the transfer building.
Recyclables
Commercial recyclers weigh in on the lane 2 scale and then turn left (east) onto Cross Road to access the
MHR area. This area contains bunkers and rolloff containers for various materials. Some of these are
located under a canopy roof, while others are located in an uncovered, paved area. Commercial recyclers
weigh out on the lane 5 scale.
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Self-haul recyclers drop off their recyclable materials at a vehicle turnout area on the west side of the
main road, north of the scale plaza. This recycling area contains rolloff containers for at least nine types
of recyclables (three colors of glass, aluminum, steel cans, newspaper, cardboard, and two types of
plastic). While recyclables in self-haul vehicles are not weIghed, outbound containers of self-hauled
recyclables are weighed prior to shipment to market.
Moderate Risk Waste (MRW)
Residents with household (small) quantities of moderate risk waste cross the inbound self-haul scale in
lane 3 and turn left onto Cross Road to access the MRW Facility. Alternatively, self-haulers can visit the
MRWF after leaving the transfer building. The MRWF includes a covered unloading area, a fully-
enclosed area for processing and bulking wastes, and storage areas for MRW in drums. The MRWF has
spill containment, fire sprinklers, and mechanical ventilation. It also has double-walled storage tanks for
used motor oil and anti-freeze, as well as spIll-contained pallets for auto batteries. The MRWF is located
adjacent to the metals/hazardous/recycle area, which allows sharing of storage tanks, equipment, other
facilities and staff. The MRWF is staffed by a worker with extensive training in identifying and handling
hazardous materials.
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Hazardous Waste (HW)
Co-located with the commercial recyclables and metals area, the MHR receives and stores hazardous
wastes such as contaminated soils and asbestos. A 40 ft by 40 ft canopy provides rain protection for
selected metals, hazardous materials, or recyclables. The rest of the area consists of pavement exposed to
the weather. Hazardous wastes include used motor 011, antifreeze, and auto batteries. Oil and antifreeze
will be stored in two 500-gallon double-wall tanks, and batteries will be stored on spill pallets. In the
future, the City may designate other hazardous wastes to be received by the facility.
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Special Wastes and Metals
Co-located with the commercial recyclables and hazardous waste area, this area receives special wastes
including contaminated soil, coal ash, other bulky wastes, asbestos, creosoted lumber, painted materials,
televisions and computer monitors, and tires. Metals (other than "tin" cans and aluminum cans) include
non-ferrous and ferrous metals, bulky metal items (e.g. furniture), and white goods (appliances).
Depending on the quantity and handling characteristics, these materials will be stored on the ground, in
bunkers, or in rolloff containers. Bunkers to separate and store materials will be constructed of concrete
"ecology" blocks stacked 2-3 hIgh. Materials with a high potential for contaminating stormwater runoff
will be stored under tarps or other cover.
Yard Waste/Biosolids
Yard waste can be brought in by self-haulers, commercial haulers, and landscaping/yard maintenance
firms. The City will deliver partially dewatered biosolids from its wastewater treatment plant. Self-
hauled yard waste IS weighed on the scale in lane 3, while commercial yard waste and biosolids are
weighed on the scale in lane 2. After unloading, vehicles exit north on West Road. Self-haulers weigh
out on the lane 4 scale and commercial haulers on the lane 5 scale.
Water Treatment Plant
Vehicles, ranging in size from cars through tractor-trailers, will use lane 1 to bypass the mbound scales
and continue southeast to the main gate of the water treatment plant. Vehicles leaving the plant proceed
northwest to the scale plaza, then use lane 6 to bypass the outbound scales.
Tarping
Open-top containers and roll-off boxes carrying recyclables, MSW, or other wastes will be tarped at a
portable tarping station located in the trailer yard. Under normal waste-handling conditions, tarping is not
required, as MSW will be compacted into rear-loaded shipping containers on chassis rather than open-top
containers or transfer trailers.
Landscaping
Site landscaping will create an attractive facility provide visual screening of solid waste activities or
equipment. It will consist generally of low-maintenance, native trees and shrubs. Landscaping near the
transfer building will consist of low shrubs that will not provide cover for rodents.
Exterior Building Materials and Colors
Significant exterior building materials are indicated on the drawings. These include metal roofs and wall
panels; concrete and metal wall panels; and translucent panels for skylights and walls to minimize the
need for electric lights. Colors will be selected in consultation with the City during the design
development phase.
Sign age
The following table is a preliminary list illustrating the type of signs that will be used to inform customers
about the various waste-receiving and handling areas, to direct vehicle traffic, and to promote safety.
Location WxH (in.) Contents
Main gate 60x36 Facility & operator's names; business hours; services; fees
Roads 6 x 24 Road names
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Intersections 36x40 Arrows direct vehicles to MRWF, MHR, transfer bldg, composting, etc.
Traffic Per code Directs vehicle traffic; stop, one-way, yield, do not enter, etc.
Safety As needed As needed: e.g. transfer bUilding eo children must remain in vehicle, etc.
Self-haul recycling 36x48 Area name; materials accepted; bin names
Scale plaza 36 x 40 Directs self-haul & commercial to appropriate lanes
Metals/haz/recycle 36 x 48 Area name; matenals accepted; bunker names; safety
MRWF 36 x 48 Area name; materials accepted; safety
Co-composting 36 x 48 Area name; matenals accepted; safety
Water treatment 36 x 40 Directs vehicles to the water treatment plant entrance
4.6.2.8. 13 List of Proposed Equipment
At this stage of the design process, it is not practical to provide a list of all possible equipment. The
proposed equipment includes, but is not limited to, the following general categories:
. Compactor: pre-load compactor is fed by gravity through a feed chute in the tipping floor and
compacts the waste into one or two bales to make a full container-load. Electric motors drive
hydraulic pumps to power the compaction cylinder(s). Unit is sized to compact Year 2023
average-day tonnages in an 8-hour shift; can handle 2023 peak tonnages in one over-time shift.
Similar to attached specifications sheets for Harris Transpak 500; actual unit manufactured by
Hams or Shredding Systems Inc.
. Rolling stock: road and yard tractors; transfer trailers; various types of road and intermodal
containers; various chassis; pickup trucks and cars.
. Waste handling/earth-moving equipment: rubber-tire bucket loaders, tracked loaders, skid-steer
tractors, sweepers, backhoes, excavators.
. Waste containers: various dumpsters, roll-off containers, ISO containers, and double-wall tanks.
. Building services: plumbing, heating, ventilating, and air-conditioning equipment for sanitation,
personnel comfort and health, or as required by code.
. PollutIon prevention equipment: catch basins, manholes, oil/water separator, sewage lift stations.
4.6.2.8.14 List of Technical Assumptions
It is not practical to provide a list of all technical assumptions. The facility will be designed and
constructed in accordance with applicable codes (Federal, state, and local, mUnIcipal, building,
mechanical, plumbing, electrical, and environmental, etc.) and regulations. It will take into account
existmg conditIons and applicable City and County planning documents. Fundamental engineering
principles and sound engineering judgment based on years of experience designing and operating simIlar
facilities will dictate, along with cost considerations, how the facility is designed, constructed, and
operated. A significant technical assumption is that the soils in the development area are suitable for
construction of buildings and pavement, and do not contain large quantities of deleterious materials such
as peat or expansive soils.
4.6.2.9 Description of the Proposer's Approach to the Operations Plan
WCWI's approach to the facility Operations Plan will utilize experience from other facilities which the
company operates. Using this experience, the plan will be tailored to the Port Angeles facility based on
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site specific conditions and facility layout, the various components of the facIlity, waste volume, and
regulatory requirements. The developed plan will follow an established and proven format that will
enable sufficient detaIl to assure efficient and safe operation of the facility.
The general outline of the Operations Plan will include a facility design overvIew section and an
operations section:
. Design Overview Section- will include a discussion of site location, waste and traffic volume,
site utilities, and a discussion of facility design criteria.
. Operations Section - will include a discussion of site operating hours, traffic patterns, staffing
requirements, waste management (acceptance, unloading, loading, and transport), control of
nuisance conditions (noise, odor, dust) emergency plans, spill control, waste screening, and
recordkeeping.
The Operations plan will address the above items for all components of the facility including the transfer
building, MRWF, MHR, recycling area, and co-compo sting operation.
4.6.2.10 Description of the Proposer's Approach to the Contingency Plan
The WCWI Contingency Plan will address a variety of contingency scenarios or emergencies that could
disrupt normal transfer station operations. The overall objective is to return MSW-handling operations to
normal as soon as possible. Example scenarios include fire; explosion; release of toxic or hazardous
substances; work stoppage by WCWI employees or non-affiliated parties; emergency weather conditions
(snow, flooding); impassable roadways; building structural or equipment failure; power outages (both
short and long-term); discovery of the receipt of unacceptable wastes; handling of disaster wastes; etc.
The Contingency Plan will list the response actions for each scenario. Depending on waste characteristics
and quantities, response actions could mclude on-site storage of various wastes in containers, in the
transfer building, at the MHR area or MRWF. Some wastes might be immediately loaded into trailers or
ISO containers and stored on-site or hauled immediately. In some mstances, a rapid response to and
cleanup of the emergency (e.g. on-site spill of toxic materials) will have a higher priority than remstatmg
normal MSW-handling procedures.
During power outages, WCWI will utilize portable generators to supply emergency power to critical areas
such as the scalehouse and transfer building lights, but not discretionary uses such as the compactors.
The Contingency Plan will have a comprehensive list of contacts and phone numbers, as well as local,
State, and Federal emergency response teams that could also provide emergency response and medical
assistance.
4.6.2.11 Description of How the Overall Technical and Cost Proposal is Consistent with
the Goals and Policies in the County's SWMP
WCWI has reviewed the November 2000 Clallam County Comprehensive Solid Waste Management Plan
(CSWMP) and developed its proposal to respond to the goals and recommendations of the adopted
CSWMP.
First, the Waste Import/Export Chapter of the CSWMP calls for developing a contract for waste export
services, including a reliable transportation and disposal system. WCWI will provide a transfer station
facility and transportation/disposal system that meets these requirements. The facility will have the
capability to handle waste generated in the County, subject to the constraints of the RFP and interIocal
agreements.
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Second, the CSWMP established a recycling goal of 30% that could eventually grow to 40%. The
CSWMP recognizes that closing the Port Angeles Landfill and contracting for waste export will create
new financial dynamics for avoided costs. This in turn provides a financial incentive to examine ways to
recycling more materials. Table 3.5 of the CSWMP identifies targeted materials that will help increase the
recycling rate to 30%, including yard debris, old corrugated cardboard (OCC), newspaper, mixed and
office paper, and ferrous materials.
WCWI's proposed site development includes adequate space to accept segregated yard debris as a
feedstock for the Co-composting facility. We will work with the City to set up a fee structure that offers
incentive (lower) rates for source-separated yard debris and woody waste than for solid waste. Lower
fees will encourage some customers to source-separate their garbage from their yard/wood waste. This
differential rate structure could be extended to construction and demolition contractors to encourage them
to segregate wood waste from their projects.
The southwest comer of the transfer building provides a limited amount of floor space for receiving high-
graded commercial loads of waste without disrupting solid waste operations. WCWI could floor-sort
these high-graded loads to remove materials such as OCC, wood and metals. In addition, the transfer
buIlding can be easily expanded if it becomes economically feasible to add equipment for processing and
recovering recyclable materials.
Third, the transfer building can be used to consolidate recyclable materials into larger trailers for transport
to markets, especially commingled recyclable materials, using the top-load chute. Under some
conditions, it may be feasible to run loads of single-stream materials (e.g. newspaper, OCC, or mixed
waste paper) through the compactor for more economical transport to a materials processing facility.
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The proposed transfer station provides a central facility for accepting, processing and transporting waste
from the City and County. WCWI has built into its design the flexibility to implement programs and
services that encourage the recycling of more materials. WCWI will work with the City to examine ways
to ensure that its transfer station provides those services needed to achieve the goals of the CSWMP.
4.6.3 PERSONNEL TRANSITION PLAN
4.6.3.1 City Employee Retention Plan
Waste Connections, Inc (WeI) is the fourth largest publicly traded solid waste company in North
America. WCI has integrated more than 120 companies and 160 operations since 1997. This number has
included Thirty-One (31) municipal solid waste landfills and twenty-eight (28) municipal solid waste
transfer stations and twenty (20) waste recycling or materials recovery facilities. Integration of work force
and management has been the cornerstone ofWCI's operational success.
There are two key elements to a successful transitton. FIrst, it is essential to retain as many employees,
from the labor categones up through the supervisory ranks, as possible. Secondly, advance planning and
coordination with City staff will ensure that the integrity of the system is not compromised, during the
transition.
Existing City personnel shall be given first nght of refusal for positions in which they are qualified.
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4.6.3.2 Communication Plan for City Employees
Assuming an October 2, 2006 commercial operations start date, WCWI's management team will begin
interviewmg the current CIty'S landfill personnel July 10, 2006. WCWI expects to retain all of this staff.
This initial interviewing and hiring process will be completed by July 31, 2006. This approach will allow
WCWI sixty days to fill any open field positions. All employees, existing and new hires, will attend
orientation training that will begin in September and be completed by the operation start date. New hires
will receive the training before being placed in the field. The training will include safety and compliance
practices, unacceptable waste recognition, employee conduct and work rules. If necessary, any new or
existing employees who require more extensive training (Unacceptable Waste, etc.) will receive this
training prior to October 2, 2006. AddItionally, it is WCI's practice to bring entire groups of new
employees together for benefits, payroll and general Q&A about the company. These meetings will be
attended by Corporate !Regional Management and should occur in early September. In the unlikely event
that local employees cannot be retained by October 2, 2006, WCI will supply skilled workers from its
operations until qualified employees are found.
The planning phase of the Transition Plan will begin upon notice of selection as a finalist and will
accelerate upon award of the Contract. Upon such an award, WCI will request a meeting that will include
members of the transition team and City Staff. The intent of such a meeting wIll be to discuss
coordination of employee interviews, transfer of key records, and a general dIScussion of operations up to
and through the anticipated start up date.
4.6.3.3 Summary of the Proposer's Human Resource Benefits
.
As a rapidly growing company, WCWI has many opportunities for qualified and motivated employees to
improve professionally through continued training and positive challenges. WCWI believes in promoting
from within if qualified. Upon completion of the interview process stated in the above communication
plan, WCWI will determine competitive compensation packages for employees based upon experience
and qualifications. Waste Connections, Inc. offers a competitive benefits package.
401 K Profit Sharing Plan
All Eligible Employees are welcome to partICIpate in the 401k plan during one of our two open
enrollment periods (June and December). Employees must be employed for one year and complete 1,000
working hours. Employees may contribute up to $13,000 in 2004, unless they are over 50 years of age
then they are allowed to defer an additional $3,000. For the 2004 plan year, Waste Connections, Inc.
provided matching contribution of 50% up to the first 5% of pay contributed by employees.
Medical Benefits
The Medical Plan Benefits are extended to employees and their eligible dependents on the first of the
month following 90 days of full time employment. Employees pay a small portion of the cost of insurance
via payroll deduction for either a single, single plus one dependent, or a family program.
.
The Waste Connections Health Care Plan
This plan includes preferred provider benefits for medical expenses through a Preferred Provider
Organization, Blue Cross. This plan does not require the election of a Primary Care Physician, nor does
the plan require that the patient obtain referrals for specialist care. When a Preferred Provider is used,
benefits are paid at 80% after satisfaction of a Plan Year (June to June) Deductible. When a non-Preferred
Provider is used, benefits are paid at 60% after satisfaction of the Plan Year Deductible. The Plan Year
Deductible is $500 per individual, $1,000 per individual plus one dependent, and $1,250 per family. After
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the total amount of covered expenses an employee incurs reaches $10,000 during a plan year, the plan
will pay 100% of covered expenses during the remainder of the plan year
Prescription Drugs
This plan is extended to employees and their eligIble dependents. Waste Connections, Inc. has contracted
with Wellpoint Pharmacy (a subsidiary of Blue Cross) to process claims for prescription drugs. When
prescription drugs are provided by a participating Wellpoint pharmacy, an employee may obtain up to a
30 day supply and will be required to pay a $10 co-payment for generic prescriptions, a $30 co-payment
for source prescriptions (no generic equivalent avaIlable), or a $30 co-payment, plus the difference in cost
between the brand name and the generic equivalent, for each brand name prescription. The Plan Year
D~ductible is $75.00 per individual, $150.00 per individual plus one dependent, and $225.00 per family.
After the plan year deductible is met, co-pays are required.
Mail Order Prescriptions
Waste Connections, Inc. has also contracted with Precision Rx for mail order pharmacy service. This
program is available for "Maintenance Drugs". An employee may obtain a 90-day supply and will be
required to pay only a $20 co-payment for generic prescriptions, a $60 co-payment for source
prescriptions when generic prescriptions are not available, or a $60 co-payment plus the difference in cost
between the brand name and generic equivalent, for each brand name prescription. Deductible applies to
Mail Order prescriptions as well.
Dental
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This plan is extended to employees and their eligible dependents. This plan does not utilize a network of
preferred providers. Employees may use the services of a licensed dentist, denturist or oral surgeon of
their choice. Preventive care and diagnostic services are paid at 100%. Restorative services are paid at
80%. Major services are paid at 50%. There is no deductible for preventative care services. There is an
annual deductible of $50 per plan year, per individual, covered on this plan with a maximum of three
deductibles per family for other services. The maximum annual benefit per covered individual is $1000.
Vision
This plan is extended to employees and their eligible dependents. This plan does not utilize a network of
preferred providers. Employees may use the services of a licensed ophthalmologist, optometrist or
optician of their choice. Vision examinations are covered at 100% once in every 24-month period. A $250
allowance is provided to purchase lenses, frames and/or contact lenses once every 24- month period.
Life Insurance/Accidental Death and Dismemberment
Employees who have enrolled for health benefits will be provided with coverage equal to 1.5 times their
annual salary, up to a $50,000 maximum. Employees have an option to purchase additional life insurance
for themselves and their dependents.
Long- Term Disability
Employees, who have enrolled for health benefits will be provided with coverage equal to 50% of their
monthly salary, up to $2500 per month. This coverage begins after 90 days of being disabled. Employees
have an option to purchase additional long-term disability insurance for themselves.
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Flexible Spending Plan
Employees are welcome to enroll in our Flexible Spending Plan, which allows for money to be taken out
of each paycheck on a pre tax basis to be used toward uncovered medical expenses and/or dependent care.
This plan is regulated by the IRS and runs on a plan year basis (June-June).
Employee Assistance Program
This is a free service paid for by Waste Connections. The EAP program is confidential counseling,
education, and referral service available to all Waste Connections employees, spouses and dependents.
This plan offers free counseling, (marital, family, emotional concerns, crisis intervention, etc.) legal and
financial consultation services.
Vacation
Upon completion of one (1) full year of employment with the Company (original City hire dates will be
acknowledged for those transitioning from existing positions), regular, full-time employees will be
eligible for vacation.
Years of Continuous Service
More than one (1) year
More than three (3) years
More than seven (7) years
Annual Accrual
40 hours
80 hours
120 hours
Holiday
The following days shall be considered as holidays:
New Year's Day
Memorial Day
Fourth of July
Labor Day
Thanksgiving
Christmas Day
Work performed on any holiday shall be paid for at one and one half (1 1/2) times the employee's straight-
time rate of pay In addition to holiday pay. No employee shall be called for less than four (4) hours work
or pay in lieu thereof.
Sick Leave
After completion of one full year of employment (original City hire dates will be acknowledged for those
transitioning from existing positions), sick leave shall accumulate at the rate of three and one-third (3 1/3)
hours for each month of employment. Maximum accumulation of sick leave shall be thirty (30) days, two
hundred and forty (240) hours.
Unused sick leave will not be paid out except upon formal retirement from the Company, in which case,
an employee shall be paId fifty percent (50%) of his or her accrued but unused sick leave.
4.6.5 PROPOSED SCHEDULE
The attached project schedule is based on the dates and schedules shown in Tables B-l.l and B-l.2 of the
Performance Specifications. The proposed schedule is dIvided into permitting, design, financing, and
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construction phases. It shows major tasks, shows sequences and important submittal dates, as well as
duration (calendar days) and interdependence of major activities. A list of permits that may be reqUIred:
Facility Planning Permits
. SEP A checklist
. Traffic study
Facility Construction Permits
. Clearing, grading, filling permit
. Building plan check permit
. Energy code calc
. Building construction permit
. Mechamcal permit
. Plumbing permit
. Electrical permit
. Sign permIt
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Demolition permit
Sewer connection permit
Sewer, water, street extensions
Construction inspection fee
Right of way construction permit
Sidewalk permit
Curb and gutter permit
Catch basm permit
New or Continued Operations Permits
. Solid waste permit
. NPDES/state and local stormwater permit
. Post-closure monitormg.
Financing
WCWI will fund this project using the current cash flow of Waste Connections. As such, no outside
financmg will be required. The major tasks related to funding the project are:
. Secure Bonding for Construction
. Negotiate scopes of work and fees for all Subcontractors to WCWI
. Ensure that Subcontractors are properly bonded
. Pay Subcontractors at 57 days or as negotiated.
The attached schedule is preliminary and will be updated periodically as the project progresses. WCWI
will make a good faith effort to meet the critical milestones and facility startup date. WCWI believes that
flexibility on the part of itself and the City in adapting to real-world, real-time conditions during the
development ofthis project is critical to its ultimate success.
April 5, 2005
Waste Connections of ..h.
Washington, Inc. "'111\.'
4.6-19
.
PROPOSAL SPECIFICATION:
981007
AUTOMATIC PRELOAD WASTE COMPACTOR: TP-500
GENERAL LAYOUT DRAWING: D OS90..onS7
APPLICATION: Solid waste.
A CAPACITY AND RATING:
Ai HOPPER OPENING:
A2 COMPRESSION CHAMBER SIZE:
A3 APPROX. EXPANDED BALE SIZE:
. A4 BALE WEIGHT: (AVERAGE)
AS BALE VOLUME:
A6 APPROX. EXPANDED BALE VOLUME:
A7 BALING CYCLE:
A8 APPROX. HOURLY CAPACITY:
A7 is based on the following:
B COMPONENTS:
B1 ELECTRIC MOTORS:
B1.1 MAIN SYSTEM:
B1.2 Oil Cooler
.
81.3 Oil Filter
72" wide x 120" long
84" wide x 84" deep x 35-1/2' long
90" wide x 90" deep x 38' long
28 TONS
65 cubic yd.
83 cubic yd.
15 minutes (4 cycles/hr)
112 TONS
Twelve (12) strokes
Avg. solid waste loose density is
10 Ibs/cu. ft. Material can vary from
2 Ibs. to 30 Ibs/cu. ft.
Two (2) 100 HP. 1750 RPM, 208/220/440 volt,
38, 60 Hertz, TEFC.
One (1) S HP Motorpump
One (1) S HP Motorpump
-B
-
-
COMPONENTS: (Continued)
82 ELECTRIC CONTROL SYSTEM:
B2.1 One (1) NEMA 4 control panel to include Wye-Delta motor starters for 440 to 600 volt
power with overload protection, circuit breaker, control circuit transformer and cycle
control system wired to terminal strips. Special starting requirements are available at
additional cost.
82.2 One (1) operator's station enclosure to include oil tight control switches and signal lights,
wired to terminal strips. Console displays bale weight, length, and has numerical
diagnostic functions, as well as an emergency stop switch.
82.3 Electronic weigh beam, front and rear load cells are provided. Weights are totalized with
visual readouts at operators console and on tipping floor data board. The data board is
provided for tipping floor operation with 6" high electro-mechanical numbers for visual
display of platen position, length and weight of bale during compaction.
82.4 Remote radio control is standard.
83 HYDRAULIC SYSTEM:
83.1 MAIN PUMPS:
One (1) 60 GPM @ 2500 p.s.i.
One (1) 60 GPM @ 2250 p.s.i.
Two (2) 105 GPM @ 1650 p.s.i.
Two (2) 105 GPM @ 775 p.s.i.
B3.2 VALVES:
B3.2.1
Individual relief valves protect each pump from overload pressure.
B3.2.2
Directional valves are electrically controlled and hydraulically operated.
83.3 CYLINDERS:
83.3.1
FIRST COMPRESSION:
16-314" bore, 3 Stage Telescoping
55'.0" stroke, 275 Tons first stage
83.3.2
8ALE GATE:
Two (2) 4" bore, 35 Tons Lift
83.3.3
HITCH:
1112" bore, 1" rod, 6" stroke
B4 FILTERING AND COOLING SYSTEM:
84.1 Filtering is by replaceable cartridge type micronic filters.
84.2 Standard cooling system is oil to air heat exchanger.
84.3 Two (2) 4 KW Immersion heaters are provided
PROPOSAL SPECIFICATION - TP-500
Page 2 of 4
C
.
.
.
OPERATION:
C1 Loading is either direct into compactor from tipping floor above by push loader, or by conveyor
feed system with integral hopper.
C2 Compaction is accomplished by pushing solid waste into the bale chamber against a closed
gate at the discharge end with a reciprocating platen driven with a three (3) stage hydraulic
cylinder.
C3 Weight of bales is determined by a visual read-out from load cells located in the chamber
foundation pedestals.
C4 Bales are ejected into transport vehicles which are latched to the chamber with a hydraulic
hitch.
C5 Bales are ejected by opening a vertical gate and operating the platen to push the bale clear of
the chamber and into the transport vehicle.
o CONSTRUCTION:
01 The baler is designed for flat surface, reinforced slab installation.
02 Major sub-assemblies are plate and structural weldments of cellular construction, welded into
main chamber assembly.
D3 Final assembly is bolted and keyed.
04 The chamber floor and platen wear surfaces are fitted with weld-on wear plates of heat treated
alloy steel.
05 Shear knives are securely seated in press frame and platen.
06 All pipe is electrically welded and securely anchored.
07 Pipe flanges are steel, bolted type, with "0" ring gaskets.
D8 The baler is completely assembled and operated before shipment.
D9 Standard paint is machinery enamel over primer coat.
010 SHIPPING WEIGHT: 85 tons, approx.
E GENERAL:
E1 Layout and foundation prints show above grade dimensions and conditions. Below grade
soil conditions, piers, piling, footings and associated components are matters of local
determination for which our company can accept no responsibility.
E2 HARRIS technical services are available on a free advisory basis to assist in determining
the location and material flow conditions best suited to utilize the high production of our
equipment.
E3 This proposal also includes the services of a qualified installation specialist for five (5) eight-
hour working days. The specialist will place the press in operation and instruct your operator
in recommended operating and maintenance procedures. (Transportation and sustenance
outside the continental United States is for the purchaser's account.)
PROPOSAL SPECIFICATION. TP-500
Page 3 of 4
eE
GENERAL: (continued)
E4 Harris will not accept back charges in connection with installation or start-up of this machine
unless prior approval is obtained in writing from authorized Harris personnel.
E5 Harris will not accept any charges for work performed on this machine during contracted
warranty period unless prior approval is obtained in writing from authorized Harris personnel.
F EXPENSES ASSUMED BY THE PURCHASER TO COMPLETE THE MACHINE INSTALLATION:
F1 Freight from factory to destination.
F2 Preparation of foundation.
F3 Unloading and assembling of the baler.
F4 Wiring from power source to electric control panel.
F5 Furnishing approximately 1600 gallons of hydraulic oil for the hydraulic system.
G Limited Warranty:
This machine is covered under Harris warranty (HWMG. Inc.990101W-5td) which is attached.
.
.
PROPOSAL SPECIFICATION - TP-500 SUPER
Page 4 of 4
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14'-8"xI5'-8"
UTIUTlES / JANITOR
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JOB No DESIGNED. PROJ ENGINEER
33757114 WARNING
SCALE DRAWN BY' ~
APPROVED BY
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SEPT 2004 TO SCALE
REVISION
OUTSIDE OF
MAIN BUILDING
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NOT SHOWN FOR ClARITY
COLORED BLOCK COURSE
All. AROUND BUILDING
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MATERIALS OF CONSTRUCTION
1 FOUNDATIONS SHAll BE CONCRETE SlAB ON GRADE
2 EXTERIOR WALLS SHAll BE SPLIT FACED 8" CMU
INTERIOR WALLS OF REST ROOMS '" UTIUTlES/ JANITOR
ROOM SHAll BE 8" SMOOTH FACED CMU
All. OTHER INTERIOR WALLS SHAll BE 5/8" GYPSUM
WALL BOARD OVER UGHT GAGE METAL STUDDING WITH
ACOUSTICAL INSULATION
3. WALLS OF THE 2 omcES SHAll STOP AT SUSPENDED CElUNG
FOR POSSIBLE FUlTURE RELOCATION
4 ROOF SHAll BE PREFlNISHED METAL (SAME AS MAIN BLDG)
OVER MANUFACTURED WOOD TRUSSES
5 CElUNGS IN REST ROOMS SHAll BE 5/B"GYPSUM BOARD.
CElUNGS IN All. OTHER AREAS SHAll BE 2'x4' ACOUSTICAL
TILE AT 8'-8" ABOVE FlNISHED FLOOR CElUNGS SHAll BE
INSULATED TO R30
6. FLOORS IN REST ROOMS '" UTIUTlES/ JANITOR SHAll BE
SEALED CONCRETE.
LUNCH ROOM '" HAllWAY SHAll BE VINYL TILE
omcES '" RECEPTION AREA SHAll BE CARPETED
7. EXTERIOR DOORS '" UTIUTY ROOM ODOR SHAll BE OF
HOLLOW METAL CONSTRUCTION
INTERIOR DOORS SHALL BE OF WOOD CONSTRUCTION IN
HOLLOW METAL FRAMES.
B WINDOWS SHALL BE ALUMINUM FRAMED, DOUBLE PANE GLASS
All. INTERIOR WALLS SHALL BE PAINTED
9 BUILDING SHALL BE AIR CONDmONED WITH AN EXTERNAL
HEAT PUMP.
.
....
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NORTH ELEVATION (SIMIlAR)
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WASTE CONNECTIONS
CITY OF PORT ANGELES
P4
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33757114 WARNING
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'0 Task Name
1 Service Agreement Award
2 Permitting
- ~~-~-~ ~ --- -"- -----
3 Planning Permits
4 Construction-Related Permits
5 Operating Permits
6 Design
7 Project Development Plan (POP)
8 City Review & Approval of POP
~-- ~ --._- ---
9 Schematic Design
10 City Review - Schematic Design
11 50% Design
-----~-~--- ----- --- -~- ------ --
12 City Review - 50% Design
13 100% Design
14 Construction Permit Application
~ ~~ ~ ~ ~--~ - ----- ~ -~---
15 City Review & Approval of100% Design
16 City Review & Approval of Construction PermIt Application
17 Construction
--~ -- ----- ---
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~-- - - --~- -- -- ~--"-
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-~-~-~~--- ----- ---- -- ----" -- ---- -- -- --- ----~~~
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~______ __ H__ . .__
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--~ ~ ---~---
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Waste Connections of Washington, Inc
October 29, 2004
Duration
o days
479 days
---'1'29 days
60 days
464 days
-- ----.'---
152 days
17 days
10 days
20 days
10 days
45 days
10 days
40 days
40 days
20 days
20 days
224 days
--~-
o days
141 days
o days
17 days
18 days
18 days
45 days
88 days
18 days
64 days
o days
479 days
0._______
60 days
30 days
15 days
.___~_" ~ " HH___
449 days
Port Angeles Transfer Station Development
Proposed Project Schedule
Start Finish
Mar 1 Mar 1
Mar 1 Dee 29
-~---- ---- - ----+--+- -------
Mar 1 Aug 26
Jul 4 Sep 23
Mar 22 Dec 29
~------~- --
Feb 24 Sep 23
Feb 24 Mar 18
Mar21 Apr1
Apr4 Apr29
May 2 May 13
May 2 Jul 1
Jul4 Jul15
Jul4 Aug 26
Jul4 Aug 26
-..' Aug"29" Sep 23
Aug 29 Sep 23
Nov 23 Oct 2
____ __H_ ._________ ___
Nov 23 Nov 23
Nov23 Jun7
Jun 7 Jun 7
Jun 8 Jun 30
Jul3 Jul26
Jun 8 Jul 3
"Ju"l31 ." Sep 29
Nov 23 Mar 24
Jun 8 Jul 3
-- - ----Juf4-. - ~-~---Sep-29
Oct 2 Oct 2
Mar 1 Dee 29
Aug 31 Nov 23
Mar 1 Apr 11
Mar 22 Apr 11
Apr 12 Dec 29
Qtr 1 , 2005
Jan Feb
Qtr 4, 2005
Nov
Dec
Qtr 3, 2006
Jul Aug
. 10/2
Qtr 1,
Jan
~,
4.7 Compo II
.
.
.
City of Port Angeles
4.7 COMPONENT 11- WASTE TRANSPORT AND DISPOSAL
4.7.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS
A significant portIOn of costs in this component is the purchase of the tractors, containers and chassis to
transfer the waste from Port Angeles to our landfill in Oregon. WCWI will staff this operation with six
long-haul drivers seven days a week. The drivers will be WCWI employees with full benefits. Operating
expenses will occur in the normal course of business as described below. WCWI will properly bond and
insure the project and operations as required. See also Form 7.2 in Section 7.0 for all costs associated with
the Technical and Cost Proposal for Component II.
4.7.2 COMPONENT II (WASTE TRANSPORT AND DISPOSAL)
4.7.2.1 Disposal Site
Location
The Finley Buttes Regional Sub-title D Landfill (FBRL) is located approximately 10 miles south of the
intersection of 1-84 and Bombing Range Road on Bombing Range Road in Boardman, Morrow County,
Oregon. See Figure 1.
Ownership (or legal basis for use)
The Finley Buttes Regional Landfill is owned by Waste Connections, Inc.
Status of required permits (land-use, environmental, etc.)
The Finley Buttes Regional Landfill has all operating permits in place.
Copies of permits
Copies of the following permits for Finley Buttes Regional Landfill are provided as an attachment to this
section:
. Conditional Use Permit, Morrow County Court, Morrow County, OR, July 22, 1987
. Solid Waste Disposal Site Permit, OR Department of Environmental Quality, November 23, 1999
. TItle V Operating Permit, OR Department of Environmental Quality, April 16, 2001
. Application to Renew Title V Operating Permit, OR Department of Environmental Quality, May
28,2003
Site capacity, in total developed area and permitted expansion area.
The total permitted capacity at FBRL is 180,000,000 cubic yards. The remaining disposal capacity is
approximately 169,000,000 cubic yards. At current annual disposal volumes the facility has a remaining
site life of approximately 208 years.
April 5, 2005
Waste Connections of .h-..
Washington, Inc. ""+'
4.7-1
Ot" of Port Angeles
Figure 1. Finley Buttes Regional Landfill, located in Boardman, Oregon.
4.7-2
FVaste COllnectio1ls of' .~it.
FVaslzingtoll, Inc. ~+,.
Aprzl 5, 2005
City of Port Angeles
. List of jUrisdictions in which disposal site is located (County, Port District, etc.).
.
.
Finley Buttes Regional Landfill is located in Morrow County, Oregon.
Description of backup disposal method, authorizatIOn for use, and site if primary landfill unavailable.
In the event waste disposal at FBRL is temporarily interrupted, full waste containers will be stored onslte
at the FBRL facility until disposal can be resumed. A container storage capacity of a minimum of 80 to
100 containers is available. When disposal is resumed, use of the two waste tippers, tractors and chassis
during overtime and/or second and third shift will be implemented to reduce the container backlog. No
additional trailers will be required.
If the interruption in service lasts longer than three or four days, FBRL will begin transporting waste
containers by truck to either the WCI-owned Wasco Landfill located in The Dalles, Oregon, or the
Roosevelt Regional Landfill owned by Allied Waste Industries, with whom WCI has a reciprocal
emergency back-up agreement in place. WCI can also access the Roosevelt Regional Landfill through the
Tacoma rail intermodal facility, which has daily service to the landfill, should that become necessary until
disposal can be resumed at the FBRL. The likelihood of long-term disruption of service at FBRL is
considered remote. No disruptions have occurred to date.
Proposed staffing.
WCWI wIll hire a minimum of six (6) transfer truck drivers to transport empty and loaded intermodal
containers of solid waste between the City of Port Angeles Transfer Station and the Northwest Container
Services, Inc. (NWCS) Tacoma Intermodal Facility located in Tacoma, Washington. Please note that
NWCS is now a subsidiary ofWCI (purchase to close on or before December 1,2004). See also Section
4.6.3 regarding staffing for the transfer station operations.
FBRL has been operational and fully staffed since November 1990. No new staff is required to handle the
City of Port Angeles waste stream.
4.7.2.2 Transportation
Truck Transportation Leg
Loaded contamers from the City of Port Angeles Transfer Station will be transported via tractor/chassis to
the NWCS Tacoma Intermodal Facility for transfer to rail and shipped to FBRL located in Morrow
County, Oregon. Empty containers will be returned via rail from FBRL to the NWCS rail hub in Tacoma
and transported by tractor/chassis back to the Port Angeles Transfer Station for loading. See Map 1.
Rail Haul Transportation Leg and Intermodal Facilities
At the NWCS Tacoma Intermodal Facility loaded containers will be lifted by a top-pick directly onto rail
cars. Empty containers will then be placed on the tractor/chassis combination to be returned to the Port
Angeles Transfer Station. The loaded containers will be transported via rail to the Port of Morrow Port
District Intermodal FacilIty (to be established prior to contract Start-up) or the Union Pacific Intermodal
Facility in Hinkle, Oregon. See Map 1.
April 5, 2005
Waste Connections of ..hilt
Washington, Inc. ~+'
4.7-3
City of Port Angeles
. When the loaded containers arrive at the Port of Morrow Port District Intermodal FacIlity, or the Union
Pacific Hinkle, Oregon Intermodal FacilIty, they will be lifted off the rail cars onto an over-the-road
chassis and tractor, and then trucked to FBRL. Every container will enter the landfill at the entrance/exit
scales of the facility where they will be inspected for leakage and damage. Upon arrival at the tipping face
of the landfill each container will be tipped and waste will be discharged into the actIve cell. Any residual
waste left in the containers will be blown out with an air wand or swept out by broom and removed before
exiting the tipping area.
As the empty containers are leaving the landfill they are weighed at the landfill exit/entrance and
inspected for damage before being released to return to the Port of Morrow Port District Intermodal
Facility, or the Union Pacific Intermodal Facility in Hinkle, Oregon. The containers will be returned by
rail transport to the NWCS Tacoma Intermodal Facility and then to the Port Angeles Transfer Station by
truck.
Equipment Tracking
Monitoring and tracking of the containers during transport will be through an Electronic Data Interchange
(EDI) computer network. The EDI software package allows communication among Union Pacific
Railroad, FBRL, and the WCWI transportation coordinator located at Port Angeles Transfer Station. The
railcar and container information are transmitted at regular intervals via internet connection and are
accessible 24 hours a day. It is possible to track the rail cars and containers for location and actual status
while en route. If needed in case of computer or software failure the Union Pacific railroad offers at 24-
hour customer service support line.
.
Records of container numbers, weights, date of shipment arrival will be maintained by WCWI in Port
Angeles and at FBRL. As each container crosses the scales at Finley Buttes, records will correspond the
arrival date with the active landfill cell for disposal.
Equipment
Waste Containers: The maintenance of the specially designed forty (40) foot to forty-eight (48) foot open
top-load and closed rear-load solid waste containers will include the following activities. Visual
inspections will be made by WCWI and NWCS trained employees and inspectors at both rail loading and
unloading facilities as well as the landfill tipping area. Container inspection checklists and repair forms
will be distributed to both facilities for proper documentation of needed maintenance. As needed, the
empty containers will be steam cleaned, repaired and painted at the Finley Buttes and NWCS repair
facilities to ensure a clean, quality controlled operation prior to returning to Port Angeles Transfer Station.
Items included on the container checklist will include: gaskets, seals, tarps, hinge, floor, sides, top, vent,
liner and other comments. If a problem container is identified at the transfer station, the inspection
checklist will be transmitted to the Finley Buttes Landfill or NWCS repair facilities so they can intercept
the container when it arrives.
Container inspections are also conducted by the railroads operating personnel each time they accept the
lading for shipment. Both loaded and empty containers must comply with federal railroad standards prior
to movement.
.
4.7-4
Waste ConnectIOns of ,htlt.
Washington, Inc. "11II\.,.
April 5, 2005
City of Port Angeles
. Rolling Stock
Yard Tractor: A tractor-like vehicle (commonly called a "yard goat") will be used in the movement of
containers at the transfer station and at the intermodal facilities. The yard tractor is used to pull the chassis
bearing the container into and out of the loadmg bay at the transfer station, and to transport the containers
at the intermodal facility. The Port Angeles Transfer Station will use one yard goat.
Top Picks: Top Picks will be used to move containers between rail cars and chassis. WCWI plans to have
up two (2) top picks at the NWCS Tacoma Intermodal facility and up to two (2) top picks at the Port of
Morrow Port District Intermodal Facility, or the Union Pacific Intermodal Facility in Hinkle. Oregon.
Rail Cars: The primary rail car used for the facility is a 70-foot, single unit double stack DTTX. The
DTTX has one well capable of carrying two 40 to 48-foot ISO shipping containers. The rail cars that will
be provIded by the Union Pacific raIlroad will require the following maintenance schedule. The Federal
Railroad Administration (FRA) requires railcar inspections every 1000 miles by an Association of
American Railroads (ARR) inspector. Major overhauls are required every 300,000 miles replacing or
repairing the trucks, bearings, axles and air hoses. The Union Pacific railroad will provide the required
inspection, mamtenance and repair of the rail cars by certified ARR personnel.
.
-
Locomotives: Rail locomotives most likely to be used in this project will be General Motors Model GP40
or a similar model. This 4-axle, diesel powered locomotive generates 4,000 horsepower, has dimensions
of 59'L, 11 '3"W and 13' 5" H, and weighs approximately 271,000 pounds. Fuel capacity is 3,600 gallons.
The estimated useful life of this locomotive is 10 millIon miles. The maximum speed of the GP40 is 70
mph, with loaded pulling capabilities of 60 mph. Depending on the number of locomotives; a train can
exceed over 8,000 tons in weight.
The locomotives will be provided by Union Pacific railroad. Maintenance schedules for common service
are more frequent than for rail cars. Each time a locomotive is slotted for movement it is "blue flagged"
meaning it cannot move until the operating checklist is approved. The checklist includes minor
maintenance such a liquid levels, brakes, communication radios, and gauges. Depending on the
locomotive size and terram, major overhauls are usually required everyone 800,000 to 1,000,000 miles.
Part of the locomotive engineer's duties of operation is inspecting and reported any needed maintenance.
Chassis: Strick 53' Chassis or equivalent wIll be used to transport containers between the Port Angeles
Transfer Station, the NWCS Tacoma Intermodal Facility and the Port of Morrow Port District Intermodal
Facility, or the Union Pacific Intermodal Facility in Hinkle, Oregon, and FBRL. A minimum of nine (9)
chassis will be available between the Port Angeles Transfer Station and NWCS Tacoma Intermodal
Facility and up to six (6) chassis between the Port of Morrow Port District Intermodal Facility, or the
Union Pacific Rail Intermodal Facility in Hinkle, Oregon, and FBRL at all times.
Trucks: Road tractors, such as 359 Peterbilts or equivalent will be used to transport containers between
the Port Angeles Transfer Station, the Tacoma Intermodal Facility, the Port of Morrow Port District
Intermodal Facility, and/or the Union Pacific Intermodal Facility in Hinkle Oregon, and FBRL. A
minimum of four (4) road tractors are available at the Port Angeles Transfer Facility, and a minimum of
six (6) road tractors are available between to Port of Morrow or Hinkle, Oregon Intermodal Facilities and
FBRL at all times.
.
4.7-5
Waste Connections of .-ft.
Washington, Inc. """.r
April 5, 2005
City of Port Angeles
. Describe backup transportation modes during emergencies, strikes, inclement weather, etc.
.
.
In the event of emergencies, strikes or inclement weather, WCWI will use alternative waste handling,
transport and disposal facilities. See Map 2 for additional information on WCWI's contingency
transportation options for the Port Angeles Transfer Station.
Intermodal Facilities: Should the NWCS Tacoma Intermodal Facility become incapable of loading
containers onto the rail cars for a short period of time, the containers will be trucked to/from the LRl
Tacoma Intermodal Facility, and/or the Tidewater Barge Lines Intermodal/Barge FacIlity located in
Vancouver, Washington. See Map 2.
Rail transport: If, for any reason, service on Union Pacific Railroad mainline route is unavailable to
provide direct rail service to FBRL, WCWI personnel will determine the appropriate alternative route to
be used until UP rail service can be restored. WCWI can transport and ship loaded solid waste containers
through the LRI/BNSF Intermodal facility located in Tacoma, Washington with daily direct service to the
Roosevelt Regional Landfill. The Roosevelt Regional Landfill acts as WCWI's reciprocal emergency
back-up landfill for municipal contracts and is located in Roosevelt, Washington. See Map 2.
Barge transport: WCWI can also utilize the Tidewater Barge Lines Vancouver, Washington facility as a
transportation alternative to reach the FBRL in the event rail service is interrupted on both the UP and
BNSF lInes. Loaded containers would be transported by truck from the Port Angeles Transfer Station to
the Vancouver, Washington Tidewater barge facility for transfer and shipping via barge to the FBRL. See
Map 2.
Truck transport: Tractor/chassis combinations can be used to transport loaded containers over any of the
alternative routes and to any of the mentioned back-up facilities, as well as, utilized to transport loaded
containers directly to the FBRL, or any other permitted back-up landfill facilities in the event rail and
barge services are unavailable. See Map 2.
Describe the ownership of transportation equipment and facilities, or the legal basis for use of such
equipment and facilities.
WCWI will own the associated equipment at the Port Angeles Transfer Station and at FBRL. WCI has
purchased Northwest Container Services, Inc. (to close on or before December 1, 2004), which operates
the Tacoma Intermodal Facility. WCWI will contract with the Port of Morrow Port Distnct, whIch owns
the Port of Morrow Intermodal Facility, and/or the Union Pacific Railroad, which owns the Hinkle,
Oregon Intermodal Facility.
The Union Pacific RaIlroad owns all locomotives, railcars, and mainline tracks. The Union Pacific
Railroad will be responsible for providing the rail haul of waste to the Port of Morrow, Oregon, and/or the
Hinkle, Oregon Intermodal Facility, which serves the Finley Buttes Regional Landfill.
Status of permits required.
No specific permits are reqUIred for municipal solid waste hauling other than regular commercial vehicle
licenses.
April 5, 2005
Waste Connections of ..-It.
Washington, Inc. "".r
4.7-6
City of Port Angeles
. 4.7.2.3 Integrate Additional Waste Streams
Describe methods to integrate additional jurisdictions or other solid waste generators within the City's
proposed solid waste management system.
The City of Port Angeles Transfer Station and waste management system co-developed by WCWI and
the City of Port Angeles is being developed to be expandable in the event other neighboring jurisdictions
are added to the system. Jurisdictions such as the City ofSequim, the City of Forks, and the Makah Indian
Tribe can be added easily as those bidding opportunities become available. WCWI will attempt to work
with the City of Port Angeles and the other jUrIsdictions to collaborate and incorporate their waste streams
under the parameters of the contract ifWCWI is the successful bidder.
Describe opportunities to incorporate Jefferson County (Port Townsend-basedfacility) MSW into Service
Component II.
WCWI is designing the City of Port Angeles waste management system to be expandable to comfortably
allow the addition of solid waste customers such as Jefferson County. WCWI is the parent company of
Murrey's Olympic Disposal and possesses the WUTC authority to collect solid waste in both Jefferson
and Clallam counties; Murrey's currently is contracted to the City of Port Townsend for solid waste and
recycling collections. Allowing Jefferson County to sign onto the existing contract between Port Angeles
and WCWI could be accomplished very easily and could potentially provide a variety of synergistic
benefits to both counties.
.
4.7.2.4 Contingency Plans
WCWI's proposed long haul infrastructure, operating agreements, staff, equipment and disposal facilities
are fully operational at this time. Contingency plans for alternative transport of waste are also described in
Section 4.7.2.2. Please see also Section 4.6.2.10.
In the event that the City decides that the active landfill can no longer accept waste, and waste disposal at
the landfill is halted prior to complete construction of the Port Angeles Transfer Station, a contingency
plan would be implemented to enable waste to be transported and disposed off-site. The plan would use
existing site infrastructure, including the Z-wall, to accomplish waste transfer and off-site transport and
disposal. Details of the plan depend greatly on how far along construction of the transfer station is when
the landfill closes. Options to minimize traffic problems include restricting the hours and days for both
self-haulers and commercial haulers (to minimize overlap) and the use of additional spotters to direct
traffic. Depending on construction progress, it may be possible to send small numbers of haulers to the
partially-finished transfer building to unload directly into open-top trailers/containers. The Z-wall may be
modified to allow packer trucks to tip on the ground and a loader push the waste into the trailers.
In the event of emergencies, strikes or inclement weather, WCWI offers the City of Port Angeles a broad
range of alternative waste handling, transport and disposal facility options. These options can be
combined in a number of ways to allow the problem to be addressed specifically and cost effectively, with
minimal operational impact.
.
Example scenarios include fire; explosion; release of toxic or hazardous substances; work stoppage by
WCWI employees or non-affiliated parties; emergency weather conditions (snow, flooding); impassable
roadways; building structural or equipment failure; power outages (both short and long-term); discovery
of the receipt of unacceptable wastes; handling of disaster wastes; etc. The Contingency Plan will list the
4.7-7
Waste Connections of .hlt.
Washington, Inc. "".'
April 5, 2005
City of Port Angeles
. response actions for each scenario. Depending on waste characteristics and quantities, response actIOns
could include on-site storage of various wastes in containers, in the transfer buIlding, at the MHR area or
MRWF. Some wastes might be immediately loaded into trailers or ISO containers and stored on-site or
hauled immediately. In some instances, a rapid response to and cleanup of the emergency (e.g. on-site
spill of toxic materials) will have a higher pnority than reinstating normal MSW-handling procedures.
WCWI contingency long haul transportation and disposal options include the following:
Intermodal Facilities: Should the Tacoma NWCS Intermodal Facility become incapable of loading
containers onto the rail cars for a short period of time, the containers will be trucked to/from the LRI
Tacoma Intermodal Facility, and/or the Tidewater Barge Lines Intermodal/Barge Facility located in
Vancouver, Washington.
Rail transport: If, for any reason, service on Union Pacific UP railroad mainline route is unavailable to
provide direct rail service to FBRL, WCWI personnel will determine the appropriate alternative route to
be used until UP rail service can be restored. WCWI can also transport and ship loaded solid waste
containers through the LRI/BNSF intermodal facility in Tacoma, Washington with daily direct service to
the Roosevelt Regional Landfill. The Roosevelt Regional Landfill acts as WCWI's reciprocal emergency
back-up landfill for municipal contracts and is located in Roosevelt, Washington. See Map 2.
.
Barge transport: WCWI can also utihze the Tidewater Barge Lines Vancouver, Washington facility as a
transportation alternative to reach the FBRL in the event rail service is interrupted on both the UP and
BNSF lines. Loaded containers would be transported by truck from the Port Angeles Transfer Station to
the Vancouver, Washington Tidewater barge facility for transfer and shipping via barge to the FBRL. See
Map 2.
Truck transport: Trucks can be used to transport loaded containers over any of the alternative routes and
to any of the mentioned back-up facilities, as well as, utilized to transport loaded containers directly to the
FBRL, or any other permitted back-up landfill facilities in the event rail and barge services are
unavailable. See Map 2.
.
4.7-8
Waste Connections of .h.
Washington, Inc. ".'
April 5, 2005
.
.
.
f
l
Legend
- Primary Train Route (Union Pacific)
- Primary Truck Route
H Ighway/l nterstate
Railroad
!
i
Oregon
~
WASTE CONNECTIONS INC.
Map 1
Primary Transportation Route
.
.
.
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Legend
-
Primary Train Route (Union Pacific)
Alternate Train Route (Burlington Northern)
Pnmary Truck Route
Alternate Truck Route
Alternate Barge Route (from Tidewater)
Highway/Interstate
Railroad
-
t
1
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a
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Oregon
~
WASTE CoNNECTIONS INC.
Map 2
Alternate Transportation Routes
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Permit Number 394
EXpiration Date' September 30, 2009
Page 1 of 39
SOLID WASTE DISPOSAL SITE PERMIT: Municipal solid waste landfill
Oregon Department of Environmental Quality
400 E. Scenic Dr., Suite 307
The Dalles, OR 97058
Telephone: (541) 298-7255
Issued in accordance with the provisrom> of ORS Cfrapter 459""" and
subject to the land use compatibility statement referenced below.
ISSUED TO:
FACILITY NAME AND LOCATION:
Finley Buttes landfill Company
P.O Box 61726
Vancouver, WA 98666
Telephone Number: 503/288-7844
Finley Buttes Regional landfill
Section 5, T2N, R26E, W M. and
Section 32, T3N, R26E, W.M.
Morrow County
. OWNER:
Finley Buttes landfill Company
OPERA TOR:
Flnlev Buttes landfill Company
ISSUED IN RESPONSE TO:
. a solid waste permit renewal application received August 24, 1998.
. a land Use Compatibility Statement from Morrow CountY- Plannln9-.De~artment dated September 24, 1987
The determlnatJon to issue thIs permit is based on findings and technical information included In the permit record
ISSUED BY THE OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
ct~ ~~
Elizab~ Druback, Manager, Solid Waste and Tanks, Eastem Region
/I J "Z.J, ) "1 C,
,
Date
Permitted Activities
Until such time as this permit expires or is r:nodified or revoked, the Permittee is authorized to expand, operate and
maintain a solid waste land disposal site in conformance with tb.e requirements, limitations, and conditions ~~t forth
in this document including all attachments.
.
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Permit Number' 394
EXpiration Date: September 30, 2009
Page 2 of 39
.
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TABLE OF CONTENTS
Introduction
In this
document
This document IS a solid waste permit Issued by the Oregon Department of Environmental
Quality in accordance with Oregon Revised Statutes (ORS) 459 and Oregon Administrative
Rules (OAR), Chapter 340
thiS document contams the followmg sections:
~Sectron. ~"-;'l"'_:-~ ... -~ ~~"~;'""~':-~~;t.rf^~'~~~~:ro'pr~r/~~~.~~....._~~....:f~~:'--:.~~~: ,,- See Page - .:
--.... ='- -....lv"..'..,;:..,'!:_'- ~-'I.o- ",.~..:e,. ~""'~""-N-:(.. ~.' -. .-.I"~-~ .' ..:::::t...~
7"____-,:__..... ~':-,,,,...-' -~-~':"..~s:--..:r ,.....~ # ~_.r; ..'<~_ ",~."'~"~ -tNi.-. c: -:."1'.~~::..-wt...,:.;;,..;.; :_ ..~--... , -.-
- Permit Administration 3
1.0 Issuance 3
2.0 Disclaimers 4
3.0 I Authority 4
4:0 Permit Modification 5
- Allowable Activities 6
5.0 Authorizations 6
6.Q Prohibitions 8
-- Operations and Design 9
7.0 Operations Plan 9
8.0 Recordkeepmg and Reporting - Operations 11
9.0 Specific Operating Conditions 13
10.0 Site Development and Design 16
11.0 Recycling Requirements 19
- Environmental Monitoring 20
12.0 EnVironmental MOnltonng Plan 20
13.0 EnVironmental $ampllng ReqUirements 23
14.0 Establish Permit-Specific Concentration Limits 25
15.0 EnVironmental Monltonng Standards 26
16.0 Recordkeepmg and Reporting - Environmental Monitoring 29
17.0 EnVironmental MOnltonng Network 31
- Site Closure 33
18.0 Closure Construction and Mamtenance 33
19.0 Fmanclal Assurance 35
- Compliance Schedule 36
20.0 Summary of Due Dates 36
.
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.1.5
1.6
1.7
1.8
.
1.0 ISSUANCE
1.1
In this
section
1.2
Permittee
1.3
Permit
number
1.4
Permit tenn
Facility type
Facility
owner!
operator
Basis for
issuance
Definitions
PermIt Number' 394
ExpIration Date: September 30,2009
Page 3 of 39
PERMIT ADMINISTRATION
ThIS section describes the parameters surrounding permIt Issuance, Including the
following information:
. Penrnittee
. Penrnit number
. Penrnit tenrn
. Facility type
. Facility owner/operator
. Basis for issuance, and
. Definitions
This penrnlt is issued to Finley Buttes Landfill Company
This penrnit will be referred to as Solid Waste Permit Number 394.
The issue date of this permit is the date signed by the Regional Administrator.
The eXpiratIon date of this permit is September 30, 2009.
The facility is permitted as a municipal solid waste landfill.
The owner of thIs facility is:
Finley Buttes Landfill Company
The operator of this facility is:
Finley Buttes Landfill Company
This permit is Issued based upon the follOWing documents submitted by the Permittee:
· A solid waste permit renewal application form receIved August 24, 1998, and
. A Land Use Compatibility Statement from Morrow County Planning Department
dated September 24. 1987.
Unless otherwIse specified, all terms are as defined in OAR 340-93-030.
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2.0 DISCLAIMERS
2.1
In this
section
2.2
Property
rights
2.3 Department
liability
3.0 AUTHORITY
3.1 In this
section
3.2 Ten-year
permit
3.3 Documents
superseded
3.4 Binding
nature
3.5 Other
compliance
3.6
Penalties
Permit Number: 394
Expiration Date. September 30, 2009
Page 4 of 39
.
This section describes disclaimer information for the Department, including property
nghts and Department liabilIty.
The issuance of thiS permit does not convey any property nghts m eIther real or
personal property, or any exclusive privileges, nor does it authonze any Injury to private
property or any InvaSion of personal rights. -
The Department, ItS officers, agents, or employees do not sustam any liability on
account of the issuance of this permit or on account of the construction, mamtenance,
or operation of facilities pursuant to this permit.
ThIS section describes the authority of the Oregon Department of Environmental
Quality to issue thiS permit, including the followmg mformation:
· Ten-year permit
. Documents superseded
· Binding nature
. Other compliance, and
. Penalties
.
This permit is issued for a maximum of 10 years as authonzed by Oregon Revised
Statutes 459.245(2).
ThiS document IS the pnmary solid waste permit for the facility, superseding all prevIous
solid waste permits and permit addenda issued for the Finley Buttes Regional Landfill
by the Department.
Conditions of thiS permit are binding upon the Permittee. The Permittee is liable for all
acts and omissions of the Permittee's contractors and agents.
Issuance of this permit does not relieve the Permittee from the responsibility to comply
with all other applicable federal, state, or local laws or regulations. This includes the
following solid waste requirements, as well as all updates or additions to these
requirements.
. solid waste permit renewal application receIved August 24, 1998.
. Oregon Revised Statutes, Chapters 459 and 459A
· Oregon Administrative Rules Chapter 340, and
. any documents submitted by the Permittee and approved by the Department.
Violation of permit conditions may subject the Permittee to civil penalties for each day
of each violation .
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Permit Number: 394
EXpiration Date. September 30,2009
Page 5 of 39
4.0 PERMIT MODIFICATION
4.1
In this
section
4.2
Five-year
review
.4.3
Modification
4.4
Modification
and
revocation by
Department
4.5 Modification
by Permittee
4.6 Public
participation
4.7 Changes in
ownership
.
This section descnbes information about modification of this permit, including:
. Five-year review
. Modification
. Modification by Department
. Modification by Permittee
. Public participation, and
. Changes In ownership
Between the 4th and 6th year of the life of the permit, the Department will review the
permit and determine whether or not the permit should be amended.
While not an exclusive list, the following factors will be used In making that
determination.
· compliance hIstory of the facility
. changes In volume, waste compositIon, or operations at the facility
. changes In state or federal rules which should be Incorporated into the permit
. a significant release of leachate or landfill gas to the environment from the facility
. Significant changes to a Department-approved site development plan and/or
conceptual design
At any time in the life of the permit, the Department or the Permittee may propose
changes to the permit.
The Director may, at any time before the expiration date, modIfy, suspend, or revoke
this permit In whole or In part, in accordance with Oregon Revised Statutes 459.255, for
reasons Including but not limited to the following:
. violation of any terms or conditions of this permit or any applicable statute, rule,
standard, or order of the Commission
. obtaining this permit by misrepresentation or failure to disclose fully all relevant
facts, or
. a Significant change In the quantity or character of solid waste received or In the
operation of the disposal site
The Permittee must apply for a modification to this permit if there is a Significant change
in facility operations or a deviation from activities described In this document.
Significant changes in the permit will be made public by the issuance of a public notice
as required by Department rules.
The Permittee must report to the Department any changes in either ownership of the
disposal site property or of the name and address of the Permittee or operator within
ten (10) days of the change.
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Permit Number: 394
EXpiration Date: September 30, 2009
Page 6 of 39
.
ALLOWABLE ACTIVITIES
5.0 AUTHORIZATIONS
5.1
In this
section
5.2
Wastes
authorized
for receipt
5.3
Authorization
of other
wastes
5.4
Authorization
of activities
This section describes the activities the Permittee IS authorized to conduct, including:
. Wastes authorized for receipt
. Authorization of other wastes
. Authorization of other activities
. Tires
· Salvaging and recycling, and
· Special wastes
This permit authorizes the facility to accept solid wastes as defined In ORS 459.005,
except non-digested sewage sludges and septic tank pumpings, and free liqUids other
than those incidental free liquids associated with solid waste collection and
transportation.
Wastes excluded from the above authorization may be authorized for acceptance If:
. the Permittee develops a special waste management plan and submits it to the
Department for approval
· the Department approves the special waste management plan, and
. the Permittee can demonstrate that the materials do not constitute hazardous
waste. as defined by state and federal regulations
.
All facility actiVities are to be conducted In accordance with the proVisions of this permit.
All plans required by thiS permit become part of the permit by reference once approved
by the Department. Any conditions of the approval are also incorporated into this
permit unless contested by the Permittee within 30 days of the receipt of a conditional
approval.
.
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5.6
.5.7
.
5.5
Tires
Salvaging
and recycling
Special
wastes
Permit Number' 394
Expiration Date. September 3D, 2009
Page 7 of 39
This permit authonzes the facility to accept up to 30,000 whole tires for storage while
awaiting processing Whole tIres must be stored in compliance with OAR 340-64-035
and the Department-approved Operations Plan/Manual.
Whole waste tires shall not be dIsposed of in the landfill, except in accordance with
OAR 340-64-052. Unless otherwise approved by the Department, whole waste tires
may be disposed of in the landfill only If the tIres'
a. are from vehicles not normally used on the highway, and the tires have been
determined to be exempt from OAR 340-64-052(1) banning whole tire disposal;
OR
b. have been processed into tire chips such that:
. the amount of exposed steel belt is minimized; and
. the whole tire volume is reduced by at least 65 percent, as demonstrated by the
test specified In OAR 340-65-052(3) and the monitoring program described In the
Department approved Operations Plan/Manual.
Unless otherwise approved by the Department, waste tire chips disposed of In the
landfill must be spread Into a thin layer on the working face to help dissipate any heat
buildup form pOSSible exothermiC reactions within the tire chips.
Salvaging and recycling are authorized if conducted in a controlled and orderly manner.
Special wastes maybe accepted In accordance with the Department approved
Operation Plan/Manual or Department approved amendments to the Plan/Manual
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6.0 PROHIBITIONS
6.1
In this
section
6.2
Hazardous
waste
disposal
6.3
Liquid waste
disposal
6.4 Vehicle
disposal
6.5 Used oil
disposal
6.6 Battery
disposal
6.7 Recyclable
material
disposal
PermIt Number: 394
EXpiration Date September 30, 2009
Page 8 of 39
.
This section descnbes specific activities the Permittee is prohibited from conducting,
including.
. Hazardous waste disposal
. Liquid waste disposal
. Vehicle disposal
. Used oil disposal
. Battery disposal
. Recyclable matenal disposal
. Open burning; and
. Large appliances
The Permittee must not accept hazardous wastes.
Reference: Hazardous wastes are defined in ORS 466 005 and OAR 340 Division 101
The Permittee must not accept liquid waste for disposal.
Definition' Liquid wastes are wastes that do not pass the paint filter test performed in
accordance with EPA Method 9095.
.
The PermIttee must not accept discarded or abandoned vehicles for disposal.
The Permittee must not accept used 011 for disposal.
The Permittee must not accept lead-acid batteries for disposal.
The PermIttee must not landfill or dispose of any source separated recyclable material
brought to the disposal site.
Exception If the source separated matenal is determined to be in a condition which
makes the material unusable or not recyclable then it may be landfilled. This
determination must be made after consultation with the Department.
6.8 Open burning The Permittee must not conduct any open burning at the site.
6.9
Large
Appliances
The Permittee must not knowingly accept for disposal large metal-jacketed residential,
commercial, and Industnal appliances such as refrigerators, washers, stoves, and
water heaters.
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Permit Number' 394
Expiration Date September 30,2009
Page 9 of 39
OPERATIONS AND DESIGN
7.0 OPERATIONS PLAN
7.1
In this
section
7.2
Operations ,
Plan
7.3
Plan content
.
This section describes the requirements associated with a facility Operations Plan,
including. ......l r,
. Operations Plan - \'2w/5bc:l.. OP~ pto.f\ c\o.1cl q h16/0D - rJv.~ Swl;.l'I/..\ t \O..X G'<\ ~/.a.'\ \ Dt),
. Plan Content -
. Operations and Maintenance Manual
. Plan and Manual maintenance
. Plan and Manual Compliance, and
. Submittal address
The facility shall be operated In accordance with the Operations Plan titled "Operation
and Maintenance Manual Finley Buttes Landfill Boardman, Oregon June 1992"
approved by the Department August 6, 1992. and subsequent Department approved
revisions to the plan. Upon approval, this plan and subsequent revisions to the plan are
Incorporated into this permit by reference
The Operations Plan must describe the operation of the disposal site in accordance
with all regulatory and permit requirements, Including the following:
~Conterit~area~3il j::~~." (:')~~::!1r~ll~~Desciibe plans~f6r~~~S7~: :..2;SJ.:~~~~:"':':';
General operations . handling and removal of unauthorized wastes discovered at the
facIlity
. management of landfill gas
. management of landfill leachate
. surface water and erosion control structure design
. non-compliance response
Disposal operatIons . placement of daily and Intermediate cover
. detecting and preventing the disposal of regulated hazardous
wastes, polychlOrinated biphenyl wastes, and any other
unacceptable wastes as determined by the Department
. disposal of putrescible wastes
. disposal of cleanup materials contaminated with hazardous
substances
. fill progression and phasing
.
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Permit Number: 394
Expiration Date September 30. 2009
Page 10 of 39
.
Special waste . Identifying and characterizing wastes which required special
management plan management or waste streams not otherwise authorized by the
permit
. describe procedures for tracking and reporting all special wastes
. load check procedures
. identifying the source of all special wastes
. determining appropnate handling procedures
. documenting plan Implementation, including waste characterization
References. OAR 340-93-190, OAR 340-94-040[11][b][J] .
Inspection and . washing equipment
maintenance . maintaining leachate and gas collection systems
. maintaining surface water control structures
Operating record . operating record location
Contingency . providing fire protection equipment
. notificatIon of emergencies and fires to Department
7.4
Operations
and
Maintenance
Manual
7.5
Plan and
Manual
maintenance
7.6
Plan and
Manual
compliance
7.7
Submittal
address
Reference: OAR 340-94-040 describes requirements for preparation of an Operations Plan.
Within 90 days of permit issuance, the Permittee must update the Operations and
Maintenance Manual which deSCribes speCific procedures tor conducting routine and
emergency operations at the site. A copy of the Operations and Maintenance Manual
must be maIntained in the Operating Record location and be available for Department
review.
.
The Permittee must revise both the Operations Plan and the Operations and
Maintenance Manual as necessary to keep them current and reflective of current facility
conditions and procedures.
The Permittee must submit Operations Plan revisions to the Department for approval.
The Permittee must conduct all operations at the facility In accordance with the
approved Operations Plan, Including any amendments, and the Operations and
Maintenance Manual.
All submittals to the Department under thiS section must be sent to:
Oregon Department of EnVIronmental Quality
Manager, Solid Waste Program
400 E. Scenic Dnve, SUite #307
The Dalles, OR 97058
(541) 298-7255
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Permit Number 394
EXpiration Date September 30,2009
Page 11 of 39
8.0 RECORDKEEPING AND REPORTING - OPERATIONS
8.1
In this
section
8.2
Non-
compliance
reporting
8.3 Permit
e8.4 display
Access to
records
8.5 Procedure
e
This section descnbes record keeping and reporting operational information for the
facility. Including
. non-compliance reporting
. permit display
. access to records
. procedure, and
. submittal address
In the event that any condition of this permit or of the Department's rules IS Violated, the
Permittee must immediately take action to correct the unauthorized condition and
Immediately notify the Department at:
(541) 276-4063
Response. In response to such a notification, the Department may conduct an
investigation to evaluate the nature and extent of the problem, and to evaluate plans for
additional corrective actions, as necessary
The Permittee must display thiS permit, or a photocopy thereof, where it can be readily
referred to by operating personnel
Upon request, the Permittee must make all records and reports related to the permitted
facility available to the Department.
The Permittee must keep records and submit reports according to the following
Step Action
1 Establish a location for the Operating Record at the facility or another location
mutually agreed with the Department.
2 Place information required by 40 CFR 258.29(a) in the Operating Record.
3 Collect information during facility operations on the amount of each type of
solid waste received, recording "0" if the waste is not received.
At a minimum, the following types of waste must be separately Identified, and
be categorized as being either in- or out-of-state wastes:
. municipal solid waste
. industnal solid waste
. contaminated cleanup matenal, including petroleum-contaminated soil
. approved alternative dally cover
4 Collect information about the amount of each material recovered for recycling
or other beneficial purpose each quarter
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8.6
Submittal
address
Permit Number: 394
Expiration Date: September 30, 2009
Page 12 of 39
5 Submit the information collected in Step 3 above on the Solid Waste Disposal
Report/Fee CalculatIon form provided by the Department
Pay solid waste fees as required by OAR 340-97.
Date due the last day of the month following the end of the calendar quarter
6 Submit the information collected in Step 4 above, on a form provided or
approved by the Department, to the wasteshed representative.
-
Date due: January 25th of each year
7 Retain copies of all records and reports for five years from the date created.
8 Update all records such that they reflect current conditions at the facility.
All submittals to the Department under thIs section must be sent to:
Oregon Department of Environmental Quality
Waste Management and Cleanup Division
Solid Waste Program
811 S.W. Sixth Ave.
Portland, OR 97204
(503)229-5913
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Permit Number: 394
EXpiration Date September 30, 2009
Page 13 of 39
9.0 SPECIFIC OPERATING CONDITIONS
9.1
In this
section
. 9.2
Discovery of
prohibited
waste
9.3
Daily cover
9.4
Interim cover
This section describes specific conditions to which site operations must conform.
including
. Discovery of prohibited waste
. Daily cover
. Interim cover
. Surface water structures
. Asbestos waste management
. Leachate management systems
. Transfer containers
. Litter control
. Vector control
. Equipment wash
. Air emissions
. On-site roads
. Landfill gas management, and
. Signs
Any solid wastes discovered at the facilIty which appear to be prohibited waste must be
isolated or removed Immediately. Non-hazardous prohibited waste must, within one
week, be transported to a disposal site authorized to accept such waste, unless
otherwise approved by the Department.
In the event discovered wastes are hazardous or suspected to be hazardous, the
Permittee must, within 48 hours, notify the Department and initiate procedures to
identify and remove the waste. Hazardous wastes must be removed within 90 days,
unless otherwise approved by the Department. Temporary storage and transportation
must be carried out in accordance with the rules of the Department.
All solid wastes must be covered with a layer of six Inches of compacted soil or an
approved alternative dally cover of equivalent performance at the end of each working
day.
Intermediate (intem) cover must be placed on top of each advancing lift as specified in
the Department-approved Operations and Maintenance Manual and Design plans.
9.5 Surface water All storm water drainage structures must be maintained in good functional condition.
structures Any Significant damage must be reported to the Department and repairs made as soon
as possible.
.
9.6
9.7
9.8
9.9
9.10
9.11
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Asbestos
waste
management
Leachate
Management
Systems
Transfer
Containers
Litter Control
Vector
Control
Equipment
Washwater
PermIt Number' 394
EXpIratIon Date. September 30, 2009
Page 14 of 39
.
Off loading and disposal of fnable asbestos-containing solid waste must be conducted
as specified In the Department-approved OperatIons Plan and Operations Manual and
in accordance wIth 40 CFR Parts 61 and 763 and OAR 340-32
The Permittee shall construct. operate and maintain In good functional condition all
leachate containment, collection, detection, removal, storage and treatment systems
approved by the Department Leachate shall be continuously removed from all landfill
leachate collection systems, such that hydraulic head on the bottom liner IS minimized
and does not exceed 30 cm (1 foot)
The leachate collectIon, containment, removal and treatment system shall be
maintained in accordance with the Department approved Operations and Maintenance
Manual.
Leachate or sludge shall not be removed from the leachate evaporation pond, except
as approved In writing by the Department or In accordance with the Department
approved OperatIons and Maintenance Manual.
Public access to the leachate storage and evaporation lagoon shall be controlled by
fencing (the site penmeter fence) and gates that shall be locked when the disposal site
is closed.
Transfer containers used for transportatIon of regional solId waste shall be emptied
within seventy two hours of receipt, unless prevented by unexpected conditions, such
as frozen contents, suspicIous waste content, damaged containers, etc In which case
contents shall be unloaded as soon as feasible.
.
All transfer containers owned by Finley Buttes Landfill Company used for solid waste
transport on public roads shall be constructed, maintained, and operated so as to
prevent leaking, shifting, or spilling of solid waste while in transit
Blowing debris shall be controlled such that the entire disposal site and adjacent lands
are maintained reasonably free of litter at all times. Any debris that escapes the
disposal site shall be retrieved and properly disposed of as soon as practicable.
The landfill disposal site and public receiving station shall be operated and maintained
in a manner that deters to the maximum extent practicable the attraction of birds,
insects and rodents
The permittee shall operate and maintain any truck, container, or equipment washing in
a clean and nuisance free condition. Disposal of wastewater from washing shall be
accomplished in accordance with the approved Operations and Maintenance Manual.
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9.12
Air emissions
9.13
On-site roads
9.14
Landfill gas
management
9.15 Signs
e
e
Permit Number' 394
Expiration Date: September 30, 2009
Page 15 of 39
Air emiSSions (dust, malodors, air tOXICS, etc.) from construction, operation and all other
activities at the disposal site shall be controlled In compliance with Oregon air quality
standards, "preventIon of Significant deterioration" Increments (OAR 340-31-005
through 340-31-130), and the Department's interim policy on air toxics (as expressed in
the letter from Ron Householder to EPA (George Abel) April 15, 1987).
Roads from the landfill property line to the active disposal area shall be constructed and
maintained to minimize traffic hazards, dust and mud, and to provide reasonable all-
weather vehicle access to the site.
Landfill gas must be controlled in accordance with the requirements of 40 CFR Parts
51, 52 and 60.
Landfill gas collection, containment, removal and treatment systems shall be
maintained in good functional condition.
Signs which clearly state the disposal area rules shall be posted to facilitate compliance
with the approved Operations Plan. A clearly visible and legible sign shall be erected at
the site entrance to provide the following information:
. Name of the facility
. Emergency telephone numbers
. Days and hours site IS open
. Authorized or prohibited wastes, and
. Current Solid Waste Permit Number
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Permit Number' 394
Expiration Date September 30 2009
Page 16 of 39
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10.0 SITE DEVELOPMENT AND DESIGN
10.1
In this
section
10.2
Baseline
design
criteria
This section describes site development and design requirements for continued use of
the landfill, or any landfill expansion or new facility construction, including
. Baseline deSign cntena
. Site development plan
. Stability monltonng
. Design plans
. Construction requirements
. Construction documents
. Construction inspection
. Construction report submittal
. Construction report content
. Approval to use, and
· Submittal address
Conceptual and detailed plans submitted for a new MSW landfill disposal unit pursuant
to this permit shall provide for the following Information:
. A composite liner system which includes an approved geomembrane liner (not less
than 60 mils In thickness when using high density polyethylene, and not less than
30 mils of thickness for other types of approved geomembranes) and at least two
feet of compacted sOil haVing an In-place permeability not greater than 1 X 10-7
cm/sec, or an alternative liner approved by the Department pursuant to 40 CFR
Part 258 40(a)(1)
. A 'primary leachate collection and removal system (LCRS) which fully covers the
liner system, As required by 40 CFR 258.40(a)(2), the pnmary LCRS must function
to maintain less than a 30-cm (1 foot) depth of leachate over the liner, All leachate
collection pipes must be serviceable by clean-outs,
. A secondary leachate collection and removal system(s) designed to effectively
monitor the performance of the overlYing composite liner system. The secondary
leachate collection and removal system(s)'must, at a minimum, be' (1) capable of
detecting and collecting leachate at locations of maximum leak probability, and (2)
hydraulically separate from groundwater to prevent erroneous monitoring results
caused by infiltrating groundwater,
. A leachate collection sump(s) having two composite bottom liners and a leak
detection and removal system. Each composite liner must meet the minimum
composite liner cnteria described above In this subsection, or equivalent.
. Construction of an appropnate operations layer above the primary LCRS, to protect
the LCRS and liner system from damage,
. If applicable, appurtenant leachate storage Impoundments having two liners and a
leak detection and removal system. One liner must meet the minimum composite
liner criteria described above in this subsection,
.
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Permit Number 394
EXpiration Date September 30, 2009
Page 17 of 39
10.3 Design plans The Permittee must submIt two copies of englneenng design plans for new disposal Units,
closure of eXisting units, or other ancillary facilities for Department review and approval at
least SIX months pnor to the anticIpated constructIon date unless an alternative schedule IS
approved by the Department. The desIgn plans must be prepared and stamped by a
qualified professIonal engIneer with current Oregon registration.
The engineenng design plans must:
. specIfy applicable performance criteria, construction matenal properties and
charactenstIcs, dImensions, and slopes, and
. provide all relevant engineenng analyses and calculatIons as a basIs for the desIgn
10.4
Construction
requirements
10.5
Construction
documents
.
10.6
Construction
report
submittal
.
The Permittee must perform all construction In accordance with approved plans and
specificatIons, including all condItIons of approval, and any amendments to those plans
and specifications approved in writing by the Department
Prior to construction of: a final landfill cover system; a new landfill disposal unit, a leachate
storage or treatment faCIlity; or any other waste containment Unit at the site, the Permittee
must submit and receIve wntten Department approval of complete construction document
for the project to be constructed The construction documents submitted must.
. be consistent with the applicable Department-approved design plan(s), including
accurate translatIon of design specifications Into construction requirements;
. define the construction project team;
. include construction contract documents specifyIng matenal and workmanshIp
requIrements to gUide how the Constructor IS to furnish products and execute work
. include a Construction Quality Assurance (CQA) plan, describing the measures taken
to monitor that the quality of matenals and the work performed by the Constructor
complies With project specifications and contract requirements
Within 90 days of completing construction of. a waste containment unit (e.g., such as a
landfill disposal Unit or leachate storage Impoundment); a final cover system over an
existing or new Unit; or a major appurtenant facility, the Permittee must submIt to the
Department a Construction Certification Report, prepared by a qualified independent
party, to document and certify that all required components and structures have been
constructed in compliance with the permit requirements and approved design
specifications.
10.7
10.8
10.9
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Construction
-report
content
Approval to
use
Submittal
address
Permit Number. 394
EXpiration Date September 30, 2009
Page 18 of 39
.
The construction report must Include_
. an executive summary of the construction project and any major problems
encountered
. a list of the goveming construction documents
. a summary of all construction and CQA activities
. manufacturers certifications for confonrnance of all geosynthetlc matenals with project
specifications
. test data documenting soil materials confonrnance with project specifications
. a summary of all CQA observations, Including daily inspection records and test data
sheets documenting matenals deployment and InstallatIon in confonrnance with
project specifications
. problem IdentIfication and corrective measures Implemented
. designer acceptance reports for errors and InconSistencies
. a list of deviations from design and matenal speCifications, including documentation
Justifying the deviations, copies of change orders and recorded field adjustments, and
copies of wntten Department approvals for deviations and change orders
. signed certificates for subgrade acceptance prior to placement of soil liner and for
acceptance of sOil liner pnor to deployment of geomembrane liner
. photographs and as-constructed drawings, including record surveys of subgrade, soil
liner, granular drainage layer and protective soil layer, and
. a certification statement(s) and signatures legally representing the CQA consultant,
designer and facility owner, one of which IS that of a professional engineer With
current Oregon registration
.
The Penrnlttee must not dispose of solid waste In newly constructed disposal units until the
Department has accepted the construction certification. If the Department does not
respond to the Construction Certification Report Within 30 days of its receipt, the Penrnittee
may place waste In the unit.
All submlttals.to the Department under this section must be sent to:
Oregon Department of Environmental Quality
Manager, Solid Waste Program
400 E. Scenic Dnve, SUite #307
The Dalles, OR 97058
(541) 298-7255
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Permit Number: 394
Expiration Date' September 30, 2009
Page 19 of 39
11.0 RECYCLING REQUIREMENTS
11.1
11.2
11.3
.
11.4
11.5
11.6
11.7
.
In this
section
Materials
Receiving
location
Material use
Recycling
information
Sign
Storage
This section describes the requirements associated with recycling operations of
source separated materials conducted at the facility.
. Materials
. ReceiVing location
· Matenal use
. Recycling Information
. Sign, and
· Storage
The Permittee must proVide a place for receiVing the following recyclable matenals.
X ferrous scrap metal X non-ferrous scrap metal (including
X motor oil aluminum)
X newspaper 0 corrugated cardboard and kraft paper
o container glass (brown paper bags)
o hl-grade office paper 0 tin cans
The place for receiving recyclable material must be located at the disposal site or at
another location convenient to the population served by the disposal site. The
recycling center must be available to every persons whose solid waste enters the
disposal site.
All source separated recyclable matenals must be reused or recycled.
The Permittee must provide recycling information to disposal site users on pnnted
handbills which Includes the following:
. the location of the recycling center at the disposal site or another location
. the hours of operation of the recycling center
. instructions for correct preparation of accepted source separated recyclable
matenal
. the material accepted for recycling, and
. reasons why people should recycle
A sign must be prominently displayed whIch indicates:
. the availability of recycling at the disposal site or another location
Note' the sign must Indicate the recycling center location, if not at the disposal site
· the matenals accepted at the recycling center, and
· the hours of operation of the recycling center (if different than disposal site hours)
All recyclable materials, except car bodies, white goods and other bulky items, must
be stored in containers unless otherwise approved by the Department.
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Permit Number: 394
EXpiration Date' September 30, 2009
Page 20 of 39
.
ENVIRONMENTAL MONITORING
12.0 ENVIRONMENTAL MONITORING PLAN
12.1 In this
section
12.2 EMP
Submittal
12.3
EMP
contents
This section describes requirements for an environmental mOnltonng plan for the
facility, including:
· EMP submittal
· EMP contents
. Long-term monltonng plan
. Additional monitonng pOints, and
. Submittal address
Within 180 days of the permit Issue date, the Permittee must submit, for approval, three
copies of an Environmental MOnltonng Plan (EMP) to the Department. The plan must
be prepared and stamped by an Oregon Registered Geologist or an Oregon RegIstered
Englneenng Geologist Upon approval, this plan IS incorporated Into thIs permit by
reference.
The EMP must include plans implementing an enVIronmental monitoring program that
will characterize potential facilIty impacts The updated plan may consist of the
previous approved EMP With any changes or additions since that time (i.e., approved
permit-specific concentration limits, revised parameter lIsts, revised scheaules, new
wells). The updated EMP must Include the following contents.
.
Topic Contents to be included in the EMP:
Monitoring Description of how the mOnltonng network IS designed to charactenze facility impacts
network through the monltonng of:
design . Groundwater
. Surface water -'"
. Leachate
. Secondary Leachate CollectIon System (leak detection)
. Landfill gas
. Private wells, and
. any other appropriate environmental monitOring
Location map of all samplIng locations, depicting.
. the unique Identification numbers of all sampling locations
. surrounding features (including manmade, natural, and contours)
. the location and boundary of the facility, and
. all landowners within one-half mile radius of the solid waste boundary
.
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Permit Number' 394
EXpiration Date September 30, 2009
Page 21 of 39
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.
Monitoring Descnptlon and evaluation of the current status and mtegnty of the mOnitoring network
network as a whole
construction Description of the current status and mtegnty of each monitoring pomt within the
network.
Plans for routmely evaluating and maintaining the integrity of all mOnitoring pOints
Sampling and SIte-specific procedures for sample collection methods, including
analysis . sample filtration
. bottling, preservation, and shipment procedures
. chain of custody and recordkeeplng procedures
. sample holding times
. analytical methods and detection limits, and
. methods of library searches for organic compounds (as applicable)
Field QA/QC Site-specific procedures for.
. documentation of all sample and equipment handling procedures, including
calibration of field measurement equipment
. maintenance of adequate field records and cham of custody documentation
. preparation and shipment of one volatile organic compound tnp blank for each
shipment that includes samples for volatile organic analysIs I
. collection of field, equipment, or other appropnate clanks plus duplicates for all
parameters at a minimum frequency of once per day of the sampling event
Laboratory Site-specific procedures for:
QA/QC . maintenance of a written Laboratory Quality Assurance Plan, including EPA
validation guidelines
. routine equipment calibration to standards of known concentrations
. analysis and reporting of results of laboratory method blanks, duplicates, and
matrix spikes for all analytes on schedules appropnate for the analytical
methods used
. reporting of the accuracy and the precision data for the analysis penod
Data analysis Site-speCific procedures for:
& evaluation . a comprehensive comparison of groundwater sampling results to applicable
standards, Including, but not limited to, federal and state drinking water
standards and a review of any SignIficant changes In water quality that were
identified pursuant to the EnVIronmental MOnltonng Standards established in
this permit
. performing statistical analyses of the groundwater data
. identifying and addreSSing any field or lab data that did not meet lab quality
assurance/quality control objectives (e g., holding times exceeded)
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Permit Number: 394
EXpiration Date September 30, 2009
Page 22 of 39
.
Reporting
Proposed form for the annual enVIronmental report, that will:
. discuss the results of all environmental monitoring performed dunng the year
. discuss the results of the previous year's Data AnalysIs and Evaluation
. itemize any activities resulting from the exceedance of a relevant standard or
Significant change In water quality, such as resampllng, submittal of a
Prellmmary Assessment, or Assessment Monitonng
. discuss any preventative measures and the results of such actions, if
applicable
. assess the current status of the environmental monitoring network
. provide updated information for each sampling event and monitored Unit,
depicting groundwater flow rates and directions, and piezometnc water
contours
. summanze Sampling and AnalysIs, Field QNQC, and Lab QNQC techniques
Implemented during the year
. provide copies of applicable mformation, including field data, laboratory
analytical reports and cham-of-custody reports; all data must be cross-
referenced and labeled with the designated field sampling location
. provide summary tables of the year's monitonng data by location and
parameter
. provide updated time series plots and chemical composition plots
. provide results of a major anion-cation balance for each groundwater
mOnltonng well sampled for major anions and cations
. provide an executive summary
.
12.4
12.5
12.6
Long-term
monitoring
plan
Additional
monitoring
points
Submittal
address
Reference' The Solid Waste Landfill GUidance, September 1996, prOVides mformatlon
on applrcable elements of an EnVironmental Monitonng Plan Following the
organizational format provided In the Guidance will expedite Department review of the
plan,
After approval of permit specific concentration limits (PSCLs) or any subsequent
approved modification of PSCLs, the Permittee must update the EMP to reflect the
long-term monltonng plan and submit the updated plan for Department review and
approval.
Note' See also the requirements for establishing PSCLs in this permit
Any new or replacement monitoring point established during the time frame of this
permit must be Incorporated into the EMP The updated plan must be resubmitted to
the Department for approval.
All submittals to the Department under this section must be sent to:
Oregon Department of Environmental Quality
Manager, Solid Waste Program
400 E. Scenic Drive, Suite #307
The Dalles, OR 97058
(541) 298-7255
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Permit Number 394
EXpiration Date- September 30,2009
Page 23 of 39
13.0 ENVIRONMENTAL SAMPLING REQUIREMENTS
13.1
In this
section
13.2
Notification
13.3
Split
sampling
e
e
This section also describes general sampling requirements, including-
. notification
. split sampling
. Interim monitoring
. mOnitoring after updated EMP approval
. leachate and liqUid volume monitoring, and
. changes in sampling or split sampling
The Permittee must notIfy the Department In writing of all upcoming sampling events at
least ten (10) working days prior to the scheduled date of the sampling event at the
following address
Oregon Department of Environmental Quality
Manager, Solid Waste Program
400 E_ Scenic Drive, Suite #307
The Dalles, OR 97058
(541) 298-7255
The Permittee must split samples with the Department when requested, and must
schedule all requested split-sampling events with the Department laboratory at least
forty-five (45) days prior to the sampling event.
The following sampling events must be conducted as split sampling events with the
Department.
Summer 2000
Summer 2004
Summer 2008
Winter 2002 (:J..I(~ ~ .2(t.)
Winter 2006
If sampling in the... schedule the sampling event
after.... But before...
winter January 1 February 28
spring April 1 May 31
summer July 1 August 31
fall October 1 November 30
13.4
13.5
13.6
13.7
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Interim
monitoring
Monitoring
after updated
EMP
approval
Leachate and
liquid
volume
monitoring
Changes in
sampling or
split
sampling
Permit Number. 394
EXpiration Date September 30, 2009
Page 24 of 39
.
Until superseded by an EnVIronmental Monltonng Plan approved by the Department,
the Permittee must conduct all environmental sampling In accordance with the following
documents as approved by the Department.
· Permit 394, Attachment 1&2
. June 1996 Sampling and AnalysIs Plan for Finley Buttes Regional Landfill
Groundwater samples must be collected quarterly (once per year during each of the
following periods. January 1 - February 28, Apnl1 - May 31, July 1 - August 31, and
October 1 - November 30) for all wells and any additional monitonng wells until a
minimum of nine acceptable data points have been acquired for each mOnltonng well.
The Permittee may commence semiannual groundwater sampling at those wells which
have accumulated nine acceptable data pOints. All semiannual grounawater sampling
must be conducted during the summer (July 1 - August 31) and Winter (January 1 -
February 28) quarters
The Department must approve any changes to the sampling program In writing prior to
Implementation. The Permittee must notify the Department's Eastern Region office
located In The Dalles in wntlng of all upcoming sampling events at least 10 days pnor to
the sampling event.
Upon approval, the Permittee must perform all environmental monltonng at the facility
In accordance with the site-specific Environmental MOnitoring Plan, including any
conditions of the approval.
.
The Permittee must measure, record, and place In the Operating Record the follOWing:
. the weekly volume of leachate removed from each pnmary leachate collection
sump,
. the weekly volume of leachate disposed by each Implemented leachate disposal
method;
. the weekly volume of liquid removed from each secondary leachate collection
sump, servicing an active disposal unlt(s). and
. the monthly volume of liquid removed from each secondary leachate collection
sump, servicing only Inactive or closed disposal units,
The Permittee must define the methodology and reporting reqUirement for leachate
monitonng in the facility EMP.
The Department reserves the nght to add to or delete from the list of scheduled
sampling events, sample locations, parameters to be sampled for, and to conduct
unscheduled samplings or split sampling.
In the event of changes to the split sampling schedule, the Department will notify the
Permittee of the changes at least 30 days prior to the split sampling event.
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PermIt Number. 394
EXpiration Date September 30, 2009
Page 25 of 39
14.0 ESTABLISHING PERMIT-SPECIFIC CONCENTRATION LIMITS
14.1
14.2
14.3
.
14.4
14.5
.
In this
section
Gathering
data
Statistical
analysis
Proposing
PSCLs
Changing
PSCLs
This section describes requirements for establishing permit-specific concentration
limits (PSCLs) for groundwater mOnitoring, including
. Gathenng data
. StatIstical analysis
. Proposing PSCLs, and
. Changing PSCLs
Monitoring of the background wells in accordance wIth the approved Environmental
MOnltonng Plan (EMP) must be conducted until all necessary data sets have been
collected, and permit-specific concentration limits are proposed for each individual
parameter.
The Permittee must perform statistical evaluations of monitoring results for each
sampling event In the annual report In accordance with 40 CFR 258 53 or other
methods approved of in advance by the Department In order to establish compliance
concentration limIts
References. Stat/st/cal Analysis of Groundwater Monitoring Dara at RCRA facil/ties,
Addendum to Intenm Final GUIdance, USEPA, June 1992
Staflstical GUidance for all RCRA Sites, DEQ:SWPC, August 3, 1992
The Permittee must propose to the Department, for review and approval, permlt-
specific concentration limits (PSCLs) pursuant to the gUidelines specified in OAR 340-
40-030[3]. PSCLs must be generated for all parameters that are to be included In the
long-term monItoring of the site once there are at least nine acceptable data points
from the appropriate background well(s) as established under thiS permit
If the Permittee can demonstrate to the Department's satisfaction that the background
groundwater quality has significantly changed since the PSCL was established, and
this change IS not due to any Influence from the permitted facility, then the Permittee
can propose for Department approval a revised level of the specIfic PSCL(s) that is
affected
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Permit Number 394
EXpiration Date. September 30, 2009
Page 26 of 39
15.0 ENVIRONMENTAL MONITORING STANDARDS
15.1
This section describes requirements for evaluating compliance with environmental
monltonng standards, including:
. Rule
. Review of results
· resamplrng of results
. Secondary leachate collection system
. Methane limits, and
. Methane exceedance
In this
section
15.2
Rule
The Permittee must not allow the release of any substance from the landfill Into
groundwater which will result In a violation of any applicable federal or state
groundwater or drinking water rules or regulations beyond the: solid waste boundary of
the disposal site or an alternative boundary speCified by the Department.
The Permittee must review the analytical results after each monltonng event according
to the following table.
15.3
Review of
results
If data show results... then...
above permit-specific concentration limits (if 1. Notify the Department within 10 days of
established) receipt of laboratory results, and
2. Perform resampling Immediately and
evaluate results as described below
Note: If this is a known release, previously
confirmed to the Department in wntlng,
resampling is not required
indicating a significant change In water quality at 1. NotIfy the Department Within 10 days of
any monitoring point receipt of laboratory results, and
Examples of siqnificant chanqes: 2 Perform resampllng Immediately and
. Detection of a VOC or other hazardous evaluate results as descnbed below
constituent not detected In background; Note' If this is a known release,. previously
. Exceedance of a Table 1 or 3 value listed in confirmed to the Department In wnting,
OAR 340-40 unless the background water resampling is not required
quality is above these numencallimlts;
. Exceedance of a Safe Dnnkrng Water
Standard;
. Detection of a compound In an order of
magnitude higher than background
none of the above continue groundwater mOnltonng With next
scheduled sampling event
.
.
.
.~
Permit Number. 394
EXpiration Date September 30, 2009
Page 27 of 39
15.4
Resampling
results
Upon receipt of data from resampling, the Permittee must review the results according
to the following table.
.
If resampling data show results... then...
that confirm the exceedance of a 1 notify the Department within 10 days of receipt of
permit-specific concentration limit at laboratory data, or within 60 days of the resample date
a compliance point (whichever comes sooner) -
2 submit a Remedial Investigation workplan or other
acceptable plan for Department approval within 90 days
of the date of resampling. Plan must specify how the
objectives of Oregon's Groundwater Quality Protection
Rules (OAR 340-40) will be met by the proposed
investigation This may Include the monitonng of Group
4* parameters, In addition to routine detection monitonng.
that confirm the Significant change 1 notify the Department Within 10 days of receipt of
in water quality results noted In the laboratory data, or within 60 days of the sample date
routine sampling event (whichever comes sooner)
2. submit a plan Within 30 days (unless another time period
IS authorized) for developing an assessment program
With the Department
that do not confirm the results noted 1 continue With routine monrtonng
in the routine sampling event 2. discuss the data from the routine sampling event and the
resampling results in the next annual environmental
monitonng report
Group 4*: Assessment monitoring
The following analyses comprise the assessment monitoring parameter group'
Semi-volatile Organic Constituents, including Phenols, according to EPA
Method 8270
Mercury, according to EPA Method 7470
Cyanide, according to EPA Method 9010
Nitrite
All Method 8270 analyses must include a library search to identify any unknown
compounds present
15.5
Secondary
Leachate
Collection
System
Methane
Monitoring
If the Permittee observes the presence of liqUids In the secondary leachate collection
system the Permittee must commence the sampling and analysis and reporting
procedures defined in the Department approved Environmental Monitoring Plan (EMP).
15.6
The Permittee must define the frequency and methodology for methane monitoring in
the facility EM P.
.
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~s
. .e
.--.......:;;:
15.7
Methane
limits
15.8
Methane
exceedance
Permit Number: 394
EXpiration Date' September 30, 2009
Page 28 of 39
The concentration of methane must not exceed:
. 25 percent of the Lower Explosive Limit for methane In onsite structures (excluding
gas control structures or gas recovery system components), or
. the Lower Explosive Limit for methane at the facility boundary
Note. The Lower Explosive limit for methane IS 5 percent.
If methane levels exceed the specified limIts, then the Permittee must:
1. immediately take all necessary steps to ensure protection of human health;
2. within 7 days of detection (unless the Department approves an alternative
schedule), enter the methane levels in the operating record and describe measures
taken to protect human health and safety
3. within 60 days of detection, implement a remediation plan for the methane
releases, incorporate the plan into the monitoring records, and notify the
Department that the plan has been Implemented
.
.
.
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Permit Number. 394
EXpiration Date September 30, 2009
Page 29 of 39
16.0 RECORDKEEPING AND REPORTING - ENVIRONMENTAL MONITORING
16.1
In this
section
16.2
Semi-annual
and annual
reports
.
.
ThiS section descnbes record keeping and reporting requirements associated with
environmental monltonng, including:
. Semi-annual and annual reports
. Statement of compliance
· Submittal address
· Split sampling submittal
· Lab address, and
· Department response to split samples
Prior to March 31 of each calendar year, the Permittee must submit to the Department
two copies of an annual environmental monltonng report covenng the prevIous calendar
year The report must be prepared In accordance with the approved format and
stamped by an Oregon Registered Geologist or an Oregon RegIstered Engineenng
Geologist and must follow the format approved In the EnVIronmental Monitoring Plan,
and include the following:
· tabulation of all eXisting data for the facility by well and parameter
· tabulation of quarterly measurements of volume of leachate generated
· updated time series plots and box plots or other statistical analYSIS approved of In
advance by the Department, for all sampling pOints and for all detected parameters
unless the data precludes such analysis
. companson of the results With applicable standards and permit specific
concentration limits when established
. current and legible site maps depicting piezometnc water elevation contours at the
time of the sampling event, and
. an Interpretation of the data which includes an evaluation of the extent and
magnitude of Impact on the groundwater onginatlng from landfill activities.
A semi-annual groundwater report must be submitted to the Department 90 days after
completion of the second quarter sampling event. ThiS report will include the following:
. summary tables of the first quarter sampling information and second quarter
sampling information,
· current and legible site maps depicting piezometric water elevation contours at
the time of the sampling event, and
. a diSCUSSion of the analytical results.
16.3
16.4
16.5
16.6
16.7
~
=~
"
Statement of
compliance
Submittal
address
Split
sampling
submittal
Lab address
Department
response to
split samples
Permit Number: 394
EXpiration Date September 30, 2009
Page 30 of 39
.
A statement of compliance must be included In the Annual Environmental Monitonng
Report that:
. summanzes the comparison of the analytical results With the relevant mOnitoring
standards
· states whether or not federal or state standards were exceeded for the relevant
medIa
. states whether or not a Significant change In water quality occurred
Except where otherwise noted, all submittals to the Department under this section must
be sent to:
Oregon Department of Environmental Quality
Manager, Solid Waste Program
400 E. Scenic Dnve, Suite #307
The Dalles, OR 97058
(541) 298-7255
Within 90 days of any split sampling event, the Permittee must submIt the fOllowmg
Information from the split sampling event to the Department's laboratory:
· a copy of all information pertinent to the sample collection handimg, transport and
storage, including field notes
· copies of all laboratory analytical reports
· caples of all laboratory QA/QC reports
· site map showmg flow directIons and contours, and
· any other data or reports requested by the Department
.
All split sampling reporting must be sent to:
Oregon Department of Environmental Quality
Lab, Groundwater Monitoring Section
1712 SW 11th Avenue
Portland, OR 97201
(503) 229-5983
If requested by the Permittee and after the Permittee has submitted all split sampling
data information, the Department lab may send the Permittee a copy of:
. the Department's analYSIS of the split sample
. a copy of the QA/QC report
. a copy of the analytical report, or
. a copy of field data sheets
.
~
.~
Permit Number' 394
EXpiration Date. September 30, 2009
Page 31 of 39
17.0 ENVIRONMENTAL MONITORING NETWORK
17.1
In this
section
17.3 Monitoring
devices
17.4 Damage
reporting
.
17.5 Device
construction
17.6
Construction
reporting
17.7
Recommen-
dation to
abandon
.
This section describes requirements for the environmental monitoring network,
Including.
. Well installation
. MOnitOring deVices
· Damage reporting
. DeVice construction
. Construction reporting
. Recommendation to abandon
. Gas system maintenance, and
. Gas system damage repair
The Permittee must protect. operate, and maintain gas, groundwater, leachate. and
surface water monitoring deVices so that samples representative of actual conditions
can be collected.
Any damage to a mOnitoring device must be reported to the Department in writing
WIthIn fourteen days of the discovery, along with a deSCription of proposed repaIr or
replacement measures and a time schedule for completion of this work.
ExamDles: damage impairing well function or changing the physical location to any
degree
All monitoring well abandonment (decommissions), replacements, repairs, and
installatIons must be conducted to comply with the Water Resources Department Rules
OAR 690-240 and with the Department's GUidelines for Groundwater Monitoring Well
dnllmg, Construction, and Decommissioning dated August 1992.
All monitoring well repairs, abandonments, replacements, and installations, including
driller's logs, well location information, and construction Information must be
documented In a report prepared and stamped by an Oregon Registered Geologist or
Oregon Registered Engineenng Geologist and must be submitted to the Department
within thirty (30) days of the action.
The Permittee must submit a recommendation to the Department to decommiSSion or
replace any well in the monitoring network that:
· has been installed in a borehole that hydraulically connects two saturated strata,
· does not have the corresponding and necessary supporting documentation of
appropriate Installation or construction, or
· is damaged or destroyed during the time frame of this permit
~
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. ,
17.8
~as system
maintenance
17.9
Gas system
damage
repair
Permit Number: 394
EXpiration Date September 30,2009
Page 32 of 39
Upon installation, the Permittee must operate and maintain in good working order the
landfill gas contamment, collection, removal, treatment, and monitoring system such
that nuisance odors are deterred to the maximum extent practical and methane
concentrations do not exceed compliance limits.
Within 60 days of discovery of the damage, the Permittee must replacE' or repair the
damage to any equipment m the gas system and submit a written inspection report to
the Department.
.
.
.
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Permit Number. 394
Expiration Date September 30,2009
Page 33 of 39
SITE CLOSURE .
18.0 CLOSURE CONSTRUCTION AND MAINTENANCE
18.1
18.2
18.3
.18.4
18.5
18.6
18.7
.
In this
section
Plan
development
Closure
permit
Closure plan
approval
Closure
schedule
Final cover
Vegetation
This section descnbes requirements for closure construction and maintenance at the
facility, including:
· Plan development
· Closure permit
· Closure plan approval
· Closure schedule
· Final cover
· Vegetation
· Final cover maintenance
· Deed record, and
· Submittal address
The Permittee must maintain up-to-date conceptual "worst-case" closure and post-closure
plans The plans must be placed in the facility file.
At least five (5) years pnor to the anticipated final closure of the landfill, the Perrmttee
must apply for a closure permit.
At least 6 months prior to final closure of any portion of the landfill, the Permittee must
submit for approval detailed engineering plans, specifications, and a schedule for closure.
Reference: The Solid Waste Landfill Guidance, September 1996, provides information
on applicable elements of a Closure Plan. Following the organizational format provided
in the Guidance will expedite Department review of the plan
The Permittee must close each area of the landfill on the schedule approved by the
Department.
Unless otherwise approved In wrIting by the Department, the final cover system must
be deSigned and constructed in accordance with Oregon AdministratIve Rule 340-94-
120 The final cover shall have a permeability less than or equal to the permeability of
the bottom liner system.
The permittee must establish and maIntain a healthy growth of vegetation over the closed
areas of the landfill consistent with the proposed final use.
~
"
18.8
Final cover
maintenance
18.9
Deed record
18.10 Submittal
address
Permit Number 394
ExpiratIon Date- September 30,2009
Page 34 of 39
.
The Permittee must maintain the final surface contours of the landfill cover such that:
erosion and pondlng of water are deterred to the maxImum extent practical, the Integnty
of the cover system IS preserved in accordance with the approved plans, and the site IS
maintained sUitable for productive agricultural use.
The Permittee must reconstruct the cover system with approved materials and grade and
seed all areas that have settled or where water ponds, and all areas where the cover soil
has been damaged or thinned by cracking or erosion. Areas where vegetation has not
been fully established shall be fertilized, re-seeded and maintained. Any damage repair
or other reconstruction of a geomembrane bamer component in the final cover system
shall be conducted in accordance with a construction quality assurance plan approved by
the Department.
Within 30 days after final closure of the disposal site, the Permittee must record a notation
on the deed to the facility property as required by 40 CFR 258.60(1) and OAR 340-94-
130(1 )(a), and submit a copy of the notation on the deed to the Department.
All submittals to the Department under thiS section must be sent to:
Oregon Department of EnVIronmental Quality
Manager, Solid Waste Program
400 E Scenic Dnve, SUite #307
The Dalles, OR 97058
(541) 298-7255
.
.
r;$O
.~
Permit Number: 394
EXpiration Date September 30, 2009
Page 35 of 39
19.0 FINANCIAL ASSURANCE
19.1
In this
section
19.2
Financial
assurance
plan
19.3
Annual
update
.
19.4 Use of
financial
assurance
19.5 Continuous
nature
19.6 Submittal
address
.
ThIS section desCribes requirements for financial assurance at the facility, including:
. Financial assurance plan
. Annual update
. Use of financial assurance
. Continuous nature, and
. Submittal address
The Permittee must maintain a financial assurance plan and provide financial assurance
for the costs of site closure, post-closure care, and corrective action, if any. The plan
must be placed In the facility file.
Reference The plan must be prepared In accordance with OAR 340-94-140. Acceptable
mechanisms are desCribed In OAR 340-94-145.
Annually, by December 31 of each year the Permittee must submit certIfication to the
Department stating that the financial assurance plan(s) and financial assurance
mechanism(s) have been reviewed, updated, and found adequate, and that the updated
documents have been placed In the facility operating record.
Reference: OAR 340-94-140(6)( d)
The Permittee must not use tne financial assurance for any purpose other than to finance
the approved closure, post-closure, and corrective action actiVities or to guarantee that
those activities will be completed.
Continuous financial assurance must be maintained for the facility until the Permittee or
other person owning or controlling the site IS no longer required to demonstrate
financial responsibility for closure, post-closure care, or corrective action (if reqUired).
All submittals to the Department under thIs section must be sent to'
Oregon Department of Environmental Quality
Manager, Solid Waste Program
400 E Scenic Dnve, SUite #307
The Dalles, OR 97058
(541) 298-7255
~
Permit Number 394
Expiration Date September 30, 2009
Page 36 of 39
.
COMPLIANCE SCHEDULE
20.0 SUMMARY OF DUE DATES
20.1
Summary
The following IS a summary of event-dnven reporting required by this permit. This section
does not Include routine reporting and submittals reqUIred by this permit.
.- h'- . :'Due.Date'~:i-:;:.e.:,''';': ;-::t1~~~'~~~~~~:~~i~~t,~~~~;f-~: -See'section... ,'. - ---....~.- - -
-,.- .... ,-..- .- j>' . - - - - . -.. -,.....- .
90 days of permit Update Operations and 74 Operations Plan and
Issuance Maintenance Manual Mamtenance Manual
6 months before any Submit design plans 104 Design plans, and
construction or closure 18.5 Closure plan approval
Pnor to construction Submit construction documents and 10.6 Construction
receive Department approval documents
90 days after Submit construction certification 10.7 ConstructIon report
completion of any major report submittal
construction
180 days of permit Submit updated EnVironmental 12.2 EMP Submittal
issue date Monitonng Plan
10 workmg days pnor to Notify Department in wrltmg of 13.2 Notification
environmental sampling upcoming sampling event
event
90 days of any spIlt Submit information from the split 16.5 Split sampling
sampling event sampling event SUbmIttal
30 days of any well Submit well construction report 17.6 Construction reporting
construction
5 years pnor to facility I Submit closure permit application 18.3 Closure permit
closure
30 days after faCIlity Submit copy of notation on property 18.9 Deed record
closure deed recording the presence of
waste
.
.
.~
Monitoring
Location
MW-2, MW-3
MW-4, MW-5
MW-7, MW-8
BMW-1
Cell-3
LDS-1, LDS-2
LDS-P
Note:
Permit Number 394
Expiration Date. September 30, 2009
Page 37 of 39
ATTACHMENT 1
Environmental Monitorinq Location, Parameters and Frequencies:
Analyte Group
Time of Year
MOnltorrng Frequency
EXlstin Groundwater Monltorrn Wells
Group 3 Annual
Group 2a
Group 2b
Group 1 a
Grou 1 b
New Groundwater MOnltonn Wells
Group 1 a Quarterly for 2 years, then
GroL.:p 1 b Semiannually
Grou 2a
Grou 3
Group 2b
Semiannual
Semiannual
Semiannual
Winter
Summer and Winter
Summer and Winter
Summer and Winter
Sprrng, Summer, Fall,
\^/Jnter, then Summer and
Winter
Summer and Winter
Semiannual
Leachate Monitonn Locations
Group 1 b
Group 2a
I Group 3
GroUD 2b
Semiannual
Summer and Winter or I
two seasonal occurrences
in a calendar year at least
90 da s apart
Spnng, Summer, Fall, and I
I
Winter
I Group 7
Landfill Gas Monitorin
Quarterly
LDS-1 = Leak Detection monltonng beneath Cell-1
LDS-2 = Leak Detection monitoring beneath Cell-2
LDS-P = Leak Detection monitonng beneath Leachate Storage and Evaporation Pond
.
~
. - .~
.... -- - -
In this
attachment
Group 1a:
Field
indicators
Group 1 b:
Laboratory
indicators
Group 2a:
Common
anions and
cations
Permit Number- 394
Expiration Date September 3D, 2009
Page 38 of 39
.
ATTACHMENT 2: PARAMETER GROUPS
This attachment describes the parameter groups and any associated requirements for
environmental monrtorlng
The following parameters compnse the field indicators parameter group:
Elevation of water level Specific Conductance
pH Dissolved Oxygen
Temperature
These parameters must be measured in the field at the time samples are collected, either
down-hole in situ, m a flow-through well, or Immediately following sample recovery, with
instruments calibrated to relevant standards
The following parameters compnse the laboratory indicators parameter group'
Hardness (as CaC03) Total Dissolved Solids (TDS)
Total Alkalinity (as Ca(03) Total Suspended Solids (TSS)
Specific Conductance (lab) Chemical Oxygen Demand (COD)
pH (lab) Total Organic Carbon (TOC)
Sample handling, preservation, and analysis are determined by requirements for each
individual analyte: EPA or AWNA Standard Methods techniques must be followed
.
The following parameters comprise the common anrons and cations parameter group:
Calcium (Ca) Manganese (Mn) Sulfate (S04)
Magnesium (Mg) Ammonia (NH4) Chloride (CI)
Sodium (Na) Carbonate (C03) NItrate (N03)
Potassium (K) Bicarbonate (HC03) Silica (Si02)
Iron (Fe)
Dissolved concentrations must be measured. Samples must be field-filtered and field-
preserved accordmg to standard DEQ and/or EPA guidelines and analyzed by appropriate EPA.
or AVl/WA Standard Methods technrques. Results must be reported in mg/L and meq/L.
.
.~
Group 2b:
Trace metals
.
Group 3:
Volatile
organic
constituents
Group 4:
Assessment
monitoring
Group 7:
Landfill Gas
Monitoring
.
Permit Number' 394
EXpiration Date' September 30, 2009
Page 39 of 39
The followrng parameters comprise the trace metals parameter group:
Antimony (Sb) Chromium (Cr)
Arsenic (As) Cobalt (CO)
Barium (Ba) Copper (Cu)
Beryllium (Be) Lead (Pb)
Cadmium (Cd) Nickel (Ni)
Selenium (Se)
Silver (Ag)
Thalladlum (TI)
Vanadium (V)
Zrnc (Zn)
If the To~I~Suspended Solids concentration is.~h;... ? ~en an~lyze f~r..:',::';.~, -"; .:t-~'" .:.? T' -: ,.
-~i:t.-..-. -..~:: < '.-...~..~=. .:t...:...:r..::..".z.. .-,,!--".~ _"".. v ':'-:~ . . .:~~..:- -_~..... ~...,. . . ... . .. ~ _. "h....,,~<:,.r.. -~ - "'- I ".. ~," ~...
less than or equal to 100 mg/L rn the sample total concentrations (unfiltered)
greater than 100 mg/L rn the sample both total (unfiltered) and dissolved
(field-filtered)
Samples must be field-preserved accordrng to standard DEQ and/or EPA guidelines and
analyzed by EPA Method 6010 or Department-approved equivalent. Results must be reported
in mg/L.
AnalysIs for all compounds detectable by EPA Method 8260 or EPA Method 524.2, includrng a
library search to Identify any unknown compounds present Method 8260 comprises the
volatile organic constituents parameter group. Facilities that want to use Methods 8010 and
8020 as an alternative must obtain approval by the Department prior to use.
The following analyses comprise the assessment monitoring parameter group
Semi-volatile Organic Constituents, including Phenols, according to EPA Method 8270
Mercury, according to EPA Method 7470
Cyanide, accordrng to EP,A, Method 9010
Nitrite
All Method 8270 analyses must include a library search to Identify any unknown compounds
present.
Methane
m - d.. 9 Jf/ 0
. , _ _ . :;"i6EO
.,AR8AOI\. ~l.!~tln""JJC-"
I' . ..,-" I '"'
evlQrr-CW '-'~1'1'11' C' .
,.... '/ :cr...
'1" (-",-
./ It ., ,., ll~ .
.... ~ I,. ,~ ~ ;...\}/
3EFORE 7HE ~ORROW COUNTY COURT
.
MOR~ml COmHY, OREGON
I~ 7HE ~ATTER OF ~HE APPROVAL OF A
CO~DITIO~riL GSE 2E2MIT FOR rIDEWATER
BARGE LI~ES, INC.
2INAL ORDER OF APPROVAL
'-
WHEREAS, Tidewater Sarge Lines, Inc. has mad~ application
for a Conditional Use Permit for the establishment of a solid
waste landfill pursuant to Morrow County Ordinance 3.0Ul (2) (Q);
and
~HEREAS, the Mor=ow County Planning Commission and this
Court have held public hearings following legal notice pu=suant
'.
~o state law and county ordinance,
.::mi, THEREFORE, IT IS HEREBY ORDERED:
~. T~at the Morrow County Court adopts the findings of fac~
,r.u conclusions of law which is actached hereto, marked "Exhibit
A", and by this reference is incorporated herein;
2. That the application of Tidewater Barge Lines, Inc. for
a cond"icional use permit for establishment of a solid wasce
landfill at Finley Buttes, located in Township 2N, Range 26E,
Section 5 an~ Township 3N, Range,25E, SEction 32, Tax Lots 1511
and 301, consisting of approximately 800 acres is hereby
approved;
. Page 1 - Final Order of Approval
~
3. That is FURTHER ORDERED that the following are
conditions of a~~roval 3nd are ~ade a ~art of the conditions of
approval pursuant to Section 6.030 of the Morrow County Zoning
Ordinance;
A. The Applicant will obtain a valid permit, issued by the
Department of Environmental Quality or the Environmental Quality
Commission, for the operation, maintenance and closure of a
landfill;
B. The applicant will apply for a license and will enter
into a contract/agreement with Morrow County pursuant to the
,
\
,
Morrow County Solid Waste Management Ordinance, Number MC-I-87.
C. The rlpplicant will provide an all-weather paved road,
approximately 9 1/2 miles in length, as part of Bombing Range
~oad. The terms and conditions upon which such all-weather road
will be provided shall be more specifically defined by the
contract/agreement under the Morrow County~olid Waste Management
Ordinance;
D. If, during construction and operation of the landfill,
m~jor archeological artifacts are found, appropriate state
agencie~ will be immediately contacted for proper disposition of
L
Page 2 - Final Order of Approval
.
.
.
.
:,.
i.
materials.
E. The Applicant shall comply with the followIng conditions
of approval set forth in the staff report of the ~orro~ County
21anning ~epartment and adapted by the Morrow County Planning
Commission, specifically conditions A(l), A(Z), 0, F, and Gi
F. 'The ~pplicant agrees that permItted uses on the property
fallowing closure and termination of long-term monitoring WIll be
restricted to dry-land farming, and other uses of the property
shall be conditional uses pursuant to the Morrow County Zoning
Ordinance.
BY ORDER OF ~HE MORROW COUNTY COURT, dated this 22nd day of
July, 1987.
.".. ....
. ;..... .. -.
Carlson, Judge
ce, ..-'-- ~0
~r;' ~M
G . ~-1. /I J err y II P e c l<, _ 0 m.m 1 S S 1 0 n e r
" J
gmT: ~
~~'>IJ ~jj~
, Co un t:] Cl.e r.'"
Page 3 - Final Order of Approval
.
.
.
)0 -g~~.~
*.. ..*
/*...*9
Department of Environmental Quality
Eastern Region Bend Office
2146 NE 4th, Suite 104
Bend, OR 97701
(541) 388-6146
FAX (541) 388-8283
APR 1 6 20m
Pamela S. Pawelek
Environmental Compliance Manager
Finley Buttes Landfill Company
PO Box 61726
Vancouver, WA 98666
RECEIVED
APR 1 8 2001
Re: Issuance of Oregon Title V
Operating Permit No. 25-0001
Application No. 018556
Morrow County
The Department of Environmental Quality has completed processing your Oregon Title V Operating Permit
application and has issued the enclosed permit. Also enclosed are the reporting and modification forms for Title V
sources. Please use these forms for all reports submitted to the Department and all requests for permit
modifications.
.
The permit became effective the date it was signed. If you wish to appeal any of the conditions or limitations
contained in the attached permit or if you have any questions, please contact Doug Welch in our Pendleton Office at
(541) 278-4626. If issues related to the permit conditions cannot be resolved to your satisfaction, you may request a
hearing before the Environmental Quality Commission or its authorized representative. Any such requests shall be
made in writing within 20 days of the date of this letter, and shall clearly specify which permit conditions are being
challenged and why, including each alleged factual or legal objection. Permit conditions that are not contested shall
be in effect upon the date the permit was signed (OAR 340-218-0220).
You are urged to carefully read the permit and take all possible steps to ensure compliance with the conditions
established.
Sincerely,
y::;~~
Peter Brewer, P.E.
Region Manager
Air Quality Program
bh
Enclosure
cc: Michelle Butler, DEQ:Air Quality Division
Doug Welch, DEQ:Pendleton Office
LRAPA
EPA
Finely Buttes Landfill Company, 73221 Bombing Range Roa~, Boardman, OR 97818
.
6
DEQ:OCI
-,'..
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 1 of 28
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
OREGON TITLE V OPERATING PERMIT
Eastern Region
2146 N.E. 4th, #104
Bend, OR 97701
Telephone: (541) 388-6146
RECEIVED
APR 1 8 2001
Issued in accordance with the provisions of
ORS 468A.040 and based on the land use compatibility fmdings included in the permit record.
ISSUED TO:
INFORMATION RELIED UPON:
Finley Buttes Landfill Company
P.O. Box 61726
Vancouver, W A 98666
PLANT SITE LOCATION:
73221 Bombing Range Road
Boardman, OR 97818
Application Number: 018556
Received: 6/28/99
LAND USE COMPATIBILITY STATEMENT:
From: Morrow County
Dated: 5/28/99
ISSUED BY THE DEPARTMENT OF ENVIRONMENTAL QUALITY
P:;;:~~U']ity M",.g"
8f; I I"', 2CO I
Dat
Nature of Business: Municipal Solid Waste Landfill SIC: 4953
RESPONSIBLE OFFICIAL:
Title:
Landfill Development Manager
FACILITY CONTACT PERSON
Name: Pamela S. Pawelek
Title: Environmental Compliance Manager
Phone: (360) 695-4858
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Permit No.: 25-0001
Expiration Date: 06/01/04
Page 2 of 28
TABLE OF CONTENTS
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LIST OF ABBREVIATIONS THAT MAY BE USED IN TIffi PERMIT ..............................................................:....3
PERMITTED A CTIVITlES ........................................ .... ................................... ....... .............................. ......................4
EMISSION UNIT (ED) AND POLLUTION CONTROL DEVICE (PCD) IDENTIFICATION .....................""'.........4
OPERATING SCENARIOS....... .................................... ..... .... .......................................... ............................................4
EMISSION LIMITS AND STANDARDS, TESTING, MONITORING, AND RECORDKEEPING
REQUIREMENTS ......................... .............................. ......... ............... ........... ...... ..... ...................................................5
F acility wide................................................. ........... ........................ ...... ...... ....... .................................................... 5
Emissions Unit LFG-O 1 (Baseline Scenario ).......................................................................................................... 7
Emissions Unit LFG-O 1 (Alternate Operating Scenario )................................................................. .......... .............9
Insignificant Activities ........................................................... ....... ...................................................................... .12
PLANT SITE EMISSIONS LIMITS ........................ ... ............. ..................................................... ....... .............. .........13
GENERAL TESTING REQUIREMENTS .................................................................................................................14
GENERAL MONITORING AND RECORDKEEPING REQUIREMENTS .............................................................15
REPORTING REQUIREMENTS ............................ .......................................................................................... ..... ....16
NON-APPLICABLE REQUIREMENTS .................. ................................................................... ..................... .........19
GENERAL CONDITIONS ............ ............................................ ......................... .................................................... ....20
Permit No.: 25-0001 .
Expiration Date: 06/01/04
Page 3 of28
LIST OF ABBREVIATIONS THAT MAYBE USED IN THE PERMIT
ACDP
ASTM
CFR
CO
DEQ
dscf
EPA
EU
FCAA
gr/dscf
HAP
HCFC
ill
I&M
LFG
:MM cu. ft.
Mg
NA
NMOC
NOx
NSPS
O2
OAR
ORS
Pb
PCD
PM
PM 10
ppm
ppmv
PSEL
psia
S02
ST
VE
VMT
VOC
Air Contaminant Discharge Permit
American Society of Testing and Materials
Code of Federal Regulations
Carbon Monoxide
Oregon Department of Environmental Quality
Dry standard cubic feet
US Environmental Protection Agency
Emissions Unit
Federal Clean Air Act
Grain per dry standard cubic feet (1 pound = 7000 grains)
Hazardous Air Pollutant as defmed by OAR 340-244-0040
Halogenated Chloro-Fluoro-Carbons
Identification number
Inspection and maintenance
Landfill Gas
Million Cubic Feet
Megagrams (106 grams)
Not applicable
Non-Methane Organic Compounds
Nitrogen oxides
New Source Performance Standard
Oxygen
Oregon Administrative Rules
Oregon Revised Statutes
Lead
Pollution Control Device
Particulate matter
Particulate matter less than 10 microns in size
Parts per million
Parts per million by Volume
Plant Site Emission Limit
pounds per square inch, actual
Sulfur dioxide
Source test
Visible emissions
Vehicle miles traveled
Volatile organic compounds
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Permit No.: 25-0001
Expiration Date: 06/01/04
Page 4 of28
PERMITTED ACTIVITIES
1. Until such.time as this permit expires or is modified or revoked, the permittee is allowed to discharge air
contaminants from those processes and activities directly related to ,or associated wi~ air contaminant
source(s) in accordance with the requirements, limitations, and conditions of this permit. [OAR 340-218-
0010 and 340-218-0120(2)]
2. All conditions in this permit are federally enforceable and state enforceable except Conditions 9 tlrrough 13
which are only enforceable by the state. [OAR 340-218-0060]
3. Attachment 1 of this permit provides a cross-reference for SIP rules that have been renumbered in the
current Oregon Administrative Rules. [OAR 340-218-0060 and 340-218-0070]
EMISSION UNIT (ED) AND POLLUTION CONTROL DEVICE (PCD) IDENTIFICATION
4. The emissions units regulated by this permit are the following [OAR 340-218-0040(3)):
Emission Unit Description EUill Pollution Control Device Description PCD ill
Gas resulting from the decomposition of LFG-O 1 nonel nonel
landfill materials,
Engines to power transfer trailer tipper, ENG-Ol none none
generators, power washer, heaters, and air
compressors (NOx and CO only)
Fugitive emissions from piles to store STR-Ol Water applied as required NA
cover soil, liner soil, and drain rock
Fugitive emissions from material transfer MH-Ol Water applied as required NA
from storage piles to working cells
Fugitive emissions from vehicular traffic PRD-O 1 Water applied as required NA
on paved roads
Fugitive emissions from vehicular traffic UPR-O I Water applied as required NA
on unpaved roads
Aggregate Insignificant emissions AI none none
including: ParticulatelPMIO, S02' and VOC
emissions from engines (ENG-O 1), and
VOC emissions from the leachate
collection system
1. A collection and control system will be installed under the alternative operating scenario.
OPERATING SCENARIOS [OAR 340-218-0140(1)]
5. The permittee may operate the landfill under the following operating scenarios:
5.a. In the base operating-scenario, the landfill gases (emission unit LFG-Ol) are uncontrolled and are
emitted to the atmosphere. Under this scenario, Conditions 16 through 19 are applicable.
5.b. In the alternative operating scenario, the permittee must install a system to collect and control
landfill gas emissions (LFG-Ol) in accordance with New Source Performance Standards (NSPS).
Under this scenario, Conditions 20 through 36 are applicable.
The permittee must contemporaneously record the change from the base operating scenario to the
alternative operating scenario in a log at the facility.
6.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 5 of28
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EMISSION LIMITS AND STANDARDS, TESTING, MONITORING, AND RECORDKEEPING
REQUIRE:MENTS
The following tables contain swnmaries of applicable requirements other than the Plant Site Emission Limits
(PSEL), along with the monitoring methods for the emissions umts to which those requirements apply.
Applicable Condition Testing Monitoring
Requirement Number PollutantIParameter Limit/Standard Averaging Time Condition Condition
340-208-0210(2) 7 FugItive emiSSions mmimize NA NA 8
340-248-0280(10)(a) 9 asbestos proper handlIng of asbestos each shipment NA 10
340-248-0280( 10)( c) 12 asbestos excavation or disturbance of each occurrence NA 13
as bestos waste
340-228-0110(2) 14 #2 Dlsnllar.e oLl 0.5 percent by weight each shipment NA 15
sulfur content
Table 1 Facility Wide Emission Limits and Standards
7.
Fugitive Dust
Applicable Requrrement: The permittee must not allow or permit any materials to be handled, transported,
or stored; or a building, its appurtenances; or a road to be used, constructed, altered, repaired or
demolished; or any equipment to be operated, without taking reasonable precautions to prevent particulate
matter from becoming airborne. Such reasonable precautions include but are not limited to the following:
[OAR 340-208-0210(2)]
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7.a. Use, where possible, of water or chemicals for control of dust in the demolition of existing
buildings or structures, construction operations, the grading of roads or the clearing of land;
7.b. Application of asphalt, oil, water, or other suitable chemicals on unpaved roads (UPR-Ol),
material stockpiles (STR-Ol), and other surfaces which can create airborne dust (MH-Ol and
PRD-O 1);
7.c. Full or partial enclosure of material stockpiles in cases where application of oil, water, or
chemicals are not sufficient to prevent particulate matter from becoming airborne;
7.d. Covering, at all times when in motion, open bodied trucks transporting materials likely to become
airborne.
8. Monitoring Requirement: At least once each month for a minimum period of30 minutes, the permittee
must visually survey the entire facility for any sources of excessive fugitive emissions using EP A Method
22. For the purpose of this survey, excessive fugitive emissions are considered to be any visible emissions
that leave the plant site boundaries. If sources of excessive fugitive emissions are identified, the permittee
shall: [OAR 340-218-0050(3)(a)]
8.b.
Immediately take corrective action to minimize the fugitive emissions, including but not limited to
those actions identified in Condition 7; or
Conduct a modified EP A Method 9 test within 24 hours to quantify the magnitude and ensure
opacity is less than 20%;
For the purposes of this permit "modified EPA Method 9" is defmed as follows .
Opacity shall be measured in accordance with EPA Method 9. For all standards, the minimum
observation period shall be six minutes, though longer periods may be required by a specific rule
or permit condition. Aggregate times (e.g., 3 minutes in anyone hour) consist of the total
duration of all readings during the observation period that are equal to or exceed the opacity
percentage in the standard, whether or not the readings are consecutive. Each EP A Method 9
reading represents 15 seconds of time. [See the defmition of "Opacity" in OAR 340-208-00 I 0]
Recordkeeping: The permittee shall maintain records of the fugitive emission surveys, corrective
actions (if necessary), and/or the results of any modified EP A Method 9 tests.
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8.a.
8.c.
8.d.
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Permit No.: 25-0001
Expiration Date: 06/01/04
Page 6 of28
9.
Asbestos Handling
Applicable Requirement: For all asbestos-containing waste material received, the permittee must:
9.a. Ensure that off-loading of asbestos-containing waste material is done under the direction and
supervision of the landfill operator or their authorized agent and accomplished in a manner that
prevents the leak-tight transfer containers from rupturing and prevents visible emissions to the air
[OAR 340-248-0280(1 O)(a)(A)] If visible emissIOns are observed, the permittee must .
immediately take measures to suppress emissions. Such measures include but are not limited to
wetting the source of emissions or covering the source of emissions with soil.
9.b. Ensure that off-loading of asbestos-containing waste material occurs at the immediate location
where the waste is to be buried and restrict public access to the off-loading area until waste is
covered. [OAR 340-248-0280(1 O)(a)(B)]
9.c. Immediately notify the Department by telephone, followed by a written report the following
working day, of the presence of improperly enclosed or uncovered waste. Submit a copy of the
signed asbestos waste shipment record along with the report. [OAR 340-248-0280(10)(a)(E)]
9.d. Send a copy of the signed asbestos waste shipment record to the asbestos waste generator as soon
as possible, but no longer than 30 days after receipt of the waste. [OAR 340-248-0280(10)(a)(F)]
9.e. Upon discovering a discrepancy between the quantity of waste designated on the asbestos waste
shipment records and the quantity actually received, attempt to reconcile the discrepancy with the
asbestos waste generator. If the discrepancy cannot be reconciled, the permittee must report the
discrepancy and reconciliation attempts in writing to the Department within the 15th day after
receiving the waste. A copy of the asbestos waste shipment record with the Department assigned
asbestos project number shall be submitted with the report. [OAR 340-248-0280(1 O)(a)(G)]
9.f. Select the asbestos waste burial site in an area of minimal work activity that is not subject to future
excavation. [OAR 340-248-02 80( I 0)( a )(H)]
9.g. Cover all asbestos-containing waste material deposited at the disposal site with at least 12 inches
of soil or six inches of soil plus 12 inches of other waste before compacting equipment runs over
it but not later than the end of the operating day. [OAR 340-248-0280(IO)(a)(I)]
These conditions are enforceable only by the state.
Monitoring Requirement: For all asbestos-containing waste material received, the permittee shall visually
survey the off-loading of the leak-tight transfer containers to ensure no visible emissions are released and
that the container is properly disposed. This condition is enforceable only by the state.
10.
11.
Recordkeeping Requirements: The permittee must maintain the following records:
Il.a. A copy of asbestos waste shipment records must be maintained for at least three years [OAR 340-
248-0280(10)(a)(D)];
1 Lb. A log of visible observations taken during unloading [OAR 340-248-0280(10)(a)(A)];
lI.c. A record of the location, depth and area, and quantity in cubic yards of asbestos-containing waste
material within the disposal site on a map or diagram of the disposal area must be maintained until
. landfill closure. [OAR 340-248-0280(10)(b)]
These conditions are enforceable only by the state.
Applicable Requirement: Excavation or disturbance of asbestos-containing waste material, that has been
deposited at a waste disposal site and is covered, is considered an asbestos abatement project. The
Department must be notified of all such activities using Department forms. The project notification and
project notification fees must be submitted to the Department at least 45 days before beginning any
excavation or disturbance of the asbestos-containing waste disposal site. The notification must include, but
is not limited to: [OAR 340-248-0280(IO)(c)]
12.a The reason for disturbing the waste;
12.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 7 of28
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12.b. Procedures to be used to control emissions during the excavation, storage, transport,. and ultimate
disposal of the excavated asbestos-containing waste material. If deemed necessary, the
Department may require changes in the emission control procedures to be used;
12.c. The location of any temporary storage site and the fmal disposal site.
These conditions are enforceable only by the state.
13. Monitoring and Recordkeeping Requirement: The permittee must maintain a record of the location of all
asbestos containing waste and keep a log of any asbestos waste area disturbed for any reason. This.-
condition is enforceable only by the state.
Sulfur Content of Diesel Oil
14. Applicable Requirement: The permittee shall not use any ASTM Grade 2 distillate fuel oil containing
more than 0.5 percent sulfur by weight, including periods of startup, shutdown, and malfunction. The
sulfur content of the oil shall be monitored in accordance with Condition 15. [340-028-0110(2)]
15. Monitoring Requirement: The permittee shall monitor the sulfur content of each shipment of ASTM Grade
2 distillate fuel oil received by obtaining a sulfur analysis certificate from the vendor for each shipment.
Condition Pollutant! Limit! Averaging Testing Monitoring
Applicable Requirement Number Parameter Standard Time Condition Condition
340-238-0100(2) 16 NMOC 50 annual 18 17
40 CFR 60752 Mglyear
Table 2 Emissions Unit LFG-Ol (Baseline Scenario):
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Landfill Gas Emissions (Baseline Scenario)
16. Applicable Requirement: Under the baseline operating scenario the permittee must annually calculate the
NMOC emission rate in accordance with Conditions 17 through 19. [40 CFR 60.752(b)]
16.a. If the calculated NMOC emission rate is less than 50 Mglyear, the permittee must continue to
calculate and submit annual reports on NMOC emissions until such time as the calculated NMOC
emission rate is equal to or greater than 50 Mglyear, or the landfill is closed.
16.b. If the estimated NMOC emission rate is less than 50 Mglyr for five consecutive years, the
permittee may elect to submit an estimate of the NMOC emissions for the next five year period in
lieu of the annual report. The estimate shall include the amount of solid waste in-place and an
estimated waste acceptance rate for each year of the five year period. This estimate shall be
revised at least once every fi~e years. If the actual waste acceptance rate exceeds the estimated
rate in any year, a revised 5-year estimate shall be submitted. [40 CFR 60.757(b)(I)(ii)]
16.c. If the calculated NMOC emission rate is equal to or greater than 50 Mglyear, the permittee must:
[40 CFR 60.752(b)(2)]
16.c.i. Within in one year, submit a collection and control system design plan prepared by a
professional engineer;
16.c.ii. Install a collection and control system within 18 months of the submittal of the design
plan that effectively captures the gas generated within the landfill;
16.c.iii. Operate the collection and control system in accordance with the alternate operating
scenario.
17.
Monitoring Requirement: Under the baseline operating scenario, the permittee must annually calculate the
NMOC emission rate using the following equation: [40 CFR 60.754(a)(l)(i)]
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Permit No.: 25-0001
Expiration Date: 06/01/04
Page 8 of28
n
MNMOC = L2kLoM,(e-kr, XCNMocX3.6xlO-9)
,=1
Where:
MNMOC
k
Lo
M)
t)
~OC
3.6xlO.9
= Total NMOC emission rate from the landfill, Mg/year
= Methane generation rate constant, year'] (default 0.02/year)
.= Methane generation potential, meters3/Mg solid waste (default 170 ~3/Mg)
= Mass of solid waste in the ith section, Mg -
= age of the ith section, years
= Concentration ofNMOC, ppmv as Hexane (default 4,000 ppmv)
= Conversion factor
The mass of nondegradable solid waste may be subtracted from the total mass of solid waste in a particular
section of the landfill when calculating the value for M, if the docwnentation of ConditIOn 19 is followed.
18. Testing Requirement (optional): If the permittee wants to use values other than the default values for
~oc, or k in the monitoring equation of Condition 17 the following procedure must be used:
l8.a. The permittee shall determine NMOC concentration, CNMOC, by installing at least 2 sample probes
per hectare of landfill surface that has retained waste for at least 2 years. If the landfill is larger
than 25 hectares in area, no more than 50 samples are required. The sample probes should be
located to avoid known areas of nondegradable solid waste. The permittee shall collect and
analyze one sample oflandfill gas from each probe to determine NMOC concentration using EPA
method 25C, method 18 or any other alternative method approved by the Department and EP A. If
method 18 is used, the minimum list of compounds to be tested shall be those published in the
most current Compilation of Air Pollutant Emission Factors (AP-42). If composite sampling is
used, equal volumes shall be taken from each sample probe. The permittee shall divide the
NMOC concentration from method 25C by six to convert the ppmv as carbon to ppmv as hexane.
If the resulting NMOC emission calculation is less than 50 Mglyr, the permittee must retest the
site-specific NMOC concentration at least every 5 years. [40 CFR 60.754(a)(3)]
l8.b. The permittee shall determine the methane generation rate constant, k, by using the procedures of
EPA method 2E, or any other alternative method approved by the Department and EPA. [40 CFR
60.754(a)(4)]
19. Recordkeeping Requirement: The permittee must keep for at least 5 years up-to-date records of the
maximum design capacity, the current amount of solid waste in place, and the year by year acceptance rate.
Records of the annual calculation ofNMOC emissions must be kept along with docwnentation of the
nature, date of deposition, amount, and location of asbestos-containing or nondegradable waste excluded
from the calcu,lation ofNMOC emissions. [40 CFR 60.758(a)]
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 9 of 28
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Applicable CondItion Pollutant! Averaging Testing Monitoring
Requirement Number Parameter Limlt!Standard Time Condition Condition
40 CFR 60.753(a) 20 NMOC Installation of NA NA 21
collection wells
40 CFR 60.753(b) 22 collectIOn well maintain NA NA 23
pressure negative pressure -
40 CFR 60.753(c) 25 well air infiltration 550C and 5% O2 NA 26 26
40 CFR 60.753(d) 28 uncollected methane 500 ppm above NA 29 29
background
40 CFR 60.752(b) 31 collected landfill gas route to NA 32,34 33,35
40 CFR 60.753(e) controUtreatrnent
40 CFR 60 753(f) device
Table 3 Emissions Unit LFG-Ol (Alternate Operating Scenario):
Landfill Gas Emissions (Alternate Operating Scenario)
20. Applicable Requirement: The permittee must collect gas from each area, cell, or group of cells in the
landfill in which the initial solid waste has been placed for a period of 5 years or more if active; or 2 years
or more if closed or at fmal grade. [40 CFR 60.753(a)]
21.
Monitoring and Recordkeeping Requirement: The permittee must maintain records of the date waste is
initially placed in each cell and the date the alternative operating scenario begins.
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22.
Applicable Requirement: The permittee must collect landfill gas at a sufficient extraction rate and must
operate the system in a manner to minimize off-site migration of subsurface gas. The permittee must
operate the gas collection system with negative pressure at each wellhead except under the following
conditions: [40 CFR 60.753(b)]
22.a. A fire or increased well temperature. The permittee must record instances when positive pressure
occurs in efforts to avoid a fire.
22.b. Use of a geomembrane or synthetic cover. The permittee must develop acceptable pressure limits
in the design plan submitted under Condition 16.c.i.
22.c. A decommissioned well. A well may experience a static positive pressure after shut down to
accommodate for declining flows. All design changes which decommission wells must be
approved by the Department.
22.d. The Department approves an alternative pressure standard under the control system design plan.
[40 CFR 60.752(b)(2)(i)(B)].
Ifmonitoring demonstrates that the pressure standard at each wellhead is not met, corrective action must be
taken as specified in Condition 23. If corrective actions are taken, the monitored exceedance is not a
violation. [40 CFR 60.753(g)]
23.
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Monitoring Requirement: The permittee must measure the gauge pressure in the gas collection header of
each active wellhead on a monthly basis. If a pressure greater than the standard exists, action must be
initiated to correct the exceedance within 5 calendar days. If the pressure standard cannot be achieved
without excess air infiltration within 15 calendar days of the first measurement, the gas collection system
must be expanded to correct the exceedance within 120 days of the initial measurement greater than the
pressure standard. [40 CFR 60.755(a)(3)] Installation of additional collection wells to maintain the
pressure standard are not required during the first 180 days after initial gas collection system start-up. [40
CFR 60.755(a)(4)]
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Permit No.: 25-000 I
Expiration Date: 06/01/04
Page 10 of28
24.
Recordkeeping Requirement: The permittee must maintain an up-to-date map showing each existing and
planned collector in the system, including installation dates, records of the density of wells or other gas
extraction devices, and records of the maximum expected gas generation flow rate calculation. [40 CFR
60.758(a)(1)] The permittee must maintain logs of monthly wellhead monitoring, including any monitored
exceedance, the value and length of time of the exceedance, and corrective action.
25.
Applicable Requirement: The permittee must operate each active interior wellhead in the collectio~ system
with a landfill gas temperature less than 550 C and with an oxygen level less than 5%. The permittee may
establish a higher operating temperature or oxygen value at a particular well if data are provided
demonstrating that the elevated parameters do not cause fires or significantly inhibit anaerobic
decomposition by killing methanogens. [40 CFR 60.753(c)] The oxygen must be monitored in acc-ordance
with Condition 26. Ifmonitoring demonstrates that the temperature or oxygen levels at each wellhead is
not met, corrective action must be taken as specified in Condition 26. If corrective actions are taken, the
monitored exceedance is not a violation. [40 CFR 60.753(g)]
26.
Monitoring and Testing Requirement: The permittee must monitor the temperature and oxygen content of
landfill gas from each wellhead on a monthly basis. Unless otherwise approved by the Department oxygen
must be determined using method 3A as modified in 40 CFR 60.754(c)(2). If a well exceeds one of the
operating parameters, action must be initiated within 5 calendar days. If correction of the exceedance
cannot be achieved within 15 calendar days of the first measurement, the gas collection system must be
expanded to correct the exceedance within 120 days of the initial exceedance. Any attempted corrective
measure must not cause exceedances of other operational or performance standards. [40 CFR
60.755(a)(5)]
27. Recordkeeping Requirement: The permittee must maintain logs of monthly wellhead monitoring,
including any monitored exceedance, the value and length of time of the exceedance, and corrective action;
28. Applicable Requirement: The collection system must be operated so that the methane concentration is less
than 500 ppm above background at the surface of the landfill. [40 CFR 60.753(d)] The methane
concentration must be monitored in accordance with Condition 29. If monitoring demonstrates that the
methane concentration exceeds the limit, corrective action must be taken as specified in Conditions 29.c or
29.e. If corrective actions are taken, the monitored exceedance is not a violation. [40 CFR 60.753(g)]
29. Monitoring and Testing Requirement: After installation of the landfill gas collection system, the permittee
must monitor surface concentrations of methane along the entire perimeter of the collection area and along
a pattern that traverses the landfill at 30 meters intervals (or a site-specific established spacing) for each
collection area on a quarterly basis using an organic vapor analyzer, flame ionization detector, or other
portable monitor meeting the specifications of 40 CFR 60.755(d). The background methane concentration
must be determined by moving the probe inlet upwind and downwind outside the boundary of the landfill
at a distance of at least 30 meters from the perimeter wells. Monitoring must be performed in accordance
with section 4.3.1 of method 21 except that the probe inlet shall be placed within 5 to 10 centimeters of the
ground. Monitoring must be performed during typical meteorological conditions. [40 CFR 60.755(c)]
Any reading of 500 ppm or more above background at any location must be recorded as a monitored
exceedance and the following actions shall be taken. As long as the specified actions are taken, the
exceedance is not a violation of the operational requirements.
29.a.
29.b.
The location of each of each monitored exceedance must be marked and recorded.
Perform maintenance on the landfill cover, adjust the vacuum on adjacent collection wells to
increase the gas collection in the vicinity of each exceedance, or other maintenance and then
monitor the location again within 10 days of detecting the exceedance.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 11 of28
29.c. Ifre-monitoring shows a second exceedance, additional corrective action must be taken and the
location monitored again within 10 days of the second exceedance. If a third exceedance occurs
the permittee must take the action specified in Condition 29.e and no further monitoring is
required until the action specified in Condition 29.e has been taken.
29.d. Any location that initially showed an exceedance, but is less than 500 ppm above background on
subsequent re-monitoring required in Conditions 29.b or 29.c must be re-monitored 1 month from
the initial exceedance. If the I-month re-monitoring shows a concentration less than 500 ppm
above background, no further monitoring is required at that location until the next quarterly
monitoring period. If the monitoring show an exceedance, the actions specified in Conditions
29.c or 29.e must be taken.
29.e. For any location where monitored methane concentration equals or exceeds 500 ppm above
background three times within a quarterly period, a new well or other collection device must be
installed within 120 calendar days of the initial exceedance. An alternative remedy to the
exceedance, such as upgrading the blower, header pipes or control device, and a corresponding
timeline for installation may be submitted to the Department for approval.
30. Recordkeeping Requirement: The permittee must maintain surface methane concentration monitoring logs
including any monitored exceedance and corrective action;
31.
Applicable Requirement: All collected gas must be routed to a control system meeting one of the
following requirements. [40 CFR 60.752(b)(2)] The control or treatment system must be operated at all
times when the collected gas is routed to the system. In the event the collection or control system is
inoperable, the gas mover system shall be shut down and all valves in the collection and control system
contributing to the venting of the gas to the atmosphere must be closed within one hour. [40 CFR
60.753(e), (f)]
31.a. If the permittee installs an open flare to control landfill gas, the flare shall be designed for and
operated with no visible emissions except for periods not to exceed 5 minutes during any 2
consecutive hours as determined by Condition 32. The flare must be operated with a flame
present at all times as determined by Condition 33. [40 CFR 60.18(c)]
31.b. If the permittee installs a non-open flare control device, the system must reduce NMOC by 98
weight percent. If the control device is an enclosed combustion device the NMOC can either be
reduced 98 weight percent or have an exit NMOC concentration of20 ppmv, dry basis as hexane
at 3% oxygen. The reduction efficiency or exit NMOC concentration shall be established in
accordance with Condition 34 and monitored in accordance with Condition 35. Ifa boiler or
process heater is used as the control device, the landfill gas stream must be introduced into the
flame zone.
31.c. If the permittee elects to route the collected gas to a treatment system that processes the collected
gas for subsequent sale or use, all emissions from any atmospheric vent from the gas treatment
system is subject to the requirements of Conditions 31.a or 31.b.
Testing Requirement: If the permittee installs an open flare to control landfill gas emissions, visible
emissions shall monitored by conducting an EP A Method 22 test. This method does not require that the
opacity of emissions be determined, therefore, the person conducting this test does not need to be Method 9
certified. However, the individual should be familiar with the general procedures of EP A Method 9
including using the proper location to observe visible emissions. An initial Method 22 test shall be
performed within 180 days after initial startup of the flare. The initial test shall include an observation
period of2 hours. [40 CFR 60.18(f)(1)]
32.
33.
Monitoring Requirement: The presence of a flare pilot flame must be monitored using a thermocouple or
any other equivalent device to detect the presence of a flame. [40 CFR 60.18(f)(2)]
.
.
.
.
.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 12 of28
34.
Testing Requirement: Under the alternative operating scenario, if the permittee installs a non-open flare
control device, an initial source test using EPA method 25, method 18 or other method approved by the
Department and EP A must be performed no later than 180 days after initial startup. If using method 18,
the minimum list of compounds to be tested must be those published in the most recent Compilation of Air
Pollutant Emission Factors (AP-42). The following equation must be used to calculate efficiency: [40
CFR 60.754(d)]
~m . NMOCm - NMOCout
Control E.JJ lClency =
NMOCm
where:
NMOCIO
NMOCOUI
mass ofNMOC entering control device
mass ofNMOC exiting control device
35. Monitoring Requirement: Under the alternative operating scenario, if the permittee installs a non-open
flare control device, the permittee must calibrate, maintain and operate according to the manufacturer's
specifications the following equipment: [40 CFR 60.756(b)]
35.a. A temperature monitoring device equipped with a continuous recorder. A temperature monitoring
device is not required for boilers or process heaters with design heat input capacity greater than 44
megawatts.
35.b. Either a gas flow rate measuring device that measures and records gas flow to the control device
every 15 minutes; or secure the control device bypass line valve in the closed position with a car-
seal or a lock-and-key type configuration. If the bypass line valve is secured, a visual inspection
of the seal or closure mechanism shall be performed at least once every month.
36. Recordkeeping Requirement: The permittee must maintain records of periods when the collection system
or control device is inoperable. The record must log where the problem occurred, the reason the system is
inoperable, and the response taken. If inspections of the control device bypass line valve are conducted, a
log of these inspections must be kept.
36.a. If a flare is used as the control device, record must be kept of the flare type, all visible emission
readings, heat content determination, flow rate or bypass flow rate measurements, exit velocity
determinations during testing, continuous records of the flare pilot flame or flare flame monitoring
as well as all periods of operations during which the pilot flame of the flare is absent
36.b. If an enclosed combustion device other than a boiler or process heater is used as the control
device, record of the average combustion temperature measured at least every 15 minutes and
averaged over the same time period of the performance test and the percent reduction ofNMOC
determined by test must be kept.
36.c. If a boiler or process heater is used as the control device, record of the location at which the
collected gas stream is introduced into the boiler or process heater and boiler operating parameters
must be kept.
Insignificant Activities Emission Limits and Standards
37. Applicable Requirements: The Department acknowledges that insignificant emissions units identified by
rule as either categorically insignificant activities or aggregate insignificant emissions [OAR 340-200-
0020] exist at facilities required to obtain an Oregon Title V Operating Permit. These units must comply
with all applicable requirements. In general, the requirements that could apply are incorporated as follows:
37.a.
37.b.
OAR 340-208-0110 (20% opacity)
OAR 340-228-0210 (0.1 gr/dscf corrected to 12% CO2 or 50% excess air for fuel burning
equipment)
OAR 340-226-0210 (0.1 gr/dscf for non-fugitive, non-fuel burning equipment)
37.c.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 13 of 28
38. Testing, Monitoring, and Recordkeeping Requirements: Unless otherwise specified in this permit or an
applicable requirement, the Department is not requiring any testing, monitoring, recordkeeping, or
reporting for the applicable emissions limits and standards. However, if testing were performed for
compliance purposes, the permittee would be required to use the test methods identified in the defmitions
of "opacity" and "particulate matter" in OAR 340-208-0010 and perform the testing in accordance with the
Department's Source Sampling Manual.
PLANT SITE EMISSION LIMITS
39. The plant site emissions shall not exceed the following:
Table 4 Plant Site Emission Limits
Baseline Scenario Alternate Operating Scenario
Plant Site Emission Limit Plant Site Emission Limit Credits
Pollutant (lb/day) (ton/yr) (lb/day) (ton/yr) (tons/yr)
PM! PM10 340 43 348 44 0
CO 174 7.7 510 69 0
NOx 141 6.8 160 10 0
S02 -- 1.0 -- 1.0 0
VOC 102 20 26 5.8 0
40. Monitoring and Recordkeeping Requirements: The permittee must determine compliance with the PSEL by
conducting monitoring in accordance with the following procedures, test methods, and frequencies: [OAR 340-
218-0050(3)]
40.a. The permittee shall monitor and maintain records of the following process parameters:
Table 5 Process Parameters to Monitor for PSEL Compliance
Emissions Unit Process Parameter Units Frequency
Engines (ENG-Ol) power of each engine x hours hp-hr daily, annual
of operation
Stockpiles (STR-Ol)
Cover soil (active piles) active area, days of activity acres, acre-days daily, annual
Cover soil (inactive piles) inactive area, days of inactivity acres, acre-days daily, annual
Liner soil (active piles) active area, days of activity acres, acre-days daily, annual
Liner soil (inactive piles) inactive area, days of inactivity acres, acre-days daily, annual
Drain rock (active piles) active area, days of activity acres, acre-days daily, annual
Drain rock (inactive piles) inactive area, days of inactivity acres, acre-days daily, annual
Material Handling (MH-OI) tons handled ton daily, annual
Roads (pRD-O 1, UPR-O 1) vehicle miles traveled VMT daily, annual
Landfill Gas generated (LFG-O 1) refuse in place Mg. daily, annual
Landfill Gas to Flare (LFG-O 1) gas flow rate million cubic feet daily, annual
* Refuse in place may exclude asbestos or nondegradable refuse placed in a segregated area if documentation is
provided. Amount of refuse in place is input to EP A model to calculate LFG emissions.
.
.
.
.
.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 14 of28
40.b.
The permittee shall determine compliance with the PSEL by calculating emissions using the
following formula, the process parameter measurements identified in Condition 40.a. and the
emission factors listed in Condition 40.c.:
E= :L(Peu xEFeu) 1 K
where:
E=
PC1J=
EFC1J=
Pollutant emissions - lbslday or tonslyr
Process parameter identified in Condition 40.a.
Emission factor identified for each emissions unit and pollutant in
Condition 40.c.
2,000 lb/ton for annual emissions, 1.0 lb/lb for daily emissions.
K=
40.c. Emissions factors for calculating pollutant emissions:
Table 6 Emission Factors used to Monitor for PSEL Compliance
Short Term Annual
Emissions units Pollutant Emission Factor Emission Factor Units
ENG-OI (diesel) NO. 3. I OE-02 3.IOE-02 Iblhp-hr
CO 6.68E-03 6.68E-03 Ib/hp-hr
ENG-OI (gasoline) NO. 1.IOE-02 1.IOE-02 Ib/hp-hr
CO 4.39E-OI 4.39E-OI Ib/hp-hr
STR-O 1
Active stockpiles PMlPM10 6.3 6.3 lb/acre-day
Inactive stockpiles PMlPMIO 1.7 1.7 Ib/acre-day
MH-OI PMlPMIO 1.94E-03 1.94E-03 Ib/ton
PRD-OI PMlPMIO 0.377 0.377 IbNMT
UPR-OI PMlPMIO 1.39 1.39 IbNMT
LFG-O I (baseline) CO EP A Modell EPA Modell NA
VOC EP A Modell EPA Modell NA
LFG-OI (alternate)
Flare2 PMlPMIO 17 17 lb/MM cu. ft.
NO. 40 40 lbl MM cu. ft.
CO 750 750 lbl MM cu. ft.
VOC 0.8% ofEPA model1.2 0.8% ofEPA model1.2 NA
Landfill2 CO 25% of EP A model1.2 25% ofEPA model1.2 NA
VOC 25% ofEPA model'.2 25% of EP A model1.2 NA
1. EPA "Landfill Air Emissions Estimation Model" Version 1.0. with default parameters: methane generation rate
(k) 0.02 yr-!, methane generation potential (Lo) 100 mJ/Mg, CO concentration 309.32 ppmv, VOC emissions are
39% ofNMOC emissions, and site-specific NMOC concentration of926.00 ppmv.
2. Assumes 75% oflandfill gas is collected and routed to flare. Flare controls 99.2% ofVOC emissions.
GENERAL TESTING REQUIREMENTS
41. Unless otherwise specified in this permit, the permittee shall conduct all testing in accordance with the
Department's Source Sampling Manual. [OAR 340-212-0120]
41.a. Only regular operating staff may adjust the processes or emission control device parameters
during a compliance source test and within two (2) hours prior to the tests. Any operating
adjustments made during a compliance source test, which are a result of consultation during the /
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 15 of28
tests with source testing personnel, equipment vendors, or consultants, may render the source test
invalid.
41.b. Unless otherwise specified by permit condition or Department approved source test plan, all
compliance source tests shall be performed at maximum operating rates (90 to 110% of device
design capacity or maximum landfill gas collection system efficiency in the case of landfill gas
control devices).
41.c. Each source test shall consist of at least three (3) test runs and the emIssions results shall b~
reported as the arithmetic average of all valid test runs. If for reasons beyond the control of the
permittee a test run is invalid, the Department may accept two (2) test runs for demonstrating
compliance with the emission limit or standard.
41.d. Source test reports prepared in accordance with the Department's Source Sampling Manual shall
be submitted to the Department within 30 days of completing any required source test, unless a
different time period is approved in the source test plan submitted prior to the source test.
42. The permittee shall conduct an emission factor verification test using the following test method and minimum
test frequency if the landfill gas is vented through an enclosed flare:
Table 7 Emission Factor Verification Testing
Monitoring Point Pollutant Test Method Minimum- :-.
LFG-Ol (alternate scenario) CO EP A Method 10 1 time per permit term II
-
42.a. The permittee shall notify the Department at least 15 days prior to conducting any emission factor
verification tests by submitting a source test plan in accordance with the Department's Source
Sampling Manual.
42.b. The permittee shall submit a summary of all emission factor verification tests to the Department
within 45 days of any test. The summary shall include the following information:
42.b.i. Emissions unit and monitoring point identification;
42.b.ii. Emission results in pounds per hour;
42.b.iii. Process parameters during the test (e.g. gas flow rate, etc.); and
42.b.iv. Control device operating parameters.
42.c. The emissions factors listed in Condition 40.c. are not enforceable limits unless otherwise
specified in this permit. Compliance with the PSEL shall only be determined by the calculations
contained in Condition 40.b. of this permit using the monitored parameters recorded during the
reporting period and the'Cmission factors contained in Condition 40.c.
42.d. The CO emission factor verification test on the flare will be waived if the alternative operating
scenario is started within 1 year of the expiration date of this permit.
GENERAL MONITORING AND RECORDKEEPING REQUIREMENTS [OAR 340-218-0050(3)(a) and
(b)]
43.
Moni~oring Requirements:
43.a. The permittee shall not knowingly render inaccurate any required monitoring device or method.
[OAR 340-218-0050(3)(a)(E)]
43.b. Methods used to determine actual emissions for fee purposes shall also be used for compliance
determination and can be no less rigorous than the requirements of OAR 340-218-0080. [OAR
340-218-0050(3)(a)(F)]
43.c. Monitoring requirements shall commence on the date of permit issuance unless otherwise
specified in the permit or an applicable requirement. [OAR 340-218-0050(3)(a)(G)]
.
.
.
/
.
44.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 16 of28
Recordkeeping Requirements:
44.a. The permittee shall maintain the following general records of testing and monitoring required by
this permit: [OAR 340-218-0050(3)(b)(A)]
44.a.i. The date, place as defined in the permit, and time of sampling or measurements;
44.a.ii. The date(s) analyses were performed;
44.a.iii. The company or entity that performed the analyses;
44.a.iv. The analytical techniques or methods used;
44.a.v. The results of such analyses;
44.a. vi. The operating conditions as existing at the time of sampling or measurement; and
44.a.vii. The records of quality assurance for continuous monitoring systems (including but not
limited to quality control activities, audits, calibration drift checks).
44.b. Unless otherwise specified by permit condition, the permittee shall make every effort to maintain
100 percent of the records required by the permit. If information is not obtained or recorded for
legitimate reasons (e.g., the monitor or data acquisition system malfunctions due to a power
outage), the missing record(s) shall not be considered a permit deviation provided the amount of
data lost does not exceed 10% of the averaging periods in a reporting period or 10% of the total
operating hours in a reporting period, ifno averaging time is specified. Upon discovering that a
required record is missing, the permittee shall document the reason for the missing record. In
addItion, any missing record that can be recovered from other available information shall not be
considered a missing record. [OAR 340-214-0110,340-212-0160, and 340-218-0050(3)(b)]
44.c. Recordkeeping requirements shall commence on the date of permit issuance unless otherwise
specified in the permit or an applicable requirement. [OAR 340-218-0050(3)(b )(C)]
44.d. Unless otherwise specified, the permittee shall retain records of all required monitoring data and
support information for a period of at least five (5) years from the date of the monitoring sample,
measurement, report, or application. Support information includes all calibration and
maintenance records and all original strip-chart recordings for continuous monitoring
instrumentation, and copies of all reports required by the permit. [OAR 340-218-0050(b )(B)]
REPORTlNG REQUIREMENTS
45. Within 180 days of installation and startup of a collection and control system and every year thereafter in
the annual report, the permittee must submit a report containing the following information. The initial
report shall include the initial performance test results (Conditions 32, 34) and the following information:
[40 CFR 60.757(1)]
Value and length of time for exceedance of applicable parameters monitored in Conditions 23, 26,
33, and 35;
Description and duration of all periods when the gas stream is diverted from the control device
through a bypass line;
Description and duration of all periods when the control device does not operate for a period
exceeding 1 hour;
All periods when the collection system does not operating in excess of 5 qays;
The location of each exceedance of the 500 ppm methane concentration monitored in Condition
29, and the concentration recorded at each location for which an exceedance was recorded in the
previous month;
The date of installation and the location of each well or collection system expansion added
pursuant to Conditions 20,23, and 29.
46. The permittee must submit the following information with the initial performance test report. [40 CFR
60.757(g)] If the calculated NMOC emission rate exceeds 50 Mglyear, the permittee must submit a
.
45.a.
45.b.
45.c.
45.d.
45.e.
45.f.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 17 of28
collection and control system design report within 1 year of the fIrst annual NMOC emission report
showing a 50 Mglyear NMOC emission rate including:
46.a. A diagram of the collection system showing all wells, horizontal collectors, surface collectors, or
other gas extraction devices, including the locations of any areas excluded from collection and the
proposed sites for future collection system expansion;
46.b. The data upon which the suffIcient density of wells, horizontal collectors, surface collecto~s, or
other gas extraction devices and the gas mover equipment are based;
46.c. The documentation of the presence of asbestos or nondegradable materials for each area from
which collection wells have been excluded;
46.d. The sum of the gas generation flow rates for all areas from which collection wells have been
excluded based on non-productivity and the calculations of gas generation flow rate for each
excluded area;
46.e. The provisions for increasing gas mover equipment capacity with increased gas generation flow
rate, if the present gas mover equipment is inadequate to move the maximum flow rate expected
over the life of the landfIll;
46.f. The provisions for the control of off-site migration.
The permittee shall submit four (4) copies of reports of any required monitoring at least every 6 months,
completed on forms approved by the Department. Six month periods are January 1 to June 30, and July 1
to December 31. One copy of the report shall be submitted to the Air Quality Division, two copies to the
regional offIce, and one copy to the EP A. All instances of deviations from permit requirements shall be
clearly identifIed in such reports: [OAR 340-218-0050(3)(c)(A) and 340-218-0080(6)(d)]]
47.a. The fIrst semi-annual report shall be due on July 30 and shall include the semi-annual compliance
certifIcation, OAR 340-218-0080.
47.b. The annual report shall be due on February 15 and shall consist of the following:
47.
47.b.i.
47.b.ii.
47.b.iii.
47.b.iv.
47.b.v.
47.b.vi.
47.b.vii.
47.b.viii.
47.b.ix.
Annual NMOC emission rate report including all the data, calculations, sample reports
and measurements used to estimate the emissions. Annual NMOC reporting will not
be required when a collection and control device is operating in compliance under the
alternative operating scenario;
Hours of operation of each engine multiplied by that engine's rating (hp-hr/yr);
Area of each storage pile (cover soil, liner soil, drain rock) multiplied by the number of
days that pile is active or inactive (acre-day/yr);
Amount of stockpile material handled (ton/yr);
Number of vehicle miles traveled on paved and unpaved roads (VMT/yr);
Volume of landfIll gas sent to the control device (alternative operating scenario) (MM
cu. ft.lyr);
The emission fee report; [OAR 340-220-0100]
The excess emissions upset log; [OAR 340-214-0340]
The second semi-annual compliance certifIcation; and [OAR 340-218-0080]
48. The semi-annual compliance certifIcation shall include the following (provided that the identifIcation of
applicable information may cross-reference the permit or previous reports, as applicable): [OAR 340-218-
0080(6)(c)]
The identifIcation of each term or condition of the permit that is the basis of the certifIcation;
The identifIcation of the methodes) or other means used by the owner or operator for determining
the compliance status with each term and condition during the certifIcation period, and whether
such methods or other means provide continuous or intermittent data. Such methods and other
means shall include, at a minimum, the methods and means required under OAR 340-218-
0050(3). Ifnecessary, the owner or operator also shall identify any other material information that
/
48.a.
48.b.
.
.
.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 18 of28
48.c.
must be included in the certification to comply with section 113(c)(2) of the FCAA, which
prohibits knowingly making a false certification or omitting material information;
The status of compliance with terms and conditions of the permit for the period covered by the
certification, based on the method or means designated in OAR 340-218-0040(6)(c)(B). The
certification shall identify each deviation and take it into account in die compliance certification.
The certification shall also identify as possible exceptions to compliance any periods during which
compliance is required and in which an excursion or exceedance, as defmed under OAR 340-200-
0020, occurred; and
Such other facts as the Department may require to determine the compliance status of the source;
48.d.
49. Notwithstanding any other provision contained in any applicable requirement, the owner or operator may
use monitoring as required under OAR 340-218-0050(3) and incorporated into the permit, in addition to
any specified compliance methods, for the purpose of submitting compliance certifications. [OAR 340-
218-0080(6)(e)]
Excess Emissions Reporting [OAR 340-214-0300 through 340-214-0360]
50.a. The permittee shall report all excess emissions in accordance with OAR 340-214-0300 through
340-214-0360. In summary, the permittee shall immediately (i.e., as soon as possible but in no
case more than one hour after the beginning of the excess emission period) notify the Department
by telephone or in person of any excess emission, other than pre-approved startup, shutdown, or
scheduled maintenance. Notification shall, to the extent reasonably ascertainable at the time of
notification, include the source name, nature of the emissions problem, name of the person
making the report, name and telephone number of the contact person for further information, date
and time of the onset of the upset condition, whether or not the incident was planned, the cause of
the excess emission (e.g., startup, shutdown, maintenance, breakdown, or other), equipment
involved in the upset, estimated type and quantity of excess emissions, estimated time of return to
normal operations, efforts made to minimize emissions, and a description of remedial actIOns to be
taken. Follow-up reporting shall be made in accordance with Department direction and OAR 340-
214-0330(2) and 340-214-0340.
50.b. In the event of any excess emissions which are of a nature that could endanger public health and
occur during non-business hours, weekends, or holidays, the permittee shall immediately notify
the Department by calling the Oregon Emergency Response System (OERS). The current number
is 1-800-452-0311.
50.c. If startups, shutdowns, or scheduled maintenance may result in excess emissions, the permittee
shall submit startup, shutdown, or scheduled maintenance procedures used to minimize excess
emissions to the Department for prior authorization, as required in OAR 340-214-0310 and 340-
214-0320. New or modified procedures shall be received by the Department in writing at least 72
hours prior to the first occurrence of the excess emission event. The permittee shall abide by the
approved procedures and have a copy available at all times.
50.d. The permittee shall notify the Department of planned startup/shutdown or scheduled maintenance
events only if required by permit condition or if the source is located in a nonattainment area for a
pollutant which may be emitted in excess of applicable standards.
50.e. The permittee shall maintain and submit to the Department a log of planned and unplanned excess
emissions, on Department approved forms, in accordance with OAR 340-214-0340.
.
50.
The permittee shall promptly report deviations from permit requirements that do not cause excess
emissions, including those attributable to upset conditions, as defmed in the permit, the probable cause of
such deviations, and any corrective actions or preventive measures taken. "Prompt" means within seven (7)
days of the deviation. Deviations that cause excess emissions, as specified in OAR 340-214-0300 through
340-214-0360 shall be reported in accordance with OAR 340-214-0340. [OAR 340-218-0050(3)(c)(B)]
52. The permittee shall submit any required source test report within 30 days after the source test; unless
otherwise approved in the source test plan. [OAR 340-218-0050(3)( c )(C) and 340-212-0120]
51.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 19 of28
.
53. All required reports shall be certified by a responsible official consistent with OAR 340-218-
0040(5);[OAR 340-218-0050(3)(c)(D)]
54. Reporting requirements shall commence on the date of permit issuance unless otherwise specified in the
permit. [OAR 340-218-0050(3)(c)(E)]
55. Addresses of regulatory agencies are the following, unless otherwise instructed:
DEQ - Eastern Region
2146 NE 4th, #104
Bend, OR 97701
(541) 388-6146
DEQ - Air Quality Division
811 SW Sixth Avenue
Portland, OR 97204
(503) 229-5359
Air Operating Permits
US Environmental Protection Agency
Mail Stop OAQ-l 08
1200 Sixth Avenue
Seattle, W A 98101
NON-APPLICABLE REQUIREMENTS
56. State and Federal air quality requirements (e.g., rules and regulations) currently determined not applicable
to the permittee are listed below along with the reason for the non-applicability: [OAR 340-218-0110]
Applicable Reason Applicable Reason Applicable Reason Applicable Reason
Requirement Code Requirement Code Requirement Code ReqUIrement Code
OAR Chapter 340: Division 218: Division 234: Division 260:
Division 202 0050(4) b all rules b 0030 and 0040 b
all rult-s 0090 and 0100 b Division 236: 40 eFR
Division 206 Division 222 all rules b Part 55 b .
0050 c 0050 and 0060 h Division 240: Part 57 b
Division 208 Division 226: all rules c Part 60, except subparts b
0210 c 0310 and 0320 e Division 242: A, Cc, and appendices
0520 through 0670 d 0400 h all rules c Part 61, except subparts b
Division 210: Division 228: Division 244: A, M, and appendices
0100 through 0120 b 0100 f OlIO through 0180 h Part 63, except subpart b
0200 through 0220 b 0120 f 0200 through 0220 b A and appendices
Division 212: 0200 through 0210 e Division 256: Part 72 through 76 b
0210 through 0280 Division 230: all rules b Part77 b
Division 214: all rules e Division 258: Part7 8 b
0130(2) and (3) h Division 232: all rules b Part 82 b
0210 and 0220 c 0040 through 0140 c Part 85 through 89 b
Reason code definitions:
a This pollutant is not emitted by the facility.
b The facility is not in this source category.
c The facility is not in a special controVnonanainment area.
d The facility is not in this county.
e The facility does not have this emissions Unit.
f The facility does not use this fuel type.
g The rule does not apply because no changes have been made at the facility that would trigger these procedural requirements
h This method/procedure is not used by the facility.
This rule applies only to DEQ and regional authorities
j. There are no emissions units with add-on control devices or the pre-controlled potential emiSSIOns are is less than 100 tons per year or the
emissions units with add-on control devices and pre-controlled emissions greater than 100 tons per year are subject to emissions standards
promulgated after November of 1990.
.
.
.
.'
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 20 of 28
GENERAL CONDITIONS
G 1. General Provision
Terms not otherwise defined in the permit shall have the meaning assigned to such terms in the refe.(enced
regulation.
G2. Reference materials
Where referenced in this permit, the version of the following materials are effective as of the dates noted
unless otherwise specified in the permit:
a. Source Sampling Manual; January 23, 1992 - State Implementation Plan Volume 3, Appendix A4;
b. Continuous Monitoring Manual; January 23, 1992 - State Implementation Plan Volume 3,
Appendix A6; and
c. All state and federal regulations as in effect on the date of issuance of this permit.
G3. Compliance [OAR 340-2 I 8-0040(3)(n)(C), 340-218-0050(6), and 340-218-0080(4)]
a.
The permittee shall comply with all conditions of the federal operating permit. Any permit
condition noncompliance constitutes a violation of the Federal Clean Air Act and/or state rules
and is grOlmds for enforcement action; for permit termination, revocation and re-issuance, or
modification; or for denial of a permit renewal application. Any noncompliance with a permit
condition specifically designated as enforceable only by the state constitutes a violation of state
rules only and is grounds for enforcement action; for permit termination, revocation and re-
issuance, or modification; or for denial of a permit renewal application.
Any schedule of compliance for applicable requirements with which the source is not in
compliance at the time of permit issuance shall be supplemental to, and shall not sanction
noncompliance with the applicable requirements on which it is based.
For applicable requirements that will become effective during the permit term, the source shall
meet such requirements on a timely basis unless a more detailed schedule is expressly required by
the applicable requirement.
b.
c.
G4. Credible Evidence:
Notwithstanding any other provisions contained in any applicable requirement, any credible evidence may
be used for the purpose of establishing whether a person has violated or is in violation of any such
applicable requirements. [OAR 340-214-0120]
G5.
Certification [OAR 340-214-0110,340-218-0040(5), 340-218-0050(3)(d), and 340-218-0080(2)]
Any document submitted to the Department or EPA pursuant to this permit shall contain certification by a
responsible official of truth, accuracy and completeness. All certifications shall state that based on
information and belief formed after reasonable inquiry, the statements and information in the document are
true, accurate, and, complete. The permittee shall promptly, upon discovery, report to the Department a
material error or omission in these records, reports, plans, or other documents.
/
G6.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 21 of28
Open Burning [OAR Chapter 340, Division 264]
The permittee is prohibited from conducting open burning, except as may be allowed by OAR 340-264-
0020 through 340-264-0200.
G7. Asbestos [40 CFR Part 61, Subpart M (federally enforceable), OAR Chapter 340-248-0010 through 340-
248-0180 (state-only enforceable) and 340-248-0210 through 340-248-0280]
The permittee shall comply WIth OAR Chapter 340, Division 248, and 40 CFR Part 61, Subpart M when
conducting any renovation or demolition activities at the facility.
G8. Stratospheric Ozone and Climate Protection [40 CFR 82 Subpart F, OAR 340-260-0040]
The permittee shall comply with the standards for recycling and emissions reduction pursuant to 40 CFR
Part 82, Subpart F, Recycling and Emissions Reduction.
G9. Permit Shield [OAR 340-218-0110]
a.
Compliance with the conditions of the permit shall be deemed compliance with any applicable
requirements as of the date of permit issuanc~ provided that:
i. Such applicable requirements are included and are specifically identified in the permit, or
ii. The Department, in acting on the permit application or revision, determines in writing
that other requirements specifically identified are not applicable to the source, and the
permit includes the determination or a concise summary thereof.
Nothing in this rule or in any federal operating permit shall alter or affect the following:
i. The provisions of ORS 468.115 (enforcement in cases of emergency) and ORS 468.035
(function of department);
11. The liability of an owner or operator of a source for any violation of applicable
requirements prior to or at the time of permit issuance;
lll. The applicable requirements of the national acid rain program, consistent with
section 408(a) of the FCAA; or
iv. The ability of the Department to obtain information from a source pursuant to ORS
468.095 (investigatory authority, entry on premises, status of records).
Sources are not shielded from applicable requirements that are enacted during the permit term,
unless such applicable requirements are incorporated into the permit by administrative
amendment, as provided in OAR 340-218-0 150( 1 )(h), significant permit modification, or
reopening for cause by the Department.
b.
c.
G10. Inspection and Entry [OAR340-218-0080(3)]
Upon presentation of credentials and other documents as may be required by law, the permittee shall allow
the Department of Environmental Quality, or an authorized representative (including an authorized
contractor acting as a representative of the EPA Administrator), to perform the following:
a.
Enter upon the permittee's premises where an Oregon Title V operating permit program source is
located or emissions-related activity is conducted, or where records must be kept under the
conditions of the permit;
Have access to and copy, at reasonable times, any records that must be kept under c'onditions of
the permit;
Inspect, at reasonable times, any facilities, equipment (including monitoring and air pollution
control equipment), practices, or operations regulated or required under the permit; and
As authorized by the FCAA or state rules, sample or monitor, at reasonable times, substances or
parameters, for the purposes of assuring compliance with the permit or applicable requirements.
b.
c.
d.
21
.
.
'.
.
.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 22 of 28
G11. Fee Payment [OAR 340-220-0010, and 340-220-0030 through 340-220-0190]
The permittee shall pay an annual base fee and an annual emission fee for all regulated air pollutants
except for carbon monoxide, any class I or class II substance subject to a standard promulgated under or
established by Title VI of the Federal Clean Air Act, or any pollutant that is a regulated air pollutant solely
because it is subject to a standard or regulation under section 112(r) of the Federal Clean Air Act. The
permittee shall submit payment to the Department of Environmental Quality, Business Office, 811 SW 6th
Avenue, Portland, OR 97204, within 30 days of the date the Department mails the fee invoice or August 1
of the year following the calendar year for which emission fees are paid, whichever is later. Disputes shall
be submitted in writing to the Department of Environmental Quality. Payment shall be made regardless of
the dispute. User-based fees shall be charged for specific activities (e.g., computer modeling review,
ambient monitoring review, etc.) requested by the permittee.
G12. Off-Permit Changes to the Source [OAR 340-218-0140(2)]
a.
The permittee shall monitor for, and record, any off-permit change to the source that:
i. ~s not addressed or prohibited by the permit;
ii. Is not a Title I modification;
iii. Is not subject to any requirements under Title IV of the FCAA;
iv. Meets all applicable requirements;
v. Does not violate any existing permit term or condition; and
VI. May result in emissions of regulated air pollutants subject to an applicable requirement
but not otherwise regulated under this permit or may result in insignificant changes as
defmed in OAR 340-200-0020.
A contemporaneous notification, if required under OAR 340-218-0 140(2)(b), shall be submitted
to the Department and the EP A.
The permittee shall keep a record describing off-permit changes made at the facility that result in
emission~ of a regulated air pollutant subject to an applicable requirement, but not otherwise
regulated under the permit, and the emissions resulting from those off-permit changes.
The permit shield of Condition G9 shall not extend to off-permit changes.
b.
c.
d.
G13. Section 502(b)(10) Changes to the Source [OAR 340-218-0140(3)]
a. The permittee shall monitor for, and record, any section 502(b)(10) change to the source, which is
defmed as a change that would contravene an express permit term but would not:
i. Violate an applicable requirement;
11. Contravene a federally enforceable permit term or condition that is a monitoring,
recordkeeping, reporting, or compliance certification requirement; or
111. Be a Title I modification.
b. A minimum 7-day advance notification shall be submitted to the Department and the EPA in
accordance with OAR 340-218-0 140(3)(b).
c. The permit shield of Condition G9 shall not extend to section 502(b)(1 0) changes.
G 14. Administrative Amendment [OAR 340-218-0150]
Administrative amendments to this permit shall be requested and granted in accordance with OAR 340-
218-0150. The permittee shall promptly submit an application for the following types of administrative
amendments 'upon becoming aware of the need for one, but no later than 60 days of such event:
a.
Legal change of the registered name of the company with the Corporations Division of the State
of Oregon, or
Sale or exchange of the activity or facility.
b.
22
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 23 of28
GIS. Minor Permit Modification [OAR 340-218-0170)
The permittee shall submit an application for a minor permit modification in accordance with OAR 340-
218-0170.
.
G 16. Significant Permit Modification [OAR 340-218-0180]
The permittee shall submit an application for a significant permit modification in accordance with OAR
340-218-0180
Gl7. Staying Permit Conditions [OAR 340-218-0050(6)(e))
Notwithstanding Conditions G 14 and GIS, the filing of a request by the permittee for a permit
modification, revocation and re-issuance, or termination, or of a notification of planned changes or
anticipated noncompliance does not stay any permit condition.
G 18. Construction/Operation Modification [OAR 340-218-0190]
No permittee shall construct or make modifications required to be reviewed under OAR 340-218-0190, the
construction/operation modification rules, without receiving a Notice of Approval in accordance with OAR
340-218-0190. The permittee should allow 60 days for Department review of applications for a
construction/operation modification if public notice is not required, or 180 days ifpublic notice is required.
G19. New Source Review Modification [OAR 340-224-0010]
No permittee shall construct or make modifications required to be reviewed under New Source Review
(OAR 340-224-0010(1)) without receiving an Air Contaminant Discharge Permit (ACDP) (OAR 340-216-
0010). The permittee should allow 180 days for Department review of an ACDP application for New
Source Review. '
.
G20. Need to Halt or Reduce Activity Not a Defense [OAR 340-2 I 8-0050(6)(b))
It shall not be a defense for a permittee in an enforcement action that it would have been necessary to halt
or reduce the permitted activity in order to maintain compliance with the conditions of this permit.
G21. Duty to Provide Information [OAR 340-218-0050(6)(e) and OAR 340-214-0110]
The permittee shaH furnish to the Department, within a reasonable time, any information that the
Department may request in writing to determine whether cause exists for modifying, revoking and
reissuing, or terminating the permit, or to determine compliance with the permit. Upon request, the
permittee shall also furnish to the Department copies of records required to be retained by the permit.
G22. Reopening for Cause [OAR 340-218-0050(6)( c) and 340-218-0200)
a. The permit may be modified, revoked, reopened and reissued, or terminated for cause as
determined by the Department.
b. A permit shall be reopened and revised under any of the circumstances listed in OAR 340-218-
0200(1)(a).
c. Proceedings to reopen and reissue a permit shall foHow the same procedures as apply to initial
permit issuance and shaH affect only those parts of the permit for which cause to reopen exists.
G23. Severability Clause [OAR 340-218-0050(5))
.
Upon any administrative or judicial challenge, all the emission limits, specific and general conditions,
monitoring, recordkeeping, and reporting requirements of this permit, except those being challenged,
remain valid and must be complied with.
23
.
.
.
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 24 of 28
G24. Permit Renewal and Expiration [OAR 340-218-0040(1)(a)(D) and 340-218-0130]
a. This permit shall expire at the end of its term. Permit expiration terminates the permittee's right to
operate unless a timely and complete renewal application is submitted as described below.
b. Applications for renewal shall be submitted at least 12 months before the expiration of this permit,
unless the Department requests an earlier submittal. If more than 12 months is required to process
a permit renewal application, the Department shall provide no less than six (6) months for the
owner or operator to prepare an application. Provided the permittee submits a timely and
complete renewal application, this permit shall remain in effect until fmal action has been taken
on the renewal application to issue or deny the permit.
G25. Permit Transference [OAR 340-218-0150(1)( d)]
The permit is not transferable to any person except as provided in OAR 340-218-0150(1)(d).
G26. Property Rights [OAR 340-200-0020 and 340-218-0050(6)(d)]
The permit does not convey any property rights in either real or personal property, or any exclusive
privileges, nor does it authorize any injury to private property or any invasion of personal rights, nor any
infringement of federal, state, or local laws or regulations, except as provided in OAR 340-218-0110.
G27.
Permit Availability [OAR 340-200-0020 and 340-218-0120(2)]
The permittee shall have available at the facility at all times a copy of the .oregon Title V Operating Permit
and shall provide a copy of the permit to the Department or an authorized representative upon request.
ALL INQUIRIES SHOULD BE DIRECTED TO:
Department of Environmental Quality
Eastern Region - Pendleton Office
700 S.E. Emigrant, Suite 330
Pendleton, OR 97801
Telephone: (541) 276-4063
24
Permit No.: 25-000 I
Expiration Date: 06/0 1I04
Page 25 of 28
Attachment 1 .
Cross-reference from New Rule Numbers to Old Rule Numbe~s (Effective October 14, 1999)
New Rule Old Rule New Rule Old Rule New Rule Old Rule New Rule Old Rule
Number Number Number Number Number Number Number Number
200-0020 020-0205 208-0530 030-0430 214-0320 028-1420 220-0 I 00 028-2650
200-0020 028-0110 208-0540 030-0440 214-0330 028-1430 220-0110 028-2660
200-0030 020-0003 208-0550 030-0450 214-0340 028-1440 220-0120 028-2670
200-0040 020-0047 208-0560 030-0460 214-0350 028-1450 220-0130 028-2680
200-0050 028-0700 208-0570 030-0470 214-0360 028-1460 220-0140 028-2690
200-0 I 00 020-0200 208-0580 030-0480 216-0010 028-1700 220-0150 028-2700
200-0110 020-0210 208-0590 030-0490 216-0020 028-1720 220-0160 028-2710
200-0120 020-0215 208-0600 030-0500 216-0040 028-1770 220-0170 028-2720
202-0010 031-0005 208-0610 030-0510 216-0050 028-1710 220-0180 028-2730
202-0050 031-0010 208-0620 030-0520 216-0060 028-1725 220-0190 028-2740
202-0060 031-0015 208-0630 030-0530 216-0070 028-1730 222-0010 028-1000
202-0070 031-0020 208-0640 030-0540 216-0080 028-1740 222-0020 028-1010
202-0080 031-0025 208-0650 030-0600 216-0090 028-1750 222-0040 028-1020
202-0090 031-0030 208-0660 030-0610 216-0100 028-1790 222-0050 028-1040
202-0100 031-0040 208-0670 030-0620 218-00 I 0 028-2100 222-0060 028-1050
202-0110 031-0045 210-0010 028-0200 218-0020 028-2110 222-0070 028-1060
202-0120 031-0050 210-0100 028-0500 218-0040 028-2120 224-0010 028-1900
202-0130 031-0055 210-0110 028-0510 218-0050 028-2130 224-0030 028-1910
202-0200 031-0100 210-0120 028-0520 218-0060 028-2140 224-0040 028-1920 .
202-0210 031-0110 210-0200 028-0800 218-0070 028-2150 224-0050 028-1930
> 202-0220 031-0115 21 0-021 0 028-0810 218-0080 028-2160 224-0060 028-1935
204-0010 031-0500 210-0220 028-0820 218-0090 028-2170 224-0070 028-1940
204-0020 031-0510 212-0110 028-0900 218-0100 028-2180 224-0080 028-1950
204-0030 031-0520 212-0120 028-1100 218-0110 028-2190 224-0090 028-1970
204-0040 031-0530 212-0130 028-1110 218-0120 028-2200 224-0100 028-1990
204-0050 031-0120 212-0140 028-1120 218-0130 028-2210 224-0110 . 028-2000
204-0060 031-0130 212-0150 028-1130 218-0140 028-2220 226-0010 021-0005
204-0070 021-0010 212-0160 028-1140 218-0150 028-2230 226-0100 028-0600
204-0080 024-0301 212-0200 028-1200 218-0160 028-2240 226-0110 028-0610
204-0090 022-0470 212-0210 028-1210 218-0170 028-2250 226-0120 028-0620
206-00 I 0 027-0005 212-0220 028-1220 218-0180 028-2260 226-0130 028-0630
206-0030 027-0010 212-0230 028-1230 218-0190 028-2270 226-0140 028-0640
206-0040 027-0012 212-0240 028-1240 218-0200 028-2280 226-0200 021-0012
206-0050 027-0015 212-0250 028-1250 218-0210 028-2290 226-0210 021-0030
206-0060 027-0025 212-0260 028-1260 218-0220 028-2300 226-0300 021-0035
206-0070 027-0035 212-0270 028-1270 218-0230 028-2310 226-0310 021-0040
208-00 I 0 021-0005 212-0280 028-1280 218-0240 028-2320 226-0320 021-0045
208-0010 021-0050 214-0 I 00 028-0200 218-0250 028-1790 226-0400 028-1030
208-0010 030-00 I 0 214-0110 028-0300 220-0010 028-2560 228-00 I 0 021-0012
208-0100 021-0012 214-0120 028-0310 220-0030 028-2580 228-0020 021-0005
208-0110 021-0015 214-0130 028-0400 220-0040 028-2590 228-0020 022-0005
208-0200 021-0055 214-0200 028-1500 220-0050 028-2600 228-0020 022-0050 .
208-0210 021-0060 214-0210 028-1510 220-0060 028-2610 228-0100 022-0010
208-0500 030-0400 214-0220 028-1520 220-0070 028-2620 228-0110 022-0015
208-0510 030-0410 214-0300 028-1400 220-0080 028-2630 228-0120 022-0020
208-0520 030-0420 214-0310 028-1410 220-0090 028-2640 228-0130 022-0025
25
Permit No.: 25-0001
Expiration Date: 06/01/04
. Page 26 of28
New Rule Old Rule New Rule Old Rule New Rule Old Rule New Rule Old Rule
Number Number Number Number Number Number Number Number
228-0200 022-0055 232-0190 022-0183 236-0150 025-0285 240-0320 030-0210
228-0210 021-0020 232-0200 022-0186 236-0200 025-0405 240-0330 030-0215
228-0300 022-0075 232-0210 022-0190 236-0220 025-0415 240-0340 030-0220
230-0010 025-0850 232-0220 022-0200 236-0230 025-0430 240-0350 030-0225
230-0020 025-0852 232-0230 022-0210 236-0300 025-0070 240-0360 030-0230
230-0030 025-0750 232-0240 022-0220 236-0310 025-0055 240-0400 030-0300
230-0030 025-0855 234-0010 025-0005 236-0320 025-0060 240-0410 03{)-0310
230-0030 025-0950 234-0010 025-0150 236-0330 025-0065 240-0420 030-0320
230-0100 025-0860 234-0010 025-0220 236-0410 025-0110 240-0430 030-0330
230-0110 025-0865 234-00 1 0 025-0305 236-0420 025-0115 240-0440 030-0340
230-0120 025-0870 234-0010 025-0350 236-0430 025-0120 242-0010 030-0800
230-0130 025-0875 234-0010 025-0410 236-0440 025-0125 242-0020 030-0810
230-0140 025-0880 234-0100 025-0010 236-0500 025-0745 242-0030 030-0820
230-0150 025-0885 234-0110 025-0015 238-0010 025-0505 242-0040 030-0830
230-0200 025-0890 234-0120 025-0020 238-0020 025-0515 242-0050 030-0840
230-0210 025-0895 .234-0130 025-0025 238-0040 025-0510 242-0060 030-0850
230-0220 025-0900 234-0140 025-0027 238-0050 025-0530 242-0070 030-0860
230-0230 025-0905 234-0200 025-0155 238-0060 025-0535 242-0080 030-0870
230-0300 025-0950 234-0210 025-0165 238-0070 025-0800 242-0090 030-0880
. 230-0310 025-0960 234-0220 025-0170 238-0080 025-0805 242-0100 030-0890
230-0320 025-0970 234-0230 025-0175 238-0090 025-0520 242-0110 030-0900
230-0330 025-0980 234-0240 025-0180 238-0100 025-0740 242-0120 030-0910
230-0340 025-0990 234-0250 025-0185 240-0010 030-0005 242-0130 030-0920
230-0350 025-1000 234-0260 025-0190 240-0020 030-0007 242-0140 030-0930
230-0360 025-1010 234-0270 025-0205 240-0030 030-0010 242-0150 030-0940
230-0400 025-0750 234-0310 025-0224 240-0100 030-0012 242-0160 030-0950
230-0410 025-0750 234-0320 025-0226 240-0110 030-0015 242-0170 030-0960
232-0010 022-0100 234-0330 025-0228 240-0120 030-0021 242-0180 030-0970
232-0020 022-0104 234-0340 025-0230 240-0130 030-0025 242-0190 030-0980
232-0030 022-0102 234-0350 025-0232 240-0140 030-0030 242-0200 030-0990
232-0040 022-0104 234-0360 025-0234 240-0150 030-0031 242-0210 030-1000
232-0050 022-0106 234-0400 025-0355 240-0160 030-0035 242-0220 030-1010
232-0060 022-0107 234-0410 025-0360 240-0170 030-0040 242-0230 030-1020
232-0070 022-0110 234-0420 025-0370 240-0180 030-0043 242-0240 030-1030
232-0080 022-0120 234-0430 025-0380 240-0190 030-0044 242-0250 030-1040
232-0085 022-0125 234-0500 025-0310 240-0200 030-0046 242-0260 030-1050
232-0090 022-0130 234-0510 025-0315 240-021 0 030-0050 242-0270 030-1060
232-0100 022-0137 234-0520 025-0320 240-0220 030-0055 242-0280 030-1070
232-0120 022-0140 234-0530 025-0325 240-0230 030-0065 242-0290 030-1080
232-0130 022-0150 236-0010 025-0105 240-0240 030-0067 242-0300 030-1100
232-0140 022-0153 236-0010 025-0260 240-0250 030-0070 242-0310 030-1110
232-0150 022-0160 236-0100 025-0255 240-0260 030-0111 242-0320 030-1160
232-0160 022-0170 236-0120 025-0265 240-0270 030-0115 242-0330 030-1120
. 232-0170 022-0175 236-0130 025-0270 240-0300 030-0200 242-0340 030-1130
232-0180 022-0180 236-0140 025-0280 240-0310 030-0205 242-0350 030-1140
26
Permit No.: 25-0001
Expiration Date: 06/01/04
Page 27 of28 .
New Rule Old Rule New Rule Old Rule New Rule Old Rule New Rule Old Rule
.. Number Number Number Number Number Number Number Number
242-0360 030-1150 248-0010 032-5590 252-0160 020-0860 256-0420 024-0335
242-0370 030-1170 248-0010 033-0020 252-0170 020-0870 256-0430 024-0337
242-0380 030-1180 248-0100 033-0010 252-0180 020-0880 256-0440 024-0340
242-0390 030-1190 248-0110 033-0030 252-0190 020-0890 256-0450 024-0355
242-0400 030-0700 248-0120 033-0040 252-0200 020-0900 256-0460 024-0357
242-0410 030-0710 248-0130 033-0050 252-0210 020-0910 256-0470 024-0360
242-0420 030-0720 248-0140 033-0060 252-0220 020-1000 258-0010 02-2-0450
242-0430 030-0730 248-0150 033-0070 252-0230 020-1010 258-0100 022-0440
242-0440 030-0740 248-0160 033-0080 252-0240 020-1020 258-0110 022-0460
242-0500 022-0400 248-0170 033-0090 252-0250 020-1030 258-0120 022-0490
242-0510 022-0401 248-0180 033-0100 252-0260 020-1040 258-0130 022-0500
242-0520 022-0402 248-0210 032-5600 252-0270 020-1050 258-0140 022-0503
242-0600 022-0700 248-0220 032-5604 252-0280 020-1060 258-0150 022-0507
242-0610 022-0710 248-0230 032-5605 252-0290 020-1070 258-0160 022-0510
242-0620 022-0740 248-0240 032-5610 254-0010 020-0100 258-0170 022-0520
242-0630 022-0760 248-0250 032-5620 254-0020 020-0105 258-0180 022-0530
242-0700 022-0900 248-0260 032-5630 254-0030 020-0110 258-0190 022-0540
242-0710 022-0910 248-0270 032-5640 254-0040 020-0115 258-0200 020-0136
242-0720 022-0920 248-0280 032-5650 254-0050 020-0120 258-0210 022-0550
242-0730 022-0930 250-0010 020-1500 254-0060 020-0125 258-0220 022-0560 .
242-0740 022-0940 250-0020 020-1520 254-0070 020-0130 258-0230 022-0570
242-0750 022-0950 250-0030 020-1510 254-0080 020-0135 258-0240 022-0580
242-0760 022-1100 250-0040 020-1530 256-0010 024-0005 258-0250 022-0590
242-0770 022-1110 250-0050 020-1540 256-0010 024-0305 258-0260 022-0600
242-0780 022-1120 250-0060 020-1550 256-0100 024-0010 258-0270 022-0610
242-0790 022-1130 250-0070 020-1560 256-0110 024-0015 258-0280 022-0620
244-0010 032-0100 250-0080 020-1570 256-0120 024-0020 258-0290 022-0630
244-0020 032-0110 250-0090 020-1580 256-0130 024-0025 258-0300 022-0640
244-0030 032-0120 250-0100 020-1590 256-0140 024-0030 258-0310 022-0650
244-0040 032-0130 250-0110 020-1600 256-0150 024-0035 258-0400 022-0300
244-0050 032-0140 252-00 I 0 020-0710 256-0160 024-0040 260-0010 022-0405
244-0100 032-0300 252-0020 020-0730 256-0200 024-0100 260-0020 022-0410
244-0110 032-0310 252-0030 020-0720 256-0210 024-0200 260-0030 022-0415
244-0120 032-0320 252-0040 020-0740 256-0300 024-0300 260-0040 022-0420
244-0130 032-0330 252-0050 020-0750 256-0310 024-0306 262-0010 034-0001
244-0140 032-0340 252-0060 020-0760 256-0320 024-0307 262-0020 034-0005
244-0150 032-0350 252-0070 020-0770 256-0330 024-0308 262-0030 034-0010
244-0160 037-0360 252-0080 020-0780 256-0340 024-0309 262-0040 034-0015
244-0170 032-0370 252-0090 020-0790 256-0350 024-0312 262-0050 034-0020
244-0180 032-0380 252-0100 . 020-0800 256-0360 024-0314 262-0100 034-0045
244-0200 032-0500 252-0110 020-0810 256-0370 024-0318 262-0110 034-0050
244-0210 032-0505 252-0120 020-0820 256-0380 024-0320 262-0120 034-0060
244-0220 032-0510 252-0130 020-0830 256-0390 024-0325 262-0130 034-0070
244-0220 032-5520 252-0140 020-0840 256-0400 024-0330 262-0200 034-0150 .
244-0230 032-5400 252-0150 '020-0850 256-0410 024-0332 262-0210 034-0155
27
Permit No.: 25-0001
Expiration Date: 06/01/04
. Page 28 of28
New Rule Old Rule
Number Number
262-0220 034-0160
262-0230 034-0165
262-0240 034-0170
262-0250 034-0175
262-0300 034-0200
262-0310 034-0205
262-0320 034-0210
262-0330 034-0215
264-0010 023-0022
264-0020 023-0025
264-0030 023-0030
264-0040 023-0035
264-0050 023-0040
264-0060 023-0042
264-0070 023-0043
264-0080 023-0045
264-01 00 023-0055
264-0110 023-0060
264-0120 023-0065
. 264-0130 023-0070
264-0140 023-0075
264-0150 023-0080
264-0160 023-0085
264-0170 023-0090
264-0180 023-0100
264-0190 023-0105
264-0200 023-0115
266-0010 026-0001
266-0020 026-0003
266-0030 026-0005
266-0040 026-0010
266-0050 026-0012
266-0060 026-0013
266-0070 026-0015
266-0080 026-0031
266-0090 026-0033
266-0100 026-0035
266-0110 026-0040
266-0120 026-0045
266-0130 026-0055
268-0030 028-1980
268-0040 028-1960
.
28
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Review Report/Permit No.: 25-0001
Application Number: 018556
Page 1 of18 .
OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY
OREGON TITLE V OPERATING PERMIT REVIEW REPORT
RECEIVED
APR 1 8 2001
Finley Buttes Landfill Company
P.O. Box 61726
Vancouver, WA 98666
PSEL SOURCE AMB COMPL SPEC REPORT EXCESS SIZE
CRED TEST COMS CEMS MON SCHED COND AI S I Q 1M R IN NSPS NSR PSD TVIA2'
X xlXI I X I X X X I
TABLE OF CONTENTS
LIST OF ABBREVIATIONS USED IN THIS REVIEW REPORT ...................................................................... 2
PERMITTE E ID ENTIFI CA TI ON ...... ...... ............:........ .................. ....... ................... ..... ..... ............. ....................... 3
FACILITY D ESCRIPTI ON .... ......... ............. ........... ............... ..................... ............ ....... .... ........... ........... ......... ....... 3
ALTERNATE OPERA TIN G SCENARIO .............................................................................................................. 3
EMISSIONS UNIT AND POLLUTION CONTROL DEVICE IDENTIFICATION .......................................... 3
.
EMISSION LIMITS AND STANDARDS ................................................................................................................ 5
PLANT SITE EMISSION LIMIT S ...... ..................................... ......... ................ ................. ........ ..... ..... ................... 7
HAZARD 0 U S AIR PO LL UT ANTS .......... .... ..... ...... ..... .............................. ............ ....... .......................................... 8
M 0 NITO RIN G REQ UIRE MENT S ...... ................................. ............................ ....... ....... .................. ..... ...... ........... 9
RE CORD }(E EPIN G RE Q UIREMENTS . ............... ....... ........... ............. ........ ....... ...... ........ ......................... .......... 1 0
REPO R TIN G RE Q UIREMENTS .. .......... ............... ..... ............. ............ ....... .... ........ .......... ........ ... ....... .............. .... 1 0
GENERAL BACKGROUND INFORMA TION .................................................................................................... 10
CO I\1PLIAN CE HISTO R Y .......... ................ ........ ................ .................................. .................................... ............. 1 0
SOURCE TEST RES UL TS .. ........... ......... .............................. .............. ....... ................ ....... .................... ................. 1 0
PUB LI C N OTI CE .............................. .............. ............ ........... ...... ........................... ....... ................. ...... ..... ............. 11
APPEND IX A EMISSI ON S D ET AIL SHEE T ................................................................................................... 12
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Review ReportJPerrnit No.: 25-0001
Application Number: 018556
Page 2 of 18
LIST OF ABBREVIA nONS USED IN THIS REVIEW REPORT
AMB Ambient NA Not applicable
AQMA Air quality management area NESHAP National emission standard for hazardous
ASTM American Society of Testing and air pollutants
Materials NMOC Non-Methane Organic Compowi-ds
CEMS Continuous emissions monitoring system NOx Oxides of nitrogen
CFR Code of federal regulations NSPS New source performance standard
CMS Continuous monitoring system NSR New source review
CO Carbon monoxide O2 Oxygen
CO2 Carbon dioxide OAR Oregon Administrative Rules
COMPL Compliance ORS Oregon Revised Statutes
COMS Continuous opacity monitoring system O&M Operation and maintenance
COND Condition Pb Lead
CRED Credit PCD Pollution Control Device
DEQ Oregon Department of Environmental PM Particulate matter
Quality PM 10 Particulate matter less than 10 microns in
dscf dry standard cubic feet size
EF Emission factor ppm Parts per million
EPA United State Environmental Protection ppmv Parts per million by volume
. Agency PSD Prevention of significant deterioration
ED Emissions unit PSEL Plant Site Emission Limit
FCAA Federal Clean Air Act SCHED Schedule
gr/dscf grains per dry standard cubic feet SPEC Special
HAP Hazardous air pollutant S02 Sulfur dioxide
Hp Horsepower ST Source test
ill Identification code VE Visible emissions
I&M Inspection and maintenance VMT Vehicle mile traveled
LFG Landfill gas VOC Volatile organic compound
Mg Megagrams yr Year
MON Monitoring
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Review ReportJPermit No.: 25-0001
Application Number: 018556
Page 3 of 18
.
PERMITTEE IDENTIFICATION
1. Finley Buttes Landfill Company owns and operates the Finley Buttes Regional Landfill located at 73221
Bombing Range Road near Boardman.
FACILITY DESCRIPTION
2. Finley Buttes Regional Landfill is a municipal solid waste landfill which began accepting waste in 1990.
The landfill accepted refuse in 1998 at an average dally rate of 1,350 tons/day. The rate of waste
acceptance is expected to increase to an estimated 1,625 tons/day by 2004. The reported maximum design
capacity of the landfill is approximately 74,399,403 cubic meters. The facility is limited to 510 acres
maximum refuse disposal area. Final closure of the entire facility is projected for the year 2046. Waste
acceptance rates cannot be accurately forecasted, are highly seasonal, and can vary widely from month to
month.
3. Refuse is shipped from various, distant transfer stations by truck. The waste is unloaded, compacted and
landfilled in accordance with good landfill practices. Emissions include fugitives from vehicle traffic,
waste handling, and moving dirt as part of landfill operations. As the waste decomposes, landfill gases are
emitted. The landfill gas (LFG) emissions can contain methane, carbon dioxide, and more than 100
different non-methane organic compounds. Refuse placed in the landfill can take up to two years to reach
its peak emission potential and the emission rate is highly variable.
ALTERNATE OPERATING SCENARIO
.
4. Under the emission guideline (40 CFR Subpart Cc), Finley Buttes is required to submit a design plan for a
system to collect and control landfill gases within one year of calculating Non-Methane Organic
Compound (NMOC) emissions in excess of 50 Mg/yr (55 tons/yr). The system must be installed within 18
months of submittal of the design plan. Finley Buttes currently estimates the 50 Mglyr threshold will be
exceeded in 2001 resulting in installation of a control system by 2003. Since that date occurs prior to the
expiration of this permit, an alternate operating scenario is included in the permit for a landfill gas
collection and control system.
EMISSIONS UNIT AND POLLUTION CONTROL DEVICE IDENTIFICATION
5. Provided below is a description of each of the emissions unit at this facility:
Landfill (LFG-O 1) The landfill is divided into separate areas called cells. Prior to placement of waste, the cell is
prepared by installing a liner, leachate collection system, and low permeability soils as required by solid waste
regulations. As waste is brought in, it is placed on the prepared cell, compacted and covered with dirt at the end of
the day. Only that portion of the cell in which waste is actively being placed is left uncovered. When the waste in a
cell reaches a given height an intermediate cover is placed on the cell and the adjacent cells are developed. This is
done to maintain the stability of the slope along the edge of the cell. When the adjacent cells have been developed
waste is again placed on the original cell. This process is repeated until the cell reaches its fmal height and a final
cover is applied. A period of several years may pass between the time an intermediate cover is applied to a cell and
the time the adjacent cells have been developed sufficiently to apply additional waste. As a resuJt, a typical cross
section of the landfill may contain 8 year-old waste on the bottom, topped by 4 year-old waste, topped by fresh
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Review ReportlPezmit No.: 25-0001
Application Number: 018556
Page 4 of 18
waste. The landfill is pezmitted to accept asbestos contaminated waste. The asbestos contaminated waste is placed
only in designated areas of the landfill. The landfill also accepts petroleum contaminated soil.
Emissions of landfill gas result from the anaerobic decomposition of waste. The amount of gas generated depends
on many factors including the quantity, composition, and age of the waste as well as landfill conditions
(precipitation, compaction practices, etc.). Due to the heterogeneous nature of the waste and the difference in the
age of the waste, the amount and composition ofLFG produced can vary from location to location within the
landfill.
New Source Performance Standards (NSPS) establish emission limits for new (subpart WWW) and existing
(emission guidelines, Subpart Cc) sources. Finley Buttes commenced construction before 5/30/91 and therefore is
an existing source and is required to install a system to collect and control the emissions of landfill gas within 30
months of the date when the first annual non-methane organic compound (NMOC) emission rate equals or exceeds
50 megagrams (Mg) per year (55 tons/year). Finley Buttes estimates this level may be exceeded in 2001. Current
plans call for installation of a flare to control the landfill gas.
Internal Combustion Engines (ENG-O I) This emission unit consists of several internal combustion engines ranging
from 1/3 to 115 horsepower. Emissions ofparticulates/PM,o, S02, and VOC from all engines are each less than 1
ton per year and are included in the aggregate insignificant emission unit for these pollutants. The engines are
detailed below.
Description Fuel Rating (hp) Maximum hr/yr
Transfer Trailer Tipper Diesel 115 3007
Generator/Light Plant Diesel 30 723
Power Washer Gasoline 11 120
Heaters Diesel 1/3 39
Air Compressor Diesel 40 120
Storage Piles (STR-O 1) In preparing the cells for placement of waste, dirt is removed and stod.l'iled for later use in
covering the waste. Three separate storage piles are maintained for cover soil (3 acres), liner soil (7 acres), and
drain rock (0.7 acres). Wind erosion of the stockpiles can create emissions of fugitive dust. Water is applied as
required to suppress fugitive dust.
Material Handling (MH-O 1) Soil is stored in piles during excavation of cells within the permitted landfill area.
Some of this material is recovered daily to cover waste received during a given day and as liner material in new cell
construction. The recovery and deposition of this soil is affected by scrapers. The use of these scrapers creates
fugitive dust emissions.
Paved Roads (pRD-Ol) The main entrance road of the facility is paved. Vehicular traffic on this road kicks up
emissions of fugitive dust. Water is applied to suppress fugitive dust.
Unpaved Roads (upR-Ol) Many areas of the facility carry vehicular traffic but are not paved. Fugitive dust is
produced from traffic along these roads. Water is applied to suppress fugitive dust.
Leachate Management (LM-Ol) Rain and other fluids flowing through the landfilled waste are collected in a liner
system and transferred/pumped to a leachate storage and evaporation pond. The leachate may contain trace
amounts of various organic compounds which are emitted as fugitives. The VOC emissions from this unit are
considered aggregate insignificant.
Review Report!Permit No.: 25-0001
Application Number: 018556
Page 5 of 18
Categorically insignificant activities at the facility include the following:
. Constituents of a chemical mixture present at less than 1 % by weight of any chemical or compound regulated
under Divisions 200 through 268 of OAR chapter 340, or less than 0.1 % by weight of any carcinogen listed in
the u.s. Department of Health and Human Service's Annual Report on Carcinogens when usage of the
chemical mixture is less than 100,000 pounds/year
. Evaporative and tail pipe emissions from on-site motor vehicle operation
. Distillate oil, kerosene, and gasoline burning equipment rated at less than or equal to 2.0 million Btu/hr.
. Janitorial activities
. Personal care actiVIties
. Groundskeeping activities including, but not limited to building painting and road and parking lot maintenance
. Instrument calibration
. Maintenance and repair shop
. Automotive repair shops and storage garages
. Air cooling or ventilating equipment not designed to remove air contaminants generated by or released from
associated equipment
. Temporary construction activities
. Accidental fires
. Air vents from air compressors
. Electrical charging stations
. Routine maintenance, repair, and replacement such as anticipated activities most often associated with and
performed during regularly scheduled equipment outages to maintain a plant and its equipment in good
operating condition, including but not limited to steam cleaning, abrasive use, and woodworking
. Electric motors
. Storage tanks, reservoirs, transfer and lubricating equipment used for ASTM grade distillate or residual fuels,
lubricants, and hydraulic fluids
. On-site storage tanks not subject to any New Source Performance Standards (NSPS), including underground
storage tanks (UST), storing gasoline or diesel used exclusively for fueling of the facility's fleet of vehicles.
. Pressurized tanks containing gaseous compounds
. Stonn water settling basins
. Fire suppression and training
. Hazardous air pollutant emissions of fugitive dust from paved and unpaved roads except for those sources that
have processes or activities that contribute to the deposition and entrainment of hazardous air pollutants from
surface soils
. Health, safety, and emergency response activities
. Emergency generators and pumps used only during loss of primary equipment or utility service
EMISSION LIMITS AND STANDARDS
6. The diesel oil burned at the facility is limited to a sulfur content of 0.5 percent by weight or less. [OAR
340-228-0110]
6.a. Testing Requirements: The permittee is required to obtain a certificate from the supplier stating
that the fuel meets the specifications. If they cannot get a certificate, then the permittee would
have to analyze a sample of the fuel to show that it meets the specifications.
6.b.
Monitoring requirements: The permittee is required to maintain records of the sulfur content of
the fuel used at the facility.
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Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 6 of 18
7.
Since the facility was constructed after 1970, the applicable requirement is OAR 340-208-0110(2) (20%
opacity). The grain loading standards of OAR 340-226-0210 do not apply since most particulate emissions
are fugitive, which is exempt from this standard [OAR 340-226-0210(2)]. Those emissions which are not
fugitive (ENG-01) are exempt from OAR 340-228-0210 since internal combustion engines are excluded
from the defmition of fuel burning equipment. [OAR 340-228-0020(4)]
7.a. Testing Requrrements: A modified EPA Method 9 is used to measure opacity.
7.b. Monitoring Requirements:. The permittee will monitor fugitive emissions monthly using 'EPA
method 22. If visible emissions are observed during any method 22 test, the permittee must either
conduct an EP A method 9 test within one hour or take steps to reduce fugitives, such as applying
water to the source of fugitive dust.
8. This facility is subject to subpart Cc of the federal New Source Performance Standards (NSPS - 40 CFR
Part 60).
8.a.
On June 27,1996 the facility submitted an Initial Design Capacity Report as required in 40 CFR
60.757(a) (which is referenced in 40 CFR 60.35c). This report was amended on December 20,
1996. The maximum design capacity was reported as 74,399,403 cubic meters (m3) which is
greater than the 2,500,000 cubic meters (m3) level which triggers the emission guideline. Using
the Tier 1 method contained in 40 CFR 60.754, the facility determined the Non-Methane Organic
Compound (NMOC) emissions to be greater than 50 Mglyear, which would trigger the need to
install a collection and control system.
8.b.
On January 8, 1998 the facility submitted information to support Tier 2 calculations in accordance
with 40 CFR 60.754(a)(3). On-site sampling was conducted July 1997 which measured an
average NMOC concentration of926 ppm (compared to 4,000 ppm value used in Tier 1
calculations). At this concentration the NMOC emissions do not currently exceed 50 Mglyear, but
emissions are projected to exceed 50 Mglyear in the year 2001. This defers the need to install a
collection and control system at this time.
8.c.
Finley Buttes plans to perform a second Tier 2 analysis by 2001. If the NMOC concentration is
less than 926 ppm Finley Buttes may be able to further defer installation of a LFG collection and
control system. If the NMOC concentration is 926 ppm or greater, a plan for a collection and
control system must be submitted within 1 year and the system must be installed with 18 months
of submitting the plans for the collection and control system.
8.d.
Testing Requirements: Emissions ofNNIOC are estimated using the equation in 40 CFR
60.754(a)(1). Since the facility has already llsed the Tier 2 procedure to calculate emissions the
Tier 1 procedure is no longer applicable. In Tier 2 the NMOC concentration of the landfill gas is
measured using EPA method 25C or 18 and the procedures of 40 CFR 60.754(a)(3) and used in
the NMOC equation. The permittee has the option of using a Tier 3 NMOC calculation. In Tier 3
the site-specific methane generation rate constant is determined using the procedures of EP A
Method 2E and plugged into the ~OC equation.
After installation of the collection and control system the permittee continues to estimate the
NMOC emission rate according to 40 CFR 60.754(b) for purposes of determining when the
system can be removed. This equation requires the measurement of the landfill gas flow rate at
the header to the control device using see,tion 4 of EP A Method 2E or other approved method. In
addition, the average NMOC concentration at the header to the control device is measured using
the procedures ofEPA Method 25C or 18 or another approved method.
Review Report/Permit No.: 25-0001
Application Number: 018556
Page 7 of 18
.
The control system is required to reduce NMOC emission by 98 weight percent or reduce the
outlet NMOC concentration to less than 20 ppmv, dry basis as hexane at 3% oxygen.
8.e. Monitoring Requiremen~: The permittee is required to calculate and report on the NMOC
emissions annually unless five consecutive annual reports estimate NMOC emissions to be less
than 50 Mglyr, in which case the permittee may elect to submit an estimate of the NMOC
emission rate for the following 5 years in lieu of the annual report. In addition, ifNMOC
emissions exceed 50 Mglyr a collection and control system is installed and annual NMOC
emission reports are no longer required.
Once the collection and control system is installed, the permittee is required to monitor the
temperature, pressure, and oxygen or nitrogen content of the collected landfill gas on a monthly
basis. On the flare, the permittee must install a device to indicate the continuous presence of a
flame, and a device to measure the flow to or bypass of the flare. In addition, the permittee must
monitor the surface concentration of methane at the landfill to ensure the collection system is
operating effectively.
9. Since asbestos is disposed of at the landfill, the requirements of OAR 340-248-0280 and 40 CFR part 61
subpart M apply. These requirements deal mostly with proper handling and disposal, and associated
recordkeeping.
PLANT SITE EMISSION LIMITS
.
10. Plant Site EmiSSIOn Limit discussion:
Baseline Netting Baseline Previous Baseline Scenario Alternate Scenario
Emission Rate Previous Proposed PSEL Proposed Increase Proposed Increase
Pollutant (tons/yr ) (tons/yr) (tons/yr) (tons/yr) (ton/yr) (tons/yr) (tons/yr) (tons/yr)
PMlPM10 0 0 0 0 43 43 44 44
CO 0 0 0 0 7.7 7.7 69 69
NO. 0 0 0 0 6.8 6.8 10 10
S02 0 0 0 0 1.0 1.0 1.0 1.0
VOC 0 0 0 0 20 20 5.8 5.8
10.a. The baseline emission rate and netting baseline is zero for all pollutants since the facility did not
operate during the baseline period of 1977 or 1978. Since the facility has not undergone a New
Source Review (NSR) or Prevention of Significant Deterioration (PSD) the baseline has not been
adjusted and the netting baseline is, therefore, also zero for all pollutants.
10.b. The previous PSEL for this facility is zero since the facility does not have a current air permit.
1O.c. As described in condition 4 of this review report the landfill is permitted to operate under two
scenarios. The baseline scenario involves no landfill gas collection system or flare. The
alternate scenario includes the landfill gas collection and control system (assumed to be a flare),
along with the associated changes in emissions. For both scenarios landfill gas generation is
based on projected emissions at the end of the permit term (2004).
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Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 8 of 18
11.
Components of the PSEL
Assigned PSEL
Baseline Scenario Alternate Scenario Unassigned PSEL Credits
Pollutant (tons/yr) (lb/day) (tons/yr) (lb/day) (tons/yr) (tons/yr)
PMlPMIO 43 340 44 348 0 0
CO 7.7 174 69 510 0 0
NOx 6.8 141 10 160 0 0
S02 1.0 -- 1.0 -.. 0 0
VOC 20 102 5.8 26 0 0
SIGNIFICANT EMISSION RATE
12. The proposed PSEL increases over baseline (maximum increase of baseline and alternative operating
scenario) for PM and PMIO are greater than the Significant Emission Rate (SER) as defmed in OAR 340-
200-0020 and are shown below. The maximum PSEL increase over baseline for all other criteria pollutants
IS less than the Significant Emission Rate and no further analysis is requued for those pollutants.
Increase due to utilIzing Increase due to physical
Requested increase over capacity that existed in the changes or changes in the
Pollutant SER previous netting baseline baseline period method of operation
PMlPMIO 25/15 44 0 44
CO 100 69 0 69
NOx 40 10 0 10
S02 40 1.0 0 1.0
VOC 40 20 0 20
13. Any emissions increase greater than the SER is defmed as a major modification. (OAR 340-200-020(62)]
Therefore, there has been a major modification for PM and PM10 emissions. New major modifications
must meet the Prevention of Significant Deterioration (PSD) requirements of OAR 340-224-0070 for the
pollutant which triggered the major modification designation.
In 1987 and 1988 as part of the initial Solid Waste permit an air quality analysis was performed. This
analysis used methodologies that were current at the time. Screening meteorology from Portland General
Electric's (pGE) coal-fired power plant near Boardman was used. The PSD increment analysis included
the impact of the PGE coal-fued power plant. The results were reviewed by the Department at the time.
The Department considers these results still valid and does not require further analysis at this time.
HAZARDOUS AIR POLLUTANTS
14.
According to the emissions estimations provided by Finley Buttes Landfill in the Title V permit
application, this facility is not a major source of hazardous air pollutants (HAP) emissions. The total
estimated HAP emissions could be as much as 6.4 tons/yr primarily as toluene (2.2 tons/yr).
Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 9 of 18
TOXIC AND FLAMMABLE SUBSTANCE USAGE
15. Finley Buttes reported insignificant amounts (~l 000 lb/yr) of ethylene glycol, dichlorodifluoromethane,
and friable asbestos.
STRATOSPHERIC OZONE DEPLETING SUBSTANCES
16. Finley Buttes Landfill sometimes receives appliances for disposal that have dichlorodifluoromethane,
which is a Class I ozone depleting substance. Therefore, 40 CFR part 82 - applies to the disposal of -
appliances containing ozone depleting substances. In addition, other equipment such as air conditioning
and fire extinguishers or other equipment containing Class I or Class II substances must be serviced by
certified repairmen to ensure that the substances are recycled or destroyed appropriately.
17. A Maximum Achievable Control Technology (MACT) standard for Municipal Landfills was proposed on
11/7/00 (65 FR 66672) and is tentatively scheduled to be [mal on 9/01 (Subpart AAAA).
MONITORING REQUIREMENTS
18.
40 CFR 70.6(a)(3)(i) requires that all monitoring and analysis procedures or test methods required under
applicable requirements be contained in Title V permits. In addition, where the applicable requirement
does not require periodic testing or monitoring, periodic monitoring must be prescribed that is sufficient to
yield reliable data from the relevant time period that is representative of the source's compliance with the
permit. The requirement to include in a permit testing, monitoring, recordkeeping, reporting, and
compliance certification sufficient to assure compliance does not require the permit to impose the same
level of rigor with respect to all emissions units and applicable requirement situations. It does not require
extensive testing or monitoring to assure compliance with the applicable requirements for emissions units
that do not have significant potential to violate emission limitations or other requirements under normal
operating conditions. Where compliance with the underlying applicable requirement for an insignificant
emission unit is not threatened by a lack of a regular program of monitoring and where periodic testing or
monitoring is not otherwise required by the applicable requirement, then in this instance, the status quo
(i.e., no monitoring) will meet section 70.6(a)(3)(i).
18.a. Insignificant emissions units include both categorically insignificant activities and aggregate
insignificant emissions. The Department is not requiring monitoring for the categorically
insignificant activities that the permittee identified in the application because these were identified
by the Department durmg the Title V program development and included in the rules as activities
that do not have any potential for causing significant environmental impacts. The activities
generate trIvial emissions (less than 1 ton per year) and there are no control devices.
1S.b. The Department is also not requiring monitoring for the aggregate insignificant emissions, which
are those activities that are not identified in the rule as categorically insignificant but the combined
emissions are less than one ton per year. In most cases, these are simple uncontrolled activities or
pieces of equipment that do not have any potential to cause a significant impact on the
environment. For this facilit), the aggregate insignificant emissions include fugitive VOC
emissions from the leachate management system (LM-Ol) and particulate/PMIO, S02, and VOC
emissions from the internal combustion engines (ENG-Ol).
19.
Compliance Assurance Monitoring (CAM) is not required at this source since it is subject to an emission
limitation proposed after 11/15/90 under section 111 of the Clean Air Act. However, the permit does
include specific periodic monitoring requirements for emission units other than insignificant activities. In
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Review Report/Permit No.: 25-0001
Application Number: 018556
Page 10 of 18
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most cases, the monitoring is not a direct measure of compliance because the emissions are either not
measured or they are measured with methods or procedures other than reference test methods. Even
though the monitoring consists of procedures other than reference test methods, the monitoring has been
developed such that it should be capable of providing a reasonable assurance that the emission units are in
compliance with the underlying emission limits and standards and the information may be used for
enforcement purposes pursuant to the credible evidence rules promulgated by the EPA.
RECORDKEEPING REQUIREMENTS
20. The permit includes requirements for maintaining records of all monitoring and testing information for a
minimum period of 5 years. These records include test results, parameter monitoring data, visible
emissions data, the date and time of measurements; and, all corrective actions, including the date, time, and
outcome.
REPORTING REQUIREMENTS
21. The permit includes requirements for submitting semi-annual and annual monitoring reports that include
compliance certifications and excess emissions reports. The annual monitoring report will also include
operation data, emissions data, excess emission log, and an emission fees report. The permittee is required
to immediately notify the Department of any excess emissions and keep records of the excess emissions.
GENERAL BACKGROUND INFORMATION
22. The proposed permit is a new permit for an existing facility. Passage of the New Source Performance
Standards and Emission Guidance require this facility to obtain a Title V permit.
23. Finley Buttes has a current solid waste permit (#394) from the Department.
24. This source is located in an area that is in attainment for all pollutants. This source is not located within
100 kilometers (62 miles) of a Class I air quality protection area.
COl\1PLLW'CE HISTORY
25. The facility has not been inspected for air quality compliance, but regular inspections will be performed
once the permit is issued.
SOURCE TEST RESULTS
26. As part of a Tier 2 calculation, Finley Buttes conducted testing to determine the average NMMOC
concentration. The sampling was conducted July 1997 and measured an average NMOC concentration of
926 ppm.
Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 11 of18 .
PUBLIC NOTICE
27. This permit was placed on public notice from February 23 to March 29, 2001. No comments were
received in response to the public notice and no hearing was requested. Therefore, a copy of the proposed
permit was sent to EP A for a 5 day expedited review period. EP A may agree to an expedited review of 5
days if there were no substantive or adverse comments during the comment period. In any event, the
public will have 105 days (45 day EPA review period plus 60 days) from the date the proposed per.mit is
sent to EPA to appeal the permit with EPA. The permit will be issued following EPA's review. -
DAW:TJJ
04113/01
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Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 12 ofl8
APPENDIX A EMISSIONS DETAIL SHEET
Review ReportlPennit No.: 25-0001
Application Number: 018556
Page 13 of 18
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Finley Buttes Landfill
Baseline Scenario Plant Site Emissions Detail Sheet (2004)
ParticulatelPMIO
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day ton/yr
ENG-OII
STR-O I Stockpiles2 -
Cover Soil (Active) 3.0 acres 6.3 Ib/acre-day EP A FIRE Database 18.9
780 acre-day/yr 6.3 Ib/acre-day EP A FIRE Database 2.5
Cover Soil (Inactive) 315 acre-day/yr 1. 7 Ib/acre-day EP A FIRE Database 0.3
Liner Soil (Active) 7.0 acres 6.3 Ib/acre-day EP A FIRE Database 44.1
525 acre-day/yr 6.3 Ib/acre-day EP A FIRE Database 1.7
Liner Soil (Inactive) 2,030 acre-day/yr 1.7 Ib/acre-day EP A FIRE Database 1.7
Drain Rock (Active) 0.7 acres 6.3 Ib/acre-day EP A FIRE Database 4.4
52.5 acre-day/yr 6.3 Ib/acre-day EP A FIRE Database 0.2
Drain Rock (Inactive) 203 acre-day/yr 1. 7 Ib/acre-day EP A FIRE Database 0.2
MIl-01 1,580 tons/day 1.94E-03 Ibltons AP-42/Source Est.3 3.1
Material Handling 268,750 tons/yr 1.94E-03 Ibltons AP-42/Source Ese 0.3
PRD-O 1 153.0 VMT/day 0.377 IbNMT AP-42/Source Est.4 57.7
Paved Roads 39,784 VMT/yr 0.377 IbNMT AP-42/Source Est.4 7.5
UPR-OI 152.5 VMT/day 1.3 9 IbNMT AP-425 212
Unpaved Roads 39,660 VMT/yr 1.391bNMT AP-425 27.6
AI Aggregate Insignificant 1.0
Total Particulate/PMJo Emissions 340 43
.
S02
-
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day ton/yr
ENG-OII
AI Aggregate Insignificant 1.0
Total S02 Emissions - 1.0
NOx
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day ton/yr
ENG-016
Diesel Engines' 4,447 hp-hr/day 3.IOE-02Ib/hp-hr AP-42 (Table 3.3-1) 137.9
372,308 hp-hr/yr 3.10E-02Ib/hp-hr AP-42 (Table 3.3-1) 5.8
Gas Engines 264 hp-hr/day 1.l0E-02 Ib/hp-hr AP-42 (Table 3.3-1) 2.9
1,320 hp-hr/yr I.IOE-02 lb/hp-hr AP-42 (Table 3.3-1) 0.01
AI Aggregate Insignificant 1.0
Total NOx Emissions 140.8 6.8
.
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Review ReportJPermit No.: 25-000 I
Application Number: 018556
Page 14 of 18
co
-
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day ton/yr
LFG-Ol Landfill Gas7 365 day/year EP A model 28.5
EP A model 5.2
ENG-OI6
Diesel Engines 4,447 hp-hr/day 6.68E-03 Ib/hp-hr AP-42 (Table 3.3-1) 29.7
372,308 hp-hr/yr 6.68E-03 Ib/hp-hr AP-42 (Table 3.3-1) - 1.2
Gas Engines 264 hp-hr/day 4.39E-Ol Ib/hp-hr AP-42 (Table 3.3-1) 115.9
1,320 hp-hr/yr 4.39E-Ol Ib/hp-hr AP-42 (Table 3.3-1) 0.3
AI Aggregate Insignificant 1.0
Total CO Emissions 174 7.7
voc
-
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day tonlyr
LFG-Ol Landfill Gas7 365 day/year EP A model 102.5
EPA model 18.7
ENG-Ol1
AI Aggregate Insignificant 1.0
Total VOC Emissions 102 19.7
Footnotes
I Engine emissions for particulate/PMIO, S02, and VOC are insignificant (004, 004, and 0.5 respectively) and are
considered part of the aggregate insignificant emission unit for those pollutants.
2 Assumes cover soil pile active 260 day/yr, liner soil pile active 75 day/yr, drain rock pile active 75 day/yr.
Maximum short term emissions occur in active piles.
3 From AP-42 Section 13.2.4. (assumes 13 mph mean wind speed, 2% moisture, k=0.35, 50% control for water
spray). Daily soil deposition rate 812.5 ton/day, 260 day/yr; liner placement 767 ton/day, 75 day/yr.
4 From AP-42 Section 13.2.1 (assumes 704 glm2 silt loading and 22.2 tons avg vehicle weight. 50% Control.)
5 From AP-42 Section 13.2.2 (assumes 6.4 g/m2 silt content, 27.85 tons avg vehicle weight, 0.2% moisture, 100
days with at least 0.01 in. of precipitation, and 50% control due to watering.)
6 Conservatively assumes all engines operating simultaneously 24 hr/day.
7 Landfill gas emissions based on EPA computer model using estimated waste in place by 2004. Average daily
emissions based on annual emissions and 365 days/yr. VOC emissions are assumed to be 39% by weight of
total NMOC emissions in 2004.
Review ReportlPermit No.: 25-0001
ApplicatlOn Number: 018556
Page 15 of 18
.
Alternative Operating Scenario Plant Site Emissions Detail Sheet (2004)
ParticulatelPMIO
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day ton/yr
LFG-OI Landfill Gas 0.476 MMcfi'day 17 Ib/MMcf AP-42 (Table 2.4-5) 8.1
Flares 173.9 MMcfi'yr 17 Ib/MMcf AP-42 (Table 2.4-5) 1.5
ENG-01' - --
-
STR-01 Stockpiles2
Cover Soil (Active) 3.0 acres 6.3 Ib/acre-day EP A FIRE Database 18.9
780 acre-day/yr 6.3 Ib/acre-day EP A FIRE Database 2.5
Cover Soil (Inactive) 315 acre-day/yr 1.7 Ib/acre-day EP A FIRE Database OJ
Liner Soil (Active) 7.0 acres 6.3 Ib/acre-day EP A FIRE Database 44.1
525 acre-day/yr 6.3 Ib/acre-day EP A FIRE Database 1.7
Liner Soil (Inactive) 2,030 acre-day/yr 1.7 lb/acre-day EP A FIRE Database 1.7
Drain Rock (Active) 0.7 acres 6.3 Ib/acre-day EP A FIRE Database 4.4
52.5 acre-day/yr 6.3 lb/acre-day EP A FIRE Database 0.2
Drain Rock (Inactive) 203 acre-day/yr 1. 7 Ib/acre-day EP A FIRE Database 0.2
MH-01 1,580 tons/day 1.94E-03 Ibltons AP-42/Source Est.3 3.1
Material Handling 268,750 tons/yr 1.94E-03 Ibltons AP-42/Source Est.3 OJ
PRD-OI 153.0 VMT/day 0.377 IbNMT AP-42/Source Est.4 57.7
Paved Roads 39,784 VMT/yr 0.377 Ib/YMT AP-42/Source Est.4 7.5
UPR-OI 152.5 VMT/day 1.391b/YMT AP-42 5 212
Unpaved Roads 39,660 VMT/yr 1.3 9 lb/YMT AP-42 5 27.6
AI Aggregate Insignificant 1.0
Total PartlculatelPMIO Emissions 348 44
.
S02
-
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day ton/yr
ENG-OI1
AI Aggregate Insignificant 1.0
Total SOl Emissions - 1.0
NOx
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference lb/day ton/yr
LFG-OI Landfill Gas 0.476 MMcflday 40 Ib/MMcf AP-42 (Table 2.4-5) 19.0
FlareS J 73.9 MMcflyr 40 1b/MMcf AP-42 (Table 2.4-5) 3.5
ENG-OI b Diesel Engines 4,447 hp-hr/day 3.lOE-02Iblhp-hr AP-42 (Table 3.3-1) 137.9
372,308 hp-hr/yr 3.l0E-02Iblhp-hr AP-42 (Table 3.3-1) 5.8
Gas Engines 264 hp-hr/day I.I0E-02 Iblhp-hr AP-42 (Table 3.3-1) 2.9
1,320 hp-hr/yr 1.10E-02 Iblhp-hr AP-42 (Table 3.3-1) 0.01
AI Aggregate Insignificant 1.0
Total NOx Emissions 159.8 10.3
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Review Report/PennitNo.: 25-0001
Application Number: 018556
Page 16 of 18
co
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference Ib/day tonlyr
LFG-Ol Landfill Gas 7 365 day/year 25% of EP A model 7.1
25% ofEPA model 1.3
Flares 0.476 MMcfi'day 7501b/MMcf AP-42 (Table 2.4-5) 357.0
173.9 MMcf/yr 750 Ib/MMcf AP-42 (Table 2.4-5) - 65.2
ENG-OI6
Diesel Engines 4,447 hp-hr/day 6.68E-03 lb/hp-hr AP-42 (Table 3.3-1) 29.7
372,308 hp-hr/yr 6.68E-03 Ib/hp-hr AP-42 (Table 3.3-1) 1.2
Gas Engines 264 hp-hr/day 4.39E-Ol lb/hp-hr AP-42 (Table 3.3-1) 115.9
1,320 hp-hr/yr 4.39E-Ollb/hp-hr AP-42 (Table 3.3-1) 0.3
AI Aggregate Insignificant 1.0
Total CO Emissions 510 69.0
voc
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference lb/day tonlyr
LFG-O 1 Landfill Gas7 365 day/year 25% of EP A model 25.8
25% of EP A model 4.7
FlareS 365 day/year AP-42 (Table 2.4-5) 0.0003
AP-42 (Table 2.4-5) 0.1
ENG-Ol!
AI Aggregate Insignificant 1.0
Total VOC Emissions 26 5.8
Footnotes
1 Engine emissions for particulate/PMIO, S02, and VOC are insignificant (0.4,0.4, and 0.5 respectively) and are
considered part of the aggregate insignificant emission unit for those pollutants.
2 Assumes cover soil pile active 260 day/yr, liner soil pile active 75 day/yr, drain rock pile active 75 day/yr.
Maximum short term emissions occur in active piles.
3 From AP-42 Section 13.2.4. (assumes 13 mph mean wind speed, 2% moisture, k=0.35, 50% control for water
spray). Daily soil deposition rate 812.5 ton/day, 260 day/yr; liner placement 767 ton/day, 75 day/yr.
4 From AP-42 Section 13.2.1 (assumes 7.4 glm2 silt loading and 22.2 tons avg vehicle weight. 50% Control.)
5 From AP-42 Section 13.2.2 (assumes 6.4 glm2 silt content, 27.85 tons avg vehicle weight, 0.2% moisture, 100
days with at least 0.01 in. of precipitation, and 50% control due to watering.)
6 Conservatively assumes all engines operating simultaneously 24 hr/day.
7 Landfill gas ,emissions based on EP A computer model using estimated waste in place by 2004. Average daily
emissions based on annual emissions and 365 days/yr. VOC emissions are assumed to be 39% by weight of
total NMOC emissions in 2004.
8 Assumes 75% collection efficiency ofLFG
Molecular Weight Concentration IEmissions
Pollutant (glmol) (ppmvY (tonlyr)2
1,1,1- Trichloroethane 133.41 0.48 0.039
1,1,2,2,- Tetrachloroethane 167.85 1.11 0.112
1,1- Dichloroethane 98.97 2.35 0.140
1,1- Dichloroethene 96.94 0.2 0.012
1,2-Dichloroethane 98.96 0.41 0.024
1,2- Dichloropropane 112.99 0.18 0.012
Acrylonitrile 53.06 6.33 0.202
Benzene 78.11 1.91 0.090
Carbon Disulfide 76.13 0.58 0.027
Carbon Tetrachloride 153.84 0.004 3.70E-04
Carbonyl Sulfide 60.07 0.49 0.018
Chlorobenzene 112.56 0.25 0.017
Chloroethane 64.52 1.25 0.049
Chloroform 119.39 0.03 0.002
Dichlorobenzene 147 0.21 0.019
Dichloromethane 84.94 14.3 0.731
Ethylbenzene 106.16 4.61 0.294
Hexane 86.18 6.57 0.341
Mercury 200.61 2.92E-04 3.52E-05
Methyl Ethyl Ketone 72.11 7.09 0.308
Methyl Isobutyl Ketone 100.16 1.87 0.113
Perchloroethylene 165.83 3.73 0.372
Toluene 92.13 39.3 2.178
Trichloroethylene 131.4 2.82 0.223
Vinyl Chloride 62.5 7.34 0.276
Xylenes 106.16 12.1 0.773
Total HAPs 6.368
Hazardous Air Pollutants (2004)
Landfill Gas Emissions
(1) Concentrations taken from AP-42 (11/98) Table 2.4-1
(2) Based on estimated LFG flow of 882 scfm (4.64E08 scfi'yr) in 2004.
Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 17 of 18
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Review ReportlPermit No.: 25-0001
Application Number: 018556
Page 18 of 18
Hazardous Air Pollutants (2004)
ENG-Ol
Emission Factor Emissions
Emission Point Operating Parameters Rate Reference lb/yr
Acetaldehyde 372,308 hp-hr/yr diesel 5.37E-06 Ib/hp-hr AP-42 (Table 3.3-2) 1.00E-03
1,320 hp-hr/yr gas 5.37E-06 lb/hp-hr AP-42 (Table 3.3-2) 3.54E-06
Acrolein 372,308 hp-hr/yr diesel 6.48E-07 lb/hp-hr AP-42 (Table 3.3-2} 1.21E-04
1,320 hp-hr/yr gas 6.48E-07 Ib/hP-hr AP-42 (Table 3.3-2) 4.28E-07
Benzene 372,308 hp-hr/yr diesel 6.53E-06 Ib/hp-hr AP-42 (Table 3.3-2) 1.22E-03
1,320 hp-hr/yr gas 6.53E-06 Ib/hp-hr AP-42 (Table 3.3-2) 4.31E-06
1,3 Butadiene 372,308 hp-hr/yr diesel 2.74E-07 lb/hp-hr AP-42 (Table 3.3-2) 5.lOE-05
1,320 hp-hr/yr gas 2.74E-07 Ib/hp-hr AP-42 (Table 3.3-2) 1.81E-07
Formaldehyde 372,308 hp-hr/yr di~sel 8.26E-06 Ib/hp-hr AP-42 (Table 3.3-2) 1.54E-03
1,320 hp-hr/yr gas 8.26E-06lb/hp-hr AP-42 (Table 3.3-2) 5.45E-06
Napthalene 372,308 hp-hr/yr diesel 5.94E-07 lb/hp-hr AP-42 (Table 3.3-2) l.l1E-04
1,320 hp-hr/yr gas 5.94E-07 lb/hp-hr AP-42 (Table 3.3-2) 3.92E-07
Propylene 372,308 hp-hr/yr diesel 1.81E-05 lb/hp-hr AP-42 (Table 3.3-2) 3.37E-03
1,320 hp-hr/yr gas 1.81E-05 lb/hp-hr AP-42 (Table 3.3-2) 1.19E-05
Toluene 372,308 hp-hr/yr diesel 2.86E-06 lb/hp-hr AP-42 (Table 3.3-2) 5.32E-04
1,320 hp-hr/yr gas 2.86E-06 lb/hp-hr AP-42 (Table 3.3-2) 1.89E-06
Xylenes 372,308 hp-hr/yr diesel 2.00E-06 lb/hp-hr AP-42 (Table 3.3-2) 3.72E-04
1,320 hp-hr/yr gas 2.00E-06 lb/hp-hr AP-42 (Table 3.3-2) l.32E-06
(;; -Oregon
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-.. ..
-.. ,.-
John A Kttzhaber, M 0 , Governor
Department of Environmental Quality
Eastern Region Bend Office
2146 NE 4th, Suite 104
Bend, OR 97701
(541) 388-6146
FAC< (541) 388-8283
December 2, 2002
RECEIVED
DEe it - 2.002
Pamela S. Pawelek
Environmental Compliance Manager
Finley Butte Landfill Company
PO Box 61726
Vancouver, W A 98666
Re: Renewal of Oregon Title V Operating
Permit No. 25-000 I
Morrow County
This is to notify you that your Oregon Title V Operating Permit will expire on June 1,2004. In accordance with
OAR 340-218-0040(1)(a), you need to submit your renewal application by June 1,2003.
.
Enclosed is a Renewal Application fonn (API06), along with a revised Applicable Requirement Checklist
(AR40 1 R) and a new form for Compliance Assurance Monitoring (CP709), which mayor may not be applicable to
your facility. Instructions on how to fill out the above mentioned forms are also included.
Please send an original and two copies your completed application to:
Department of Environmental Quality
Eastern Region-Bend Office
Attn: Bonnie Hough, Permit Coordinator
2146 NE 4th Street, Suite 104
Bend, OR 97701
If you have any questions, please contact our Pendleton Office at (541) 276-4063.
~'
~.
Pennit Coordinator
Eastern Region-Bend Office
bh
Enclosures
cc: Air Quality Program, DEQ:Pendleton Office
.
~
DE(I.-X'
WASTE CONNECf10NS INc.
Connlct with thl Futurl<a
May 28, 2003
DEQ - Air Quality
Eastern Re~ion
2146 NE 4t , #104
Bend, Oregon 97701
Subject:
Finley Buttes Landfill Company, Boardman Oregon
Title V Air Operating Permit 25-0001
Submittal of Renewal Application and Off-Permit Notification
Dear Air Quality Personnel;
Enclosed please find four copies and one electronic copy of the renewal application (form
API06) for the Finley Buttes Regional Landfill's Title V Air Operating Permit No. 25-0001. In
addition, please find an Off-Permit Notification (form MD902) regarding the replacement of the
current transfer trailer tipper.
If you have any questions, please contact me at 503.288.7844.
v~ ~~V-
Pamela S. Pawelek
PNW Environmental Manager
Waste Connections, Inc.
cc/att: Jim Little. WCI
.
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P.O Box 61726.611 SE Kaiser Avenue. Suite 110 . Vancouver. WA 98666.360-695-4858 (WA) . 503-288-7844 (OR) . Fax: 360-695-5091
@
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.
.
Oregon Title V Air Operating Permit
Renewal Application Information
FORM API06
Answer Sheet
Facility name:
Finley Buttes Landfill Company
Permit Number:
25-0001
1. Contact Person: Name Pamela S. Pawelek
Title Environmental Compliance Manager
Phone number 503.288.7844
e-maIl address pamelap@wasteconnections.com
Fax number 360.695.5091
2. Permit cover page changes: None
3. Were there any off-permit changes? No
If yes, integrate changes mto renewal permlt? [If -
no exnlaml
4. Were there any seCTIon 502(b)(10) changes? No
If yes, integrate changes mto renewal permlt? [If -
no exnlainl
5. Process information: Production No AnTIcipated Changes
Fuel usage AnTICIpate slight reductlon in fuel consumptlon With
renlacement transfer trailer tinner (see #9)
Raw rnatenal usage Not Applicable
6. Operating schedule hours/day Landfill ermssion unit (LFG-OI) = 24hourslday
Disnosal onerations = 10 hours/day
days/week 5
weeks/year 52
Seasonal months Not Applicable
7 Number of employees 7
8. Will there be any changes to the operating No
scenario(s)? [if yes, descnbe and attach form
API031
9. Will there be any new, modified, or Replace current transfer trailer tipper. See attached Off-
reconstructed stationary sources or arr pollution Permit Notification form (MD902).
control equipment? [if yes, attach appropriate
form( s)l
10. Are the current emissions units correctly Yes
- identrlied and defined m the permit? [if no,
nroVlde necessarY reVlsions 1
11. Does the CAM rule apply to any of the J No
ennssions units? [if yes, list the pollutant-
specific emissions units that the rules apply to
and attach form CP7091
12. Does the aCCIdental release preventlon No
regulation apply to the facility? [if yes, list the
regulated substances present in processes at the
facilitv and identlfv the annlicable nrograml
13. Are there any other new applicable I No
Oregon Department of EnVIronmental Quality
Oregon nt/e V Operatzng Permtt Application Forms
Page I 01'3
revIsed /2/06/02
Oregon Title V Air Operating Permit
Renewal Application Information
FORM API06
Answer Sheet
requirements? [if yes, lIst the new applicable
requirements, errusslOns units, and attach a
senes CP700 form that descnbes the proposed
morutonnl11
14. Are there any requested changes lD the Plant No
SIte ErruSSlOns LlITIlts (PSEL) other than those
idenhfied lD Item 9 above? [if yes answer the
followlnl! 1
Are the changes a result ofhavlDg better -
emisslOns mformahon such as a new errusslon
factor from a recent source test? If yes,
complete and attach any applicable emissions
forms from senes ED600.
Are the changes due to an lDcrease lD -
produchon? If yes, complete and attach the
applIcable errusslOns form from series ED600.
If the errussIOns lDcreases are greater than the
sigmficant emissIOn rate (SER), the owner or
operator will need to proVIde an assessment of
the arr quality Impact lD accordance with OAR
340-222-004 H3)(bt
I 15. Is the source lD compliance with all of the Yes
condmons of the current perrrut? [ifno, attach a
comoliance schedulel
16. Are there any requested changes to testing No
conditions? [if yes, Identrfy the condition, the
reouested chancre and the reasonl
17. Are there any requested changes to momtoring No
condlhons other than those bemg replaced by
CA.l\1? (If yes, Identrfy the condihon., the
reauested chan!Je and the reasonl
18. Are there any requested changes to No
recordkeepmg condihons? (if yes, Identify the
condmon the renuested chan!Je and the reason 1
19. Are there any requested changes to reporting No
condihons? (if yes, identify the condihOn., the
renuested chan!Je and the reasonl
20. Are there any requested changes to the non- No
applicable requrrements? (if yes, Identrfy the
condihon the renuested chant7e and the reasonl
21. - Are there any other requested changes to any No
condihon? (if yes, IdentIfy the conmhOn., the
reouested chancre and the-reasonl
Oregon Depanmenc of EnVIronmental Qua/zty
Oregon Tille V Operating Permll Applicallon Forms
Page 2 of 3
revISed 12/06/02
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Oregon Title V Air Operating Permit
Renewal Application Information
Statement of Certification:
FORM API06
Answer Sheet
Based on information and belief formed after reasonable inquiry, the statements and information in this document
and any attachments are true, accurate and complete. I also certify that all statements made concerning compliance,
w~ich are based on monitoring required by the permit but not required to be submitted to the Department, are true,
accurate and complete based on information and beliefformed after reasonable inquiry
Pamela S. Pawelek
Name of Responsible Official
Environmental Compliance Manager
Title of Responsible Official
May 28. 2003
Date
Oregon Department of Environmental Quality
Oregon Title V Operating Pennlt Application Fonns
Page 3 of 3
revISed /2106102
Off-Permit Chanee Notification
FORM MD902
Answer Sheet
FacIlity name: Finlev Buttes Landfill Company
Permit Number:
25-000 I
.
Part A
1. Contact Person: Name Pamela S. Pawelek
Title Environmental Compliance Manager
Phone number 503.288.7844
e-mail address pamelap@wasteconnections.com
Fax number 360.695.5091
2. Descnbe the change: Replace current transfer trailer tIpper (2 diesel engmes at 115 hp each) with a new
ColumbIa Low Profile Landfill Tipper (smgle diesel engme at 94hp).
., Date change will take effect: Mid August 2003
.J.
4. Will there be any change m emISSIOns Wlthm Finley Buttes Landfill anticipates a slight reduction in
the PSEL as a result of the off-permit change? CO and NO, emisSIOns but is not requestmg a reduction
If yes, complete Part B and attach in PSELs.
documentatIOn.
5. Pollutants CO and NO,
6. Will the change be subject to any reqUIrements No
not already addressed m the permIt? If yes, lIst
the new reaUIrements bv rule citatIon.
7. Is the change addressed or prohibIted by the No
nermit?
8. Is the change a Title I modificatIon? No
9. Is the change subject to the ACId Rain program? No
10. Will the change violate any existmg permit term No
or conditIon?
.
Statement of Certification:
Based on information and belief formed after reasonable mquiry, the statements and information in this document and
any attachments are true, accurate and complete.
Pamela S. Pawelek
N e of Responsible Official
Environmental Compliance Manager
Title of Responsible Official
U73.
Mav 28. 2003
Date
S~nature of Respo sible Official
.
Oregon Department of EnVIronmental Quality
Oregon Title V Operating Pennlt Application Fonns
Page 1 of!
revzsed 12/06102
.
.
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Off-Permit Chane:e Notification
FORM MD902
Answer Sheet
Part B
PSEL Itons/vr)
Device/nrocess Pollutant Before chanpe After chanQe
Provide docwnentation below or attach the infonnatlon to this form
Oregon Department of EnVIronmental Quality
Oregon Title V Operating Permit Application Forms
Page 2 of 1
revised 12/06102
-~
4.8 Compo III
City of Port Angeles
. 4.8 COMPONENT III - BLUE MOUNTAIN DROP-BOX OPERATIONS
4.8.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS
.
.
WCWI proposes to provide the equipment, labor, and materials necessary to operate the Blue Mountain
Drop Box located on Blue Mountain Road between Sequim and Port Angeles, Washington. WCWI will
utilize and maintain the existmg facility configuration: a building with restroom, concrete apron, paved
drive-around, water well, and oil/antifreeze recycling tanks.
WCWI will staff the operation (24-30 hours per week at Blue Mountain facility). Employees will be
included in WCWI's benefits program. Operating expenses will occur in the normal course of business as
described below. WCWI will properly bond and insure the project and operations as required. WCWI will
also furnish:
. Electrical and telephone service.
. Uniquely identified transfer containers marked in a manner consistent with Transfer Station
trailers, and associated roll-off trucks.
. Portable toilet for customers.
In summary, WCWI will meet all RFP requirements for Component III, except as noted in 4.8.3. WCWI
incorporates by reference Appendix B.3, Blue Mountain Drop-Box Operations performance
specifications.
4.8.2 COMPONENT III (BLUE MOUNTAIN DROP-Box OPERATIONS)
4.8.2.1 Description of the Proposer's Approach to the Operations Plan
WCWI's Operations Plan will establish the facihty management, operation, and maintenance procedures
and methods needed to meet the RFP requirements including:
Provide the labor, equipment, materials, and utilities necessary to operate and maintain the Drop-Box
facility, and to monitor residential and commercial self-haul wastes.
WeIgh waste and collect disposal charges for residential and commercial self-haul loads.
Provide containers for the collection of wastes and recyclable materials.
Haul wastes collected at the Drop-Box faCIlity to the Transfer Station.
Haul recyclable materials collected at the Drop-Box facility to the Transfer Station or a materials
recovery facility.
Maintain and/or make necessary improvements to the infrastructure, security system, equipment, and
operation of the Drop-Box facility to meet operating and aesthetic requirements.
Apply a waste screening and acceptance policy consistent with the policy established for the Transfer
Station.
Maintain records of solid waste, handling and disposal, including periodic reports such as daily receipts
and waste quantity transported, operating permits, compliance reports, and pay requests.
The Operations Plan will address all the Items listed in RFP B.3 1.1.1. Following are a few examples
(subject to modification) of the types of procedures that will be detailed in the Operations Plan:
April 5, 2005
Waste Connections of .."ft.
Washington, Inc. "'.'
4.8-1
.
.
.
City of Port Angeles
Hours of operation
Operating Hours:
Receiving Hours:
Monday, Wednesday and Saturday, 9 to 6 pm
9 am to 5 pm
Waste receiving, screening, and acceptance
Waste receiving will occur from 9 am to 5 pm. Incoming vehicles will be weighed and their waste
screened as described below. Outbound vehicles will be weighed and the appropriate fees collected.
Waste screening will follow the protocols, procedures, and acceptance policy established in the Port
Angeles Transfer Station Operations Plan. Please see Section 4.6.2.7.
Cash handling procedures for collection of disposal charges
The WCWI station attendants are responsible for maintaining true and accurate records, accounting for all
money received at the facility. These records will be kept separate from any books or accounts for
WCWI's services and business operations performed at other facilities. Separate books and accounts will
be maintained for the recycling program and its component activities. WCWI will provide the Public
Works and Utilities Director or their designee full and prompt access to all records descnbing business or
operations at the Blue Mountain Drop-box Operations.
Cash transactions will be recorded and deposited daily. A locked register with predetermined cash will be
on site to handle that day's transactions. All financial transactions will be recorded and the accounts
reconciled daily.
Safety and emergency training
WCWI will provide operation and safety training for all drop-box facility staff, mcluding:
Mandatory CPR & first aid training.
Waste screening training, including recognition of unacceptable waste before and after unloading, and
identification and tracing of unacceptable wastes to the responsible party.
All training required by Occupational Safety and Health Administration (OSHA) and Washington
Industrial Safety and Health Act (WISHA).
Training for employees in the location and use of safety equipment at the site.
Training in emergency response.
Waste loading and transport
Waste wIll be accumulated in roll-off containers at the Drop Box facility. Withm 72 hours of being filled,
each roll-off container will be transported to the Port Angeles Transfer Station for disposal. At the end of
each day, staff wIll insure that all waste has been loaded into containers and these containers have been
tarped for the night.
WCWI will comply with State gross vehicle and axle weights requirements, and will unload and reload
containers as necessary to achieve compliance. At the Transfer Station, the City will weigh each load,
April 5, 2005
Waste Connections of ..h.
Washington, Inc. "'.'
4.8-2
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City of Port Angeles
calculate the net weight, and provide WCWI with a weigh ticket. The weigh ticket will serve as the basis
of payment.
Recyclables handling
WCWI station attendants will operate the public Drop-Off facilities for recyclable materials as follows:
WCWI will promptly greet each customer entering the facility.
WCWI will inspect, and weigh the load and collect the appropriate disposal charge.
WCWI will direct the customer to the appropriate area based on waste type (recyclables, mIxed waste, or
both).
Recyclables will be placed directly into appropriate contamer whenever possible. Recyclables will not be
allowed to accumulate elsewhere around the facility.
If the customer has mixed solid waste, WCWI will direct the customer to the off-loading area, remove the
disposal chain protecting the disposal area and, if necessary, assist the customer with unloading of waste.
WCWI will screen loads to determine if unacceptable waste is present. Ifunacceptable waste IS identified,
WCWI will inform the customer that the waste cannot be accepted. The waste will be retrieved and
returned to the customer.
Handling of used motor oil, antifreeze, and auto batteries
Used motor oil, antifreeze and auto batteries will continue to be received at the Drop Box Facility. The oil
and antifreeze will be accumulated in two separate 300-gallon double wall storage tanks and pumped out
for offsite recycling by an outside vendor on a regularly scheduled basis. Used auto batteries will be
collected in an approved battery containment container that will be collected on a regular basis by a
licensed recycling/disposal vender.
Site security
Station attendants will ensure site security and follow operating procedures to prevent unauthorized site
access. The facility is fenced and the gate is locked at all non-operating times. No new site security
lighting will be installed, as WCWI does not believe that any significant new security improvements are
required.
Building annual maintenance.
WCWI station attendants will schedule regular inspections and preventive maintenance for the equipment
and the facility. WCWI personnel will clean the Drop-Box area daily and keep the facility clean and
sanitary. WCWI will keep on-site records of service, maintenance and repairs for equipment used in
collection and transport of solid waste and recyclables.
Traffic control
WCWI station attendants will manage incoming and outgoing traffic at the Drop Box facility so that
waiting times are minimized and safe operating conditions are maintained at all times.
April 5, 2005
Waste Connections of ..h..
Washington, Inc. "'+"'"
4.8-3
City of Port Angeles
.
Noise mitigation
WCWI will operate the Drop Box facility site during Days and Hours of Operation as described above.
Operations will comply with applicable City, County and state regulations. WCWI will respond to noise
complaints promptly and will work with the City to mitigate noise impacts as appropriate.
Dust, litter, odor, and vector control
WCWI station attendants will ensure the tipping areas and areas around the Drop-Box are kept clean and
swept daily. Trailers will be routinely cleaned to prevent odors. Full waste containers will not be stored
on-site for longer than 72 hours. WCWI will respond to all complaints by local residents within 24 hours
regarding odors from the facility.
WCWI will conduct on-site litter control during the Days and Hours of Operation. WCWI will perform
daily inspections paying particular attention to wind-blown material near the facility boundaries.
WCWI will control insect, rodents, birds and other animals, as necessary to mitigate a nuisance or health
and safety hazard. WCWI will respond promptly to all nuisance mitigation requests from the City.
Environmental control
.
WCWI proposes to operate the facility as is, with existing environmental controls in place. Because of
the site's remote location with respect to sanitary sewers, it is not practical to provide catch basins that
drain into a sanitary sewer. Visible leakage from a waste container (other than uncontaminated rain water
dripping off the outside of a container) will immediately be mopped up using spill absorbents, pads, or
similar materials. Except dunng Receiving Hours, partially-filled and full containers holding waste (not
recyclables) will be tarped to exclude rain and minimize the potential for leakage. No stormwater
separation will be provided other than the operational measures described in this paragraph.
Public information management
General information on recycling and waste disposal options will be available onsite as public
information sheets. Public inquiries will also be directed to City of Port Angeles and internet resources.
4.8.2.2 Description of Proposer's Approach to the Contingency Plan
.
The Operations Plan will contain a comprehensive set of contingency operating procedures that would
take effect in the event of interruption of normal operations at the Drop-Box facility, such as:
. Fires and explosions.
. Release of toxic or hazardous substances.
. Work stoppage by WCWl's employees.
. Emergency weather conditions.
. Building or equipment failure.
Unknown delivery of unacceptable wastes.
The Contingency Plan will include:
Arrangements and agreements (if required) with local emergency response agencIes describing the
services to be rendered by each agency in the event of an emergency.
A site diagram and description of the 10catlOn and intended use of all emergency equipment.
4.8-4
Waste Connections of .h..
Washington, Inc. "'+'
April 5, 2005
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City of Port Angeles
Names, telephone numbers, and addresses of persons designated by WCWI as emergency coordinators.
An emergency coordinator will be at the Transfer Station, or on-call by telephone or radio within thirty
minutes of the site. Emergency coordinators will be familiar with all parts of the Operations and
Contingency Plans.
WCWI will conduct emergency response drills at least twice per year.
4.8.3 OPERATE EXISTING BLUE-MoUNTAIN FACILITY
WCWI proposes to provide the equipment, labor, and materials necessary to operate and maintain the
Blue Mountain Drop Box in its existing configuration (building with restroom, concrete apron, paved
drive-around, water well, and oil/antifreeze recycling tanks). Current operational practices would be
continued. Per the RFP, WCWI would also furnish:
. Electrical and telephone service.
. Uniquely identified transfer containers marked in a manner consistent with Transfer Station
trailers, and associated roll-off trucks.
. Portable toilet for customers.
. During Receiving Hours (9 am to 5 pm) on Monday and Wednesday, the facility will be staffed
by one solid waste attendant. On Saturday it will be staffed by two attendants. Operating Hours
would be Monday, Wednesday and Saturday, 9 to 6 pm.
Operation of the facility would include:
1. At the tipping scale, the station attendant will visually inspect the load before it is allowed to be
unloaded into the hopper. The attendant will continue to monitor the material as it enters the
hopper. If any suspect material is identified, it will be unloaded separately and handled according
to procedures set forth in the Operations Plan (e.g., returned to the driver). After the load is
discharged, station attendants will examine the discharged load. They will look for containers
with warning labels, sealed drums, leaking containers, wastes with strong and unusual odors,
sludge and burning or smoldering wastes. They will be instructed to follow the safety procedures
of the Operations Plan prior to closely inspecting any suspicious wastes.
2. After the attendant approves the waste, the scale is tipped into the container and the waste is
accepted. The driver is then released to pay the fees due.
April 5, 2005
Waste Connections of ..hit
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4.8-5
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'. 6.10 FINANCIAL QUALIFICATIONS
Copies of most recent 10-Ks filed with the U.S. Securities and Exchange Commission
(SEC) and all 1 O-Qs since the last 10-K
Please see attached.
A copy of the prospectus and official statement, if any, for the Proposer's latest security
offerings
Please see attached report
The rating on outstanding corporate debt
On Sept. 26, 2003, Standard & Poor's Ratings Services raised its corporate credit rating on Folsom, Calif.-
based Waste Connections Inc. to 'BB+' from 'BB', reflecting its improving financial profile as evidenced
by its attractive profitability, increased cash flow generation and management's disciplined growth
strategy. Please see attached report from Standard & Poor dated September 26,2003.
Description of all financial commitments in excess of one million dollars ($1,000,000)
presently obligated including completion guarantees on all construction projects and
operating agreements and their bearing on the Proposer's financial ability to guarantee
the performance and other requirements of this project.
Please refer to WCI's June 2004 10Q form, attached.
.
Description of any outstanding contractual arrangements affecting ability
None.
Evidence of the ability to obtain the required insurance, a construction performance
bond and a performance bond, or other acceptable guarantees in the amounts defined in
Section 3.3.
See letter from Evergreen National Indemnity Company.
Copies of all violation notices that the Proposer has received under similar agreements
during the last three years.
None.
Pending or potential legal actions that would materially affect the Proposer's financial
situation and/or its ability to meet its contractual obligations to the City.
None.
Evidence of the ability to secure financing necessary for development of the Transfer
Station and MRWF.
WCI has over $300 Million available capacity in its line of credit and $200 Million in additional
authorized capacity.
A proposal bond in the amount of $200,000.
. Please see Form 5.4 in Section 5.
6.10-1
Waste Connections of .hlt
Washington, Inc. ",.,.
October 29, 2004
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Waste Connections Inc. Rating Raised to 'BB+' Stable;
Bank Loan Assigned 'BB+'
Publication date: 26-Sep-2003
Analyst(s):
Liley Mehta, New York (1) 212-438-1263
Credit Rating: BB+jStablej--
Rationale
On Sept. 26, 2003, Standard & Poor's Ratings Services raised its corporate credit
rating on Folsom, Calif.-based Waste Connections Inc. to 'BB+' from 'BB', reflecting its
improving financial profile as evidenced by its attractive profitability, increased cash
flow generation and management's disciplined growth strategy. The outlook is stable. In
addition, Standard & Poor's assigned its 'BB+' rating to Waste Connections' proposed
$500 million senior secured credit facilities, based upon preliminary terms and
conditions. Proceeds will be used to refinance the company's existing revolving credit
facility. Total debt outstanding was about $562 million at June 30, 2003.
The rating revision is supported by Waste Connections' demonstrated operating
strength, which benefits from the company's unique business strategy including a focu's
on secondary markets, and significant operations under exclusive franchisee contracts.
Acquisition-driven growth remains the key focus, but management is expected to
maintain its prudent and successful track record of acquiring and integrating numerous,
but small solid waste operations, while maintaining an improving trend in credit
measures.
The ratings on Waste Connections Inc. are based on its average business position
as a major regional solid waste management company, efficient operations, and generally
favorable industry characteristics. These factors are partially offset by aggressive debt
leverage, risks associated with an active growth strategy, and a somewhat less favorable
operating environment because of a sluggish economy.
Waste Connections provides collection, recycling, transfer, and disposal services
in secondary (nonurban) markets, primarily in the western and southeastern U.S. The
firm serves more than 1 million residential, commercial, and industrial customers in 22
states. About 50%-55% of revenues and a greater percentage of cash flows are generated
under exclusive contract arrangements, with the balance derived from competitive
markets. In addition, the company benefits from the significant remaining life of its
(
,
landfills, and few sites closing in the next 10 years. Although the solid waste
management industry is mature and competitive, earnings prospects for Waste
Connections are enhanced by the essential nature of its services, its leading presence in a
number of growth markets, and expected benefits from acquisitions. Concerns include
management of an active growth strategy, lower special waste and commercial
construction-related volumes, pressure on certain costs, and reduced pricing flexibility.
However, the soft economy has not yet had a material adverse impact on financial
performance, helped by the company's relatively small exposure to more cyclical
industrial markets.
Waste Connections has expanded rapidly in the past three years, primarily
through acquisitions, taking advantage of the fragmented nature of many western
markets. However, reliable internal growth has also been a meaningful and increasing
contributor, in part due to the markets' attractive demographics. The entry into selected
markets in the midwestern and southwestern states broadened geographic diversity and is
consistent with the company's strategy to have a leading market share or fully integrated
operations in all markets served. The firm's growth has been financed by a combination
of debt, equity, and internal cash flow.
Despite Waste Connections' relatively modest scale of operations compared with
those of leading industry participants, its operating profit margins of about 35% are
impressive and the highest in the industry. This reflects exclusive contract arrangements,
a low cost structure, and improving integration of services (waste internalization is in a
respectable low-60% area, anticipated to improve to the high 60% level by year-end
2003). Credit protection measures are sufficient for the rating, with funds from operations
to total debt (adjusted for capitalized operating leases) at about 24%, EBITDA interest
coverage approximately 5.5x, and debt to capital in the low 50% area, for the 12 months
ended June 30, 2003. The company benefits from strong free cash generation, with free
operating cash flow to total adjusted debt of above 10%, which is well above medians for
the rating. Increased levels of free cash generation will likely continue to be used for
acquisition driven growth spending.
Although the company may exceed these spending levels and modestly increase
its debt periodically, Standard & Poor's expects that management will maintain a
modestly de-levering trend, given the attractive profitability and earnings base. Thus,
funds from operations to total adjusted debt and total adjusted debt to capital are likely to
trend toward 25% and 50%, respectively. Moreover, there is potential for accelerated and
material improvement in the capital structure, if $150 million of subordinated notes due
2006 (callable beginning in April 2004) are converted into the company's common stock,
which currently trades fairly close to the conversion price.
The rating on the proposed $500 million senior secured credit facilities is the
same as the corporate credit rating. The credit facilities include a $350 million revolving
credit facility due 2008 and a $150 million term loan due 2010. Under the proposed terms
of the credit agreement, the credit facility can be increased to $600 million, at Waste
Connections' option, provided no event of default has occurred at the time of request. If
fully drawn, the bank facility would represent about 63% of the company's total debt, and
is expected to be subject to financial covenants including maximum debt to EBITDA,
minimum EBIT interest coverage, minimum net worth, and maximum capital expenditure
restrictions. The obligations under the facility will be secured by a first-priority perfected
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security interest in all assets of Waste Connections and its subsidiaries and a pledge of all
of the stock of each subsidiary.
In evaluating the underlying collateral, Standard & Poor's has used an enterprise
value approach, given the likelihood that the business would retain more value as an
operating entity in the event of a bankruptcy. Recovery prospects are bolstered by the
strength of the proposed security package and a $325 million subordinated debt cushion
at closing (although some portion of the proceeds may be used to refinance existing
subordinated debt). Based on Standard & Poor's simulated default scenario, lenders
would be expected to realize a meaningful recovery of the outstanding principal. In a
simulated default scenario, Standard & Poor's assumes that the revolving credit facility
would be fully drawn and that Waste Connections operating results would ~e
significantly depressed. The ratings on the credit facilities are based on preliminary terms
and conditions.
Liquidity.
At June 30, 2003, Waste Connections had $215 million of borrowing capacity under its
existing $435 million revolving credit facility maturing in 2005. The company is
expected to maintain about $200 million in availability, at closing of the new bank
facility, after providing for letters of credit. Under the terms of the proposed credit
facilities, the company could use borrowings under the revolving credit facility to
refinance its $150 million convertible subordinated notes due 2006. Expected liquidity
under the proposed revolving credit facility, coupled with increasing internally generated
cash flow, should be sufficient to fund operating needs (primarily capital expenditures),
selected acquisitions, and light debt maturities for the next several years. The successful
completion of the proposed bank facility would significantly extend debt maturities, and
the company is expected to remain comfortably in compliance with financial covenants.
Outlook
The outlook is stable. Ratings stability is provided by the company's leading positions in
most of its markets, sufficient liquidity, and a disciplined growth strategy, which
incorporates continued strengthening of its financial profile.
Ratings List
Waste Connections Inc.
Corporate credit rating
Senior secured debt
Subordinated debt
To
BB+/Stable
BB+
BB-
From
BB/Positive
Complete ratings information is available to subscribers of RatingsDirect, Standard &
Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Credit
Ratings Actions.
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Moody's Investors Service upgraded the existmg ratings of Waste Connections, Inc. ("WCN") as outlined
below:
.
$425 millIon semor secured revolvlllg credit facIlity due 2005 - raised to Ba2 from Ba3,
$150 rmllion issue of 5.5% convertible subordlllated notes due 2006 - raised to B 1 from B2;
$175 million Issue of floating rate convertible subordinated notes due 2022 - raised to Bl from B2;
Senior Implied Rating - raised to Ba2 from Ba3;
Senior Unsecured Issuer Ratmg - raised to Ba3 from B 1.
At the same time, Moody's assigned a (P)Ba2 ratlllg to WCN's proposed $500 million senior secured credit
facIlity comprised of a $350 million senior secured revolvIng credit facility due 2008 and a $150 million
semor secured term loan due 2010. Moody's estimates that at closing approximately $250 million offunds
will be drawn (i.e. the entire $150 million term loan facility and approximately $100 million under the
revolving credit facility). The proceeds are expected to be used to repay outstandings of approximately
$241 rmllion under the existing credit facility (whose rating would be withdrawn upon refinancing) and pay
transaction fees and expenses of approximately $4 rmllIon. The rating IS contingent upon the receipt of
final documentation in form and substance acceptable to Moody's.
The rating outlook is stable.
The upgrade was prompted by the relative stabilIty and economIC resilience ofWCN's revenues and
profitability during a weak economy; its improved cash generatIOn and Improved leverage; and the
mallltenance of its business franchise mix despite sigmficant growth though acqUIsitions.
The ratings reflect the large portion of revenues being generated under exclusive market agreements
(approximately 53%); leading market positions in most secondary western and southern markets; high
internalization rate in non-exclusive markets as well as low exposure to the more cyclical Industrial and
construction and demolition sectors. Further, the ratings reflect improved liquidity as a result of the
proposed refinancing.
.
The ratings are constrained by WCN's weak balance sheet with total debt approximating the size of the
trading twelve months revenues; intangible assets of approximately 46% of total assets, reflecting
acquisition-based growth strategy of the company; and negative tangible net worth of approximately $104
million at June 30, 2003. Further, the ratings also incorporate acquisition risks associated with an
aggreSSIve acquisition-based growth strategy, which Moody's antiCIpates to continue as recent internal
growth in core revenue is nominal.
The stable outlook reflects Moody's belief that the company will be able to maintain its current revenue mix
and operating margins over the next few years even as it expands geographIcally. The stable outlook also
assumes that the company will continue its de-leveraging efforts and will seek to maintain a balanced fiscal
polIcy during its acquiSItive phase. A sigmficant diminution in operating profitabilIty or cash generatIOn or
any Increases in leverage may result III a negative rating conSIderation.
The (P)Ba2 rating on WCN's proposed senior secured credit facilIty reflects the benefits of the security
package as well as the debt's position as the largest facility within the capital structure. The facility is the
joint and several obligation ofWCN and its current and future direct and indirect subsidiaries. The facility
is secured by a perfected first priority lien on all assets of the company and subsidiaries as well as a pledge
of stock of the subsidIaries. The revolving facilIty does not have sub-limits for the letters of credit, and, If
needed, could be used in its entirety for LC issuance. The facility has a permitted incremental capaCIty of
$100 million, which could bring the total capacity size to $600 million.
The B 1 ratlllg on the convertible subordinated notes reflects the effective subordination of the notes to the
claims of the senior creditors of the holdIng company, as well as the effective subordination ofthe notes to
any liabilities of the subsidiarIes.
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Despite a weak economic envIronment, WCN mamtained its revenue growth which was primarily dnven
by acquisitions despite a decline in core revenues m the first SIX months of 2003. Year over year, revenues
grew approximately 23%, to $532.2 rmllion, for the trailing twelve months ending June 30, 2003
AcquisitIOns accounted for approximately 83% of that growth, with the balance attrIbutable to select pnce
increases and a moderate growth in volume during the second half of 2002. WCN was able to mamtain ItS
profit margins in spite of mcreased insurance, fuel and labor costs due to its use of fuel hedges and higher
internalizatIOn of waste into the landfills it owns or operates. As such, gross profit margin remamed
unchanged at approximately 43.8% for the trailing twelve months ending June 30, 2003 as compared to the
traIlIng twelve months period ending June 30, 2002. Similarly, EBIT margin remamed flat at 26.1 % for the
trailIng twelve months ending June 30, 2003 as compared to a year ago, but when adjusted to one tIme non-
cash charge reversals in during the twelve months period ending June 30, 2002, normalized EBIT margm
improved to 26.1 % in 2003 from 25.1 % m 2002.
Financial leverage is still high, but it has shown signs of improvement since Moody's rated the company m
May of 2002. Measured as total debt to revenues, leverage was approximately 1.0 times for the trailing
twelve months ending June 30, 2003, down from approxImately 1.3 times for a comparable period a year
ago. Improved cash flow generation also resulted in de-leveraging, despite a slight increase in absolute
debt amount in 2003. As such, total debt to free cash flow, measured as cash flow from operations less
capex, decreased to approximately 7.1 times for the trailing twelve months period ending June 30, 2003,
from approximately 8.0 times for a comparable period a year ago, in line with Moody's expectations.
Increased operating profits resulted in improved interest coverage, despite higher mterest expense
associated with higher debt levels. Measured as EBIT to interest expense, coverage improved to
approximately 4.2 times for the trailing twelve months ending June 30,2003 from approxImately 3.6 tImes
for a comparable period a year ago. Similarly, fixed charges coverage, inclusive of operatIng leases and the
current portion of the long-term debt, increased to approximately 3.5 times for the LTM ending June 30,
2003 from approximately 3.1 times a year ago.
.
Going forward, Moody's expects that WCN will continue to grow primarily via tuck-in acquisitions.
However, as the company's internalization rates and cash flow generation continue to improve, Moody's
expects that an increasmg amount of these acquisitions WIll be financed using internally generated cash.
Further, Moody's expects that WCN will continue to de-leverage and improve its balance sheet in the long
run, as the company's earnings and cash flow generation increase
Waste Connections, Inc., based III Folsom, CA, is a regional, integrated solid waste services company.
Through its operating subsidiaries, it provides solid waste collection, transfer, disposal and recyclIng
services in secondary markets of the Western, Midwestern and Southern US. The company serves
residential, industrial and commercial clients. In fiscal 2002, Waste Connections, Inc. generated
approXImately $500 million III revenues, approximately fifty three percent of which revenues was derived
from exclusive arrangements.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
0' QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2004
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-23981
WASTE CONNECTIONS, INC.
(Exact name of registrant as specified III Its charter)
Delaware
(S tate or other jurisdictIOn of incorporatIOn or orgamzation)
94-3283464
(I.R.S. Employer IdentIfication No.)
35 Iron Point Circle, Suite 200, Folsom, CA 95630
(Address of principal executIve offices)
(916) 608-8200
(RegIstrant's telephone number, including area code)
IndIcate by check mark whether the registrant (1) has filed all reports required to be filed by SectIon 13 or 15(d) of
the SeCUrItIes Exchange Act of 1934 dUrIng the preceding 12 months (or for such shorter perIod that the regIstrant
was reqUIred to file such reports), and (2) has been subject to such filIng requirements for the past 90 days.
Yes [X] No [ ]
IndIcate by check mark whether the regIstrant is an accelerated filer (as defined III Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock:
As of April 15, 2004:
29,089,514 shares of common stock
PART I-FINANCIAL INFORMATION
Item 1. Fmancial Statements
Condensed Consolidated Balance Sheets - December 31, 2003 and March 31, 2004
Condensed Consolidated Statements ofIncome for the three months ended
March 31, 2003 and 2004
Condensed Consohdated Statements of Cash Flows for the three months ended
March 31, 2003 and 2004
Notes to Condensed Consolidated Financial Statements
Item 2. Management's DIScussion and AnalysIs of
Fmancial ConditIOn and Results of Operations
Item 3. Quantitative and QualitatIve Disclosures About Market Risk
Item 4. Controls and Procedures
P ART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. ExhIbits and Reports on Form 8-K
Signatures
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. P ART I - FINANCIAL INFORMATION
Item 1. Financial Statements
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UnaudIted)
(In thousands, except share and per share amounts)
December 31, March 31,
ASSETS 2003 2004
Current assets:
Cash and equivalents $ 5,276 $ 4,911
Accounts receIvable, less allowance for doubtful
accounts of $2,570 and $2,440 at December 31, 2003
and March 31,2004, respectIvely 72,474 70,049
Prepaid expenses and other current assets 11,270 10,719
Total current assets 89,020 85,679
Property and equipment, net 613,225 620,257
GOOdWIll, net 590,054 599,713
Intangible assets, net 64,784 69,012
Restncted cash 17,734 16,537
Other assets, net 21,135 20,418
$ 1,395,952 $ 1,411,616
LIABILITIES AND STOCKHOLDERS' EQUITY
. Current habIhtIes:
Accounts payable $ 38,682 $ 37,320
Accrued liabIlities 31,920 35,866
Deferred revenue 23,738 25,329
Current portion oflong-term debt and notes payable 9,740 9,674
Total current habIhtIes 104,080 108,189
Long-term debt and notes payable 601,891 580,770
Other long-term habIhtIes 8,400 8,752
Deferred lllcome taxes 120,162 125,800
Total habilities 834,533 823,511
COlrurutments and contlllgencles
Mlllonty interests 23,925 23,617
Stockholders' eqUlty:
Preferred stock. $0.01 par value; 7,500,000 shares authonzed;
none Issued and outstandlllg
Common stock: $0.01 par value; 50,000,000 shares authonzed;
28,666,788 and 29,086,180 shares Issued and outstanding at
December 31, 2003 and March 31, 2004, respectIvely 287 291
Additional paid-lll capItal 348,146 362,818
Deferred stock compensation (436 ) (2,468 )
Retained eamlllgs 189,094 205,296
Accumulated other comprehensIve income (loss) 403 (1,449 )
. Total stockholders' equity 537,494 564,488
$ 1,395,952 $ 1,411,616
See accompanYlllg notes.
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
.
Three months ended
March 31.
2003 2004
Revenues $ 128,454 $ 149,258
Operatmg expenses:
Cost of operations 71,821 85,063
Selling, general and administrative 12,881 15,595
DepreciatIon and amortIzation 10,580 13,443
Operatmg income 33,172 35,157
Interest expense (8,050) (6,823)
Other mcome 38 76
Income before income tax proviSIOn and mmonty interests 25,160 28,410
Minonty interests (2,282) (2,631 )
Income before income tax provision 22,878 25,779
Income tax provision (8,465) (9,577)
Income before cumulatIve effect of change in accountmg
principle 14,413 16,202
Cumulative effect of change in accountmg principle, net of .
tax expense of $166 282
Net mcome $ 14,695 $ 16,202
Basic earnings per common share:
Income before cumulatIve effect of change m accountmg
pnncIple $ 0.51 $ 0.56
Cumulative effect of change in accounting principle .01
Net income per common share $ 0.52 $ 056
Diluted earnings per common share:
Income before cumulatIve effect of change in accounting
principle $ 0.49 $ 053
CumulatIve effect of change m accountmg pnncIple .01
Net mcome per common share $ 0.50 $ 0.53
Shares used in the per share calculatIons:
BasIc 28,080,260 28,856,746
Dlluted 32,656,498 33,456,468
See accompanying notes.
.
2
. WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Three months ended
March 3 L
2003 2004
Cash flows from operating activities:
Net mcome $ 14,695 $ 16,202
Adjustments to reconcile net income to
net cash provIded by operating activities:
Gain on disposal of assets (67) (38)
DepreciatlOn 10,235 12,828
Amortization of mtangIbles 345 615
Deferred income taxes 4,232 5,495
Mmonty mterests 2,282 2,631
CumulatIve effect of change in accounting princIple (448)
Amortization of debt issuance costs 591 625
Stock-based compensation 55 200
Interest income on restricted cash (24) (70)
Closure and post-closure accretlOn 107 103
Net change m operating assets and liabIlItIes, net of acquisitions 4,167 9,298
Net cash provided by operating activities 36,170 47,889
. Cash flows from investmg activItIes:
Payments for acquisitions, net of cash acqUlred (3,573) (6,081)
Capital expenditures for property and eqUlpment (11,841) (15,628)
Proceeds from dIsposal of assets 89 184
Net change m other assets (1,186) 1,326
Net cash used m mvestmg actIvItIes (16,511) (20,199)
Cash flows from financmg activIties:
Proceeds from long-term debt 11,500 21,500
Principal payments on notes payable and long-term debt (30,344) (56,963)
Distributions to minority interest holders (2,156) (2,940)
Proceeds from optlOn and warrant exercises 2,086 10,585
Debt Issuance costs (7) (237)
Net cash used m financmg actIvItIes (18,921) (28,055)
Net increase (decrease) m cash and eqUlvalents 738 (365)
Cash and equivalents at beginmng of period 4,067 5,276
Cash and equivalents at end of period $ 4,805 $ 4,911
Non-cash financing actIvIty:
LiabIlities assumed and notes payable issued to sellers $ $ 14,105
See accompanymg notes.
.
3
WASTE CONNECTIONS, INe.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except share, per share and per ton amounts)
.
1. BASIS OF PRESENTATION AND SUMMARY
The accompanying condensed consohdated financIal statements relate to Waste Connections, Inc. and its
subsidIaries (the "Company") as of March 31,2004 and for the three month penods ended March 31, 2003 and
2004. The consohdated financial statements of the Company include the accounts of Waste Connections, Inc. and
Its wholly-owned and maJonty-owned subsidIaries. All sigmficant intercompany transactions and balances have
been elimmated in consohdatIon
The accompanying unaudited condensed consolidated financial statements have been prepared m accordance with
accounting pnnciples generally accepted in the Umted States for intenm financial information and with the
mstructions to Form lO-Q and Article 10 of Regulation S-X. Accordmgly, they do not include all of the information
and footnotes reqUlred by accounting principles generally accepted m the Umted States for complete fmancial
statements. Operatmg results for the three month periods ended March 31, 2004 are not necessanly indicative of the
results that may be expected for the year ending December 31, 2004.
The Company's consolidated balance sheet as of March 31, 2004, the consolidated statements of mcome for the
three months ended March 31, 2003 and 2004, and the consolidated statements of cash flows for the three months
ended March 31, 2003 and 2004 are unaudIted. In the opinion of management, such financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a fair presentatIon of the Company's
financial positIon, results of operations, and cash flows for the penods presented. The consolidated fmancial
statements presented herem should be read in conjunctIOn wIth the Company's 2003 annual report on Form lO-K. .
2. ADOPTION OF NEW ACCOUNTING STANDARDS
FIN 46
In January 2003, the F ASB issued Interpretation No. 46 ("FIN 46") which was subsequently amended in December
2003. FIN 46 requires that unconsolidated vanable interest entitIes be consohdated by their primary beneficiaries.
A primary beneficiary is the party that absorbs a majonty of the entity's expected losses or residual benefits. FIN 46
applies to vanable interest entities created after January 31, 2003 and to existmg variable mterest entities begInnmg
after June 15,2003. The Company fully adopted FIN 46 on March 31, 2004 and this adoptIon did not have a
material Impact on the Company's financial statements.
3. STOCK-BASED COMPENSATION
As permitted under the provIsions of SF AS No. 123, the Company has elected to account for stock-based
compensation using the intrinsic value method prescribed by APB 25. Under the mtnnsIC value method,
compensation cost is the excess, If any, of the quoted market pnce or faIr value of the stock at the grant date or other
measurement date over the amount an employee must pay to acquire the stock
Pro forma informatIOn regardmg net mcome and eammgs per share is reqUlred by SFAS No. 123, and has been
determined as if the Company had accounted for its employee stock optIons under the fair value method of that
Statement using a Black-Scholes option pncmg model. For purposes of pro forma disclosures, the estimated fair
value of the options is amortIzed to expense over the options' vesting penod.
.
4
.
.
.
The following table summanzes the Company's pro forma net mcome and pro forma basIc and diluted earnings per
share for the three months ended March 31, 2003 and 2004:
Net income, as reported
Add: stock-based employee compensatlOn
expense mcluded m reported net mcome, net
of related tax effects
Deduct: total stock-based employee
compensatlOn expense determined under faIr
value method for all awards, net of
related tax effects
Pro forma net income
Three Months Ended
March 31,
2003 2004
$ 14,695 $ 16,202
35 126
Earnings per share
BaSIC - as reported
BasIc - pro forma
(1,614) (2,237)
$ 13,116 $14,091
$ 0.52 $ 0.56
$ 047 $ 0.49
$ 0.50 $ 0.53
$ 0.45 $ 0.47
Diluted - as reported
Diluted - pro forma
4 LANDFILL ACCOUNTING
At March 31, 2004, the Company owned 21 landfills, and operated, but dId not own, five landfills under life-of-slte
operating contracts and nine landfills under operatmg contracts with finite terms. The Company also owns one
Subtitle D landfill site that is permitted for operatlOn, but not constructed as of March 31, 2004. The Company's
landfills have site costs wIth a net book value of $385,503 at March 31, 2004. With the exception of two owned
landfills that only accept construction and demohtion waste, all landfills that the Company owns or operates are
Subtitle D landfills For the Company's nine landfills operated under contracts WIth [mite terms, the owner of the
property, generally a municipahty, usually owns the permIt and IS generally responsIble for closure and post-closure
obhgatlOns. The Company IS responsIble for all closure and post-closure liabihtIes for four of the five operatmg
landfills that It operates under life-of-site operating contracts.
Many of the Company's existmg landfills have the potentIal for expanded disposal capacIty beyond the amount
currently permItted. The Company's internal and third-party engineers perform surveys at least annually to estimate
the dIsposal capacity at its landfills. The Company's landfill depletlOn rates are based on the remaming dIsposal
capacity, considering both permItted and deemed permItted airspace, at its owned landfills and landfills operated
under life-of-slte operatmg contracts. Deemed permItted airspace consists of addItIonal disposal capacity being
pursued through means of an expanSlOn. Deemed permitted airspace that meets certam mternal cnteria is included
in the estImate of total landfill mrspace. The Company's internal criteria to determme when deemed permItted
mrspace may be mcluded as disposal capacity are as follows
(1) The land where the expanSlOn is bemg sought IS contIguous to the current dIsposal SIte, and the Company
either owns It or the property is under option, purchase, operating or other agreements;
(2) Total development costs, final cappmg costs, and closure/post-closure costs have been determmed,
(3) Internal personnel have performed a financIal analysis of the proposed expanslOn SIte and have determined
that it has a positive financial and operational impact;
(4) Internal or external personnel are actively workmg to obtain the necessary approvals to obtain the landfill
expanslOn permIt;
5
(5) The Company considers It probable that the expansion will be achieved. For a pursued expanSIOn to be
considered probable, there must be no sIgnificant known technical, legal, community, business, or pohtical
restnctions or similar issues existing that could impaIr the success of the expansion; and
(6) The land where the expansion IS being sought has the proper zoning or proper zoning can readtly be
obtamed.
.
The Company IS currently seeking to expand penmtted capacity at seven of its owned landfills and four landfills that
it operates under life-of-site operating contracts, and consIders the achievement of these expanSIOns to be probable.
Although the Company cannot be certain that all future expanSIOns will be permItted as desIgned, the average
remainmg life, when considering remaining pennitted capacity, probable expanSIOn capacity and projected annual
disposal volume, of the Company's owned landfills and landfills operated under life-of-sIte operating contracts is 61
years, wIth lives rangmg from 3 to 263 years.
The Company uses the units-of-productIon method to calculate the depletion rate at the landfills it owns and the
landfills It operates under life-of-site operating contracts This methodology dIVIdes the costs assocIated with
acqumng, permItting and developmg the entire landfill by the total remaming dIsposal capacIty of that landfill. The
resultmg per unit depletton rate is applied to each ton of waste disposed at the landfill and is recorded as expense for
that period. During the three months ended March 31, 2003 and 2004, the Company expensed approximately
$2,882 and $3,683, respectIvely, or an average of$2.30 and $2.46 per ton consumed, respectively, related to landfill
depletIon.
The Company reserves for closure and post-closure maintenance obligatIOns at the landfills it owns and certam
landfills it operates under life-of-sIte operating contracts. Final capping costs are included in the calculation of
closure and post-closure liabilities. The Company calculates the net present value of its closure and post-closure
commItments recorded in 2004 assuming a 2.5% inflation rate and a 7.5% dIscount rate. The resulting closure and
post-closure obligation is recorded on the balance sheet as an addItIon to site costs and amortIzed to depletion
expense as the landfill's airspace is consumed. During the three months ended March 31, 2003 and 2004, the
Company expensed approximately $107 and $103, respectively, or an average of$0.09 and $0.07 per ton consumed, .
respectively, related to closure and post-closure accretion expense.
The followmg is a reconciliatIOn of the Company's closure and post-closure liability balance from December 31,
2003 to March 31, 2004:
Closure and post-closure liability at December 31, 2003
Changes resulting from adjustments to the timing or amount
of undIscounted cash flows
LiabIhties incurred
Accretion expense
Closure and post-closure liabIhty at March 31, 2004
$ 5,479
(880)
106
103
$ 4,808
At March 31, 2004, $11,730 of the Company's restncted cash balance was for purposes of setthng future closure
and post-closure liabilities.
5. ACQUISITIONS
During the three months ended March 31, 2004, the Company acquired three non-hazardous solid waste collection
businesses. Aggregate consideration for the acqUIsItions consisted of$4,226 m cash (net of cash acqUIred) $3,096 in
notes payable to sellers, and the assumption of debt totaling $11,179.
The results of operations of the acqUIred businesses have been mcluded in the Company's consohdated financial
statements from theIr respective acquisition dates.
The purchase prices have been allocated to the IdentIfied intangible assets and tangIble assets acqUIred and habilities .
assumed based on theIr estimated faIr values at the dates of acquisition, with any residual amounts allocated to
6
.
.
.
goodwill. The purchase price allocatIons are considered prelimlllary until the Company IS no longer waitlllg for
lllformation that it has arranged to obtalll and that is known to be available or obtainable. Although the time
reqUIred to obtain the necessary information will vary wIth circumstances specIfic to an indIvidual acquisition, the
"allocatIon penod" for finahzing purchase price allocations generally does not exceed one year from the
consummation of a business comblllatIon.
As of March 31, 2004, the Company had SIX acquisItIons for which purchase pnce allocatIons were prehmlllary,
mamly as a result of pending working capital valuations. The Company believes the potential changes to its
preliminary purchase pnce allocatlOns wIll not have a matenal impact on its financial condition, results of operations
or cash flows
A summary of the prehmlllary purchase price allocatlOns for the acquisitions consummated in the three months
ended March 31, 2004 is as follows:
Acquired assets:
Accounts receivable
Prepaid expenses and other current assets
Property and equipment
Goodwill
Long-term franchIse agreements and contracts
Other intangIbles
Non-competItion agreements
Assumed liabtlItIes:
Accounts payable
Accrued habIhtIes
Deferred taxes
Debt and other liabilitIes assumed
$
491
42
5,151
9,659
4,514
259
70
(982)
(560)
(143)
(14,275)
4,226
$
During the three months ended March 31, 2004, the Company paId $1,855 of acquiSItIon-related liabilities accrued
at December 31, 2003.
The three acqUISItIons acquired III the three months ended March 31, 2004 were not significant to our results of
operatlOns.
Goodwtll and long-term franchise agreements and contracts acqUIred III the three months ended March 31, 2004
totahng $9,659 and $4,514, respectively, are expected to be deductible for tax purposes.
6. INTANGIBLE ASSETS
IntangIble assets, exclusive of goodwtll, conSIst of the followlllg as of March 31, 2004:
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Amortizable intangible assets'
Long-term franchIse agreements
and contracts
Non-competItion agreements
Other, net
$
51,325 $ (2,410) $ 48,915
4,056 (2,698) 1,358
2,674 (970) 1,704
58,055 (6,078) 51,977
17,035 17,035
75,090 $ (6,078) $ 69,012
7
Nonamortized intangible assets:
Indefimte-hved llltangIble assets
IntangIble assets, exclUSIve of goodwill
$
.
The weIghted-average amortization periods for long-term franchise agreements, non-competItion agreements and
other intangibles acquired during the three months ended March 31, 2004 are 21.4 years, 5 years and 10 years,
respectively.
Estimated future amortization expense of amortizable intangIble assets for the next five years IS as follows:
For the year ended December 31, 2004
For the year ended December 31,2005
For the year ended December 31, 2006
For the year ended December 31, 2007
For the year ended December 31, 2008
$ 2,440
2,322
2,131
1,879
1,711
7. LONG-TERM DEBT
In March 2004, the Company entered into two interest rate swap agreements. Each interest rate swap agreement has
a notIonal amount of $37,500, a three-year term, and effectively fixes the interest rate on the notional amount at an
mterest rate of 2.25%, plus appltcable margin. These interest rate swap agreements are effective as cash flow
hedges for a portion of the Company's variable rate debt and the Company applies hedge accountmg pursuant to
SF AS No. 133 to account for these instruments. The notional amounts and all other significant terms of the swap
agreements are closely matched to the provisions and terms of the variable rate debt bemg hedged.
In March 2004, the Company refinanced the senior secured term loan portion of Its credit facIlity in order to reduce
the effectIve borrowmg cost. The appltcable margin on the senior secured term loan was reduced by 25 basis points;
all other terms remained consistent. In addition, the Company mcreased the amount outstanding under the senior
secured term loan from $175,000 to $200,000, resulting in an increase m the size of the credit faciltty to $600,000.
.
In April 2004, the Company announced that it had completed the redemptIOn of its $150,000 aggregate princIpal
amount, 5.5% Convertible Subordmated Notes due 2006. Holders of the notes chose to convert a total of $123,648
principal amount of the notes mto 3,251,312 shares of Waste Connections common stock at a price of $38.03 per
share, or approxImately 26.295 shares per $1 pnncIpal amount of notes, plus cash in lieu of fractIOnal shares. Waste
Connections redeemed the balance of $26,352 principal amount of the notes by proceeds from our credIt facilIty at a
redemption price of $1.022 per $1 princIpal amount of the notes. All holders of the notes also receIved accrued
mterest of $0.0275 per $1 pnncipal amount of notes. As a result of the redemption, the Company expects to
recognize an estimated $1,478 of pre-tax expense, or $1,127 expense, net of taxes, m the second quarter, 2004.
.
8
.
8. DILUTED EARNINGS PER SHARE CALCULATION
The followlllg table sets forth the numerator and denominator used III the computation of diluted earnlllgs per
common share:
Numerator:
Net income for basic earnings per share
Interest expense on convertible
subordinated notes due 2006, net of tax
effects
Net income for diluted earnings per share
DenomlllatOf"
BaSIC shares outstanding
Dilutive effect of convertible
subordinated notes due 2006
Di1utive effect of optIOns and warrants
DIlutIve effect of restricted stock
Diluted shares outstandlllg
Three months ended
March 31.
2003 2004
$ 14,695 $ 16,202
1,476 1,476
$ 16,171 $ 17,678
28,080,260 28,856,746
3,944,775 3,944,775
625,780 645,978
5,683 8,969
32,656,498 33,456,468
As of March 31, 2004, all stock options and warrants were lllcluded in the computation of dIluted income per share
as they were all dIlutIve.
. 9. COMPREHENSIVE INCOME
Comprehensive income includes changes in the fair value of lllterest rate swaps that qualify for hedge accounting.
The dIfference between net lllcome and comprehensive income for the three months ended March 31, 2003 and
2004 IS as follows:
Net income
Unrealized gam (loss) on interest rate swaps, net
of tax (benefit) expense of $585 and $(1,088) for
the three months ended March 31, 2003 and
2004, respectIvely
Comprehensive income
Three months ended
March 3 L
2003 2004
14,695 $ 16,202
$
$
908
15,603
(1,852)
$ 14,350
The components of other comprehensive income and related tax effects for the three months ended March 31, 2003
and 2004 are as follows:
Amounts reclassified into earnings
Changes in faIr value of mterest rate swaps
.
Three months ended March 31. 2003
Gross Tax effect Net of tax
$ 1,718 $ 636 $ 1,082
(225) (51) (174)
$ 1,493 $ 585 $ 908
9
.
Amounts reclassified into earnings
Changes in faIr value of interest rate swaps
Three months ended March 3 L 2004
Gross Tax effect Net of tax
$ 477 $ 176 $ 301
(3,417) (1,264) (2,153)
$ (2,940) $ (1,088) $ (1,852)
The estimated net amount of the existing unrealized losses as of March 31, 2004 (based on the interest yield curve at
that date) included in accumulated other comprehensive income (loss) expected to be reclassified into pre-tax
earnings within the next 12 months is $2,420. The timing of actual amounts reclassified mto earnings is dependent
on future movements in interest rates.
10. COMMITMENTS AND CONTINGENCIES
The Company owns undeveloped property in Harper County, Kansas where it is seekmg permits to construct and
operate a municipal solid waste landfill In 2002, th~ Company received a special use permit from Harper County
for zoning the landfill and in 2003 It received a draft permit from the Kansas Department of Health and EnvIronment
to construct and operate the landfill. In July 2003, the District Court of Harper County invalidated the previously
Issued zomng permit. The Company has appealed the District Court's deciSIOn to invalidate the zoning permit. The
Kansas Department of Health and EnVIronment has notified the Company that it will not issue a final permit to
construct and operate the landfill until the zoning matter IS resolved. At March 31,2004, the Company had $4,100
of capItalized expenditures related to this landfill development project. Based on the advice of counsel, the
Company beheves that it will preVail in this matter and does not beheve that an Impairment of the capitalized
expendItures exists. If the Company does not prevail on appeal, however, it will be required to expense in a future .
period the $4,100 of capitalized expenditures, less the recoverable value of the undeveloped property and other
amounts recovered, whIch would hkely have a material adverse effect on ItS reported income for that period.
The Company is pnmarily self-msured for automobile liabIhty, general liability and workers' compensation claims.
The Company is a party to various claims and SUItS pending for alleged damages to persons and property and alleged
liabIlities occurring during the normal operations of the solid waste management busmess. On October 31, 2003, the
Company's subsidiary, Waste Connections of Nebraska, Inc., was named as a defendant m the case of Karen
Colleran, Conservator of the Estate of Robert Rooney v. Waste Connections of Nebraska, Inc. The plaintIff seeks
recovery for damages allegedly suffered by Father Robert Rooney when the bIcycle he was riding collided with one
of the Company's garbage trucks. The complaint alleges that Father Rooney suffered serious bodIly injury,
mcludmg traumatic brain mjury. The plaintiff seeks recovery of past medical expenses of approximately $430 and
an unspecIfied amount for future medIcal expenses, home healthcare, past pain and suffering, future pam and
suffering, lost mcome, loss of earnmg capaCIty, and permanent injury and disability. The Company's pnmary
defense IS that the plaintiff IS not entitled to any damages under Nebraska law, where the accident occurred, because
the negligence of Father Rooney was equal to or greater than any negligence on the part of the Company's dnver,
and the Company intends to defend this case vigorously. This case IS m the preliminary stages of dIscovery and the
Company has not accrued any potential loss as of March 31, 2004; however, an adverse outcome in thIS case
coupled WIth a sIgmficant award to the plaintiff could have a material adverse effect on the Company's reported
mcome in the period incurred.
AddItIonally, the Company IS party to various legal proceedings in the ordmary course of business and as a result of
the extensIve governmental regulation of the sohd waste mdustry. The Company's management does not beheve
that these proceedmgs, either individually or in the aggregate, are hkely to have a material adverse effect on ItS
busmess, financial condItIon, operating results or cash flows.
.
10
.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
.
CertaIn mformatIon contained In this Quarterly Report on Form lO-Q, includIng, without limItation, information
appearing under thIS Part I, Item 2, includes statements that are forward-lookIng In nature. These statements can be
identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "should" or
"anticipates" or the negatIve thereof or comparable termInology, or by discussions of strategy. Our business and
operations are subject to a vanety of nsks and uncertaIntIes and, consequently, actual results may differ matenally
from those projected by any forward-looking statements In thIS Quarterly Report on Form 10-Q. Factors that could
cause actual results to dIffer from those projected include, but are not limited to, the following: (l) difficulties In
making acquisitions, acquIring exclusive contracts and generating internal growth may cause our growth to be
slower than expected; (2) our growth and future financIal performance depend SIgnificantly on our ability to
Integrate acquired businesses into our orgamzatIOn and operatIons; (3) our acquisitIOns may not be successful,
resulting in changes in strategy, operatIng losses or a loss on sale of the bUSIness acquired, (4) we compete for
acquisition candIdates WIth other purchasers, some of which have greater finanCIal resources than we do, and these
other purchasers may be able to offer more favorable acquisition terms, thus lImIting our ability to grow through
acquisition; (5) timing of acquisItions may cause fluctuations in our quarterly results, which may cause our stock
price to decline; (6) rapid growth may strain our management, operatIOnal, financial and other resources; (7) we may
be unable to compete effectively with governmental servIce prOVIders and larger and better capItalized companies,
which may result in reduced revenues and lower profits; and (8) we may lose contracts through competitive biddIng,
early termInation or governmental action, which would cause our revenues to declIne. These nsks and uncertainties,
as well as others, are dIscussed in greater detail in our other filings with the SecuntIes and Exchange CommissIOn,
including our most recent Annual Report on Form 1O-K. There may be addItIonal risks of which we are not
presently aware or that we currently belIeve are immatenal which could have an adverse Impact on our business.
We make no commItment to revise or update any forward-looking statements in order to reflect events or
CIrcumstances after the date any such statement IS made.
The following discussion should be read In conjunction with the unaudIted financial statements and notes thereto
included elsewhere herein.
OVERVIEW
Waste ConnectIons, Inc. is an integrated solId waste servIces company that proVIdes solid waste collection, transfer,
dIsposal and recyclIng services in mostly secondary markets in the Western and Southern U. S. As of March 31,
2004, we served more than one million commercIal, industrial and reSIdentIal customers from a network of
operations In 23 states: Alabama, Arizona, CalIfornIa, Colorado, Georgia, IllinOIS, Iowa, Kansas, Kentucky,
MInnesota, MissiSSIppi, Montana, Nebraska, New MeXICO, OhIO, Oklahoma, Oregon, South Dakota, Tennessee,
Texas, Utah, Washington, and Wyoming. As of that date, we owned 103 collectIOn operations and operated or
owned 33 transfer stations, operated or owned 33 SubtItle D landfills, owned two constructIon and demolItIOn
landfills and operated or owned 26 recyclIng facilities. We also owned one Subtitle D landfill site that IS permItted
for operation, but not constructed as of March 31,2004
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
.
The preparation of financial statements In conformity with generally accepted accounting principles requires
estImates and assumptions that affect the reported amounts of assets and lIabIlIties, revenues and expenses, and
related dIsclosures of contIngent assets and liabilities In the consolidated financial statements. As described by the
Securities and Exchange Commission, critical accounting estImates and assumptions are those that may be material
due to the levels of subjectivity and judgment necessary to account for higWy uncertaIn matters or the susceptibilIty
of such matters to change, and that have a matenalImpact on the financial condition or operatIng performance of the
company. There were no sIgmficant changes to our critical accounting estimates and assumptions in the three
months ended March 31, 2004. Refer to our Annual Report on Form 10-K for a complete descnption of our critical
accountIng estimates and assumptions.
11
GENERAL
.
Our revenues consist mainly of fees we charge customers for solid waste collection, transfer, disposal and recycling
services. Our collection business also generates revenues from the sale of recyclable commodIties, which have
significant vanability. A large part of our collection revenues comes from providing commercial, industnal and
resIdential services. We frequently perform these services under service agreements, municIpal contracts or
franchise agreements with govermnental entities. Our existing franchise agreements and all of our existing
mumcipal contracts give us the exclusive nght to provide specIfied waste services in the specified tern tory during
the contract term. These exclusIve arrangements are awarded, at least initially, on a competitive bid baSIS and
subsequently on a bid or negotiated basis. We also provide residential collection services on a subscription basis
with individual households. More than 50% of our revenues for the three months ended March 31, 2004 were
derived from market areas where services are provIded predominantly under exclusive franchIse agreements, long-
term municipal contracts and govermnental certificates. Govermnental certIficates grant us perpetual and excluslVe
collection rights m the covered areas. Contracts with counties and municipalities and govermnental certificates
provide relatively conSIstent cash flow during the terms of the contracts. Because we bill most reSIdential customers
quarterly, subscnption agreements also provide a stable source of revenues for us.
We charge transfer statIon and landfill customers a tIppmg fee on a per ton and/or per yard basis for disposing of
their sohd waste at the transfer stations and landfill facllities. Many of our transfer and landfill customers have
entered into one to ten year disposal contracts WIth us, most of WhICh proVIde for annual indexed pnce increases.
We typIcally determine the prices of our solid waste services by the collection frequency and level of service, route
density, volume, weIght and type of waste collected, type of eqUlpment and containers furnished, the distance to the
dIsposal or processing facIhty, the cost of disposal or processing, and prices charged by competitors for similar
services. The terms of our contracts sometImes limit our ability to pass on price increases. Long-term solid waste
collection contracts often contain a formula, generally based on a pubhshed price index, that automatically adjusts .
fees to cover mcreases in some, but not all, operatmg costs, or that limit mcreases to less than 100% of the mcrease
m the apphcable pnce mdex.
Cost of operations include labor and benefits, tipping fees paid to third-party disposal facilities, eqUlpment
maintenance, workers' compensation, vehicle msurance, claims expense, third-party transportation expense, fuel, the
cost of materials we purchase for recycling, district and state taxes and host commumty fees and royalties. Our
smgle largest cost IS labor, followed by third-party dIsposal, cost of vehicle mamtenance, taxes and fees and fuel.
We use a number of programs to reduce overall cost of operations, including increasing the use of automated routes
to reduce labor and workers' compensatlOn exposure, comprehensive mamtenance and health and safety programs,
and mcreasing the use of transfer statlOns to further enhance internahzation rates Our high-deductible msurance
covers automobile liability, general liability, workers' compensation claims, automobile collislOn and employee
group health claims. If we experience insurance claims or costs above or below our historically evaluated levels,
our estimates could be materially affected.
Selling, general and adrnimstratIve ("SG&A") expenses include management, sales force, clencal and admimstrative
employee compensation and benefits, legal, accounting and other professional services, bad debt expense, and rent
expense for our corporate headquarters.
DepreciatlOn expense includes depreCiatIon of fixed assets over their estImated useful lives usmg the straIght-hne
method. Depletion expense includes depletlOn of landfill SIte costs and total future development costs as remammg
airspace of the landfill is consumed. Remammg airspace at our landfills includes both permitted and deemed
permitted airspace. Amortization expense includes the amortIzation of definite-lived intangible assets, consisting
primanly of long-term franchIse agreements and contracts, customer lists, and non-competitlOn agreements, over
therr estimated useful hves using the straight-hne method. Goodwill and indefimte-lived intangIble assets,
consisting primarily of certain perpetual rights to provide sohd waste collection and transportation services in
speCIfied territories, are not amortized.
At March 31, 2004, we had 287.3 mllhon tons of pennitted remaining airspace capacity and 83.3 million tons of
deemed probable expansion airspace capacity at our 26 owned and operated landfills and landfills operated under
.
12
.
.
.
life-of-site operating contracts. We do not measure remaining airspace capacity at the nine landfills we operate
under contracts wIth finite terms. Based on remammg permitted capacity as of March 31, 2004, and projected
annual dIsposal volumes, the average remairung landfill hfe for our owned landfills and landfills operated under life-
of-sIte operating contracts IS approxImately 47 years. The operatmg contracts for WhICh the contracted term IS not
the hfe of the landfill have expiration dates from 2004 to 2013.
The disposal tonnage that we received in the three months ended March 31, 2003 and 2004 at all of our landfills IS
shown below (tons in thousands):
March 31, 2003
Number of Total
Sites Tons
March 31, 2004
Number of Total
SItes Tons
Owned landfills or landfills operated
under life-of-site contracts
Operated landfills
1,251
223
1,474
26
9
35
1,494
228
1,722
23
7
30
We capltahze some third-party expendItures related to pending acquisitions or development projects, such as legal,
engineenng and interest expenses. We expense indIrect acquisition costs, such as executive and corporate overhead,
pubhc relations and other corporate servIces, as we mcur them. We charge against net income any unamortized
capitalized expenditures and advances (net of any portlOn that we beheve we may recover, through sale or
otherwise) that may become impaired, such as those that relate to any operation that is permanently shut down and
any pending acquisition or landfill development project that we believe will not be completed. We routmely evaluate
all capitalized costs, and expense those related to projects that we believe are not likely to succeed. At March 31,
2004, we had $0.3 m1l1ion in capltahzed expenditures relating to pending acquisitions. We own undeveloped
property m Harper County, Kansas, where we are seekmg permIts to construct and operate a municipal solid waste
landfill. In 2002, we received a special use permIt from Harper County for zomng the landfill and m 2003 we
receIved a draft permit from the Kansas Department of Health and EnVIronment to construct and operate the landfill.
In July 2003, the Distnct Court of Harper County mvahdated the prevlOusly issued zonmg permit. We have
appealed the District Court's decision to invalidate the zomng permIt The Kansas Department of Health and
Environment has notified us that it will not issue a final permit to construct and operate the landfill until the zoning
matter is resolved. At March 31, 2004, we had $4.1 m1l1ion of capitahzed expenditures related to this landfill
development project. Based on the adVIce of counsel, we believe that we will prevail m thIS matter and do not
believe that an Impairment of the capitahzed expendItures exists. If we do not preVail on appeal, however, we w1l1
be required to expense in a future period the $4.1 million of capitalized expendItures, less the recoverable value of
the undeveloped property and other amounts recovered, WhICh would likely have a material adverse effect on our
reported income for that period.
We pen odic ally evaluate acquired assets for potential Impairment indicators. If any Impairment mdicators are
present, a test of recoverability is performed by companng the carrying value of the asset or asset group to its
undlscounted expected future cash flows. If the carrymg values are m excess of undiscounted expected future cash
flows, impairment IS measured by companng the fair value of the asset to ItS carrying value. If the fair value of an
asset IS determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of
the difference IS recorded m the penod that the impairment mdlcator occurs. As of March 31, 2004, there have been
no adjustments to the carrying amounts of mtanglbles, mcluding goodw1l1, resultmg from these evaluations. As of
March 31,2004, goodw1l1 and other intangible assets represented 47.4% of total assets and 118.5% of stockholders'
equity.
NEW ACCOUNTING PRONOUNCEMENT
For a description of the new accountmg standards that affect us, see Note 2 to our Condensed Consohdated
Fmanclal Statements included under Item 1 of this Form 10-Q.
13
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2004
.
The following table sets forth items in our consolIdated statements of income as a percentage of revenues for the
periods llldicated.
Revenues
Cost of operations
Selling, general and
administrative expenses
Depreciation and
amortization expense
Operating income
Three months ended
March 31.
2003 2004
100.0% 100.0%
55.9 57.0
10.0 10.4
8.3 9.0
25.8 23.6
(63) (4.6)
0.0 0.1
(1 8) (1.8)
(6.5) (6.4)
0.2
11.4% 10.9%
Interest expense, net
Other income
Minority interests
Income tax expense
Cumulative effect of change in
accounting princIple
Net income
Revenues. Total revenues lllcreased $20.8 million, or 162%, to $149.3 million for the three months ended March
31,2004 from $128.5 million for the three months ended March 31, 2003. The increase in revenues III the three .
months ended March 31, 2004, resulted primanly from the full-quarter inclusion of revenues from acquisitions
closed durlllg the three months ended March 31, 2003, and the lllcluSIOn of revenues from acquisitIOns closed
subsequent to March 31, 2003, which together totaled approximately $15.6 mIllion Of the remallling change III
revenues, increases in recyclable commodIty prices increased revenues by $0.9 millIon, and pnce and volume
changes in our existing business resulted in a net revenue increase of $4.3 mIllIon. The net increase III revenues
from price and volume changes III our existlllg business consIsted of lllcreased pnces charged to our customers and
increased volumes, partially offset by exiting the roll-off busllless at our Georgia operations and the loss of certain
municipal contracts that expired subsequent to March 31, 2003, and were not renewed.
Cost of Operations. Total cost of operatIOns increased $13.3 million, or 18.4%, to $85.1 million for the three months
ended March 31,2004, from $71.8 million for the three months ended March 31,2003. The increase was primarily
attributable to operatlllg costs associated with acquisItIons closed subsequent to March 31, 2003, increases in
medical expenses for our self-insured employee health plans and increased expenses associated wIth higher
collection volumes.
Cost of operations as a percentage of revenues increased 1.1 percentage points to 57.0% for the three months ended
March 31,2004 from 55.9% for the three months ended March 31,2003. The increase as a percentage of revenues
was primarily attributable to companies acqurred subsequent to March 31, 2003 having operating margllls below our
company average associated wIth a higher mIX of collectIOn volumes, higher labor and other operating costs, and
increased medIcal expenses resulting from a higher volume of claims and an increase in the number of claims
reaching our per claIm deductible limIts for our self-lllsured employee health plans.
SG&A. SG&A expenses increased $2.7 million, or 21.1%, to $15.6 mIllIon for the three months ended March 31,
2004 from $12.9 mIllIon for the three months ended March 31, 2003. Our SG&A expenses for the three months
ended March 31, 2004, increased from the prior year period as a result of additional personnel from acquisitions
closed subsequent to March 31, 2003, increased accounting expenses related to new corporate governance .
requirements, lllcreased management lllforrnation system expenses, increased employee bonus and stock
14
.
compensation expense recognized in the three months ended March 31, 2004 and increased payroll tax expenses
resulting from an mcrease in exerCises of stock options during the first three months of 2004
SG&A expenses as a percentage ofrevenues for the three months ended March 31, 2004, increased 0.4 percentage
points to 10.4% from 10.0% for the three months ended March 31, 2003. The mcrease was primarily due to
increased employee bonus and stock compensation expense recogmzed in the three months ended March 31, 2004
and increased payroll tax expense resulting from increased stock optiOn exercises in that quarter.
Depreciation and Amortization. Depreciation and amortization expense increased $2.8 milhon, or 27.1%, to $13.4
milhon for the three months ended March 31, 2004, from $10 6 milhon for the three months ended March 31, 2003.
The increase was pnmarily attributable to depreciation and depletion associated with acqUisitions closed subsequent
to March 31, 2003, increased depreciatiOn expense resulting from new equipment acquired to support our base
operatiOns, mcreased amortization expense associated with intangible assets acquired in acquisitions closed
subsequent to March 31, 2003 and increased depletion expense resultmg from higher volumes at our landfill
operatiOns.
DepreCiation and amortization expense as a percentage of revenues mcreased 0.7 percentage points to 9.0% for the
three months ended March 31, 2004, from 8.3% for the three months ended March 31,2003. The increase was the
result of depreciatiOn expense associated with new equipment acquired subsequent to March 31, 2003, which
replaced older equipment with lower depreciation costs, mcreased amortization expense associated with intangible
assets acquired in acquisitions closed subsequent to March 31, 2003 and increased depletiOn expense resulting from
higher volumes at our landfill operations.
.
Operatmg Income. Operatmg income increased $2.0 milhon, or 6.0%, to $35.2 million for the three months ended
March 31, 2004, from $33.2 million for the three months ended March 31, 2003. The increase was pnmanly
attributable to the growth in revenues partially offset by increased operating costs, recurring SG&A expenses to
support the revenue growth, increases m employee bonus and stock compensation expense and increased
depreCiation and amortizatiOn expenses.
Operating income as a percentage of revenues decreased 2.2 percentage points to 23.6% for the three months ended
March 31, 2004, from 258% for the three months ended March 31, 2003. The decrease was due to the
aforementioned percentage of revenue increases in cost of operatiOns, SG&A expenses, and depreciation and
amortization expenses.
Interest Expense. Interest expense decreased $1 3 million, or 15.2%, to $6.8 million for the three months ended
March 31, 2004, from $8.1 million for the three months ended March 31, 2003. The decrease was primarily
attributable to the expiration of two interest rate swap agreements m late 2003 that reqUired fixed mterest payments
in excess of our variable rate borrowing cost.
Mmonty Interests. Minority mterests mcreased $0.3 milhon, or 15.3%, to $2.6 million for the three months ended
March 31, 2004, from $2.3 million for the three months ended March 31, 2003. The mcrease m mmority interests
was due to mcreased earmngs by our majority-owned subsidianes.
Provision for Income Taxes. Income taxes increased $1.1 million, or 13.1%, to $9.6 million for the three months
ended March 31,2004, from $85 million for the three months ended March 31,2003. This increase was due to
mcreased pre-tax eammgs and an mcrease m our effective tax rate of 0.2 percentage pomts due to the recognition of
non-tax deductible expenses in 2004.
Cumulative Effect of Change in Accounting Pnnciple. Cumulative effect of change in accounting pnnciple for the
three months ended March 31, 2003 consisted of a $0.3 milhon gain, net of tax effects, resultmg from our adoptiOn
of SF AS No. 143 on January 1,2003. Our adoption of SF AS No. 143 reqUired us to record a cumulative change in
accounting for landfill closure and post-closure obhgations retroactively to the date of the acquisition of each
landfill.
. Net Income. Net mcome increased $.1.5 million, or 10.3% to $16.2 million for the three months ended March 31,
2004, from $14.7 milhon for the three months ended March 31, 2003. The increase was pnman1y attnbutab1e to
15
mcreased operating income and decreased interest expense, partIally offset by increased minonty mterest expense .
and Income tax expense.
LIQUIDITY AND CAPITAL RESOURCES
Our busIness IS capital intensIve. Our capital reqUirements mclude fleet and containers, facihties, and expendItures
for landfill cell constructIon, landfill development and landfill closure activitIes in the future. We plan to meet our
capital needs through vanous finanCIng sources, including internally generated funds, debt and eqUity financings.
As of March 31, 2004, we had a working capital deficit of $22.5 llllllion, including cash and eqUivalents of $4.9
million. Our strategy in managmg our working capItal is generally to apply the cash generated from our operations
that remaInS after satisfying our working capital and capital expenditure requirements to reduce our indebtedness
under our credit facIlity and to mmImIze our cash balances.
In October 2003, we entered into a new credit facIhty to increase the maXImum borrowings avaIlable to us to $575
mIllion. This new credit facIlity consisted of a $400 mIllion semor secured revolving credit facihty with a syndicate
of banks for WhICh Fleet NatIOnal Bank acts as agent and a $175 million senior secured term loan. In March 2004,
we refinanced the semor secured term loan portion of our credit facIhty in order to reduce the effective borrowing
cost. The applicable margin on the senior secured term loan was reduced by 25 basis points; all other terms
remained consistent. In additIon, we increased the amount outstandIng under the senior secured term loan from
$175 mIllion to $200 mIllion, resulting in an increase In the size of the facIhty to $600 mIllion. The senior secured
revolving credit facIlity matures in October 2008. The senior secured term loan requires annual principal payments
equal to 1 % of the initial term loan amount with all remaIning outstanding amounts due October 2010. Under the
new credit facility, there is no maximum amount of stand-by letters of credit that can be issued; however, the
issuance of stand-by letters of credit reduces the amount of total borrowings available. We are able to increase the
maximum borrOWIngs under the new credit faCIlity to $675 million, although no existIng lender will have any
obligatIOn to increase ItS commitment, provided that no event of default, defined in the new credit facIhty, has .
occurred. The borrowings under the new credit facihty bear interest at a rate per annum equal to, at our discretion,
either the Fleet National Bank Base Rate plus applicable margin, or the LIBOR rate plus applicable margin. The
applicable margin under the revolving credit facIlity vanes depending on our leverage ratio. At March 31, 2004, the
applicable margin on the term loan is 25 basIs points in the case of loans based on the Base Rate and 175 basis
pOInts in the case of loans based on the LIBOR rate. Virtually all of our assets, Including our interest in the eqUity
securities of our subsidiaries, secure our obhgatIOns under the new credit facility.
The new credit facility places certain business, financial and operatIng restrictions on us relating to, among other
things, additional Indebtedness, Investments, acquisitions, asset sales, mergers, dividends, distributIOns, and
repurchases and redemption of capital stock. The new credit facility also requires that we maintaIn specified
financial ratios and balances. As of March 31, 2004, we were in compliance with all applicable covenants in our
outstanding credit facility The credIt facihty also requires the lenders' approval of acquisitions in certain
circumstances. We use the credIt facility for acquisItions, capItal expenditures, workIng capital, standby letters of
credit and general corporate purposes. The $21.5 million decrease in outstanding borrowings under our credit
facihty In 2004 was primarily due to cash generated from operations and the proceeds from stock option exercises
partially offset by funding new acquisitions and capItal expendItures. If we are unable to incur additIOnal
indebtedness under our credit facility or obtain additional capItal through future debt or equity fmancings, our rate of
growth through acquisItIons may declIne.
In March 2004, we entered into two additional three-year interest rate swap agreements. Each mterest rate swap
agreement has a notIonal amount of$37.5 llllllion and effectively fixed the Interest rate on the notional amount at an
interest rate of2.25%, plus applicable margIn.
.
16
.
As of March 31,2004, we had the following contractual obligatIons (in thousands).
Payments Due by Penod
Less Than
Recorded Obligations Total 1 Year 1 to 3 Years 4 to 5 Years Over 5 Years
Long-term debt (1) $ 590,444 $ 9,674 $ 166,046 $ 21,857 $ 392,867
Total contractual cash
obligatIOns $ 590,444 $ 9,674 $ 166,046 $ 21,857 $ 392,867
(I) Long-term debt payments mclude $65 mIlhon m pnnclpal payments due 2008 related to our sernor secured revolvmg credit faclhty and
$200 mIlhon m pnnclpal payments due 2010 related to our senIOr secured term loan, both under our credit faclhty As of March 31, 2004,
our credit faclhty allowed us to borrow up to $600 mIlhon On Apn115, 2004, we completed the redemptIOn of our $150 mIlhon aggregate
pnnclpal amount, 5 5% Convertible Subordmated Notes due 2006 Holders of the notes chose to convert a total of$123 61mlhon pnncipal
amount of the notes mto conunon stock. The balance of $26 4 Imlhon pnnclpal amount of the notes were redeemed by proceeds from our
credit faclhty at a redemptIOn price of $1 ,022 per $1,000 pnnclpal amount of the notes
Amount of Commitment Expiration Per Period
Less Than
Unrecorded ObhgatIOns Total 1 Year 1 to 3 Years 4 to 5 Years Over 5 Years
Operatmg leases (2) $ 27,061 $ 3,985 $ 6,272 $ 4,613 $ 12,191
UncondItIonal purchase
obligatIOns(2) 18,049 7,248 10,801
Total commercial
commItments $ 45,110 $ 11,233 $ 17,073 $ 4,613 $ 12,191
.
(2) We are patty to operatmg lease agreements and unconditIOnal purchase obhgatlons These lease agreements and purchase obhgatlOns are
estabhshed m the ordmary course of our busmess and are deSigned to provide us With access to faclhtles and products at competitive,
market-dnven pnces These arrangements have not matenally affected our financIal pOSitIOn, results of operations or hqUldlty durmg the
three months ended March 31, 2004 nor are they expected to have a matenallmpact on our future financIal pOSItion, results of operations or
hqUldlty
We are party to stand-by letters of credit and financial surety bonds. These stand-by letters of credit and financial
surety bonds are generally established to support our financIal assurance needs and landfill operations. These
arrangements have not matenally affected our financIal posItion, results of operatIOns or hqUldity dunng the three
months ended March 31, 2004, nor are they expected to have a matenal impact on our future financial pOSItIon,
results of operations or liqUldity.
The minority mterest holders of one of our majonty-owned subsidIanes have a currently exercIsable option (the "put
option") to reqUlre us to complete the acqulSltIOn of thIS majority-owned subsidiary by purchasing their minority
ownership mterests for fair market value. The put option calculates the fair market value of the subsidIary based on
its current operating income before deprecIation and amortization, as defined m the put optIon agreement. The put
optIOn does not have a stated termination date. At March 31,2004, the minority interest holders' pro rata share of
the subsidiary's fair market value IS estImated to be worth between $67 mtlhon and $80 million. Because the put
optIOn is reqUlred at faIr market value, no amounts have been accrued relative to the put optIOn.
For the three months ended March 31, 2004, net cash proVIded by operatmg activities was $47.9 mIllion. Of this
amount, $9.3 million was provided by working capItal for the penod. The pnmary components of the reconcihatIon
of net income to net cash provided by operations for the three months ended March 31, 2004, consist of non-cash
expenses includmg $13.4 million of depreciation and amortIzation, $26 million of mmonty interest expense, $0.6
million of debt Issuance cost amortization, and the deferral of $5.5 milhon of mcome tax expense resulting from
temporary dIfferences between the recognition of income and expenses for financIal reporting and income tax
purposes.
.
For the three months ended March 31, 2004, net cash used in investmg actIvities was $20.2 million. Of tills amount,
$6.1 mtllion was used to fund the cash portIOn of acquisitIons and to pay a portIOn of acquisition costs that were
included as a component of accrued liabilities at December 31, 2003 Cash used for capital expendItures was $15.6
million, which was pnmarily for investments in fixed assets, conslstmg of trucks, containers, other equipment and
17
landfill development. Cash provIded by investing activities Included $1.3 million of net borrowIngs of restricted
cash.
.
For the three months ended March 31,2004, net cash used in financing activities was $28.1 mIllion, which included
$10.6 million of proceeds from stock optIOn and warrant exercises, less $35.5 mIllion of net payments under our
various debt arrangements, $2.9 mIllIon of cash distributions to minority interest holders and $0.2 millIon of debt
issuance costs, primarily related to our amended credit faCIlIty.
We made approximately $15.6 millIon in capital expenditures for property and equipment dunng the three months
ended March 31, 2004. We expect to make capital expendItures of approximately $70 0 million in 2004 in
connection with our existing business. We intend to fund our planned 2004 capItal expenditures principally through
eXIsting cash, internally generated funds, and borrowings under our existing credit facility. In addition, we may
make substantial additIOnal capital expenditures In acqUIring solid waste collection and disposal businesses. If we
acquire addItional landfill disposal facilities, we may also have to make significant expenditures to bring them into
compliance with applicable regulatory requirements, obtain permits or expand our available disposal capacity. We
cannot currently determine the amount of these expenditures because they will depend on the number, nature,
condition and permitted status of any acqUIred landfill disposal facIlitIes. We believe that our credit facility and the
funds we expect to generate from operations will provide adequate cash to fund our workIng capital and other cash
needs for the foreseeable future.
From time to tIme we evaluate our eXIsting operatIOns and their strategic Importance to us. If we detennine that a
given operating unit does not have future strategic importance, we may sell or otherwise dispose of those operations.
Although we believe our operatIOns would not be Impaired by such dIspositions, we could incur losses as a result.
SEASONALITY
Based on historic trends experienced by the businesses we have acquired, we expect our operating results to vary
seasonally, WIth revenues typically lowest in the first quarter, higher in the second and thIrd quarters and lower in .
the fourth quarter than In the second and thIrd quarters. We expect the fluctuatIOn In our revenues between our
hIghest and lowest quarters to be approximately 10% to 12%. This seasonality reflects the lower volume of solid
waste generated during the late fall, winter and early spring months because of decreased construction and
demolItIOn activities dunng the winter months In the U.S. In additIOn, some of our operating costs may be higher in
the winter months. Adverse winter weather conditions slow waste collection activities, resultIng in higher labor and
operational costs. Greater precIpitation in the WInter Increases the weight of collected waste, resultIng in higher
disposal costs, which are calculated on a per ton baSIS.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, we are exposed to market nsk, IncludIng changes in Interest rates and certaIn
commodity prices. We use hedge agreements to manage a portion of our nsks related to interest rates. While we are
exposed to credit risk in the event of non-performance by counterparties to our hedge agreements, in all cases such
counterparties are highly rated financIal instItutIOns and we do not anticipate non-performance. We do not hold or
issue derivatIve financIal Instruments for trading purposes. We monitor our hedge pOSItIons by regularly evaluating
the positions at market and by performing sensitivity analyses.
In May 2003, we entered into two forward-startIng Interest rate swap agreements. Each interest rate swap agreement
has a notional amount of $87.5 million and effectively fixed the Interest rate on the notIonal amount at interest rates
ranging from 2.67% to 268%, plus applicable margIn. The effective date of the swap agreements was February
2004 and each swap agreement expIres in February 2007.
In March 2004, we entered into two addItional three-year Interest rate swap agreements. Each interest rate swap
agreement has a notional amount of$37.5 million and effectively fixed the Interest rate on the notional amount at an
interest rate of2.25%, plus applicable margin.
.
18
.
.
.
We have performed sensitivity analyses to determine how market rate changes wIll affect the fair value of our
market nsk sensitIve hedge positIOns and all other debt. Such an analysis is inherently limited in that it reflects a
singular, hypothetIcal set of assumptions. Actual market movements may vary sIglllficantly from our assumptions.
FaIr value sensitIVIty IS not necessanly mdicatIve of the ultImate cash flow or earnings effect we would recoglllze
from the assumed market rate movements. We are exposed to cash flow nsk due to changes in mterest rates WIth
respect to the net floatmg rate balances owed at March 31,2003 and 2004, of $250.7 mIlhon and $167.9 mIllion,
respectively, mcluding floatmg rate debt under our credit facIhty, our 2022 Notes, vanous floatmg rate notes
payable to thIrd parties and floating rate municipal bond obligations, offset by our debt effectIvely fixed under
mterest rate swap agreements. A one percentage point increase in interest rates on our variable-rate debt as of
March 31, 2003 and 2004, would decrease our annual pre-tax income by approximately $2.5 million and $1.7
million, respectively. All of our remaming debt instruments are at fixed rates, or effectively fixed under the interest
rate swap agreements described above; therefore, changes in market interest rates under these instruments would not
siglllficantly impact our cash flows or results of operations.
We market a variety of recyclable materials, including cardboard, office paper, plastic contamers, glass bottles and
ferrous and aluminum metals. We own and operate 26 recycling processmg facilitIes and sell other collected
recyclable materials to third parties for processing before resale. We often share the profits from our resale of
recycled materials with other parties to our recycling contracts. For example, certain of our muniCIpal recychng
contracts m Washington, negotiated before we acqUIred those businesses, speCIfy benchmark resale prices for
recycled commodities. If the prices we actually receive for the processed recycled commodItIes collected under the
contract exceed the pnces speCIfied in the contract, we share the excess with the municipality, after recovering any
prevIOUS shortfalls resulting from actual market prices falling below the prices speCIfied in the contract. To reduce
our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of
chargmg collection and processing fees for recycling volume collected from thIrd partIes. Although there can be no
assurance of market recoveries, in the event of a decline, because of the proVIsions wIthm certam of our contracts
that pass commodity risk along to the customers, we believe, given historical trends and fluctuations in the recycling
commoditIes market, that a 10% decrease m average recycled commodIty pnces from the pnces that were m effect
at March 31, 2004 would not materially affect our cash flows or pre-tax income
ITEM 4. CONTROLS AND PROCEDURES
Our management, includmg our ChIef Executive Officer and ChIef FmancIal Officer, evaluated the effectiveness of
the deSIgn and operatIon of our dIsclosure controls and procedures, as defined m Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as of March 31, 2004. Based on that evaluation, the Chief Executive
Officer and ChIef Fmancial Officer concluded that our dIsclosure controls and procedures were effective, in all
matenal respects, to ensure that information required to be disclosed in the reports we file or submIt under the
Exchange Act is recorded, processed, summarized and reported as and when required.
Dunng the quarter ended March 31, 2004, there were no significant changes m our mtemal controls or mother
factors that could significantly affect these controls subsequent to the date they were evaluated m connection with
the preparatIon of this quarterly report on Form 10-Q.
19
PARTII- OTHER INFORMATION
.
ITEM 1. LEGAL PROCEEDINGS
We own undeveloped property m Harper County, Kansas, where we are seekIng pernuts to construct and operate a
municipal sohd waste landfill. In 2002, we received a special use permIt from Harper County for zoning the landfill
and in 2003 we received a draft permit from the Kansas Department of Health and Environment to construct and
operate the landfill. In July 2003, the District Court of Harper County invalidated the previously issued zoning
permIt. We have appealed the Distnct Court's decision to mvalidate the zoning permIt. The Kansas Department of
Health and EnvIronment has notified us that It will not issue a final permit to construct and operate the landfill until
the zoning matter is resolved. At March 31, 2004, we had $4.1 million of capitalized expenditures related to this
landfill development project. Based on the advIce of counsel, we believe that we will prevail in this matter and do
not believe that an Impalfffient of the capitalized expenditures exists. If we do not prevail on appeal, however, we
will be reqUIred to expense in a future period the $4.1 million of capitalized expenditures, less the recoverable value
of the undeveloped property and other amounts recovered, WhICh would likely have a matenal adverse effect on our
reported mcome for that penod
We are primanly self-insured for automobile liability, general liability and workers' compensation claims. We are a
party to vanous claims and SUItS pending for alleged damages to persons and property and alleged liabihties
occurnng during the normal operations of our sohd waste management busmess. On October 31, 2003, our
SUbSIdiary, Waste Connections of Nebraska, Inc. was named as a defendant m the case of Karen Colleran,
Conservator of the Estate of Robert Rooney v. Waste Connections of Nebraska, Inc. The plaintiff seeks recovery for
damages allegedly suffered by Father Robert Rooney when the bicycle he was ridmg collided with one of our
garbage trucks. The complaint alleges that Father Rooney suffered senous bodIly mjury, including traumatic bram
injury. The plaintIff seeks recovery of past medical expenses of approximately $430,000 and an unspecified amount
for future medical expenses and home healthcare, past pain and suffenng, future pain and suffering, lost mcome,
loss of earning capaCIty, and permanent injury and disablhty. Our primary defense IS that the plaintiff is not entitled
to any damages under Nebraska law, where the accident occurred, because the neghgence of Father Rooney was
equal to or greater than any negligence on the part of our driver, and we intend to defend this case vigorously on
these and other grounds. This case is m the prehminary stages of dIscovery, and we have not accrued any potentIal
loss as of March 31, 2004; however, an adverse outcome in this case coupled with a sigmficant award to the plamtiff
could have a material adverse effect on our reported income in the period incurred.
.
Additionally, we are a party to vanous legal proceedings resulting from the ordinary course of business and the
extenSIve governmental regulatIOn of the solid waste mdustry. Our management does not believe that these
proceedings, either individually or in the aggregate, are likely to have a material adverse effect on our business,
finanCial condItion, operating results or cash flows.
ITEM 6 EXHffilTS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit Number
Descrintion of Exhibits
3.1 (a)
Amended and Restated Certificate of Incorporation of the Registrant, in effect as of the
date hereof
Amended and Restated By-Laws of the Registrant, m effect as of the date hereof
Form of Common Stock CertIficate
Form of Note for the Registrant's 5.5% Convertible Subordmated Notes due April 15,
2006
3.2 (a)
4.1 (a)
4.2 (h)
4.3 (h) (+) Indenture between the Registrant, as Issuer, and State Street Bank and Trust Company, as
Trustee, dated as of April 4, 2001
.
20
4.4 (h) (+)
. Exhibit Number Descriotion of Exhibits
First Amended and Restated Employment Agreement between the RegIstrant and Ronald
J. Mittelstaedt, dated as oOune 1,2000
Second Amended Employment Agreement between the Registrant and Darrell Chambhss,
dated as of June 1, 2000
108 (e) Second Amended Employment Agreement between the RegIstrant and Michael Foos,
dated as of June 1, 2000
4.5 (h) (+)
4.6 (i)
4.7 (i) (+)
48 (i)(+)
4.9 (i) (+)
10.1 (d)
10.2 (a)
10.3 (a)
10.4 (a)
10.5 (c)
10.6 (f)
.
10.7 (e)
Purchase Agreement between the Registrant and Memll Lynch, PIerce, Fenner & Smith
Incorporated, dated March 30,2001
Registration Rights Agreement between the RegIstrant and Merrill Lynch, Pierce, Fenner
& SmIth Incorporated, dated as of Apn14, 2001
Form of Note for the RegIstrant's Floating Rate ConvertIble Subordmated Notes Due 2022
Indenture between the RegIstrant, as Issuer, and State Street Bank and Trust Company of
California, N.A., as Trustee, dated as of April 30, 2002
Purchase Agreement between the Registrant and Deutsche Bank SecuntIes Inc., dated April
26,2002
RegistratlOn Rights Agreement between the RegIstrant and Deutsche Bank Securities Inc.,
dated as of April 30, 2002
Second Amended and Restated 1997 Stock OptIon Plan
Form of Option Agreement
Form of Warrant Agreement
Form of Stock Purchase Agreement dated as of September 30, 1997
Form of Third Amended and Restated Investors' Rights Agreement, dated as of December
31,1998
10.9 (a) Employment Agreement between the Registrant and Steven Bouck, dated as of February
1,1998
10.10 (a) Employment Agreement between the RegIstrant and Eugene V. Dupreau, dated as of
February 23, 1998
10.11 (a) Form ofIndernnification Agreement entered into by the RegIstrant and each of its
dIrectors and officers
1012 (b) (+) Loan Agreement, dated as oOune 1, 1998, between Madera DIsposal Systems, Inc. and
the Cahfomm Pollution Control Fmancing Authority
10.13 (b) Employment Agreement between the Registrant and David M. Hall, dated as of July 8,
1998
10.14 (g) Employment Agreement between the Registrant and James M. Little, dated as of
September 13, 1999
10.15 (g) Employment Agreement between the RegIstrant and Jerri L. Hunt, dated as of October 25,
1999
10.16 (J) Employment Agreement between the Registrant and Kenneth 0 Rose, dated as of May 1,
2002
10.17 (j)
.
10.18 (k)
Employment Agreement between the Registrant and Robert D. Evans, dated as of May 10,
2002
2002 Semor Management Equity Incentive Plan
21
Exhibit Number Descriotion of Exhibits
.
10.19 (k)
10.20 (1)
10.21 (m)
10.22 (n)
10.23 (n)
10.24 (0)
10.25 (P)
10.26
31.1
31.2
32
(a)
(b)
2002 Stock OptlOn Plan
2002 Restncted Stock Plan
Consultant Incentive Plan
Employment Agreement between the Registrant and David G. Eddie, dated as of May 15,
2001
Employment Agreement between the Registrant and Worthmg F. Jackman, dated as of April
11,2003
Amended and Restated Revolvmg Credit and Term Loan Agreement dated as of October 22,
2003
Refinancing FacIltty Amendment to Amended and Restated Revolving Credit and Term
Loan Agreement dated as of March 2,2004
Second Amended and Restated Employment Agreement between the Registrant and Ronald
J. MIttelstaedt, dated March 1,2004
CertificatlOn of President and Chief Executlve Officer
CertificatlOn of Chief FinancIal Officer
Certificate of Chief Executive Officer and Chief Financial Officer
Incorporated by reference to the exhibIts filed WIth the RegIstrant's RegistratIon Statement on
Form S-l, RegIstratIon No. 333-48029.
Incorporated by reference to the exhibIts filed WIth the Registrant's RegIstration Statement on
Form S-4, RegIstration No. 333-59199.
.
(c) Incorporated by reference to the exhibits filed with the Registrant's RegIstratIon Statement on
Form S-4, Registration No. 333-65615.
(d) Incorporated by reference to the exhIbit filed WIth the RegIstrant's Form S-8, Registration No.
333-42096.
(e) Incorporated by reference to the exhibit filed with the Registrant's Form lO-Q filed on November
14,2000.
(f) Incorporated by reference to the exhibit filed with the Registrant's Form 10-Q filed on August 7,
2000.
(g) Incorporated by reference to the exhibIt filed with the Registrant's Form lO-K filed on March 13,
2000.
(h) Incorporated by reference to the exhibit filed with the Registrant's Form S-3 filed on June 5,
2001.
(i) Incorporated by reference to the exhibit filed with the Registrant's Form S-3 filed on July 29,
2002.
(j) Incorporated by reference to the exhibit filed with the Registrant's Form 10-Q filed on August 13,
2002.
(k)
.
Incorporated by reference to the exhibit filed with the Registrant's Form S-8 filed on February
21,2002.
22
.
.
.
. ..
(1)
Incorporated by reference to the exhIbit filed wIth the RegIstrant's Form S-8 filed on June 19,
2002.
(m) Incorporated by reference to the exhibit filed with the Registrant's Form S-8 filed on January 8,
2003.
(n) Incorporated by reference to the exhibIt filed wIth the Registrant's Form 10-Q filed on August
13,2003.
(0) Incorporated by reference to the exhIbit filed with the RegIstrant's Form 8-K filed on October 23,
2003.
(p) Incorporated by reference to the exhIbit filed with the Registrant's Form 10-K filed on March 12,
2004.
(+) Filed without exhIbits and schedules (to be provided supplementally on request of the
CommIssIOn).
(b) Reports on Form 8-K:
On February 19, 2004, we filed a report on Form 8-K announcing the results of our earnings for the fourth
quarter of2003.
On April 15, 2004, we filed a report on Form 8-K announcing the completion of the redemption of our $150
million aggregate principal amount, 5.5% Convertible Subordmated Notes due 2006.
23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authonzed.
Date: Apnl 22, 2004
Date: April 22, 2004
24
WASTE CONNECTIONS, INC.
BY:
Isl Ronald 1. Mittelstaedt
Ronald J. Mittelstaedt,
President and Chief ExecutIve Officer
BY:
Isl Steven F. Bouck
Steven F. Bouck,
Executive Vice President and Chief
Financial Officer
.
.
.
.
.
.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
0' QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2004
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-23981
WASTE CONNECTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdzctlOn of zncorporatlOn or organzzatlOn)
94-3283464
(IR S Employer IdentificatIOn No.)
35 Iron Point Circle, Suite 200, Folsom, CA 95630
(Address of principal executive offices)
(916) 608-8200
(Regzstrant's telephone number, zncludzng area code)
IndIcate by check mark whether the registrant (1) has filed all reports reqUIred to be filed by SectIOn 13 or l5( d) of
the Secunttes Exchange Act of 1934 during the preceding 12 months (or for such shorter penod that the regIstrant
was reqUIred to file such reports), and (2) has been subject to such filtng reqUIrements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the regIstrant IS an accelerated filer (as defined m Rule l2b-2 of the Exchange Act).
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Issuer's classes of common stock:
As of July 15, 2004:
47,993,677 shares of common stock
P ART I - FINANCIAL INFORMATION
Item 1. Financial Statements
.
Condensed Consolidated Balance Sheets - December 31, 2003 and June 30, 2004
Condensed Consohdated Statements ofIncome for the three and SIX months ended
June 30, 2003 and 2004
Condensed Consolidated Statement of Stockholders' Equity and ComprehensIve
Income for the six months ended June 30, 2004
Condensed Consolidated Statements of Cash Flows for the SIX months ended
June 30, 2003 and 2004
Notes to Condensed Consolidated Fmancial Statements
Item 2. Management's DIscussion and AnalysIs of
Financial Condition and Results of Operations
Item 3. QuantItative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
PART II - OTHER INFORMATION
Item 1. Legal Proceedmgs
Item 2. Changes in Secunties, Use of Proceeds and Issuer Purchases of Equity Secuntles
.
Item 4. SubmiSSIOn of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6. ExhibIts and Reports on Form 8-K
SIgnatures
.
. P ART I - FINANCIAL INFORMATION
Item 1. Fmancial Statements
WASTE CONNECTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
December 31, June 30,
ASSETS 2003 2004
Current assets:
Cash and eqUlvalents $ 5,276 $ 5,569
Accounts receivable, less allowance for doubtful
accounts of$2,570 and $2,267 at December 31,2003
and June 30, 2004, respectively 72,474 75,965
Prepaid expenses and other current assets 11,270 10,590
Total current assets 89,020 92,124
Property and equipment, net 613,225 629,127
GoodwIll, net 590,054 603,141
Intanglble assets, net 64,784 69,008
Restricted cash 17,734 13 ,994
Other assets, net 21,135 21,037
$ 1,395,952 $ 1,428,431
LIABILITIES AND STOCKHOLDERS' EQUITY
. Current liabilities:
Accounts payable $ 38,682 $ 40,499
Accrued habIlltles 31,920 31,563
Deferred revenue 23,738 25,560
Current portlon oflong-term debt and notes payable 9,740 8,624
Total current hablhtles 104,080 106,246
Long-term debt and notes payable 601,891 467,425
Other long-term liabilities 8,400 8,003
Deferred income taxes 120,162 130,200
Total liabilities 834,533 711,874
Commltments and contingencies
Mmonty interests 23,925 23,682
Stockholders' eqUlty:
Common stock: $0.01 par value; 50,000,000 and 100,000,000
shares authonzed at December 31, 2003 and June 30, 2004,
respectlvely; 43,000,182 and 47,978,277 shares issued
and outstanding at December 31,2003 and June 30, 2004,
respectlvely 430 480
AddltlOnal paid-in capital 348,003 467,024
Deferred stock compensation (436 ) (2,176 )
Retamed earnings 189,094 224,467
Accumulated other comprehensive income 403 3,080
. Total stockholders' eqUlty 537,494 692,875
$ 1,395,952 $ 1,428,431
See accompanymg notes.
WASTE CONNECTIONS, INC. .
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share amounts)
Three months ended Six months ended
June 30. June 30.
2003 2004 2003 2004
Revenues $ 138,883 $ 160,561 $ 267,337 $ 309,820
Operating expenses:
Cost of operations 77,427 90,889 149,248 175,952
Selling, general and administratIve 13,179 15,445 26,060 31,040
Depreciation and amortization 11,282 13,851 21,862 27,295
Operating income 36,995 40,376 70,167 75,533
Interest expense (7,786) (5,174) (15,836) (11,998)
Other expense (205) (1,572) (167) (1,496)
Income before income tax provlsion and
minority interests 29,004 33,630 54,164 62,039
Minority mterests (2,593) (3,054) (4,875) (5,685)
Income before income tax provislOn 26,411 30,576 49,289 56,354
Income tax provision (9,772) (11,405) (18,237) (20,981)
Income before cumulative effect of change
in accounting principle 16,639 19,171 31,052 35,373
Cumulative effect of change in accountmg .
pnnciple, net of tax expense of $166 282
Net mcome $ 16,639 $ 19,171 $ 31,334 $ 35,373
Basic earnmgs per common share:
Income before cumulatIve effect of
change in accountmg principle $ 0.39 $ 0.40 $ 0.73 $ 0.78
CumulatIve effect of change in
accounting principle 0.01
Net mcome per common share $ 0.39 $ 0.40 $ 0.74 $ 0.78
Dlluted earnings per common share:
Income before cumulative effect of
change in accounting $ 0.37 $ 0.39 $ 0.69 $ 0.75
Cumulative effect of change m
accounting princlple 001
Net income per common share $ 0.37 $ 0.39 $ 0.70 $ 0.75
Shares used m the per share calculations
BaS1C 42,397,502 47,425,227 42,260,726 45,233,354
Diluted 49,199,573 49,443,469 49,093,940 49,692,267
See accompanying notes.
.
2
.
WASTE CONNECTIONS, INC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
SIX Months Ended June 30, 2004
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
3alances at December 31, 2003
ssuance of common stock
warrants to consultants
~onverslOn of2006 Notes, net of
Issuance costs of $1,729
/ estmg of restncted stock
~ancellatlOn of un vested
restncted stock
ssuance of unvested restncted
stock
\mortlzatlOn of defel1'ed stock
compensatJon
:xercIse of stock optJons and
warrants, mcludmg tax benefit
of$3,419
~epurchase of common stock
~et Income
~hanges In faIr value of mterest
rate swaps, net of $1 ,572 of tax
~o.enslve Income
3alances at June 30, 2004
.
COMPREHENSIVE
INCOME
STOCKHOLDERS' EQUITY
COMMON STOCK
SHARES AMOUNT
43,000,182 $ 430
4,876,968 49
7,394
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
ADDITIONAL
PAID-IN
CAPITAL
$ 348,003 $
172
121,870
(143)
2,242
3
403
DEFERRED
STOCK RETAINED
COMPENSATION EARNINGS TOTAL
$ (436 ) $ 189,094 $ 537,494
1,123,870 II 22,780
(1,030,137 ) (10 ) (27,900)
$ 35,373
2,677
$ 38,050
47,978,277 $ 480 $ 467,024 $
See accompanymg notes
172
121,919
49
(94)
(2,242 )
453
453
22,791
(27,910)
35,373 35,373
2,677 2,677
3,080 $
(2,176 ) $ 224,467 $ 692,875
WASTE CONNECTIONS, INC. .
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
SlX months ended
June 30.
2003 2004
Cash flows from operating activities:
Net income $ 31,334 $ 35,373
Adjustments to reconcile net income to
net cash provIded by operating actIvIties:
Loss (gain) on disposal of assets 219 (92)
Depreciation 21,198 26,054
Amortization of mtangibles 664 1,241
Deferred income taxes 9,118 9,896
Minority interests 4,875 5,685
Cumulative effect of change in accounting pnnciple (448)
AmortizatIOn of debt issuance costs 1,182 1,388
Stock-based compensatIOn 55 453
Interest mcome on restricted cash ( 189) (153)
Closure and post-closure accretion 214 205
Net change in operating assets and liabIhties, net of
acqUlsItIons 5,512 4,098
Net cash provided by operating actIvIties 73,734 84,148
Cash flows from investing activities: .
Payments for acquisitions, net of cash acquired (21,074) (12,373)
CapItal expendItures for property and equipment (30,772) (33,895)
Proceeds from disposal of assets 526 752
Net change m other assets (1,719) 3,949
Net cash used in investing activities (53,039) (41,567)
Cash flows from financing activities:
Proceeds from long-term debt 27,000 107,500
Principal payments on notes payable and long-term debt (48,153) (134,960)
Distributions to minonty mterest holders (4,606) (5,929)
Proceeds from option and warrant exercises 7,050 19,278
Payments for repurchase of common stock (27,910)
Debt issuance costs (53) (267)
Net cash used in financmg actIvitIes (18,762) (42,288)
Net lllcrease m cash and equivalents 1,933 293
Cash and equivalents at begmmng ofpenod 4,067 5,276
Cash and equivalents at end of period $ 6,000 $ 5,569
Non-cash financing act1VIty:
LiabIhties assumed and notes payable issued to sellers of
businesses acqUlred $ 1,294 $ 15,619
See accompanying notes.
.
4
.
.
.
WASTE CONNECTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except share, per share and per ton amounts)
1.
BASIS OF PRESENTATION AND SUMMARY
The accompanying condensed consolidated financlal statements relate to Waste ConnectlOns, Inc. and ItS
Subsldlanes (the "Company") as of June 30,2004 and for the three and six month penods ended June 30, 2003 and
2004. The consohdated financial statements of the Company include the accounts of Waste Connections, Inc. and
ItS wholly-owned and majority-owned subsidiaries. All sigmficant intercompany transactions and balances have
been elimmated m consolidation.
The accompanying unaudited condensed consolidated financlal statements have been prepared m accordance with
accounting principles generally accepted in the United States for interim financlal information and wlth the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the mformation
and footnotes required by accountmg principles generally accepted III the United States for complete financial
statements. Operatmg results for the three and six month periods ended June 30, 2004 are not necessanly indicative
of the results that may be expected for the year ending December 31, 2004.
The Company's consolidated balance sheet as of June 30, 2004, the consolidated statements of income for the three
and SlX months ended June 30, 2003 and 2004, and the consolidated statements of cash flows for the SlX months
ended June 30, 2003 and 2004 are unaudited. In the opinion of management, such financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company's
financial position, results of operatlOns, and cash flows for the periods presented. The consolidated financlal
statements presented herem should be read in conjunction wlth the Company's 2003 annual report on Form 1O-K.
In prepanng the Company's financial statements, several estimates and assumptions are made that affect the
accountmg for and recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must
be made because certam of the information that IS used in the preparatlOn of the Company's financlal statements is
dependent on future events, cannot be calculated with a high degree of precision from data avatlable or IS slmply not
capable of bemg readtly calculated based on generally accepted methodologies. In some cases, these estimates are
particularly difficult to determme and the Company must exercise slgmficant Judgment The most dlfficult,
subjective and complex estimates and the assumptions that deal with the greatest amount of uncertamty are related
to the Company's accounting for landfills and asset Impalrments. One additional area that mvolves estimation IS
when the Company estimates the amount of potential exposure it may have wlth respect to htigatlOn, claims and
assessments m accordance with SF AS No.5, Accountmg for Contingencles Actual results for all estimates could
dlffer matenally from the estimates and assumptlOns that the Company uses m the preparation of ItS financlal
statements.
2 ADOPTION OF NEW ACCOUNTING STANDARDS
FIN 46
In January 2003, the F ASB Issued Interpretation No. 46 ("FIN 46") which was subsequently amended m December
2003. FIN 46 reqmres that unconsolidated variable interest entities be consolidated by thelr pnmary benefic lanes
A primary beneficiary IS the party that absorbs a majonty of the entity's expected losses or residual benefits. FIN 46
apphes to vanable mterest entities created after January 31,2003 and to existing variable mterest entities beginnmg
after June 15,2003. The Company fully adopted FIN 46 on March 31, 2004 and thls adoption did not have a
matenal impact on the Company's financlal statements.
5
3. STOCK SPLIT
.
On May 26,2004, the Company announced that Its Board of DIrectors had declared a three-for-two stock split of its
common stock, in the form of a 50% stock divIdend to stockholders of record on June 10, 2004. Shares resulting
from the spht were distributed on June 24, 2004 (payment date). Shares, share price, per share amounts, common
stock at par value and capital in excess of par value have been restated to reflect the effect of the stock spht for all
periods presented in this Form 10-Q. As a result of the stock split, fractional shares equal to 837 whole shares were
repurchased at a price of$23.
4. STOCK-BASED COMPENSATION
As permitted under the provIsions of SFAS No. 123, the Company has elected to account for stock-based
compensation using the intrinsIc value method prescribed by APB 25. Under the intrinsic value method,
compensation cost is the excess, if any, of the quoted market pnce or faIr value of the stock at the grant date or other
measurement date over the amount an employee must pay to acquire the stock.
Pro forma lllformation regarding net income and earnlllgs per share IS required by SFAS No. 123, and has been
determllled as if the Company had accounted for its employee stock optIOns under the faIr value method of that
Statement using a Black-Scholes option pncing model. For purposes of pro forma disclosures, the estimated fair
value of the optIOns IS amortized to expense over the optIons' vestlllg period.
The following table summarizes the Company's pro forma net income and pro forma basic and diluted earnlllgs per
share for the three and SIX months ended June 30, 2003 and 2004:
Three months ended Six months ended
June 30, June 30,
2003 2004 2003 2004 .
Net lllcome, as reported $ 16,639 $ 19,171 $ 31,334 $ 35,373
Add' stock-based employee compensatIon
expense included III reported net
lllcome, net of related tax effects 159 35 285
Deduct: total stock-based employee
compensatIOn expense determined
under fair value method for all awards,
net of related tax effects (1,816) (2,024) (3,467) (4,254)
Pro forma net income $ 14,823 $ 17,306 $ 27,902 $ 31,404
Earnings per share:
BaSIC - as reported $ 039 $ 040 $ 0.74 $ 0.78
BaSIC - pro forma $ 035 $ 036 $ 0.66 $ 0.69
Diluted - as reported $ 0.37 $ 0.39 $ 0.70 $ 0.75
Dlluted - pro forma $ 0.33 $ 0.36 $ 0.63 $ 0.67
5. LANDFILL ACCOUNTING
At June 30, 2004, the Company owned 21 landfills, and operated, but dId not own, five landfills under life-of-sIte
operatlllg contracts and eight landfills under operatlllg contracts with fimte terms. The Company also owns two
SubtItle D landfill sItes that are permItted for operatIon, but not constructed as of June 30, 2004 The contract for
one landfill operating under a hmited term, from which the Company generated approximately $0.7 million of
annuahzed revenues, expired on June 30, 2004. The Company's landfills have site costs with a net book value of .
$388,856 at June 30, 2004. WIth the exception of two owned landfills that only accept constructIon and demohtion
waste, all landfills that the Company owns or operates are Subtitle D landfills. For the Company's eIght landfills
6
.
operated under contracts with finite terms, the owner of the property, generally a municipahty, usually owns the
permit and is generally responsible for closure and post-closure obligatIons. The Company is responsible for all
closure and post-closure liabilities for four of the five operating landfills that it operates under life-of-site operating
contracts
Many of the Company's existmg landfills have the potential for expanded disposal capaclty beyond the amount
currently permitted. The Company's internal and third-party engmeers perform surveys at least annually to estImate
the disposal capacity at itS landfills. The Company's landfill depletion rates are based on the remaining disposal
capacity, considering both permitted and deemed permitted airspace, at itS owned landfills and landfills operated
under life-of-site operatmg contracts. Deemed permitted airspace conSists of additiOnal disposal capaCity being
pursued through means of an expanSiOn. Deemed permitted airspace that meets certain internal cnteria is included
in the estimate of total landfill airspace. The Company's mternal criteria to determme when deemed permitted
airspace may be included as disposal capaCity are as follows:
(1) The land where the expanSiOn is bemg sought is contIguous to the current disposal site, and the Company
either owns it or the property is under option, purchase, operating or other agreements;
(2) Total development costs, final capping costs, and closure/post-closure costs have been determined;
(3) Internal personnel have performed a financial analysis of the proposed expansion site and have determmed
that it has a positive financial and operational impact;
(4) Internal or external personnel are actively worlang to obtain the necessary approvals to obtain the landfill
expansion permit;
(5) The Company considers it probable that the expansion will be achieved. For a pursued expanSiOn to be
conSidered probable, there must be no significant known technical, legal, commumty, business, or politIcal
restnctions or Similar issues existmg that could impair the success of the expansion; and
(6) The land where the expansion is bemg sought has the proper zoning or proper zoning can readily be
obtamed.
.
The Company is currently seelang to expand permitted capacity at seven of its owned landfills and four landfills that
it operates under life-of-site operatmg contracts, and considers the achievement of these expanSiOns to be probable.
Although the Company cannot be certain that all future expansions will be permitted as designed, the average
remainmg hfe, when considenng remaining permitted capacity, probable expanSiOn capacity and projected annual
disposal volume, of the Company's owned landfills and landfills operated under life-of-site operatmg contracts is 58
years, with lives rangmg from 3 to 263 years.
The Company uses the units-of-productiOn method to calculate the depletiOn rate at the landfills it owns and the
landfills it operates under life-of-site operatmg contracts. This methodology divides the costs associated with
acqumng, permittmg and developing the entIre landfill by the total remainmg disposal capacity of that landfill. The
resulting per umt depletIon rate is applied to each ton of waste disposed at the landfill and is recorded as expense for
that penod Dunng the six months ended June 30, 2003 and 2004, the Company expensed approximately $6,123
and $7,440, respectively, or an average of $2.30 and $2.35 per ton consumed, respectIvely, related to landfill
depletiOn.
The Company reserves for closure and post-closure mamtenance obhgations at the landfills it owns and certam
landfills it operates under hfe-of-site operating contracts Fmal cappmg costs are mcluded in the calculatiOn of
closure and post-closure l1abil1ties. The Company calculates the net present value of itS closure and post-closure
commitments recorded in 2004 assummg a 2 5% inflation rate and a 7.5% dlscount rate. The resulting closure and
post-closure obhgatiOn is recorded on the balance sheet as an addition to site costs and amortized to depletIon
expense as the landfill's airspace is consumed. Dunng the SiX months ended June 30, 2003 and 2004, the Company
expensed approximately $287 and $205, respectIvely, or an average of $0.08 and $0.06 per ton consumed,
respectiVely, related to closure and post-closure accretIon expense.
.
7
The following is a reconcihation of the Company's closure and post-closure habIlity balance from December 31,
2003 to June 30, 2004:
Closure and post-closure hability at December 31, 2003
Changes resulting from adjustments to the timing or amount
of un discounted cash flows
LiabIhtIes mcurred
Accretion expense
Closure and post-closure liabIhty at June 30, 2004
.
$ 5,479
(880)
213
205
$ 5,017
At June 30, 2004, $12,167 of the Company's restncted cash balance was for purposes of settling future closure and
post-closure liabilities.
6. ACQUISITIONS
Dunng the SIX months ended June 30, 2004, tlte Company acquired seven non-hazardous solid waste collection and
disposal busmesses. Aggregate consIderation for the acqUIsItions consisted of $10,384 in cash (net of cash
acquired), $4,346 in notes payable to sellers, common stock warrants valued at $172, and the assumptIon of debt
totaling $11,179.
The results of operations of the acquired businesses have been included m the Company's consolidated financial
statements from their respective acquisition dates.
The purchase prices have been allocated to tlte identified intangIble assets and tangible assets acquired and liabilities
assumed based on their estImated fair values at the dates of acquisition, wIth any residual amounts allocated to
goodwill. The purchase pnce allocations are conSIdered prehmmary untIl the Company is no longer waitmg for
information that it has arranged to obtam and that IS known to be avaIlable or obtainable. Although tlte time
reqUIred to obtain the necessary information WIll vary with circumstances speCIfic to an indivIdual acqUIsition, the
"allocation penod" for finahzing purchase pnce allocatIons generally does not exceed one year from the
consummatIon of a busmess combmatIOn.
.
As of June 30, 2004, the Company had eight acquisitions for which purchase pnce allocatIOns were preliminary,
mamly as a result of pending workmg capital valuatIons. The Company believes the potential changes to its
preliminary purchase price allocations WIll not have a matenalImpact on its fmancIal condition, results of operations
or cash flows.
A summary of the prelimmary purchase price allocations for the acqUISItIons consummated in the six months ended
June 30, 2004 is as follows:
AcqUIred assets:
Accounts receivable
Prepaid expenses and other current assets
Property and eqUIpment
Goodwill
Long-term franchise agreements and contracts
Other mtangIbles
Non-competItion agreements
Assumed habIlities:
Accounts payable
Accrued liabIhtIes
Deferred taxes
Debt and other habIhtIes assumed
Total cash consideration, net
$
$
8
1,109
60
9,387
13,087
5,087
259
118
(1,421)
(1,540)
(143)
(15,619)
10,384
.
.
.
.
During the six months ended June 30, 2004, the Company paid $2,161 of acqUIsItIon-related liabilities accrued at
December 31, 2003.
The seven acqUIsItIons acquired in the SIX months ended June 30, 2004 were not significant to the Company's results
of operations.
Goodwill and long-term franchIse agreements, contracts, and other llltanglb1es acquired in the six months ended
June 30, 2004 totahng $12,121 and $5,094, respectively, are expected to be deductible for tax purposes.
7. INTANGIBLE ASSETS
Intangible assets, exclusive of goodwill, consIst ofthe following as of June 30, 2004:
Gross Carrylllg
Amount
Accumulated
Amortization
Net Carrying
Amount
AmortIzable intangible assets:
Long-term franchIse agreements
and contracts $
Non-competition agreements
Other, net
51,732 $ (2,845) $ 48,887
4,104 (2,837) 1,267
2,675 (1,023) 1,652
58,511 (6,705) 51,806
17,202 17,202
75,713 $ (6,705) $ 69,008
Nonamortlzed llltangible assets:
Indefinite-hved llltanglb1e assets
IntangIble assets, exclusive of goodWIll $
The weighted-average amortization periods for long-term franchise agreements, non-competition agreements and
other llltanglb1es acquired dunng the six months ended June 30, 2004 are 21.4 years, 5 years and 10 years,
respectIvely.
EstImated future amortIzatIon expense of amortIzable intangible assets for the next five years IS as follows:
For the year ended December 31, 2004
For the year ended December 31, 2005
For the year ended December 31, 2006
F or the year ended December 31, 2007
F or the year ended December 31, 2008
$ 2,409
2,318
2,119
1,923
1,726
8. LONG-TERM DEBT
The Company has entered into lllterest rate swap agreements to hedge risk associated WIth fluctuations III interest
rates. The lllterest rate swap agreements have a notlOna1 amount of $250,000, exprre in 2007, and effectively fix the
lllterest rate on the notlOnal amount at an average lllterest rate of 2.55%, plus applicable marglll. These lllterest rate
swap agreements are effectIve as cash flow hedges for a portlOn of the Company's vanable rate debt and the
Company apphes hedge accountlllg pursuant to SFAS No. 133 to account for these instruments The notional
amounts and all other SIgnificant terms of the swap agreements are closely matched to the provislOns and terms of
the variable rate debt belllg hedged.
In March 2004, the Company refinanced the semor secured term loan portion of ItS credIt faclhty III order to reduce
the effective borrowlllg cost The apphcable marglll on the senior secured term loan was reduced by 25 baSIS pOllltS;
all other terms remained consistent. In addition, the Company increased the amount outstanding under the semor
secured term loan from $175,000 to $200,000, resulting III an lllcrease in the SIze of the credIt faclhty to $600,000.
9
In April 2004, the Company redeemed its $150,000 aggregate pnnclpal amount 5.5% Convertlble Subordinated
Notes due 2006. Holders of the notes chose to convert a total of $123,648 pnnclpal amount of the notes into
4,876,968 shares of Waste ConnectlOns common stock at a price of approxlmately $25.35 per share, or
approxlmately 39.443 shares per $1 pnncipal amount of notes, plus cash in lieu of fractional shares. The Company
redeemed the balance of $26,352 principal amount of the notes with proceeds from its credit facility at a redemptlOn
price of $1.022 per $1 principal amount of the notes. All holders of the notes also receIved accrued interest of
$0.0275 per $1 principal amount of notes. As a result of the redemption, the Company recogmzed $1,478 of pre-tax
expense ($1,125 net of taxes) m Apn12004.
.
On July 15, 2004, the Company completed an exchange offer wlth respect to ltS $175,000 aggregate principal
amount Floating Rate Convertible Subordinated Notes due 2022 (the "2022 Notes"). As of that date, holders of
$172,022 principal amount of old 2022 Notes had tendered their notes m exchange for an equal princlpal amount of
the Company's new 2022 Notes. The Company offered to exchange $1 in principal amount of new 2022 Notes for
each $1 in principal amount of lts old 2022 Notes accepted for exchange. Through the exchange offer, the Company
updated certain features of the old 2022 Notes with terms that are now prevalent in the convertible note market,
mcluding net share settle and dlvldend protection provisions. The lmtial converSlOn pnce of the new 2022 Notes IS
$32.26 per share, WhlCh lS equal to approximately 30.9981 shares per $1 in principal amount of new 2022 New
Notes, and reflects the Company's three-for-two spht of its common stock in June 2004. Holders of $2,978 principal
amount of old 2002 Notes had not tendered their notes in exchange for new 2022 Notes as of that date, and, as a
result, their notes will remain subject to the provlslOns of the Indenture governing the old 2022 Notes, except in the
case of any such holders complying with the guaranteed delivery procedures outlined m the exchange offer.
9. DILUTED EARNINGS PER SHARE CALCULATION
The following table sets forth the numerator and denominator used in the computation of diluted earnmgs per
common share:
Three months ended Six months ended .
June 30, June 30,
2003 2004 2003 2004
Numerator:
Net mcome for baslc earnmgs per share $ 16,639 $ 19,171 $ 31,334 $ 35,373
Interest expense on convertlble
subordinated notes due 2006, net of tax
effects 1,476 231 2,951 1,707
Net income for diluted earnings per share $ 18,115 $ 19,402 $ 34,285 $ 37,080
Denominator:
BaS1C shares outstanding 42,397,502 47,425,227 42,260,726 45,233,354
Dilutive effect of convertIble
subordmated notes due 2006 5,917,163 910,333 5,917,163 3,413,748
Dilutive effect of options and warrants 880,865 1,086,709 909,767 1,027,839
Dilutive effect of restncted stock 4,043 21,200 6,284 17,326
Diluted shares outstanding 49,199,573 49,443,469 49,093,940 49,692,267
As of June 30, 2004, all outstanding stock options and warrants were included m the computation of diluted mcome
per share, as they were all dtluhve.
.
10
.
10 COMPREHENSIVE INCOME
Comprehensive income includes changes in the faIr value of interest rate swaps that qualIfy for hedge accountmg
The difference between net mcome and comprehensive mcome for the three and six months ended June 30, 2003
and 2004 IS as follows:
Net income
Unrealized gain on interest rate swaps, net
of tax expense of $119 and $2,660 for the three
months ended June 30, 2003 and 2004,
respectively, and $703 and $1,572 for the SIX
months ended June 30, 2003 and 2004,
respectively 203 4,529 1,112 2,677
Comprehensive income $ 16,842 $ 23,700 $ 32,446 $ 38,050
The components of other comprehensive mcome and related tax effects for the three and six months ended June 30,
2003 and 2004 are as follows:
Three months ended
June 30,
2003 2004
16,639 $ 19,171
Six months ended
June 30,
2003 2004
31,334 $ 35,373
$
$
Three months ended June 30, 2003
Gross Tax effect Net of tax
$ 1,603 $ 593 $ 1,010
(1,281) (474) (807)
$ 322 $ 119 $ 203
Three months ended June 30, 2004
Gross Tax effect Net of tax
$ 889 $ 329 $ 560
6,300 2,331 3,969
$ 7,189 $ 2,660 $ 4,529
Six months ended June 30, 2003
Gross Tax effect Net of tax
$ 3,108 $ 1,150 $ 1,958
(1,293) (447) (846)
$ 1,815 $ 703 $ 1,112
Six months ended June 30, 2004
Gross Tax effect Net of tax
$ 1,366 $ 506 $ 860
2,883 1,066 1,817
$ 4,249 $ 1,572 $ 2,677
Amounts reclassIfied into earnings
Changes m fair value of mterest rate swaps
.
Amounts reclassIfied into earnmgs
Changes in fair value of mterest rate swaps
Amounts reclassified into earnings
Changes in faIr value of interest rate swaps
Amounts reclassIfied mto earnmgs
Changes m faIr value of interest rate swaps
11. SHARE REPURCHASE PROGRAM
.
On May 3, 2004, the Company announced that ItS Board of Directors had authorized a common stock repurchase
program for the repurchase of up to $200 million of common stock over a two-year penod. Under the program,
stock repurchases may be made m the open market or in privately negotiated transactIons from tIme to time at
management's dIscretion. The timing and amounts of any repurchases will depend on many factors, includmg the
Company's capital structure, the market pnce of the common stock and overall market conditions. As of June 30,
2004, the Company had repurchased 1,029,300 shares of its common stock under this program at a cost of$27,887.
11
12. COMMITMENTS AND CONTlNGENCIES
.
The Company owns undeveloped property in Harper County, Kansas where It IS seeking permits to construct and
operate a municipal solid waste landfill. In 2002, the Company received a specIal use permit from Harper County
for zoning the landfill and in 2003 It receIved a draft permIt from the Kansas Department of Health and Environment
to construct and operate the landfill. In July 2003, the DIStriCt Court of Harper County invalidated the prevIOusly
issued zoning permIt. The Company has appealed the DIStriCt Court's decisIOn to invalIdate the zomng permIt. The
Court of Appeal heard oral arguments over our appeal on June 16,2004. The Kansas Department of Health and
Environment has notified the Company that it wIll not issue a final permit to construct and operate the landfill until
the zoning matter IS resolved. At June 30, 2004, the Company had $4,209 of capitalIzed expenditures related to this
landfill development project. Based on the advice of counsel, the Company believes that it wIll prevail in this matter
and does not believe that an Impairment of the capitalized expenditures exists. If the Company does not prevail on
appeal, however, It wIll be reqUIred to expense in a future period the $4,209 of capitalized expenditures, less the
recoverable value of the undeveloped property and other amounts recovered, which would lIkely have a materIal
adverse effect on ItS reported mcome for that period.
The Company is prImarily self-insured for automobile liability, general liabIlity and workers' compensation claims
as a result of its hIgh deductible programs. The Company IS a party to varIous claims and SUItS pendmg for alleged
damages to persons and property and alleged liabilities occurring during the normal operatIOns of the solid waste
management busmess. On October 31, 2003, the Company's subsIdiary, Waste ConnectIons of Nebraska, Inc., was
named as a defendant in the case of Karen Colleran, Conservator of the Estate of Robert Rooney v. Waste
Connections of Nebraska, Inc. The plaintiff seeks recovery for damages allegedly suffered by Father Robert
Rooney when the bIcycle he was ridmg collided with one of the Company's garbage trucks in Valley County,
Nebraska. The complaint alleges that Father Rooney suffered serIOUS bodily injury, mcludmg traumatic brain mjury.
The plamtIff seeks recovery of past medical expenses of approximately $430 and an unspecified amount for future
medIcal expenses, home healthcare, past pam and suffering, future pain and sufferIng, lost income, loss of earning
capacity, and permanent injury and dIsabIlity. The Company's primary defense is that the plamtiff is not entitled to .
any damages under Nebraska law because the neglIgence of Father Rooney was equal to or greater than any
negligence on the part of the Company's driver, and the Company mtends to defend this case vigorously. This case
is m the early stages of dIscovery and the Company has not accrued any potential loss as of June 30, 2004; however,
an adverse outcome in thIS case coupled with a sigmficant award to the plaintiff could have a material adverse effect
on the Company's reported mcome m the period incurred.
Additionally, the Company IS party to various legal proceedmgs in the ordmary course of business and as a result of
the extenSIve governmental regulation of the solId waste industry. The Company's management does not believe
that these proceedmgs, either individually or in the aggregate, are likely to have a material adverse effect on its
business, financIal conditIon, operating results or cash flows.
.
12
.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
.
Certain information contamed in this Quarterly Report on Form 10-Q, including, without limitation, mformation
appeanng under this Part I, Item 2, mcludes statements that are forward-looking in nature. These statements can be
identified by the use of forward-Iookmg terminology such as "beheves", "expects", "may", "WIll", "should" or
"anticipates" or the negative thereof or comparable termmology, or by dIScussions of strategy. Our business and
operations are subject to a variety of risks and uncertamtIes and, consequently, actual results may differ materially
from those projected by any forward-looking statements m thIS Quarterly Report on Form lO-Q. Factors that could
cause actual results to differ from those projected include, but are not hmIted to, the following: (1) dIfficulties in
making acquiSItions, acqumng exclusive contracts and generating internal growth may cause our growth to be
slower than expected; (2) our growth and future financial performance depend sigmficantly on our ability to
mtegrate acquired businesses into our organization and operations; (3) our acqUIsitions may not be successful,
resultmg m changes in strategy, operating losses or a loss on sale of the business acquired; (4) we compete for
acquisitIOn candidates WIth other purchasers, some of WhICh have greater financial resources than we do, and these
other purchasers may be able to offer more favorable acqUIsItion terms, thus limiting our abIhty to grow through
acquisition; (5) timing of acquisitions may cause fluctuations m our quarterly results, which may cause our stock
pnce to decline; (6) rapid growth may stram our management, operational, financial and other resources; (7) we may
be unable to compete effectively with governmental service providers and larger and better capitalized compames,
which may result in reduced revenues and lower profits; and (8) we may lose contracts through competitIve bidding,
early termination or governmental action, WhICh would cause our revenues to decline. These risks and uncertainties,
as well as others, are discussed in greater detaIl m our other filings with the Secunties and Exchange CommiSSIOn,
mcludmg our most recent Ammal Report on Form 1O-K. There may be addItional risks of which we are not
presently aware or that we currently beheve are immaterial WhICh could have an adverse impact on our busmess.
We make no commitment to revise or update any forward-Iookmg statements in order to reflect events or
CIrcumstances after the date any such statement IS made.
The followmg diSCUSSIOn should be read m conjUnctIOn WIth the unaudIted finanCIal statements and notes thereto
included elsewhere herein
OVERVIEW
Waste Connections, Inc. IS an mtegrated sohd waste services company that prOVIdes sohd waste collection, transfer,
dIsposal and recychng servIces m mostly secondary markets m the Western and Southern U.S As of June 30, 2004,
we served more than one million commercial, mdustrial and residential customers from a network of operations in
23 states: Alabama, Arizona, California, Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky, Minnesota,
MiSSIssippI, Montana, Nebraska, New Mexico, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah,
Washmgton, and Wyoming As of that date, we owned 104 collection operations and operated or owned 33 transfer
stations, operated or owned 33 SubtItle D landfills, owned two construction and demolition landfills and operated or
owned 26 recycling facilitIes. We also owned two Subtitle D landfill sites that are permitted for operation, but not
constructed as of June 30, 2004.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
.
The preparation of finanCIal statements m conformIty WIth generally accepted accounting principles reqUIres
estimates and assumptIOns that affect the reported amounts of assets and liabilities, revenues and expenses, and
related disclosures of contingent assets and liabIhties m the consohdated financial statements. As described by the
SecuntIes and Exchange CommISSIOn, cntIcal accountmg estimates and assumptions are those that may be material
due to the levels of subjectivIty and judgment necessary to account for highly uncertam matters or the susceptibility
of such matters to change, and that have a matenal impact on our financial condItion or operatmg performance.
There were no SIgnificant changes to our cntIcal accounting estimates and assumptions m the SIX months ended June
30,2004. Refer to our Annual Report on Form 10-K for a complete descriptIOn of our cntical accountmg estimates
and assumptIOns.
13
GENERAL
.
Our revenues consist mamly of fees we charge customers for solid waste collection, transfer, disposal and recycling
services. Our collection business also generates revenues from the sale of recyclable commodities, which have
sigmficant vanabihty. A large part of our collection revenues comes from providing commercial, mdustrial and
residential services. We frequently perform these services under service agreements, municipal contracts or
franchise agreements with governmental entities. Our existing franchise agreements and all of our existing
municipal contracts give us the exclusive right to proVide specified waste services in the specified territory during
the contract term. These exclusive arrangements are awarded, at least mitially, on a competitive bid basis and
subsequently on a bid or negotiated basis. We also provide residential collection services on a subscription basis
with individual households. More than 50% of our revenues for the six months ended June 30, 2004 were derived
from market areas where services are proVided predommantly under exclUSive franchise agreements, long-term
municipal contracts and governmental certificates. Governmental certificates grant us perpetual and exclusive
collectiOn rights m the covered areas. Contracts with counties and municipahties and governmental certificates
provide relatively consistent cash flow during the terms of the contracts. Because we bill most residential customers
quarterly, subscription agreements also provide a stable source of revenues for us.
We charge transfer station and landfill customers a tippmg fee on a per ton and/or per yard basis for disposing of
their solid waste at the transfer stations and landfill facilities. Many of our transfer and landfill customers have
entered mto one to ten year disposal contracts with us, most of which provide for annual indexed pnce increases.
We typically determine the pnces of our sohd waste services by the collection frequency and level of service, route
density, volume, weight and type of waste collected, type of equipment and containers furnished, the distance to the
disposal or processing facility, the cost of disposal or processing, and pnces charged by competitors for similar
services. The terms of our contracts sometimes limit our abihty to pass on price increases. Long-term solid waste
collectiOn contracts often contam a formula, generally based on a published price mdex, that automatically adjusts
fees to cover increases in some, but not all, operating costs, or that limit mcreases to less than 100% of the mcrease .
m the applicable pnce index.
Cost of operations includes labor and benefits, tipping fees paid to third-party disposal facilities, eqUipment
mamtenance, workers' compensation, vehicle msurance, claims expense, third-party transportation expense, fuel, the
cost of materials we purchase for recychng, district and state taxes and host community fees and royalties. Our
single largest cost is labor, followed by third-party disposal, cost of vehicle maintenance, taxes and fees and fuel.
We use a number of programs to reduce overall cost of operations, including increasing the use of automated routes
to reduce labor and workers' compensation exposure, comprehensive maintenance and health and safety programs,
and increasing the use of transfer statiOns to further enhance internalization rates. Our high-deductible insurance
covers automobile liability, general liability, workers' compensation claims, automobile collision and employee
group health claims. If we experience insurance claims or costs above or below our historically evaluated levels,
our estimates could be matenally affected.
Selhng, general and admmistrative ("SG&A") expenses include management, sales force, clencal and admmistrative
employee compensatiOn and benefits, legal, accountmg and other professional services, bad debt expense, and rent
expense for our corporate headquarters.
DepreCiation expense mcludes depreciatiOn of fixed assets over their estimated useful lives usmg the straight-line
method. Depletion expense includes depletion of landfill site costs and total future development costs as remainmg
airspace of the landfill is consumed. Remammg airspace at our landfills includes both permitted and deemed
permitted airspace. AmortizatiOn expense mcludes the amortization of defimte-lived intangible assets, consisting
primanly of long-term franchise agreements and contracts, customer hsts, and non-competitiOn agreements, over
their estimated useful lives using the straight-line method. Goodwill and indefinite-hved mtangible assets,
consistmg pnmanly of certam perpetual rights to proVide solid waste collectiOn and transportation services in
specified temtories, are not amortized.
At June 30, 2004, we had 285.6 milhon tons of permitted remaming airspace capacity and 83.3 million tons of
deemed probable expanSiOn airspace capacity at our 26 owned and operated landfills and landfills operated under
.
14
.
.
.
life-of-site operatmg contracts. We do not measure remammg airspace capacity at the eight landfills we operate
under contracts with fimte terms. Based on remaimng permitted capacity as of June 30, 2004, and projected annual
disposal volumes, the average remaimng landfill life for our owned landfills and landfills operated under hfe-of-site
operating contracts is approximately 45 years. The operating contracts for which the contracted term is not the life
of the landfill have expiratiOn dates from 2004 to 2013.
The disposal tonnage that we received m the six months ended June 30, 2003 and 2004 at all of our landfills owned
or operated during the respective period is shown below (tons in thousands):
June 30, 2003
Number of Total
Sites Tons
June 30, 2004
Number of Total
Sites Tons
Owned landfills or landfills operated
under life-of-site contracts
Operated landfills under hmited term
operating agreements
26
3,169
23
2,660
366
3,026
9
35
494
3,663
7
30
We capitalize some third-party expenditures related to pending acqUisitions or development projects, such as legal,
engineering and mterest expenses. We expense mdirect acqulSltiOn costs, such as executive and corporate overhead,
public relatiOns and other corporate services, as we incur them. We charge against net income any unamortized
capitalized expenditures and advances (net of any portiOn that we believe we may recover, through sale or
otherwise) that may become impaired, such as those that relate to any operation that is permanently shut down and
any pending acquisition or landfill development project that we believe will not be completed. We routmely evaluate
all capitalized costs, and expense those related to projects that we beheve are not likely to succeed. At June 30,
2004, we had $0.1 million m capitahzed expenditures relatmg to pending acquisitions.
We own undeveloped property m Harper County, Kansas, where we are seekmg permits to construct and operate a
municipal solid waste landfill. In 2002, we received a special use permit from Harper County for zoning the landfill
and in 2003 we received a draft permit from the Kansas Department of Health and Environment to construct and
operate the landfill. In July 2003, the Distnct Court of Harper County invalidated the previously issued zoning
permit. We have appealed the District Court's deciSiOn to invalidate the zoning permit. The Kansas Department of
Health and Environment has notified us that it will not issue a final permit to construct and operate the landfill until
the zoning matter is resolved. At June 30, 2004, we had $4 2 nulhon of capitalized expenditures related to this
landfill development project. Based on the advice of counsel, we beheve that we will prevail in this matter and do
not believe that an impairment of the capitalized expenditures exists. If we do not prevail on appeal, however, we
will be required to expense in a future penod the $4.2 milhon of capitalized expenditures, less the recoverable value
of the undeveloped property and other amounts recovered, which would likely have a matenal adverse effect on our
reported mcome for that penod.
We penodically evaluate acquired assets for potential impairment indicators. If any impairment mdicators are
present, a test of recoverability is performed by companng the carrymg value of the asset or asset group to its
undiscounted expected future cash flows. If the carrymg values are in excess of undiscounted expected future cash
flows, impairment is measured by companng the fair value of the asset to itS carrymg value. If the fair value of an
asset is determined to be less than the carrymg amount of the asset or asset group, an impairment in the amount of
the difference is recorded m the penod that the impairment indicator occurs. As of June 30, 2004, there have been
no adjustments to the carrymg amounts of mtangibles, mcludmg goodwill, resulting from these evaluations. As of
June 30, 2004, goodwill and other intangible assets represented 47.1 % of total assets and 97.0% of stockholders'
equity.
NEW ACCOUNTING PRONOUNCEMENTS
For a descnption of the new accounting standards that affect us, see Note 2 to our Condensed Consolidated
Financial Statements included under Part I, Item 1 of this Form 10-Q.
15
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2004
.
The following table sets forth Items m our consolIdated statements of income as a percentage of revenues for the
periods indIcated.
Three months ended SIX months ended
June 30. June 30.
2003 2004 2003 2004
Revenues 100 0% 100.0% 100.0% 100.0%
Cost of operations 558 56.6 55.8 56.8
Selling, general and
administratIve expenses 9.5 9.6 9.8 10.0
DepreciatIOn and
amortizatIOn expense 8.1 8.7 8.2 8.8
Operating income 26.6 25.1 26.2 24.4
Interest expense, net (5.6) (3.2) (5.9) (3.9)
Other expense (0:1) (1.0) (0.1) (0.5)
Minority interests (1.9) (1.9) (1.8) (1.8)
Income tax expense (7.0) (7.1) (6.8) (6.8)
Cumulative effect of change m
accounting pnncIple 0.1
Net mcome 12.0% 11.9% 11.7% 11.4%
Revenues. Total revenues mcreased $21.7 million, or 15.6%, to $160.6 mIllion for the three months ended June 30,
2004, from $138.9 millIon for the three months ended June 30, 2003. Acquisitions closed subsequent to June 30, .
2003 increased revenues approximately $15.1 million. Increases in recyclable commodIty prices increased revenues
by $1.2 mIllIon, and mcreased prices charged to our customers and volume changes in our eXIsting business resulted
in a net revenue increase of approxImately $5.4 mIllIon. The volume mcrease was partially offset by exiting the
roll-offbusmess at our GeorgIa operatIOns.
Revenues for the SIX months ended June 30, 2004 mcreased $42.5 ill11lIon, or 15.9%, to $309.8 million from $267.3
million for the six months ended June 30, 2003. AcqUISItions closed subsequent to June 30, 2003, and the full-
period inclUSIOn of revenues from acquiSItions closed dunng the six months ended June 30, 2003, increased
revenues approxImately $30.7 million. Increases m recyclable commodity prices mcreased revenues by $2.1
millIon, and increased prices charged to our customers and volume changes m our eXIsting business resulted in a net
revenue increase of $9.7 millIon. The volume mcrease was partially offset by exiting the roll-off business at our
Georgta operatIOns and the loss of certain mumcipal contracts that expIred subsequent to June 30, 2003, and were
not renewed.
Cost of Operations. Total cost of operatIons mcreased $13.5 mIllIon, or 17.4%, to $90.9 mIllIon for the three months
ended June 30, 2004, from $77.4 millIon for the three months ended June 30, 2003. Cost of operations for the six
months ended June 30,2004, mcreased $26.8 million, or 17.9%, to $176.0 millIon from $149.2 mIllIon for the six
months ended June 30, 2003. The increases were primarily attributable to operating costs associated with
acqUIsitions closed subsequent to June 30, 2003, increases m medIcal expenses for our self-msured employee health
plans, higher fuel costs and mcreased expenses associated with hIgher collection volumes.
Cost of operatIons as a percentage of revenues mcreased 0.8 percentage pomts to 56.6% for the three months ended
June 30, 2004, from 55.8% for the three months ended June 30, 2003. Cost of operatIOns as a percentage of
revenues for the six months ended June 30, 2004, increased 1.0 percentage point to 56.8% from 55.8% for the six
months ended June 30, 2003. The mcreases as a percentage of revenues were primarily attnbutable to companIes
acquired subsequent to June 30, 2003, having operatmg margms below our company average associated with a .
higher mix of collection volumes, higher labor and other operating costs, mcreased fuel costs, increased medical
16
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expenses resulting from a higher volume of claims and an increase in the number of claims reachmg our per claIm
deductible limIts for our self-insured employee health plans.
SG&A. SG&A expenses mcreased $22 millIon, or 17.2%, to $15.4 mIllIon for the three months ended June 30,
2004, from $13.2 million for the three months ended June 30, 2003. SG&A expenses for the six months ended June
30, 2004 increased $4.9 millIon, or 19.1 %, to $31.0 million from $26.1 million for the SIX months ended June 30,
2003. Our SG&A expenses for the three and six months ended June 30, 2004, increased from the prior year penods
as a result of addItIonal personnel from acqUIsItions closed subsequent to June 30, 2003, increased accountmg
expenses related to new corporate governance requirements, mcreased management mformation system expenses,
mcreased employee bonus and stock compensatIOn expense recogmzed m the three months ended June 30, 2004,
and increased payroll tax expenses resulting from an increase in exercises of stock options during the first six
months of2004, partIally offset by a declIne in bad debt expense due to improved customer collections.
SG&A expenses as a percentage of revenues for the three months ended June 30, 2004, increased 0.1 percentage
pomts to 9.6% from 9.5% for the three months ended June 30, 2003. SG&A as a percentage of revenues for the six
months ended June 30, 2004, increased 0.2 percentage pomts to 10.0% from 9.8% for the six months ended June 30,
2003. The increases were pnmarily due to mcreased employee bonus and stock compensation expense and
mcreased payroll tax expenses resultmg from increases m exercises of stock optIons, partially offset by a decline in
bad debt expense due to improved customer collections.
Depreciation and AmortizatIon. DepreciatIon and amortIzatIon expense mcreased $2.6 millIon, or 22.8%, to $13.9
millIon for the three months ended June 30, 2004, from $11.3 million for the three months ended June 30, 2003.
DepreciatIOn and amortization expense for the six months ended June 30, 2004, increased $5.4 million, or 24.9%, to
$27.3 mIllIon from $21.9 mIllIon for the SIX months ended June 30, 2003. The increases were primarily attributable
to deprecIatIOn and depletion assocIated WIth acqulSltIOns closed subsequent to June 30, 2003, increased
depreciation expense resulting from new equipment acquired to support our base operatIOns, mcreased amortizatIon
expense assocIated WIth mtangIble assets acquired in acquisitIOns closed subsequent to June 30, 2003, and increased
depletIOn expense resultmg from hIgher volumes at our landfill operatIOns.
.
DeprecIatIon and amortIzatIon expense as a percentage ofrevenues increased 0.6 percentage points to 8.7% for the
three months ended June 30, 2004, from 8.1 % for the three months ended June 30, 2003. Depreciation and
amortIzatIon expense as a percentage of revenues for the SIX months ended June 30, 2004, increased 0.6 percentage
points to 8.8% from 8.2% for the SIX months ended June 30, 2003. The increases in depreciation and amortization
as a percentage of revenues were the result of depreciation expense assocIated WIth new eqUIpment acquired
subsequent to June 30, 2003, whIch replaced older eqUIpment WIth lower depreciation costs, increased amortization
expense associated WIth intangible assets acquired in acquisitions closed subsequent to June 30, 2003.
Operatmg Income. Operatmg income mcreased $3.4 mIllIon, or 9.1 %, to $40.4 millIon for the three months ended
June 30, 2004, from $37.0 million for the three months ended June 30, 2003. Operating income for the six months
ended June 30, 2004 increased $5 3 mIllion, or 7.6%, to $75.5 millIon from $70.2 million for the six months ended
June 30, 2003. The increases were pnmanly attnbutable to the growth m revenues, partIally offset by mcreased
operatmg costs, recurring SG&A expenses to support the revenue growth, increases in employee bonus and stock
compensation expense and mcreased deprecIatIOn and amortIzation expenses.
Operating income as a percentage of revenues decreased 1 5 percentage points to 25.1 % for the three months ended
June 30, 2004, from 26.6% for the three months ended June 30, 2003. Operating income as a percentage of
revenues for the six months ended June 30, 2004, decreased 1 8 percentage pomts to 24.4% from 26.2% for the SIX
months ended June 30, 2003. The decreases were due to the aforementIOned percentage of revenue increases m cost
of operations, SG&A expenses, and deprecIatIOn and amortIzatIon expenses.
.
Interest Expense. Interest expense decreased $2.6 million, or 33.5%, to $5.2 mIllIon for the three months ended
June 30, 2004, from $7.8 millIon for the three months ended June 30, 2003. Interest expense for the SIX months
ended June 30, 2004, decreased $3.8 millIon, or 24.2%, to $12.0 millIon from $15.8 mIllIon for the six months
ended June 30, 2003. The decreases were attributable to declInes m our total outstanding debt balances and a
decrease in the effectIve mterest rate of our aggregate debt balance, due primarily to the expiration of two interest
rate swap agreements in late 2003 that reqUIred fixed mterest payments m excess of our variable rate borrowing cost.
17
The decrease m our total outstanding debt balance was primarily due to the redemption of our $150 mtlhon
aggregate principal amount, 5.5% ConvertIble Subordmated Notes due 2006, whIch resulted m $123.6 mtllion of the
outstandmg note princIpal bemg converted into our common stock, partially offset by additional borrowings to fund
acquisitions and repurchases of our common stock.
Other Expense. Other expense mcreased to $1.6 mtllion for the three months ended June 30, 2004, from $0.2
million for the three months ended June 30, 2003. Other expense increased to $1.5 million for the six months ended
June 30, 2004, from $0.2 mtllion for the six months ended June 30, 2003. Other expense m the three and six months
ended June 30, 2004, includes $1.5 million of costs associated WIth the redemptIon of our $150 million 5.5%
ConvertIble Subordinated Notes due 2006. These redemption costs mcluded early redemption premIUm payments
and the write-off of a portion of the unamortized debt Issuance costs. The remaining components of other expense
in 2003 and 2004 were net losses mcurred on the dIsposal of certain assets.
Minority Interests. Mmonty interests increased $0.5 million, or 17.8%, to $3.1 mtllion for the three months ended
June 30, 2004, from $2.6 mtlhon for the three months ended June 30, 2003. Mmority interest increased $0.8
mtllion, or 16.6%, to $5.7 million for the SIX months ended June 30, 2004, from $4.9 million for the six months
ended June 30, 2003. The increases in minority interests were due to mcreased earnmgs by our majority-owned
subsidiaries.
ProvisIOn for Income Taxes. Income taxes increased $1.6 milhon, or 16.7%, to $11.4 million for the three months
ended June 30, 2004, from $9.8 million for the three months ended June 30, 2003. Income taxes mcreased $2.8
million, or 15.0%, to $21.0 million for the six months ended June 30, 2004, from $18.2 million for the six months
ended June 30, 2003. These increases were due to increased pre-tax earnings and an increase in our effectIve tax
rate. Our effective tax rates for the three and six months ended June 30, 2004 were 37.3% and 37.2%, respectively,
an increase from 37.0% in the pnor year penods. The increase in our effective tax rate was due to the recognition of
non-tax deductible expenses in 2004, partIally offset by the reversal of certam tax contingencIes that expired in the
current year periods.
Cumulative Effect of Change in Accounting PrincIple. Cumulative effect of change in accounting principle for the
six months ended June 30, 2003, consIsted of a $0.3 mtllion gain, net of tax effects, resulting from our adoptIon of
SFAS No. 143 on January 1, 2003. Our adoption of SFAS No. 143 reqUIred us to record a cumulative change m
accountmg for landfill closure and post-closure obligations retroactIvely to the date of the acqUIsItion of each
landfill.
Net Income. Net mcome mcreased $2.6 million, or 15.2%, to $19.2 million for the three months ended June 30,
2004, from $16.6 million for the three months ended June 30, 2003. Net mcome increased $4.1 mIllion, or 12.9% to
$35.4 mtlhon for the SIX months ended June 30, 2004, from $31.3 million for the SIX months ended June 30, 2004.
The increases were primanly attrIbutable to increased operating mcome and decreased mterest expense, partIally
offset by increased minority mterest expense, other expense and income tax expense.
LIQUIDITY AND CAPITAL RESOURCES
Our business IS capItal mtensive. Our capItal reqUIrements mclude fleet and containers, factlItIes, and expendItures
for landfill cell construction, landfill development and landfill closure actIvitIes m the future. We plan to meet our
capital needs through various financing sources, includmg mternally generated funds, debt and equity financings.
As of June 30, 2004, we had a workmg capItal defiCIt of $14.1 milhon, mcluding cash and equivalents of $5.6
mtlhon. Our strategy m managmg our workmg capital is generally to apply the cash generated from our operations
that remams after satIsfymg our workmg capItal and capital expenditure requirements to reduce our mdebtedness
under our credit facIhty and to mmimIze our cash balances.
In October 2003, we entered into a new credit facIhty to mcrease the maXImum borrowings available to us to $575
milhon. ThIS new credit facihty consisted of a $400 million senior secured revolvmg credIt factlity WIth a syndIcate
of banks for WhICh Fleet National Bank acts as agent and a $175 million senior secured term loan. In March 2004,
we refinanced the semor secured term loan portion of our credIt facIhty in order to reduce the effective borrowing
cost. The applicable margin on the senior secured term loan was reduced by 25 basis points; all other terms
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remained consistent. In addition, we increased the amount outstanding under the senior secured term loan from
$175 mtlhon to $200 million, resulting III an increase III the SIze of the facility to $600 mtllion. The senior secured
revolving credit faclhty matures in October 2008. The senior secured term loan requires annual pnnclpal payments
equal to 1 % of the lllitial term loan amount with all remallllllg outstandlllg amounts due October 2010. Under the
new credit facility, there IS no maximum amount of stand-by letters of credIt that can be issued; however, the
Issuance of stand-by letters of credit reduces the amount of total borrowings avatlable. We are able to mcrease the
maXImum borrowlllgs under the new credit facility to $675 mtllion, although no eXlstmg lender will have any
obligation to mcrease ItS commitment, provIded that no event of default, defined in the new credIt facility, has
occurred. The borrowmgs under the new credIt faclhty bear interest at a rate per annum equal to, at our discretIon,
eIther the Fleet National Bank Base Rate plus apphcable margm, or the LIBOR rate plus applicable margin. The
applicable margin under the revolvlllg credit facility varies depending on our leverage ratio. At June 30, 2004, the
applicable margin on the term loan was 25 basis points III the case of loans based on the Base Rate and 175 basis
points in the case of loans based on the LIBOR rate. VIrtually all of our assets, includmg our mterest in the equity
securities of our subSIdiaries, secure our obligatIOns under the new credIt factlity.
The new credit faclhty places certam business, financial and operating restrictions on us relating to, among other
things, addItional indebtedness, investments, acquisItIons, asset sales, mergers, dIVIdends, distributions, and
repurchases and redemption of capital stock. The new credIt facility also requires that we maintam specIfied
financial ratios and balances. As of June 30, 2004, we were III compliance with all apphcable covenants m our
outstanding credit facihty. The credit facihty also requires the lenders' approval of acqUIsitions in certalll
circumstances. We use the credIt factlity for acqUIsItions, capital expendItures, working capItal, standby letters of
credit and general corporate purposes. The $16.0 mtlhon increase in outstandmg borrowings under our credit
faclhty m 2004 was primarily due to our cash redemption of a portion of our $150 million aggregate principal
amount, 5.5% Convertible Subordmated Notes due 2006 and our repurchase of outstandmg common stock, offset by
cash generated from operations and the proceeds from stock optIOn exercises. If we are unable to incur addItional
indebtedness under our credit facility or obtam additional capital through future debt or equity financmgs, our rate of
growth through acqUIsitions may decline.
As of June 30, 2004, we had the following contractual obligations (in thousands):
Principal Payments Due by Period
Less Than
Recorded ObhgatIons Total 1 Year 2 to 3 Years 4 to 5 Years Over 5 Years
Long-term debt (1) $ 476,050 $ 8,624 $ 15,622 $ 65,838 $ 385,966
Total contractual cash
obligations $ 476,050 $ 8,624 $ 15,622 $ 65,838 $ 385,966
(I) Long-term debt payments mclude $44 nulllOn III pnnclpal payments due 2008 related to our senIor secured levolvmg credIt faCIlIty and
$198 ImllIon m pnnclpal payments due 20 I 0 related to our senIor secured tenTI loan, both under our credIt faCIlIty As of June 30, 2004, our
credIt faCIlIty allowed us to bOlTOW up to $600 millIon
Unrecorded Obligations Total
Operating leases (2) $ 27,102
UncondItIonal purchase
obligations(2) 15,735
Total commercial
commItments $ 42,837
Amount of CommItment ExpiratIon Per Period
Less Than
1 Year
$ 3,994
2 to 3 Years
$ 6,289
4 to 5 Years
$ 4,628
Over 5 Years
$ 12,191
10,235
5,500
$ 11,789
$ 4,628
$ 12,191
$ 14,229
(2) We are party to operatmg lease agIeements and unconditIonal purchase oblIgatIOns These lease agreements and purchase oblIgatIOns are
establIshed m the ordmary course of our busmess and are deSIgned to proVIde us WIth access to faCIlItIes and products at competItIve,
market-dnven pnces These arrangements have not matenally affected our finanCIal pOSItIOn, results of operatIOns or lIqUIdIty dunng the
three or SIX months ended June 30, 2004, nor are they expected to have a materIal Impact on our future financIal pOSItIOn, results of
operatIOns or hqUIdlty
19
Weare party to stand-by letters of credit and financIal surety bonds These stand-by letters of credIt and financial
surety bonds are generally estabhshed to support our financial assurance needs and landfill operations. These
arrangements have not matenally affected our financIal positlOn, results of operatlOns or liqmdlty during the six
months ended June 30, 2004, nor are they expected to have a material impact on our future financial position, results
of operations or liqmdlty.
The minonty interest holders of one of our majority-owned Subsldlanes have a currently exercisable optlOn (the "put
option") to requITe us to complete the acqulSltion of this majonty-owned subsIdiary by purchasing their minority
ownershIp interests for fair market value. The put optlOn calculates the fair market value of the subsIdiary based on
its current operating income before deprecIation and amortIzatIon, as defined in the put optlOn agreement. The put
optlOn does not have a stated termination date. At June 30, 2004, the minority interest holders' pro rata share of the
SubsIdIary's fair market value IS estImated to be worth between $69 million and $83 mlllion. Because the put option
is required at fair market value, no amounts have been accrued relatIve to the put option.
For the SIX months ended June 30, 2004, net cash provIded by operating activities was $84.1 million. Of this
amount, $4.1 million was provided by working capital for the period. The primary components of the reconciliation
of net income to net cash provIded by operatIons for the SIX months ended June 30, 2004, consIst of non-cash
expenses including $27.3 mllhon of depreciation and amortizatlOn, $5.7 million of minority interest expense, $1.4
million of debt issuance cost amortIzation, and the deferral of $9.9 million of income tax expense resulting from
temporary differences between the recogmtIon of income and expenses for finanCIal reportmg and income tax
purposes.
For the six months ended June 30, 2004, net cash used in mvestmg activities was $41.6 million. Of this amount,
$12.4 mlllion was used to fund the cash portion of acqmsitlOns and to pay a portion of acquisItion costs that were
included as a component of accrued liablhtles at December 31,2003. Cash used for capital expenditures was $33.9
mlllion, whIch was primarily for mvestments in fixed assets, consisting of trucks, contamers, other equipment and
landfill development. Cash prOVIded by investing activities mcluded $3.9 mlllion of net draws of restricted cash.
For the six months ended June 30, 2004, net cash used in financing actIvitIes was $42.3 milhon, whIch included
$19.3 mllhon of proceeds from stock optlOn and warrant exercises, less $27.5 million of net payments under our
vanous debt arrangements, $27.9 mlllion to repurchase shares of our common stock, $5.9 mllhon of cash
distnbutIons to minority mterest holders and $0.3 million of debt Issuance costs, primarily related to our amended
credIt facility.
We made approxImately $33.9 million m capItal expendItures for property and equipment during the SIX months
ended June 30, 2004. We expect to make capItal expendItures of approximately $70.0 mllhon in 2004 m connectlOn
with our existing busmess. We intend to fund our planned 2004 capital expendItures pnnclpally through existing
cash, internally generated funds, and borrowings under our existing credit facility. In addition, we may make
substantial additlOnal capItal expendItures in acquiring sohd waste collection and disposal businesses. If we acquire
addItional landfill disposal facIlItIes, we may also have to make slgmficant expendItures to bnng them into
compliance with apphcable regulatory requirements, obtain permits or expand our available disposal capacity. We
cannot currently determine the amount of these expenditures because they will depend on the number, nature,
condItion and permitted status of any acqmred landfill dIsposal facilitIes We believe that our credIt facility and the
funds we expect to generate from operatlOns wlll provide adequate cash to fund our workmg capital and other cash
needs for the foreseeable future
From tIme to time we evaluate our existing operations and theIT strategic importance to us. If we determme that a
gIven operatmg unit does not have future strategic importance, we may sell or otherwise dispose of those operatIons.
Although we believe our operatIons would not be Impaired by such dISpositions, we could incur losses as a result.
SEASONALITY
Based on historic trends, we expect our operating results to vary seasonally, with revenues typically lowest in the
first quarter, higher in the second and thIrd quarters and lower in the fourth quarter than m the second and thIrd
quarters. We expect the fluctuation in our revenues between our hIghest and lowest quarters to be approximately
10% to 12%. This seasonality reflects the lower volume of solid waste generated dunng the late fall, winter and
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early spnng months because of decreased construction and demolition activIties during the winter months in the
U.S. In addition, some of our operatmg costs may be hIgher m the winter months. Adverse winter weather
condItions slow waste collection activities, resulting in higher labor and operatIOnal costs Greater precipitation in
the winter increases the weIght of collected waste, resulting in higher disposal costs, which are calculated on a per
ton basIs.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, we are exposed to market nsk, mcluding changes m interest rates and certain
commodity prices. We use hedge agreements to manage a portion of our risks related to interest rates. While we are
exposed to credit risk in the event of non-performance by counterparties to our hedge agreements, m all cases such
counterparties are highly rated fmancial instItutions and we do not anticipate non-performance. We do not hold or
issue derivative finanCIal mstruments for trading purposes. We monitor our hedge positIOns by regularly evaluating
the positions at market and by performing sensitivity analyses.
In May 2003, we entered into two forward-startmg mterest rate swap agreements. Each mterest rate swap agreement
has a notIOnal amount of $87.5 mIllion and effectively fixed the mterest rate on the notional amount at mterest rates
rangmg from 2.67% to 2.68%, plus applicable margm The effective date of the swap agreements was February
2004 and each swap agreement expires m February 2007
In March 2004, we entered into two additional three-year interest rate swap agreements. Each interest rate swap
agreement has a notional amount of $37.5 mIllIon and effectively fixed the interest rate on the notional amount at an
mterest rate of2.25%, plus applIcable margin.
We have performed sensItivity analyses to determme how market rate changes wIll affect the fair value of our
market risk sensitive hedge positions and all other debt. Such an analysis is mherently lImIted m that It reflects a
singular, hypothetical set of assumptions. Actual market movements may vary sIgmficantly from our assumptions.
Fair value sensitivity is not necessarily mdIcative of the ultimate cash flow or earmngs effect we would recogmze
from the assumed market rate movements. Weare exposed to cash flow nsk due to changes m mterest rates with
respect to the net floating rate balances owed at June 30, 2003 and 2004, of $249.4 million and $202.4 million,
respectively, includmg floatmg rate debt under our credit faCIlIty, our 2022 Notes, various floating rate notes
payable to thIrd partIes and floating rate mumcIpal bond obligatIOns, offset by our debt effectively fixed under
mterest rate swap agreements. A one percentage point mcrease in mterest rates on our vanable-rate debt as of June
30, 2003 and 2004, would decrease our annual pre-tax mcome by approxImately $2.5 millIon and $2.0 million,
respectively. All of our remammg debt instruments are at fixed rates, or effectively fixed under the interest rate
swap agreements descnbed above; therefore, changes m market interest rates under these instruments would not
sigmficantly impact our cash flows or results of operations
We market a variety of recyclable matenals, mcludmg cardboard, office paper, plastic containers, glass bottles and
ferrous and aluminum metals. We own and operate 26 recyclmg processing facilities and sell other collected
recyclable matenals to third parties for processing before resale. We often share the profits from our resale of
recycled matenals WIth other parties to our recycling contracts. For example, certain of our muniCIpal recycling
contracts m Washington, negotiated before we acquired those businesses, speCIfy benchmark resale prices for
recycled commodities. If the pnces we actually receIve for the processed recycled commodIties collected under the
contract exceed the pnces specified in the contract, we share the excess WIth the municipalIty, after recovering any
previous shortfalls resultmg from actual market pnces fallmg below the pnces speCIfied m the contract To reduce
our exposure to commodIty price risk with respect to recycled matenals, we have adopted a pricing strategy of
chargmg collection and processmg fees for recyclmg volume collected from third partIes Although there can be no
assurance of market recoveries, m the event of a declIne, because of the provisions wIthm certam of our contracts
that pass commodIty risk along to the customers, we believe, given historical trends and fluctuations in the recyclIng
commodities market, that a 10% decrease m average recycled commodity prices from the pnces that were in effect
at June 30, 2004 would not materially affect our cash flows or pre-tax income.
21
ITEM 4. CONTROLS AND PROCEDURES
Our management, mcludmg our Chief Executive Officer and ChiefFmanclal Officer, evaluated the effectiveness of
the design and operatIon of our disclosure controls and procedures, as defined in Rules l3a-15(e) and l5d-15(e)
under the Securities Exchange Act of 1934, as of June 30, 2004. Based on that evaluatIOn, the ChIef Executive
Officer and ChIef Financial Officer concluded that our dIsclosure controls and procedures were effectIve, in all
matenal respects, to ensure that mformatIOn required to be disclosed in the reports we file or submit under the
Exchange Act is recorded, processed, summanzed and reported as and when reqUIred.
During the quarter ended June 30, 2004, there were no significant changes m our internal controls or in other factors
that could slgmficantly affect these controls subsequent to the date they were evaluated in connectIon with the
preparation of thIS quarterly report on Form 10-Q.
22
.
.
.
.
.
.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We own undeveloped property in Harper County, Kansas, where we are seeklllg permits to construct and operate a
municipal solId waste landfill. In 2002, we received a speCial use permIt from Harper County for zoning the landfill
and in 2003 we received a draft permit from the Kansas Department of Health and EnvIronment to construct and
operate the landfill. In July 2003, the Distnct Court of Harper County invalidated the previously Issued zoning
permIt. We have appealed the DIStriCt Court's decision to mvalidate the zOlllng permit. The Court of Appeal heard
oral arguments over our appeal on June 16,2004. The Kansas Department of Health and EnvIronment has notified
us that it will not issue a final permit to construct and operate the landfill unttl the zOlllng matter IS resolved. At
June 30, 2004, we had $4.2 million of capitalized expendItures related to this landfill development project. Based
on the advIce of counsel, we believe that we WIll prevail in this matter and do not belIeve that an impairment of the
capitalized expenditures exists. If we do not prevail on appeal, however, we will be required to expense in a future
period the $4.2 million of capItalized expenditures, less the recoverable value of the undeveloped property and other
amounts recovered, whIch would likely have a material adverse effect on our reported lllcome for that period.
We are pnmarily self-lllsured for automobile liability, general liability and workers' compensation clmms as a result
of our high deducttble programs. We are a party to various clmms and suits pending for alleged damages to persons
and property and alleged lIabtlities occurring dunng the normal operatIOns of our solId waste management busllless.
On October 31,2003, our subsIdiary, Waste Connections of Nebraska, Inc. was named as a defendant in the case of
Karen Colleran, Conservator of the Estate of Robert Rooney v. Waste Connections of Nebraska, Inc. The plaintiff
seeks recovery for damages allegedly suffered by Father Robert Rooney when the bIcycle he was riding collIded
with one of our garbage trucks in Valley County, Nebraska. The complalllt alleges that Father Rooney suffered
serious bodily injury, including traumatic bram injury. The plallltiff seeks recovery of past medical expenses of
approximately $430,000 and an unspecIfied amount for future medIcal expenses and home healthcare, past pain and
suffering, future pain and suffering, lost income, loss of eammg capacity, and permanent injUry and dIsability. Our
primary defense IS that the plamtiff is not entitled to any damages under Nebraska law because the negligence of
Father Rooney was equal to or greater than any negligence on the part of our dnver, and we intend to defend thIs
case vIgorously on these and other grounds. This case IS m the early stages of discovery, and we have not accrued
any potential loss as of June 30, 2004; however, an adverse outcome m this case coupled with a siglllficant award to
the plaintiff could have a material adverse effect on our reported income m the penod mcurred.
Additionally, we are a party to various legal proceedmgs resulting from the ordinary course of business and the
extensive governmental regulation of the solid waste mdustry. Our management does not belIeve that these
proceedings, either individually or in the aggregate, are lIkely to have a material adverse effect on our busllless,
financIal condition, operating results or cash flows.
23
ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES
.
On May 3,2004, we announced that our Board of Directors had authonzed a common stock repurchase program for
the repurchase of up to $200 million of our common stock over a two-year penod Under the program, we may
repurchase stock in the open market or III privately negotiated transactions from time to time at management's
discretion. The timing and amounts of any repurchases will depend on many factors, including our capital structure,
the market pnce of our common stock and overall market condihons. The table below reflects repurchases we have
made as of June 30, 2004:
(In thousands, except share and per share amounts; amounts below reflect our
three-for-two split of our common stock in June 2004):
Total Number MaxImum
of Shares Approximate Dollar
Total Number Average Purchased as Value of Shares that
of Shares Price Paid Part of Publicly May Yet Be Purchased
Period Purchased Per Share Announced Program Under the Program
4/1/04 - 4/30/04 283,350 (1) $ 27.17 N/A
5/1/04 - 5/31/04 682,950 (2) 26.95 637,950 $ 182,806
6/1/04 - 6/30/04 63,000 27.99 63,000 181,042
Total 1,029,300 $ 27.07 700,950 $ 181,042
(I) These shal es were purchased m open market transactIons other than through a publicly announced program This program was
approved by our Board of DIrectors on FeblUary 25, 2004 and authonzed us to lepurchase up to approximately $45 mtllion of our
common stock from tIme to tIme
.
(2) Under the program descnbed m footnote 1 above, 45,000 shales of common stock were purchased m open market transactIOns on May
3,2004
.
24
.
.
.
.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(Amounts below reflect our three-for-two split of our common stock in June 2004.)
Our annual meetlllg of stockholders was held on May 26, 2004.
Ron J. Mittelstaedt was elected as a Class III director by the votes llldlcated below.
Total Votes For:
39,840,939
Total Votes Withheld:
1,634,452
The term for Mr. Mittelstaedt will run until the date of our annual meetlllg of stockholders III 2007 and untIl a
successor has been duly elected and qualified. Continuing in office as Class I dIrectors, whose term runs unhl the
annual meetlllg of stockholders in 2005 and until their successors have been duly elected and qualified, were Eugene
V. Dupreau and Robert H. Davis. Continuing in office as Class II dIrectors, whose term runs unhl the annual
meeting of stockholders in 2006 and until their successors have been duly elected and quahfied, were Michael W.
Harlan and William J. Razzouk.
The followlllg proposal was adopted at the annual meeting by the votes llldlcated below:
To approve the amendment of our Amended and Restated CertIficate ofIncorporation to (a) lllcrease the authorized
number of shares of common stock from 50,000,000 to 100,000,000 shares and (b) delete references to the Series A
Preferred Stock which converted to common stock upon the completlOn of our imhal public offenng.
Total Votes For.
39,084,540
Total Votes Agalllst:
2,373,661
Total Votes Abstallled.
17,190
The followlllg proposal was adopted at the annual meetlllg by the votes llldlcated below:
To approve the 2004 Equity Incentive Plan.
Total Votes For:
24,081,675
Total Votes Agalllst:
13,864,513
Total Votes Abstained.
52,461
Total Broker No-Vote:
3,476,742
The followmg proposal was adopted at the annual meetlllg by the votes llldlcated below:
To rahfy the appollltment of Ernst & Young LLP as our llldependent audItors for Waste Connections for the year
2004
Total Votes For:
40,916,919
Total Votes Against:
547,117
Total Votes Abstained:
11,355
25
ITEM 5. OTHER INFORMATION
.
(a) In accordance with Rule 416(b) promulgated under the Securities Act of 1933, as amended (the "Secunties
Act"), the number of shares of our common stock registered for sale under the Securities Act by the
followmg RegIstration Statements on Form S-8 has been deemed to be increased to include the shares of
common stock Issued m connection with our three-for-two stock splIt m the form of a 50% stock dividend
effected on June 24, 2004 (the "Stock SplIt"), to the extent issued with respect to shares desIgnated by such
registration statements but unsold as of the date of the Stock SplIt: Registration Statement on Form S-8
(Reg No. 333-102413) filed with the SEC on January 8,2003; RegIstration Statement on Form S-8 (Reg.
No. 333-90810) filed with the SEC on June 19,2002; Registration Statement on Form S-8 (Reg. No. 333-
83172) filed WIth the SEC on February 21, 2002; Registration Statement on Form S-8 (Reg. No. 333-
42096) filed with the SEC on July 24, 2000; Registration Statement on Form S-8 (Reg. No. 333-72113)
filed with the SEC on February 10, 1999; and Registration Statement on Form S-8 (Reg. No. 333-63407)
filed with the SEC on September 15, 1998.
(b) On July 20,2004, our Board of DIrectors approved amendments to our Amended and Restated Bylaws that,
among other things, affect the advance notice procedures by which stockholders may recommend nommees
for our board of directors, as descnbed m the Proxy Statement for our annual stockholders meetmg held on
May 26, 2004. As a result of such amendments, m order to be considered for inclusion in our proxy
materials for future annual meetmgs of stockholders, notice of a stockholder's nomination of a person for
election to the Board must be received by the Secretary of Waste Connections at our principal executive
offices no later than the close of business (California time) on the one hundred twentieth (l20th) day prior
to the date which is the same month and day as the date of our proxy statement released to stockholders in
connection with the prevIOUS year's annual meetmg To be considered timely, stockholder proposals
submitted after this deadline must be delIvered to or mailed and received at our prinCIpal executive offices
no later than the close of busmess (California time) on the mnetieth (90th) day prior to the meeting of
stockholders. The amendments to our Amended and Restated Bylaws did not otherwIse materially change
the procedures governing stockholder nommatIOns of candidates for our Board of DIrectors described .
therem and in our most recent Proxy Statement.
.
26
.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) ExhIbits:
Exhibit Number
3.1 (r)
3.2
4.1 (a)
4.2 (h)
4.3 (h) (+)
4.4 (h) (+)
4.5 (h)(+)
4.6 (1)
4.7 (i) (+)
48(1)(+)
.
4.9 (1) (+)
4 10 (r)
4.11 (r)(+)
10.1 (d)
10.2 (a)
10.3 (a)
10 4 (a)
105 (c)
10.6 (e)
10 7 (e)
10.8 (a)
10.9 (a)
.
10.10 (a)
Description of Exhibits
Amended and Restated Certificate ofIncorporation of the Registrant, 1ll effect as of the
date hereof
Amended and Restated Bylaws of the Registrant, 1ll effect as of the date hereof
Form of Common Stock CertIficate
Form of Note for the RegIstrant's 5.5% ConvertIble Subordinated Notes due Apnl15,
2006
Indenture between the Registrant, as Issuer, and State Street Bank and Trust Company, as
Trustee, dated as of Apri14, 2001
Purchase Agreement between the RegIstrant and Merrill Lynch, PIerce, Fenner & Smith
Incorporated, dated March 30, 2001
Registration Rights Agreement between the Registrant and Mernll Lynch, Pierce, Fenner
& SmIth Incorporated, dated as of Apri14, 2001
Form of Note for the RegIstrant's Floating Rate Convertible Subordinated Notes Due 2022
Indenture between the Registrant, as Issuer, and State Street Bank and Trust Company of
Cahfomta, N.A., as Trustee, dated as of April 30, 2002
Purchase Agreement between the Registrant and Deutsche Bank Securities Inc., dated Apn1
26,2002
RegIstratIon RIghts Agreement between the Registrant and Deutsche Bank SecuntIes Inc.,
dated as of Apn1 30, 2002
Form of Note for the RegIstrant's new Floating Rate Convertible Subordmated Notes Due
2022
Form ofIndenture between the RegIstrant, as Issuer, and U.S. Bank NatIOnal ASSOCIation, as
Trustee
Second Amended and Restated 1997 Stock Option Plan
Form of OptIon Agreement
Form of Warrant Agreement
Form of Stock Purchase Agreement dated as of September 30, 1997
Form of ThIrd Amended and Restated Investors' RIghts Agreement, dated as of December
31,1998
Second Amended Employment Agreement between the Registrant and Darrell Chambhss,
dated as of June 1, 2000
Second Amended Employment Agreement between the RegIstrant and MIchael Foos,
dated as of June 1, 2000
Employment Agreement between the Registrant and Steven Bouck, dated as of February
1, 1998
Employment Agreement between the Registrant and Eugene V. Dupreau, dated as of
February 23, 1998
Form ofIndenmIficatIOn Agreement entered into by the RegIstrant and each of ItS
dIrectors and officers
27
Exhibit Number Description of Exhibits
.
10.11 (b) (+) Loan Agreement, dated as of June 1, 1998, between Madera Disposal Systems, Inc. and
the Cahfornia PollutIOn Control Fmancing Authority
10.12 (b) Employment Agreement between the RegIstrant and David M. Hall, dated as of July 8,
1998
10.13 (g) Employment Agreement between the Registrant and James M LIttle, dated as of
September 13, 1999
10.14 (g) Employment Agreement between the RegIstrant and Jerri L. Hunt, dated as of October 25,
1999
1O.15(j)
1O.16(J)
10.17 (k)
10.18 (k)
10.19(1)
1020 (m)
10.21 (n)
10.22 (n)
10.23 (0)
10.24 (p)
10.25 (q)
10.26
10.27
10.28
31.1
31.2
32
(a)
(b)
(c)
(d)
Employment Agreement between the Registrant and Kenneth O. Rose, dated as of May 1,
2002
Employment Agreement between the Registrant and Robert D. Evans, dated as of May 10,
2002
2002 Senior Management Equity Incentive Plan
2002 Stock OptIon Plan
2002 Restricted Stock Plan
Consultant Incentive Plan
Employment Agreement between the RegIstrant and David G. Eddie, dated as of May 15,
2001
Employment Agreement between the Registrant and Worthmg F. Jackman, dated as of April
11, 2003
Amended and Restated Revolving CredIt and Term Loan Agreement dated as of October 22,
2003
Refinancing Facility Amendment to Amended and Restated Revolving Credit and Term
Loan Agreement dated as of March 2,2004
Second Amended and Restated Employment Agreement between the Registrant and Ronald
J. Mittelstaedt, dated March 1,2004
Amendment No.2 to Amended and Restated Revolving CredIt and Term Loan
Agreement, dated May 4, 2004
Nonquahfied Deferred Compensation Plan, dated July 1,2004
2004 EqUIty IncentIve Plan, as amended and restated July 20, 2004
Certification of PresIdent and Chief Executive Officer
CertificatIon of ChIef Fmancial Officer
Certificate of ChIef Executive Officer and ChIefFmancIal Officer
.
Incorporated by reference to the exhibits filed WIth the Registrant's RegistratIon Statement on
Form S-I, RegIstratIon No. 333-48029.
Incorporated by reference to the exhibits filed WIth the RegIstrant's RegIstratIOn Statement on
Form S-4, RegIstratIon No. 333-59199.
Incorporated by reference to the exhIbIts filed WIth the Registrant's Registration Statement on
Form S-4, RegIstratIon No. 333-65615.
Incorporated by reference to the exhibit filed with the RegIstrant's Form S-8, filed on July 24,
2000.
.
28
.
.
.
..
(e)
Incorporated by reference to the exhibit filed with the RegIstrant's Form lO-Q filed on November
14,2000.
(f) Incorporated by reference to the exhIbit filed with the RegIstrant's Form 10-Q filed on August 7,
2000.
(g) Incorporated by reference to the exhibIt filed with the Registrant's Form 10-K filed on March 13,
2000.
(h) Incorporated by reference to the exhIbIt filed wIth the Registrant's Form S-3 filed on June 5,
2001.
(i) Incorporated by reference to the exhIbit filed wIth the Registrant's Form S-3 filed on July 29,
2002.
U) Incorporated by reference to the exhibIt filed with the Registrant's Form 10-Q filed on August 13,
2002.
(k) Incorporated by reference to the exhIbIt filed WIth the Registrant's Form S-8 filed on February
21,2002.
(1) Incorporated by reference to the exhibit filed with the Registrant's Form S-8 filed on June 19,
2002.
(m) Incorporated by reference to the exhibit filed with the RegIstrant's Form S-8 filed on January 8,
2003.
(n)
Incorporated by reference to the exhibit filed wIth the RegIstrant's Form 10-Q filed on August
13,2003.
(0) Incorporated by reference to the exhibIt filed wIth the Registrant's Form 8-K filed on October 23,
2003.
(p) Incorporated by reference to the exhibIt filed wIth the RegIstrant's Form 10-K filed on March 12,
2004.
(q) Incorporated by reference to the exhIbIt filed with the Registrant's Form 10-Q filed on Apnl 22,
2004
(r) Incorporated by reference to the exhIbit filed WIth the Registrant's Form T-3 filed on June 16,
2004.
(+) FIled wIthout exhIbIts and schedules (to be provided supp1ementally on request of the
CommIssIOn).
(b) Reports on Form 8-K:
On Apnl 15,2004, we filed a report on Form 8-K announcmg the completIOn of the redemptIOn of our $150
mIllion aggregate pnncipal amount, 5.5% ConvertIble Subordinated Notes due 2006.
On Apnl 22, 2004, we filed a report on Form 8-K announcmg the results of our earnings for the first quarter of
2004.
On Apnl 22, 2004, we filed a report on Form 8-K providmg estImates for certam components of our results of
operatIons for the second quarter of2004.
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Date: July 22, 2004
Date: July 22, 2004
30
WASTE CONNECTIONS, INC.
BY:
/s/ Ronald J. Mittelstaedt
Ronald J. MIttelstaedt,
PresIdent and Chief Executive Officer
BY:
/s/ Steven F. Bouck
Steven F. Bouck,
Executive Vice PresIdent and ChIef
financIal Officer
. .
.
.
.
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WASTE CONNECTIONS, INC.
Offer to Exchange
Floating Rate Convertible Subordinated Notes Due 2022
(CUSIP No 941053AEO)
for Any and All Outstanding
Floating Rate Convertible Subordinated Notes Due 2022
(CUSIP Nos. 941053AC4 and 941053AD2)
Waste ConnectIOns, Inc. IS offering to exchange $1,000 m principal amount of our Floatmg Rate
ConvertIble Subordinated Notes Due 2022, or the New Notes, for each $1,000 in principal amount of our
outstandmg Floating Rate ConvertIble Subordinated Notes due 2022, or the Old Notes, that is properly
tendered and accepted for exchange on the terms set forth in this offering circular and in the accompanying
Letter of Transmittal, which we refer to together as the exchange offer See page 22 for how to tender Old
N otcs.
.
The exchange offer WIll expire at 5:00 p.m., New York City time, on July 15, 2004, the expiration date,
unless we extend It. We WIll announce any extensions by press release or other permitted means no later than
9.00 a.m , New York City time on the day after expiration of the exchange offer You may wIthdraw tendered
Old Notes at any tunc up until 5.00 pm. Ncw York City tlmc on thc cxplration date.
The terms of the New Notes are similar to the terms of the Old Notes, but have a net share settlement
mechamsm, dIVidend protections, and other Important terms as descnbed in this offenng Circular See page 8
of this offenng clfcular for a summary comparison of the Old Notes to the New Notes.
Deutsche Bank Secunties Inc, which has adVIsed us that It is the benefiCIal owner of $69,581,000
pnnclpa1 amount of thc outstandmg Old Notes, or approxImately 40% of the aggregate outstandmg pnncipal
amount of the Old Notes, has mformed us that it intends to tender all of the Old Notes that It owns in this
exchange offer.
Our common stock is traded on the New York Stock Exchange, or NYSE, under the symbol "WCN"
On June 14, 2004 the closing sale pnce for our common stock on the NYSE was $42.40 per share.
..
THE EXCHANGE OFFER IS DESCRIBED IN DETAIL IN THIS OFFERING CIRCULAR,
AND WE URGE YOU TO READ IT CAREFULLY, INCLUDING THE SECTION TITLED "RISK
FACTORS," BEGINNING ON PAGE 13 OF THIS OFFERING CIRCULAR, FOR A DISCUSSION
OF FACTORS THAT YOU SHOULD CONSIDER BEFORE YOU DECIDE TO PARTICIPATE IN
THE EXCHANGE OFFER.
NEITHER OUR BOARD OF DIRECTORS NOR ANY OTHER PERSON IS MAKING ANY
RECOMMENDATION AS TO WHETHER YOU SHOULD CHOOSE TO EXCHANGE YOUR OLD
NOTES FOR NEW NOTES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR DETERMINED IF THIS OFFERING CIRCULAR IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of tillS offermg CIrcular IS June 16, 2004.
~
,/
I
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YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS OFFERING
CIRCULAR. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFER-
ENT FROM THAT CONTAINED IN THIS OFFERING CIRCULAR. THE CONTENTS OF ANY
WEBSITES REFERRED TO IN THIS OFFERING CIRCULAR ARE NOT PART OF THIS OFFER-
ING CIRCULAR.
.
THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO EXCHANGE IN
ANY JURISDICTION IN WHICH, OR FROM ANY PERSON TO OR FROM WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER UNDER APPLICABLE FEDERAL SECURITIES OR
STATE SECURITIES LAWS. THE DELIVERY OF THIS OFFERING CIRCULAR SHALL NOT
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF
OR THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR
ANY ATTACHMENTS HERETO NOR IN THE AFFAIRS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES SINCE THE DATE HEREOF.
IN MAKING A DECISION IN CONNECTION WITH THE EXCHANGE OFFER. NOTE-
HOLDERS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE
TERMS OF THE EXCHANGE OFFER, INCLUDING THE MERITS AND RISKS INVOLVED.
NOTEHOLDERS SHOULD NOT CONSTRUE THE CONTENTS OF THIS OFFERING CIRCULAR
AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH NOTE-
HOLDER SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, FINANCIAL AND TAX
ADVISORS WITH RESPECT TO ANY SUCH MATTERS CONCERNING THIS OFFERING
CIRCULAR AND THE EXCHANGE OFFER CONTEMPLATED THEREBY
WE ARE RELYING ON SECTION 3(A)(9) OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") TO EXEMPT THE EXCHANGE OFFER FROM THE
REGISTRA TION REQUIREMENTS OF THE SECURITIES ACT WITH RESPECT TO THE
EXCHANGE OF THE OLD NOTES FOR THE NEW NOTES. WE ARE ALSO RELYING ON
SECTION I8(B)(4)(C) OF THE SECURITIES ACT TO EXEMPT THE EXCHANGE OFFER
FROM STATE SECURITIES LAW REQUIREMENTS. WE HAVE NOT FILED A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR ANY OTHER FEDERAL OR STATE SECURI-
TIES LAWS WITH RESPECT TO THE NEW NOTES THAT MAY BE DEEMED TO BE OFFERED
BY VIRTUE OF THIS EXCHANGE OFFER
.
GENERALL Y, THE SECURITIES ACT PROHIBITS THE OFFER OF SECURITIES TO THE
PUBLIC UNLESS A REGISTRATION STATEMENT HAS BEEN FILED WITH THE SEC AND
THE SALE OF SECURITIES UNTIL SUCH REGISTRATION STATEMENT HAS BEEN DE-
CLARED EFFECTIVE BY THE SEC, UNLESS AN EXEMPTION FROM REGISTRATION IS
A V AILABLE. THE EXCHANGE OFFER CONSTITUTES AN "OFFER" OF SECURITIES UNDER
THE SECURITIES ACT. HOWEVER, WE ARE AVAILING OURSELVES OF SECTION 3(A)(9)
OF THE SECURITIES ACT WHICH PROVIDES AN EXEMPTION FROM REGISTRATION FOR
EXCHANGES OF SECURITIES BY THE ISSUER WITH ITS EXISTING NOTEHOLDERS EX-
CLUSIVELY WHERE NO COMMISSION OR OTHER REMUNERATION IS PAID OR GIVEN
D1RECTL Y OR INDIRECTLY FOR SOLICITING SUCH EXCHANGE. ACCORDINGLY, NO
FILING WITH THE SEC IS BEING MADE WITH RESPECT TO THE EXCHANGE OFFER.
WE HAVE NEVERTHELESS PREPARED THIS OFFERING CIRCULAR WHICH CONTAINS
SUBSTANTIALLY THE SAME INFORMATION WHICH WOULD BE REQUIRED FOR A REGIS-
TRATION STATEMENT AND ARE DISTRIBUTING THIS OFFERING CIRCULAR TO THE
NOTEHOLDERS. BECAUSE NO FILING WITH THE SEC IS REQUIRED FOR THE EXCHANGE
OFFER, THE SEC IS NOT REVIEWING OR COMMENTING ON THE DOCUMENTS USED IN
THE EXCHANGE OFFER.
.
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TABLE OF CONTENTS
Special Note Regarding Forward-Looking Statements
Summary. . . . . . . . .. .... . . .
Risk Factors
Ratios of Earnmgs to Fixed Charges. . . .... . . . . . . . .. .............................
Pnce Range of Common Stock ........ . . . . . . . . . . . . . . . . . . . . . . . . . . .. ........
Stock Repurchase and Dividend Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization . .... . . . . . . . .. ............. ..... ... .
The Exchange Offer. . . . . . . . . . . . . . . . " ........ ......... .
Description of the New Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Capital Stock.. " . . . . . . .. ......... ......... . . . . . . . . . . . . . . . .
Certain United States Federal Tax Considerations. . . . . . . . . .. .. ...........................
Where You Can Fmd More Information. ........ ........
.
.
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III
1
13
16
17
17
18
19
27
43
43
52
.
THIS OFFERING CIRCULAR INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND
FINANCIAL INFORMATION ABOUT WASTE CONNECTIONS, INC. THAT IS NOT INCLUDED
IN OR DELIVERED WITH THIS DOCUMENT THIS INFORMATION IS AVAILABLE WITH-
OUT CHARGE TO NOTEHOLDERS UPON WRITIEN OR ORAL REQUEST TO: OFFICE OF
INVESTOR RELATIONS, WASTE CONNECTIONS, INC., 35 IRON POINT CIRCLE, SUITE 200,
FOLSOM, CA 95630, (916) 608-8200. IN ORDER TO OBTAIN TIMELY DELIVERY, NOTE HOLD-
ERS MUST REQUEST THE INFORMATION NO LATER THAN FIVE BUSINESS DAYS PRIOR
TO THE EXPIRATION DATE, OR JULY 10,2004, UNLESS EXTENDED.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information contained in this offering circular includes statements that are forward-Iookmg in
nature. These statements can be identified by the use of forward-looking terminology such as "believes",
"expects", "may", "will", "should" or "anticipates" or the negative thereof or comparable terminology, or by
discussions of strategy. Our business and operations are subject to a vanety of risks and uncertainties and,
consequently, actual results may differ materially from those projected by any forward-lookIng statements in
this offering circular. Factors that could cause actual results to differ from those projected include, but are not
lllTIltcd to, the follOWIng
. difficulties in making acquisitions, acquiring exclusive contracts and generating internal growth may
cause our growth to be slower than expected;
. our growth and futurc finanCial performance depend significantly on our ablllty to Integrate acquired
businesses mto our organization and operations;
. our acquisitions may not be successful, resulting m changes in strategy, operating losses or a loss on sale
of the busmess acquired;
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. we compete for acquisition candidates with other purchasers, some of which have greater financial
resources than we do, and these other purchasers may be able to offer more favorable acquiSition terms,
thus ltmitmg our abiltty to grow through acqUIsitiOn;
. timing of acquisitions may cause fluctuations in our quarterly results, which may cause our stock price
to declme;
. rapid growth may strain our management, operational, financial and other resources,
. we may be unable to compete effectively with governmental service providers and larger and better
capitalized compames, which may result m reduced revenues and lower profits; and
. we may lose contracts through competitive bidding, early termInation or governmental action, which
would cause our revenues to declIne
These risks and uncertaInties, as well as others, are discussed III greater detail in our other filIngs with the
SEC, includIng our most recent Annual Report on Form lO-K and subsequent Quarterl)' Report on
Form 10-Q You should read carefully the section of thiS offering circular under the heading "Risk Factors"
begmning on page 13. There may be additional risks of whIch we are not presently aware or that we currently
belIeve are immatenal which could have an adverse Impact on 'our bUSiness. We make no commitment to
revise or update any forward-looking statements in this offering circular to reflect events or circumstances after
the date of this offering circular.
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SUMMARY
This summary does not contain all the information you should consider before exchanging your Old
Notes for the New Notes. You should read this entire offering circular carefully, as well as those additional
documents to which we refer you. See "Where You Can Fmd More InformatIOn." References m this offering
circular to "Waste Connections", "we", "us", "our", "the company" and "our company" refer to Waste
Connections, Inc. and its subsidiaries and all references to "solId waste" mean non-hazardous solId waste
unless othemise specified.
Our Exchange Offer
We have summarized the terms of the exchange offer in this section. Before you decide whether to tender
your Old Notes in the exchange offer. you should read the detailed descnptlOn of the exchange offer under
''The Exchange Offer" for further information.
Reasons for the Exchange Offer. . . . . .
We beheve that It is m the best interests of our company and our
stockholders to have convertible notes that contain terms that are
now prevalent in the convertible note market, includmg the preva-
lence of net sharc settle and dividend protection provisions.
Net share settle proviSIOns - In April 2004, our total leverage and
debt-to-capItal ratios declined to record low levels when, In re-
spon~e to our call for redemption, approximately 80% of our
previously outstandmg 51/2% Convertlble Subordinated Notes due
2006 converted into our common stock. The net share settle
provisions being mtroduced in this exchange offer will allow us to
substitute cash for the pnncipal value portIOn of the conversion
value due holders of the New Notes under certain conversion
scenanos, thereby reducing the number of shares of common stock
issued upon such conversions of the New Notes.
DlVldend protection provlslOn~ - Since the Old Notes were issued
in May 2002, changes in tax law and investor sentiment have made
cash dlVldends more attractive. Our credit faCility was recently
amended to provide us With the ability to pay annual cash divi-
dends of up to $50.0 million plus option proceeds. We believe that
most new convertible notes Issued smce mid-2003 have mcluded
terms that adjust the conversIOn price upon payment of a cash
diVidend. similar to the provisions being mtroduced in this ex-
change offer.
Terms of the Exchange Offer .
We are offering to exchange $1,000 m pnncipal amount of New
Notes for each $1,000 in principal amount of our Old Notes
accepted for exchange New Notes will be issued in denominations
of $1,000 and any integral multiple of $1,000. You may tender all,
some or none of your Old Notes
Expiration Date; Extension,
Termination
The exchange offer and your withdrawal nghts Will expIre at
5'00 p m New York City time, on July 15,2004, or any subsequent
date to which we extend It. We may extend the expiration date for
any reason; we will announce any extensions by press release or
other permitted means no later than 9:00 a.m, New York City
time, the day after the previously scheduled expiration date You
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must tender your Old Notes prior to the expiratlOn date if you wish
to participate in the exchange offer. We have the right to:
. extend the period during which the exchange ofTer is open and
retain all tendered Old Notes;
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. waive any condition or otherwise amend the terms of the
exchange offer in any respect, prior to the expiration date; or
. terminate the exchange offer prior to our acceptance of any
previously tendered Old Notes If any of the conditions to the
exchange offer are not satisfied.
Conditions to the Exchange Offer .. . The exchange offer is subject to customary conditions. Please read
the section titled "The Exchange Offer - Conditions to the Ex-
change Offer," beginmng on page 21 of this offering circular, for
more information.
You may withdraw tendered Old Notes at any time up until
5:00 p.m New York City time on the expiration date, or any
subsequent date to which we extend It. See "The Exchange
Offer - Withdrawal of Tenders" for a more complete description
of Withdrawal provisions.
If you hold Old Notes through a broker, dealer, commercial bank,
trust company or other nominee, you should contact that person
promptly If you Wish to tender your Old Notes. Tenders of your
Old Notes will be effected by book-entry transfers through The
Depository Trust Company. If you hold your Old Notes through a
broker, dealer, commercial bank, trust company or other nominee,
you may also comply with the procedures for guaranteed delivery.
Please do not send letters of transmittal to us. You should send
those letters to U.S Bank National Association (succes&or to State
Street Bank and Trust Company of California, N.A.), the ex-
change agent, at the address set forth on the back cover of this
offering Circular. The exchange agent can answer your questlOns
regarding how to tender your Old Notes.
If all the conditions to the exchange offer are satisfied or waived
prior to thc cxpiration date, we wIll accept all Old Notcs propcrly
tendered and not withdrawn prior to the expiration of the exchange
offer and will issue the New Notes promptly after the expiration
date. We will Issue New Notes in exchange for Old Notes that are
accepted for exchange only after receipt by the exchange agent of
(i) a timely book-entry confirmation of transfer of Old Notes mto
the exchange agent's DTC account or, if tender is made through an
ehgible instltulton, a notice of guaranteed dehvery and (ii) a
properly completed and executed letter of transmittal or an elec-
tronic confirmation pursuant to DTC'& Automatic Tender Offer
Program. Our oral or written notice of acceptance to the exchange
agent Will be considered our acceptance of the exchange offer
Accrued Interest on Old Notes. . ... Intere&t on the New Notes will accrue from the last mterest
payment date on which interest was paid on the Old Notes.
Holders whose Old Notes are accepted for exchange will be
deemed to have Waived the right to receive any interest accrued on
the Old Notes.
Withdrawal Rights .
Procedures for Tendering Old Notes.
Acceptance of Old Notes.. ..... .
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Amendment of the Exchange Offer. .
Consequences of Not Exchanging Old
Notes. . . . . .. . . . . . .
Use of Proceed~; Fees and Expenses of
the Exchange Offer. . . . .
Tax Consequences
Deciding Whether to Participate in the
Exchange Offer. .. ................
Exchange Agent
RISk Factors . .
We reserve the nght not to accept any of the Old Notes tendered
and to otherwise mterpret or modify the terms of the exchange
offer, provided that we will extend the penod dunng which notes
may be tendered or withdrawn as a result of changes in the terms
of or information relatmg to the exchange offer.
If you do not exchange your Old Notes III the exchange offer, the
lIquidity of any trading market for Old Notes not tendered for
exchange, or tendered for exchange but not accepted, could be
significantly reduced to the extent that Old Notes are tendered and
accepted for exchange m the exchange offer.
We will not receIVe any ca~h proceeds from the exchange offer. Old
Notes that are properly tendered and not withdrawn, and ex-
changed pursuant to the exchange offer, will be retIred and can-
celed. We estimate that the total fees and expenses of the exchange
offer will be approximately $175,000.
You generally should not recognize any gain or loss for United
States federal income tax purposes as a result of an exchange of
Old Notes for New Notes.
Please see the section titled "Certam United States Federal Tax
Considcrations" begmnIng on page 43 of this offerIng cilcular
Neither we nor our officers or dIrectors make any recommendatIOn
as to whether you should tender or refrain from tendenng all or any
portIOn of your Old Notes in the exchange offer. Further, we have
not authorized anyone to make any such recommendation. You
must make your own decision as to whether you should tender your
Old Notes m the exchange offer and, if so, the aggregate amount of
Old Notes to tender after reading this offering circular, including
the "Risk Factors" and the letter of transmittal and consulting with
your advisors, if any, ba~ed on your own financial position and
reqUIrements.
U.S. Bank N ational As~ociation (successor to State Street Bank
and Trust Company of CalIfornia, N.A.).
You should consider carefully the matters descnbed under "Risk
Factors," beginning on page 13 of this offering circular as well as
other mformatlOn set forth in this offering circular and in the
accompanymg letter of transmittal before you deCIde to participate
m the exchange offer.
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New Notes
We have summanzed the terms of the New Notes in thIs section. Before you decIde whether to tender
your Old Notes in the exchange offer, you should read the detailed description of the New Notes under
"Description of the Nevv Notes" for further information.
Issuer . . . . . . . . . . . .. ........
Waste Connections, Inc.
Up to $175 mIllIon in aggregate principal amount of Floating Rate
Convertible Subordinated Notes Due 2022.
New Notes Offered .....
Maturity. . .
May I, 2022.
Interest. . . . . . . .. .......
Interest will accrue at a per annum rate equal to 3-month LIBOR
plus 0.50%, adjusted quarterly. Notwithstanding any such adjust-
ments, the mterest rate on the New Notes will never be less than
zero.
Interest Payment Datcs .. .
May I, August 1, November 1, and February 1 begmning Au-
gust I, 2004.
Ranking . ., .
The New Notes will be unsecured and rank junior to our existing
and future Senior Indebtedness as that term is defined in "Descrip-
tIOn of the New Notes - Subordination"; provided, however that
Senior Indebtedness does not include the Old Notes. The New
Notes wIll be effectively subordinated to all existing and future
mdebtedness and other liabilities of our subsidiaries.
The New Notes will rank pan passu vvith the Old Notes.
The Indenture under which the New Notes will be issued (the
"Indenture") will not restnct our ability to Incur Senior Indebted-
ness or other indebtedness, nor will It restrict the abilIty of our
subsldianes to mcur Indebtedncss. As of March 31, 2004, we had
$265.4 mIllion of semor indebtedness and $590 4 million of total
Indebtedness.
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Conversion Rights. . . . . . .
Holders may surrender New Notes for conversIOn into cash and, If
applicable, shares of our common stock prior to the matunty date,
only if any of the following conditions IS satisfied.
. the closing sale price of our common stock for at least 20 trading
days in the period of 30 consecutive trading days ending on the
last tradIng day of the quarter precedIng the quarter in whIch the
conversion occurs, IS more than 110% of the conversion price per
share of our common stock on that 30th trading day,
. we have called the New Notes for redemptIOn;
. during such period, if any, that the credit rating assigned to the
New Notes by Moody's Inve~tors Service, Inc. and Standard &
Poor's Rating Group IS below B3 or B-, respectIvely, or If
neIther ratmg agency IS ratmg the New Notes;
. during the five business day period after any nine consecutIve
trading day period in which the trading price of the New Notes
(per $1,000 principal amount) for each day of such period was
less than 95% of the product of the closing sale price per share of
our common stock multiplied by the number of ~hares of our
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common stock issuable upon conversion of $1,000 pnncipal
amount of the New Notes; or
. upon the occurrence of specified corporate transactions de-
scribed below under "DescnptlOn of the New Notes - Conver-
sion Rights"
Conversion Price; Adjustments
Holders exercismg theIr conversIOn rights may convert any out-
standing New Notes mto cash. and if applicable, shares of our
common stock at an initial conversion price of $48.39 per share,
which is equal to 206654 shares per $1,000 in principal amount of
New Notes.
The conversIOn price may be adjusted for certain reasons, but will
not be adjusted for accrued interest. Upon conversion, the holder
will not receive any cash payment representing accrued interest.
See "DescriptIon of the New Notes - Conversion Pnce
Adjustments"
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Subject to certaIn exceptIons described In "Description of the New
Notes," once New Notes are tendered for conversion, the value
(the "ConverslOn Value") of the cash and shares of our common
stock, if any, to be receIved by a holder converting $1,000 principal
amount of the New Notes will be determined by multiplymg the
Conversion Rate by the Ten Day Average Closing Stock Price (as
defined below). We will deliver the Conversion Value to holders as
follows: (I) an amount In cash (the "PrIncipal Return") equal to
the lesser of (a) the aggregate ConversIOn Value of the New Notes
to be convertcd and (b) the aggregate principal amount of the New
Notes to be converted, (2) If the aggregate Conversion Value of
the New Notes to be converted is greater than the Principal
Return, an amount m whole shares (the "Net Shares"), deter-
mined as set forth below, equal to such aggregate Conversion
Value less the Prmclpal Return (the "Net Share Amount"), and
(3) an amount in cash in lieu of any fractional shares of common
stock. We WIll pay the PrinCIpal Return and cash in heu of
fractional shares and deliver the Net Shares, If any, as promptly as
practIcable after determmatlOn of the Net Share Amount The
number of Net Shares to be paId will be determined by dIviding
the Net Share Amount by the Ten Day Average Closmg Stock
Pnce The Ten Day Average Closmg Stock Pnce WIll be the
average of the clOSIng per share pnces of our common stock on the
New York Stock Exchange on the ten consecul1ve trading days
begInnIng on the second tradIng day following the day the New
Notes are submitted for conversIOn.
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In additIon, If we declare a ca&h diVIdend or cash dIstribution to all
of the holders of our common stock, under certain circumstances,
thc ConvcrslOn Pnce shall be decrcased to equal the pnce deter-
mined by mull1plymg the Conversion Price m effect immediately
prIor to the record date for such dividend or distribution by the
following fractIOn.
(Pre-Dividend Sale Price.- Divid~nd Adjustment Amol1.!!~L
(Pre-Dividend Sale Price)
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"Pre-DivIdend Sale PrIce" means the average common stock prIce
for the three consecutive tradmg days ending on the trading day
immedIately preceding the record date for such dividend or distri-
butIOn. "Dividend Adjustment Amount" means the full amount of
the dividend or distribution to the extent payable m cash applicable
to one share of our common stock.
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The "common stock price" on any date means the cloSIng sale
price per share (or if no closing sale prIce IS reported, the average
of the bid and ask prices or, if more than one in either case, the
averagc of thc average bid and the average ask prIces) on such date
for our common stock as reported in composite transactions on the
prIncipal natIOnal securIties exchange or other quotation system on
which our common stock IS quoted or listed or admitted to trading
on such day or, if our common stock is not quoted or listed or
admitted to trading on a national securities exchange or quotation
<;ystem, as reported by the National Quotation Bureau Incorpo-
rated, or similar generally accepted reportIng service.
A "trading day" means any regular or abbreviated trading day of
the New York Stock Exchange.
See "DescriptIOn of the New Notes - Conversion PrIce
AdJustments"
OptIonal Redemption. . . . We may redeem the New Notes at any time on or after May 7,
2006, at specIfied prices, plus accrued and unpaId interest
Mandatory Redemption. . . . . . . . . . . .. Except as set forth under "Description of the New Notes - Right
to Require Purchase of New Notes upon a Change in Control" and
"- Repurchase of New Notes at the Option of the Holder," we
are not reqUIred to make mandatory redemption of, or sInkmg fund
payments WIth respect to, the New Notes.
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Repurchase of New Notes at the
Option of the Holder
Change in Control ... ..
You may require us to repurchase your New Notes on May I of
2009, 2012 and 2017 for a purchase price equal to 100% of the
prIncipal amount of the New Notes plus accrued interest. The
purchase price IS payable in cash. See "Description of the New
Notes - Repurchase of New Notes at the OptIOn of the Holder."
Upon the occurrence of a Change in Control, as that term is
defined III "Description of the New Notes - Right to Require
Purchase of New Notes upon a Change in Control", you WIll have
the right to require us to repurchase your New Notes at a purchase
prIce equal to 100% of the principal amount, plus accrued and
unpaId interest to the date of repurchase. The purchase prIce IS
payable III cash
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The Company
Waste Connections, Inc , a Delaware corporation organized in 1997, is an integrated solid waste services
company that provides solid waste collection, transfer, disposal and recycling services m mostly secondary
markets m the Western and Southern United States. As of March 31, 2004, we served more than one million
commercial, industnal and reSidential customers from a network of operations in 23 states: Alabama, Arizona,
California, Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky, Mmnesota, MiSSISSippi, Montana. Nebraska,
New MexIco, OhIO, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, and Wyoming.
As of that date, we owned 103 collectIOn operations, operated or owned 33 transfer statIOns, operatcd or owned
33 Subtitle D landfills, owned two construction and demolitIOn landfills and operated or owned 26 recycling
facilities. We also owned one Subtitle D landfill site that is permitted for operation, but not constructed as of
March 31, 2004.
Our growth strategy focuses on expanding into secondary markets located primarily in the Western and
Southern United States that have strong demographic growth trends and where competitIve barners to entry
can be developed. We target markets where we can either (i) proVide waste collection services under
franchises, exclusive contracts or other arrangements, or (il) garner a leading market position and provide
vertically integrated collection and disposal service~ We generally seek to avoid operating m highly
competitive, larger urban markets. Weare a leading provider of solid waste services in most of our markets,
and more than 50% of our revenues are derived from market areas where we have franchise or exclusive rights
to prOVide our services.
We have focused on secondary markets mostly in the Western and Southern United States because we
believe that in tho~e areas. (i) there is a greater opportunity to enter into exclusive arrangements; (Ii) there is
less competition from larger solid waste services companies; (iii) strong economic and population growth rates
are projected, and (iv) there remain a number of mdependent solid waste services companies ~uitable for
acquisition.
We have developed a two-pronged busmess strategy tailored to the competitive and regulatory factors
that affect our markets:
. Control the Waste Stream In markets where waste collection services are provided under exclusive
arrangements, or where wa~te disposal is municipally funded or available at multiple mumclpal
sources, we believe that controlling the waste stream by prov1ding collection services IS often more
Important to our growth and profitability than owmng or operatmg landfills. In addItIOn, contracts in
some westt:m U.S. markets dictate the disposal facility to be used. The large size of many western
states increases the co~t of mterstate and long haul disposal, heightening the effects of regulatIOns that
direct waste disposal, whIch may make it more difficult for a landfill to obtain the disposal volume
necessary to operate profitably In markets with these charactenshcs, we beheve that landfill ownership
or vertical integration is not as critical to our success.
. Provide Vertically Integrated ServIces In markets where we belIeve that owning landfills IS a strategic
element to a collection operatIOn because of competitive and regulatory factors. we generally focus on
providmg integrated serVices, from collection through disposal of solid waste m landfills that we own or
operate. During the three month penod endmg March 31, 2004, approximately 69% of waste we
collected in our markets was disposed of at landfills we owned or operated.
Our cxecutIve offices are located at 35 Iron Point Circle, SUite 200, Folsom, Cahforma 95630. Our
telephone number is (916) 608-8200 Our website is www wasteconnectlOns com. The information provided
on our website IS not incorporated into tll1S offenng Circular.
Our common stock is traded on the NYSE under the symbol "WCN". For additIOnal mformation
concermng our company, please see "Where You Can Find More Information" on page 52 of th1S offering
CIrcular.
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Issuer . .. .
Notes Offered
Interest Payment Dates. .
Interest .....
Matunty. . .
Conversion Rights .
Old ~otes
Summary Comparison of the Old Notes to the New Notes
New Notes
Waste Connections, Inc
$175 million in aggregate principal
amount of Floating Rate Convertible
Subordinated Notes Due 2022 Issued
under an Indenture dated as of
April 30. 2002 between our company
and U.S. Bank National Association
(successor to State Street Bank and
Trust Company of California, N.A.),
as trustee.
Payable on May 1, August 1,
November I and February I of each
year.
3-month LlBOR plus 0.50%,
adjusted quarterly.
May 1, 2022.
Holders of the Old Notes may
convert their Old Notes mto shares
of our common stock during any
time commencing after August 1,
2002 and prIor to the maturity date
in any of the following
circumstances.
. the closing sale price of our
common stock for at lea~t
20 trading days In the period of
30 consecutive tradmg days ending
on the last trading day of the
quarter preceding the quarter in
which the conversion occurs IS
more than 110% of the conversion
price for the Old Notes on that
30th trading day
. we have called the Old Notes for
redemption.
. the credit rating assigned to the
Old Notes by both Moody's
Investors ServIce, Inc. and
Standard & Poor's Rating Group
is below a speCified level, or if
neither rating agency is rating the
Old Notes.
Same as the Old Notes.
Up to $175 million in aggregate
prIncIpal amount of Floating Rate
Convertible Subordmated Notes Due
2022 to be issued under a new
Indenture between our company and
U.S. Bank National Association,
(successor to State Street Bank and
Trust Company of California, N.A.),
as trustee.
Same as the Old Notes.
Same as the Old Notes.
Same as the Old Notes.
Same terms as the Old Notes.
except that upon conversion of the
New Notes at any time on or prior
to the business day immediately
preceding the maturity date, Holders
WIll receive cash, shares of common
stock, or cash and shares of common
stock, as deSCrIbed under
"Description of the New Notes-
Conversion Rights"
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Old Notes
New Notes
. during the five busmess day period
Immediately following any nine
consecutive tradmg day period in
which the trading price per $1,000
in principal amount of the Old
Notes for each day of such period
was less than 95% of the product
of the closing sale price of our
common stock on that day
multiplied by the number of shares
of our common stock Issuable
upon conversion of $1,000 m
pnncipal amount of the Old
Notes.
. upon the occurrence of specified
corporate transactIOns
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New Notes
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Old l'\ote~
Conversion Price .. .. . The Old Notes may be converted
into our common stock at the imtlal
converSIOn price per share of $48.39.
This represents a conversion rate of
approximately 20.6654 shares of our
common stock per $1,000 in
pnncipal amount of Old Notes The
converSIOn price may be adjusted for
certam transactions affectmg our
common stock, but will not be
adjusted for accrued mterest Upon
converSIOn, the holder Will not
receive any cash payment
representing accrued and unpaid
mterest, if any.
Same terms as the Old Notes
except that: '
(i) subject to certain exceptwns
descnbed in "Descnption of the
New Notes", once Notcs are
tendered for conversion, the
Conversion Value of the cash
and shares of our common
stock, if any, to be recelVed by
a holder converting $1,000
principal amount of the New
Notes will be determined by
multiplying the ConverSiOn
Rate by the Ten Day Average
Closing Stock Price We will
deliver the Conversion Value to
holders as follows. (1) an
amount in cash (the "Principal
Return") equal to the lesser of
(a) the aggregate Converswn
Value of the New Notes to be
converted and (b) the
aggregate principal amount of
the New Notes to be converted
(2) if the aggregate Conversion'
Value of the New Notes to be
converted is greater than the
Principal Return, an amount in
whole shares (the "Net
Shares"), determined as set
forth below, cqual to such
aggregate Conversion Value less
the PrinCipal Return (the "Net
Share Amount"), and (3) an
amount in cash in lieu of any
fractional shares of common
stock. The number of Net
Shares to bc pmd Will bc
determmed by dividing the Net
Share Amount by the Ten Day
Average Closmg Stock Price.
Thc Tcn Day Avcrage Closmg
Stock Price will be the average
of the closing per share prices
of our common stock on the
New York Stock Exchange on
the ten consecutive trading days
begmmng on the second tradmg
day followmg the day the New
Notes are submitted for
conversion. Upon conversion of
the New Notes under the
circumstances described under
"Description of the New
Notes - Conversion upon
Credit Rating Event." and
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Old Note~
Optional Redemption of
the Notes. .
At any time on or after May 7, 2006,
subject to the con<;ent of the lenders
under our credit facil1ty, the Old
Notes are redeemable at our optIOn,
in whole, or from time to timc, in
part, on not less than 30 days' notIce
Thc redemption price, expressed as a
percentage of the princIpal amount,
is 102% from May 7, 2006 through
April 30, 2007, and 10 1 % from
May 1, 2007 through Apnl 30, 2008,
and 100% of the pnnclpal amount on
or after May I, 2008, plus accrued
and unpaid Interest thereon to the
redemptIOn date.
New Notes
"- Conversion upon
SatIsfaction of TradIng Price
Condition", we will deliver, at
our option, cash, shares of
common stock, or a
combination of cash and shares
of common stock;
(ii) under certain CIrcumstances. we
WIll adjust the conversion price
If we declare a dividend or
dIstnbutlOn to all of the holders
of our common stock, and
(iii) the conversion price may be
adjusted if we or one of our
subsidianes makes a payment
in respect of a tender or
exchange offer, other than an
odd-lot offer, for our common
stock which involves an
aggregate consideration that,
together With any cash and
other consideration payable In
respcct of any tcnder or
exchange offer by us or one of
our subsidIaries for shares
concluded Within the preceding
12 months, exceeds 10% of our
aggregate market capitalIzation
on the expiration of the tender
or exchange offer
See "DescriptIOn of the New
Notes - Conversion Rate
Adjustment".
Same terms as the Old Notes
11
New Notes
.
Repurchase of the Notes
at the OptIOn of the
Holder ...........
Events of Default. . . . . . .
Old :\"ote~
A holder of Old Notes has the right
to require us to purchase all or a
portion of such holder's Notes on
May 1,2009, May 1,2012 and
May 1,2017. We will repurchase the
Old Notes for an amount of cash
equal to 100% of the principal
amount of the Old Notes on the date
of purchase, plus accrued and unpaid
interest, up to but not including the
date of repurchase, payable in cash.
. Default in the payment of
principal, or default for 30 days in
payment of any mterest;
. Failure to pay when due the
pnncipal of or interest on
mdebtedness for money borrowed
by us or our subsIdIaries in excess
of $20.0 million, or the
acceleratIOn of that mdebtedness
that IS not wIthdrawn, wIthin
15 days of written notice thereof;
. Failure to cure within 60 days a
default in performance or breach
of any of the covenants in the
indenture; or
. Certam events of bankruptcy,
insolvency or reorganization.
Same terms as the Old Notes.
Same terms as the Old Notes.
.
.
12
.
RISK FACTORS
You should carefully consIder the rIsks described below before you decide to exchange your Old Notes
for the New Notes. The rIsks and uncertaInties set forth below arc not the only nsks and uncertaIntIes that we
face. AddItional risks and uncertaintIes not presently known to us or that we currently deem immaterIal may
also impair our business and results of operations. If any of the following risks actually occur they could
materIally and adversely affect our business, financial condItion or operating results In that case, the trading
price of our common stock could decline, which in turn could result in a decline m the tradmg price of the
New Notes or the loss of all or a part of your Investment
You should also consider nsk factors set forth under the headings "Risks Related to Our BusIness" and
"Risks Related to Our Industry" in our most recent Annual Report on Form 10-K, filed 'With the SEC on
March 12, 2004, which arc mcorporated by reference hereIn.
RISKS RELATING TO THE EXCHANGE OFFER
.
If an acthe market for the New Notes fails to develop or is not sustained, the trading price and liquidity
of the New Notes could be materially and adversely affected.
Prior to the exchange offer, there has been no trading market for the Ne'W Notes. The liquidIty of the
trading market for the New Notes will depend in part on the level of participation of the holders of Old Notes
III the exchange offer The greater the partIcipation III the exchange offer, the greater the liqUIdity of the
tradmg market for the New Notes and the lesser the liquidity of any trading market for the Old Notes not
tendered in the exchange offer. As a result, we cannot assure )'ou that any market for the New Notes will
develop or. if one does develop, that It will be maintamed. If an active market for the New Notes fails to
develop or be sustaIned, the tradmg price and liquidIty of the New Notes could be matenally adversely
affected.
If you do not exchange your Old Notes, there may be a substantially smaller public trading market for
your Old Notes and the market price of your Old Notes may decline.
If the exchange offer IS consummated, the tradmg and the liquidIty of the market for the Old Notes may
be SIgnificantly limited. As a result, the unexchanged Old Notes may trade at a dIscount to the pnce at which
they would trade if the transactions contemplated by this offering circular were not consummated, subject to
the market for similar seCUrItIes and other factors. We cannot assure you that an actIve market In the
unexchanged Old Notes will eXist or be maIntained and we cannot assure you as to the prices at which the
unexchanged Old Notes ma)' be traded
Our Board of Directors has not made a recommendation with regard to whether or not you should tender
your Notes in the exchange offer nor has our company obtained a third-party determination that the
exchange offer is fair to holders of the Old Notes.
We have deSIgned the New Notes to have terms substantially similar to the Old Notes The exchange
offer has been unammously approved by our board of directors We are not, however, makIng a recommenda-
tion whether holders of Old Notes should exchange their notes. We have not retaIned and do not intend to
retalll any unaffillated representatIve to act solely on behalf of the holders for purposes of negotlatmg the terms
of the exchange ofTer and/or preparIng a report concerning the faIrness of the exchange offer We cannot
assure holders of the Old Notes that the value of the New Notes received in the exchange offer will III the
future equal or exceed the value of the Old Notes tendered and we do not take a pOSition as to whether you
should participate in the exchange offer.
.
13
You should consider the U.S. Federal Income Tax consequences of exchanging your Old Notes for New
Notes in the exchange offer.
Although the matter is not free from doubt, we beheve that the exchange of Old Notes for New Notes
should not be treated as an "exchange" for United States federal income tax purpo&es, and, as a result, that
you generally should not recognize any gain or loss as a result of the eAchange However, there can be no
assurance that the Internal Revenue Service will agree wIth this conclusIOn Even if the exchange of Old
Notes for New Notes is treated as an "exchange" for United States federal income tax purposes, you generally
should not recognize any gain or loss as a result of the exchange provided that the Old Notes and the New
Notes constitute "securities" for United States federal Income tax purposes, although the New Notes may be
treatcd as havIng been issued at a discount or premium.
Tax matters are complIcated. You are urged to consult your tax advisor regarding the tax consequences of
participating in the exchange otTer and the ownershIp of New Notes. For a discussion of certain United States
federal income tax considerations related to the exchange and the New Notes, see "Certain Umted States
Federal Tax Considerations."
.
RISKS RELATED TO THE NEW NOTES
Our indebtedness could adversely affect our financial condition; we may incur substantially more debt by
increasing our costs and limiting our ability to take actions that would increase our revenue and execute
our growth strategy.
As of March 31. 2004, we had $590.4 millIon of total Indebtedness outstandIng. After giving efTect to the
redemption of our 5'/,% Convertible Subordinated Notes due 2006 in April 2004, and assuming that all of the
Old Notes are tendered In the Exchange OfTer, as of March 31. 2004, we had $467.9 million of total
indebtedness. Our Indebtedness could have important consequences to you. For example. it could:
. increase our vulnerability to general adverse economic and Industry conditions;
. lImit our abilIty to obtaIn additional financIng;
. require the dedication of a sub&tantial portIOn of our cash flow from operations to the payment of
pnncipal of, and mterest on, our indebtedness, thereby redUCIng the availabIlity of such cash now to
fund our growth strategy. working capItal, capItal expenditures and other general corporate purposes;
. limit our fleXIbility in planning for, or reacting to. changes In our business and the Industry; and
. place us at a competItive dIsadvantage relatIve to our competitors with less debt.
We may Incur substantIal additional debt In the future The terms of our credit faCIlity and the Old Notes
do not fully prohibit us from doing so. If new debt is added to our current levels, the related risks described
above could intensify.
.
The New Notes are subordinated to Senior Indebtedness, so that in the event of a default, our Senior
Indebtedness would be repaid in full before any payment is made on the New Notes.
LIke the Old Notes, the New Notes are unsecured and subordinated In nght of payment to all of our
existing and future Semor Indebtedness, which IS defined under "DescnptlOn of the New Notes-
SubordInation." As a rcsult, in the event of bankruptcy, hqUldatIon or reorganizatIOn or upon acceleratIOn of
the New Notes due to an Event of Default, as defined below. and in specific other events, our assets will be
available to pay oblIgatIons on the New Notes and on convertIble subordInated indebtedness ranking pari
passu with the New Notes only after all Semor Indebtedness has been paid In full in cash or other payment
satisfactory to the holders of SenIor Indebtedness. There may not be suffiCIent assets remaining to pay
amounts due on any or all of the New Notes then outstanding. The New Notes are also effectively
subordinated to the indebtedness and other habllities, Including trade payables, of our subsidiaries. The
Indenture does not prohibit or limit the Incurrence of SenIor Indebtedness or the l11currence of other
indebtedness and other liabilities by us Our credit facility provides for borrOWIng of up to $600.0 million
.
14
.
mcluding the refinancing of the term loan portion of the credit facility that occurred on March 2, 2004 The
incurrence of additIOnal indebtedness and other habilitle~ could adversely affect our abIlity to pay our
obligatlOn~ on the New Notes. As of March 31,2004, after giving effect to bOlTowings we inculTed to redeem
our 5'/2% Convertible Subordinated Notes due 2006 in April 2004, we had $292.9 million of Senior
Indebtedness to which the New Notes would be subordmated in nght of payment. We anticipate that from
time to time, we and our subsIdiaries will mcur addItional indebtedness, IncludIng Semor Indebtedness. After
giving effect to the redemption of our 5'/2% Convertible Subordinated Notes due 2006 in Apri] 2004, and
assuming that all of the Old Notes are tendered in the Exchange Offer, as of May 31, 2004, we had no
outstandmg indebtedness that would rank pan passu wIth the New Notes.
Holders of the New Notes will suffer immediate dilution in net tangible book lalue on com'crsion of the
New Notes into common stock.
Net tangible book value repre~ents the amount of our tot a] tangible assets less total liabilities. If holders
receive shares of common stock upon conversion of the New Notes, those holders will suffer immedIate
substantial dIlutIOn In the net tangible book value per share of the common stock Issued upon such conversIOn.
We may not be able to repurchase the New Notes when required to.
On May I of 2009, 2012 and 2017 or upon the occurrence of a Change in Control, holders of the New
Notes may requirc us to offer to repurchase their New Notes for cash. In addition, holders of the Old Notes
have similar nghts under the indenture govermng the Old Notes. We may not have suffiCient funds at the tnne
of any such events to make the required repurchases.
.
The source of funds for any repurchase required as a result of any such events will be our available cash or
cash generated from operating activities or other sources, including borrowings, sales of assets, sales of equity
or funds provIded by a new controlling entity. We cannot a~sure you, however, that sufficient funds will be
available at the time of any such events to make any required repurchases of the New Notes tendered
Furthermore, the use of aVallab]e cash to fund the repurchase of the New Notes may impaIr our ability to
obtain additional financing in the future
The New Notcs are unsccured obligations of our company and will be effcctively subordinated to any
present or future obligations to secured creditors and liabilities of our subsidiaries.
Like the Old Notes, the New Notes are unsecured obligations of our company and WIll be effectively
subordinated to any present or future secured debt. In the event of our insolvency, the assets securing any
future secured facilities would be available to satisfy the claims of our secured lenders pnor to any application
of those a~sets to payment of other credItors, including the holders of the New Notes In addition, the Old
Notes are, and the New Notes will be, structurally subordmated to all liabilities of our subsidIaries. Further,
the Indenture governing the New Notes does not limit the incurrence of semor debt or the incurrence of other
debt and liabIlItIes by us or our subSIdIaries. The incurrence of additional debt and other liabIlities could
lmpcde our abIlity to pay obligations on our New Notes.
There is no current market for the New Notes, and it is uncertain whether an active trading market will
develop. Lack of an active trading market for the New Notes may cause the price of the New Notes to
decline.
.
There is no established trading market for the New Notes, and a market for the New Notes may not
develop or, If developed, be maintained. We do not intend to apply to list the New Notes for trading on any
secunties exchange. If an actIve market for the New Notes fails to develop or be maintained, their price may
decline Furthermore, If a market were to develop, the market price for the New Notes may be adversely
affected by changes In our financIal performance, changes in the overall market for SImIlar securities and
pClformancc or prospects for compamcs in our mdustry.
15
RATIOS OF EARNINGS TO FIXED CHARGES
.
Ratios of earnings to combined fixed charges ..
Year Ended December 31,
1999 2000 2001 2002 2003
2.7x 26x 2.6x 3.6x 4.0x
Three
Months
Ended
March 31,
2004
4.5x
For purposes of computing the ratios of earnings to combined fixed charges, earnings represent pre-tax
income from continuing operations plus fixed charges. Combined fixed charges represent interest expense and
the portion of rents representative of interest related to continuing operations.
.
.
16
.
PRICE RANGE OF COMMON STOCK
Our common stock currently trades on the NYSE under the symbol "WeN". The closing sale price of
our common stock on the NYSE on June 14, 2004 was $42.40 per share There is no established trading
market for the Old Notes. As of May 31. 2004, there were 31,918,262 shares of common stock issued and
outstandmg and there was $]75,000,000 In principal amount of the Old Notes outstanding.
The followmg table sets forth, for the periods mdlcated, the high and low sales prices per share for our
common stock, as reported on The Nasdaq Stock Market - National Market for the periods indicated
through October 23,2002, and as reported on the New York Stock Exchange beginning October 24, 2002. For
current pnce information, you should consult publicly available sources.
2002
FlfSt Quarter
Sccond Quarter
Third Quarter ..
Fourth Quarter .
2003
First Quarter. . . . . . . . . . . . .. . . . . . . . . . . . . . .
Second Quarter . . . . . .. ...... ........................
Third Quarter. . . .. .. . . . . . .. . ........
Fourth Quarter. . . .... . . .. ... .. .
2004
High_ Low
$34 26 $23.49
37.68 30.60
36.24 25.60
3956 29.73
$39.98 $30.75
37.20 31.78
3690 31.57
38.08 31.90
.
First Quarter ........ . . . . . . .. .........
Second Quarter (through June 14,2004)......
$4075
4399
$36.41
38.34
STOCK REPURCHASE AND DIVIDEND POliCIES
On May 3, 2004, we announced that our board of dIrectors had authorized a common stock repurchase
program for the repurchase of up to $200.0 million of common stock over a two-year period, The amendment
to our credit agreement approving repurchases at this level also provides us the flexibility to pay annual cash
dividends of up to $50.0 million plus optIOn proceeds. We have never paid cash diVidends on our common
stock. Although many other publicly tradcd solid wastc companies pay a cash dividend, we do not cunently
anl1cipate paymg any cash diVidends on our common stock
.
17
CAPIT ALIZA nON
.
The folloWIng table scts forth our (I) cash and cash cqUlvalents and (il) capitalizatIOn, In cach case as of
March 31, 2004 and as adjusted to give effect to (A) the redemption in Apnl 2004 of our outstanding
5'h% ConvertIble Subordinated Notes due 2006 and (B) the exchange offer, as&uming all Old Notes are
exchanged for New Notes. You should read this table in conjunctIon wlth our financial statements and
accompanying notes included in our 2003 Annual Report on Form 1O-K, the management's discussion and
analysIs and results of operations section included In our 2003 Annual Report on Form lO-K and the
consolidated financIal statements and accompanyIng notes mcluded m our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2004, all incorporated into this offering circular by reference.
As of Marcb 31, 2004
Actual As Adjusted
(Dollars in thou~and~)
Cash and Cash Equivalents
Total Dcbt Obligations (Including cun'ent portion):
Senior Indebtedness(a) . . . . . . . . . . . . . . . . . . . . . .
51//70 Convertible Subordinated Notes due 2006
Old Notes . . . . . . . . . . .. ............ .
New Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total debt. . . . . .
$
4,911 $
265,444
150,000
175,000
590,444
Stockholders' Equity:
Preferred Stock: $0.01 par value; 7,500,000 shares authonzed; none
issued and outstanding. . . . . . . . . . . . . .. . . . . . . . .. .......
Common Stock: $0.01 par value; 50,000,000 shares authoriLed;
29,086,180 and 32,337,492 lssued and outstandmg at March 31,
2004 actual and as adjusted. rcspectively . .
Additional paid-in capital. . ............. .........
Deferred stock compensation . . . . . .. . . ......
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . .
Retained earmngs. . . . . . . . . . . . . .
291
362,818
(2,468)
( 1,449)
205,296
564,488
$1,154,932
Total stockholders' equity.
Total capitalization ..........
4,911
292,938
175,000
467,938
.
323
484,705
(2,468 )
(1,449)
204,169
685,280
$1,153,218
(a) Includes amounts outstanding under our senior secured credit facility, which consists of a $200 mlllion
outstanding term loan and a $400 million available revolving faCIlIty. As adjusted amount reflects
borrowings to redeem the 5'/2% Convertible Subordmated Notes due 2006 that remained unconverted
followmg our call for redemption in Apnl 2004.
18
.
.
THE EXCHANGE OFFER
Purpose of the Exchange Offer
We believe that it is In the best interests of our company and our stoekho]ders to have convertlb]e notes
that contam terms that are now prevaknt in the eonvertIb]e note market that have emerged since we Issued
the Old Notes m May 2002. The two prImary terms being introduced in the terms of the New Notes are
(a) net share settle provisions applieab]e upon conversion of the New Notes and (b) a dividend protection
provision to adjust the converSIOn prIce under certam CIrcumstances should we pay a cash dividend m the
future.
.
Net share settle provisions: In AprI] 2004, our total leverage and debt-to-capita] ratios declined to record
low ]eve]~ when. in response to our call for redemption, approximately 80% of our previously outstanding
5'12% Convertible Subordmated Notes due 2006 converted mto our common stock WIth this exchange offer,
we will be able to reduce the number of shares we would need to issue under certain conversion scenarios by
substituting cash for the principal value portIOn of the conversion value. As a result. in the case of a future
conversion of the New Notes, our total leverage and debt-to-caplta] ratios would not decline to the extent they
did upon the conversion of our 5]/2% Convertible Subordinated Notes due 2006.
Dividend protection provisions: Since the Old Notes were issued in May 2002, changes in tax law and
investor sentiment have made cash dividends more attractIve. Our credit agreement was recently amended to
provide us with the ability to pay annual cash dividends of up to $50.0 million plus option proceeds We
believe that most new convertible notes issued since mld-2003 have included terms that adjust the conversion
prIce upon payment of a cash dlVldend.
The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of Old
Notes in any jurisdIctIOn in which the exchange offer or the acceptance of it would not be in compliance with
the seCUrItIes or blue sky laws of such Jurisdiction
Our board of director, and officers do not make any recommendation to the holders of Old Notes a~ to
whether or not to tender all or any portion 01 their Old Notes In addItion, we have not authorIzed anyone to
make any such recommendation. You must make your own decIsion whether to tender your Old Notes and, if
so, the amount of Old Notes to tender. No officer, director or affilIate of the company owns any of the Old
Notes.
.
Terms of the Exchange Offer; Period for Tendering
This offering circular and the accompanymg letter of transmittal contain the terms and conditIOns of the
exchange offer Upon the terms and subject to the condltlOns included in this offering circular and in the
accompanying letter of transmittal, which together are the exchange offer, we will accept for exchange Old
Notes which are properly tendered prior to the expiratIOn date, unless you have preVIOusly wIthdrawn them.
. When you tender to us Old Notes as provided below, our acceptance of the Old Notes will constitute a
bindmg agreement between you and us upon the terms and subject to the conditIons in thiS offering
clrcu]ar and In the accompanying letter of transmlttal.
. For each $1,000 principal amount of Old Notes you tender and that is accepted by us in the exchange
offer, we Will give you $1,000 prinCIpal amount of New Notes.
. You may tender all, ,ome or none of your existing Old Notes.
. Our obligation to acccpt Old Notes for exchange In the exchange offer is subject to the conditions
described under "- ConclttlOns to the Exchange Offer"
. The exchange olfer expIres at 5:00 pm., New York City tIme, on July 15,2004. We may, however, in
our sole discretIon, extend the perIod of time for which the exchange offer is open. References in this
offering circular to the expiration date mean 5'00 pm., New York City tIme, on July 15, 2004 or, if
extended by us, the latcst date to which the exchange offer IS extended by us.
19
.
. We wIll keep the exchange offer open for at least 20 business days, or longer if required by applicable
law, after the date that we first mail notIce of the exchange offer to the holders of the Old Notes. We
are sending this offering circular. together with the letter of transmIttal, on or about the date of this
offering circular to all of the registered holders of Old Notes at their addresses listed in the trustee's
secunty register wIth respect to the Old Notes.
. We expressly reserve the right, at any tIme, to extend the period of tIme during which the exchange
offer is open, and thereby delay acceptance of any Old Notes, by giving oral or wntten notice of an
extension to the exchange agent and notIce of that extension to the holders as described below. During
any extension, all Old Notes previously tendered will remain subject to the exchange offer unless
withdrawal rights are exercised. Any Old Notes not accepted for exchange for any reason will be
returned without expense to the tendenng holder promptly after the expIration or termination of the
exchange offer.
. We expressly reserve the right to amend or termmate the exchange offer at any tIme pnor to the
expiration date, and not to accept for exchange any Old Notes that we have not yet accepted for
exchange, If any of the conditions of the exchange offer specified below under "- CondItions to the
Exchange Offer" are not satisfied.
. We will give oral or written notice of any extension, amendment, waiver, termination or non-
acceptance descnbed above to holders of the Old Notes promptly If we amend thiS exchange offer m
any respect or Waive any condition to the exchange offer. we will give wntten notice of the amendment
or waiver to the exchange agent and will make a publtc announcement of the amendment or Waiver
promptly afterward. If we extend the expiratIon date, we WIll gIve notice by means of a press release or
other publIc announcement no later than 9:00 a.m., New York City time, on the business day after the
previously scheduled expiration date. Without limitmg the manner in which we may choose to make
any publIc announcement and subject to applIcable law, we will have no obligation to publIsh, advertise
or otherwise communicate any public announcements other than by issuing a press release to the Dow
Jones News Service.
.
. If we consIder an amendment to the exchange otfer to be matenal, or If we waive a material condition
of the exchange offer, we will promptly disclose the amendment or waiver in an offering circular
supplement, and if required by law, we will extend the exchange offer for a period of five to ten business
days
. Holders of Old Notes do not have any appraisal or dissenters' nghts m connection WIth the exchange
offer.
. We intend to conduct the exchange offer in accordance with the applicable reqUirements of the
SecUlities Exchange Act of 1934, as amended (the "Exchange Act"), and the appltcable rules and
regulations of the SEe.
Important Reservation of Rights Regarding the Exchange Offer
You should note that:
. All questions as to the validity, form, eltgibllity, time of receipt and acceptance of Old Notes tendered
for exchange, mcludmg the letter of transmittal and the Illstructions to such letter of transmittal, will be
determined by us in our sole discretion and our determination shall be final and bmding.
. We reserve the absolute nght to reject any and all tenders of any particular Old Notes not properly
tendered or to not accept any particular Old Notes the acceptance of WhICh might. in our judgment or
the Judgment of our counsel, be unlawful.
. We also reserve the absolute right to waive any defects or Irregulanties or conditions of the exchange
offer as to any particular Old Notes either before or after the expiratIOn date, including the nght to
Waive the meliglbilt1y of any holder who seeks to tender Old Notes III the exchange offer. If we waive a
condltion With respect to any particular noteholder, we will waive it for all note holders. Unless we agree
.
20
.
to waive any defect or Iffegularity m connection with the tender of Old Notes for exchange, you must
cure any defect or Iffegulanty within any reasonable period of time as we shall determine.
. Neither the company. the exchange agent nor any other person shall be under any duty to give
notification of any defect or Iffegulanty with respect to any tender of Old Notcs for exchange, nor shall
any of them mcur any liabIlIty for failure to give any notification.
Conditions to the Exchange Offer
We may not accept Old Notes for exchange and may take the actions listed below if, prior to the
expiration date, any of the following events occur:
. any action, proceeding or litIgation seeking to enjoin, make illegal or delay completion of the exchange
offer or otherwise relating in any manner to the exchange offer is mstituted or threatened;
. any order, stay, judgment or decree is issued by any court, government, governmental authority or other
legulatory or administrative authority and is in effect, or any statute, rule, regulation, governmental
order or mjunctlOn shall have been proposed, enacted, enforced or deemed applIcable to the exchange
offer. any of which would or might restrain, prohibit or delay completion of the exchange offer or
impair the contemplated benefits of the exchange offer to us. See "- Purpose of the Exchange Offer",
. any of the followmg occurs and the adverse effect of such occurrence shall. m our reasonable judgment,
be continuing:
.
. any general ~uspension of trading m, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States;
. any cxtraordinary or material adverse change m United States finanCIal markets generally;
. a declaratIOn of a banking moratonum or any suspension of payments m respect of banks m the
UnIted States;
. any limitation, whether or not mandatory, by any governmental entity on, or any other event that
would reasonably be expected to materially adversely affect, the extension of credit by banh or other
lending mstItutIOns, or
. a commencement of a war, act of terrorism or other natIOnal or mternational calamIty dIrectly or
mdirectly involving the Ul1lted States, which would reasonably be expected to affect matenally and
adversely, or to delay matenally, the completion of the exchange offer
. any of the SItuations described above existed at the time of commencement of the exchange offer and
that situation deteriorates materially after commencement of the exchange offer;
. any tender or exchange offer, other than thIS exchange offer by us, with respect to some or all of our
outstanding common stock or any merger, acquisition or other business combination proposal involving
us shall have been proposed, announced or made by any person or entity; or
. any event or event~ occur that have resulted or may result, in our reasonable judgment, in an actual or
threatened change III the business conditIOn, income, operations, ~tock ownership or prospects of the
company and our subsidIaries. taken as a whole that, in our reasonable judgment, would have a
material adverse effect on our company.
. If any of the above events occur, we may.
.
. terminate the exchange offer and promptly return all tendered Old Notes to tendering noteholder~,
. extend the exchange offer, subject to the WIthdrawal rights described III "The Exchange Offer-
Withdrawal of Tenders" herein, and retam all tendered Old Notes until the extended exchange offer
expIres;
21
. amend the terms of the exchange offer, which may result in an extension of the period of time for
which the exchange offer is kept open: or
. waive the unsatisfied condition, subject to any requirement to extend the period of time durmg which
the exchange offer is open, complete the exchange offer.
.
Legal Limitation
The above conditions are for our sole benefit We may assert these conditIOns with respect to all or any
portion of the exchange offer regardless of the circumstances giving rise to them. We may waive, in our
discretion, any condition, in whole or in part, at any time prior to the expiratIon date of the exchange offer. Our
failure at any time to exercise our rights under any of the above conditions does not represent a waiver of these
fights. Each right IS an ongoing right that may be asserted at any time prior to the expiration date of the
exchange offer. Any determination by us concerning the conditions described above will be final and binding
upon all parties
If a stop order Issued by the SEC IS threatened or in effect with respect to thc quahficatlOn of thc
Indenture governing the New Notes under the Trust Indenture Act, we will not:
. accept for exchange any Old Notes tendered; or
. Issue any New Notes in exchange for any Old Notes.
Procedures for Tendering
Tender of Old Notes Held Through a Custodian
If you are a beneficial owner of Old Notes that are held of record by a custodIan bank, depository
institution, brokcI, dealer, tlUSt company or other nominee, you must instruct the custodian to tender the Old
Notes on your behalf Your custodian will provide you with ItS mstructIOn letter which you must use to give
these instructions.
.
Tender of Old Notes Held Through DTC
To effectively tender Old Notes that are held through DTC, DTC partiCipants should transmit their
acceptance through the Automated Tender Offer Program, or ATOP, for which the transactIOn will be
eligIble, and DTC will then edit and veflfy the acceptance and send an agent's message to the exchange agent
for its acceptance Delivery of tendered Old Notes must be made to the exchange agent pursuant to the book-
entry delivery procedures set forth below or the tendermg DTC participant must comply with the guaranteed
delivery procedures 1>et forth below. No letters of transmittal will be required to tender Old Notes through
ATOP.
In addition, the exchange agent must recelVe:
. an electronic confirmation pursuant to DTC's ATOP system indicating the aggregate principal amount
of Old Note1> to be tendered and any other documents required by the letter of transmIttal, and
. prior to the expiration date, a confirmatIOn of book-entry transfer of such Old Notes into the exchange
agent's account at DTC, in accordance with the procedure for book-entry transfer described below; or
. the holder must comply with the guaranteed delivery procedures described below.
Your Old Notes must be tendered by book-entry transfer. The exchange agent Will establish an account
wIth respect to the Old Notes at DTC for purposes of the exchange offer within two business days after the
commencement of the exchange offer. Any financial institution that is a participant in DTC must make book-
entry delivery of the Old Notes by having DTC transfer such Old Notes into the exchange agent's account at
DTC in accordance with DTC's procedures for transfer. Although your Old Notes will be tendered through
the DTC facihty, the letter of transmittal, or facsimIle, or an electronic confirmatIon pursuant to DTC's
ATOP system, wIth any required signature guarantees and any other rcquired documents must be transmitted
.
22
.
to and received or confirmed by the exchange agent at its address set forth on the back cover of this offering
circulal, pnor to 5'00 pm, New York City tune, on the expiration date
You or your broker must ensure that the exchange agent receives an agent's message from DTC
confirming the book-entry transfer of your Old Notes An agent's message is a message transmitted by DTC
and received by the exchange agent that forms a part of the book-entry confirmatIOn that states that DTC has
received an express acknowledgment from the DTC participant tendering the Old Notes that such participant
agrees to be bound by the terms of the letter of transmittal
Delivery of documents to DTC in accordance with Its procedures does not constitute delivery to the
exchange agent.
If you are an institution that is a participant in DTC's book-entry transfer facility, you should follow the
same procedures that are applicable to persons holdmg Old Notes through a financial institution.
Do not send letters of transmittal or other exchange olTer documents to us
It is your responsibility to provide all necessary materials to the exchange agent before the expiration
date. If the exchange agent does not receive all of the reqUired matenals before the expiration date, your Old
Notes \\oil1 not be validly tendered.
We will have accepted the validity of tendered Old Notes if and when we give oral or written notice to the
exchange agent. The exchange agent Will act as the new trustee's agent for purposes of receiving the New
Notes from us. If we do not accept any tendered Old Notes for exchange because of an invalid tender or the
occurrence of any other event, the exchange agent will return those Old Notes to you, Without expense,
promptly after the expiration date via book-entry transfer through DTC.
.
Guaranteed Delivery Procedures
If you desire to tender your Old Notes and you cannot complete the procedures for book-entry transfer
set forth above on a timely basIs, you may still tender your Old Notes if:
. your tender IS made through an eligible institution;
. prior to the expiration date, the exchange agent receives from the eligible institution a properly
completed and duly executed letter of transmittal, or a facsimile of such letter of transmIttal or an
electronic confirmation pursuant to DTC's A TOP system, and notice of guaranteed delivery, substan-
tially in the form provided by us, by facsImile transmission, mail or hand delivery, that.
. sets forth the name and address of the holder of Old Notes and the principal amount of Old Notes
tendered,
. states that the tender is being made thereby; and
. guarantees that within three NYSE tradmg days after the expiration date a book-entry confirmatIOn
and any other documcnts required by the lettcr of transmittal will be depoSited by the eligible
institution With the exchange agent
Acceptance of Old Notes and Delivery of New Notes
.
If all of the conditIOns to the exchange offer are satlsficd or waivcd pnor to thc expiration date, we will
accept all Old Notes properly tendered and not Withdrawn as of the expiratIOn date and will issue the New
Notes promptly after the expiration date See "- Conditions to the Exchange Offer" For purpo~es of the
exchange alTer, our giving of oral or written notice of our acceptance to the exchange agent will be considered
our acceptance of the exchange offer.
23
In all cases, we will Issue New Notes in exchange for Old Notes that are accepted for exchange only after
timely receipt by thc cxchange agent of:
. a book-entry confirmation of transfer of Old Notes into the exchange agent's account at DTC using the
book-cntry tran~fcr procedures descnbed above;
. a properly completed and duly executed letter of transmittal or an electronic confirmation of the
submitting holder's acceptance through DTC's ATOP system; and
.
. any other requircd documcnts.
The exchange agent will act as agent for the tendering holders for the purposes of receiving the New
Notes from us, and will make the exchange on, or promptly after, the expiration date. Following thiS exchange
the holders in whose names the New Notes will be issuable upon exchange will be deemed the holders of
record of the New Notes.
The reasons we may not accept tendered Old Notes include:
. the Old Notes were not validly tendered pursuant to the procedures for tendering; see "- Procedures
for Tendering",
. we determine in our reasonable discretion that any of the conditions to the exchange offer have not
been satisfied pnor to the expiration date; see "- Conditions to the Exchange Offer";
. a holder has validly withdrawn a tender of Old Notes; see "- Withdrawal of Tenders"; or
. we have, pnor to the expiration date of the exchange offer, delayed or terminated the exchange offer,
see "- Terms of the Exchange Offer; Penod for Tendering".
If we do not accept any tendered Old Notes for any reason mcluded m the terms and conditions of the
exchange offer, we will return any unaccepted or non-exchanged Old Notes tendered by book-entry transfer
into the exchange agent's account at DTC using the book-entry transfer procedures descnbed above, and non-
exchanged Old Notes will be credited to an account maintained with DTC promptly after the expiration or
termination of the exchange offer.
.
Old Notes which are not tendered for exchange or are tendered but not accepted in connection with the
exchange offer will remain outstanding and remain subject 10 the indenture governing the Old Notes.
Any validly tendered Old Notes accepted for exchange in the exchange offer will be retired and will not
be reissuable.
Consequences of Not Exchanging Old Notes
If the exchange otfer IS consummated, Old Notes that are not tendered, or are tendered but not accepted
in the exchange offer, Will remam outstandmg. Accordingly, Illterest thereon will contmue to accrue III
accordance with their terms, and the Old Notes will continue to have the benefit of the mdenture governing
the unexchanged Old Notes but not the benefit of the Indenture governing the New Notes. However, any
trading market for unexchanged Old Notes could become significantly limited due to the reduction m the
amount of Old Notes outstanding after completion of the exchange offer, which may adversely affect the
market price and pnce volatility of the Old Notes. See "Risk Factors - Risks Relating to the Exchange
Offer".
Withdrawal of Tenders
You may withdraw your tender of Old Notes at any time pnor to 5:00 p.m., New York City time, on the
expiration date, or any subsequent date to which we extend it Holders who wish to exercise their right of
withdrawal with respect to the exchange offer must give wntten notIce of withdrawal delivered by mail, hand
delivery or fac~lInilc transmissIOn, which notice must be received by the exchange agent on or prIor to
.
24
.
5:00 p.m., New York City time, on the expiration date at Its address set forth on the back cover of thIs offering
cIrcular. In order to be valtd, a notice of wIthdrawal must:
. specify the name of the person who tendered the Old Notes to be wIthdrawn;
. specIfy the aggregate amount of Old Notes to be withdrawn, if not all of the Old Notes are tendered by
the holder;
. contain a statement that you are wIthdrawing your election to have your Old Notes exchanged;
. be signed by the holder in the same manner as the original signature on the letter of transmittal by
which the Old Notes were tendered, including any required signature guarantees; and
. specify, on the notice of withdrawal, the name and number of the account at DTC to be credited wIth
the wIthdrawn Old Notes and otherwIse comply with the procedures of such facility, If you tendered
your Old Notes in accordance wIth the procedure for book-entry transfer described above.
A valid withdrawal of tendered Old Notes on or prior to the explTatlOn date shall be deemed a valid
revocation of the tender of Old Notes. Properly wIthdrawn Old Notes may be retendered by following the
procedures described under "Procedures for Tendering" above at any tIme on or prior to 5'00 pm., New York
City time, on the expiration date.
.
Tenders of any Old Notes will automatically be withdrawn if the exchange offer is terminated without any
such Old Notes belllg exchanged thereunder or otherwIse provided herein. In the event of termination of the
exchange offer. the Old Notes tendered pursuant to the exchange offer will be returned to the tendering holder
promptly If we are delayed m our acceptance for exchange of any Old Notes or if we are unable to accept for
exchange Old Notes pursuant to the exchange offer for any reason, then, without prejudice to our rights
hereunder, tendered Old Notes may be retaIned by the exchange agent on our behalf, and may not be
withdrawn, subject to Rule l4e-1 of the Exchange Act, which requires that an offeror pay the consideratIOn
offered or return the Old Notes dcposited by or on behalf of the holders promptly after the tenmnation or
withdrawal of a tender offer, except as otherWIse proVIde m this sectIOn.
Any attempted withdrawal of previously tendered Old Notes other than in accordance with the
provisions described above will not constitute a valid withdrawal of such tender.
All questions as to form and valtdity (includIng time of receipt) of any delIvery or revocation of a tender
WIll be determmed by us, III our sole discretIon, whIch determInatIOn will be final and bmdmg None of us, the
exchange agent, the trustee or any other person WIll be under any duty to give notIfication of any defect or
irregularity m any delIvery or revocatIOn of a tender or Incur any lIability for failure to give any such
notIfication.
Exchange Agent
U.S. Bank NatIOnal AssocIation (successor to State Street Bank and Trust Company of CalIfornia,
N .A.) has been appomted to act as the exchange agent for the exchangc offer. All executed letters of
transmIttal should be dIrected to the exchange agent at the addresses set forth on the back cover of this
offering circular. QuestIOns and requests for assistance, requests for additional copies of this offering CIrcular
or of the letter of transmIttal and requests for notIces of guaranteed delivery should be directed to the
exchange agent at the address set forth on the back cover of this offenng circular
.
US. Bank National ASSOCIatIOn will assIst us WIth the distribution of this offering CIrcular and the other
exchange materials. The exchange agent WIll receive customary compensation for ItS services, will be
reimbursed for reasonable out-of-pocket expenses and will be indemmfied against lIabilities in connection with
its services, Including lIabilities under the federal securities laws The exchange agent has not been retamed to
make solicitations or recommendations The fees receIved by the exchange agent WIll not be based on the
aggregate prmcipal amount of Old Notes tendered in thc exchange offer.
25
Fees and Expenses
We wIll pay the reasonable and customary fees and reasonable out-of-pocket expenses of U.S. Bank
National Association 111 its capacity as exchange agent, and the trustee, and legal, accounting, and related fees
and expenses. We will not pay any fees or commissions to any broker or dealer or any other person for
solicIting tenders of Old Notes under the exchange offer. Brokers, dealers. commercial banks and trust
companies will, upon request, be reimbursed by us for reasonable and necessary costs and expenses incurred
by them in forwarding materials to their customers.
.
Transfer Taxes
Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes, except
that holders who Instruct us to register New Notes in the name of, or request that Old Notes not tendered or
not accepted in the exchange offer be returned to, a person other than the registered tendering holder, will be
responsIble for the payment of any applicable transfer tax.
.
.
26
.
DESCRIPTION OF THE NEW NOTES
The New Notes will be issued under an Indenture between Waste ConnectlOm, Inc and US. Bank
NatIOnal AssociatIon (successor to State Street Bank and Trust Company of CalIfornia, N.A.), as trustee.
The following description is only a summary of the material prOVisions of the Indenture and the New Notes.
We urge you to read the Indenture and the New Notes in their entirety because they, and not this description,
define your rights as a holder of the New Notes. You may request copIes of these documents at our address
shown under "Where You Can Find More Information" The terms of the New Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended. For purposes of this section, references to "we," "us," "ours" and "Waste ConnectIons" include
only Waste Connections, Inc. and not its subsidiaries.
General
.
We will issue the New Notes up to an aggregate principal amount of $175,000,000. The New Notes are
unsecured, subordinated obligations of Waste Connections and mature on May I, 2022, unless earlier
redeemed at our option as described under "- OptIOnal RedemptIOn of the New Notes," repurchased by us at
a holder's optIOn at certain dates as described under "- Repurchase of New Notes at the Option of the
Holder" or repurchased by us at a holder's optIOn upon a Change III Control of Waste Connections as
descnbed under "- Right to Require Purchase of New Note~ upon a Change in Control." Interest on the
New Notes wIll accrue at a variable rate, as described under "- Interest." The Indenture does not contain
any restrIction on'
o the payment of dividends;
o the issuance of Senior Indebtedness (as defined below) or other indebtcdness; or
o the repurchase of securities of Waste ConnectIOns;
and does not contain any financial covenants. Other than as desCrIbed under "- Right to Require Purchase of
New Notes upon a Change in Control," the Indenture contains no covenants or other provisions to afford
protection to holders of New Notes in the event of a highly leveraged transaction or a Change in Control of
Waste Connections.
We will pay the principal of, premium, if any, and mterest on the New Notes at the office or agency
maintained by us in the Borough of Manhattan in New York CIty. Holders may register the transfer of their
New Notes at the same location. We reserve the right to pay mterest to holders of the New Notes by check
mailed to the holders at their registered addresses Except under the lImited Circumstances described below,
the New Notes will be issued only in fully registered book-entry form, without coupons, and will be
represented by one or more global notes. There will be no service charge for any registration of transfer or
exchange of New Notes. We may, however, require holders to pay a sum sufficient to cover any tax or other
governmental charge payable in connection with any transfer or exchange
Interest
.
The New Note~ will bear interest at a per annum rate equal to 3-month LIBOR plus 0.50%, adjusted
quarterly as described below NotWIthstanding any quarterly adjustments of the interest rate, the interest rate
borne by the New Notes will never be less than zero
We will pay interest quarterly in arrears on May I, August I, November I and February I of each year,
unless any such mterest payment date (other than an interest payment date at matunty) would otherWise be a
day that is not a busmess day, in which case the interest payment date wIll be postponed to the next
succeeding business day (except if that busmess day falls m the next succeedmg calendar month, that interest
payment date wIll be the Immediately preceding business day). If the matunty date of the New Notes IS a day
that is not a business day, all payments to be made on such day will be made on the next succeedmg busine~s
day, with the same force and effect as if made on the due date, and no additional interest Will be payable as a
result of sllch a delay In paymcnt. We WIll pay interest to thc holders of record at the closc of business on the
27
fifteenth calendar day of the month preceding each mterest payment date. Interest on the New Notes will
accrue from thc last interest payment date on which interest was paid, or, if no mterest has been paId, from the
last interest payment date on which interest was paid on the Old Notes. Holders whose Old Notes are
accepted for exchange will be deemed to have waived the right to receive any interest accrued on the Old
Note~.
.
The interest rate is determmed by the trustee actmg as calculation agent The interest rate for each
quarterly period (other than the period before the first interest payment date) will be adjusted on the first day
of such quarterly perIod (which we refer to a~ the interest adjustment date), which will be the interest
payment date for the immedIately precedmg quarterly perIod. The adjusted interest rate is based upon
3-month LIBOR, determIned on the second precedmg London Banking Day prior to the applicable interest
adjustment date (which we refer to as the mterest determination date) as described below, plus 0.50%.
Interest on the New Notes will accrue at a rate for the pCrIod before the first interest payment date equal to
the interest rate for such period on the Old Notes.
Interest generally is computed on the basIs of the actual number of days for which Interest is payable In
the relevant interest perIod, divided by 360.
The term "3-month LIBOR" means, with respect to any interest determinatIOn date.
(a) the rate for 3-month deposits in United States dollars commencing on the related Interest
adjustment date, that appears on the Moneyline Telerate Page 3750 (as descrIbed below) as of
11'00 A.M., London time, on the Interest determInation date, unless fewer than two such offered rates so
appear; or
(b) If fewer than two offered rates appear, or no rate appears, as the case may be. on the particular
interest determInation date on the Moneylme Telerate Page 3750, the rate calculated by the calculation
agent of at least two offered quotatIons obtained by the calculatIon agent after requesting the principal
London offices of each of four major reference banks in the London interbank market to provide the
calculation agent WIth ItS offered quotation for depOSIts In Umted States dollars for the period of three
months, commenCIng on the related interest adjustment date, to prime banks in the London interbank
markets at approximately 11.00 A.M., London tIme, on that interest deternunation date and In princIpal
amount that is representative for a single transactIon in United States dollars in that market at that
time, or
.
(c) If fewer than two offered quotations referred to In clause (b) are prOVIded as requested, the rate
calculated by the calculation agent as the arithmetic mean of the rates quoted at approximately
11.00 A.M., New York time, 011 the particular interest determination date by three major banks In the
City of New York selected by the calculation agent for loans in United States dollars to leading European
banks for a pcriod of threc months and 111 a princIpal amount that is representative for a smgle transaction
In United States dollars in that market at that time; or
(d) if the banks so selected by the calculation agent are not quoting as mentioned in dause (c),
3-month LIBOR in effect ImmedIately prior to the particular mterest determinatIOn date.
"Moneyhne Telerate Page 3750" means the display on Moneyline Telerate (or any successor service) on
such page (or any other page as may replace such page on such service) or such other service or services as
may be nominated by the BrItish Bankers' Association as the information vendor for the purpose of dIsplaying
the London Interbank rates of major banks for United States dollars.
"London Banking Day" mean~ a day on which commercial banks are open for business, including
dealings in United States dollars, in London.
The term "business day" means any day, other than a Saturday or Sunday, that is neither a legal holiday
nor a day on whIch commercial banks are authOrIzed or required by law, regulation or executIve order to close
in The City of New York
.
28
.
Conversion Rights
A holder may convert any outstandmg New Notes into cash and, if applicable, shares of our common
stock at an inItial conversIOn price per share of $48 39. This represents an inItial conversIOn rate of
20.6654 shares per $1,000 prinCipal amount at maturity of the New Notes.
The conversion price (and resulting conversion rate) IS, however, 6ubJect to adjustment as described
below. A holder may convert New Notes only in denominations of $1.000 and integral multiples of $1,000.
General
.
Holders may surrender New Notes for conversion into cash and, if applicable, shares of our common
stock prior to the maturity date only if one of the following conditions is satisfied:
. the clo6mg sale pnce per share of our common stock for at least 20 trading days in the period of 30
consecutive trading days ending on the last trading day of the calendar quarter preceding the calendar
quarter m which the conversion occurs IS more than 110% of the conversion pnce per share of our
common stock on that thIrtieth tradmg day;
. we have called the New Notes for redemption,
. during such period, if any, that the credit rating assigned to the New Notes by both Moody's Investors
Service, Inc. and Standard & Poor's Rating Group is below a specified level, or if neither rating agency
is rating the New Notes;
. during the five business day period after any nIne consecutIve tradmg day period in which the trading
price of the New Notes (per $1.000 principal amount) for each day of such penod was less than 95% of
the product of the closing sale price per share of our common stock multiplied by the number of shares
of our common stock issuable upon conversion of $1,000 principal amount of the New Notes, or
. upon the occurrence of specified corporate transactions.
Subject to certain exceptIOns described below under "- Conversion Upon Satisfaction of Tradmg Pnce
Condition" and "- ConversIOn Upon Specified Corporate Transactions," once New Notes are tendered for
conversIOn. holders tenderIng the New Notes WIll be entitled to receive, per $1,000 pnnclpal amount of New
Notes, cash and, if applicable, shares of our common stock, the aggregate value of which (the "Conversion
Value") will be equal to the product of:
(1) the ConversIOn Rate then in effect: and
(2) the average of the common stock prices for the ten con6ecutive tradmg days (appropriately
adjusted to take mto account the occurrence during such period of stock splits and SImilar events)
begmnmg on the second trading day immediately following the day the New Notes are tendered for
converSIOn (the ''Ten Day Average Closmg Stock Price").
Subject to certain exceptions descnbed below and except for conversions described under "- Conversion
Upon Credit Ratmg Event," "- ConversIOn Upon SatisfactIon of Trading Price Condition" and "- Conver-
sion Upon SpeCIfied Corporate TransactIOns," we wIll delIver the Conversion Value of the New Notes
surrendered for conversion to converting holders as follows:
(I) an amount In cash (the "PrinCipal Return") equal to the lesser of (a) the aggregate Conversion
Value of the New Notes to be converted and (b) the aggregate pnnclpal amount of the New Notes to be
converted,
(2) if the aggregate ConversIOn Value of the New Notes to be converted is greater than the
PrIncipal Return, an amount m whole shares (the "Net Shares"), determined as set forth below, equal to
such aggregate Conversion Value less the PrinCipal Return (the "Net Share Amount"), and
.
(3) an amount In cash in lieu of any fractlOnal shal cs of common stock
29
The number of Net Shares to be paid will be determined by dividing the Net Share Amount by the Ten
Day Average Closing Stock PrIce. The cash payment for fractIOnal share~ also will be based on the Ten Day
Average Closing Stock Price
The Conversion Value, Principal Return, Net Share Amount and the number of Net Shares will be
determined by us at the end of the ten consecuhve trading day penod beginning on the second trading day
immediately following the day the New Notes are tendered for conversion (the "Determination Date").
We will pay the Principal Return and cash In lIeu of fractional shares and deliver the Net Shares, if any,
as promptly as practicable after the Determination Date, but In no event later than four business days
thereafter.
.
DelIvery of the Pnnclpal Return, Net Shares and cash in lIeu of fractional shares wIll be deemed to
satisfy our obligation to pay the principal amount of the New Notes and accrued interest payable on the New
Notes, except as deSCrIbed below. Accrued interest will be deemed paid in full rather than canceled,
extinguished or forfeited. We will not adjust the Conversion Price to account for accrued interest.
Except as described In this paragraph, no holder of New Notes wIll be entitled, upon conversion of the
New Notes, to any actual payment or adjustment on account of accrued but unpaid interest on a converted
New Note, or on account of diVidends or distributions on shares of our common stock issued in connection
with the conversIon. If New Notes are converted aftel a regular record date and prior to the opening of
business on the next Interest payment date, IncludIng the date of matunty, holders of such New Notes at the
close of business on the regular record date will receive the interest payable on such New Notes on the
correspondIng Interest payment date notwithstanding the conversIon. In such event, when the holder
surrenders the New Note for conversion, the holder must deliver payment to us of an amount equal to the
interest payable on the interest payment date on the principal amount to be converted. The foregoing sentence
shall not apply to New Notes called for redemption on a redemption date withm the period between the close
of business on the record date and the opening of business on the Interest payment date, or to New Notes
~urrendered for conversion on the interest payment date.
If you wish to exercIse your conversIOn rIght, you must deliver an Irrevocable conversion notice In
accordance with the proviSIOns of the Indenture, together, If the New Notes are in certificated form, with the
certificated security, to the trustee who will, on your behalf, convert the New Notes into cash and shares of our
common stock. You may obtain copIes of the required form of the conversion notice from the trustee If a
holder of a New Note has delivered notice of Its election to have such New Note repurchased at the option of
such holder on May I of 2009, 2012 and 2017 or as a result of a Change in Control, such New Note may be
converted only if the notice of election IS withdrawn as described under "- Repurchase of New Notes at the
Option of the Holder" or "- Right to ReqUire Repurchase of New Notes Upon a Change of Control."
The "common stock pnce" on any date means the clOSIng sale price per share (or If no clOSIng sale prIce
is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average
bid and the average a~k pnces) on such date for our common stock as reported In composite transactions on
the principal national securities exchange or other quotation system on which our common stock is quoted or
lIsted or admitted to tradIng on such day or, if our common stock IS not quoted or listed or admitted to trading
on a natIOnal seCUrIties exchange or quotation system, as reported by the National Quotation Bureau
Incorporated, or Similar generally accepted reporting service
A "trading day" means any regular or abbreViated trading day of The New York Stock Exchange.
.
Conversion Upon Satisfaction of Market Price Condition
A holder may surrender any of ItS New Notes for conversion during any calendar quarter if the closing
sale pnce per share of our common stock for at least 20 trading days in the period of 30 consecutive trading
days endIng on the last trading day of the precedmg calendar quarter, exceeds 110% of the prevaihng
conversion price per share of our common stock on that thlftieth trading day. The conversIOn agent, which will
imtially be the trustee, will, on our behalf, determine at the end of each quarter if the New Notes are
convertible a~ a result of the market prIce of the share and notify us.
.
30
.
Com'ersion Upon Notice of Redemption
A holder may surrender for conversion any New Note called for redemptIOn at any tIme prior to the close
of business on the day that IS two business days prIor to the redemption date, even If It IS not otherwIse
convertIble at such tIme.
Conversion Upon Credit Rating Event
A holder may surrender any of its New Notes for conversIOn dUrIng any perIod in which the respective
credit ratings assigned to the New Notes by both Moody's Investors Service, Inc. and Standard & Poor's
Rating Group are reduced below B3 or B-, respectively, if the credit rating asslgned to the New Notes is
suspended or withdrawn by both such rating agencies or if neither agency is rating the New Notes. We will
dehver the ConversIOn Value of the New Notes surrendered for conversIOn in these CIrcumstances, at our
optIOn, m cash, shares of common stock, or in a combInation of cash and shares of common stock. We will
notify such holder by the second trading day following the date of conversion whether we will pay such holder
in cash, shares of common stock or a combination of cash and shares of common stock, and in what
percentage.
.
Conversion Upon Satisfaction of Trading Price Condition
A holder may surrender any of its New Notes for conversion dUrIng the five business day period after any
nine consecutive trading day period in which the trading price of the New Notes (per $1,000 principal
amount) (as determined following a request by a holder of the New Notes in accordance with the procedures
described below) for each trading day of such perIod was less than 95% of the product of the closing sale price
per share of our common stock multiplied by the number of shares of our common stock issuable upon
conversIOn of $1,000 pnncipal amount of the New Notes; a holder surrendenng New Notes for such
conversIOn will receIve cash or shares of our common stock or a combination of both, at our option. with a
value equal to the aggregate principal amount of such holder's New Notes so surrendered as of the conversion
date. If a holder surrenders ItS New Notes for such conver~ion, we will notify such holder by the second
tradmg day followmg the date of conversIOn whether we will pay such holder in cash, share~ or a combinatIOn
of cash and shares, and in what percentage. Any share delivered will be valued at the greater of (x) the
conversIOn pnce on the conversion date and (y) the closing sale pnce per ~hare of our common stock on the
third trading day after the conversion date. We will pay such holder any portion of the prInclpal amount of
such holder's New Notes so surrendered to be paid in cash on the third trading day after the conversion date
WIth respect to any portion of the sum of the pnncipal amount of such holder's New Notes so surrendered to
be paId In shares of our common stock. we will deliver the shares to such holder on the fourth trading day
follOWIng the conversion date.
The "tradmg price" of the New Notes on any date of determinatIon means the average of the secondary
market bid quotations per $1,000 principal amount of New Notes obtained by the conversion agent for
$5,000,000 principal amount of the New Notes at approximately 3:30 p.m, New York CIty tIme. on such
determination date from three independent nationally recognized securities dealers we select. provided that if
at least three such bids cannot reasonably be obtained by the conversion agent, but two such bids are obtamed,
then the average of the two bids shall be used. and if only one such bid can reasonably be obtaIned by the
conversion agent, thIS one bid shall be used. If the conversIOn agent cannot reasonably obtam at least one bid
for $5,000,000 prmclpal amount of the New Notes from a natIOnally recognized securitIes dealer or in our
reasonable Judgment, the bId quotatlOns arc not indicatIve of the secondary markct value of the New Notes,
then the trading price of the New Notes will be deemed to equal (a) the number of shares of our common
stock issuable upon conversion of $1,000 principal amount of the New Notes multiphed by (b) the closing
sale price per share of our common stock on such determination date The conversIOn agent shall have no
obligation to determIne the trading price of the New Notes unless we have requested such determinatIOn; and
we shall have no obligation to make such request unless a holder proVIdes us with reasonable eVIdence that the
tradmg pnce of the New Notes would be less than 95% of the product of the closing ,ale prIce per share of our
common stock and the number of shares of our common stock issuable upon conversIOn of $1,000 principal
amount of the New Notes; at which tIme, we shall instruct the conversion agent to determine the trading price
.
31
of the New Notes begInning on the next trading day and on each successive trading day until the tradIng price
is greater than or equal to 95% of the product of the closing sale pnce per share of our common stock and the
number of shares of our common stock issuable upon conversIOn of $1,000 principal amount of the New
Notes.
.
Conversion Upon Specified COIporate Transactions
If we elect to:
. distribute to all or substantially all holders of our common stock, rights, warrants or options entitling
them to subscribe for or purchase, for a period expiring withIn 60 days of the date of distribution, our
common stock at less than the then current market price; or
. distribute to all or substantially all holders of our common stock, our assets, debt securities or certain
rights to purchase our securities, which distribution has a per share value exceeding 10% of the closing
price per share or our common stock on the day preceding the declaration date for such distribution,
we must notify the holders of New Notes at least 20 days prior to the ex-dividend date for such distribution.
At any time once we have given such notice, holders may surrender their New Notes for conversion until the
earlier of the close of busllless on the business day prior to the ex-dividend date or our announcement that
such distributIOn will not take place. No adjustment to the ability of a holder to convert will be made if the
holder will otherwise participate in the distribution without conversion.
In additIOn, If we are a pmiy to a consolidatIOn, merger, share exchange, ~ale of all or substantially all of
our assets or other transaction, In each case pursuant to which our common stock would be converted into
cash, securities or other property, a holder may surrender its New Notes for conversIOn at any time from and
after the date which IS 15 days prior to the anticipated effective date of such transaction until and including the
date which is 15 days after the actual date of such transaction. If we are a party to a consolidatIOn, merger,
share exchange, sale of all or substantially all of our assets or other transaction, in each case pursuant to which
our common stock is converted into cash, securities, or other property, then at the effective time of the
transaction, a holder's right to convert its New Notes Will be changed mto a right to convert such New Notes
into the kllld and amount of cash securities and other property which such holder would have received if such
holder had converted such New Notes immediately prior to the transaction. If the transaction also constitutes
a Change in Control. such holder can reqUire us to repurchase all or a portion of its New Notes as described
under "- Right to Require Purchase of New Notes upon a Change In Control"
If a holder of a New Note has delivered notice of its election to have the New Note repurchased at the
option of such holder or as a result of a Change in Control, the New Note may be converted only If the notice
of election is withdrawn as described, respectively, under "- Repurchase of New Notes at the Option of the
Holder" or "- Right to ReqUire Purchase of New Notes upon a Change in Contro!."
.
Conversion Price Adjustments
We Will adjust the conversion price If (without duplication).
(I) we issue common stock as a dividend or distrIbutIOn on our common stock;
(2) we subdivide, combine or reclaSSify our common stock;
(3) we issue to all or substantially all holders of our common stock rights, warrants or options
entitling them to subscribe for or purchase common stock at less than the then current market pnce;
(4) we distribute to all or substantially all holders of common stock eVidences of our Indebtedness,
shares of capital stock (other than common stock), securities, cash, property, rights. warrants or options,
excludlllg:
. those rights, warrants or options referred to in clause (3) above:
. any dividend or distribution paid exclusively in cash referred to in clause (5) below; and
.
32
.
. any dividend or distribution referred to in clause (1) above;
(5) we declare a cash dividend or cash distribution to all of the holders of our common stock. If we
declare such a cash dividend or cash distributIOn, the ConversIOn Price shall be decreased to equal the
pnce dctermined by multip]ymg the ConvcrslOn Price in effect immcdlatcly prIor to the record datc for
such dividend or distribution by the following fraction:
(Pre-Dividend Sale PrIce - Dividend Adjustment Amount)
(Pre-Dividend Sale Price)
provided that no adjustment to the ConversIOn Price will be made if we provide that holders of New
Notes will participate in the cash dividend or cash distrIbution without conversion; provided further, that
if the numerator of the foregoing fraction is less than $1 00 (includIng a negative amount), then in lieu of
any adjustment under this clause (5), we shall make adequate provision so that each holder of New
Notes shall have the rIght to receIVe upon conversion, In addition to the cash and shares of common stock
issuable upon such conversion, the amount of cash such holder would have received had such holder
converted ItS New Notes immediately prior to the record date for such cash dividend or cash distribution
at the Conversion Rate and for the Conversion Value In effect at such time "Pre-Dividend Sale Price"
means the average common stock price for the three consecutive tradmg days endmg on the tradmg day
ImmedIate]y preceding the record date for such dividend or distributIOn. "DlVldend Adjustment Amount"'
means the full amount of the cash dividend or cash distributIOn applicable to one share of our common
stock; or
.
(6) we or one of our subsidiaries makes a payment in respect of a tender offer or exchange offer,
other than an odd-lot offer, for our common stock which involves an aggregate consideration that,
together With any cash and other consideration payable in respect of any tender or exchange offer by us or
one of our subsidiaries for shares concluded withm the preceding 12 months, exceeds 10% of our
aggregate market capitaliLation on the expiration of the tender or exchange offer.
The conversIOn price will not be adjusted until adjustments amount to I % or more of the conversion price
as last adjusted. We will carry forward any adjustment we do not make and will include it in any future
adjustment.
If our common stock is converted into the right to receive cash, securitIes or other property as a result of
any consolidatIOn, merger, share exchange, sale of all or substantially all of our a~sets or other transaction,
each New Note then outstanding would, without the consent of any holders of New Notes, become
convertible only Into the kInd and amount of cash, securities and other property which the holder of such New
Note would have received if the holder had converted the New Note immediately prior to the transaction. We
will not issue fractional shares to a holder who converts a New Note. In lieu of issuing fractional shares, we
will pay cash based upon the market price
If we make a distrIbution of property to our stockholders which would be taxable to them as a dividend
for federal income tax purposes and the conversion prIce of the New Notes IS decreased, this decrease may be
deemed to be the receipt of taxable mcome to U.S. holders (as defined in "Certain Umted States Federa] Tax
Considerations") of New Notes and would generally result in withholding taxes for non-U.S holders (as
defined m "Certam Umted States Federal Tax ConSiderations") of New Notes. Because thiS deemed mcome
would not give flse to any cash from which any applicable withholding tax could be satisfied, we may set-off
any such withholding tax applicable to Non-United States Holders against cash payments of interest payable
on the New Notes. See "Certain United States Federa] Tax Comlderations - Consequences to U.S. Ho]ders
of New Notes - ComtructIve Dividends" and "- Consequences to Non-U.S Ho]ders of New Notes-
DlVIdends and Constructive Dividends."
.
In additIOn, we may make any decreases in the conversIOn price that our board of directors deem~
advlsab]e to aVOId or dllninish any mcome tax to holders of our common stock resulting from any dividend or
distribution of stock, or rights to acquire stock, or from any event treated as such for Income tax purposes or
for any other reasons.
33
Subordination
.
The payment of the prIncipal or, premIum, if any, and Interest on the New Notes will. to the extent
descnbed in the Indenture, be subordInated In right of payment to the pnor payment in full of all our Senior
Indebtedness. The holders of all Senior Indebtedness will first be entltled to receive payment in full of all
amounts due or to become due on the Senior Indebtedness, or proviSIOn for payment in money or money's
worth, before the holders of the New Notes will be entitled to receive any payment III respect of the New
Notes, when there is a payment or distribution of assets to creditors upon our:
. liqUIdation;
. dissolution;
. winding up,
· reorganization;
. assignment for the benefit of credItors,
. marshaling of assets;
. bankruptcy,
. Insolvency; or
. similar proceedings.
In addition, because our subsidiaries are not obligated under the New Notes, the New Notes will be
effectively ~ubordlllated to all existing and future indebtedness and other liabilities of our subsidiaries.
No payments on account of the New Notes or on account of the purchase or acquisition of New Notes
may be made If a default in any payment \~Ith respect to Senior Indebtedness has occurred and is continuing.
If (I) there is a default on any Designated Senior Indebtedness (as defined below) other than a payment
default that occurs that permits the holders of that DeSIgnated Semor Indebtedness to accelerate its maturity
and (2) the trustee and Waste Connections receive the notice required by the Indenture, no payments may be
made on the New Notes for up to 180 days many 365-day period unless the default is cured or waived. By
reason of this subordination, in the event of our insolvency, holders of the New Notes may recover less ratably
than holders of our Selllor Indebtedness.
.
Payments on the New Notes may and shall be resumed, m the case of a payment default, upon the date
on which such default IS cured or waived, and III the case of a non-payment default, upon the earliest of
(I) the date on which such non-payment default IS cured or waived, (2) 180 days after the date on which the
applIcable payment blockage notIce is receIved, or (3) the date on which the payment blockage period IS
termmated by wntten notIce from the representative of the Senior Indebtedness to the trustee and Waste
Connections, unles~ a payment default has occurred and IS continuing. Only one payment blockage period may
be commenced withm any 365-day penod No Event of Default WIth respect to Designated Senior
Indebtedness that existed or was continuing at the commencement of any payment blockage period with
respect to such Designated Senior Indebtedness can be the basis for the commencement of a second payment
blockage period whether or not withm a penod of 365 days, unless such Event of Default was cured or waived
for at least 90 days. No payment blockage period may extend beyond 180 days.
No actIOn may be taken to declare the New Notes due and payable nor may any judicial or other
proceedings to collect the New Notes be initiated during any standstill period. A standstill period commences
on the occurrence of a payment default or the date on which Waste Connections and the tru~tee receive notice
of a payment blockage period and continue~ until (I) the date on which the default is cured or waived,
(2) holders of Selllor Indebtedness take action to declare the Selllor Indebtedness due and payable or take
certain actions to collect the Semor Indebtedness, (3) the date on which the Semor Indebtedness becomes
automatically due and payable, (4) the occurrence of a bankruptcy, insolvency or reorganization of Waste
Connections or a Significant Subsidiary of Waste Connections or (5) 120 days after a payment default or
180 days after a payment blockage notice is gIven. The trustee or the holders of the New Notes must give the
.
34
.
agent for holders of Senior Indebtedness at least five business days' pnor written notice of any Intent to declare
the New Notes due and payable or to make any other amount owmg under the Indenture due and payable.
"Senior Indebtedness" means:
. the principal of and premium, If any, and interest on, and fees, costs, enforcement expenses, collateral
protection expenses and other reImbursement or mdemnity oblIgatIOns III respect of all of our
indebtedness or obligations to any person for money borrowed that is evidenced by a note, bond,
debenture, loan agreement, or similar instrument or agreement including default interest and interest
accruing after a bankruptcy;
. commItment or standby fees due and payable to lending institutions with respect to credit facilities
available to us;
. all of our noncontmgent obligations (l) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (2) under interest rate swaps, caps. collars, optIons,
and SImilar arrangements, and (3) under any foreign exchange contract. currency swap agreement,
futures contract, currency option contract or other foreign currency hedge;
. all of our obligations for the payment of money relating to capitalized lease oblIgatIOns:
. any lIabilities of others described in the preceding clauses that we have guaranteed or whIch are
otherwise om legal liabIlity; and
renewals, extensions, refundings, refinancmgs, restructmings, amendments and modIfications of any
such indebtedness or guarantee;
.
in each case other than any indebtedness or other oblIgatIOn of ours that by ItS terms IS not supenor in right of
payment to the New Notes, including the Old Notes. The New Notes WIll rank pari passu in right of payment
with the Old Notes.
"DeSIgnated Semor Indebtedness" means our oblIgatIOns under our credit faCIlIty and any partIcular
Semor Indebtedness m which the instrument Cleating or evidencing the same or the assumptIon or guarantee
thereof, or related agreements or documents to whIch we are a party. expressly provides that &uch
indebtedness shall be Designated Senior Indebtedness for purposes of the Indenture. The Instrument,
agreement or other document evidencing any Designated Senior Indebtedness may place limItations and
conditions of the nght of such senior debt to exercise the rights of Designated Semor Indebtedness.
As of March 31, 2004, we had approximately $265.4 million of mdebtedne'is constItuting Senior
Indebtedness We expect from time to time to Incur additional Indebtedness. The Indenture does not lImit or
prohibit us from incurring additional Senior Indebtedness or other indebtedness. See "RISk Factors - Risks
Related to the New Notes - The New Notes are Subordmated to Senior Indebtedne&s
Optional Redemption of New Notes
At any tIme on or after May 7, 2006, subject to the consent of the lenders under our credIt faCIlity, we
may redeem the New Notes In whole, or from time to time, in part, at our optIOn on at least 30 days' notice
The redemptIOn price, expressed as a percentage of the principal amount, will be as follows:
Redemption Perio~
Redemptio~rice
May 7, 2006 through Apnl 30, 2007. .. ...
May I, 2007 through April 30, 2008. . . . . . . . .
on or after May I, 2008 . .
102%
101%
100%
.
plu&, in each case. accrued and unpaid mterest thereon to the redemption date.
If we opt to redeem less than all of the New Notes at any time, the trustee will select or cause to be
selected the New Notes to be redeemed by any method that it deems fail and appropnate In the event of a
35
partial redemption, the trustee may provide for selectIOn for redemption of portIOns of the principal amount of
any New Note of a denominatIOn larger than $] ,000
.
Repurchase of New Notes at the Option of the Holder
A holder has the nght to reqUire us to repurchase all or a portion of the New Notes on May I of 2009,
2012 and 2017. We will repurchase the New Notes for an amount of cash equal to 100% of the principal
amount of the New Notes on the date of purchase, plus accrued and unpaid interest to the date of repurchase.
To exercise the repurchase right, the holder of a New Note must deliver, during the penod beginning at any
time from the opening of business on the date that is 20 business days pnor to the repurchase date until the
close of business on the business day before the repurchase date, a written notice to us and the trustee of such
holder's exercise of the repurchase right. This notice must be accompanied by certificates evidencing the New
Note or New Notes with respect to which the right is being exercised, duly endorsed for transfer. This notice
of exercise may be withdrawn by the holder at any time on or before the close of busine~s on the busine~s day
preceding the repurchase date.
We may not repurchase any New Note at any time when the subordination provisions of the Indenture
otherWise would prohibit us from making payments of principal in respect of the New Notes. If we fail to
repurchase the New Notes when reqUired under the preceding paragraph, this failure will constitute an Event
of Default under the Indenture whether or not repurchase is permitted by the subordinatIOn provisions of the
Indenture
For a discussion of the tax treatment to a holder of the New Notes upon repurchase at the option of the
holder, see "Certain United States Federal Tax Considerations - Consequences to U.S. Holders of New
Note~ - Sale, Exchange or Redemphon of the New Notes" and "- Consequences to Non-US. Holders of
New Notes - Sale, Exchange or RedemptIOn of the New Notes or Common Stock"
Mandatory Redemption
Except as set forth under "- Right to Require Purchase of New Notes upon a Change in Control" and
"- Repurchase of New Notes at the Option of the Holder," we are not required to make mandatory
redemption of, or sinking fund payments with respect to, the New Notes.
.
Right to Require Purchase of New Notes Upon a Change in Control
If a Change in Control (as defined below) occurs, each holder of New Notes may require that we
repurchase the holder's New Notes on the date fixed by us that IS not less than 45 nor more than 60 days after
we gIve notice of the Change in Control We Will repurchase the New Notes for an amount of cash equal to
100% of the principal amount of the New Notes on the date of purchase, plus accrued and unpaid Interest to
the date of repurchase.
"Change In Control" means the occurrence of one or more of the follOWing events. (1) any sale, lease,
exchange or other transfer (In one transactIOn or a series of related transactions) of all or "substantially" all of
the assets of Waste Connections and its subsidiaries, taken as a whole, to any person or group of related
persons, as defined In SectIOn 13(d) of the Exchange Act; (11) the approval by the holders of capital stock of
Waste ConnectIOns of any plan or proposal for the liqUidation or dissolutIOn of Waste Connections (whether
or not otherwise in compliance with the proviSIOns of the applicable Indenture), (iii) any person or group shall
become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the
aggregate ordinary voting power represented by Waste Connections' issued and outstanding voting stock of, or
any successor to, all or substantially all of Waste ConnectIOns' assets, or (iv) the first day on which a majority
of the members of Waste Connections' board of dIrectors are not ContinUing Directors.
The definition of Change in Control includes a phrase relating to the sale, lease, exchange or other
transfer of "all or substantially all" of the assets of Waste Connections and Its ~ubsidlanes taken as a whole.
Although there is a developing body of case law interpreting the phrase "substantially all," there IS no precise
established definitlOn of the phrase under applicable law. Accordingly, the ability of a holder of New Notes to
.
36
.
reqUIre Waste Connections to repurchase such New Notes as a result of a sale, lease, exchange or other
transfer of less than all of the asset~ of Waste ConnectIOns and Its subsidiaries taken as a whole to another
person or group may be uncertaIn.
"Continuing Directors" means, as of any date of determination, any member of the board of directors of
Waste Connections who (I) was a member of such board of directors on the date of the original issuance of
the New Notes or (n) was nommated for election or elected to such board of directors with the approval of a
majority of the Continuing Directors who were members of such board at the time of such nomination or
election.
On or prior to the date of repurchase, we will deposit with a paying agent an amount of money sufficient
to pay the aggregate repurchase price of the New Notes which is to be paid on the date of repurchase.
We may not repurchase any New Note at any time when the subordination proviSIOns of the Indenture
otherwise would prohibIt us from making payments of principal in respect of the New Notes. If we fail to
repurchase the Ncw Notes when required under the precedmg paragraph, this fmlurc will constitute an Event
of Default under the Indenture whether or not repurchase is permitted by the subordination provisIOns of the
Indenture
On or before the 30th day aftcl the Change In Control, we must mall to the trustee and all holders of the
New Notes a notice of the occurrence of the Change in Control, stating:
. the repurchase date;
. thc date by which the repurchase right must be exercised;
.
. the repurchase price for the New Notes; and
. the procedures which a holder of New Notes must follow to exercise the repurchase right.
To exerCIse the repurchase right, the holder of a New Note must deliver. on or before the third business
day before the repurchase date, a wfltten notice to us and the trustee of the holder's exercise of the repurchase
fight ThiS notice must be accompamed by certificates evidencing the New Note or New Notes With respect to
which the right IS bemg exerCIsed, duly endorsed for transfer. This notlce of exercise may be withdrawn by the
holder at any time on or before the c1o~e of bUSIness on the bUSIness day preceding the repurchase date.
The effect of these provisions granting the holders the right to require us to repurchase the New Notes
upon the occurrence of a Change in Control may make it more difficult for any person or group to acquire
control of us or to effect a bUSiness combinatIOn WIth us. Moreover, under the Indenture, we will not be
permitted to pay prinCipal of or Interest on, or otherwIse acquire the New Notes, including any repurchase at
thc election of the holders of New Notes upon the occurrence of a Change m Control, if a payment default on
our Senior Indebtedness has occurred and is continUIng, or If our Semor Indebtedness IS not paid in full in the
event of our insolvency, bankruptcy, rcorganization, dis~olution or other wmdmg up Our ability to pay cash to
holders of New Notes follOWIng the occurrence of a Change In Control may be limited by our then existing
financial re~ources. We cannot assure you that sufficient funds will be available when necessary to make any
reqUIred repurchases. See "Risk Factors - We may not be able to repurchase the New Notes when required
to."
If a Change in Control occurs and the holders exercise their rights to reqUIre us to repurchase New
Notes, we intend to comply WIth applicable tender offer rules under the Exchange Act With respect to any
repurchase.
.
The term "beneficial owner" shall be determined In accordance with Rules 13d-3 and 13d-5 promulgated
by the SEe under the Exchange Act or any successor provision, except that a person shall be deemed to have
"beneficlal ownership" of all shares of our common stock that the person has the right to acquire, whether
exerCIsable ImmedIately or only after the passage of time
37
Consolidation, Merger and Sale of Assets
We may, without the consent of the holders of any of the New Notes, consolidate with, or merge into any
other person or convey, transfer or lease our properties and assets substantially as an entirety to, any other
person, if:
.
. we are the resultmg or surviving corporation or the successor. transferee or lessee. if other than us, is a
corporation organized under the laws of any U.S. jurisdIction and expressly assumes our obligatIOns
under the Indenture and the New Notes by means of a supplemental indenture entered into with the
trustee, and
. after giving effect to the transaction, no Event of Default and no event which, with notice or lapse of
tIme, or both, would constitute an Event of Default, shall have occurred and be continuing.
Under any consolidation, merger or any conveyance, transfer or lease of our properties and assets as
descnbed in the preceding paragraph, the successor company will be our successor and shall succeed to, and
be substituted for, and may exercise every right and power of, Waste Connections under the Indenture. If the
predecessor is still in existence aftcr the transactIon, It Will be released from Its obligations and covenants
under the Indenture and the New Notes.
Modification and Waiver
We and the trustee may enter mto one or more supplemental indentures that add, change or ehmmate
provision~ of the Indenture or modify the rights of the holders of the New Notes with the consent of the
holders of at least a majority m pnncipal amount of the New Notes then outstandIng. Without the consent of
each holder of an outstanding New Note, however, no supplemental indenture may, among other things:
. change the stated maturity of the pnncipal of, or any Installment of interest on, any New Note;
. reduce the principal amount of, or the premium or rate of interest on, any New Note;
. change the currency In which the prinCipal of any New Note or any premium or lI1tcrest is payable;
. impaIr the right to institute suIt for the enforcement of any payment on or with respect to any New
Note when due;
.
. adversely affect the right provided in the Indenture to convert any New Note,
. modify the subordInation proVIsions of the Indenture in a manner adverse to the holders of the New
Notes;
. modify the provisions of the Indenture relating to our requirement to offer to repurchase New Notes
upon a Change In Control or at the option of the holders in a manner adverse to the holders of the New
Notes;
. reduce the percentage In prinCipal amount of the outstandIng New Notes necessary to modify or
amend the Indenture or to cons,ent to any waiver prOVided for in the Indenture, or
. waIve a default in the payment of prinCipal of, or any premium or mterest on, any New Note.
The holders of a majority in prIncipal amount of the outstandIng New Notes may, on behalf of the
holders of all New Notes'
. WaIve comphance by us With restrictive proVISIOns of the Indenture other than as provided In the
preceding paragraph: and
. waive any past default under the Indenture and Its consequences, except a default in the payment of
the pnncipal of or any premium or lI1terest on any New Note or 111 respect of a provision which under
the Indenture cannot be modified or amended without the consent of the holder of each outstanding
.
38
.
New Note affected. Without the consent of any holders of New Notes, we and the trustee may enter
mto one or more supplemental indentures for any of the following purposes.
. to cure any ambigUIty, omIssion. defect or Inconsistency in the Indenture;
. to evidence a successor to us and the assumption by the successor of our oblIgatIOns under the
Indenture and the New Notes;
. to make any change that does not adversely affect the rights of any holder of the New Notes,
. to comply wIth any requirement in connectIon with the qualIfication of the Indenture under the Trust
Indenture Act; or
. to complete or make provision for certain other matters contemplated by the Indenture.
.
Events of Default
Each of the following is an "Event of Default";
(l) a default in the payment of any interest upon any of the New Notes when due and payable,
contmued for 30 days;
(2) a default in the payment of the pnncIpal of and premium, if any, on any of the New Notes when
due, including on a redemption date, purchase date or repurchase date;
(3) failure to pay when due the principal of or interest on indebtedness for money borrowed by us or
our subsidiaries in excess of $20.0 million, or the acceleration of that indebtednes~ that is not withdrawn
within 15 days after the date of wntten notice to us by the trustee or to us and the trustee by the holders
of at least 25% in pnnclpal amount of the outstandIng New Notes;
(4) a default by us in the performance, or breach, of any of our other covenants in the Indenture
which are not remedied by the end of a period of 60 days after written notice to us by the trustee or to us
and the trustee by the holders of at least 25% In principal amount of the outstanding New Notes; or
(5) events of bankruptcy, insolvency or reorgamzatIon of Waste Connections or any Significant
SubSIdiary of Waste Connections.
If an Event of Default described in clauses (l), (2), (3) or (4) occurs and is continuing, either the trustee or
the holders of at least 25% in principal amount of the outstanding New Notes may declare the principal
amount of, and accrued interest on, all New Notes to be immediately due and payable This declaratIOn may
be reSCInded if the condItions described in the Indenture are satisfied If an Event of Default of the type
referred to in clause (5) occurs, the pnnclpal amount of and accrued interest on the outstandIng New Notes
wIll automatically become Immediately due and payable.
"Significant Subsidiary" means a "Significant SubSidiary" as defined in Regulation S-X under the
Exchange Act.
Within 90 days after a default, the trustee must give to the regIstered holders of New Notes notice of all
uncured defaults known to It. The trustee will be protected in withholding the notIce if it in good faith
determines that the withholding of the notice is in the best interests of the registered holders, except in the
case of a default in the payment of the pnncipal of, or premium, if any, or Interest on, any of the New Notes
when due or III the payment of any redemptIOn obligation
The holders of not less than a majority III prinCIpal amount of the outstanding New Notes may direct the
time, method and place of conducting any proceedings for any remedy available to the trustee, or exerCising
any trust or power conferred on the trmtee. Subject to the provisions of the Indenture relating to the dutIes of
the trustee, If an Event of Default occurs and is continUing, the trustee Will be under no obligatIon to exercise
any of the rights or powers under the Indenture at the request or direction of any of the holders of the New
Notes unless the holders have offered to the trustee reasonable indemmty or security against any loss, lIability
or expense. Except to enforce the right to receive payment of principal, premium, If any, or Interest when due
.
39
or the rIght to convert a New Note In accordance with the Indenture, no holder may InstItute a proceedIng or
pursue any remedy with respect to the Indenture or the New Notes unless It complies with the conditions
provided in the Indenture, includIng'
. holders of at least 25% in prinCIpal amount of the outstanding New Notes have requested the trustee to
pursue the remedy; and
holders have offered the trustee securIty or indemnity satisfactory, to the trustee against any loss,
lIabIlity or expense.
We are required to deliver to the trustee annually a certificate indicatIng whether the officers SIgning the
certificate know of any default by us In the performance or observance of any of the terms of the Indenture. If
the officers know of a default, the certificate must speCIfy the status and nature of all defaults.
.
Book Entry, Delivery and Form
DTC wIiI act as securitIes depositary for the New Notes. The New Notes Will be mltlally issued in the
form of one or more global notes regIstered in the name of DTC or ItS nomInee. Upon the issuance of a global
note, DTC or ItS nominee will credit the accounts of persons holding through It with the respective principal
amounts of the New Notes represented by such global note. Ownership of beneficial interests in a global note
will be lImited to persons that have accounts WIth DTC ("participants") or persons that may hold interests
through participants. Any person acquiring an interest in a global note through an offshore transaction may
hold such interest through Cedel or Euroclear. Ownership of benefiCIal interests In a global note will be shown
on, and the transfer of that ownership interest will be effected only through, records maIntamed by DTC (w ith
respect to participants' interests) and such participants (with respect to the owners of beneficial interests In
such global note other than partIcipants). The laws of some jurisdictions may require that certaIn purchasers
of securities take physical delivery of such seCUrIties in definitive form. Such limits and such laws may impair
the ability to transfer or pledge beneficial interests In a global note. Payment of principal of and interest on
New Notes represented by a global note will be made in Immediately available funds to DTC or its nominee.
as the case may be, as the sole registered owner and the sole holder of the New Notes represented thereby for
all purposes under the Indenture. We have been advised by DTC that upon receipt of any payment of principal
of or interest on any global note, DTC will immediately credit. on its book-entry regIstration and transfer
system, the accounts of participants with payments in amounts proportionate to their respective benefiCial
interests III the prIncipal or face amount of such global note as shown on thc records of DTC Payments by
partICIpants to owners of beneficial interests in a global note held through such partIcipants will be governed by
standing instructions and customary practices as IS now the case with securitIes held for customer accounts
registered in "street name" and will be the sole responSIbilIty of such partiCIpants
A global note may not be transferred except as a whole by DTC or a nomInee of DTC to a nomInee of
DTC or to DTC. A global note is exchangeable for certificated New Notes only if:
. DTC notifies us that It IS unwilling or unable to contInue as a depOSitary for such global note or if at any
time DTC ceases to be a clearIng agency registered under the Exchange Act and we do not appoint a
successor depositary within 90 days of such notIce;
. we In our discretion at any time determine not to have all the New Notes represented by such global
note, or
.
. there shall have occurred and be continuing a default or an Event of Default with respect to the New
Notes represented by such global note.
Any global note that is exchangeable for certificated New Notes pursuant to the precedmg sentence will
be exchanged for certificated New Notes In authOrIzed denominations and registered in such names as DTC
or any successor depositary holding such global note may direct. Subject to the foregoing, a global note is not
exchangeable, except for a global note of like denomination to be registered in the name of DTC or any
successor depOSItary or its nominee. In the event that a global note becomes exchangeable for certificated New
Notes,
.
40
.
. certificated New Notes will be Issued only m fully registered form m denommations of $1,000 or
integral multlples thereof,
. payment of pnncIpal of, and premium, If any, and mterest on, the certificated New Notes will be
payable, and the transfer of the certificated New Notes will be registerable, at our office or agency
mamtamed for such purposes, and
. no service charge will be made for any registration of transfer or exchange of the certIficated New
Notes, although we may require payment of a sum sufficient to cover any tax or governmental charge
Imposed m connection therewith
.
So long as DTC or any successor depositary for a global note, or any nominee, is the registered owner of
such global note. DTC or such successor deposltary or nominee, as the case may be, will be considered the
sole owner or holder of the New Notes represented by such global note for all purposes under the Indenture
and the New Notes Except as set forth above, owners of beneficial interests in a global note will not be
entitled to have the New Notes represented by such global note registered m their names, WIll not receive or
be entitled to receive phy~ical delivery of certificated New Notes in definitive form and will not be considered
to be the owners or holders of any New Notes under such global note. Accordingly, each person owning a
benefiCial interest in a global note must rely on the procedures of DTC or any successor depOSitary, and. if
such person is not a participant, on the procedures of the participant through \\hich such person owns its
intelest, to exelcise any lights of a holder under the Indenture. We understand that under eXisting industry
practices, m the event that we request any'actlon of holders or that an owner of a beneficlalmterest in a global
note desires to give or take any action which a holder is entitled to give or take under the Indenture, DTC or
any successor depOSitary would authonze the participants holding the relevant beneficial mterest to give or
take such actlon and such partiCIpants would authonze benefiCial owners owning through such participants to
give or take such actIon or would otherwise act upon the mstructlOns of benefiCial owners owning through
them.
DTC has advised us that DTC IS'
. a limited-purpose tru&t company orgamzed under the Banking Law of the State of New York;
. a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform CommercIal Code, and
. a "cleanng agency" registered under the Exchange Act
DTC was created to hold the securities of its participants and to facilitate the clearance and settlement of
securitic& transactIOns among its partICIpants m such secunties through electronic book-entry changes In
accounts of the partiCipants, thereby elimmatmg the need for physical movement of secunties certIficates
DTC's participants include securities brokers and dealers, banks. trust companies. clearing corporations and
certain other organizations some of whom (or their representatives) own DTC. Access to DTC's book-entry
sy&tem is also aVailable to others, such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or mdirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in global
notes among participants of DTC, it is under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time DTC may discontinue providing ItS services as
depositary with respect to the New Notes at any time by giVIng reasonable notice to us. Under such
circumstances, m the event that a successor depositary is not obtaIned, certificated New Notes are reqUlred to
be prInted and dclivered
.
We may deCIde to discontinue use of the system of book-entry transfers through DTC, or a successor
depositary. In that event, certificated New Notes will be pnnted and delivered. Neither we nor the trustee WIll
41
have any responsIbilIty for the performance by DTC or ItS participants or indIrect partIcipants of their
re~pective obligations under the rules and procedures governmg their operations.
.
Governing Law
The Indenture and the New Notes are governed by and WIll be construed in accordance wIth the laws of
the State of New York without regard to principles of conflict of laws.
.
42
.
.
DESCRIPTION OF CAPITAL STOCK
A descnption of our capital stock is mcorporated by reference to our Registration Statement on Form 8-A
(Flle No. 000-23981), filed with the SEC on April 2, 1998, which IS incorporated mto this offering circular by
refcrence At our annual meetmg of stockholdels on May 26, 2004, we amended our amended and restated
certificate of incorporation to increase the number of the company's authorized shares of common stock from
50,000,000 to 100,000,000. Noteholders desiring copies of such documents may contact us at our address or
phone number indicated under "Where You Can Find More InformatiOn."
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a summary of certain United States federal income and estate tax considerations relating
to the exchange offer and the ownership and disposition of the New Notes and common stock into which the
New Notes are convertible (the "Common Stock"), but does not purport to be a complete analysis of all the
potential tax consideratiOns relatmg thereto. This summary is based upon the proviSIOns of the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated thereunder, admillls-
trative rulings and JudIcial deCisions, all as of the date hereof. These authoritles may be changed, possibly
retroactIvely, so as to result m Ulllted States federal Income and estate tax consequences different from those
set forth below. We have not sought any ruling from the Internal Revenue Service ("IRS") with respect to
the statements made and the conclusions reached In the following summary, and there can be no assurance
that the IRS Will agree with such statements and conclusions. For purposes of this discussion, the term
"notes" refers to both Old Notes and New Notes.
.
This summary is limited to holder, who receive the New Notes in exchange for Old Notes pursuant to
the exchange aIrel' or, with respect to the discussion under "Consequences of the Exchange Offer - Non-
Exchanging Holders," holders who do not exchange their Old Notes pursuant to the exchange offer, and, in
each case, who hold notes and the Common Stock as capital assets WithIn the meaning of the Code. This
summary also doe, not address the tax consideratIOns armng under the laws of any foreign, state or local
JunsdlctiOn In additIOn, thiS discussion does not address tax consideratiOns applicable to an Investor's
particular circumstances or to investors that may be subject to special tax rules, including, without limitatiOn:
. banks, insurance companies, or other financial institutions;
. holders subJect to the alternative milllmum tax;
. tax-exempt orgalllzatlOns;
. dealers in securities or currencies;
. traders m secuntles that elect to use a mark-to-market method of accounting for their securities
holdings;
. foreign per>ons or entities (except to the extent specifically set forth below);
. persons that own, or are deemed to own, more than 5% of our Company (except to the extent
specifically set forth below),
. persons that, on the date of acquisltloll of the notes, own notes with a fair market value of more than
5% of the aggregate fall' market value of our common stock;
. certaIn former cItizens or long-term residents of the United States,
. U.S holders (as defined below) whose functional currency is not the U.S. dollar,
. persons who hold the notes as a posltion in a hedging transaction, "straddle," "conversion transaction"
or other risk reductiOn transactiOlls, or
.
. persons deemed to sell the notes or common stock under the constructive sale provisions of the Code
43
.
In addItIOn, if a holder IS an entIty treated as a partnership for United States federal income tax purposes,
the tax treatment of each partner of such partnership generally will depend upon the status of the partner and
upon the activities of the partnershIp. Partnerships that hold notes or common stock, and partners in such
partnerships, should consult theIr tax advisors.
For purposes of this dIscussion, a "U.S. holder" means a holder of notes that is:
. an IndIvidual citIzen or resident of the United States;
. a corporation or other entity taxable as a corporation for United States federal income tax purposes, or
partnershIp or other entity taxable as a partnership for United States federal Income tax purposes,
created or organized in the United States or under the laws of the United States, any state thereof, or
the DIstrIct of Columbia;
. an estate, the Income of which is subject to United States federal income taxation regardless of its
source; or
. a trust that (1) IS subject to the primary supervIsion of a United States court and the control of one or
more United States persons or (2) has a valid election in effect under applIcable Treasury Regulations
to be treated as a United States person.
A non-US holder IS a holder of notes that IS not a U.S. holder.
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICA-
TION OF THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR
SITUATION AS WELL AS ANY TAX CONSEQUENCES OF THE EXCHANGE OFFER AND THE
OWNERSHIP AND DISPOSITION OF THE NEW NOTES AND THE COMMON STOCK ARISING
UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE,
LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX
TREATY.
.
Consequences of the Exchange Offer
Exchanging Holders
Generally, the modification of a debt instrument, whether effected pursuant to an amendment of the
terms of a debt instrument or an actual exchange of an existing debt instrument for a new debt Instrument, will
be treated as an exchange of the existing debt instrument for a new debt Instrument for tax purposes if there is
deemed to be a "significant modIfication" of the existing debt instrument as determmed for United States
federal income tax purposes. It is not entirely clear whether the exchange of the Old Notes for New Notes will
be treated as a slgmficant modIfication of the terms of the Old Notes for United States federal Income tax
purposes. The exchange WIll be a significant modificatIOn If, based on all facts and circumstances, the legal
rights or obligations that are altered and the degree to which they are altered are economically SIgnificant. We
intend to take the pOSition that the exchange of Old Notes for New Notes will not constItute an exchange for
Umted States federal Income tax purposes because we believe that the differences between the terms of the
Old Notes and the New Notes are not economically significant and, as a result, do not constitute a slgmficant
modification of the terms of the Old Notes for Umted States federal income tax purposes. Assuming that the
exchange of Old Notes for New Notes does not constItute a sigmficant modIficatIon of the Old Notes, subject
to the diSCUSSIOn of fractional New Notes below, you will not recognize any gaIn or loss as a result of the
exchange, and you Will have the same tax baSIS and holdIng period In the New Notes as you had in the Old
Notes pnor to the exchange. The diSCUSSIOns under "Tax Consequences to US. Holders of New Notes" and
"Tax Consequences to Non-US. Holders of New Notes" below assume that the exchange is not treated as a
SIgnificant modification of the Old Notes for United States federal income tax purposes.
There can be no assurance that the IRS will agree that the exchange does not constitute a signilicant
modification of the term~ of the Old Notes. If the exchange were treated as a significant modificatIOn of the
terms of the Old Notes, such exchange should be treated as a recapitalizatIOn for Umted States federal income
tax purposes If the exchange were treated as a recapitalization, subject to the discussion of fractional New
.
44
I'
.
.
Notes below, you should not recogmze any gain or loss as a result of the exchange, and you should have the
same tax basis and holding period m the New Notes as you had in the Old Notes prior to the exchange.
Whether the exchange would constitute a recapItalization would depend, In part, on whether the notes were
treated as "securities" for United States federal income tax purposes. Whether a debt Instrument constitutes a
security depends on a vanety of factors. including the term of the instrument. A debt instrument wIth a term
of five years or less generally does not quahfy as a security, and a debt instrument with a term of ten years or
more generally does qualify as a secunty The treatment of a debt instrument wIth a term between five and ten
years as a security is unclear. Because holders have the nght to require us to redeem the notes at certain times
prior to matunty of the notes, the notes may be VIewed as having terms of less than ten years and, as a result,
may not constItute secunties for United States federal income tax purposes.
If the Old Notes or the New Notes were not treated as secunties, the exchange would be a taxable
transaction for United States federal income tax purposes In such case, you would recognize gain or loss in
the manner descnbed below under "- Consequences to U.S Holders of New Notes - Sale Exchange or
Redemption of the New Notes" or "- Consequences to Non-U.S. Holders of New Notes - Sale. Exchange
or RedemptIOn of the New Notes or Common Stock," as apphcable, treating the issue price of the New Notes
(as described below) plus any cash in lieu of fractional New Notes you receive as your amount realized in the
exchange Your holding penod in the New Notes would begin the day after the exchange, and your tax basis in
the New Notes generally would equal the issue pnce of the New Notes.
If the exchange of Old Notes for New Notes IS treated as an exchange for tax purposes (i e, either a
recapitalization or a taxable exchange). it will be necessary to determine the "Issue price" of the New Notes.
If eIther the Old Notes or the New Notes are traded on an established securities market for purposes of the
original issue discount provisions of the Code, the issue plice of the New Notes would equal the fair market
value of the publicly traded notes as of the date the New Notes are issued. In such case, the New Notes would
be issued with original issue discount if theIr stated redemption price at maturity exceeded their issue price, or,
alternatively, would be issued WIth bond premIUm If your adjusted tax basis in your New Notes exceeded the
amount payable in respect of such New Notes at matunty.
If both the Old Notes and the New Notes are not so traded, because the interest rate on the New Notes
is less than the applicable federal rate for a debt Instrument WIth a term equal to the term of the New Notes,
the is~ue price of the New Notes would equal their "Imputed princIpal amount" within the meamng of the
Code. The imputed principal amount of a New Note generally would equal the sum of the present values of all
payments due under the New Note, using a dIscount rate equal to the long-term appltcable federal rate in
effect at the time of the exchange oIfer.In such case, a New Note would be issued with original Issue discount
because the issue price of a New Note would be less than its stated redemption price at maturity (generally,
the amount we are reqUIred to pay you upon maturity of the New Note).
Subject to a statutory de mimmis rule, you would be required to include any original Issue discount in
income on a constant yield to maturity basis over the term of the New Notes and in advance of your receipt of
cash payments attnbutable to such income. Subject to applicable limitations. you may elect to amortize bond
premium as an offset to Interest Income otherwIse required to be included in Illcome III respect of the New
Notes dunng the taxable year.
Even if you generally do not recogmze any gain or loss as a result of the exchange because the exchange
does not constItute a significant modificatIOn of the Old Notes or qualifies as a recapItahzation, you may
recogm7e gain or loss WIth respect to any cash received in heu of fractional notes. A U.S. holder who receives
cash III lieu of a fractlOnal New Note 'WIll recognize gaIll or loss In the manner descnbed below under
"- Consequences to U.S. Holders of New Notes - Sale, Exchange or Redemption of the New Notes." The
receIpt of cash In lieu of fractional notes by a non-U S. holder wIll be subject to tax as descnbed under
"- Consequences to Non-U.S. Holders of New Notes - Sale, Exchange or Redemption of New Notes or
Common Stock."
.
45
Non-Exchanging Holders
If you are a holder of Old Notes who does not exchange your Old Notes for New Notes m the exchange
offer, you will not recogniLe any gam or loss for Umted States federal income tax purposes as a result of the
exchange offer. You will continue to have the same tax basis and holding period in your Old Notes as you had
pnor to the exchange offer.
.
Consequences to U.S. Holders of New Notes
The following is a summary of certain United States federal income tax consequences that will apply to
you If you are a U.S. holder of the New Notes. Certain consequences to "non-U.S. holders" of the Ncw Notcs
are descnbed under "- Consequences to Non-U.S. Holders of New Notes" below.
Interest
You generally mu~t include Intcrest paid on the New Notes as ordinary income at the timc it IS received
or accrued, in accordance with your regular method of accountmg for United States federal mcome tax
purposes.
Atlditional Amounts
As descnbed under the heading "Description of Notes - Conversion Price Adjustments" and "- Op-
tional Redemption of the New Notes," we may be required to pay you additional amounts under certain
circumstances. This discussIOn assumes that the New Notes are not treated as contingent payment debt
instmments due to the possibility of such addItional amounts. We intend to take the position that any
payments of additIOnal amounts described under "Description of the New Notes - ConversIOn Price
Adju~tments" should bc taxable to you as additIOnal ordinary Income and that any paymcnts of additional
amounts descnbed under "Descnption of the New Notes - Optional Redemption of the New Notes" should
be taxable to you in the manner de~cribed under "Sale, Exchange or Redemption of the New Notes," in each
case, when received or accrued, in accordance with your method of accounting. This position is based in part
on the assumptIOn that, as of the date of issuance of the New Notes, the possibility that additional amounts
Will have to be paid is a "remote" or "mcidental" contingency within the meaning of applicable Treasury
regulations. Our determination that such possibility is a remote or incidental contingency is binding on you,
unless you expliCitly disclose that you are takmg a different pOSitIOn to the IRS on your tax return for the year
during which you acqUire the New Note. However, the IRS may take a contrary position from that described
above, which could affect the timmg and charactcr of both your income from the notcs and our dcduction With
respect to the payments of additional amounts
If we pay additional amounts, you should consult your tax advisor concernmg the appropriate tax
treatment of the payment of additional amounts With respect to the New Notes
.
Market Discount
If you acqUired an Old Note at a cost that is less than the stated redemption price (I e., the principal) at
maturity of the notes, the amount of such difference is treated as "market discount" for federal income tax
purposes, unless such difference IS less than .0025 multiplied by the stated redemption price at maturity
multiplied by the numbcr of complcte years to matunty (from the date of acqUlsitlOn). Any applicable market
discount on your Old Notes will carry over to your New Notes.
Undcr the markct discount mles of the Code, you are rcqUlred to treat any gain on the sale, exchange,
retirement or other disposition of a New Note as ordinary income to the extent of the accmed market discount
that has not previously been included in income Thus, prinCipal payments and payments received upon the
sale or exchange of a New Note are treated as ordinary income to the extent of accmed market discount that
has not preVIOusly been included In mcome. If you dispose of a New Note With market discount in certain
otherwise nontaxable transactions, you must include accmed market discount as ordinary income as If you had
~old thc Ncw Notc at its then fair markct value.
46
.
.
In general, the amount of market dIscount that has accrued is determined on a ratable basis. You may,
however, elect to determine the amount of accrued market discount on a constant YIeld to maturity basis. This
electIOn IS made on a debt Instrument-by-debt Instrument basis and IS irrevocable.
WIth respect to New Notes WIth market discount, you may not be allowed to deduct immediately a
portion of the interest expense on any indebtedness incurred or continued to purchase or to carry the notes.
You may elect to include market discount in income currently as It accrues, In which case the interest deferral
rule set forth in the precedmg sentence will not apply. ThiS election will apply to all debt instruments that you
acquire on or after the first day of the first taxable year to whIch the election applies and is irrevocable without
the consent of the IRS. Your tax basis in a New Note will be increased by the amount of market discount
Included in your Illcome under the election
Amortizable Bond Premium
.
If you purchased an Old Note for an amount in excess of the stated redemption price at maturity, you will
be considered to have purchased the Old Note with "amortizable bond premium" equal in amount to the
excess. Any applicable amortizable bond premIUm will carryover to a New Note you receive in the exchange
offer. Generally, you may elect to amortiL:e the premIUm as an offset to Illterest income otherwise required to
be included in income in respect of the New Note during the taxable year, using a constant yield method
similar to that described above, over the remaining term of the New Note (or, If it results in a smaller amount
of amortizable premium, until an earlier call date). Under Treasury Regulations, the amount of amortizable
bond premIUm that you may deduct in any accrual period IS limited to the amount by which your total interest
inclusions on the New Note in prior accrual periods exceed the total amount treated by you as a bond
premium deduction m prior accrual periods. If any of the excess bond premium is not deductIble, that amount
is carned forward to the next accrual perIod. If you elect to amortIze bond premium, you must reduce your tax
basis in the New Note by the amount of the premium used to offset mterest income as set forth above. An
election to amortize bond premium applIes to all taxable debt obligations then owned and thereafter acquired
by you and may be revoked only with the consent of the IRS.
Sale, Exchange or Redemption of the New Notes
Upon the sale, exchange or redemption of a New Note (other than a conversion descnbed below under
"- Conversion of the Notes"), you generally will recogmze capital gain or loss equal to the dIfference
between (I) the amount of cash proceeds and the fair market value of any property received on the sale,
exchange or redemptIOn (except to the extent such amount IS attrIbutable to accrued interest income not
previously mcluded in income, whIch Will be taxable as ordinary income) and (ii) your adjusted tax baSIS in
the New Note. Your adjusted tax basis III aNew Note generally will equal the amount you paid for the Old
Note and will be subsequently increased by market discount previously included in income in respect of the
Old Note and the New Note received In exchange for such Old Note and will be reduced by any amortizable
bond premium III respect of the Old Note and the New Note received m exchange for such Old Note whIch
has been taken into account.
Except as des en bed under "Market Discount" above, such capital gain or loss wIll be long-term capItal
gain or loss if your holding period in the New Note is more than one year at the time of sale, exchange or
redemptIOn. Long-term capital gaInS recognized by certain noncorporate U.S. holders. including individuals,
generally Will be subject to a reduced tax rate. The deductibility of capital losses IS subject to lImitations.
COUl'ersion of the New Notes
.
If you convert a New Note and we delIver a combination of cash and common stock. you should
recognlLe any gain (but not loss) realIzed, but only to the extent that such gain does not exceed the cash
received (other than cash received that is attrIbutable to accrued Interest Income and other than cash received
III lIeu of a fractional share of common stock). Such galll generally will be a capital gain and Will be taxable as
described under "- Sale. Exchange or RedemptIOn of the Notes," above.
47
Cash received m lieu of a fractIOnal share of common stock upon a converSlOn of a New Note should be
treated as a payment m exchange for the fraction a] share. According]y, the receipt of cash in lieu of a
fractIonal share of common stock should generally result in capital gain or loss, if any, measured by the
difference between the cash received for the fractional share of common stock and your tax basis in the
fractlOnal share. Cash received that is attributable to accrued mterest income not previously mcluded in
income will be taxable as ordinary income.
Your tax basis in any common stock received from us in exchange for aNew Note should equal your
adjusted tax basis m the New Note at the tIme of the exchange, reduced by any basis allocable to a fractional
share. reduced by the amount of cash received in the exchange (other than eash received that is attributable to
accrued interest income not previously mcluded in income and other than cash received in lieu of a fractional
share of common stock) and Increased by the amount of any gain recognized by you on the exchange (other
than gain with respect to a fractional share). The holdmg penod for common stock received on conversion
generally should include the holding period of the New Note converted.
If you convert a New Note and we deliver solely cash equal to the prinCIpal amount of the New Note in
satisfaction of our obligation, you generally will be subject to the rules described in "- Sale, Exchange or
RedemptIon of the Notes."
.
Constructive Dividends
Holders of convertible debt instruments such as the New Notes may, in certain circumstances, be
deemed to have received distributions of stock if the conversion price of such instruments is adjusted.
However, adjustments to the conversion price made pursuant to a bona fide reasonable adjustment formula
which has the effect of preventing the dilution of the interest of the holders of the debt instruments generally
will not be deemed to result in a constructive dIstnbution of stock Certam of the possIble adjustments
provided in the New Notes (mcludmg, without limitatlOn, adjustments III respect of taxable dIvidends to our
stockholders) may not qualify as being pursuant to a bona fide reasonable adjustment formula. If such
adjustments are made, you may be deemed to have received constructive dIstnbutions mcludible m your
income in the manner described below under "- DiVIdends" even though you have not receIved any cash or
property as a result of such adjustments In addition, in certain circumstances, the fallure to provide for such
an adjustment may also result In a constructIve distnbution to you
.
Dividends
DIstributlOns, if any, made on our common stock generally will be included in your income as ordinary
dIVIdend income to the extent of our current or accumulated earmngs and profits. DIstributions in excess of
our current and accumulated earnings and profits will be treated as a return of capita] to the extent of your
adjusted tax basIs m the common stock and thereafter as capital gain from the sale or exchange of such
common stock. DiVIdends received by a corporate U.S. holder may be eligIble for a dividends received
deductIon, and diVIdends receIved by non-corporate holders for taxable years beginmng prior to January 1,
2009, generally will be subject to tax at the lower applicable capital gams rate, provided certain holding period
requirements are satIsfied. It is unclear whether any such constructive dividend would be eligible for the
preferential rates of Umted States federal mcome tax applicable to certam dividends receIved by noncorporate
holders descnbed above. It is also unclear whether a corporate holder would be entItled to claim the dlVidends
received deduction with respect to a constructive dIVldend.
Sale. Exchange 0/' Redemption of Common Stock
Upon the sale. exchange or redemptlOn of our common stock, you generally will recognize capital gain or
loss equal to the difference between (i) the amount of cash and the fair market value of any property received
upon the sale, exchange or redemptlOn and (Ii) your adjusted tax basIs III the common stock. Such capital gam
or loss will be long-term capital gain or loss If your holding period in the common stock IS more than one year
at the tIme of the sale, exchange or redemption. Long-term capital gains recognized by certain non-corporate
U S. holders, including indIVIduals, generally WIll be subject to a reduced rate of Umted States federal mcome
.
48
.
tax. Your adjusted tax basis and holding penod in common stock received upon a conversIOn of a New Note
are determined as discussed above under "- ConversIOn of the Notes." The deductibility of capital losses is
subject to limitatIons.
Backup Withholding and Information Reporting
We are reqUIred to furnish to the record holders of the New Notes and common stock, other than
corporations and other exempt holders, and to the IRS, information with respect to interest paid on the New
Notes and dlVldends paid on the common stock.
You may be subject to backup withholding with respect to interest paId on the New Notes, dividends paid
on the common stock or with respect to proceeds received from a disposition of the New Notes or shares of
common stock. Certain holders (including, among others, corporations and certain tax-exempt orgamzations)
are generally not subject to backup withholding. You will be subject to backup withholding If you are not
otherwise exempt and you (i) fail to furnish your taxpayer IdentificatIOn number ("TIN"), which, for an
llldlVldual, IS ordlllarily his or her SOCial security number, (il) furnish an Incorrect TIN; (iii) are notified by
the IRS that you have faIled to properly report payments of interest or dividends; or (iv) fail to certIfy. under
penalties of perjury, that you have furnished a correct TIN and that the IRS has not notified you that you are
subject to backup withholding. Backup withholding IS not an additIOnal tax but, rather, IS a method of tax
collection. You generally will be entitled to credit any amounts withheld under the backup WithholdIng rules
agaInst your US. federal Income tax lIability provided that the reqUIred Information is furnished to the IRS in
a timely manner.
.
Consequences to Non-U.S. Holders of New Notes
The following is a summary of certain material United States federal income and estate tax consequences
that will apply to you If you are a non-US. holder of the New Notes
In general. subject to the diSCUSSIOn below concerning backup withholding:
Interest
You wIll not be subject to the 30% United States federal withholding tax with re~pect to payments of
interest on the New Notes, provided that.
. you do not own, actually or constructively, 10% or more of the total combIned voting power of all
classes of our stock entitled to vote,
. you are not a "controlled foreign corporation" With respect to which we are, directly or llldlrectly, a
"related person";
. you are not a bank receiving Interest pursuant to a loan agreement entered Into in the ordinary course
of ItS trade or business; and
.
. you provide your name and address. and certify, under penalties of perjury, that you are not a United
States person (which certification may be made on an IRS Form W-8BEN (or successor form)), or
that you hold your New Notes through certain foreign intermediaries and you and the foreign
Intermediaries satisfy the certification requirements of applicable Treasury Regulations
Spccial ccrtification rules apply to non-U S. holders that are pass-through cntlties rather than corpora-
tIons or individuals. Prospective investors should consult theu tax adVISors regarding the certdication
requirements for non-US. holders.
If you cannot satisfy the requirements described above, you will be <;ubject to the 30% United States
federal withholding tax with respect to payments of interest on the New Notes, unless you provide us with a
properly executed (I) IRS Form W -8BEN (or successor form) claIming an exemption from or reductlon in
withholding under the benefit of an applIcable Untted States income tax treaty or (2) IRS Form W-8ECI (or
successor form) stating that the Interest IS not subJcct to withholding tax because ]t is effectively connected
49
wIth the conduct of a United States trade or business. If you are engaged in a trade or business m the United
States and interest on a New Note is effectively connected with your conduct of that trade or business, you
will be subject to Umted States federal income tax on that interest on a net income basIs (although you will be
exempt from the 30% withholding tax, provided the certification requitements descnbed above are satIsfied) in
the same manner as if you were a United States person as defined under the Code. In addition, if you are a
foreign corporation, you may be subject to a branch profits tax equal to 30% (or lower rate as may be
prescnbed under an apphcable United States income tax treaty) of your earnmgs and profits for the taxable
year, subject to adjustments, that are effectively connected with your conduct of a trade or business in the
United States.
.
Additional Amounts
Absent further relevant guidance from the IRS, we intend to treat payments of addItional amounts
described under "Descnption of the New Notes - ConversIOn Price Adjustments", if any, made to
non-U.S. holders as subject to United States federal wIthholding tax Therefore, we intend to withhold on such
payments at a rate of 30% unless we receIve an IRS Form W-8BEN or an IRS Form W-8ECI from you
claiming, respectIvely, that such payment~ are subject to reduction or elimmation of WIthholding under an
applicable treaty or that such payments are effectively connected with your conduct of a United States trade or
business. If we WIthhold tax from any payment of additIonal amounts made to you and such payment were
determined not to be subject to United States federal tax, you generally would be entttled to a refund of any
tax withheld.
Sale, Exchange or Redemption of the New Notes or Common Stock
Any gam realized by you on the sale, exchange, redemption or other disposition of a New Note (except
with respect to accrued and unpaid mtefC',t, which would be taxable as descnbed above) or a share of common
stock generally will not be subject to United States federal income tax unless:
.
. the gain is effectively connected with your conduct of a trade or business in the United States;
. you are an individual who IS present m the United States for UD days or more m the taxable year of
sale, exchange or other dispositIOn, and certain condItions are met; or
. in the case of common stock, we are or have been a "Umted States real property holding corporation"
for United States federal income tax purposes at any time during the shorter of the five-year period
ending on the date of disposition or the period that you held our common stock
If your gain is desenbed m the first bullet pomt above, you generally Will be subject to United States
federalmcome tax on the net gam denved from the sale. If you are a corporation, then you may be required to
pay a branch profits tax at a 30% rate (or such lower rate as may be prescribed under an applicable Umted
States income tax treaty) on any such effectively connected gam. If you are an individual described in the
second bullet point above, you WIll be subject to a flat 30% United States federal income tax on the gain
derived from the sale, which may be offset by Umted States source capital losses, even though you are not
considered a reSIdent of the Umted States. Non-Umted States holders should consult any applicable income
tax treatIes that may provide for different rules. In addItion, such holders are urged to consult their tax advisers
regardmg the tax consequences of the acqUISItion, ownership and disposItion of the New Notes or the common
stock.
We do not believe that we are currently, and do not antiCIpate becoming, a United States real property
holding corporation. Even if we were. or were to become, a United States real property holding corporation, no
adverse tax consequences would apply to you If you hold, directly and mdIrectly, at all times during the
applicable penod, five percent or less of our common stock, proVIded that our common stock was regularly
traded on an established securitIes market
50
.
.
Conversion of the New Notes
To the extent you receive cash upon converSiOn of a New Note, you generally would be subject to the
rules descnbed under "- Consequences to Non-U.S Holders - Sale, Exchange or Redemption of the Notes
or Common Stock" above. Otherwise, you generally would not recognize any income, gam or loss on the
converSiOn of aNew N ate into common stock.
Dividends and Constructive Dividends
.
In general, dividends, if any, received by you with respect to our common stock (and any deemed
distributions resulting from certam adjustments, or failures to make certain adjustments, to the conversion
price of the New Notes, see "- Consequences to US. Holders of New Notes - Constructive Dividends"
above) will be subject to withholding of Ulllted States federal income tax at a 30% rate, unless such rate is
reduced by an applicable United States mcome tax treaty. Because a constructive dividend deemed received
by a non-U.S. holder would not give rise to any cash from which any applicable Withholding tax could be
satisfied, we may set-off any such withholding tax against cash payments of interest payable on the New
Notes. Dividends that are effectively connected with your conduct of a trade or busmess in the United States
are generally subject to United States federal income tax on a net income basb and are exempt from the 30%
withholding tax (assuming compliance With certain certification requirements). Any such effectively con-
nected dividends received by a non-US. holder that IS a corporation may also, under certain circumstances, be
subject to the branch profits tax at a 30% rate or such lower rate as may be prescnbed under an applicable
United States income tax treaty.
In order to claim the benefit of a Umted States income tax treaty or to claim exemption from withholding
because dividends paid to you on our common stock are effectively connected With your conduct of a trade or
business m the Umted States, you must provide a properly executed IRS Form W -8BEN for treaty benefits or
W -8ECI for effectively connected income (or such successor form as the IRS designates), prior to the
payment of dividends. These forms must be pcriodlcally updatcd You may obtain a refund of any cxcess
amounts withheld by timely filing an appropriate claim for refund.
United Stutes Federul Estute Tux
A New Note held by an individual who at the time of death is not a citiLen or resident of the United
States (as specialty defined for United States federal estate tax purposes) will not be subject to United States
federal estate tax if the mdividual did not actually or constructively own 10% or more of the total combined
votmg power of all classes of our stock and, at the time of the individual's death, payments With respect to such
New Note would not have been effectively connected with the conduct by such mdlVldual of a trade or
busmess in the United States. If you are an mdividual who at the time of death is not a Citizen or resident of
the United States (as specially defined for United States federal estate tax purpo~es), your common stock Will
be subject to United States estate tax unless an applicable United States estate tax treaty prOVides otherwise.
.
Buckup Withholding and lnformution Reporting
If you are a non-US. holder, in general, you will not be subject to backup Withholding and information
reporting With respect to payments that we make to you prOVided that we do not have actual knowledge or
reason to know that you are a United States person and you have given us the statement described above
under "Conscquences to Non-US Holders - Interest" In addition, you Will not be subject to backup
withholdmg or information reporting with respect to the proceeds of the sale of a New Note or a share of
common stock within the United States or conducted through certain U S.-related finanCial mtermedianes, if
the payor receives the statement described above and does not have actual knowledge or reason to know that
you are a Ulllted States person, as defined under the Code, or you otherWise establish an exemptiOn. However,
we may be reqUired to report annually to the IRS and to you the amount of, and the tax Withheld WIth respect
to, any mterest or dividends paid to you, regardle<;s of whether any tax was actually Withheld. Copies of these
informatIOn returns may also be made available under the prOVisions of a specific treaty or agreement to the
tax authoritlcs of the country in which you reside.
51
You generally will be entItled to credIt any amounts withheld under the backup withholding rules against
your U.S. federal income tax liability provided that the required information is furnished to the IRS in a
tImely manner.
.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other mformation wIth the SEe. You
may read and copy any matenals we tile wIth the SEC at the SEe's public reference room at Room 1024,
450 Fifth Street, N.W., Washington, D.e. You can request copies of these documents by writing to the SEC
and paying a fee for the copymg cost. Please call the SEC at 1-800-SEC-0330 for more information about the
operation of the publIc reference rooms. Our SEC filings are also aVailable at the SEC's website at
''http://www.sec.gov.'' In addition, we make our reports on Form lO-K, lO-Q and 8-K aVaIlable on our
internet website free of charge after we file them with the SEe. Our internet web site address is
www.wasteconnectlOns.com The mformatlOn mcorporated by reference is deemed part of thIS offering
circular, except for any information superseded by information contained directly m this offermg cIreu]ar.
The SEC allows us to "mcorporate by reference" Information that we file with it, which means that we
can disclose important information to you by referring you to those documents. The information incorporated
by reference is an important part of this offering circular, and information that we file later with the SEC will
automatically update and supersede this InformatIon. All informatIOn appeanng in this offering circular is
qualified In its entirety by the information and financIal statements (mcluding notes thereto) appearing in the
documents incorporated by reference, except to the extent set forth In the immediately preceding sentence.
Any such statement so modified or superseded shall not be deemed, except as so modIfied or superseded, to
constitute a part of this offenng circular. We Incorporate by reference the documents lIsted below and any
future filings we will make wIth the SEC under Section 13(a), B(c), 14 or 15(d) of the Exchange Act prior
to the completion or termmation of this exchange offer.
.
. Annual Report on Form lO-K for the year ended December 3], 2003, filed with the SEC on March 12,
2004,
. Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, filed with the SEC on April 22,
2004,
. Current Reports on Form 8-K filed with the SEC on Apnl 15, 2004 and April 22, 2004; and
. The description of our common stock contained In our registration statement on Form 8-A, File
No. 000-23981. filed with the SEC on April 2, 1998, under the Exchange Act, including any
amendment or report filed for the purpose of updatmg such descriptIOn.
You may reque~t a copy of these filIngs at no cost, by writIng or telephoning us at the following address:
INVESTOR RELATIONS
WASTE CONNECTIONS, INC
35 IRON POINT CIRCLE, SUITE 200
FOLSOM, CA 95630
(916) 608-8200
If for any reason we are not reqUIred to comply with the reporting requirements of the Exchange Act, we
are still required under the Indenture governing the New Notes to furnish the holders of the New Notes with
the InformatIOn, documents and other reports specified in SectIOns 13 and 15 (d) of the Exchange Act
.
52
.
WASTE CONNECTIONS, INC.
OFFER TO EXCHANGE
FLOATING RATE CONVERTIBLE SUBORDINATED NOTES DUE 2022
FOR ANY AND ALL OUTSTANDING
FLOATING RATE CONVERTIBLE SUBORDINATED NOTES DUE 2022
U.S. Bank National AssociatiOn (successor to State Street Bank and Trust Company of California,
N.A.) has been appointed to act as the exchange agent for the exchange offer. All executed letters of
transmittal should be directed to the exchange agent at the address set forth below QuestiOns and requests for
assIstance, requests for addltlOna] copies of this offering circular or of the letter of transmittal and requests for
notIces of guaranteed delivery should be dIrected to the exchange agent, addressed as follows.
To' U.S. Bank Nationa] AssocIation
.
By Mail, Overnight Mail. Couner or Hand'
U S. Bank N ationa] A~sociahon
West Side Flats Operations Center
60 LlVlngston Avenue
S1. Paul. MN 55107
Attn' Specialized Finance
For InformatiOn: (213) 615-6043
By Facsllllile
(651) 495-8]58
Attention: Specialized Fmance
Confirm by Receipt of Facsimile Only: (651) 495-3511
DELIVERY OF A LETTER OF TRANSMITTAL OR AGENTS MESSAGE TO AN ADDRESS
OTHER THAN THE ADDRESS LISTED ABOVE OR TRANSMISSION OF INSTRUCTIONS BY
FACSIMILE OTHER THAN AS SET FORTH ABOVE IS NOT VALID DELIVERY OF THE
LETTER OF TRANSMITTAL OR AGENTS MESSAGE.
All inquiries relating to this offering circular and the transactions contemplated hereby should be directed
to the company at the telephone number and address set forth below:
Worthing Jackman
Waste Connections, Inc.
35 Iron Point Circle, Suite 200
Folsom, CA 95630
Please call (916) 608-8266
Offenng circular
June 16, 2004
.
.
LETTER OF TRANSMITTAL
To Offer for Exchange
Floating Rate Convertible Subordinated Notes Due 2022
for Any and All Outstanding
Floating Rate Convertible Subordinated Notes Due 2022
of
Waste Connections, Inc.
Pursuant to the Offering Circular Dated June 16, 2004
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
JULY 15, 2004, UNLESS EXTENDED BY US (THE "EXPIRATION DATE"). TENDERS
MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
Delivery to
U.S. Bank National Association, The Exchange Agent
By Mail, Overflight Mail, Courier or Hand
U.S. Bank National Association
West Side Flats Operations Center
60 Livmgston Avenue
St. Paul, MN 55107
Attn. Specialized Finance
For Information' (213) 615-6043
.
By Facsirmle
(651) 495-8158
AttentIOn' Speclalized Fmance
Confirm by Receipt of Facsimile Only' (651) 495-3511
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY. IF A DELIVERY IS MADE TO WASTE CONNECTIONS, INC. IT WILL
NOT BE FORWARDED TO THE EXCHANGE AGENT AND THEREFORE SUCH DELIVERY WILL NOT
CONSTITUTE A VALID DELIVERY.
BEFORE COMPLETING THIS LETTER OF TRANSMITTAL, YOU SHOULD READ THE LETTER OF
TRANSMITTAL AND THE ACCOMPANYING INSTRlJCTIONS CAREFULLY.
The undersigned acknowledges that he or she has receIVed and reviewed the offering CIrcular, dated June 16, 2004
(a~ amended or supplemented from time to time, the "Offering Circular"), of Waste Connections, Inc., a Delaware
corporatIOn (the "Company"), and this Letter of TransmIttal, which together constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 m pnnclpal amount of Floating Rate ConvertIble Subordinated Notes due 2022
(the "New Notes") for each $1,000 in principal amount of Floatmg Rate Convertible Subordmated Notes due 2022 (the
"Old Notes") of the Company held by the registered holders thereof (the "Holders").
The undersigned hereby tenders the Old Notes descnbed m the box entitled "Description of Old Notes" below
pursuant to the terms and conditIOns descnbed III the Offering CIrcular and thIS Letter of Transmittal. The undersigned is
the registered holder of all the Old Notes (the "Holder") and the underSIgned represents that it has received from each
.
( ,
.
beneficial owner of Old Notes (the "BeneficIal Owners") a duly completed and executed form of "Instructions to
Registered Holder from Beneficial Owner" accompanying this Letter of Trammittal, InstructIng the undersigned to take
the action descrIbed In this Letter of TransmIttal.
.
In order to tender Old Notes In the Exchange Offer, you must BOTH-
l. (A) tender your Old Notes by book-entry transfer to the account maintamed by the Exchange Agent at The
Depository Trust Company ("DTC") such that the Old Notes are received by the Exchange Agent prior to
5.00 pm., New York CIty Time, on the ExpIration Date according to the procedures set forth in the sectIon tItled
"The Exchange Offer - Procedures for Tendering," m the Offering Circular and the InstmctIOns in this Letter of
Transmittal, or
(B) tender your Old Notes according to the guaranteed delivery procedures set forth in the section titled "The
Exchange Offer - Guaranteed Delivery Procedures," in the OfferIng Circular and the instructions in this Letter of
TransmIttal, If you are unable to deliver confirmatIOn of the book-entry tender of your Old Notes Into the Exchange
Agent's account at DTC (a "Book-Entry Confirmation") and all other documents reqUlred by this Letter of
TransmIttal to the Exchange Agent prior to 5'00 pm., New York CIty Time, on the Expiration Date, AND
2. submIt a properly completed Letter of Transmittal to the Exchange Agent by mail or facsimIle so that it is
received by the Exchange Agent at the address set forth on the cover of thIs Letter of TransmIttal prior to 5:00 p.m.,
New York CIty TIme, on the ExpIratIOn Date You need not submit this Letter of Transmittal If, In accordance WIth
DTC~ Automatic Tender Offer Program ("ATOP"), DTC will send an agent's message ("Agent's Message")
stating that DTC has receIVed an express acknowledgment from you that you will be bound by the terms and
condItions hereof as if you had completed, executed and delivered this Letter of Transmittal.
DelIvery of documents to DTC docs not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and sIgned thIS Letter of TransmIttal to indicate the
action the underSIgned deSlTes to take with respect to the Exchange Offer.
List below the Old Notes to which this Letter of Transmittal relates. If the space provided below IS inadequate, the
information reqUired below should be listed and attached on a separate signed schedule. Tenders of Old Notes will be
accepted only in denominations of $1,000 and multiples thereof.
DESCRIPTION OF OLD NOTES
Name(s) and Address(es) of Registered lIolder(s) or
Name of DTC Participant and Participant's DTC
Account Number m Which Old Notes are Held Aggregate Principal Amount
(Please fill in, if blank) of Old Notes Presently Held Tendered*
Total
* Unless otherWIse specIfied above, all Old Notes held for the account of the undersigned WIll be tendered.
o CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE
FOLLOWING
Name of TenderIng InstItutIOn.
.
DTC Account Number:
2
.
Transaction Code Number:
o CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s).
Window Ticket Number (if any):
Date of Execution of Notice Guaranteed Delivery:
Name of lnstitutIon which Guaranteed Dehvery:
If Guaranteed Delivery is to be made by Book-Entry Transfer, complete the following:
Name of Tendering InstitutIOn:
DTC Account Number:
Transaction Code Number:
Please read the section titled "The Exchange Offer - Conditions to the Exchange Offer," in the Offering Circular.
o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE TEN (10) ADDITIONAL .
COPIES OF THE OFFERING CIRCULAR.
Name
Address.
If the undersigned is not a broker-dealer, the undersigned represents that it IS not engaged In, and does not intend to
engage In, a distribution of New Notes. If the undersigned is a broker-dealer that Will receive New Notes for its own
account in exchange for Old Notes that were acqUIred as a result of market-making activitIes or other trading activities, It
acknowledges that it will dehver a prospectus meeting the requirements of Section 10 of the Securities Act of 1933 (the
"SecuritlCs Act") in connection WIth any resale of such New Notes, however, by so acknowledging and by delivering such
a prospectus the underSIgned will not be deemed to admit that It IS an "underwnter" WIthIn the meaning of the SecuritIes
Act. If the undersigned is a broker-dealer that will receIve New Notes, it represents that the Old Notes to be exchanged
for the New Notes were acquired as a result of market-makmg actIvitIes or other trading actlVltIes.
SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
.
3
.
.
.
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer set forth In the OITering Circular, receipt of
winch is hereby acknowledged, and this Letter of Transmittal, the undersigned hereby tenders to the Company the
aggregate amount of Old Notes Indicated In this Letter of Transmittal. Subject to, and effective upon, the acceptance for
exchange of the Old Notes tendered hereby in accordance with the terms and conditions of the Exchange Offer
(including, If the Exchange OITer is extended or amended, the terms and conditions of such extension or amendment),
the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all nght, title and interest In and
to such Old Notes as are being tendered hereby.
The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the undersigned's true and
lawful agent and attorney-in-fact with respect to such tendered Old Notes with full knowledge that the Exchange Agent
also acts as an agent for the Company, with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), subject only to the right of withdrawal descnbed in the Offering Circular, to
deliver Old Notes to the Company together with all accompanying evidences of transfer and authenticity to, or upon the
order of the Company, upon receipt by the Exchangc Agent, as the undersigned's agent, of the New Notes to be issued in
exchange for such Old Notes, present such Old Notes for transfer, and transfer the Old Notes on the books of the
Company and receive for the account of the Company all benefits and otherwise exercise all rights of benefiCial ownership
of such Old Notes, all in accordance with the terms and conditlOns of the Exchange OITer
The undersigned hereby covenants, represents and warrants that.
1 the undersigned is the holder of the Old Notes tendered for exchange hereby;
2 the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Old Notes
tendered hereby, and to acquire New Notes issuable upon the exchange of such tendered Old Notes,
3 when the Old Notes are accepted for exchange, the Company will acquire good, marketable and
unencumbered title thereto, free and clear of all security interests, liens, restnctions, charges. encumbrances,
conditional sales agreements or other obligations relatmg to the sale or transfer of the Old Notes, and not subject to
any adverse claim or right when the same are accepted by the Company;
4. any New Notes acquired in exchange for Old Notes tendered hereby will have been acqUired In the ordmary
course of business of the person receiving such New Notes, whether or not such person IS the undersigned,
5 neither the Holder of such Old Notes nor any such other person IS an "affiliate" of the Company. as defined
III Rule 405 under the Securities Act;
6 the underSigned has read all of the terms and conditions of the Exchange Offer and agrees that tenders of Old
Notes pursuant to any of the procedures described in the accompanying instructions will constitute the underSigned's
acceptance of the terms and conditions of the Exchange Offer; and
7 the undersigned has a "net long position." within the meamng of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, in the Old Notes or equivalent secunties at least equal to the Old Notes being
tendered, and the tender of the Old Notes complies with Rule 14e-4.
The underSigned acknowledges that thiS Exchange Offer is beIng made In reliance on 1I1terpretations by the staff of
the Secunties and Exchange Commission (the "SEC"). as set forth III no-actIOn letters issued to third parties, that the
New Notes Issucd pursuant to the Exchange Offer 111 exchange for the Old Notes may bc offered for resale, resold and
otherwise transferred by holders thereof (other than any such holder that IS an "afllhate" of the Company or any of the
guarantor subSIdIaries of the Old Notes or the New Notes. within the meaning of Rule 405 under the Securities Act),
without compliance with the registration and prospectus delivery provisions of the SeCUrities Act, proVided that such New
Notes are acquired III the ordinary course of such holders' business, such holders are not holding any Old Notes that have
the status of, or are reasonably likely to have the status of, an unsold allotment in the imtial oITering, and ~uch Holders
have no arrangement with any person to participate in the distribution of such New Notes However, the SEC has not
considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the statr of the SEC
would make a similar determination with respect to the Exchange Offer as in other circumstances 1f the underSigned is
4
not a broker-dealer, the undersigned represents that It is not engaged in. and does not Illtend to engage in, a distribution of
New Notes and has no arrangement or understanding to participate in a distributIOn of New Notes. If any Holder IS an
afIiliate of the Company, IS engaged in or intends to engage III or has any arrangement or understanding with respect to the
distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holder (I) could not rely on the
applIcable Illterpretations of the staff of the SEC and (Ii) must comply with the registration and prospectus delIvery
requirements of the Securities Act in connection with any resale transaction. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Old Notes, it represents that the Old Notes to be exchanged for
the New Notes were acquired by it as a result of market-making activities or other trading actlVlties and acknowledges
that it will deliver a prospectus meeting the requirements of the SecuritIes Act in connection with any resale of such New
Notes; however, by so acknowledging and by delIvenng a prospectus meeting the requirements of the Securities Act. the
undersigned will not be deemed to admit that it is an "underwnter" withm the meanmg of the Secunties Act
.
The undersigned understands that acceptance of tendered Old Notes by the Company for exchange will constitute a
binding agreement between the underSigned and the Company upon the terms and subject to the conditions of the
Exchange Offer In all cases in which a participant elects to accept the Exchange Offer by transmitting an express
acknowledgement in accordance with the ATOP procedures, such participant shall be bound by all of the terms and
conditions of thiS Letter of TransmIttal. The undersigned recognizes that, under certain circumstances set forth in the
Offenng Circular, the Company may not be reqUIred to accept for exchange any of the Old Notes tendered thereby.
The underSIgned will, upon request, execute and deliver any additIOnal documents deemed by the Company or the
Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the Old Notes
tendered hercby. The undersigned agrees that it (and any beneficial owner(s) on whose behalf it IS acting) will not sell,
pledge, hypothecate or otherwise encumber or transfer any Old Notes tendered thereby from the date of this Letter of
Transmittal and agrees that any purported sale, pledge, hypothecation or other encumbrance or transfer WIll be void and of
no effect
For purposes of the Exchange Offer, the Company will be deemed to have accepted for exchange, and to have .
exchanged. validly tendered Old Notes (or defectively tendered Old Notes whIch defect the Company has, or has caused
to be, waived) If and when the Company gives oral or wntten notice thereof to the Exchange Agent. This tender may be
withdrawn only in accordance with the procedures set forth in the section titled "The Exchange Offer - Withdrawal of
Tenders." in the Offering Circular.
All authority conferred or agreed to be conferred in this Letter of Transmittal and every oblIgation of the undersigned
hereunder shall be bmding upon the successors, assigns, heirs, executors, adminIstrators, trustees in bankruptcy and legal
representatIves of the undcrsigned and shall not be affected by, and shall survive. the death or incapaCIty of the
undersigned. '
Unless otherwise indicated herem in the box entitled "SpeCIal Issuance InstructIOns" below, please credit the New
Notes to the account indicated above maintained at DTC. Similarly, unless otherwise indIcated herein in the box entitled
"Special Dehvery InstructIons" below, please dehver the New Notes to the account indIcated above mamtained at DTC.
Any Old Notes not exchanged or not accepted for exchange Will be credited to the account mdlcated above maintamed at
DTC promptly followmg the expIratIOn or termination of the Exchange Offer
TIlE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE TENDERED THE
OLD NOTES AS SET FORTH IN SUCH BOX ABOVE.
.
5
.
.
.
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 2 and 3)
To be completed ONLY if the New Notes are to
be issued III the name of someone other than the
registered holder of the Old Notes whose name(s)
appear(s) above.
Issue New Notes to
Name.
(Please Type or Print)
(Plea~e 1 ype or Print)
Address.
(Include Zip Code)
(Complete Substitute Form W-9)
(Book-Entry Transfer Facility Account Number,
if applicable)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 2 and 3)
To be completed ONLY if the New Notes are to
be delivered to someone other than the registered
holder of the Old Notes whose name(s) appear(s)
above, or to such registered holder(s) at an address
other than that shown above.
Dehver New Notes to:
Name(s)'
(Please Type or Print)
(Please Type or Print)
Address
(Include Zip Code)
(Complete Substitute Form W-9)
(Book-Entry Tran!>fer Facility Account Number,
if applicable)
6
.
PLEASE SIGN HERE TO TENDER YOUR OLD NOTES
(To be completed by all Tendering Holders)
(Complete accompanying substitute Form W-9 below)
Signature(s) of Owner(s)
Date
Area Code and Telephone Number
If a Holder is tendering any Old Notes, this Letter of Transmittal must be signed by the registered Holder(s)
as the name(s) appear(s) on the certificatc(s) for the Old Notcs or by any pcrson(s) authorized to become
registered Holder(s) by endorsements and documents transmitted herewith. If signature is by an attorney-in-fact,
trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity,
please set forth full title. SEE INSTRUCTION 2.
Name(s):
(Please Type or Print)
Capacity or Title.
Address:
(Include Zip Code)
.
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 2)
Signature(s) Guaranteed by an Eligible Institution:
(Authorized Signature)
(Title)
(Name and Firm)
Date
Area Code and Telephone Number
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF, OR AN ELECTRONIC
CONFIRMATION PURSUANT TO DTC'S ATOP SYSTEM (TOGETHER WITH A BOOK-ENTRY CONFIR-
MATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY)
MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY
BOX ABOVE.
.
7
.
.
.
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
I. Delivery of thIs Letter of Transmittal, Guaranteed Delivery Procedures. This Letter of Transmittal. or an
electronic confirmatIOn pursuant to DTC's ATOP system, is to be completed by Holders of Old Notes for tenders that are
made pursuant to the procedures for delivery by book-entry transfer set forth in the section tItled "The Exchange Offer -
Procedures for Tendering" in the Offering Circular Book-Entry Confirmation as well as a properly completed and duly
executed Letter of TransmIttal (or manually signed facsimile hereof), or an electromc confirmation pursuant to The
Depository Trust Company's ATOP system, and any other required documents, including any required signature
guarantees, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or
the tcnderIng Holder must comply with the guaranteed delivery procedures set forth below. The book-entry transfer of
Old Notes must be accompanied by an agent's message (an "Agent's Message") confirming that DTC has received
express acknowledgment from the Holder that such Holder agrees to be bound by the Letter of Transmittal and that the
Letter of Transmittal may be enforced against such Holder. Electronic confirmation pursuant to DTC's ATOP system
must also Include an express acknowledgment (an "Express Acknowledgment") by the Holder that such Holder has
received and agreed to be bound by the Letter of TransmIttal and that the Letter of Transmittal may be enforced against
such Holder. Old Notes tendered hereby must be in denommations of amount of $1,000 and any integral multIple thereof
Holders who wish to tender their Old Notes and who cannot complete the procedure for book-entry transfer on a
timely basIs or who cannot dehver all other required documcnts to the Exchange Agent on or prior to the ExpiratIOn Date
may tender theIr Old Notes pursuant to the guaranteed delIvery procedures set forth in the section titled "The Exchange
Offer - Guaranteed Delivery Procedures," in the Offenng Circular Pursuant to such procedures, (i) such tender must
be made through an Ehgible Institution (as defined below), (ii) prior to 5'00 p.m, New York City Time, on the
ExpiratIOn Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed
Letter of TransmIttal (or manually signed facsimile hereof), or an electronic confirmation pursuant to DTC's ATOP
system, and Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile
transmiSSIOn, mail or hand delivery), settmg forth the name and address of the Holder of Old Notes and the amount of
Old Notes tcndcred, stating that the tendcr is being made thereby and guaranteeing that within thrce (3) New York
Stock Exchange, Inc ("NYSE") trading days after the ExpIration Date. a Book-Entry Confirmation and any other
documents requested by this Letter of Transmittal, including any signature guarantees, an Agent's Message 111 the case of
a book-entry transfer or an Expres~ Acknowledgment in the case of a tran~fer through the ATOP system, wIll be
deposited by the Eligible Institution with the Exchange Agent, and (iii) a Book-Entry Confirmation and all other
documents required by thiS Letter of TransmIttal, must be received by the Exchange Agent within three (3) NYSE
trading days after the Expiration Date.
The delivery of the Old Notes and all other required documents will be deemed made only when confirmed by the
Exchangc Agent The method of delIvery of this Letter of Transmittal and all other required documents is at the election
and rIsk of the tendenng Holder. If such delivery is by maIl, it is recommended that registered mail WIth return receipt
requested, properly insured, be used. In all cases, sufficient time should be allowed to assure timely delivery. No Letters of
Transmittal or other documents should be sent to the Company.
See thc section titled "The Exchange Offer," in the Offering Circular.
2. Signatures on this Letter of Transnllttal, Bond Powers and Endorsements, Guarantee of SIgnatures If this
Letter of Transmittal is signed by the regIstered Holder of the Old Notes tendered hereby, the signature must correspond
exactly with the name as it appears on a security pOSitIOn listmg as the Holder of such Old Notes in the DTC system
WIthout any change whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners, all of such owners must sign this Letter
of Transmittal.
If any tcndered Old Notes are regl~tered in different names, it will be necessary to complete, sign and submit as
many separate copies of this Letter of Transmittal as there are different registrations. When this Letter of Transmittal IS
signed by the registered Holder or Holders of the Old Notes speCIfied herein and tendered hereby, no separate bond
powers are reqUIred. If, however, the New Notes are to be Issued to a person other than the registered Holder, then
separate bond powers arc reqUIred.
8
If this Letter of Transmittal or any bond powers are signed by trustees, executors, admimstrators, guardians,
attorneys-in-fact, officers of corporations or others acting m a fiduciary or representative capacity, such persons should so
indicate when sIgmng, and, unless waived by the Company, proper eVidence satisfactory to the Company of their authOlity
to so act must be submitted.
Signatures on bond powers required by this Instruction 2 must be guaranteed by a firm which is a financial institution
(including most banks, savings and loan associalions and brokerage houses) that is a parlicIpant in the Securities Transfer
Agents Medallion Program, the New York Stock Exchange MedallIon Signature Program or the Stock Exchanges
Medallion Program (each an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed by an Eligible InstitutlOn, provided the Old Notes
are tendered:
.
(i) by a registered Holder of Old Notes (including any p31ticipant in the DTC system whose name appears on a
security position listing as the Holder of such Old Notes) who has not completed the box entitled "SpeCIal Issuance
Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal, or
(ii) for the account of an Eligible InstitutlOn.
3 Speczal Issuance and Dehvery instructIOns If New Notes are to be issued m the name of a person other than the
signer of this Letter of Transmittal, or if New Notes are to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown above, the appropnate boxes on thiS Letter of Transmittal should be
completed. Old Notes not exchanged will be returned by crediting the account maintained at DTC specified herem. See
Instruction 9.
In the case of issuance in a different name, separate bond powers With a guaranteed signature is required and the
employer identIficatIOn or SOCIal security number of the person named must also be indicated.
4 important Tax informatIOn Under current federal income tax law, a Holder whose tendered Old Notes are
accepted for exchange may be subject to backup withholding unless the Holder provides the Exchange Agent, with either .
(i) such Holder's correct taxpayer identificatIOn number ("TIN") on Substitute Form W-9 attached hereto, certifying
that the TIN provided on Substitute Form W-9 IS correct (or that such Holder IS awaiting a TIN) and that (A) the
Holder has not been notified by the Internal Revenue Service that he or she is subject to backup withholdmg as a result of
a failure to report all interest or dividends or (B) the Internal Revenue Service has nolified the Holder that he or she is no
longer subject to backup withholdmg; or (ii) an adequate basis for exemption from backup withholding If such Holder is
an individual, the TIN is such Holder's SOCial security number. If the Exchange Agent is not provided with the correct
taxpayer identificatIOn number, the Holder may be subject to certain penalties Imposed by the Internal Revenue Service.
Certam Holders (mcluding, among others, all corporatIOns and certam foreign mdlVlduals) are not subject to these
backup Withholding and reportmg requirements. Exempt Holders should indicate their exempt status on Substitute
Form W-9 A foreign individual may qualIfy as an exempt recipIent by submitting to the Exchange Agent a properly
completed Internal Revenue Service Form W-8 (which the Exchange Agent will proVide upon request) Signed under
penalty of perjury, attesting to the Holder's exempt status. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "GUidelines") for additIOnal instructions.
If backup withholding applies, the Company is required to withhold a portion of certain payments made to the
Holder or other payee. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of tax Withheld. If "'Ithholding results m an
overpayment of taxes, a refund may be obtained from the Internal Revenue Service.
NOTE' FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAX-
PAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
5. Transfer Taxes The Company will pay all transfer taxes, if any, applicable to the transfer of Old Notes to it or
its order pursuant to the Exchange Offer. If, however, New Notes are to be registered or issued in the name of, any person
other than the registered Holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of
.
9
.
.
.
any person other than the person sigmng thIs Letter of TransmIttal, or if a transfer tax is imposed for any reason other than
the transfer of Old Notes to the Company or it~ order pur~uant to the Exchange Offer, the amount of any such transfer
taxes (whether Imposed on the registered Holder or any other persons) will be payable by the tendenng Holder If
satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, no New Notes will be
is~ued until such evidence IS received by the Exchange Agent.
6. Waiver of Conditions The Company leserve~ the absolute right to waive or amend, in its discretion, in whole or
m part, at any time pnor to 5 00 p.m., New York City Time, on the ExpIration Date, satIsfaction of any or all condItions
enumerated m the Offermg CIrcular, which may result in an extensIOn of the period of time for which the Exchange Offer
is kept open.
7. No Conditional Tenders No alternative, conditIOnal, irregular or contmgent tenders wIll be accepted. All
tendermg Holders of Old Notes, by executIOn of thIS Letter of Transmittal (or an Agent's Message in lieu thereof), shall
waive any nght to receive notice of the acceptance of theIr Old Notes for exchange.
The Company will determine, in its sole discretion, all questions as to the form, validity, eligibility (including time of
receIpt) and acceptance for exchange of any tender of Old Notes, which determination shall be final and bmding The
Company reserves the absolute right to reject any and all tenders of any particular Old Notes not properly tendered or to
not accept any partIcular Old Notes which acceptance might, in the judgment of the Company or its counsel, be unlawful
The Company also reserves the absolute fight, m ItS sole dIscretion, to waive any defects or irregularities or conditions of
the Exchange Offer as to any particular Old Notes elthcr before or after the Expiration Date (mcludmg thc nght to waIve
the inelig]bihty of any Holder who seeks to tender Old Notes in the Exchange Offer). The interpretation of the terms and
condItions of the Exchange Offer as to any particular Old Notes either before or after the Expiration Date (including the
Letter of Transmittal and the instructions thereto) by the Company shall be tinal and bmdmg on all partIes. Unless
waived, any defects or Iffegulantie<; m connectIOn with the tender of Old Notes for exchange must be cured within such
reasonable period of tIme as the Company shall determme NeIther the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of any defect or irregularity with respect to any tender of Old Notes for
exchange, nor shall any of them mcur any liability for faIlure to give such notification.
8. Partial Tenders Tenders of Old Notes will be accepted only in mtegral multiples of $1,000 princ]pal amount. If
a tender for exchange IS to be made with respect to less than the entire pnncipal amount of any Old Notes, fill in the
principal amount of Old Notes which are tende]ed for exchange on the form entltlcd "DescnptlOn of Old Notes," as more
fully described in the footnotes thereto In the case of a parllal tender for exchange, a new certificate for the remainder of
the principal amount of the Old Notcs, WIll bc scnt to the Holders unless otherwise indIcated in the appropriate box on
this Letter of Transmittal as promptly as practicable after the expiratIOn or termination of the Exchange Offer.
9 Withdrawal of Tenders. Tenders of Old Notes may be withdrawn at any tllne prior to 5:00 p.m , New York CIty
Time, on the ExpIratIOn Date. A valid withdrawal of tendered Old Notes on or prior to the Expiration Date shall be
decmed a vahd revocatIOn of the tender of the Old Notes Tenders of any Old Notes W]lI automatically be wIthdrawn If
the Exchange Offer IS termmated without any such Old Notes bemg exchanged as provided in the Offering CIrcular. fn
the event of termmation of the Exchange Offer, the Old Notes tendered pursuant to such exchange offer wlll be returned
to the tendering Holder promptly.
For a withdrawal of a tender of Old Notes to be effectIve, a wntten notIce of withdrawal must be received by the
Exchange Agent at the address set forth above or, in the case of EligIble Institutions, at the facsimIle number above, prior
to 5:00 p.m , New York CIty Time, on the Expiration Date. Any such notice of Withdrawal must (I) specify the name of
the person having tendered the Old Notes to be WIthdrawn (the "Depositor"), (ii) in the case of a tender by book-entry
transfer, speCify the name and number of the account at DTC to be credited with thc WIthdrawn Old Notcs and othcrwise
comply WIth the procedures of such fadhty, (Hi) contain a statement that such Holder is wlthdrawmg hIS election to have
such Old Notes exchanged, (IV) be Signed by the Holder m the same manner as the origmal sIgnature on the Letter of
Transmittal by which such Old Notes were tendered (mcludmg any required signature guarantees) or be accompamed by
documents of transfer to have the Trustee with respect to the Old Notes register the transfer of such Old Notes m the
name of the person Withdrawing the tender, and (v) specify the prinCIpal amount of Old Notes to be withdrawn, If not all
of the Old Notes tendered by the Holder All questions as to the validity, form and eligibility (including time of receipt)
of such notIces will be determmed by the Company, whose determmation shall be fmal and bmding on all parties. Any Old
Notcs so withdrawn WII! be deem cd not to havc been validly tcndcrcd for exchange for purposes of the Exchange Offer
10
and no New Notes will be Issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Any Old
Notes that have been tendered for exchange but which are not exchanged for any reason will be credited into the
Exchange Agent's account at DTC pursuant to the book-entry transfer procedures set forth m the section titled "The
Exchange Offer - Procedures for Tendenng," in the Offenng Circular, and such Old Notes will be credited to the
account specified herein maintained with DTC for the Old Notes as soon as practicable after withdrawal, rejection of
tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following the
procedures descnbed above at any time pnor to 5.00 p.m., New York CIty Time, on the Expiration Date
Any attempted withdrawal of previously tendered Old Notes other than in accordance with the provisions described
above and in the Offenng Circular will not constitute a valid withdrawal of such tender
All questions as to form and validity (includmg time of receIpt) of any delivery or revocation of a tender will be
determmed by the Company, in its sole discretion. which determination will be final and binding. None of the Company,
the Exchange Agent, the Trustee or any other person will be under any duty to give notificatIOn of any defect or
Irregularity m any delivery or revocation of a tender or incur any liability for failure to give any such notification.
10. Mutilated, Lost, Stolen or Destroyed Private Notes Any tendenng Holder whose Old Notes have been
mutilated, lost. stolen or destroyed, should contact the Exchange Agent at the address mdicated herein for further
mstructions.
.
II. Requests for 4ss1stunce or AdditIOnal Copies Questions relating to the procedure for tendering Old Notes and
requests for assistance may be directed to the Company at the address and telephone number set forth herem. Requests
for additional copies of the Offering Circular and this Letter of Transmittal, and requests for Notices of Guaranteed
Delivery and other related documents may be directed to the Company or from your broker, dealer, commercIal bank,
trust company or other nommee
.
.
11
.
.
.
TO BE COMPLETED BY ALL TENDERING SHAREHOLDERS
(SEE INSTRUCTION 4)
PAYER'S NAME: U.S. BANK NATIONAL ASSOCIATION
SUBSTITUTE
Part 1 - PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT
AND CERTIFY BY SIGNING AND
DATING BELOW.
SOCial Secunty Number OR
Employer IdentIficatIOn Number
FORM W -9
Department of the Treasury
Internal Revenue SerVIce
Payer's Request for Taxpayer
IdentificationNumber (TIN) and
Certification
Part 2 - Certification
Under Penalties of Perjury, I certIfy that:
(l) The number shown on this form is my current
taxpayer Identification number (or I am Waiting
for a number to be issued to me) and
(2) I am not subject to backup withholding eIther
because I have not been notified by the Internal
Revenue ServIce (the "IRS") that I am subject to
backup withholding as a result of failure to report
all mterest or dividends, or the IRS has notified me
that I am no longer subject to backup withholdmg.
(3) I am a US person (mc1uding U.S re~ident
alien); and
(4) Any other information provided on thIS form IS
true and correct.
Part 3 -
AWaltmg TIN D
Certification Instructions - You must cross out item (2) in Part 2 above if you
have been notIfied by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notlfied by the IRS that you are subject to backup withholding you receive another
notIficatIOn from the IRS stating that you are no longer subject to backup
withholding, do not cross out Item (2).
Signature
Date
Name_________
Address
City
State
ZIp Code
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECK THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identIficatIOn number has not been issued to me, and either
(a) I have mailed or deltvered an application to receive a taxpayer Identification number to the appropriate Internal
Revenue ServIce Center of Social Security AdminIstration Office or (b) I intend to mail or deliver an applicatIOn m
the near future I understand that If I do not provIde a taxpayer identificatIOn number by the time of the exchange, a
portion of all reportable payments made to me thereafter will be withheld untIl I provide a number.
SIgnature
Date
12
.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER - Social Secunty Numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer Identifica-
tion Numbers have nIne digits separated by only one hyphen: i.e., 00-0000000. The table below will help determme the
number to give the payer.
For this type of account:
Give the SOCIAL
SECURITY number
of-
I An mdlvldual's account
2 Two or more mdlvldual> (Joml
account)
3 Husb<md and wIfe (jomt
account)
4 CustodIan account of <I mmor
(UnIform GIft 10 Mmors Act)
Adult and mmor (JOInt
account)
6 Account ill the name of
guardian or comllllttee for a
desIgnated w,ud mmor, or
mcompetent person
7 a The usual revocable s<lvmgs
trust account (grantor IS also
trustee)
b So-called trust account that
IS not ,1 legal or valid trust
under ,tatc law
The mdlvldual
The actual owner of the account
or, If combmed funds, the first
IIldivldual on the account ( I)
The actual owner of the account
or, If Jomt funds, the first
mdlvldual on the account (I)
The mmor(2)
The adult or, If the mmor IS the
only contnbutor, the mmor(l)
The ward. nunol. or
II1competent person (3)
The grantor-trustee (I)
The actual owner(l)
For this type of account:
Give the EMPLOYER
IDENTIFICATION nnlllber
of-
8 Sole propnetorslllp account
9 A valid trust, estate or pensIOn
tnlst
to Corporate account
II. ReligIOUS, chantable, or
educational organlLatlOn
account
12 Partner,hlp account held m the
name of the bu,mess
13 ASSOCIation, club. or other tax-
exempt organIzatIOn
14 A broker or regIstered nommee
15 Account wIth the Department
of Agnculture m the name of a
public entIty (such as a state or
local government, school
dlstnct. or pnson) that receIves
agncultural program payment'
The owner(4)
The legal entlty(5)
The corporation
The orgamzatIon
The pat tnershlP
The organIzatIOn
The broker or nomInee
The public entIty
.
(I) List fil,t and CIrcle the name of the person whose number you furnIsh If only one per,on on a Jomt account has a SOCIal secunty number, that
person's numbcr must be furmshed
(2) Circle the mmor's name and furnish the mmol's SOCIal secunt} number
(3) CIrcle the ward'" mmor', or mcompetent per'on's name and furnl,h ,uch per,on', SOCIal secunty number
(4) You must show your mdlVldual name, but you may also enter your busmess or "domg busmess as" name You m,lY use either your SOCIal secunty
number or employer IdentificatIOn number (If you have one)
(5) LIst first and CIrcle the name of the legal trust. estate, or pensIOn trust Do not furnIsh the tall.pd}er IdentificatIOn number of the personal
representatIve or trustee unless the legal entIty Itself IS not deSignated In the account title
:'\OTE: If no name 1> CIrcled when there IS more than one name, the number Will be conSidered to be that of the first name IIstcd
.
.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
.
Obtaining a Number
If you do not have a taxpayel IdentIficatIon numbcr or If you do
not know your number, obtam Form SS-5. ApplIcatIOn for
Social SecurIty Card, or Form SS-4, ApplIcatIon for Employer
IdentificatIOn Number. at the local office of the SOCIal SecurIty
Admmlstration or the Internal Revenue Service (the "IRS")
and apply for a number SectIon reference~ m thcse gUidelines
refer to sectIOns undel the Internal Revenue Code of 1986, as
amcnded
Payees specIfically exempted from backup wlthholdmg Include.
. An orgamzatIOn exempt from tax under Section 501 (a), an
mdlvldual retIrement account (IRA), or a custodIal ac-
count under SectIOn 403(b) (7), if the account satIsfies the
reqUIrements of SectIon 401 (f) (2)
. The Umted States or a state thereof, the DistrIct of Colum-
bia, a posseSSIOn of the United States, or a polItical subdiVI-
sion or wholly-owned agency or instrumentalIty of anyone
or more of the foregolllg.
. An International organization or any agency or mstrumen-
talIty thereof.
. A foreIgn government or any polItIcal subdlvI;IOn. agency
or mstrumentalIty thereof.
Payees that may be excmpt from backup wlthholdmg include
. A corporatIOn.
. A financial institution
. A dealer In SeCUrItIes or commodItIes reqUIred to leglster 1Il
the United States, the DIstrIct of ColombIa, or a posses.,ion
of the United States
.
. A real estate investment trust
. A common trust fund operated by a bank under
SectIOn 584(a)
. An entIty regi~tered at all tIme; during the tax year under
the Investment Company Act of 1940, as amended
. A nuddleman known in the mvestment commulllty as a
nommee or custodian
. A futures commISSIOn merchant regIstered WIth the Com-
modity Futures Tradmg Commls&ion.
. A foreIgn central bank of Issue
. A trust exempt from tax under SectIOn 664 or described m
SectIOn 4947
Payments of dIVidends and patronage dlVldends not generally
subject to backup wlthholdmg mclude the followmg
. Payments to nonreSident aliens subject to withholding
under SectIOn 1441
. Payments to partnershIps not engaged m a trade or busmess
m the U S and whIch have at least one nonreSident alien
partner
. Payments of patronage diVIdends where the amount re-
cClved IS not paId m moncy.
. Payments made by certam foreIgn orgamzatIons
. SectIOn 404(k) payments made by an ESOP
Payments of mterest not generally subject to backup wlthhold-
mg mclude the followmg
. Payment; of mterest on oblIgatIons Issued by indlVlduals.
Note You may be subJcct to backup wlthhohhng If tlus
mteresl IS $600 or more and IS paid m the course of the
payel's trade or busmess and you have not prOVided your
correct taxpayer IdentIficatIOn number to the payer
. Payments of tax-exempt interest (including exempt-Inter-
est dividends under Section 852).
. Payments deSCrIbed in SeCllon 6049(b) (5) to nonreSident
aliens.
. Payments on tax-free covenant bonds under Section 1451
. Payments made by certam foreIgn organizatIOns.
. Mortgage or student loan mterest paid to you.
Exempt payees described above should file Form W -9 to aVOid
pOSSIble erroncous backup withholding. FILE THIS FORM
WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" IN
PART 2 OF THE FORM, SIGN AND DATE THE FORM
AND RETURN IT TO THE PAYER
Certam payments other than mterest, dIVIdends, and patronage
dIVIdends, whIch are not subject to 1I1!ormation report1l1g are
alw not subject to backup w1lhhold1l1g For detmls, see the
regulatlOlls under SectIOns 6041,604IA, 6045. 6050A and
6050N
Privacy Act Notice. - SectIOn 6109 rcqUlres most rccipicnts of
dlVldend, mterest, or certam other income to give taxpayer
IdentIficatIOn numbers to payers who must report the payments
to the IRS The IRS use., the numbers for IdentIfication pur-
po~es and to help verIfy the accuracy of tax returns The IRS
may also proVide thiS mfonnatlOn to the Department of JustIcc
for clVll and crimmal lItigatIOn and to CitIes, states and the
DI&trIct of Columbia to carry out theIr tax laws The IRS may
also dlsclo~e thIS lIlformatlOn to other countnes under a tax
treaty, or to Federal and ;tate agencies to enforce Federal
non tax cflmlllal laws and to combat terrorism. Payers must be
given the numbers whether or not reCipients are reqUIred to file
tax return; Payers must generally WIthhold a portIon of taxable
Interest, diVIdend, and certam other payments to a payee who
does not furmsh a taxpayer IdenllficatlOn number to a payer.
Certam penaltIes may also apply.
Penallles
(1) Penalt} for Failure to Furnish Taxpayer Identification
Number. - If you fall to furnish your correct taxpayer IdentIfi-
catIon number to a payer, you are subject to a penalty of $50 for
cach such faIlure unless your failure IS duc to reasonablc cause
and not to WIllful neglect
(2) Civil Penalty for False Information With Respect to
\Vithholding. - If you make a false statement With no reasona-
ble baSIS whIch results in no ImpoSItIOn of backup wlthholumg,
you are subject to a penalty of $500
(3) Criminal Penalty for Falsifying Information. - WIllfully
falslfymg certIfications or affirmatIons may subject you to cnml-
n<ll penaltIes mcluding fines and/or Ilnpnsonment
(4) Misuse of Taxpayer Identification Numbers. - If the re-
quester discloses or uses taxpayer IdentificatIOn numbers m
ViolatIOn of federal law, the requcster may be subject to CIV 11 and
crimmal pendltles
FOR ADDITIONAL INFORMATION CONTACT YOUR
TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
The Exchange Agent jor the Exchange Offer IS
U.S. Bank National Association
By Mall, Overnight Mall, Courier or Hand'
U.S. Bank National Association
West Side Flats Operations Center
60 Livingston Avenue
St. Paul, MN 55107
Attn: SpecialIzed FInance
For Information. (213) 6] 5-6043
By FaCSImile-
(651) 495-8l58
Attention: Specialized Finance
Confirm by Receipt of Facsimile Only' (651) 495-3511
Any questions regardIng the Exchange Offer or requests for additIonal copies of the Offenng Circular or the Letter of
Trammittal may be directed to the Company at the address and telephone number set forth below.
WorthIng Jackman
Waste Connections, Inc
35 Iron Point Circle, Suite 200
Folsom, CA 95630
Please call. (9l6) 608-8266
.
.
.
.
NOTICE OF GUARANTEED DELIVERY
Waste Connections, Inc.
For Tender of
Floating Rate Convertible Subordinated Notes Due 2022
Pursuant to its Exchange Offer
Described in the Offering Circular, Dated June 16, 2004
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
JULY 15, 2004, UNLESS EXTENDED BY THE COMPANY (THE "EXPIRATION
DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRA-
TION DATE.
The Exchange Agent IS
U.S. Bank National Association
Bv Mall, OvernIght AIml, Couner or Hand
U.S. Bank National Association
West Side Flats OperatlOm, Center
60 LIvingston ^ venue
St. Paul, MN 55107
Attn: SpecIalized Finance
For InformatIOn (213) 615-6043
.
By FacJlmrle
(651) 495-8158
AttentIOn Specialized Finance
Confirm by ReceIpt of Facsnmle Only' (651) 495-3511
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY.
You mmt use thIS form to accept the Exchange Offer of Waste ConnectIOns, Inc (the "Company") made pursuant to the offenng
circular, dated June 16, 2004 (the "Offering Circular"), If the procedure for book-entry transfer cannot be completed on a tnnely baSIS
or tnne wIll not permIt all reqUIred documents to reach U S. Bank National Association, as exchange agent of the Exchange Offer (the
"Exchange Agent") pnor to 5:00 pm, New York CIty time, on July 15, 2004. ThIS letter or such form may be delivered or transmItted
by faCSImile transmIssIon, mail or hand delivery to the Exchange Agent as set forth below In additIOn, In order to utIlize the guaranteed
delivery procedure to tender your Floating Rate ConvertIble Subordinated Notes due 2022 (the "Old Notes") pursuant to the
Exchange Offcr, a Lcttcr of Transmittal (or manually SIgned faCSImIle thcreof) or an electronic confirmation pursuant to The
DepOSitory Trmt Company's ;\ TOP system, wIth any reqUired sIgnature guarantees and any other reqUired documents (including an
agent's message, or an expres, acknowledgment, confirming that you have receIved and agree to be bound by the Letter of Transmittal
and that the Lcttcr of TransmIttal may be enforccd agamst you) must also be rcceIVed by thc Exchange Agent pnor to the ExpIratIon
Date Caplt,\lIzed terms u,ed but not defined herein are defined In the Letter of TransmIttal
TI-lIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARA~TEE SIGNATURES. IF A
SIGNATURE ON A LETTER UF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITU-
TION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICA-
BLE SPACE PROVIDED 01'\ THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
Upon the tcrms and conditions set forth m the Offcnng CIrcular and thc accompanymg Letter of Transmittal, the undersIgned
hereby tenders to the Company the aggregate pnnclpal amount of Old Note, ,et forth below pursuant to the guaranteed delivery
procedure descllbed In the sectIOn titled "The Exchange Offer - Guarantecd Delivery Procedures." In the Offenng Circular By so
tendering, the undersigned does hereby make, at and as of the date hereof, the representations and warrantIes of a tendering Holder of
Old Notes set forth In thc Lctter of TransmIttal
.
All authority herem conferred or agreed to be conferred by thIS Notice of Guaranteed Delivery shall survIve the death or incapaCIty
of thc undelslgned and every oblIgatIOn of thc undcrslgned hereundel shall be bmdlng upon the heIrS, personal representatIves,
executors, successors, a,sign" trustees m bankruptcy and other legal representatIVe~ of the undersIgned
PLEASE SIGN AND COMPLETE
CertiDeate Numbers of Old Notes
(if Available)
Principal Amount of Old Notes Tendered
Signature(s) of Registered Holder(s) or Authorized Signatory
Name(s):
(Please Type or PrlOt)
Title
Address:
Area Code and Telephone Number: ____
Date.
If Old Notes will be tendered by book-entry transfer. check the trust company below:
o The Depository Trust Company
Depository Account Number:
2
.
.
.
.
.
.
This Notice of Guarantecd Delivcry must bc signed by the Holdcr(s) of Old Notes cxactly as its (thclr) name(s)
appear(s) on a security positIon lIstmg as the owner of the Old Notes, or by person(s) authorized to become registered
Holder(s) by endorsements and documents transmitted wIth this Notice of Guaranteed DelIvery If signature is by an
attorney-in-fact, trustee, executor, admmistrator, guardian, officer or other person acting in a fidUCiary or representative
capacity, such person must provide the following information:
Name(s): Capacity: Address(es):
Do not send Old Notes with this form. Old Notes should be sent to the K"change Agent together with a properly completed and
duly executed Letter of Transmittal.
3
GUARANTEE
(Not To Be Used For Signature Guarantee)
The undersigned, a firm that is a participant III the SecurIties Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program, or an "eligible guarantor
institution" (as such term is defined in Rule 17 Ad-IS under the SecurIties Exchange Act of 1934, as amended), hereby
guarantees that, within three New York Stock Exchange trading days after the date of execution of this Notice of
Guaranteed Delivery, a properly completed and duly executed Letter of Transmittal (or manually Signed facsimile
thereof), the Old Notes, in proper form for transfer, or a book-entry confirmation of transfer of such Old Notes into the
Exchange Agent's account at The Depository Trust Company, including the agent's message instead of a Letter of
Transmittal, as the case may be, with any required signature guarantees and any other documents required by the Letter
of Transmittal, will be deposited by the undersigned with the Exchange Agent.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL
AND THE OLD NOTES TENDERED HEREBY, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE INSTEAD OF A LETTER OF TRANSMITTAL, TO THE EXCHANGE AGENT WITHIN
THE TIME PERIOD SET FORTH ABOVE AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL
LOSS TO THE UNDERSIGNED.
SIGN HERE
Name of Firm:
Authonzed Signature
Name and Title (please type or print):
Address:
Area Code and Telephone Number
Date:
4
.
.
.
.
.
.
Waste Connections, Inc.
Invites Holders of Its
Floating Rate Convertible Subordinated Notes Due 2022
(CUSIP Nos. 941053AC4 and 941053AD2)
To Exchange Their Notes for
Floating Rate Convertible Subordinated Notes Due 2022
(CUSIP NO. 941053AEO)
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
JUL Y 15, 2004, UNLESS EXTENDED BY THE COMPANY (THE "EXPIRATION
DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRA-
TION DATE.
To. Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Waste Connections. Inc. (the "Company") is offenng, upon and subject to the terms and conditIons set forth in the
offering circular, dated June 16,2004 (as amended or supplemented from time to time, the "Offenng Circular"), and the
enclosed Letter of Transmittal (the "Letter of Transmittal"), to exchange (the "Exchange Offer") $1,000 in pnncipal
amount of Floating Rate Convertible Subordinated Notes due 2022 (the "New Notes") for each $1,000 in pnnclpal
amount of Floating Rate Convertible Subordinated Notes due 2022 (the "Old Notes") of the Company held by the
registered holders thereof (the "Holders"). The Exchange Offer is subject to important conditions as described in the
Offenng Circular
We are requesting that you contact your clients for whom you hold Old Notes regardIng the Exchange Offer. For
your information and for forwarding to your clients for whom you hold Old Notes registered in your name or in the name
of your nommee, or who hold Old Notes registered in their own names, we are enclOSIng the followmg documents:
1. The Offering Circular, dated June 16, 2004;
2 The Letter of Transmittal for your use and for the InfOrmatIOn of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer If time WIll not permIt all reqUIred
documents to reach the Exchange Agent prior to the Expiration Date (as defined below) or if the procedure for
book-entry transfer cannot be completed on a timely basIs,
4. A form of letter which may be sent to your chents for whose account you hold Old Notes registered m your
name or the name of your nommee, WIth space provIded for obtaming such clients' instructions With regard to the
Exchange Offer,
5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9, and
6 Return envelopes addressed to U S. Bank National ASSOCIatIOn, the Exchange Agent for the Exchange Offer,
at, West Side Flats Operations Center, 60 Livingston Avenue, St. Paul, MN 55107, Attention. Specialized Finance.
A substItute Form W-8 BEN. contaInlllg mformatlOn for Non-U.S. holders relatmg to Umted States federal lllcome
tax withholdmg, shall be made available by the Company upon your request
Your prompt action is requested. The Exchange Offer WIll expire at 5:00 pm, New York City tIme, on the
ExpIration Date. Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the
ExpIration Date.
.
To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or manually
signed facsimIle thereof), or an electronic confirmatIOn pursuant to the DeposItory Trust Company's A TOP system. with
any reqUIred sIgnature guarantees and any other reqUIred documents, should be sent to the Exchange Agent, all In
accordance with the instructions set forth in the Letter of Transmittal and the Offering Circular.
If a Holder of Old Notes desires to tender, but the procedure for book-entry transfer cannot be completed on a timely
basis, a tender may be effected by following the guaranteed delivery procedures described In the section titled "The
Exchange Offer - Guaranteed Delivery Procedures," in the Offering CIrcular.
The Company will, upon request, reImburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary costs and expenses incurred by them in forwarding the Offering CIrcular and the related documents to the
bcncficlal owncrs of Old Notcs held by them as nominee or III a fiducIary capacity The Company will payor cause to be
paid all stock transfer taxes applicable to the exchange of Old Notes pursuant to the Exchange Offer. except as set forth in
Instruction 5 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed
materiab, should be directed to the Company at the address and phone number set forth below:
Worthing Jackman
Waste ConnectIOns, Inc.
35 Iron Point Circle, Suite 200
Folsom, CA 95630
Please call (916) 608-8266
Very truly yours,
Wa<;te ConnectIOns, Inc.
.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE
IN THE OFFERING CIRCULAR OR THE LETTER OF TRANSMITTAL.
.
2
.
.
.
Waste Connections, Inc.
Invites Holders of Its
Floating Rate Convertible Subordinated Notes Due 2022
(CUSIP Nos. 941053AC4 and 941053AD2)
To Exchange Their Notes for
Floating Rate Convertible Subordinated Notes Due 2022
(CUSIP No. 941053AEO)
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
JULY 15, 2004, UNLESS EXTENDED BY THE COMPANY (THE "EXPIRATION
DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRA-
TION DATE.
June 16, 2004
To Our Clients.
Enclosed for your consIderation are an offering circular, dated June 16, 2004 (a~ amended or supplemented from
tllne to time, the "Offering Circular"), and the related Letter of Transmittal (the "Letter of Transmittal"), relating to the
offer by Waste ConnectIOns, Inc. (the "Company") to exchange (the "Exchange Offer") $1,000 m prmClpal amount of
Floating Rate Convertlble Subordinated Notes due 2022 (the "New Notes") for each $ 1.000 JIl pnnclpal amount of
Floatmg Rate Convertible Subordinated Notes due 2022 (the "Old Notes") of the Company held by the registered
holders thereof (the "Holders").
This material I, being forwarded to you as the beneficial owner of the Old Notes held by us for your account or
benefit but not regIstered m your name. A tender of such Old Notes may only be made by us as the registered holder of
record and pursuant to your mstructlons.
Accordingly, we request instructions as to whether you wish us to tender on your behalf any or all of the Old Notes
held by us for your account, pursuant to the terms and conditions set forth in the enclosed Offering Circular and Letter of
Transmittal, which we urge you to read carefully.
Your instructIOns should be forwarded to us as promptly as possible in order to permit us to tender the Old Notes on
your behalf in accordance with the provisions of the Exchange Offer.
Any Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any tllne prior to the ExpiratIOn Date
New Notes will not be issuable in exchange for Old Notes so withdrawn. Any permitted WIthdrawal of Old Notes may not
be rescinded, and any Old Note, properly withdrawn will afterwards be deemed not valIdly tendered for purposes of the
Exchange Offer Withdrawn Old Notes may, however, be re-tendered by again following one of the appropriate
procedures described in the Offering Circular and in the Letter of Transmittal at any time before the Expiration Date.
Your attentIOn IS directed to the following
1. The Exchange Offer is subject to certain conditions set forth in the section titled "The Exchange Offer-
Conditions to the Exchange Offer," in the OfferIng Circular.
2 The Exchange Offer is for any and all of the outstandmg Old Notes.
3. If YOll desire to tender your Old Notes pursuant to the Exchange Offer, we must recelve your instructions in
ample tIme to permit us to effect a tender of Old Notes pnor to the ExpiratIOn Date.
4. Any transfer taxes inCident to the transfer of Old Notes from the holder to the Company will be paid by the
Company, except as otherwise provided in Instruction 5 of the Letter of Transmittal
If you wish to have us tender any or all of your Old Notes held by us for your account or benefit pursuant to the
Exchange Offer, please so instruct us by completing, exccutmg and returnmg to us the instruction form included with this
letter. The accompanymg Letter of Transmittal IS furmshed to you for mformational purposes only and may not be used
directly by you to tender Old Notes held by us and registered m our name for your account.
Very truly yours,'
2
.
.
.
..
.
.
.'
.
INSTRUCTIONS TO REGISTERED HOLDER FROM BENEFICIAL OWNER
WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therem relatmg to the
Exchange Offer made by Waste Connections, Inc. (the "Company") wIth respect to the Old Notes of the Company. This
will instruct you to tender with respect to the pnncipal amount of Old Notes indIcated below (or, If no number is
Indicated below. all Old Notcs) held by you for the account of the undersigned, upon and subject to the terms and
conditions set forth in the Oirering Circular and the related Letter of Transmittal.
Floating Rate Convertible Subordinated Notes due 2022
$
(Aggregate Amount of Old Notes to be tendered)*
D Please do not tender any Old Notes held by you for any account
Dated:
Signature (s) **
Print name(s) here**.
Pnnt Address (es):
Area Code and Telephone Number(s):
Area Code and Facsimile Number(s)'
Tax IdentificatIOn or Social Secunty Number(s):
My Account Number(s) with you.
N one of the Old Notes held by us for your account will be tendered unless we receive wntten mstructIons from you to
do so. After receipt of ImtructlOns to tender, we will tender all of the Old Notes held by us for your account unless we
receIve specIfic contrary instructions.
* If no aggregate prmclpal amount of the Notes IS specIfied, the Holder wIll be deemed to have tendered hIS or her
Notes with respect to the entIre aggregate prIncipal amount of Notes that such Holder holds.
** If Notes are beneficially owned by two or more Beneficial Owners, all such owners must sign.
3
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WASTE CONNECTIONS, INC.
2003 ANNUAL REPORT
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WESTERN REGION:
PACIFIC NORTHWEST REGION.
24 COLLECTION OPERATIONS
II TRANSFER STATIONS
3 LANDFILLS
10 RECYCLING OPERATIONS
26 COLLECTION OPERATIONS
4 TRANSFER STATIONS
II LANDFILLS
8 RECYCLING OPERATIONS
3,600 employees -+
165 locations
I
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CENTRAL REGION:
MAP LEGEND
. COLLECTION
. TRANSFER
. DISPOSAL
... RECYCLING
(.) REGIONAL
OFFICE
* CORPORATE
HEADQUARTERS
32 COLLECTION OPERATIONS
9 TRANSFER STATIONS
13 LANDFILLS
8 RECYCLING OPERATIONS
21 COLLECTION OPERATIONS
9 TRANSFER STATIONS
9 LANDFILLS
4"""'-~
-l-f~ '
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~ 23 states ~ 4 regions ~ 1 team
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YEAR ENDED DECEMBER 31
($000,) 1999 2000 2001 2002 2003
Reven ues 184,225 304,355 377,533 498,661 563,509
Operating Income 31,596 75,874 93,445 130,131 144,954
Net cash from operations 21,973 53,776 87,198 131,488 157,215
Total assets 617,958 810,104 979,353 1,261,882 1,395,952
Long-term debt 275,145 334,194 416,171 578,481 601,891
Stockholders' equity 218,521 334,208 379,805 45 \,712 537,494
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REVENUES EARNINGS STOCKHOLDERS'
PER SHARE EQUITY
600,000 550,000
$225
550,000 500,000
$200
500,000 450,000
450,000 $175
400,000
400,000 $150
350,000
350,000
$125 300,000
300,000 ;;; ;;;
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$ 50
100,000 100,000
50,000 $ 25 50,000
0 $ 00 0
1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 1999 2000 2001 lOOl l001
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Letter to Shareholders
Fiscal year 2003 was an important year for Waste Connections as the benefits of our differentiated
strategy continued to shine through in a difficult economy. Since our founding in 1997, our strategy
has remained the same-focus on expanding into secondary and suburban markets that have strong
demographic growth trends and where competitive barriers to entry can be developed.
Our growth strategy seeks to avoid highly competitive, large urban markets and targets markets where
we can either provide solid waste collection services under franchises, exclusive contracts or similar
arrangements, or markets where we can garner the #1 or #2 market position with significant vertical
integration.
Today, we are the #1 or #2 provider of solid waste services in most of our markets, and over 50% of
our revenues are derived from market areas where we have franchise or exclusive rights to provide our
servICes.
The resilience of our strategy was tested in a difficult economic environment during 2003, and we
are proud to report that it was successful on many fronts. Our financial margins continue to lead the
industry and were relatively stable year over year while the margins of others in our sector declined
significantly. We were able to maintain this relative stability despite completing numerous acquisitions
in several attractive markets over the past two years. In general, these acquisitions had margins that are
structurally lower than our corporate average.
Our theme for last year's annual report was Stay the Course. The continuity and success of our
strategy clearly suggest we not deviate from what differentiates us. We have many accomplishments
to be proud of in 2003 and many opportunities ahead of us. We are committed to improving upon
our industry-leading financial performance in 2004 and as such, have chosen a theme for this year
of Execution & Accountability.
2003 Accomplishments
Last year we asked our employees to focus on what we called the three I's-Integrity; Injury and
Accident Prevention; and Internal Development. Let us update you on progress we made to these
ongoing priorities.
Integrity: Integrity is the cornerstone of a successful company. We continuously strive to maintain
and improve our integrity not only in areas such as corporate governance and financial matters, but
also in other areas such as compliance with laws governing our employees, the environment, anti-
trust and competitive practices. Last year we expanded our internal controls group and published a
comprehensive policies and procedures manual to help ensure compliance with corporate standards.
In November, Institutional Shareholders Services evaluated our corporate governance, and we were
pleased to receive from ISS a Corporate Governance Quotient (CGQ) ranking Waste Connections
as outperforming 92.3% of companies in the S&P 600 Index.
Injury and Accident Prevention: It is imperative that we provide our employees a safe work environment.
In 2003, we continued to implement our employee health and safety training and vehicle maintenance
programs designed to reduce the frequency of injuries and accidents. Our risk management procedures
have successfully mitigated the rising costs for workers' compensation, auto and general liability claims.
We are pleased to report that our frequency of incidents for both workers' compensation and liability
declined year over year, in some cases by more than 20%. Containing or reducing insurance costs has
meaningful benefits for our employees and stockholders, as we are primarily self-insured.
Internal Development: Steady improvements were made throughout the year to increase both our
internal growth rate and the percentage of waste we internalize to our own landfills. Despite a soft
economy, we remained disciplined in pursuing price increases to offset rising costs. While we were
successful in being awarded many new municipal contracts, including a landfill operating agreement
in Central California, this discipline cost us somewhat on volume growth as competitors took some
contracts at extremely low margins. Volume growth turned positive in the fourth quarter, providing
strong momentum into 2004. Our internalization rate increased from approximately 63% early in
2003 to about 70% as we exited the year. We continuously seek to improve these metrics in order to
maintain or increase overall margins.
Other notable achievements in 2003 that laid a strong foundation for the Company included:
. making significant capital investments to improve our facilities and fleet;
. signing or completing acquisitions with almost $65 million of annualized revenue,
a majority of which is in exclusive markets;
. expanding our corporate and regional management infrastructure;
. receiving credit rating upgrades from both Standard & Poor's and Moody's; and
. closing a new $575 million senior credit facility with the lowest term loan pricing for a
debut issuer.
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Execution & Accountability
As mentioned earlier, our theme this year for all employees is Execution & Accountability. In 2003,
we fell short in a couple of areas due to a combination of factors. Some factors we could control-
such as operational effectiveness and execution of the business plan; others we could not-such as the
economy, spikes in certain cost items, weather and completion schedules for new investments.
This year our focus is on eliminating the controllable factors that can influence our results. Our Board
of Directors and senior management establish the corporate strategy and adopt business plans developed
by local management. Our employees are responsible for the execution of their plans and should be
held accountable for delivering results by our many constituents, including customers and shareholders.
Throughout 2003, we significantly expanded our Operations Analysis and Integration Group as a resource
both to help ensure commitments made by our employees in their 2004 budgets are implemented as
scheduled and to help improve underperforming locations. The new senior members of this group are
experienced operating managers in the solid waste industry who playa valuable supporting role in
assisting local managers in the execution of their business plans.
We have been fortunate to attract what we believe is the best team in the solid waste industry.
We offer employees the opportunity and incentives to work in a dynamic and growth-oriented
environment. Execution & Accountability is a theme consistent with our culture as we are only as
strong as our weakest link. Together, our over 3,600 member team is committed to improving
our performance in 2004. This focus should deliver solid results.
Outlook for 2004
For 2004, we see more positives than negatives given the decrease in many of the headwinds we faced
and the significant investments we made in 2003. Price and volume growth are budgeted at higher
rates than we realized in 2003. The back-end loaded nature of our acquisitions in 2003 provides visibility
for strong top line growth this year. Financial margins for the full year should remain relatively stable,
although the typically lower margins from newly completed acquisitions could dilute the overall corporate
average. The expiration of high rate interest rate swaps in late 2003 will reduce our borrowing cost in
2004 and provide additional cushion in a potentially rising interest rate environment. Finally, our
strong free cash flow generation will fund a greater portion of our acquisition program and should
continue to improve our credit ratios.
Conclusion
We are well positioned for 2004 due to the support of our customers and stockholders and the efforts
of our loyal employees. We especially would like to recognize two of our founding employees for
whom 2003 was a year of transition. In September, Eric Moser announced his retirement effective
early 2004. Eric has been a valuable contributor to the development of the company. Eric's personality
and skills will be missed, and we wish him the best of luck in his future plans. In October, Darrell
,Chambliss was promoted to Chief Operating Officer, a well-deserved promotion that positions the
company for continued growth.
Our differentiated strategy continues to produce superior results within the solid waste industry. We
have demonstrated the discipline to maintain this strategy and are committed to improving our financial
results. We owe it to our stockholders to execute our plans and be held accountable to our results.
Ronald J. Mittelstaedt
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Steven F. Bouck
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 1 5 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2003
OR
] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
CommiSSIOn File No. 0-28652
WASTE CONNECTIONS, INC.
(Exact name of registrant as specified in its charter)
f
,
Delaware
(State or other }unsdictlon
of incorporatIon or orgamzation)
94-3283464
(I R.S. Employer Identification)
35 Iron Point Circle
Suite 200
Folsom, California
(Address of pnnclpal executive offices)
95630
(ZIp Code)
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(916) 608-8200
(RegIstrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]
No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in defmitive proxy or information statements incorporated by reference in Part III
ofthis Form 10-K or any amendment to this Form 1O-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes [X]
No [ ]
Aggregate market value of voting stock held by non-affiliates of registrant as of June 30, 2003: $973,781,357
Number of shares of Common Stock outstanding as of February 29, 2004: 28,925,102
DOCUMENTS INCORPORATED BY REFERENCE
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,_ Portions of the registrant's definitive Proxy Statement for the 2004 Annual Meeting of Stockholders are incorporated by reference into
:t Part III hereof.
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WASTE CONNECTIONS, INC.
ANNUAL REPORT ON FORM 10-K Ii) :
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TABLE OF CONTENTS
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PART I
1. BUSINESS 1
2. PROPERTIES 20
3. LEGAL PROCEEDINGS 20
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 21
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 24
6. SELECTED FINANCIAL DATA 25
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 27
7A. QUANTIT A TNE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK 39
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 40
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 40
9A. CONTROLS AND PROCEDURES 41
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 77
11, 12, 13, 14. 77
PART IV ~l
15. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS
ON FORM 8-K 77
SIGNATURES 78
SCHEDULE II - V ALUA TION AND QUALIFYING ACCOUNTS 79
EXHIBIT INDEX 80
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Forward Looking Statements
Certam information contained in this Annual Report on Form lO-K, including, without limitation, information appearing under
Item 1, "Business," and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes
statements that are forward-looking in nature. These statements can be identified by the use of forward-looking terminology such as
"believes", "expects", "may", "will", "should" or "anticipates" or the negative thereof or comparable termmology, or by discussions
of strategy. Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may
matenally differ from those projected by any forward-looking statements m this Annual Report on Form 1O-K. Factors that could
cause actual results to differ from those projected include, but are not limited to: (1) competition or unfavorable economic or industry
conditions could lead to a decrease in demand for our services and/or to a decline in prices we realize for our services, (2) we depend
in part on acquisitions for growth; we may be required to pay higher prices for acquisitions, and we may experience difficulty in '
integrating and deriving synergies from acquisitions, or fmding acquisition targets suitable to our growth strategy, (3) we may not
always have access to the additional capital that we require to execute our growth strategy or our cost of capital may increase, (4)
governmental regulations may reqUIre increased capital expenditures or otherwise affect our business, (5) businesses that. we acquire
could have undiscovered liabtlities, (6) large, long-term collection contracts on which we depend may not be replaced when they
expire or are terminated, (7) we are hIghly dependent on the servIces of our senior management, who would be difficult or impossible
to replace, and (8) we have a substantial amount of goodwill; if mdicators of impairment arise, a write-down of our goodwill may be
required, which could materially impair our net worth. These risks and uncertainties, as well as others, are discussed in greater detail
in our other filings with the Securities and Exchange Commission. We make no commItment to revise or update any forward-looking
statement to reflect events or circumstances after the date any such statement is made.
ITEM 1. BUSINESS
General
@ I '. Waste Connections, Inc., a Delaware corporation organized in 1997, is an mtegrated solid waste servIces company that provides
l .olid waste collection, transfer, disposal and recycling servIces m mostly secondary markets in the Western and Southern U.S. As of
December 31, 2003, we served more than one million commercial, residential and industrial customers from operations in 23 states:
Alabama, Arizona, California, Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Montana, Nebraska, New
Mexico, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washmgton, and Wyoming. As of that date, we owned or
operated a network of 101 collection operations, 33 transfer stations, 34 municipal solid waste landfills, one construction and
demolition landfill and 26 recycling operations. We also owned one municipal solid waste landfill site that is permitted for operation,
but not constructed as of December 31, 2003.
Our growth strategy focuses on expanding into secondary markets located pnmarily in the Western and Southern U.S. that have
strong demographic growth trends and where competitive barriers to entry can be developed. We target markets where we can either
(1) provide waste collection services under franchises, exclusive contracts or other arrangements, or (2) gamer a leading market
positIOn and provide vertically integrated collection and disposal services. We generally seek to avoid operating in highly competitive,
larger urban markets. Weare a leading proVIder of solid waste services in most of our markets, and more than 50% of our revenues are
derived from market areas where we have franchise or exclusive rights to provide our services.
We have focused on secondary markets mostly m the Western and Southern U.S. because we believe that in those areas: (1) there
IS a greater opportunity to enter into exclusive arrangements; (2) there is less competition from larger solid waste services companies;
(3) strong economic and populatIOn growth rates are projected; and (4) there remain a number of independent solid waste services
companies SUItable for acqUIsition.
We have developed a two-pronged business strategy tailored to the competitive and regulatory factors that affect our markets:
_ Control the Waste Stream. In markets where waste collection servIces are provided under exclUSIve arrangements, or where waste
disposal is muniCIpally funded or available at multiple municipal sources, we believe that controlling the waste stream by
providing collection services is often more important to our growth and profitability than owning or operating landfills. In addition,
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contracts in some western U.S. markets dictate the disposal facility to be used. The large size of many western states increases tbi; ,,:,I(
cost of interstate and long haul disposal, heightening the effects of regulatiOns that direct waste disposal, which may make it mol:~J,
difficult for a landfill to obtam the disposal volume necessary to operate profitably. In markets with these characteristics, we I
believe that landfill ownership or vertical integration is not as critical to our success.
- Provide Verticallv Integrated Services. In markets where we believe that owning landfills is a strategic element to a collection
operation because of competitive and regulatory factors, we generally focus on providmg integrated services, from collection
through disposal of solid waste in landfills that we own or operate. In December 2003, approximately 69% of waste we collected
in our markets was disposed of at landfills we owned or operated.
Our senior management team has extensive experience in acquiring, integrating and operating solid waste services businesses, and
we intend to continue to pursue an acquisition-based growth strategy. As of December 31,2003, we had acquired 167 businesses since
our inception in September 1997. We anticipate that a substantial part of our future growth will come from acquiring additional solid
waste collection, transfer and disposal businesses and, therefore, we expect additional acquisitions could continue to affect period-to-
period comparisons of our operating results.
Unless otherwise noted, all descriptions of our business in this Annual Report on Form 10-K are as of December 31, 2003.
Industry Background
We estimate that the U.S. solid waste services industry generated revenues of approximately $40 billion in 2003. The solid waste
services industry has undergone significant consolidation and integration since 1990. We believe that the following factors have
primarily caused this consolidation and integration:
Increased Regulations. Industry regulations implemented in the early 1990s caused operating and capital costs to rise. Many
smaller industry participants have found these costs difficult to bear and have closed their operations or sold them to larger
operators. In addition, Subtitle D regulations require more stringent engineering of solid waste landfills and mandate liner systems, .
leachate collection, treatment and monitoring systems and gas collection and monitoring systems. These ongoing costs ar'" ( ')
combined with increased financial reserve requirements for solid waste landfill operators relating to closure and post-closur'l) , .1
monitoring. As a result, the number of solid waste landfills is declining while the average size is increasing.
Increased Integration of Collection and DisDosal Operations. In certain markets, competitive pressures are forcing operators to
become more efficient by establishing an integrated network of solid waste collection operations and transfer stations, through
which they secure solid waste streams for disposal. Operators have adopted a variety of disposal strategies, including owning
landfills, establishing strategic relationships to secure access to landfills and capture significant waste stream volumes to gain
leverage in negotiating lower landfill fees, and securing long-term, most-favored-pricing contracts with high capacity landfills.
Pursuit of Economies of Scale. Larger operators achieve economies of scale by vertically integrating their operations or by
spreading their facility, asset and management infrastructure over larger volumes. Larger solid waste collection and disposal
companies have become more cost-effective and competitive by controlling a larger waste stream and by gaining access to
significant fmancial resources to make acquisitions.
In the Western U.S., we believe these factors did not accelerate consolidation as much as in other regions because waste collection
services in these markets are provided largely under three types of contractual arrangements which limit the impact of factors that
have driven consolidation elsewhere in the United States. These arrangements include certificates or permits, franchise agreements
and municipal contracts. Certificates of public convenience and necessity or permits, such as governmental certificates awarded to
solid waste collection service providers in unincorporated areas and electing municipalities in Washington state by the Washington
Utilities and Transportation Commission (the "WUTC"), typically grant the holder the exclusive and perpetual right to provide
specific residential, commercial and/or industrial waste services in a defined territory at specified rates. See "G certificates" on page 8.
Franchise agreements typically provide an exclusive service period of five to ten years or longer and specifY the service territory, a
broad range of services to be provided, and rates for the services. They also often give the service provider a right of first refusal to
extend the term of the agreement. Municipal contracts typically provide a shorter service period and a more limited scope of services
than franchise agreements and generally require competitive bidding at the end of the contract term. Unless customers within the areas
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,,avered by certain .governmental certificates, franchise agreements and municipal contracts ,elect not to receive any waste collection
.rvices, they are required to pay collection fees to the company providing these services in their area. These exclusive rights and
contractual arrangements create barriers to entry that can be overcome mostly by the acquisition of the company with such exclusive
rights or contractual arrangements.
The solid waste services industry remains very regional in nature with acquisition opportunities available in selected markets. Due
to the prevalence of exclusive arrangements and the reduced pace of consolidation, we believe the Western markets contain the largest
and most attractive number of acquisitton opportunities. We expect the consolidation trend in the solid waste industry to continue, but
at a slowing pace. Some of the remaimng independent landfill and collection operators lack the capital resources, management skills
and technical expertise necessary to comply with stringent environmental and other governmental regulations and to compete with
larger, more efficient, integrated operators. In addition, many of the remaining independent operators may wish to sell their businesses
to achieve hquidity in their personal finances or as part of their estate planning.
GROWTH STRATEGY
_ Internal Growth. To generate continued internal revenue growth, we focus on increasing market penetratIOn in our current and
adjacent markets, soliciting new commercial, industrial, and residential customers in markets where such customers may elect
whether or not to receive waste collection services, marketing upgraded or additional services (such as compaction or automated
collection) to existing customers and, where appropriate, raising prices. Where pOSSIble, we intend to leverage our franchise-based
platforms to expand our customer base beyond our exclusive market temtories. As customers are added in existing markets, our
revenue per routed truck increases, which generally increases our collection efficienCIes and profitability. In markets in which we
have exclusive contracts, franchises and certificates, we expect internal volume growth generally to track population and business
growth.
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Exclusive Arrangements. We derive a significant portIOn of our revenues from arrangements, including franchise agreements,
municipal contracts and governmental certtficates, under which we are the exclusive service provider in a specified market. We
intend to devote significant resources to securing additional franchise agreements and municipal contracts through competitive .
bidding and additional governmental certIficates by acquiring other companies. In bidding for franchises and muniCIpal contracts
and evaluating acquisition candidates holding governmental certificates, our management team draws on its experience in the
waste industry and its knowledge of local service areas in existing and target markets. Our dIStrict managers maintain relationships
with local governmental officials within their service areas, and sales representatives may be assigned to cover specific
municipalities. These personnel focus on mamtaining, renewmg and renegotiating existing franchise agreements and municipal
contracts and on securing additional agreements and contracts whIle maintaining acceptable financial returns.
Expansion Through Acquisitions. We intend to expand the scope of our operations by continuing to acquire solid waste operations
in new markets and in existing or adjacent markets that are combmed with or "tucked in" to our existing operations. We focus our
acquisition efforts on markets that we believe proVIde significant growth opportunities for a well-capitahzed market entrant and
where we can create economic and operational barriers to entry by new competitors. We believe that our experienced management,
decentralized operating strategy, financial strength, SIze and public company status make us an attractive buyer to certain solid
waste collection and disposal acquisition candidates. We have developed an acquisition disciphne based on a set of financial,
market and management criteria to evaluate opportunities. Once an acqUIsition is closed, we seek to mtegrate it and to mimmize
disruption to the ongoing operations of both Waste Connections and the acqUIred busmess.
In new markets, we often use an initial acquisition as an operating base and seek to strengthen the acquired operation's presence in
that market by providing additional services, adding new customers and making "tuck-in" acquisitions. We next seek to broaden
our regional presence by adding additional operations in markets adjacent to the new location. We beheve that many suitable
"tuck-in" acquisition opportunities exist within our current and targeted market areas that provide us with opportunities to increase
our market share and route density.
OPERATING STRATEGY
_ Decentralized Operations. We manage our operations on a decentralIzed basis. This places decision-making authority close to the
customer, enabling us to identify customers' needs quickly and to address those needs in a cost-effective manner. We believe that
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decentralization provides a low-overhead, highly efficient operational structure that allows us to expand Into geographical_,-;:li
contiguous markets and operate in relatively small communities that larger competitors may not find attractive. We believe th")l
this structure gives us a strategic competitive advantage, given the relatively rural nature of much of the Western and Southern
U.S., and makes us an attractive buyer to many potential acqUlsitlOn candIdates.
We currently deliver our services from approximately 118 operating locations grouped into the following four regions: Pacific
Northwest, Western, Central and Eastern. We organized our business into these four regions on the basis of their respective
geographic characteristics, interstate waste flow, revenue base, employee base, regulatory structure and acquisition opportunities.
Each region has a reglOnal vice president and a regional controller, reporting directly to the corporate management. They are
responsible for operations and accounting in their respective region and supervIse a regional staff.
Each operating location has a district manager with autonomous service and decision-making authority for their operations and
who is responsible for maintaining service quality, promoting safety, implementIng marketing programs, and overseeing day-to-
day operations, including contract administration. District managers also help identify acquisition candidates and are responsible
for integrating acquired businesses into our operations and obtaining the permits and other governmental approvals required for us
to operate them.
Onerating Enhancements. We develop company-wide operating standards, which are taIlored for each of our markets based on
industry standards and local conditions. Upon closing an acquisition, we implement cost controls and employee training and
safety procedures, and establish a sales and marketing plan for each market. We use a wide area information system network,
implement financial controls, and consolidate certain accounting, personnel and customer service functions. While regional and
district management operate with a high degree of autonomy, our senior officers monitor regional and district operations and
require adherence to our accountIng, purchasing, marketing and internal control policies, particularly with respect to financial
matters. Our executive officers regularly review the performance of district managers and operatlOns. We belIeve that by
establishing operating standards, closely monitonng performance and streamlining certain administrative functions, we can
improve the profitability of existing and newly acquired operations.
If we can internalize the waste stream of acquired operations, we can further increase operating efficiencies and improve capi - J_7
utilization. Where not restricted by exclusive agreements, contracts, permits or certificates, we also solicit new commercia, ,
industrial and residential customers in areas within and surrounding the markets served by acquired collection operations, to
further improve economies of scale and increase collection volumes.
SERVICES
Commercial, Industrial and Residential Collection Services
We serve more than one million commercial, industrial and residential customers from operations in 23 states. Our services are
generally provided under one of the following arrangements: (1) governmental certificates; (2) exclusive franchise agreements; (3)
exclusive municipal contracts; (4) commercial and industrial service agreements; (5) residential subscriptions; and (6) residential
contracts.
Governmental certificates, exclusive franchise agreements and exclusive municipal contracts grant us nghts to provide services
within specified areas at established rates. We currently have in excess of 650 such exclusive arrangements, whIch vary in both size
and duratlOn. Governmental certificates are unique to the State of Washington and are generally perpetual in duration. Generally,
franchise agreements with government entities tend to be larger and of longer duration than municipal contracts. We continue to
provide service under some municipal contracts that have expired, while new agreements are being negotiated. We do not expect that
the loss of any current contracts in negotiation for renewal or contracts likely to terminate in 2004 would have a material adverse
affect on our revenues or cash flows. No individual contract or customer accounted for more than 5% of our total revenues for the
year ended December 31,2003.
We provide commercial and industrial services, other than those we perform under exclusive arrangements, under service
agreements generally. ranging from one to three years. We determine fees under these agreements by such factors as collection
frequency, level of service, route density, the ty,pe, volume and weight of the waste collected, type of equipment and containers
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tpnished, the distance to the disposal or processing facility, the cost of disposal or processing and prices charged in our markets for
.milar services. Collection of larger volumes associated with commercIal and industrial waste streams generally help improve our
operating efficIencies, and consolidation of these volumes allows us to negotiate more favorable disposal prices. Our commercial and
industrial customers use portable containers for storage, enabling us to service many <::ustomers with fewer collection vehicleS.
Commercial and industrial collection vehicles normally reqUlre one operator. We provide one to ten cubic yard containers to
commercial customers, 10 to 50 cubic yard containers to industrial customers, and 30 to 96 gallon carts to residential customers. For
an additional fee, we install on the premises of large volume customers stationary compactors that compact waste prior to collection.
We provide residential waste services, other than those we perform under exclusive arrangements, under contracts with
homeowners' associations, apartment owners or mobile home park operators, or on a subscription basis with individual households.
We set base residential fees on a contract basis primarily based on route densIty, the frequency and level of service, the distance to the
disposal or processing facility, weight and type of waste collected, type of equipment and containers furnished, the cost of disposal or
processing and prices charged by competitors in that market for similar services. Collection fees are paid either by the municipalities '
from tax revenues or directly by the residents receiving the services.
Landfills
Currently, solid waste landfills in the Umted States must be designed, permitted, operated, closed and maintained after closure in
compliance with federal, state and local regulations pursuant to Subtitle D of the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"). Operating a solid waste landfill involves excavating, constructing liners and final caps, continually spreading and
compacting waste, covering waste wIth earth or other inert matenal at least once a day to mamtain sanitary conditions, using the
airspace effectively and preparing the site so it can ultimately be used for other purposes.
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We seek to identify solid waste landfill acquisition candidates to achieve vertical integration in markets where the economic and
regulatory environment makes landfill acquisitions attractive. In some markets, acquiring landfills provides opportunities to vertically
integrate our collection, transfer and disposal operations while improving operating margins. When we have vertical integration, we
eliminate third party disposal costs and generally are able to realize higher margms and stronger operating cash flows. The fees .
.harged at disposal facIlities, which are known as "tipping fees," are based on market factors and take into account the type and
~eight or volume of solid waste deposited and the type and size of the vehicles used to transport waste. We evaluate landfill
acquisItion candidates by determining, among other factors, whether access to the landfill is economically feasible from our existmg
market areas eIther directly or through transfer stations, the amount and disposal cost of waste we currently dispose of at a facility
owned by a third party that could be dIverted to the landfill, the expected life of the landfill, the potential for expanding the landfill
and the potential for material environmental liabilities at the landfill.
Our municipal sohd waste landfill facilities consisted of the following at December 31, 2003:
Owned and operated landfills 20
Operated landfills under limited-term operating agreements 9
Operated landfills under life-of-site operating agreements 5
34
We also own one muniCipal solid waste landfill site that is permitted for operation, but not constructed as of December 31, 2003.
Currently, we own landfills in California, Colorado, Illinois, Kansas, Minnesota, Nebraska, New Mexico, Oklahoma, Oregon,
Tennessee and Washington. In addItion, we operate, but do not own, landfills in California, Colorado, Georgia, Mississippi, Nebraska
and New Mexico. With the exception of one landfill located in Tennessee that only accepts construction and demolition waste, all
landfills that we own or operate are municipal solid waste landfills. In January 2004, we also acquired a company operating a
construction and demolition landfill m Kentucky. For landfill operatmg agreements, the owner of the property, generally a
municipality, usually owns the permIt and we operate the landfill for a contracted term, which may be the life of the landfill. Under
our operating agreements for WhICh the contracted term is not the life of the landfill, the property owner is .generally responsible for
closure and post-closure obligations. We are operating at reduced disposal volumes at one of our operated landfills under a limited-
term operating agreement, for which we had no closure or post-closure obligations. The limited term operating agreement for another
of our landfills is set to expire in July 2004 from which we generate approximately $0.7 million of annuahzed revenues. The loss of
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these two limited-term operating agreements is not expected to have a material financial impact. We are responsible for all closur.t,:":,\
and post-closure liabilities at four of our five operated landfills for which we have life-of-site operating agreements. ,J'\
Based on remaining permitted capacity as of December 31, 2003, and projected annual disposal volumes, the average remaining
landfill life for our owned and operated landfills and landfills operated, but not owned, under 1ife-of-site operating agreements, is
estimated to be approximately 49 years. Many of our existmg landfills have the potential for expanded disposal capacity beyond the
amount currently permitted. We monitor the available permitted in-place disposal capaCIty of our landfills on an ongoing basis and
evaluate whether to seek to expand this capacity. In making this evaluation, we consider various factors, including the volume of
waste projected to be disposed of at the landfill, the size of the unpermitted acreage included in the landfill, the likelihood that we will
be able to obtain the necessary approvals and permits required for the expansion, and the costs that would be involved in developing
the additional capacity. We also regularly consider whether it is advisable, in light of changing market conditions and/or regulatory
requirements, to seek to expand or change the permitted waste streams or to seek other permit modifications. We are currently
seeking to expand permitted capacity at 11 of our landfills for which we consider expansions to be probable. Although we cannot be
certain that all future expansions will be permitted as designed, the average remaining landfill life for our owned and operated landfills
and landfills operated, but not owned, under life-of-site operating agreements is estimated to be approximately 63 years when
considering remaining permitted capacity, probable expansion capacity and projected annual disposal volume. The operating
contracts for which the contracted term is not the life of the landfill have expiration dates from 2004 to 2013. The following table
reflects estimated landfill capacity and airspace changes, as measured in tons, for owned and operated landfills and landfills operated,
but not owned, under life-of-site operating agreements (in thousands):
2002 2003
Probable Probable
Permitted Expansion Total Permitted Expansion Total
Balance, beginning of year 271,139 21,890 293,029 290,942 47,542 338,484
Acquisitions and new life-of-site
operating agreements 16,195 16,195 9,561 1,400 10,961
New expanSIons pursued 34,901 34,901 29,548 29,548 . "1
Permits granted 6,133 (6,133) 550 (550) I
Airspace consumed (5,454) (5,454) (5,894) (5,894)
Changes in engineering estimates 2,929 (3,116) (187) (6,367) 5,358 (1,009)
Balance, end of year 290,942 47,542 338,484 288,792 83,298 372,090
The estimated remaining operating lives for our owned and operated landfills and landfills operated, but not owned, under life-of-
site operating agreements, based on remaining permitted and probable expansion capacity and projected annual disposal volume, in
years, as of December 31,2002, was as follows:
o to 10
11 to 20 21 to 40
41 to 50
51 +
Total
Owned and operated
landfills
Operated landfills under
life-of-site operating
agreements
2
2
4
11
20
4
1
2
2
13
3
23
2
2
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6 The estimated remaining operating lives for our owned and operated 'landfills and landfills operated, but not owned, under life-of-
.ite operating agreements, based on remaining permitted and probable expansion capacity and projected annual disposal volume, in
years, as of December 31, 2003, was as follows:
o to 10
11 to 20
21 to 40
41 to 50
51 +
Total
Owned and operated
landfills
Operated landfills under
life-of-site operating
agreements
2
2
3
4
9
20
2
2
5
1
5
2
11
5
25
2
The disposal tonnage that we received in 2002 and 2003 at all of our municipal solid waste landfills is shown below (tons in
thousands):
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Owned and operated
landfills
Operated landfills under
limited-term operating
agreements
Operated landfills under
life-of-site operating
agreements
2002 2003
Number of Total Number of Total
Sites Tons Sites Tons
20 5,057 20 5,335
7 610 9 896
3
397
5
559
30
6,064
34
6,790
Transfer Station Services
We have an active program to acquire, develop, own and operate transfer stations in markets proximate to our collection
operations. Transfer stations extend our direct-haul reach and link disparate collection operations with disposal facilities that we own,
operate or have under contract. We owned or operated 33 transfer stations at December 31,2003. Currently, we own transfer stations
m Colorado, Georgia, Kansas, Montana, Nebraska, Oklahoma, Oregon, Tennessee and Washington. In addition, we operate, but do
not own, transfer stations in California, Kentucky, Nebraska, and Washington. Transfer stations receive, compact, and load solid
waste onto larger vehicles to be transported to landfills. We believe that transfer stations benefit us by:
concentratmg the waste stream from a wider area, which increases the volume of disposal at our landfill facilities and gives us
greater leverage in negotiating for more favorable disposal rates at other landfills;
Improving utihzation of collection personnel and equipment; and
buildmg relatIOnships with muniCIpalities and private operators that dehver waste, which can lead to additional growth
opportunities.
Recychng Services
We offer municipal, commercIal, industrial and residential customers recycling services for a variety of recyclable materials,
includmg cardboard, office paper, plastic contamers, glass bottles and ferrous and aluminum metals. We own or operate 26 recycling
processing operations and sell other collected recyclable materials to third parties for processing before resale. We often share the
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profits from our resale of recycled materials with other parties to our recycling contracts. For example, certam of our mumcip:6 ~. I
recycling contracts in Washington, negotiated before we acquired those businesses, specify certain benchmark resale prices fo',----", ,
recycled commodities. To the extent the prices we actually receIve for the processed recycled commodities collected under those
contracts exceed the prices specified in the contracts, we share the excess WIth the municipality, after recovering any previous
shortfalls resulting from actual market prices falling below the prices specified in the contracts. To reduce our exposure to commodity
price volatility and risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing
fees for recycling volume collected from third parties. We believe that recycling will continue to be an important component of local
and state solid waste management plans due to the public's increasing environmental awareness and expanding regulations that
mandate or encourage recycling.
G CERTIFICATES
A substantial portion of our Washington collection business is performed under governmental certificates (referred to as "G
certificates") awarded by the WUTC. G certificates apply only to unincorporated areas of Washington and muniCIpalIties that have
elected to have their solid waste collection overseen by the WUTC. G certificates generally grant the holder the exclusive and
perpetual right to provide certain solid waste collection and transportation services in a specified territory. The WUTC has repeatedly
determined that, in enacting the statute authorizing G certificates, the Washington legislature intended to favor grants of exclusive,
rather than overlapping, service rights for conventional solid waste services. Accordingly, most G certificates currently grant exclusive
solid wast~ collection and transportation rights for conventional solid waste services in specified territories.
SALES AND MARKETING
In many of our existing markets, we provide waste collection, transfer and disposal services to municipalities and governmental
authorities under exclusive arrangements, and, therefore, do not contract directly with individual customers. In addition, because we
have grown primarily through acquisitions, we have generally assumed existing franchise agreements, municipal contracts and G
certificates from the acquired companies, rather than obtaining new contracts. For these reasons, our sales and marketing efforts to
date have been narrowly focused. We have added sales and marketing personnel as necessary to extend or renew eXIsting contracts~ 'J
solicit new contracts or customers in markets where we are not the exclusive provider of solid waste services, expand our presenc~l ~
into areas adjacent to or contiguous with our existing markets, and market additional services to existing customers. "
, COMPETITION
The solid waste services industry is highly competitive and requires substantial labor and capital resources. The industry presently
includes three large national waste companies: Allied Waste Industries, Inc., Republic Services, Inc., and Waste Management, Inc.
Casella Waste Systems, Inc., and Waste Industries USA, Inc. are two other public companies with a regional focus and annual
revenues in excess of $200 million. Certain of the markets in whIch we compete or will likely compete are served by one or more
large, national solid waste companies, as well as by numerous privately held regional and local solid waste companies of varying sizes
and resources, some of which have accumulated substantial goodwill in their markets. We also compete with operators of alternative
disposal facilities, including incinerators, and with counties, munIcipalities, and solid waste districts that maintain their own waste
collection and disposal operations. Public sector operators may have [mancial advantages over us, because of their access to user fees
and similar charges, tax revenues and tax-exempt financing.
We compete for collection, transfer and disposal volume based primarily on the price and quality of our services. From time to
time, competitors may reduce the price of their services in an effort to expand their market shares or service areas .or to win
. competitively bid municipal contracts. These practices may cause us to reduce the price of our services or, if we elect not to do so, to
lose business. We provide a substantial portion of our residential, commercial and industrial collection services under exclusive
franchise and municipal contracts and certificates, some of which are subject to periodic competitive bidding. We provide the balance
of our services under subscription agreements with individual households and one to three year service contracts with commercial and
industrial customers.
The solid waste collection and disposal mdustry has undergone significant consolidation, and we encounter competition in our
efforts to acquire landfills, transfer and collection operations. Intense competition exists not only for collection, transfer and disposal
volum~, but also for remaining acquisitIon candidates. We generally compete for acquisition candidates with publicly owned regional
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I)) .t large national waste management companies. Competition in the dIsposal industry is also affected by the increasing national
J '\ phasis on recycling and other waste reduction programs, which may reduce the volume of waste deposited m landfills.
Accordingly, it may become uneconomical for us to make further acquisitions or we may be unable to locate or acquire suitabl~
acquisition candidates at price levels and on terms and conditions that we consider appropriate, particularly in markets we do not
already serve. .
REGULATION
Introduction
Our landfill operations and non-landfill operations, including waste transportation, transfer stations, vehicle maintenance shops
and fueling facilities, are all subject to extensive and evolving federal, state and local environmental laws and regulations, the
enforcement of which has become increasingly stringent. The environmental regulations that affect us are administered by the EP A
and other federal, state and local environmental, zoning, health and safety agencies. The WUTC regulates the portIon of our collectio~
business in Washington performed under G certificates, which generally grant us perpetual and exclusive collectIOn rIghts in certain
areas. We are currently in substantial compliance with applIcable federal, state and local environmental laws, permits, orders and
regulations. We do not currently antIcipate any material costs necessary to brIng our operatIons into environmental compliance
(although there can be no assurance in this regard). We attempt to anticipate future regulatory reqUIrements and to plan in advance as
necessary to comply with them.
The principal federal, state and local statutes and regulatIOns that apply to our operations are deSCrIbed below. All of the federal
statutes described below contam prOVIsions that authOrIze, under certain circumstances, lawsuits by private CItIzens to enforce the
provisions of the statutes. In additIon to penalties, some of those statutes authorize an award of attorneys' fees to parties that
successfully bring such an action. Enforcement actions under these statutes may include both civil and criminal penaltIes, as well as
injunctive relief in some instances.
The Resource Conservation and Recovery Act of 1976 (nRCRAn)
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. RCRA regulates the generation, treatment, storage, handlIng, transportation and disposal of solid waste and requires states to
develop programs to ensure the safe disposal of solid waste RCRA divides solid waste into two groups, hazardous and nonhazardous.
Wastes are generally classified as hazardous if they either (i) are specifically included on a lIst of hazardous wastes, or (ii) exhibit
certain characteristIcs defined as hazardous. Household wastes are specifically deSIgnated as nonhazardous. Wastes classified as
hazardous under RCRA are subject to much stricter regulation than wastes classified as nonhazardous, and bUSIllesses that deal with
hazardous waste are subject to regulatory oblIgatIons in addition to those imposed on handlers of nonhazardous waste. From the date
of inception through December 31, 2003, we did not, to our knowledge, transport hazardous wastes under circumstances that would
subject us to hazardous waste regulatIOns under RCRA. Some of our ancillary operations (e.g., vehIcle maintenance operations) may
generate hazardous wastes. We manage these wastes in substantIal compliance with applicable laws.
In October 1991, the Environmental Protection Agency adopted the Subtitle D Regulations governing solid waste landfills. The
Subtitle D RegulatIOns, whIch generally became effectIve m October 1993, mclude locatIon restrictions, facility design standards,
operating criteria, closure and post-closure reqUIrements, finanCIal assurance requirements, groundwater monitoring requirements,
groundwater remediation standards and corrective action reqUIrements. In addition, the Subtitle D Regulations require that new
landfill sites meet more stringent liner design criteria (typically, composite soil and synthetic lIners or two or more synthetic liners)
intended to keep leachate out of groundwater and have extensive collection systems to carry away leachate for treatment prior to
disposal. Groundwater monitOrIng wells must also be installed at virtually all landfills to monitor groundwater quality and, indirectly,
the effectiveness of the leachate collection system. The Subtitle D Regulations also require, where certain regulatory thresholds are
exceeded, that faCIlIty owners or operators control emissions of methane gas generated at landfills in a manner intended to protect
human health and the environment. Each state is required to revise ItS landfill regulatIOns to meet these requirements or such
requirements will be automatically Imposed by the EP A on landfill owners and operators III that state. Each state is also required to
adopt and implement a permit program or other appropriate system to ensure that landfills in the state comply with the Subtitle D
RegulatIOns. Various states III WhICh we operate or in which we may operate in the future have adopted regulations or programs as
stringent as, or more stringent than, the Subtitle D Regulations.
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RCRA also regulates underground storage of petroleum and other regulated materials. RCRA requires registration, complianA~\
with techmcal standards for tanks, release detection and reporting, and correctIve actlOn, among other things. Certain of our faciliti!-./I,
and operations are subject to these requirements.
The Federal Water Pollution Control Act of 1972 (the "Clean Water Act")
The Clean Water Act regulates the discharge of pollutants from a variety. of sources, including solid waste disposal sites and
transfer stations, into waters of the Umted States. If run-off from our owned or operated transfer stations or run-off or collected
leachate from our owned or operated landfills is discharged into streams, rivers or other surface waters, the Clean Water Act would
require us to apply for and obtain a dIscharge permit, conduct samplIng and monitoring and, under certain circumstances, reduce the
quantity of pollutants in such discharge. Also, virtually all landfills are required to comply with the EP A's storm water regulations
issued in November 1990, which are designed to prevent contaminated landfill storm water runoff from flowing into surface waters.
We believe that our facilities comply in all material respects with the Clean Water Act reqUlrements. Various states in which we
operate or in which we may operate in the future have been delegated authority to implement the Clean Water Act permitting
requirements, and some of these states have adopted regulations that are more stringent than the federal requirements. For example,
states often require permits for discharges to ground water as well as surface water.
The Comprehensive EnvIronmental Response, Compensation, and Liability Act of 1980 ("CERCLA")
CERCLA established a regulatory and remedial program intended to provide for the investIgation and cleanup of facilities where
or from which a release of any hazardous substance into the environment has occurred or is threatened. CERCLA's primary
mechanism for remedying such problems is to impose strict Joint and several liability for cleanup of facilities on current owners and
operators of the SIte, former owners and operators of the site at the time of the disposal of the hazardous substances, any person who
arranges for the transportation, dIsposal or treatment of the hazardous substances, and the transporters who select the disposal and
treatment facilities. CERCLA also imposes liability for the cost of evaluating and remedying any damage to natural resources. The
costs of CERCLA investigation and cleanup can be very substantIal. Liability under CERCLA does not depend on the existence or
disposal of "hazardous waste" as defined by RCRA; it can also be based on the existence of even very small amounts of the more th~,
700 "hazardous substances" listed by the EP A, many of which can be found in household waste. In addition, the definition ~)
"hazardous substances" in CERCLA incorporates substances designated as hazardous or toxic under the federal Clean Water Act," .
Clear Air Act and Toxic Substances Control Act. If we were found to be a responsible party for a CERCLA cleanup, the enforcing
agency could hold us, or any other generator, transporter or the owner or operator of the contaminated facility, responsible for all
investigative and remedial costs, even if others were also liable. CERCLA also authorizes the imposition of a lien in favor of the
United States on all real property subject to, or affected by, a remedial action for all costs for which a party is liable. CERCLA gives a
responsible party the right to bring a contribution action against other responsible parties for their allocable shares of investigative and
remedial costs. Our ability to obtain reimbursement from others for their allocable shares of such costs would be limited by our ability
to find other responsible parties and prove the extent of their responsibIlity and by the fmancial resources of such other parties.
Various state laws also impose liability for mvestigation, cleanup and other damages associated with hazardous substance releases.
The Clean Air Act
The Clean Air Act generally, through state implementation of federal requirements, regulates emissions of aIr pollutants from
certain landfills based on factors such as the date of the landfill constructlOn and tons per year of emissions of regulated pollutants.
Larger landfills and landfills located in areas where the ambient air does not meet certain requirements of the Clean Air Act may be
subject to even more extensive air pollution controls and emission limitations. In addition, the EP A has issued standards regulating the
disposal of asbestos-containing materials. Air permits may be required to construct gas collectIon and flaring systems, and operating
permits may be required, dependmg on the potentIal air emissions. State air regulatory programs may implement the federal
requirements but may impose additlOnal restrictions. For example, some state air programs unIquely regulate odor and the emission of
toxic air pollutants.
The Occupational Safety and Health Act of 1970 (the "aSH Act")
The aSH Act is administered by the Occupational Safety and Health Administration ("OSHA"), and in many states by state
ag~ncies whose programs have been approved by OSHA. The aSH Act establishes employer responsibilities for worker health and
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~ cYAiety, including the obligation to maintain a workplace free ofrecognized hazards likely to cause death or serious:injury,'toJcomply
'IJ' "Aili'adopted worker protection standards, to maintain certain records, to provide workers with required disclosures and to implement
" certain{health~d':'safety trainjng'prograt11S'.~;Yarious OSHkstaDOards may apply to' oUr operations;,'including',standards;conceriling,
notices ofihazards~, safety:in,exca:~ati6n' and"demolition'work; the handling of asbestos' and aSbestos;containing, materials: 'and-worker
training and emergency response programs. ' ~';, ,";:,;;-t[':E~:'~r,
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'Flow itontro1lIrlterstate; Waste Restrictions':
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wast~ that originates from specified geographic areas, restrict the importation of out-of-state waste or wastes originating outside the
local jurisdictions or otherwise discriminate against non-locaFwask'These restrictions, ,generally known',as flcrw'control restrictions~
are controversial, and some courts have held that some flow control schemes violate constitutional limits on state or local regulation of
interstate commerce: ,From :,time to time,' ,federal' -legislation is proposed that would allow' some local flow, contt:ol',restrictionS'.
Although no such'federallegislation::has"been enacted, to~date, if such federal legislation should,be,enacted in the future,states"in
whichJwe,,'owni orzoperate,landfi:lls 'could"limif'or, prohibit the importation:c!)f' out-of-state;, waste' or direct ,that <wastes beihandled :at
specified'.facilities:'Such 'staie,actionscould aoversely affect our landfills. These::'re~trictions could.also result in higher disposal costs
fOl:,:OUr :colle~ti6noperations. ,mwe. w:ere.-umible, to pass such ,higher 'costs through,to our customers, our business, fmancial conditio!:)
and~operating results could'be'adversely' affected:,') ': :", - :,' ;"', <, ,,!O~,,~
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certain cases, we may elect not to challenge such restrictions. These restrictions could reduce the volume of waste going to landfills in
certain areas, which may,preventus from ,operating our ,landfills at their full capacity,and/oueduce the prices that we can charge for
lanafill disposaL services. These restrictions may also result in higher disposal costs for our collection operations. Ifwe were unable to
pass:sucD'higher costs through1tofoUr,customers, 'ow-;business, fmancial;conditiorrand operating results could be adversely,affected.
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It'. ~~state in ';'~ch we now ~.;, or may oper~te in the ~~;"'i.ws ':'d rego1atio~s gov'-"';;'g~e g~e~tio~. stor~~.
"', treatment,haridling;'transportation':and disposal of solid waste, occupationat:safety:and health, water and air ,pollution and, in,most
_ cases\ ;the 'siting; design, "9peration;,maintenance,' closure and,post~dosure maintenance of landfills ,and transfer stations. State and
local,permits and ,approval foithese 'operations may be required and inay'be subject-to,periodicrenewal, modification or ,revocation by
the issuing'iigencie!LIn additi<m;'.many' states 'have adopted.statutes 'comparable ,to;, and in some cases, more 'stringent,than, CERGLA
These statutes'impose requirements'for investigation and'c1eanup ,of contaminated' sites, andiliability,for costs and dainages associated
with 'such': sites;. and some,:provide, fOfi'the,impQsition~'of liens on property owned,'by responsible parties."Fu,rthermore;Jniany
municipalities also have ordinances, local laws and regulations affectmg our ,-operations. These .inc1udezoning' and, health'measures
that limit solid waste management activities to specified sites or activities, flow control provisions that direct or restrict the delivery of
solid wastes'to specific facilities, laW's that-grant the right to',establish franchises for'collection,services and then put:such franchises
out'for bid"and bans, or otheNestrictions'on,the movement of solid wastes into a municipality. '~ " " ' 'J l' ,:>:l J,
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qmintity, of,waste that may be accepted:' at ,the landfill ,during a given time, period, and/or ,specify the types: of waste, that may...be
accepted at the landfill. Once an operating permit for a landfill'is obtained, ,it must ,generally 'be>renewedperiodical1~: ';c ''C', ~,<!,;~' ;::' v,
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There has been an increasing trend at the state and local level to mandate and encourage waste reduction at ,the source and,"wasie
recycling, and to prohibit or restrict the disposal in landfills of certain types of solid wastes, such as yard wastes, leaves and tires. The
enactment of regulatIOns reducmg the volume and types of wastes ,available for transport to and disposal in landfills could-prevent us
from operating our facilities at .their full capacity . ' ',': " ',~ ,
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Some state and local authorities enforce certain federal laws in addition to state and local laws and regulations. For example, ,in
some states, RCRA, the OSH Act, parts of the Clean Air Act and parts of the Clean Water Act are enforced by local or state
authonties instead of by the EP A, and in some states those laws are enforced jointly by state or local and federal authorities.
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In many states, public authorities regulate the rates that landfill operators may charge. The adoption of rate regulation or the
reductIOn of current rates in states in which we own or operate landfills could adversely affect our business, financial conditIOn and
operating results.
Solid waste collection servIces in all unincorporated areas of Washington and in electing municipalities In Washington are
provided under G certificates awarded- by the WUTC. The WUTC also sets rates for regulated sohd waste collection services in
Washington.
RISK MANAGEMENT, INSURANCE AND FINANCIAL SURETY BONDS
Risk Management
We maintain environmental and other risk management programs appropriate for our business. Our envIronmental risk
management program Includes evaluating existing facilities and potential acquisitions for environmental law comphance. We do not
presently expect environmental compliance costs to increase matenally above current levels, but we cannot predict whether future
acquisitions will cause such costs to increase. We also maintain a worker safety program that encourages safe practices in the
workp~ace. Operating practices at our operations emphaSIze minimizing the possibility of environmental contaminatIOn and htigation.
Our facilities comply in all material respects with applicable federal and state regulatIOns.
Insurance
Beginning August 1, 2002, we significantly changed our insurance programs for automobile habIlity, property, general liability,
workers' compensatIOn and employer's liability. Prior to this date, each of these areas was thrrd-party insured with a per incident
deductible of up to $5,000. Under our current insurance program, we carry per incident deductibles of $2 million for automobile
liability claims, $1.5 million for workers' compensation and employer's liability claims, and $1 million for general liability claims. '" I
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Dunng a 12 month period, our automobile liability policy will pay up to $3 million in the aggregate per Incident, after we pay the' II
$2 mIllion deductible. Additionally, we have an umbrella policy with a third party insurance company for automobile liability, I
general liability and employer's liability that will pay, during a 12 month period, up to an aggregate of $25 milhon of claIms in excess
of the $5 million limit for automobile claims and in excess of the $1 million limit for general liabtlity and $1.5 million limit for I
employer's liability claims. Since workers' compensation is a statutory coverage limited only by the various state jurisdictions, the I
umbrella coverage is not applicable. Also, our umbrella policy does not cover property claims, as the insurance limits for these claims I
are in accordance with the replacement values of the insured property. I
In November 2002, we purchased environmental protection insurance under a three-year policy with limits of $10 million per
occurrence, with a $20 million aggregate limit. This insurance covers all owned or operated landfills and transfer stations and all
owned materials recycling operations. Under our policy, insurance is guaranteed for acquired and newly constructed faCIlitIes, but
each addition to the policy is underwritten on a site-specific basis and the premium IS set according to the conditions found at the site.
Our policy provides insurance for new pollution conditions that originate after the commencement of our coverage. Pollution
conditions existing prior to the commencement of our coverage, if found, could be excluded from coverage.
Financial Surety Bonds
We use financial surety bonds for a variety of corporate guarantees. The two largest uses of finanCIal surety bonds are for
municipal contract performance guarantees and landfill closure and post-closure financial assurance required under certain
environmental regulations. Environmental regulations require demonstrated financial assurance to meet closure and post-closure
requirements for landfills. In addition to surety bonds, these requirements may also be met through alternative financial assurance
instruments, including insurance, letters of credit and restricted cash deposits.
In August 2003, we paid $5.3 million to acquire a 9.9% interest in a company that, among other activities, issues financial surety bOflds to secure landfill closure and post-closure obligations for companies operating in the solid waste sector.
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I'MPLOYEES
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2,6n: 'employees ,involVed' iD. 'collection, transfer, disposal and recycling operations;,and 46l .sales"clerical; data.processing, or::other .
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Approximately 308 of our drivers, mechanics, equipment operators and sorters in various locations ,art: employed,under~c'onective
bargaining agreements primarily with the Teamsters Union. These employees are subject to labor agreements that are subject to
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We do-not expect any significant disruption in our business in 2004 as a result oflabor negotiations or employee strikes. "We are
noF ~wai"e"of.' aI?-Y organizational' efforts"among 'OUr'employees and 'we "believe1'thaf"oUr4 relations nWith, ,ont{<employees . are:.gbod:
:Approximately 30, ,Wont gate 'derksand, 'Operators 'at one ,of oUr 'majority::oWned: subsidiaries. in Pierce GoUIity;, Was11ington' 'are
representea by the' Teamsters' lind'the Operating. Engineers Uniofts: ! Oft "AugUst' 31 ,2003; tlidabonigreeIi1ent,witln1iese~emptoyees
expired, and the"employees have continued to work.under the terinS,of,tlie'exprreo.'lah'Oi agreeineIlt~" We are,curreQtly,pegotiating:a
new labor agreement with these employees and have no reason to believe that we will not be successful in reaching a 'mutually
acceptable agreement.
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RISK FACTORS
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Outlined below are some of the risks that we face and that could affect our business and financial statements for 2004 and beyond.
However, they are not the only rIsks that we face. There may be additional risks that we do not presently know of or that we currently
believe are immaterial that could also impair our business.
RISKS RELATED TO OUR BUSINESS
Difficulties in making acquisitions. acauiring exclusive contracts and generating internal growth may cause our growth to be slower
than expected.
Our,-growth strategy includes expanding through acquisitions, acquiring additional exclusive arrangements and generating internal
growth. Most of our growth has been through acquisitions. From inception through December 31, 2003, we acquired 167 solid waste
services related businesses. Although we have identified numerous acquisition candidates that we believe are suitable, we may not be
able to acquire them at prices or on terms and conditions favorable to us. Our ability to grow also depends on several other factors,
including:
- the availability of capital to support our growth;
- our 'ability to compete with existing and emerging companies;
- our ability to maintain profit margins in the face of competitive pressures;
- our ability to continue to recruit, train and retain qualified employees; and
- continued strong demand for our services.
Difficulties in any of these areas could hinder our growth.
Our owth and future fmancial
and operations.
Part of our strategy is to achieve economies of scale and operating efficiencies by growing through acquisitions. We may not
achieve these goals unless we effectively combine the operations of acquired businesses with our existing operations. Our senior
management team may not be able to integrate our completed and future acquisitions. Any difficulties we encounter in the integration
process could interfere with our operations and reduce our operating margins.
Our acquisitions may not be successful. resulting in changes in strategy, operating losses or a loss on sale of the business acauired.
Even if we are able to make acqUIsitions on advantageous terms and are able to integrate them successfully into our operations and
organization, some may not fulfill our strategy. in a given market due to factors that we cannot control, such as market position or
customer base. As a result, operating margins could be less than we originally anticipated when we made those acquisitions. We then
may change our strategy with respect to that market or those businesses and decide to sell the operations at a loss, or keep those
operations and recognize an impairment of goodwill and/or intangible assets.
We compete for acquisition candidates with other purchasers, some of which have greater fmancial resources than we do. These
competitors mav be able to offer more favorable acquisition terms, thus limiting our ability to grOW through acquisition.
Other companies have adopted or will probably adopt our strategy of acquiring and consolidating regional and local businesses.
We expect that increased consolidation in the solid waste services mdustry will increase competitive pressures. Increased competition
for acquisition candidates may make fewer acquisition opportunities available to us, and may cause us to make acquisitions on less
attractive terms, such as higher purchase prices. Acquisition costs may increase to levels beyond our fmancial capability or to levels
that would adversely affect our operating results and fmancial condition.
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We are not always able to control the timing of our acquisitions. Obtaining third-party consents and regulatory approvals,
completing due diligence on the acquired businesses, and finalizing transaction terms and documents are not entirely within our
control and may take longer than we anticipate, causing certam transactions to be delayed. Our inability to complete acquisitions in the
time frames that we expect may cause our operating results to be less favorable than expected, which could cause our stock price to
decline.
Rapid growth may strain our management. operational. financial and other resources.
To maintain and manage our growth, we will need to expand our management information systems capabilities and our operational
and financial systems and controls. We will also need to attract, train, motivate, retain and manage additional senior managers,
technical professionals and other employees. Failure to do any of these things would restrict our ability to maintain and improve our
profitability while continuing to grow.
We may be unable to compete effectively with governmental service providers and larger and better capitalized companies. which
may result in reduced revenues and lower profits.
Our industry is highly competitive and requires substantial labor and capital resources. Some of the markets in whIch we compete
or will likely compete are served by one or more large, national solid waste companies, as well as by regional and local solid waste
companies of varying sizes and resources, some of which have accumulated substantial goodwill in their markets.
We also compete with counties, municipalities and solid waste distncts that maintain their own waste collection and disposal
operations. These operators may have fmancial advantages over us because of their access to user fees and similar charges, tax
revenues and tax-exempt fmancing. Some of our competItors may also be better capitalized than we are, have greater name
recognition than we do or be able to provide or be willing to bid their services at a lower price than we may be willing to offer.
earl termination or overnmental action which would cause our revenues to
We derive a substantial portion of our revenue from services provided under exclusive municipal-contracts, franchise agreements
and governmental certificates. Many of these will be subject to competitive bidding at some time in the future. For example, we have
approximately 47 municipal contracts, representing annual revenues of approximately $4.2 milhon, that could expire in the next 12
months and have no renewal provisions. We also intend to bid on addItional municipal contracts and franchise agreements. We may
not be the successful bidder. In addition, some of our customers may termmate their contracts with us before the end of the contract
term. Municipalities may annex unincorporated areas within countIes where we provide collection services; as a result, our customers
in annexed areas may be required to obtain services from competitors that have been franchised by the annexing municipalities to
provide those services. Municipalities in which services are currently provided on a competitive basis may elect to franchise collection
services. Unless we are awarded franchises by these municipalities, we will lose customers. Municipalities may decide to provide
servIces to their residents themselves on an optional or mandatory basis, causing us to lose customers. Municipalities m Washington
may by law annex unincorporated territory, which would likely remove such territory from the area covered by governmental
certificates issued to us by the Washington Utility and Transportation CommiSSIOn. Annexation would reduce the areas covered by our
governmental certificates and subject more of our Washington operations to competitive bidding in the future. Moreover, legislative
actIOn could amend or repeal the laws governing WUTC regulatIon, which could harm our competitive position by subjecting more
areas to competitive bidding. If we are not able to replace revenues from contracts lost through competitive bidding or early
terminatIOn or from the renegotiation of existing contracts WIth other revenues withm a reasonable time penod, our revenues will
decline.
We depend significantly on the services of the members of our senior management team. and the departure of any of those persons
could cause our operating results to suffer.
Our success depends significantly on the continued individual and collective contributions of our senior and district management
team. Key members of our management have entered into employment agreements, but we may not be able to enforce these
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agreements. The loss of the services of any member of our senior or district management or the mablhty to hire and retain experienceA'\
management personnel could harm our operating results. V I
Our decentralized decision-making structure could allow local managers to make decisions that adversely affect our operating results.
We manage our operations on a decentralized basis. Local managers have the authority to make many decisions concerning their
operations without obtaining prior approval from executive officers, subject to compliance with general company-wide policies. Poor
decisions by local managers could result in loss of customers or increases m costs, in either case adversely affecting operating results.
Efforts bv labor unions to organize our employees could divert management attention and increase our operating expenses.
From time to time, labor unions attempt to organize our employees, and these efforts will likely continue in the future. Some
groups of our employees are represented by unions, and we have negotiated collective bargaining agreements with some of these
groups. Additional groups of employees may seek union representation in the future, and negotiating collective bargaining agreements
with these groups could divert management attention and result m increased operating expenses and lower net income. If we are
unable to negotiate acceptable collective bargaining agreements, we might have to wait through "cooling off' periods, which are often
followed by union-initiated work stoppages, including strikes. Depending on the type and duration of any labor disruptions, our
operating expenses could increase significantly, which could adversely affect our [mancial condition, results of operations and cash
flows.,
The 2'.eogra"hic concentration of our business makes our results vulnerable to factors affecting the regions in which we operate. and
seasonal fluctuations may cause our business and financial results to vary among Quarters. which could create volatility in our stock
price.
Our business and [mancial results would be harmed by downturns in the general economy of the regions in which we operate and
other factors affecting the regions, such as state regulations affecting the solid waste services industry and severe weather conditions.
Based on historic trends experienced by the businesses we have acquired, we expect our operating results to vary seasonally, Wi~'"
revenues typically lowest in the first quarter, higher in the second and third quarters, and lower in the fourth quarter than in the secon ,
and third quarters. We expect the fluctuation in our revenues between our highest and lowest quarters to be in the range 0 -
approximately 10% to 12%. This seasonality reflects the lower volume of solid waste generated during the late fall, winter and early
spring months because of decreased construction and demolition activities during the winter months. In addition, some of our
operating costs may be higher in the winter months. Adverse winter weather conditions slow waste collection activities, resulting in
higher labor and operational costs. Greater precipitation in the winter increases the weight of collected waste, resultmg in higher
disposal costs, which are calculated on a per ton basis. Because of these factors, we expect operating income to be generally lower in
the winter months, and our stock price may be negatively affected by these variations.
Unusuallv adverse weather conditions may interfere wlth our operations. harming our operating results.
Our collection and landfill operations could be adversely affected, beyond the normal seasonal variations described above, by
unusually long periods of inclement weather, which could interfere with collection and landfill operations, reduce the volume of waste
generated by our customers and delay the development of landfill capacity. Periods of particularly harsh weather may force us to
temporarily suspend some of our operations.
Increases in the costs of labor. disposal. fuel or energy could reduce operating margins.
Our continued success will depend on our ability to attract and retain qualified personnel. We compete with other businesses in our
markets for qualified employees. From time to time, the labor supply is tight in some of our markets. A shortage of qualified
employees would require us to enhance our wage and benefits packages to compete more effechvely for employees or to hire more
expensive temporary employees. Labor is one of our largest costs, and even relatively small increases in labor costs per employee
could materially affect our cost structure. If we fail to attract and retain qualified employees, to control our labor costs, or to recover
any increased labor costs through increased prices we charge for our services or otherwise offset such increases with cost savings in
other areas, our operating margins could suffer. If we incur increased disposal costs in areas where we do not dispose of solid waste at
landfills that we own or operate or if we incur increased disposal costs at landfills that we do own or operate and if, in elther case, we
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Are unable to pass these costs on to our customers, our operating results would suffer. Although fuel and energy costs account for a
\Welatively small portion of our total operating expenses, the price of fuel and energy is volatile, and shortages sometimes occur.
Significant increases in the cost of fuel or energy, or shortages of fuel or energy, could interrupt or curtail our operations and lower.
our operating margins. I
Decreased availability of surety bonds could require us to obtain other means of financlal assurance. which could result in additional
capital outlays and increased expense and cause a reduction in our operating margins.
We use financial surety bonds for a variety of corporate guarantees. The two largest uses of fmancial surety bonds are for
municIpal contract performance guarantees and landfill closure and post-closure financial assurance required under certain
environmental regulations. Environmental regulations require demonstrated financial assurance to meet closure and post-closure
requirements for landfills. In addition to surety bonds, these requirements may also be met through alternative financial assurance
instruments, including msurance, letters of credit and restricted cash deposits.
If our current bond underwriters are unwilling to issue addItional bonds, renew existing bonds when such bonds expire, or increase
their total bond commitment, or if we are unable to obtain surety bonds through new underwriters as such needs arise, we would need
to arrange other means of financial assurance, such as a cash trust or a letter of credit, to secure contract performance or meet closure
and post-closure requirements. Such alternate financial assurance may not be readily available, and may result in additional expense
or capital outlays.
Increases in insurance costs and in the amount that we self-insure for various risks could reduce our operating margins and reported
earnings.
We mamtain insurance programs for employee group health, automobile liabIlity, property, general liabIlity, workers'
compensation, employer's liability, environmental protection and directors and officers' liability. To control rising insurance costs,
beginning August 2002, we became effectively self-insured by mcreasing our per inCIdent deductibles. We carry umbrella poliCIeS for
fl~rtain types of claims to provide excess coverage over the underlying polICIes and per inCIdent deductibles. The increased amounts
..~at we self-msure could cause significant volatility in our operatmg margms and reported earnings based on the occurrence and claIm
costs of incidents, accidents and injuries. Our insurance accruals are based on claims filed and estimates of claims incurred but not
reported and are developed by our management with assistance from our third-party actuary and our third-party claims administrator.
To the extent these estimates are inaccurate, we may recognIze substantial addItional expenses in future periods that would reduce
operating margins and reported earnings. Significant increases in premiums on insurance that we retain also could reduce our
margins.
Each business that we aCQuire or have aCQuired may have liabilities that we fail or are unable to discover. including liabilities that
arise from prior owners' failure to comply with environmental laws. which may harm our financial condition.
As a successor owner, we may be legally responsible for liabilities that arise from businesses that we acquire. Even if we obtain
legally enforceable representations, warranties and indemnities from the sellers of such businesses, they may not cover the liabilities
fully. Some envIronmental liabilities, even If we do not expressly assume them, may be imposed on us under vanous legal theories.
Our msurance program does not cover liabilities associated WIth some environmental issues that may eXIst prior to attachment of
coverage. A successful umnsured claim against us could harm our financial condition.
Our growth may be limIted by the inabIlity to obtam new landfills and expand existing ones.
We currently own and/or operate a number of landfills. Our ability to meet our growth objectives may depend in part on our ability
to acquire, lease and expand landfills and develop new landfill sites. We may not be able to obtain new landfill sites or expand the
permitted capacity of our landfills when necessary. Obtammg new landfill sites is Important to our expanSIOn into new non-exclusive
markets; if we do not believe that we can obtain a landfill site in a non-exclusive market, we may choose not to enter that market.
Expanding existing landfill sites is important In those markets where the remaining lives of our landfills are relatively short. We may
choose to forego acquisitions and internal growth in these markets because increased volumes would further shorten the lives of these
landfills. Either of these circumstances could result in slower growth.
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In some areas in which we operate, suitable land for new sites or expansIOn of existing landfill sites may be unavailable, which coul,"\\~l
increase our disposal costs and reduce our operating margins. "II:/J
Operating permits for landfills in states where we operate must generally be renewed every five to ten years. It has become
increasingly difficult and expensive to obtain required permits and approvals to build, operate and expand solid waste management
facilities, including landfills and transfer stations. The process often takes several years, requires numerous hearings and compliance
with zoning, environmental and other requirements, and is frequently resisted by citizen, public interest and other groups. We may not
be able to obtain or maintain the permits we require to expand, and such permits may contain burdensome terms and conditions. Even
when granted, final permits to expand are often not approved until the remaining permitted disposal capacity of a landfill is very low.
Local laws and ordinances also may affect our ability to obtain permits to expand landfills. If we were to exhaust our permitted
capacity at a landfill, our ability to expand internally would be limited, and we could be required to cap and close that landfill and be
forced to dispose of collected waste at more distant landfills or at landfills operated by our competitors. The resulting increased costs
would reduce our operating margins.
Our accruals for our landfill closure and post-closure costs may be inadequate, and our earnings would be lower if we are required to
pay additional amounts.
We will generally be required to pay closure and post-closure costs for landfills and disposal facilities that we own or operate
under \llife-of-site operating agreement. Closure and post-closure costs are generally paid for a term of 30 years after fmal closure of a
landfill, and accrued during the operating life of the landfill based on engineering estimates of future requirements associated with the
final landfill design, fmallandfill capping and closure and post-closure process. Our obligations to pay closure or post-closure costs
may exceed the amount we accrued and reserved and other amounts available from funds or reserves established to pay such costs.
Paying additional amounts would lower our earnings and could cause our stock price to decline.
We may incur additional charges related to capitalized expenditures, which would lower our earnings.
In accordance with accounting principles generally accepted in the United States, we capitalize some expenditures and advances I' ;S;
relating to acquisitions, pending acquisitions and landfill development projects. We expense indirect acquisition costs such a ~
executive salaries, general corporate overhead, public affairs and other corporate services as we incur those costs. We charge against ~"
earnings any unamortized capitalized expenditures and advances (net of any amount that we estimate we will recover, through sale or
otherwise) that relate to any operation that is permanently shut down or determined to be impaired, any pending acquisition that is not
consummated and any landfill development project that we do not expect to complete. Any such charges against earnings could lower
our stock price.
Recent accounting pronouncements may require a write-down of our goodwill, which could materially impair our net worth.
As a result of our acquisition strategy, we have a material amount of goodwill recorded on our fmancial statements. Under SF AS
No. 142, effective January 1, 2002, we no longer amortize our existing goodwill. We are required to test goodwill for impairment
using the two-step process prescribed in SFAS No. 142. The first step is a screen for potential impairment, while the second step
measures the amount of the impairment, if any. We perform the first of the required impairment tests of goodwill and indefinite-lived
intangible assets annually on October 1. To date, no events or changes in circumstances have occurred that indicated the potential
existence of goodwill or indefmite-lived intangible asset impairment and it has not been necessary to write down any of our goodwill
or indefinite-lived intangible assets. If, as a result of performing impairment tests, we are required to write down any of our goodwill
or indefmite-lived intangible assets, our operatmg results would be negatively impacted and our net worth would be reduced. Our
credit agreement contains a covenant requiring us to maintain a minimum net worth. A reduction in net worth, therefore, if substantial,
could limit the amount that we can borrow under our credit agreement and any failure to comply with the agreement could result in an
event of default under the credit agreement.
If we fail to comply with covenants and conditions in our credit facility, we mav be unable to make acquisitions and may be required
to repay our debt early, which could harm our financial results.
Our credit facility requires us to obtain the consent of the lending banks before acquiring any other business for more than $100
IJl\l1ion in cash and assumed debt. If we are not able to obtain our banks' consent to acquisitions of this size, we may not be able to
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~omplete them, which could inhibit our growth. Our credit facility also contains fmancial covenants based on our current and
'''projected financial condition after completing an acquisition. If we are not able to satisfy these fmancial covenants on a pro forma
basis upon completing an acquisition, we would not be able to complete the acquisition without a waiver from our lending banks.
Whether or not a waiver is needed, if the results of our future operations differ materially from what we expect, we may no longer be,
able to comply with the covenants in the credit facility. Our failure to comply with these covenants may result in a default under the
credit facility, which would allow our lending banks to accelerate the date for repayment of debt incurred under the credit facility and
could harm our business and financial results.
Provisions in our charter and bvlaws mav deter changes in control that could benefit our stockholders.
Provisions in our Certificate of Incorporation and By-Laws, and in the Delaware General Corporation Law, may deter tender offers
and hostile takeovers and delay or prevent changes in control or management of Waste Connections, including transactions in which
stockholders might be paid more than current market prices for their shares. These provisions may also limit our stockholders' ability
to approve transactions that they believe are in their best interests.
We face uncertainties relating to pending litigation.
We and some of our subsidiaries are currently involved in CIvil litigation relating to the conduct of our business. The timing and
final resolution of these matters are uncertain. Additionally, the possible outcomes or resolutions of these matters could include
judgments against us or settlements, either of which could require substantial payments by us, adversely affecting our operating
results.
RISKS RELATED TO OUR INDUSTRY
Extensive and evolving environmental laws and regulations may restrict our operations and ,growth and increase our costs.
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Environmental laws and regulations have been enforced more and more stringently in recent years because of greater public
tnterest in protecting the environment. These laws and regulations impose substantial costs on us and affect our business in many
ways, including as described below. In addition, federal, state and local governments may change the rights they grant to, and the
restrictions they impose on, solid waste services companies, and those changes could restrict our operations and growth.
We may be unable to obtain and maintain licenses or vermits and zoning. environmental and/or other land use approvals that we need
to own and overate our landfills.
These licenses or permits and approvals are difficult and time-consuming to obtain and renew, and elected officials and citizens'
groups frequently oppose them. Failure to obtain and maintain the permits and approvals we need to own or operate landfills
(including increasing their capacity) could force us to dispose of collected waste at more distant landfills or at landfills owned by our
competitors, thus increasing our disposal costs and reducing our operating margins. '
ExtenSIve regulations that govern the design. operation and closure of landfills may restrict our landfill operations or incr-ease our
costs of operating landfills.
Regulations that govern landfill operations include the regulations that establish minimum federal requirements adopted by the
EPA in October 1991 under Subtitle D of the RCRA. If we fail to comply with these regulations, we could be required to undertake
investigatory or remedial activities, curtail operations or close landfills temporarily or permanently. Future changes to these
regulations may require us to modify, supplement or replace equipment or facilities at substantial costs. If regulatory agencies fail to
enforce these regulations vigorously or consistently, our competitors whose facilities do not comply with the Subtitle D regulations or
their state counterparts may obtain an advantage over us. Our financial obligations arising from any failure to comply with these
regulations could harm our business and earnings.
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We ma be sub'ect in the normal course of business to 'udicial and admmistrative roceedin s involvin federal state or loca~~\:
agencies or citizens' grOUps. which could interrupt our operations. require expensive remediation and create negative publicity. ~)
Governmental agencies may impose fines or penalties on us. They may also attempt to revoke or deny renewal of our operating
permits, franchises or licenses for violations or alleged violations of environmental laws or regulations, or require us to remediate
potential environmental problems relating to waste that we or our predecessors collected, transported, disposed of or stored.
Individuals or community groups might also bring actions against us in connection with our operations. Any adverse outcome in these
proceedings could harm our operations and financial results and create adverse publicity, which could damage our competitive
position and stock price.
Liabilities for environmental damage may adversely affect our business and earnings.
We are liable for any enyironmental damage that our solid waste facilities cause, including damage to neighboring landowners or
residents, particularly as a result of the contamination of soil, groundwater or surface water, and especially drinking water. We may be
liable for damage resulting from conditions existing before we acquired these facilities. We may also be liable for anyon-site
environmental contamination caused by pollutants or hazardous substances whose transportation, treatment or disposal we or our
predecessors arranged. We have limited insurance coverage to compensate us for damages associated with environmental conditions.
If we were to incur liability for environmental damage, environmental cleanups, corrective action or damage not covered by insurance
or in excess of the amount of our coverage, our financial condition could be materially and adversely affected.
Fluctuations in prices. for recycled commodities that we sell may cause our revenues and operating results to decline.
We provide recycling services to some of our customers. The sale prices of and demand for recyclable materials, particularly paper
products, are frequently volatile and when they decline our revenues and operating results may decline.
Future changes in laws regulating the flow of solid waste in interstate commerce could adversely affect our ot>erating results.
-*'~
The U.S. Supreme Court has held that states may not regulate the flow of solid waste in interstate commerce if the effect would b~l)
to discriminate between interstate and intrastate commerce. If legislation is enacted that overturns or modifies this decision, and if one ~
or more of the states in which we dispose of interstate waste takes action that would prohibit or increase the costs of our continued
disposal of interstate waste, our operating results could be adversely affected.
ITEM 2. PROPERTIES
As of December 31, 2003, we owned 101 collection operations, 26 transfer stations, 20 municipal solid waste landfills, one
construction and demolition landfill and 26 recycling operations and operated, but did not own, an additional seven transfer stations
and 14 municipal solid waste landfills. We also own one municipal solid waste landfill site which was permitted for operation, but not
constructed as of December 31,2003. We lease various offices and facilities, including our corporate offices in Folsom, California.
We own various equipment, including waste collection and transportatiOn vehicles, related support vehicles, carts, containers, and
heavy equipment used in landfill operations. We believe that our existing facilities and equipment are generally adequate for our
current operations. However, we expect to make additional investments in property and equipment for expansion and replacement of
assets and in connection with future acquisitions.
Our corporate headquarters is located in Folsom, California, where we lease approximately 31,000 square feet of space.
ITEM 3. LEGAL PROCEEDINGS
We own undeveloped property in Harper County, Kansas, where we are seeking permits to construct and operate a municipal solid
waste landfill. In 2002, we received a special use permit from Harper County for zoning the landfill and in 2003 we received a draft
permit from the Kansas Department of Health and Environment to construct and operate the landfill. In July 2003, the District Court
of Harper County invalidated the previously issued zoning permit. We have appealed the District Court's decision to invalidate the
zoning permit. The Kansas Department of Health and Environment has notified us that it will not issue a final permit to construct and
operate the landfill until the zoning matter is resolved. At December 31, 2003, we had $3.9 million of capitalized expenditures related
..
20
I" this landfill development project. Based on the advice of counsel, we believe that we will prevail in this matter and do not believe
'at an impairment of the capitalized expenditures exists. If we do not prevail on appeal, however, we will be required to expense in a
future period the $3.9 million of capitalized expenditures, less the recoverable value of the undeveloped property and other amounts.
recovered, which would likely have a material adverse effect on our reported income for that period. I
We are primarily self-insured for automobile liability, general liability and workers' compensation claims. We are a party to
various claims and suits pending for alleged damages to persons and property and alleged liabilities occurring during the normal
operations of our solid waste management business. On October 31, 2003, our subsidiary, Waste Connections of Nebraska, Inc. was
named as a defendant in the case of Karen Colleran, Conservator of the Estate of Robert Rooney v. Waste Connections of Nebraska,
Inc. The plaintiff seeks recovery for damages allegedly suffered by Father Robert Rooney when the bicycle he was riding collided
with one of our garbage trucks. The complaint alleges that Father Rooney suffered serious bodily injury, including traumatic brain
injury. The plaintiff seeks recovery of past medical expenses of approximately $430,000 and an unspecified amount for future medical
expenses and home healthcare, past pain and suffering, future pain and suffering, lost income, loss of earning capacity, and permanent
injury and disability. Our primary defense is that the plaintiff is not entitled to any damages under Nebraska law, where the accident
occurred, because the negligence of Father Rooney was equal to or greater than any negligence on the part of our driver, and we
intend to defend this case vigorously on these and other grounds. This case is in the preliminary stages of discovery, and we have not
accrued any potential loss as of December 31, 2003; however, an adverse outcome in this case coupled with a significant award to the
plaintiff could have a material adverse effect on our reported income in the period incurred.
Additionally, we are a party to various legal proceedings resulting from the ordinary course of business and the extensive
governmental regulation of the solid waste industry. Our management does not believe that these proceedings, either individually or in
the aggregate, are likely to have a material adverse effect on our business, fmancial condition, operating results or cash flows.
ITEM 4. SUBMISSION OF MA TIERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the fourth quarter of 2003.
tXECUTIVE OFFICERS
The following table sets forth certain information concerning our executive officers as of March 1,2004:
NAME
Ronald J. Mittelstaedt (1)
Steven F. Bouck
Darrell W. Chambliss
Robert D. Evans
Kenneth O. Rose
David G. Eddie
Michael R. F oos
David M. Hall
Eric O. Hansen
Jerri L. Hunt
Worthing F. Jackman
James M. Little
AGE
40
47
39
57
55
34
38
46
39
52
39
42
POSITIONS
President, Chief Executive Officer and Chairman
Executive Vice President and Chief Financial Officer
Executive Vice President and Chief Operating Officer
Executive Vice President, General Counsel and Secretary
Senior Vice President - Administration
Vice President - Corporate Controller
Vice President - ChiefInformation Officer
Vice President - Business Development
Vice President - Information Technology
Vice President - Human Resources
Vice President - Finance and Investor Relations
Vice President - Engineering
(I) Member of the Executive Committee of the Board of Directors.
Ronald J. Mittelstaedt has been President, Chief Executive Officer and a director since Waste Connections was formed, and was
elected Chairman in January 1998. Mr. Mittelstaedt has more than 15 years of experience in the solid waste industry. He served as a
consultant to United Waste Systems, Inc., with the title of Executive Vice President, from January 1997 to August 1997, where he was
responsIble for corporate development for all states west of Colorado. As Regional Vice President of USA Waste Services, Inc.
(including Sanifill, Inc., which was acquired by USA Waste Services, Inc.) from November 1993 to January 1997, he was responsible
for all operations in 16 states and Canada. Mr. MIttelstaedt held various positions at Browning-Ferris Industries, Inc. ("BFI") from
August 1988 to November 1993, most recently as Division Vice President in northern California, overseeing the San Jose market.
~ I t
21
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Previously he was the District Manager responsible for BFI's operations in Sacramento and the surrounding areas. He holds a B.~
degree in Finance from the University of California at Santa Barbara. .
Steven F. Bouck has been Executive Vice President and Chief Financial Officer since February 1998. Mr. Bouck held various
positions with First Analysis Corporation from 1986 to 1998, including most recently as Managing Director coordinating corporate
finance. In that capacity, he provided merger and acquisition advisory services to companies in the environmental industry. Mr. Bouck
was also responsible for investing venture capital funds focused on the environmental industry that were managed by First Analysis.
In connection with those investments, he served on the boards of directors of several companies. Mr. Bouck holds B.S. and M.S.
degrees in mechanical engineering from Rensselaer Polytechnic Institute and an M.B.A. in Finance from the Wharton School. He has
been a Chartered Financial Analyst since 1990.
Darrell W. Chambliss has been Executive Vice President and Chief Operating Officer since October 2003. From October 1, 1997
to that date, he served as Executive Vice President - Operations. Mr. Chambliss held various management positions at USA Waste
Services, Inc. (including Sanifill, Inc. and United Waste, Inc., both of which were acquired by USA Waste Services, Inc.) from April
1995 to September 1997, including most recently Division Manager in Coming, California, where he was responsible for the
operations of 19 operating companies as well as supervising and integrating acquisitions. From July 1989 to April 1995, he held
various management positions with BFI, including serving as Assistant District Manager in San Jose, California, where he was
responsible for a significant hauling operation, and serving as District Manager in Tucson, Arizona for more than three years. Mr.
Chambliss holds a B.S. degree in Business Administration from the University of Arkansas.
Robert D. Evans has been Executive Vice President, General Counsel and Secretary of Waste Connections since June 2002. From
1978 until he joined the company, Mr. Evans was a partner in the San Francisco law firm of Shartsis, Friese & Ginsburg LLP, where
he was also a member of the Management Committee. Mr. Evans' practice included representing companies in mergers and
acquisitions and corporate fmance transactions. Prior to joining Waste Connections, Mr. Evans had been the Company's primary
outside counsel since its formation. Mr. Evans holds a B.A. degree in Economics and a J.D. degree from the University of California
at Berkeley.
Kenneth O. Rose has been Senior Vice President - Administration since May 2002. He also served as a consultant to Wast~
Connections m March and April 2002. From May 2000 to March 2002, he provided consulting services to WorldOil.Com, Inc. and
Gulf Publishing Company. As Vice President - Administration for Coach USA, Inc., from October 1996 to April 2000, Mr. Rose was
responsible for all corporate administrative activities in the United States, Canada and Mexico. Mr. Rose has over seven years
experience in the solid waste industry obtained primarily with USA Waste Services, Inc. (including Sanifill, Inc., which was acquired
by USA Waste Services, Inc.) where he held the position of Corporate Director - Administration from December 1990 to September
1996. From August 1989 to November 1990, Mr. Rose provided consulting and personnel services to BSI, Inc., a solid waste services
company in Houston, Texas acquired by Sanifill, Inc. Prior to joining the waste industry, Mr. Rose held various administrative
positions in the oil and offshore drilling industries from 1971 to 1989 with Standard Oil Company-Indiana, Gulf Oil Corporation and
Chevron Corporation. Mr. Rose holds a B.S. degree in Accounting from the University of Wyoming.
David G. Eddie has been Vice President -Corporate Controller since March 2004. From April 2003 to February 2004, Mr. Eddie
served as Waste .Connections' Vice President - Public Reporting and Compliance. From May 2001 to March 2003, Mr. Eddie served
as Waste Connections' Director of Finance. Mr. Eddie served as Corporate Controller for International Fibercom, Inc. from April
2000 to May 2001. From September 1999 to April 2000, Mr. Eddie served as Waste Connections' Manager of Financial Reporting.
From September 1994 to September 1999, Mr. Eddie held various positions, including Audit Manager, for PricewaterhouseCoopers
LLP. Mr. Eddie is a Certified Public Accountant and holds a B.S. degree in Accounting from California State University, Sacramento.
Michael R. Foos has been Vice President - Chief Information Officer since April 2003. From October 1999 to March 2003, Mr.
Foos served as Vice President - Finance and Chief Accounting Officer of Waste Connections. From October 1997 to September
1999, Mr. Foos served as Vice President and Corporate Controller of Waste Connections. Mr. Foos served as Division Controller of
USA Waste Services, Inc. (including Sanifill, Inc., which was acquired by USA Waste Services, Inc.) from October 1996 to
September 1997, where he was responsible for fmancial compilation and reporting and acquisition due diligence for a seven-state
region. Mr. Foos served as Assistant Regional Controller at USA Waste Services, Inc. from August 1995 to September 1996, where he
was responsible for internal financial reporting for operations in six states and Canada. Mr. Foos also served as District Controller for
G
22
f.aste Management, Inc. from February 1990 to July 1995, and was a member of the audit staff of Deloitte & Touche from 1987 to
\11990. Mr. Foos holds a B.S. degree in Accounting from Ferris State University.
David M. Hall has been Vice President - Business Development since August I, 1998. Mr. Hall has more than 17 years Of
experience in the solid waste industry with extensive operating and marketing experience in the Western U.S. From October, 1995 to
July 1998, Mr. Hall was the Divisional Vice President of USA Waste Services, Inc., Rocky Mountain Division (including Sanifill, Inc.
which was acquired by USA Waste Services, Inc.). In that position, he oversaw all operations and business development in six Rocky
Mountain states. Prior to his employment with Sanifill, Mr. Hall held various management positions with BFI from October 1986 to
October 1995, including Vice President of Sales for the Western United States. Mr. Hall was employed from 1979 to 1986 in a variety
of sales and marketing management positions in the high technology sector. Mr. Hall received a B.S. degree in Management and
Marketing from Southwest Missouri State University.
Eric O. Hansen has been Vice President - Information Technology since January 2001. From April 1998 to December 2000, Mr.
Hansen served as Waste Connections' Director of Management Information Systems. Mr. Hansen served as Information 'Systems
Manager with Fibres International from October 1997 to April 1998. Mr. Hansen held various positions including NT Administrator
for the Multnomah Athletic Club in Portland, Oregon from August 1989 to October 1997. Mr. Hansen holds a B.S degree from
Portland State University.
Jerri L. Hunt has been Vice President - Human Resources since December 1999. Ms. Hunt also served as Vice President -
Human Resources and Risk Management from December 1999 to May 2002. From 1994 to 1999, Ms. Hunt held various positions
with First Union National Bank (including the Money Store, which was acquired by First Union National Bank), most recently Vice
President of Human Resources in which she managed all aspects of human resources for over 5,000 employees located throughout the
United States. From 1989 to 1994, Ms. Hunt served as Manager of Human Resources and Risk Management for BFI, where she was
responsible for all aspects of human resources and safety and environmental compliance matters. Ms. Hunt also served as a Human
Resources Supervisor for United Parcel Service from 1976 to 1989. She holds a B.S. degree from California State University,
Sacramento and a master's degree in Human Resources from Golden Gate University.
,. Worthing F. Jackman has been Vice President - Finance and Investor Relations since April 2003. Mr. Jackman held various
'fnvestment banking positions with Alex. Brown & Sons, now Deutsche Bank Securities, Inc., from 1991 through 2003, including most
recently as a Managing Director within the Global Industrial & Environmental Services Group. In that capacity, he provided capital
markets and strategic advisory services to companies in a variety of sectors, including solid waste services. Mr. Jackman holds a B.S.
in Finance from Syracuse University and an M.B.A. from the Harvard Business School.
James M. Little has been Vice President - Engineering since September 1999. Mr. Little held various management positions with
Waste Management, Inc. (formerly USA Waste Services, Inc., which was acquired by Waste Management, Inc. and Chambers
Development Co. Inc., which was acquired by USA Waste Services, Inc.) from April 1990 to September 1999, including Regional
Environmental Manager and Regional Landfill Manager, and most recently Division Manager in Ohio, where he was responsible for
the operations of ten operating companies in the Northern Ohio area. Mr. Little is a certified professional geologist and holds 'a B.S.
degree in Geology from Slippery Rock University.
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PART II
~
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock trades on the New York Stock Exchange under the symbol "WCN". The following table sets forth, for the
periods indicated, the high and low prices per share of our common stock, as reported on The Nasdaq Stock Market@ - National
Market for the periods indicated through October 23,2002, and as reported on the New York Stock Exchange beginning October 24,
2002.
HIGH LOW
2002
First Quarter $ 34.26 $ 23.49
Second Quarter 37.68 30.60
Third Quarter 36.24 25.60
Fourth Quarter 39.56 29.73
2003
First Quarter $ 39.98 $ 30.75
Second Quarter 37.20 31. 78
Third Quarter 36.90 31.57
Fourth Quarter 38.08 31.90
2004
First Quarter (through March 1, 2004) $ 40.75 $ 36.41
On March 1,2004, there were 79 record holders of Waste Connections' common stock.
f
We have never paid cash dividends on our common stock and do not currently anticipate paying any cash dividends on ow
common stock. We intend to retain all earnings to fund the operation and expansion of our business. In addition, our existing credit
facility limits the amount of cash dividends we can pay.
The following is a summary of all of our equity compensation plans, including plans that were assumed through acquisitions and
individual arrangements that provide for the issuance of equity securities as compensation, as of December 31, 2003. See Note 10 to
the consolidated financial statements for additional discussion.
Plan Category
(a)
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(b)
Weighted-average
exercise price of
outstanding options,
warrants and rights
(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
Equity compensation plans approved by
security holders
Equity compensation plans not approved
by security holders
2,222,089
$27.20
1,949,006
1.492.256
3.441.262
1.568.972
$28.95
$27.92
Total
3.791.061
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24
I fTEM 6. SELECTED FINANCIAL DATA
!
This table sets forth selected financial data of Waste Connections, in thousands, except share and per share amounts, for the ,
periods indicated. This data should be read in conjunction with and is qualified by reference to "Management's Discussion 'and,
Analysis of Financial Condition and Results of Operations" included in Item 7 in this Annual Report on Form IO-K and our audited
consolidated financial statements, including the notes thereto and the independent auditors' report thereon and the other financial
information included in Item 8 in this Form 1O-K. The selected data in this section are not intended to replace the consolidated
financial statements included in this Report.
YEARS ENDED DECEMBER 31,
1999 (a) 2000 (b) 2001 (c) 2002 (c) 2003 {c)
STATEMENT OF OPERA nONS DATA:
Revenues $ 184,225 $ 304,355 $ 377,533 $ 498,661 $ 563,509
Operating expenses:
Cost of operations 112,838 174,724 211,064 282,187 316,841
Selling, general and administrative 16,019 25,579 32,007 47,366 54,367
Depreciation and amortization 14,769 27,195 36,138 38,977 47,347
Loss on disposal of operations 833 4,879
Acquisition-related expenses 9,003 1'50
Income from operations 31,596 75,874 93,445 130,131 144,954
Interest expense (11 ,379) (28,491 ) (29,571) (31,372) (31,666)
Other income (expense), net (66) 116 (6,196) (813) (192)
Income before income tax provision
and minonty interests 20,151 47,499 57,678 97,946 113,096
Minority interests (7,338) (9,367) (10,549)
Income before Income tax prOVIsion 20,151 47,499 50,340 88,579 102,547
:, Income tax provision (10,924) (19,310) (19,812) (33,113) (37,233)
Income before effect of accounting change 9,227 28,189 30,528 55,466 65,314
Cumulative effect of change in accounting
principle, net of tax expense of$166 282
Net income $ 9,227 $ 28,189 $ 30,528 $ 55,466 $ 65,596
Basic earnings per common share:
Income before cumulative effect of change in
accounting principle $ 0.49 $ 1.21 $ 1.13 $ 2.00 $ 2.31
Cumulative effect of change in accounting principle .01
Net income per common share $ 0.49 $ 1.21 $ 1.13 $ 2.00 $ 2.32
Diluted earnings per common share:
Income before cumulative effect of change in
accounting pnnciple $ 0.46 $ 1.17 $ 1.10 $ 1.90 $ 2.17
Cumulative effect of change in accounting principle .01
Net income per common share $ 0.46 $ 1.17 $ 1.10 $ 1.90 $ 2.18
Shares used in calculating basic income per share 18,655,801 23,301,358 27,069,685 27,750,642 28,327,296
Shares used in calculating diluted income per share 19,929,539 23,994,994 27,675,639 32,325,624 32,871,652
It
25
h_ --.J
DECEMBER 31, ~
1999 (a) 2000 (b) 2001 (c) 2002 (c) 2003 (c)
BALANCE SHEET DATA:
Cash and equivalents $ 2,393 $ 2,461 $ 7,279 $ 4,067 $ 5,276
Working capital (deficit) (10,149) (10,398) (4,825) (23,048) (15,060)
Property and equipment, net 335,260 384,237 465,806 578,040 613,225
Total assets 617,958 810,104 979,353 1,261,882 1,395,952
Long-term debt 275,145 334,194 416,171 578,481 601,891
Total stockholders' equity 218,521 334,208 379,805 451,712 537,494
(a) Acquisition-related expenses in 1999 related to the expenses resulting from 13 acquisitions that were accounted for using the
pooling-of-interests method.
(b) Loss on disposal of operations in 2000 related to a pre-tax loss recognized on the sale of our Idaho operations. Acquisition-
related expenses in 2000 related to expenses, for commissions, professional fees, and other direct costs resulting from the one
acquisition that was accounted for using the pooling-of-interests method.
(c) For more information regarding this fmancial data, see the Management's Discussion and Analysis of Financial Condition
and Results of Operations section included in this report. For disclosures associated with the impact of the adoption of new
accounting pronouncements and the comparability of this information, see Note 1 of the consolidated financial statements.
4
4
26
'TEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the "Selected Financial and Operating Data," our Consolidated
Financial Statements and the notes thereto included elsewhere herein.
Industry Overview
The solid waste industry is a very local and competitive business, requmng substantial labor and capital resources. The
participants compete for collection accounts primarily on the basis of price and the quality of service and compete for landfill business
on the basis of tipping fees, geographic location and quality of operations. The solid waste industry has been consolidating and
continues to consolidate as a result of a number of factors, including the increasing costs and complexity associated with waste
management operations and regulatory compliance. Many small independent operators and municipalities lack the capital resources,
management, operating skills and technical expertise necessary to operate effectively in such an environment. The consolidation trend
has caused solid waste companies to operate larger landfills that have complementary collection routes that can use company-owned
disposal capacity. Controlling the point of transfer from haulers to landfills has become increasingly important as landfills continue to
close and disposal capacity moves further from collection markets.
Generally, the most profitable industry operators are those companies that are vertically integrated or enter into long-term
collection contracts. A vertically integrated operator will benefit from (1) the internalization of waste (bringing waste to a company-
owned landfill); (2) the ability to charge third-party haulers tipping fees either at landfills or at transfer statIOns; and (3) the
efficiencies gained by being able to aggregate and process waste at a transfer station prior to landfilling.
The solid waste industry is experiencing continuing consolidation as companies seek to take advantage of economies of scale by
increasing route densities and market share in hauling operations, and by reducing disposal expenses by owning landfill operations.
Waste Connections, Inc. is an integrated solid waste services company that provides solid waste collection, transfer, disposal and
recycling services in mostly secondary markets in the Western and Southern U.S. To meet the competitive and regulatory pressures
tithin the solid waste services industry, we have developed a two-pronged strategy. In markets where we beheve that owning
andfills is a strategic element to a collection operation because of competitive and regulatory factors, we generally focus on providing
integrated services, from collection through disposal of solid waste in landfills that we own or operate. In markets where waste
collection services are provided under exclusive arrangements, or where waste disposal is municipally funded or available at multiple
municipal sources, we believe that controlling the waste stream by providing collection services under exclusive arrangements is often
more important to our growth and profitability than owning or operating landfills.
Executive Overview
In 2003, we continued to execute our strategy of growth through acquisitions with tightly defined parameters for acquisition
candidates. Despite a number of challenges, including a poor economy, negative internal volume growth in the first three quarters,
and weather in certain markets that impacted operations, we maintained relatively consistent operating margins for the full year. Our
13.0% revenue growth year-over-year was the result of acquisitions completed during 2003, as well as the rollover effect from
acquiSItions closed in 2002 and pnce increases implemented in our base business. The majority of acquisitions in 2003 occurred in
the second half of the year, which resulted in approximately $20 million of revenue growth in 2003 from acquisitions closed in 2003.
We estImate that these acquisitions should contribute approximately $45 million of rollover revenue growth in 2004. In general,
acquired companies initially have lower operating margins than our consolidated average. As such they tend to increase net income
and earnings per share but initially reduce operating margins.
Internal volume growth was negative in the first three quarters of 2003 primarily as a result of lower revenues from one-time,
event-based projects relative to 2002. Volume growth turned positive in the fourth quarter and is expected to be positive for full year
2004. In addition to the negative internal volume growth, some of our operations were adversely affected by weather in 2003, which
affected our ability to bring certain projects on-line, further impacting volume growth and internalIzation efforts. Pricing is budgeted
to be marginally stronger for the full year 2004 than experienced in 2003.
t
27
~
Throughout 2003, we contmued to increase internahzation of waste we collected by disposing it at landfills we owned or operated6
We increased our internalization rate from 63% in the first quarter to over 69% in the fourth quarter. Higher levels of internalizatiorfll~
tend to drive higher gross margins, higher levels of depletion expense and higher capital expenditures. We expect our internalization
rate to remain fairly constant at 70% in 2004, absent the influence of additional acquisitions completed in 2004. We invested $70
million in capital expenditures in 2003 to upgrade and expand facilities, build more landfill capacity, automate routes in certain
markets, and reduce the overall average life of our fleet. Despite the increased levels of capital expenditures, cash flow from
operations exceeded capital expenditures and represented an increased portion of the consideration we paid for acquisitions. We
expect this trend to continue in 2004.
We also expanded management infrastructure to help ensure commitments made by employees in 2004 budgets are implemented
and to help improve under-performing locations. Management infrastructure was also expanded in support of various regulatory and
accounting oversight measures, in particular, the implementation of requirements under the Sarbanes-Oxley Act. Some of these
additions occurred late in 2003, which, combined with higher expected incentive compensation in 2004, will result in higher overall
SG&A expenses in 2004, though SG&A as a percentage of revenue should remain about the same as in 2003. In addition, with safety
incentives and management infrastructure put in place in 2002 and at the beginning of 2003, we increased our focus on employee
health and safety programs to reduce the frequency of incidents and contain risk management costs, which we effectively self-insure.
Two high-rate interest rate swaps expired in early December 2003, and we executed two lower-rate interest rate swaps that began
February 2004. The expiration of our high-rate interest rate swaps should result in reduced interest expense in 2004, absent a
significant increase in overall interest rates this year or an acceleration of our acquisition program. In addition, we refinanced our
senior credit facility that was due in May 2005 and was scheduled to become current debt in May 2004. This refmancing also
provided us with additional capacity to fund our growth strategy and the flexibility to call our $150 million of 5.5% Convertible
Subordinated Notes due April 2006, which are first callable beginning April 2004. These notes are convertible into approximately
3.944 million shares of common stock at a conversion price of $38.03 and have an initial early call premium of 102.2%. These shares
are included in our fully diluted share count used to calculate reported diluted earnings per share numbers. Our lenders have pre-
approved our ability to call the notes early. On March 3, 2004, we announced that on April 15, 2004, we intend to redeem the notes in
full. If the holders elect to redeem their notes for cash, our diluted share count would decrease, which would increase our diluted ~',
earnmgs per share. If the holders elect to convert the notes into common stock, our cash interest expense will decline bA
approximately $8.3 million. Conversion would further strengthen our balance sheet and have no significant earnings impact as th~
conversion shares are already included m our diluted earnings per share calculation.
Critical Accounting Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and
assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent
assets and liabilities in the consolidated financial statements. As described by the Securities and Exchange Commission, critical
accounting estimates and assumptions are those that may be material due to the levels of subjectivity and judgment necessary to
account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on the fmancial
condition or operating performance of the company. Based on this definition, we believe the following are our critical accounting
estimates.
Self-insurance liabilities. During 2002, we increased our scope of high-deductible insurance, adding automobile liability, general
liability and workers' compensation claims. Previously, our high-deductible insurance program covered only automobile collision and
employ.ee group health claims. Our insurance accruals are based on claims filed and estimates of claims incurred but not reported and
are developed by our management with assistance from our third-party actuary and our third-party claims administrator. The
insurance accruals are influenced by our past claims experience factors, which have a limited history, and by published industry
development factors. If we experience insurance claims or costs above or below our historically evaluated levels, our estimates could
be materially affected. The frequency.: and amount of claims or incidents could vary significantly over time, which could materially
affect our self-insurance liabilities. Additionally, the actual costs to settle the self-insurance liabilities could materially differ from the
original estimates and cause us to revise our estimates of future costs.
Accounting for landfills. Our adoption of SF AS No. 143 on January 1,2003 resulted in a significant change to our accounting policies
fpr landfill closure and post-closure obligations. For additional information and analyses of the impact that adopting SFAS No. 143
t:
28
i.ad on our balance sheet and our results of operations for the year ended December 31, 2003, see Note 1 to our Consolidated Financial
'tatements included in this Form lO-K.
We recognize landfill depletion expense as airspace of the landfill is consumed. Our landfill depletion rates are based on the
remaining disposal capacity at our landfills, considering both permitted and deemed permitted airspace. Landfill closure and post- '
closure liabilities are calculated by estimating the total obligation in current dollars, inflating the obligation based upon the
expected date of the expenditure and discounting the inflated total to its present value using a credit-adjusted risk-free rate. The
resulting closure and post-closure obligation is recorded on the balance sheet as the landfill's total airspace is consumed. The
accounting methods discussed below require us to make certain estimates and assumptions. Changes to these estimates and
assumptions could have a material effect on our financial position and results of operations. Any changes to our estimates are
applied prospectively.
Landfill development costs. Landfill development costs mclude the costs of acquisitIOn, construction associated with excavation,
liners, site berms, groundwater monitoring wells and leachate collection systems. We estimate the total costs associated with,
developing each landfill site to its final capacity. Total landfill costs include the development costs associated with "deemed"
permitted airspace. Deemed permItted airspace is descnbed below. Landfill development costs depend on future events and thus
actual costs could vary significantly from our estimates. Material differences between estimated and actual development costs may
affect our cash flows by increasing our capital expenditures and thus affect our results of operations by increasmg our landfill
depletion expense.
t
Closure and post-closure obligations. We reserve for estimated closure and post-closure maintenance obligations at the landfills we
own and certain landfills that we operate, but do not own, under life-of-site operating contracts. Final capping costs are included in
the calculation of closure and post-closure liabilities. We could have additional material financial obligations relating to closure
and post-closure costs at other disposal facilities that we currently own or operate or that we may own or operate in the future. In
2003, we calculated the net present value of our closure and post closure commitments assuming a 3.0% mflation rate and an 8.5%
discount rate. Effective January 1,2004, the inflation rate and discount rate that we will apply to changes in our estimated closure
and post-closure commitments are 2.5% and 7.5%, respectively. The resulting closure and post-closure obligation is recorded on
the balance sheet as an addition to site costs and amortized as depletIon expense as the landfill's total airspace IS consumed.
Significant reductions in our estimates of the remaining lives of our landfills, or significant mcreases in our estimates of the landfill
closure and post-closure maintenance costs could have a material adverse effect on our financial condition and results of
operations. Additionally, changes in regulatory or legislatIve requirements could increase our costs related to our landfills and
result in a material adverse effect on our financial condition and results of operations.
Disposal capacity. Our internal and third-party engineers perform surveys at least annually to estimate the remaining disposal
capacity at our landfills. Our landfill depletion rates are based on the remaining disposal capacity, considering both permitted and
deemed permitted airspace, at the landfills that we own and at the landfills that we operate, but do not own, under life-of-site
operating contracts. Deemed permitted airspace consists of additional disposal capacity being pursued through mellns of an
expansion. Deemed permitted airspace that meets certain internal cnteria is included in our estimate of total landfill airspace. The
internal critena we use to determine when deemed permitted airspace may be included as disposal capacIty are as follows:
(1) The land where the expansion is being sought is contIguous to the current disposal site, and we either own it or the property is
under option, purchase, operating or other agreement;
(2) Total development costs, final capping costs, and closure/post-closure costs have been determined;
(3) Internal personnel have performed a financial analysis of the proposed expansion site and have determined that it has a
positive financial and operational Impact;
(4) Internal or external personnel are actively working to obtain the necessary approvals to obtain the landfill expansion permit;
(5) We consider it probable that we will achieve the expansion. For a pursued expansion to be considered probable, there must
be no significant known technical, legal, community, business, or political restnctions or similar issues existing that -could
impair the success of the expansion; and
(6) The land where the expansion is bemg sought has the proper zoning or proper zoning can readily be obtained.
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We may be unsuccessful in obtaining permits for deemed permitted disposal capacity at our landfills. In such case, we will chargd
the previously capitahzed development costs to expense. This will adversely affect our operating results and cash flows and coul~
result in greater landfill depletion expense being recognized on a prospective basis.
We periodically evaluate our landfill sites for potential impairment indicators. Our judgments regarding the existence of
impairment indicators are based on regulatory factors, market conditions and operational performance of our landfills. Future
events could cause us to conclude that impairment indicators exist and that our landfill carrying costs are impaired. Any resulting
impairment loss could have a material adverse effect on our financial condition and results of operations.
Impairment of intane:ible assets. We periodically evaluate acquired assets for potential impairment indicators. Our judgments
regarding the existence of impairment indicators are based on regulatory factors, market conditions, anticipated cash flows and
operational performance of our acquired assets. Future events could cause us to conclude that impairment indicators exist and that
goodwill or other intangibles associated with our acquired businesses are impaired. Any resulting impairment loss could reduce our
net worth and have a material adverse effect on our fmancial condition and results of operations. Additionally, our credit agreement
contains a covenant requiring us to maintain a minimum net worth. A reduction in net worth, if substantial, could limit the amount that
we can borrow under our credit agreement and any failure to comply with the agreement could result in an event of default under the
credit agreement. As of December 31, 2003, goodwill and intangible assets represented 46.9% of our total assets.
Allocation of acquisition ourchase orice. We allocate acquisition purchase prices to identified intangible assets and tangible assets
acquired and liabilities assumed based on their estimated fair values at the dates of acquisition, with any residual amounts allocated to
goodwill.
We deem the total remaining permitted and deemed permitted airspace of an acquired landfill to be a tangible asset. Therefore, for
acquired landfills, we initially allocate the purchase price to identified intangible and tangible assets acquired, excluding landfill
airspace, and liabilities assumed based on their estimated fair values at the date of acquisition. Any residual amount is allocated to
landfill airspace.
We often consummate single acquisitions that include a combination of collection operations and landfills. For each separate14
identified collection operation and landfill acquired in a single acquisition, we perform an initial allocation of total purchase price t~
the identified collection operations and landfills based on their relative fair values. Following this initial allocation of total purchase
price to the identified collection operations and landfills, we further allocate the identified intangible assets and tangible assets
acquired and liabilities assumed for each collection operation and landfill based on their estimated fair values at the dates of
acquisition, with any residual amounts allocated to either goodwill or landfill site costs, as discussed above.
General
Our revenues consist mainly of fees we charge customers for solid waste collection, transfer, disposal and recycling services. Our
collection business also generates revenues from the sale of recyclable commodities, which have significant variability. A large part of
our collection revenues comes from providing commercial, industrial and residential services. We frequently perform these services
under service agreements, municipal contracts or franchise agreements with governmental entities. Our existing franchise agreements
and all of our existing municipal contracts give us the exclusive right to provide specified waste services in the specified territory
during the contract term. These exclusive arrangements are awarded, at least initially, on a competitive bid basis and subsequently on
a bid or negotiated basis. We also provide residential collection services on a subscription basis with individual households. More
than 50% of our revenues for the year ended December 31, 2003 were derived from market areas where services are provided
predominantly under exclusive franchise agreements, long-term municipal contracts and governmental certificates. Governmenta
certificates grant us perpetual and exclUSiVe collection rights in the covered areas. Contracts with counties and municipalities anc
governmental certificates provide relatively consistent cash flow during the terms of the contracts. Because we bill most residentia
customers quarterly, subscription agreements also provide a stable source of revenues for us.
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~ _ The table below shows for the periods indicated the percentage of our total reported revenues attributable to services provided,
\Plor to intercompany eliminations.
Collection
Disposal and transfer
Recycling
Other
2001
67.9 %
28.3
3.4
0.4
100.0 %
Year Ended December 31,
2002 2003
65.9 % 65.6 %
30.6 30.7
3.3 3.4
0.2 0.3
100.0 % 100.0 %
We charge transfer station and landfill customers a tipping fee on a per ton and/or per yard basis for disposing of their solid waste
at the transfer stations and landfill facilities. Many of our transfer and landfill customers have entered into one to ten year disposal
contracts with us, most of which provide for annual indexed price increases.
We derive a substantial portion of our revenues from services provided under exclusive municipal contracts and franchise
agreements. No single contract or customer accounted for more than 5% of our revenues for the years ended December 31, 2001, 2002
and 2003.
We typically determine the prices of our solid waste services by the collection frequency and level of service, route density,
volume, weight and type of waste collected, type of equipment and containers furnished, the distance to the disposal or processing
facility, the cost of disposal or processing, and prices charged by competitors for similar services. The terms of our contracts
sometimes limit our ability to pass on price increases. Long-term solid waste collection contracts often contain a formula, generally
based on a published price index, that automatically adjusts fees to cover increases in some, but not all, operating costs, or that limit
increases to less than 100% of the increase in the applicable price index.
~ Cost of operations include labor and benefits, tipping fees paid to third-party disposal facilities, equipment maintenance, workers'
.ompensation, vehicle insurance, claims expense, third-party transportation expense, fuel, the cost of materials we purchase for
recycling, district and state taxes and host community fees and royalties. Our single largest cost is labor, followed by third-party
disposal, cost of vehicle maintenance, taxes and fees and fuel. We use a number of programs to reduce overall cost of operations,
including increasing the use of automated routes to reduce labor and workman's compensation exposure, comprehensive maintenance
and health and safety programs, and increasing the use of transfer stations to further enhance internalization rates. During 2002, we
increased our scope of high-deductible insurance, adding automobile liability, general liability and workers' compensation claims.
Previously, our high-deductible insurance program covered only automobile collision and employee group health claims. If we
experience insurance claims or costs above or below our historically evaluated levels, our estimates could be materially affected.
Selling, general and administrative (nSG&An) expenses include management, sales force, clerical and administrative employee
compensation and benefits, legal, accounting and other professional services, bad debt expense, and rent expense for our corporate
headquarters.
Depreciation expense includes depreciation of fixed assets over their estimated useful lives using the straight-line method.
Depletion expense includes depletion of landfill site costs and total future development costs as remaining airspace of the landfill is
consumed. Remaining airspace at our landfills includes both permitted and deemed permitted airspace. Amortization expense
includes the amortization of defmite-1ived intangible assets, consisting primarily of long-term franchise agreements and contracts and
non-competition agreements, over their estimated useful lives using the straight-line method. Goodwill and indefmite-lived intangible
assets, consisting primarily of certain perpetual rights to provide solid waste collection and transportation services in specified
territories, are not amortized.
We capitalize some third-party expenditures related to pending acquisitions or development projects, such as legal, engineering and
interest expenses. We expense indirect acquisition costs, such as executive and corporate overhead, public relations and other
corporate services, as we incur them. We charge against net income any unamortized capitalized expenditures and advances (net of
any portion that we believe we may recover, through sale or otherwise) that may become impaired, such as those that relate to any
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operation that is permanently shut down and any pending acquisition or landfill development project that we believe will not ~ '
completed. We routinely evaluate all capi.ta~ize~ costs~ a~d expense ~ose relate~ to projects ~at we ~e~i~ve are not likely to succee ~;
At December 31, 2003, we had $0.3 mIlhon In capitahzed expenditures relating to pending acqmsitlons. We own undevelope '
property, in Harper County, Kansas where we are seeking permits to construct and operate a municipal solid waste landfill. In 2002,
we received a special use permit from Harper County for zoning the landfill and in 2003 we received a draft permit from the Kansas
Department of Health and Environment to construct and operate the landfill. In July 2003, the District Court of Harper County
invalidated the previously issued zoning permit. We have appealed the District Court's decision to invalidate the zoning permit. The
Kansas Department of Health and Environment has notified us that it will not issue a final permit to construct and operate the landfill
until the zoning matter is resolved. At December 31, 2003, we had $3.9 million of capitalized expenditures related to this landfill
development project. Based on the advice of counsel, we believe that we will prevail in this matter and do not believe that an
impairment of the capitalized expenditures exists. If we do not prevail on appeal, however, we will be required to expense in a future
period the $3.9 million of capitalized expenditures, less the recoverable value of the undeveloped property and other amounts
recovered, which would likely have a material adverse effect on our reported income for that period.
We continually evaluate the value and future benefits of our intangible assets, including goodwill. We assess the recoverability
from future operations using cash flows and income from operations of the related acquired businesses as measures. Under this
approach, the carrying value is reduced if it becomes probable that our best estimate for expected future cash flows of the related
business would be less than the carrying amount of the intangible assets. As of December 31,2003, there have been no adjustments to
the carrying amounts of intangibles, including goodwill, resulting from these evaluations. As of December 31, 2003, goodwill and
other'intangible assets represented 46.9% of total assets and 121.8% of stockholders' equity.
Results of Operations
The following table sets forth items in our consolidated statement of operations in thousands and as a percentage of revenues for
the periods indicated:
Year Ended December 31,
Asa% Asa% Asa% t..
of 200 1 of2002 of 2003
2001 Revenues 2002 Revenues 2003 Revenues
Revenues $ 377,533 100.0 % $ 498,661 100.0 % $ 563,509 100.0%
Cost of operations 211,064 56.0 282,187 56.6 316,841 56.3
Selling, general and administrative 32,007 8.5 47,366 9.5 54,367 9.6
Depreciation and amortization 36,138 9.5 38,977 7.8 47,347 8.4
Loss on disposal of operations 4,879 1.3
Income from operations 93,445 24.7 130,131 26.1 144,954 25.7
Interest expense, net (29,571 ) (7.8 ) (31,372 ) (6.3 ) (31,666 ) (5.6)
Other income (expense), net (6,196 ) (1.6 ) (813 ) (0.2 ) (192 ) (0.1)
Minority interests (7,338 ) (1.9 ) (9,367 ) (1.9 ) (10,549 ) (1.9)
Income tax provision (19,812 ) (5.3 ) (33,113 ) (6.6 ) (37,233 ) (6.6)
Cumulative effect of change in
accounting principle, net of tax 282 0.1
Net income $ 30,528 8.1 % $ 55,466 11.1 % $ 65,596 11.6%
Years Ended December 31, 2003 and 2002
Revenues. Total revenues for the year ended December 31,2003 increased $64.8 million, or 13.0%, to $563.5 million from $498.7
million for the year ended December 31, 2002. Revenues in the year ended December 31, 2003 from acquisitions closed in 2003 as
well as the inclusion in 2003 of 12 months of revenues from businesses acquired in 2002 totaled approximately $60.4 million, or
93.2% of the increase. Of the remaining increase in revenues, $10.1 million was attributable to selected price increases and $1.0
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'illion was due to improved recyclable commodity prices offset by a decline in volumes in our existing business of $6.7 million The
olume reductions were primarily the result of the inclusion of one-time projects in 2002 that were not repeated in 2003 and decreased
" volume at our transfer station in Wichita, Kansas. Revenue resulting from one-time projects varies from year to year and.generally is ,
influenced by clean-ups from weather and other natural phenomena and the volume of construction activity in our markets. The
decreased volume at our transfer station in Wichita, Kansas was a permanent reduction in -revenues resulting from a loss of volumes
from a competitor who had temporarily used our transfer station in the prior year.
Cost of Operations. Total cost of operations increased $34.6 million, or 12.3%, to $316.8 million for the year ended December 31,
2003 from $282.2 million for the year ended December 31, 2002. The increase was almost entirely attributable to acquisitions closed
in 2003 and the inclusion in 2003 of 12 months of operating costs from businesses acquired in 2002. Exclusive of the impact of
acquisitions, total cost of operations increased $0.5 million due to increases in vehicle maintenance and insurance, offset by lower
disposal expense driven by higher levels of internalization and lower labor costs. The decline in labor costs in the base business was
primarily attributable to the incurrence in 2002 of $1.4 million of non-recurring costs resulting from an employee labor strike at our
facilities in Pierce County, Washington.
Total cost of operations as a percentage of revenues for the year ended December 31, 2003 decreased 0.3 percentage points to
56.3% from 56.6% for the year ended December 31, 2002. The decrease as a percentage of revenues was primarily attributable to the
incurrence in 2002 of $1.4 million of non-recurring costs resulting from an employee labor strike at our facilities in Pierce County,
Washington and greater integration in 2003 of collection volumes into landfills we own or operate, partially offset by increased
insurance costs.
SG&A. Total SG&A increased $7.0 million, or 14.8%, to $54.4 million for the year ended December 31,2003 from $47.4 million
for the year ended December 31, 2002. The increase was primarily attributable to additional personnel from acquisitions closed in
2003 and the inclusion in 2003 of 12 months of SG&A costs from businesses acquired in 2002. Exclusive of the impact of
acquisitions, SG&A expenses were almost unchanged. During 2002, SG&A expenses included $1.3 million of nonrecurring
employment-related expenses associated with the termination of our search for a chief operating officer and the hiring of two new
corporate officers, $0.3 million of nonrecurring costs associated with the listing of our common stock on the New York Stock
raxchange and $0.4 million of expense associated with the relocation of our corporate office. Excluding these nonrecurring items,
.G&A expenses increased due to the inclusion in 2003 of costs from additional corporate, regional and district level personnel,
increased legal and accounting expenses related to the new corporate governance requirements, and higher director and officer liability
insurance costs. In 2004, we expect our SG&A expenses to continue to increase as a result of the full year impact of acquisitions
closed in 2003 and our expanded management infrastructure, the issuance to employees of $2.2 million of restricted stock in 2004 that
will be amortized to expense over its three-year vesting term, and an expected increase in full year incentive compensation expense.
SG&A as a percentage of revenues for the year ended December 31,2003 increased 0.1 percentage point to 9.6% from 9.5% for
the year ended December 31, 2002. The increase in SG&A as a percentage of revenues resulted from the addition of corporate,
regional and district level personnel, increased legal and accounting expenses related to the new corporate governance requirements
and higher director and officer liability insurance costs, partially offset by the incurrence in 2002 of $1.3 million of nonrecurring
employment-related expenses associated with the termination of our search for a chief operating officer and the hiring of two new
corporate officers, costs associated with listing our common stock on the New York Stock Exchange and our corporate office
relocation. SG&A expenses in 2004 are expected to be flat as a percentage of revenues.
Depreciation and Amortization. Depreciation and amortization expenses for the year ended December 31, 2003 increased $8.3
million, or 21.5%, to $47.3 million from $39.0 million for the year ended December 31, 2002. The increase resulted primarily from
increased depreciation expense associated primarily with acquisitions closed in 2003, the inclusion in 2003 of 12 months of
depreciation from businesses acquired in 2002, additional intangible amortization resulting from acquisitions and increased
depreciation in our base business. The increased depreciation in our base business is primarily the result of capital expenditures
running at levels significantly higher than depreciatIOn.
DepreciatIon and amortization as a percentage of revenues for the year ended December 31,2003 increased 0.6 percentage points
to 8.4% from 7.8% for the year ended December 31,2002. The increase in depreciation and amortization as a percentage of revenues
resulted from the significant capital expenditures in 2003 as well as an increase in contract amortization associated with <:ontracts
acquired in 2003.
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33
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Operating: Income. Operating income for the year ended December 31, 2003 increased $14.9 million, or 11.4%, to $145.0 milliot)
from $130.1 million for the year ended December 31, 2002. The increase was primarily attributable to the growth in revenues,
partially offset by higher operating costs, depreciation, amortization and SG&A expenses.
Operating income as a percentage of revenues for the year ended December 31, 2003 decreased 0.4 percentage points to 25.7%
from 26.1 % for the year ended December 31, 2002. The decrease in operating income as a percentage of revenues was pnmarily
attributable to an increase In depreciation and amortization offset partially by lower cost of operations.
Interest Expense. Interest expense for the year ended December 31,2003 increased $0.3 million, or 0.9%, to $31.7 million from
$31.4 million for the year ended December 31, 2002. The increase was primarily attributable to higher debt levels incurred to fund
our acquisitions, partially offset by. a lower average borrowing cost. Additionally, the expiration of our two high-rate interest rate
swap agreements in December 2003 resulted in savings in the month of December of approximately $0.5 million. At December 31,
2003, we had $265.1 million of net floating rate balances, including floating rate debt under our credit facility, our Floating Rate
Convertible Subordinated Notes due 2022, various floating rate notes payable to third parties and floating rate municipal bond
obligations, offset by our debt effectively fixed under interest rate swap agreements scheduled to commence in February 2004. Should
interest rates rise, our interest costs on these borrowings would increase. A one percent increase in interest rates would result in a $2.7
million increase in interest expense.
Other Expense. Other expense decreased to $0.2 million for the year ended December 31, 2003 from $0.8 million for the year
ended December 31, 2002. The primary component of other expense for the year ended December 31, 2003 was net losses on the
disposal of certain assets.
Minority Interests. Minority interests increased $1.1 million, or 12.6%, to $10.5 million for the year ended December 31,2003,
from $9.4 million for the year ended December 31, 2002. The increase was attributable to increased earnings by our majority-owned
subsidiaries.
Provision for Income Taxes. Income taxes increased $4.1 million, or 12.4%, to $37.2 million for the year ended December 316
2003, from $33.1 million for the year ended December 31, 2002. This increase was due to increased pre-tax earnings, partially offsell
by a 0.7 percentage point reduction in our effective tax rate due to the reversal of state tax liabilities associated with contingencies that
expired in 2003 as well as an overall decline in our effective state tax rate due to changes in the apportionment of our earnings. The
effective income tax rate for the year ended December 31, 2003 was 36.3%, which is above the federal statutory rate of 35-.0%
primarily due to state and local taxes, partially offset by a reduction in our effective tax rate due to the reversal of tax liabilities
associated with contingencies that were resolved in 2003. We analyze our tax reserves periodically (but not less frequently than
annually) and adjustments are made as events occur to warrant adjustments to the reserve. For example, if the statutory period for
assessing tax on a given tax return or period lapses, the reserve associated with that period will be reduced.
Cumulative Effect of Change in Accounting Principle. The cumulative effect of change in accounting principle, net of tax, was due
to the adoption of SFAS No. 143 on January 1,2003. See Note 1 to our Consolidated Financial Statements for further discussion of
the impact of adopting SF AS No. 143.
Net Income. Net income increased $10.1 million, or 18.3%, to $65.6 million for the year ended December 31, 2003, from $55.5
million for the year ended December 31, 2002. The increase was primarily attributable to increased operating income in 2003,
partially. offset by higher income tax expense and higher minority interests.
Years Ended December 31, 2002 and 2001
Our adoption of SFAS No. 143 resulted in the reclassification of accretion expense from interest expense to cost of operations.
The amounts reclassified were $0.9 million and $0.5 million for the years ended December 31, 2002 and 2001, respectively. The
discussion below reflects this reclassification.
Revenues. Total revenues for the year ended December 31, 2002 increased $121.2 million, or 32.1%, to $498.7 million from
$377.5 million for the year ended December 31, 2001. Revenues in the year ended December 31, 2002 from acquisitions closed in
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'02 as well as the inclusion in 2002 of 12 months of revenues from businesses acquired in 2001 totaled approximately $94.9 million,
78.4% of the increase. For the remaining increase in revenues, $15.5 million was attributable to selected price increases, $2.3
'million was due to improved recyclable commodity prices and $8.5 million was the result of volume growth in our existing business.,
Cost of Operations. Total cost of operations increased $71.1 million, or 33.7%, to $282.2 milhon for the year ended December 31,
2002 from $211.1 million for the year ended December 31, 2001. The lDcrease was primarily attributable to acquisitions closed in
2002, the inclusion in 2002 of 12 months of operating costs from businesses acquired in 2001, $1.4 million of costs incurred resulting
from an employee labor strike at our facilities in Pierce County, Washington, growth in our existing business and higher insurance
costs, partially offset by greater integration of collection volumes into landfills we owned or operated.
Total cost of operations as a percentage of revenues for the year ended December 31, 2002 increased 0.6 percentage points to
56.6% from 56.0% for the year ended December 31, 2001. The increase as a percentage of revenues was primarily attributable to the
mix of revenues associated with acquisitions closed in 2002, which had gross margins below our company average, higher insurance
costs, and costs resulting from a labor strike in Pierce County, Washington, partially offset by greater integration of collection
volumes into landfills we owned or operated.
SG&A. Total SG&A increased $15.4 million, or 48.0%, to $47.4 million for the year ended December 31, 2002 from $32.0
million for the year ended December 31, 2001. The increase was primarily attributable to additional personnel from acquisitions
closed in 2002, the inclusion in 2002 of 12 months of SG&A costs from businesses acquired in 2001, additional corporate, regional
and district level overhead, $1.3 million of employment-related expenses assOCIated with the termination of our search for a chief
operating officer and the hiring of two new corporate officers, higher relocatlOn expenses associated with new hires and transfers of
existing employees, increased bad debt expense, increased legal expenses, higher insurance costs, stock compensation expense related
to the issuance of restricted stock to district-level personnel in ,2002, $0.4 million expense associated with the relocation of our
headquarters and early termination of our former corporate headquarters property lease and $0.3 million of costs associated with the
listing of our common stock on the New York Stock Exchange. During the year ended December 31, 2001, we recognized $0.9
million of expenses related to the termination of negotiations and due diligence for a large potential acquisition.
. SG&A as a percentage of revenues for the year ended December 31, 2002 increased 1.0 percentage point to 9.5% from 8.5% for
We year ended December 31, 2001. The increase in SG&A as a percentage of revenues resulted from acquisitions closed in 2002
having SG&A costs as a percentage of revenues above our company average, additional corporate, regional and district level overhead
to accommodate our current and future growth, employment-related expenses associated with the termination of our search for a chief
operating officer and the hiring of two new corporate officers, higher employee relocation expenses related to new hires and transfers
of existing employees, increased bad debt expense, increased legal expenses, stock compensation expense related to restricted stock
issued to district-level personnel in 2002, the accrual of an expense associated with the relocation of our headquarters and early
termination of our former corporate headquarters property lease and costs associated with the listing of our common stock on the New
York Stock Exchange. The increase in SG&A as a percentage of revenues was partially offset by the recognition during 2001 of
expenses related to the termination of negotiations and due diligence for a large potential acquisition.
Depreciation and Amortization. Depreciation and amortization expenses for the year ended December 31, 2002 increased $2.9
million, or 7.9%, to $39.0 million from $36.1 million for the year ended December 31,2001. The increase resulted primarily from
increased depletion due to higher volumes of waste disposed at our landfills, depreciation and depletIon associated with acquisitions
closed in 2002 and the inclusion in 2002 of 12 months of depreciatlOn and depletion from businesses acquired in 2001, and increased
depreciation expense resulting from new equipment acquired to support our base operations, partially offset by decreased amortization
expense from not amortizing goodwill during the year ended December 31, 2002, due to the application of the nonamortization
provisions of SF AS No. 142. Total goodwill amortization expense recognized in the year ended December 31, 2001 was $9.6 million.
No goodwill amortization expense was recognized in the year ended December 31, 2002.
Depreciation and amortization as a percentage of revenues for the year ended December 31, 2002 decreased 1.7 percentage points
to 7.8% from 9.5% for the year ended December 31, 2001. The decrease in depreciation and amortization as a percentage of revenues
was the result of applying the nonamortization provisions of SFAS No. 142, partially offset by increased depletion due to higher
volumes of waste disposed at our landfills and increased depreciation expense associated with new equipment acquired in 2002.
Goodwill amortization expense as a percentage of revenues for the year ended December 31, 2001 was 2.5%.
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35
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Loss on Disposal of Operations. During the year ended December 31, 2001, we sold some of our Utah operations that wea
deemed to no longer be of strategic importance. We recognized a non-cash pre-tax loss of $4.9 million from this sale. '(jJ
Ooerating Income. Operating income for the year ended December 31, 2002 increased $36.7 million, or 39.3%, to $130.1 million
from $93.4 million for the year ended December 31, 2001. The increase was primarily attributable to the growth in revenues,
applying the nonamortization provisions of SF AS No. 142 and the absence of the prior year loss associated with the disposal of some
of our Utah operations, partially offset by higher operating costs, depreciation, depletion and SG&A expenses.
Operating income as a percentage of revenues for the year ended December 31, 2002 increased 1.4 percentage points to 26.1 %
from 24.7% for the year ended December 31, 2001. The increase in operating income as a percentage of revenues was attributable to
applying the nonamortization provisions of SFAS No. 142 and not incurring losses on the disposal of operations, partially offset by
declines in gross margins, higher depreciation and depletion expenses and an increase in SG&A expenses as a percentage of revenues.
Interest Expense. Interest expense for the year ended December 31, 2002 increased $1.8 million, or 6.1 %, to $31.4 million from
$29.6 million for the year ended December 31,2001. The increase was primarily attributable to higher debt levels incurred to fund
our acquisitions, partially offset by lower interest rates on our revolving credit facility and our replacing a portion of the borrowings
under our revolving credit facility with lower interest subordinated debt obligations. At December 31, 2002, we had $76.0 million of
floating rate borrowings under our credit facility, $175.0 million of Floating Rate Convertible Subordinated Notes due 2022 and $18.0
million of other floating rate debt.
Other EXDense. Other expense decreased to $0.8 million for the year ended December 31, 2002 from $6.2 million for the year
ended December 31, 2001. The primary component of other expense for the year ended December 31, 2001 was $6.3 million of
expenses resulting from cash payments for the early termination of an interest rate swap. During the first quarter of 2001, we
determined that the debt, the specific cash flows of which an interest rate swap was designated as hedging, would be repaid prior to its
due date from the net proceeds of our convertible subordinated debt offering; therefore, it was probable that the future variable interest
payments under the related debt (the hedged transactions) would not occur. The remaining components of other expense for 2002 and
2001 were net losses incurred on the disposal of certain assets.
Minority Interests. Minority interests increased $2.1 million, or 27.7%, to $9.4 million for the year ended December 31, 200'
from $7.3 million for the year ended December 31,2001. The increase was attributable to increased earnings by our majority-owned
subSidiaries, as well as our owning majority interests in those entities, acquired in February 2001, for the entire 12 months ended
December 31, 2002, compared to owning them for approximately eleven months in the year ended December 31, 2001.
Provision for Income Taxes. Income taxes increased $13.3 million, or 67.1%, to $33.1 million for the year ended December 31,
2002, from $19.8 million for the year ended December 31, 2001. This increase was due to increased pre-tax earnings, partially offset
by a 1.5 percentage point reduction in our effective tax rate due to the elimination of non-deductible goodwill. The effective income
tax rate for the year ended December 31,20'02 was 37.4%, which is above the federal statutory rate of 35.0% primarily due to state
and local taxes.
Net Income. Net income increased $25.0 million, or 81.7%, to $55.5 million for the year ended December 31, 2002, from $30.5
million for the year ended December 31, 2001. The increase was primarily attributable to increased operating income in 2002, and the
absence of prior year losses associated with the disposal of some of our Utah operations and the termination of an interest rate swap in
2001, partially offset by increases in interest expense, higher income tax expense and higher minority interests.
Liquidity and Capital Resources
Our business is capital intensive. Our capital requirements include acquisitions and fixed asset purchases. We expect that we will
also make capital expenditures for landfill cell construction, landfill development and landfill closure activities in the future. We plan
to meet our capital needs through various fmancing sources, including internally generated funds, debt and equity financings.
As of December 31, 2003, we had a working capital deficit of $15.1 million, including cash and equivalents of $5.3 million. Our
working capital deficit decreased $7.9 million from $23.0 million at December 31, 2002. Our strategy in managing our working
capital is generally to apply the cash generated from our operations that remains after satisfying our working capital and capital
I
t
36
~xpenditure requirements to reduce our indebtedness under our credit facility and to minimize our cash balances. The decrease in our
.,orking capital deficit from the prior year resulted primarily from an increase in accounts receivable related to increased revenues,
combined with a decrease in accrued liabilities due primarily to a decrease in the unrealized loss on our interest rate swaps of $4.0
million, as well as a decrease in acquisition-related accounts due to the payment of purchase price holdbacks.
In April 2001, we sold $150 million of 5.5% Convertible Subordinated Notes due April 2006 (the "2006 Notes") in a Rule l44A
private placement. The 2006 Notes are unsecured, rank junior to existing and future Senior Indebtedness, as defined in the indenture
governing the notes, and are convertible at any time at the option of the holder into common stock at a conversion price of $38.03 per
share. We received proceeds of approximately $144.4 million from our private placement of these notes and used these proceeds to
repay certain outstanding indebtedness under our credit facility. On March 3, 2004, we announced that on April 15, 2004, we intend
to redeem the 2006 Notes in full. Holders of the 2006 Notes may elect to receive either cash or our common stock in exchange for
their notes. If holders of the 2006 Notes elect to receive cash, the source of the redemption proceeds will be our revolving credit
facility.
In April 2002, we sold $175 million of Floating Rate Convertible Subordinated Notes due 2022 (the "2022 Notes"). The 2022
Notes bear interest at the 3-month LIB OR rate plus 50 basis points, payable quarterly. The 2022 Notes are unsecured and rank pari
passu with the 2006 Notes and junior to all existing and future senior indebtedness, as defmed in the indenture governing the notes.
Upon the incurrence of certain conditions, the 2022 Notes are convertible into common stock at 20.6654 shares per $1,000 principal
amount of notes, or $48.39 per share. Our issuance of the 2022 Notes did not result in any change in material covenants or in the
committed amount under our credit facility. We received proceeds of approximately $169.0 million from our sale of the 2022 Notes
and used the proceeds to repay a portion of the outstanding indebtedness under our credit facility.
As of December 31, 2002, we had a $435 million revolving credit facility with a syndicate of banks for which Fleet Boston
Financial Corporation acted as agent. In October 2003, we amended our credit facility to increase the maximum borrowings to $575
million. This new credit facility consists of a $400 million senior secured revolving credit facility with a syndicate of banks for which
Fleet National Bank acts as agent, and a $175 million senior secured term loan. In March 2004, the senior secured term loan was
refinanced to increase the total borrowing to $200 million. As of December 31, 2002, we had an aggregate of $216 million
I&:mtstanding under our credit facility, exclusive of outstanding stand-by letters of credit of $23.6 million. As of December 31,2003,
"$228 million was outstanding under our credit facility as follows: $175 million was outstanding under our senior secured term loan
and $53.0 million was outstanding under our senior secured revolving credit facility, exclusive of outstanding stand-by letters of credit
of $45.9 million. The senior secured revolving credit facility requires monthly interest payments and matures in October 2008. The
senior secured term loan requires annual principal payments equal to 1 % of the notional balance at the end of years one through six
with all remaining outstanding amounts due October 2010. Under the new credit facility, there is no maximum amount of stand-by
letters of credit that can be issued; however, the issuance of stand-by letters of credit reduces the amount of total borrowings available.
The new credit facility requires us to pay a commitment fee ranging from 0.25% to 0.50% of the unus~d portion of the new credit
facility. We are able to increase the maximum borrowings under the new credit facility to $675 million, although no existing lender
will have any obligation to increase its commitment, provided that no event of default, as defmed in the new credit facility, has
occurred. The borrowings under the new credit facility bear interest at a rate per annum equal to, at our discretion, either the Fleet
National Bank Base Rate plus applicable margin or the LIBOR rate plus applicable margin. The applicable margin under the revolving
credit facility varies depending on our leverage ratio. The applicable margin on the term loan is 50 basis points in the case of loans
based on the Fleet National Base Rate and 200 basis points in the case of loans based on the LIBOR rate. Virtually all of our assets,
including our interest in the equity securities of our subsidiaries, secure our obligations under the new credit facility. The new credit
facility places certain business, fmancial and operating limitations on us relating to, among other things, the incurrence of additional
indebtedness, investments, acquisitions, asset sales, mergers, dividends, distributions and repurchases and redemption of capital stock.
The new credit facility permits redemption of the 2006 Notes for cash. The new credit facility also requires that specified financial
ratios and balances be maintained. As of December 31,2002 and 2003, we were in compliance with all applicable covenants in our
then outstanding credit facility. The credit facility also requires the lenders' approval of acquisitIOns in certain cir<:umstances. We use
the credit facility for acquisitions, capital expenditures, working capital, standby letters of credit and general corporate purposes. The
$12 million increase in outstanding borrowings under our credit facility in 2003 was primarily due to funding new acquisitions and
capital expenditures, partially offset by cash generated from operations and the proceeds from stock option exercises. If we are unable
to incur additional indebtedness under our credit facility or obtain additional capital through future debt or equity financings, our rate
of growth through acquisitions may decline.
it
37
As of December 31, 2003, we had the following contractual obligations (in thousands):
Long-term debt (l)
Total recorded obligations
Total
$ 611,631
$ 611,631
Payments Due by Period
Less Than 1
Year
$ 9,740
$ 9,740
e
Recorded Obligations
1 to 3 Years
$ 165,266
$ 165,266
4 to 5 Years
$ 72,960
$ 72,960
Over 5 Years
$ 363,665
$ 363,665
(1) Long-term debt payments mclude $53 nulhon m principal payments due 2008 related to our semor secured revolvmg credit facility and $175 million in
principal payments due 2010 related to our semor secured term loan, both under our new credit faclhty. As of December 31,2003, our credit faclhty allowed us to
borrow up to $575 nulhon.
Unrecorded Obligations
Amount of Commitment Expiration Per Period
Less Than 1
Total Year 1 to 3 Years 4 to 5 Years Over 5 Years
$ 27,056 $ 3,980 $ 6,272 $ 4,613 $ 12,191
20,526 9,725 10,801
$ 47,582 $ 13,705 $ 17,073 $ 4,613 $ 12,191
Operating leases (2)
Unconditional purchase
Obligations (2)
, Total unrecorded obligations
(2) We are party to operating lease agreements and unconditional purchase obhgatlons as discussed in Note 9 to the consolidated financial statements. These lease
agreements and purchase obligatIons are established m the ordmary course of our business and are deSigned to provide us With access to facilitIes and products at
competitive, market-driven pnces. These arrangements have not matenally affected our financial pOSition, results of operatIons or hqUldlty durmg the year ended
December 31, 2003 nor are they expected to have a matenal impact on our future financial pOSitIOn, results of operations or hquldity.
We are party to stand-by letters of credit as discussed in Note 8 to the consolidated fmancial statements and fmancial surety bonds
as discussed in ,Note 9 to the consolidated fmancial statements. These stand-by letters of credit and financial surety bonds ar~
generally established to support our fmancial assurance needs and landfill operations. These arrangements have not materiall.
affected our fmancial position, results of operations or liquidity during the year ended December 31, 2003 nor are they expected to .
have a material impact on our future financial position, results of operations or liquidity.
The minority interest holders of a majority-owned subsidiary of Waste Connections have a currently exercisable option (the put
option) to require Waste Connections to complete the acquisition of this majority-owned subsidiary by purchasing their minority
ownership interests for fair market value. The put option calculates the fair market value of the subsidiary based on its current
operating income before depreciation and amortization, as defmed in the put option agreement. The put option does not have a stated
termination date. At December 31, 2003, the minority interest holders' pro rata share of the subsidiary's fair market value is estimated
to be worth between $65 million and $80 million. Because the put is required at fair market value, no amounts have been accrued
relative to the put option.
For the year ended December 31, 2003, net cash provided by operations was approximately $157.2 million. Of this, $0.1 million
was provided by. 'Working capital for the period. The primary components of the reconciliation of net income to net cash provided by
operations for the year ended December 31, 2003 consist of non-cash expenses including $47.3 million of depreciation and
amortization, $10.5 million of minority interest expense, $2.4 million of debt issuance cost amortization, and the deferral of $27.9
million of income tax expense resulting from temporary differences between the recognition of income and expenses for financial
reporting and income tax purposes.
For the year ended December 31, 2003, net cash used in investing activities was $161.0 million. Of this, $84.9 million was used to
fund the cash portion of acquisitions and to pay a portion of acquisition costs that were included as a component of accrued liabilities
at December 31,2002. Cash used for capital expenditures was $70.2 million, which was primarily for investments in fixed assets,
consisting of trucks, containers, other equipment and landfill development. Other cash inflows from investing activities include $1.5
million received from the disposal of assets. Other cash outflows from investing activities include $3.6 million of restricted cash
~
38
,~ding in 2003 for our landfill closure and post-closure ob~iga~ions and $5.3 million paid to acquire a 9.9% interest in a company that
.sues surety bonds for landfill closure and post-closure oblIgatIOns.
For the year ended December 31,2003, net cash provided by financing activities was $4.9 million, which included $6.5 millioI1 of
net borrowings under our various debt arrangements for the funding of capital expenditures and acquisitions and $12.3 million of
proceeds from stock option and warrant exercises, less $9.7 million of cash distributions to minority interest holders and $4.1 million
of debt issuance costs, primarily related to our amended credit facility.
We made approximately $70.2 million in capital expenditures during the year ended December 31, 2003. We expect to make
capital expenditures of approximately $70 million in 2004 in connection with our existing business. We intend to fund our planned
2004 capital expenditures principally through existing cash, internally generated funds, and borrowings under our existing credit
facility. In addition, we may make substantial additional capital expenditures in acquiring solid waste collection and disposal
businesses. If we acquire additional landfill disposal facilities, we may also have to make significant expenditures to bring them into
compliance with applicable regulatory requirements, obtain permits or expand our available disposal capacity. We cannot currently
determine the amount of these expenditures because they will depend on the number, nature, condition and permitted status of any
acquired landfill disposal facilities. We believe that our credit facility and the funds we expect to generate from operations will
provide adequate cash to fund our working capital and other cash needs for the foreseeable future.
From time to time we evaluate our existing operations and their strategic importance to Waste Connections. If we determine that a
given operating unit does not have future strategic importance, we may sell or otherwise dispose of those operations. Although we
believe our operations would not be impaired by such dispositions, we could incur losses on them.
I
I
I
I For a description of the new accounting standards that affect us, see Note 1 to our Consolidated Financial Statements included in
j this Form 1O-K.
J~
; LATION
I(
I To date, inflation has not materially affected our operations. Consistent with industry practice, many of our contracts allow us to
I pass through certain costs to our customers, including increases in landfill tipping fees and, in some cases, fuel costs. Therefore, we
believe that we should be able to increase prices to offset many cost increases that result from inflation. However, competitive
pressures may require us to absorb at least part of these cost increases. Management's estimates associated with inflation have an
impact on our accounting for landfill liabilities.
New Accounting Pronouncements
SEASONALITY
Based on historic trends experienced by the businesses we have acquired, we expect our operating results to vary seasona:lly, with
revenues typically lowest in the first quarter, higher in the second and third quarters and lower in the fourth quarter than in the second
and third quarters. We expect the fluctuation in our revenues between our highest and lowest quarters to be approximately 10% to
12%. This seasonality reflects the lower volume of solid waste generated during the late fall, winter and early spring months because
of decreased construction and demolition activities during the winter months in the U.S. In addition, some of our operating costs may
be higher in the winter months. Adverse winter weather conditions slow waste collection activities, resulting in higher labor and
operational costs. Greater precipitation in the winter increases the weight of collected waste, resulting in higher disposal costs, which
are calculated on a per ton baSIS.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
In the normal course of business, we are exposed to market risk, including changes in interest rates and certain commodity prices.
We use hedge agreements to manage a portion of our risks related to interest rates. While we are exposed to credit risk in the event of
non-performance by counterparties to our hedge agreements, in all cases such counterparties are highly rated fmancial institutions and
we do not anticipate non-performance. We do not hold or issue derivative fmancial instruments for trading purposes. We monitor our
hedge positions by regularly evaluating the positions at market and by performing sensitivity analyses.
t
39
~
"'i
In December 2000, the Company restructured two existing interest rate swap agreements, extending their maturity througtl:!
December 2003 and removing the embedded option features of the agreements. As of December 31, 2000, the Fleet Boston swap had
a notional amount of $125 million at a fixed rate of 6.17% plus applicable margin and the Union Bank of California swap had a
notional amount of$125 million at a fixed rate 00.01% plus applicable margin. In March 2001, $110 million of the notional amount
under the Union Bank of California swap was terminated because the Company used the proceeds from its Convertible Subordinated
Notes offering to repay $11 0 million of the LIBOR note the cash flows of which this swap was designated to hedge. The Company
made a cash payment of $6.3 million to terminate the swap prior to its due date.
In May 2003, we entered into two forward-starting interest rate swap agreements. Each interest rate swap agreement has a
notional amount of $87.5 million and effectively fixes the interest rate on the notional amount at interest rates rangmg from 2.67% to
2.68%, plus applicable margin. The effective date of the swap agreements is February 2004 and each swap agreement expires in
February 2007. These interest rate swap agreements are effective as cash flow hedges for a portion of our variable rate debt and we
apply hedge accounting pursuant to SF AS No. 133 to account for these instruments. The notional amounts and all other significant
terms of the swap agreements are matched to the provisions and terms of the variable rate debt being hedged.
We have performed sensitivity analyses to determine how market rate changes will affect the fair value of our market risk senSitive
hedge positions and all other debt. Such an analysis is inherently limited in that it reflects a singular, hypothetical set of assumptions.
Actual market movements may, vary significantly from our assumptions. Fair value sensitivity is not necessarily indicative of the
ultimate cash flow or earnings effect we would recognize from the assumed market rate movements. We are exposed to cash flow risk
due to changes in interest rates with respect to the net floating rate balances owed at December 31,2002 and 2003 of $269.0 million
and $265.1 million, respectively, including floating rate debt under our credit facility, our 2022 Notes, various floating rate notes
payable to third parties and floating rate municipal bond obligations, offset by our debt effectively fixed under interest rate swap
agreements. A one percent increase in interest rates on our variable-rate debt as of December 31, 2002 and 2003 would decrease our
annual pre-tax income by approximately $2.7 million in both years. All of our remaining debt instruments are at fixed rates, or
effectively fixed under the interest rate swap agreements described above; therefore, changes in market interest rates under these
instruments would uot significantly impact our cash flows or results of operations. f
We market a variety of recyclable materials, including cardboard, office paper, plastic containers, glass bottles and ferrous and ;
aluminum metals. We own and operate 26 recycling processing operations and sell other collected recyclable materials to third parties
for processing before resale. We often share the profits from our resale of recycled materials with other parties to our recycling
contracts. For example, certain of our municipal recycling contracts in Washington, negotiated before we acquired those businesses,
specify benchmark resale prices for recycled commodities. If the prices we actually receive for the processed recycled commodities
collected under the contract exceed the prices specified in the contract, we share the excess with the municipality, after recovering any
previous shortfalls resulting from actual market prices falling below the prices specified in the contract. To reduce our exposure to
commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees
for recycling volume collected from third parties. Although there can be no assurance of market recoveries, in the event of a decline,
because of the provisions within certain of our contracts that pass commodity risk along to the customers, we believe, given historical
trends and fluctuations in the recycling commodities market, that a 10% decrease in average recycled commodity prices from the
prices that were in effect at December 31, 2002 and 2003 would not materially affect our cash flows or pre-tax income.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See page 42 of this Report for an index to our fmancial statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
f
40
~M9A. CONTROLS AND PROCEDURES
As of December 31, 2003, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13(a)-l5(e) and 15(d)-15(e) ,
under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are effective, in all material respects, to ensure that
information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and
reported as and when required.
During the three months ended December 31, 2003, there were no significant changes (including corrective actions with regard to
significant deficiencies and material weaknesses) in our internal control over financial reporting or in other factors that have materially
affected, or are reasonably likely to materially affect, our internal control over fmancial reporting.
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41
r~--. -- -. - -..
WASTE CONNECTIONS, INC.
--------1
ti
INDEX TO FINANCIAL STATEMENTS
Page
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheets as of December 31, 2002 and 2003
Consolidated Statements of Income for the years ended
December 31, 200 I, 2002 and 2003
Consolidated Statements of Stockholders' Equity and Comprehensive
Income for the years ended December 31, 200 I, 2002 and 2003
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2002 and 2003
Notes to Consolidated Financial Statements
43
44
45
46
47
49
~1
~,.
1
42
t
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Stockholders
Waste Connections, Inc.
We have audited the accompanying consolidated balance sheets of Waste Connections, Inc. as of December 31, 2002 and 2003, and
the related consolidated statements of income, stockholders' equity and comprehensive income, and cash flows for each of the three
years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in Item 15.(a). These
fmancial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on
these fmancial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated fmancial position of
Waste Connections, Inc. at December 31, 2002 and 2003, and the consolidated results of its operations and its cash flows for each of
the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related fmancial statement schedule, when considered in relation to the basic fmancial statements
taken as a whole, presents fairly in all material respects the information set forth therein.
~s discussed in Note 1 to the consolidated financial statements, effective January 1, 2003 the Company adopted Statement of
Financial Accounting Stanqards No. 143, "Accounting for Asset Retirement Obligations" and effective January 1,2002, the Company
adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
ERNST & YOUNG LLP
Sacramento, California
February 13,2004, except for
paragraph 1 of Note 16, as to
which the date is March 2, 2004
and paragraph 2 of Note 16, as
to which the date is March 3, 2004
.
43
WASTE CONNECTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
tJI ,~
ASSETS
Current assets:
Cash and equivalents $
Accounts receivable, net of allowance for doubtful accounts of $2,509
and $2,570 at December 31, 2002 and 2003, respectively
Prepaid expenses and other current assets
Total current assets
DECEMBER 31,
2002 2003
4,067 $ 5,276
63,488 72,474
8,652 11,270
76,207 89,020
578,040 613,225
548,975 590,054
33,498 64,784
25,162 38,869
1,261,882 $ 1,395,952
Property and equipment, net
Goodwill,. net
Intangible assets, net
Other assets, net
$
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,688 $ 38,682 €J :1
Accrued liabilities 45,905 31,920
Deferred revenue 19,016 23,738
. Current portion oflong-term debt and notes pa~able 3,646 9,740
Total current liabilities 99,255 104,080
Long-term debt and notes payable 578,481 601,891
Other long-term liabilities 14,813 8,400
Deferred income taxes 94,543 120,162
Total liabilities 787,092 834,533
Commitments and contingencies
Minority interests 23,078 23,925
Stockholders' equity:
Preferred stock: $0.01 par value; 7,500,000 shares authorized; none
issued and outstanding
Common stock: $0.01 par value; 50,000,000 shares authorized;
28,046,535 and 28,666,788 shares issued and outstanding
at December 31, 2002 and 2003, respectively 280 287
Additional paid-in capital 332,705 348,146
Deferred stock compensation (775 ) (436 )
Retained earnings 123,498 189,094
Accumulated other comprehensive (loss) income (3,996 ) 403
Total stockholders' equity 451,712 537,494
,
$ 1,261,882 $ 1,395,952 (J
" I
,
',-
See accompanying notes.
44
.
"
rt1 "
WASTE CONNECTIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
YEARS ENDED DECEMBER 31,
2001 2002 2003
Revenues $ 377,533 $ 498,661 $ 563,509
Operating expenses:
Cost of operations 211,064 282,187 316,841
Selling, general and administrative 32,007 47,366 54,367
Depreciation and amortization 36,138 38,977 47,347
Loss on disposal of operations 4,879
Income from operations 93,445 130,131 144,954
Interest expense (29,571 ) (31,372 ) (31,666 )
Other income (expense), net (6,196 ) (813 ) (192 )
Income before income tax provision and minority interests 57,678 97,946 113,096
Minority interests (7,338 ) (9,367 ) (10,549 )
Income before income tax provision 50,340 88,579 102,547
j lcome tax provision (19,812 ) (33,113 ) (37,233 )
. ./1 _ come before cumulative effect of change in 30,528
I accounting principle 55,466 65,314
i Cumulative effect of change in accounting principle,
I net of tax expense of $166 282
I Net income $ 30,528 $ 55,466 $ 65,596
Basic income per common share:
Income before cumulative effect of change in
accounting principle $ 1.13 $ 2.00 $ 2.31
Cumulative effect of change in accounting principle .01
Net income per common share $ 1.13 $ 2.00 $ 2.32
Diluted income per common share:
Income before cumulative effect of change in
accounting principle $ 1.10 $ 1.90 $ 2.17
Cumulative effect of change in accounting principle .01
Net income per common share $ 1.10 $ 1.90 $ 2.18
Shares used in calculating basic income per share 27,069,685 27,750,642 28,327,296
Shares used in calculating diluted income per share 27,675,639 32,325,624 32,871,652
If!'
See accompanymg notes.
45
~-- - ~. ~ """'".~-,... ~.b'_ _~ ,~......= - W
I I :0' w ASTE CO~.:?ONS, INC.
I
I CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
STOCKHOLDERS' EQUITY
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE DEFERRED
COMPREHENSIVE COMMON STOCK PAID-IN INCOME STOCK RETAINED
INCOME SHARES AMOUNT CAPITAL (LOSS) COMPENSATION EARNINGS TOTAL
Balances at December 31, 2000 26,480,046 $ 265 $ 296,439 $ $ $ 37,504 $ 334,208
Issuance of common stock warrants 105 105
Stock optIOns granted below fair market value 200 (200 )
Issuance of common stock 337,905 3 8,634 8,637
Amortization of deferred stock compensation 40 40
ExerCise of stock optIons and warrants 605,718 6 11,216 11 ,222
Amount reclassified mto earnings, net of taxes 5,847 5,847
Cumulative effect of accountmg change (3,600 ) (3,600 )
Changes m faIr value of interest rate swaps (7,182 ) (7,182 )
Net mcome $ 30,528 30,528 30,528
Other comprehensive income (loss) (8,144)
Income tax effect of other comprehensive income 3,209
ComprehensIve mcome $ 25,593
Balances at December 31, 200 I 27,423,669 274 316,594 (4,935) (160 ) 68,032 379,805
Issuance of common stock warrants 577 577
Issuance of restricted stock 812 (812 )
Stock optIOns granted below faIr market value 650 (650 )
AmortIzatIOn of deferred stock compensation 847 847
ExerCise of stock options and warrants 622,866 6 14,072 14,078
Amounts reclassified into earnmgs, net of taxes 4,002 4,002
Changes in fair value of mterest rate swaps (3,063 ) (3,063 )
Net income $ 55,466 55,466 55,466
Other comprehensIve income (loss) 1,751
Income tax effect of other comprehensive income (812 )
Comprehensive mcome $ 56,405
Balances at December 31, 2002 28,046,535 280 332,705 (3,996 ) (775 ) 123,498 451,712
Issuance of common stock warrants to employees 17 17
Issuance of common stock warrants to
consultants 173 173
Common stock donated to charitable trust 1,000 34 34
Issuance of vested restncted stock 4,975
CancellatIOn of unvested restncted stock (125) 45 (80)
AmortizatIon of deferred stock compensation 294 294
Exercise of stock options and warrants 614,278 7 15,342 15,349
Amounts reclassified into earnings, net of taxes 4,200 4,200
Changes m fair value of mterest rate swaps 199 199
Net mcome $ 65,596 65,596 65,596
Other comprehensive income (loss) 7,033
Income tax effect of other comprehensive income (2,634 )
Comprehensive mcome $ 69,995
Balances at December 31, 2003 28,666,788 $ 287 $ 348,146 $ 403 $ (436 ) $ 189,094 $ 537,494
See accompanymg notes
46
WASTE CONNECTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
I' .
YEARS ENDED DECEMBER 31,
2001 2002 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 30,528 $ 55,466 $ 65,596
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss (gain) on disposal of assets 4,868 (1 ) 333
Depreciation 25,687 37,626 45,670
Amortization of intangibles 10,451 1,351 1,677
Loss on termination of interest rate swap 6,337
Deferred income taxes 12,442 10,132 27,931
Minority interests 7,338 9,367 10,549
Cumulative effect of change in accounting principle (448 )
Amortization of debt issuance costs 1,592 2,195 2,403
Stock-based compensation 40 847 345
Interest income on restricted cash (654 ) (485 ) (302 )
Closure and post-closure accretion 474 856 437
Tax benefit on the exercise of stock options 3,602 3,572 3,078
Loss on early extinguishment of debt 305
Changes in operating assets and liabilities, net of
effects from acquisitions:
Accounts receivable, net (1,978 ) (1,594 ) (2,909 )
Prepaid expenses and other current assets (3,556 ) 380 (1,570 )
Accounts payable (1,677 ) (2,730 ) 5,821
I Deferred revenue 576 478 3,658
It
,I, Accrued liabilities (8,937 ) 13,610 (4,911 )
11i
I Other long-term liabilities (250 ) 418 (143 )
Net cash provided by operating activities 87,198 131,488 157,215
CASH FLOWS FROM INVESTING ACTMTIES:
Proceeds from disposal of assets 3,049 2,234 1,534
Payments for acquisitions, net of cash acquired (52,853 ) (166,626 ) (84,855 )
Capital expenditures for property and equipment (40,215 ) (56,776 ) (70,213 )
Investment in unconsolidated entity (5,300 )
Increase in restricted cash, net of interest income (989 ) (2,014 ) (2,093 )
Decrease (increase) in other assets 168 291 (24 )
Net cash used in investing activities (90,840 ) (222,891 ) (160,951 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 263,521 381,000 108,940
Principal payments on notes payable and long-term debt (246,638 ) (290,962 ) (102,469 )
Proceeds from option and warrant exercises 7,620 10,506 12,271
Termination of interest rate swap (6,337 )
Distributions to minority interest holders (3,370 ) (5,880 ) (9,702 )
Debt issuance costs (6,336 ) (6,473 ) (4,095 )
Net cash provided by fmancing activities 8,460 88,191 4,945
Net increase (decrease) in cash and equivalents 4,818 (3,212 ) 1,209
Cash and equivalents at beginning of year 2,461 7,279 4,067
Cash and equivalents at end of year $ 7,279 $ 4,067 $ 5,276
iI'
'1,1 ~ See accompanying notes.
47
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WASTE CONNECTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
See accompanying notes
48
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WASTE CONNECTlONS,.INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
Waste Connections, Inc. ("WCI" or "the Company") was incorporated in Delaware on September 9, 1997 and commenced its
operations on October 1, 1997 through the purchase of certain solid waste operations in Washington. The Company is an integrated,
non-hazardous solid waste services company that provides collection, transfer, disposal and recycling services to commercial,
industrial and residential customers in Alabama, Arizona, California, Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky, Minnesota,
Mississippi, Montana, Nebraska, New Mexico, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington, and ,
Wyoming.
Basis of Presentation
These consolidated financial statements include the accounts of WCI and its wholly-owned and majority-oWned subsidiaries. The
consolidated entity is referred to herein as the Company. All intercompany accounts and transactions have been eliminated in
consolidation.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less at purchase to be cash equivalents.
As of December 31, 2002 and 2003, cash equivalents consisted of demand money market accounts.
[ f ttconcentrations of Credit Risk
~II : Fmancial instruments that potentially subject th, Company to coucentratious uf credit risks cousist primarily of accounts
I receivable. The Company generally does not require collateral on its trade receivables. Credit risk on accounts receivable is
! minimized as a result of the large and diverse nature of the Company's customer base. The Company maintains allowances for losses
j based on the expected collectibility of accounts receivable. Credit losses have been within management's expectations.
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Revenues are recognized as services are provided. Certain customers are billed in advance and, accordingly, recognition of the
related revenues is deferred until the services are provided.
Revenue Recognition and Accounts Receivable
The Company's receivables are recorded when billed, advanced or accrued and represent claims against third parties that will be
settled in cash. The carrying value of the Company's receivables, net of the allowance for doubtful accounts, represents their estimated
net realizable value. The Company estimates its allowance for doubtful accounts based on historical collection trends, type of
customer such as municipal or non-municipal, the age of outstanding receivables and existing economic conditions. If events or
changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectiblity
of those balances and the allowance is adjusted accordingly. Past-due receivable balances are written off when the Company's internal
collection efforts have been unsuccessful in colIecting the amount due.
Property and Equipment
Property and equipment are stated at cost. Improvements or betterments, not considered to be maintenance and repair, which
significantly extend the life of an asset are capitalized. Expenditures for maintenance and repair costs are charged to expense as
incurred. The cost of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts
in the year of disposal. Gains and losses resulting from disposals of property and equipment are recognized in the period in which the
.
49
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- __J
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
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property and equipment is disposed. Depreciation is computed using the straight-line method over the estimated useful lives of the
assets or the lease term, whichever is shorter.
The estimated useful lives are as follows:
Buildings
Machinery and equipment
Rolling stock
Containers
20 years
3 - 15 years
10 years
5 - 15 years
Landfill Accounting
On January 1,2003, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"),
which provides standards for accounting for obligations associated with the retirement of long-lived assets. The adoption of SFAS
No. 143 impacted the calculation and accounting for landfill retirement obligations, which the Company has historically referred to as
closl,lfe and post-closure obligations. The impact of SFAS No. 143 is discussed in the closure and post-closure obligations section
below.
The Company utilizes the life cycle method of accounting for landfill costs and the units of consumption method to amortize
landfill construction costs over the estimated remaining capacity of a landfill. Under this method the Company includes future
estimated construction costs using current dollars, as well as costs incurred to date, in the amortizatIOn base. Additionally, the
Company includes deemed permitted expansion airspace, which has not been permitted, in the calculation of the total remaining
capacity of the landfill.
- Landfill development costs. Landfill development costs include the costs of acquisition, construction associated with excavatio~
liners, site berms, groundwater monitoring wells and leachate collection systems. The Company estimates the total costs
associated with developing each landfill site to its final capacity. This includes certain projected landfill site costs that are uncertain
because they are dependent on future events and thus actual costs could vary significantly from estimates. The total cost to develop
a site to its final capacity includes amounts previously expended and capitalized, net of accumulated airspace amortization, and
projections of future purchase and development costs, landfill fmal capping costs, liner construction costs, operating construction
costs, and capitalized interest costs. Total landfill costs include the development costs associated with "deemed" permitted
airspace. Deemed permitted airspace is addressed below.
- Closure and post-closure obligations. The Company reserves for estimated closure and post-closure maintenance obligations at the
landfills it owns and certam landfills that it operates, but does not own. Accrued closure and post-closure costs represent an
estimate of the current value of the future obligation associated with closure and post-closure monitoring of non-hazardous solid
waste landfills currently owned and/or operated by the Company. Closure and post-closure monitoring and maintenance costs
represent the costs related to cash expenditures yet to be incurred when a landfill facility ceases to accept waste and closes.
Accruals for closure and post-closure monitoring and maintenance requirements in the U.S. consider site inspection, groundwater
monitoring, leachate management, methane gas control and recovery, and operating and maintenance costs to be incurred during
the period after the facility closes. Certain of these environmental costs, principally capping and methane gas control costs, are also
incurred during the operating hfe of the site in accordance with the landfill operation requirements of Subtitle D and the air
emissions standards. Daily maintenance activities, which mclude many of these costs, are expensed as incurred during the
operating life of the landfill. Daily maintenance activities include leachate disposal; surface water, groundwater, and methane gas
monitoring and maintenance; other pollution control activities; mowing and fertilizing the landfill fmal cap; fence and road
maintenance; and third party inspection and reporting costs. Site specific closure and post-closure engineering cost estimates are
prepared annually for landfills owned and/or operated by the Company for which it is responsible for closure and post-closure.
Upon the adoption of SF AS No. 143, landfill closure and post-closure liabilities are calculated by estimating the total obligation in
current dollars, inflating the obligation based upon the expected date of the expenditure using an inflation rate of 3% and
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WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
.
discounting the inflated total to its present value using an 8.5% discount rate. The resulting closure and post-closure obligation is
recorded as a long-term liability with a corresponding increase to landfill site costs as the landfill's total airspace is consumed.
Final capping costs are included in the calculation of closure and post-closure liabilities. Final capping costs are estimated using
current dollars, inflated to the expected date of the fmal capping expenditures, discounted to a net present value and recorded on
the balance sheet as a component of closure and post-closure liabilities as landfill airspace is consumed. At December 31, 2002
and 2003, accruals for landfill closure and post-closure costs (including costs assumed through acquisitions) were $13,749 and
$5,479, respectively. When using discounted cash flow techniques, reliable estimates of market premiums may not be obtainable.
In the waste industry, there is no market for selling the responsibility for fmal capping, closure and post-closure obligations
independent of selling the landfill in its entirety. Accordingly, the Company does not believe that it is possible to develop a
methodology to reliably estimate a market risk premium and has therefore excluded any such market risk premium from its,
determination of expected cash flows for landfill asset retirement obligations. The Company estimates that its closure and post-
closure payment commitments will begin in 2006. Interest is accreted on the recorded liability using the corresponding discount
rate. Interest accretion was reduced as a result of the decrease in the recorded closure and post-closure liabilities and has been
reclassified from interest expense to cost of operations, thus causing a reduction in income from operations. However, there has
been no change in operating cash flow. In accordance with SFAS No. 143, the closure and post-closure liability is recorded as an
addition to site costs and amortized to depletion expense on a units-of-consumption basis as landfill airspace is consumed. The
impact of changes determined to be changes in estimates, based on an annual update, is accounted for on a prospective basis.
Depletion expense resulting from the closure and post-closure obligations recorded as a component of landfill site costs will
generally be less during the early portion of a landfill's operating life and increase thereafter. The closure and post-closure
liabilities reflect owned landfills and landfills operated under life-of-site operating agreements with estimated remaining lives,
based on remaining permitted capacity, probable expansion capacity and projected annual disposal volumes, that range from
approximately 3 to 263 years, with an average remaining life of approximately 63 years. The costs for closure and post-closure
obligations at landfills the Company owns or operates are generally estimated based on interpretations of current requirements and
proposed or anticipated regulatory changes. The estimates for landfill closure and post-closure costs, including final cappmg costs,
also consider when the costs would actually be paid and factor in inflation and discount rates. The possibility of changing legal and
regulatory requirements and the forward-looking nature of these types of costs make any estimation or assum}?tion less certain.
Adopting SFAS No. 143 required a cUmulative adjustment to reflect the change in accounting for landfill obligations retroactively
to the date of the inception of the landfill. Inception of the asset retirement obligation is the date operations commenced or the date
the asset was acquired. Upon adopting SFAS No. 143 on January 1, 2003, the Company recorded a cumulative effect of the
change in accounting principle of $448 ($282, net of tax), a decrease in its closure and post-closure liability of $9,142 and a
decrease in net landfill assets of $8,667. Discounting the obligation with a higher discount rate and recording the liability as
airspace is consumed resulted in a decrease to the closure and post-closure liabilities recorded by the Company before it adopted
SFAS No. 143.
The closure and post-closure liability at January 1,2002, on a pro forma basis as if SFAS No. 143 had been applied during all
periods presented, would have been $2,894. The following is a reconciliation of the Company's closure and post-closure liability
balance from December 31, 2002 to December 31, 2003:
Closure and post-closure liability at December 31, 2002
Decrease in closure and post-closure liability from adopting
SFAS No. 143
Liabilities incurred
Accretion expense
Closure and post-closure liability at December 31, 2003
$ 13,749
(9,142)
435
437
$ 5,479
.
51
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
t
Pro forma financial information to reflect the reported results of operations for the two years ended December 31, 2001 and 2002,
as ifSFAS No. 143 were adopted on January 1,2001, is as follows:
Basic earnings per share as reported
Pro forma impact of applying SFAS No. 143, net of tax
Pro forma basic earnings per share
Year Ended December 31,
2001 2002
$ 30,528 $ 55,466
(28 ) 318
$ 30,500 $ 55,784
$ 1.13 $ 2.00
.01
$ 1.13 $ 2.01
$ 1.10 $ 1.90
.01
$ 1.10 $ 1.91
Net income as reported
Pro forma impact of applying SFAS No. 143, net of tax
Pro forma net income
Diluted earnings per share as reported
Pro forma impact of applying SFAS No. 143, net of tax
Pro forma diluted earnings per share
At December 31, 2003, $12,253 of the Company's restricted cash balance was for purposes of settling future closure and post-closure
liabilities.
- DIsposal caDacity. The Company's internal and third-party engineers perform surveys at least annually to estimate the disposale
capacity at its landfills. This is done by using surveys and other methods to calculate, based on the terms of the permit, height ~
restrictions and other factors, how much airspace IS left to fill and how much waste can be disposed of at a landfill before it has
reached its final capacity. The Company's landfill depletion rates are based on the remaining disposal capacity, considering both
permitted and deemed permitted airspace, at its landfills. Deemed permitted airspace consists of additional disposal capacity being
pursued through means of an expansion. Deemed permitted airspace that meets certain internal criteria is included in the estimate
of total landfill airspace. The Company's internal criteria to determine when deemed permitted airspace may be included as
disposal capacity is as follows:
(1) The land where the expansion is being sought is contiguous to the current disposal site, and is either owned by the Company
or the property is under option, purchase, operating or other agreement;
(2) Total development costs, final capping costs, and closure/post-closure costs have been determined;
(3) Internal personnel have performed a financial analysis of the proposed expansion site and have determined that it has a
positive financial and operational impact;
(4) Internal or external personnel are actively working to obtain the necessary approvals to obtain the landfill expansion permit;
(5) Obtaining the expansion is considered probable. For a pursued expansion to be considered probable, there must be no
significant known technical, legal, community, business, or political restrictions or similar issues existing that could impair
the success of the expansion; and
(6) The land where the expansion is being sought has the proper zoning or proper zoning can readily be obtained.
It is possible that the Company's estimates or assumptions will ultimately turn out to be significantly different from actual results.
In some cases the Company may be unsuccessful in obtaining an expansion permit or the Company may determine that an
expansion permit that the Company previously thought was probable has become unlikely. To the extent that such estimates, or the
assumptions used to make those estimates, prove to be significantly different than actual results, or the belief that the Company
will receive an expansion permit changes adversely in a significant manner, the costs of the landfill, including the costs incurred in
the pursuit of the expansion, may be subject to impairment testing, as described below, and lower profitability may be experienced
e\
52
I
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
due to higher amortization rates, higher capping, closure and post-closure rates, and higher expenses or asset impairments related
to the removal of previously included expansion airspace.
The Company periodically evaluates its landfill sites for potential impairment indicators. The Company's judgments regarding the
existence of impairment indicators are based on regulatory factors, market conditions and operational performance of its landfills.
Future events could cause the Company to conclude that impairment indicators exist and that its landfill carrying costs are impaired.
Allocation of Acquisition Purchase Price
A summary of the Company's acquisition purchase price allocation policies is as follows:
_ Acquisition purchase price is allocated to identified intangible assets and tangible assets acquired and liabilities assumed based on
their estimated fair values at the dates of acquisition, with any residual amounts allocated to goodwill.
- The Company deems the total remaining airspace of an acquired landfill to be a tangible asset. Therefore, for acquired landfills, it
initially allocates the purchase price to identified intangible and tangible assets acquired, excluding landfill airspace, and liabilities
assumed based on their estimated fair values at the date of acquisition. Any residual amount is allocated to landfill airspace.
- The Company often consummates single acquisitions that include a combination of collection operations and landfills. For each
separately identified collection operation and landfill acquired in a single acquisition, the Company performs an initial allocation
of total purchase price to the identified collection operations and landfills based on their relative fair values. Following this initial
allocation of total purchase price to the identified collection operations and landfills, the Company further allocates the identified
intangible assets and tangible assets acquired and liabilities assumed for each collection operation and landfill based on their
:,. estimated fair values at the dates of acquisition, with any residual amounts allocated to either goodwill or landfill site costs, as
'" discussed above.
- The Company accrues the payment of contingent purchase price if the events surrounding the contingency are deemed assured
beyond a reasonable doubt. Contingent purchase price related to landfills is allocated to landfill site costs and contingent purchase
price for acquisitions other than landfills is allocated to goodwill.
Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and intangible assets of the
acquired entities. Goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual
impairment tests in accordance with SF AS No. 142. Other intangible assets, including those meeting new recognition criteria 'under
SF AS No. 142, continue to be amortized over their estimated useful lives.
The Company fully adopted the new rules on accounting for goodwill and other intangible assets beginning on January 1,2002.
The Company tests goodwill for impairment using the two-step process prescribed in SFAS No. 142. The fIrSt step is a screen for
potential impairment, while the second step measures the amount of the impairment, if any. At least annually, the Company performs
impairment tests of goodwill and indefinite-lived intangible assets based on the carrying values. As a result of performing the tests for
potential impalrment, the Company determined that no impairment existed as of December 31, 2003 and therefore, it was not
necessary to write down any of its goodwill or indefinite-lived intangible assets.
Net income for the year ended December 31, 2001, adjusted for the nonamortization provisions of SFAS No. 142, was $37,390.
Basic and diluted shares outstanding were 27,069,685 and 27,675,639, respectively, for the year ended December 31,2001. Adjusted
basic and diluted earnings per share were $1.38 and $1.35, respectively, for the year ended December 31, 2001.
The Company acquired indefinite-lived intangible assets, long-term franchise agreements, contracts and non-competition
agreements in connection with certain of its acquisitions. The amounts assigned to indefinite-lived intangible assets consist of the
,
53
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WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
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value of certain perpetual rights to provide solid waste collection and transportation services in specified territories. The estimated fair
value of the acquired indefinite-lived intangible assets, long-term franchise agreements and contracts was determined by management
based on the discounted net cash flows associated with the rights, agreements and contracts. The estimated fair value of the non-
competition agreements reflects management's estimates based on the amount of revenue protected under such agreements. The
amounts assigned to the franchise agreements, contracts, and non-competition agreements are being amortized on a straight-line basis
over the expected term of the related agreements (ranging from 5 to 56 years). In accordance with the provisions of SF AS No. 142,
indefinite-lived intangible assets resulting from acquisitions completed subsequent to June 30, 2001 are not amortized; however, they
are required to be classified separately from goodwill.
Restricted Cash
Restricted cash held by trustees is included in other non-current assets and consists principally of funds held in trust for the
construction of various facilities, and funds deposited in connection with landfill closure and post-closure obligations. Proceeds from
these fmancing arrangements are directly deposited into trust funds, and the Company does not have the ability to utilize the funds in
regular operating activities. Accordingly, these amounts are reported as an investing activity when the cash is released from the trust
funds ~d as a financing activity when the industrial revenue bonds are repaid out of the Company's cash balances.
Asset Impairments
Long-lived assets consist primarily of property, plant and equipment, goodwill and other intangible assets. Property, plant,
equipment and other intangible assets are carried on the Company's fmancial statements based on their cost less accumulated
depreciation or amortization. The recoverability of these assets is tested whenever events or changes in circumstances indicate that
their carrying amount may not be recoverable.
Typical indicators that an asset may be impaired include:
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- A significant decrease in the market price of an asset or asset group;
- A significant adverse change in the extent or manner in which an asset or asset group is being used or in its physical condition;
- A significant adverse change in legal factors or in the business climate that could affect the value of an asset or asset group,
including an adverse action or assessment by a regulator;
- An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-
lived asset;
- Current period operating or cash flow losses combined with a history of operating or cash flow losses or a projection or forecast
that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or
- A current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly
before the end of its previously estimated useful life.
If any of these or other indicators occur, a test of recoverability is performed by comparing the carrying value of the asset or asset
group to its undiscounted expected future cash flows. If the carrying values are in excess of undiscounted expected future cash flows,
impairment is measured by comparing the fair value of the asset to its carrying value. Fair value is determined by an internally
developed discounted projected cash flow analysis of the asset. Cash flow projections are sometimes based on a group of assets, rather
than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company will determine
whether an impairment has occurred for the group of assets for which the projected cash flows can be identified. If the fair value of an
asset is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is
recorded in the period that the impairment indicator occurs. Several impairment indicators are beyond the Company's control, and
whether or not they will occur cannot be predicted with any certainty. Estimating future cash flows requires significant judgment and
projections may vary from cash flows eventually realized. There are other considerations for impairments of landfills and goodwill, as
described below.
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54
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WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
Landfills - There are certain indicators listed above that require significant judgment and understanding of the waste industry when
applied to landfill development or expansion projects. For example, a regulator may initially deny a landfill expansion permit
application though the expansion permit is ultimately granted. In addition, management may periodically divert waste from one
landfill to another to conserve remaining permitted landfill airspace. Therefore, certain events could occur in the ordinary course of
business and not necessarily be considered indicators of impairment due to the unique nature of the waste industry.
Goodwill - The Company assesses whether goodwill is impaired on an annual basis. If the Company determined the existence of
goodwill impairment, the Company would measure that impairment based on the amount by which the book value of goodwill
exceeds its implied fair value. The implied fair value of goodwill is determined by deducting the fair value of a reporting unit's
identifiable assets and liabilities from the fair value of the reporting unit as a whole, as if that reporting unit had just been acquired and
the purchase price were being initially allocated. Additional impairment assessments may be performed on an interim basis if the
Company encounters events or changes in circumstances, such as those listed above, that would indicate that, more likely than not, the
book value of goodwill has been impaired.
Fair Value of Financial Instruments
The Company's financial instruments consist primarily of cash, trade receivables; restricted funds held in trust, trade payables,
debt instruments and interest rate swaps. As of December 31, 2002 and 2003, the carrying values of cash, trade receivables, restricted
funds held in trust, and trade payables are considered to be representative of their respective fair values. The carrying values of the
Company's debt instruments, excluding the 2006 Convertible Subordinated Notes and 2022 Floating Rate Convertible Subordinated
Notes, approximate their fair values as of December 31, 2002 and 2003, based on current incremental borrowing rates for similar
types of borrowing arrangements. The Company's 2006 Convertible Subordinated Notes have a carrying value of $150,000 and had a
fair value of approximately $186,915 at December 31, 2002 and $160,770 at December 31, 2003, based on the publicly quoted trading
.rice of these notes. The Company's 2022 Floating Rate Convertible Subordinated Notes have a carrying value of$175,000 and had a
ir value of approximately $181,475 at December 31, 2002 and $178,798 at December 31,2003, based on the publicly quoted trading
, rice of these notes. The Company's interest rate swaps are recorded at their estimated fair values based on estimated cash flows
calculated using interest rate yield curves as of December 31, 2002 and 2003.
Derivative Financial Instruments
SFAS No. 133, "Accounting for Derivatives and Hedging Activities", as amended, became effective January 1,1001. SFAS No.
133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. SF AS No. 133 requires the Company to recognize all derivatives on the balance sheet at
fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative is a hedge, depending on
the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (Note II) until the hedged item
is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings.
The Company's objective for utilizing derivative instruments is to reduce its exposure to fluctuations in <:ash flows due to changes
in the variable interest rates of certain borrowings issued under its credit facility and other variable rate debt. The Company's strategy
to achieve that objective involves entering into interest rate swaps that are specifically designated to certain variable rate instruments
and accounted for as cash flow hedges.
At December 31, 2003, the Company's derivative instruments consist of two forward-starting interest rate swap agreements,
entered into in May 2003. Each interest rate swap agreement has a notional amount of $87,500 and effectively fixes the interest rate
on the notional amount at interest rates ranging from 2.67% to 2.68%, plus applicable margin. The effective date of the swap
agreements is February 2004 and each swap agreement expires in February 2007. These interest rate swap agreements are effective as
cash flow hedges for a portion of the Company's variable rate debt, and the Company applies hedge accounting to account for these
t
55
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
t :,i
instruments. The notional amounts and all other significant terms of the swap agreements are matched to the provisions and terms of
the variable rate debt being hedged.
Income Taxes
The Company: uses the liability method to account for income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between the financial reporting and income tax bases of assets and liabilities and are measured using
the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company assumes
the deductibility of certain costs in its income tax filings and estimates the future recovery of deferred tax assets.
The Company has accrued income tax reserves for contingencies identified in the preparation of previously filed tax returns. The
Company establishes the reserves based upon management's assessment of exposure associated with permanent differences, tax
credits and interest expense. The tax reserves are analyzed periodically (but not less frequently than annually) and adjustments are
made as events occur to warrant adjustments to the reserve. For example, if the statutory period for assessing tax on a given tax return
or period lapses, the reserve associated with that period will be reduced.
Stock-Based Compensation
As permitted under the provisions of SFAS No. 123, the Company has elected to account for stock-based compensation using the
intrinsic value method prescribed by APB 25. Under the intrinsic value method, compensation cost is the excess, if any, of the quoted
market price or fair value of the stock at the grant date or other measurement date over the amount an employee must pay to acquire
the stock.
The weighted'average grant date fair values per share for options granted during 2001,2002 and 2003 are as follows:
Exercise prices equal to market price of stock
Exercise prices less than market price of stock
2001
$ 10.32
15.73
2002
$ 9.40
16.17
2003
$ 7.76
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Pro forma information regarding net income and earnings per share is required by SF AS No. 123, and has been determined as if
the Company had accounted for its employee stock options under the fair value method of that Statement. The fair value for these
options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average
assumptions for the years ended December 31, 2001, 2002 and 2003: risk-free interest rate of 4.5%,3.5% and 2.4%, respectively;
dividend yield of zero; volatility factor of the expected market price of the Company's common stock of 45%, 40% and 25%,
respectively; and a weighted-average expected life of the option of 4 years.
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no
vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions
including the expected stock price volatility. Because the Company's employee stock options have characteristics Significantly
different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the
Company's employee stock options.
tl
56
,
~
.
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
For purposes of pro fonna disclosures, the estimated fair value of the options is amortized to expense over the options' vestfug
period. The following table summarizes the Company's pro fonna net income and pro fonna basic net income per share for the years
ended December 31, 2001, 2002 and 2003:
Year Ended December 31,
2001 2002 2003
Net income, as reported $ 30,528 $ 55,466 $ 65,596
Add: stock-based employee compensation expense
included in reported net income, net of related tax
effects 24 533 196
Deduct: total stock-based employee compensation
expense detennined under fair value method for
all awards, net of related tax effects (3,135) (5,771) (7,105)
Pro fonna net income $ 27,417 $ 50,228 $ 58,687
Earnings per share:
Basic - as reported $ 1.13 $ 2.00 $ 2.32
Basic - pro fonna 1.01 1.81 2.07
Diluted - as reported 1.10 1.90 2.18
Diluted - pro fonna 0.99 1.75 1.98
I"er Share Information
I Basic net income per share is computed using the weighted average number of common shares outstanding. Diluted net income per
share is computed using the weighted average number of common and potential common shares outstanding. Potential common shares
I are excluded from the computation if their effect is anti-dilutive.
I
Advertising Costs
Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2001, 2002 and 2003 was
$1,160, $1,403 and $1,842, respectively.
Insurance Liabilities
During 2002, the Company increased its scope of high-deductible insurance, adding automobile liability, general liability and
workers' compensation claims. Previously, the Company's high-deductible insurance program covered only automobile collision and
employee group health claims. The Company's insurance accruals are based on claims filed and estimates of claims incurred but not
reported and are developed by the Company's management with assistance from its third-party actuary and its third-party claims
administrator. The insurance accruals are influenced by the Company's past claims experience factors, which have a limited history,
and by published industry development factors. At December 31, 2002 and 2003, the Company's total accrual for self-insured
liabilities was $4,038 and $8,611, respectively.
Segment Infonnation
The Company identifies its operating segments based on management responsibility and geographic location. The Company
considers each of its four operating regions that report stand-alone financial infonnation and have segment managers that report to the
.
57
~---_._~---
---~
WASTE CONNECTIONS, INe.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
,~
,).
Company's chief operating decision maker to be an operating segment. The Company has assessed and determined that it has met all
of the aggregation criteria required under SF AS No. 131 to aggregate multiple operating segments into one reportable segment.
Therefore, all operating segments have been aggregated together and are reported as a single segment consisting of the collection,
transfer, recycling and disposal of non-hazardous solid waste primarily in the Western and Southern United States.
Reclassifications
Certain amounts reported in the Company's prior years' financial statements have been reclassified to conform with the 2003
presentation.
New Accounting Pronouncements
SFAS No. 143
In June 2001, the Financial Accounting Standards Board issued SFAS No. 143, "Accounting for Asset Retirement Obligations"
("SFA~ No. 143"), which outlines standards for accounting for obligations associated with the retirement of long-lived assets. The
Company fully adopted the new rules under SFAS No. 143 beginning on January 1,2003, which impacted the accounting for landfill
retirement obligations, historically referred to as closure and post-closure obligations. Refer to the section on landfill accounting
within this footnote for further detail.
FIN 45
In November 2002, the F ASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). It clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee, including its ongoin.'
obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur~
,The objective of the initial measurement of the liability is the fair value of the guarantee at its inception. The initial recognition and
initial measurement provisions of FIN 45 are effective on a prospective basis to guarantees issued after December 31, 2002, and the
Company will record the fair value of future material guarantees, if any. The Company did not have any material guarantees at
December 31, 2003.
FIN 46
In January 2003, the FASB issued Interpretation No. 46 ("FIN 46") which was subsequently amended in December 2003. FIN 46
requires that unconsolidated variable interest entities be consolidated by their primary beneficiaries. A primary beneficiary is the
party. that absorbs a majority of the entity's expected losses or residual benefits. FIN 46 applies to variable interest entities created
after January 31,2003 and to existing variable interest entities beginning after June 15,2003. The adoption of FIN 46 did not have a
material impact on the Company's financial statements.
SFAS No. 150
In May 2003, the Financial Accounting Standards Board issued SFAS No. 150, "Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity" ("SFAS No. ISO"). SFAS No. 150 establishes standards for how an issuer
classifies and measures certain fmancial instruments with characteristics of both liabilities and equity. It requires that an issuer classify
a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS No. 150 was effective for
financial instruments entered into or modified after May 31, 2003, and otherwise was effective at the beginning of the first interim
period beginning after June 15,2003. The adoption of SFAS No. 150 did not have a material impact on the Company's financial
statements.
The minority interest holders of a majority-owned subsidiary of Waste Connections have a currently exercisable option (the put
oJ?tion) to require Waste Connections to complete the acquisition of this majority-owned subsidiary by purchasing their minority
<<;
58
~
'I
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ownership interests for fair market value. The put option calculates the fair market value of the subsidiary based on its current
operating income before depreciation and amortization, as defmed in the put option agreement. The put option does not have a stated
termination date. At December 31, 2003, the minority interest holders' pro rata share of the subsidiary's fair market value is estimated
to be worth between $65,000 and $80,000. Because the put is exercisable at fair market value, no amounts have been accrued relative
to the put option.
2. USE OF ESTIMATES AND ASSUMPTIONS
In preparing the Company's financial statements, several estimates and assumptions are made that affect the accounting for and
recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must be made because certain of the
information that is used in the preparation of the Company's financial statements is dependent on future events, cannot be calculated
with a high degree of precision from data available or is simply not capable of being readily calculated based on generally accepted
methodologies. In some cases, these estimates are particularly difficult to determine and the Company must exercise significant
judgment. The most difficult, subjective and complex estimates and the assumptions that deal with the greatest amount of uncertainty
are related to the Company's accounting for landfills and asset impairments and are discussed in Note 1. One additional area that
involves estimation is when the Company estimates the amount of potential exposure it may have with respect to litigation, claims and
assessments in accordance with SFAS No.5, Accounting for Contingencies. Actual results for all estimates could differ materially
from the estimates and assumptions that the Company uses in the preparation of its financial statements.
3. ACQUISITIONS
2002 and 2003 Acquisitions
During 2002, the Company acquired 17 non-hazardous solid waste businesses that were accounted for as purchases. Aggregate'
lonsideration for the acquisitions consisted of $166,626 in cash (net of cash acquired), $2,217 in notes payable to sellers, common
, tock warrants valued at $577 and the assumption of debt and long-term liabilities totaling $73,464.
During 2003, the Company acquired 16 non-hazardous solid waste businesses that were accounted for as purchases. Aggregate
consideration for the acquisitions consisted of $76,471 in cash (net of cash acquired), common stock warrants valued at $173 and the
assumption of debt totaling $23,033.
The results of operations of the acquired businesses have been included in the Company's consolidated financial statements from
their respective acquisition dates.
The purchase prices have been allocated to the identified intangible assets and tangible assets acquired and liabilities assumed
based on their estimated fair values at the dates of acquisition, with any residual amounts allocated to goodwill. The purchase price
allocations are considered preliminary until the Company is no longer waiting for information that it has arranged to obtain and that is
known to be available or obtainable. Although the time required to obtain the necessary information will vary with circumstances
specific to an individual acquisition, the "allocation period" for fmalizing purchase price allocations generally does not exceed one
year from the consummation of a business combination.
As of December 31, 2003, the Company had five acquisitions for which purchase price allocations were preliminary, mainly as a
result of pending working capital valuations. The Company believes the potential changes to its preliminary purchase price
allocations will not have a material impact on its fmancial condition, results of operations or cash flows.
"
59
r~'~---------------- -
----1
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
t
A summary of the purchase price allocations for acquisitions consummated in 2002 and preliminary purchase price allocations for
the acquisitions consummated in 2003 is as follows:
2002
Acquisitions
2003
Acquisitions
Acquired assets:
Accounts receivable
Prepaid expenses and other current assets
Property and equipment
Goodwill
Indefmite-lived intangible assets
Long-term franchise agreements and other
Non-competition agreements
Deferred tax asset
Other assets
Assumed liabilities:
Deferred revenue
Accounts payable and accrued liabilities
Debt and long-term liabilities assumed
Deferred income taxes
$
10,521 $
1,032
95,285
137,218
6,529
11,216
764
(5,182)
(17,048)
(73,464)
(5,722)
161,149 $
$
6,076
918
20,768
41,078
325
32,272
364
4,436
4,026
(1,064)
(7,398)
(23,033)
(2,124)
76,644
During the year ended December 31, 2002, the Company paid $8,271 of acquisition-related liabilities accrued at December 31411
2001. During the year ended December 31, 2003, the Company paid $8,384 of acquisition-related liabilities accrued at December 31'
2002.
Goodwill acquired in 2002 and 2003 totaling $103,644 and $38,615, respectively, is expected to be deductible for tax purposes.
In connection with an acquisition consummated in 2002, the Company is required to pay $2,000 of contingent consideration in
cash to the former shareholders which is triggered by the Company obtaining an expansion permit for a landfill acquired. The
Company has included in these financial statements the $2,000 contingent cash payment because it considers it beyond a reasonable
doubt that the expansion permit for the landfill acquired in 2002 will be obtained. Additionally, at December 31,2003, the Company
accrued an $850 liability to former owners of a company acquired in 2003 that was payable in cash based upon the acquired company
meeting or exceeding certain revenue targets during the 90 day period following the close of the acquisition. The acquired company
met the required revenue targets and the $850 was paid in full in January 2004.
The following pro forma results of operations assume that the Company's significant acquisitions occurring in 2002 and 2003,
accounted for using the purchase method of accounting, were acquired as of January 1, 2002 (unaudited):
Year Ended December 31,
2002 2003
$ 577,248 $ 588,335
56,266 66,520
2.03 2.35
1.92 2.20
Total revenue
Net income
Basic income per share
Diluted income per share
60
t
""~"'- ~ -
~:.
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE 1\ND PER SHARE AMOUNTS)
The unaudited pro fonna results do not purport to be indicative of the results of operations which actually would have resulted had
the acquisitions occurred on January 1,2002, nor are they necessarily indicative offuture operating results.
4. INTANGIBLE ASSETS
Intangible assets, exclusive of goodwill, consisted of the following at December 31, 2003:
Gross Carrying
Amount
Amortizable intangible assets:
Long-tenn franchise agreements
and contracts
Non-competition agreements
Other, net
Accumulated
Amortization
Net Carrying
Amount
$
46,810 $ (1,994) $ 44,816
3,986 (2,551 ) . 1,435
2,415 (917) 1,498
53,211 (5,462) 47,749
17,035 17,035
70,246 $ (5,462) $ 64,784
Nonamortized intangible assets:
Indefinite-lived intangible assets
Intangible assets, exclusive of goodwill
$
The weighted-average amortization periods of long-tenn franchise agreements and non-competition agreements acquired during
the year ended December 31, 2003 are 37.5 and 5 years, respectively.
, Intangible assets, exclusive of goodwill, consisted of the following at December 31, 2002:
Gross Carrying
Amount
Amortizable intangible assets:
Long-tenn franchise agreements
and contracts
Non-competition agreements
Other, net
Accumulated
Amortization
Net Carrying
Amount
$
14,552 $ (1,064) $ 13,488
3,622 (1,983) 1,639
2,400 (740) 1,660
20,574 (3,787) 16,787
16,711 16.711
37,285 $ (3,787) $ 33,498
Nonamortized intangible assets:
Indefinite-lived intangible assets
Intangible assets, exclusive of goodwill
$
The weighted-average amortization periods of long-tenn franchise agreements and non-competition agreements acquired during
the year ended December 31, 2002 are 38.4 and 5 years, respectively.
The amounts assigned to indefinite-lived intangible assets consist of the value of certain perpetual rights to provide solid waste
collection and transportation services in specified territories. These indefmite-lived intangible assets were subject to amortization
prior to the Company's adoption of SF AS No. 142.
Estimated future amortization expense for the next five years of amortizable intangible assets is as follows:
.
61
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
,
For the year ended December 31, 2004
For the year ended December 31, 2005
For the year ended December 31, 2006
For the year ended December 31, 2007
For the year en<ted December 31, 2008
$
2,154
2,037
1,853
1,615
1,504
Total goodwill amortization expense for the year ended December 31, 2001 was $9,581. Total amortization expense for intangible
assets was $870, $1,351 and $1,677 for the years ended December 31,2001,2002 and 2003, respectively.
5. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
Landfill site costs
Rolling stock
Land, buildings and improvements
Containers
Machinery and equipment
December 31,
2002 2003
$ 412,226 $ 429,838
102,756 126,748
64,299 72,463
57,365 66,711
50,926 69,668
687,572 765,428
(109,532 ) (152,203 )
$ 578,040 $ 613,225
t,
Less accumulated depreciation and depletion
The Company's landfill depletion expense for the years ended December 31, 2001, 2002 and 2003 was $8,008, $12,123, and
$13,618, respectively.'
6. OTHER ASSETS
Other assets consist of the following:
Restricted cash
Deferred financing costs
Investment in unconsolidated entity
Other
December 31,
2002 2003
$ 11,314 $ 17,734
12,270 13,961
5,300
1,578 1,874
$ 25,162 $ 38,869
Restricted cash is included as part of other assets and generally consists of amounts on deposit with various banks that support the
Company's financial assurance obligations for its landfill facilities' closure and post-closure costs and amounts outstanding under
various municipal debt obligations.
f'
62
~--~"'''-='''--~''''~~~~''--<--~~~""","--=-~"",--"-~---~--~~,-,,,"",,-- --.
~~il
~:
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
7. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
Income taxes
Payroll and payroll-related
Interest payable
Insurance claims
Acquisition-related
Interest rate swaps
Other
December 31,
2002 2003
$ 11 ,996 $ 4,784
7,137 5,783
4,201 4,422
4,038 8,611
11,017 3,232
3,996
3,520 5,088
$ 45,905 $ 31,920
8. LONG-TERM DEBT
Long-term debt consists of the following:
l}I'
t~: ,
Revolver under Credit Facility
Term Loan under Credit Facility
2006 Convertible Subordinated Notes
2022 Floating Rate Convertible Subordinated Notes
200 1 Wasco Bonds
California Tax-Exempt Bonds
Notes payable to sellers in connection with acquisitions,
unsecured, bearing interest at 5.0% to 9.0%, principal
and interest payments due periodically with due dates
ranging from 2004 to 2012
Notes payable to third parties, secured by substantially all
assets of certain subsidiaries of the Company, bearing
interest at 3.0% to 11.0%, principal and interest payments
due periodically with due dates ranging from 2004 to 2010
$
December 31,
2002 2003
216,000 $ 53,000
175,000
150,000
175,000
13,600
28,970
150,000
175,000
13,600
8,945
5,357
5,356
Less - current portion
13,225
582,127
(3,646 )
578,481 $
10,705
611,631
(9,740 )
601,891
$
Credit Facility
In 2000, the Company entered into a revolving credit facility with a syndicate of banks for which Fleet Boston Financial
Corporation acted as agent. Under the credit facility, the Company could borrow up to $435,000. In October 2003, the Company
amended its Credit Facility to increase the maximum borrowings to $575,000. This new credit facility consists of a $400,000 senior
secured revolving credit facility with a syndicate of banks for which Fleet National Bank acts as agent, and a $175,000 senior secured
term loan. As of December 31, 2002, the Company had an aggregate of $216,000 outstanding under the credit facility, exclusive of
.
63
[~--- "."."
WASTE CONNECTIONS, INe.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
~
outstanding stand-by letters of credit of $23,638. As of December 31, 2003, $228,000 was outstanding under the credit facilIty as
follows: $175,000 was outstanding under the semor secured term loan and $53,000 was outstanding under the senior secured
revolving credit facility, exclusive of outstanding stand-by letters of credit of $45,905. The senior secured revolving credit facility
requires monthly 10terest payments and matures in October 2008. The senior secured term loan requires annual principal payments
equal to 1 % of the notional balance at the end of years one through six with all remaining outstanding amounts due October 2010.
Under the new credit facIlity, there is no maximum amount of stand-by letters of credit that can be Issued; however, the issuance of
stand-by letters of credit reduces the amount of total borrowings available. The new credit facility requires the Company to pay a
commitment fee ranging from 0.25% to 0.50% of the unused portion of the new credit facility. The Company is able to increase the
maximum borrowings under the new credit facility to $675,000, although no existing lender will have any obligation to increase its
commitment, provided that no event of default, defined in the new credit facility, has occurred. The borrowings under the new credit
facility bear interest at a rate per annum equal to, at the Company's discretion, either the Fleet National Bank Base Rate plus
applicable margin (5.0% and 4.5% as of December 31, 2002 and 2003, respectively), or the LIBOR rate plus applicable margin
(approximately 3.7% and 3.2% as of December 31, 2002 and 2003, respectively). The applicable margin under the revolving credit
facility varies depending on the Company's leverage ratio. The applicable margin on the term loan is 50 basis points in the case of
loans based on the Base Rate and 200 basis points 10 the case of loans based on the LIB OR rate. Virtually all of the Company's
assets, including its interest in the equity securities of its subsidiaries, secure its obligations under the new credit facility. The new
credit facility places certain business, financial and operating limitations on the Company relating to, among other things, the
incurrence of additional indebtedness, investments, acquisItions, asset sales, mergers, dividends, distributions and repurchases and
redemption of capital stock. The new credit facility does permit redemption of the 2006 Notes. The new credit facility also requires
that specified financial ratios and balances be ma1Otained. As of December 31, 2002 and 2003, the Company was in compliance with
all applicable covenants in its then outstanding credit facility.
5.5% Convertible Subordinated Notes Due 2006
In April 2001, the Company issued 5.5% Convertible Subordinated Notes due April 2006 (the "2006 Convertible SubordinattA
Notes") with an aggregate pr10cipal amount of $150,000 in a Rule 144A offering. The 2006 Convertible Subordinated Notes aTl
unsecured, rank junior to existing and future Senior Indebtedness, as defined in the indenture governing the notes, and are convertible
at any time at the option of the holder into common stock at a conversion price of $38.03 per share. The notes are callable by the
Company beginning April 2004 at an early call premium of 102.2%. The proceeds from the sale of the 2006 Convertible
Subordinated Notes were used to repay a portion of the outstanding indebtedness and related costs under the Credit Facility.
Floating Rate Convertible Subordinated Notes due 2022
In April 2002, Waste Connections issued Floating Rate Convertible Subordinated Notes due 2022 (the "2022 Floating Rate
Convertible Subordinated Notes") with an aggregate principal amount of $175,000 in a Rule 144A offering. The 2022 Floating Rate
Convertible Subordinated Notes are unsecured and rank pan passu with the Company's 2006 Convertible Subordinated Notes and
junior to all other existing and future senior indebtedness, as defined in the indenture governing the 2022 Floating Rate Convertible
Subordinated Notes. The 2022 Floating Rate Convertible Subordinated Notes bear interest at the 3-month LIBOR rate plus 50 basis
points, payable quarterly.
The holders may surrender notes for conversion into common stock at a conversion price of $48.39 per share on or after August 1,
2002, but prior to the maturity date, only if any of the following conditions are satisfied: (a) the closing sale price per share of the
Company's common stock for at least 20 trading days 10 the period of 30 consecutive trading days ending on the last trading day of
the calendar quarter preceding the calendar quarter in which the conversion occurs is more than 110% of the conversion price per
share on that thirtieth trad10g day; (b) during such period, if any, that the credit ratings assigned to the 2022 Floating Rate Convertible
Subordinated Notes by Moody's Investors Service, Inc. and Standard & Poor's Rating Group (the "Rating Agencies") are reduced
below B3 or B-, respectively; (c) if neither Rating Agency is rating the 2022 Floating Rate Convertible Subordinated Notes; (d) during
the five business day penod after any nine consecutive trading day penod in which the trading price of the 2022 Floating Rate
Convertible Subordinated Notes (per $1 principal amount) for each day of such period is less than 95% of the product of the closing
sale price of the Company's common stock multiplied by the number of shares Issuable upon conversion of $1 prinCipal amount of the
,
t
64
~~~""" =_"'~4 "" - - "-'" -''-~-:-'''';;''';~-~-~-~~-.-;c~___''''~''''''''-,""--_''_''''''~_r''''~~__._",~"_ _~__ ~~ ~___~____~.~..-~
~'.)
~,
WASTE CONNI;:CTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
2022 Floating Rate Convertible Subordinated Notes; (e) upon the occurrence of specified corporate transactions; or (f) if the 2022
Floating Rate Convertible Subordinated Notes have been called for redemption and the redemption has not yet occurred.
The Company may redeem all or a portion of the 2022 Floating Rate Convertible Subordinated Notes for cash at any time on or
after May 7, 2006. Holders of the 2022 Floating Rate Convertible Subordinated Notes may require the Company to purchase their
notes in cash at a price of par plus accrued interest, if any, upon a change in control of the Company, as defined in the indenture, or on
any of the following dates: May 1, 2009, May 1, 2012 and May 1, 2017.
The net proceeds from the sale of the 2022 Floating Rate Convertible Subordinated Notes were used to repay a portion of the
outstanding indebtedness under the Company's credit facility.
Wasco Bond
In December 1999, the Company completed a $13,600 tax-exempt bond financing for its Wasco subsidiary (the "Wasco Bond").
These funds were used for the acquisition, construction, furnishing, equipping and improving of a landfill located in Wasco County,
Oregon (the "Landfill Project"). In March 2001, the Company refmanced the Wasco Bond by completing $13,600 of tax-exempt
revenue bond financing through the issuance of three bonds (the "2001 Wasco Bonds"). The Company incurred debt extinguishment
costs of$I44, net of tax, related to this refinancing. The 2001 Wasco Bonds consist of$I,040 of 6.5% term bonds due March 1,2004,
$4,085 of 7.0% term bonds due March 1, 2012 and $8,475 of 7.25% term bonds due March 1, 2021. On an annual basis, the
Company is required to remit sinking fund payments to a restricted cash account held by a trustee. The sinking fund requirement in
2002 and 2003 were $325 and $345, respectively. The total future sinking fund requirements are as follows: $370 in 2004, $395 in
2005, $425 in 2006, $455 in 2007, $485 in 2008 and $10,800 thereafter. Until used to repay outstanding principal on the bonds, these
sinking fund payments are classified as restricted cash and mcluded in other assets in the accompanying consolidated balance sheet.
!. .a1ifOrnia Tax-Exempt Bonds
In June 1998, the Company completed.a $1,800 tax-exempt bond financing for its Madera subsidiary (the "Madera Bond"). These
funds were used for specified capital expenditures and improvements, including installation of a landfill gas recovery system. The
bonds mature on May 1, 2016 and bear interest at variable rates based on market conditions for California tax-exempt bonds
(approximately 1.8% and 1.3% at December 31,2002 and 2003, respectively). The bonds are backed by a letter of credit issued by
Fleet Boston Financial Corporation under the Credit Facility for $1,829.
In July 1998 and May 1999, Cold Canyon Landfill, Inc. and South County Sanitary Service, Inc., wholly-owned subsidiari(\s of the
Company acquired in 2002, received a total of $9,490 from the issuance of tax-exempt ,bond financing (the "Cold Canyon and South
County Bonds") through the California Pollution Control Financing Authority. These funds were used for specified capital
expenditures and improvements. The outstanding balance of the Cold Canyon and South County Bonds was $7,145 at December 31,
2003 with scheduled principal maturities of$I,300 in May 2006 and $5,845 in July 2008. The Cold Canyon and South County Bonds
bear interest at vanable rates based on market conditions for California tax-exempt bonds (approximately 1.8% and 1.3% at December
31,2002 and 2003, respectively) and are backed by a letter of credit issued by Fleet Boston Financial Corporation under the Credit
Facility for $7,246.
In June 1999, GreenWaste of Tehama, a wholly-owned subsidiary of the Company acquired in 2003, received a total of $3,435
from the issuance of tax-exempt bond financing (the "Tehama Bonds") through California Pollution Control Financing Authority.
These funds were used to finance improvements to and expansion of certain solid waste disposal facilities. The outstanding balance of
the Tehama bonds was $2,060 at December 31, 2003. The bond bears interest at variable rates based on market conditions for
California tax-exempt bonds (approximately 1.3% at December 31,2003). On an annual basis, the Company is reqUIred to remit
sinking fulld payments to a restricted cash account held by a trustee. There was not a sinking fund requirement in 2003. The total
future sinking fund requirements are as follows: $430 in 2004, $455 in 2005, $475 in 2006, $60 in 2007, $60 in 2008 and $580
thereafter. Until used to repay outstanding principal on the bonds, these sinking fund payments are classified as restricted cash and
included in other assets in the accompanying consolidated balance sheet.
.
65
F;-:-- ...-. 'u,...
_1
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
t
In August 1997 and October 2001, GreenTeam of San Jose, a wholly-owned subsidiary of the Company acquired in 2003, received
a total of $18,040 from the issuance of tax-exempt bond financing (the "San Jose Bonds") through California Pollution Control
Financing Authority. These funds are used for specified capital expenditures and improvements. The outstanding balance of the San
Jose bonds was $17,965 at December 31, 2003. The bonds bear interest at variable rates based on market conditions for California
tax-exempt bonds (approximately 1.3% at December 31, 2003). On an annual basis, the Company is required to remit sinking fund
payments to a restricted cash account held by a trustee. There was not a sinking fund requirement in 2003. The total future sinking
fund requirements are as follows: $1,960 in 2004, $2,080 in 2005, $2,180 in 2006, $2,305 in 2007, $2,420 in 2008 and $7,020
thereafter. Until used to repay outstanding principal on the bonds, these sinking fund payments are classified as restricted cash and
included in other assets in the accompanying consolidated balance sheet.
The Company. has a total of $28,970 of tax-exempt bonds at December 31, 2003 that mature through 2016 that are remarketed
weekly by a remarketing agent to effectively maintain a variable yield. If the remarketing agent is unable to remarket the bonds, then
the remarketing agent can put the bonds to the Company. The Company has obtained stand-by letters of credit, issued under its senior
secured revolving credit facility, to guarantee repayment of the bonds in this event. The Company classified these borrowings as 10ng-
term at December 31,2003 because the borrowings are supported by stand-by letters of credit issued under the Company's senior
secured revolving credit facility which is long-term.
Interest Rate Swaps
In December 2000, the Company restructured two existing interest rate swap agreements, extending their maturity through
December 2003 and removing the embedded option features of the agreements. As of December 31, 2000, the Fleet Boston swap had
a notional amount of $125,000 at a fixed rate of 6.17% plus applicable margin and the Union Bank of California swap had a notional
amount of $125,000 at a fixed rate of 7.01 % plus applicable margin. In March 2001, $110,000 of the notional amount under the
Union Bank of California swap was terminated because the Company used the proceeds from its Convertible Subordinated Not4
offering to repay $110,000 of the LIBOR note, the cash flows of which this swap was designated to hedge. The Company made a cas!
payment of$6,337 to terminate the swap in 2001.
At December 31, 2003, the Company's derivative instruments consisted of two forward-starting interest rate swap agreements,
entered into in May 2003. Each interest rate swap agreement has a notional amount of $87,500 and effectively fixes the interest rate
on the notional amount at interest rates ranging from 2.67% to 2.68%, plus applicable margin. The effective date of the swap
agreements is February 2004 and each swap agreement expires in February 2007. These interest rate swap agreements are effective as
cash flow hedges for a portion of the Company's variable rate debt and the Company applies hedge accounting pursuant to SFAS No.
133 to account for these instruments. The notional amounts and all other significant terms of the swap agreements are closely matched
to the provisions and terms of the variable rate debt being hedged.
As of December 31, 2003, aggregate contractual future principal payments by calendar year on long-term debt are due as follows:
2004 $ 9,740
2005 7,395
2006 157,871
2007 6,240
2008 66,720
Thereafter 363,665
$ 611,631
t
66
-i; '..:;- tk <'-<- _ ~
-- - -,e> ' - __"'~~__ ~~ __....~~.r"'~'""'~_ ~~_____~_~o____""_~_,~_~~____ ____
~,
.
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
9. COMMITMENTS AND CONTINGENCIES
COMMITMENTS
Leases
The Company leases its facilities and certain equipment under non-cancelable operating leases for periods ranging from one to ten
years. The Company's total rent expense under operating leases during the years ended December 31, 2001, 2002 and 2003 was
$2,699, $4,493, and $4,687, respectively.
As of December 31, 2003, future minimum lease payments under these leases, by calendar year, are as follows:
2004 $ 3,980
2005 3,468
2006 2,804
2007 2,391
2008 2,222
Thereafter 12,191
$ 27,056
Financial Surety Bonds
The Company uses fmancial surety bonds for a variety of corporate guarantees. The two largest uses of fmancial surety bonds are
"r municipal contract performance guarantees and landfill closure and post-closure financial assurance required under certain
.nvironmental regulations. Environmental regulations require demonstrated fmancial assurance to meet closure and post-closure
requirements for landfills. In addition to surety bonds, these requirements may also be met through alternative financial assurance
instruments, including insurance, letters of credit and restricted cash deposits.
At December 31, 2002 and 2003, the Company had provided customers and various regulatory authorities with surety bonds in the
aggregate amount of approximately $36,300 and $54,495, respectively, to secure its landfill closure and post-closure r~quirements and
$27,800 and $37,795, respectively, to secure performance under collection contracts and landfill operating agreements.
In August 2003, the Company paid $5,300 to acquire a 9.9% interest in a company that, among other activities, issues financial
surety bonds to secure landfill closure and post-closure obligations for companies operating in the solid waste industry. The Company
accounts for this investment under the cost method of accounting. At December 31, 2003, this investee company had written $17,815
of the Company's financial surety bonds for landfill closure and post-closure obligations. The Company's r~imbursement obligations
under these bonds are secured by a pledge of its stock in the investee company.
Unconditional Purchase Obligation
The Company has an unconditional obligation to purchase diesel fuel under a 24 month agreement expiring on December 31, 2005.
The total minimum amount of diesel fuel to be purchased under the agreement is $20,526.
CONTINGENCIES
Environmental Risks
The Company is subject to liability for any environmental damage that its solid waste facilities may cause to neighboring
landowners or residents, particularly as a l'esult of the contamination of soil, groundwater or surface water, and especially drinking
~
WASTE CONNECTIONS, INe.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
c
water, including damage resulting from conditions existing prior to the acquisition of such facilities by the Company. The Company
may. also be subject to liability for any off-site environmental contamination caused by pollutants or hazardous substances whose
transportation, treatment or disposal was arranged by the Company or its predecessors. Any substantial liability for environmental
damage incurred by the Company could have a material adverse effect on the Company's financial condition, results of operations or
cash flows. As of December 31, 2003, the Company is not aware of any sigmficant environmental liabilities.
Legal Proceedings
The Company owns undeveloped property in Harper County, Kansas where it is seeking permits to construct and operate a
municipal solid waste landfill. In 2002, the Company received a special use permit from Harper County for zoning the landfill and in
2003 it received a draft permit from the Kansas Department of Health and Environment to construct and operate the landfill. In July
2003, the District Court of Harper County invalidated the previously issued zoning permit. The Company has appealed the District
Court's decision to invalidate the zoning permit. The Kansas Department of Health and Environment has notified the Company that it
will not issue a final permit to construct and operate the landfill until the zoning matter is resolved. At December 31, 2003, the
Company had $3,900 of capitalized expenditures related to this landfill development project. Based on the advice of counsel, the
Company believes that it will prevail in this matter and does not believe that an impairment of the capitalized expenditures exists. If
the Company does not prevail on appeal, however, it will be required to expense in a future period the $3,900 of capitalized
expenditures, less the recoverable value of the undeveloped property and other amounts recovered, which would likely have a material
adverse effect on its reported income for that period.
The Company. is primarily self-insured for automobile liability, general liability and workers' compensation claims. The Company
is a party to various claims and suits pending for alleged damages to persons and property and alleged liabilities occurring during the
normal operations of the solid waste management business. On October 31, 2003, the Company's subsidiary, Waste Connections of
Nebraska, Inc., was named as a defendant in the case of Karen Colleran, Conservator of the Estate of Robert Rooney v. Waste
Connections of Nebraska, Inc. The plaintiff seeks recovery for damages allegedly suffered by Father Robert Rooney when the bicyc~
he was riding collided with one of the Company's garbage trucks. The complaint alleges that Father Rooney suffered serious bodil'
injury, including traumatic brain injury. The plaintiff seeks recovery of past medical expenses of approximately $430 and an
unspecified amount for future medical expenses, and home healthcare, past pain and suffering, future pain and suffering, lost income,
loss of earning capacity, and permanent injury and disability. The Company's primary defense is that the plaintiff is not entitled to
any damages under Nebraska law, where the accident occurred, because the negligence of Father Rooney was equal to or greater than
any negligence on the part of the driver, and the Company intends to defend this case vigorously. This case is in the preliminary stages
of discovery and the Company has not accrued any potential loss as of December 31, 2003; however, an adverse outcome in this case
coupled with a significant award to the plaintiff could have a material adverse effect on the Company's reported income in the period
incurred.
In the normal course of its business and as a result of the extensive governmental regulation of the solid waste industry, the
Company is subj~ct to various judicial and administrative proceedings involving federal, state or local agencies. In these proceedings,
an agency may seek to impose fines on the Company or to revoke or deny renewal of an operating permit held by the Company. From
time to time the Company may also be subject to actions brought by citizens' groups or adjacent landowners or residents in connection
with the permitting and licensing of landfills and transfer stations, or alleging environmental damage or violations of the permits and
licenses pursuant to which the Company operates.
In addition, the Company is a party to various claims and suits pending for alleged damages to persons and property, alleged
violations of certain laws and alleged liabilities arising out of matters occurring during the normal operation of the waste management
business. However, as of December 31, 2003 there is no current proceeding or litigation involving the Company that the Company
believes will have a material adverse impact on its business, financial condition, results of operations or cash flows.
-I
68
~.
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER 'SHARE AMOUNTS)
Guarantees
The Company has guaranteed the tax-exempt bonds for its Wasco subsidiary. If this subsidiary fails to meet its obligations
associated with tax-exempt bonds as they come due, the Company will be required to perform under the related guarantee agreement.
No additional liability has been recorded for these guarantees because the underlying obligations are reflected in the Company's
consolidated balance sheets. See Note 8 for information on the Wasco tax-exempt bond balances and maturities.
10. STOCKHOLDERS' EQUITY
Common Stock
Of the 21,333,212 shares of common stock authorized but unissued as of December 31, 2003, the following shares were reserved
for issuance:
Stock option plans
2006 Convertible Subordinated Notes
2022 Floating Rate Convertible Subordinated Notes
Consultant Incentive Plan
Stock purchase warrants
Restricted stock plan
6,537,795
3,944,775
3,616,445
500,000
120,333
90,025
14,809,373
. IReStricted Stock
~ ~ .
f " During 2002, the Company's Board of Directors adopted the 2002 Restricted Stock Plan (the "Restricted Stock Plan") in which
selected employees, other than officers and directors, may participate. Restricted stock awards under the Restricted Stock Plan mayor
may not require a cash payment from a participant to whom an award is made. The awards become free of the stated restrictions over
periods determined at the date of the grant, subject to continuing employment, the achievement of particular performance goals and/or
the satisfaction of certain vesting provisions applicable to each award of shares. The Board of Directors currently administers the
Restricted Stock Plan. The Board of Directors authorizes the grant of any stock awards and determines the employees to whom shares
are awarded, number of shares to be awarded, award period and other terms and conditions of the awards. Shares of restricted stock
may be forfeited and revert to the Company if a plan participant resigns from Waste Connections and its subsidiaries, is terminated for
cause or violates the terms of any noncompetition or nonsolicitation agreements to which that plan participant is bound (if such plan
participant has been terminated without cause). A total of 95,000 shares were reserved for issuance under the Restricted Stock Plan.
During the years ended December 31, 2002 and 2003, the Company issued 23,003 and 1,300 shares of restricted stock, with grant-date
fair values of $35.28 and $36.63 per share, respectively, to selected employees. The total fair value of the issued restricted stock was
$812 and $48 for the years ended December 31, 2002 and 2003, respectively, and is being amortized to expense over the three-year
restriction period. During 2003, a portion of the restricted stock granted in 2002 became free of restrictions, resulting in the issuance
of 4,975 shares of common stock.
Stock Options
In 1997, the Company's Board of Directors adopted a stock option plan in which all officers, employees, directors and consultants
may participate (the "1997 Option Plan"). Options granted under the 1997 Option Plan may either be incentive stock optiQns or
nonqualified stock options, generally have a term of 10 years from the date of grant, and will vest over periods determined at the date
of grant. The exercise prices of the options are determined by the Company's Board of Directors and will be at least 100% or 110% of
the fair market value of the Company's common stock on the date of grant as provided for in the Option Plan.
.~
t~
69
~:-
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
f
The 1997 Option Plan provides for the reservation of common stock for issuance thereunder equal to 3,500,000 shares. The
amount of common stock reserved for issuance under the 1997 Option Plan is decreased for options exercised and increased for
previously granted options that have been forfeited or cancelled. As of December 31, 2003, options for 64,006 shares of common
stock were available for future grants under the 1997 Option Plan.
In 2002, the Company's Board of Directors authorized two additional equity-based compensation plans: the 2002 Stock Option
Plan and 2002 Senior Management Equity Incentive Plan. A total of 2,500,000 shares of the Company's common stock were
reserved for future issuance under the 2002 Stock Option Plan. Participation in the 2002 Stock Option Plan is limited to consultants
and employees, other than officers and directors. Options granted under the 2002 Stock Option Plan are nonqualified stock options
and have a term of no longer than ten years from the date they are granted. Options generally become exercisable in installments
pursuant to a vesting schedule set forth in each option agreement. The Board of Directors authorizes the granting of options and
determines the employees and consultants to whom options are to be granted, the number of shares subject to each option, the exercise
price, option term, vesting schedule and other terms and conditions of the options. A total of 3,000,000 shares of the Company's
common stock were reserved for future issuance under the 2002 Senior Management Equity Incentive Plan. The Company's
stockholders approved the 2002 Senior Management Equity Incentive Plan on May 16, 2002. Participation in the 2002 Senior
Management Equity Incentive Plan is limited to officers and directors of the Company. Options granted under the 2002 Senior
Management Equity Incentive Plan may be either incentive stock options or non-qualified stock options. As of December 31, 2003,
options for 965,061 and 1,885,000 shares of common stock were available for future grants under the 2002 Stock Option Plan and
2002 Senior Management Equity Incentive Plan, respectively.
As of December 31, 2001, 2002, and 2003, a total of 521,396, 690,577, and 940,367 options to purchase common stock were
exercisable under all stock option plans, respectively.
A summary of the Company's stock option activity and related information for the years ended December 31, 2001, 2002 an~
2003 is presented below: .
Outstanding as of December 31, 2000
Granted
Forfeited
Exercised
Outstanding as of December 31, 2001
Granted
Forfeited
Exercised
Outstanding as of December 31, 2002
Granted
Forfeited
Exercised
Outstanding as of December 31, 2003
Number of
Shares (Options)
1,464,251
1,050,050
(55,597 )
(556,835 )
1,901,869
1,530,589
(112,161 )
(616,670 )
2,703,627
1,643,750
(113,066)
(610,583)
3,623,728
70
Weighted
Average
Exercise Price
$ 13.65
25.26
20.58
13.33
20.00
25.91
26.09
17.12
23.79
32.70
28.80
20.10
28.29
t-
,.
I~
I,
~.
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
The following table summarizes information about stock options outstanding as of December 31, 2003:
Shares
2,500
118,666
1,411,217
2,091,345
3,623,728
Options Outstanding
Weighted
Average
Remaining
Contractual
Life
(In Years)
6.4
5.3
7.6
9.0
8.3
Options Exercisable
Exercise Price
$3.50 to 5.00
$10.25 to 12.00
$16.81 to 25.06
$25.31 to 37.75
Weighted
Average
Exercise
Price
$ 3.80
11.00
24.11
32.13
28.29
Shares
500
118,666
578,343
242,858
940,367
Weighted
Average
Exercise
Price
$ 5.00
11.00
23.90
31.11
24.12
Stock Purchase Warrants
In 2002, the Company's Board of Directors authorized the 2002 Consultant Incentive Plan (the "Consultant Incentive Plan"), under
which warrants to purchase the Company's common stock may be issued to certain consultants to the Company. Warrants awarded
under the Consultant Incentive Plan are subject to a vesting schedule set forth in each warrant agreement. Historically, warrants
issued have been fully vested and exercisable at the date of grant. The Board of Directors authorizes the issuance of warrants and
determines the consultants to whom warrants are to be issued, the number of shares subject to each warrant, the purchase price,
I ~xercise date and period, warrant term and other terms and conditions of the warrants. The Board reserved 500,000 shares of the
I \~ompany's common stock for future issuance under the Consultant Incentive Plan. The Company issued 400 and 41,600 warrants
under the Consultant Incentive Plan during the years ended December 31, 2002 and 2003, respectively.
The following table summarizes information about warrants outstanding as of December 31, 2002 and 2003:
Issue Warrants Exercise Fair Value Outstanding at December 31,
Date Issued Pnce of Warrants 2002 2003
Warran~issuedinconnection
with an acquisition February 1998 200,000 $ 4.00 $ 954 73,333 73,333
Warrants issued to third-party
acquisition consultants Throughout 2001 11,499 28.28 to 33.45 104 11,429
Warrants Issued to third-party
acquisition consultan~ Throughout 2002 64,610 26.75 to 37.00 577 64,610 52,400
Warran~ issued to employees Throughout 2003 600 33.66 to 35.00 17 600
Warran~ issued to third-party
acquisition consultants Throughout 2003 41,000 28.45 to 35.77 173 41,000
149,372 167,333
The warrants are exercisable when granted and expire between 2003 and 2008.
Warrants issued to employees and third-party acquisition consultants are valued using the Black-Scholes pricing model with
assumed stock price volatility and risk-free interest rates similar to those used for stock options, and with an expected life of 2 years.
~.
71
~----~------- ------------- - -- -----
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
t,' .~
Warrants issued to third-party acquisition consultants are recorded as an element of the related cost of acquisitions. Warrants issued to
employees are charged to expense.
11. COMPREHENSIVE INCOME
Comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-stockholder sources. The
components of other comprehensive income (loss) and related tax effects for the years ended December 31, 2001, 2002 and 2003 are
as follows:
Year Ended December 31. 2001
Gross Tax effect Net of tax
Cumulative effect of accounting change $ (5,940) $ 2,340 $ (3,600)
Amounts reclassified into earnings 9,648 (3,801) 5,847
Changes in fair value of interest rate swaps (11,852) 4,670 (7,182)
$ (8,144) $ 3,209 $ (4,935)
Year Ended December 31. 2002
Gross Tax effect Net of tax
Amounts reclassified into earnings $ 6,404 $ (2,402) $ 4,002
Changes in fair value of interest rate swaps (4,653) 1,590 (3,063)
$ 1,751 $ (812) $ 939
Year Ended December 31. 2003 fi
Gross Tax effect Net of tax
Amounts reclassified into earnings $ 6,667 $ (2,467) $ 4,200
Changes in fair value of interest rate swaps 366 (167) 199
$ 7,033 $ (2,634) $ 4,399
In March 2001, the Company determined that the debt, the specific cash flows of which an interest rate swap was designated to
hedge, would be repaid prior to its due date as a result of the convertible subordinated debt offering (Note 8); therefore, it was
probable that the future variable interest payments under the related debt (the hedged transactions) would not occur and accordingly,
unrealized losses of $6,337 in other comprehensive income related to the swap were reclassified into earnings. The interest rate swap
was terminated for a cash payment equal to its then fair value of $(6,337).
The estimated net amount of the existing unrealized gains as of December 31, 2003 (based on the interest rate yield curve at that
date) included in accumulated other comprehensive income expected to be reclassified into pre-tax earnings within the next 12 months
is $0. The timing of actual amounts reclassified into earnings is dependent on future movements in interest rates.
f
72
I.
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
12. INCOME TAXES
The provision for income taxes before the cumulative effect of the change in accounting principle for the years ended December
31, 2001, 2002 and 2003 consists of the following:
Year Ended December 31,
2001 2002 2003
Current:
Federal $ 6,792 $ 21,151 $ 8,334
State 578 1,830 1,112
Deferred:
Federal 12,388 9,293 26,844
State 54 839 1,109
$ 19,812 $ 33,113 $ 37,399
Significant components of deferred income tax assets and liabilities are as follows as of December 31, 2002 and 2003:
2002 2003
Deferred income tax assets:
Accounts receivable reserves $ 951 $ 963
Accrued expenses 934 1,305
. State taxes 102
r Net operating losses from acquired subsidiaries 4,436
. ~
Other 837 1,294
Total deferred income tax assets: 2,824 7,998
Deferred income tax liabilities:
Net asset basis difference in
non-taxable acquisitions (59,454 ) (61,332 )
Amortization (9,393 ) (24,462 )
Depreciation (26,336 ) (37,000 )
Other liabilities (33 ) (1,706 )
Prepaid expenses (2,151 ) (3,660 )
Total deferred income tax liabilities (97,367 ) (128,160 )
Net deferred income tax liability $ (94,543 ) $ (120,162 )
During the years ended December 31, 2002 and 2003, the Company reduced its taxes payable by $3;572 and $3,078, respectively,
as a result of the exercise of non-qualified stock options and the disqualifying disposition of incentive stock options. These amounts
were recorded in additional paid-in capital.
-:jl'~.
)' ,
_ 7 "_
73
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
t
The differences between the Company's provision for income taxes as presented in the accompanying statements of operations and
benefit for income taxes computed at the federal statutory rate consist of the items shown in the following table as a percentage of pre-
tax income:
Income tax provision at the statutory rate
State taxes, net of federal benefit
Goodwill amortization
Other
Year Ended December 31,
2001 2002 2003
35.0% 35.0% 35.0%
2.0 2.2 1.1
1.5
0.9
39.4%
0.2
37.4%
0.2
36.3%
At December 31, 2003, the Company had approximately $12,000 of federal and state net operating loss ("NOL") carryforwards.
The federal and state NOL carryforwards have expiration dates through the year 2022. While we expect to realize the deferred tax
assets, ~hanges in estimates of future taxable income or in tax laws may alter this expectation.
13. NET INCOME PER SHARE INFORMATION
The following table sets forth the calculation of the numerator and denominator used in the computation of basic and diluted net
income per share for the years ended December 31, 2001, 2002 and 2003:
Year Ended' December 31,
2001 2002 2003 f
Numerator:
Net income for basic earnings per share $ 30,528 $ 55,466 $ 65,596
Interest expense on 2006 Convertible Subordinated Notes,
net of tax effects 5,852 5,902
Net income for diluted earnings per share $ 30,528 $ 61,318 $ 71,498
Denominator:
Basic shares outstanding 27,069,685 27,750,642 28,327,296
Dilutive effect of 2006 Convertible Subordinated Notes 3,944,775 3,944,775
Di1utive effect of stock options and warrants 605,954 628,954 595,888
Dilutive effect of restricted stock 1,253 3,693
Diluted shares outstanding 27,675,639 32,325,624 32,871,652
The Company's 2006 Convertible Subordinated Notes are convertible at any time at the option of the holders into a total of
3,944,775 shares of common stock. These shares have not been included in the computation of diluted net income per share for the
year ended December 31, 2001 because to have done so would have been antidilutive. The Company's 2022 Floating Rate
Convertible Subordinated Notes are convertible into 3,616,445 shares of common stock in accordance with the provisions listed in
Note 8 to these financial statements. These shares have not been included in the computation of diluted net income per share for the
year ended December 31, 2002 and 2003 because none of the provisions that would result in conversion of the notes into common
stock occurred during 2002 and 2003.
t
74
~Ja
p '"
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
Additionally, as of December 31,2002 and 2003, the following stock options and warrants were not included in the computation
of diluted net income per share because to do so would have been antidilutive:
Outstanding options
Outstanding warrants
December 31, 2002
Nwnber of Exercise
Shares Price Range
122,250 $33.06 to $37.75
24,650 $33.30 to $37.00
146,900
December 31, 2003
Number of Exercise
Shares Price Range
45,250 $34.87 to $37.75
2,700 $35.00 to $37.00
47,950
14. EMPLOYEE BENEFIT PLANS
WCI has a voluntary savings and investment plan (the "WCI 401(k) Plan"). The WCI 401(k) Plan is available to all eligible, non-
union employees ofWCI. Under the WCI 401(k) Plan, WCI's contributions were 40% of the fIrst 5% of the employee's contributions
at December 31, 2002 and were 50% of the fIrst 5% of the employee's contributions at December 31,2003. The Murrey Companies
have a voluntary savings and investment plan (the "Murrey 401(k) Plan"). The Murrey 401(k) Plan is available to all eligible, non-
union employees of the Murrey Companies. Under the Murrey 401(k) Plan, the Murrey Companies' contributions are at the discretion
of management. During the years ended December 31, 2001, 2002 and 2003, the tota1401(k) plan expense for the WCI and Murrey
401(k) plans was approximately $1,132, $1,477, and $1,942, respectively.
15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
. The following table summarizes the unaudited consolidated quarterly results of operations as reported for 2002 and 2003:
First Second Third Fourth
Quarter Quarter Quarter Quarter
Revenues:
2002 as reported $ 105,742 $ 128,091 $ 133,487 $ 131,341
Gross profit:
2002 (reflecting SFAS No. 143
reclassification as more fully
described in Note 1) 46,427 55,917 58,020 56,111
Net income:
2002 as reported 12,171 14,342 15,193 13,760
Basic income per common share:
2002 as reported 0.44 0.52 0.55 0.49
Diluted income per common share:
2002 as reported 0.43 0.49 0.51 0.47
t
75
WASTE CONNECTIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
Revenues:
2003 as reported
Gross profit:
2003 as reported
Income before cumulative effect of
change in accounting principle:
2003 as reported
Cumulative effect of change in
accounting principle, net of tax:
2003 as reported
Net income:
, 2003 as reported
Basic income per common share before
effect of change in accounting
principle:
2003 as reported
Net income per common share:
2003 as reported
Diluted income per common share
Before effect of change in accounting
principle:
2003 as reported
Net income per common share:
2003 as reported
16. SUBSEQUENT EVENTS
t
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
128,454
138,883
146,178
149,994
56,633
61,456
64,808
63,771
14,413
16,639
17,290
16,972
282
14,695
16,639
17,290
16,972
0.51 0.59 0.60 0.61
0.52 0.59 0.60 0.61
t
0.49 0.55 0.56 0.57
0.50 0.55 0.56 0.57
On March 2, 2004, the Company refmanced the term loan portion of its credit facility in order to reduce the effective borrowing
cost. The applicable margin on the senior secured term loan was reduced by 25 basis points; all other terms remained consistent. In
addition, the Company increased the amount outstanding under the senior secured term loan from $175,000 to $200,000, resulting in
an increase in the size of the facilit)l to $600,000.
On March 3, 2004, the Company announced that on April 15, 2004, it intends to redeem in full the Company's 5.5% Convertible
Subordinated Notes due 2006. Holders may convert their notes into shares of Waste Connections' common stock at a price of $38.03
per share or they may- have their notes redeemed at a total redemption price of$1.0495 per $1 principal amount of notes, consisting of
a redemption price of $1.022 plus accrued interest of $0.0275.
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Except as set forth above in Part I under "Executive Officers" and in the paragraph below, the information required by Item 10 has
been omitted from this report, and is incorporated by reference to the caption "Election of Directors" in our defmitive Proxy Statement
for the 2004 Annual Meeting of Stockholders, which we will file with the Commission pursuant to Regulation 14A within 120 days
after the end of our 2003 fiscal year.
We have adopted a Code of Conduct and Ethics that applies to our officers (including our principal executive officer, principal
fmancial officer, principal accounting officer, controller, and all other officers), directors and employees. We have also adopted
Corporate Governance Guidelines to promote the effective functioning of our Board of Directors and its Committees, to promote the
interests of stockholders and to ensure a common set of expectations concerning how the Board, its Committees and Managem~nt
should perform their respective functions. Our Code of Conduct and Ethics and our Corporate Governance Guidelines are available on '
our website at http://wasteconnections.com as are the charters of our Board's Audit, Nominating and Corporate Governance and
Compensation Committees. Information on the website is not part of this report. If we grant any waiver from our Code of Conduct
and E1:h;ics with respect to the conduct of executive officers or directors, we will publicly disclose such waiver to our stockholders as
required by applicable law. -
Stockholders may also obtain copies of the Corporate Governance documents, discussed above by contacting the Secretary of
Waste Connections at the address or phone number listed on the cover page of this Annual Report.
ITEMS 11, 12, 13 and 14.
The information required by Items 11 through 14 of Part III has been omitted from this report, and is incorporated by reference to
the captions "Executive Compensation," "Principal Stockholders," "Certain Relationships and Related Transactions" and "Principal
t-.' ccounting Fees and Services" in our definitive Proxy Statement for the 2004 Annual Meeting of Stockholders.
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ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
(a) See Index to Financial Statements on page 40. The following Financial Statement Schedule is filed herewith on page 77 and
made a part of thiS Report:
Schedule II -- Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulations of the Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.
(b) Reports on Form 8-K
On October 23, 2003, we filed a report on Form 8-K reporting our third quarter earnings in the form of a press release.
On October 23, 2003, we filed a report on Form 8-K reporting the closing of an agreement for $575 million in senior secured
credit facilities comprised of a $400 million senior secured five-year revolving credit facility and a $175 million senior secured seven-
year term loan.
(c) See Exhibit Index immediately following signature pages.
1(1
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SIGNATURES
f
Pursuant to the requrrements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused thi~
report to be sIgned on ItS behalf by the undersigned, thereunto duly authorized.
Waste Connections, Inc.
By: /s/ Ronald J. Mittelstaedt
Ronald J. Mittelstaedt
President, Chief Executive Officer and Chairman
Date: March 12, 2004
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoin
Ronald J. Mittelstaedt and Steven F. Bouck, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him
any and all capacities to sign any amendments to this Annual Report on Form lO-K, and to file the same with exhibits thereto aJ
other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that ea
of said attorneys-in-fact, or his substitutes, may do or cause to be done by virtue hereof. '
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf
the Registrant and in the capacities and on the dates indicated.
Sil!oature
/s/ Ronald J. Mittelstaedt
Ronald J. MIttelstaedt
/s/ Steven F. Bouck
Steven F. Bouck
/s/ David G. Eddie
David G. Eddie
/s/ Eugene V. Dupreau
Eugene V. Dupreau
/s/ Michael W. Harlan
MIchael W. Harlan
/s/ William J. Razzouk
William J. Razzouk
/s/ Robert H. Davis
Robert H. Davis
Title Date
President, Chief Executive Officer and Chairman
(principal executIve officer) March 12, 2004
Executive Vice President and Chief Financial Officer
(principal financial officer) March 12,2004
Vice President -
Corporate Controller (principal accounting officer) March 12,2004
Director and Regional Vice President - Western
Region March 12,2004
Director
M~
~.--
Director
March 12,2004
Director
March 12,2004
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! . ASTE CONNECTIONS, INC.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2001, 2002 and 2003
(in thousands)
Description
Deducted from asset accounts:
Allowance for doubtful accounts:
Year ended December 31, 2001
Year ended December 31, 2002
Year ended December 31, 2003
Additions Deductions
Balance at Charged to Charged (Write-offs, Balance
Beginning Costs and to Other Net of at End
of Year Expenses Accounts Collections) of Year
$ 1,899 $ 1,922 $ $ (1,654) $ 2,167
2,167 2,809 (2,467) 2,509
2,509 2,792 (2,731) 2,570
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EXHIBIT INDEX
Exhibit Number
3.1 (a)
3.2 (a)
4.1 (a)
4.2 (h)
4.3 (h)(+)
4.4 (h) (+)
4.5 (h) (+)
4.6 (i)
4.7 (i) (+)
4.8 (i)(+)
4.9 (i) (+)
10.1 (d)
10.2 (a)
10.3 (a)
10.4 (a)
10. (c)
10.6 (f)
10.7 (e)
10.8 (e)
10.9 (a)
10.10 (a)
10.11 (a)
10.12 (b) (+)
t
Description of Exhibits
Amended and Restated Certificate of Incorporation of the Registrant, in effect as of the date
hereof
Amended and Restated By-Laws of the Registrant, in effect as of the date hereof
Form of Common Stock Certificate
Form of Note for the Registrant's 5.5% Convertible Subordinated Notes due Apn115, 2006
Indenture between the Registrant, as Issuer, and State Street Bank and Trust Company, as
Trustee, dated as of April 4, 2001
Purchase Agreement between the Registrant and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, dated March 30, 2001
Registration Rights Agreement between the Registrant and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, dated as of April 4, 2001
Form of Note for the Registrant's Floating Rate Convertible Subordinated Notes Due 2022
Indenture between the Registrant, as Issuer, and State Street Bank and Trust Company of
California, N.A., as Trustee, dated as of April 30, 2002
Purchase Agreement between the Registrant and Deutsche Bank Securities Inc., dated April 26,
2002
Registration Rights Agreement between the Registrant and Deutsche Bank Securities Inc., dated as
of April 30, 2002
Second Amended and Restated 1997 Stock Option Plan
Form of Option Agreement
Form of Warrant Agreement
Form of Stock Purchase Agreement dated as of September 30, 1997
Form of Third Amended and Restated Investors' Rights Agreement, dated as of December 31,
1998
f
First Amended and Restated Employment Agreement between the Registrant and Ronald J.
. elstaedt, dated as of June 1, 2000
Secon mended Employment Agreement between the Registrant and Darrell Chambliss, dated
as of June , 2000
Second Amended Employment Agreement between the Registrant and Michael Foos, dated as of
June 1, 2000
Employment Agreement between the Registrant and Steven Bouck, dated as of February 1,1998
Employment Agreement between the Registrant and Eugene V. Dupreau, dated as of February
23, 1998
Form of Indemnification Agreement entered into by the Registrant and each of its directors and
officers
Loan Agreement, dated as of June 1, 1998, between Madera Disposal Systems, Inc. and the
California Pollution Control Financing Authority
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I ~-:.xhibit Number
- 10.13 (b)
10.14 (g)
i
~
10.15 (g)
, 10.16 (j)
10.17 (j)
10.18(k)
10.19 (k)
10.20 (I)
10.21 (m)
10.22 (n)
10.23 (n)
10.24 (0)
10.25
f 12.1
21.1
If~. 23.1
24
31.1
f 31.2
32
f: 99.1
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Descriotlon of Exhibits
,-
Employment Agreement between the Registrant and David M. Hall, dated as of July 8, 1998
Employment Agreement between the R~gistrant and James M. Little,_ dated as of September 13,
1999'" - - ' ,
Employment Agreement between the Registrant and Jerri L. Hunt, dated as of October 25, 1999
Employment Agreement between the Registrant ~d :Ke~eth O. Rose, datrd as of May 1,2002
Employment Agreement between the Registrant and Robert D. Evans, dat~d as of May 10,2002
2002 Seni~r Management Equity Incentive Pian
2002 Stock Option Plan
2002 Restricted Stock Plan
, .
Consultant Incentive Plan
, , ,
Employment Agreement between the Registrant and David G. Eddie, dated as of May 15,2001
Employment Agreement between the Registrant and Worthing F. Jackman, dated as of April 11,
2003
Amended and Restated Revolving Credit and Term Loan Agreement dated as of October 22, 2003
Refmancing Facility Amendment to 'Amended and Restated Revolving Credit and Term Loan
Agreement dated as of March 2, 2004
Statement regarding computation of ratio of earnings to ftxed charges
Subsidiaries of the Registrant
Consent of Ernst & Young LLP, Independent Auditors
Power of Attorne~. Reference is made to the, signature page of this Form 10-K.
Certiftcation of President and Chief Executive Officer
Certiftcation of Chief Financial Officer
Certiftcate of Chief Executive Officer and Chief Financial Officer
Proxy Statement for the Registrant's 2004 Annual Stockholders Meeting scheduled to be held
May 29, 2004. (To be fIled with the Commission prior to 120 days after December 31,2003, and
incorporated by reference herein to the extent indicated in Part III to this Form 1O-K.)
81
~'1"~---- -----------------------,-- - - - '- ,
(a)
(b)
(c).
(d)
(e)
(t)
(g}
(h)
(i)
G)
(k)
(I)
(m)
Incorporated by reference to the exhibits filed with the Registrant's Registration Statement on Form S-I, Registratiof,J
No. 333-48029.
Incorporated by reference to the exhibits filed with the Registrant's Registration Statement on Form S-4, Registration
No. 333-59199.
Incorporated by reference to the exhibits filed with the Registrant's Registration Statement on Form S-4, Registration
No. 333-65615.
Incorporated by reference to the exhibit filed with the Registrant's Form S-8, Registration No. 333-42096.
Incorporated by reference to the exhibit filed with the Registrant's Form 10-Q filed on November 14,2000.
Incorporated by reference to the exhibit filed with the Registrant's Form 10-Q filed on August 7, 2000.
Incorporated by reference to the exhibit filed with the Registrant's Form lO-K filed on March 13,2000.
Incorporated by reference to the exhibit filed with the Registrant's Form S-3 filed on June 5, 2001.
Incorporated by reference to the exhibit filed with the Registrant's Form S-3 filed on July 29,2002.
Incorporated by reference to the exhibit filed with the Registrant's Form IO-Q filed on August 13,2002.
Incorporated by reference to the exhibit filed with the Registrant's Form S-8 filed on February 21,2002.
Incorporated by reference to the exhibit filed with the Registrant's Form S-8 filed on June 19,2002.
fJ
(n) Incorporated by reference to the exhibit filed with the Registrant's Form 10-Q filed on August 13,2003.
Incorporated by reference to the exhibit filed with the Registrant's Form S-8 filed on January 8, 2003.
(0) Incorporated by reference to the exhibit filed with the Registrant's Form 8-K filed on October 23, 2003.
(+) Filed without exhibits and schedules (to be provided supplementally on request of the Commission).
-'"
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BOARD OF DIRECTORS & EXECUTIVE OFFICERS
Ronald J. Mittelstaedt, Director
Chazrman, President and Chief Executive Officer
Steven F. Bouck
Executive Vice Preszdent and Chief Financial Officer
Darrell W. Chambliss
Executive Vice Preszdent and Chzef Operatmg Officer
Robert D. Evans
Executwe Vice President - General Counsel
Kenneth O. Rose
Senior Vice President - Admmistration
David G. Eddie
Vice President - Corporate Controller
Michael R. Foos
Vice President - Chief Information Officer
David M. Hall
Vice President - Business Development
Eric O. Hansen
Vice Preszdent - Information Technology
Jerri L. Hunt
Vice Preszdent - Human Resources
Worthing F. Jackman
Vice President - Finance and Investor Relations
James M. Little
Vice President - Engineermg Servzces
Eugene V. Dupreau, Director
western Regional Vice President
Michael W. Harlan, Director
Executive Vice Preszdent, Chzef Operating Officer and Chief
Fmancial Officer - U.S. Concrete, Inc. - A provzder of
ready-mixed concrete and related products.
William J. Razzouk, Dzrector
Prmczpal- WjR Advzsors and WjR Ventures -
Management comultmg and mvestment firms.
Robert H. Davis, Director
President and Chief Executive Officer - GreenMan
Technologies, Inc. - A tzre shredding and recycling company.
REGION OFFICERS
WESTERN REGION
Eugene Dupreau, RegIOnal Vice President
Barry Peck, Regional Controller
PACIFIC NORTHWEST REGION
Eric Merrill, Regional Vice Preszdent
Brent Ditton, RegIOnal Controller
CENTRAL REGION
Phil Rivard, Regional Vice Prestdent
Randy Baham, RegIOnal Controller
EASTERN REGION
Rob Nielsen, RegIOnal Vice Preszdent
Blake Rhodes, RegIOnal Controller
E';- ----- -------- -- - - --
w
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STOCK MARKET INFORMATION
Waste Connections' common stock is traded on the
New York Stock Exchange under the ticker symbol
WCN.
COMPANY OFFICES
35 Iron Point Circle
Suite 200
Folsom, CA 95630
Telephone: (916) 608-8200
Fax: (916) 351-0249
ANNUAL MEETING
Shareholders are invited to attend our annual, meeting on
May 26, 2004, at 10:00 a.m. at the CSUS Alumni
Center - Capital Room, 6000 J Street, State University
Drive South, Sacramento, CA 95819.
TRANSFER AGENT & REGISTRAR
EquiServe Trust Company, N.A.
P.O. Box 43023
Providence, RI 02940-3023
Tel: (877) 282-1168
www.equiserve.com
INDEPENDENT AUDITORS
Ernst & Young LLP
555 Capitol Mall
Suite 650
Sacramento, CA 95814
LEGAL COUNSEL
Shartsis, Friese & Ginsburg LLP
One Maritime Plaza
Eighteenth Floor
San FranCISco, CA 94111
INVESTOR RELATIONS
Worthing Jackman
Telephone: (916) 608-8266
Fax: (916) 608-8291
e-mail: worthingi@wasteconnections.com
Additional copies of this report, Form IO-K,
the Proxy Statement or other finanCial information
are avatlable to shareholders without charge
by contacting our Investor Relations Department.
You may also contact us by vlsinng the Investor
Relations page on the Company's Web site at
www.wasteconnecnons.com.
,"
WASTE CONNECTIONS, INC.
35 IRON POINT CIRCLE FOLSOM, CA 95630 TELEPHONE (916) 608-8200 FAX. (916) 351-0249
~_____ _ ___ ;:-~'::'_"_-:;::-__ ------~~....._'~_____:---r..,~-;--_.... __~_.....__v;_ --
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON> D.C. 20549
FORM IO-K
(Mark One)
[Xl
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31> 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
[ ]
Commission File Number 1-6146
UNION PACIFIC RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
94-6001323
(I.R.S. Employer
Identification No.)
1416 DODGE STREET, OMAHA, NEBRASKA
(Address of principal executive offices)
68179
(Zip Code)
(402) 271-5000
(Registrant's telephone number, including area code)
- Securities-registered-pursuant to Section 12(h )-of the-Act:------------
Title of each Class
Name of each exchange on which registered
Missouri Pacific Railroad Company
4-1/4% First Mortgage Bonds due 2005
Missouri Pacific Railroad Company
4-3/4% General Income Mortgage Bonds due 2020 and
2030
Missouri Pacific Railroad Company
5% Income Debentures due 2045
New York Stock Exchange> Inc.
New York Stock Exchange> Inc.
New York Stock Exchange> Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION l(l)(a) AND (b)
OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES
-L
NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10- K or any amendment to this Form 10- K. [Xl.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes
No ----X-
None of the Registrant's voting stock is held by non-affiliates. The Registrant is a wholly owned subsidiary ofU nion
Pacific Corporation.
As of March 5, 2004, the Registrant had outstanding 7,130 shares of Common Stock, $10 par value, and 620 shares
of Class A Stock, $10 par value.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of Union Pacific Corporation's definitive Proxy Statement
for the Annual Meeting of Shareholders to be held on April 16, 2004, have been incorporated by reference into Part III
of this report. The Corporation's Proxy Statement will be filed with the Securities and Exchange Commission pursuant
to Regulation 14A.
2
...
.
.
.
.
.
.
Item 1.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
TABLE OF CONTENTS
UNION PACIFIC RAILROAD COMPANY
PART I
Business .... ......... ......... ..... ..... ............. ................ ........ ....... ....... ................. ...................... ........... ......
Properties.........................................................................................................................................
Legal Proceedings................ .............................................. ................... ................ ................ ...........
Submission of Matters to a Vote of Security Holders ...................................................................
PART II
Market for the Registrant's Common Equity and Related Shareholder Matters .........................
Selected Financial Data.... ...... ....... ...... ............ ............. .................. ......... ............. ...........................
Management's Discussion and Analysis of Financial Condition and Results of Operations ......
Management's Narrative Analysis of the Results of Operations ................................................... 10
Risk Factors ... ....... ........ ......... ................ ............................... ....... ......... .......... .... ......... ..... .... ........... 10
Cautionary Information ......... ................... .......... .............. ............................................................. 21
Quantitative and Qualitative Disclosures about Market Risk ......................................................
Financial Statements and Supplementary Data.............................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.....
Controls and Procedures ...... ............ ................ ......................... ............ ........... ..... ..... ........... .........
PART ill
4
7
8
9
10
10
10
22
23
48
48
Item 11.
~____ Jtem_l O. __ _ _Directors_and_Executive_Officers of the Registrant..............................,."...~"..~.....".,._",...,._=...." __ ___ ~_ _______ _ ____ ______ ____
49
Item 12.
Item 13.
Item 14.
Item 15.
Executive Compensation.. ................ ...... ..... ............. ...................... .... ......... .................. .................
Security Ownership of Certain Beneficial Owners and Management ..........................................
Certain Relationships and Related Transactions ...........................................................................
Principal Accounting Fees and Services. .............. ......... ........................... ....................... ..... ..........
PART IV
Exhibits, Financial Statement Schedules and Reports on Form 8-K............................................
Signatures .............. .... .... ..................... ................ ...... ................. ...... ........ ....... .......................... ....... 51
Certifications ............ ...... ................. ...... ...... ............. ................. ................ .............. .......... ....... .......
3
49
49
49
50
57
PART I
.
Item 1. Business
Union Pacific Railroad Company, together with its wholly owned and majority-owned subsidiaries and certain affiliates
(collectively, the Company, UPRR or the Railroad), is a Class I Railroad, incorporated in Delaware, and is an indirect
wholly owned subsidiary of Union Pacific Corporation (the Corporation or UPC): The Company's principal executive
offices are located at 1416 Dodge Street, Room 1230, Omaha, NE 68179. The telephone number at that address is (402)
271-5000.
For purposes of this report, unless the context otherwise requires, all references herein to the "Company", "we", "us",
and "our" shall mean Union Pacific Railroad Company.
Union Pacific Railroad Company is the largest railroad in North America, covering 23 states across the western two-
thirds of the United States. Our operating results include Southern Pacific Rail Corporation, which we acquired in
October 1996. In addition, during 1997, we acquired an ownership interest in a consortium, which was granted a 50-year
concession to operate the Pacific-North and Chihuahua Pacific lines in Mexico. We made an additional investment in
the consortium in 1999 and currently hold a 26% ownership interest.
Available Information - Our Internet website is www.up.com. We make available free of charge on the website (under
the "Investors" caption link) our annual report on Form lO-K, our quarterly reports on Form lO-Q, our current reports
on Form 8-K, the Corporation's proxy statement and Forms 3, 4 and 5, filed on behalf of the Corporation's directors and
executive officers and amendments to such reports filed or furnished pursuant to the Securities Exchange Act of 1934,
as amended (the Exchange Act), as soon as reasonably practicable after such material is electronically filed with, or
furnished to, the Securities Exchange Commission (SEC). We also make available on our website previously filed SEC
reports and exhibits via a link to EDGAR on the SEC's Internet site at www.sec.gov. Additionally, the Corporation's
corporate governance materials, including Board Committee charters, governance guidelines and policies and codes of
conduct and ethics for directors, officers and employees may also be found on our website at www.up.comJinvestors.
From time to time, the corporate governance materials on the web site may be updated as necessary to comply with rules
issued by the SEC and NYSE or as desirable to promote the effective and efficient governance of our company. Any
security holder wishing to receive, without charge, a copy of any of these SEC filings or corporate governance materials
should write to Secretary, Union Pacific Corporation, 1416 Dodge Street, Room 1230, Omaha, NE 68179.
.
The reference to our web site address does not constitute incorporation by reference of the information contained
on the website and should not be considered part of this report.
OPERATIONS
------ --------
We are a classTiallroad that-operates-intheUnited States. Wenaveapproxunately33;oOO-routemilesliDlili:lg Pacific-- --
Coast and Gulf Coast ports with the Midwest and eastern United States gateways and providing several north/south
corridors to key Mexican gateways. We serve the western two-thirds of the country and maintain coordinated schedules
with other rail carriers for the handling of freight to and from the Atlantic Coast, the Pacific Coast, the Southeast, the
Southwest, Canada and Mexico. Export and import traffic is moved through Gulf Coast and Pacific Coast ports and
across the Mexican and Canadian borders. Commodity revenue totaled $11.0 billion in 2003 and is comprised of the
following six commodity groups:
Agricultural- The transportation of Agricultural Products, including whole grains (for animal and human consumption)
and commodities produced from these grains, food and beverage products and sweeteners, provided 14% of 2003
commodity revenue. With access to most major grain markets, we provide a critical link between the Midwest and
western producing areas and the primary Pacific Northwest (PNW) and Gulfports, as well as Mexico. We also serve
significant domestic markets, including grain processors and feeders, as well as ethanol producers in the Midwest, West,
South and Rocky Mountain states. Unit trains of grain efficiently shuttle between producers and export terminals or
domestic markets. Primary food commodities consist of a variety of fresh and frozen fruits and vegetables, dairy products
and beverages, which are moved to major U.S. population centers for consumption. Express Lane, our premium and
perishables service moving fruits and vegetables from the PNW and California to destinations in the East, continues to
.
4
.
draw market share from trucks. Frozen meat and poultry are also transported to the West Coast ports for export, while
beverages are imported into the U.S. from Mexico. Sweeteners are primarily short haul sugar beet movements from the
fields to the refineries, both of which are located in Idaho.
Automotive - Weare the largest automotive carrier west of the Mississippi River, serving seven vehicle assembly plants
and distributing imported vehicles from six West Coast ports and Houston. We serve 42 vehicle distribution centers,
from which vehicles are delivered to all major western U.S. cities. These centers serve as railcar-to-truck haulaway
operations for major domestic and international automotive manufacturers. In addition to transporting finished vehicles,
we currently provide expedited handling of automobile materials in both boxcars and containers to several assembly
plants. Converting automotive material shipments from the highway to rail is a key growth opportunity. Mexico is also
an important contributor to the automotive market for us, as manufacturers continue to locate both vehicle
manufacturing and parts facilities at locations throughout the country. Automotive materials flow north and south across
the border bound for assembly plants in Mexico, the U.S. and Canada. In 2003, the transportation of finished vehicles
and automobile materials accounted for 11 % of total commodity revenue.
Chemicals - The transportation of Chemicals provided 14% of our 2003 commodity revenue. Our franchise enables us
to serve the large chemical producing areas along the Gulf Coast, as well as the Rocky Mountain region. More than two-
thirds of the chemicals business consists ofliquid and dry chemicals, plastics and liquid petroleum products. "Pipeline"
service, designed to eliminate unnecessary stops in terminals, reduces delivery times and significantly improves asset
utilization for us and our customers. In addition to transporting plastics, customers also leverage our industry leading
storage-in-transit yards for intermediate storage of plastic resins. Soda ash shipments originate in southwestern Wyoming
and California and are consumed primarily in glass producing markets in the East, the West and abroad. Fertilizer
movements originate on the Gulf Coast, as well as in the West and Canada, bound for major agricultural end-users in
the Midwest and the western U.S.
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Energy- Coal transportation accounted for 22% of our 2003 commodity revenue. Our geographic footprint positions
us to transport coal destined for utilities and industrial facilities in 27 states, as well as to the Gulf and railJbarge/ship
facilities on the Mississippi and Ohio Rivers and the Great Lakes. We serve mines located in the Southern Powder River
Basin ofWyorning, in addition to Colorado, Utah, southern Wyoming and southern Illinois. Southern Powder River
Basin coal represents the largest and fastest growing segment of the market, as utilities continue to favor its low cost and
low-sulfur content In addition, we continue to penetrate markets in the East as electricity generation continues to grow
in the face of declining eastern coal production. High-BTU low-sulfur coal from Colorado and Utah is also transported
to domestic utilities and industries, as well as for export to Mexico.
Industrial Products - Industrial products includes a broad range of commodities, from bulk products like stone, cement,
minerals, waste and scrap to higher-value shipments like lumber, paper and government and consumer goods. Bulk
commodities often move in unit train service from origin to a distribution facility in major metropolitan areas. Other
commodities move in manifest trains and rely on our extensive network to move between thousands of shippers and
customers across North America. We continue to focus on capturing share from trucks by providing consistent and
- reliable service;- In-2003,-the transportation-ofindustrial-products-provided-20%of total-c;ommodity-revenue. - ---- -~-
Intermodal- Our Intermodal business, which represents 19% of2003 commodity revenues, is classified as international,
domestic or premium shipments. International business consists of international container traffic for steamship
customers. It arrives at West Coast ports for destinations throughout the United States. Domestic business includes
domestic container and trailer traffic handled by intermodal marketing companies (primarily shipper agents and
consolidators) and truckload carriers. Less-than-truckload and package carriers with time sensitive business requirements
account for the majority of our premium business. Service performance and reliability drive intermodal business growth,
as modeled by the 60-hour transcontinental rail service solution provided by us and our partnering rail carrier to UPS
in 2003.
Working Capital- We currently have, and historically have had, a working capital deficit, which is not uncommon in our
industry and does not indicate a lack of liquidity or financial stability. We maintain adequate resources to meet our daily
cash requirements, and we have sufficient financial capacity to satisfy our current liabilities.
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Competition - We are subject to competition from other railroads, motor carriers and barge operators. Our main rail
competitor is Burlington Northern Santa Fe Corporation. Its rail subsidiary, The Burlington Northern and Santa Fe
Railway Company, operates parallel routes in many of our main traffic corridors. In addition, our operations are
5
conducted in corridors served by other competing railroads and by motor carriers. Motor carrier competition is
particularly strong with respect to five of our six commodity groups (excluding energy), due to shorter delivery times
offered by such carriers. Because of the proximity of our routes to major inland and Gulf Coast waterways, barge
competition can be particularly pronounced, especially for grain and bulk commodities. Competition can pressure both
transit time requirements and pricing, as well as place a greater emphasis on the quality and reliability of the service
provided. While we must build or acquire and maintain our rail system, trucks and barges are able to use public rights-of-
way maintained by public entities. Any future improvements or expenditures materially increasing the quality of these
alternative modes of transportation in the locations in which we operate, or legislation granting materially greater latitude
for motor carriers with respect to size or weight limitations, could have a material adverse effect on our results of
operations, financial condition and liquidity.
Equipment Suppliers - We are dependent on two key suppliers oflocomotives. Due to the capital intensive nature and
sophistication of this equipment and its production, there are strong barriers of entry to potential new suppliers.
Therefore, if one of these suppliers discontinues manufacturing locomotives, we could realize a significant increase in the
cost and the potential for reduced availability of the locomotives that are necessary to our operations.
Employees - Approximately 86% of our 46,000 full time equivalent employees are represented by 14 major rail unions.
National negotiations under the Railway Labor Act to revise the national labor agreements for all crafts began in late 1999.
In May 2001, the Brotherhood of Maintenance of Way Employees (BMWE) ratified an agreement, which included
provisions for wage increases (based on the consumer price index) and progressive employee health and welfare cost
sharing rates.
In August 2002, the carriers reached an agreement with the United Transportation Union (UTU) that incorporated
wage increases. The agreement also provided for the operation of remote control locomotives by trainmen that was
challenged by the Brotherhood of Locomotive Engineers (BLE). A January 2003 arbitration decision held that the
operation of remote control locomotives in terminals does not violate the BLE agreement In November 2003, agreement
was reached with the UTU on employee health and welfare cost sharing rates and plan design changes.
In November 2002, the International Brotherhood of Boilermakers and Blacksmiths (IBB) reached an agreement
that incorporated wage increases.
In January 2003, an arbitration award was rendered establishing wage increases and employee health and welfare cost
sharing rates for the Transportation Communications International Union (TCU). Health and welfare plan design
changes were also part of the TCU agreement.
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Other settled agreements that incorporated wage increases and employee health and welfare cost sharing rates
combined with plan design changes include the Brotherhood of Railway Signalmen (BRS) in September 2003 and the
Brotherhood of Locomotive Engineers (BLE) in December 2003. Contract discussions with the remaining unions are
------either-innegotiation-or-mediation.-d--- ------ ----------- --- -- ---------- -- - ------ -------------- - - -----------
All settlements previously discussed include a five year contract period, expiring December 31, 2004.
Effective January 2004, the Brotherhood of Locomotive Engineers merged with the International Brotherhood of
Teamsters (IBT). The BLE has changed its name to the Brotherhood of Locomotive Engineers and Trainmen (BLET).
Additional information regarding our operations is presented within the Consolidated Financial Statements, Item
8.
GOVERNMENTAL AND ENVIRONMENTAL REGULATION
Governmental Regulation - Our operations are subject to a variety of federal, state and local regulations, generally
applicable to all businesses (see also the discussion of certain regulatory proceedings in Legal Proceedings, Item 3).
Our operations are subject to the regulatory jurisdiction of the Surface Transportation Board (STB) of the United
States Department of Transportation (DOT) and other federal and state agencies. Our operations are also subject to the
regulations of the Federal Railroad Administration of the DOT. The STB has jurisdiction over rates charged on certain
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regulated rail traffic; freight car compensation; transfer, extension or abandonment of rail lines; and acquisition of control
of rail common carriers.
The DOT and the Occupational Safety and Health Administration, along with other federal agencies, have
jurisdiction over certain aspects of safety, movement of hazardous materials, movement and disposal of hazardous waste
and equipment standards. Various state and local agencies have jurisdiction over disposal of hazardous waste and seek
to regulate movement of hazardous materials in areas not otherwise preempted by federal law.
Environmental Regulation - In addition to the regulations governing the transportation of hazardous materials, we are
subject to extensive federal and state environmental statutes and regulations pertaining to public health and the
environment. The statutes and regulations are administered and monitored by the Environmental Protection Agency
(EPA) and by various state environmental agencies. Those laws primarily affecting our operations are the Resource
Conservation and Recovery Act of 1976, regulating the management and disposal of solid and hazardous wastes, the
Comprehensive Environmental Response, Compensation and Liability Act of 1976, regulating the cleanup of
contaminated properties, the Clean Air Act regulating air emissions and the Clean Water Act, regulating waste water
discharges.
Information concerning environmental claims and contingencies and estimated remediation costs is set forth in
Management's Narrative Analysis of the Results of Operations - Critical Accounting Policies - Environmental, Item 7.
Item 2. Properties
Our primary real estate, equipment and other property (properties) are owned or leased to support our rail operations.
We believe that our properties are in good condition and are adequate for current operations. We operate facilities and
equipment designated for both maintenance and repair, including locomotives, railcars and other equipment, and for
monitoring such maintenance and repair work. The facilities include rail yards, intermodal ramps and maintenance shops
throughout the rail system. We had approximately $1.9 billion in capital expenditures during 2003, including non-cash
financings of $188 million, for, among other things, building and maintaining track, structures and infrastructure,
upgrading and augmenting equipment and implementing new technologies
Certain of our properties are subject to federal, state and local provisions involving the protection of the environment
(see discussion of environmental issues in Governmental and Environmental Regulation, Item I, Management's Narrative
Analysis of the Results of Operations - Critical Accounting Policies - Environmental, Item 7).
Track - We utilize approximately 33,000 main line and branch line route miles in 23 states in the western two-thirds of
the United States. We own approximately 27,000 route miles with the remainder of route miles operated under trackage
rights or leases. As of and for the years ending December 31, 2003, 2002 and 2001, route miles operated and track miles
- - Installed and replacedareas-follows:-- ----- ------------- - - ------------------ -- - --------------------------------
Miles 2003 2002 2001
Main line .......................................................................................................... 27,547 27,504 27,553
Branch line ........... ............ ........... .......... ......... .......... .......... ...... ............. .... ........ 5,284 5,637 6,033
Yards, sidings and other main lines ................................................................. 21,285 21,760 21,669
Total ........ .............. ..... .......... .... .................. ...... ...... ...... ............ ............ ............. 54,116 54,901 55,255
Track miles of rail installed and replaced:
New..... ............ ............. ..... ..... ............. ........... ..... ....... ......... .......... ................ 739 783 857
Used ........ ............. .............. .......... ....... ..... ......... ...................... ............. ......... 309 330 388
Ties installed and replaced (000) ..................................................................... 4,855 4,531 3,648
7
Equipment - Our primary rail equipment as of and for the years ending December 31, 2003, 2002 and 2001, consisted
of the following:
Equipment 2003 2002 2001
Owned or leased at year-end:
Locomotives ........ ........ ....... .............. ..... ...... ..... ..... ............ ......... .................. ..... 7,251 7,094 6,886
Freight cars:
Covered hoppers...... .......... ..... ........ ............... ......... ........ .......... ......... .......... 29,374 30,602 33,901
Boxcars ........ .... ..... .................. ...... ...................... ............. ........ ....... ........ ...... 18,691 15,040 15,561
Open-top hoppers.. ..... ..... .................. ...................... ...... .............................. 13,489 15,891 17,202
Gondolas....................................................................................................... 14,955 14,793 15,431
Other........................ ..... .... ........ ........... .... .............. ...................... ................. 11,296 14,551 14,681
Work equipment and other.............................................................................. 6,950 6,950 6,950
Purchased or leased during the year:
Locomotives ..................... ...... ......... ......... ........ ..... ............... ......... ......... ...... 265 530 500
Freight cars.......... ..... ............. ............ ................... ...... ... ........ ............ ........... 580 3,823 793
Average age of equipment (years):
Locomotives.... ......... ...... ........ ............ ......................... .................. ...... ......... 14.3 14.4 14.9
Freight cars ..... ..... .................. .............. .......... .......... ............ ......... ........... ..... 24.5 21.9 22.5
Item 3. Legal Proceedings
Environmental Matters
The United States Attorney for the Central District of California has notified us that the office intends to present criminal
charges against us for alleged violations of federal environmental laws, including the federal Clean Water Act, in
connection with releases of oil contaminated wastewater from our Taylor Yard in 2001 and 2003. In addition, the State
authorities are proposing civil penalties for these same releases in the amount of $125,000.
After a series of protracted negotiations, the California Department of Toxic Substances Control ("DTSC")
threatened civil prosecution against us in November 2003, relating to our failure to register as a hazardous waste
transporter under California law from April 2000 to August 200 1. We contend that we are exempt from the registration
requirements due to federal preemption. The DTSC has proposed civil penalties of$125,160 for the alleged violation. We
will vigorously oppose this proposed penalty.
As previously reported in our Annual Report on Form 10-K for 2001, on January 30, 2002, the Louisiana Department
of Environmental Quality (LDEQ) issued to us a notice of a proposed penalty assessment in the amount of $195,700. We
previously met with the LDEQ regarding this matter to present documentation indicating that no penalty should be
- - - - assessed.-- W e-havefiledsuit- against the-IDEQ -in-10uisiana-State-District-Gourt-challenging-the penalty;-'I'he-1DEQ-
proposed penalty relates to the derailment of one of our trains carrying hazardous materials near Eunice, Louisiana on
May 27, 2000. The derailment caused a fire and explosion that resulted in the evacuation of approximately 3,800 residents
of the surrounding area and numerous claims for personal injuries, property damage and business interruption, which
was previously reported in our report on Form 10-Q for the period ended June 30, 2000. To date, several class action
claims have been filed against us. The amount of damages have not been specified in these claims; and, therefore, it is
not possible to predict the ultimate outcome of these proceedings. Settlement discussions with the class representatives
are ongoing. We believe we have substantial defenses and, although losses have exceeded self-insured retention amounts,
we believe our insurance coverage is adequate to cover any material damage claims or settlements.
As previously reported in our Quarterly Report on Form lO-Q for the quarter ended June 30, 2002, a criminal case,
relating to a series of alleged releases of hazardous materials, was filed against us by the District Attorneys of Merced,
Madera and Stanislaus Counties. The criminal case was dismissed in the last quarter of 2003 and was subsequently refiled
as a civil action by several counties. The civil suit seeks civil penalties against us in connection with the release of calcium
oxide ("lime"), which leaked from an unidentified railcar between Chowchilla and Sacramento, California, on December
27,2001, and another incident in which lime leaked from a railcar between Chowchilla and Stockton, California on
February 21, 2002. The suit contends that regulatory violations occurred by virtue of our alleged failure to timely report
the release of a "hazardous material," our alleged disposal of hazardous waste, and the alleged release of material into the
waters of the State of California. The amount of the claim is not specified but could exceed $100,000.
8
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As previously reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, the San Joaquin
County District Attorney filed an action against us on February 3, 2003, alleging claims under the California Business and
Professions Code section 17200 (unfair business practices), Fish and Game Code section 5650 and 5650.1, California
Health and Safety Code section 25189(d) and Public Nuisance, California Civil Code section 3480. The claims arise from
a February 16, 2000 deraihnent in Stockton, California in which a locomotive struck an object on the tracks, resulting
in the puncture of a fuel tank. The District Attorney alleged that diesel fuel from this spill entered waters of the State of
California. The complaint also asserted claims under the above referenced statutes for any other diesel spill which may
have occurred in the State of California, between 2000 and 2003, in which diesel may have passed into waters of the State
of California and seeks injunctive relief, as well as civil penalties of $25,000 for the alleged February 16, 2000 diesel spill
and total penalties of not less than $250,000 for all diesel spills which may have occurred since 2000. The District Attorney
filed an amended complaint on April 10, 2003, which narrowed the claims to the incident of February 16, 2000. The
amended complaint seeks both injunctive relief and daily penalties, which could exceed $100,000, for each day that fuel
was in the affected waterway.
As previously reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, on April 26,
2002, we received written notice of a proposed $250,000 penalty from the Illinois Environmental Protection Agency
relating to a collision between one of our trains and a train from Conrail. The collision occurred near Momence, Illinois,
on March 23,1999 when an eastbound Conrail train failed to stop at a signal and struck our train that was properly
occupying a crossing. The collision resulted in a release of diesel fuel from the fuel tanks of our locomotive, which was
promptly reported and remediated. We received notice in January 2003 that the amount of the proposed penalty,
including oversight costs, has been reduced to $127,000. We will vigorously oppose this proposed penalty.
We have received notices from the EP A and state environmental agencies alleging that we are or may be liable under
certain federal or state environmental laws for remediation costs at various sites throughout the United States, including
sites which are on the Superfund National Priorities List or state superfund lists. Although specific claims have been made
by the EP A and state regulators with respect to some of these sites, the ultimate impact of these proceedings and suits by
third parties cannot be predicted at this time because of the number of potentially responsible parties involved, the degree
of contamination by various wastes, the scarcity and quality of volumetric data related to many of the sites, and! or the
speculative nature of remediation costs.
Information concerning environmental claims and contingencies and estimated remediation costs is set forth in
Management's Narrative Analysis of the Results of Operations - Critical Accounting Policies - Environmental, Item 7.
Other Matters
As previously reported, Western Resources, Inc. (Western) filed a complaint on January 24,2000, in the U.S. District
Court for the District of Kansas alleging that UPRR and The Burlington Northern and Santa Fe Railway Company (BNSF)
materially breached our service obligations under the transportation contract to deliver coal in a timely manner to
_ W~~krn~Jeif!.~YJ:l!~Sgy_~~m~1:,__ Qn S~pte.!!!1JS:! L~,~Jl~~,t:h~j!1!y~eturn.-e_<ljl~S:l"dict fiI1A!I!gJhCltj:lJ.~~o_ntra~hCl~ nQ!
been breached by the railroads, and the judgment dismissing the case was entered by the court on September 16, 2002.
Western filed a motion for a new trial on September 30, 2002, which was denied by the court on March 6, 2003. Western
filed notice of its intent to appeal the verdict to the 10th Circuit Court of Appeals on April 4, 2003. On October 22, 2003,
Western agreed to have the matter dismissed in exchange for a payment of $50,000 by the railroads, which did not
constitute an admission of liability, and, on November 5,2003, the court dismissed the complaint.
Item 4. Submission of Matters to a Vote of Security Holders
Omitted in accordance with General Instruction I of Form lO-K.
9
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters
.
As of the date of filing this Report, we had the following amounts of capital stock issued and outstanding: 7,130 shares
of Common Stock, par value $10.00 per share (our Common Stock), 620 shares of Class A Stock, par value $10.00 per
share (our Class A Stock), 4,829 Redeemable Preference Shares (Series A), initial par value $10,000 per share, and 436
Redeemable Preference Shares (Series B), initial par value $10,000 per share (collectively, the Preference Shares). All of
our Common Stock and our Class A Stock, which constitutes all of the voting capital stock, is owned by the Corporation
or a wholly owned subsidiary of the Corporation, and all of the Preference Shares, which are non-voting stock, are owned
by the Federal Railroad Administration. Accordingly, there is no market for our capital stock.
Our Board of Directors has restricted the availability of retained earnings for payment of dividends by $131 million.
This represents (a) the amount by which the estimated fair value of our investment in our non-transportation
subsidiaries, as determined by our Board of Directors, exceeded the net book value of such investment, which was trans-
ferred to the Corporation by means of a dividend in June 1971 ($110 million) and (b) the amount by which the fair
market value exceeded the book value of certain investment securities which were transferred to the Corporation by
means of a dividend in November 1972 ($21 million).
Our Class A Stock is entitled to a cash dividend whenever a dividend is declared on the Common Stock, in an amount
which equals 8 percent of the sum of the dividends on both the dass A Stock and the Common Stock. Dividends on our
Common Stock, which are paid on a quarterly basis, totaled $231 million and $189 million in 2003 and 2002, respectively.
Dividends paid on our Class A Stock were $20 million and $16 million in 2003 and 2002, respectively.
Weare subject to certain restrictions related to the payment of dividends. The amount of retained earnings available
for dividends was $7.5 billion and $6.4 billion at December 31, 2003 and 2002, respectively.
Item 6. Selected Financial Data
.
Omitted in accordance with General Instruction I of Form lO-K.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations
Omitted in accordance with General Instruction I of Form lO-K. In lieu thereof, a narrative analysis is presented.
..MANKGEMENT'SNARRATIVEANALYSISOF THERESULTS.OF.OPERATIONS-
The following discussion should be read in conjunction with the Consolidated Financial Statements and applicable notes
to the Consolidated Financial Statements, Item 8, and other information included in this report.
RISK FACTORS
We Frue Competition from Other Railroads and Other Transportation Providers - We are subject to competition from other
railroads, which operate parallel routes in many of our traffic corridors, in addition to motor carriers and, to a lesser
extent, ships, barges and pipelines. Competition can pressure both transit time requirements and pricing, as well as place
a greater emphasis on the rate charged and the quality and reliability of the service provided. While we must build or
acquire and maintain our rail system, trucks and barges are able to use public rights-of-way maintained by public entities.
Any future improvements or expenditures materially increasing the quality of these alternative modes of transportation
in the locations in which we operate, or legislation granting materially greater latitude for motor carriers with respect to
size or weight limitations, could have a material adverse effect on our results of operations, financial condition and
liquidity.
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10
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We Are Subject to Significant Governmental Regulation - We are subject to governmental regulation by a significant
number of federal, state and local authorities with respect to our railroad operations and a variety of health, safety, labor,
environmental, as discussed below, and other matters. Our failure to comply with applicable laws and regulations could
have a material adverse effect on us. Governments may change the legislative or regulatory framework within which we
operate without providing us with any recourse for any adverse effects that the change may have on our business. Also,
some of the regulations require us to obtain and maintain various licenses, permits and other authorizations, and we
cannot assure you that we will continue to be able to do so.
We Are Subject to Significant Environmental Laws and Regulations - Our operations are subject to extensive federal, state
and local environmental laws and regulations concerning, among other things, emissions to the air, discharges to waters
and the handling, storage, transportation and disposal of waste and other materials and cleanup of hazardous material
or petroleum releases. We generate and transport hazardous and non-hazardous waste in our current operations, and
we have done so in our former operations. Environmental liability can extend to previously owned or operated properties,
leased properties and properties owned by third parties, as well as to properties currently owned and used by us.
Environmental liabilities have arisen and may also arise from claims asserted by adjacent landowners or other third parties
in toxic tort litigation. We have been and may be subject to allegations or findings to the effect that we have violated, or
are strictly liable under, these laws or regulations. Although, we have appropriately recorded current and long-term
liabilities for known future environmental costs, we could incur significant costs as a result of any of the foregoing, and
we may be required to incur significant expenses to investigate and remediate known, unknown or future environmental
contamination, which could have a material adverse effect on our results of operations, financial condition and liquidity.
Rising Fuel Costs Could Materially and Adversely Affect Our Business - Fuel costs constitute a significant portion of our
transportation expenses. Diesel fuel prices are subject to dramatic fluctuations. Significant price increases may have a
material adverse effect on our operating results. Additionally, fuel prices and supplies are influenced significantly by
international political and economic circumstances. If a fuel supply shortage were to arise from OPEC production
curtailments, a disruption of oil imports or otherwise, higher fuel prices and any subsequent price increases would, despite
our fuel surcharge programs, materially affect our operating results, financial condition and liquidity.
The Majority of Our Employees Belong to Labor Unions, and Strikes or Work Stoppages Could Adversely Affect Our
Operations - We are a party to collective bargaining agreements with various labor unions in the United States. Some of
these agreements expire within the next two years. Disputes with regard to the terms of these agreements or our potential
inability to negotiate acceptable contracts with these unions could result in, among other things, strikes, work stoppages
or other slowdowns by the affected workers. If the unionized workers were to engage in a strike, work stoppage or other
slowdown, or other employees were to become unionized or the terms and conditions in future labor agreements were
renegotiated, we could experience a significant disruption of our operations and higher ongoing labor costs.
We May Be Affected by General Economic Conditions - Several of the commodities we transport come from industries with
cyclical business operations. As a result, prolonged negative changes in domestic and global economic conditions affecting
the producers and consumers of the commodities carried by us may have an adverse effect on our operating results,
M_aIlcial <:Q.Il~!i()1! ~<l)igl!@!Y~ .
Severe Weather Could Result in Significant Business Interruptions and Expenditures - Severe weather conditions and other
natural phenomena, including earthquakes, fires and floods, may cause significant business interruptions and result in
increased costs, increased liabilities and decreased revenues, which could have an adverse effect on our operating results,
financial condition and liquidity.
We Are Dependent on Two Key Suppliers of Locomotives - Due to the capital intensive nature and sophistication of
locomotives, there are strong barriers to entry for new suppliers. Therefore, if one of these suppliers discontinues
manufacturing locomotives, we could realize a significant increase in the cost and the potential for reduced
availability of the locomotives that are necessary to our operations.
We May Be Subject to Various Claims and Lawsuits That Could Result in Significant Expenditures - The nature of our
business exposes us to the potential for various claims and litigation related to labor and employment, personal injury
and property damage, environmental and other matters. Any material changes to current litigation trends could have
a material adverse effect on our operating results, financial condition and liquidity.
We May Be Affected by Future Acts of Terrorism or War or Risk of War - Terrorist attacks, such as those that occurred on
September 11, 2001, any government response thereto and war or risk of war may adversely affect our results of
11
operations, financial condition, our ability to raise capital or our future growth. Our rail lines and facilities could be direct
targets or indirect casualties of an act or acts of terror, which could cause significant business interruption and result in
increased costs and liabilities and decreased revenues and have a material adverse effect on our operating results, financial
condition or liquidity. Any act of terror, retaliatory strike, sustained military campaign or war or risk of war may have
an adverse impact on our operating results, financial condition and liquidity by causing or resulting in unpredictable
operating or financial conditions, including disruptions of rail lines, volatility or sustained increase of fuel prices, fuel
shortages, general economic decline and instability or weakness of financial markets which could restrict our ability to
raise capital. In addition, insurance premiums charged for some or all of the coverages currently maintained by us could
increase dramatically, or certain coverages may not be available to us in the future.
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CRITICAL ACCOUNTING POLICIES
Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements requires estimation and judgment that
affect the reported amounts of revenues, expenses, assets and liabilities. We base our estimates on historical experience
and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. The following are our critical accounting policies that affect significant areas of our financial statements and
involve judgment and estimates. If these estimates differ significantly from actual results, the impact on our Consolidated
Financial Statements may be material.
Depreciation - The railroad industry is capital intensive. Properties are carried at cost. Provisions for depreciation are
computed principally on the straight-line method based on estimated service lives of depreciable property. The lives are
calculated using a separate composite annual percentage rate for each depreciable property group, based on the results
of a depreciation study. We are required to submit a report on depreciation studies and proposed depreciation rates every
three years for equipment property and every six years for road property, to the Surface Transportation Board for review
and approval. The cost (net of salvage) of depreciable rail property retired or replaced in the ordinary course ofbusiness
is charged to accumulated depreciation, and no gain or loss is recognized. A gain or loss is recognized in other income
for all other property upon disposition. The cost of internally developed software is capitalized and amortized over a five-
year period. An obsolescence review of capitalized software is performed on a periodic basis.
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Capital spending in recent years has increased the total value of our depreciable assets. Capital spending totaled $1.9
billion for the year ended December 31, 2003, including non-cash financings of $188 million. In 2003, we implemented
depreciation studies, approved by the Surface Transportation Board, resulting in lower depreciation expense of $50
million for the year ended December 31, 2003, due to a reduction in depreciation rates for certain track assets (effective
January 1, 2003), partially offset by increased rates for locomotives and other assets (effective July 1, 2003). For the year
ended December 31, 2003, depreciation expense was $1.1 billion. Various methods are used to estimate useful lives for
each group of depreciable property. Due to the capital intensive nature of the business and the large base of depreciable
assets, variances to those estimates could have a material effect on our Consolidated Financial Statements. If the estimated
useful lives of all depreciable assetswere-increased-by:-one-year, annual depreciation_expense_ would decrease_by $36
million. If the estimated useful lives of all assets to be depreciated were decreased by one year, annual depreciation
expense would increase by $39 million.
Environmental- We generate and transport hazardous and non-hazardous waste in our current operations and have
done so in our former operations, and we are subject to federal, state and local environmental laws and regulations. We
have identified approximately 417 sites at which we are or may be liable for remediation costs associated with alleged
contamination or for violations of environmental requirements. This includes 51 sites that are the subject of actions taken
by the U.S. government, 29 of which are currently on the Superfund National Priorities List. Certain federal legislation
imposes joint and several liability for the remediation of identified sites; consequently, our ultimate environmental
liability may include costs relating to activities of other parties, in addition to costs relating to our own activities at each
site.
When an environmental issue has been identified with respect to the property owned, leased or otherwise used in
the conduct of our business, we and our consultants perform environmental assessments on such property. We expense
the cost of the assessments as incurred. We accrue the cost of remediation where our obligation is probable and such
costs can be reasonably estimated.
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The liability includes future costs for remediation and restoration of sites, as well as for ongoing monitoring costs,
but excludes any anticipated recoveries from third parties. Cost estimates are based on information available for each
site, financial viability of other potentially responsible parties, and existing technology, laws and regulations. We believe
that we have adequately accrued for our ultimate share of costs at sites subject to joint and several liability. However, the
ultimate liability for remediation is difficult to determine because of the number of potentially responsible parties
involved, site-specific cost sharing arrangements with other potentially responsible parties, the degree of contamination
by various wastes, the scarcity and quality of volumetric data related to many of the sites, and/or the speculative nature
of remediation costs. For the year ended December 31, 2003 and 2002, we recorded environmental expenses of $26
million and $37 million, respectively. As of December 31,2003 and 2002, we had a liability of$187 million and $188
million, respectively of which $57 million and $71 million were classified as current.
Income Taxes - We account for income taxes by recording taxes payable or refundable for the current year and deferred
tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements
or tax returns.
As required under Financial Accounting Standards Board (FASB) Statement No. 109, "Accounting for Income
Taxes", these expected future tax consequences are measured based on provisions of tax law as currently enacted; the
effects of future changes in tax laws are not anticipated. Future tax law changes, such as a change in the corporate tax rate,
could have a material impact on our financial condition or results of operations.
When appropriate, we record a valuation allowance against deferred tax assets to offset future tax benefits that may
not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than
not that all or some portion of our deferred tax assets will not be realized, based in part upon management's judgments
regarding future events. Based on that analysis, we have determined that a valuation allowance is not appropriate at
December 31,2003.
Pension and Other Postretirement Benefits - We provide defined benefit retirement income to eligible non-union
employees through the Corporation's qualified and non-qualified (supplemental) pension plans. Qualified and non-
qualified pension benefits are based on years of service and the highest compensation during the latest years of
employment with specific reductions made for early retirements. We also provide other postretirement benefits (OPEB).
All non-union and certain of our union employees participate in the Corporation's defined contribution medical and
life insurance programs for retirees.
We account for the pension plans in accordance with F ASB Statement No. 87, "Employers' Accounting for Pensions"
(FAS 87) and our postretirement benefits in accordance with FASB Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" (FAS 106). FAS 87 and FAS 106 require us to make various estimates and
assumptions, including discount rates used to value liabilities, expected rates of return on plan assets, salary increases,
employee turnover rates, anticipated employee mortality rates and expected future health care costs. The estimates we
used are based on our historical experience, as well as current facts and circumstances and are updated at least annually.
_ V'! e _~~e third-party a~uari<:s _to assist _us in PI"operly: ~e~~_~&_~e expe~se _~~ ~~~ilig_ ~~o(;iated~~ ~~se ~el!efits.
Funded Status - The funded status of the pension plans represents the difference between the fair value of pension assets
and the present value of pension liabilities (projected benefit obligation, or PBO). The PBO is the present value of
benefits earned to date by plan participants, including the effect of assumed future salary increases. The funded status
is impacted by actual asset returns and cash funding, as well as a year-end discount rate, which is used to calculate the
present value of the projected benefit obligation. The discount rate we use for this purpose is based on a hypothetical
portfolio of high quality bonds with cash flows matching the plans' expected benefit payments. The OPEB plan is
unfunded and funding occurs as claims are paid. The PBO of the OPEB plan is equal to the accumulated benefit
obligation, as the present value of OPEB liabilities is not affected by salary increases. The discount rate used in valuing
OPEB obligations is equal to the pension discount rate for both 2003 and 2002.
The following table presents the funded status of the pension and OPEB plans, as well as the key assumptions that
impact the funded status as of December 31, 2003:
13
Millions of Dollars Pension Benefits OPEB
Funded status:
Fair Value of Plan Assets........................................................................ $1,520 $ -
Projected Benefit Obligation ................................................................. (1,804) (543)
Funded status .... .......... ...... ........ ......... .... ...................... .... .............. ........ $ (284) $(543)
Assumptions:
Discount rate .............. ............. .............. ....... ...... ....................... ............. 6.50% 6.50%
Salary increase........ ............ ..... .............................. ........... ...................... 3.50% N/A
Health care cost trend rate:
Current . ...... ......... ......... ................ ................... ..... ..... ............... ......... N/A 9.0%
Level in 2008...................................................................................... N/A 5.0%
The following table shows the estimated impact that changes in the assumed discount rate, salary increase and health
care cost trend rate would have had on our projected benefit obligation as of December 31,2003:
Increase / (Decrease) in Projected Benefit Obligation
Millions of Dollars
Discount Rate:
0.25 % increase................ ... ..... ............. ....... ..... ......... ......... .....................
0.25 % decrease ..... ......... ......... ..... ......... ......... ... ................ ........ ..............
Salary Increase:
0.25 % increase... ....................... ........ ......... .......... ......... ..........................
0.25 % decrease..... ..... .... ......... .......... ................... ........ ..... ......... .............
Health Care Cost Trend Rate:
1 % increase. ..... ........... .............. .......................... ......................... ...........
1 % decrease.... .............. .......... ........... ......................... .............. ......... .....
Pension OPEB
$(50) $(15)
52 15
6 N/A
(5) N/A
N/A $59
N/A (49)
Cash Contributions - We follow F AS 87 rules to record the expense and liability associated with the pension plans.
However, actual cash funding is governed by employee benefit and tax laws. No cash funding was required for us in 2003.
During 2003, we voluntarily contributed $100 million to the funded pension plan.
Contributions required subsequent to 2003 are dependent on asset returns and future discount rates. We do not
anticipate minimum pension funding requirements in 2004. We voluntarily contributed $50 million in January of 2004
to help mitigate any potential required funding in the future. Future contributions are expected to be funded primarily
by cash generated from operating activities.
. G~h fiulQ.i9g (oJ .QJ>mt b~efi!S. ~ J:>~~~tQ~g~s.P.ai9. S:~~ ~aid, ~~ ofJ::etiI"ee. cOJl~ib~1:i.o~s, ~Q~~d ~3?.JI!illj.()n
and $46 million for 2003 and 2002, respectively. Expected claims for 2004 total $35 million, net of employee
contributions.
Expense - Pension expense for 2003 was $15 million, while we recorded pension income in 2002 of $14 million. OPEB
expense for 2003 and 2002 was $43 million and $45 million, respectively. Both pension and OPEB expense is determined
based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost
on those liabilities, less the expected return on pension plan assets (for pension only). With respect to the value of
pension plan assets, the expected long-term rate of return on plan assets is applied to a calculated value of plan assets that
recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in
pension expense, but it can have the effect of delaying the recognition of differences between actual returns on assets and
expected returns based on long-term rate of return assumptions. The expected rate of return on assets was 8% for 2003
and 9% for 2002.
Differences in actual experience in relation to assumptions are not recognized immediately, but are deferred and,
if necessary, amortized as pension or OPEB expense.
The following table illustrates the estimated impact on 2003 pension and OPEB expense relative to a change in the
discount rate, expected return on plan assets and health care cost trend rate.
14
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.
Increase / (Decrease) in Expense
Millions of Dollars
Discount Rate:
0.25 % increase ........................................ ..... ......... .................. ................... ..........
0.25 % decrease ....... ........ ................ ............... ......... ..... ....................... ......... ........
Expected Return on Plan Assets:
0.25 % increase... ....... ........... ......... ......... ............... .... .... ..... ...... ............................
0.250/0 decrease..... ......................................... .............. ...... ........ ....... ........... ........
Health Care Cost Trend Rate:
1 % increase........ ............ ............... ......................... ............. ......... ..... ...... ..... ........
1 % decrease .................. ............ ....... ..... ................. .................. ...... ..... ......... ........
Pension
OPEB
$(4)
1
$(2)
1
(4)
4
N/A
N/A
N/A
N/A
10
(9)
Personal Injury and Occupational Dlness - The cost of personal injuries to employees and others related to our activities
is charged to expense based on estimates of the ultimate cost and number of incidents each year. We use third party
actuaries to assist us in properly measuring the expense and liability. Compensation for work-related accidents is
governed by the Federal Employers' Liability Act (FELA). Under FELA, damages are assessed based on a finding of fault
through litigation or out-of-court settlements. We offer a comprehensive variety of services and rehabilitation programs
for employees who are injured at work. Annual expenses for our personal injury-related events were $250 million and
$221 million in 2003 and 2002, respectively. As of December 31,2003 and 2002, we had a liability of$615 million and
$668 million accrued for future personal injury costs, respectively, of which $272 million was recorded in current
liabilities as accrued casualty costs in both years. We have additional amounts accrued for claims related to certain alleged
occupational illnesses. Changes in estimates can vary due to evolving trends in litigation related to personal injury and
occupational illness cases based on large jury awards and public pressures associated with certain occupational related
injuries.
RESULTS OF OPERATIONS
Millions of Dollars, Except Per Share Amounts 2003 2002
Income before cumulative effect of accounting change .................................................. $1,140 $1,374
Cumulative effect of accounting change .......................................................................... 274 -
Net income.. ................. .................. ......... .......... ............. ....... .......... ....... ........ .................... $1,414 $1,374
Net income as percentage of operating revenues............................................................. 12.3% 12.4%
Operating margin ... ........ ......... .............. ....... .................... ..... ........... ......... ............. ........... 18.6% 21.0%
Income Before ~umulative Effect of-Accounting-Change --The decrease in income before-cumulative effect of-
accounting change in 2003 compared to 2002 was driven by higher fuel prices, inflation, network costs (including
expenses associated with increased volumes), and lower gains from real estate sales (2002 asset sales with the Utah Transit
Authority (UTA) for $141 million pre-tax and the Santa Clara Valley Transportation Authority (VTA) for $73 million
pre-tax), which more than offset revenue gains, lower interest expense and productivity improvements. Productivity is
measured by both gross ton miles per inflation-adjusted expense dollar and gross ton miles per employee. Gross ton miles
are calculated by multiplying the weight of a loaded or empty freight car by the number of miles hauled.
Operating Revenues - Operating revenue is comprised of commodity revenue and other revenues. Other revenues
primarily include subsidiary revenue from various companies that are wholly owned or majority owned, revenue from
the Chicago commuter rail operations and accessorial revenue earned due to customer detainment of Railroad owned
or controlled equipment. We recognize commodity revenues on a percentage-of-completion basis as freight moves from
origin to destination. Other revenue is recognized as service is performed or contractual obligations are met.
Operating revenues increased $406 million (4%) to $11.5 billion in 2003 over 2002. Commodity revenue increased
$378 million (4%) in 2003. The increase was driven by growth in the Industrial Products, Agricultural, Intermodal and
Energy commodity groups, including revenue from our fuel surcharge programs. Revenue carloads increased 1 % in 2003,
15
while average revenue per car (referred to as ARC) increased 2% to $1,195 in 2003. Other revenue increased $28 million
(6%) in 2003, driven by increased passenger, subsidiary and accessorial revenues.
The following tables summarize the year-over-year changes in commodity revenue, revenue carloads and average
revenue per car by commodity type:
.
Commodity Revenue in Millions of Dollars 2003 2002
Agricultural ................................................................................... .... ...... ............ ........ ......... .. $ 1,578 $ 1,506
Automotive .... ............ ............. .................... .................... ..... ........... ............. .......................... 1,216 1,209
Chemicals ................................ ...... ............................ ......... ............... ........ ................ ............. 1,589 1,575
Energy................ .................. .................. .............. ..... ..... ......... ......... ..... ........ ............... ........... 2,412 2,343
Industrial Products ............ ....... ...... ................ ................ .... ............. ..... ................ ........... ...... 2,180 2,035
Intermodal .................................................................................................................................. 2,066 1,995
Total .... ......... ................... ........ ........ ..... ....... ........ ..... .................. .......... ............. ..... ...... .......... $1l,041 $10,663
Revenue Carloads in Thousands 2003 2002
Agricultural.......... ............ ........ ............. ............................... ........... ........... ..... ..... ............ ...... 883 875
Automotive ... ................................... ......... ......... ......... .................. ......................................... 820 818
Chemicals.. ......... ......... .......... ........ .......... ......... .................. .................... ............ .................... 888 904
Energy..................................................................................................................................... 2,187 2,164
Industrial Products. ......... ....................... ..... ............... ........................ ........... ..... .... ..... .......... 1,478 1,419
Intermodal .............................................................................................................................. 2,983 2,951
Total ............................................................................................................................................ 9,239 9,131
Average Revenue Per Car 2003 2002
Agricultural.......... ........ ....... ............. .......... .......... ............ ............. .... ......... ............ ................ $1,787 $1,722
Automotive ...... ................... ......... ........... ............ ..... ... .................. ....... ...... ............................ 1,484 1,477
Chemicals .. ......... ........... ....... ......... ................................................ ..................... .................... 1,788 1,742
Energy.. ........................ ........... .............................. ......... .......... ........ .................. ..................... 1,103 1,083
Industrial Products .......... ....................... ......... ................................ ................... ....... ............ 1,475 1,434
Intermodal ........................................................................................................................................ 693 676
Total ............................................................................................................................................................................. $1,195 $1,168
.
Agricultural - Revenue in 2003 rose 5% due to a 4% improvement in ARC and a 1 % increase in carloads. The
improvement was driven by-higher-wheatdemand for Gulf exports,-in addition to added ethanol shipments resulting
from heightened demand for the fuel additive. Revenue gains were also achieved through additional shipments of sugar
beets due to a favorable crop in 2003 and canned and packaged foods resulting from additional, longer-haul shipments
from the west coast. ARC grew due to the positive mix impact oflonger average length of haul shipments, as well as price
increases and fuel surcharges.
Automotive - Revenue increased 1 % in 2003 as a result of a slight rise in both carloads and ARC. Revenue growth was
the result of additional volume due to market share gains for materials shipments, partially offset by a decline in revenues
from domestic manufacturers, as the softening economy weakened demand for finished vehicles and forced production
cuts. ARC was up slightly in 2003, as price increases were partially offset by the mix impact of disproportionate growth
in materials shipments, which move at a lower ARC than finished vehicles.
Chemica/s- Revenue in 2003 grew 1 %, as a 2% decline in carloads was offset by a 3% increase in ARC. Reduced plastics
volume led the decline in carloads as the soft economy combined with higher input costs caused producers to lower
inventories and reduce shipments. Growth of market demand for domestic and export soda ash partially offset the
decline. ARC improved due to a mix shift toward longer average length of haul moves, driven by fewer cars in storage-in-
transit, in addition to price increases and fuel surcharges.
.
16
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.
.
Energy- Revenue climbed 3% in 2003. Strong utility demand due to lower inventories in the last three quarters more
than offset the absence of export traffic from the Colorado and Utah mining regions (which Japan is now sourcing from
other Far Eastern producers), resulting in a 1 % increase in carloads. Fourth quarter carloads were the highest ever from
the Southern Powder River Basin and Colorado and Utah mining regions. During 2003, tonnage moved from the
Southem Powder River Basin was also the highest ever for us. ARC increased 2%, primarily due to index-based contract
escalators.
Industrial Products - Revenue increased 7% in 2003. Revenue was driven by 3% growth in ARC and a 4% improvement
in carloads, which was attributable to government, steel and lumber business growth. The increase in government
shipments was driven by movement of military equipment and ammunition in support of the war effort. Lumber
positively impacted carloads, as housing starts and low interest rates continue to drive demand. Steel and scrap
shipments also increased as the weakening dollar created higher domestic and export demand for U.S. produced steel,
augmented by market share gains. ARC rose due to price increases, fuel surcharges and more high-ARC lumber moves.
Intermodal- Revenue climbed 4% in 2003 driven by a 3% increase in ARC and a 1 % gain in carloads. Carloads were up
due to strong imports and improved economic conditions, as well as the year over year impact of the labor dispute
between the International Longshoreman and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA)
which occurred primarily in the fourth quarter of 2002. ARC improved due to fuel surcharges and price increases.
Mexico Business - Included in the commodity revenue reported above is revenue from shipments to and from Mexico.
This revenue grew 2% to $893 million in 2003 compared to $873 million for 2002. Business growth in 2003 was led by
market share gains in auto parts shipments and increased revenue for agricultural products resulting from higher corn
and meal exports, as well as increased beer imports.
Operating Expenses - Operating expenses increased $597 million (7%) to $9.4 billion in 2003 compared to 2002. The
increase in expenses was due primarily to higher fuel prices in addition to wage and benefit inflation and volume-related
costs, as gross ton miles increased 3% for the year. A 2% reduction in employment levels, combined with lower
depreciation expense and cost control efforts partially offset the increase. Cost control efforts are defined as focused
actions to reduce discretionary spending and failure costs. Expenses in the third and fourth quarters were also negatively
affected by increased crew and asset utilization costs, associated with a deterioration in network fluidity as discussed under
Other Matters in this Item 7.
Salaries, Wages and Employee Benefits- Salaries, wages and employee benefits were $3.8 billion and $3.6 billion in 2003
and 2002, respectively. The increase in 2003 of$213 million (6%) was driven by the adoption ofFASB Statement No.
143, "Accounting for Asset Retirement Obligations" (FAS 143), which accounted for $110 million of the increase. Other
drivers included inflation, volume-related_costs (driven by a 3% increase in grossJon miles), prote_ction_cQsts, increased
crew utilization costs due to a shortage of available crews and pension expense. Protection cost represents the differential
payment when the wage earned for active employment is lower than an employee's "protected" rate of pay. An
individual's protected rate is imposed by the Surface Transportation Board for employees adversely affected by a merger
or is established by collective bargaining agreements in other cases.
Equipment and Other Rents - Equipment and other rents primarily includes rental expense we pay for freight cars owned
by other railroads or private companies; freight car, intermodal and locomotive leases; other specialty equipped vehicle
leases; and office and other rentals. Expenses decreased $17 million (1%) in 2003 compared to 2002. The decrease was
due primarily to lower rental prices for private railcars, partially offset by higher locomotive lease expense and increased
car cycle times driven by higher inventory of cars on the system due to slower network train speed in the third and fourth
quarters. Car cycle time for equipment and other rents is defined as the average number of accumulated days that loaded
and empty cars from other railroads spend on our system. The higher locomotive lease expense is attributable to our
increased leasing of new, more reliable and fuel efficient locomotives. These new locomotives replaced older, non-leased
models in the fleet, which helped reduce expenses for depreciation, labor, materials and fuel during the year.
Depreciation - The majority of depreciation relates to track structure, including rail, ties and other track material.
Depreciation expense decreased $76 million (7%) in 2003 from 2002 levels. The decrease was driven by the adoption of
17
FAS 143 as well as the implementation of depreciation studies approved by the Surface Transportation Board, which
resulted in lower depreciation rates in 2003 for certain track assets, partially offset by increased rates for locomotives and
other assets. Conversely, capital spending in recent years has increased the total value of depreciable assets, partially
offsetting the favorable impact ofFAS 143 and the depreciation studies in 2003.
Fuel and Utilities - Fuel and utilities include locomotive fuel, utilities other than telephone and gasoline and other fuels.
Expenses increased $276 million (26%) in 2003 over 2002. The increase was driven by fuel prices, which averaged 92 and
73 cents per gallon in 2003 and 2002, respectively (including taxes and transportation costs). The higher fuel price in
2003 contributed $255 million to the increase; however, approximately 44% of these costs were recovered through our
fuel surcharge programs and are included in operating revenues. A 3% increase in gross ton miles in 2003 resulted in an
additional $25 million in fuel expense. Additionally, we hedged approximately 13% and 42% of our fuel consumption
for 2003 and 2002, in accordance with the Company's policy applicable to hedging, which decreased fuel costs by $28
million in 2003 and $55 million in 2002.
Materials and Supplies - Materials used for the maintenance of our rail lines, structures and equipment is the principal
component of materials and supplies expense. Office, small tools and other supplies and the costs of freight services
purchased to ship company materials are also included. Expenses decreased by $51 million (11%) in 2003. The lower
expense in 2003 was primarily driven by costs associated with track removal. Additionally, expense decreased due to
fewer locomotives repaired, cost control measures and a shift to more contracting oflocomotive repairs, which resulted
in a corresponding increase to Purchased Services and Other Costs. The reduction was partially offset by higher costs for
locomotive materials.
Casualty Costs - The largest component of casualty costs is personal injury expense. Freight and property damage,
insurance, environmental matters and occupational illness expense are also included in casualty costs. Costs in 2003
increased $51 million (14%). The increase in 2003 was driven by higher personal injury expense, insurance costs due to
increased premiums and expenses associated with destruction of foreign equipment. Destruction of foreign equipment
expense is incurred when equipment owned by other railroads is damaged while in our possession.
Purchased Services and Other Costs - Purchased services and other costs include the costs of services purchased from
outside contractors, state and local taxes, net costs of operating facilities jointly used by us and other railroads,
transportation and lodging for train crew employees, trucking and contracting costs for intermodal containers, leased
automobile maintenance expenses, telephone and cellular expense, employee travel expense and computer and other
general expenses. Expenses increased $201 million (22%) in 2003, as a result of higher state and local taxes, increased
spending for contract services and joint facility expense. Crew transportation costs and trucking expenses for intermodal
containers also increased due to network performance. State and local taxes increased primarily as a result of higher
income levels used to assess property taxes. Growth in contract services was primarily driven by higher costs for
contracting oflocomotive maintenance (referenced in Materials and Supplies) and contract-related expenses resulting
from the cost of track removal. Joint facilities costs were up due to reduced haulage receipts and increased expenses
associated with a new joint facility contract.
Operating Income - Operating income decreased $191 million (8%) to $2.1 billion in 2003. Revenue growth,
productivity gains and lower depreciation expense were more than offset by higher fuel prices, inflation, volume and
resource utilization costs.
Non-Operating Items - Interest expense decreased $49 million (9%) in 2003. The improvement was a result oflower
weighted-average debt levels, including intercompany borrowings, of $6,587 million and $7,117 million in 2003 and 2002,
as well as lower weighted-average interest rates of7.5% in 2003 and 7.6% in 2002. Other income fell $202 million in 2003.
The reduction was primarily a result of higher 2002 real estate gains (2002 asset sales to the Utah Transit Authority with
a pre-tax value of$141 million and the Santa Clara Valley Transit Authority with a pre-tax value of$73 million). Income
tax expense decreased $110 million (15%) in 2003 versus 2002. The decrease was driven by lower pre-tax income, which
was partially offset by a tax adjustment recognized in 2002 for prior years' income tax examinations.
18
.
.
.
.
.
.
OTHER MATTERS
Intercompany Relationship with UPC - At December 31, 2003 and 2002, we had $972 million and $904 million working
capital deficit balances, respectively, relating to UPC's management of our cash position. As part of UPC's cash
management activities, we advance excess cash (cash available after satisfying all of our obligations and paying dividends
to UPC) to UPC. We declare and pay dividends to UPC which typically approximate the dividends that UPC declares
to its shareholders; however, there is no formal requirement to do so. The dividend declaration between us and UPC is
determined solely by our Board of Directors. To the extent we require additional cash for use in our operations, UPC
makes such funds available to us for borrowing. Transactions between UPC and us are treated as net intercompany
borrowings in the Consolidated Statements of Financial Position.
The majority of our intercompany borrowings from UPC relate to the acquisitions of the Chicago and North
Western Transportation Company and Southern Pacific Rail Corporation which were funded by UPC on our behalf. We
assumed these acquisition costs in the form of intercompany borrowings from UPC. The intercompany borrowings
accrue interest at an annual rate of 7.5%, which may be adjusted from time to time, and are payable on demand. There
are no restrictions on the amount we are able to borrow from UPC. Intercompany borrowings are unsecured and rank
equally with all of our other unsecured indebtedness.
UPC provides us with various services, including strategic planning, legal, treasury, accounting, auditing, insurance,
human resources and corporate affairs. In 2003, pursuant to a services agreement, UPC will continue to provide services
to us, and we will pay UPC its share of the costs as determined by an independent review. Billings for these services were
$58 million for the year ended December 31, 2003.
Ratio of Earnings to Fixed Charges - For the years ended December 31,2003 and 2002, our ratio of earnings to fixed
charges was 3.7 and 3.9, respectively. The ratio of earnings to fixed charges is based on continuing operations. Earnings
represent income before cumulative effect of accounting change, less equity in undistributed earnings of unconsolidated
affiliates, plus fixed charges and income taxes. Fixed charges represent interest charges, amortization of debt discount and
the estimated amount representing the interest portion of rental charges. The change in our ratio is due primarily to the
changes in our income from continuing operations.
Inflation - The cumulative effect of long periods of inflation has significantly increased asset replacement costs for
capital-intensive companies. As a result, assuming that all operating assets are replaced at current price levels,
depreciation charges (on an inflation-adjusted basis) would be substantially greater than historically reported amounts.
Derivative Financial Instruments - We use derivative financial instruments in limited instances for other than trading
purposes to manage risk related to changes in fuel prices. We are not a party to leveraged derivatives and, by policy, do
not use derivative financial instruments for speculative purposes. Financial instruments qualifying for hedge accounting
must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at
inception and throughout the hedged period. We formally document the nature and relationships between the hedging
instruments and hedged items, as well as our risk-management_objectives, strategies for undertaking the_various hedge
transactions and method of assessing hedge effectiveness. We use swaps, collars, futures and/or forward contracts to
mitigate the downside risk of adverse price movements and hedge the exposure to variable cash flows. The use of these
instruments also limits future gains from favorable movements. The purpose of these programs is to protect our
operating margins and overall profitability from adverse fuel price changes.
Market and Credit Risk - We address market risk related to derivative financial instruments by selecting instruments with
value fluctuations that highly correlate with the underlying item being hedged. Credit risk related to derivative financial
instruments, which is minimal, is managed by requiring high credit standards for counterparties and periodic settlements.
At December 31, 2003 we have not been required to provide collateral, nor have we received collateral relating to our
hedging activities.
In addition, we enter into secured financings in which the debtor has pledged collateral. The collateral is based upon
the nature of the financing and the credit risk of the debtor. We generally are not permitted to sell or repledge the
collateral unless the debtor defaults.
19
Determination of Fair Value - The fair values of our derivative financial instrument positions at December 31, 2003 and
2002 were determined based upon current fair values as quoted by recognized dealers or developed based upon the swap
spread.
.
Sensitivity Analyses - The sensitivity analyses that follow illustrate the economic effect that hypothetical changes in interest
rates or fuel prices could have on our results of operations and financial condition. These hypothetical changes do not
consider other factors that could impact actual results.
Interest Rates - At December 31,2003 and 2002, we had variable-rate debt representing approximately 1 % of our total
debt for both years. If variable interest rates average one percentage point higher in 2004 than our December 31, 2003
variable rate, which was approximately 3%, our interest expense would increase by less than $1 million. If variable
interest rates averaged one percentage point higher in 2003 than our 2002 annual variable rate, which was approximately
3%, our interest expense would have increased by less than $1 million. This amount was determined by considering the
impact of the hypothetical interest rates on the balances of our variable-rate debt at December 31, 2003 and 2002,
respectively.
Market risk for fixed-rate debt is estimated as the potential increase in fair value resulting from a hypothetical one
percentage point decrease in interest rates as of December 31,2003, and amounts to approximately $201 million at
December 31, 2003. Market risk resulting from a hypothetical one percentage point decrease in interest rates as of
December 31,2002, amounted to approximately $198 million at December 31, 2002. The fair values of our fixed-rate
debt were estimated by considering the impact of the hypothetical interest rates on quoted market prices and current
borrowing rates.
Fuel- Fuel costs are a significant portion of our total operating expeI].ses. As a result of the significance of fuel costs and
the historical volatility of fuel prices, we periodically use swaps, collars, futures and/or forward contracts, as well as our
fuel surcharge programs, to mitigate the impact of adverse fuel price changes.
As of December 31, 2003, collars are in place for 9% of expected fuel consumption for 2004. The collars have a floor
of $0.64, a cap of $0.74 and a ceiling of $0.86 per gallon, excluding taxes, transportation costs and regional pricing
spreads. As of December 31, 2003, we had no outstanding hedges for 2005. Based on annualized fuel consumption
during 2003, and excluding the impact of the hedging program, each one-cent increase in the price of fuel would have
resulted in approximately $8 million of additional fuel expense, after tax.
.
As of December 31, 2002, we hedged approximately 7% of our forecasted 2003 fuel consumption using fuel swaps
at $0.58 per gallon, excluding taxes, transportation costs and regional pricing spreads.
Acc~unt:ing J?r~mouncements - In December 2003, the FASB published a revision to FASB Interpretation No. 46
"Consolidation of Variable Interest Entities" (FIN 46) to clarify some of the provisions and to exempt certain entities
from its requirements. Under the new guidance, special effective date provisions apply to enterprises that have fully or
partially applied FIN 46 prior to issuance of the revised interpretation. We adopted FIN 46 in June of 2003. The revision
did not require us to modify our accounting related to the implementation of FIN 46.
Network Performance - Our network performance and operating efficiency were adversely affected in the third and
fourth quarters by a shortage of trainmen and engineers, combined with an expanded summer track maintenance
program and fourth quarter record-level volumes. Additional operating expenses were incurred as crew utilization costs
and car cycle times increased due to slower network train speed. As discussed under Operating Expenses in this Item 7,
labor, rent expense and other costs were affected by our network performance. Programs have been put in place, which
we believe should remedy the situation, including, among other things, hiring and training additional employees and
accelerating certain locomotive acquisitions.
Commitments and Contingencies - There are various claims and lawsuits pending against us and certain of our
subsidiaries. We are also subject to various federal, state and local environmental laws and regulations, pursuant to which
we are currently participating in the investigation and remediation of various sites.
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20
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CAUTIONARY INFORMATION
Certain statements in this report are, and statements in other material filed or to be filed with the Securities and Exchange
Commission (as well as information included in oral statements or other written statements made or to be made by us)
are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of
1934. These forward-looking statements include, without limitation, statements regarding: expectations as to operational
improvements; expectations as to cost savings, revenue growth and earnings; the time by which certain objectives will
be achieved; estimates of costs relating to environmental remediation and restoration; proposed new products and
services; expectations that claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations
or agreements, or other matters will not have a material adverse effect on our consolidated financial condition, results
of operations or liquidity; and statements concerning projections, predictions, expectations, estimates or forecasts as to
our business, financial and operational results, and future economic performance, statements of management's goals and
objectives and other similar expressions concerning matters that are not historical facts.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times that, or by which, such performance or results will be achieved. Forward-
looking information is based on information available at the time and/or management's good faith belief with respect
to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially
from those expressed in the statements.
The following important factors, in addition to those discussed in "Risk Factors" in Item 7, could affect our future
results and could cause those results or other outcomes to differ materially from those expressed or implied in the
forward-looking statements:
. whether we are fully successful in implementing our financial and operational initiatives, including
gaining new customers and retaining existing ones, along with containment of operating costs;
.
material adverse changes in economic and industry conditions, both within the United States and
globally;
.
the effects of adverse general economic conditions affecting customer demand and the industries and
geographic areas that produce and consume commodities carried by us;
. industry competition, conditions, performance and consolidation;
. general legislative and regulatory developments, including possible enactment of initiatives to re-
regulate the rail industry;
. legislative, regulatory, or legal developments involving taxation, including enactment of new federal
or state income tax rates, revisions of controlling authority, and the outcome of tax claims and
litigation;
. changes in securities and capital markets;
. natural events such as severe weather, fire, floods, earthquakes or other disruptions of our operating
systems, structures and equipment;
. any adverse economic or operational repercussions from terrorist activities and any governmental
response thereto;
. war or risk of war;
. changes in fuel prices;
.
changes in labor costs and labor difficulties, including stoppages affecting either our operations or our
customers' abilities to deliver goods to us for shipment; and
21
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the outcome of claims and litigation, including those related to environmental contamination, personal
injuries and occupational illnesses arising from hearing loss, repetitive motion and exposure to asbestos
and diesel fumes.
Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update
forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting
forward-looking information. If we do update one or more forward-looking statements, no inference should be drawn
that we will make additional updates with respect thereto or with respect to other forward-looking statements.
Item 7 A. Ouantitative and Qualitative Disclosures about Market Risk
Information concerning market risk sensitive instruments is set forth under Management's Narrative Analysis of the
Results of Operations - Other Matters, Item 7.
****************************************
22
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Item 8. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
Independent Auditors' Report. ......... ..... ...... ................ ................. .................. ............. ..... .......... ..............
Consolidated Statements ofIncome
For the Years Ended December 31, 2003, 2002 and 2001..................................................................
Consolidated Statements of Financial Position
At December 31,2003 and 2002..........................................................................................................
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2003, 2002 and 2001 ..................................................................
Consolidated Statements of Changes in Common Shareholders' Equity
For the Years Ended December 31,2003,2002 and 2001 ..................................................................
Notes to the Consolidated Financial Statements......................................................................................
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24
25
26
27
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29
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Union Pacific Railroad Company
Omaha, Nebraska
.
We have audited the accompanying consolidated statements of financial position of Union Pacific Railroad Company
(an indirect wholly owned subsidiary of Union Pacific Corporation) and Consolidated Subsidiary and Affiliate Companies
(the Company) as of December 31, 2003 and 2002, and the related consolidated statements of income, changes in
common shareholders' equity and cash flows for each of the three years in the period ended December 31, 2003. Our
audits also included the consolidated financial statement schedule listed in the Table of Contents at Part N, Item 15.
These consolidated financial statements and consolidated financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the consolidated financial statements and
consolidated financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position
of Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies at December 31, 2003 and
2002, and the results of their operations and their cash flows for each of the three years in the period ended December
31,2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our
opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the information set forth therein.
As discussed in Note 13 to the consolidated financial statements, the Company changed its method of accounting
for asset retirement obligations in 2003.
.
Isl DELOITTE & TOUCHE LLP
Omaha, Nebraska
February 6, 2004
.
24
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CONSOLIDATED STATEMENTS OF INCOME
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
Millions of Dollars, for the Years Ended December 31, 2003 2002 2001
Operating revenues................. .... .............. ......... .......................... ...... ..... ............ ...... $11,509 $11,103 $10,800
Operating expenses:
Salaries, wages and employee benefits ................................................................ 3,803 3,590 3,514
Equipment and other rents ................................................................................. 1,218 1,235 1,211
Depreciation......................................................................................................... 1,063 1,139 1,120
Fuel and utilities. ................................. ................... ..... ....... ........... ...... ................. 1,341 1,065 1,249
Materials and supplies. .............. ...... ............ .............. ..... ........... .......... ...... .......... 413 464 473
Casualty costs......... ......... ....... ................ ...... .............. ..... ........... ..... ..................... 411 360 328
Purchased services and other costs ..................................................................... 1,118 917 824
Total operating expenses............ ..... .............. .......... ................... .... ................... ....... 9,367 8,770 8,719
Operating income......... .......... ... .......... ................................ ..... ......... ......... .............. 2,142 2,333 2,081
Other income ...... .......................... ........ ..... .............. ......... ....... ................................. 119 321 174
Interest expense.... ...... ........ ................. ....... ......... ......... ........... ......... ....... ................. (492) (541) (584)
Income before income taxes .................................................................................... 1,769 2,113 1,671
Income taxes. ..... ......................... .................. ...... ................ ........ .............. ......... ....... (629) (739) (613)
Income before cumulative effect of accounting change ......................................... 1,140 1,374 1,058
Cumulative effect of accounting change, net of income tax: expense of$167 ....... 274 - -
Net income. .......... ....... ............ .................... ......... .......... ......... .... ...... ......... ....... ........ $ 1,414 $ 1,374 $ 1,058
The accompanying notes are an integral part of these Consolidated Financial Statements.
25
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
Millions of Dollars, as of December 31, 2003 2002
Assets
Current assets:
Cash and temporary investments .......................................................................... $ 154 $ 110
Accounts receivable, net. ................. ..... .......... .................. ............ .... ............... ... .... 473 529
Inventories ... .......... ......... ....... ............ .............. ...... ............. ..... ............ ....... ............ 267 277
Current deferred income taxes .............................................................................. 184 281
Other current assets...... ..... ......... ....... ....... ..... .................. .................. ..... ......... ....... 181 189
Total current assets......... ... ................... ......... ................. ......................... ...... ....... ..... 1,259 1,386
Investments:
Investments in and advances to affiliated companies........................................... 688 649
Other investments... ............. ........ .............. ........................ ................ ... ................. 37 49
Total investments .. ................. ...... ...... .......... ....................... .............. ................... ..... 725 698
Properties:
Road and other ........................ ............... ............. ...... ........................ ..... ................ 30,635 29,370
Equipment ... ........................... ..... ........................ ........... ............... ................. ........ 7,649 7,451
Total cost............ ......... ................................ .................................. ......................... 38,284 36,821
Accumulated depreciation ....... ......... .................................. ..................... ............. (8,022) (7,841)
Net properties..... ...................... ............. .............. ................ ........................... ...... ..... 30,262 28,980
Other assets ........... .... ..... ............................... ......... ...................... ............... ............... 295 250
Total assets ...... .............. ............ ........... .................. ..... ................... ................. ........... $32,541 $31,314
Liabilities and Common Shareholders' Equity
Current liabilities:
Accounts payable ................... ................... .......... ..... .......... ......... ..................... ....... $ 502 $ 416
Accrued wages and vacation .................................................................................. 359 362
Accrued casualty costs .......... ............................... .... ......... ...... ....... ......... ......... ....... 385 403
Income and other taxes .......................................................................................... 247 226
Debt due within one year ....................................................................................... 167 275
Interest payable.... ......... ............ ........... .............. .............. ............. ............. ............. 73 71
Other current liabilities ... ............ ....................... ....... ........................... ......... ......... 498 537
Total current liabilities. .................. ..... ...................... ............. ...... .................... ......... 2,231 2,290
Intercompany borrowings from UPC ...................................................................... 4,372 4,464
Third-party debt due after one year ......................................................................... 1,998 1,984
Deferred income taxes. .............. .......... ................. ................. ...... ..... .......... .......... ..... 9,287 8,823
Accrued casualty costs............... .......... ............... ..... ................. ......... ............. ...... ..... 595 658
Retiree benefits obligation ........... .................................. .... ......... .... ............... ........... 678 888
Other long-term liabilities ................. ......... ..... ......... ......... ........................... ............ 319 333
Redeemable preference shares .................................................................................. 16 18
Commitments and contingencies
Common shareholders' equity..... ..................... .............. ............... ........ ......... ..... ..... 13,045 11,856
Total liabilities and common shareholders' equity.................................................. $32,541 $31,314
The accompanying notes are an integral part of these Consolidated Financial Statements.
26
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
Millions of Dollars, for the Years Ended December 31, 2003 2002 2001
Operating Activities
Net income. ........... ................... ........ ................. ......... ..... ..... .......... ............ ......... $1,414 $1,374 $ 1,058
Adjustments to reconcile net income to net cash provided by operating
activities:
Cumulative effect of accounting change......................................................... (274) - -
Depreciation ........... .............. ............... ..... ............ .................. .................. ........ 1,063 1,139 1,120
Deferred income taxes ....... ....... .......... ......... ...... ............ ............. .............. ....... 378 529 428
Cash paid to fund pension plan ...................................................................... (100) (100) -
Other, net . ....... ....... ................... ............... ............. .................. .............. ...... ..... ( 467) (316) (432)
Changes in current assets and liabilities, net .................................................. 123 (307) (150)
Cash provided by operating activities................................................................ 2,137 2,319 2,024
Investing Activities
Capital investments....... ................... ................... .... .... ...... .............. ...... .............. (1,749) (1,691) (1,563)
Proceeds from asset sales .................................................................................... 150 409 317
Other investing activities, net ....... ... ..... ......... ............. ...... .......... ............... ......... 126 (52) (133)
Cash used in investing activities......................................................................... (1,473) (1,334) (1,379)
Financing Activities
Dividends paid to parent .................................................................................... (251) (205) (200)
Debt repaid... ................ .......... .... ........ ...... ......... ... ...... ..... ......................... ........... (279) (219) (368)
Advances to affiliates .... ......... ....................... ......... ..... .................... ............. ....... (92) (539) (78)
Financings ................ ................. ................ .............. ..... ..... ......... ..... ..... ..... .......... 2 1 -
Cash used in financing activities ........................................................................ (620) (962) (646)
Net change in cash and temporary investments................................................ 44 23 (1)
Cash and temporary investments at beginning of year ..................................... 110 87 88
Cash and temporary investments at end of year ............................................... $ 154 $ 110 $ 87
Changes in Current Assets and Liabilities, Net
Accounts receivable, net .............. .................. ............. .......... ........ ......... ............. $ 56 $ (89) $ (47)
Inventories........................................................................................................... 10 (27) 97
Other current assets ..... ................... ..... ............. .... ..... ......... .................. ........ ...... 8 (44) (24)
Accounts, wages and vacation payable .............................................................. 83 (71) (97)
Other current liabilities...................... .............. ......... .......... ...... ............... .......... (34) (76) (79)
Total.... ............... ................ .......................... ........ ....... ....... .............. .................... $ 123 $ (307) $ (150)
Supplemental cash flow information:
Non-cash transactions:
Non-cash locomotive lease financings .................................................... $ 188 $ 126 $ 124
Cash paid during the year for:
Interest.. ....................... ..... ......... ......... ......... ..... ..... ....................... ............. $ 490 $ 549 $ 595
Income taxes, net..... .......... .......... ......... .......... .......... ..... ....... ........ ..... ........ 204 278 111
The accompanying notes are an integral part of these Consolidated Financial Statements.
27
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON SHAREHOLDERS' EQUITY
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
.
Accumulated Other
Comprehensive Income (Loss)
Minimum Foreign
Pension Currency
Common Class A Paid-in- Retained Liability Translation Derivative
Millions of Dollars Stock [a] Stock [b] Surplus Earnings Adjustments Adjustments Adjustments Total Total
Balance at January 1,2001...................... $- $- $4,782 $5,197 $ (2) $ 2 $- $- $ 9,979
Net income .............................................. - - - 1,058 - - - - 1,058
Other comprehensive income [cJ ........... - - - - (5) 1 (7) (11) (11)
Comprehensive income.......................... 1,047
Dividends declared ................................ - - - (200) - - - - (200)
Balance at December 31, 2001................ - - 4,782 6,055 (7) 3 (7) (11) 10,826
Net income .............................................. - - - 1,374 - - - - 1,374
Other comprehensive income (loss) [cJ. - - - - (141) (12) 14 (139) (139)
Comprehensive income.......................... 1,235
Dividends declared ................................ - - - (205) - - - - (205)
Balance at December 31, 2002................ - - 4,782 7,224 (148) (9) 7 (150) 11,856
Net income .............................................. - - - 1,414 - - - - 1,414
Other comprehensive income (loss) [c}. - - - - 39 (9) (4) 26 26
Comprehensive income.......................... 1,440
Dividends declared ................................ - - - (251) - - - - (251)
Balance at December 31, 2003................ $- $- $4,782 $8,387 $(109) $(18) $3 $(124) $13,045
[a] Common stock $10.00 par value: 9,200 shares authonzed; 4,465 outstandmg (see note 8 to the Consolidated Financial Statements).
[b] Class A stock, $10.00 par value: 800 shares authorized, 388 outstanding.
[c] Other comprehensive income (loss), net of tax of $16, $(85) and $(6) in 2003, 2002 and 2001, respectlvely.
.
The accompanying notes are an integral part of these Consolidated Financial Statements.
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28
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
For purposes of this report, unless the context otherwise requires, all references herein to the "Company", "we", "us",
and "our" mean Union Pacific Railroad Company.
Significant Accounting Policies
Principles of Consolidation - The Consolidated Financial Statements include the accounts of Union Pacific Railroad
Company, a Delaware corporation, and all of its subsidiaries and certain affiliates (collectively, the Company, UPRR or
the Railroad). The Company is an indirect wholly owned subsidiary of Union Pacific Corporation, a Utah corporation
(the Corporation or UPC). Investments in affiliated companies (20% to 50% owned) are accounted for using the equity
method of accounting. All significant intercompany transactions are eliminated.
Cash and Temporary Investments - Temporary investments are stated at cost which approximates fair value and consist
of investments with original maturities of three months or less.
Inventories - Inventories consist of materials and supplies carried at the lower of average cost or market.
Property and Depreciation - Properties are carried at cost. Provisions for depreciation are computed principally on
the straight-line method based on estimated service lives of depreciable property. The cost (net of salvage) of depreciable
rail property retired or replaced in the ordinary course of business is charged to accumulated depreciation, and no gain
or loss is recognized. A gain or loss is recognized in other income for all other property upon disposition. The cost of
internally developed software is capitalized and amortized over a five-year period. An obsolescence review of capitalized
software is performed on a periodic basis.
Impairment of Long-lived. Assets - We review long-lived assets, including identifiable intangIbles, for impairment when
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment
indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the long-lived
assets, the carrying value is reduced to the estimated fair value as measured by the discounted cash flows.
Revenue Recognition - We recognize commodity revenues on a percentage-of-completion basis as freight moves from
origin to destination. Other revenue is recognized as service is performed or contractual obligations are met.
Translation of Foreign Currency - Our portion of the assets and liabilities related to foreign investments are translated
into U.s. dollars at the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at the
average rates of exchange prevailing during the year. Unrealized adjustments are reflected within shareholders' equity
as accumulated other comprehensive income or loss. Transaction gains and losses related to intercompany accounts are
not significant.
Financial Instruments - The carrying value of our non-derivative financial instruments approximates fair value. The
fair value of financial instruments is generally determined by reference to market values as quoted by recognized dealers
or developed based upon the present value of expected future cash flows discounted at the applicable swap spread.
We periodically use derivative financial instruments, for other than trading purposes, to manage risk related to changes
in fuel prices.
Stock-Based. Compensation - We participate in UPC's stock incentive programs. At December 31, 2003, the
Corporation had several stock-based employee compensation plans, which are described more fully in note 9. We
account for those plans under the recognition and measurement principles of APB Opinion No. 25, "Accounting for
Stock Issued to Employees", and related Interpretations. No stock-based employee compensation expense, related to
stock option grants, is reflected in net income as all options granted under those plans had an exercise price equal to the
market value of the underlying common stock on the date of grant. Stock -based employee compensation expense related
29
to restricted stock, units and other incentive plans is reflected in net income. The following table illustrates the effect on
net income if we had applied the fair value recognition provisions of Financial Accounting Standards Board (F ASB)
Statement No. 123, <<Accounting for Stock-Based Compensation", to stock-based employee compensation.
.
Year Ended December 31,
Millions of Dollars, Except Per Share Amounts 2003 2002 2001
Net income, as reported ............................................................................ $1,414 $1,374 $1,058
Stock-based employee compensation expense included in reported net
income, net of tax .............................................................................. 17 8 5
Total stock-based employee compensation expense determined under
fair value based method for all awards, net of tax ............................ (31) (22) (24)
Pro forma net income ............................................................................... $1,400 $1,360 $1,039
Use of Estimates - Our Consolidated Financial Statements include estimates and assumptions regarding certain assets,
liabilities, revenues and expenses and the disclosure of certain contingent assets and liabilities. Actual future results may
differ from such estimates.
Income Taxes - We account for income taxes in accordance with F ASB Statement No. 109, "Accounting for Income
Taxes". The objectives of accounting for income taxes are: (1) to recognize the amount oftaxes payable or refundable
for the current year; and (2) to recognize the future tax consequences (deferred taxes) associated with items of income
or expense that are reported in an entity's financial statements in different time periods than its tax returns. Deferred
taxes are measured using current tax law; future changes in tax laws are not anticipated, but such future changes could
have a material impact on our financial condition or our results of operations.
Pension and Postretirement Benefits - We incur certain employment-related expenses associated with pensions and
postretirement health benefits. In order to measure the expense associated with these benefits, we must make various
estimates including discount rates used to value certain liabilities, expected return on plan assets used to fund these
expenses, salary increases, employee turnover rates, anticipated mortality rates and expected future healthcare costs. The
estimates used by us are based on our historical experience as well as current facts and circumstances. We use third-party
actuaries to assist us in properly measuring the expense and liability associated with these benefits. Actual results that vary
from the previously mentioned assumptions could have a material impact on our results of operations, financial condition
or liquidity.
.
Personal Injury - The cost of injuries to employees and others on our property is charged to expense based on estimates
of the ultimate cost and number of incidents each year . We use third party actuaries to assist us in properly measuring
the expense and liability.
Environmental - When environmental issues have been identified with respect to the property owned, leased or
otherwise used in the conduct of our business, we and our consultants perform environmental assessments on such
property. We expense the cost of the assessments as incurred. We accrue the cost of remediation where our obligation
is probable and such costs can be reasonably estimated.
Differences in Securities and Exchange Commission (SEe) and Surface Transportation Board (STB) Accounting - STB
accounting rules require that railroads accrue the cost of removing track structure over the expected useful life of these
assets. Railroads historically used this prescribed accounting for reports filed with both the STB and SEC. In August
2001, the FASB issued Statement No. 143, "Accounting for Asset Retirement Obligations" (FAS 143). This statement was
effective for us beginning January 1, 2003, and prolnbits the accrual of removal costs unless there is a legal obligation to
remove the track structure at the end of its life. We concluded that we did not have a legal obligation to remove the track
structure, and therefore, under generally accepted accounting principles, we could not accrue the cost of removal in
advance. As a result, reports filed with the SEC will reflect the expense of removing these assets in the period in which
they are removed.
Change in Presentation - Certain prior year amounts have been reclassified to conform to the 2003 Consolidated
Financial Statement presentation. These reclassifications had no effect on previously reported operating income or net
income.
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30
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1. Operations
We are a Class I railroad that operates in the United States. Our operating results have included Southern Pacific Rail
Corporation since October 1996. In addition, during 1997, we acquired an ownership interest in a consortium, which
was granted a 50-year concession to operate the Pacific-North and Chihuahua Pacific lines in Mexico. We made an
additional investment in the consortium in 1999 and currently hold a 26% ownership interest in the consortium.
We have approximately 33,000 route miles linking Pacific Coast and Gulf Coast ports with the Midwest and eastern
United States gateways and providing several north/south corridors to key Mexican gateways. We serve the western two-
thirds of the country and maintain coordinated schedules with other rail carriers for the handling of freight to and from
the Atlantic Coast, the Pacific Coast, the Southeast, the Southwest, Canada and Mexico. Export and import traffic is
moved through Gulf Coast and Pacific Coast ports and across the Mexican and Canadian borders. Railroad freight is
comprised of six commodity groups (percent of total commodity revenues for the year ended December 31, 2003):
agricultural (14%), automotive (11 %), chemicals (14%), energy (22%), industrial products (20%) and intermodal (19%).
Employees - Approximately 86% of our 46,000 full time equivalent employees are represented by 14 major rail unions.
National negotiations under the Railway Labor Act to revise the national labor agreements for all crafts began in late 1999.
In May 2001, the Brotherhood of Maintenance of Way Employees (BMWE) ratified an agreement, which included
provisions for wage increases (based on the consumer price index) and progressive employee health and welfare cost
sharing rates.
In August 2002, the carriers reached an agreement with the United Transportation Union (UTU) that incorporated
wage increases. The agreement also provided for the operation of remote control locomotives by trainmen that was
challenged by the Brotherhood of Locomotive Engineers (BLE). A January 2003 arbitration decision held that the
operation of remote control locomotives in terminals does not violate the BLE agreement. In November 2003, agreement
was reached with the UTU on employee health and welfare cost sharing rates and plan design changes.
In November 2002, the International Brotherhood of Boilermakers and Blacksmiths (IBB) reached an agreement
that incorporated wage increases.
In January 2003, an arbitration award was rendered establishing wage increases and employee health and welfare cost
sharing rates for the Transportation Communications International Union (TCU). Health and welfare plan design
changes were also part of the TCU agreement.
Other settled agreements that incorporated wage increases and employee health and welfare cost sharing rates
combined with plan design changes include the Brotherhood of Railway Signalmen (BRS) in September 2003 and the
Brotherhood of Locomotive Engineers (BLE) in December 2003. Contract discussions with the remaining unions are
either in negotiation or mediation.
All settlements previously discussed include a five year contract period, expiring December 31, 2004.
Effective January 2004, the Brotherhood of Locomotive Engineers merged with the International Brotherhood of
Teamsters (IBT). The BLE has changed its name to the Brotherhood of Locomotive Engineers and Trainmen (BLET).
Competition - Weare subject to competition from other railroads, motor carriers and barge operators. Our main rail
competitor is Burlington Northern Santa Fe Corporation. Its rail subsidiary, The Burlington Northern and Santa Fe
Railway Company, operates parallel routes in many of our main traffic corridors. In addition, our operations are
conducted in corridors served by other competing railroads and by motor carriers. Motor carrier competition is
particularly strong with respect to five of our six commodity groups (excluding energy), due to shorter delivery times
offered by such carriers. Because of the proximity of our routes to major inland and Gulf Coast waterways, barge
competition can be particularly pronounced, especially for grain and bulk commodities. Competition can pressure both
transit time requirements and pricing, as well as place a greater emphasis on the quality and reliability of the service
provided. While we must build or acquire and maintain our rail system, trucks and barges are able to use public rights-of-
way maintained by public entities. Any future improvements or expenditures materially increasing the quality of these
alternative modes of transportation in the locations in which we operate, or legislation granting materially greater latitude
31
for motor carriers with respect to size or weight limitations, could have a material adverse effect on our results of
operations, financial condition and liquidity.
.
Equipment Suppliers - Weare dependent on two key suppliers oflocomotives. Due to the capital intensive nature and
sophistication of this equipment and its production, there are strong barriers of entry to potential new suppliers.
Therefore, if one of these suppliers discontinues manufacturing locomotives, we could realize a significant increase in the
cost and the potential for reduced availability of the locomotives that are necessary to our operations.
2. Transactions with Affiliates
At December 31, 2003 and 2002, we had $972 million and $904 million working capital deficit balances, respectively,
relating to UPC's management of our cash position. As part ofUPe's cash management activities, we advance excess cash
(cash available after satisfying all of our obligations and paying dividends to UPC) to UPC. We declare and pay dividends
to UPC which typically approximate the dividends that UPC declares to its shareholders; however, there is no formal
requirement to do so. The dividend declaration between us and UPC is determined solely by our Board of Directors. To
the extent we require additional cash for use in our operations, UPC makes such funds available to us for borrowing.
Transactions between UPC and us are treated as net intercompany borrowings in the Consolidated Statements of
Financial Position.
The majority of our intercompany borrowings from UPC relate to the acquisitions of the Chicago and North
Western Transportation Company and Southern Pacific Rail Corporation which were funded by UPC on our behalf. We
assumed these acquisition costs in the form of intercompany borrowings from UPC. The intercompany borrowings
accrue interest at an annual rate of 7.5%, which may be adjusted from time to time, and are payable on demand. There
are no restrictions on the amount we are able to borrow from Upc. Intercompany borrowings are unsecured and rank
equally with all of our other unsecured indebtedness.
UPC provides us with various services, including strategic planning, legal, treasury, accounting, auditing, insurance,
human resources and corporate affairs. In 2003, pursuant to a services agreement, UPC will continue to provide services
to us, and we will pay UPC its share of the costs as determined by an independent review. Billings for these services were
$58 million for the year ended December 31, 2003.
.
3. Financial Instruments
Strategy and Risk - We use derivative financial instruments in limited instances for other than trading purposes to
manage risk related to changes in fuel prices. We are not a party to leveraged derivatives and, by policy, do not use
derivative financial instruments for speculative purposes. Financial instruments qualifying for hedge accounting must
maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception
and throughout the hedged period. We formally document the nature and relationships between the hedging instruments
and hedged items, as well as our risk-management objectives, strategies for undertaking the various hedge transactions
and method of assessing hedge effectiveness. We use swaps, collars, futures and/or forward contracts to mitigate the
downside risk of adverse price movements and hedge the exposure to variable cash flows. The use of these instruments
also limits future benefits from favorable movements. The purpose of these programs is to protect our operating margins
and overall profitability from adverse fuel price changes.
Market and Credit Risk - We address market risk related to derivative financial instruments by selecting instruments
with value fluctuations that highly correlate with the underlying hedged item. Credit risk related to derivative financial
instruments, which is minimal, is managed by requiring high credit standards for counterparties and periodic settlements.
At December 31, 2003, we had not been required to provide collateral, nor have we received collateral relating to our
hedging activities.
In addition, we enter into secured financings in which the debtor has pledged collateral. The collateral is based upon
the nature of the financing and the credit risk of the debtor. We generally are not permitted to sell or repledge the
collateral unless the debtor defaults.
.
32
.
.
.
Determination of Fair Value - The fair values of our derivative financial instrument positions at December 31, 2003 and
2002, were determined based upon current fair values as quoted by recognized dealers or developed based upon the swap
spread.
Fuel Strategy - Fuel costs are a significant portion of our total operating expenses. As a result of the significance of fuel
costs and the historical volatility of fuel prices, we periodically use swaps, collars, futures and! or forward contracts, as well
as our fuel surcharge programs, to mitigate the impact of adverse fuel price changes.
The following is a summary of our derivative financial instruments for continuing operations at December 31, 2003
and 2002:
Millions, Except Percentages and Average Commodity Prices
Fuel hedging:
Swaps and swaptions:
Number of gallons hedged for 2002 [a] .........................................................................
Average price of2002 hedges (per gallon) [h] ...............................................................
Number of gallons hedged for 2003 [e] .........................................................................
Average price of2003 hedges outstanding (per gallon) [h] ..........................................
Collars:
Number of gallons hedged for 2003.........................................................................
Average cap price for 2003 collars outstanding [h] ..................................................
Average floor price for 2003 collars outstanding [h] ................................................
Average ceiling price for 2003 collars outstanding [h] .............................................
Number of gallons hedged for 2004 .........................................................................
Average cap price for 2004 collars outstanding [h] ..................................................
Average floor price for 2004 collars outstanding [h] ................................................
Average ceiling price for 2004 collars outstanding [h] .............................................
2003
2002
552
$ $0.56
145 88
$0.63 $0.58
22
$0.77 $
$0.67 $
$0.88 $
120
$0.74 $
$0.64 $
$0.86 $
[a] Fuel hedges which were In effect during 2002.
[h] Excludes taxes, transportation costs and regional pricing spreads.
[e] Fuel hedges which were in effect during 2003. These hedges expIred December 31,2003.
The fair value asset and liability positions of our outstanding derivative financial instruments at December 31, 2003
and 2002 were as follows:
Millions of Dollars 2003 2002
Fuel hedging:
Gross fair value asset position ............................................................................................ $6 $12
Gross fair value (liability) position..................................................................................... - -
Total fair value asset (liability) position, net ......................................................................... $6 $12
Fuel hedging positions will be reclassified from accumulated other comprehensive income (loss) to fuel expense over
the life of the hedge as fuel is consumed.
Our use of derivative financial instruments had the following impact on pre-tax income for the years ended
December 31, 2003, 2002 and 2001:
Millions of Dollars 2003 2002 2001
Decrease (increase) in fuel expense from fuel hedging................................... $28 $36 $(14)
Decrease (increase) in fuel expense from fuel swaptions................................ - 19 (6)
Decrease (increase) in operating expenses ...................................................... 28 55 (20)
Increase (decrease) in other income, net from fuel swaptions....................... - 5 (18)
Increase (decrease) in pre-tax income ............................................................. $28 $60 $(38)
33
Fair Value of Debt Instruments - The fair value of our long-term and short-term debt has been estimated using quoted
market prices, where available, or current borrowing rates. At December 31, 2003 and 2002, the fair value of total debt
exceeded the carrying value by approximately $247 million and $323 million, respectively. At December 31,2003 and
2002, approximately $262 million and $251 million, respectively, of fixed-rate debt securities contain call provisions that
allow us to retire the debt instruments prior to final maturity, with the payment of fixed call premiums, or in certain cases,
at par.
.
Sale of Receivables - We have sold without recourse on a 364-day revolving basis, an undivided interest in a designated
pool of accounts receivable to investors through Union Pacific Receivables, Inc. (UPRI), a bankruptcy-remote subsidiary.
At December 31, 2003 and 2002, UPRI had transferred $695 million and $667 million, respectively, of accounts receivable
to the investors. UPRI subsequently sells an interest in such pool to the investors and retains an undivided interest in a
portion of these receivables. This retained interest is included in accounts receivable in our Consolidated Financial
Statements. At December 31,2003 and 2002, UPRI had a retained interest of$105 million and $67 million, respectively.
The outstanding undivided interest held by investors of $590 million and $600 million at December 31, 2003 and 2002,
respectively, is sold at carrying value, which approximates fair value, and there is no gain or loss recognized from the
transaction. These sold receivables are no longer included in our Consolidated Financial Statements.
On August 7, 2003, the program was renewed for one year with a capacity to sell to the investors an undivided
interest in accounts receivable of $600 million. The amount of receivables sold fluctuates based upon the availability of
the amount of receivables eligible for sale and is directly affected by changing business volumes and credit risks, including
default and dilution. If default or dilution percentages were to increase one percentage point, the amount of receivables
available for sale would decrease by $6 million. Should UPC's credit rating fall below investment grade, the amount of
receivables sold would be reduced, and, in certain cases, the investors have the right to discontinue this reinvestment.
We have been designated by the investors to service the sold receivables; however, no servicing asset or liability has
been recognized as the servicing fees adequately compensate us for our responsibilities. The costs of the sale of receivables
program are included in other income and were $10 million, $13 million and $27 million in 2003, 2002 and 2001,
respectively. The costs include interest, program fees paid to banks, commercial paper issuing costs, and fees for unused
commitment availability. Payments collected from sold receivables can be reinvested in new receivables on behalf of the
buyers. Proceeds from collections reinvested in the program were approximately $11 billion in both 2003 and 2002.
.
In January 2004, UPRI reduced the outstanding undivided interest held by investors by $30 million to $560 million,
due to a decrease in available receivables at December 31, 2003.
4. Income Taxes
We are included in the consolidated income tax return of the Corporation. The consolidated income tax liability of the
Corporation is allocated among the parent and its subsidiaries on the basis of the separate contributions to the
consolidated income tax liability, with the benefit of tax losses and credits utilized in consolidation allocated to the
companies generating such losses and credits.
.
34
.
.
.
Components of income tax expense were as follows for the years ended December 31, 2003, 2002 and 2001:
Millions of Dollars 2003 2002 2001
Current:
Federal................................................................................................................... $208 $193 $175
State.. .............. ......... ............... .............. ...... ............. ................ ............. ................. 43 17 10
Total current ....................... ...... ......... .................... ........... ........................... ..... ......... 251 210 185
Deferred:
Federal................................................................................................................... 396 466 378
State .......................... .................. ............ 0 ...................... ............ 0.... ........... ............ (18) 63 50
Total deferred..... ........................... ........... ........ ............... ....... .............. ......... ...... ....... 378 529 428
Total ......... .... .............. .............. ......... ..... .... ......... ......... .......... ............. ..... ......... ..... .... $629 $739 $613
Deferred income tax liabilities (assets) were comprised of the following at December 31, 2003 and 2002:
Millions of Dollars 2003 2002
Net current deferred income tax asset ............................................................................... $ (184) $ (281)
Property...... ....... ............................. ..... .............. ............................. ....... ......... ............... ...... 8,525 8,168
State taxes, net.......... 0......... ..... ..... ......... ......................... .......... ......................... .... .............. 655 653
Other .......... .................. ..... ......... ......... ..... ......... .......................... ....... ............. ........... ......... 107 2
Net long-term deferred income tax liability...................................................................... 9,287 8,823
Net deferred income tax liability... ................... ......... ......... .............. .......... ............. ........... $9,103 $8,542
For the years ending December 31, 2003, 2002 and 2001, a reconciliation between statutory and effective tax rates
is as follows:
Percentages 2003 2002 2001
Statutory tax rate...... ........ .............. ............ ................. .......... .............. ...... ................ 35.0% 35.0% 35.0%
State taxes-net ................ ... ..... ..... ............ ....................... ............. .... .................. ........ 0.9 2.5 2.4
Other ..... ......... ................... ....... ................ ......... .... .......... ....... ...... ..... .................. ...... (0.3) (2.5) ( 0.7)
Effective tax rate.... .................. .................. .... 0... ......... ........... ................ ......... ........... 35.6% 35.0% 36.7%
All federal income tax years prior to 1986 are closed. Federal income tax liabilities for 1986 through 1994 have been
resolved, pending final resolution of interest calculations, which may take several years. Resolution of these years resulted
in a decrease in income tax expense of $33 million in 2002. Years 1995 through 1998 are currently under examination
by the IRS.
We believe we have adequately reserved for federal and state income taxes.
5. Debt
Other than intercompany borrowings, the majority of our debt is publicly held. The intercompany borrowings accrue
interest at an annual rate of 7 .5%, which may be adjusted from time to time, and are payable on demand. There are no
restrictions on the amount we are able to borrow from UPC. Intercompany borrowings are unsecured and rank equally
with all of our other unsecured indebtedness. Total debt as of December 31, 2003 and 2002, is summarized below:
35
Millions ofVollars 2003 2002
Intercompany borrowings from UPC, 7.5% ........................................................................... $4,372 $4,464
Capitalized leases, 4.7% to 11.6% due through 2026 ............................................................. 1,531 1,457
Equipment obligations, 6.3% to 10.3% due through 2019 .................................................... 374 534
Notes and debentures, 2% to 5.4% due through 2054 ........................................................... 157 160
Mortgage bonds, 4.3% to 4.8% due through 2030 ................................................................. 152 153
Tax-exempt financings, 2.6% due through 2015 .................................................................... 12 12
Unamortized discount................. ........ ....... .......... ................ ................. .......... ...... ............. ...... (61) (57)
Total debt ..... ................ ......... ......... ............ ............ ......... ......... ............. ...... .......... ...... ...... ........ 6,537 6,723
Less current portion.......... ..... ......... .......... ................ ...... ......... ......... .......... ......... ......... ............ (167) (275)
T otallong -term debt ................... .............. ............ ....... .................. .............. ......... ..... .... ....... ... $6,370 $6,448
.
Debt Maturities - Aggregate debt maturities, excluding intercompany borrowings, as of December 31, 2003, are as
follows:
Millions ofVollars
2004 ............................................................................................................................................................. $ 167
2005 ................................................................................................................................................................. 242
2006 ............................................................................................................................................................. 149
2007 ..................................................................................................................................................................... 135
2008 ................................................................................................................................................................ 131
Thereafter ............. .......... ..... .............. ........................ ......................... ....... ........... ............... ........ .......... ..... 1,341
Total debt................................................................................................................................................... $2,165
In February 2004, we called our 4.25% mortgage bonds, with an outstanding balance of approximately $92 million
and maturity date ofJanuary 1, 2005, for redemption in Aprll2004.
Mortgaged Properties - Equipment with a carrying value of approximately $3.5 billion and $3.7 billion at December 31,
2003 and 2002, respectively, serves as collateral for the capital leases and other types of equipment obligations in
accordance with the secured financing arrangements utilized to acquire such railroad equipment.
.
As a result of the merger of Missouri Pacific Railroad Company (MPRR) with and into UPRR on January 1,1997,
and pursuant to the underlying indentures for the MPRR mortgage bonds, UPRR must maintain the same value of assets
after the merger in order to comply with the security requirements of the mortgage bonds. As of the merger date, the
value of the MPRR assets which secured the mortgage bonds was approximately $5.8 billion. In accordance with the
terms on the indentures, this collateral value must be maintained during the entire term of the mortgage bonds
irrespective of the outstanding balance of such bonds.
Income- Based Securities - We have certain debt instruments which contain provisions that limit the payment of interest,
require sinking fund installments and impose certain restrictions in the event all interest is not paid based upon available
income levels. Other debt instruments contain provisions that may impose restrictions on the Company's ability to
declare dividends on certain classes of capital stock (note 8).
Significant New Financings - During May 2003, we entered into a capital lease covering new locomotives. The related
capital lease obligation totaled approximately $188 million and is included in the Consolidated Statements of Financial
Position as debt.
.
36
.
.
.
6. Leases
We lease certain locomotives, freight cars and other property. Future minimum lease payments for operating and capital
leases with initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2003 were as follows:
Millions of Dollars
2004 ................. ......... ......................... ....... ............................ ................ ................ ......
2005 ...................... ....... ................................ ...... .............. ..... ....... ......................... ......
2006 .......................... .......... ...................... ............................ .... . ...... ... . ........ .... ..... ......
2007 ................... ................ .......... ........................ ........ .............. ............. ..... ...............
2008 ..... .......... ................ .................................................. ......... ..................... ....... ......
Later Years ................................ .................. .............. ....................... .......... .......... ... ....
Total minimum lease a ents................................................................................
Amount re resentin interest ...................................................................................
Present value of minimum lease a ents ..............................................................
Operating Leases
$ 434
392
333
269
206
1,318
$2,952
Capital Leases
$ 223
200
198
180
172
1,552
2,525
(994)
$1,531
Rent expense for operating leases with terms exceeding one month was $583 million in 2003, $581 million in 2002,
and $571 million in 2001. Contingent rentals and sub-rentals are not significant.
7. Retirement Plans
Pension and Other Postretirement Benefits
Pension Plans- We provide defined benefit retirement income to eligible non-union employees through the Corporation's
qualified and non-qualified (supplemental) pension plans. Qualified and non-qualified pension benefits are based on
years of service and the highest compensation during the latest years of employment with specific reductions made for
early retirements.
Other Postretirement Benefits (OPEB) - All non-union and certain of our union employees participate in the Corporation's
defined contribution medical and life insurance programs for retirees. These costs are funded as paid.
Medicare Reform Act
On December 13, 2003, Congress passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003
(Medicare Reform Act). The provisions of the Medicare Reform Act include prescription drug benefits for Medicare
eligible individuals. We have elected to recognize this legislation in 2003, in accordance with FASB Sta1IPosition No. 106-
1, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of2003", which results in a $47 million reduction to the accumulated benefit obligation for other
postretirement benefits as of December 31, 2003. This reduction is based on the value of the projected federal subsidy,
assumes no changes in participation rates and is recorded as an unrecognized actuarial gain. The estimated reduction
in post-65 per capita claim costs was 17%. There was no effect on 2003 expense. For 2004, we expect a reduction in
OPEB expense of $7 million. Future guidance from either Congress or the FASB could result in a change to this
recognition.
Funded Status
Projected Benefit Obligation (PBO)- The projected benefit obligation of the pension plans is the present value of benefits
earned to date by plan participants, including the effect of assumed future salary increases. The PBO of the OPEB plan
is equal to the accumulated benefit obligation, as the present value of OPEB liabilities are not affected by salary increases.
Changes in our projected benefit obligation are as follows for the years ended December 31:
37
Pension OPEB
Millions of Dollars 2003 2002 2003 2002
Projected benefit obligation at beginning of year ................................. $1,703 $1,654 $551 $497
Service cost .............. ......... ................................................... ....... ............ 27 21 7 6
Interest cost .................. ...... ......... ............. .......... ........... ...... ................... 113 117 35 37
Plan amendments ......................................................................... .......... - (1) (74) (48)
Actuarial loss .............. ....... ........... .......... ............ ......... ................... ........ 76 34 61 105
Gross benefits paid ................................................................................. (115) (122) (37) (46)
Projected benefit obligation at end of year ........................................... $1,804 $1,703 $543 $551
Assets - Assets used in calculating the funded status are measured at the fair value at December 31. Changes in the fair
value of the plan assets are as follows for the years ended December 31) 2003 and 2002:
Pension OPEB
Millions of Dollars 2003 2002 2003 2002
Fair value of plan assets at beginning of year ........................................ $1,231 $1,404 $ - $ -
Actual return on plan assets................................................................... 297 (159) - -
Voluntary funded pension plan contributions ..................................... 100 100 - -
Unfunded pIan benefit payments.......................................................... 7 8 37 46
Gross benefits paid ................................................................................. ( 115) (122) (37) (46)
Fair value of plan assets at end of year .................................................. $1)520 $1)231 $ - $ -
Funded Status - The funded status represents the difference between the projected benefit obligation and the fair value
of the plan assets. Below is a reconciliation of the funded status of the benefit plans to the net liability recognized for the
years ended December 31, 2003 and 2002:
Pension OPEB
Millions of Dollars 2003 2002 2003 2002
Funded status at end of year ................................................................. $(284) $(472) $(543) $(551)
Unrecognized net actuarial loss ............................................................ 201 290 216 171
Unrecognized prior service cost (credit) .............................................. 46 55 (116) (56)
Unrecognized net transition oblil!:ation ............................................... (2) (4) - -
Net liability recognized at end of year .................................................. $ (39) $(131) $(443) $(436)
Liability Recorded in Consolidated Statement of Financial Position - The net liability represents the amount previously
accrued by us for pension and OPEB costs. The following table presents the components of the benefit plan liabilities in
the Consolidated Statements of Financial Position for December 31, 2003 and 2002:
Pension OPEB
Millions of Dollars 2003 2002 2003 2002
Prepaid benefit cost.... ............... .......... .............. ..... ........... ............... ...... $34 $ 7 $ - $ -
Accrued benefit cost....... ............. ................. ............ ..... ......................... (73) (137) (443) (436)
Additional minim urn liability. ......... ...... ...................... ......... ......... ........ (221) (294) - -
Intangtble assets................................... ........ ..... ..... ............. ......... ..... ...... 46 55 - -
Accumulated other comprehensive income ......................................... 175 238 - -
Net liability recognized at end of year ................................................... $(39) $(131) $(443) $(436)
At December 31, 2003 and 2002) $35 million and $43 million) respectively) of the total pension and other
postretirement liability were classified as a current liability.
38
.
.
.
.
.
.
Unfunded Accumulated Benefit Obligation - The accumulated benefit obligation is the present value of benefits earned to
date, assuming no future salary growth. The unfunded accumulated benefit obligation represents the difference between
the accumulated benefit obligation and the fair value of the plan assets. The projected benefit obligation, accumulated
benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of the fair
value of the plan assets were as follows for the years ended December 31, 2003 and 2002:
Millions of Dollars 2003 2002
Projected benefit obligation............. .... ............................ .......... ............ $(1,789) $(1,688)
Accumulated benefit obligation ............................................................ $(1,769) $(1,646)
Fair value of plan assets.......................................................................... 1,503 1,216
Unfunded accumulated benefit obligation ........................................... $ (266) $ (430)
The accumulated benefit obligation for all defined benefit pension plans was $1.8 billion and $1.7 billion as of
December 31, 2003 and 2002, respectively.
Assumptions - The weighted-average actuarial assumptions used to determine benefit obligations at December 31,2003,
2002 and 2001 were as follows:
Percentages
Discount rate......................... ...... ........ ........ ....... ......
Salary increase ..........................................................
Health care cost trend rate:
current............ ................. ......................... ...........
Level in 2008........................................................
Pension
2003 2002 2001
6.50% 6.75% 7.25%
3.50 3.75 4.25
N/A N/A N/A
N/A N/A N/A
OPEB
2003 2002 2001
6.50% 6.75% 7.25%
N/A N/A N/A
9.00 10.0 7.70
5.00 5.00 5.50
Expense
Both pension and OPEB expense is determined based upon the annual service cost of benefits (the actuarial cost of
benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. With
respect to the value of pension plan assets, the expected long-term rate of return on plan assets is applied to a calculated
value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce Year-
to-year volatility in pension expense, but it can have the effect of delaying the recognition of differences between actual
returns on assets and expected returns based on long-term rate of return assumptions. The expected rate of return on
assets was 8% for 2003 and 9% for 2002.
Differences in actual experience in relation to assumptions are not recognized immediately, but are deferred and,
if necessary, amortized as pension or OPEB expense.
The components of our net periodic pension and other postretirement costs (income) for the years ended December
31,2003,2002 and 2001 were as follows:
Pension OPEB
Millions of Dollars 2003 2002 2001 2003 2002 2001
Service cost ............................................................... $ 27 $ 21 $ 22 $ 7 $ 6 $ 6
Interest cost .............................................................. 113 117 113 35 37 30
Expected return on plan assets ................................ (133) (144) (157) - - -
Amortization of.
Transition obligation. .......... ................. ............... (2) (2) (1) - - -
Prior service cost (credit) .................................... 9 9 12 (15) (3) (2)
Actuarial loss (gain)............................................. 1 (15) (23) 16 5 -
Total net periodic benefit cost (income) ................ $ 15 $ (14) $ (34) $43 $45 $34
39
Assumptions - The weighted-average actuarial assumptions used to determine expense for the years ended December 31,
2003,2002 and 2001 were as follows:
Pension OPEB
Percentages 2003 2002 2001 2003 2002 2001
Discount rate ............................................................ 6.75% 7.25% 7.5% 6.75% 7.25% 7.5%
Expected return on plan assets ................................ 8.0 9.0 10.0 N/A N/A N/A
Salary increase .......................................................... 3.75 4.25 4.5 N/A N/A N/A
Health care cost trend rate:
Current........ ....................... ................ .................. N/A N/A N/A 10.0 7.70 7.70
Level in 2008 ........................................................ N/A N/A N/A 5.00 5.50 5.50
.
The discount rate we used is based on a hypothetical portfolio of high quality bonds with cash flows matching the
plans' expected benefit payments at December 31. The expected return on plan assets is based on our asset allocation mix
and our historical return, taking into account current and expected market conditions. The actual return on pension plan
assets was approximately 25% in 2003, compared to an 11 % loss in 2002. Our historical annualized ten-year rate of
return on plan assets is approximately 9%. During 2003, we decreased our expected return on plan assets from 9% to
8%. This assumption change resulted in an increase to 2003 pension expense of$17 million.
Assumed health care cost trend rates have a significant effect on the expense and liabilities reported for health care
plans. The health care cost trend rate is based on historical rates and expected market conditions. A one-percentage point
change in the expected health care cost trend rates would have the following effects on OPEB:
Millions of Dollars
Effect on total service and interest cost components. ..........................................
Effect on accumulated benefit obligation.............................................................
One % pt.
Increase
One % pt.
Decrease
$ 5
59
$ (4)
(49)
.
Equity Adjustment
During 2002, actual asset returns for the pension plans were adversely impacted by continued deterioration in the equity
markets. Also during 2002, corporate bond yields, which are used in determining the discount rate for future pension
obligations, continued to decline. As a result of negative asset returns and lower discount rates, we were required to
recognize an additional minimum pension liability. An additional minimum pension liability adjustment is required
when our accumulated benefit obligation exceeds the fair value of the plan assets, and that difference exceeds the net
pension liability. The liability was recorded as a $141 million after-tax reduction to common shareholders' equity as part
of accumulated other comprehensive loss in 2002.
Because the fair value of plan assets improved in 2003, the 2003 adjustment to shareholders' equity was $39 million,
after-tax, recorded as an increase to equity in accumulated other comprehensive income.
The remaining equity reduction from 2002 will be restored to the balance sheet in future periods if the fair value
of plan assets exceeds the accumulated benefit obligations. Recognition of this reduction to equity did not affect net
income or cash flow in 2003 and had no impact on compliance with debt covenants.
Cash Contributions
The following table details our cash contributions for the years ended December 31, 2003 and 2002, and the expected
contributions for 2004:
Millions 0 Dollars
2002 ... ........... ...... ........ ....... ..............
2003 ................ .............. ........... ........
2004 (e ected)...............................
Pension
Funded Un nded
$100 $8
100 7
50 8
40
OPEB
$46
37
35
.
.
.
.
Our policy with respect to funding the qualified plans is to fund at least the minimum required by the Employee
Retirement Income Security Act of 1974, as amended, and not more than the maximum amount deductible for tax
purposes. There are currently no minimum funding requirements, as set forth in employee benefit and tax laws. All
contributions made to the funded pension plans for 2002 and 2003 were voluntary. The 2004 funded pension plan
contribution was voluntary and was made in January 2004 with cash generated from operations.
All benefit payments for other postretirement benefits are voluntary, as the postretirement plans are not funded, and
are not subject to any minimum regulatory funding requirements. Benefit payments for each year represent claims paid
for medical and life insurance, and we anticipate our 2004 OPEB payments will be made from cash generated from
operations.
Benefit Payments
The following table details expected benefit payments for the years 2004 though 2013:
Millions of Dollars
2004 ............... ............... ....... ...... ............ ...... ................... ................ ..........
2005 ......... ......... ................ ..... .......... ...... ............ ............................. ..........
2006 ...... ......... ...... .................. ............. ......... .................. ........ ............. ......
2007 ... ............................... ............. .............. ...... ........... ...................... ......
2008 ... ............................... ................................................. ................. ......
Years 2009 - 2013 ....................................................................................
Pension Benefits
$116
116
117
119
122
697
Other Postretirement
Benefits
$35
38
37
39
40
215
Expected benefit payments for other postretirement benefits are adjusted for estimated reimbursements for
prescription drugs beginning in 2006, based on the Medicare Reform Act passed in 2003.
Asset Allocation Strategy
The pension plan asset allocation at December 31, 2003 and 2002 and target allocation for 2004 are as follows:
Percentage of Plan Assets
T ar~et Allocation December 31,
Asset Category 2004 2003 2002
Equity securities ................ ..... ............................... ..... ............. 65% to 75% 70% 66%
Debt securities. ...................... ........ ..... ........... .............. .... ........ 25% to 35% 30% 34%
Real estate ...... ........... .......................... ....... .................... .......... 0% 0% 0%
Other ............ ...... ...................... ..... ...................... .......... .......... 0% 0% 0%
Total ... ................................................ .................. ...... ............. 100% 100%
The investment strategy for pension plan assets is to maintain a broadly diversified portfolio designed to achieve our
target of an average long-term rate of return of 8%. While we believe we can achieve a long-term average rate of return
of 8%, we cannot be certain that the portfolio will perform to our expectations. Assets are strategically allocated between
equity and debt securities in order to achieve a diversification level that mitigates wide swings in investment returns. Asset
allocation target ranges for equity and debt portfolios are evaluated at least every three years with the assistance of an
external consulting firm. Actual asset allocations are monitored monthly and rebalancing actions are executed at least
quarterly, if needed.
The majority of the plan's assets are invested in equity securities because equity portfolios have historically provided
higher returns than debt portfolios over extended time horizons and are expected to do so in the future.
Correspondingly, equity investments also entail greater risks than debt investments. The risk ofloss in the plan's equity
portfolio is mitigated by investing in a broad range of equity types. Equity diversification includes large-capitalization
and small-capitalization companies, growth-oriented and value-oriented investments, and U.S. and non-U.S. securities.
41
Equity risks are further balanced by investing a significant portion of the plan's assets in high quality debt securities.
The average quality rating of the debt portfolio exceeded AA as of December 31, 2003 and 2002. The debt portfolio is
also broadly diversified and primarily invested in u.s. Treasury, mortgage, and corporate securities with an intermediate
average maturity. The weighted-average maturity of the debt portfolio was 6.1 years at December 31, 2003 and 7.0 years
as of December 31,2002.
.
The investment of pension plan assets in Union Pacific securities is specifically prohibited for both the equity and
debt portfolios other than through index fund holdings.
Other Retirement Programs
Thrift Plan- The Corporation provides a defined contribution plan (thrift plan) to eligible non-union employees, and
we make matching contributions to the thrift plan. We match 50 cents for each dollar contributed by employees up to
the first 6 percent of compensation contributed. The thrift plan contributions were $11 million, $10 million and $11
million for the years ended December 31, 2003, 2002, and 2001, respectively.
Railroad Retirement System - All Railroad employees are covered by the Railroad Retirement System (the System). On
December 21, 2001, The Railroad Retirement and Survivors' Improvement Act of 200 1 (the Act) was signed into law. The
Act was a result of historic cooperation between rail management and labor, and provides improved railroad retirement
benefits for employees and reduced payroll taxes for employers. Contributions made to the System are expensed as
incurred and amounted to approximately $562 million in 2003, $595 million in 2002 and $607 million in 2001.
Collective Bargaining Agreements - Under collective bargaining agreements, we participate in multi-employer benefit
plans, which provide certain postretirement health care and life insurance benefits for eligible union employees.
Premiums under this plan are expensed as incurred and amounted to $27 million in 2003, $16 million in 2002 and $13
million in 2001.
8. Capital Stock and Dividend Restrictions
.
Our Board of Directors has restricted the availability of retained earnings for payment of dividends by $131 million. This
represents (a) the amount by which the estimated fair value of our investment in our non-transportation subsidiaries,
as determined by our Board of Directors, exceeded the net book value of such investment, which was transferred to the
Corporation by means of a dividend in June 1971 ($110 million) and (b) the amount by which the fair market value
exceeded the book value of certain investment securities which were transferred to the Corporation by means of a
dividend in November 1972 ($21 million).
Our capital structure consists of Class A Stock, Common Stock and Redeemable Preference Shares (Series A). The
Class A Stock is entitled to a cash dividend whenever a dividend is declared on the Common Stock, in an amount which
equals 8 percent of the sum of the dividends on both the Class A Stock and the Common Stock. All of our Common
Stock and our Class A Stock, which constitutes all of the voting capital stock, is owned by the Corporation or a wholly
owned subsidiary of the Corporation, and all of the Preference Shares, which are non-voting stock, are owned by the
Federal Railroad Administration. Accordingly, there is no market for our capital stock.
The number of shares shown in the Statements of Changes in Common Shareholders' Equity in the Consolidated
Financial Statements, Item 8, excludes 2,665 shares of Common Stock and 232 shares of Class A Stock owned by Southern
Pacific Rail Corporation, whose results are included in the Consolidated Financial Statements.
We are subject to certain restrictions related to the payment of dividends. The amount of retained earnings available
for dividends was $7.5 billion and $6.4 billion at December 31, 2003 and 2002, respectively.
9. Stock Options and Other Stock Plans
We participate in the Corporation's stock incentive plans. There are no options outstanding for Railroad participants
under the 1988 Stock Option and Restricted Stock Plan of Union Pacific Corporation (1988 Plan) and 5,069,640 options
outstanding under the 1993 Stock Option and Retention Stock Plan of Union Pacific Corporation (1993 Plan) for
Railroad participants. There are 878,044 retention shares and stock units (the right to receive shares of common stock)
.
42
.
.
.
outstanding under the 1993 Plan for Railroad participants. The Corporation no longer grants options or awards of
restricted stock under the 1988 Plan or the 1993 Plan.
The UP Shares Stock Option Plan of Union Pacific Corporation (UP Shares Plan) was approved by UPC's Board of
Directors on April 30, 1998. The UP Shares Plan reserved 12,000,000 shares ofUPC common stock for issuance. The
UP Shares Plan was a broad-based option program that granted eligible active employees on April 30, 1998 an option to
purchase 200 shares ofUPC common stock at $55.00 per share. All options granted were non-qualified options that
became exercisable on May 1, 2001 and remain exercisable until April 30, 2008. If an optionee's employment terminates
for any reason, the option remains exercisable for a period of one year after the date of termination, but no option is
exercisable after April 30, 2008. No further options may be granted under the UP Shares Plan. As of December 31, 2003,
there were 5,230,166 options outstanding for Railroad participants under the UP Shares Plan.
The Corporation adopted the Executive Stock Purchase Incentive Plan (ESPIP) effective October 1, 1999, in order
to encourage and facilitate ownership ofUPC common stock by officers and other key executives of the Corporation and
its subsidiaries. Under the ESPIP, participants purchased a total of 1,008,000 shares ofUPC common stock with the
proceeds of 6.02% interest-bearing, full recourse loans from the Corporation. Loans totaled $47 million and have a final
maturity date ofJanuary 31, 2006. Deferred cash payments were to be awarded to the participants to repay interest and
the loan principal if certain performance and retention criteria were met within a 40-month period ending January 31,
2003. Dividends paid on the purchased shares were originally assigned to the Corporation to offset the accrued interest
on the loan balance until March 2001 when the first performance criterion was satisfied and, accordingly thereafter, the
dividends on the purchased shares were paid directly to the participants. Satisfaction of the first performance criterion
also entitled participants to receive a cash payment equal to the net accrued interest on the outstanding principal balance
of the loan. Satisfaction of the second performance criterion, in December 2002, entitled participants to receive a cash
payment equal to one-third of the outstanding principal balance of their loan, and satisfaction of the retention criterion
of continued employment with the Corporation until January 31, 2003, entitled participants to receive an additional cash
payment equal to one-third of the outstanding principal balance of their loan. Such payments have been applied against
the participants' outstanding loan balance pursuant to the terms of the ESPIP. The remaining balance of the loan is
payable in three equal installments on January 31,2004, January 31,2005 and January 31, 2006. At December 31, 2003
and 2002, the outstanding loan balance was $8 million and $45 million, respectively. None of the Corporation's executive
officers subject to Section 16 of the Securities Exchange Act of 1934, as amended, had outstanding loans as ofJanuary 31,
2004. The remaining outstanding loans were $1 million at January 31, 2004.
In November 2000, the Corporation's Board of Directors approved the 2001 Long Term Plan (LTP). Participants
were awarded retention shares or stock units and cash awards subject to the attainment of certain performance targets
and continued employment through January 31, 2004, or other applicable vesting dates. The L TP performance criteria
include three year (for fiscal years 2001, 2002 and 2003) cumulative earnings per share and stock price targets. The
Corporation met the cumulative earnings per share target at December 31, 2003, which entitled Railroad participants to
receive 76,260 shares, 260,592 stock units and $24 million at January 31, 2004, or other applicable vesting dates, totaling
48% of the maximum amount available under the LTP.
The Union Pacific Corporation 2001 Stock Incentive Plan (2001 Plan) was approved by the shareholders in April
2001. The 2001 Plan reserved 12,000,000 shares of UPC common stock for issuance to eligible employees of the
Corporation in the form of non-qualified options, incentive stock options, retention shares, stock units and incentive
bonus awards. Awards and options under the 2001 Plan may be granted to employees of the Corporation and its
subsidiaries. Non-employee directors are not eligIble. As of December 31, 2003, there were 652,364 retention shares and
stock units outstanding for Railroad participants under the 2001 Plan, and there were 2,759,550 options outstanding for
Railroad participants under the 2001 Plan.
Pursuant to the above plans, 6,899,211, 9,544,569 and 12,461,025 shares ofUPC common stock were available for
grant by the Corporation at December 31, 2003, 2002 and 2001, respectively.
Options - Stock options are granted with an exercise price equal to the fair market value of the Corporation's common
stock as of the date of the grant. Options are granted with a 10-year term and are generally exercisable one to two years
after the date of the grant. A summary of the stock options issued under the 1988 Plan, the 1993 Plan, the UP Shares Plan
and the 2001 Plan and changes during the years ending December 31 are as follows:
43
Year Ended December 31,
2003 2002 2001
Weighted Weighted Weighted
-Average -Average -Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding, beginning of year...... 16,069,140 $53.40 17,819,221 $52.02 19,827,847 $51.50
Granted. ....... ......... .................. ......... 1,487,050 55.98 1,348,900 61.14 1,219,550 49.92
Exercised. ............ .......... ......... .......... (4,220,336) 52.20 (2,832,897) 48.42 (1,287,876) 38.88
Forfeited .............. ........ ................ .... (264,796) 54.66 (266,084) 54.93 (1,940,300) 54.89
Outstanding, end of year ................ 13,071,058 $54.06 16,069,140 $53.40 17,819,221 $52.02
Options exercisable at year end...... 11,405,408 $53.78 14,720,690 $52.70 16,607,771 $52.17
Weighted-average fair value of
options granted during the year.. $14.25 $17.84 $13.13
The following table summarizes information about our outstanding stock options as of December 31, 2003:
Options Outstanding Options Exercisable
Weighted-
Weighted-Average Weighted- Average
Range of Exercise Number Remaining Average Number Exercise
Prices Outstanding Contractual Life Exercise Price Exercisable Price
$20.60 - $49.88 3,061,787 5.20 $46.66 3,011,787 $46.77
$52.88 - $56.50 8,457,566 4.84 55.48 7,005,316 55.38
$57.54 - $61.90 1,551,705 7.46 60.93 1,388,305 60.91
$20.60 - $61.90 13,071,058 5.24 $54.06 11,405,408 $53.78
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing
model, with the following weighted-average assumptions for options granted in 2003, 2002, and 2001.
Risk-free interest rates .. ................. ........ ....... ........ .............. ....................... ................
Dividend yield .......................... .............. ......... ......... ........... ..................... ....... ...........
Expected lives-years .... ................. ....... ...................... ....... ............ .............. ................
Volatility ............. ................ ....... ............... ...... ................ ...... ........ .... .......... ......... .......
2003 2002 2001
2.9% 4.4% 4.3%
1.5 % 1.3 % 1.4 %
5 5 4
28.4% 28.8% 29.5%
Restricted Stock and Other Incentive Plans - The Corporation's plans provide for awarding retention shares of common
stock or stock units to eligible employees. These awards are subject to forfeiture if employment terminates during the
prescribed retention period, generally three or four years, or, in some cases, if a certain prescribed stock price or other
financial criteria is not met. Restricted stock awards are issued to non-employee directors and are subject to forfeiture
if certain service requirements are not met. During the year ended December 31, 2003, 197,703 retention shares, stock
units and restricted shares were issued to Railroad participants at a weighted-average fair value of $56.0 1. During 2002,
436,270 retention shares, stock units and restricted shares were issued to Railroad participants at a weighted-average fair
value of $58.25. During 2001, 223,502 retention shares, stock units and restricted shares were issued to Railroad
participants at a weighted-average fair value of $49 .95. The cost of retention and restricted awards is amortized to expense
over the retention period.
Under the LTP, no performance retention stock units were issued in 2003, 4,400 performance retention stock units
and 766,900 performance retention shares and stock units were issued to Railroad participants at a weighted-average fair
value of $60.68 and $50.11 during 2002 and 2001, respectively. The cost of the LTP is marked to market and is expensed
over the performance period, which ended January 31,2004.
44
.
.
.
.
.
.
The cost associated with the ESPIP retention criterion was amortized to expense over the 40-month period. The cost
associated with the ESPIP first performance criterion is expensed over the life of the loan, and the cost associated with
the second performance criterion was expensed in December 2002.
During the years ended December 31, 2003, 2002 and 2001, we expensed $27 million, $13 million and $8 million,
respectively, related to the other incentive plans described above. During the years ended December 31, 2003, 2002 and
2001, UPC expensed $1 million, $15 million and $4 million, respectively, attributable to Railroad participants in the other
incentive plans described above.
10. Commibnents and Contingencies
Unasserted Claims - There are various claims and lawsuits pending against us and certain of our subsidiaries. It is not
possible at this time for us to determine fully the effect of all unasserted claims on our consolidated financial condition,
results of operations or liquidity; however, to the extent possible, where unasserted claims can be estimated and where
such claims are considered probable, we have recorded a liability. We do not expect that any known lawsuits, claims,
environmental costs, commitments, contingent liabilities or guarantees will have a material adverse effect on our
consolidated financial condition, results of operations or liquidity.
Personal Injury and Occupational Dlness - The cost of personal injuries to employees and others related to our activities
is charged to expense based on estimates of the ultimate cost and number of incidents each year . We use third party
actuaries to assist us in properly measuring the expense and liability. Compensation for work-related accidents is
governed by the Federal Employers' Liability Act (FELA). Under FELA, damages are assessed based on a finding of fault
through litigation or out-of-court settlements. We offer a comprehensive variety of services and rehabilitation programs
for employees who are injured at work. Annual expenses for our personal injury-related events were $250 million in 2003,
$221 million in 2002 and $200 million in 2001. As of December 31, 2003 and 2002, we had aliabilityof$615 million and
$668 million, respectively, accrued for future personal injury costs, of which $272 million was recorded in current
liabilities as accrued casualty for each year. We have additional amounts accrued for claims related to certain alleged
occupational illnesses. The impact of current obligations is not expected to have a material adverse effect on our results
of operations or financial condition.
Environmental Costs - We generate and transport hazardous and non-hazardous waste in our current operations, and
have done so in our former operations, and are subject to federal, state and local environmental laws and regulations.
We have identified approximately 417 sites at which we are or may be liable for remediation costs associated with alleged
contamination or for violations of environmental requirements. This includes 51 sites that are the subject of actions taken
by the U.S. government, 29 of which are currently on the Superfund National Priorities List. Certain federal legislation
imposes joint and several liability for the remediation of identified sites; consequently, our ultimate environmental
liability may include costs relating to activities of other parties, in addition to costs relating to our own activities at each
site.
When an environmental issue has been identified with respect to the property owned, leased or otherwise used in
the conduct of our business, we and our consultants perform environmental assessments on such property. We expense
the cost of the assessments as incurred. We accrue the cost of remediation where our obligation is probable and such
costs can be reasonably estimated.
As of December 31,2003 and 2002, we had a liability of $187 million and $188 million, respectively, accrued for
future environmental costs, of which $57 million and $71 million were recorded in current liabilities as accrued casualty
costs. The liability includes future costs for remediation and restoration of sites, as well as for ongoing monitoring costs,
but excludes any anticipated recoveries from third parties. Cost estimates are based on information available for each
site, financial viability of other potentially responsible parties, and existing technology, laws and regulations. We believe
that we have adequately accrued for our ultimate share of costs at sites subject to joint and several liability. However, the
ultimate liability for remediation is difficult to determine because of the number of potentially responsible parties
involved, site-specific cost sharing arrangements with other potentially responsible parties, the degree of contamination
by various wastes, the scarcity and quality of volumetric data related to many of the sites, and/or the speculative nature
45
of remediation costs. The impact of current obligations is not expected to have a material adverse effect on our results
of operations or financial condition.
Remediation of identified sites previously used in operations, used by tenants or contaminated by former owners
required cash spending of$36 million in 2003, $68 million in 2002, and $63 million in 2001. We are also engaged in
reducing emissions, spills and migration of hazardous materials, and spent cash of$8 million, $6 million and $5 million
in 2003, 2002, and 2001, respectively, for control and prevention. In 2004, we anticipate spending $52 million for
remediation and $8 million for control and prevention. The impact of current obligations is not expected to have a
material adverse effect on our liquidity.
Purchase Obligations and Guarantees - We periodically enter into financial and other commitments in connection with
our businesses. We do not expect that these commitments or guarantees will have a material adverse effect on our
consolidated financial condition, results of operations or liquidity.
At December 31, 2003, we had unconditional purchase obligations of $100 million for the acquisition oflocomotives
as part of our multi-year capital asset acquisition plan. In addition, we were contingently liable for $360 million in
guarantees and $27 million in letters of credit at December 31, 2003. These contingent guarantees were entered into in
the normal course of business and include guaranteed obligations of affiliated operations. None of the guarantees
individually are significant, and a liability of $7 million has been recorded related to these guarantees as of December 31,
2003. The final guarantee expires in 2022. We are not aware of any existing event of default, which would require us to
satisfy these guarantees.
Headquarters Building - We have a synthetic operating lease arrangement to finance a new headquarters building, which
is being constructed in Omaha, Nebraska. The expected completion date of the building is mid-2004. It will total
approximately 1.1 million square feet with approximately 3,800 office workspaces. The cost to construct the new
headquarters, including capitalized interest, is approximately $260 million. The Corporation has guaranteed all of our
obligation under this lease.
We are the construction agent for the lessor during the construction period. We have guaranteed, in the event of
a loss caused by, or resulting from, our actions or failures to act as construction agent, 89.9% of the building related
construction costs incurred up to that point during the construction period. Total building related costs incurred and
drawn from the lease funding commitments as of December 31, 2003, were approximately $125 million. Accordingly,
our guarantee at December 31, 2003, was approximately $113 million. As construction continues and additional costs
are incurred, this guarantee will increase accordingly. At December 31, 2003, we had a liability recorded of approximately
$7 million related to the fair value of this guarantee.
After construction is complete, we will lease the building under an initial term of five years with provisions for
renewal for an extended period subject to agreement between us and the lessor. At any time during the lease, we may,
at our option, purchase the building at approximately the amount expended by the lessor to construct the building. If
we elect not to purchase the building or renew the lease, the building is returned to the lessor for remarketing, and we
have guaranteed a residual value equal to 85% of the total construction related costs. The guarantee will be approximately
$220 million.
11. Other Income
Other income included the following:
Millions of Dollars 2003 2002 2001
Net gain on non-operating asset dispositions............................................................ $ 84 $287 $133
Rental income.......... ............................ ......... .................. .............. ............................... 57 60 89
Interest income .................................... .............. ....... ............ ........ ......... ............. ......... 5 7 8
Fuel swaption ............................................................................................................... - 5 (18)
Other, net................................ .... .................. ......... ........ ...... .......... ........ ..... ....... .......... (27) (38) (38)
Total....... .... ..... ................ ........ ............ ..... ......... ..... ......... ...... ........ ..... .... ......... ..... ........ $119 $321 $174
46
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.
.
.
.
.
Included in the 2002 gain on non-operating asset dispositions is a pre-tax gain of$141 million related to the sale of
land, track, operating rights and facilities to the Utah Transit Authority (UTA) for $185 million, which included
approximately 175 miles of track that stretches from Brigham City, Utah, through Salt Lake City, Utah, south to Payson,
Utah. The transaction contributed $88 million to our earnings on an after-tax basis.
Also included in the 2002 gain on non-operating asset dispositions is a pre-tax gain of$73 million related to the sale
of land and track to the Santa Clara Valley Transportation Authority (VTA) for $80 million, which included
approximately 15 miles of track that stretches from William Street in San Jose, California, north to Paseo Padre Parkway
in Fremont, California. The transaction contributed $45 million to our earnings on an after-tax basis.
12. Accounting Pronouncements
In December 2003, the FASB published a revision to FASB Interpretation No. 46 "Consolidation of Variable Interest
Entities" (FIN 46) to clarify some of the provisions and to exempt certain entities from its requirements. Under the new
guidance, special effective date provisions apply to enterprises that have fully or partially applied FIN 46 prior to issuance
of the revised interpretation. We adopted FIN 46 in June of 2003. The revision did not require us to modify our
accounting related to the implementation of FIN 46.
13. Cumulative Effect of Accounting Change
Surface Transportation Board (STB) accounting rules require that railroads accrue the cost of removing track structure
over the expected useful life of these assets. Railroads historically used this prescribed accounting for reports filed with
both the STB and SEC. In August 2001, the FASB issued Statement No. 143, "Accounting for Asset Retirement
Obligations" (FAS 143). This statement was effective for us beginning January 1, 2003, and prohibits the accrual of
removal costs unless there is a legal obligation to remove the track structure at the end of its life. We concluded that we
did not have a legal obligation to remove the track structure, and therefore, under generally accepted accounting
principles, we could not accrue the cost of removal in advance. As a result, reports filed with the SEC will reflect the
expense of removing these assets in the period in which they are removed. For STB reporting requirements only, we will
continue to follow the historical method of accruing in advance, as prescribed by the STB. F AS 143 also requires us to
record a liability for legally obligated asset retirement costs associated with tangible long-lived assets. In the first quarter
of 2003, we recorded income from a cumulative effect of accounting change, related to the adoption of F AS 143, of $274
million, net of income tax expense of $167 million. The accounting change had no effect on our liquidity. Had the
change been retroactively applied, the change would not have had a material impact on net income.
14. Selected Quarterly Data
Selected unaudited quarterly data are as follows:
Millions of Dollars
2003 Mar. 31 June 30 Sep.30 Dec. 31
Operating revenues ................ ............. ........ ................ $2,725 $2,881 $2,946 $2,957
Operating income. ......... .... ............. ......... ......... .......... 371 582 594 595
Cumulative effect of accounting change [a]............... 274 - - -
Net income ............. ......... ................. ............. .............. 441 295 317 361
2002 Mar. 31 June 30 Sep.30 Dec. 31
Operating revenues... .... ......................... ..................... $2,649 $2,808 $2,838 $2,808
Operating income ....................................................... 508 598 638 589
Net income ......... ....... .... .......... ....... ......... .......... .... ...... 243 316 414 401
fa] Cumulative effect of accounting change is shown net of income tax expense 0[$167 million.
****************************************
47
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with
the participation of the Company's management, including the Company's Chief Executive Officer (CEO) and Executive
Vice President - Finance and Chief Financial Officer (CFO) of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the
CEO and the CFO concluded that, as of the end of the period covered by this report, the Company's disclosure controls
and procedures are effective in alerting them, in a timely manner, to material information relating to the Company
(including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings.
Additionally, the CEO and CFO determined that there have been no changes to the Company's internal control over
financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.
48
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.
.
.
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.
PART III
Item 10. Directors and Executive Officers of the Registrant
Omitted in accordance with General Instruction I of Form lO-K.
Item 11. Executive Compensation
Omitted in accordance with General Instruction I of Form lO-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Omitted in accordance with General Instruction I of Form lO-K.
Item 13. Certain Relationships and Related Transactions
Omitted in accordance with General Instruction I of Form lO-K.
Item 14. Principal Accounting Fees and Services
Information concerning the independent auditor fees billed and the nature of services comprising the fees for UPC,
including accounting fees and services for UPRR, for each of the two most recent fiscal years in each of the following
categories: (i) audit fees, (ii) audit - related fees, (ill) tax fees and (iv) all other fees, is set forth in the Audit Committee
Report segment of the Corporation's Proxy Statement and is incorporated herein by reference.
Information concerning the Corporation's Audit Committee's policies and procedures pertaining to pre-approval
of audit and non-audit services rendered by its independent auditor is set forth in the Audit Committee segment of the
Corporation's Proxy Statement and is incorporated herein by reference.
49
PART IV
Item 15. Exhibits. Financial Statement Schedules and Reports on Form 8-K
(a) Financial Statements, Financial Statement Schedules and Exhibits:
(1) Financial Statements
The financial statements filed as part of this filing are listed on the index to Consolidated Financial
Statements, Item 8, on page 23.
(2) Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts
Schedules not listed above have been omitted because they are not applicable or not required or the
information required to be set forth therein is included in the Consolidated Financial Statements, Item
8, or notes thereto.
(3) Exhibits
Exhibits are listed in the exhibit index on page 53.
(b) Reports on Form 8- K
On March 1, 2004, UPRR furnished a Current Report on Form 8-K updating UPC's earnings outlook for the
first quarter of 2004.*
On January 21,2004, UPRR furnished a Current Report on Form 8-K announcing UPC's financial results for
the fourth quarter of 2003.*
On October 23, 2003, UPRR furnished a Current Report on Form 8-K announcing UPC's financial results for
the third quarter of 2003.*
* These reports, or certain portions thereof, were furnished under Item 9 or Item 12 of Form 8- K and are referenced
herein for informational purposes only. Therefore, such reports or applicable provisions thereof are not, and such
contents should not be deemed, incorporated by reference into any registration statements filed by Union Pacific Railroad
Company with the SEC under the Securities Act of 1933, as amended.
50
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SIGNATURES
Pursuant to the requirements of Section 13 or 15( d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalfby the undersigned, thereunto duly authorized, on this 5th day of March, 2004.
UNION PACIFIC RAILROAD COMPANY
By /s/ Richard K. Davidson
Richard K. Davidson, Chairman,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below, on this 5th day
of March, 2004, by the following persons on behalf of the registrant and in the capacities indicated.
PRINCIPAL EXECUTIVE OFFICER
AND DIRECTOR:
/s/ Richard K. Davidson
Richard K. Davidson, Chairman,
Chief Executive Officer and Director
PRINCIPAL FINANCIAL OFFICER:
/s/ Robert M. Knight. Jr.
Robert M. Knight, Jr.,
Executive Vice President-Finance
and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Richard J. Putz
Richard J. Putz,
Chief Accounting Officer and Controller
DIRECTORS:
Philip F. Anschutz*
Thomas J. Donohue*
Archie W. Dunham*
Spencer F. Eccles*
Ivor J. Evans*
Elbridge T. Gerry, Jr.*
Judith Richards Hope*
Richard J. Mahoney*
Steven R. Rogel*
Ernesto Zedillo Ponce de Leon*
* By /s/ Thomas E. Whitaker
Thomas E. Whitaker, Attorney-in-fact
51
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
.
Millions of Dollars, for the Years Ended December 31, 2003 2002 2001
Allowance for doubtful accounts:
Balance, beginning of period ............................................................ $107 $110 $ 98
Charged to expense ........................................................................... 13 16 17
W rite-off's, net of recoveries .............................................................. (36) (19) (5)
Balance, end of period .............................................................................. $ 84 $107 $110
Accrued casualty costs:
Balance, beginning of period ............................................................ $1,061 $1,077 $1,156
Charged to expense ........................................................................... 411 360 328
Cash payments and other reductions ............................................... (492) (376) (407)
Balance, end of period .............................................................................. $ 980 $1,061 $1,077
Accrued casualty costs are presented in the Consolidated Statements
of Financial Position as follows:
Current ... .............. ......... ..... ..... ..... ......... ..... ........ ........................ $ 385 $ 403 $ 404
Long-term................................................................................... 595 658 673
Balance, end of period .............................................................................. $ 980 $1,061 $1,077
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Union Pacific Railroad Company
Exhibit Index
Exhibit No.
Description
Filed with this Statement
3(a)
By-laws ofUPRR, as amended, effective February I, 2004.
12
Ratio of Earnings to Fixed Charges.
24
Powers of Attorney executed by the directors of UPRR.
31(a)
Certification Pursuant to Rule 13a-14(a) of the Exchange Act, as Adopted pursuant to Section
302 of the Sarbanes-Oxley Act of2002 - Richard K. Davidson.
31(b)
Certification Pursuant to Rule 13a-14( a) of the Exchange Act, as Adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002 - Robert M. Knight, Jr.
32
Certifications Pursuant to 18 U.S.c. Section 1350, as Adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of2002 - Richard K. Davidson and Robert M. Knight, Jr.
Incorporated by Reference
2
Agreement and Plan of Merger, dated as ofJanuary 29, 1998, between UPRR and Southern
Pacific Transportation Company (SPT) is incorporated herein by reference to Exhibit 2 to the
Registrants' Current Report on Form 8-K dated February 13, 1998.
3(b)
Amended Certificate ofIncorporation of the Registrant, effective as of February 1,1998, is
incorporated herein by reference to Exhibit 3(a) to the Company's Annual Report on Form
lO-K for the year ended December 31,1998.
4
Pursuant to various indentures and other agreements, the Registrant has issued long-term
debt. No single agreement has securities or obligations covered thereby which exceed 10%
of the Registrant's total consolidated assets. The Registrant agrees to furnish the Commission
with a copy of any such indenture or agreement upon request by the Commission.
10 (a)
Amended and Restated Anschutz Shareholders Agreement, dated as ofJuly 12,1996, among
UPC, UPRR, The Anschutz Corporation (TAC), Anschutz Foundation (the Foundation) and
Mr. Philip F. Anschutz, is incorporated herein by reference to Annex D to the Joint Proxy
Statement/Prospectus included in Post-Effective Amendment No.2 to UPC's Registration
Statement on Form S-4 (No. 33-64707).
10 (b)
Amended and Restated Registration Rights Agreement, dated as ofJuly 12, 1996, among UPC,
TAC and the Foundation is incorporated herein by reference to Annex H to the Joint Proxy
Statement/Prospectus included in Post-Effective Amendment No.2 to UPC's Registration
Statement on Form S-4 (No. 33-64707).
lO(c)
Amended and Restated Registration Rights Agreement, dated as ofJuly 12, 1996, among UPC,
UP Holding Company, Inc., Union Pacific Merger Co. and Southern Pacific Rail Corporation
(SP) is incorporated herein by reference to Annex J to the Joint Proxy Statement/Prospectus
included in Post-Effective Amendment No.2 to UPC's Registration Statement on Form S-4
(No. 33-64707).
53
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Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
l,Millions of Dollars, Except for Ratio 2003 2002 2001 2000 1999
~ncome from continuing operations.................. $1,140 $1,374 $1,058 $ 926 $ 854
Jundistributed equity (earnings) loss ................. 15 (34) (48) 24 (45)
Total earnings .................................................. 1,155 1,340 1,010 950 809
ncome taxes................... .................. ......... .......... 629 739 613 511 465
lFixed charges:
Interest expense including
amortization of debt discount .................... 492 541 584 592 618
Portion of rentals representing an interest
factor . ............. .............. ................... ............. 168 167 176 169 181
Total fixed charges .......................................... 660 708 760 761 799
Earnings available for fixed charges ................... $2,444 $2,787 $2,383 $2,222 $2,073
Ratio of earnings to fixed charges ...................... 3.7 3.9 3.1 2.9 2.6
55
10(d)
Agreement, dated September 25, 1995, among UPC, UPRR, Missouri Pacific Railroad
Company (MPRR), SP, SPT, The Denver & Rio Grande Western Railroad Company
(D&RGW), St. Louis Southwestern Railway Company (SLSRC) and SPCSL Corp. (SPCSL),
on the one hand, and Burlington Northern Railroad Company (BN) and The Atchison,
Topeka and Santa Fe Railway Company (Santa Fe), on the other hand, is incorporated by
reference to Exhibit 10.11 to UPC's Registration Statement on Form S-4 (No. 33-64707).
10(e)
Supplemental Agreement, dated November 18, 1995, between UPC, UPRR, MPRR, SP, SPT,
D&RGW, SLSRC and SPCSL, on the one hand, and BN and Santa Fe, on the other hand, is
incorporated herein by reference to Exhibit 10.12 to UPC's Registration Statement on Form
S-4 (No. 33-64707).
54
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Exhibit 24
UNION PACIFIC RAILROAD COMPANY
Powers of Attorney
Each of the undersigned directors of Union Pacific Railroad Company, a Delaware corporation (the "Company"),
do hereby appoint each ofJames R. Young, Carl W. von Bernuth and Thomas E. Whitaker his or her true and lawful
attorney-in-fact and agent, to sign on his or her behalf the Company's Annual Report on Form 10-K, for the year ended
December 31, 2003, and any and all amendments thereto, and to file the same, with all exhibits thereto, with the Securities
and Exchange Commission.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney as ofJanuary 29, 2004.
/s/ Phillip F. Anschutz
Phillip F. Anschutz
/s/ Elbridge T. Gerry, Jr
Elbridge T. Gerry, Jr
/s/ Thomas J. Donohue
Thomas J. Donohue
/s/ Judith Richards Hope
Judith Richards Hope
/s/ Archie W. Dunham
Archie W. Dunham
/s/ Richard J. Mahoney
Richard J. Mahoney
/s/ Spencer F. Eccles
Spencer F. Eccles
/s/ Steven R. Rogel
Steven R. Rogel
/s/ IVOl J. Evans
Ivor J. Evans
/s/ Ernesto Zedillo
Ernesto Zedillo
56
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Exhibit 31(a)
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Richard K. Davidson, certify that:
1. I have reviewed this annual report on Form lO-K of Union Pacific Railroad Company;
2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5. The registrant's other certifying officer( s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
Date: March 5, 2004
/s/ Richard K. Davidson
Richard K. Davidson
Chairman and Chief Executive Officer
Union Pacific Railroad Company
57
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Exbibit31(b)
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
.
I, Robert M. Knight, Jr., certify that:
1. I have reviewed this annual report on Form lO-K of Union Pacific Railroad Company;
2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
.
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
Date: March 5, 2004
/s/ Robert M. Knight, Jr.
Robert M. Knight, Jr.
Executive Vice President - Finance
and Chief Financial Officer
Union Pacific Railroad Company
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EXHIBIT 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Annual Report of Union Pacific Railroad Company (the Company) on Form lO-K
for the period ending December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the
Report), I, Richard K. Davidson, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.c.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
By: Isl Richard K. Davidson
Richard K. Davidson
Chairman and Chief Executive Officer
Union Pacific Railroad Company
March 5, 2004
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained
by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Annual Report ofU nion Pacific Railroad Company (the Company) on Form 10- K
for the period ending December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the
Report), I, Robert M. Knight, Jr., Executive Vice President - Finance and Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best
of my knowledge, that:
(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
By: Isl Robert M. Knight, Jr.
Robert M. Knight, Jr.
Executive Vice President - Finance
and Chief Financial Officer
Union Pacific Railroad Company
March 5, 2004
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained
by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
59
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FORM lO-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[Xl QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 2004
-OR-
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from
to
Commission file number 1-6146
UNION PACIFIC RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
94-6001323
(I.R.S. Employer
Identification No.)
1400 DOUGLAS STREET, OMAHA, NEBRASKA
(Address of principal executive offices)
68179
(Zip Code)
(402) 544-5000
(Registrant's telephone number, including area code)
---------------- -- - ---
---- - ------ ----- -- -- ---- --- -----
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to fIle such reports), and (2) has been subject to such filing requirements for the past 90
days.
YES -L NO
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rille 12b-2 of the Exchange
Act).
YES NO ----X-
As of Jilly 31, 2004, the Registrant had outstanding 7,130 shares of Common Stock, $10 par value, and 620 shares
of Class A Stock, $10 par value.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(l) (a) AND
(b) OF FORM 1O-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
TABLE OF CONTENTS
UNION PACIFIC RAILROAD COMPANY
PART I. FINANCIAL INFORMATION
Page Number
Item 1: Consolidated Financial Statements:
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three Months Ended June 30, 2004 and 2003.............................................................................. 3
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Six Months Ended June 30, 2004 and 2003................................................................................... 4
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
At June 30, 2004 and December 31, 2003.................................................................................................... 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended June 30, 2004 and 2003................................................................................... 6
CONSOLIDATED STATEMENT OF CHANGES IN COMMON SHAREHOLDERS' EQUITY
(Unaudited)
For the Six Months Ended June 30. 2004................................................................................................... 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ............................................... 8
Item 2: Management's Narrative Analysis of the Results of Operations.................................................................... 15
Item 3: Quantitative and Qualitative Disclosures About Market Risk......................................................................
23
Item 4: Controls and Procedures ...................................................................................................................................... 23
PART II. OTHER INFORMATION
Item 1: Legal Proceedings.................................................................................................................................................. 24
Item 6: Exhibits and Reports on Form 8-K .................................................................................................................... 24
Signatures .................................. ................................................................................ ........................................................... 25
2
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PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements ofIncome (Unaudited)
Union Paciflc Railroad Company and Consolidated Subsidiary and Aff11jate Companies
Millions of Dollars,
For the Three Months Ended June 30, 2004 2003
Operating revenues ......................................................................................................................... $3,020 $ 2,881
Operating expenses:
Salaries, wages and employee benefits....................................................................................... 1,032 933
Equipment and other rents ......................................................................................................... 359 297
Depreciation .................................................................................................................................. 276 251
Fuel and utilities ........................................................................................................................... 435 323
Materials and supplies ................................................................................................................. 115 99
Casualty costs ................................................................................................................................ 115 104
Purchased services and other costs............................................................................................ 327 292
Total operating expenses ................................................................................................................ 2,659 2,299
Operating income............................................................................................................................ 361 582
Other income .................................................................................................................................. 9 18
Interest expense................................................................................................................................ (123) (124)
Income before income taxes .......................................................................................................... 247 476
Income taxes ........................... ..................................... ...... .~.......... ........ ..................... ...................... (82) (181)
Net income....................................................................................................................................... $ 165 $ 295
The aa:ompanying notes are an integral part of these Consolidated Finandal Statements.
3
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Consolidated Statements ofIncome (Unaudited)
Union Paciflc Railroad Company and Consolidated Subsidimy and Affiliate Companies
.
Millions of Dollars.
For the Six Months Ended June 30, 2004 2003
Operating revenues ......................................................................................................................... $ 5,904 $ 5,606
Operating expenses:
Salaries, wages and employee benefits....................................................................................... 2,026 1,873
Equipment and other rents......................................................................................................... 685 606
Depreciation .................................................................................................................................. 549 525
Fuel and utilities ........................................................................................................................... 824 675
Materials and supplies .................................................................................................................. 237 201
Casualty costs ................................................................................................................................ 263 204
Purchased services and other costs............................................................................................ 645 569
Total operating expenses ................................................................................................................ 5,229 4,653
Operating income............................................................................................................................ 675 953
Other income .................................................................................................................................. 28 32
Interest expense................................................................................................................................ (251) (250)
Income before income taxes .......................................................................................................... 452 735
Income taxes ..................................................................................................................................... (123) (273)
Income before cumulative effect of accounting change............................................................ 329 462
Cumulative effect of accounting change, net of income tax expense of $167....................... - 274
Net income....................................................................................................................................... $ 329 $ 736
The accompanying notes are an integral part of these Comolldated FinandaJ Statements.
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Consolidated Statements of Financial Position (Unaudited)
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
June 30, Dec. 31,
Millions of Dollars 2004 2003
Assets
Current Assets
Cash and temporary investments............................................................................ $ 50 $ 154
Accounts receivable, neL.......................................................................................... 548 473
Inventories ................................................................................................................... 290 267
Current deferred income taxes ................................................................................ 297 184
Other current assets ................................................................................................... 234 181
Total current assets ....................................................................................................... 1,419 1,259
Investments:
Investments in and advances to affiliated companies .......................................... 717 688
Other investments ...................................................................................................... 32 37
Total investments .......................................................................................................... 749 725
Properties:
Road and other ........................................................................................................... 31,375 30,635
Equipment................................................................................................................... 7,654 7,649
Total cost ..................................................................................................................... 39,029 38,284
Accumulated depreciation ........................................................................................ (8,423) (8,022)
Net properties ................................................................................................................ 30,606 30,262
Other assets .................................................................................................................... 281 295
Total assets .. ................... ..... .......... .......... .......... ............. ................... ...... ....................... $33,055 $32,541
Liabilities and Common Shareholders' Equity
Current Liabilities:
Accounts payable........................................................................................................ $ 548 $ 502
Accrued wages and vacation..................................................................................... 393 359
Accrued casualty costs ............................................................................................... 385 385
Income and other taxes ............................................................................................. 222 247
Debt due within one year.......................................................................................... 171 167
Interest ......................... .......................... ............... ........ ........ ....................................... 64 73
Equipment-rents payable.;-.:..........;.:.............:.;;..:.-.:.;...:.....:.......;.. ..-.... ....................... 140 128--
Other current liabilities ............................................................................................. 388 370
Total current liabilities ................................................................................................. 2,311 2,231
Intercompany borrowings from UPC ........................................................................ 4,558 4,372
Third-party debt due after one year ........................................................................... 1,804 1,998
Deferred income taxes .................................................................................................. 9,378 9,097
Accrued casualty costs .................................................................................................. 667 595
Retiree benefits obligation ........................................................................................... 633 678
Other long-term liabilities ........................................................................................... 473 509
Redeemable Preference Shares ................................................................................... 15 16
Commitments and contingencies
Common shareholders' equity .................................................................................... 13,216 13,045
Total liabilities and common shareholders' equity .................................................. $33,055 $32,541
The accompanying notes are an integral part of these Consolidated Financial Statements.
5
Consolidated Statements of Cash Flows (Unaudited)
Union Pacific Railroad Company and Consolidated Subsidiary and Affiliate Companies
Millions of Dollars,
For the Six Months Ended June 30, 2004 2003
Operating Activities
N et income............................................................................................................................................. $ 329 $ 736
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of accounting change........................................................................................ - (274)
Depreciation........................................................................................................................................ 549 525
Deferred income taxes ....................................................................................................................... 135 127
Cash paid to fund pension plan....................................................................................................... (50) (50)
Other, net............................................................................................................................................. 28 (158)
Changes in current assets and liabilities, net................................................................................. (75) 173
Cash provided by operating activities ................................................................................................ 916 1,079
Investing Activities
Capital investments............................................................................................................................... (857) (863)
Proceeds from asset sales ...................................................................................................................... 31 42
Other investing activities, net.............................................................................................................. (31) 97
Cash used in investing activities.......................................................................................................... (857) (724)
Financing Activities
Dividends paid to parent...................................................................................................................... (156) (116)
Debt repaid ............................................................................................................................................. (193) (199)
Advances from (to) affiliated companies .......................................................................................... 186 (44)
Cash used in financing activities ......................................................................................................... (163) (359)
Net change in cash and temporary investments............................................................................... (104) (4)
Cash and temporary investments at beginning of period............................................................... 154 110
Cash and temporary investments at end of period.......................................................................... $ 50 $ 106
Changes in Current Assets and Liabilities, Net
Accounts receivable, net ....................................................................................................................... $ (75) $ 36
Inventories........ ............... .................................................. ........................................................... .......... (23) (2)
Other current assets .............................................................................................................................. (53) (26)
Accounts, wages and vacation payable............................................................................................... 80 116
Other CUIT_entliabilities ........................................................................................................................ (4) 49
Total........................................................................................................................................................ $ (75) $ 173
Supplemental cash flow information:
Non-cash capital lease fmandngs .................................................................................................... $ - $ 188
Cash (paid) received during the period for:
Interest............................................................................................................................................. (261) (258)
Income taxes, net............................................................................................................................ (16) 5
The accompanying notes are an integral part of these Consolidated FinandaJ Statements.
6
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Consolidated Statement of Changes in Common Shareholders' Equity (Unaudited)
Union Pacillc Railroad Company and Consolidated Subsidiary and Affiliate Companies
Accumulated Other
Comprehensive Income (Loss)
Minimum Foreign
Millions of Dollars, fa] fb] Paid- Pension Currency
For the Six Months Ended Common Class A in- Retained Liability Translation Derivative
June 30, 2004 Shares Shares Surplus Earnings Adjustments Adjustments Adjustments Total Total
Balance at]anuary I, 2004......... $- $ - $4,182 $8,381 $(109) $ (18) $3 $(124) $13,045
Net income ................................ - - - 329 - - - - 329
Other comprehensive loss,
net of tax of $(1) ...................... - - - - - (1) (1) (2) (2)
Comprehensive income ............. 321
Dividends declared ..................... - - - (156) - - - - (156)
Balance at]une 30, 2004............ $- $ - $4,182 $8,560 $(109) $(19) $2 $(126) $13,216
fa] Common Stock, $10.00 par value; 9,200 shares authorized; 4,465 outstanding.
[b] Class A Stock, $1O.oo par value; 8oo shares authorized; 388 outstanding.
The ac:rompanying notes are an integral part of these Consolidated Finandal Statements.
7
UNION PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY AND AFFILIATE
COMPANIES
.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For purposes of this report, unless the context otherwise requires, all references herein to the "Company," "we,"
"us," and "our" mean Union Pacific Railroad Company.
1. Responsibilities for Financial Statements - Union Pacific Railroad Company (the Registrant), a Class I
railroad incorporated in Delaware and an indirect wholly owned subsidiary of Union Pacific Corporation (the
Corporation or UPC) , together with a number of wholly owned and majority-owned subsidiaries and certain
affiliates (collectively, UPRR, the Company or the Railroad), operates various railroad and railroad-related
businesses. Our Consolidated Financial Statements are unaudited and reflect all adjustments (consisting only of
normal and recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods presented. Our Consolidated Statement of Financial
Position at December 31,2003 is derived from audited fmancial statements. Our Consolidated Financial Statements
should be read in conjunction with our Consolidated Financial Statements and notes thereto contained in our 2003
annual report on Form 1O-K. The results of operations for the three and six months ended June 30, 2004 are not
necessarily indicative of the results for the entire year ending December 31, 2004. Certain prior year amounts have
been reclassified to conform to the 2004 fmancial statement presentation.
2. Stock-Based Compensation - We participate in the Corporation's stock incentive plans. We account for those
plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation
expense related to stock option grants is reflected in net income as all options granted under those plans had an
exercise price equal to the market value of our common stock on the date of grant. Stock-based compensation
expense related to retention shares, stock units and other incentive plans is reflected in net income. The following
table illustrates the effect on net income if we had applied the fair value recognition provisions of Financial
Accounting Standards Board (FASB) Statement No. 123, Accounting for Stock-Based Compensation, to stock-based
employee compensation. See note 10 to the Consolidated Financial Statements for discussion of the proposed
accounting standard related to the treatment of stock options.
.
Three Months Ended Six Months Ended
June 30, June 30,
Millions of Dollars 2004 2003 2004 2003
Net income, as reported .....................................................-......................... $165 $295 $329 $73li
Stock-based employee compensation expense included in reported
net income, net of tax........................................................................... 2 2 3 7
Total stock-based employee compensation expense determined
under fair value based method for all awards, net of tax ............... (6) (5) (11) (14)
Pro forma net income.................................................................................. $161 $292 $321 $729
.
8
.
.
.
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing
model. with the following weighted-average assumptions for options granted during both the three and six months
ended June 30, 2004 and 2003:
Risk-free interest rates ..................................................................................................................
Dividend yield................................................................................................................................
Expected lives-years ......................................................................................................................
Vola tiIity .... ............... ........ .................... ....... .............. ......... ....... ...... ....... ............................... .........
2004 2003
3.3% 2.9%
1.7% 1.5%
5.6 5.0
25.9% 28.4%
3. Transactions with Affiliates - At June 30, 2004 and December 31,2003, we had $892 million and $972 million
working capital deficit balances, respectively, relating to UPC's management of our cash position. As part of UPC's
cash management activities, we advance excess cash (cash available after satisfying all of our obligations and paying
dividends to UPC) to UPC. We declare and pay dividends to UPC which typically approximate the dividends that
UPC declares to its shareholders; however, there is no formal requirement to do so. The dividend declaration
between us and UPC is determined solely by our Board of Directors. To the extent we require additional cash for use
in our operations, UPC makes such funds available to us for borrowing. Transactions between UPC and us are
treated as net intercompany borrowings in the Consolidated Statements of Financial Position.
The majority of our intercompany borrowings from UPC relate to the acquisitions of the Chicago and North
Western Transportation Company and Southern Pacific Rail Corporation which were funded by UPC on our behalf.
We assumed these acquisition costs in the form of intercompany borrowings from UPC. The intercompany
borrowings accrue interest at an annual rate of 7.5%, which may be adjusted from time to time, and are payable on
demand. There are no restrictions on the amount we are able to borrow from UPC. Intercompany borrowings are
unsecured and rank equally with all of our other unsecured indebtedness.
UPC provides us with various services, including strategic planning, legal, treasury, accounting, auditing,
insurance, human resources and corporate affairs. Billings for these services were $15 million and $12 million for
the three months ended June 30, 2004 and 2003, respectively. Billings were $27 million for the six months ended
June 30 in both 2004 and 2003.
4. Financial Instruments
Strategy and Risk - We use derivative fmancial instruments in limited instances for other than trading purposes to
manage risk related to changes in fuel prices and to achieve our interest rate objectives. We are not a party to
leveraged derivatives and, by policy, do not use derivative financial instruments for speculative purposes. Financial
instrQments qu~g for hedge accountipg must w~tain a specified level Qf effectiveness between the hedging
instrument and the item being hedged, both at inception and throughout the hedged period. We formally document
the nature and relationships between the hedging instruments and hedged items, as well as our risk-management
objectives, strategies for undertaking the various hedge transactions and method of assessing hedge effectiveness. We
use swaps, collars, futures and/or forward contracts to mitigate the downside risk of adverse price movements and
hedge the exposure to variable cash flows. The use of these instruments also limits future benefits from favorable
movements. The purpose of these programs is to protect our operating margins and overall profitability from
adverse fuel price changes or interest rate fluctuations.
Market and Credit Risk - We address market risk related to derivative fmancial instruments by selecting
instruments with value fluctuations that higWy correlate with the underlying hedged item. Credit risk related to
derivative fmancial instruments, which is minimal, is managed by requiring high credit standards for counterparties
and periodic settlements. At June 30, 2004, we have not been required to provide collateral, nor have we received
collateral relating to our hedging activities.
Determination of Fair Value - The fair values of our derivative fmancial instrument positions at June 30, 2004
and December 31, 2003, were determined based upon current fair values as quoted by recognized dealers or
9
developed based upon the present value of expected future cash flows discounted at the applicable swap spread or
U.S. Treasury rate.
.
Interest Rate Cash Flow Hedges - For cash flow hedge transactions in which we hedge the exposure to variability of
cash flows, changes in the fair value of the derivative are reported in accumulated other comprehensive income until
earnings are affected by the hedged item.
In May 2004, in anticipation of a future lease transaction, we entered into treasury lock transactions with notional
amounts totaling $125 million and an average locked-in rate of 5.08%. We can close on the treasury locks anytime up
to their expiration on September 30, 2004, and we plan to do so concurrent with the inception of the lease.
The treasury locks are accounted for as cash flow hedges and are recorded at fair value in our Consolidated
Statement of Financial Position. The gain or loss at closing will be amortized over the term of the lease. At June 30,
2004, we had an unrealized loss of $3 million, $2 million after-tax, in accumulated other comprehensive income
related to these derivative instruments. There were no interest rate cash flow hedges outstanding at December 31,
2003.
Fuel Cash Flow Hedges - Fuel costs are a significant portion of our total operating expenses. In 2003 and 2004, our
primary means of mitigating the impact of adverse fuel price changes has been our fuel surcharge program.
However, we use swaps, collars, futures and/or forward contracts to further mitigate the impact of adverse fuel price
changes. We currently have no fuel hedges in place for 2005.
The following is a summary of our fuel derivatives qualifying as cash flow hedges:
Millions,
Except Average Commodity Prices
Fuel hedging:
Swaps:
Number of gallons hedged for 2003 [a] ........................................................................
Average price of 2003 hedges (per gallon) [b] .............................................................
Collars:
Number of gallons hedged for 2003 [a] ........................................................................
Average cap price for 2003 collars (per gallon) [b] .....................................................
Average floor price for 2003 collars (per gallon) [b] ..................................................
Average ceiling price for 2003 collars (per gallon) [b] ...............................................
Number of gallons hedged for the remainder of 2004................................................
Average cap price for 2004 collars outstanding (per gallon) [b)...............................
Average floor price for 2004 collars outstanding (per gallon) [b) ............................
Average ceiling price for 2004 collars outstanding (per gallon) [b] .........................
Gross fair value asset position............................................................................................
Gross fair value (liability) position....................................................................................
June 30, Dec. 31,
2004 2003
.
145
$ $0.63
22
$ $0.77
$ $0.67
$ $0.88
57 120
$0.72 $0.74
$0.63 $0.64
$0.85 $0.86
7 6
[a] Fuel hedges expired Derember 31,2003.
[b] Excluding taxes, transportation costs and regional pricing spreads.
Fuel hedging positions qualifying as cash flow hedges will be reclassified from accumulated other comprehensive
income to fuel expense over the life of the hedge as fuel is consumed. At June 30, 2004, a gain of $4 million, net of
tax, was recorded in accumulated other comprehensive income associated with our fuel derivatives qualifying as cash
flow hedges.
Earnings Impact - The decrease in fuel expense from hedging increased pre-tax income by $3 million during the
three months ended June 30 in both 2004 and 2003. Fuel hedging increased pre-tax income by $7 million and $11
million during the six months ended June 30, 2004 and 2003, respectively.
10
.
.
.
.
For the six months ended at June 3D, 2004 and 2003, we recorded less than $1 million for hedging
ineffectiveness.
Sale of Receivables - We have sold without recourse on a 364-day revolving basis, an undivided interest in a
designated pool of accounts receivable to investors through Union Pacific Receivables, Inc. (UPRI), a bankruptcy-
remote subsidiary. At June 3D, 2004 and December 31, 2003, UPRI had transferred $770 million and $695 million,
respectively, of accounts receivable to the investors. UPRI subsequently sells an interest in such pool to the investors
and retains an undivided interest in a portion of these receivables. This retained interest is included in accounts
receivable in our Consolidated Financial Statements. At June 30,2004 and December 31,2003, UPRI had a retained
interest of $180 million and $105 million, respectively. The outstanding undivided interest held by investors of $590
million at both June 3D, 2004 and December 31, 2003 is sold at carrying value, which approximates fair value, and
there is no gain or loss recognized from the transaction. These sold receivables are not included in our Consolidated
Financial Statements.
The amount of receivables sold fluctuates based upon the availability of the amount of receivables eligible for
sale and is directly affected by changing business volumes and credit risks, including default and dilution. If default
or dilution percentages were to increase one percentage point, the amount of receivables available for sale would
decrease by $6 million. Should UPC's credit rating fall below investment grade, the amount of receivables sold
would be reduced, and, in certain cases, the investors have the right to discontinue this reinvestment.
The investors have designated us to service the sold receivables; however, no servicing asset or liability has been
recognized as the servicing fees adequately compensate us for our responsibilities. The costs of the sale of receivables
program are included in other income and were $2 million for both the three months ended June 3D, 2004 and 2003,
and $4 million and $5 million for the six months ended June 3D, 2004 and 2003, respectively. The costs include
interest, program fees paid to banks, commercial paper issuing costs and fees for unused commitment availability.
Payments collected from sold receivables can be reinvested in new receivables on behalf of the buyers. Proceeds
from collections reinvested in the program were approximately $5.9 billion and $5.4 billion during the six months
ended June 3D, 2004 and 2003, respectively. On August 5, 2004, the sale of receivables program was renewed on a
364-day revolving basis without any significant term changes.
5. Debt Redemption - On April 5, 2004, we redeemed the Missouri Pacific Railroad Company 4.25% first
mortgage bonds with an outstanding balance of approximately $92 million and a maturity date of January 1, 2005.
6. Retirement Plans
Pension and Other Postretirement Benefits
Pension Plans - We provide dermed benefit retirement income to eligible non~union employees through the
Corporation's qualified and non-qualified (supplemental) pension plans. Qualified and non-qualified pension
benefits are based on years of service and the highest compensation during the latest years of employment with
specific reductions made for early retirements.
Other Postretirement Benefits (OPEB) - We provide dermed contribution medical and life insurance benefits for
eligible retirees. These benefits are funded as medical claims and life insurance premiums are paid.
Expense
Pension and OPEB expenses are determined based upon the annual service cost of benefits (the actuarial cost of
benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets.
With respect to the value of pension plan assets, the expected long-term rate of return on plan assets is applied to a
calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended
to reduce year-to-year volatility in pension expense, but it may have the effect of delaying the recognition of
differences between actual returns on assets and expected returns based on long- term rate of return assumptions.
11
Differences in actual experience in relation to assumptions are not recognized immediately, but are deferred .
and. if necessary. amortized as pension or OPEB expense.
The components of our net periodic pension costs for the three and six months ended June 30, 2004 and 2003
were as follows:
Pension
Three Months Ended Six Months Ended
June 30, June 30,
Millions of Dollars 2004 2003 2004 2003
Service cost.............. .................. .............. ..... ............. ....................... $ 7 $ 7 $ 15 $ 14
Interest cost..................... .................. ............... ..... ....... ....... ............. 29 29 58 57
Expected return on plan assets..................................................... (35) (36) (69) (68)
Amortization of:
Transition obligation ................................................................ - - (1) (1)
Prior service cost.... ...................... ...................... ............ ...... ...... 2 3 4 5
Actuarial loss ..... ................................. .......... ................... ........ ... 1 1 2 1
Total net periodic benefit cos1...................................................... $ 4 $ 4 $ 9 $ 8
The components of our net periodic OPEB costs for the three and six months ended June 30, 2004 and 2003
were as follows:
OPEB
Three Months Ended
June 30,
2003
$ 2
9
2004
$ 2
8
Six Months Ended
June 30,
2004 2003
$ 4 $ 4
17 18
.
Millions of Dollars
Service cost............. .......... ........... ................... ............ ........ .......... ....
Interest cost....... ....................... ................... ............... ............ ..........
Amortization of:
Prior service cost (credit) .........................................................
Actuarial loss ..............................................................................
Total net periodic benefit cos1......................................................
(4)
4
$ 10
(4)
4
$ 11
(9) (8)
8 8
$20 $22
Cash Contributions
During 2004, we have voluntarily contributed $50 million to the pension plans, and we do not expect to make
additional contributions in 2004.
7. Capital Stock - The number of shares shown in the Common Stock section of the Consolidated
Statement of Changes in Common Shareholders' Equity excludes 2,665 shares of Common Stock and 232 shares of
Class A Stock owned by Southern Pacific Rail Corporation, an affiliate of the Registrant, whose results are included
in our Consolidated Financial Statements.
.
12
.
.
.
8. Other Income - Other income included the following for the three months and six months ended June 30, 2004
and 2003:
Three Months Six Months
Ended June 30, Ended June 30,
Millions of Dollars 2004 2003 2004 2003
Net gain on non-operating asset dispositions...................................... $7 $14 $21 $24
Rental income............................................................................................ 13 13 24 25
Interest income......................................................................................... 1 1 2 2
Other, net ................................................................................................... (12) (10) (19) (19)
TotaI............................................................................................................ $9 $18 $28 $32
9. Commitments and Contingencies
Un asserted Claims - There are various claims and lawsuits pending against us and certain of our subsidiaries. It is
not possible at this time for us to determine fully the effect of all unasserted claims on our consolidated financial
condition, results of operations or liquidity; however, to the extent possible, where unasserted claims can be
estimated and where such claims are considered probable, we have recorded a liability. We do not expect that any
known lawsuits, claims, environmental costs, commitments, contingent liabilities or guarantees will have a material
adverse effect on our consolidated fmancial condition, results of operations or liquidity.
Personal Injury and Occupational Illness - The cost of personal injuries to employees and others related to our
activities is charged to expense based on estimates of the ultimate cost and number of incidents each year. We use
third-party actuaries to assist us in properly measuring the expense and liability. Compensation for work-related
accidents is governed by the Federal Employers' Liability Act (FELA). Under FELA, damages are assessed based on a
fmding of fault through litigation or out-of-court settlements. We offer a comprehensive variety of services and
rehabilitation programs for employees who are injured at work. Expenses for our personal injury-related events
were $83 million and $63 million for the three months ended June 30, 2004 and 2003, respectively. Expenses in the
second quarter of 2004 were negatively impacted in part by costs related to a derailment near San Antonio that
occurred in late June. Our expenses for personal injury-related events for the six months ended June 30, 2004 and
2003 were $183 million and $121 million, respectively. Our first quarter 2004 expense included $30 million,
excluding interest, relating to a 2002 jury verdict against us for a 1998 grade-crossing accident that was upheld in the
first quarter of 2004. As of June 30, 2004 and December 31, 2003, we had a liability of $680 million and $615
million, respectively, accrued for future personal injury costs, of which $272 million was recorded in current
liabilities as accrued casualty costs in both years. We have additional amounts accrued for claims related to certain
alleged occupational illnesses. The impact of current obligations is not expected to have a material adverse effect on
our consolidated financial condition, results of operations or liquidity.
Environmental Costs- We generate and transport hazardous and non-hazardous waste in our current operations
and have done so in our former operations, and we are subject to federal, state and local environmental laws and
regulations. We have identified 397 sites at which we are or may be liable for remediation costs associated with
alleged contamination or for violations of environmental requirements. This includes 51 sites that are the subject of
actions taken by the U.S. government, 29 of which are currently on the Superfund National Priorities List. Certain
federal legislation imposes joint and several liability for the remediation of identified sites; consequently, our
ultimate environmental liability may include costs relating to activities of other parties, in addition to costs relating
to our own activities at each site.
When an environmental issue has been identified with respect to the property owned, leased or otherwise used
in the conduct of our business, we and our consultants perform environmental assessments on such property. We
expense the cost of the assessments as incurred. We accrue the cost of remediation where our obligation is probable
and such costs can be reasonably estimated.
As of June 30, 2004 and December 31, 2003, we had a liability of $186 million and $187 million, respectively,
13
accrued for future environmental costs, of which $51 million and $57 million were recorded in current liabilities as
accrued casualty costs. The liability includes future costs for remediation and restoration of sites, as well as for
ongoing monitoring costs, but excludes any anticipated recoveries from third parties. Cost estimates are based on
information available for each site, fmancial viability of other potentially responsible parties and existing technology,
laws and regulations. We believe that we have adequately accrued for our ultimate share of costs at sites subject to
joint and several liability. However, the ultimate liability for remediation is difficult to determine because of the
number of potentially responsible parties involved, site-specific cost sharing arrangements with other potentially
responsible parties, the degree of contamination by various wastes, the scarcity and quality of volumetric data related
to many of the sites and/or the speculative nature of remediation costs. The impact of current obligations is not
expected to have a material adverse effect on our consolidated fmancial condition, results of operations or liquidity.
Purchase Obligations and Guarantees - We periodically enter into fmancial and other commitments in
connection with our business. We do not expect that these commitments or guarantees will have a material adverse
effect on our consolidated fmancial condition, results of operations or liquidity.
At June 30, 2004, we were contingently liable for $422 million in guarantees and $27 million in letters of credit.
These contingent guarantees were entered into in the normal course of business and include guaranteed obligations
of affiliated operations. The guarantee with the longest remaining term expires in 2022. We are not aware of any
existing event of default that would require us to satisfy these guarantees.
As described in note 10 to our Consolidated Financial Statements, Item 8, in our 2003 annual report on Form
1O-K, we have a synthetic operating lease arrangement to fmance a new headquarters building. We guarantee a
residual value equal to 85% of the total construction-related costs upon completion of the building. During
construction, we guarantee 89.9% of the construction costs incurred. At June 30, 2004, our guarantee related to the
building was approximately $177 million. The guarantee will be approximately $220 million upon completion of the
building. At June 30, 2004, we had a liability of approximately $6 million related to the fair value of this guarantee.
UPC guarantees our entire obligation under this lease.
Income Taxes - The IRS has substantially completed its examination of the Corporation's federal income tax
returns for the years 1995 to 1998 and has issued a preliminary notice of deficiency. Specifically, the IRS proposes to
disallow 100% of the deductions claimed in connection with certain donations of property occurring during those
years. The Corporation disputes the proposed adjustments and intends to vigorously defend its position through
applicable IRS procedures, and, if necessary, litigation. At this time, we are unable to estimate the impact this may
have on our Consolidated Financial Statements.
10. Accounting Pronouncements - In March 2004, the F ASB issued an exposure draft, Share-Based Payment, an
Amendment ofF ASB Statements No. 123 and 95. If fmalized as drafted, we will be required to record compensation
expense for stock options beginning January 1,2005. We will be required to record compensation costs based on
the fair value of the awards granted to employees. We are currently assessing the impact that this proposed standard
would have on our Consolidated Financial Statements.
11. Cumulative Effect of Accounting Change - Surface Transportation Board 4STB) accounting rules require
that railroads accrue the cost of removing track structure over the expected useful life of these assets. Railroads
historically used this prescribed accounting for reports filed with both the STB and SEC. In August 2001, the FASB
issued Statement No. 143, Accounting for Asset Retirement Obligations (F AS 143). This statement was effective for us
beginning January I, 2003, and prohibits the accrual of removal costs unless there is a legal obligation to remove the
track structure at the end of its life. We concluded that we did not have a legal obligation to remove the track
structure, and therefore, under generally accepted accounting principles, we could not accrue the cost of removal in
advance. As a result, reports filed with the SEC will reflect the expense of removing these assets in the period in
which they are removed. For STB reporting requirements only, we will continue to follow the historical method of
accruing in advance, as prescribed by the STB. F AS 143 also requires us to record a liability for legally obligated asset
retirement costs associated with tangible long-lived assets. In the fIrst quarter of 2003, we recorded income from a
cumulative effect of accounting change, related to the adoption of FAS 143, of $274 million, net of income tax
expense of $167 million. The accounting change had no effect on our liquidity.
14
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.
.
.
"
. Item 2. Management's Narrative Analysis of the Results of Operations
.
.
UNION PACIFIC RAILROAD COMPANY AND CONSOLIDATED SUBSIDIARY
AND AFFILIATE COMPANIES
RESULTS OF OPERATIONS
Three Months and Six Months Ended June 30, 2004 Compared to
Three Months and Six Months Ended June 30, 2003
For purposes of this report, unless the context otherwise requires, all references herein to the "Company." "we,"
"us." and "our" mean Union Pacific Railroad Company.
The following discussion should be read in conjunction with the Consolidated Financial Statements and
applicable notes to the Consolidated Financial Statements. Item I, and other information included in this report.
Union Pacific Railroad Company (the Registrant). a Class I railroad incorporated in Delaware and an indirect
wholly owned subsidiary of Union Pacific Corporation (the Corporation or UPC). together with a number of wholly
owned and majority owned subsidiaries and certain affiliates (collectively, UPRR, the Company or Railroad).
operates various railroad and railroad-related businesses.
Available Information
Our Internet website is www.up.com. We make available free of charge on our website (under the "Investors"
caption link) our annual reports on Form lO-K. our quarterly reports on Form lO-Q. our current reports on Form 8-
K, the Corporation's proxy statement and Forms 3, 4 and 5. filed on behalf of UPC's directors and executive officers
and amendments to such reports fIled or furnished pursuant to the Securities Exchange Act of 1934. as amended (the
Exchange Act). as soon as reasonably practicable after such material is electronically filed with. or furnished to, the
Securities Exchange Commission (SEC). We also make available on our website previously fIled SEC reports and
exhibits via a link to EDGAR on the SEC's Internet site at www.sec.gov. Additionally. the Corporation's corporate
governance materials, including Board Committee charters, governance guidelines and policies and codes of conduct
and ethics for directors. officers and employees may also be found on our website at www.up.comlinvestors. From
time to time. the corporate governance materials on our website may be updated as necessary to comply with rules
issued by the SEC and the New York Stock Exchange or as desirable to promote the effective and efficient governance
of our company. Any security holder wishing to receive. without charge. a copy of any of these SEC filings or
corporate governance materials should write to Secretary, Union Pacific Corporation. 1400 Douglas Street. Omaha.
NE 68179.
This reference to our website address and any other references to it contained in this report are provided as a
convenience and do not constitute, and should not be deemed an. incorporation by reference of the information
contained on the website. Therefore. such information should not be considered part of this report.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our Consolidated
Financial Statements. which have been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these fmancial statements requires estimation and judgment that affect
the reported amounts of revenues, expenses. assets and liabilities. We base our estimates on historical experience
and on various other assumptions that are believed to be reasonable under the circumstances. the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. If these estimates differ materially from actual results. the impact on the Consolidated Financial
Statements may be material. Our critical accounting policies are available in our 2003 annual report on Form 1O-K,
Item 7. There have been no significant changes with respect to these policies during the first six months of 2004.
15
Network Performance Update
As discussed in this Item 2 and as previously reported, operating results have been adversely affected by our
inefficient network performance. which resulted in additional costs. including higher salary. equipment rent. fuel
and other expenses. With the conclusion of the second quarter. we have seen our network performance stabilize due to
several efforts implemented over the last nine months. Hiring and training efforts have continued at a significant rate.
as nearly 2,300 trainmen were placed in service during the fIrSt half of 2004. We expect an additional 1,300 in the third
quarter of 2004. By year-end. over 5.000 new employees will have been placed in train service. With improving
conductor levels. we are working aggressively to train experienced conductors to become engineers. New employee
hiring is being partially offset by attrition. We estimate an average annual year-over-year increase of approximately
2.000 full-time equivalent train crew personnel. In addition to hiring and training crews. we have accelerated
locomotive acquisitions to improve velocity. During the fIrSt half of 2004. 96 new locomotives and 347 units under
short-term leases entered our system. An additional 299 new units are expected to come on line through the end of the
year.
Although these additional, critical resources helped to stabilize our rail network. record volumes hampered
improvement efforts in the nrst six months of 2004. As a result. in anticipation of further increases in demand in the
coming months. we have implemented additional. significant actions that we believe will help protect the system from
additional congestion and improve velocity. To control volume in several of our key corridors and terminals. we are
limiting carloadings and reducing the overall inventory of railcars on our system. The key corridors include the 1-5
Corridor between Seattle and Roseville. California. the Sunset Cbrridor between Los Angeles and EI Paso. the route
between Los Angeles and Salt Lake City. and the Central Corridor through Iowa and Illinois. Steps to limit carloadings
include creating an allocation system for certain shipments to protect critical terminals from overload. temporarily
limiting the number of rock and aggregate materials carloads handled in Texas. consolidating selected automobile and
chemical trains. regulating the volume of selected agricultural commodities. and capping the numbers of incremental
train starts.
Although the timing of a return to more effective operations remains uncertain. we believe these efforts will allow
us to improve network fluidity. handle greater traffic volume and operate more efficiently. Our future results will be a
function of our service improvement. which will be indicated by our train velocity. car volume and other operating
metrics. all of which are updated weekly on our website at www.up.com/investors/reports.
Results of Operations
Net Income - We reported net income of $165 million in the second quarter of 2004 compared to $295 million for
the same period in 2003. Year-to-date net income was $329 million versus $736 million in 2003. Included in 2003
net income is the cumulative effect of accounting change of $274 million. net of tax. Along with the impact of the
cumulative effect of accounting change on year-to-date comparisons. the decrease in second quarter and year-to-
date periods was driven by wage and benent inflation. volume-related expenses and higher operational costs
associated with a slower rail network. In addition. increased casualty and interest expense associated with an
unfavorable court ruling involving a 1998 third-party crossing accident drove expenses higher in the nrst quarter.
while expenses resulting from a derailment in San Antonio in late June negatively impacted income for the second
quarter of 2004. Partially offsetting these expenses was revenue growth in the second quarter and year-to-date
periods; a reduction of the deferred state income tax liability primarily attributable to relocating customer service.
accounting and information technology operations to Omaha. Nebraska (recognized in the nrst quarter of 2004) and
state income tax credits earned in connection with the new headquarters building in Omaha.
Operating Revenues - Operating revenue is comprised of commodity revenue and other revenues. Other revenues
primarily include subsidiary revenue from various companies that are wholly owned or majority owned. revenue
from the Chicago commuter rail operations and accessorial revenue earned due to customer detainment of Railroad
owned or controlled equipment. We recognize commodity revenues on a percentage-of-completion basis as freight
moves from origin to destination. Other revenue is recognized as service is performed or contractual obligations are
met.
16
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.
.
.
"
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..
.
Second quarter rail commodity revenues increased $137 million (5%) to $2.9 billion compared to 2003. Second
quarter revenue carloads grew 2% compared to a year ago, with particularly strong growth in the Chemical and
Agricultural commodity groups. Average revenue per car (ARC) for the period increased 3% to $1,225 driven by
pricing increases, fuel surcharges, index-based contract escalators and positive mix. Year-to-date rail commodity
revenues grew 6% to $5.7 billion compared to 2003 driven by a 3% increase in both revenue carloads and average
revenue per car. We recognized $67 million and $106 million in operating revenue from our fuel surcharge
programs in the second quarter and year-to-date periods, respectively, in 2004 compared to $34 million and $55
million for the same periods in 2003. Other revenues increased $2 million (2%) to $119 million in the second
quarter compared to a year ago and declined $9 million (4%) year-to-date when compared to 2003 as a result of
lower accessorial revenue, partially offset by an increase in subsidiary revenue during the second quarter.
The following tables summarize the year-over-year changes in rail commodity revenue, revenue carloads
and ARC by commodity type:
Three Months Ended Six Months Ended
Commodity Revenue June 30, % June 30, %
Millions of Dollars 2004 2003 Change 2004 2003 Change
Agricultural....................................................... $ 399 $ 374 7% $ 810 $ 747 8%
Automotive........................................................ 326 320 2 623 622 -
Chemicals........................................................... 429 393 9 839 787 7
Energy ................................................................. 597 602 (1) 1,183 1,163 2
Industrial Products........................................... 606 561 8 1,169 1,071 9
Intermodal......................................................... 544 514 6 1,054 981 7
Total..... ................ ....... ............. .......................... $2,901 $2,764 5% $5,678 $5,371 6%
Three Months Ended Six Months Ended
Revenue Carloads June 30, % June 30, %
Thousands 2004 2003 Change 2004 2003 Change
Agricultural....................................................... 216 206 5% 446 420 6%
Automotive........................................................ 217 214 1 420 421 -
Chemicals ........................................................... 238 226 6 462 445 4
Energy ................................................................. 540 537 - 1,081 1,058 2
Industrial Products........................................... 387 382 1 752 722 4
Intermodal......................................................... 770 752 2 1,495 1,445 3
Total................................................................... 2,368 2,317 2% 4,656 4,511 3%
Three Months Ended Six Months Ended
A verage Revenue June 30, % June 30, %
Per Car 2004 2003 Change 2004 2003 Change
Agricultural........................................................ $1,853 $1,818 2% $1,818 $1,779 2%
Automotive........................................................ 1,503 1,494 1 1,482 1,478 -
Chemicals ........................................................... 1,799 1,743 3 1,816 1,769 3
Energy ................................................................. 1,106 1,120 (1) 1,095 1,099 -
Industrial Products ........................................... 1,566 1,466 7 1,555 1,481 5
Intermodal......................................................... 706 684 3 705 679 4
Total.................................................................... $1,225 $1,193 3% $1,220 $1,190 3%
Agricultural - Revenue grew 7% in the second quarter and 8% for the year-to-date period of 2004 over the
comparable periods in 2003 with carloads improving 5% in the second quarter and 6% year-to-date and ARC
increasing 2% in both periods. The improvement in carloads was driven by increased demand for Gulf export
17
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wheat, as well as meal shipments to both Mexico and domestic locations. Additionally. corn and feed grains
experienced growth in the second quarter as demand to the Pacific Northwest increased. ARC improved due to price
increases. the positive mix impact of a longer average length of haul and fuel surcharges.
.
Automotive - Revenue improved 2% for the second quarter but remained flat for the year-to-date period of 2004
over the comparable periods in 2003. For the second quarter. sales for the international manufacturers remained
strong while several domestic manufacturers saw declines. These gains for the quarter-to-date period were offset by
the frrst quarter decline in revenue due to lower revenues from domestic manufacturers. which were driven by lower
production levels. ARC increased 1 % in the second quarter due to positive mix as a result of longer haul and higher
ARC vehicle moves but was flat for the year-to-date period.
Chemicals - Revenue for the second quarter and year-to-date period of 2004 over the comparable periods of 2003
grew 9% and 7%, respectively. as carloads and ARC showed improvement in both periods. An increase in market
demand related to the overall economic recovery for liquid and dry chemicals as well as plastics drove the 6% and
4% improvement in carloadings for the second quarter and year-to-date periods in 2004. Liquified petroleum gas
also contributed to the improvement with increased propane shipments, which were driven by more robust plant
inventories combined with colder winter conditions in the frrst quarter and an anticipated warmer summer in 2004.
ARC improved 3% in both periods due to a mix shift toward longer average length of haul moves in addition to price
increases and fuel surcharges.
Energy - Revenue decreased 1 % for the second quarter and increased 2% for the year-to-date period of 2004 over the
comparable periods of 2003. Overall, second quarter volume was flat as ColoradolUtah volumes continued to be
strong. offsetting market share losses in the South Powder River Basin and resource constraints on our system. Year-
to-date carload volumes increased 2%. mainly due to a 9% increase in the ColoradolUtah market. Demand for
western coal, especially from the ColoradolUtah market, drove the increase. A snowstorm in March of 2003. which
affected critical energy routes in Wyoming and Colorado, also impacted the year-over-year carloading comparison.
ARC decreased 1 % for the second quarter and was flat year-to-date. primarily due to shorter average length of haul.
..
Industrial Products - Revenue increased 8% for the second quarter and 9% for the year-to-date period of 2004 over
the comparable periods of 2003, due to increases in both carloads and ARC. The revenue gain in both periods was
driven by a 1% gain in carloads for the second quarter and a 4% improvement year-to-date resulting from
strengthened demand for lumber and steel. partially offset by lower stone and government shipments. Steel
shipments increased as a result of higher demand for U.S. produced steel. while lumber shipments improved as
housing starts and low interest rates continued to drive demand. Conversely. stone shipments in the second quarter
were hampered by slower network velocity, which increased car cycle times. Government shipments declined as
2003 was positively impacted by the increased movement of military equipment and ammunition in support of the
war in Iraq. ARC grew 7% and 5% for the second quarter and year-to-date periods due to price increases. fuel
surcharges. and more high-ARC lumber moves and fewer low-ARC stone shipments.
Intermodal - Revenue for the second quarter and year-to-date period of 2004 over the comparable periods of 2003
grew 6% and 7%, respectively. as carloads and ARC increased in both periods. Domestic revenue grew 6% in the
second quarter and 10% in the first half of the year driven by improved overall economic conditions. International
revenue increased in the second quarter and fIrst half of the year due to continued strength in imports from the Far
East as more domestic goods are manufactured or assembled overseas. ARC for the three and six month periods
improved 3% and 4%. respectively. due to fuel surcharges and price increases.
Mexico Business - Included in the commodity revenue reported above is revenue from shipments to and from
Mexico, which increased 7% to $243 million for the second quarter and improved 9% to $471 million for the year-
to-date period of 2004 over the comparable periods of 2003. Business gains were led by an increase in agricultural
revenues resulting from higher wheat and import beer in addition to industrial products. Reduced finished vehicle
imports in both periods and reduced revenue in the first quarter derived from auto parts moves partially offset the
increases.
.
18
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Operating Expenses - Second quarter operating expenses increased $360 million (16%) to $2.7 billion compared to
the same period in 2003. Year-to-date operating expenses increased $576 million (12%). Expenses in both periods
were negatively impacted by wage and benefit inflation, volume-related costs and increased crew and asset utilization
costs as the network continued to operate at suboptimal levels. Fuel costs also increased significantly in the second
quarter versus 2003. Expenses in the first quarter of 2004 were also impacted by severe winter weather conditions,
derailments in key through-freight locations and higher casualty costs relating to a 2002 jury verdict against us for a
1998 crossing accident that was upheld in the first quarter of 2004. Increased casualty costs were also recognized in
the second quarter of 2004 due to a derailment in San Antonio, Texas.
Salaries, Wages and Employee Benefits - Salaries, wages and employee benefits increased $99 million (11 %) in the
second quarter of 2004 compared to 2003. Year-to-date, wage and benefit expenses rose $153 million (8%). The
increases were driven by inflation, volume-related costs, training expenses associated with an increase in trainmen
employment levels and increased crew utilization costs due to slower velocity. A severance program implemented in
the first quarter of 2003 and lower protection costs and management performance-based compensation expense in
2004 partially offset these increases. Protection cost represents the differential payment when the wage earned for
active employment is lower than an employee's "protected" rate of pay. An individual's protected rate is imposed by
the Surface Transportation Board for employees adversely affected by a merger or is established by collective
bargaining agreements in other cases. We also benefited from cost savings driven by a lower non-transportation
force during the fIrSt half of 2004.
Equipment and Other Rents - Equipment and other rents primarily includes rental expense that we pay for freight
cars owned by other railroads or private companies; freight car, intermodal and locomotive operating leases; other
specialty equipped vehicle leases; and office and other rentals. Expenses increased $62 million (21%) in the second
quarter compared to 2003 and $79 million (13%) year-to-date. The increase in both periods was driven by an
increase in carload volumes combined with slower network velocity that increased inventory levels and car cycle
times, which resulted in higher locomotive and car rental expense. Car cycle time is defmed as the amount of time
that a car spends on our system without changing its loaded/unloaded status or having a new waybill issued. These
increases were partially offset by reduced rental prices for private freight cars. The higher locomotive expense is also
due to the increased leasing of new locomotives, which are being utilized for the higher business volumes and to
assist us with network performance.
Depredation - The majority of depreciation expense relates to track structure, including rail, ties and other track
material. Depreciation expense increased $25 million (10%) in the second quarter versus the same period in 2003
and $24 million (5%) year-to-date compared to 2003. The increase is due to higher capital spending in recent years,
which has increased the total value of our depreciable assets, thus requiring additional depreciation expense.
Mitigating the increase was a depreciation study implemented in June of 2003 which reduced rates for certain track
assets and raised rates for locomotives and other assets.
Fuel and Utilities - Fuel and utilities is comprised of locomotive fuel, gasoline, other fuels and utilities other than
telephone. Expenses increased $112 million (35%) in the second quarter and $149 million (22%) year-to-date 2004
compared to a year ago. The additional expenses were driven by higher fuel prices, a 3% and 4% increase in gross
ton miles for the second quarter and year-to-date periods, respectively, and a higher fuel consumption rate
(measured by gallons consumed per thousand gross ton miles). Fuel prices averaged $1.16 per gallon in the second
quarter of 2004 compared to 88 cents per gallon in the second quarter of 2003 (price includes taxes and
transportation costs). Year-to-date, fuel prices averaged $1.09 per gallon compared to 94 cents per gallon in 2003.
Higher fuel prices in 2004 resulted in a $97 million increase in fuel expense in the second quarter and $101 million
increase year-to-date compared to 2003. The increase in gross ton miles for the second quarter and year-to-date
periods resulted in additional fuel expense of $8 million and $22 million, respectively. We hedged approximately 8%
of our fuel consumption for the second quarter, which decreased fuel costs by $4 million. Gasoline, utilities and
propane expenses increased $2 million in the second quarter and $6 million year-to-date primarily due to higher
prices.
Materials and Supplies - Materials used for the maintenance of our lines, structures and equipment is the principal
component of materials and supplies expense. Office, small tools and other supplies along with the costs of freight
19
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services purchased to ship company materials are also included. Expenses increased $16 million (16%) in the second
quarter and $36 million (18%) year-to-date, primarily due to increased use of locomotive repair materials associated
with maintaining a larger fleet with more units off warranty, additional freight car repairs and other materials
expense. These increases were partially offset by a shift of additional third-party contracting of locomotive repairs,
resulting in a corresponding increase to Purchased Services and Other Costs.
.
Casualty Costs - The largest component of casualty costs is personal injury expense. Freight and property damage,
insurance, environmental matters and occupational illness expense are also included in casualty costs. Casualty costs
increased $11 million (11%) in the second quarter compared to 2003 and $59 million (29%) year-to-date primarily
due to increased personal injury costs, including costs relating to a 2002 jury verdict against us for a 1998 crossing
accident that was upheld in the first quarter of 2004 and costs related to a derailment near San Antonio that occurred
in the latter part of the second quarter. Expenses associated with destruction of foreign equipment and freight loss
and damage also increased as we incurred more costs related to derailments in 2004 compared to 2003.
Purchased Services and Other Costs - Purchased services and other costs include the costs of services provided by
outside contractors, state and local taxes, net costs of operating facilities jointly used by us and other railroads,
transportation and lodging for train crew employees, trucking and contracting costs for intermodal containers,
leased automobile maintenance expenses, telephone and cellular expense, employee travel expense and computer
and other general expenses. Expenses increased $35 million (12%) in the second quarter of 2004 and $76 million
(13%) year-to-date when compared to last year driven by higher expenses for contract maintenance services and
state and local taxes. Trucking expenses for intermodal carriers and crew transportation costs also rose due to
additional volume and slower network velocity. The increase in contract maintenance was primarily driven by an
increase in locomotive maintenance expense.
Operating Income - Second quarter operating income decreased $221 million (38%) to $361 million while
operating income year-to-date declined $278 million (29%) to $675 million as wage and benefit inflation, higher fuel
prices, volume and resource utilization costs associated with network performance, severe weather conditions in the
fIrst quarter, derailments and higher casualty costs more than offset year-to-date commodity revenue growth of 6%.
The operating margin for the second quarter was 12.0%, compared to 20.2% in 2003. The year-to-date operating
margin was 11.4% compared to 17.0% a year ago.
.
Non-Operating Items - Interest expense decreased $1 million (1%) in the second quarter and increased $1 million
(flat) year-to-date compared to the same periods in 2003 primarily due to lower average debt levels that were offset
by higher weighted average interest rates on a year-to-date basis. Our average debt levels decreased to $6.6 billion
and $6.5 billion for the three and six months ended June 30, 2004, respectively, from $6.7 billion for both the three
and six months ended June 30, 2003. Second quarter other income decreased $9 million (50%) to $9 million while
other income for the year-to-date period decreased $4 million (13%) to $28 million in 2004 compared to 2003. The
decreases in both periods were driven primarily by lower net gains on the disposition of assets. Income tax expense
decreased $99 million (55%) in the second quarter and $150 million (55%) year-to-date compared to 2003 due to
lower pre-tax income; a reduction of the deferred state income tax liability primarily attributable to relocating
customer service, accounting and information technology operations to Omaha, Nebraska (recognized in the fIrst
quarter of 2004) and state income tax credits earned in connection with the new headquarters building in Omaha.
.
20
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Other Operating and Financial Statistics
Three Months Ended June 30,
2004 2003
Six Months Ended June 30,
2004 2003
Gross ton-miles (billions)........................................
Revenue ton-miles (billions) ...................................
260.6
136.1
253.8
132.3
512.5
270.7
495.1
258.7
Gross and Revenue Ton-Miles - Gross and revenue ton-miles increased 3% for the second quarter and 4% and
5%, respectively, for the year-to-date periods driven by an increase in carloadings, longer average length of haul for
Agricultural and Chemical shipments and the positive impact of volume growth experienced in the higher density
commodity groups, primarily Agricultural, Chemicals and Industrial Products. Gross ton-miles are calculated by
multiplying the weight of a loaded or empty freight car by the number of miles hauled. Revenue ton-miles do not
include the weight of the freight car.
OTHER MATTERS
Intercompany Relationship with UPC - At June 30,2004 and December 31, 2003, we had $892 million and $972
million working capital deficit balances, respectively, relating to UPC's management of our cash position. As part of
UPC's cash management activities, we advance excess cash (cash available after satisfying all of our obligations and
paying dividends to UPC) to UPC. We declare and pay dividends to UPC which typically approximate the dividends
that UPC declares to its shareholders; however, there is no formal requirement to do so. The dividend declaration
between us and UPC is determined solely by our Board of Directors. To the extent we require additional cash for use
in our operations, UPC makes such funds available to us for borrowing. Transactions between UPC and us are
treated as net intercompany borrowings in the Consolidated Statements of Financial Position.
The majority of our intercompany borrowings from UPC relate to the acquisitions of the Chicago and North
Western Transportation Company and Southern Pacific Rail Corporation which were funded by UPC on our behalf.
We assumed these acquisition costs in the form of intercompany borrowings from UPC. The intercompany
borrowings accrue interest at an annual rate of 7.5%, which may be adjusted from time to time, and are payable on
demand. There are no restrictions on the amount we are able to borrow from UPC. Intercompany borrowings are
unsecured and rank equally with all of our other unsecured indebtedness.
UPC provides us with various services, including strategic planning, legal, treasury, accounting, auditing,
insurance, human resources and corporate affairs. Billings for these services were $15 million and $12 million for
the three months ended June 30, 2004 and 2003. respectively. Billings were $27 million for the six months ended
June 30 in both 2004 and 2003.
Commitments and Contingencies - There are various claims and lawsuits pending against us and certain of our
subsidiaries. We are also subject to various federal. state and local environmental laws and regulations. pursuant to
which it is currently participating in the investigation and remediation of various sites.
Pensions - As of June 30, 2004, we have voluntarily contributed $50 million to the pension plans. and we do not
expect to make additional contributions in 2004.
Accounting Pronouncements - In March 2004. the F ASB issued an exposure draft. Share-Based Payment, an
Amendment of FASB Statements No. 123 and 95. If fmalized as drafted. we will be required to record compensation
expense for stock options beginning January 1. 2005. We will be required to record compensation costs based on the
fair value of the awards granted to employees. We are currently assessing the impact that this proposed standard
would have on our Consolidated Financial Statements.
Income Taxes - The IRS has substantially completed its examination of the Corporation's federal income tax
returns for the years 1995 to 1998 and has issued a preliminary notice of deficiency. Specifically, the IRS proposes to
disallow 100% of the deductions claimed in connection with certain donations of property occurring during those
21
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years. The Corporation disputes the proposed adjustments and intends to vigorously defend its position through
applicable IRS procedures, and, if necessary, litigation. At this time, we are unable to estimate the impact this may
have on our Consolidated Financial Statements.
.
Ratio of Earnings to Fixed Charges - For the three months and six months ended June 30, 2004, our ratio of
earnings to fIXed charges was 2.4 and 2.2, respectively. compared to 3.4 for both the three months and six months
ended June 30, 2003. The ratio of earnings to fixed charges has been computed on a consolidated basis. Earnings
represent income before the cumulative effect of accounting change (net income for the quarter ended June 30,
2004), less equity earnings net of distributions, plus fIXed charges and income taxes. Fixed charges represent
interest charges. amortization of debt discount and the estimated amount representing the interest portion of rental
charges.
CAUTIONARY INFORMATION
Certain statements in this report are. and statements in other material fIled or to be filed with the Securities and
Exchange Commission (as well as information included in oral statements or other written statements made or to be
made by us) are. or will be, forward-looking statements as defmed by the Securities Act of 1933 and the Securities
Exchange Act of 1934. These forward-looking statements include, without limitation. statements regarding:
expectations as to operational or service improvements; statements concerning expectations of the effectiveness of
steps taken or to be taken to improve operations or service. including the hiring and training of train crews,
acquisition of additional locomotives. infrastructure improvements and management of customer traffic on the
system to meet demand; expectations as to cost savings. revenue growth and earnings; the time by which certain
objectives will be achieved; statements or information concerning projections, predictions. expectations, estimates or
forecasts as to our business. fmancial and operational results and future economic performance; statements of
management's goals and objectives; estimates of costs relating to environmental remediation and restoration;
proposed new products and services; expectations that claims, lawsuits. environmental costs. commitments,
contingent liabilities. labor negotiations or agreements. or other matters that will not have a material adverse effect
on our consolidated financial condition, results of operations or liquidity and any other similar expressions
concerning matters that are not historical facts.
.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times that. or by which. such performance or results will be achieved.
including expectations of operational and service improvements. Forward-looking information is based on
information available at the time and/or management's good faith belief with respect to future events. and is subject
to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in
the statements.
The following important factors. in addition to those discussed in "Risk Factorsft in Item 7 of our 2003 annual
report on Form lO-K, could affect our future results and could cause those results or other outcomes to differ
materially from those expressed or implied in the forward-looking statements:
· whether we are fully successful in implementing our fmancial and operational initiatives. including
gaining new customers and retaining existing ones. along with containment of operating costs;
· whether we are successful in improving network operations and service by hiring and training
additional train crews. acquiring additional locomotives. improving infrastructure and managing
customer traffic on the system to meet demand;
· material adverse changes in economic and industry conditions. both within the United States and
globally;
.
the effects of adverse general economic conditions affecting customer demand and the industries
and geographic areas that produce and consume commodities carried by us;
.
22
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industry competition, conditions, performance and consolidation;
.
general legislative and regulatory developments, including possible enactment of initiatives to re-
regulate the rail industry;
· legislative, regulatory, or legal developments involving taxation, including enactment of new
federal or state income tax rates, revisions of controlling authority, and the outcome of tax claims
and litigation;
· changes in securities and capital markets;
· natural events such as severe weather, fire, floods, earthquakes or other disruptions of our
operating systems, structures and equipment;
· any adverse economic or operational repercussions from terrorist activities and any governmental
response thereto;
. war or risk of war;
· changes in fuel prices;
· changes in labor costs and labor difficulties, including stoppages affecting either our operations or
our customers' abilities to deliver goods to us for shipment; and
· the outcome of claims and litigation, including those related to environmental contamination,
personal injuries and occupational illnesses arising from hearing loss, repetitive motion and
exposure to asbestos and diesel fumes.
Forward-looking statements speak only as of the date the statement was made. We assume no obligation to
update forward-looking information to reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information. If we do update one or more forward-looking statements, no inference
should be drawn that we will make additional updates with respect thereto or with respect to other' forward-looking
statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information provided in Item 7 A. Quantitative and
Qualitative Disclosures About Market Risk of our 2003 annual report on Form 1O-K.
Item 4. Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and
with the participation of the Company's management, including the Company's Chief Executive Officer (CEO) and
Executive Vice President - Finance and Chief Financial Officer (CFO) , of the effectiveness of the design and
operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon
that evaluation, the CEO and the CFO concluded that, as of the end of the period covered by this report, the
Company's disclosure controls and procedures are effective in alerting them, in a timely manner, to material
information relating to the Company (including its consolidated subsidiaries) required to be included in the
Company's periodic SEC filings.
Additionally, the CEO and CFO determined that there have been no changes to the Company's internal control
over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over fmancial reporting.
23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
ENVIRONMENTAL MATTERS
We have received notices from the EPA and state environmental agencies alleging that we are or may be liable under
certain federal or state environmental laws for remediation costs at various sites throughout the United States,
including sites which are on the Superfund National Priorities List or state superfund lists.
Although specific claims have been made by the EPA and state regulators with respect to some of these sites, the
ultimate impact of these proceedings and suits by third parties cannot be predicted at this time because of the
number of potentially responsible parties involved, the degree of contamination by various wastes, the scarcity and
quality of volumetric data related to many of the sites, and! or the speculative nature of remediation costs.
Item 6. Exhibits and Reports on Form 8-X
(a) Exhibits
Exhibits are listed in the exhibit index on page 26.
(b) Reports on Form 8-X
On July 22, 2004, the Registrant furnished a Current Report on Form 8-K announcing UPC's fmancial
results for the second quarter of 2004.*
On July 9, 2004, the Registrant furnished a Current Report on Form 8-K announcing the issuance of a letter
to customers.*
On June 9. 2004, the Registrant furnished a Current Report on Form 8-K regarding-an update to UPC's
earnings outlook for the second quarter of 2004.*
On April 29, 2004, the Registrant furnished a Current Report on Form 8-K announcing UPC's financial
results for the first quarter of 2004. *
On April 15. 2004, the Registrant furnished a Current Report on Form 8-K announcing the issuance of a
letter to customers. *
* These reports. or certain portions thereof, were furnished under Item 9 or Item 12 of Form 8-K and are referenced
herein for informational purposes only. Therefore, such reports or applicable provisions thereof are not, and such
contents should not be deemed, incorporated by reference into any registration statements ftled by Union Pacific
Railroad Company with the SEC under the Securities Act of 1933, as amended.
24
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II
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: August 6, 2004
UNION PACIFIC RAILROAD COMPANY
(Registrant)
By Isl Robert M. Knight. Jr.
Robert M. Knight, Jr.
Executive Vice President - Finance and
Chief Financial Officer
(principal Financial Officer)
By Is! Richard T. Putz
Richard J. Putz,
Chief Accounting Officer and Controller
(Chief Accounting Officer and Duly Authorized
Officer)
25
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J
UNION PACIFIC RAILROAD COMPANY
EXHIBIT INDEX
.
Exhibit No.
Description
Exhibits Filed with this Statement
12(a) Ratio of Earnings to Fixed Charges for the Three Months Ended June 3D, 2004 and
2003.
12 (b) Ratio of Earnings to Fixed Charges for the Six Months Ended June 3D, 2004 and
2003.
31 (a) Certification Pursuant to RuIe 13a-14(a) of the Exchange Act, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 - Richard K. Davidson.
31 (b) Certification Pursuant to RuIe 13a-14(a) of the Exchange Act, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 - Robert M. Knight, Jr.
32 Certifications Pursuant to 18 D.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 - Richard K. Davidson and Robert M. Knight,
Jr.
Exhibits IncOl:porated by Reference
3 (a)
Amended Certificate of Incorporation of the Registrant, effective as of February I,
1998, is incorporated herein by reference to Exhibit 3(a) to the Company's annual
report on Form 10-K for the year ended December 31,1998.
.
3 (b) By-laws of the Registrant, as amended effective as of February I, 2004, are
incorporated herein by reference to Exhibit 3(a) to the Company's annual report on
Form lO-K for the year ended December 31,2003.
.
26
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EXHIBIT Il(a)
Ratio of Earnings to Fixed Charges
Union Pacilic Railroad Company and Consolidated Subsidiary and Affiliate Companies
(Unaudited)
Three Months Ended June 30,
Millions of Dollars, Except Ratios 2004 2003
Earnings:
N et income................................................................................................... $165 $295
Equity earnings net of distributions......................................................... (11) (16)
Total earnings ...................................................................................................... 154 279
Income taxes ........................................................................................................ 82 181
Fixed charges:
Interest expense including amortization of debt discount................... 123 124
Portion of rentals representing an interest factor .................................. 48 67
Total fIXed charges .............................................................................................. 171 191
Earnings available for fIXed charges ................................................................. $407 $651
I Ratio of earnings to fixed charges.....................................................................
2.4
3.4 I
27
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EXHIBIT 12(b) .
Ratio of Earnings to Fixed Charges
Union Pacific Railroad Company and Consolidated Subsidiary and AiJiliate Companies
(Unaudited)
Six Months Ended June 30.
Millions of Dollars. Except Ratios 2004 2003
Earnings:
Income before cumulative effect of accounting change....................... $ 329 $ 462
Equity earnings net of distributions......................................................... (26) 38
Total earnings ...................................................................................................... 303 500
Income taxes ........................................................................................................ 123 273
Fixed charges:
Interest expense including amortization of debt discount................... 251 250
Portion of rentals representing an interest factor .................................. 93 77
Total fIXed charges .............................................................................................. 344 327
Earnings available for fIXed charges ................................................................. $ 770 $1,100
I Ratio of earnings to fixed charges.....................................................................
2.2
3.41
.
.
28
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Exhibit 31 (a)
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
I. Richard K. Davidson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Union Pacific Railroad Company;
2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other fmancial information included in this report, fairly
present in all material respects the fmancial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control over fmancial reporting that
occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's
internal control over fmancial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over fmancial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
fmancial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report fmancial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal control over fmancial reporting.
Date:
August 6, 2004
/s/ Richard K. Davidson
Richard K. Davidson
ChaIrman and
Chief Executive Officer
Union Pacific Railroad Company
29
~
.,
Exhibit 31 (b)
.
CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER
I, Robert M. Knight. Jr.. certify that:
1. I have reviewed this quarterly report on Form lO-Q of Union Pacific Railroad Company;
2. Based on my knowledge. this report does not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements made. in light of the circumstances under which such statements were
made. not misleading with respect to the period covered by this report;
3. Based on my knowledge. the financial statements. and other fmancial information included in this report, fairly
present in all material respects the fmancial condition, results of operations and cash flows of the registrant as of. and
for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this .
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control over fmancial reporting that
occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected. or is reasonably likely to materially affect, the registrant's
internal control over fmancial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over fmancial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report fmancial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant's internal control over fmancial reporting.
Date: August 6, 2004
/s/ Robert M. Knight. lr.
Robert M. Knight, Jr.
Executive Vice President - Finance and
Chief Financial Officer
Union Pacific Railroad Company
.
30
to
",
t'
.
EXHIBIT 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350.
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Quarterly Report of Union Pacific Railroad Company (the Company) on
Form lO-Q for the period ending June 30. 2004 as filed with the Securities and Exchange Commission on the date
hereof (the Report). I. Richard K. Davidson. Chairman and Chief Executive Officer of the Company. certify,
pursuant to 18 U.S.C. Section 1350. as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the
best of my knowledge. that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
(2) The information contained in the Report fairly presents. in all material respects, the financial condition
and results of operations of the Company.
By: Is! Richard K. Davidson
Richard K. Davidson
Chairman and
Chief Executive Officer
Union Pacific Railroad Company
August 6, 2004
. A signed original of this written statement required by Section 906 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Quarterly Report of Union Pacific Railroad Company (the Company) on
Form 10-Q for the period ending June 30. 2004 as filed with the Securities and Exchange Commission on the date
hereof (the Report). I. Robert M. Knight. Jr., Executive Vice President - Finance and Chief Financial Officer of the
Company. certify. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. to the best of my knowledge. that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934: and
(2) The information contained in the Report fairly presents. in all material respects. the fmancial condition
and results of operations of the Company.
.
By: Is! Robert M. Knight. Jr.
Robert M. Knight. Jr.
Executive Vice President - Finance and
Chief Financial Officer
Union Pacific Railroad Company
August 6, 2004
A signed original of this written statement required by Section 906 has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
31
7.0 Cost Forms
_s'
Form 7.1A
_:2-
- - - --------~------- ---- ----~----- -----~ --~-- - - ---- - ~-
.
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 7.1A
TECHNICAL AND COST PROPOSAL
Service Component I
Transfer Station Development
Fixed Monthly Service Fee
Transfer Station Development
1. Permitting for Construction
2. Architecture and Engineering
3. Construction Management
4. On-site Demolition and Salvage
5. Site Improvement, Site Preparation, and Utilities
6. Startup Costs
7. Construction Bond
$110.79
$3,136.96
$1,906.78
$86.11
$12,189.30
$332.15
$467.47
$123.02
8. Insurance During Construction
Fixed Transfer Station Facilities
9. Main Building (Tipping, Staff, and Admin. Areas)
10. Public Recyclable Materials Drop-off Area
11. Public Yard Waste Drop-off Area
12. Public Special Waste Drop-off Area/HHW Drop-Off
13. Scale House and Scales
14. Scale Interface to City Network
15. On-site Roadway Improvements
16. Other Infrastructure and Improvements d
17. Pollution Prevention Facilities
18. Fixed CranelTop-load Compaction EqUipment
19. Fixed Rear-load Compaction Equipment
20. Initial Facility Spare Parts Inventory
21. Other Fixed Equipment d
Moderate Risk Waste Facility (Service Component VII)
22. Total MRW Facility Design, Development, Construction e
Subtotal: Development and Fixed Facilities Price (Items 1-22)
Transfer Station Equipment
23. Yard Tractor(s)
$18,858.44
$861.13
$553.58
$531.47
$4,096.23
$86.11
$6,162.91
$0
$775.01
$1,685.35
$6,150.55
$98.41
$1,599.13
$2,607.99
$62,418.89
$61509
Waste Connections of Washinqton, Inc.
Legal Name of Proposer
April 5. 2005
P-1
.
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 7.1A Continuation
TECHNICAL AND COST PROPOSAL
Service Component I
Transfer Station Development
Fixed Monthly Service Fee
24. Loaders/Dozers
25. Mobile Top-load Compaction Equipment
26. Public Yard Waste Drop-Off Containers/Equipment
27. Public Special Waste Drop-Off Containers/Equipment
28. Initial Equipment Spare Parts/Maintenance Supplies
29. Other Equipment d
Subtotal: Equipment Price (Items 23-29)
Other Fixed Monthly Items
30. Financing
31. Performance Bond
32. Insurance After Start-up
33. Other d
$3,383.00
$307.55
$174.07
$174.07
$98.41
$615.09
$5,367.28
$138.40
$73.81
$147.62
$0
$359.83
Subtotal: Other Fixed Monthly Price (Items 30-33)
TOTAL FIXED MONTHLY SERVICE FEE
(Development and Fixed Facilities Price + Equipment Price +
Other Fixed Items Price)
NOTES:
a Required: without exception or modification to the terms and conditions set forth in the RFP, the Service Agreement, and
the Performance Specifications.
C Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
d Attach an itemized descnption to this form.
e Include all costs and profit on design, development, construction, financing and startup of the MRW Facility in accordance
with the Performance Specifications and the Service Agreement.
Attach an itemized description to this form.
$68,146.00
April 5. 2005
P-2
Waste Connections of Washinqton, Inc.
Legal Name of Proposer
.
.
.
FORM 7.1A
TECHNICAL A1'.T)) COST PROPOSAL
OTHER BREAKDOWN
7.1A#
Description
Itemized List F
Quantity Unit Unit Cost
TOTAL
Site Improvement, Prep, Utilities $ 991,000
5 Total excavation/cut - TS 50,000 CY $ 3.32 $ 166,000
5 Fill/compaction - TS 15,000 CY $ 7.20 $ 108,000
5 Structural filVcompaction - TS 5,000 CY $ 10.00 $ 50,000
5 Haul excess material 30,000 CY $ 1.20 $ 36,000
5 Dewatering 1 LS $ 5,000 $ 5,000
5 Potable Water/Fire Main 1 LS $ 134,000 $ 134,000
5 Sanitary Sewer 1 LS $ 75,000 $ 75,000
5 Storm Drainage System 1 LS $ 134,000 $ 134,000
5 Curbs 200 LF $ 40 $ 8,000
5 Striping 1 LS $ 2,000 $ 2,000
5 Site Concrete - sidewalks, etc. 20 CY $ 300 $ 6,000
5 Litter Fence 1,000 LF $ 30 $ 30,000
5 Signage 1 LS $ 5,000 $ 5,000
5 Landscaping 1 LS $ 15,000 $ 15,000
5 Power Supply & distribution 1 LS $ 126,000 $ 126,000
5 Site Lighting 1 LS $ 52,000 $ 52,000
5 2" condUits for City's telecomm 1 LS $ 39,000 $ 39,000
5 firing range berm - not relocated o CY $ 2.40 $
Comments
TOTAL
raise Transfer Bldg & Trailer Parking by
-1 ft to reduce cutlfill
pipe, hydrants, meters, backflow
2 lift stations, pipe
pipe, ditch, culvert
Itemized List D
21 Tarp Station 1 $ 30,000
21 Pit Scales 2 $ 40,000
21 Card Reader System Allowance 1 unit $ 70,000
$ 140,000
29 Sweeper 1 $ 30,000
29 Pick Up Truck 1 $ 20,000
$ 50,000
Included in TS excavation/cut berm is not
relocated; height & west are unchanged,
east slope is regraded
.
.
~.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 7.18
TECHNICAL AND COST PROPOSAL
Service Component I
Transfer Station Operations
Unit Prices a
Rate A C Rate BC Rate CC
< 45,000 tons per 45,001 - 60,000 tons > 60,000 tons per
year per year year
1. Personnel $7.32 $6.01 $5.13
2. Utilities $.39 $.39 $.39
3. Maintenance Supplies $1.84 $1.64 $1.38
4. Contract Services $1.39 $1.23 $1.04
5. Records and Administration $1.04 $.92 $.79
6. Other To be determined and mutually agreed upon with the City of Port Angeles
Total Transfer Station Operations $11.98 $10.19 $8.73
a Applicable only to Acceptable Waste and Acceptable Special Waste received at the transfer station and loaded for
long-haul and disposal in accordance with the Service Agreement. Not applicable to MRW or recyclable materials.
b Required: With no exception or modification to the terms and conditions set forth in the RFP, the Service Agreement,
and the Performance Specifications.
C Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
8. Annual Price Escalation Adjustment Factor (Z1B 1-5)
Z1B1-5 =
% of CPI
70
April 5. 2005
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
P-3
~
Form 7.2
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 7.2
TECHNICAL AND COST PROPOSAL
Service Component II
Acceptable Waste Transport and Disposal Unit Prices a
1. Long-Haul Transportation from Transfer Station (< 45,000 tons per year)
$22.02
2. Long-Haul Transportation from Transfer Station (45,001 to 60,000 tons per year)
$21.33
3. Long-Haul Transportation from Transfer Station (> 60,000 tons per year)
$21.33
4. Solid Waste Disposal
$20.00
.
5. Taxes - Contractor Defined Oregon Department of Environmental Quality $1.25
NOTES
a Applicable only to transport to and from the Port Angeles Transfer Station to the Disposal Site and disposal of
Acceptable Waste in accordance with the Service Agreement. Unit prices are based on tons of waste weighed at the
out bound transfer station scales.
b Required: without exception or modification to the terms and conditions set forth in the RFP, the Service Agreement,
and the Performance Specifications.
C Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
8. Percent of Unit Price subject to CPI adjustment (W21-4)
W21-4 =
68%
(0-100%)
Percent of Unit Price subject to FPI adjustment (X21.3)
10. Annual Fuel Price Escalation Adjustment Factor C'f21-3)
Y21-3 =
80% of FPI
11. Annual Price Escalation Adjustment Factor (Z21-4)
Z2 1-4 =
80% of CPI
.
April 5. 2005
P-4
Waste Connections of Washinqton, Inc.
Legal Name of Proposer
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 7.2A
TECHNICAL AND COST PROPOSAL
Service Component II
Special Waste Transport and Disposal Unit Prices a
1. Contaminated Soil
2. Bulky Waste
3. Asbestos
4. Coal Ash
5. White Goods
6. Self-Haul Tires
7. Processed Wood Waste
8. Treated Timber
9. Dredge Soils
10. Taxes - Contractor Defined Oregon Department of
Environmental Quality
11. Other
,04d
$40.53
$41.33
$142.00
$40.53
$55.00
$81.33
$41.33
$41.33
$40.53
.
$1.25
To be determined and
mutually agreed upon with
the City of Port Angeles
NOTES
a Applicable only to transport to and from the Port Angeles Transfer Station to the Disposal Site and disposal of
Acceptable Special Waste in accordance with the Service Agreement. Unit prices are based on tons of waste
weighed at the out bound transfer station scales.
b
Required: without exception or modification to the terms and conditions set forth in the RFP, the Service Agreement.
and the Performance Specifications.
C Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
12. Percent of Unit Price subject to CPI adjustment 0N2A 1-9)
W2A 1-9 =
68%
(0-100%)
Percent of Unit Price subject to FPI adjustment (X2A 1-9)
14. Annual Fuel Price Escalation Adjustment Factor (Y2A1-S)
Y2A1-9 =
80
% of FPI
15. Annual Price Escalation Adjustment Factor (Z2A 1-9)
Z2A 1-9 =
80
% of CPI
I.
April 5. 2005
P-5
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
Fom17.3
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 7.3
TECHNICAL AND COST PROPOSAL
Service Component III
Blue Mountain Drop Box Operations Unit Prices a
1. Drop Box Operations
2. Insurance
$72.14
$2.03
$.63
3. Performance Bond
4. Other
To be determined and
mutually agreed upon with
the City of Port Angeles
$74.80
Total Blue Mountain Operations Unit Price
NOTES
a Unit prices are based on tons of wasted weighed in at the transfer station facility in accordance with the Service
Agreement.
b Required: without exception or modification to the terms and conditions set forth in the RFP, the Service Agreement,
and the Performance SpeCifications.
C Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
.
6. Annual Price Escalation Adjustment Factor> (Z31-3)
Z3 1-3 =
70
% of CPI
.
April 5. 2005
P-6
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
.
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 7.4
TECHNICAL AND COST PROPOSAL
Service Component IV
Recyclable Collection and Processing Unit Prices
1. Recyclable Materials - Curbside - Tier 1
Bi~Weekly curbside collection within Port Angeles;
processing, transportation, marketing, and sales.
2. Recyclable Materials - Curbside - Tier 2
Bi-Weekly curbside collection within Port Angeles;
processing, transportation, marketing, and sales.
3. Residential Yard Debris - Curbside
Bi-Weekly curbside collection within Port Angeles;
transportation to Port Angeles LandfillfTransfer Station.
4. Residential Yard Debris - Curbside
Monthly curbside collection within Port Angeles;
transportation to Port Angeles LandfillfTransfer Station.
5. Commercial Cardboard - Tier 1
Semi-weekly collection from locations within Port
Angeles; transportation, marketing, and sales.
6. Commercial Cardboard - Tier 2
Semi-weekly collection from locations within Port
Angeles; transportation, marketing, and sales.
7. Recyclable Materials - Public Facilities
Weekly collection from seven City facilities;
transportation, processing, marketing, and sales.
8. Recyclable Materials - School District Facilities
Weekly collection from School District facilities;
transportation, processing, marketing, and sales.
9. Recyclable Materials - Self.Haul Transfer Station
Drop-Off Facility
Collection, processing, transportation, marketing, and
sales of materials received at the transfer station.
10. Recyclable Materials - Self-Haul Blue Mountain
Drop-Off Facility.
Collection, processing, transportation, marketing, and
sales of materials received at the Drop-Off Facility.
11. Recyclable Materials
Collection at 10 community events per year.
$4.62
b Per participating
residence per month
$4.47
b Per participating
residence per month
$5.89
C Per participating
residence per month
$4.03
C Per participating
residence per month
$11.46
d Per participating
customer per month
$1046
d Per participating
customer per month
$0
Per month per
location
$10.46
Per month per
location
$208.33
Per month
$890.85
Per month
$0
No Charge to the City
Aoril 5. 2005
Waste Connections of Washinqton, Inc.
Legal Name of Proposer
P-7
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 7.4 Continuation
TECHNICAL AND COST PROPOSAL
Service Component IV
Recyclable Collection and Processing Unit Prices
12.Percent of Unit Price subject to CPI adjustment (W41-11)
W41-11 = 92%
(0-100%)
13.Percent of Unit Price subject to FPI adjustment (~1-11)
14.Annual Fuel Price Escalation Adjustment Factor (Y41-11)
Y41-11 =
80
% of FPI
.
15.Annual Price Escalation Adjustment Factor (Z41-11) Z41-11 = 70 % of CPI
a Required: With no exception or modification to the terms and conditions set forth in the RFP, the Service Agreement,
and the Performance Specifications.
b Per residence based on containers delivered. Tier 1 unit pricing is for participation from up to 60% of all eligible
customers, Tier 2 unit pricing is for more than 60% of the eligible customers.
C Per residence based on carts delivered.
d Per location based on containers delivered. Tier 1 unit pricing is for participation from up to 60% of all eligible
customers, Tier 2 unit pricing is for more than 60% of the eligible customers.
e Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
.
April 5. 2005
P-8
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.'
FORM 7.5
TECHNICAL AND COST PROPOSAL
Service Component V
Co-Composting Operations Unit Prices
1. Personnel
2. Utilities
3. Maintenance Supplies
4. Contract Services
5. Records and Administration
6. Insurance
7. Performance Bond
8. Equipment (contractor Provided)
9. Other
.
Total Co-Composting Operations Unit Price
NOTES
$4.15
$3.19
$1.00
$.75
$13.06
To be determined and
mutually agreed upon
with the City of Port
Angeles
$63.55
a Required: without exception or modification to the terms and conditions set forth in the RFP, the Service Agreement,
and the Performance Specifications.
b Inclusive of all contractor incurred taxes and fees as defined in the Performance Specifications.
11. Annual Price Escalation Adjustment Factora (Zs 1-8)
ZS1-8 =
70
% of CPI
.
April 5. 2005
P-9
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
;I
il
;/
I/"
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 7.6A
TECHNICAL AND COST PROPOSAL
Service Component VI
Moderate-Risk Waste Transport and Disposal ale
1. Oil - based paint Gallon $6.40
2. Paint related waste Gallon $10.20
3. Latex Paint (disposal) Gallon $5.20
4. Latex Paint (recycle) Gallon $6.60
5. Flammable Liquid Gallon $5.60
6. Pesticides Pound $2.58
7. Aerosols - Flammable Pound $2.92
8. Aerosols - Pesticides Pound $3.00
9. Acids and Alkalines Pound $2.18
10. Penta Pound $2.58
11. Clordane Pound $2.58
. 12. Flammable Solids Pound $4.80
13. Oxidizers Pound $2.62
14. Organic Peroxides Pound $4.80
15. Other To be determined and mutually
agreed upon with the City of Port
Angeles
Moderate-Risk Waste Operations b
16. Hourly Rate $35.72/ hr
NOTES
a Applicable only to transport and disposal of Acceptable Moderate-Risk Waste in accordance with the Service
Agreement. Unit prices are based on fully packed containers identified under packing methods. Unit prices
are based on waste weighed out of the transfer station facIlity.
b Applicable only to handling of Acceptable Moderate-Risk Waste at the MRWF in accordance with the Service
Agreement. Hourly rates are for on-site operations based on a minimum of 5 hours per day, 2 days per week.
C Cost proposal shall reflect all MRW and special waste recycling and reuse revenues collected by the
contractor as part of MRW and special waste handling and disposal.
d Required: without exception or modification to the terms and conditions set forth in the RFP, the Service
Agreement, and the Performance Specifications.
e Inclusive of all contractor defined taxes and utilities.
'e
17 Annual Price Escalation Adjustment F actord (Zs 1-
16)
Zsl-16 =
70
% of CPI
April 5. 2005
P-10
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 7.68
TECHNICAL AND COST PROPOSAL
Service Component VI
Moderate-Risk Waste Packing Method
1.
2.
3. Latex Paint (disposal)
4. Latex Paint (recycle)
5. Flammable Liquid
6. Pesticides
7. Aerosols - Flammable
8. Aerosols - Pesticides
9. ACids and Alkalines
10. Penta
11. Clordane
12. Flammable Solids
. 13. OXidizers
14. Organic Peroxides
15. Other
Bulk
Loose
Bulk
Loose
Bulk
Labpack
Loose
Loose
Labpack
Labpack
Labpack
Loose
Labpack
Labpack
To be determined and mutually agreed upon with the City of Port Angeles
.
April 5. 2005
P-11
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
Exhibit B
~
.
.
Exhibit 8
Performance Specifications
I
APPENDIX TITLE SECTIONS PAGE
1. Transfer Station Project Development 8.1-1
8.1 Transfer Station 2. Transfer Station Performance
Specifications 8.1-14
3. Waste Transport 8.2-1
Waste Transport And 4. Tractor-Trailer Combinations
8.2 8.2-5
Disposal 5. Waste Disposal
8.2-6
6. 81ue Mountain Project Description 8.3-1
8.3 81ue Mountain Drop- 7. 81ue Mountain Performance Specifications
80x Operations
8.3-8
8. Recycling Project Description 8.4-1
8.4 Recyclable Collection 9. Recycling Performance Specifications
And Processing
8.4-6
10. Co-Composting Project Description 8.5-1
8.5 Co-Composting 11. Co-Composting Performance
Operations
Specifications 8.5-5
12. Moderate-Risk Waste Project 8.6-1
Development
8.6 Moderate-Risk Waste 8.6-8
13. Moderate-Risk Waste Performance
Specifications
April 5, 2005
Transfer Station
Appendix 8.1
Apnl 5, 2005
.~
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.
.
.
TABLE OF CONTENTS
1. TRANSFER STATION PROJECT DEVELOPMENT ...............................................1
1.1 INTRODUCTION AND PROJECT SCHEDULE ............................................ 1
1.2 PROJECT DEVELOPMENT PLAN ............................................................... 3
1.2.1 Scheduling of Permitting and Construction Activities.......................... 3
1.2.2 Staffing............ .............. ............... .......................... ..... ....................... 4
1.2.3 Project Status Reporting Requirements..............................................4
1.2.4 Contingency Plan for Delays or Early Landfill Closure........................ 5
1.3 FACILITY SITING... ......... .................... ...... ........................ ..... .......... ............. 5
1.4 PERMITTING ............. .......... ...... ........ ...... ........ ....................... ...................... 5
1.5 PUBLIC INVOLVEMENT AND INFORMATION ............................................ 6
1.6 TRANSFER STATION DESiGN.... .... ..... ............. ......... ........... .......... ..... ....... 6
1.6.1 Requirements for Design Phase... .............. ....... ..... ..... ........... ............ 6
1.6.2 Submission, Review, and Approval of Design Documents .................7
1.6.3 Contractor Changes to Facility Design Specifications ........................ 9
1.7 FACILITY CONSTRUCTION AND STARTUP ...............................................9
1.7.1 Commencement of Construction ........................................................9
1.7.2 Subcontractors............................. ......... ................... ..... ..................... 9
1.7.3 Staffing......... ........................... ............. ........................ ............ ..........9
1.7.4 Facility Site Preparation.................................................................... 10
1.7.5 Procurement of Equipment, Components, and Services ..................10
1.7.6 Preliminary Operations Plan ............... .................. ....... ........ ............. 10
1.7.7 , Completion of Construction ..............................................................11
1.7.8 Demolition. ................. ......... ......... ....... ................. ......... ............ ........ 11
1.7.9 Startup Acceptance Testing..... ........... ................. ........ ..................... 12
1.7.10 13Commercial Operations ................................................................ 13
2. TRANSFER STATION PERFORMANCE SPECIFICATIONS ...............................14
2.1 FUNCTIONAL REQU IREMENTS.. ..... ..... ............ .................. ...................... 14
2.1.1 General Waste Receiving and Transfer Requirements..................... 14
2.1.2 Compatibility with City Refuse Collection and Disposal Operations . 15
2.1.3 Management of Yard Waste.... ....... ....... ....... ................ .................... 15
2.1.4 Separate Public Drop-Off Recycling Facility .....................................15
2.1.5 Drop-off for HHW.. ......... .......... ........... ........ .................. .................... 16
2.1.6 Transfer Technology................. ........... ....................... ....... ............... 17
2.1.7 Special Wastes......................... ........... .......................... ............. ...... 17
2.1.8 Public Information Area .................................................................... 17
City of Port Angeles
April 5, 2005
TABLE OF CONTENTS (Continued)
.
2.1.9 Contractor's Office................................ ............................................ 17
2.2 DESIGN CRITERIA............... ....... ................................................. .............. 17
2.2.1 Operational Areas a nd Site Size..... ......... ............... ........... ........ ....... 17
2.2.2 Design Life and Design Capacity...................................................... 18
2.2.3 Transfer Station Building .................................................................. 19
2.2.4 Waste Transfer Facilities ........ ........... ........................ ........... ............ 20
2.2.5 Waste Compaction...... ...... .................... ................. ........ ..................20
2.2.6 Waste Storage Requirements........ ......................... ..........................21
2.2.7 Scales and Scale House........... ..:... ......................... ........... .............. 21
2.2.8 Site Access and Road Improvements...............................................22
2.2.9 Noise, Odor Control, and Mitigation..................................................23
2.2.10 Dust, Litter, and Vector Control... .......... ............. .......... ....................23
2.2.11 Environmental Control...................................................................... 23
2.2.12 Aesthetic Design and Landscaping...................................................24
2.2.13 Safety Planning and Engineering ..................................................... 24
2.2.14 Utilities ... ........ ............. ............ ............. .................... .............. ......... 24
2.2.15 Security... .................... ........................................................... .......... 25
2.2.16 Taxes ... .................... ......................... ................ ..... ............ ...........25
2.3 FACILITY MANAGEMENT .... ..................... ....... ............... ................ ...........25 .
2.3.1 Data Collection, Billing, and Reporting Requirements ...................... 25
2.3.2 Public Information ........................... .............................. .................... 25
2.3.3 Staffing.... ..... ............. ............................... ............................ ............25
2.3.4 Safety and Emergency Response Training ......................................26
2.4 FACILITY OPERATIONS...... ............... ...... ........... ............ .......... ................ 27
2.4.1 General...... .................. ............ ........ ........................ ...... ...................27
2.4.2 Days and Hours of Operations .........................................................28
2.4.3 Scale Operations........................ ..... ........................................... ...... 28
2.4.4 Final Operations Plan....................................................................... 29
2.4.5 Self-haul and Commercial Vehicles .................................................. 31
2.4.6 Waste Transfer ................................ ............ ....................... .............. 31
2.4.7 Unacceptable Waste........................ ........................ ............ ............. 31
2.5 FACILITY MAINTENANCE......................... ............ ....................... .............. 32
2.5.1 General.................................... ............. ....... ....................... .............. 32
2.5.2 Buildings................ .......... ....... 0 0...00... ..... 0.. 0 0 ..... 0......... ..... 0 0.........00.....32
2.5.3 Scales... 0...................... 0 0.. 0 ................ ........ 0 0 ............ 0...0.. 0 0... ....... 0 0 0 0... 32
2.5.4 Roads and Pavements.... ......... 0.000... .................. 0...... 0..... ..... 0 ...........32
2.5.5 Cleaning and Janitorial Services...... ........... .......... ........... ........ ......... 33
City of Port Angeles
ii
April 5, 2005
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TABLE OF CONTENTS Continued)
2.5.6 Landscape Maintenance...................... ......... ...... .... .................... ...... 33
2.6 OWNERSHIP OF EQUIPMENT ....................... ...... .......... .............. ....... ...... 33
2.7 MEASUREMENT AND PAyMENT....... ....................................................... 34
LIST OF TABLES
8.1-1. PROJECT DEVELOPMENT SCHEDULE ..........................................................32
8.1-2. PROJECT CONSTRUCTION SCHEDULE ........................................................ 32
City of Port Angeles
iii
April 5, 2005
ACRONYMS - DESCRIPTION
CCEHD
MRW
MRWF
MSW
sOSHA
PALF
SEPA
SWAC
WISHA
Clallam County Environmental Health Department
Moderate-Risk Waste
Moderate-Risk Waste Facility
Municipal Solid Waste
Occupational Safety and Health Administration
Port Angeles Landfill
State Environmental Policy Act
Solid Waste Advisory Committee
Washington Industrial Safety and Health Act
City of Port Angeles
iv
April 5, 2005
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1. TRANSFER STATION PROJECT DEVELOPMENT
1.1 INTRODUCTION AND PROJECT SCHEDULE
The Contractor shall be responsible for all development activities necessary for
completion and Startup of a new solid waste Transfer Station as described in the
Performance Specifications, the RFP, and the Service Agreement. In the event of any
conflict among the preceding documents, the most burdensome Contractor duty or
obligation shall prevail, unless otherwise approved by the City's Authorized
Representative. The work conducted during Transfer Station development shall lead to
a complete and fully operational Facility that is integrated with other site activities.
Project development as described in this section includes the following:
. A Project Development Plan, as described in Section 1.2 of the Performance
Specifications, completed following the execution of the Service Agreement.
. Facility development, design development, construction documents, value
engineering (required no later than 50% design development), supervision,
management, quality assurance, inspection, and examination, and Startup of the
Transfer Station and other supporting infrastructure identified in the Performance
Specifications.
. . Completion of Acceptance Testing.
. Documentation for Facility design, procurement, construction, operations and
maintenance. The Contractor shall provide documentation as required by all
applicable codes, standards, statutes or regulations, and to support permit
applications and environmental impact statements.
. Obtaining all required operating and construction permits and licenses.
. Facility inspections and re-inspections.
. Participation and support of public involvement and information activities during
Project development, as necessary.
. All costs including bonds, insurance, and other fees (including direct, indirect and
incidental) related to the Contractor's work.
. Receiving, storing, handling, installing, testing, and Startup of all equipment.
. Contingency plan for Transfer Station development delays or early closure of the
Port Angeles Landfill (PALF) as described in Section 1.2.4.
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City of Port Angeles
8.1-1
April 5, 2005
Tables B.1-1 and 8.1-2 summarize the Transfer Station and MRWF Project .
Development and Construction Schedules including Contractor deliverables. The
Contractor's Authorized Representative may request modifications to the Project
Development and Constmction Schedules. All Contractor requests to modify the
schedules shall be in writing to the City's Authorized Representative. Upon consultation
with the Contractor's Authorized Representative, the City's Authorized Representative in
its reasonable discretion may modify the schedules.
Table 8.1-1. Project Development Schedule
Deliverables
1. Basis of Design Report1
2. City Approval of Basis of Design Report
3. 50 Percent Design Completion
4. City Review of 50 Percent Design
5. Project Development Plan
6. City Approval of Project Development Plan
7. 95 Percent Design Completion and Construction Permit
Application
8. City Review of 95 Percent Design
9. Submit building permit applications
10. 100% Design and Construction Documents (bid package)
11. Building permits received
12. City Approval of 100% Design and Construction
Documents
Completion Dates
April 20, 2005
April 29, 2005
May 6, 2005
May 20,2005
May 27, 2005
June 10,2005
July 26, 2005
August 9, 2005
August 15, 2005
September 8, 2005
September 16, 2005
September 22, 2005
.
1The Basis of Design Report shall be based on the Contractor's conceptual design
included in the Technical and Cost Proposal and include identification of all applicable
construction codes and design criteria.
.
CIty of Port Angeles
8.1-2
April 5, 2005
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Table 8.1-2. Project Construction Schedule
Deliverables
Completion Dates
October 3, 2005
March 24, 2006
June 7,2006
July 3, 2006
1. Construction Start
2. Preliminary Operations Plan
3. Construction Complete
4. Commence Startup and Acceptance Testing, Provide Final
Operations Plan and As-Builts
5. City Approval of Acceptance Testing, Final Operations Plan,
and As-Builts
6. Commercial Operations
7. Construction Schedule Contingency (Days)
September 29,
2006
October 2, 2006
90
1.2 PROJECT DEVELOPMENT PLAN
The Contractor's Authorized Representative shall submit a Project Development Plan
for the City's Authorized Representative review and approval including but not limited to
the Project Development and Construction Schedule, staffing, status reporting and
Contingency Plans through the start of full-scale operations. The Contractor's
Authorized Representative may request changes and modifications to the Project
Development Plan. The City's Authorized Representative in its reasonable discretion
shall approve the Project Development Plan prior to the Contractor initiating design
activities. The City's Authorized Representative will approve plans based on their
conformance with industry standards, City building requirements, the Service
Agreement, and the Performance Specifications.
The Contractor's Project Development Plan must include the items identified in this
section.
1.2.1 Scheduling of Permitting and Construction Activities
The Contractor's Authorized Representative shall submit a detailed schedule for all
Project Development and Construction activities through Startup and Acceptance
Testing. In accordance with the Project Development and Construction Schedules, the
Contractor's detailed Project Construction Schedule shall include, at a minimum, the
expected completion date of the key tasks for the design, construction, Startup, and
testing phases of the Project, including design reviews and approvals by the City's
Authorized Representative. The Contractor shall ensure Startup and Acceptance
Testing will commence in accordance with the Project Construction Schedule.
City of Port Angeles
8.1-3
April 5, 2005
The Contractor's detailed Project Construction Schedule shall be updated monthly as a
part of the monthly progress report as required by Section 1.2.3 of the Performance
Specifications.
.
1.2.2 Staffing
The Contractor shall establish a project management organization for Project
development. The Contractor's project manager shall be directly accountable to the
City's Authorized Representative for the Contractor's performance and shall be the
prime contact for all discussions with the City's Authorized Representative.
The Contractor shall establish an effective subcontract and construction management
function to ensure subcontracts and equipment orders are made on schedule, delivery
of equipment and material orders on schedule, and effective management of all
construction activities both on-site and off-site.
In addition to the project manager, the Contractor's key personnel shall be identified in
the management plan. Replacement of key personnel shall be subject to advance
approval by the City's Authorized Representative, whose approval shall not be
unreasonably withheld.
The Contractor shall make every attempt to retain existing City solid waste employees
in accordance with the personnel transition plan provided in the Contractor's Technical
and Cost Proposal. .
1.2.3 Project Status Reporting Requirements
The Contractor shall provide monthly progress reports to the City's Authorized
Representative no later than 30 calendar days after the close of the previous calendar
month. This report shall present:
. The Contractor's assessment of the Project's progress during the previous month
compared to the Contractor's detailed Project Construction Schedule.
. Any significant problems that may have arisen during the reporting period, with a
discussion of the possible effects of these problems on the Contractor's
compliance with the Performance Specifications and plans for correcting the
problems.
. Any proposed delays to the Contractor's detailed Project Construction Schedule.
. Planned activities for the next monthly period.
The Contractor's Authorized Representative shall also be available for weekly Project
review meetings with the City's Authorized Representative.
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City of Port Angeles
8.1-4
April 5, 2005
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.
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The Contractor shall provide the City's Authorized Representative and the City's
designated representatives full and complete access to the Project site at anytime.
1.2.4 Contingency Plan for Delays or Early Landfill Closure
The Contractor's Project Development Plan shall contain a Preliminary Operations Plan
including a Contingency Plan, for backup methods that will be used if the Transfer
Station and associated long-haul Transportation/Disposal facilities are not operational
prior to the Startup and Acceptance Testing date as specified in the Project
Construction Schedule. The Project Development Plan shall describe proposed
methods for temporary storage, intermodal loading (if applicable), long-haul transfer,
and Disposal of waste until the new Transfer Station and long-haul
Transportation/Disposal facilities become fully operational.
1.3 FACILITY SITING
The Contractor shall construct all new facilities within the area designated in
accordance with its Technical and Cost Proposal. The Contractor shall coordinate their
construction with other construction or operations that may be occurring at the site in a
manner that minimizes impacts to other contractors or operators (e.g., water treatment
plant).
Within 60 days of the execution of the Agreement, the City's Authorized Representative
shall provide the Contractor a site topographic survey of the Transfer Station
development area to determine existing conditions. If needed due to City excavation for
daily landfill cover, the City shall update the site topographic survey prior to the
construction start date specified in the Project Construction Schedule. The City shall be
responsible for relocation of the berm to accommodate the Contractor's design for the
location of the new scale house. The Contractor is responsible for all design studies,
assessments, and engineering calculations required to prepare the site for construction.
The City shall provide existing information regarding site conditions, including but not
limited to the grading plan for the City future water treatment plant, but provides no
determination regarding soil or ground conditions within the designated area. Site
operations and other construction may change the conditions of the ground between the
date of the pre-proposal conference and the start of construction. The Contractor shall
be responsible for recognizing and accommodating any changes that may occur.
The Contractor shall receive written authorization from the City's Authorized
Representative before designing or developing facilities outside the designated area.
1.4 PERMITTING
The Contractor shall be responsible for preparing applications for all federal, state, and
local construction permits, licenses and other applicable approvals including up to thirty
hours of architecture and engineering services after completing applications. All
City of Port Angeles
B.1.5
April 5, 2005
construction permit applications shall be submitted to the City's Authorized .
Representative for review. The City shall be designated as the permit applicant, and
shall be responsible for submitting applications, paying fees and providing all
information r,equired by regulatory agencies for review processes and approvals. The
Contractor's Authorized Representative shall promptly notify the City's Authorized
Representative of any delays in the Project Construction Schedule caused by
Contractor delays in preparing applications for construction permits.
The Contractor shall assume full responsibility for the identification of any and all
required regulatory approvals. The Contractor's Authorized Representative shall submit
a list of all anticipated approvals required as part of their Project Development Plan.
All mitigation measures, both on-site and off-site, required by the State Environmental
Policy Act (SEPA) or other approvals or permits shall be the responsibility of the City,
and at the City's expense.
The City shall obtain a Solid Waste Handling Facility Permit from the Clallam County
Environmental Health Department (CCEHD) before construction begins. Final approval
of permit(s) is by CCEHD.
A SEPA Environmental Checklist shall be completed by the City.
By selecting the Contractor to perform this Service Component, the City does not
guarantee that any permit will be secured from the City, County, federal, state or any
other local government agencies.
.
1.5 PUBLIC INVOLVEMENT AND INFORMATION
The Contractor shall support the City, County, and Solid Waste Advisory Committee
(SWAC) in their efforts and obligations to inform the community of Project activities.
The Contractor's Authorized Representative shall work with the City's Authorized
Representative in a timely manner to promptly provide information when requested.
1.6 TRANSFER STATION DESIGN
1.6.1 Requirements for Design Phase
The Contractor shall supply all materials and resources to complete the design phase in
accordance with all applicable requirements set forth in the Performance Specifications,
the RFP, and the Service Agreement. The design shall be consistent with the
conceptual design included in the Contractor's Technical and Cost Proposal.
The Contractor shall verify to its own satisfaction any information provided by the City
concerning the Facility design, and shall obtain any and all other information necessary
to design and construct the Transfer Station. The Contractor shall be solely responsible
.
City of Port Angeles
8.1-6
April 5, 2005
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for providing all surface or subsurface information affecting the design. This shall
include, butl not be limited to, topographical surveys, soil test borings, geotechnical,
hydrological, utility, and other applicable data. The Contractor shall match the contours
of the grading plan for the new City water treatment plant in its Technical and Cost
Proposal and grading plan for the solid waste processing Facility. The Contractor's
grading plan shall minimize the use of retaining walls, and allow for a smooth grade
transition and proper drainage for both sites.
The Contractor shall have the sole responsibility for design of the Facility such that it
conforms to the Performance Specifications and local, state, and federal requirements
for developing solid waste processing facilities. The Contractor shall perform all design
work in accordance with Applicable Law, established engineering principles and
practices, and applicable code requirements.
1.6.2 Submission, Review, and Approval of Design Documents
During design of the facilities, the Contractor's Authorized Representative shall make
available for the City's Authorized Representative review and approval, all plans,
drawings, calculations, construction materials, specifications, schedules, and other
documents related to the design and construction of the facilities. These documents
shall be provided with the 50 and 95% percent design, and 100% design submittals as
provided in Table 8.1-1. The City's Authorized Representative will have final approval
authority for the design and construction documents. The design shall be based on the
Contractor's conceptual design. The design shall evaluate priorities, assumptions, if
spaces or functions can be shared or co-located, if Facility size is adequate, and to
optimize use of the site. The Contractor's Authorized Representative shall also provide
as-builts in accordance with the Project Construction Schedule. The City's Authorized
Representative review of the reference materials will be limited to determining whether
the design conforms to the requirements of the Performance Specifications and the
Service Agreement. The reviews and any comments made by the City's Authorized
Representative on the plans, specifications, drawings, schedules, and the like, shall not
relieve the Contractor from its obligations under the Service Agreement, and those
representations made in its Technical and Cost Proposal. The Contractor shall not
commence construction or operations until the City's Authorized Representative
approves the design and construction documents, and the Preliminary Operations Plan.
The Contractor's Authorized Representative shall submit for the City's Authorized
Representative review and approval, at a minimum, the following design documents:
. General Facility site layout (scale not smaller than 1 inch equals 50 feet).
. A site plan including a calculation of the excavation/cut, fill/compaction, and haul
excess material quantities based on the City provided site topographic survey in
accordance with the Technical and Cost Proposal. The site plan shall identify
City of Port Angeles
8.1-7
April 5, 2005
where excess materials shall be stored on-site by the Contractor at the time of .'
excavation.
. Building Plans: floor plans, sections, elevations, interior and exterior details,
finish schedules, and specifications.
. Electrical and mechanical drawings.
. Grading drainage utility drawings.
. On-site roadway improvements.
. General equipment arrangements and elevation drawings.
. Traffic control/traffic flow.
. Control system schematic and logic.
. Major equipment specifications.
. Status of construction permits.
. Status of equipment procurement.
. Assumptions.
.
. Materials to be used in construction, including brand name or model number,
copies of manufacturer's descriptive literature, or catalog cut-sheets.
Within 15 days of receipt of all review documents, the City's Authorized Representative
will meet with the Contractor's Authorized Representative to discuss the documents,
and identify any required changes. In the event that the City's Authorized
Representative design review determines that the Facility design, construction
documents, or Preliminary Operations Plan are not consistent with the Technical and
Cost Proposal, the Performance Specifications, or the Service Agreement, the City's
Authorized Representative, will provide the Contractor's Authorized Representative with
a written notice of any required changes. The Contractor's Authorized Representative
shall promptly correct any changes required by the City's Authorized Representative.
The City's Authorized Representative review and approval of these design materials will
not constitute a determination as to the sufficiency or adequacy of the design plans,
specifications, or engineering or construction judgments made by the Contractor, nor
shall the review act as a waiver of liability or relieve the Contractor of any obligation to
design, construct, and operate the Facility in a manner which conforms to the
Performance Specifications and the Service Agreement.
.
City of Port Angeles
B.1-8
April 5, 2005
.
Nothing in this section shall excuse the Contractor from proceeding with performance of
its obligations under the Service Agreement.
1.6.3 Modifications to Facility Design Specifications
The Contractor's Authorized Representative or the City's Authorized Representative
may propose modifications to the Performance Specifications and the City's Authorized
Representative's approved design and construction documents. All modifications shall
be made in accordance with the Service Agreement.
1.7 FACILITY CONSTRUCTION AND STARTUP
1.7.1 Commencement of Construction
.
Construction may commence when the Contractor has obtained the necessary
construction permits and the City's Authorized Representative has approved the design
and construction documents and the Preliminary Operations Plan. The Contractor shall
furnish or procure all services, labor, equipment, and materials necessary to construct
and complete the Facility in its entirety, and in full working order in accordance with the
design and construction documents, laws, the Performance Specifications and the
Service Agreement.
The Contractor is required to the extent applicable, to procure Labor and Industries
permits LI 700-7 and LI 700-29 and abide by the requirements thereof. Copies of
"Statement of Intent to Pay Prevailing Wages" and "Affidavit of Wages Paid" shall be
submitted to the City Clerk and Department of Labor and Industries prior to City
Acceptance Testing.
1.7.2 Subcontractors
Upon execution of any subcontract between the Contractor and a Subcontractor for any
substantial work related to the Project, the Contractor's Authorized Representative shall
inform the City's Authorized Representative of the name of that Subcontractor and the
nature of the work to be performed. The Contractor shall independently verify that all
proposed Subcontractors are fully licensed for their intended role in the Project. The
Contractor will be responsible for ensuring that all Subcontractors are provided with
complete information regarding all aspects of the specifications for their part of the
Project. The City's Authorized Representative reserves the right to disapprove any
Subcontractor.
1.7.3 Staffing
The Contractor is encouraged to employ local Subcontractors during the Facility
construction period. The Contractor shall maintain personnel at the Facility with full
authority to make all operating decisions related to Facility construction and Startup
.
City of Port Angeles
8.1-9
April 5, 2005
during normal working hours, and shall have key maintenance and operating personnel .
on-call at all other times.
1.7.4 Facility Site Preparation
The Contractor shall be responsible for site preparation. All permit applications for site
preparation shall be the responsibility of the Contractor. The Contractor may Dispose of
unsuitable fill material excavated from the Transfer Station site at the Port Angeles
Landfill at no charge. Site preparation by the Contractor includes but is not limited to:
. Site grading.
· Extending and connecting Utilities, including stormwater, sanitary sewer, potable
water, temporary provision of bottled water for potable purposes, electrical, and
telecommunications.
· Connecting the Co-Composting Facility's leachate collection system to the
sanitary sewer.
· Security improvements in accordance with the Contractor's Technical and Cost
Proposal.
. Improvement of on-site roads, including overlay, widening, and drainage controls
to accommodate the change in the on-site traffic circulation resulting from the .
Transfer Station development. The Contractor shall improve on-site roadways in
a manner that provides access to the Transfer Station, scale house, Co-
Composting Facility, Moderate-Risk Waste Facility (MRWF), and other site
facilities, and maintains existing drainage and stormwater controls.
1.7.5 Procurement of Equipment, Components, and Services
The Contractor shall manage the procurement of equipment, components, and services,
and expedite the procurement as necessary to assure fulfillment of all delivery
schedules for subcontracted or purchased equipment and material in accordance with
the Project Construction Schedule. The City will not be responsible for materials
delivered to the site, if the Contractor or Subcontractor fails to perform under the terms
of the Service Agreement.
1.7.6 Preliminary Operations Plan
The Contractor's Authorized Representative shall prepare and submit a Preliminary
Operations Plan in accordance with the Project Construction Schedule for the City's
Authorized Representative review describing how they will comply with the Performance
Specifications. The Preliminary Operations Plan shall describe the sequence of
operations and testing to be performed during Startup and Acceptance Testing. The
Preliminary Operations Plan will also describe the schedule for Acceptable Waste
.
CIty of Port Angeles
B.1-10
Apnl 5, 2005
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deliveries; phasing in of commercial and self-haul waste streams; plans for screening
and . handlin9 of Unacceptable Waste; plans for Acceptable HHW and Acceptable
Special Waste receipt and handling. The Preliminary Operations Plan will describe
procedures for conducting Startup and commercial operations in accordance with the
Service Agreement. In accordance with the Personnel Transition Plan requirements of
the RFP, the Contractor shall provide a list of all City personnel who will be provided the
first right of refusal for employment openings or will be adversely affected under the
Service Agreement. The Contractor's Authorized Representative shall incorporate any
of the City's Authorized Representative's required changes to the Preliminary
Operations Plan and submit a Final Operations Plan in accordance with the Project
Construction Schedule.
1.7.7 Completion of Construction
. Upon notification by the Contractor's Authorized Representative, the City's
Authorized Representative shall inspect the Facility for completion and
conformance to the City's Authorized Representative's approved design and
construction documents, and any City approved modifications. Prior to Startup,
the Contractor's Authorized Representative shall provide the City's Authorized
Representative with as-built documentation for all Contractor-constructed
features. The as-built site plan shall include a calculation of the actual
excavation/cut, fill/compaction, and haul excess material quantities based on the
City provided site topographic survey.
The City's Authorized Representative will review the as-builts and, as appropriate, notify
the Contractor's Authorized Representative that construction is approved.
1.7.8 Demolition
The existing administrative office and Z-wall including paved area shall not be
demolished. Upon the City's Authorized Representative's written request, the
Contractor shall raze the following site features:
· The existing scale house and scales and Dispose of said materials at the Port
Angeles Landfill at no Disposal Charge to the Contractor.
. The existing equipment shed.
Demolition shall include complete removal of designated features, capping of all Utilities
in accordance with the construction/demolition permit, and restoration of disturbed
areas. The Contractor shall be responsible for removing the scales from the existing
scale house and for the salvage and/or Disposal of demolition materials. The
Contractor shall present demolition and site restoration plans as part of their design
submittals. The Contractor shall restore the on-site roadway upon demolition of the
scale house in accordance with the Performance Specifications.
CIty of Port Angeles
8.1-11
April 5, 2005
1.7.9 Startup Acceptance Testing
Startup and Acceptance Testing shall commence when the City's Authorized
Representative has determined that Transfer Station construction is complete and all
necessary permits, regulatory approvals, and all other Project permit requirements are
satisfied, all equipment is installed, all utility installations are complete, personnel have
been trained in Startup and commercial operations procedures, the Final Operations
Plan is approved, and safety and emergency procedures have been established.
Startup shall commence in accordance with the Project Construction Schedule and
extend for a period not to exceed 90 days, during which time the Contractor shall
conduct Acceptance Testing to demonstrate the Facility meets the requirements of the
Performance Specifications and the Service Agreement. The Contractor shall satisfy
the City's Authorized Representative that the Transfer Station is fully operable, and
capable of processing 100 percent of the waste streams.
Startup and Acceptance Testing shall include but is not limited to the following activities:
. Adherence to the Startup procedure and schedule as defined in the Final
Operations Plan.
. Training of all personnel required for commercial operations.
. Checking, adjustment, repair, and/or replacement of all mechanical, electrical,
and data management equipment and Utilities as necessary to satisfy the
Performance Specifications.
. Modification of Transfer Station operations to satisfy requirements of the Service
Agreement.
. Conducting Acceptance Testing necessary to demonstrate adherence to the
requirements within the Service Agreement. The Contractor shall record data
related to the Acceptance Testing and provide the City's Authorized
Representative with a written report documenting tests.
. Revision of the Final Operations Plan to reflect changes to equipment and
operations made during Startup and Acceptance Testing as approved by the
City's Authorized Representative, County, and DOE.
During Startup and Acceptance Testing, the City's Authorized Representative will direct
an increasingly greater portion of the waste stream to the Transfer Station in order to
assess the ability of the Facility and Contractor to screen, accept, handle, and process
the designated waste streams. The City's Authorized Representative will have the sole
discretion to determine the quantity of waste directed to the Transfer Station and MRWF
during Acceptance Testing. At the time the City's Authorized Representative
determines the Facility and Contractor meet the requirements of the Performance
CIty of Port Angeles
April 5, 2005
8.1-12
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Specifications and are capable of fully servicing the designated waste streams, the
City's Authorized Representative may continue to direct portions of the waste stream to
the existing Landfill cell, until such time the City's Authorized Representative determines
the Landfill will no longer accept waste.
The Contractor shall provide all personnel, services, Utilities, equipment, supplies, and
other elements to carry out and complete the Startup and Acceptance Testing. The
Facility, excluding the scale house, shall be operated by employees of the Contractor,
who are intended to be regularly employed by the Contractor during commercial
operations. The City's Authorized Representative and its designated representatives
shall have access to the Transfer Station and will observe the Acceptance Testing.
1.7.10 Commercial Operations
The City's Authorized Representative will authorize the Contractor to begin commercial
operations when the City's Authorized Representative, acting reasonably, determines
that the Contractor has successfully completed Acceptance Testing, and the
Contractor's Authorized Representative has submitted and the City's Authorized
Representative has approved the Final Operations Plan.
City of Port Angeles
8.1-13
April 5, 2005
2. TRANSFER STATION PERFORMANCE SPECIFICATIONS
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2.1 FUNCTIONAL REQUIREMENTS
2.1.1 General Waste Receiving and Transfer Requirements
The Transfer Station shall be designed to optimize the screening, receiving, and
handling of Acceptable Wastes, as defined in the approved Waste Acceptance Policy.
The Contractor shall be responsible for weighing, routing, processing, loading, and
preparing the waste for transfer to a final Disposal Site. Municipal solid waste
generated within the County may be delivered by commercial garbage haulers,
municipal garbage haulers, commercial businesses, and private self-haulers.
Unless otherwise approved by the City's Authorized Representative, HHW and
Recyclable Materials generated by waste reduction programs and programs for
curbside collection of recyclables will not be processed through the Transfer Station.
The Contractor shall provide:
. Computerized weigh system, scales, and scale house Facility capable of
weighing all incoming and outgoing loads of waste directed to the Transfer
Station.
. Management of on-site queuing and traffic for all incoming and outgoing vehicles. .
. The Contractor will direct the Customer to the appropriate area based on waste
type (Recyclable Materials, Acceptable Special Waste, Acceptable Moderate-
Risk Waste, Acceptable Household Hazardous Waste, Yard Waste, Biosolids,
White Goods or Mixed MSW).
. If the Customer has Mixed MSW, the Contractor shall direct the Customer to the
off-loading area, and assist the Customer with off-loading of waste if necessary.
. Screening and diversion of recyclables, Acceptable Moderate-Risk Waste, Yard
Debris, and Acceptable HHW to designated facilities.
. Separate tipping floor areas designated for unloading of commercial collection
vehicles and self-haul vehicles.
. Processing and loading of Municipal Solid Waste and construction, demolition,
and land clearing debris waste into Trailers or containers.
. Separate handling and management of Unacceptable Waste and Acceptable
Special Waste according to the terms of the Service Agreement and the
Performance Specifications.
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City of Port Angeles
B.1-14
April 5, 2005
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. Drop-off recycling facilities as required in the Performance Specifications.
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. All other functions specifically set forth in the Performance Specifications and the
Service Agreement.
The Contractor's Authorized Representative shall annually provide the City's Authorized
Representative the right of first refusal to retain a portion or all of the used motor oil
accepted by the Contractor at the Facility.
2.1.2 Compatibility with City Refuse Collection and Disposal Operations
The Transfer Station shall be designed and operated to maintain full compatibility with
the existing solid waste collection and Disposal operations within the City and the
proposed service area. The Transfer Station shall provide on-site storage space for a
minimum of 15 Trailers or containers-on-chassis (any combination). The Contractor
shall provide and operate all equipment necessary for moving and loading Trailers, such
equipment shall be compatible with the transfer Trailers provided under Service
Component" of the Performance Specifications.
2.1.3 Management of Yard Waste
A separate uncovered paved drop-off area located at the Co-Composting Facility shall
be provided for the diversion and accumulation of Yard Waste arriving at the Facility.
The drop-off area shall be designed and operated so as to prevent the contamination of
this waste by other Acceptable and Unacceptable Wastes.
2.1.4 Separate Public Drop-Off Recycling Facility
The Contractor shall provide a separate uncovered paved drop-off recycling Facility
within the development area for Customer use during operating hours. This Facility
should be located upstream of the scale house but within an observable distance so
that recyclable drop-off materials can be monitored and removed from loads prior to
weighing. Traffic flows to, from, and within the drop-off recycling area shall be separate
from all other traffic patterns and queuing areas at the Transfer Station. At a minimum,
the Facility shall meet the following performance standards:
. Provide adequate vehicle ingress and egress.
. Materials collected will include, at a minimum:
~ Aluminum cans.
~ Tin cans.
~ Green, brown, and clear glass.
City of Port Angeles
8.1-15
Apnl 5, 2005
~ Number 1 and 2 plastics.
~ Newsprint.
~ Cardboard.
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. The Facility will be located on the site so that future expansion of the site can be
easily accommodated, if required.
. Within the drop-off recycling area, site space shall be provided for Customer
parking during unloading, container pick-up, equipment maneuvering, and for the
drop-off containers. Adequate sorting and storage areas shall be provided either
within the drop-off area or on the Transfer Station site property.
2.1.5 Drop-off for HHW
The Contractor shall provide a separate uncovered paved area within the development
area for Drop-Off of Acceptable HHW materials by residential Customers.
The HHW Drop-Off Facility shall be co-located with the Special Waste Drop-Off Facility
and meet the following minimum requirements:
. A collection area, with contaminant and spill control for Acceptable HHW
including auto batteries, used motor oil, and antifreeze. Residents with .
Acceptable MRW shall be directed by the Contractor to the MRWF.
. If additional types of household Hazardous Waste are approved by the City's
Authorized Representative for acceptance the Contractor shall accept such
additional HHW.
. Provide adequate storage for the following categories of waste: used motor oil,
antifreeze, and auto batteries. Containers will typically be 55-gallon drums.
Used motor oil may be stored in 350-gallon tanks.
The Contractor's Operations Plan will include training for HHW.
The Contractor shall be fully responsible for handling, processing, shipping, recycling,
and Disposal of all Acceptable HHW collected at the Facility. Hours open for Customer
use of the Drop-Off Facility shall be Monday through Saturday from 9:00 A.M to 5:00
P.M. The Contractor shall be fully responsible for payment of all costs associated with
handling, processing, shipping, recycling, and Disposal of Acceptable HHW collected at
the Drop-Off Facility.
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City of Port Angeles
B.1-16
April5,2005
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2.1.6 Transfer Technology
The Transfe'r Station shall be designed with a tipping floor for waste unloading by
Commercial Haulers and self-haulers and waste loading into long-haul Trailers. Surge
pits or maceration pits shall not be part of Transfer Station design. The Transfer Station
shall be designed to load wastes into top or rear-loading Trailers. The Transfer Station
shall be designed to allow operation either with or without rear-compaction equipment.
The Contractor shall be responsible for providing compaction equipment in accordance
with its Technical and Cost Proposal.
2.1.7 Special Wastes
The Contractor shall be fully responsible for handling, processing, and Disposal of all
Acceptable Special Waste as specified in the Service Agreement.
The Contractor shall provide a separate uncovered paved areas and facilities for
receiving, handling, and/or transfering Acceptable Special Wastes.
2.1.8 Public Information Area
The Transfer Station shall include an area for posting notices and distributing
information provided by the Contractor and the City to Customers of the Transfer
Station. The public information area shall be prominently visible to Customers, and
shall be readily accessible to all Facility Customers. The public information area shall
be covered and protected from the wind. The City will provide information on tipping
fees, handling policies for Acceptable Special Waste and Acceptable HHW, descriptions
of Acceptable and Unacceptable Waste, summaries of recycling opportunities in the
County, and notices regarding other County solid waste and environmental information
at the public information area.
2.1.9 Contractor's Office
The Contractor will be required to maintain an office at the Transfer Station, which shall
be provided with local telephones and personnel necessary to respond to complaints
and orders for special services or to receive instructions. This office shall be operated
during Transfer Station operating hours or as otherwise directed or approved in writing
by the City's Authorized Representative. The address and telephone number of the
office shall be given to the City's Authorized Representative in writing.
2.2 DESIGN CRITERIA
2.2.1 Operational Areas and Site Size
At a minimum, the Transfer Station shall provide the following operational areas in
conformance with the requirements set forth in the Performance Specifications:
City of Port Angeles
8.1-17
April 5, 2005
. Scale house with inbound and outbound scales with computerized weigh system.
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. Separate on-site queuing areas for commercial garbage vehicles and self-haul
vehicles.
. A fully enclosed building with separate areas for Commercial Hauler and self-
haul tipping.
. Unacceptable Waste handling area.
. Trailer loading and waste compaction area.
. Biosolids shall be directed to the Co-Composting Facility.
. Separate Customer access Drop-Off Facilities for recyclables, Acceptable HHW,
White Goods, bulk metals, Yard Wastes, and tires.
. Trailer storage and staging area.
. Employee and visitor parking area.
. Employee and staff facilities, including office space, meeting area, lunch room,
and restrooms and decontamination area.
. Separate Acceptable Special Waste h~ndling area(s).
.
. Equipment storage and maintenance area.
. Administrative and records management office.
. Temporary storage capacity to accommodate a minimum of two days of
Acceptable Waste (excluding Yard Waste, Biosolids, White Goods, Recyclable
Materials, and Acceptable Moderate-Risk Waste) delivered to the Transfer
Station on the tipping floor.
The Contractor is encouraged to utilize building materials with recycled content where
economically feasible such as steel, cement, concrete, asphalt pavement, wallboard,
and landscaping materials.
2.2.2 Design Life and Design Capacity
The Transfer Station shall have a minimum design life of 30 years and be designed to
easily accommodate expansion of the tipping floor at anytime during the Term of the
Service Agreement. Site size shall be sufficient to allow for future expansion of floor
space and associated expansion needs for traffic circulation, parking, loading of
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City of Port Angeles
8.1-18
April 5, 2005
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Trailers, and changes in compactive method. The Contractor shall design the Transfer
Station using the following ,minimum design criteria:
. A minimum of two new inbound scales (one self-haul, one Commercial Hauler).
. A minimum of two new outbound scales (one self-haul, one Commercial Hauler).
. Annual tickets:
87,000 per year
500 tickets
. Peak day tickets:
. Peak hour tickets:
80 tickets
. Solid waste quantity for Disposal:
60,000 tons per year
190 tons per day
. Equivalent daily average:
(52 weeks per year, six days per week basis)
. Hourly average (actual):
22 tons per hour
. Peak day (estimate):
450 tons per day
116 tons per hour
. Peak hour (estimate):
Daily Disposal ticket information is provided in Appendix'A of the RFP.
The Transfer Station design shall provide for:
. A minimum of two Commercial Hauler (15 feet wide minimum) and eight self-haul
(12 feet wide minimum) vehicle stalls within the Transfer Station.
2.2.3 Transfer Station Building
The Transfer Station shall be designed with a tipping floor for waste unloading by
Customers and waste loading into long-haul Trailers. Surge pits or maceration pits shall
not be part of Transfer Station design.
The building shall be of sufficient size to provide two days storage of waste on the
tipping floor. The floor shall be constructed of reinforced concrete with sufficient
strength to prevent erosion from moving and loading waste.
The building may be constructed of concrete or metal. All overhead doors shall be
sized to prevent damage from trucks and other vehicles. Overhead doors shall have
motorized operators.
City of Port Angeles
8.1-19
April 5, 2005
To minimize buildup of dust within the tipping floor area of the building during operating
hours, a separate ventilation system shall be provided and properly sized. Additionally,
the Contractor shall provide a dust control system at or near the Trailer loading area.
All water generated within the Transfer Station shall be routed to the sanitary sewer
system. Stormwater generated outside of the building shall be routed to the stormwater
system.
2.2.4 Waste Transfer Facilities
The waste transfer facilities shall include one tunnel for top-loading trailers and another
tunnel for one rear-loading compactor, staging area, and Trailer/container storage area.
The loading tunnels and walls shall be reinforced concrete. The size of the tunnels shall
be sufficient to move the tractors and Trailers, open truck cab doors, and allow access
by workers. Tunnels shall have trench drains to receive water that could potentially
have contacted the waste. These drains will discharge into the sanitary sewer. As the
tunnels are roofed-over and adjacent pavement slopes away from the tunnels, no
stormwater should enter the tunnels.
The staging area and storage area shall have paving sections designed to handle the
live loads imposed by the moving container units.
Pre-load compactors shall have sufficient room for installation and room for workers to
operate the controls. The hydraulic control system shall be located so that there is
sufficient room and circulation for cooling the unit.
2.2.5 Waste Compaction
The Transfer Station shall be capable of loading loose waste in open-top transfer
Trailers. Use of moving or fixed crane/top-load compaction or tamping equipment shall
be in accordance with the Contractor's Technical and Cost Proposal. The Facility shall
be designed to accommodate either moving or fixed tamping devices. Use of fixed rear-
load compaction equipment shall be in accordance with the Contractor's Technical and
Cost Proposal. Prior to installation, the fixed rear-load compaction equipment shall be
refurbished to new specifications including but not limited to hydraulic systems,
cylinders, filtering system, cooling system, and platen wear surfaces. The City's
Authorized Representative shall approve all fixed crane/top-load compaction or tamping
equipment in writing in advance of the Contractor's purchase. The maximum Trailer
weight shall not exceed standards set forth in local, state, and federal laws.
The Contractor shall be responsible for maintaining the fixed crane/top-load compaction
or tamping equipment in good working order and condition. The Contractor shall plan,
schedule, and conduct preventative maintenance to minimize equipment downtime.
Replacements of any item, component, device, or system shall be of the same type or
City of Port Angeles
8.1-20
April 5, 2005
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equivalent quality as installed using original Transfer Station construction and
equipment.
2.2.6 Waste Storage Requirements
The Transfer Station shall provide a minimum of two days of covered storage capacity
on the tipping floor for incoming waste in the event of an interruption in the
Transportation or Disposal operations, or interruption of transfer or compaction
operations, if any.
2.2.7 Scales and Scale House
The Transfer Station Facility shall provide separate incoming and outgoing scales with
an accompanying scale house, new scales shall be a minimum of aD-foot length. The
scales must be capable of weighing all vehicle types utilizing the Transfer Station,
including transfer Trailers. The scale system shall be designed to achieve and maintain
maximum cycle times to satisfy peak hour tickets defined in Section 2.2.2. Scale
facilities shall be designed, maintained and operated so as to be legal for trade, and
usable for determining Disposal Charges. Scales used for weighing waste shall be
designed and maintained in accordance with the requirements set forth in
"Specifications, Tolerances, and Other Technical Requirements for Weighing and
Measuring Devices," U.S. Department of Commerce, National Bureau of Standards,
Handbook 44.
. Provisions shall be made for staff and other vehicles to pass by both inbound and
outbound scales without passing over the scales. However, there will be no exception
for any vehicle hauling waste to bypass the scales. The scale house shall be a
minimum of 200 square feet in interior area and shall include an area for scale control
operations, a safe for placing and securing receipts, and a convenience room for City
staff that includes a restroom, a kitchen sink, a refrigerator, and cabinet storage for
supplies and personal items. The scale house shall be constructed with an HV AC
system for environmental control of temperature and air flow. The interior layout shall
include an office space and a storage room. The storage room shall be provided with a
door with a cylindrical lock, keyed differently than exterior door locks. The Contractor
shall provide two separate sets of keys for interior and exterior doors. All window
glazing shall be heat absorbing or include a reflective film.
As part of the Contractor's design, the Contractor shall be required to provide a fully
functional scale house that integrates a software system for the scale house (e.g.,
WasteWorks or an equivalent approved by the City's Authorized Representative), scale
hardware and software, card reader hardware and software, and barcode hardware and
software, all of which comprise the card reader system. The Contractor shall also
identify any additional hardware, software and cost to integrate the City's software
system with the City's enterprise software system (Le., HTE) for on-line cash and
accounts receivable.
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City of Port Angeles
8.1-21
April 5, 2005
The new scale house shall be provided with hardware and software needed to interface
vehicle scale information into the City's software system including any required
hardware and software upgrades to the City's software system. The Contractor shall
provide conduit and work areas for City and/or Contractor provided hardware, software,
and telecommunications devices.
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Conduits shall be provided to accommodate communications and electrical systems
including scale house traffic lights and a card reader system for the outer inbound and
outbound scales for Commercial Haulers. The card reader system for the outer inbound
and outbound scales shall be fully operational and interfaced with the vehicle scale
information and City software system and not require the intervention of a scale house
operator to originate or issue a ticket under Normal Operating Conditions. The card
reader system shall include devices required to program and read cards, 300
programmable cards, and any required hardware and software upgrades to the City's
system shall be provided by the Contractor for the outer inbound and outbound scales
for Commercial Haulers. The outer outbound scale shall be provided with a ticket
printer. The card reader system technology may utilize a proximity card or radio
frequency tag.
Conduits shall be provided to accommodate communications and electrical systems
including scale house traffic lights and a bar code system for the inner inbound and
outbound scales for self haulers. The bar code system for the inner inbound and
outbound scales shall be fully operational and interfaced with the vehicle scale
information and City software system and require minimal intervention of a scale house .
operator to originate or issue a ticket under Normal Operating Conditions. A bar code
system including devices required to program and read cards, 100 programmable
cards, and any required hardware and software upgrades to the City's system shall be
provided by the Contractor for the inner inbound and outbound scales for self haulers.
An intercommunications system shall be provided by the Contractor between the scale
house and both inner and outer inbound and outbound scales.
After Acceptance Testing, the City shall be responsible for ongoing card reader system
hardware and software maintenance and upgrades.
In addition to inbound and outbound scales, the Transfer Station Trailer bays shall have
axle scales for the monitoring and adjustment of Trailer loads.
2.2.8 Site Access and Road Improvements
Site access shall be through the existing Landfill gate. Traffic flow and queuing shall
occur along the Landfill's existing west haul road. On-site roads shall be designed and
constructed by the Contractor to provide two-way traffic and queuing areas for the
Transfer Station, Co-Composting Facility and MRWF. The Contractor shall maintain on-
site roads for the Term of the Service Agreement in accordance with their Technical and
Cost Proposal. All road improvements shall conform to the most current edition of the
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City of Port Angeles
8.1-22
April 5, 2005
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City of Port Angeles Urban Services Standards and Guidelines. On-site roads shall
meet the City of Port Angeles Urban Development Standards. The Transfer Station
shall' be designed to eliminate or minimize on-site cross traffic. The Contractor shall be
responsible for controlling movement of traffic on-site and off-site, if necessary,
including the provision of staff to direct traffic. Disabled vehicles shall be removed from
operational areas by the Contractor when necessary.
Transfer station on-site roads shall be designed to accommodate maximum expected
vehicle queues on site. Vehicle queues shall not extend off-site.
2.2.9 Noise, Odor Control, and Mitigation
Noise, odor control, and mitigation of off-site impacts shall be achieved in compliance
with applicable City, County, and state regulations. After hour operations must comply
with local noise ordinances.
2.2.10 Dust, Litter, and Vector Control
The presence of dust, litter, and vectors on the site shall be minimized through Facility
design. There shall be no off-site dust, litter, or vector impacts. Waste storage, tipping,
compaction, and Trailer loading areas shall be enclosed within the Facility. The
Contractor shall include dust, litter, and vector controls in the design documents and the
Operations Plan. Dust control areas must include, at a minimum, vehicle queuing and
tipping, Facility acc~ss roads, and waste loading areas.
The Contractor shall allow ongoing wildlife hazard mitigation by the USDA, the Port of
Port Angeles, and the City. This shall include providing access to USDA
representatives.
2.2.11 Environmental Control
The Transfer Station design shall incorporate all environmental control systems
necessary to satisfy all applicable federal, state, and local environmental laws and
regulations. It shall include an HVAC system for office spaces and a separate
ventilation system for the tipping area. The Transfer Station shall be designed to
minimize the entry of precipitation and stormwater into covered waste tipping, storage,
and compaction areas. Surface water generated within the Transfer Station building
shall be considered contact water and require off-site treatment via the sanitary sewer
systems.
The Contractor, in accordance with the August 2001 Department of Ecology Stormwater
Management Manual for Western Washington, shall provide for stormwater collection,
SWPP, spill prevention controls for chemical contamination, and connections to the
proposed stormwater facilities located at the northeast and northwest corners of the
site. The Contractor shall demonstrate that discharges from their facilities are not
chemically contaminated. The City will provide downstream stormwater quantity and
City of Port Angeles
8.1-23
April 5, 2005
sediment quality treatment. Stormwater shall be collected from all impervious surfaces .
on the Facility site. The Contractor shall provide all activity specific stormwater controls.
All stormwater contacting tipping areas, Trailer storage areas, and waste loading and
compacting areas shall be collected and treated as contaminated runoff and disposed
through the sanitary sewer system. One or more oil/water separators, as necessary to
process all contaminated runoff, shall be provided and maintained by the Contractor
regularly. The Contractor shall design and construct activity specific stormwater
facilities to integrate with existing site stormwater facilities and permit requirements.
The Contractor shall prepare and submit with their design plans a Spill Prevention Plan
and a Pollution Control Plan that conforms to Washington State Department of Ecology
requirements.
2.2.12 Aesthetic Design and Landscaping
Exterior building materials, exterior Facility color, and signage shall be identified in the
Contractor's Technical and Cost Proposal, and finalized prior to City approval of 100%
design and construction documents. The Transfer Station design shall include
adequate exterior lighting and landscaping for the purposes of creating an aesthetically
pleasing site layout and mitigating site noise, glare, and litter impacts. The Contractor
shall provide foundation plantings for an aesthetically pleasing appearance, consisting
of trees, grasses, and shrubs.
2.2.13 Safety Planning and Engineering
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The Transfer Station shall be constructed in a fire resistant manner and provided with a
fire control system. All equipment, replacement equipment, and equipment
maintenance shall be the responsibility of the Contractor. The equipment shall be
tested and installed in accordance with manufacturer's guidelines and all applicable
federal, state, and local requirements. The Contractor shall provide 24-hour monitored
alarm service for the installed fire control system.
The Contractor shall abide by all local, state, and federal safety engineering
requirements. The Contractor shall provide for provision of first-aid stations, emergency
medical response for injured staff and Customers, and chemical exposure treatment
procedures.
2.2.14 Utilities
Electrical power, water, stormwater, sanitary sewer, fiber optics, and telephone Utilities
are available at the Landfill site. The Contractor shall confirm the location of all utility
connection points and notify the City's Authorized Representative of any changes. The
Contractor shall provide all utility requirements for the Transfer Station, including any
improvements, upgrades, and/or enhancements to existing utility connections.
The Contractor shall also provide two spare 2-inch conduits for the City to install City
provided telecommunications, fiber optic, and/or computer network cabling from the
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City of Port Angeles
8.1-24 '
April 5, 2005
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Transfer Station to the MRWF, recycling Drop-Off Facility, the scale house and the Co-
Composting Facility. The Contractor shall be responsible for all recurring monthly utility
charges except for services provided by the City using the spare conduit and recurring
monthly utility charges for the scale house.
2.2.15 Security
The Contractor shall provide measures to ensure site security and eliminate
unauthorized site access. The Contractor shall repair all damage to the Transfer
Station or its equipment resulting from failure to provide adequate security measures.
Sufficient exterior lighting shall be provided to deter unauthorized nighttime access and
assist with night inspections of the Facility.
2.2.16 Taxes
The City shall be responsible for payment of Washington State excise tax, and City
utility tax. The Contractor shall be responsible for payment of all other taxes and fees in
accordance with the Service Agreement.
2.3 FACILITY MANAGEMENT
2.3.1 Data Collection, Billing, and Reporting Requirements
Transfer station scales shall interface with the City's Wasteworks Software System.
The City shall be responsible for scale house records and ticket data collection, data
management, Customer billing and reporting. The City shall provide the computer
system and software.
2.3.2 Public Information
The City will be responsible for all public information documents and/or media releases.
The Contractor shall display notices and distribute public information materials to
Transfer Station Customers at the public information area provided for this purpose.
Any information concerning the site or its operations that the Contractor wishes to make
available to Customers shall be pre-approved by the City's Authorized Representative.
2.3.3 Staffing
The Contractor shall provide sufficient on-site personnel to ensure efficient
management, operation, and maintenance of the Transfer Station during Delivery
Hours. In order to accommodate staff leaves for sickness and vacation, the Contractor
shall ensure that additional personnel are available to provide continuous operation and
maintenance of the Transfer Station. The Contractor's Operations Plan shall identify
the number and type of employee to meet operating requirements. Specifically the
Contractor shall provide:
City of Port Angeles
B.1-25
April 5, 2005
· One Transfer Station Supervisor who shall be responsible for all daily operations
and communications with the City's Authorized Representative.
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· Equip~ent operators in sufficient number to provide efficient loading (and
compaction, if applicable), on-site movement of loaded and unloaded transfer
Trailers, and all other management, supervisory, operating or maintenance work
requiring the use of equipment to fulfill Transfer Station functional requirements
and compliance with the Service Agreement.
· Laborers in sufficient number to assist in the control of traffic, unloading of
refuse, control of litter, maintenance of the site, and screening of wastes
received.
The Contractor's Operations Plan shall anticipate and respond to waste quantity
fluctuations, providing sufficient number of personnel to operate the Transfer Station in
full compliance with the Performance Specifications.
2.3.4 Safety and Emergency Response Training
The Contractor shall implement an employee safety orientation and training program
that shall begin at the time of Transfer Station Startup and shall continue throughout the
Term of the Service Agreement. The Transfer Station Supervisor shall be designated
as Transfer Station Safety Coordinator, or shall designate that duty to another member
of the staff. As a minimum, the coordinator shall be responsible for the implementation .
of the following program requirements:
· Orientation for new employees, including safety training and emergency
contingency planning.
. Accident reporting procedures including notification to the City's Authorized
Representative and other appropriate agencies.
. Mandatory first aid training for all Transfer Station staff.
. Regularly scheduled safety meetings.
. Fire prevention training.
· Waste screening training, including recognition of Unacceptable Waste before
and after unloading, and identification and tracing of Unacceptable Wastes to the
responsible party.
. Training concerning procedures for effective cleanup, management, and
Disposal of Unacceptable Waste once detected in collection vehicles, tipping
area, or transfer Trailers.
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City of Port Angeles
8.1-26
April 5, 2005
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. Routine inspection and testing procedures for all safety and emergency
equip01ent and protective devices, and routine walk-through inspection of the
Transfer Station to identify and correct potential or actual unsafe conditions.
. Investigation and documentation of all accidents to ascertain the cause and
future methods of preventing recurrence.
. Observation of all applicable Occupational Safety and Health Administration
(OSHA) and Washington Industrial Safety and Health Act (WISHA) standards.
Posting of safety bulletins and posters required by regulatory agencies and other
materials concerning accident prevention and hazardous conditions.
The preceding list of minimum safety program requirements is not provided as, and
shall not be regarded as, a complete or sufficient list of safety program measures or
procedures. The inclusion of the preceding list shall not be deemed to relieve the
Contractor of its full responsibility for providing a safe operation and workplace, or to
impose any liability whatsoever on the City for the Contractor's operations, actions, or
omissions.
2.4 FACILITY OPERA liONS
2.4.1 General
The Contractor has the sole responsibility for operation of the Transfer Station with the
exception of the scale house. The services performed by the Contractor shall be
performed in accordance with all state, federal, and local regulations. Inspections,
reviews and approvals by the City's Authorized Representative as provided in the
Performance Specifications or the Service Agreement shall not diminish the
Contractor's rights and responsibilities or create any City liability for the Contractor's
operation thereof.
The Contractor shall provide efficient service to Customers at all times, providing
employees for all assignments who are dependable, trustworthy, neat and clean in
appearance, and courteous to the Customers. Fire-arms shall be prohibited.
At closure time each day, the Contractor shall continue operations until all waste is
removed from the receiving areas. Odor abatement shall be conducted through a
comprehensive program of cleaning equipment, tipping areas, and platforms. Litter
shall be minimized and controlled on-site on a daily basis, and litter from on-site
activities shall not be allowed off-site. On-site traffic noise shall be reduced through
enforcement of on-site speed limits. The tipping floor and Trailer loading area shall be
washed or swept clean at the end of each day.
The Contractor shall be responsible for all operation and maintenance costs associated
with the Transfer Station Equipment and compaction equipment. The Contractor shall
CIty of Port Angeles
8.1-27
Apnl 5, 2005
be responsible for all damage to the Transfer Station and its equipment, and shall repair
or replace such damage.
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2.4.2 Days and Hours. of Operations
The Transfer Station shall at a minimum be open for deliveries by Customers as follows:
Monday through Saturday
9:00 A.M. to 5:00 P.M.
The Transfer Station shall accept Commercial Haulers between 6:00 A.M. and 5:00
P.M. each day it is open. The Transfer Station shall be closed to Customers on all legal
holidays. The Transfer Station shall accept City and County residential collection trucks
on all legal holidays except:
. New Years Day.
. Thanksgiving Day.
. Christmas Day.
The City's Authorized Representative and Contractor's Authorized Representative may
modify operating hours and days in accordance with the Service Agreement.
2.4.3 Scale Operations
During Delivery Hours, the City will weigh all vehicles delivering waste upon entering
and leaving the Facility, to determine the net weight of each type of waste delivered.
Waste export Trailers shall also be weighed. Subject to audit by the City, the tare (Le.,
empty) weight of individual Commercial Haulers and tractor-Trailers may be established
and recorded so that the vehicles may not be required to be weighed each time after
unloading. The City may randomly verify the tare weights for each vehicle or Trailer any
time.
.
After weighing, the City shall prepare a weight ticket that indicates the Customer,
vehicle or Trailer identification, waste type, date, time, inbound gross weight, outbound
gross weight or listed tare weight as applicable, net weight, and Disposal Charge.
Weight tickets for Trailers shall include the Trailer identification number. If the scale is
inoperable at any time, the City shall make alternative arrangements to weigh all
inbound and outbound traffic. The City reserves the right to establish any other reliable
means of measuring waste quantities in the event that a scale is inoperable or
determined to not meet calibration standards.
The Contractor shall provide for annual scale calibration at the Contractor's expense.
The Contractor's Authorized Representative may request modifications to the scale
operations for non-Delivery Hours.
.
City of Port Angeles
8.1-28
April 5, 2005
.
.
.
2.4.4 Final Operations Plan
The Final Operations Plan will be submitted to the City's Authorized Representative for
approval concurrent with commencement of Startup and Acceptance Testing. The
Contractor's Authorized Representative shall address all of the City's Authorized
Representative's comments on the Preliminary Operations Plan in the Final Operations
Plan and shall provide revised plans for Transfer Station Facility management,
operating and maintenance issues identified during Startup and Acceptance Testing.
The Final Operations Plan shall provide a list of all City personnel who are hired by the
Contractor. The Final Operations Plan shall also contain a Contingency Plan in the
event the Transfer Station construction is delayed. The Transfer Station construction
and Acceptance Testing requires basic infrastructure such as roads and Utilities to be
available and in place. Some measures to be considered could be lease of portable
power generation, installation of temporary surfacing pending completion of paving, or
use of temporary holding tanks to obtain potable water or hold wastewater.
At a minimum, the Final Operations Plan shall establish procedures for the following:
. Staffing and hours of operation.
. Waste receiving, screening, and acceptance.
. Unacceptable waste identification and management.
. Safety and emergency training.
. Loading and compaction operations.
. Coordination with waste long haul and Disposal operations.
. Operation of Customer Drop-Off Facilities for recyclables, Acceptable HHW,
White Goods, and tires.
. Handling of used motor oil, antifreeze, and auto batteries.
. Handling of Yard Waste and Acceptable Special Waste.
. Site security.
. Building annual maintenance.
. Traffic control.
. Noise mitigation.
. Dust, litter, odor, and vector control.
City of Port Angeles
B.1-29
April 5, 2005
. Environmental control.
.
. Public information management.
The Contractor shall include a comprehensive set of contingency operating procedures
in their Final Operations Plan that will take effect in the event of interruption of normal
operations at the Transfer Station, including but not limited to:
. Fires and explosions.
. Release of toxic or hazardous substances.
. Work stoppage by the Contractor's employees.
. Emergency weather conditions.
. Building or equipment failure.
. Unknown delivery of Unacceptable Wastes.
. Handling wastes from catastrophic events.
· Arrangements and agreements (if required) with local emergency response
agencies describing the services to be rendered by each agency in the event of
an emergency.
.
. A site diagram and description of the location and intended use of all emergency
equipment.
. Names, telephone numbers, and addresses of all Persons designated as
emergency coordinators by the Contractor. An emergency coordinator shall be
at the Transfer Station, or on-call by telephone or radio within thirty minutes of an
emergency. Emergency coordinators shall be familiar with the Operations Plan.
The Contractor shall conduct emergency response drills at least twice per year.
The City's Authorized Representative shall prepare a response that confirms whether or
not the Final Operations Plan was completed in conformance with requirements of the
Service Agreement. The response will specify if the Contractor must satisfy any
outstanding requirements prior to commercial operations.
The City's Authorized Representative's approval of the Final Operations Plan and
authorization to commence commercial operations shall not be deemed as the City's
approval, or acquiescence to any conditions or Contractor activities that do not conform
to Applicable Law, the Performance Specifications, or the Service Agreement, nor shall
that review and authorization impose any liability on the City for Contractor errors,
omissions, or actions. The City's Authorized Representative's approval of the Final
.
City of Port Angeles
B.1-30
April 5, 2005
.
.
.
Operations Plan shall in no way relieve the Contractor from adherence to the
Performance Specifications and the Service Agreement. The City's Authorized
Representative will forward the Final Operations Plan to CCEHD for review and
approval. CCEHD approval of the Final Operations Plan is required before the
Contractor may commence commercial operations.
2.4.5 Self-haul and Commercial Vehicles
The Transfer Station shall receive both self-haul and Commercial Hauler waste
collection vehicles simultaneously and separately. The Contractor shall be responsible
for directing commercial and self-haul vehicles to their designated queuing and tipping
areas. During heavy traffic flow, the Contractor may direct vehicles to areas other than
those normally designated, consistent with the Final Operations Plan.
2.4.6 Waste Transfer
The Contractor shall be responsible for the full cycle of transfer operations, including
moving empty Trailers from the staging area to the compactor, loading containers using
a compactor and/or top-loading trailers as applicable, with load cells for containers and
axle scales for trailers, preparation of all required documentation, and returning the
sealed and loaded transfer Trailer to the Trailer staging area. All Trailers will be
delivered to and removed from the staging area by the Contractor.
The Contractor shall load Trailers as required in Section 2.2.5 and shall exercise
reasonable care to avoid unusual wear or damage to the Trailers during loading. The
Contractor shall verify that loaded tractor-Trailer combinations conform to legal gross
vehicle weight and axle loading requirements prior to leaving the Transfer Station with a
loaded Trailer and shall unload and reload Trailers as necessary to achieve compliance
with applicable weight limits. The Contractor shall assure that tractor-Trailer
combinations do not exceed legal gross vehicle weight or axle loading requirements.
Any additional costs such as overweight fines that might result from tractor-Trailer
combinations leaving the Transfer Station while exceeding gross vehicle weight or axle
loading requirements shall be the responsibility of the Contractor.
2.4.7 Unacceptable Waste
The Contractor shall screen wastes delivered to the Transfer Station in a manner
sufficient to make a reasonable determination whether or not Unacceptable Wastes are
present in accordance with the Waste Acceptance Policy and procedure developed as
part of the Final Operations Plan. The Contractor's waste screening procedures shall
be specified in a waste acceptance plan/policy accepted by the CCEHD.
City of Port Angeles
B.1-31
April 5, 2005
2.5
FACILITY MAINTENANCE
.
2.5.1
General
. ,
The Contractor shall be responsible for maintaining the Transfer Station in good working
order and condition. The Contractor shall maintain and repair all equipment and
facilities, including, but not limited to, plumbing, mechanical, structural, and electrical
systems and components, all landscaping, signage, drainage systems, and related
components. The Contractor shall plan, schedule, and conduct preventative
maintenance to minimize equipment downtime. All signs will comply with City and local
ordinances, and will be maintained in good condition at all times. Replacements of any
item, component, device, or system shall be of the same type or equivalent quality as
installed using original Transfer Station construction and equipment. The City's
Authorized Representative may make unannounced visits to ensure compliance with
Facility maintenance requirements.
2.5.2 Buildings
Buildings shall be maintained in good condition at all times. Interior and exterior
surfaces shall be repainted by the Contractor, as needed, as reasonably determined by
the City's Authorized Representative.
The Contractor shall inspect, lubricate, adjust, repair, maintain, and replace all building
systems, including but not limited to plumbing, sumps, fixtures, heating, ventilation, and
air condition systems, fire and dust suppression systems and communications
equipment. Any item, component, or device necessary for efficient Transfer Station
operations that is lost, damaged, destroyed, or that fails during the Term of the Service
Agreement shall be replaced by the Contractor. Replacements of any item, component,
device, or system shall be of the same type or equivalent quality as installed using
original Transfer Station construction.
.
2.5.3 Scales
At the City's Authorized Representative's request and in accordance with the
manufacturer's requirements, the Contractor shall perform maintenance, and repair
weighing system scales. Scales used for weighing waste shaJl be maintained in
accordance with the requirements set forth in "Specification, Tolerances, and Other
Technical Requirements for Weighing and Measuring Devices," U.S. Department of
Commerce, National Bureau of Standards, Handbook 44.
2.5.4 Roads and Pavements
The Contractor shall repair and patch roads and pavements improved under the Service
Agreement as necessary to maintain roads and pavements in good condition.
.
City of Port Angeles
B.1-32
April 5, 2005
.
.
.
The Contractor shall daily remove any and all obstructions from all Transfer Station
roads, Trans,fer Station on-site paved areas, and site entrance areas. These areas shall
be kept clean by high pressure washing with water, power brooms, or other street
cleaning equipment. The Contractor shall also paint and maintain traffic direction lines
on the roadways on the Transfer Station site as necessary to guide traffic clearly to
scale locations and recycling drop-off areas. Different colors shall be used to designate
roadways leading to Customer areas and roadways leading to commercial areas.
2.5.5 Cleaning and Janitorial Services
The Contractor shall steam clean the interior and exterior of the main building at least
annually from the commencement of commercial operations. Cleaning of all surfaces
that accumulate dust within the Transfer Station shall be performed regularly. Vehicle
maneuvering areas outside of the Transfer Station shall be swept as needed and
staging areas within the Transfer Station shall be swept daily, at a minimum, and
pressure washed at least monthly, or more often as needed. Detergents and
degreasers will be used to clean the floor when necessary. Volatile materials shall be
properly stored in covered metal containers. Liquid wastes from cleaning activities shall
be removed daily and disposed of by deposit into Trailers or into sanitary sewers. The
Contractor shall supply all equipment, supplies, and labor for cleaning, housekeeping,
and liquid waste Disposal.
Janitorial services shall be regularly provided by the Contractor to maintain all offices,
restrooms, employee break rooms, and other indoor facilities. Janitorial services shall
include, as appropriate, vacuuming, dusting, sweeping, mopping, cleaning, buffing
floors, stripping and waxing floors, emptying the trash, cleaning windows, cleaning
bathroom sinks, toilets, and counters, replacing toilet tissue and paper towels,
replacement and cleaning of doormats.
2.5.6 Landscape Maintenance
The general appearance of landscaped areas shall be kept neat and well maintained.
Regular landscaping maintenance activities shall include planting, weed control,
mulching, mowing, irrigating, mechanical weed control, turf and lawn maintenance,
pruning, tree staking, and clearance of drainage ways. Landscape maintenance shall
be provided for all landscaped areas and other areas accessible to the Transfer Station.
2.6 OWNERSHIP OF EQUIPMENT
All vehicles, equipment, and materials (excluding Appurtenances) proposed by the
Contractor for use in performance of the Service Agreement shall be owned by the
Contractor, provided that leases or other forms of agreement may be allowed by written
approval by the City's Authorized Representative prior to execution of the Service
Agreement. Any leases or agreements entered into subsequent to the Service
Agreement shall be subject to approval by the City's Authorized Representative prior to
City of Port Angeles
8.1-33
Apnl 5, 2005
the Commencement Date under this component. All such leases or agreements shall .
be provided in the event the Contractor fails to perform, or the default of such lease or
agreement.
Conditional sales contracts, mortgages, or other agreements for financing the purchase
of vehicles and equipment may be allowed if the City's Authorized Representative is
satisfied prior to executing the Service Agreement, as to the City's rights to take
possession of the vehicles and equipment, in event of the Contractor fails to perform the
Service Agreement or defaults under such lease or agreement under Service
Component I.
2.7 MEASUREMENT AND PAYMENT
The Contractor's monthly Service Fee will provide for payment to the Contractor for
Transfer Station development and operation services rendered in accordance with the
Service Agreement.
Tractor-Trailer combinations used by the Contractor to Transport waste under Service
Component II shall be weighed by the City at the Transfer Station after loading in
accordance with Section 2.4.3 of Performance Specification B.1. The difference
between the gross and tare weights will be the net weight of waste in the Trailer. After
verifying the information on the ticket, the Contractor shall sign the weight ticket, and will
receive a copy of the ticket. The net weight shown on the weight ticket will serve as the
basis of payment for services provided by the Contractor to operate the Transfer Station .
under Service Component I in accordance with the Service Agreement.
.
City of Port Angeles
B. 1-34
April 5, 2005
.
.
.
Waste Transport And Disposal Performance Specifications
Appendix B.2
Apnl 5, 2005
TABLE OF CONTENTS
.
3. WASTE TRAN SPORT .......... ............. ........... ................. ............. .............. ..... .......... 1
3.1 INTRODUCTION ......... ....... .................. ....... ........ ................ ........... ..... .......... 1
3.2 TRAILER REQUI REMENTS . ................ ...... ..... ................... ........... ............... 1
3.2.1 Rear-load Trailers... .................... ........... ................... ........... ............... 2
3.3 MAINTENANCE AND REPAIRS ............ .......................... ............ .................2
3.4 PROVISION AND STORAGE REQUIREMENTS.......................................... 2
3.5 UTILITI ES................ ................. .......... ............. ........... .... ................. ..............3
3.6 OWNERSHIP OF EQUIPMENT ........ ..................... ......................... .............. 3
3. 7 TAXES........ ........ ........ ....... ................... .......................... ................ ...... ......... 3
3.8 PERMITTING............. .......... ................ ....... ............... ............... ...... ...... ........3
3.9 OPERATIONS PLAN ............... .................. ...................... ......... ...... .............. 4
4. TRACTOR-TRAILER COMBINATIONS .........................................................~........ 5
5. WASTE DIS POSAL .... ...... .............................. ... ........ ...................... ............... .........7
5.1 DISPOSAL SITE. .................................. .............................. .................. ........ 7
5.2 DISPOSAL DOCUMENTATION .................................................................... 7 .
5.3 MEASUREMENT AND PAyMENT................................................................ 7
.
City of Port Angeles
April 5, 2005
.
.
.
ACRONYMS DESCRIPTION
City
CSWMP
MSW
USDOT
WAC
City of Port Angeles
Comprehensive Solid Waste Management Plan
Municipal Solid Waste
United States Department of Transportation
Washington Administrative Code
City Df Port Angeles
April 5, 2005
ii
/' 3. WASTE TRANSPORT
.
3.1 INTRpOUCTION
The Contractor shall be responsible for all activities necessary for waste Transport and
Disposal as described in the Performance Specifications, the RFP, and the Service
Agreement. In the event of any conflict among the preceding documents, the most
burdensome Contractor duty or obligation shall prevail, unless otherwise approved by
the City's Authorized Representative. The Contractor shall supply all resources to
provide Service Component II in accordance with all applicable requirements set forth in
the Performance Specifications, the RFP, and the Service Agreement. Service
Component II includes waste Transport to and Disposal at an out-of-county Landfill that
is, or will be, permitted and in compliance with standards equal to or exceeding those of
Washington Administrative Code (WAC) 173-351 and Federal Subtitle D Regulations,
for Municipal Solid Waste (MSW). Included with this Service Component is Transport
from the Transfer Station to a Disposal Site including the use and associated cost of an
intermodal Facility, if applicable.
3.2 TRAILER REQUIREMENTS
It is the intent of the Performance Specifications to ensure that the Contractor's
equipment is suitable for long distance waste Transport. Trailers shall be rigid and
durable, corrosion resistant, nonabsorbent, easily cleaned, and suitable for handling .
with no sharp edges or other hazardous conditions. Trailers shall be capable of
withstanding the hard use typically associated with handling solid waste. The
Contractor shall provide Trailers in accordance with their Technical and Cost Proposal.
Trailers shall be designed, engineered, and rated to perform satisfactorily and safely at
all times in full compliance with all applicable local, state, and federal requirements.
Trailers shall be leak resistant to a height of 18 inches from the Trailer floor. Trailer
doors shall be fitted with a heavy-duty rubber seal similar to seals commonly used in the
solid waste hauling industry.
Each Trailer shall be identified by a permanently affixed number that cannot be hand
removed. The identification number shall be a minimum of six inches in height and shall
be easily legible at a distance of 50 feet. No Trailer identification number shall be
duplicated.
Trailers shall be designed with vents that allow dissipation of heat and expanding gases
that may be generated during storage or Transport to the Disposal Site. Vents shall be
located to prevent vent blockage and screened to prevent the release of waste during
Transport. Trailers shall be of either a top-load or rear-load design, and shall be
compatible with in-Trailer compaction of waste with a knuckle-boom crane or other
.
City of Port Angeles
B.2-1
April 5, 2005
.
.
.
compaction or tamping device, such as a hydraulic ram compactor in accordance with
the Contractor's Technical and Cost Proposal.
.
Trailers shall be designed and maintained so that leakage or spillage of either wastes or
liquids from the Trailer while in transit or storage does not occur, and that waste does
not blowout of the Trailer during Transport. Open top Trailers shall have a top cover
that minimizes entry of water, and that is easily removed or opened for loading, and
closed for Transport. Removal and replacement of covers shall be accomplished
routinely by one Person in five minutes or less.
3.2.1 Rear-load Trailers
Rear-load Trailer design should be suitable for loading with a preload compactor
substantially equivalent to compactors made by Harris Waste Management Group
(Models TP-150, 250 and 500) and Shredding Systems (Models 4000 and 4500).
3.3 MAINTENANCE AND REPAIRS
The Contractor shall maintain Trailers in accordance with the manufacturer's
recommended maintenance schedule. Trailers shall be maintained in a safe working
condition at all times. The Contractor shall inspect Trailers at least monthly for
corrosion, leaks, loose-fitling doors, holes or other damage to the top-closing
mechanism, seals, sidings, frames or other damage incurred during loading, Transport
and Disposal of waste. Damaged Trailers shall be promptly repaired as necessary.
Each time a Trailer is emptied, all waste shall be removed from the Trailer, and the
Contractor shall clean the Trailer as necessary to comply with the requirements of the
jurisdictional health department(s) and to mitigate odors, unsightliness, or vectors.
If a Trailer is damaged, the Contractor shall repair or replace the Trailer at its own
expense. The Contractor, at its own expense, shall repair or replace Trailers as
necessary because of Normal Wear And Tear.
3.4 PROVISION AND STORAGE REQUIREMENTS
The Contractor shall provide a staging area at the Transfer Station where the Contractor
shall deliver or store empty Trailers and loaded Trailers.
The Contractor shall provide sufficient Trailers to Transport 100 percent of the total daily
throughput of waste plus at least two additional Trailers as a contingency in the event of
a Trailer failure. The Contractor shall remove Trailers from the site within 48 hours after
they are loaded. There shall be at all times a minimum of 3 empty Trailers available on-
site.
City of Port Angeles
8.2-2
April 5, 2005
3.5
UTILITIES
.
The Contractor shall be responsible for recurring monthly charges for all Utilities,
including but not limited to phones, electricity, water, sewage, and fuel charges.
3.6 OWNERSHIP OF EQUIPMENT
All vehicles, equipment, and materials (excluding Appurtenances) proposed by the
Contractor for use in performance of the Service Agreement shall be wholly owned by
the Contractor, provided that leases or other forms of agreement may be allowed by
written approval by the City's Authorized Representative prior to execution of the
Service Agreement. Any leases or agreements entered into subsequent to the Service
Agreement shall be subject to approval by the City's Authorized Representative prior to
the Commencement Date under this Service Component. All such leases or
agreements shall be provided in event the Contractor fails to perform, or the default of
such lease or agreement.
Conditional sales contracts, mortgages, or other agreements for financing the purchase
of vehicles and equipment may be allowed if the City's Authorized Representative is
satisfied prior to executing the Service Agreement, as to the City's rights to take
possession of the vehicles, equipment, and materials in event the Contractor fails to
perform the Service Agreement or defaults under such lease or agreement under
Service Component II.
.
3.7 TAXES
The City shall be responsible for payment of Washington State excise tax, and City
utility tax. The Contractor shall be responsible for payment of all other in accordance
with the Service Agreement
3.8 PERMITTING
The Contractor shall be responsible for preparing applications for all federal, state, and
local permits, licenses and other approvals applicable. All applications shall be
submitted to the City's Authorized Representative for review. The Contractor shall be
designated as the permit applicant, and shall be responsible for submitting applications,
paying fees, and providing all information required by regulatory agencies for review
processes and approvals.
The Contractor shall assume full responsibility for the identification of any and all
required regulatory approvals. The Contractor shall submit a list of all anticipated
approvals required as part of the Project Development Plan.
.
City of Port Angeles
8.2-3
April 5, 2005
"e
.
.
All mitigation measures for the Disposal Site, required by the State Environmental
Policy Act (SEPA) or ot~er approvals c;>r permits shall be the responsibility of the
Contractor, and at the Contractor's expense.
By selecting the Contractor to perform this Service Component, the City does not
guarantee that any permit from City or County agencies, federal, or other state and local
government agencies, will be secured.
3.9 OPERA liONS PLAN
The Contractor shall prepare and submit a Preliminary Operations Plan in accordance
with the Project construction schedule for the City's Authorized Representative's review
describing how they will comply with the Performance Specifications. The Preliminary
Operations Plan shall describe the sequence of operations and testing to be performed
during Startup and Acceptance Testing. The Contractor shall incorporate any City
required changes to the Preliminary Operations Plan and submit a Final Operations
Plan in accordance with the Project construction schedule. The Final Operations Plan
will be submitted to the City's Authorized Representative for approval concurrent with
commencement of Transfer Station Startup and Acceptance Testing.
The Preliminary Operations Plan shall describe waste Transport methods, staffing,
equipment, routing, intermodal facilities, and Disposal locations. The Preliminary
Operations Plan shall include a Contingency Plan for backup methods that will be used
if the long-haul Transportation/Disposal facilities are not operational 90 days prior to
Transfer Station completion.
The Contingency Plan will take effect in the event of interruption of normal waste long-
haul Transportation/Disposal operations including work stoppage by Contractor's
employees, emergency weather conditions, building or equipment failure, lack of access
to the primary system for waste long-haul, lack of access to the primary Disposal Site,
and handling of wastes from catastrophic events.
The City's Authorized Representative shall prepare a response that confirms whether or
not the Final Operations Plan was completed in conformance with requirements of the
Service Agreement. The response will specify if the Contractor must satisfy any
outstanding requirements prior to commercial operations.
The City's Authorized Representative's approval of the Final Operations Plan and
authorization to commence commercial operations shall not be deemed as the City's
approval, or acquiescence to any conditions or Contractor activities that do not conform
to Applicable Law, the Performance Specifications, or the Service Agreement, nor shall
that review and authorization impose any liability on the City for Contractor errors,
omissions, or actions. The City's Authorized Representative's approval of the Final
Operations Plan shall in no way relieve the Contractor from adherence to the
Performance Specifications and the Service Agreement.
City of Port Angeles
8.2-4
Apri15,2005
./ 4. TRACTOR-TRAILER COMBINATIONS
All tractor-Trailer combinations shall meet United State Department of Transportation
(USDOT) requirements and be fully licensed and insured to Transport waste in Washington
State and other states. All drivers shall be USDOT certified and shall maintain current
licenses.
The Contractor shall verify that loaded tractor-Trailer combinations conform to legal gross
vehicle weight and axle loading requirements prior to leaving the Transfer Station with a
loaded Trailer and shall unload and reload Trailers as necessary to achieve compliance
with applicable weight limits. The Contractor shall assure that tractor-Trailer combinations
do not exceed legal gross vehicle weight or axle loading requirements. Any additional
costs such as overweight fines that might result from tractor-Trailer combinations leaving
the Transfer Station while exceeding gross vehicle weight or axle loading requirements
shall be the responsibility of the Contractor.
City of Port Angeles
Apri15,2005
8.2-5
.
"
.
.
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.
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5. WASTE DISPOSAL
5.1 DISPOSAL SITE
The Contractor shall Dispose of all Transfer Station wastes in accordance with the
Technical and Cost Proposal. All wastes leaving the Transfer Station site shall become
the sole responsibility of the Contractor, and shall not be returned to the Transfer
Station, except as set forth in Section 10 of the Service Agreement.
The Disposal Site shall, at a minimum, be sited, designed, and constructed and
available to receive waste by 90 days prior to Transfer Station Startup and Acceptance
Testing. The Disposal Site shall be designed, constructed, operated, monitored, closed,
and otherwise maintained in a manner that complies with all Applicable Law for
Municipal Solid Waste Landfills. The Contractor must clearly demonstrate that the
Disposal Site will be available to receive waste by the actual Transfer Station
Commercial Operations Date and provide documentation demonstrating its compliance
with Applicable Law or a City approved equivalent standard.
The Contractor shall not Dispose of Transfer Station waste in a landfill, or an expansion
cell next to an existing landfill, that is, or is proposed to be, on the National Priority List
of the Federal Superfund Program (40CFR Part 300), or that is, or is proposed to be, on
a similar list under a similar program for any state.
If the Disposal Site is located in a jurisdiction that is required to prepare a
Comprehensive Solid Waste Management Plan (CSWMP), or its equivalent if the
Disposal Site is located outside the State of Washington, the plan of the receiving
jurisdiction shall allow waste import to the Disposal Site.
Any decision to change the Disposal Site must be approved by the City's Authorized
Representative in advance which approval shall not be unreasonably withheld.
5.2 DISPOSAL DOCUMENTATION
The Contractor shall provide the City's Authorized Representative with Disposal receipts
for all wastes Transported from the Transfer Station. Disposal receipts shall include the
date of Disposal, Disposal Site, Trailer identification number, tare weight, and gross
weight. The City will compare Disposal receipts with payment records. The
Contractor's Authorized Representative shall provide written responses to any
discrepancies identified by the City's Authorized Representative.
City of Port Angeles
8.2-7
April 5, 2005
5.3
MEASUREMENT AND PAYMENT
The Contractor's monthly Service Fee will provide for payment to the Contractor for
waste Transport and Disposal services rendered in accordance with the Service
Agreement.
Tractor-Trailer combinations used by the Contractor to Transport waste shall be
weighed by the City at the Transfer Station after loading in accordance with Section
2.4.3 of Performance Specification B.1. The difference between the gross and tare
weights will be the net weight of waste in the Trailer. After verifying the information on
the ticket, the Contractor shall sign the weight ticket, and will receive a copy of the
ticket. The net weight shown on the weight ticket will serve as the basis of payment for
services provided by the Contractor to Transport and Dispose of waste under Service
Component II in accordance with the Service Agreement.
5.3.1 MEASURING DEVICE
Scales used for weighing waste shall be designed and maintained in accordance with
the requirements set forth in "Specifications, Tolerances, and Other Technical
Requirements for Weighing and Measuring Devices," U.S. Department of Commerce,
National Bureau of Standards, Handbook 44.
CIty of Port Angeles
8.2-8
April 5, 2005
.
.
.
.
.
.
Blue Mountain Drop-Box Operations Performance Specifications
Appendix B.3
April 5, 2005
TABLE OF CONTENTS (Continued)
TABLE OF CONTENTS
6. BLUE MOUNTAIN PROJECT DESCRIPTION .......................................................1
6.1 INTRODUCTION AND PROJECT SCHEDULE ............................................ 1
6.1.1 Operations Plan................................................ ..... ........ .....................2
6.2 GENERAL PROJECT REQUiREMENTS......................................................4
6.2.1 Staffing........... ...................................... ........ ....... ...... ...... ...................4
6.2.2 Project Status Reporting Requirements.............................................. 5
6.2.3 Disposal Charges.............................. ....... ............. ............. ................6
6.2.4 Facilities and Equipment... ................ .................... .............. ................6
6.2.5 Ownership of Equipment ....................................................................7
6.2.6 Days and Hours of Operation........ ......... ..... ........ ..... ..........................7
7. BLUE MOUNTAIN PERFORMANCE SPECIFICATIONS ....................................... 8
7.1 FUNCTIONAL REQUiREMENTS............... .............. .......... ......... ..................8
7.1.1 Blue Mountain Drop-box Operations/Recycling Specific
Requirements........... ...................... ...... ........ ...... ................................8
7.2 GENERAL OPERATIONS................................................. .............. ...... ........8
7.2.1 Incoming Waste.............................. ...................... ........ ......................8
7.2.2 Unacceptable Waste......................... ..................................................9
7.2.3 Environmental Control.......................................... ..............................9
7.2.4 Inspection........ ................................ ..................... ....... ........ ...............9
7.2.5 Holiday Operations ............................................... ........ ....... ............. 10
7.2.6 Materials Transport............................... ........ ......... ......... .................. 10
7.2.7 Facility Security.......... ................................... ...... ........... ................... 10
7.2.8 Utilities ............. ........... .................... ........ .............. ......... .............. ..... 10
7.2.9 Taxes 11
7.3 EQUIPMENT AND EQUIPMENT MAINTENANCE ..................................... 11
7.3.1 General................................................................ ............... .............. 11
7.3.2 Maintenance Records ....... ................ .......... ...... ........ .......... .............. 11
7.3.3 Maintenance Schedule.... ....................................... .......... ................ 11
7.4 MEASUREMENT AND PAyMENT.............................................................. 11
7.5 PERMITTING..... ......... .................................... ........................... .......... ....... 12
7.6 SCALE OPERATIONS .............................. .................................................. 12
City of Port Angeles
April 5, 2005
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ACRONYMS DESCRIPTION
City
County
DNR
MSW
OSHA
WISHA
City of Port Angeles
Clallam County
Washington State Department of Natural Resources
Municipal Solid Waste
Occupational Safety and Health Administration
Washington Industrial Safety and Health Act
City of Port Angeles
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April 5. 2005
,G: BLUE MOUNTAIN PROJECT DESCRIPTION
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6.1 INTRODUCTION AND PROJECT SCHEDULE
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The Contractor shall be responsible for all activities necessary for operation of the Blue-
Mountain Drop-Box Facility as described in the Performance Specifications, the RFP,
and the Service Agreement. In the event of any conflict among the preceding
documents, the most burdensome Contractor duty or obligation shall prevail, unless
otherwise approved by the City's Authorized Representative. The Contractor shall be
responsible for all equipment, labor, and materials necessary to operate the Blue
Mountain Drop-Box Operations as described in the Performance Specifications, the
RFP, and the Service Agreement. This Service Component includes operation,
maintenance, and waste Transport at the Blue Mountain Drop-Box Operations, located
on Blue Mountain Road, between Sequim and Port Angeles, Washington. Clallam
County (County) presently leases the property from the Washington State Department
of Natural Resources (DNR). The Contractor shall not be responsible for DNR lease
expenses. The Facility handles approximately 1,000 tons of municipal waste per year.
Specific activities include:
. Provide all labor, equipment, supplies, and materials necessary to operate and
maintain the Drop-Box Facility, and monitor residential and commercial self-haul
wastes.
. Weigh waste and collect Disposal Charges for residential and commercial self-
haul loads.
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. Provide containers for the collection of wastes.
. Direct the diversion of Recyclable Materials.
. Haul wastes collected at the Drop-Box Facility to the Transfer Station.
. Maintain and make necessary improvements to the infrastructure, security,
equipment, and operation of the Drop-Box Facility as necessary to meet
operating and aesthetic requirements for the Facility.
. Apply a waste screening and acceptance policy consistent with the policy
established for the Transfer Station.
. Maintain records of solid waste, handling and Disposal, and provide routine
reports to support compliance requirements for the Drop-Box Facility. Routine
reports may include, but are not limited to, daily receipts, and waste quantity
received and Transported, operating permits, compliance reports, and pay
requests.
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City of Port Angeles
B.3-1
April 5, 2005
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The Contractor's Technical and Cost Proposal shall include handling waste quantities
currently be,ing handled and processed through the Drop-Box Facility. All wastes
received at the Drop-Box Facility are subject to the requirements and policies
established for the existing Landfill and the proposed Transfer Station (Refer to Service
Component I). This includes recycling requirements, waste import restrictions, and
waste screening and acceptance requirements.
6.1.1 Operations Plan
The Contractor's Authorized Representative shall submit a Preliminary Operations Plan
to the City's Authorized Representative within 30 calendar days of the Commencement
Date of this Service Component. The Contractor's Authorized Representative shall
address all of the City's Authorized Representative comments on the Preliminary
Operations Plan. The Contractor shall start operations within 30 calendar days
following the City's Authorized Representative's acceptance of the Final Operations
Plan. The Operations Plan shall contain a Contingency Plan including a comprehensive
set of contingency operating procedures that will take effect in the event of interruption
of normal operations. At a minimum, the Operations Plan shall establish procedures for
the following:
. Staffing and hours of operation.
. Waste receiving, screening, and acceptance.
. Cash handling procedures for collection of Disposal Charges.
. Unacceptable waste identification and management.
. Safety and emergency training.
. Waste loading operations.
. Coordination with waste long haul and Disposal operations.
. Operation of Customer Drop-Off Facilities for recyclables.
. Handling of used motor oil, antifreeze, and auto batteries.
. Site security.
. Building annual maintenance.
. Traffic control.
. Noise mitigation.
City of Port Angeles
April 5, 2005
8.3-2
· Dust, litter, odor, and vector control.
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. Environmental control.
· Public information management.
The Contractor shall include a comprehensive set of contingency operating procedures
in their Operations Plan that will take effect in the event of interruption of normal
operations at the Drop-Box Facility, including but not limited to:
. Fires and explosions.
· Release of toxic or hazardous substances.
· Work stoppage by the Contractor's employees.
· Emergency weather conditions.
· Building or equipment failure.
· Unknown delivery of Unacceptable Wastes.
· Handling wastes from catastrophic events.
· Arrangements and agreements (if required) with local emergency response
agencies describing the services to be rendered by each agency in the event of
an emergency.
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· A site diagram and description of the location and intended use of all emergency
equipment.
· Names, telephone numbers, and addresses of all Persons designated as
emergency coordinators by the Contractor. An emergency coordinator shall be
at the Transfer Station, or on-call by telephone or radio within thirty minutes of an
emergency. Emergency coordinators shall be familiar with the Operations Plan.
The Contractor shall conduct emergency response drills at least twice per year.
The City's Authorized Representative shall prepare a response that confirms whether or
not the Final Operations Plan was completed in conformance with requirements of the
Service Agreement. The response will specify if the Contractor must satisfy any
outstanding requirements prior to commercial operations.
The City's Authorized Representative's approval of the Final Operations Plan and
authorization to commence commercial operations shall not be deemed as the City's
approval, or acquiescence to any conditions or Contractor activities that do not conform
to Applicable Law, the Performance Specifications, or the Service Agreement, nor shall
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City of Port Angeles
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April 5, 2005
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that review and authorization impose any liability on the City for Contractor errors,
omissions, or actions. The City's Authorized Representative's approval of the Final
Operations Plan shall in no way relieve the Contractor from adherence to the
Performance Specifications and the Service Agreement. The City will forward the Final
Operations Plan to CCEHD for review and approval. CCEHD approval of the Final
Operations Plan is required before the Contractor may commence commercial
operations.
6.2 GENERAL PROJECT REQUIREMENTS
6.2.1 Staffing
Contractor activities at the Drop-Box Facility will include:
. Weigh and monitor residential and commercial self-haul waste loads.
. Direct the separation of Recyclable Materials.
. Divert Unacceptable Waste in accordance with the Transfer Station Waste
Acceptance Policy.
. Assist Customers with the placement of wastes into designated containers.
. . Regularly inspect and document the condition of the Drop-Boxes.
. Control litter and maintain a clean and safe Drop-Box Facility.
. Collect Disposal Charges, issue sequentially numbered weight tickets, and
prepare monthly reports on waste quantities and amounts collected.
. Transport the waste to the Transfer Station for final disposition. The Contractor
shall not allow full containers to remain on site for more than 72 hours before
Transporting them to the Transfer Station for disposition.
. The Contractor shall require all employees to be courteous at all times. They
shall not play loud music or use loud or profane language.
. The Contractor shall provide operation and safety training for all its personnel.
This shall include:
)> Mandatory first aid training for all staff.
)> Waste screening training, including recognition of Unacceptable Waste before
and after unloading, and identification and tracing of Unacceptable Wastes to
the responsible party.
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City of Port Angeles
8.3-4
April 5, 2005
~ All training required by Occupational Safety and Health Administration
(OSHA) and Washington Industrial Safety and Health Act (WISHA).
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~ Training for employees in use and location of safety equipment at the site.
~ Training in emergency response.
· Whenever a principal officer of the Contractor is not immediately available or
present, the City's Authorized Representative may give orders related to
imminent environmental, health and human safety issues to the Contractor's
Authorized Representative who is in charge of local operations.
. The City's Authorized Representative will notify the Contractor's Authorized
Representative of all complaints received by the City. The Contractor's
Authorized Representative shall answer complaints courteously and promptly.
The Contractor is responsible for resolving all such complaints.
The Contractor's Authorized Representative shall designate a project manager for Drop-
Box operations. The Contractor's project manager shall be directly accountable to the
City for the Contractor's performance and shall be the prime contact for all discussions
with the City relative to the Blue Mountain Drop-Box Operations.
In addition to the project manager, the Contractor's key personnel shall be identified in
the Operations Plan. Replacement of key personnel shall be subject to approval by the .
City's Authorized Representative, whose approval shall not be unreasonably withheld.
6.2.2 Project Status Reporting Requirements
The Contractor's Authorized Representative shall provide monthly reports to the City's
Authorized Representative during the Term of the Service Agreement. The report shall
be provided in a printed or computer readable electronic format compatible with the
City's software standards. The reports will be due within 30 calendar days of the end of
the reporting period. At a minimum, the report shall include:
· A summary of the total number of Customers, the total amount of Disposal
Charges collected, and the waste tonnage received at the Blue Mountain Drop-
Box Facility.
. A summary of the waste tonnage Transported to the Transfer Station.
· A discussion of highlights and problems, and measures taken to resolve
problems.
The Contractor's Authorized Representative shall also be available for monthly Project
review meetings with the City's Authorized Representative.
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CIty of Port Angeles
8.3-5
April 5, 2005
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6.2.3 Disposal Charges
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The Contractor shall pay the City an amount equal to the Disposal Charges it collected
each month. Disposal charges collected shall include accounts receivable for credit
transactions. Contractor payment to the City of the total Disposal Charges collected
shall accompany the Contractor's monthly report.
6.2.4 Facilities and Equipment
The City will provide the following facilities and equipment:
. Existing building with restroom.
. Concrete apron.
. Paved drive-around.
. Water well.
. Oil/antifreeze recycle tanks.
The Contractor shall provide the following:
. Electrical and telephone service.
. Uniquely identified transfer containers, marked consistent with Transfer Station
Trailers.
. Mobile toilet.
. Scales similar to the hopper scales that are currently in use.
The Contractor is responsible for providing his own transfer equipment (containers, roll-
on Trailers/trucks), or other appropriate units of operation.
6.2.5 Ownership of Equipment
All vehicles, equipment, and materials (excluding Appurtenances) proposed by the
Contractor for use in performance of the Service Agreement shall be owned by the
Contractor, provided that leases or other forms of agreement may be allowed by written
approval by the City's Authorized Representative prior to execution of the Service
Agreement. Any leases or agreements entered into subsequent to the Service
Agreement shall be subject to approval by the City's Authorized Representative prior to
the Commencement Date under this Service Component. All such leases or
agreements shall be provided in event the Contractor fails to perform, or the default of
such lease or agreement.
CIty of Port Angeles
8.3-6
April 5, 2005
Conditional sales contracts, mortgages, or other agreements for financing the purchase
of vehicles and equipment may be allowed if the City's Authorized Representative is
satisfied prior to executing the Service Agreement, as to the City's rights to take
possession of the vehicles, equipment, and materials in event the Contractor to perform
the Service Agreement or defaults under such lease or agreement under Service
Component III.
6.2.6 Days and Hours of Operation
The Contractor shall staff the Blue Mountain Drop-Box Facility during its hours of
operation. The Contractor will have the Drop-Box Facility open to Customers a
minimum of three days per week (one day of which must be Saturday or Sunday), eight
hours per day within the hours of 8:00 A.M. and 7:00 P.M. as approved by the City's
Authorized Representative. Any operation beyond this will be by choice of the
Contractor without additional compensation.
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8.3-7
April 5, 2005
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7. BLUE MOUNTAIN PERFORMANCE SPECIFICATIONS
7.1 FUNCTIONAL REQUIREMENTS
7.1.1 Blue Mountain Drop-box Operations/Recycling Specific Requirements
The following are the specific requirements for Drop-Box and recycling Drop-Off
operations:
. The Contractor shall promptly greet each Customer entering the Facility.
. The Contractor shall inspect and weigh the load and collect the appropriate
Disposal Charge.
. The Contractor will direct the Customer to the appropriate area based on waste
type (Recyclable Materials, Acceptable HHW, Acceptable Waste, or Mixed
MSW). The Contractor's Authorized Representative shall annually provide
Clallam County the right of first refusal to retain a portion or all of the used motor
oil accepted by the Contractor at the Facility.
. Recyclables will be placed directly into an appropriate container whenever
possible. Recyclables will not be allowed to accumulate anywhere around the
. Facility.
. If the Customer has Mixed MSW, the Contractor shall direct the Customer to the
off-loading area, and assist the Customer with off-loading of waste if necessary.
. The Contractor shall screen loads to determine if Unacceptable Waste is present.
If Unacceptable Waste is identified, the Contractor shall inform the Customer that
the waste cannot be accepted. The waste will be retrieved and returned to the
Customer.
. Within 72 hours of filling a waste container, the Contractor shall be responsible
for Transporting the material to the Transfer Station. At the end of each day, the
Contractor shall ensure that all waste is loaded into containers.
. The Blue Mountain Drop-Box Operations will be limited to Acceptable Waste
including Mixed MSW (excluding Biosolids, White Goods, Recyclable Materials
under Service Component IV).
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City of Port Angeles
8.3-8
April 5, 2005
7.2
GENERAL OPERA liONS
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7.2.1 Incoming Waste
The Contractor shall provide scales to weigh loads and determine Disposal Charges for
each Customer. Recyclable Materials will not be included in the weight total. If
Unacceptable Waste is delivered to the Facility, the Contractor shall direct the Person
delivering the waste to remove the material from the Drop-Box. If the owner of the
Unacceptable Waste cannot be identified, the Contractor shall be responsible for proper
Disposal of the waste at its own expense.
7.2.2 Unacceptable Waste
The Contractor shall screen wastes delivered to the Drop-Box Facility in a manner
sufficient to determine whether or not Unacceptable Wastes are present in accordance
with the Waste Acceptance Policy and procedure developed as part of Service
Component I.
7.2.3 Environmental Control
The Contractor shall be responsible for the environmental controls listed in Sections
7.2.3.1 through 7.2.3.3.
7.2.3.1 Odor Control
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The Contractor shall ensure the tipping areas and areas around the Drop-Box are kept
clean and swept daily. Containers shall be routinely cleaned to prevent odor
accumulation. Full waste containers shall not be stored on-site for any longer than 48
hours excluding holidays or emergency situations. The Contractor shall respond to all
complaints by local residents within 24 hours regarding odors emanating from the
Facility.
7.2.3.2 Litter Control
The Contractor shall conduct on-site litter control during the Days and Hours of
Operation. The Contractor shall perform daily inspections paying particular attention to
wind-blown material near the Facility boundaries. The Contractor shall conduct daily
litter control and pickup on areas outside the boundaries of the Facility.
7.2.3.3 NuisanceNector Control
The Contractor shall be responsible for the control of insect, rodents, birds and other
animals, as necessary to mitigate a nuisance or health and safety hazard.
The City's Authorized Representative will evaluate the need for additional environmental
controls to mitigate impacts, such as noise or dust, as necessary. The Contractor's
City of Port Angeles
8.3-9
April 5, 2005
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Authorized Representative shall respond promptly to all nuisance mitigation requests
from the City;s Authorized Representative.
7.2.4 Inspection
The Contractor shall inspect operating machinery, litter control, and general
housekeeping during the Days and Hours of Operation. The Contractor shall inspect
safety equipment weekly, at a minimum. The frequency of additional operation or
procedural inspections shall be conducted as directed by the City's Authorized
Representative.
The Contractor shall record the results of all inspections conducted at the Facility in a
logbook or on City approved inspection forms. A copy of all logbooks or inspection
forms will remain onsite at all times.
7.2.5 Holiday Operations
The Contractor shall not be required to operate the Facility on legal holidays.
7.2.6 Materials Transport
Once a waste container has been filled, the Contractor shall be responsible for
Transporting and disposing of the material to the Transfer Station. At the end of each
day, the Contractor shall ensure that all waste is loaded into containers.
The Contractor shall be fully responsible for insuring containers comply with legal gross
vehicle and axle weights requirements, and shall unload and reload containers as
necessary to achieve compliance with applicable weight limits. The Contractor shall be
responsible for payment of all overweight fines received for containers loaded by the
Contractor.
7.2.7 Facility Security
The Contractor shall provide measures to ensure site security and eliminate
unauthorized site access. Security measures shall be effective at all times. The
Contractor shall repair all damage to the Blue Mountain Drop-Box Operations or its
equipment resulting from failure to provide adequate security measures. Sufficient
exterior lighting shall be provided to deter unauthorized nighttime access and assist with
night inspections of the Facility.
7.2.8 Utilities
The Contractor shall be responsible for recurring monthly charges for all Utilities,
including but not limited to phones, electricity, water, sewer, and fuel charges.
City of Port Angeles
B 3-10
April 5, 2005
7.2.9
Taxes
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The City shall be responsible for payment of Washington State excise tax, and City
utility tax. The Contractor shall be responsible for payment of all other taxes and fees in
accordance with the Service Agreement
7.3 EQUIPMENT AND EQUIPMENT MAINTENANCE
7.3.1 General
All equipment and containers shall be maintained in a satisfactory condition to meet the
terms of the Service Agreement. Maintenance is the sole responsibility of the
Contractor.
7.3.2 Maintenance Records
The Contractor shall keep records of all service, maintenance and repairs for all
equipment use in collection, and processing of solid waste or recyclables. The
Contractor shall keep copies of all records on-site at all times and these records shall be
made available to the City's Authorized Representative and all regulatory agencies with
jurisdiction over the Facility.
7.3.3 Maintenance Schedule
The Contractor shall schedule regular preventive maintenance for the equipment and
the Facility. The Contractor shall clean the Drop-Box area daily. The Contractor shall
be required to keep the Facility clean and sanitary. The City's Authorized
Representative reserves the sole right to determine the adequacy of cleaning and
maintenance.
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7.4 MEASUREMENT AND PAYMENT
The Contractor's monthly Service Fee will provide for payment to the Contractor for
Blue Mountain Drop-Box Operation services rendered in accordance with the Service
Agreement.
Vehicles used by the Contractor to Transport waste containers shall be weighed by the
City at the Transfer Station after loading in accordance with Section 2.4.3 of
Performance Specification B.1. The difference between the gross and tare weights will
be the net weight of waste in the vehicle and waste containers. After verifying the
information on the ticket, the Contractor shall sign the weight ticket, and will receive a
copy of the ticket. The net weight shown on the weight ticket will serve as the basis of
payment for services provided by the Contractor for Blue Mountain Drop-Box Operation
services under Service Component III in accordance with the Service Agreement.
City of Port Angeles
8.3-11
Apri15,2005
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7.5 PERMITTING
The City's Authorized Representative shall be responsible for preparing applications for
all federal, state, and local permits, licenses and other approvals applicable. The City
shall be designated as the permit applicant, and shall be responsible for submitting
applications, paying fees, and providing all information required by regulatory agencies
for review processes and approvals.
The City shall assume full responsibility for the identification of any and all required
regulatory approvals.
By selecting the Contractor to perform this Service Component, the City does not
guarantee that any permit from City or County agencies, federal, or other state and local
government agencies, will be secured.
7.6 SCALE OPERATIONS
The Contractor will weigh all Acceptable Waste delivered to the Facility.
After weighing, the Contractor shall prepare a sequentially numbered weight ticket that
indicates the Customer, waste type, date, time, net weight, and Disposal Charge. If the
scales are inoperable at any time, the Contractor may estimate the net weight until the
scales are operable.
The Contractor shall provide for scale maintenance, repairs, and annual scale
calibration at the Contractor's expense.
City of Port Angeles
8.3-12
Apnl5,2005
Recyclables Collection And Processing Performance Specifications
Appendix 8.4
Apri/5,2005
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TABLE OF CONTENTS
8. P R OJ Eel DESC RIPTION ........ .............. ............. ........ ......... ........ .......... ..... ........ .... 1
8.1 INTRODUCTION AND PROJECT SCHEDULE ............................................ 1
8.1.1 Project Schedule................................................................................. 2
8.2 GENERAL PROJECT REQUIREMENTS...................................................... 3
8.2.1 Staffing........... ....... .............. ........................ ....................................... 3
8.2.2 Project Status Reporting Requirements...... ....... .................................4
8.2.3 Public I nvolvement and Information.................................................... 4
9. PERFORMANCE SPECIFICATIONS ......................................................................5
9.1 FUNCTIONAL REQUIREMENTS.. ............. ............ ....... .................. ..............5
9.1.1 Curbside Program Specific Requirements.......................................... 5
9.1.2 Commercial Cardboard Specific Requirements .................................. 6
9.1.3 Collection of Yard Debris Specific Requirements ............................... 7
9.1.4 Drop-Off Recycling Facilities Requirements .......................................7
9.2 GENERAL OPERATIONS ..................... ........................ .......... ........... ...........8
9.2.1 Collection Vehicles ............................................ .................................8
9.2.2 loading and Material Identification .................. ...................................8
9.2.3 Materials Transport............... ................................... ............. .............. 8
9.2.4 Parking of Vehicles............................................................................. 9
9.2.5 Holiday Collections............................................................................. 9
9.2.6 Annexation... .......... ..... ....... ........... ....................... ........... ....................9
9.3 EQUIPMENT AND EQUIPMENT MAINTENANCE ....................................... 9
9.3.1 General... ...... ....... ....... ....... ................................. .................. ............ 10
9.3.2 Ownership of Equipment .................. .............. ................ ...... ............ 10
9.3.3 Cleaning and Painting of Vehicles and Equipment ........................... 10
9.3.4 Cleaning Facilities....... ....... ............. ..................... ......... .................... 10
9.4 MEASUREMENT AND PAyMENT.............................................................. 10
9.5 UTilITIES.......... ...... ................................. ..................... ................................9
9.6 TAXES............... .............................................. .............. ................................9
9.7 PERMITTING.... ............................. ...................... ....................................... 11
9.8 OPERATIONS PLAN ..................................................................................11
ACRONYMS DESCRIPTION
City
City of Port Angeles
City of Port Angeles
April 5, 2005
County
HHW
MSW
SWAC
Clallam County
Household Hazardous Waste
Municipal Solid Waste
Solid Waste Advisory Committee
City of Port Angeles
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April 5, 2005
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8. RECYCLING PROJECT DESCRIPTION
8.1 INTRODUCTION AND PROJECT SCHEDULE
The Contractor shall be responsible all equipment, labor, and materials necessary to
collect and process Recyclable Materials as described in the Performance
Specifications, the RFP, and in accordance with terms of the Service Agreement. In the
event of any conflict among the preceding documents, the most burdensome Contractor
duty or obligation shall prevail, unless otherwise approved by the City's Authorized
Representative. For the purpose of this Project, "Recyclable Materials" include the
following:
. Aluminum cans.
. Tin cans.
. Green, brown and clear recyclable glass.
. All Number 1 and Number 2 plastics.
. Newsprint.
. Cardboard.
. Ledgerpaper.
. Computer paper.
. Magazines.
. Catalogues.
. Telephone books.
. All common "junk mail" with the exception of envelopes with "glasene" windows.
. Excluding any bottles, cans, and jars that contain any Hazardous Waste
including, but not limited to, paints, thinners, aerosols, drain cleaners, motor oil,
pesticides, and antifreeze.
The Contractor shall provide recycling collection services, including all related
Transportation, processing, marketing, Customer records, and sales services, as set
forth below:
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8.4-1
April 5, 2005
· Bi-weekly curbside collection of commingled Recyclable Materials (excluding
green, brown and clear recyclable glass) from all eligible single-family and multi-
family residential dwellings up to a four family dwelling, that have received a
recycling container and are located within the Port Angeles corporate limits and
areas that may be annexed during the Term of the Service Agreement.
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. Bi-weekly or monthly curbside collection of Yard Debris from all eligible single-
family and multi-family residential dwellings up to a four family dwelling, that have
received a recycling cart and are located within the Port Angeles corporate limits
and areas that may be annexed during the Term of the Service Agreement and
delivery of the collected material to the City's Co-Composting Facility at the
Transfer Station site.
. Semi-weekly curbside collection of cardboard from all eligible commercial
locations that have received a recycling container and are located within the Port
Angeles corporate limits and areas that may be annexed during the Term of the
Service Agreement.
· Bi-weekly collection of Recyclable Materials from up to seven City and School
District facilities within the Port Angeles corporate limits and areas that may be
annexed during the Term of the Service Agreement.
· Provision and servicing of Drop-Off Facilities for collection of Recyclable
Materials from residential and commercial self-haulers at the Transfer Station .
and the Blue Mountain Drop Box Operations.
. Provision and servicing of up to 3 Drop-Off Facilities for collection of green,
brown and clear recyclable glass from residential self-haulers at mutually
agreeable locations within the City.
. Collection of Recyclable Materials from up to 10 community events such as:
~ Household Hazardous Waste (HHW) Event.
~ Clallam County (County) Fair.
~ Festival of the Trees.
~ Juan de Fuca Festival of the Arts.
~ Relay for Life.
~ Duck Derby.
. Collection of Recyclable Materials from other facilities upon City request at
commercial rates established by the Contractor.
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City of Port Angeles
8.4-2
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. Project status reporting.
Commercial recycling services is limited to commercial cardboard collection from
commercial businesses located within the City.
Upon the Contractor's Authorized Representative's request, the City shall provide an
electronic copy of the City's Customers' service addresses to be exclusively used by the
Contractor for operations and Project status reporting. The Contractor shall treat this
information as confidential in accordance with the Service Agreement.
8.1.1 Project Schedule
The Contractor agrees to distribute containers and commence curbside collection within
30 days following the Commencement Date of this Service Component.
8.2 GENERAL PROJECT REQUIREMENTS
8.2.1 Staffing
The Contractor shall establish a project management organization for the Project. The
Contractor's project manager shall be directly accountable to the City for the
Contractor's performance and shall be the prime contact for all communications with the
City.
In addition to the project manager, the Contractor's key personnel shall be identified in
the Operations Plan. Replacement of key personnel shall be subject to approval by the
City's Authorized Representative, whose approval shall not be unreasonably withheld.
Additional employee and staffing requirements include:
. The Contractor shall require all employees to be courteous at all times. They
shall not play loud music, or use loud or profane language.
. Each employee shall, at all times, carry a company ID card and a valid
Washington State Driver's License and endorsements for the type of vehicle
being operated.
. The Contractor shall assign a qualified Person or Persons to be in charge of its
operation. The City's Authorized Representative shall be given the name of the
Person or Persons and information regarding their experience.
. The Contractor shall provide operation and safety training for all the Contractor's
personnel.
. Employees, in collecting materials, shall follow regular walks for pedestrians
while on private property. They shall not trespass, loiter, cross property to
City of Port Angeles
8.4-3
Apnl 5, 2005
adjoining premises, or meddle with property that does not concern them. They .
shall also replace containers in an orderly manner after completion of each
collection and not affect Municipal Solid Waste (MSW) collection by the City.
. Whenever a principal officer of the Contractor is not immediately available or
present, the City's Authorized Representative may give orders related to
imminent environmental, health and human safety issues to the Contractor's
Authorized Representative's in charge of the operations.
. The Contractor's Authorized Representative shall answer complaints courteously
and promptly within 24 hours of receipt of the complaint. The City's Authorized
Representative will notify the Contractor's Authorized Representative of all
complaints received. The Contractor shall resolve all such complaints.
. Whenever the City's Authorized Representative or a Customer notifies the
Contractor of locations that have not received scheduled service at no fault of the
Customer, the Contractor shall service such locations by the end of the following
workday.
. Contractor employees shall handle all containers with reasonable care to avoid
damage, and shall immediately cleanup and Dispose of any spilled contents.
8.2.2 Project Status Reporting Requirements
The Contractor's Authorized Representative shall provide monthly reports to the City's
Authorized Representative. The reports shall be provided in a computer readable
electronic format compatible with the City's software standards. The reports will be due
within 30 calendar days of the end of the reporting period. At a minimum, the monthly
reports shall include:
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. A summary of the: Customer containers and carts provided and the number and
type (Le., commingled recycling or Yard Waste) of set-outs collected; and the
tickets at the Transfer Station and recovered tonnages for each type of material.
. A discussion of highlights and problems, and measures taken to resolve
problems, and increase efficiency and participation.
. Complaints received and responses provided.
. Copies of weight tickets for each load of Recyclable Material and materials that
are not recyclable.
The Contractor's Authorized Representative shall meet quarterly for Project review
meetings with the City's Authorized Representative. The City's Authorized
Representative will issue an agenda and notify the Contractor's Authorized
Representative seven calendar days prior to the quarterly meeting.
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City of Port Angeles
8.4-4
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Upon the City's Authorized Representative's request, the Contractor's Authorized
Representati~e shall provide semi-annual reports to the City's Authorized
Representative. The semi-annual reports shall be provided in a computer readable
electronic format compatible with the City's software standards. The semi-annual
reports will be due within 30 calendar days of the City's Authorized Representative's
request. At a minimum, the semi-annual reports shall include:
. A list of all residential Customer service addresses including: the date that
recycling containers and carts were delivered, replaced and removed; the serial
number of recycling containers and carts; and the dates that each type (Le.,
commingled recycling or Yard Waste) of Customer set-outs or not-outs per
service address during the reporting period.
. A list of all commercial Customer service addresses including: the date that
recycling containers were delivered, replaced and removed; the serial number of
the recycling containers; and the dates that each Customer container was
serviced by the Contractor per service address during the reporting period.
8.2.3 Public Involvement and Information
The Contractor shall provide public awareness and education services as described
below, unless otherwise approved by the City's Authorized Representative:
. . Distribution of recycling brochures with distribution of containers.
. Distribute recycling information to support community events. Provide Contractor
personnel for up to 10 community events per year.
. Contractor shall participate in Solid Waste Advisory Committee (SWAC)
meetings.
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City of Port Angeles
8.4-5
Apnl 5, 2005
9. RECYCLING PERFORMANCE SPECIFICATIONS
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9.1 FUNCTIONAL REQUIREMENTS
9.1.1 Curbside Program Specific Requirements
The following are the specific requirements for the curbside program:
. The Contractor shall, at its expense, provide containers or carts at the City's
Authorized Representative's request to all Customers requesting services that
are living in single-family and multi-family' dwelling units up to a four family
dwelling and commercial cardboard Customers within the City. The Contractor
shall be responsible for the maintenance and inventory of all containers and
carts.
. The days and hours of operation for residential collection of these materials shall
normally be Monday through Friday, 7:00 AM. to 6:30 P.M.
. The City shall require its recycling Customers to set-out recycling containers and
carts no later than 7AM on the scheduled service day for collection. The
Contractor reserves the right to charge the Customer for return trips for out of
route collections due to Customer negligence.
. The Contractor shall have the exclusive right to provide collection services and
market and retain all revenues received by the Contractor for the resale of the
Recyclable Materials under this Service Component in accordance with the
Service Agreement.
.
. The Contractor shall service new accounts or delete existing accounts within 72
hours or three business days after receipt of verbal notice from the City's
Authorized Representative.
. The Contractor shall schedule collection in accordance with maps that the City's
Authorized Representative shall provide to the Contractor indicating the days on
which regular refuse collections are made by the City so that refuse, recyclables,
and Yard Waste are collected on the same day. In the event of changes in
routes or schedules that will alter the day of collection, the City's Authorized
Representative shall notify the Contractor's Authorized Representative in writing
10 days prior to the change. The City's Authorized Representative shall also
notify Customers of such changes in Recyclable Materials, by mail, or by direct
contact, at the discretion of the City's Authorized Representative. City residential
refuse collection occurs on all legal holidays occurring Monday through Friday,
with the exception of Thanksgiving, Christmas and New Years Day. The City
reserves the right to alter collection days; however, should this occur the
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CIty of Port Angeles
8.4-6
Apnl 5, 2005
.
Contractor's Authorized Representative shall receive at least 10 working days
notic~ and the City shall be responsible for all Customer notification.
. During the Term of the Service Agreement, at the City's Authorized
Representative's request the Contractor shall provide and deliver containers and
replace damaged containers at no additional charge to the City or Customer. At
the City's Authorized Representative's request the Contractor shall remove
containers from inactive service locations. The Contractor shall not charge the
City but may charge a Customer for replacement containers that are damaged or
stolen due to Customer negligence and for containers delivered to the same
service location that it was removed from within a two-month period. The
Contractor shall deliver and remove containers within two business days of
notification by the City's Authorized Representative.
. Containers for collection of recyclables shall, at a minimum, be a new 96-gallon
cart for commingled recyclables to be provided by the Contractor for each
residential account in the City. The containers shall be marked for commingled
recyclables. All containers shall be approved in writing by the City's Authorized
Representative prior to purchase. The type of container shall be the industry
standard or a City approved equivalent. The container shall be made of plastic,
preferably recycled, or the structural equivalent.
.
. Upon Customer request, the Contractor shall provide pack-out service for the
disabled or elderly providing the quantity of Customers receiving pack-out service
does not exceed 3% of all City collection Customers.
. The Contractor shall provide recycling brochures to all Customers receiving
services at the time recycling containers are delivered. These brochures shall
contain information on what materials are included in the recycling program, what
materials are to be placed in the container, collection schedule and container
placement, and what to do with old containers, if any.
. Upon the request of either Party, which may be made no more frequently than
once per year, the Contractor's Authorized Representative shall provide the
City's Authorized Representative with brochures in sufficient quantity to be
included with City Customer utility bills (approximately 10,000). The brochures
must be in Microsoft Word format using letter size (8-1/2 X 11 inch) page setup.
The Contractor's Authorized Representative shall provide electronic files to the
City for all brochure materials.
. Recycling containers that are in use prior to the execution of the Service
Agreement are the property of Waste Management. After the Commencement
Date of this Service Component, the Contractor shall distribute new recycling
containers to the initial list of households specified by the City and retrieve all
containers owned by Waste Management that are placed out for collection
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City of Port Angeles
8.4-7
April 5, 2005
concurrent with the initial delivery of containers. Containers owned by Waste .
Management shall be retrieved by the Contractor as part of the deliver of
containers to the initial list of households specified by the City and delivered to
the Transfer Station, where Waste Management may pick them up. Collection of
containers from households that do not receive services under the Service
Agreement or from subsequent lists of households specified by the City shall be
the responsibility of Waste Management. The Contractor shall provide for
collection of containers upon termination of this Service Component.
9.1.2 Commercial Cardboard Specific Requirements
The following are the specific requirements for the collection of commercial cardboard
accounts:
· Collection of corrugated cardboard from commercial Customer locations in Port
Angeles shall occur five days per week with collections from each Customer
being mandated by the Customer's service level requirements. Some of this
service level information is available through the City and some is proprietary to
the current Contractor.
· During the Term of the Service Agreement, at the City's Authorized
Representative's request the Contractor shall provide and deliver containers and
replace damaged containers as required at no additional charge to the City or
Customer. At the City's Authorized Representative's request the Contractor shall .
remove containers from inactive service locations. The Contractor shall not
charge the City but may charge a Customer for replacement containers that are
damaged or stolen due to Customer negligence and for containers delivered to
the same service location that it was removed from within a two-month period.
The Contractor shall deliver and remove containers within two business days of
notification by the City's Authorized Representative. The City's Authorized
Representative shall approve all containers in writing in advance of the
Contractor's purchase of such containers.
· All containers shall be approved in writing by the City's Authorized
Representative prior to purchase. The type of container shall be the industry
standard or a City approved equivalent.
· The Contractor shall provide a suitable vehicle to collect and haul cardboard.
· The Contractor shall serve additional commercial locations within 48 hours or two
business days after receipt of verbal notice from the City's Authorized
Representative.
· The days and hours of operation for commercial collection of these materials
shall normally be Monday through Friday, 4:30 A.M. to 6:30 P.M.
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City of Port Angeles
8.4-8
April 5, 2005
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. Cardboard containers that are in use prior to the execution of the Service
Agreement are the. property of Waste Management. After the Commencement
Date of this Service Component, the Contractor shall distribute new cardboard
containers to the initial list of households specified by the City and retrieve all
containers owned by Waste Management that are placed out for collection.
Containers owned by Waste Management shall be retrieved by the Contractor as
part of the deliver of containers to the initial list of locations specified by the City
and delivered to the Transfer Station where Waste Management may pick them
up. Collection of containers from locations that do not receive services under the
Service Agreement or from subsequent lists of locations specified by the City
shall be the responsibility of Waste Management. The Contractor shall provide
for collection of containers upon termination of this Service Component.
9.1.3 Collection of Yard Debris Specific Requirements
The following are the specific requirements for the collection of Yard Debris:
. Yard debris collection shall be on the same day, and during the same hours, as
refuse and recycle collection. The Customer will place material at the same
approximate location as the curbside recyclables containers, but must maintain a
5-foot clearance from all City containers.
. During the Term of the Service Agreement, at the City's Authorized
Representative's request the Contractor shall provide and deliver carts and
replace damaged carts as required at no additional charge to the City or
Customer. At the City's Authorized Representative's request the Contractor shall
remove carts from inactive service locations. The, Contractor shall not charge the
City but may charge a Customer for replacement carts that are damaged or
stolen due to Customer negligence and for carts delivered to the same service
location that it was removed from within a two-month period. The Contractor
shall deliver and remove carts within two business days of notification by the
City's Authorized Representative. The City's Authorized Representative shall
approve all carts in writing in advance of the Contractor's purchase of such carts.
. The Contractor shall not accept Yard Debris collected in plastic bags or deliver
Yard Debris contaminated with plastic bag material to the Co-Composting
Facility.
. Materials collected shall be delivered to a designated location at the Transfer
Station for shredding and composting.
. The days and hours of operation for residential collection of these materials shall
normally be Monday through Friday, 7:00 A.M. to 6:30 P.M.
City of Port Angeles
B.4-9
April 5, 2005
. During the months of December through February the City's Authorized
Representative may notify the Contractor's Authorized Representative to limit
curbside collection of Yard Debris to once per month in lieu of bi-weekly
collection. The City's Authorized Representative's notice shall be provided at
least thirty days in advance to the Contractor's Authorized Representative. The
City's and Contractor's Authorized Representatives shall agree on the days of
the month that Yard Debris will be collected during the months of December
through February.
.
. The Contractor shall provide curbside collection of trees during the month of
January on the same day, and during the same hours, as refuse and recycle
collection.
. Yard Debris carts that are in use prior to the execution of the Service Agreement
are the property of Waste Management. After the Commencement Date of this
Service Component, the Contractor shall distribute new Yard Debris carts to the
initial list of households specified by the City and retrieve all containers owned by
Waste Management that are placed out for collection. Yard Debris carts owned
by Waste Management shall be retrieved by the Contractor as part of the deliver
of carts to the initial list of households specified by the City and delivered to the
Transfer Station where Waste Management may pick them up. Collection of
carts from households that do not receive services under the Service Agreement
or from subsequent lists of households specified by the City shall be the
responsibility of Waste Management. The Contractor shall provide for collection .
of carts upon termination of this Service Component.
9.1.4 Drop-Off Recycling Facilities Requirements
This Service Component involves collecting, hauling, weighing, and processing for
Disposal, all self-haul Recyclable Materials from Drop-Off facilities at the Transfer
Station and the Blue Mountain Drop Box Operations.
The following are the specific requirements for the Transfer Station and the Blue
Mountain Drop-Off Operations:
. Recycling services at the Transfer Station and Blue Mountain Drop Box
Operations sites will be located in the designated Drop-Off area. The recycling
facilities will accept the same materials as the curbside recycling program.
. The Contractor will furnish Drop-Off Facilities that will sufficiently handle the
capacity of the site. The Contractor will label Drop-Off Facilities to identify what
type of material will be accepted.
. Services will include processing, Transporting, marketing, and sales of
recyclables.
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City of Port Angeles
8.4-10
April 5, 2005
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. Pick up of recyclables shall occur during normal site operating hours. The
Contr~ctor shall make a specific pickup at the Transfer Station site after 2:00
P.M. each Friday.
. The Contractor shall be responsible to ensure the Drop-Off area is clean and free
of litter and debris.
. The Contractor may find Acceptable Waste that is not recyclable deposited in the
Drop-Off Facilities. Such materials may be delivered to the Transfer Station at
no cost to the Contractor and the City shall pay a Service Fee under Service
Component II for Transport and Disposal. All Acceptable Waste deposited in a
Drop-Off Facility that is not recyclable shall be weighed by the City at the
Transfer Station in accordance with Section 2.4.3 of Performance Specifications
B.1.
The following are the specific requirements for the collection containers for glass at up
to 3 mutually agreed upon locations within the City of Port Angeles:
. The recycling facilities will only accept glass.
. The Contractor will furnish Drop-Off Facilities that will sufficiently handle the
capacity of the site. The Contractor will label Drop-Off Facilities to identify what
type of glass will be accepted.
. Services will include processing, Transporting, marketing, and sales of
recyclables.
. The Contractor shall be responsible to ensure the Drop-Off area is clean and free
of litter and debris.
. The Contractor may find Acceptable Waste that is not recyclable deposited in the
Drop-Off Facilities. Such materials may be delivered to the Transfer Station at
no cost to the Contractor and the City shall pay a Service Fee under Service
Component II for Transport and Disposal. All Acceptable Waste deposited in a
Drop-Off Facility that is not recyclable shall be weighed by the City at the
Transfer Station in accordance with Section 2.4.3 of Performance Specifications
B.1.
9.2 GENERAL OPERATIONS
9.2.1 Collection Vehicles
The Contractor shall provide collection vehicles specifically designed and manufactured
for curbside collection of Recyclable Materials, and shall be appropriate for the
materials anticipated to be collected by the Performance Specifications. The vehicle
CIty of Port Angeles
8.4-11
April 5, 2005
shall provide for a reasonable level of flexibility with regards to future materials, which
may be collected.
The Contractor shall make all collections of Recyclable Materials. in watertight metal
receptacles or vehicles with closed tops, constructed so that the contents will not leak or
spill. Receptacles and/or vehicles shall be kept as clean as possible. They shall not be
allowed to park in the street or other places longer than is reasonably necessary to
collect recyclable goods.
The Contractor shall have brooms, dust pans, and shovels on the truck at all times for
cleaning up spilled materials.
A sign stating "This Vehicle Makes Frequent Stops" shall be placed on the rear of all
vehicles.
9.2.2 Loading and Material Identification
During the course of collecting and loading materials, the Contractor may find materials
that are not recyclable. The Contractor will ensure that such materials are placed in one
of the bins, the bin is left upright, and that notification is attached to the bin informing the
Customer why the material was not collected. The notification form shall be approved
by the City's Authorized Representative prior to use.
9.2.3
Materials Transport
The Contractor shall not, under any circumstances, be allowed to Dispose of Recyclable
Materials by landfilling, unless approved by the City's Authorized Representative. The
Contractor shall be responsible for the marketing and sale of Recyclable Materials
excluding Yard Waste collected from residential households, and shall be entitled to
applicable proceeds as provided in the Service Agreement.
9.2.4 Parking of Vehicles
The Contractor shall not use property in or adjacent to that zoned residential or adjacent
to the various Drop-Off Facilities for parking, standing, washing, cleaning, or storing
their vehicles or equipment without approval of the City. Property used for such
purposes shall be properly zoned, fenced, and have sufficient ingress and egress.
Areas used by the Contractor for storing, parking, or repair of these vehicles shall be
kept clean and orderly. Such areas shall be subject to periodic inspections by the City's
Authorized Representative.
9.2.5 Holiday Collections
When a legal holiday that is normally observed falls during the week, the Contractor,
through coordination with the City's Authorized Representative, shall arrange to make
collection on the same holiday schedule as the City's refuse collection schedule. No
CIty of Port Angeles
8.4-12
April 5, 2005
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holiday collection will be scheduled on Thanksgiving, Christmas, and New Year's Day.
The City's Authorized Representative shall provide the Contractor's Authorized
Representative with the holiday schedule by November 15th of each year.
9.2.6 Annexation
If, during the Term of the Service Agreement, additional territory in any amount
whatsoever is acquired by the City through annexation, the City reserves the right, upon
60 days written notice to the Contractor's Authorized Representative, to order the
Contractor to make collections in such annexed area, in accordance with all provisions
of the Performance Specifications and at the unit prices set forth in the Service
Agreement.
9.2.7 Community Events
Collection of Recyclable Materials at community events shall require a minimum of one
container at least 1.5-yard capacity for commingled recyclables (excluding glass) and a
cart for glass at least 96 gallons in size that shall delivered on the day before the event.
Some events may also require cardboard pick-up. Volunteers or City employees shall
provide and empty plastic collection bags into the containers throughout the duration of
the event. The Contractor shall service the containers as necessary and remove the
containers the next business day after the event.
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9.3
EQUIPMENT AND EQUIPMENT MAINTENANCE
9.3.1 General
The Contractor shall maintain all collection equipment and containers in satisfactory
condition to meet the terms of the Service Agreement.
9.3.2 Ownership of Equipment
All vehicles, equipment, and materials (excluding Appurtenances) proposed by the
Contractor for use in performance of the Service Agreement shall be owned by the
Contractor provided that leases or other forms of agreement may be allowed by written
approval of the City's Authorized Representative prior to execution of the Service
Agreement. Any such leases or agreements entered into subsequent to the Service
Agreement shall be subject to approval by the City's Authorized Representative prior to
executing the Service Agreement.
Conditional sales contracts, mortgages, or other agreements for financing the purchase
of vehicles, facilities, and equipment may be allowed if the City's Authorized
Representative is satisfied prior to executing the Service Agreement, as to the City's
rights to take possession of the vehicles, facilities, and equipment in the event the
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City of Port Angeles
8.4-13
April 5, 2005
Contractor fails to perform the Service Agreement or defaults under such lease or
agreement under Service Component IV.
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9.3.3
Cleaning and Painting of Vehicles and Equipment
I
All collection vehicles shall be clean and professional in appearance, and shall have the
name and telephone number of the Contractor, as well as any advertising of the
recycling program, as the only advertising on the vehicle.
9.3.4 Cleaning Facilities
The Contractor shall provide adequate vehicle, container, cart and Drop-Off Facility
cleaning equipment. All cleaning shall be done on a paved area, which is curbed to
prevent drainage onto surrounding areas and provides an approved catch basin and
oil/water separator connected to a sanitary sewer or a holding tank. These facilities
shall be used for all washing and steam cleaning of equipment, and be kept in sanitary
condition. All vehicles shall be kept in a clean and sanitary condition. and all collection
vehicles shall be periodically steam cleaned. inside and out.
9.4 MEASUREMENT AND PAYMENT
The Contractor's monthly Service Fee will provide for payment to the Contractor for all
services rendered in accordance with this Service Component.
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9.5 UTILITIES
The Contractor shall be responsible for recurring monthly charges for all Utilities related
to this Service Component, including but not limited to phones, electricity, water, sewer,
and fuel charges.
9.6 TAXES
The City shall be responsible for payment of Washington State excise tax, and City
utility tax. The Contractor shall be responsible for payment of all other taxes and fees in
accordance with the Service Agreement
9.7 PERMITTING
The City shall assume full responsibility for the identification of any and all required
regulatory approvals. The Contractor shall obtain owner approval for any Drop-Off
facilities placed on non-City owned property.
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City of Port Angeles
B.4-14
April 5, 2005
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9.8
OPERATIONS PLAN
The Contractor's Authorized Representative shall submit a Preliminary Operations Plan
to the City's Authorized Representative within 30 calendar days of the Commencement
Date of this Service Component. The Contractor's Authorized Representative shall
address all of the City's Authorized Representative's comments on the Preliminary
Operations Plan. The Contractor shall start operations within 30 calendar days
following the City's Authorized Representative's acceptance of the Final Operations
Plan. The Operations Plan shall also contain a Contingency Plan including a
comprehensive set of contingency operating procedures that will take effect in the event
of interruption of normal operations. At a minimum, the Operations Plan shall establish
procedures for the following:
. Staffing.
. Days and hours of operation.
. Description of collection vehicles.
. Location of initial processing facilities.
. Transport methods.
. . Location of final recycling, reuse, or resale facility.
. Drop-Off Facility maintenance.
. Location of Drop-Off Facilities for glass recycling.
The Operations Plan shall include a comprehensive set of contingency operating
procedures that will take effect in the event of interruption of normal operations,
including but not limited to:
. Release of toxic or hazardous substances.
. Work stoppage by the Contractor's employees.
. Emergency weather conditions.
. Names, telephone numbers, and addresses of all Persons designated as
emergency coordinators by the Contractor. An emergency coordinator shall be
on-call by telephone or radio within thirty minutes of an emergency. Emergency
coordinators shall be familiar with all parts of the Operations Plan. The
Contractor shall conduct emergency response drills at least twice per year.
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City of Port Angeles
8.4-15
April 5. 2005
The City's Authorized Representative shall prepare a response that confirms whether or .
not the Final Operations Plan was completed in conformance with requirements of the
Service Agreement. The response will specify if the Contractor must satisfy any
outst,anding requirements prior to commercial operations.
The City's Authorized Representative's approval of the Final Operations Plan and
authorization to commence commercial operations shall not be deemed as the City's
approval, or acquiescence to any conditions or Contractor activities that do not conform
to Applicable Law, the Performance Specifications, or the Service Agreement, nor shall
that review and authorization impose any liability on the City for Contractor errors,
omissions, or actions. The City's Authorized Representative's approval of the Final
Operations Plan shall in no way relieve the Contractor from adherence to the
Performance Specifications and the Service Agreement. The City's Authorized
Representative will forward the Final Operations Plan to CCEHD for review and
approval. CCEHD approval of the Final Operations Plan is required before the
Contractor may commence commercial operations.
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City of Port Angeles
8.4-16
Apnl 5, 2005
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Co-Composting Operations Performance Specifications
Appendix B.5
April 5, 2005
TABLE OF CONTENTS
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10. PROJECT DEseRI PTION ....... ...... ......... ............ ... ........... ..... .... ...... ........................ 1
10.1 INTRODUCTION AND PROJECT SCHEDULE ............................................ 1
10.1.1 Operations Plan .................................................................................. 2
10.2 GENERAL PROJECT REQUiREMENTS...................................................... 3
10.2.1 Permitting ............. ....... ...... .................... ................................. ............3
10.2.2 Staffing ............. ............................ .......................... ........ ........ ............3
11. PERFORMANCE SPECIFICATIONS ......................................................................5
11.1 FUNCTIONAL REQUiREMENTS.................................................................. 5
11.1.1 Materials Management....................................................................... 5
11.1.2 System Operations............................................................................. 5
11.1.3 Process Controls ................................................................................ 7
11.1.4 Inspections .........................................................................................7
11.1.5 Record Keeping .................................................................................. 7
11.1.6 Housekeeping/Decontamination ......................................................... 7
11.1.7 Reporting and Compliance ................................................................. 8
11.1 .8 Utilities................................................................................................ 8
11.1.9 Taxes ..... ......... ........... ........ ....... ........ ........... ............. ............ ..............8 .
11.2 MATERIAL OWNERSHiP........ .......... ......... ........... ...... ..... ................ ............ 8
11.3 FACILITY MAINTENANCE....... ........... ........................... ........ ........... ............9
11.4 EQUIPMENT AND EQUIPMENT MAINTENANCE .......................................9
11.4.1 General.... ........... ................................... ............ .......... ............ ...........9
11.4.2 Ownership of Equipment .................................................................... 9
11.4.3 Maintenance Records......................................................................... 9
11.4.4 Maintenance Schedule ..................... ...................... ........ ..... ............. 10
11.5 MEASUREMENT AND PAyMENT.............................................................. 10
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City of Port Angeles
April 5, 2005
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ACRONYMS DESCRIPTION
CCEHD Clallam County Environmental Health Department
City City of Port Angeles
County Clallam County
CQCR Co-Composting Quality Control Report
DCD Department of Community Development
DOE Department of Ecology
EPA Environmental Protection Agency
PFRP Process to Further Reduce Pathogens
Plan Co-Composting Facility Operations Plan
WORe Washington Organic Recycling Council
. WWTP Wastewater Treatment Plant
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City of Port Angeles
ii
Apri15,2005
10: CO-COMPOSTING PROJECT DESCRIPTION
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10.1 INT,RODUCTION AND PROJECT SCHEDULE
Service Component V requires the Contractor to provide manpower, materials, and
record keeping to operate and maintain the Co-Composting Facility, located adjacent to
the designated Transfer Station site, as described in the Performance Specifications,
the RFP and the Service Agreement. In the event of any conflict among the preceding
documents, the most burdensome Contractor duty or obligation shall prevail, unless
otherwise approved by the City's Authorized Representative. The Co-Composting
Facility was constructed in 1994 and renovated in 2003/2004 to provide for the
processing of Yard Debris and municipal Biosolids. The Co-Composting Facility uses
an aerated static pile with an aeration control system that was developed by Engineered
Compost Systems. The City currently operates the system to produce a Class A co-
compost product (as defined in WAC 173-308). The Co-Composting Facility provides
the primary source for disposing of the City's Biosolids (defined as a Type III feedstock)
and Yard Debris. The Contractor shall comply with its Technical and Cost Proposal that
presents methods and approaches to performing the activities listed below.
Specific elements of work shall include:
. The shredding of Yard Debris and green wastes delivered to the co-composting
Drop-Off Facility. The Contractor shall install new facilities for receiving, .
handling, and staging Yard Debris and green wastes as part of Service
Component I's Transfer Station development.
. Managing the delivery and storage of Biosolids from the City's wastewater
treatment plant (yWVTP). The City will deliver and place Biosolids as specified
by the Contractor.
. Mix Yard Debris and green waste with Biosolids in accordance with the Co-
Composting Facility Operations Plan (Plan) and operating permit.
. Operate the Co-Composting Facility to generate Class A co-composting
products.
. Screen finished product and return screenovers into the system.
. Stockpile co-composting products on-site as directed by the City.
. Record keeping arid reporting of co-composting operations.
. Minor maintenance to ensure the Facility remains fully operational during the
Term of the Service Agreement.
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City of Port Angeles
8.5-1
April 5, 2005
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. Coordination with other ongoing on-site activities.
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. Customer vehicle loading.
10.1.1 Operations Plan
The Contractor's Authorized Representative shall submit a Preliminary Operations Plan
to the City's Authorized Representative within 30 calendar days of the Commencement
Date of this Service Component. The Contractor's Authorized Representative shall
address all of the City's Authorized Representative's comments on the Preliminary
Operations Plan. The Contractor shall start operations within 30 calendar days
following the City's Authorized Representative's acceptance of the Final Operations
Plan. The Operations Plan shall also contain a Contingency Plan including a
comprehensive set of contingency operating procedures that will take effect in the event
of interruption of normal operations. At a minimum, the Operations Plan shall establish
procedures for the following:
. General operating requirements for the Co-Composting Facility including
inspection requirements, materials management, process controls, hours of
operation, etc. as required by the Performance Specifications.
. CompostlBiosolids handling operations and procedures including record keeping
requirements and other items presented in the Performance Specifications.
. Equipment to be used and equipment maintenance.
. Staffing, personnel, duties, and work schedules.
. Safety training.
The City will provide for all sampling and laboratory testing, as well as the marketing,
off-site Transport as necessary, and sale of the co-composting products.
The Operations Plan shall include a comprehensive set of contingency operating
procedures that will take effect in the event of interruption of normal operations,
including but not limited to:
. Release of toxic or hazardous substances.
. Work stoppage by the Contractor's employees.
. Emergency weather conditions.
. Names, telephone numbers, and addresses of all Persons designated as
emergency coordinators by the Contractor. An emergency coordinator shall be
on-call by telephone or radio within thirty minutes of an emergency. Emergency
City of Port Angeles
8.5-2
April 5, 2005
coordinators shall be familiar with all parts of the Operations Plan. The .
Contractor shall conduct emergency response drills at least twice per year.
The City's Authorized Representative shall prepare a response that confirms whether or
not the Final Operations Plan was completed in conformance with requirements of the
Service Agreement. The response will specify if the Contractor must satisfy any
outstanding requirements prior to commercial operations.
The City's Authorized Representative's approval of the Final Operations Plan and
authorization to commence commercial operations shall not be deemed as the City's
approval, or acquiescence to any conditions or Contractor activities that do not conform
to Applicable Law, the Performance Specifications, or the Service Agreement, nor shall
that review and authorization impose any liability on the City for Contractor errors,
omissions, or actions. The City's Authorized Representative's approval of the Final
Operations Plan shall in no way relieve the Contractor from adherence to the
Performance Specifications and the Service Agreement. The City's Authorized
Representative will forward the Final Operations Plan to CCEHD for review and
approval. CCEHD approval of the Final Operations Plan is required before the
Contractor may commence commercial operations.
10.2 GENERAL PROJECT REQUIREMENTS
10.2.1 Permitting
The City shall be responsible for preparing applications for all federal, state, and local
permits, licenses and other approvals applicable. The City shall be designated as the
permit applicant, and shall be responsible for submitting applications, paying fees, and
providing all information required by regulatory agencies for review processes and
approvals.
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By selecting the Contractor to perform this Service Component, the City does not
guarantee that any permit from City or County agencies, federal, or other state and local
government agencies, will be secured.
10.2.2 Staffing
The Contractor's Authorized Representative shall establish a project management
organization for the Project. The Contractor's project manager shall be directly
accountable to the City for the Contractor's performance and shall be the prime contact
for all discussions with the City's Authorized Representative.
In addition to the project manager, the Contractor's key personnel shall be identified in
the Operations Plan. Replacement of key personnel shall be subject to approval by the
City's Authorized Representative, whose approval shall not be unreasonably withheld.
Additional employee and staffing requirements include:
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City of Port Angeles
8.5-3
April 5, 2005
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. The Contractor shall require all employees to be courteous at all times. They
shall not play loud music, or use loud or profane language.
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. The Contractor's Authorized Representative shall assign a qualified Person or
Persons to be in charge of the operation. The City's Authorized Representative
shall be given the name of the Person or persons, and information regarding their
experience.
. The Contractor shall provide operation and safety training for all of its personnel.
· At least one Contractor employee involved with the co-composting operation is
required to complete Washington Organic Recycling Council (WORe) co-
compost operator training.
. Whenever a principal officer of the Contractor is not immediately available or
present, the City's Authorized Representative may give orders related to
imminent environmental, health and human safety issues to the qualified Person
or Persons in charge of the operations.
· The Contractor shall answer complaints courteously and promptly within 24
hours of receipt of the complaint. The City's Authorized Representative will notify
the Contractor's Authorized Representative of all complaints received. The
Contractor shall resolve all such complaints.
City of Port Angeles
8.5-4
April 5, 2005
11. CO-COMPOSTING PERFORMANCE SPECIFICATIONS
11.1 FUNCTIONAL REQUIREMENTS
11.1.1 Materials Management
The Contractor shall manage all materials required for feedstock necessary to produce
a Class A co-composting product suitable for resale in the commercial market place.
Materials include, but are not limited to, Yard Debris, green waste, Biosolids,
screenovers from the co-composting process, and other materials designated by the
City's Authorized Representative for incorporation into the co-composting system.
Materials management will include the storage, maintenance of storage areas, vector
control, handling, transferring, mixing, screening, and segregating co-composting
materials. The Contractor shall maintain strict decontamination protocols to reduce the
potential for cross-contamination of finished product and feedstock material.
11.1.2 System Operations
The Contractor shall provide personnel and supplies necessary to collect Yard Debris
and green wastes from the designated collection site at the Transfer Station, and
transfer them to a designated processing area for shredding and sorting of non-
conforming materials. The Contractor shall shred materials to meet the Performance
Specifications and the requirements of the Operations Plan.
The City will press Biosolids to remove free liquid, and deliver Biosolids to the Co-
Composting Facility from the City's WWTP. Biosolids shall be placed within available
areas within the existing Co-Composting Facility. The Contractor's Authorized
Representative shall provide notice to the City's Authorized Representative when 85
percent of the Biosolids storage capacity is full. The Contractor shall not utilize
alternative Biosolids storage or Disposal methods without the prior written approval by
the City's Authorized Representative.
The Contractor shall mix shredded Yard Debris with Biosolids and process screenovers
to create piles for processing in accordance with the Performance Specifications.
During processing, the Contractor shall monitor aeration, moisture, and temperature
control systems and maintain the on-site telemetry system.
The co-composting processing procedures are outlined as follows:
. The aeration blower is turned on and a minimum amount of positive air is applied
to the pile. Using the feedstock bucket on the loader, the operator spreads a 1-
foot thick "pad" of wood chips or screenovers on the floor of the selected active
Co-Composting Facility bay.
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8.5-5
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. Using the feedstock bucket on the loader, the operator loads waste from the Yard
Waste pile and the ,Biosolids pile to the Reel Auggie mixer to produce a 3:1 mix
(by volume). Yard waste and Biosolids are mixed, and discharged into a pile
from the Reel Auggie mixer conveyor belt. The operator loads the pile to the
back of the selected active Co-Composting Facility bays. The static pile shall be
constructed approximately 8 feet high and shall extend 1 foot beyond the
aeration trench when finished.
. The Yard Waste/Biosolids mix ratio should be 3:1 by volume. The mix should
allow air passage, and have a maximum moisture content of 60 percent. The
operator should have a mix sample tested for moisture content. If the mix is too
dense, add wood chips and compact for air circulation. Wood chips can be
screened out later and recycled.
. Insert temperature probe and begin automatic operation. Using the "Co-
Composting Quality Control Report" (CQCR) Form the operator will record all
pertinent information. To meet the EPA "Class A" designation for the Process to
Further Reduce Pathogens (PFRP), the compost temperature must reach 55
degrees Celsius. This temperature must be maintained for a minimum of three
days. To meet the vector attraction reduction the co-compost temperature must
be maintained at 40 degrees Celsius for another 11 days with an average
temperature of 45 degrees Celsius. When the compost has reached the desired
temperature, the aeration system data logger will continuously record
temperature. The operator will record temperatures on the CQCR Form.
. After the active compost has achieved PFRP and is showing a drop in
temperature (indicating reduced biological activity), the Contractor shall request
the City to sample the pile for the analyses specified in the co-composting
operating permit. When the lab has confirmed the material passes permit
criteria, the Contractor shall move the compost to the curing/storage pile. The
operator records this information on the CQCR Form.
. The Contractor shall allow the compost to cure for a minimum period of 120
days, or until the compost is stable. Stability can be determined by measuring for
carbon dioxide.
. Screen the finished compost to the particle size mutually agreed upon by the City
and Contractor Authorized Representatives. Oversize material can be recycled
into the compost mix by use as blanket material or bulking agent. The City will
test the screened material to document it meets Class A criteria before accepting
it for the City's use.
City of Port Angeles
8.5-6
Apri/5,2005
11.1.3 Process Controls
Monitoring the co-composting process will enable the Contractor to determine which
compost recipe works best, based on the type and quality of feedstock materials used.
At a minimum, the Contractor shall be required to check each newly constructed static
pile for moisture and report on the starting moisture content. Piles will be automatically
monitored for temperature through the composting software program.
The City shall be responsible for sampling all finished compost piles to ensure they
meet Chapter 173-350-220 of the WAC, Table A and B requirements. Compost not
meeting the requirements shown in Table A and/or Table B shall not be available for
sale. The City will only pay the Contractor its Service Fee for Class A products
accepted by the City.
11.1.4 Inspections
The Contractor shall monitor the Co-Composting Facility daily through the modem
accessing the control software. The Contractor shall answer alarm conditions promptly
to ensure a smooth, consistent operation. The Contractor shall physically check the
Facility regularly, and record all observations in an inspection log with signatures and
dates. The Contractor shall be required to keep these records for five years.
The City will inspect and provide testing of co-compost. Based on the results of product
testing, the City may reject the material as unsuitable for marketing or accept the
material and direct the Contractor to stockpile it on-site for City use and marketing.
11.1.5 Record Keeping
The Contractor shall maintain records of Co-Composting Facility operations and provide
records to the City's Authorized Representative monthly. At a minimum the records
shall document daily activities, materials management, status of co-composting
processing, equipment usage, maintenance inspections, and issues requiring the City's
response.
The Contractor, through its composting program, will produce a product, which may
ultimately become available to Customers. The agencies regulating the composting
activity have a specific set of monitoring, record keeping, and reporting requirements.
The Environmental Protection Agency (EPA) sludge rule 40-CFR-503 requires records
to be kept for a minimum of five years. The City shall be responsible for maintaining
records according to WAC 173-308-290 by lab analysis showing how the Class A
requirements were met and the results of the testing. The City shall keep a set of all
records for purposes of completing annual reports (Section 2.1.7).
City of Port Angeles
8.5-7
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11.1.6 Housekeeping/Decontamination
The Contractor shall be required to keep the Facility clean and sanitary. The Contractor
shall inspect the Facility and surrounding areas, in accordance with the approved
Operations Plan, and conduct housekeeping activities daily. The Contractor shall
routinely wash handling equipment and use handling procedures that reduce the
potential for material cross-contamination.
11.1.7 Reporting and Compliance
The Contractor's Authorized Representative shall provide monthly reports to the City's
Authorized Representative for each year of the Service Agreement. The reports will be
due within 30 days of the end of the reporting period. At a minimum, the report shall
include:
. A summary of the quantity of co-composting product produced and accepted by
the City during the month.
. A summary of any leachate collected and removed from the Co-Composting
Facility.
. A discussion of highlights and problems, and measures taken to resolve
problems and increase efficiency.
In addition, the Contractor's Authorized Representative shall prepare an annual report
containing monitoring data to the Clallam County Department of Community
Development, Environmental Health Department (CCEHD) and Washington State
Department of Ecology (DOE). The annual report shall comply with WAC 173-350-220
(4) (d).
The Contractor's Authorized Representative shall meet quarterly for Project review
meetings with the City's Authorized Representative.
11.1.8 Utilities
The Contractor shall be responsible for recurring monthly charges for all Utilities related
to this Service Component including but not limited to phones, electricity, water, sewer,
and fuel charges.
11.1.9 Taxes
The City shall be responsible for payment of Washington State excise tax, and City
utility tax. The Contractor shall be responsible for payment of all other taxes and fees in
accordance with the Service Agreement.
City of Port Angeles
8.5-8
Apn/5,2005
11.2
MATERIAL OWNERSHIP
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The City will assume ownership of all finished co-composting product that is accepted
by the City as a suitable Class A product. The Contractor shall be responsible for all
materials rejected as unsuitable and all feedstock material delivered to the Co-
Composting Facility. The City reserves all rights to the marketing and sale of finished
co-composting product.
11.3 FACILITY MAINTENANCE
The Contractor shall maintain the Co-Composting Facility to ensure the efficient
operation and production of a quality Class A product. The Contractor shall routinely
inspect leachate collection, aeration equipment, and the building floor, roof, and siding,
and perform routine housekeeping responsibilities.
11.4 EQUIPMENT AND EQUIPMENT MAINTENANCE
11.4.1 General
The Contractor is responsible for all equipment necessary for operation of the Co-
Composting Facility. The Contractor shall assume ownership of the City's equipment
used for co-composting operations. The equipment includes an auger mixer, a product
screen, and a loader. The Contractor shall own and be responsible for the equipment .
from the Commencement Date of this Service Component.
The Contractor shall be solely responsible for maintaining all equipment used in the co-
composting operations in satisfactory condition to meet the terms of the Service
Agreement. The Contractor shall be required to maintain and repair systems including
the aeration, moisture, and temperature control systems.
11.4.2 Ownership of Equipment
All vehicles and equipment proposed (excluding Appurtenances) for use in performance
of this Service Component shall be owned by the Contractor, provided that leases or
other forms of agreement maybe allowed by written approval by the City's Authorized
Representative prior to execution of the Service Agreement. All such leases or
agreements shall be provided in the event the Contractor fails to perform, or the default
of such lease or agreement. Any leases or agreements entered into subsequent to the
Service Agreement shall be subject to approval by the City's Authorized Representative.
Conditional sales contracts, mortgages, or other agreements for financing the purchase
of vehicles and equipment may be allowed if the City's Authorized Representative is
satisfied prior to execution, as to the City's rights to take possession of the vehicles and
equipment in the event the Contractor fails to perform the Service Agreement or
defaults under such lease or agreement under Service Component V.
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City of Port Angeles
8.5-9
April 5, 2005
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11.4.3 Maintenance Records
The Contractor shall keep records of all service, maintenance and repairs' for all
equipment use in the co-composting operation. The Contractor shall keep copies of all
records onsite at all times and these records shall be made available to the City's
Authorized Representative and all regulatory agencies with jurisdiction over the Facility.
11.4.4 Maintenance Schedule
The Contractor shall schedule regular preventive maintenance for equipment and the
Facility, as well as a daily cleaning schedule. The maintenance schedule shall be
included in the Co-Composting Operations Plan. The City's Authorized Representative
will determine the adequacy of the cleaning operations.
11.5 MEASUREMENT AND PAYMENT
Finished co-composting product will be measured at the Transfer Station scales
immediately following City acceptance and prior to being stockpiled on-site. Co-
composting product that is accepted by the City shall be weighed by the City at the
Transfer Station in accordance with Section 2.4.3 of Performance Specifications B.1.
The difference between the gross (vehicle loaded with finished co-composting product
gross) and tare (empty vehicle) weights will be the net weight of the finished co-
composting product. After verifying the information on the ticket, the Contractor shall
sign the weight ticket, and will receive a copy of the weight ticket. The net weight
shown on the weight ticket will serve as the basis of payment for all services provided
by the Contractor under Service Component V in accordance with the Service
Agreement.
City of Port Angeles
8.5-10
April 5, 2005
" Moderate-Risk Waste Performance Specifications
Appendix B.6
City of Port Angeles
April 5, 2005
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TABLE OF CONTENTS
12. MODERATE-RISK WASTE PROJECT DEVELOPMENT............................. 1
12.1 INTRODUCTION AND PROJECT SCHEDULE ............................................ 1
12.2 MRWF DEVELOPMENT ....... .................. .......................... ........ .................... 1
12.2.1 Project Development Plan ..... ..................... ..... ....... ...... ..:.. ....... .......... 2
12.3 FACILITY SiTING..... ....... ...... ................. ........ ......................... ...... ..... ...........3
12.4 PERMITTING ......... ........ ...... ............ ............. .................... ....... .............. .......3
12.5 MRWF DESIGN ....... ...................... ....................................... .............. ..........4
12.5.1 Requirements for Design Phase.........................................................4
12.5.2 Submission, Review, and Approval of Design Materials.....................4
12.5.3 Modifications to Facility Design Specifications ...................................5
12.6 FACILITY CONSTRUCTION ............. .......... ......................... ......................... 5
12.6.1 Commencement of Construction ..... ........... ......... ...............................5
12.6.2 Subcontractors................................................................................... 5
12.6.3 Staffing ............. ......... ......... ............ ............ ...................... ................. 5
12.6.4 Facility Site Preparation...................................................................... 6
12.6.5 Procurement of Equipment, Components, and Services ....................6
12.6.6 Preliminary Operations Plan... ................ .............. ............ ....... ........... 6
12.6.7 Completion of Construction ........................................... ..................... 6
12.6.8 Startup and Acceptance Testing......................................................... 7
12.6.9 Commercial Operations.. ................ ................ ...... ............... ...............7
13. MODERATE-RISK WASTE PERFORMANCE SPECIFICATIONS ......................... 8
13.1 FUNCTIONAL REQU IREMENTS...... ................ .......... ........ ........... ...............8
13.1.1 General MRWF Functional and Design Criteria.................................. 8
13.1.2 Uniform and National Code References .............................................9
13.1.3 Design Life and Design Capacity...... ............... ........... .............. ........ 11
13.1.4 Aesthetic Design and Landscaping................................................... 11
13.1.5 Safety Planning and Engineering .....................................................11
13.1.6 Utilities ............................................................................................ 11
13.1. 7 Security ............................................................................................ 12
13.1.8 Taxes .......................... ....... ............ ......... .................... .................. 12
13.1.9 Ownership of Equipment......... ........ ........... ................................. ..... 12
13.2 FACILITY MANAGEMENT .......................................................................... 12
13.2.1 Data Collection and Reporting Requirements................................... 12
13.2.2 Public Information ............................................................................. 13
13.2.3 Staffing ................................................... ................................. ........ 13
City of Port Angeles
April 5, 2005
/' TABLE OF CONTENTS Continued)
13.3 MRWF OPERATIONS........ ....................... ...................... ................. ........... 15
13.3.1 Overview.... ... ............... .................. ......... ..... ......... ....... ..................... 15
1'3.3.2 MRW Estimated Quantities..... ................ ................. ............. ............ 16
13.3.3 Final Operations Plan ....................................................................... 16
13.3.4 Acceptable MRW ........ ................... ................ ......... .... ...................... 18
'13.3.5 MRW Acceptance.... .................. ................. ............. ...... ...... ............. 18
13.3.6 MRW Handling.. .......... ................... ...... ............... ........ ...................... 18
13.3.7 MRW Packing and Disposal.............................................................20
13.3.8 Safety and Health Program........... .......... ..... ..... ........ ................. ...... 21
13.4 MEASUREMENT AND PAyMENT..... ............... .......................................... 21
LIST OF TABLES
8.6-1. Uniform and National Reference Codes ..................................................... 10
City of Port Angeles
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April 5, 2005
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ACRONYMS DESCRIPTION
CCEHD
CESQG
City
County
Ecology
MRW
MRWF
PALF
SEPA
US DOT
USTs
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Clallam County Environmental Health Department
Commerciall Exempt Samll Quantity Generator
City of Port Angeles
Clallam County
Department of Ecology
Moderate-Risk Waste
Moderate-Risk Waste Facility
Port Angeles Landfill
State Environmental Policy Act
United States Department of Transportation
Underground Storage Tanks
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City of Port Angeles
iii
Apn15, 2005
12. MODERATE-RISK WASTE PROJECT DEVELOPMENT
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12.1 INTRODUCTION AND PROJECT SCHEDULE
The Contractor shall be responsible for all development activities necessary for
completion and Startup of a new Moderate-Risk Waste Facility (MRWF) as described in
the Performance Specifications, the RFP, and in accordance with the Service
Agreement. In the event of any conflict among the preceding documents, the most
burdensome Contractor duty or obligation shall prevail, unless otherwise approved by
the City's Authorized Representative.
The Contractor shall construct a Transfer Station at the Port Angeles Landfill (PALF) to
receive and Transport solid waste following closure of the PALF. The Transfer Station
construction will include much of the infrastructure, such as roads, scales, and Utilities,
required to support MRWF development. Therefore, the design requirements and the
construction scheduling for the MRWF are tied directly to the Transfer Station Project
Development and Construction schedules.
12.2 MRWF DEVELOPMENT
MRWF development shall be incorporated into the Transfer Station Project
Development as described in Appendix B.1 of the Performance Specification. The
MRWF Project Development and Construction Schedules shall be included as part of .
the Transfer Station Project Development Plan. The Contractor shall be responsible for
all activities necessary for the design and construction of the MRWF. The work
conducted during MRWF development shall lead to a complete and fully operational
Facility that is integrated with other site activities. Project development as described in
this section includes the following:
. A Project Development Plan, as described in Appendix B.1 of the Performance
Specifications, completed following the Commencement Date.
. Facility design and development, construction documents, construction
(supervision, management, quality assurance, inspection, and examination), and
Acceptance Testing of the MRWF and other supporting infrastructure identified in
the Performance Specifications.
. Obtaining all required construction permits and licenses.
. Facility inspections and re-inspections.
. All costs including insurance and other fees (including direct, indirect, and
incidental) related to the Contractor's work.
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City of Port Angeles
8.6-1
Apnl 5, 2005
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. Project Development and Construction Schedules and deliverables in
accordance with Ta~les 8.1-1 and 8.1-2 of the Transfer Station Performance
Specifications.
12.2.1 Project Development Plan
The Contractor shall include the MRWF in the Project Development Plan for the
Transfer Station. The Contractor shall make changes and modifications to the Project
Development Plan based on discussions with the City's Authorized Representative.
The Project Development Plan for the MRWF must include the items listed below.
12.2.1.1 Scheduling, Permitting and Construction Activities
The Contractor shall include the MRWF in the detailed Project Construction Schedule
for the Transfer Station.
12.2.1.2 Staffing
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The Contractor's Authorized Representative shall establish a project management
organization for Project development of Service Component VI. The Contractor's
project manager shall be directly accountable to the City's Authorized Representative
for the Contractor's performance and shall be the prime contact for all discussions with
the City's Authorized Representative. The organization shall, as a minimum, have a
representative who is also a member of the Transfer Station project management
organization. The Contractor may propose the same organization as proposed for the
Transfer Station under Service Component I.
The Contractor shall establish an effective subcontract and construction management
function to ensure placement of subcontracts and equipment orders on schedule,
delivery of equipment and material orders on schedule, and effective management of all
construction activities both on-site and off-site.
In addition to the project manager, the Contractor's key personnel shall be identified in
the Operations Plan. Replacement of key personnel shall be subject to advance
approval by the City's Authorized Representative, whose approval shall not be
unreasonably withheld.
12.2.1.3 Project Status Reporting Requirements
The Contractor's Authorized Representative shall prepare monthly progress reports to
be submitted to the City's Authorized Representative no later than 30 calendar days
after the close of the previous calendar month. These reports shall include:
. The Contractor's assessment of the Project's progress during the previous month
compared to the approved Project Construction Schedule.
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City of Port Angeles
8.6-2
April 5, 2005
. Any significant problems that may have arisen during the reporting period, with a
discussion of the possible effects of these problems on the Contractor's
compliance with the Performance Specifications and plans for correcting the
problems.
. An updated Project Construction Schedule.
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. Planned activities for the next monthly period.
The Contractor's Authorized Representative shall also be available for weekly Project
review meetings with the City's Authorized Representative.
The Contractor shall provide the City's Authorized Representative full and complete
access to the Project site at any time during construction of the MRWF.
12.3 FACILITY SITING
The Contractor shall construct the MRWF within the area designated in accordance with
its Technical and Cost Proposal. The Contractor shall coordinate the construction with
other construction or operations that may be occurring at the site in a manner that
minimizes impacts to other contractors or operators (e.g., water treatment plant,
Transfer Station, Co-Composting Facility, shoreline improvements).
The MRWF location shall be well coordinated with the Transfer Station Facility and shall .1
consider sharing of Utilities, roads, offices, parking, security and area lighting, and other
related features, as well as easy and safe Customer access. It shall be sited so that all
Customer vehicles must cross the scales prior to entering or exiting the MRWF.
The Contractor is responsible for all design studies, assessments, and engineering
calculations required to prepare the site for construction. The City shall provide existing
information regarding site conditions, but provides no determination regarding soil or
ground conditions within the designated area. Site operations and other construction
may change the conditions of the ground between the date of the pre-proposal
conference and the start of construction. The Contractor shall be responsible for
recognizing and accommodating any changes that may occur, except as set forth in the
Service Agreement.
The Contractor's Authorized Representative shall receive written authorization from the
City's Authorized Representative before designing or developing facilities outside the
designated area.
12.4 PERMITTING
The Contractor shall be responsible for preparing applications for all federal, state, and
local construction permits, licenses and other applicable approvals including up to thirty
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City of Port Angeles
8.6-3
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hours of architecture and engineering services after completing applications. All
construction I permit applications shall be submitted to the City's Authorized
Representative for review. The City shall be designated as the permit applicant, and
shall be responsible for submitting applications, paying fees and providing all
information required by regulatory agencies for review processes and approvals. The
Contractor's Authorized Representative shall promptly notify the City's Authorized
Representative of any delays in the Project Construction Schedule caused by
Contractor delays in preparing applications for construction permits.
The Contractor shall assume full responsibility for the identification of any and all
required regulatory approvals. The Contractor shall submit a list of all anticipated
approvals required as part of their Project Development Plan.
All mitigation measures, both on-site and off-site, required by the State Environmental
Policy Act (SEPA) or other approvals or permits shall be the responsibility of the City,
and at the City's expense.
The City shall obtain a Solid Waste Handling Facility Permit from the Clallam County
Environmental Health Department (CCEHD) before construction begins. Final approval
of permit(s) is by CCEHD.
A SEPA Environmental Checklist shall be completed by the City.
By selecting the Contractor to perform this Service Component, the City does not
guarantee that any permit will be secured from the City, County, federal, state or any
other local government agencies.
12.5 MRWF DESIGN
12.5.1 Requirements for Design Phase
The Contractor shall supply all materials and resources to complete the design in
accordance with all applicable requirements set forth in the Performance Specifications
and the Moderate-Risk Waste Fixed Facility Guidelines (Ecology Publication No. 92-13).
The Contractor shall verify to its own satisfaction any information provided by the City
concerning the Facility design, and shall obtain any and all other information necessary
to design and construct the MRWF. The Contractor shall be solely responsible for
obtaining all surface or subsurface information regarding the design. This shall include,
but not be limited to, topographical surveys, soil test borings, geotechnical, hydrological,
utility, and other applicable data. If required, the City shall provide any pre-existing
environmental c1eanup(s) of the surface or subsurface at the City's sole expense.
The Contractor shall have the sole responsibility for design of the Facility such that it
conforms to the Performance Specifications and local, state, and federal requirements
City of Port Angeles
8.6-4
April 5, 2005
for developing solid waste facilities. The Contractor shall perform all design work in .
accordance with Applicable Law, established engineering principles and practices, and
applicable code requirements.
12.5.2
Submission, Review, and Approval of Design Materials
The Contractor shall comply with the submission, review and approval requirements for
the Transfer Station Performance Specifications for the MRWF.
12.5.3
Modifications to Facility Design Specifications
The Contractor's or the City's Authorized Representative may propose modifications to
the Performance Specifications and City approved design and construction documents.
All modifications shall be made in accordance with the Service Agreement.
12.6 FACILITY CONSTRUCTION
12.6.1 Commencement of Construction
Construction may commence when the Contractor has obtained the necessary
construction permits, when financing has been obtained, and when the City's
Authorized Representative has approved the design and construction documents and
the Preliminary Operations Plan. The Contractor shall furnish or procure all services,
labor, equipment and materials necessary to construct and complete the Facility in its .
entirety, and in full working order in accordance with the design and construction
documents, laws, the Performance Specifications and the Service Agreement.
The Contractor is required to the extent applicable, to procure Labor and Industries
permits LI 700-7 and LI 700-29 and abide by the requirements thereof. A Copy of
"Statement of Intent to Pay Prevailing Wages" and "Affidavit of Wages Paid" shall be
submitted to the City Clerk and Department of Labor and Industries prior to City
Acceptance Testing.
12.6.2
Subcontractors
The Contractor shall independently verify that each Subcontractor is fully licensed for
his or her intended role in the Project. The Contractor will be responsible for ensuring
that all Subcontractors are provided with complete information regarding all aspects of
the specifications for their part of the Project.
12.6.3
Staffing
The Contractor is encouraged to employ local Subcontractors during the Facility
construction period. The Contractor shall maintain personnel at the Facility with full
authority to make all operating decisions related to Facility construction and Startup
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City of Port Angeles
8.6-5
April 5, 2005
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during normal working hours, and shall have key maintenance and operating personnel
on-call at all other times.
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12.6.4 Facility Site Preparation
The Contractor shall be responsible for site preparation. All permits for the site
preparation shall be the responsibility of the Contractor. Preparation includes but is not
limited to:
. Site grading.
. Extending and connecting Utilities including electrical, water, sanitary sewer, and
telecommunications.
. Security improvements.
12.6.5 Procurement of Equipment, Components, and Services
The Contractor shall manage the procurement of equipment, components, and services,
and expedite the procurement as necessary to assure fulfillment of all delivery
schedules for subcontracted or purchased equipment and material in accordance with
the Project Construction Schedule. The City will not be responsible for materials
delivered to the site, if the Contractor or Subcontractor fails to perform under the terms
. of the Service Agreement.
12.6.6 Preliminary Operations Plan
The Contractor's Authorized Representative shall prepare and submit a Preliminary
Operations Plan in accordance with the Project Construction Schedule for the City's
Authorized Representative review describing how they will comply with the Performance
Specifications. The Preliminary Operations Plan shall describe the sequence of
operations and testing to be performed during Startup and Acceptance Testing. The
Preliminary Operations Plan will also describe the schedule for Acceptable Moderate-
Risk Waste deliveries; phasing in of residential self-haul waste streams; plans for
screening and handling of Unacceptable Waste; plans for Acceptable MRW receipt and
handling. The Preliminary Operations Plan will describe procedures for conducting
Startup and commercial operations in accordance with the Service Agreement. In
accordance with its Technical and Cost Proposal, the Contractor's Authorized
Representative shall provide a list of all City personnel who will be provided the first
right of refusal for employment openings or will be adversely affected under the Service
Agreement as part of the Preliminary Operations Plan. The Contractor's Authorized
Representative shall submit a Final Operations Plan in accordance with the Project
Construction Schedule.
.
City of Port Angeles
8.6-6
April 5, 2005
12.6.7
Completion of Construction
.
Upon notification by the Contractor's Authorized Representative, the City's Authorized
Representative shall inspect the Facility for completion and conf~rmance to the City
approved design plans and specification, construction documents and any City
approved modifications. The City's Authorized Representative will review the
information and, as appropriate, notify the Contractor's Authorized Representative that
construction is approved. At the completion of construction and prior to Startup, the
Contractor's Authorized Representative shall prepare and submit 'as-built' drawings and
plans for all Contractor-constructed features.
12.6.8
Startup and Acceptance Testing
Startup and Acceptance Testing shall commence when the City's Authorized
Representative has determined that MRWF construction is complete, and all necessary
permits, regulatory approvals, and all other Project permit requirements are satisfied, all
equipment is installed, all utility installations are complete, personnel have been trained
in commercial operations procedures, MRW acceptance and processing plans are in
place, and safety and emergency procedures have been established.
Startup and Acceptance Testing shall extend for a period not to exceed 90 days, during
which the Contractor shall demonstrate the MRWF meets the requirements of the
Performance Specifications, the RFP, and the Service Agreement. The Contractor shall
satisfy the City's Authorized Representative that the MRWF is fully operable and .
capable of receiving, handling, processing, packaging, and Transporting off-site all
Acceptable MRW from residential Customers.
The Contractor shall provide all personnel, services, Utilities, equipment, supplies and
other elements to carry out and complete the Startup and Acceptance Testing. The
Contractor shall operate the MRWF with employees intended to be regularly employed
by the Contractor. The City's Authorized Representative and its designated
representatives shall have access to the MRWF and will observe Contractor activities
during Startup and Acceptance Testing.
12.6.9
Commercial Operations
The City's Authorized Representative will authorize the Contractor to begin commercial
operations at the MRWF when the City's Authorized Representative, acting reasonably,
determines that the Contractor has successfully completed Acceptance Testing and the
Contractor's Authorized Representative has submitted and the City's Authorized
Representative has approved the Final Operations Plan.
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City of Port Angeles
8.6-7
April 5, 2005
.
.
.
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13.1
FUNCTIONAL REQUIREMENTS
13.1.1
General MRWF Functional and Design Criteria
The MRWF is intended to be a dedicated site provided with secondary waste
containment that is specifically designed and constructed to collect, treat, recycle,
exchange, consolidate, store, and transfer Acceptable MRW. The Facility shall comply
with the Ecology's Moderate-Risk Waste Fixed Facility Guidelines as published in
Publication No. 92-13 and the Performance Specifications.
Design requirements that the Contractor shall meet are as follows:
. The MRWF shall be sited so that all Customer vehicles Transporting MRW to the
Facility must cross the weight scales upon entering and leaving the site.
. The MRWF shall be sturdy and constructed of easily cleanable materials, and
provided with secondary containment for all MRW. Secondary containment shall
have the capacity for containing ten percent of the total waste quantity that would
ever be stored in the area, or 110 percent of the largest container, whichever is
greatest.
. Areas where flammables and combustibles are handled shall have explosion-
proof electrical wiring, fixtures, lights, motors, switches, and other electrical
components approved for use in Class I, Division 1 or 2 Fire Areas.
. The building shall be constructed of concrete or metal. All overhead doors shall
be sized to prevent damage from trucks and other vehicles. Overhead doors
shall have motorized operators.
. The roof shall have sufficient natural lighting to allow for operations without the
need for artificial lighting. However, sufficient artificial lighting shall be installed to
provide for off-daylight operations.
. Waste handling and storage areas must provide at least 30-inch aisles between
rows of containers and allow access for quick and thorough periodic inspections
of, and emergency access to, containers. Rows of drums should be no more
than two drums wide with labels faced out for easy visibility.
. Ventilation should draw or vent from both the tops and bases of facilities for
fumes that are lighter or heavier than air.
. Customer access shall be restricted while loading MRW for Transport and
Disposal.
City of Port Angeles
8.6-8
April 5, 2005
. The MRWF shall be designed and constructed to exclude underfloor spaces and
underground storage tanks (USTs), except for secondary containment spaces,
pipes and/or sumps.
.
I
. The MRWF shall divert run-on water.
. The MRWF shall be constructed with impervious surfaces throughout and
designed to handle a 24-hour, 25-year storm. Outside paved surfaces shall be
concrete to prevent degradation by oil and solvents. Joints shall be minimized
and sealed. Concrete surfaces can be degraded by some chemicals, so surface
coatings should be considered.
. The MRWF shall include pollution control measures to protect air quality
including any applicable requirements of the Washington Clean Air Act.
. The MRWF shall have a sign located at the primary Customer entrance, readable
from a distance of at least 25 feet that identifies the Facility and shows at least
the name of the site, hours during which the site is open for Customer use,
contact information, and the types of Acceptable MRW.
. Interior building areas where MRW is handled shall include floor construction that
is liquid tight, provides containment, and be sloped for drainage or provides
equivalent engineered control measures. The floor drainage slope should be at
least one percent and lead to a secondary containment area. .
. The Contractor is strongly encouraged to utilize building materials with recycled
content such as steel, cement, concrete, asphalt pavement, wallboard, and
landscaping materials.
. The MRWF shall include all other functions specifically set forth in the
Performance Specifications and the Service Agreement.
13.1.2 Uniform and National Code References
Table 8.6-1 summarizes the major uniform and national codes that apply to this Facility.
Refer to the codes and to the Moderate-Risk Waste Fixed Facility Guidelines (Ecology
Publication No. 92-13) for further guidance.
.
City of Port Angeles
8.6-9
April 5, 2005
.
.
.
Table B.6-1. Uniform and National Code References
Code Reference Section of Special Interest
Uniform Building Code
Chap 9, Requirements for Group H
Occupancies
Chap 38; Fire Extinguishing Systems
Topics Included
Occupancy Division Definitions,
Construction, Spills, Containment,
Emergency Power, Location on
Property, Lighting, Ventilation,
Sanitation, Fire Extinguishing
Systems.
Uniform Medical Code
Chap 7, Sect 704; Warm Air Heating
Systems, Prohibited Installations
Ventilation Equipment and
Installation Requirements, Fuel
Burning Heating Systems
Prohibitions.
Chap 11, Ventilation Systems and Product
Conveying Systems
Uniform Fire Code
Article 79, Flammable and Combustible
Liquids
Article 80, Hazardous Materials
Permits, Portable Containers, Fire
Protection, Inside and Outside
Storage, Piping, Valves, Fittings,
Dispensing and Mixing (MRW
Handling), Loading and Unloading,
Processing, Hazard Classification,
Storage Requirements, Handling.
Pesticide Storage.
Article 86, Pesticide Storage and Display
National Electric Code, NFPA 70
Chapter 5, Special Occupancies
Classification of Hazardous
Locations, Installation and Design
of Electrical Equipment.
Flammable and Combustible Liquids Code, NFPA 30
Chapter 4, Container and Portable Tank Design, Construction Capacities,
Storage Indoor and Outdoor Storage, Fire
Control, Protection Requirements,
Hazardous Materials Storage
Lockers Located Outside.
City of Port Angeles
B.6-10
April 5, 2005
Table 8.6-1. Uniform and National Code References
.
Code Reference Section of Special Interest
Chapter 5, Operations
Topics Included
Facility Design, Liquid Handling,
Transfer and Use, Fire Prevention
and Control.
13.1.3
Design Life and Design Capaci~
The MRWF shall have a minimum design life of 30 years and be designed to easily
accommodate expansion during that time period. The MRWF shall be a minimum of
2,000 square feet in size and shall allow for future expansion of floor space and
associated expansion needs.
13.1.4
Aesthetic Design and Landscaping
Exterior building materials, exterior Facility color, and signage shall be identified in the
Contractor's Technical and Cost Proposal, and be consistent with the Transfer Station
design criteria. The MRWF design shall include adequate exterior lighting and
landscaping for the purposes of creating an aesthetically pleasing site layout. The
Contractor shall provide foundation plantings for an aesthetically pleasing appearance.
13.1.5
Safety Planning and Engineering
.
The MRWF shall be constructed in a fire resistant manner and provided with a fire
control system. The equipment shall be tested and installed in accordance with
manufacturer's guidelines, and all applicable federal, state, and local requirements. The
Contractor shall provide 24-hour monitored alarm service for the installed fire control
system.
The Contractor shall abide by all local, state, and federal safety engineering
requirements. The Contractor shall provide for provision of first-aid stations, emergency
medical response for injured staff and Customers, and chemical exposure treatment
procedures.
13.1.6
Utilities
Electrical power, water, stormwater, sanitary sewer, fiber optics, and telephone Utilities
are available at the Landfill site. The Contractor shall extend all required Utilities to the
Moderate-Risk Waste Facility. The Contractor shall confirm the location of all utility
connection points. The Contractor shall extend the Utilities from the most cost effective
point of connection to the MRWF. The Contractor shall provide all utility requirements
for the MRWF, including any upgrades, and/or enhancements to the existing utility
.
City of Port Angeles
B.6-11
April 5, 2005
.
.
.
connections. The Contractor shall be responsible for the recurring monthly charges for
all Utilities.
13.1.7 Security
The Contractor shall provide measures to ensure site security and eliminate
unauthorized site access during construction. The Contractor shall repair all damage to
the MRWF or its equipment resulting from failure to provide adequate security
measures. Sufficient exterior lighting shall be provided to deter unauthorized nighttime
access and assist with night inspections of the Facility.
13.1.8
Taxes
The City shall be responsible for payment of Washington State excise tax, and City
utility tax. The Contractor shall be responsible for payment of all other in accordance
with the Service Agreement
13.1.9
Ownership of Equipment
All vehicles, equipment, and materials (excluding Appurtenances) proposed for use in
performance of the Service Agreement shall be owned by the Contractor, provided that
leases or other forms of agreement may be allowed by written approval by the City's
Authorized Representative prior to execution of the Service Agreement. Any leases or
agreements entered into subsequent to the Service Agreement shall be subject to
approval by the City's Authorized Representative prior to the Commencement Date
under this Service Component. All such leases or agreements shall be provided in the
event the Contractor fails to perform or the default of such lease or agreement.
Conditional sales contracts, mortgages, or other agreements for financing the purchase
of vehicles and equipment may be allowed if the City's Authorized Representative is
satisfied prior to execution, as to the City's rights to take possession of the vehicles
equipment, in the event the Contractor fails to perform the Service Agreement or
defaults under such lease or agreement under Service Component VI termination
default of the Service Agreement.
13.2 FACILITY MANAGEMENT
13.2.1 Data Collection and Reporting Requirements
The Contractor shall maintain sufficient records to document the type and quantity of
Acceptable MRW received at the MRWF, the source of the MRW (Le., Customer name
and address), the container the MRW was received in, and the type and condition of
material containers. The Contractor shall maintain records that clearly document the
handling, characterization, packaging, processing, storage, and Transport of all
Acceptable MRW.
City of Port Angeles
B.6-12
April 5, 2005
The Contractor's Authorized Representative shall submit monthly reports to the City's
Authorized Representative describing the quantities and types of Acceptable MRW
received and Transported off-site. The monthly report shall include:
.
. A summary of the quantities of Acceptable MRW received at the MRWF.
. A summary of the characterization reports including any chemical testing and the
container types loaded for off-site Transport and Disposal.
· All MRW labeling, packing, drum inventories, and current on-site waste
inventories.
. Copies of the Hazardous Waste manifests for all off-site Transport and Disposal.
· Disposal documentation for all Acceptable MRW Transported from the MRWF to
the Disposal Site.
13.2.2 Public Information
The City will be responsible for all public information documents and/or media releases.
The Contractor shall display notices and distribute public information materials to the
MRWF Customers at the Transfer Station public information area provided for this
purpose. Any information concerning the site or its operations that the Contractor
wishes to make available to Customers shall be pre-approved by the City's Authorized .
Representative.
13.2.3 Staffing
The Contractor shall provide sufficient on-site personnel to ensure efficient
management, operation, and maintenance of the MRWF. In order to accommodate
staff leaves for sickness and vacation, the Contractor shall ensure that additional
personnel are available to provide continuous operation and maintenance of the MRWF.
Prior to commencing MRWF commercial operations, the Contractor's Authorized
Representative shall provide the City's Authorized Representative a Final Operations
Plan that identifies the staff management approach to meet operating requirements.
Specifically the Contractor shall provide:
. On-site MRW Supervision that shall be responsible for all daily operations and
communication with the City. The Supervisor shall be capable of identifying
waste characteristics, chemical compatibility of different waste materials, and
testing, packaging, handling, and Transport requirements for all accepted
wastes.
. MRW Operators in sufficient number to provide efficient Customer vehicle
unloading, characterization, handling, processing, packaging, and manifesting for
Transport and Disposal, and all other management, supervisory, operating or
.
City of Port Angeles
8.6-13
April 5, 2005
.
maintenance work requiring the use of equipment to fulfill the MRWF functional
requirements and compliance with the Service Agreement
. A medical surveillance program including employee pre-employee physicals,
baseline physicals, and annual medical screenings.
The Contractor's Final Operations Plan shall anticipate and respond to waste quantity
fluctuations, providing sufficient number of personnel to operate the MRWF in full
compliance with the Performance Specifications.
13.2.3.1 Qualifications
The Contractor shall provide sufficient supervisory and operating personnel at all times,
while the MRWF is accepting wastes in accordance with the Service Agreement. The
Supervisor shall have a minimum of three years experience operating a MRWF and
handling, packaging, processing, and disposing of MRW.
The on-site Supervisor shall be able to demonstrate a working knowledge of MRWF
operations and MRW handling, including but not limited to a demonstrated
understanding and application of:
. Chemical compatibilities.
. . Chemical exposure routes, toxicological effects, and threshold exposure values.
. Personal protective equipment selection.
. Personal monitoring equipment.
. Safety planning.
. Engineering methods to control exposure.
. Medical monitoring requirements.
. Decontamination.
. The Washington Industrial Safety and Health Act.
. Emergency response.
13.2.3.2 Training
All Contractor staff shall meet all training requirements as specified in Washington
Administrative Code (WAC) Chapter 296-24 and recommended training as specified in
Ecology Publication 92-13. Staff shall have a minimum of 40 hours of training for
.
City of Port Angeles
8.6-14
April 5, 2005
hazardous materials or Hazardous Waste handling and the United States Department of .
Transportation (US DOT) hazardous materials Transport. All training certifications shall
be maintained on-site. Training certifications shall also be provided to the City's
Authorized Representative prior to any new staff starting work at the MRWF.
13.3 MRWF OPERATIONS
The MRWF hours of operation shall be from 11 :00 am to 4:00 pm every Wednesday
and Saturday.
13.3.1 Overview
The Contractor shall operate the fixed MRWF in accordance with the Performance
Specifications and the following regulatory requirements:
. Chapter 173-303 of the WAC - Dangerous Waste Regulations.
. Chapter 173-350 of the WAC - Solid Waste Handling Regulations.
. Chapter 296-24 of the WAC - General Safety and Health Standards.
. Chapter 296-62 of the WAC - General Occupational Health Standards, Vol. 1 and
2.
Additionally, the Contractor shall operate the MRWF in a manner consistent with
operating principles presented in Ecology Publication No. 92-13 Moderate-Risk Waste
Fixed Facility Guidelines.
The City will own the MRWF and will be identified as the generator for all Acceptable
MRW Transport and Disposal activities. The City's Authorized Representative will
provide the Contractor's Authorized Representative an EPA Waste Generator
Identification number upon execution of the Service Agreement.
The MRWF will operate under a solid waste handling permit issued and administered by
the CCEHD. The Contractor shall-be responsible for routine operation of the MRWF,
and acceptance, testing, processing, packaging, storage, Transport and final disposition
of all Acceptable MRW received at the MRWF.
.
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CIty of Port Angeles
86-15
April 5, 2005
.
13.3.2
MRW Quantities
I
The Contractor shall provide materials, supplies, equipment, containers and incidentals
necessary to accept MRW. The Contractor shall be prepared to adjust operations to
accommodate variations in the actual quantities received at the MRWF.
13.3.3 Final Operations Plan
The Final Operations Plan will be submitted to the City's Authorized Representative for
approval concurrent with commencement of Startup and Acceptance Testing. The
Contractor's Authorized Representative shall address all of the City's Authorized
Representative comments on the Preliminary Operations Plan in the Final Operations
Plan and shall provide revised plans for MRWF management, operating and
maintenance issues identified during Startup and Acceptance Testing. The Final
Operations Plan shall also contain a Contingency Plan in the event the MRWF
construction is delayed. The MRWF construction and Acceptance Testing requires
basic infrastructure such as roads and Utilities to be available and in place. Some
measures to be considered could be lease of portable power generation, installation of
temporary surfacing pending completion of paving, or use of temporary holding tanks to
obtain potable water or hold wastewater.
The Final Operations Plan shall, at a minimum, describe the Contractor's approach to
. the following activities:
. Staffing and hours of operation.
. A visitor policy and requirements for visitor safety and supervision
. A waste screening and acceptance protocol to preclude and redirect fully
regulated dangerous waste generators and excluded waste types.
. Procedures for handling each type of Acceptable MRW.
. Methods for managing and identifying unknown or Unacceptable Wastes.
. A storage plan that clearly segregates incompatible wastes.
. Methods for managing wastes that arrive in corroded or leaking containers.
. MRW sorting protocols and packing methods.
. Inspection and reporting forms.
. Equipment maintenance.
.
City of Port Angeles
8.6-16
April 5, 2005
. Materials inventory requirements.
.
The Contractor shall include a comprehensive set of contingency operating procedures
in their Final Operations Plan that will take effect in the event of interruption of normal
operations at the MRWF, including but not limited to:
. Fires and explosions.
. Release of toxic or hazardous substances.
. Work stoppage by the Contractor's employees.
. Emergency weather conditions.
. Building or equipment failure.
. Unknown delivery of Unacceptable Wastes.
. Handling wastes from catastrophic events.
. Arrangements and agreements (if required) with local emergency response
agencies describing the services to be rendered by each agency in the event of
an emergency.
. A site diagram and description of the location and intended use of all emergency
equipment.
.
. Names, telephone numbers, and addresses of all Persons designated as
emergency coordinators by the Contractor. An emergency coordinator shall be
at the MRWF, or on-call by telephone or radio within thirty minutes of an
emergency. Emergency coordinators shall be familiar with the Operations Plan.
The Contractor shall conduct emergency response drills at least twice per year.
The City's Authorized Representative shall prepare a response that confirms whether or
not the Final Operations Plan was completed in conformance with requirements of the
Service Agreement. The response will specify if the Contractor must satisfy any
outstanding requirements prior to commercial operations.
The City's Authorized Representative's approval of the Final Operations Plan and
authorization to commence commercial operations shall not be deemed as the City's
approval, or acquiescence to any conditions or Contractor activities that do not conform
to Applicable Law, the Performance Specifications, or the Service Agreement, nor shall
that review and authorization impose any liability on the City for Contractor errors,
omissions, or actions. The City's Authorized Representative's approval of the Final
Operations Plan shall in no way relieve the Contractor from adherence to the
Performance Specifications and the Service Agreement. The City's Authorized
.
City of Port Angeles
B.6-17
April 5, 2005
.
.
.
Representative will forward the Final Operations Plan to CCEHD for review and
approval. CCEHD approval of the Final Operations Plan is required before the
Contractor may commence commercial operations.
13.3.4 Acceptable MRW
For the purpose of the Performance Specifications, the Contractor shall only receive
Acceptable MRW delivered to the MRWF by residential Customers, CESQG are not
included. Acceptable MRW only includes the materials identified in Technical and Cost
Proposal Form 7.7.
The Contractor shall be solely responsible for arranging for the characterization,
handling, packaging, Transport, and Disposal for any materials that do not classify as
Acceptable MRW. The City will only pay the Contractor a fee for operations and
Transport and Disposal of Acceptable MRW.
13.3.5 MRW Acceptance
This Performance Specification provides for the acceptance of residential self-haul
Acceptable MRW as defined in Chapter 173-350 of the WAC. The Contractor shall be
responsible for screening all materials delivered to the MRWF and accepting or
rejecting the material in accordance with the MRW Operations Plan.
The City's Authorized Representative may at its reasonable discretion designate
additional MRW as acceptable; extend hours of MRWF operation, remove MRW from
the Acceptable Moderate-Risk Waste list, and/or impose quantity limits for each type of
Acceptable MRW.
The Contractor shall be solely responsible for all materials accepted at the MRWF,
including the handling and processing of any Unacceptable Wastes that may be
encountered during MRW acceptance, handling, sorting, processing, or Transport. The
Contractor shall have the right to recycle or beneficially reuse any Acceptable
Moderate-Risk Waste received at the MRWF. Reuse and recycling methods shall be
approved by the City's Authorized Representative prior to the Contractor initiating
recycling or reuse of Acceptable MRW.
13.3.6 MRW Handling
The Contractor shall provide the following MRW handling services:
. Provide appropriately trained personnel to screen, receive, package, manifest,
load, Transport, treat, recycle, store, and Dispose of all Acceptable MRW
collected at the MRWF. The performance of these services shall be in full
compliance with all applicable federal, state and local laws, rules, regulations,
and orders. The MRWF shall operate a minimum of five hours per day, two days
City of Port Angeles
April 5, 2005
8.6-18
per week, additional hours of operation shall be approved in advance by the
City's Authorized Representative.
.
.. Retain copies of tickets issued by the City for each residential load including the
type of Acceptable MRW delivered to the Facility. The City may establish a Tip
Fee schedule and may collect Disposal Charges for Acceptable MRW at the
scale house.
· Provide an adequate number of approved containers to properly package all
quantities of each waste type listed in the Performance Specifications.
· Supply all materials, labels, manifests, documentation, and equipment required
for unloading vehicles, and for packaging, storing, loading, Transporting and
disposing of collected materials.
. Select the appropriate treatment, storage and Disposal Sites for all Acceptable
MRW. The site(s) shall be fully permitted, EPA and state environmental agency
approved Hazardous Waste treatment, storage and Disposal facilities.
. Store Acceptable MRW at the MRWF in accordance with the Moderate-Risk
Waste Operations Plan.
· To the extent practical, the Contractor shall minimize the number of containers of
Acceptable MRW disposed by packing the largest containers prior to packing .
smaller containers of compatible materials.
. The Contractor shall bulk pack compatible MRW prior to arranging for Disposal,
reuse, or recycling to reduce Transport and Disposal costs.
. Transport the waste directly to a licensed treatment, storage, and Disposal Site.
Signed copies of all manifests shall be returned to the City's Authorized
Representative within 45 days.
· Maintain record-keeping in sufficient detail to support pay requests and meet
Facility reporting requirements as defined in the MRW Operations Plan and the
solid waste operating permit.
. Provide routine Facility maintenance necessary for upkeep of the MRWF and
equipment to meet the Performance Specifications and the requirements of the
Service Agreement.
. Provide all containers needed to properly handle and store Acceptable MRW.
. Segregate wastes by type and chemical compatibility.
.
City of Port Angeles
B.6-19
April 5, 2005
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.
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. Provide overpack containers for wastes that arrive in degraded, leaking, or
incorllpatible containers.
. Provide for the assessment, characterization and testing of unidentified MRW.
The Contractor shall be responsible for the processing of all materials received at
the MRWF. This includes any chemical testing or laboratory analysis needed to
identify waste characteristics.
. Respond to leaks or releases of MRW from containers.
. Inspect the MRWF weekly and submit monthly inspection reports.
. Maintain a current inventory of waste types, locations, and quantities.
. Load, Transport, and Dispose of Acceptable MRW in a manner that minimizes
costs and maintains adequate storage capacity at the MRWF.
. Report on and provide supporting documentation demonstrating proper
characterization, Transport and Disposal.
. Ensure handling, packaging, processing, loading, Transport and Disposal is
performed consistent with all federal, state, and local regulations governing
MRW.
. Maintain and report on the environmental controls (Le., stormwater collection and
treatment, ventilation systems, fire protection, and spill response).
. Provide routine maintenance and cleaning of MRW storage and receiving areas
to ensure a safe and clean work environment.
13.3.7 MRW Packing and Disposal
The Contractor shall provide containers and equipment for the packing and Disposal of
all Acceptable Moderate-Risk Wastes received at the MRWF. Any Unacceptable
Wastes received at the MRWF shall be packaged and disposed by the Contractor at the
Contractor's expense, except as set forth in Section 10 of the Service Agreement.
MRW packing requirements include:
. Bulk compatible wastes to reduce Transport and Disposal costs.
. Organic peroxides and reactives shall be packed in accordance with applicable
federal, state and local law.
. Acids, bases, oxidizers, and pesticides and poisons shall be lab-packed, except
that aerosols in this category shall be loose packed as provided for in federal,
state, and local law.
City of Port Angeles
B 6-20
AprilS, 2005
. The City shall weigh and/or count individual containers of Acceptable MRW at .
the scale house or MRWF that will be Transported and disposed of to determine
the Contractor's Service Fees unless otherwise mutually agreed upon by the
Parties. After weighing and/or counting, the Contractor shall verify the
information on the weight ticket or manifest, sign the ticket or manifest, and will
receive a copy of the ticket or manifest.
The Contractor's packing methods are provided in the Technical and Cost Proposal
Form 7.78. The Contractor shall arrange for all Transport and Disposal of all
Acceptable Moderate-Risk Wastes received at the MRWF. The Contractor shall
manifest all wastes loaded for off-site Transport. Prior to any shipment for Disposal, the
Contractor shall provide documentation to the City's Authorized Representative
identifying the final Disposal Site for each material or the recycling or reuse site and
methods. At the completion of the Disposal activity, the Contractor shall provide the
City's Authorized Representative with documentation demonstrating the time, location,
and status of Acceptable MRW Disposal.
13.3.8 Safety and Health Program
Prior to initiating MRWF operations, the Contractor shall prepare and implement a
Safety and Health Program that includes:
· Preparation of a safety plan and emergency response plan for all on-site
personnel. The safety plan will provide procedures and guidelines for: .
~ Accident prevention.
~ Hazard communications.
~ Respiratory protection.
~ Emergency actions and notifications.
~ Emergency response.
. Demonstrated compliance with Chapter 296-24 and 296-62 of the WAC.
The safety plan shall also present the Contractor's operations team, lines of
communication, job descriptions, health and safety responsibilities, training
requirements, and the Contractor's personal medical monitoring program.
13.4 MEASUREMENT AND PAYMENT
The Contractor's monthly Service Fee will provide for payment to the Contractor for
Moderate-Risk Waste Facility development, operation, and waste Transport and
Disposal services rendered in accordance with the Service Agreement.
.
City of Port Angeles
B.6-21
April 5, 2005
Exhibit C
Exhibit C
. Amortization Schedule
Discount Rate 6.00%
Transfer Station and MRWF Fixed Monthly Fee $ 62,778.73
Transfer Station and MRWF Total Development and Fixed Facilities Price $ 8,762,703
Transfer Station and MRWF Commercial Operations Date October 2,2006
Fixed
Payment Due Date Payment # Monthly Fee Interest Principal Final Payment
November 1, 2006 1 $ 62,778.73 $ 43,813.52 $ 18,965.21 $ 8,743,737.79
December 1, 2006 2 62,778.73 43,718.69 19,060.04 8,724,677.75
January 1, 2007 3 62,778.73 43,623.39 19,155.34 8,705,522.42
February 1, 2007 4 62,778.73 43,527.61 19,251.11 8,686,271.30
March 1, 2007 5 62,778.73 43,431.36 19,347.37 8,666,923.93
April 1, 2007 6 62,778.73 43,334.62 19,444.11 8,647,479.83
May 1, 2007 7 62,778.73 43,237.40 19,541.33 8,627,938.50
June 1, 2007 8 62,778.73 43,139.69 19,639.03 8,608,299.47
July 1, 2007 9 62,778.73 43,041.50 19,737.23 8,588,562.24
August 1, 2007 10 62,778.73 42,942.81 19,835.91 8,568,726.32
September 1, 2007 11 62,778.73 42,843.63 19,935.09 8,548,791.23
October 1, 2007 12 62,778.73 42,743.96 20,034.77 8,528,756.46
.-November 1, 2007 13 62,778.73 42,643.78 20,134.94 8,508,621.52
December 1 , 2007 14 62,778.73 42,543.11 20,235.62 8,488,385.90
January 1, 2008 15 62,778.73 42,441.93 20,336.80 8,468,049.10
February 1, 2008 16 62,778.73 42,340.25 20,438.48 8,447,610.62
March 1, 2008 17 62,778.73 42,238.05 20,540.67 8,427,069.95
April 1, 2008 18 62,778.73 42,135.35 20,643.38 8,406,426.57
May 1, 2008 19 62,778.73 42,032.13 20,746.59 8,385,679.98
June 1, 2008 20 62,778.73 41,928.40 20,850.33 8,364,829.65
July 1, 2008 21 62,778.73 41,824.15 20,954.58 8,343,875.07
August 1, 2008 22 62,778.73 41,719.38 21,059.35 8,322,815.72
September 1, 2008 23 62,778.73 41,614.08 21,164.65 8,301,651.08
October 1, 2008 24 62,778.73 41,508.26 21,270.47 8,280,380.61
November 1, 2008 25 62,778.73 41,401.90 21,376.82 8,259,003.78
December 1, 2008 26 62,778.73 41,295.02 21,483.71 8,237,520.08
January 1, 2009 27 62,778.73 41,187.60 21,591.13 8,215,928.95
February 1, 2009 28 62,778.73 41,079.64 21,699.08 8,194,229.87
March 1, 2009 29 62,778.73 40,971.15 21,807.58 8,172,422.29
April 1, 2009 30 62,778.73 40,862.11 21,916.61 8,150,505.68
May 1 , 2009 31 62,778.73 40,752.53 22,026.20 8,128,479.48
June 1,2009 32 62,778.73 40,642.40 22,136.33 8,106,343.15
July 1, 2009 33 62,778.73 40,531.72 22,247.01 8,084,096.14
August 1. 2009 34 62,778.73 40,420.48 22,358.25 8,061,737.90
.september 1, 2009 35 62,778.73 40,308.69 22,470.04 8,039,267.86
City of Port Angeles Page 1 Apnl 5, 2005
Fixed
Pa ment Due Date Pa ment # Monthl Fee Interest Princi al Final Pa me
October 1, 2009 36 $ 62,778.73 $ 40,196.34 $ 22,582.39 $ 8,016,685.4
November 1, 2009 37 62,778.73 40,083.43 22,695.30 7,993,990.18
December 1, 2009 38 62,778.73 39,969.95 22,808.77 7,971,181.40
January 1, 2010 39 62,778.73 39,855.91 22,922.82 7,948,258.58
February 1, 2010 40 62,778.73 39,741.29 23,037.43 7,925,221.15
March 1,2010 41 62,778.73 39,626.11 23,152.62 7,902,068.53
April 1, 2010 42 62,778.73 39,510.34 23,268.38 7,878,800.15
May1,2010 43 62,778.73 39,394.00 23,384.73 7,855,415.42
June 1,2010 44 62,778.73 39,277.08 23,501.65 7,831,913.77
July 1,2010 45 62,778.73 39,159.57 23,619.16 7,808,294.62
August 1,2010 46 62,778.73 39,041.47 23,737.25 7,784,557.36
September 1, 2010 47 62,778.73 38,922.79 23,855.94 7,760,701.42
October 1, 2010 48 62,778.73 38,803.51 23,975.22 7,736,726.21
November 1, 2010 49 62,778.73 38,683.63 24,095.09 7,712,631.11
December 1, 2010 50 62,778.73 38,563.16 24,215.57 7,688,415.54
January 1, 2011 51 62,778.73 38,442.08 24,336.65 7,664,078.89
February 1, 2011 52 62,778.73 38,320.39 24,458.33 7,639,620.56
March 1,2011 53 62,778.73 38,198.10 24,580.62 7,615,039.94
April 1 ,2011 54 62,778.73 38,075.20 24,703.53 7,590,336.41
May 1, 2011 55 62,778.73 37,951.68 24,827.04 7,565,509.37
June 1, 2011 56 62,778.73 37,827.55 24,951.18 7,540,558.19
July 1, 2011 57 62,778.73 37,702.79 25,075.93 7,515,482.~.
August 1, 2011 58 62,778.73 37,577.41 25,201.31 7,490,280.94
September 1, 2011 59 62,778.73 37,451.40 25,327.32 7,464,953.62
October 1, 2011 60 62,778.73 37,324.77 25,453.96 7,439,499.66
November 1, 2011 61 62,778.73 37,197.50 25,581.23 7,413,918.43
December 1, 2011 62 62,778.73 37,069.59 25,709.13 7,388,209.30
January 1, 2012 63 62,778.73 36,941.05 25,837.68 7,362,371.62
February 1, 2012 64 62,778.73 36,811.86 25,966.87 7,336,404.75
March 1, 2012 65 62,778.73 36,682.02 26,096.70 7,310,308.05
April 1, 2012 66 62,778.73 36,551.54 26,227.19 7,284,080.86
May 1, 2012 67 62,778.73 36,420.40 26,358.32 7,257,722.54
June 1, 2012 68 62,778.73 36,288.61 26,490.11 7,231,232.43
July1,2012 69 62,778.73 36,156.16 26,622.56 7,204,609.87
August 1, 2012 70 62,778.73 36,023.05 26,755.68 7,177,854.19
September 1,2012 71 62,778.73 35,889.27 26,889.45 7,150,964.73
October 1, 2012 72 62,778.73 35,754.82 27,023.90 7,123,940.83
November 1, 2012 73 62,778.73 35,619.70 27,159.02 7,096,781.81
December 1, 2012 74 62,778.73 35,483.91 27,294.82 7,069,486.99
January 1, 2013 75 62,778.73 35,347.43 27,431.29 7,042,055.70
February 1, 2013 76 62,778.73 35,210.28 27,568.45 7,014,487.26
March 1, 2013 77 62,778.73 35,072.44 27,706.29 6,986,780.97
April 1, 2013 78 62,778.73 34,933.90 27,844.82 6,958,936.14
May 1, 2013 79 62,778.73 34,794.68 27,984.05 6,930,952.1.
City of Port Angeles Page 2 Apnl 5, 2005
'f ,.,!
I
Fixed
. Payment Due Date Payment # Monthly Fee Interest Principal Final Payment
June 1,2013 80 $ 62,778.73 $ 34,654.76 $ 28,123.97 $ 6,902,828.13
July1,2013 81 62,778.73 34,514.14 28,264.59 6,874,563.55
August 1, 2013 82 62,778.73 34,372.82 28,405.91 6,846,157.64
September 1, 2013 83 62,778.73 34,230.79 28,547.94 6,817,609.70
October 1, 2013 84 62,778.73 34,088.05 28,690.68 6,788,919.03
November 1, 2013 85 62,778.73 33,944.60 28,834.13 6,760,084.90
December 1, 2013 86 62,778.73. 33,800.42 28,978.30 6,731,106.59
January 1, 2014 87 62,778.73 33,655.53 29,123.19 6,701,983.40
February 1, 2014 88 62,778.73 33,509.92 29,268.81 6,672,714.59
March 1,2014 89 62,778.73 33,363.57 29,415.15 6,643,299.44
April 1 , 2014 90 62,778.73 33,216.50 29,562.23 6,613,737.21
May 1,2014 91 62,778.73 33,068.69 29,710.04 6,584,027.17
June 1,2014 92 62,778.73 32,920.14 29,858.59 6,554,168.58
July 1,2014 93 62,778.73 32,770.84 30,007.88 6,524,160.70
August 1, 2014 94 62,778.73 32,620.80 30,157.92 6,494,002.78
September 1,2014 95 62,778.73 32,470.01 30,308.71 6,463,694.06
October 1,2014 96 62,778.73 32,318.47 30,460.26 6,433,233.81
November 1,2014 97 62,778.73 32,166.17 30,612.56 6,402,621.25
December 1,2014 98 62,778.73 32,013.11 30,765.62 6,371,855.63
January 1, 2015 99 62,778.73 31,859.28 30,919.45 6,340,936.18
February 1, 2015 100 62,778.73 31,704.68 31,074.04 6,309,862.14
.-March 1,2015 101 62,778.73 31,549.31 31,229.42 6,278,632.72
April 1 , 2015 102 62,778.73 31,393.16 31,385.56 6,247,247.16
May 1,2015 103 62,778.73 31,236.24 31,542.49 6,215,704.67
June 1, 2015 104 62,778.73 31,078.52 31,700.20 6,184,004.47
July 1, 2015 105 62,778.73 30,920.02 31,858.70 6,152,145.77
August 1,2015 106 62,778.73 30,760.73 32,018.00 6,120,127.77
September 1, 2015 107 62,778.73 30,600.64 32,178.09 6,087,949.68
October 1, 2015 108 62,778.73 30,439.75 32,338.98 6,055,610.70
November 1,2015 109 62,778.73 30,278.05 32,500.67 6,023,110.03
December 1, 2015 110 62,778.73 30,115.55 32,663.18 5,990,446.86
January 1, 2016 111 62,778.73 29,952.23 32,826.49 5,957,620.36
February 1, 2016 112 62,778.73 29,788.10 32,990.62 5,924,629.74
March 1,2016 113 62,778.73 29,623.15 33,155.58 5,891,474.16
April 1 , 2016 114 62,778.73 29,457.37 33,321.36 5,858,152.81
May 1,2016 115 62,778.73 29,290.76 33,487.96 5,824,664.85
June 1,2016 116 62,778.73 29,123.32 33,655.40 5,791,009.44
July 1,2016 117 62,778.73 28,955.05 33,823.68 5,757,185.77
August 1,2016 118 62,778.73 28,785.93 33,992.80 5,723,192.97
September 1,2016 119 62,778.73 28,615.96 34,162.76 5,689,030.21
October 1, 2016 120 62,778.73 28,445.15 34,333.57 5,654,696.63
November 1, 2016 121 62,778.73 28,273.48 34,505.24 5,620,191.39
. December 1, 2016 122 62,778.73 28,100.96 34,677.77 5,585,513.62
January 1, 2017 123 62,778.73 27,927.57 34,851.16 5,550,662.46
City of Port Angeles Page 3 Apnl 5, 2005
Fixed
Payment Due Date Payment # Monthly Fee Interest Principal Final payme.
February 1, 2017 124 $ 62,778.73 $ 27,753.31 $ 35,025.41 $ 5,515,637.0
March 1,2017 125 62,778.73 27,578.19 35,200.54 5,480,436.51
April 1 ,2017 126 62,778.73 27,402.18 35,376.54 5,445,059.97
May 1,2017 127 62,778.73 27,225.30 35,553.43 5,409,506.54
June 1,2017 128 62,778.73 27,047.53 35,731.19 5,373,775.35
July 1,2017 129 62,778.73 26,868.88 35,909.85 5,337,865.50
August 1, 2017 130 62,778.73 26,689.33 36,089.40 5,301,776.10
September 1,2017 131 62,778.73 26,508.88 36,269.85 5,265,506.25
October 1, 2017 132 62,778.73 26,327.53 36,451.19 5,229,055.06
November 1, 2017 133 62,778.73 26,145.28 36,633.45 5,192,421.61
December 1, 2017 134 62,778.73 25,962.11 36,816.62 5,155,604.99
January 1, 2018 135 62,778.73 25,778.02 37,000.70 5,118,604.29
February 1, 2018 136 62,778.73 25,593.02 37,185.70 5,081,418.59
March 1, 2018 137 62,778.73 25,407.09 37,371.63 5,044,046.95
April 1 , 2018 138 62,778.73 25,220.23 37,558.49 5,006,488.46
May 1, 2018 139 62,778.73 25,032.44 37,746.28 4,968,742.18
June 1,2018 140 62,778.73 24,843.71 37,935.01 4,930,807.16
July 1,2018 141 62,778.73 24,654.04 38,124.69 4,892,682.47
August 1, 2018 142 62,778.73 24,463.41 38,315.31 4,854,367.16
September 1, 2018 143 62,778.73 24,271.84 38,506.89 4,815,860.27
October 1, 2018 144 62,778.73 24,079.30 38,699.42 4,777,160.85
November 1, 2018 145 62,778.73 23,885.80 38,892.92 4,738,267.~.
December 1, 2018 146 62,778.73 23,691.34 39,087.39 4,699,180.54
January 1, 2019 147 62,778.73 23,495.90 39,282.82 4,659,897.71
February 1, 2019 148 62,778.73 23,299.49 39,479.24 4,620,418.48
March 1, 2019 149 62,778.73 23,102.09 39,676.63 4,580,741.84
April 1, 2019 150 62,778.73 22,903.71 39,875.02 4,540,866.83
May 1, 2019 151 62,778.73 22,704.33 40,074.39 4,500,792.44
June 1,2019 152 62,778.73 22,503.96 40,274.76 4,460,517.67
July 1,2019 153 62,778.73 22,302.59 40,476.14 4,420,041.53
August 1, 2019 154 62,778.73 22,100.21 40,678.52 4,379,363.02
September 1, 2019 155 62,778.73 21,896.82 40,881.91 4,338,481.11
October 1,2019 156 62,778.73 21,692.41 41,086.32 4,297,394.78
November 1, 2019 157 62,778.73 21,486.97 41,291.75 4,256,103.03
December 1,2019 158 62,778.73 21,280.52 41,498.21 4,214,604.82
January 1, 2020 159 62,778.73 21,073.02 41,705.70 4,172,899.12
February 1, 2020 160 62,778.73 20,864.50 41,914.23 4,130,984.89
March 1, 2020 161 62,778.73 20,654.92 42,123.80 4,088,861.09
April 1, 2020 162 62,778.73 20,444.31 42,334.42 4,046,526.67
May 1, 2020 163 62,778.73 20,232.63 42,546.09 4,003,980.58
June 1, 2020 164 62,778.73 20,019.90 42,758.82 3,961,221.75
July 1, 2020 165 62,778.73 19,806.11 42,972.62 3,918,249.14
August 1,2020 166 62,778.73 19,591.25 43,187.48 3,875,061.66
September 1, 2020 167 62,778.73 19,375.31 43,403.42 3,831,658.2.
City of Port Angeles Page 4 Apnl5,2005
Fixed
,.payment Due Date Payment # Monthly Fee Interest Principal Final Payment
October 1, 2020 168 $ 62,778.73 $ 19,158.29 $ 43,620.43 $ 3,788,037.80
November 1, 2020 169 62,778.73 18,940.19 43,838.54 3,744,199.27
December 1, 2020 170 62,778.73 18,721.00 44,057.73 3,700,141.54
January 1, 2021 171 62,778.73 18,500.71 44,278.02 3,655,863.52
February 1,2021 172 62,778.73 18,279.32 44,499.41 3,611,364.11
March 1. 2021 173 62,778.73 18.056.82 44,721.91 3,566,642.21
April 1 , 2021 174 62,778.73 17,833.21 44,945.51 3,521,696.69
May 1,2021 175 62,778.73 17,608.48 45,170.24 3,476,526.45
June 1,2021 176 62,778.73 17,382.63 45,396.09 3,431.130.35
July 1,2021 177 62,778.73 17,155.65 45.623.07 3,385,507.28
August 1,2021 178 62,778.73 16,927.54 45,851.19 3,339,656.09
September 1,2021 179 62,778.73 16,698.28 46,080.45 3,293.575.65
October 1, 2021 180 62,778.73 16,467.88 46,310.85 3,247,264.80
November 1,2021 181 62,778.73 16.236.32 46,542.40 3.200,722.40
December 1, 2021 182 62,778.73 16,003.61 46,775.11 3,153,947.28
January 1, 2022 183 62,778.73 15,769.74 47,008.99 3,106,938.29
February 1. 2022 184 62,778.73 15.534.69 47,244.03 3,059,694.26
March 1, 2022 185 62,778.73 15,298.47 47,480.25 3,012,214.00
April 1, 2022 186 62,778.73 15,061.07 47,717.66 2,964,496.35
May 1 , 2022 187 62,778.73 14,822.48 47,956.24 2,916,540.10
June 1, 2022 188 62,778.73 14,582.70 48,196.03 2,868,344.08
. July 1, 2022 189 62,778.73 14.341.72 48,437.01 2,819.907.07
August 1, 2022 190 62,778.73 14,099.54 48,679.19 2,771.227.88
September 1, 2022 191 62,778.73 13,856.14 48,922.59 2,722,305.30
October 1, 2022 192 62,778.73 13,611.53 49,167.20 2,673,138.10
November 1 , 2022 193 62,778.73 13,365.69 49,413.04 2,623,725.06
December 1, 2022 194 62,778.73 13,118.63 49,660.10 2,574,064.96
January 1, 2023 195 62,778.73 12,870.32 49,908.40 2,524,156.56
February 1, 2023 196 62,778.73 12,620.78 50,157.94 2,473,998.62
March 1, 2023 197 62,778.73 12,369.99 50,408.73 2,423,589.88
April 1, 2023 198 62,778.73 12,117.95 50,660.78 2,372.929.11
May 1, 2023 199 62,778.73 11,864.65 50,914.08 2,322,015.03
June 1, 2023 200 62,778.73 11,610.08 51,168.65 2,270,846.38
July 1, 2023 201 62,778.73 11,354.23 51,424.49 2,219,421.88
August 1, 2023 202 62,778.73 11,097.11 51,681.62 2,167,740.27
September 1, 2023 203 62,778.73 10,838.70 51,940.02 2,115,800.24
October 1, 2023 204 62,778.73 10,579.00 52,199.72 2.063.600.52
November 1, 2023 205 62,778.73 10,318.00 52,460.72 2,011,139.79
December 1. 2023 206 62,778.73 10,055.70 52,723.03 1,958,416.77
January 1, 2024 207 62,778.73 9,792.08 52,986.64 1,905,430.12
February 1, 2024 208 62,778.73 9,527.15 53,251.58 1,852,178.55
March 1, 2024 209 62,778.73 9,260.89 53,517.83 1,798,660.72
April 1, 2024 210 62,778.73 8,993.30 53,785.42 1,744,875.29
.May 1, 2024 211 62,778.73 8,724.38 54.054.35 1,690,820.94
City of Port Angeles Page 5 AprilS, 2005
Fixed
Payment Due Date Payment # Monthly Fee Interest Principal Final payme.
June 1, 2024 212 $ 62,778.73 $ 8,454.10 $ 54,324.62 $ 1,636,496.3
July 1, 2024 213 62,778.73 8,182.48 54,596.24 1,581,900.08
August 1, 2024 214 62,778.73 7,909.50 54,869.23 1,527,030.85
September 1, 2024 215 62,778.73 7,635.15 55,143.57 1,471,887:28
October 1, 2024 216 - 62,778.73 7,359.44 55,419.29 1,416,467.99
November 1, 2024 217 62,778.73 7,082.34 55,696.39 1,360,771.61
, December 1, 2024- 218 62,778.73 6,803.86 55,974.87 1,304,796.74
January 1, 2025 219 62,778.73 6,523.98 56,254.74 1,248,542.00
February 1, 2025 220 62,778.73 6,242.71 56,536.02 1,192,005.98
March 1, 2025 221 62,778.73 5,960.03 56,818.70 1,135,187.29
April 1, 2025 222 62,778.73 5,675.94 57,102.79 1,078,084.50
May 1, 2025 223 62,778.73 5,390.42 57,388.30 1,020,696.19
June 1, 2025 224 62,778.73 5,103.48 57,675.24 963,020.95
July 1, 2025 225 62,778.73 4,815.10 57,963.62 905,057.33
August 1, 2025 226 62,778.73 4,525.29 58,253.44 846,803.89
September 1, 2025 227 62,778.73 4,234.02 58,544.71 788,259.18
Qctober 1, 2025 228 62,778.73 3,941.30 58,837.43 729,421.75
November 1, 2025 229 62,778.73 3,647.11 59,131.62 670,290.13
December 1, 2025 230 62,778.73 3,351.45 59,427.28 610,862.86
January 1, 2026 231 62,778.73 3,054.31 59,724.41 551,138.45
,
February 1, 2026 232 62,778.73 2,755.69 60,023.03 491,115.41
March 1, 2026 233 62,778.73 2,455.58 60,323.15 430,792.2_
April 1 , 2026 234 62,778.73 2,153.96 60,624.76 370,167.50
May 1, 2026 235 62,778.73 1,850.84 60,927.89 309,239.61
June 1, 2026 236 62,778.73 1,546.20 61,232.53 248,007.08
July 1, 2026 237 62,778.73 1,240.04 61,538.69 186,468.39
August 1, 2026 238 62,778.73 932.34 61,846.38 124,622.01
September 1, 2026 239 62,778.73 623.11 62,155.62 62,466.39
October 1 , 2026 240 62,778.73 312.33 62,466.39 (0.00)
.
City of Port Angeles
Page 6
Apnl 5, 2005
4.9 Compo IV
City of Port Angeles
. 4.9 COMPONENT IV - RECYCLABLE COLLECTION AND PROCESSING
4.9.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS
A sIgnificant portion of costs in this component is the purchase of the trucks and containers. We will staff
the operation with three (3) recycling drivers, who will be WCWI employees with full benefits. Operating
expenses will occur in the normal course of business as described below. WCWI will properly bond and
insure the project and operations as required. See also Cost Proposal Form 7.4 in Section 7 for
information on the Technical and Cost Proposal for Component IV.
4.9.2 COMPONENT IV (RECYCLABLE COLLECTION AND PROCESSING)
4.9.2.1 Description of the Proposer's Approach to the Operations Plan
WCWI hereby incorporates by reference all requirements as set forth in the Recyclables Collection and
Processing Performance Specifications contained in Appendix B.4 of the RFP. A detailed operations plan
will be developed, submitted and mutually agreed upon by WCWI and the City of Port Angeles prior to
contract commencement.
Overview of Proposed Collection System
Public Outreach / Involvement and Information
.
WCWI has extensive experience in setting-up and maintammg highly successful residential and
commercial recycling programs throughout the Pacific Northwest and across the United States. Please see
also Section 6.4 for information on our qualifications in recycling collection programs.
WCWI believes that at the heart of every successful and sustainable municipal recycling program is an
effective and efficient public education and outreach component that is well thought-out and consistently
applied. The best way to ensure the City of Port Angeles' curbside and commercial recycling program
meets long-term waste reduction and recycling diversion goals is to consistently provide educational
opportunities to all participants. WCWI proposes achieving the highest participation and recovery rates
through the following detailed plan.
WCWI will supply all residential and commercial customers a
comprehensive recycling brochure that describes fully the materials
accepted; how to prepare them, and company information should
customers have any questions or concerns about the program.
Brochures will be made available in multIple languages as mutually
agreed upon with the City to help all citizens fully understand how the
recycling program works and benefits the environment. WCWI will
supply recycling brochures to new recycling customers at the time they
sign-up for recycling service and receive their new bins. WCWI will also meet quarterly and annually, or
more often at the City's request to assist in increasing recycling participation. We will collaborate with
the City to develop and distribute an annual brochure through the City's billings to all customers to keep
the benefits of recycling fresh in all participants' mmds. WCWI will provide electronic files in a format
acceptable to the City of Port Angeles for all brochure and public outreach materials.
Our goal is to
answer ALL
customer service
calls within 30
seconds.
~
r
.
WCWI will make public outreach materials available regularly at public events such as City Fairs, Juan
de Fuca Festival of the Arts, Relay for Life, etc. as well as place ads in local newspapers during the
April 5, 2005 Waste Connections of ~I.
Washington, Inc. "
4.9-1
City of Port Angeles
.
program start-up and annually thereafter that describe local recycling opportunities. Please see brochures
provided in the binder pocket as a sample ofWCWI materials created to promote community programs
.....<---..."'(l
WCI will provide a specific __,_._,...._.
..., ..",..,_.~(".
website for the City of Port ~i;~;~~~,,:.:;~ ~'~~~~:';';'-",",-L~~ '~~".';;.-::..
Angeles' recyclables collection program based off either the City's
Public Works and Utilities Department webpage or our own
homepage site, www.wasteconnections.com.This site will present an
overview of the City's solid waste collection program, give
instructions on how to participate in or make changes in service,
provide tips on waste reduction and proper preparation of
recyclables, and show timely information such as weather and
holiday related schedule changes. Specifically, the site will feature:
~~J:;\l$lM'~m.:d;llt'lJ)l
.
~
-,
WCWI's Murrey's Olympic Disposal Co., Inc. location at 2548 West
19th Street, Port Angeles, will serve as the business office, customer
service support center and truck terminal for the City's curbside
residential and commercial recycling collection program. Kent
Kovalenko, District Manager will be responsIble for program
implementation and overall daily operations.
" 'cudomer servk:e
,,'" ''''~~~~,..,~'-'''................~
Quatkma,. CommUb w Coacerna?
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t::::~:~:~ ~ ~~-:-~-~::~:~~~'~,~~~~:~'''''-O<--
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.
. CollectIOn Day Maps showing boundary streets and days of collection for each area. Maps will
focus on residential service, with commercial collection being noted more generally.
. Weather / Holiday Service Alerts and make-up schedules
. Upcoming Special Collection Events
. Establishing or Changing Collection Services
. Email to Customer Service Department
. Contact information: telephone numbers and other website links
Semi-Automated Collection
WCWI will utilize one (1) Peterbllt cab-over chassis equipped with dual drive with an Amrep Side-load
20- to 25-yard compactor body (or equivalent) for mixed recyclables to be used for residential and
multifamily recycle collections. Recyclables will be emptied from the side of the vehicle body. Each
vehicle with a one-person crew can service up to 700 homes per day. The vehicles have a life expectancy
of seven to ten years.
WCWI will supply a 96-gallon cart to every residential and multi-family customer subscnbing to curbside
recycling service at rates as outlined. Collection of commingled recyclables will be conducted on a
rotating biweekly basis (every other week) but will maintain the existing day/week schedule for garbage
collections performed by the City. All mixed recyclables to include mixed paper, newspaper, cardboard,
number #1 and #2 plastics, tin and aluminum would be placed inside the 96 gallon. WCWI does not
propose to provide containers or curbside collection of glass.
April 5, 2005
Yard debris will be collected using one (1) Peterbllt 320 Cab-over semi-automated side-load collection
vehicle with a McNeilus 20 to 25 cubic yard compaction body (or equivalent). WCWI will supply a 96-
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gallon cart to every residential and multi-famIly customer subscribing to yard debris service at rates as
outlined. Yard debris will be collected on a rotatmg biweekly basis (every other week) on the opposite
week of the recycling collection, but will maintain the existing day/week schedule for garbage collections
performed by the CIty. This alternating schedule will minimize collection vehicle traffic impacts on city
str~ets and alleys. All other components as outlined in the current program would remain the same.
Please see the attached price proposal forms for pricing. We believe the 96 gallon cart alternative would
decrease overall program costs and increase participation and recycling diversion by at least 25%. The
cart system provides for the use of semi-automated collection trucks, which are more efficient and will
lower on the job injuries incurred by collection personnel.
Commercial Cardboard Collection
WCWI will utIlize one front-load truck as seen below to service detachable recycling containers from
commercial customers. The truck is a Peterbilt cab-over chassis (or equivalent) equipped with a 38-cubic
yard front-end load single compartment compactor body. The truck will be loaded from the front/top and
compacted. The recyclables will be emptied by gravity from the rear of the vehicle body. Life expectancy
is seven to ten years for this equipment. Each vehicle with a one-person crew can service up to 130
businesses per day. The vehicles have a life expectancy of seven to ten years.
WCWI will provide all subscribing commercial customers with a metal
container for the collection of corrugated cardboard; containers range from
two (2) cubic yard up to six (6) cubic yard and will be emptied up to two
times per week. Collections shall occur five days per week Monday through
Friday from commercial locations in Port Angeles. WCWI will also be able
to perform on-call picks from customers requiring additional service.
.
WCWI staff will be on hand to perform on-site consultations to discuss recycling opportunities available
to commercial establishments and to consult on equipment placement at existing locations and enclosure
designs to incorporate recycling equipment at new locations. WCWI shall provide metal containers for
cardboard recycling to all new commercial accounts upon request within 48 hours or two business days
after receipt of verbal notice from the City or customer.
Route Management System
WCWI will work with the City of Port Angeles and the current contractor in advance of the start date to
obtam a complete database of all residential and commercial recycling customer information and establish
new account information and collection routes. We wIll directly contact all customers in advance of the
contract start-up date to facilitate a smooth program transition.
WCWI route sheets are designed to provide collection personnel with relevant
customer information including but not limited to, the account name and service
address, service level, current account status, and the sequence in which the
customers are to be picked up. The route sheets provide space for the driver to note
any extras, time not out, rejects, or other problems. All of this information is then
entered into the customer's individual account database so that it is available for
billing and customer service follow up.
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Drop Off Recycling Facilities
WCWI will supply containers and receptacles with sufficient capacity to receive recyclables self-hauled
by customers and delivered to the Port Angeles Transfer Station and the Blue Mountain Drop-Off
facilities. WCWI will also supply containers to receive glass at up to 3 mutually agreeable locations
within the City of Port Angeles. Acceptable recyclables to shall include cardboard, newspaper, mixed
paper, tin, aluminum, number #1 and #2 plastics, clear, brown and green glass segregated by color. Roll-
off containers ranging from 10 - 50 cubic yard in size will be stationed at each site to accommodate all
volumes delivered. Drop-Off facilities containers will be labeled to identify acceptable materials. Pick up
of recyclables shall occur during normal site operating hours. WCWI will make a specific pick-up at the
Transfer Station site after 2:00 P.M. each Friday to ensure adequate weekend capacity is available to self
haul customers.
WCWI will utilize one Peterbilt 320 Cab-over roll-off vehicle (or equivalent) to transport mixed and
segregated recyclables from the Blue Mountain and Port Angeles Transfer stations recycling facilities.
The trucks are equipped with a chain-hoist mechanism designed for servicing 10- to 50-yard containers.
They are loaded and emptied from the rear. A one-person crew can service up to 10 to 12 roll-off boxes
per day. These vehicles have a life expectancy of seven to eleven years.
Project Status Reporting
.
WCWI will provide monthly status reports to the City within fourteen (14) days of the reporting period,
reports shall include but not be limited to a summary of containers and carts delivered to customers, the
actual number of customer set-outs for both residential and commercial customer locations, and tonnage
summaries for all commodities collected. Reports shall also include tonnage summaries for all recyclable
materials delivered to the transfer station and drop-off facilities by self-haul customers. WCWI will
furnish copies of weight tickets for all loads of recycled materials in the reporting period. The monthly
status report will also include highlights and problems, and measures taken to resolve problems and
increase participation.
Recycling Processing and Marketing System
WCWI owns and operates Tacoma Recycling, a large scale material recovery facility located in Tacoma,
Washington. Tacoma Recycling is uniquely situated to take advantage of ocean routes, land routes, and
rail and currently ships over 40,000 to 50,000 tons of mixed recyclables annually to secondary markets
around the world. The facility operates two pick lines, two balers, and multiple scales and has loading
dock space to load up to seven overseas containers at a time. Current operations are conducted with one
shift per day. We have ample capacity to handle the City of Port Angeles' volume.
WCWI will transport all recyclables collected in drop boxes at the Blue Mountain Drop-off Recycling
Facility, the Port Angeles Transfer Station Recycling Facility receiving area, and all recyclables collected
in the City of Port Angeles curbside recycling program to the Port Angeles Transfer Station for
consolidation into walking-floor trailers. Once consolidated, materials will be shipped to the Tacoma
Recycling Material Recovery Facility (MRF) for processing and marketing to end users. Glass collected
from the Blue Mountain Drop Off Recycling Facility, the Port Angeles Transfer Station Recycling Facility
receiving area, and up to 3 glass drop boxes within the City of Port Angeles will be transported and
delivered in roll-off containers to Fibers International's Seattle glass recycling plant for processing.
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4.9.2.2 Description of the Proposer's Approach to the Contingency Plans
The WCWI Contingency Plan will address a variety of contingency scenarios or emergencies that could
disrupt normal collection and processing operations. Example scenarios include work stoppages;
emergency weather conditions (snow, flooding); impassable roadways; building structural or equipment
failure; or power outages (both short and long-term). The Contingency Plan will list the response actions
for each scenario. Depending on the type of interruption, response actions could include bringing in
management personnel to make pick ups in event of work stoppages and/or redirecting recyclable
materials to alternate processing facilities located in Tacoma and Seattle until such time as regular
collection and processing can resume.
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4.1 0 Compo V
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. 4.10 COMPONENT V - CO-COMPOSTING OPERATIONS
4.10.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS
WCWI intends to staff the operation by hiring the City's solid waste operations personnel as provided for
in Component 1. Operating expenses will occur in the normal course of business as described in this
section. WCWI will properly bond and insure the project and operations as required.
The City of Port Angeles currently operates a co-compo sting facility for the processing of yard waste and
biosolids, utilizing static pile with positive aeration methodology. The facility produces a Class A co-
compost product. WCWI has extensive experience in compost facility operations at its Pierce County
facilities including the LRI Compost Factory, the Purdy Road facility, and the Sales Road Facility.
4.10.2 ApPROACH TO OPERATIONS PLAN
WCWI will develop an Operations Plan (Plan) for the co-composting facility based on the existing
operation practices, the Co-Composting Facility Operations Plan / Quality Assurance Plan, facility
permit, and performance specifications included in the RFP. A preliminary Operations Plan will be
submitted to the City within 14 calendar days following written notice to proceed from the City. WCWI
will commence operations within 30-days following issuance of a wntten acceptance of the Final
Operations Plan by the City. WCWI's approach to operations and development of the Operations Plan
will use the general outline as follows:
. Management and Staffing
. 1. Training
. Proposed Equipment
. Facility Operations
1. Receiving, processing, and curing
2. Aeration system description and routine maintenance requirements
3. Water management (leachate and stormwater)
4. Dust and odor control
5. Compost monitoring and process control (Quality Assurance Quality Control)
6. Health and safety
7. Recordkeeping, reporting, and complIance
8. Permitting
9. Fire Emergency Plan
10. Inspections
11. Storage and space requirements
12. Contingency plan
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4.10.2.1 Management and Staffing
WCWI anticipates staffing needs will be met through employment of transition personnel upon assuming
operations. Appropriate experienced staff will be assigned to co-compo sting operations including the
receiving area, compo sting area, and curing area. The Operations Plan will describe tasks associated with
these components of the operation and personnel responsibilities. At least one employee that has
completed the Washington Organic Recycling Council operator training will provide oversight of
operations at the facility, and will be considered the Project Manager. Additional staff may be added
should incoming volumes warrant. The final Operations Plan will also describe ongoing training
programs for designated co-compost facility staff. WCWI regional engineering staff and local district
management will provide support services.
4.10.2.2 Proposed Equipment
Detailed specifications for proposed co-compost operations will be provided in the operations plan. An
equipment list will be provIded in the Operations Plan which will include manufacturer, model and
function. In general, WCWI plans to utilize a loader, mixer, conveyor, and screening equipment for
operation of the Co-compost facility. Interchangeable buckets wIll be used on the loader to prevent cross-
contamination. Grinding of yard waste will likely be subcontracted to a third party.
4.10.2.3 Facility Operations
Receiving, Processing, and Curing (Batch Processing)
.
WCWI views the Co-Compost facility as consisting of four components; receiving; processing; curing
and; finished product storage. The following is a general overview of our approach to operations. The
final Operations Plan to be developed by WCWI, will go into greater detail with respect to timing and
flow though successive operational bays during the composting process at the Co-Compost Facility.
A new receiving area is proposed (see Figure P.9 in Section 4.6) through the construction of a new asphalt
pad, possibly with ecology block partitions for segregating incoming waste types. The proposed location
for the new receiving area IS east of the existing co-compost facihty and will encompass approximately
4000 square feet. WCWI proposes that all yard waste customers will be designed to allow safe ingress /
egress to and from the receiving area. Biosolids from the City's waste water treatment plant wIll be
received and stored in available, un-aerated bays (such as bay 11/12) in the co-compost building. The
primary objective of the receiving area will be the safe and efficient unloading of incoming yard waste
vehicles, and a controlled area for separation of acceptable non-biosolid feedstocks. The receiving area
will also be used to remove unacceptable materials such as plastics from the yard waste. The receiving
area is designed to facIlitate proper mixing and steady flow into the processing area.
Processing will begin with grinding of yard waste with a third party grinder, followed by proper mixmg
of feedstocks. Mixing requires a 3: 1 yard waste / biosolids ratio. Grinding and mixing will likely take
place in the vicinity bays 8/9. Mixing will be accomplished using the current mixer. Upon completion of
grinding and mixing, static piles will be constructed in aerated facility bays ("processing bays") using a
loader or conveyor. Bays 6 and 7 are currently designated as aerated processing bays. An insulating cover
consisting of finished compost, wood chips, or screenovers will be placed over the pile(s).
Upon completion of pile construction, moisture and temperature will be monitored to assure active
composting is underway. The Co-Compost operation utilizes and automated monitoring system. All
. monitoring information will be recorded to assure achievement of Class A compost quality in accordance
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with facility quality control requirements. Upon achieving PFRP and corresponding temperature
reduction, the City will be notified for laboratory analysis to confirm Class A criteria. When Class A
requirements are achieved, piles will be moved to appropriate "curing bays" for curing. Current curing
bays are designated as Nos. 4 and 5. Curing enables stabilization of the compost through a slower
decomposition rate. At the conclusion of curing, the compost will be screened, and screen overs will be
returned to the process or used for pile cover.
Finished compost will be stored in bay 1 or in a segregated area of the new receiving area. WCWI
proposes the addition of a new screen such as an Erin Star Screen. The City will be notified for testing to
document that the material meets Class A criteria.
Aeration System
The Operations Plan will provide a discussion of the facility aeration system and required maintenance
activities. Optimal operating conditions and controls will also be highlighted and any potentially
beneficial modifications proposed.
Water Management
The operations plan will include a description of water management practices including leachate, or
process water, and control of storm water run-off and run-in. The facility currently utilizes a leachate
collection system consisting of drains and pipmg to a IOOO-gallon storage tank. The Operations Plan will
discuss best management practices to assure proper maintenance and controls are in place and inspected
on a routine basis.
. Dust and Odor Control
The Operations Plan will describe dust control measures which will be a concern primarily in the
receiving area where incoming loads may be of low moisture content. Measures included in the sections
could include spraying of waste loads upon receipt or while in the receiving area as warranted. The
Operations Plan will describe an odor control program. Odors are generated when orgamc material
decomposes, especially if anoxic or anaerobic conditions exist. Maintenance measures will be employed
as will be described in the final plan. As an example, these measures could include; movement of fresh
materials to the pad upon delivery; prevention of the development of anaerobic conditions in the receiving
area by efficient movement of material to the processing phase; clean up of spilled materials and; regular
cleaning ofthe receiving area.
Compost Process Monitoring and Control
The compost process requires superviSIOn and control due to potential vanatIOns in feedstock
characteristics and the biological nature of the process. The Operations Plan will specify and describe the
required sampling and testing protocols, quality assurance / quality control, and reporting requirements.
Recommendations of other testing parameters may also be made. This section will also list field
monitoring equipment maintained facility. Pnmary monitoring activities will include aeratIOn monitoring,
temperature and moisture monitoring, and maintenance of the on-site telemetry system.
The Operations Plan will specify monitoring requirements to assure compliance with quality control and
permit requirements. Monitoring requirements will be in accordance with the current facility Operations
Plan, permit, and regulatory requirements.
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The objective is to produce a Class A compose end product. The plan will also provide monitoring
documentation procedures. Temperature monitoring will be conducted using the facility's automated
system to assure PFRP requirements are being met, and for timing of pile movement mto curing bays.
The City will be notified for sampling and analysis to confirm PFRP requirements have been achieved.
Moisture monitoring and management will be conducted immediately after pile construction and
throughout the composting process to assure appropriate pile porosity and aerobic conditions. Moisture
content is required upon pile construction. Moisture addition, if necessary, will be accomplished using
facility hydrants. Upon completion of compo sting, the City will be notified for sampling and acceptance /
rejection of final compost product. Additional monitoring requirements will include yard waste inspection
to eliminate unacceptable material mixed with yard waste. Inspections will be conducted by observation
of in-coming yard waste at the scale house, upon movement of material into the processing area, and upon
screemng.
Health and Safety
The Operations Plan will provide a Co-Composting Heath and Safety Plan. This section will address
general safety and safety training requirements. Focus will be placed on safety issues common to compost
operations such as visIbility, decontamination, hand washing and protectIve clothing, confined space
entry, and general sanitation. The plan will also address safety items such as ammonia levels and allergic
reaction to mold spores.
Recordkeeping, Reporting and Compliance
WCWI will maintain records in accordance with City requirements and regulating agencies. Records will
be maintained by WCWI and provided to the City on a monthly basis. These records will include
documentation of daily activities, materials management, status of co-compo sting processing, equipment
usage, inspections, matters requiring the City's response, records of co-composting product produced and
accepted by the City, leachate generation data, and identified operational problems and hIghlights.
WCWI's Operations Plan will propose a recordkeeping format and reporting procedures. The majority of
records will be maintained by a designated on-site employee under the supervision of the WCWI District
Manager or Engineering Manager.
Permitting
WCWI has an in-house permIttmg management staff that will oversee required permitting efforts
including at federal, state, and local level. A list of required permits for all facility development activities
and long term operations will be developed by WCWI engineenng staff and provided to the City. WCWI
will develop a permit renewal and management schedule to assure complete permitting and timeliness in
renewal activities. Coordination with the City will be maintamed at all times in permitting actIvities.
Fire Emergency Plan
The Operations Plan will include fire emergency response requirements. Fire prevention, identification of
sources, response procedures, and notification requirements will be, addressed.
Inspections
The facility is equipped with an automated compost monitoring system which will be checked daily.
Facility inspections will be conducted weekly by the Project Manager. The Operations Plan will specify
. and inspection program that will include procedures, documentation, and reporting.
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4.10.2.4 Storage and Space Requirements
Feedstock: WCWI anticipates the storage of biosolids in existing facility bay No. 11/12. Based on
biosolids generation rates provided by the City, bay 11/12 has adequate storage capacIty. Incoming yard
waste will be stored on receiving area to be constructed immediately east of the compost facility.
Contingent yard waste storage capacity may include bay 10. Bays 7 through 4 will be utilized for
processing and curing.
Finished Compost: Finsihed product will be stored in available bays within the Co-Composting building.
After screening, finished product will be stored primarily in bay 1 with overflow capacity in bay 2.
Storage operations will emphasize the need for distant separation of finished product from feedstock and
processmg.
Equipment: Equipment used for the Co-Compo sting operation will be stored either in available, unused
bays in the Co-compo sting or in the vicinity of the receiving area.
4.10.2.5 Approach to Contingency Plans
The WCWI Contingency Plan wIll address a variety of contingency scenarios or emergencies that could
disrupt normal co-compo sting operations. The overall objective is to return processing and handling
operations to normal as soon as possible. Example scenarios include fire; explosion; release of toxic or
hazardous substances; work stoppage by WCWI employees or non-affiliated parties; emergency weather
conditions (snow, flooding); impassable roadways; building structural or equipment failure; power
outages (both short and long-term); discovery of the receipt of unacceptable wastes; handling of disaster
wastes; etc. The Contingency Plan will list the response actions for each scenario. Depending on the type
of interruption to onsite co-compo sting operation, WCWI will determine if offsite processing of
compostables is necessary. If it is determined that the Port Angeles co-composting operation is incapable
of receiving and processing compostables for a period of time greater than outlined in WCWI's plan of
operations, the WCWI will load incoming yard debris into walking floor trailers for transport to WCWI's
LRI Purdy, Washington composting facility for processing on a temporary basis until such time the Port
Angeles co-composting facility operations can be restored.
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4.11 Camp VI
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4.11 COMPONENT VI - MRWF DEVELOPMENT
4.11.1 TECHNICAL AND COST PROPOSAL REQUIREMENTS
WCWI will provide management and staffing for a Moderate Risk Waste Facility (MRWF) to be
constructed at the PALF as part of overall facility development. The MRWF will be a fully enclosed
building, constructed in accordance with the Moderate-Risk Waste Fixed Facility Guidelines (Department
of Ecology Publication No. 92-13, updated 1993 and 1995). WCWI will provide trained staff, equipment,
and supplies to assure the safe operation of the MRWF. WCWI intends to staff the operation by hiring the
City's solid waste operations personnel as provided for in Component I. WCWI will manage screening,
packaging, testing, and manifesting for off-site transport and recycling, treatment, or disposal at an
approved facility.
The facility is designed to aesthetically match other structures to be constructed at the facility. Roadway
layout and proposed traffic patterns have been developed to accommodate safe and efficient operations of
the MRWF as well as all other facility operations. Please see also Technical and Cost Proposal forms
7.7B. See also Section 4.6 figures P-l through P-9 and site figures.
4.11.2 ApPROACH TO OPERATIONS PLAN
WCWI approach to operations at the MRWF will utilize the following general outline:
. Management Oversight and Staffing
. Facility Layout
. . Operational Requirements
. Health and Safety
. Transportation and Disposal
. Contingency Plan
. Forms and Inspections and Reporting
The following sections provide a brief overview of WCWI's approach to operations and content of the
Final Operations Plan. The MRWF Operations Plan will be developed in consultation with Philips
Service Corporation (discussed below).
4.11.2.1 Management Oversight and Staffing
WCWI will utilize the services of Philips Service Corporation (PSC) in the training, oversight assistance,
transport, and disposal of collected MRW materials. The PSC - HHW Services Group has been in
operation since 1985, and is the largest HHW contractor in the Pacific Northwest. PSC manages HHW
programs in multiple counties within the state of Washington, and provides a hazardous waste
transportation group, as well as hazardous waste treatment facilities throughout the United States. PSC
will provide training of designated facility personnel in the operation of the facility, and regular follow-up
site visits for facility personnel support and monitoring. PSC training will emphasize proper chemical
segregation, incompatibility, unstable chemicals, explosives, labpacking, and health and safety.
WCWI District Manager - responsible for oversight of all aspects of MR WF operations.
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WCWI Program Manager / Un/oader / Sorter - responsible for day-to-day MRWF operations including
general labor, staffing needs, maintenance functions, vehicle unloading, sorting waste, labpacking, drum
labeling, material consolidatIon, and general maintenance as required.
PSC Support Manager - responsible for initial training and long- term oversight support.
Contact information and an organizational chart will be provided as part of the final Operations Plan for
operation of the MRWF.
4.11.2.2 Facility Layout
The MRWF will consist of an enclosed building at least 2000 SF in size. Construction materials will be
concrete and metal and will aesthetically match building materials utilized for other facility structures.
(See drawing P6) The floor will consist of a sealed concrete slab with drainage to secondary containment.
The MRWF will be located on a paved lot at the Northern limit of the proposed facIlity, beyond the
facility scale location. The site layout consists of an unloading zone, sorting area, labpack area, and
bulking area. Primary traffic ingress / egress to the MRWF will be from the west side of the building.
Customers arriving with materials for disposal, will be met at the unloading area by the WCWI Program
Manager or designee, and directed to a vehicle queuing area, which will be marked with directional signs
and cones.
4.11.2.3 Operational Requirements
WCWI's approach to operations and development of a Final Operations Plan will include detailed
description of staff positions, position requirements, and requirements for personnel which make up the
staff at the MRWF. Our approach to operations and development of the operating will be generally
consistent with the following outline:
. Unloading Procedures
. Procedures for Handling Unacceptable Material
. Waste Sorting Procedures
. Labpack Area
. Spill Control/Clean-up Procedures
Unloading Procedures
The Operations Plan will describe traffic flow and control to maximize safety to staff and facility users.
Staff will be responsible for unloading vehicles and will control traffic such that one vehicle at a time is
being unloading at a time. Other vehicles waiting to unload will be staged away from the unloading area
until staff is ready to signal them forward. The unloadmg area will consist of a canopy area over the
building entrance and within the building as well, depending on the nature and size of the load. No
vehicles will be allowed inside the building when flammable containers are being consolidated. In
addition, only vehicles arriving to dIspense loads of MRW material will be allowed within the facility
confines. Unloading staff will greet arriving participants, direct participant's vehicular movement within
the facility, ask questions related to the nature of the waste, and unload waste materials. In addition,
personnel handling unloading will communicate any waste packaging hazards to sorting personnel.
Unloading procedures in the final Operations Plan will also address hazard avoidance during unloading
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such as back strain, heat/cold stress, and skin contact. Depending on incoming volume, a separate
unloading and sorting (discussed below) personnel may be required
Procedures for Handling Unacceptable Waste
The Operations Plan will address procedures for load inspections and actions to take in the event
unacceptable wastes are encountered. Procedures will include notification requirements and response
actions depending on the nature of the waste material. Response actions will vary depending on
unacceptable waste type. Certain wastes received at the MRWF may be acceptable at the transfer station
(such as an inadvertent load of MSW), and in such cases the waste can be re-directed accordingly. Other
waste types however, may require isolation and the assistance of other agencies in proper disposal, such
as ammunition. The final Operations plan will expand upon these areas and describe inspectIOn
procedures, response procedures for specific waste types, and list unacceptable waste types to watch for.
Waste Sorting
Waste sorting procedures will be identified in the Operations Plan to assure that all waste is removed
from unloading carts and placed in the appropriate processing areas. The Operations Plan will designate
processing areas such as antifreeze, latex paint, oil base paint, solvents, etc. and specific procedures for
handling, processing, and bulking, as applicable to the various MRW materials received.
Labpack Area
The labpack area is where most hazardous and chemicals are packed. Unclassified chemicals are also
identified in this area. In addition, packaging and labeling in accordance with D.O.T requirements is
conducted in the labpack area. The labpack area is designed to maxImize space and organization and to
minimize the chance of contact between incompatible chemicals. The Operations Plan will expand upon
labpack instructions including identification of unclassified chemicals, drum packing, drum closing, and
drum handling procedures.
Spill Control and Clean-up Procedures
The MRWF is designed with a sealed floor and secondary containment. Spill kits will also be required.
The Operations Plan will provide a spill prevention and response plan for spill response under various
scenarios including spills in transit and within the MRWF facility. Procedures for prevention and clean-up
will be expanded upon in the Operations Plan as certain spill scenarios may require the assistance of off-
site agencies. The final plan will assess on-site clean-up and response capabilities. The spill plan will
provide emergency response procedures, emergency contacts, and spill reporting requirements.
4.11.2.4 Heath and Safety Plan
The MRWF Health and Safety Plan will be a stand alone document and will be a part ofMRWF traimng.
The Health and Safety Plan will consist of the following areas:
. Description of the Project
. Site Characterization
. SIte Safety and Health Responsibility
. Risk Analysis by Task & Associated Personnel Protective Equipment (PPE)
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City of Port Angeles
. AddItional PPE (Emergency)
. Training Requirements
. Medical Surveillance
. Air Monitoring
. Decontamination Procedures
. Emergency Response Plan
4.11.2.5 Transportation and Disposal
Any transportation services for the MRWF will be done in-house by PSC. Since 1969, PSC has been
building one of this country's safest hazardous waste transportation groups. The National Safety Council
has acknowledged this fleet for its safety record since 1989. PSC transport a variety of hazardous and
non-hazardous materials including all types of HHW, acids, bases, sludges, cyanide, oil, wastewaters,
PCBs, solvents, dirt demolition debris, and drums containing all types of wastestreams. Our fleet has a
broad spectrum of resources and equipment available to provide the exact fit that is needed to efficiently
complete transportation needs of our customers. In consultation with PSC, the MRWF Operations Plan
wIll designate likely transportation schedules, frequency and vehicle type to be used depending on waste
types and volumes. The Operations Plan will also describe the disposal/treatment facility options.
4.11.2.6 Contingency Plan
In the event of extended interruption of normal Transfer Station operations, PSC will provide off-site
mobile HHW collection services to the Port Angeles community. PSC has been providing mobile HHW
services to the Clallam County Department of Community Development since 1994 and is fully capable
of providing necessary supplies, staff and transportation for emergency collection services. Past
collection events have been held in the Wal-Mart parking lot, though PSC is capable of safely providing
mobile HHW collections at any flat paved surface in the County.
PSC is contracted through the W A State Department of Ecology's Emergency Response contract and can
be activated under emergency response timeframes.
April 5, 2005
Waste Connections of .hllt
Washington, Inc. ~+"
4.12-4
5 0 Guarantees &
Warranties
Form 5.1
,,} "\" .<~;: " ;:
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 5.1 - December 16, 2004
TECHNICAL AND COST PROPOSAL
ACKNOWLEDGEMENT OF ADDENDUM
ADDENDUM DATE OF RECEIPT OF
NUMBER ADDENDUM
1 August3,2004
2 August 13, 2004
3 August 31,2004
4 September 1, 2004
5 September 17, 2004
6 October 1, 2004
7 October 8, 2004
8 October 19, 2004
9 October 20,2004
10 November 19, 2004
SIGNED ACKNOWLEDGEMENT
December 16,2004
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
P-1
~ _:"
Form 5.2
.
.
.
.. . ....i,l/t
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 5.2 - September 17, 2004
TECHNICAL AND COST PROPOSAL
GUARANTEES AND WARRANTEES
SIGNATURE OF PROPOSER
The name of the Proposer that is submitting this Technical and Cost Proposal is:
Waste Connections of Washinqton. Inc.
doing business at: 2916 10ih Street S.
Street
Lakewood
City
WA
State
98499
Zip Code
which is the address to which all communications concerning this Technical and Cost Proposal,
and the Service Agreement shall be sent.
The names of the principal officers of the corporation submitting this Technical and Cost
Proposal, or of the partnership, or of all persons interested in this Technical and Cost Proposal
as principals are as follows:
Ron Mittelstaedt, CEO
Worthinq Jackman, CFO
Steve Bouck. President
Robert Evans, Secretary
Darrell Chambliss. COO
If the proposed firm is a partnership, attach to this form a copy of the partnership agreement. If
the Proposer is a corporation, attach to this form copies of its articles of incorporation, bylaws,
and certificate of good standing, as certified by the Secretary of the Board of Directors.
The undersigned declares that the enclosed Technical and Cost Proposal contains a true and
accurate representation of the Proposer's cost, that no changes to the terms and conditions of
the Technical and Cost Proposal Forms were made by the undersigned, and that the
undersigned agrees to provide the warranties and guarantees required in Section 5.0 of the
RFP.
10/28 ,2004
Waste Connections of Washinqton. Inc
Legal Name of Proposer
P-2
.
.
.
'.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 5.2 Continuation - September 17,2004
TECHNICAL AND COST PROPOSAL
GUARANTEES AND WARRANTEES
If Sole Proprietor or Partnership
IN WITNESS hereto the undersigned has set its hand this
,20
Signature of Proposer
day of
Title
If Corporation
IN WITNESS whereof the undersigne~h corporation has caused this instrument to be executed
by its duly authorized officers this 28 day of October ,4 . ,
~~
Waste Connections of WashinQton. Inc. Ronald Mit elsta
Name of Corporation y
Chief Executive Officer
Title
STATE OF WASHINGTON
STATE OF WASHINGTON
COUNTY OF
)
) ss.
)
) ss.
)
See attached
California All-Purpose
Acknowledgment
I certify that I know or have satisfactory evidenc hat , IS the
person who appeared before me, and said perso cknowledged that he signed this Instrument,
on oath stated that he was authorized to exe e the instrument and acknowledged it as the
of , Inc., to be the free and voluntary act and deed
of said corporation, for t e uses an ereln mentioned.
10/28 ,2004
day of
,20_,
(signature)
(type or print name)
NOTARY PUBLIC in and for the State of
Washington, residing at
P-3
Waste Connections of Washmqton, Inc
Legal Name of Proposer
k' ~
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
.
.
.
State of cP \; fo f ("\',~
County of S~c.r~m '€n-e..
On 2.g before me, {)~sj No C} r
DATE NAME, TITLE OF 0 ICER - E G ,
personally appeared .Jicn~ld H;-+bl S+N~ +-
~ ~ME(S)O~ER(S)
~personally known to me - OR - D proved to me on the basis of satisfactory evidence
to be the person(~) whose name~)@ace
subscribed to the within instrument and ac-
knowledged to me that@s~/tl')ey executed
the same in ~/~r/t~ir authorized
capacity(ie\rj, and that by C!lli:n~r/t~r
signature(~ on the instrument the person(~,
or the entity upon behalf of which the
person~) acted, executed the instrument.
.
GALE M ROSSI t
~_.. CommisSion # 1326300 ' ~
';( .,,; Notary Public - California ~
~ . Sacramento ^,~ounty
, My eomm. Expires Oct 21. 2005
No 5907
b Ii Co.
WITNESS my hand and official seal.
~~~~
SIGNATURE OF NOTARY
OPTIONAL
Though the data below IS not required by law, It may prove valuable to persons relYing on the document and could prevent
fraudulent reattachment of this form
CAPACITY CLAIMED BY SIGNER
g I~IVIDUAL
~ORPORATE OFFICER
~ ':'AL EX e.f!.J.(-H\) L rL'f}. Co e y
~ "tffiLE(S) ~
D PARTNER(S)
D LIMITED
D GENERAL
D ATTORNEY-IN-FACT
D TRUSTEE(S)
D GUARDIAN/CONSERVATOR
D OTHER:
SIGNER IS REPRESENTING:
~~~;\:~, of
DESCRIPTION OF ATTACHED DOCUMENT
GUdra~p~"'l- W N.nra~e.e <;.
TIT E OR TYPE OF DOCUMENT
Q..
NUMBER OF PAGES
101 ~<:( I oc.f
DATE OF DOCUMENT
Kobert. Ev~~
SIGNER(S) OTHER THAN NAMED ABOVE
@1993 NATIONAL NOTARY ASSOCIATION. 8236 Remmel Ave, POBox 7184. Canoga Park, CA 91309-7184
. J .~
..
.
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 5.2 Continuation - September 17,2004
TECHNICAL AND COST PROPOSAL
PARENT COMPANY GUARANTEE
The Parent Company of the Proposer is familiar with all guarantees and warranties indicated in
this Technical and Cost Proposal form, and set out fully in Section 5.0 of the RFP, is familiar
with and unconditionally guarantees all obligations of the Proposer under this RFP, and will
unconditionally guarantee the obligations of the Proposer under the Service Agreement.
IN WITNESS whereof the undersigned corporation has caused this instrument to be executed
by its duly authorized officers thiS 28th day of October , 004
~
Ronald Mi tel
By
Waste Connections. Inc.
Name of Corporation
Chief Executive Officer
Title
Robert Evans
Attest (Secretary)
STATE OF WASHINGTON
)
) ss.
STATE OF WASHINGTON
See attached
California All-Purpose
Acknowledgment
) ss.
COUNTY OF
I certify that I know or have satisfactory evidenc hat , is the
person who appeared before me, and said perso acknowledged that he signed this instrument,
on oath stated that he was authorized to ex ute the instrument and acknowledged It as the
of , Inc., to be the free and voluntary act and deed
of said corporation, for the uses and pur ses therein mentioned.
Given under my hand and offici seal this
day of
,20_
(signature)
(type or print name)
NOTARY PUBLIC in and for the State of
Washington, residing at
10/28 ,2004
Waste Connections of Washinqton. Inc
Legal Name of Proposer
P-4
..
'"
.
.
.
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
No 5907
State of C-a ~(" n " .;L
County of ~C'COxY'\~:t9
On ~be..r- '2.~, 'l..Dotl before me, H~oSS; J\:)
DATE NAME, TITLE OF OFFICER - E G, "JA
personally appeared ~Or'\~ \d \-t\\-\+eJ\ s~~d .\-
~ ~E(S) OF 1i6HER(S)
~ersonally known to me - OR - D proved to me on the basis of satisfactory evidence
to be the person~) whose nameOO ~
subscribed to the within instrument and ac-
knowledged to me tha~~/~y executed
the same in ~tw/~ir authorized
capacity(~), and that by ~tre.r/t~r
signature(~ on the instrument the person~),
or the entity upon behalf of which the
personM acted, executed the instrument.
J........~............~........~~.....
~ " GALEM ROSSI
. Cornrni$slon # 1326300 ~
i f'fIt Notary Public. California ~
t Sacramento, County l
' ~ CcImm- ExpIres- Oct 210 2005
............_-~......_......._----
WITNESS my hand and official seal.
~C\O~~~
SIGNATURE OF NOTARY
OPTIONAL
Though the data below IS not required by law, It may prove valuable to persons relymg on the document and could prevent
fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
D INDIVIDUAL
~RPORATE OFFICER
~ ,-" ~'
o l::...I\ e u e..
TITLE(
DESCRIPTION OF ATTACHED DOCUMENT
cff Cel
l1re~~~~ G~~(Q~~
ITlE OR T OF DOCUMEN
D PARTNER(S)
D LIMITED
D GENERAL
I
NUMBER OF PAGES
D ATTORNEY-IN-FACT
D TRUSTEE(S)
D GUARDIAN/CONSERVATOR
D OTHER:
~
ATE F DOCUMENT
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
~ 0or"\nec:..-tol\.~. \Y\c...
u S
THER THAN NAMED ABOVE
@1993 NATIONAL NOTARY ASSOCIATION. 8236 Remmel Ave, POBox 7184. Canoga Park, CA 91309-7184
11iiIIiI!t1.~.Un.'" ~
EVERGREEN
FLEXIBLE BONOING SOLUTIONS
6140 Parkland Blvd SUite #300 Mayfield Hts, OH 44124
phone 440-995-5100 fax 440-995-5101 toll free 800-641-9222
October 27, 2004
City of Port Angeles
P. O. Box 1150
Port Angeles, Washington 98362
To Whom It May Concern:
We have reviewed the Proposal of Waste Connections of Washington, Inc.,
For the contract: Solid Waste Processing Facility Development and
Management Services
.
We understand that Proposals will be received on October 29, 2004 on the above project,
and wish to advise that should this Proposal be accepted and the Contract awarded to
Waste Connections of Washington, Inc., Evergreen National Indemnity Company intends
to provide the required Performance Bonds. The issuance of the surety bonds is
conditioned upon Waste Connections of Washington, Inc., continuing to meet all of
Evergreen's underwriting guidelines and final reinsurer approval.
Any arrangement for the Bonds required by the Contract is a matter between Waste
Connections of Washington, Inc., and the Surety and we assume no liability to the owner
or third parties if for any reason we do not execute the requisite bonds.
Evergreen National Indemnity Company is a 570 Circular Treasury Listed company, with
an A- A.M. Best Rating and duly licensed to do business in the State of Washington.
By:
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EVERGREEN NATIONAL INDEMNITY COMPANY
COLUMBUS, OHIO
POWER OF ATTORNEY
eRlNCIPAL Waste Connections of Washington, Inc.
CONTRACT AMOUNT
EFFECTIVE DATE October 27, 2004
AMOUNT OF BOND $ N/ A
POWER NO.
KNOW ALL MEN BY THESE PRESENTS That the Evergreen NatIOnal Indemmty Company, a corporatIOn m the State of OhIO does hereby
nommate, constItute and appomt Kathy J Goe, Mana Jackson, Kathleen P Pnce, PatncIa A Temple and NIcole Skedel Its true and lawful Attomey(s)-
In-Fact to make, execute, attest, seal and deliver for and on Its behalf, as Surety, and as Its act and deed, where reqUired, any and all bonds, undertakmgs,
recognIzances and wntten obligatIOns m the nature thereof, PROVIDED, however, that the obligatIOn of the Company under thIS Power of Attorney shall
not exceed One Million FIVe Hundred Thousand Dollars ($1,500,000 00).
ThIS Power of Attorney IS granted and IS sIgned by facsImIle pursuant to the followmg ResolutIOn adopted by ItS Board of DIrectors on the 23rd day of
February, 1994
"RESOLVED, That any two officers of the Company have the authOrIty to make, execute and deliver a Power of Attorney conshtutmg as Attorney(s)-
m-fact such persons, firms, or corporat10ns as may be selected from hme to hme
FURTHER RESOLVED, that the s1gnatures of such officers and the Seal of the Company may be affixed to any such Power of Attomey or any
certIficate relatmg thereto by faCSimIle, and any such Power of Attorney or certIficate bearmg such facs1mlle SIgnatures or faCSImile seal shall be val1d
and bmdmg upon the Company, and any such powers so executed and certified by faCSimIle SIgnatures and faCSimIle seal shall be val1d and bmdmg
upon the Company m the future WIth respect to any bond or undertakmg to which 1t IS attached"
IN WITNESS WHEREOF, the Evergreen NatIOnal Indemmty Company has caused ItS corporate seal to be affixed hereunto, and these presents to be
SIgned by ItS duly authOrIzed officers th1s 27th day of August, 2001
.
~O~~
( ~~~~~~,\'l:-1.
l~ ........ g,
\ ~ SEAL iJ
\\~ 1919 ~/
,. '" OHIO;'/
''''''''''-----
EVERGREEN NATIONAL INDEMNITY COMPANY
/lwei cUd!
Roswell P ElliS, PreSIdent
.-----?~
Glenn D Southwick, Treasurer
Notary Public)
State of OhIO)
SS'
On thIS 27th day of August, 2001, before the subscnber, a Notary for the State of OhIO, duly COmInISSlOned and qualified, personally came Roswell
P EllIS and Glenn D SouthWIck of the Evergreen NatlOnal Indemmty Company, to me personally known to be the mdIvIduals and officers descnbed
herem, and who executed the precedmg mstrument and acknowledged the executIOn of the same and bemg by me duly sworn, deposed and saId that they
are the officers of saId Company aforeSaid, and that the seal affixed to the precedmg mstrument IS the Corporate Seal of saId Company, and the saId
Corporate Seal and SIgnatures as officers were duly affixed and subscribed to the Said mstrument by the authonty and directIOn of saId CorporatIOn. and
that the resolutIOn of sa1d Company, referred to m the precedmg mstrument, IS now m force
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my offic1al seal at Columbus, OhIO, the day and year above written
~'iU C ~
SAC
sueeDUffY
~ HOT~VP'J!3UC,!IT"TEOFaro
. '.,p IIYCQIJIISSIOOEX_I.UG.~2004
~1i0i'5'
Notary Public State of OhIO
My CommISSIOn expIres August 6, 2004
State of Ohio)
SS'
I, the underSIgned, Secretary of the Evergreen NatIOnal Indemmty Company, a stock corporatIOn of the State of OhIO, DO HEREBY CERTIFY
that the foregomg Power of Attorney remams m full force and has not been revoked; and furthermore that the ResolutIOn of the Board of DIrectors, set
forth herem above, IS now III force
SIgned and sealed in Columbus, OhIO thIS 27.t~ day of October 2004
.
~~~
!~r:;~;;RA~~(~ '1:-1\1. \
au ...... ("l,
IWS'1l'AL~1
\ ca Is:. ~
\ \~ "-!19.~' ~
"\... '" OHIO"
.......-
9/):p~
John A. Marazza, Secretary
Any reproductIOn or faCSimIle of this form IS VOId and mvahd
pr&.
~-
~ S1'ATES OF A.b
1{~v ~r"l!}h
~~~ . ." .~: .(l()
~e i>tate of . .(~~:~~j)). Wa;bington
Secretary of State
I, SAM REED, Secretary of State of the State of Washington and custodian of its seal, hereby
issue this
CERTIFICATE OF EXISTENCE/AUTHORIZATION
OF
WASTE CONNECTIONS OF WASHINGTON, INC.
I FURTHER CERTIFY that the records on file in this office show that the above named Profit
Corporation was formed under the laws of the State of W A and was issued a Certificate Of
Incorporation in Washington on 2/22/1983.
I FURTHER CERTIFY that as of the date of this certificate, WASTE CONNECTIONS OF
I
WASHINGTON, INe. remains active and has complied with the filing requirements of this
office.
Date: October 18, 2004
UBI: 601-127-912
Given under my hand and the Seal of the State
of Washington at Olympia, the State CapItal
~~
Sam Reed, Secretary of State
.e. -
e
--
I.,
BY-LA WS
ARTICLE I
OFFICES
1.1 The principal office of the corporation shall be located in Washington.
1.2 The corporation may also have offices at such other places both within and without
the State of Washington as the board of directors may from time to time determine
or the business of the corpora tion may require.
ARTICLE n
MEETINGS OF SHAREHOLDERS
2.1 Meetings of shareholders for any purpose may be held at such time and place within
or without the State of Washington as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
2.2 Annual meetings of shareholders, commencing with the first year, shall be held on
December 15 if not a legal holiday, and if a legal holiday, then on the next secular
day following, at 10:00 a.m., at which they shall elect a board of directors and
transact such other business as may properly be brought before the meeting.
....3. Special meetings of the shareholders for any purpose or purposes may be called by
the president and shall be called by the president or secretary at the request in
writing of a majority of the board of directors, or at the request in writing of
shareholders owning one-tenth of all the shares entitled to vote at the meetings. A
request for a special meeting shall state the purpose or purposes of the proposed
meeting, and business transacted at any special meeting of shareholders shall be
limited to the purposes stated in the notice.
2.4 Written notice stating the place, day and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than sixty days before the date of the
meeting, either personally or by mail, by or at the direction of the president, the
secretary, or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting.
2.5 The holders of a majority of the shares issued and outstanding and entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum at all
meetings of the shareholders for the transaction of business except as otherwise
provided by statute or by the Certificate of Incorporation. If, however, a quorum
shall not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by proxy,
shall have the power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
0020
e-
2.7
2.8
3.1
represented. At such adjourned meeting, provided a quorum shall be present or
represented thereat, any business may be transacted which might have been
transacted if the meeting had been held in accordance with the original notice
thereof.
2.6
If a quorum is present at any meeting, the vote of the holders of a majority of the
shares entitled to vote, present in person or represented by proxy, shall decide any
question brought before such meeting, unless the question is one upon which a
different vote is required by law or by the Certificate of Incorporation.
Each outstanding share having voting power shall be entitled to vote one vote on
each matter submitted to a vote at a meeting of shareholders. A shareholder may
vote either in person or by proxy executed in writing by the shareholder or by his
duly authorized attorney-i!l-fact.
Any action required or which may be taken at a meeting of the shareholders may
be taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the shareholders entitled to vote with respect to the
subject matter thereof.
ARTICLE ill
DIRECTO RS
The number of directors which shall constitute the whole board shall be not less
than three nor more than nine as determined by the shareholders, none of whom
need be residents of the State of Washington or shareholders of the corporation.
The directors shall be elected at the annual-meeting of the shareholders, and each
director elected shall serve until his successor shall have been elected and
qualified.
3.2 Any vacancy occurring in the board of directors may be filled by a majority of the
remaining directors though less than a quorum of the board of directors. A
director elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
Ie
3.3 The number of directors may be increased or decreased from time to time by
amendment to these by-laws but no decrease shall have the effect of shortening
the term of any incumbent director. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by election at an annual or
special meeting of shareholders.
3.4 Any director may be removed either for or without cause at any special meeting of
shareholders duly called and held for such purpose.
MEETINGS OF THE BOARD OF DIRECTORS
3.5 Meetings of the board of directors, regular or special, may be held either within or
without the State of Washington.
3.6 The firs.t meeting of each newly elected board of directors shall be held at such
time and place as shall be fixed by the vote of the shareholders at the annual
~e
0020
-2-
..
3.7
3.8
3.9
meeting and no notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a quorum shall be
present. In the event that the shareholders fail to- fix the time and place of such
first meeting, it shall be held without notice immediately following the annual
meeting of shareholders, and at the same place, unless by the unanimous consent of
the directors then elected and serving such time or place shall be changed.
Regular meetings of the board of directors may be held upon such notice, or
without notice, and at such time and at such place as shall from time to time be
determined by the board.
Special meetings of the board of directors may be called by the chairman of the
board of directors or the president and shall be called by the secretary on the
written request of two directors. Notice of each special meeting of the board of
directors shall be given to' each director at least five days before the date of the
m~eting.
Attendance of a director at any meeting shall constitute a waiver of notice of such
meeting, except where a director attends for the express purpose of Objecting to
the transaction of any business on the ground that the meeting is not lawfully
called or convened. Except as may be otherwise provided by law or by the
Certificate of Incorporation or by the by-laws, neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board of
directors need be specified in the notice or waiver of notice of such meeting.
3.10 At all meetings of the board of directors a majority of the directors shall
constitute a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of the
board of directors, unless otherwise specifically provided by law, the Certificate of
Incorporation or the by-laws. If a quorum shall not be present at any meeting of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum shall
be present.
3.11 The board of directors, by resolution passed by a majority of the whole board, may
from time to time designate members of the board to constitute committees,
including an executive committee, which shall in each case consist of such number
of directors, not less than two, and shall have and may exercise such powers, as the
board may determine and specify in the respective resolutions appointing them. A
majority of all the members of any such committee may determine its action and
fix the time and place of its meetings, unless the board of directors shall otherwise
provide. The board of directors shall have power at any time to change the
number, subject as aforesaid, and members of any such committee, to fill
vacancies and to discharge any such committee.
.
3.12 Any action required or permitted to be taken at a meeting of the board of directors
or any executive committee may be taken without a meeting if a consent in
writing, setting forth the action so taken, is signed by all the members of the board
of directors or executive committee, as the case may be.
3.13 By resolution of the board of directors, the directors may be paid their expenses, if
any, of attendance at each meeting of the board of directors and may be paid a
'.
0020
-3-
.-
fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
NOTICES
4.1 Any notice to directors or shareholders shall be in writing and shall be delivered
personally or mailed to the directors or shareholders at their respective addresses
appearing on the books of the corporatTon. Notice by mail shall be deemed to be
given at the time when the same shll,ll be deposited in the United States mail,
postage prepaid. Notice to directors may also be given by telegram.
4.2 Whenever any notice is required to be given under the provisions of the statutes or
of the Certificate of Incorporation or of these by-laws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE V
OFFICERS
t.
The officers of the corporation shall be elected by the board of directors and shall
consist of a president, a vice president, a secretary and a treasurer. The board of
directors may also elect a chairman of the board, an assistant president, additional
vice presidents, and one or more assistant secretaries and assistant treasurers.
Two or more offices may be held by the same person, except that the offices of
president and secretary may not be held by the same person.
5.2 The board of directors shall elect a president and shall elect one or more vice
presidents, a secretary and a treasurer, none of whom need be a member of the
board. The board of directors shall have the power to enter into contracts for the
employment and compensation of officers for such terms as the board deems
advisable.
5.1
5.3 The board of directors may appoint such other officers and assistant officers and
agents as it shall deem necessary, who shall hold their offices for such terms and
shall have such authority and exercise such powers and perform such duties as sh~ll
be determined from time to time by the board by resolution not inconsistent with
these by-la ws.
5.4 The salaries of all officers and agents of the corporation shall be fixed by the board
of directors.
5.5 The officers of the corporation shall hold office until their successors are elected
or appointed and qualify, or until their death or until their resignation or removal
from office. Any officer elected or appointed by the board of directors may be
removed at any time by the board, but such removal shall be without prejUdice to
the contract rights, if any, of the person so removed. Election or appointment of
an offi<:er or agent shall not of itself create contract rights. Any vacancy
.
0020
-4-
e-
5.6
occurring in any office of the corporation by death, resignation, removal or
otherwise shall be filled by the board of directors.
THE CHAIRMAN OF THE BOARD
The chairman of the board, if one be elected, shall preside at all meetings of the
board of directors and shall have such other powers and duties as may from time to
time be prescribed by the board of directors, upon written directions given to him
pursuant to resolutions duly adopted by the board of directors.
THE PRESIDENT
5.7 The president shall be the chief executive officer of the corporation, shall have
general and active management of the business of the corporation and shall see
that all orders and resolutions of the board of directors are carried into effect. He
shall preside at all meetings of the shareholders and, in the absence of the
chairman of the board, at all meetings of the board of directors.
5.8
e
5.9
5.10
THE VICE PRESIDENT
The vice presidents in the order of their seniority, unless otherwise determined by
the board of directors, shall, in the absence or disability of the president, perform
the duties and have the authority and exercise the powers of the president. They
shall perform such other duties and have such other authority and powers as the
board of directors may from time to time prescribe or as the president may from
time to time delegate.
THE SECRET AR Y AND ASSISTANT SECRETARIES
The secretary shall attend all meetings of the board of directors and all meetings
of shareholders and record all of the proceedings of the meetings of the board of
directors and of the shareholders in a minute book to be kept for that purpose and
shall perform like duties for the standing committees when required. He shall give,
or cause to be given, notice of all meetings of the shareholders and special
meetings of the board of directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under whose supervision he shall
be. He shall keep in safe custody the seal of the corporation and, when authorized
by the board of directors, shall affix the same to any instrument requiring it and,
when so affixed, it shall be attested by his signature or by the signature of an
assistant secretary or of the treasurer.
The assistant secretaries in the order of their seniority, unless otherwise deter-
mined by the board of directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary. They shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe or as the president may from time to time delegate.
THE TREASURER AND ASSISTANT TREASURERS
5.11 The treasurer shall have custody of the corporate funds and securities and shall
keep full and accurate accounts and records of receipts, disbursements and other
transactions in books belonging to the corporation, and shall deposit all moneys and
e
0020
-5-
e-
r
le
e
other valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors.
5.12 The treasurer shall disburse the funds of the corporation as may be ordered by the
board of directors, taking proper vouchers for such disbursements, and shall render
the president and the board of directors, at its regular meetings, or when the
president or board of directors so requires, an account of all his transactions as
treasurer and of the financial condition of the corporation.
5.13 If required by the board of directors, the treasurer shall give the corporation a
bond of such type, character and amount as the board of directors may require.
5.14 The assistant treasurers in the order of their seniority, unless otherwise determined
by the board of directors, shall, in the absence or disability of the treasurer,
perform the duties and ex'ercise the powers of the treasurer. They shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe or the president may from time to time delegate.
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
6.1 The shares of the corporation shall be represented by certificates signed by the
president or a vice president and the secretary or an assistant secretary of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof.
6.2
The signatures of the president or vice president- and the secretary or assistant
secretary upon a certificate may be facsimiles if the certificate is counter-signed
by a transfer agent, or registered by a registrar, other than the corporation itself
or an employee of the corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the corporation
with the same effect as if he were such officer at the date of its issue.
LOST CERTIFICATES
6.3 The board of directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the corporation alleged to have been lost or
destroyed. When authorizing such issue of a new certificate, the board of
directors, in its discretion and as a condition precedent to the issuance thereof,
may prescribe such terms and conditions as it deems expedient and may require
such indemnities as it deems adequate to protect the corporation from any claim
that may be made against it with respect to any such certificate alleged to have
been lost or destroyed.
6.4 Upon surrender to the corporation or the transfer agent of the corporation of a
certificate representing shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, a new certificate shall be issued to
the person entitled thereto and the old certificate cancelled and the transaction
recordec;l upon the books of the corporation.
0020
-6-
.-
6.5
.
6.6
CLOSING OF TRANSFER BOOKS
For the purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the board of directors may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in any case,
fifty days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer books, the board of
directors may fix in advance a date as the record date for any such determination
of shareholders, such date in any case to be not more than sixty days and, in case
of a meeting of shareholders, not less than ten days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken. If
the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the date on
which notice of the resolution of the board of directors declaring such dividend is
adopted, as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such determina-
tion shall be applied to any adjournment thereof except where the determination
has been made through the closing of the stock transfer books and the stated period
of closing has expired.
REGffiTEREDSHAREHOLDERS
The corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to vote as
such owner, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by the
laws of the State of Washington.
LIST OF SHAREHOLDERS
6.7 The officer or agent having charge of the transfer books for shares shall make, at
least ten days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting, arranged in alphabetical order, with
the address of each and the number of shares held by each, which list, for a period
of ten days prior to such meeting, shall be kept on file at the registered office of
the corporation and shall be subject to inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open at the
time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original share ledger or
transfer book, or a duplicate thereof, shall be prima facie evidence as to who are
the shareholders entitled to examine such list or share ledger or transfer book or to
vote at any meeting of the shareholders.
.
0020
-7-
.
..
.
ARTICLE vn
GENERAL PROVISIONS -
DIVIDENDS
7.1
Subject to the provISIons of the Certificate of Incorporation relating thereto, if
any, dividends may be declared by the board of directors, in its discretion, at any
regular or special meeting, pursuant to law. Dividends may be paid in cash, in
property or in the corporation's own shares, subject to any provisions of the
Certificate of Incorporation.
7.2
Before payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the directors from time to
time, in their absolute d.iscretion, think proper as a reserve fund for meeting
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may modify or
abolish any such reserve in the manner in which it was created.
CHECKS
7.3 All checks or demands for money and notes of the corporation shall be signed by
such officer or officers or such other person or persons as the board of directors
may from time to time designate.
FISCAL YEAR
7.4
The fiscal year of the corporation shall end on-September 30.
SEAL
7.5 The corporate seal shall be in such form as may be prescribed by the board of
directors. The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
BOOKS AND RECORDS
7.6 The corporation shall keep correct and complete books and records of account and
shall keep minutes of the proceedings of its shareholders and board of directors,
and shall keep at its registered office or principal place of business, or at the
office of its transfer agent or registrar, a record of its shareholders, giving the
names and addresses of all shareholders and the number and class of the shares held
by each.
ARTICLE VIII
AMENDMENTS
8.1 The by-laws may be altered, amended, or repealed or new by-laws may be adopted
by the shareholders at any regular or special meeting or by a majority of the whole
board o~ directors at any regular or special meeting, upon notice given at least ten
days prior to the meeting and stating the purpose thereof.
0020
-8-
Certificate of Amendment of Bylaws
.
of
Waste Connections of Washington, Inc.
Effective September 30, 1997
The undersigned, the assistant Secretary of Waste
Connections of Washington, Inc., a Washington corporation (the
IICorporationll), hereby certifies that the following amendment to
the Bylaws of the Corporation was duly adopted and approved by the
shareholders and the Board of Directors of the Corporation.
Section 3.1 of Article III of the Bylaws of the
Corporation is hereby amended to read in its entirety as follows:
3.1 The number of directors which shall constitute
the whole board shall be one. The director
need not be a resident of the State of
Washington or a shareholder of the
corporation. The director shall be elected at
the annual meeting of shareholders, and such
director shall serve until his or her
successor shall have been elected and
qualified.
. 747 A--
Mike Foos, Assistant Secretary
.
C,\DMS\Sl19\002\0248673 WP
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STATE of WASHING'ION
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SECRETARY of STATE
I, RA,LPH MUNRO, Secretary of State of the State of Washington and custodian of its seal,
hereby Issue thIS
CERTIFICATE OF AMENDMENT
to
BROWNING-FERRIS INDUSTRIES OF
WASHINGTON, INe.
a Washington Profit corporation. Articles of Amendment were filed for record in this
office on the date indicated below.
Changing name to WASTE CONNECTIONS OF WASHINGTON, INe.
UBI Number: 601 127912
Date: October 01, 1997
Given under my Jumd and the Seal of the State
of Washington at Olympia, the State Capital
FILED
STATE OF WASHIN~GO
OCT - 1 199
'7
Corpora~PH M'ffi.JRo the
amen~~1~O~~ATfhe
INC. . s:
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3. If an amendment provides for an exchange, reclassification, or (
cancellation of issued shares, provisions for implementing the amendment, t
if not contained in the text of the amendment itself, are as follows'~
'J
. .
~t.aL'" [WaSnlflgt.o.)
Corr _~L to'>.lS Division
O__ice of th~ ~ecretary of st~_e
e
ARTICLES OF AMENDMENT
Pursuant to RCW 23B.10.060 of the Washington Business
undersigned corporation hereby submits the following
corporation's Articles of Incorporation.
1.
The name of the corporation is: BROWNING-FERRIS INDUSTRIES OF WASHINGTON,
(N ole: Corporate name listed above must be identical to the records of the Ofiice of the SecrelAry of Sta~,)
2.
The text of ~lch amendment(s) as adopted is (are) as follows:
(Attach separate sheet, if neceSS81)')
FIRST: The name of the corporation is:
WASTE CONNECTIONS OF WASHINGTON. INC.
N/A
e. The date of adoption of each amendment (s) was:
SEPTEMBER 30, 1997
5. The amendment(s) was (were) adopted by:
Check one of the followin, statementsl
(
(
( X
The incorporators. Shareholder action was not required.
,\"
',\,
~,
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o
\
I
"
The board of directors. Shareholder action was not required.
"-.
Duly approved shareholder action in accordance with the
provisions of RCW 238.10.030 and RCW 238.10.040.
(Note: Please refer to copy of statutes listed on instruction sheet )
6.
These Articles will be effective upon filing, unless an extended
and/ or time appears here: SEPTEMBER 30
(Note: Extended effective date may not be set at more than 90 days beyond the dale the document is stamped "FIled"
by the SecreLary of Slate)
19
....
~
date ~
97 >5
.ated:~ 199)
/
EILEEN B. SCHULER, VICE PRESIDENT
(Typo or Print Name and Title)
ssf36 (R 7/90)
1 ,"., ,.:', -:' -;-.:..::, .:..
1 01 C. nf't.~..
TOTAL P.02
STATE of WASHING'ION
SECRETARY of STATE
I, RALPH MUNRO, Secretary of State of the State of Washington and custodian of its seal,
hereby certify by this certificate that the attached is a true and correct copy of
ARTICJ.-ES OF AMENDMENT
of
BROWNING FERRIS INDUSTRIES OF
WASHINGTON, INC.
Changing name to
BROWNING-FERRIS INDUSTRIES OF QW ASHINGTON, INC.
as filed in this office on March 3, 1983.
Date: May 1, 2000
Given under my hand and the Seal of the State
of Washington at Olympia, the State Capital
Q..~L-:?
Ralph Munro, Secretary of State
~
2-329002-6
DOMESTIC
FILE NUMBER
STATEOFWASHINGTON I DEPARTMENT OF STATE
I, RALPH MUNRO. Secretary of State of the State of Washington and custodian of its seal, hereby
certify that
ARTICLES OF AMENDl-1ENT TO
ARTICLES OF INCORPORATION
of
BROWNING FERRIS INDUSTRIES OF WASHINGTON, INC.
Olympia,
a domestic corporation of Washington,
Changing name to BROWNING-FERRIS INDUSTRIES OF WASBINGTON, INC.
was filed for record in this office on this date, and I further certify that such Articles remain on file in this
office.
In witness whereof I have signed and have af-
fixed the seal of the State of Washington to
this certificate at Olympia, the State Capitol,
March 3, 1983
1669
414-tf/6
~ Cfi[;04
SSF.57 AIII-701 .111.
RALPH MUNRO
SECRETARY OF STATE
.
.
.
ARTICLES OF AMENDMENT
00176HAR 983
F J LED
MAR 3 1~
SECRETARY OF ST
STATE OF \"ASHIN "
TO THE
ARTICLES OF INCORPORATION
OF
BROWNING FERR~S INDUSTRIES OF WASHINGTON, INC.
Pursuant to the provisions of RCW 23A.16.040, the
.
undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is BROWNING FERRIS
INDUSTRIES OF WASHINGTON, INC.
SECOND: The following amendment of the Articles of
Incorporation was adopted by a Resolution of the Board of
Directors of the Corporation on February 28, 1983, in the manner
-
prescribed by the Washington Business Corporation Act:
Therefore resolved that the first article of the Articles of
Incorporation be amended to read as follows:
"FIRST: The name of the corporation is BROWNING-FERRIS
INDUSTRIES OF WASHINGTON, INC."
There nave Ueen no snare~ issued.
Dated March 1, 1983.
BROWNING FERRIS INDUSTRIES OF WASHINGTON, INC.
By:
./ii~ ~i~dent
~/a#'
, cretar
and
415
..
.
.
.
STATE OF TEXAS
COUNTY OF HARRIS
I,
Helen Howard
, a notary public, do hereby certify
that on this 1st day of March, 1983, personally appeared before
me
, who, being by me first duly
Stephen L. Thomas
,sworn, declared that he is the Vice President of BROWNING FERRIS
INDUSTRIES OF WASHINGTON, INC., that he signed the foregoing
document as
Vice President of the corporation, and that the
statements therein contained are true.
~-tkv ~~
Helen Howard,Notary Public for the
State of Texas.
My commission expires February 12) 1985.
_/
4t6
I
.
2-329002-6
FILE NUMBER
DOMESTIC
STATEOFWASHINGTON I DEPARTMENT OF STATE
I, RALPH MUNRO, Secretary of State of the State of Washington and custodian of its seal, hereby
certify that
ARTICLES OF INCORPORATION
of
BROWNING FERRIS INDUSTRIES OF WASHINGTON, INe.
a domestic corporation of
Seattle,
Washington,
was filed for record in this office on this date, and I further certify that such Articles remain on file in this
office.
In witness whereof I have signed and have af.
fixed the seal of the State of Washington to
this certificate at Olympia, the State Capitol,
1667
38G-3?9
February 22, 1983
~~~
SSF-57-A(1'-70) -'1'-
RALPH MUNRO
SECRETARY OF STATE
ARTICLES OF n~CORPORATION
00158 FE8 2583
FILED
FES 221983-
.
"\
OF SECRETARY Of STAit. \
SlAW Of W~ '"', \L)
BROWNING FERRIS INDUSTRIES OF WASHINGTON, INC. VtJ)~
We, the undersigned natural persons of the age of eighteen years or more, acting
as incorporators of a corporation under the Washington Business Corporation Act, adopt
the following Articles of Incorporation for such corporation: (Note 1)
FIRST: The name of the corporation is
BROWNING FERRIS INDUSTRIES OF
WASHINGTON, INC.
SECOND: The period of its duration is-
perpetual
(May be perpetual)
THIRD: The purpose or purposes for which the corporation is organized are:
The transaction of any or all lawful business for which corporations
may be incorporated under this title.
FOURTH: The aggregate number of shares which the corporation shall have authority
to issue is One thousand shares common stock, $L 00 par value.
.
(Note 2)
FIFTH: Provisions limiting or denying to shareholders the preemptive right to
acquire additional shares of the corporation are:
NONE
(Note 3)
SIXTH: Provisions for the regulation of the internal affairs of the corporation
are:
NONE
(Note 4)
SEVENTH: The address of the initial registered office of the corporation is
1218 Third Avenue, c/o C T Corporation System, Seattle, County of King, Washington
98101, and the name of its initial registered agent at such address is C T Corpora-
. System.
STATE OF
C .TY OF
TEXAS
)
) SS
)
HARRIS
I,
Cynthia Carolyn Gilmore
, a notary public, hereby certify
, 1983, personally appeared before me,
18th
day of February
that on the
v. C. Holbrook, K. S. Hood
and
E. A. Wallace
,
who being by me first duly sworn, severally declared that they are the persons who signed
the foregoing document as incorporators, and that the statements ther~in contained are
true.
~ar~ ~
(NOTARIAL SEAL)
Notes:
.
.
1. Incorporator may also be one person or a domestic or foreign cOl~oration, in
such case change the language of the opening paragraph accordingly.
2. If the authorized shares are to consist of one class only, insert a statement
of the par value of such slnres or a statement that all of such shares are to
be without par value.
If the authorized shares are to be divided into classes, insert a statement of
the number of shares of each class, a statement of the par value of the shares
of each such class or that such shares are to be Inthout par value, and a
statement of the preferences, limitations and relative rights tn respect of the
shares of each class.
If all or any portion of the shares have no par value, the aggregate value of
those shares, or such aggl~gate value shall be stated in the affidavit filed
pursuant to RCW 23A.40.o)0.
If the authorized shares of ~ny preferred or special class are to be iSS1~d in
serjes, insert a statelllent of the designation of each series, a statement of the
variations in the relative rights and preferences as between series in so far as
the sa.me are to be fixed in the articles of incorporation, and a statement of
any authority to be vested in the board of directors to establish series and fix
and determine the variations in the relative rights and preferences as between
series.
3. If preemptive rights are not to be limited or denied, insert ''None.''
4. If no provisions for the regulation of the internal affairs of the corporation
are to be set forth, i::sert "None". If directors are to be granted the power
to adopt the bylaws, insert "The directors will have the power to adopt, alter,
amend or repeal bylaws or adopt new bylaws." If cumulative voting is to be
denied to shareholders, insert t~ shareholder shall not have the right to
cumulate his votes in the election of directors."
(H.4SH. - 1720)
3RH
-3-
, " . fO- ,
I
"e/
SECRETARY OF STATE
Olympia, Washington 98504
CONSENT TO APPOINTMENT AS REGISTERED AGENT
C T CORPORATION SYSTEM hereby consents to serve as registered agent, in the state
of Washington, for the following corporation:
BROWNING FERRIS INDUSTRIES OF WASHINGTON, INC.
C T CORPORATION SYSTEM understands that as agent for the corporation, it will be its
responsibility to accept Service of Process in the name of the corporation; to forward
all mail and license renewals to the appropriate officer(s) of the corporation; and to
immediately notify the Office of the Secretary of State of its resignation or of any
~ changes in the address of the registered office of the corporation for which it is
agent.
-~
February 18,
(Date)
1983
_...--~
W?~nSU;m)
ASSItITANT VICE PRESIDENT
C T CORPORATION SYSTEM
(Type or print name of agent)
1218 Third Avenue
(Street address of registered office)
Seattle, County of King, Washington 98101
(City, state and zip code)
~
RALPH Ml'NHO
(WASH. - 671 - 6/23/82)
OLYMPIA, WASIIING1'ON OR504
~~q
TELEPHONE
206-753...7115
Form 5.3
.
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 5.3 - September 17, 2004
TECHNICAL AND COST PROPOSAL
EXCEPTIONS TO TERMS AND CONDITIONS
Intentionally left blank. Proposed exceptions negotiated in scope of work.
April 5. 2005
Waste Connections of Washinqton. Inc.
Legal Name of Proposer
P-1
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 5.3 - September 17, 2004
TECHNICAL AND COST PROPOSAL
EXCEPTIONS TO TERMS AND CONDITIONS
Proposers may attach to this form a list of proposed exceptions or modifications to the terms
and conditions set forth in the RFP, the Service Agreement and the Performance Specifications
that may materially affect the price for Project Facilities or services to be provided by the
Proposer. For each proposed exception or modification, the Proposer must identify the page
number, section number, and paragraph number (if applicable) of the affected text of the RFP,
Service Agreement or Performance Specifications, and provide a proposed revision of that text
that is acceptable to the Proposer. These exceptions and modifications will be the sole basis for
the prices and costs provided under the heading "Optional: Proposer's Terms" in subsequent
Technical and Cost Proposal forms.
As acknowledged in Technical and Cost Proposal Form 5.2, the Proposer understands and
agrees that the City, at its sole option, may elect to accept the prices set forth under the heading
"Required: City's Terms" in the subsequent Technical and Cost Proposal forms as full
compensation for performance of the Project by the Proposer without exception or modification
to the terms and conditions set forth in the RFP, the Service Agreement and the Performance
Specifications.
.
EXCEPTlbN ' BRIEF DESCRIPTION OF PROPOSED EXCEPTION
NUMBER
In reference to Addendum 5, dated September 17,2004, Section AWL page 26:
1 The Service Fees reflected in WCWI's RFP Submittal are conditioned on the City's
award to WCWI of all seven Service Components. In the event the City awards
WCWI a lesser number of Service Components, WCWI reserves the right, in its
sole discretion, to negotiate mutually acceptable Service Fees with the City for each
of the Components awarded to WCWI or withdraw from any or all such awards.
Section 4.6 (RFP) Component 1 - Transfer Station Development
2 The facility and operations described in this proposal represent WCWI's good faith
efforts at responding to the RFP in a timely fashion. WCWI does not want to
dIctate overall facility design and operation to the City; we believe that flexibility is
critical to a successful project. WCWI is open to modifying its proposed facilities,
operations, and interim project mIlestones to benefit both parties, and desires to
work closely with the City to refine the details of its proposal. We will meet the
commercial operations date.
Section 4.6 (RFP) Component 1 - Transfer Station Development
3 WCWI believes that incentive (i.e. lower) tipping fees for certain materials such as
yard waste or woody debris will encourage source-separation and help achieve the
CSWMP's 40% recycling goals. WCWI will work with the City to determine what
level of fees would be cost-effective.
.
October 29
,2004
P-1
Waste Connections of Washinqton Inc.
Legal Name of Proposer
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
Section 4.6 (RFP) Component 1 - Transfer Station Development
4 Prelimmary earthwork balance calculations indicate that grading for the proposed
transfer station layout will result in a net excess of approximately 45,000 cubic
yards of soil material. If desired by the City, WCWI would deliver this material to
the City for use in its landfill closure/final cover, at a price to be negotiated.
Section 4.6 (RFP) Component 1 - Transfer Station Development
5 Preliminary earthwork balance calculations indicate that grading for the water
treatment plant will result in a net excess of approximately 36,000 cubic yards of
soil material. If desired by the City, WCWI would deliver this material to the City
for use in its landfill closure/final cover, at a price to be negotiated.
Section 4.6 (RFP) Component 1 - Transfer Station Development
6 WCWI believes that in the near term, vehicle traffic could be handled efficiently
using just the two relocated 70-foot scales. Installation of the two 80-foot scales
could be postponed until justified by higher vehicle traffic counts, thus reducing the
initial capital cost. If the City desires, WCWI would develop a detailed cost
estimate for an alternative scale plaza layout that allows for future installation of the
longer scales. Postponing construction of the two scales is worth approximately
$80,000.
Section 4.6 (RFP) Component 1 - Transfer Station Development
7 This proposal includes $30,000 for security fencing, gates, and related items.
WCWI specifically assumes that the Water Treatment Plant (not WCWI) will
provide and pay for the fence along their common border on the east side of the
transfer station.
October 29
,2004
Waste Connections of Washinqton Inc.
Legal Name of Proposer
P-2
1
.
.
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
8
Performance Specifications
4.8 Blue Mountain Drop Box Facility
Option 1: Operate Existing Blue-Mountain Facility
As an option WCWI proposes to provide the equipment, labor, and materials
necessary to operate and maintain the Blue Mountain Drop Box in its existing
configuration (building with restroom, concrete apron, paved drive-around, water
well, and oil/antifreeze recycling tanks). Current operational practices would be
continued. Per the RFP, WCWI would also furnish:
Electrical and telephone service.
Uniquely identified transfer containers marked in a manner consistent with Transfer
Station trailers, and associated roll-off trucks.
Portable toilet for customers.
During Receiving Hours (9 am to 5 pm) on Monday and Wednesday, the facility
will be staffed by one solid waste attendant. On Saturday it will be staffed by two
attendants. Operating Hours would be Monday, Wednesday and Saturday, 9 to 6
pm. Potential cost savings to the City would be:
.
A reduction in Tip Fees of $21.50 per ton at the Blue Mountain facility. Rates
would be reduced from $96.30 to $74.80 per ton;
$42,550.00 reduction in construction costs;
$23,000.00 reduction per year in operational costs.
Operational advantages to the City would be:
Minimization of overall facility operating expenses dedicated to additional labor
and site improvements required in the RFP at the Blue Mountain Drop Box Facility,
keeping operations simple and straight forward based on the small amount of waste
(max. 1500 TPY) anticipated to be handled at this facility.
.
October 29
,2004
P-3
Waste Connections of Washinqton Inc.
Legal Name of Proposer
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
9
Performance Specifications
.
4.8 Blue Mountain Drop Box Facility
1. If requested by the City, WCWI will provide exterior lighting to deter unauthorized
nighttime access and assist with night inspections of the facility. Reimbursement of
design and construction costs, plus the associated on-going electrical costs, will be
negotiated separately and are not included in this Bid Proposal or in Option 1
presented above.
2. If specifically required to make additional site improvements by the Health
Department, the City of Port Angeles, or other regulatory agency, such changes will
be made for reimbursement of the associated design and construction costs, plus
anyon-going costs. These changes will be negotiated separately and are not
included in this Bid Proposal or in Option 1 presented above.
3. General Changes: This Bid Proposal represents WCWI's good faith efforts at
meeting the conditions of the RFP. However, if the City or other regulatory agency
desires (or requires) modifications to the proposed facilities or operations, WCWI
will cooperate by modifying its proposal. After negotiating a mutually agreeable
changes and compensation, WCWI would design and install the necessary
infrastructure and/or modify its proposed operations accordingly. Reimbursement
of the additional design, construction, and operations costs are not included in this
Bid Proposal or in Option 1 presented above.
4. Storm water Separation: If specifically required by the Health Department or other .
regulatory agency, WCWI will design and install the infrastructure to divert
stormwater that is contaminated (by leakage from waste containers) to a sanitary
sewer system. Reimbursement of these design and construction costs, plus the
associated on-going sewage disposal costs, will be negotiated separately and are not
included in this Bid Proposal or in Option 1 presented above.
.
October 29
,2004
P-4
Waste Connections of Washinqton Inc.
Legal Name of Proposer
.
10
.
11
12
.
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
Performance Specifications
4.9 Recvclable Collection and Processing
Option 1: Semi-Automated Collection
WCWI will utilize one (1) Peterbilt cab-over chassis equipped with dual drive with an
Amrep Side-load 20- to 25-yard compactor body (or equivalent) for mixed recyclables and
three half-yard compartments for glass mounted on the truck chassis to be used for
residential and multifamily recycle collections. Recyclables will be emptied from the side
of the vehicle body. Each vehicle with a one-person crew can service up to 700 homes per
day. The vehicles have a life expectancy of seven to ten years.
96-gallon carts will be used for the collection of commingled recyclables, along with a
separate bin for the collection of glass. The glass bin will meet minimum size requirements
(11.37 gallon) specified by City. Collections will be conducted on a rotating biweekly basis
(every other week) but will maintain the existing day/week schedule for garbage collections
performed by the City. All mixed recyclables to include mixed paper, newspaper,
cardboard, number #1 and #2 plastics, tin and aluminum would be placed inside the 96
gallon; glass would be placed in a separate bin by residents for collection.
Yard debris will be collected using one (1) Peterbilt 320 Cab-over semi-automated side-load
collection vehicle with a McNeilus 25 to 30 cubic yard compaction body. Customers can
continue to put out bundles bundled in 4-foot lengths. Bundles shall not exceed a weight
limit of 50 pounds per bundle, or WCWI will supply a 96-gallon cart to every residential
and multi-family customer subscribing to yard debris service at rates as outlined. Yard
debris will be collected on a rotating biweekly basis (every other week) on the opposite
week of the recycling collection, but wIll maintain the existing day/week schedule for
garbage collections performed by the City. This alternating schedule will minimize
collection vehicle traffic impacts on city streets and alleys. All other components as outlined
in the current program would remain the same. Please see the attached price proposal forms
for pricing. We believe the 96 gallon cart alternative would decrease overall program costs
and mcrease participation and recycling diversion by at least 25%. The cart system provides
for the use of semi-automated collection trucks, which are more efficient and will lower on
the job injuries incurred by collection personnel.
See Technical and Cost Proposal Form 7.4 Continuation for pricmg information.
Service Agreement
Section 4.2 & 4.3 Delete sections in their entirety. Termination provisions of
Section 8 are sufficient.
Service Agreement
Delete Liquidated Damages, as described in Section 7.5 (a), (b), (d), (e), (f), (g) and
(h) of the Service Agreement. Liquidated damages will be determined in a mutually
agreeable manner based on actual damages incurred in lieu of pre-established
amounts based on the type of infraction.
October 29
,2004
P-5
Waste Connections of Washinqton Inc.
Legal Name of Proposer
.
.
.
City of Port Angeles
GENERAL COMMENTS
SERVICE AGREEMENT
Please note that these are WCWI's suggested changes subject to final negotiation as outlined in RFP
Section 3.6 if selected as the successful Proposer.
SECTION 2 - GENERAL PROVISIONS
Section 2.24
WCWI proposes that its obligation to discharge valid liens apply
only to liens arising out the activities of approved contractors,
not the Contractor itself.
SECTION 5 INDEMNIFICATION
5.3A: All references to attorneys fees should be located in a
parenthetical following the word "expenses" and be qualified by
the word "reasonable" (including reasonable attorneys fees)
This change should apply throughout the document wherever
reimbursement for attorneys fees is referenced.
Section 5.3(a) i
Delete words hauler and customer from last line.
Section 5.3(b)
Exception from Contractor's obligation to indemnify the CIty
should also cover damages caused by the negligence of the
City's successors, assigns officers, employees and elected
officials.
Section 5.3(c)
Delete paragraph. Standard in Paragraph 5.3(f) should govern in
cases of concurrent negligence. In place of deleted Section 5.3(c)
add reciprocal indemnification provision by the city of the
contractor including exception from city's obligation to
indemnify contractor for any damages resulting solely from
Contractor's negligence.
Section 5.3(d) 2nd para.:
Final sentence should begin "Any indemnification or exception
therefrom in the agreement. . . "
October 29, 2004
Waste Connections of ..hilt
Washington, Inc. "'11II\.'
.
.
.
~
~
City of Port Angeles ~-==:;.3J
-
GENERAL COMMENTS
SERVICE AGREEMENT
SECTION 6 - ASSIGNMENT, SUBCONTRACTING, CHANGE OF CONTROL
Section 6.1:
Add provision allowing for assignments without prior consent to
affiliates ofWCWI similar to provision allowing for such
transfers in Section 6.3 (Change of Control).
Section 6.4
Move paragraph to Section 2 (General Provisions).
SECTION 8 - DEFAULT AND TERMINATION
Section 8.2(a)
Change the word "may" in the last sentence of Section 8.2(a) to
"shall" in order to mirror the contractor's obligation to extend
such cure periods contained in Section 8.4(b).
Section 8.2(b)
Delete portion of paragraph following cross-reference to
"Section 8.3".
Section 8.3(a)
First sentence shall read as follows: "Upon the occurrence of any
Contractor Event of Default pursuant to Section 8.1 and a failure
to cure under Section 8.2, the City may, in its sole discretion:"
Section 8.3(b )(ii)
Delete, as this section negates the right to cure contained in
Section 8.2 for each of the eight enumerated subsections.
Section 8.3( c )(i)
Delete.
Section 8.3(e)
Delete the sentence which reads "The Contractor waives its right
to request an administrative hearing if it fails to respond in
writing in accordance with Section 8.2(a)", as no such obligation
exists in SectIOn 8.2(a).
Section 8.4(a)
Delete final clause of parenthetical which reads ", or the fault of
the Contractor"
SectIOn 8.5(a)
Delete.
October 29, 2004
Waste Connections of ..hilt.
Washington, Inc. ".'
^ :~
Form 5.4
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
.
FORM 5.4
PROPOSAL BOND FORM
Herewith find deposit in the form of a cashier's check, postal money order or Proposal Bo
amount of $200,000.
SIGN HERE
PROPOSAL BOND
Bond 11554378
KNOW ALL MEN BY THESE PRESENTS:
Waste Connections of Evergreen National
That we, Washington. Inc. as Principal and Indemnity Company as Surety, are held and
firmly bound unto the CITY OF PORT ANGELES as Obligee, in the penal sum of TWO IillNDRED rnOUSAND
AND 00/100 ($200.000.00) ~'dd<******-J<**-J<* Dollars, for the payment of which the Principal and
the Surety bind themselves, their heirs, executors, administrators. successors and assigns, jointly and
severally, by these presents.
The condition of this obligation is such that if the Obligee shall make any award to the Principal for:
Solid Waste Processina Facilitv Develooment and Manaaement Services
according to the terms of the Technical and Cost Proposal made by the Principal, and the Principal shall duly
make and enter into a Service Agreement with the Obligee in accordance with the terms of said Technical
and Cost Proposal and award and shall give bond for the faithful performance thereof, with Surety or
Sureties approved by the Obligee; or if the Principal shall, in case of failure 50 to do, pay and forfeit to the
Obligee the penal amount of the deposit specified in the advertisement for Request for Proposals, then this
obligation shall be null and void; otherwise it shall be and remain in full force and effect and the Surety shall
forthwith pay and forfeit to the Obl,igee, as penalty and liquidated damages, the amount of this bond.
.
^. " SIGNED, EALED AND DATED THIS 29thday of October
WAStE ,c Nt TI N OF WASHINGTON, INC.
,2004.
........,...
Principal
B 163340 Columbus
Surety address
Kathleen Price (800) 641-9222
Surety Contact and Phone Number
United Nations Insurance Agency, Inc.
Agent
6140 Parkland Boulevard, Suite 300
Cleveland, Ohio 44124
Agent Address
Karen LoConti, (440) 995-5100
Agent Contact and Phone Number
. Dated:
Received return of deposit in the sum of $
,2004
P-6
Waste Connections of Washington, Inc.
Legal Name of Proposer
EVERGREEN NATIONAL INDEMNITY COMPANY
COLUMBUS, OHIO
POWER OF ATTORNEY
.PRINCIPAL Waste Connections of Washington, INc.
CONTRACT AMOUNT
EFFECTIVE DATE October 29, 2004
AMOUNT OF BOND $ 200,000.00***>'<"1<"1<**>'0'0'<"1<
POWER NO. 5 5 4 3 7 8
KNOW ALL MEN BY THESE PRESENTS That the Evergreen NatIOnal Indemlllty Company, a corporatIOn m the State of OhIO does hereby
nommate, constitute and appomt. Kathy J Goe, MarIa Jackson, Kathleen P Pnce, PatrIcia A Temple and Nicole Skedellts true and lawful Attorney(s)-
In-Fact to make, execute, attest, seal and deliver for and on Its behalf, as Surety, and as Its act and deed, where reqUired, any and all bonds, undertakmgs,
recoglllzances and WrItten obligatIOns m the nature thereof, PROVIDED, however, that the obligatIOn of the Company under this Power of Attorney shall
not exceed One Million Five Hundred Thousand Dollars ($1,500,000 00)
This Power of Attorney IS granted and IS signed by facsimile pursuant to the followmg ResolutIOn adopted by ItS Board of Directors on the 23rd day of
February, 1994
"RESOLVED, That any two officers of the Company have the authorIty to make, execute and deliver a Power of Attorney constltutmg as Attorney(s)-
m-fact such persons, firms, or corporatIOns as may be selected from time to time
FURTHER RESOLVED, that the signatures of such officers and the Seal of the Company may be affixed to any such Power of Attorney or any
certificate relatmg thereto by faCSimile, and any such Power of Attorney or certificate bearIng such faCSimile signatures or faCSimile seal shall be valid
and bmdmg upon the Company, and any such powers so executed and certified by faCSimile signatures and faCSimile seal shall be valid and bmdmg
upon the Company m the future With respect to any bond or undertakmg to which It IS attached"
IN WITNESS WHEREOF, the Evergreen NatIOnal Indemlllty Company has caused ItS corporate seal to be affixed hereunto, and these presents to be
Signed by ItS duly authOrIzed officers thiS 27th day of August, 2001
.
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EVERGREEN NATIONAL INDEMNITY COMPANY
ILdV ~d
Roswell P Ellis, PreSident
~
Glenn D SouthWiCk, Treasurer
Notary Public)
State of OhIO)
SS
On thiS 27th day of August, 2001, before the subSCrIber, a Notary for the State of OhIO, duly commissIOned and qualified, personally came Roswell
P Ellis and Glenn D. SouthWick of the Evergreen National Indemlllty Company, to me personally known to be the mdlvlduals and officers deSCrIbed
herem, and who executed the precedmg mstrument and acknowledged the executIOn of the same and bemg by me duly sworn, deposed and said that they
are the officers of said Company aforeSaid, and that the seal affixed to the precedmg mstrument IS the Corporate Seal of said Company, and the said
Corporate Seal and signatures as officers were duly affixed and subSCrIbed to the said mstrument by the authOrIty and directIOn of said CorporatIOn, and
that the resolution of said Company, referred to m the precedmg mstrument, IS now m force
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my offiCial seal at Columbus, OhiO, the day and year above WrItten
~LU C Dufft
Notary Public State of OhiO
My CommiSSIOn expires August 6, 2004
State of OhIO )
SS
I, the underSigned, Secretary of the Evergreen NatIOnal Indemlllty Company, a stock corporatIOn of the State of OhIO, DO HEREBY CERTIFY
that the foregomg Power of Attorney remams m full force and has not been revoked; and furthermore that the ResolutIOn of the Board of Directors, set
forth herem above, IS now m force
Signed and sealed m Columbus, OhIO thiS 29th day of OC'toher 2004
.
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John A Marazza, Secretary
Any reproductIOn or faCSimile ofthrs form IS VOId and mvahd
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CIty of Port Angeles
6.0
QUALIFICATIONS
6.1 GENERAL INFORMATION ABOUT PROPOSED FIRM
Name of the Proposer and subcontractors (if any)
Prime: Waste Connections of Washington, Inc.
Subs' URS Corporation, Transfer station design and construction management
Philip Services Corporation, moderate risk waste facility operations
Business address(es)
Waste Connections of Washington, Inc.
2916 lOih Street South, Lakewood, WA 98499
2548 West 19th Street, Port Angeles, WA 98363
URS Corp.
1501 4th Ave, Suite 1400, Seattle, WA 98101-1616
III SW Columbia, Suite 1500, Portland, OR 97201-5850
Philip Services Corporation
18000 72nd Ave S. #217, Kent, WA 98032
Union Pacific Railroad
1400 Douglas Street, Omaha, NE 68179
Type of organization(s).
Waste Connections, Inc. (WCI) was founded in 1997 as a regional, integrated solid waste services
company and became a publicly traded company in 1998 WCI provides solid waste collection, transfer,
disposal, and recycling services throughout the Western United States.
URS is a publicly-owned corporation founded in 1904 URS provides its public, private, and internatIOnal
clients with environmental, civil, geotechlllcal, structural, mechanical, and electrical engineering, as well
as architecture, landscape architecture, and construction management. URS's PaCific Northwest offices
are located in Seattle, Tacoma, Spokane, Portland, Boise, and Vancouver B.C.
Philip Services Corporation (PSC), Inc. is a privately held corporation based in Houston, TX., employs
over 7,000 people With operations throughout the Umted States and Canada and IS one of the leadlllg
Illtegrated environmental service companies III North America.
Ulllon Pacific Corporation nyse' "UNP" is one of America's leading transportation companies. It's
pnnclpal operating compallles, Ulllon Pacific Railroad, is the hardest railroad in America, covering 23
states across 2/3 of the Ulllted States.
October 29, 2004
Waste Connectzons of ,hit.
Washmgton, Inc. '+''''
6 1-1
City of Port Angeles
.
Proposer's authorized representative and contact information
Edward L. Westmoreland
DIvision Vice PresIdent
2916 107th Street South, Lakewood, WA 98499
(253) 414-0349
(206) 915-3133 (mobIle)
Eddie W@WasteConnections.com
Waste Connections, Inc. (WCI) was founded in 1997 as a
regional, integrated solid waste services company and
became a publicly traded company m 1998. WCI provides solid waste collection, transfer, disposal, and
recycling services throughout the Western Umted States. As of October 2004, we serve more than
1,000,000 commercial, industnal, and residentlal customers in 22 states We own 90 collectiOn operations
and own and operate 23 transfer stations, 31 Subtitle D landfills, and 18 recycling facIlities, and 1
constructiOn and demohtiOn debris landfill, and operate but do not own an additional 6 transfer stations
and 10 SubtItle D landfills
How many years the Proposer and
subcontractors (if any) have been in business
under the present_name(s)
URS CorporatiOn has operated under its present name in Washington State since 1968. Philip ServIces
Corporation has operated smce 1995 under current name.
Any other names under which the Proposer has done business
.
Since ItS inception m 1997 Waste Connections, Inc has operated under that name only. The Washmgton
DivisIOn of WCWI currently provides solid waste collection services to approximately 200,000 single
family resIdential customers and 10,000 commercial customers (includmg recycle drop box statlons and
multIfamIly structures) in Pierce, Jefferson, Lewis, C1allam, YakIma, Mason, Clark, WhItman and Grant
Counties. The WCWI team takes pride in providing our customers with the highest quality sohd waste
management services, mcluding colIectiOn of sohd waste and recyclables, recychng processmg, transfer,
and disposal services WCWI's Washington Division operates under the followmg dba s:
WCWI Washington dba's
WCWI Washington Division dba
Amencan Disposal Company
Amencan Portable Storage
DM Disposal Company
DM Recyclmg
Empire Disposal
Island Disposal
LakeSide Disposal
Mason County Disposal
Location
Gig Harbor
Fife
Fife
Fife
Colfax
Whidbey Island
Moses Lake
Mason County
6 1-2
Waste ConnectIOns of ..h.
Washmgton, Inc. ""'+'''
.
October 29, 2004
.
.
.
CIty of Port Angeles
-
Murrey's Disposal Company
Olympic Disposal Company
. .
Fife
Port Angeles
Port Townsend, Chehahs
Tacoma
Vashon
Superior Refuse Remova] .
Tacoma RecyclIng
Vashon Disposal Company
WCI - Vancouver
Vancouver
If the Proposer is a subsidiary
Not ApplIcable
If the Proposer is a joint venture or partnership
Not Applicable.
Disclose if the Proposer, or any parent or affiliated organization, has ever been convicted
of any misconduct or been fined an amount greater than $10,000 for a civil or criminal
violation of any federal, state, or local statute or regulation in connection with a solid
waste or transportation Service Agreement.
None.
A list of any and all of the Proposer's subcontractors that may perform more than five
percent of the project value.
The Umon Pacific Railroad is the largest railroad in North America. It has Significant experience m
shipping containerized solid waste through the Columbia River Gorge m Oregon The UP RaIlroad will
provide locomotive power for the NWCS rail transportation component with direct service from Tacoma
to Port of Morrow lntermodal FaCIlIty and/or the UP Hinkle Intermodal Facility. These services will be
proVided under contract to WCWI's NWCS affiliate.
Extensive financial mformatlOn about the UP is available at http'//www up.com/investors/index.shtml
See SectIOn 6.10 for additIonal financial informatIOn about UP Railroad
October 29, 2004
Waste Connections of ..h.
Washington, Inc. "'+,r
6.1-3
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City of Port Angeles
. 6.2 PROPOSER'S SOLID WASTE TRANSFER STATION EXPERIENCE
HIDDEN VALLEY TRANSFER STATION
17925 Meridian E
Puyallup, W A 98375
Facility owner and references, owner contact, address, and telephone number
Pierce County Recycling, Compo sting and Disposal LLC dba LRI
Eddie Westmoreland
17925 Meridian E
Puyallup, W A 98375
(206)-915-3133
Facility regulatory agencies, references, contacts, addresses and telephone numbers
Tacoma Pierce County Health Department
David Bosch
3629 So D St
Tacoma, WA 98418-6813
253-798-6574
Year developed
1994 permitted
Occupancy permit in 1996
Began operation in 1999
Facility throughput (average and peak), and design capacity
. Average: 500 TPD Peak: 575 (high: 900 TPD) Design: 600 TPD
Total construction cost of the facility, cost of work performed by the Proposer during
project development, and payment received for operations in the most recent year
Construction cost: approximately $5 Million
Revenue for 2003 approximately $50,000 (the transfer station is part of a much larger system)
Description of Proposer's involvement in the project with respect to siting, permitting,
design, construction, and operation
Siting: Pierce County Recycling, Compo sting and Disposal, LLC dba LRI
Permitting: Team ofLRI employees, EMCON, and Terrill Chang (now with USR)
Designed by: EMCON
ConstructIon: Hebert Construction
Operation: LRI
Description of Proposer's involvement in the project with respect to special waste and/or
HHW handling
In 2004 LRI received permits to construct and operate a Household Hazardous Waste collection facility
within the Hidden Valley Transfer Station. The purpose of this project is to increase environmental
protection within Pierce County and to provide residents an environmentally acceptable alternative for
HHW's. The LRI HHW program will accept only HHW generated from the private residences in Pierce
County only. Prior to this time LRI held several collection events at the Hidden Valley Transfer Station.
.
Description of Proposer's approach to personnel transition, if any
N/A
6.2-1
Waste Connections of ..hit
Washington, Inc. ".,..
October 29,2004
City of Port Angeles
WICHITA TRANSFER STATION
4300 W 47th N,
Wichita, KS 67205
.
Facility owner and references, owner contact, address, and telephone number
Waste Connections Inc.
Jim Spencer -Division Vice President
2745 N Ohio
Wichita, KS 67219
316-838-4920
Paul Foster-Distnct Manager
4300 W. 37th N
Wichita, KS 67205
316-941-4320
Facility regulatory agencies, references, contacts, addresses and telephone numbers
Kansas Department of Health and Environment Sedgwick County Environmental Resources
Bill Bider, Director, Bureau of Waste Management Susan Erlenwein-Director
1000 SW Jackson St, Suite 320 2625 S. Tyler Rd
Topeka, KS 66612-1366 Wichita, KS 67215
785-296-1600 316-660-7200
Year developed
2001
Facility throughput (average and peak), and design capacity
Average: 1500 TPD Peak: 2200 TPD Design 2500 TPD
Total construction cost of the facility, cost of work performed by the Proposer during
project development, and payment received for operations in the most recent year
Construction cost: $5 Million (total cost paid by Waste Connections Inc.
Revenue for 2003: $12 million dollars
.
Description of Proposer's involvement in the project with respect to siting, permitting,
design, construction, and operation
WCI's Jim Spencer was the team leader responsible for local sitmg and zoning, state permitting, design,
construction and operation of the Wichita Transfer Station facility. The team also included Jim LIttle,
Corporate VIce President of Engineering and Harv Ebers, Project Manger. The facility took three years to
site, design, permit and construct. The team hired Midwest Environmental Consultants to assist with
permitting and Baughman Company to assist with local zoning. ConstructIon was completed by Eby
Construction, a design/build contractor.
Description of Proposer's involvement in the project with respect to special waste and/or
HHW handling
The Wichita transfer station does not handle special waste or HHW. The spotters and loader operators are
trained to look for material and if found remove material, set aside and contract out the handling of such
material.
Description of Proposer's approach to personnel transition, if any
N/A
.
6.2-2
Waste Connections of ..h.
Washington, Inc. ~+,..
October 29,2004
.
.
.
City of Port Angeles
WEST VANCOUVER MATERIAL RECOVERY FACILITY
6601 NW Old Lower River Road
Vancouver, W A 98660
Facility owner and references, owner contact, addresses and telephone number
Waste Connections Inc.
Scott Campbell- Division Vice President
6601 NW Old Lower River Road
Vancouver, WA 98660
360-737-1727
Facility Regulatory Agencies, references, contacts, addresses and telephone number
Clark County Health Department Clark County Public Works
Gary Bickett - Environmental Health Specialist Anita Largent - Solid Waste Program Manager
PO Box 9825 PO Box 9810
Vancouver, WA 98666 Vancouver, WA 98666
(360) 397-8061 (360) 397-6118 ext.4830
W A State Department of Ecology
Wyn Hoffman - Environmental Specialist
PO Box 47600
Olympia, W A 98504
(360) 407-6393
Year Developed
West Van began operating in 1992 and was purchased by Waste Connections in 1999.
Facility throughput (average and peak), and design capacity
Average: 500 TPD Peak: 800 TPD Design: 1,000 TPD Annual MSW Tons: 74,200
Total construction cost of the facility, cost of work performed by the proposer during
project development and payment received for operations in the most recent year
Construction cost: $8 million (paid by Columbia Resource Company, WCI purchased in 1999)
Revenue for 2003: $10 million
Description of the Proposer's involvement in the project with respect to siting,
permitting, design, construction and operation
WCWI has been responsible for operation and maintenance of the facility since 1999. Operations include
receipt and processing of MSW, source separated recyclable materials from both public drop-off and
curbside collection, HHW, "dry" commercial loads with high recycling potential, C&D, and yard debris.
CRC sited and permitted the facility in 1990.
Description of Proposer's involvement in the project with respect to special waste and/or
HHW handling
West Van operates a Household Hazardous Waste Facility for residents of Clark County. Activities
associated with the receiving of HHW are the inspection, unloading, sorting, classification, inventorying
and packaging of hazardous wastes.
Description of Proposer's approach to personnel transition, if any
N/A
October 29, 2004
Waste Connections of .h.
Washington, Inc. ",.,..
6.2-3
....:".
6.3
.
City of Port Angeles
6.3 PROPOSER'S SOLID WASTE LONG-HAUL TRANSPORT AND DISPOSAL
EXPERIENCE
FINLEY BUTTES REGIONAL LANDFILL - BOARDMAN, OR
From 1986 to 1990, the Finley Buttes RegIOnal Landfill (FBRL) was sIted, permitted and
constructed meeting or, in most cases, exceeding the most restrictive current state and federal
standards which Included the October 1993 Subtitle D reqUIrements. Finley Buttes Landfill
Company was formed to assume the ownership and operating control of the facility now located
in arid Morrow County, Oregon. Finley Buttes Landfill Company was acqUIred by Waste
Connections,Inc in 1999 and provides solid waste disposal servIces for Morrow County, the host
Junsdlction of the FBRL The total permItted capacity at FBRL is 180,000,000 cubic yards wIth
a remaining disposal capacity of approximately 169,000,000 cubiC yards. At current annual
disposal volumes the facility has an estimated remaining site life of 208 years
FBRL IS conveniently located WIthin 15 miles of the Port of Morrow intermodal facility operated
by Tidewater Barge Lines and the surrounding area has almost no residential development with
agnculture beIng the primary land use Waste Connections, Inc is the sole operator and
responsible for all levels of dally operation and compliance With applicable regulations
Owner Contact:
.
John Rodgers, District Manager
Finley Buttes Landfill
73221 BombIng Range Road
Boardman, OR 97818
Ph# 360 695 4858 ext 319
RegulatOlY Agency Reference'
Lissa Druback, Eastern RegIOn Manager
Oregon Department of Environmental Quality
400 East Scenic Drive, Suite 307
The Dalles, OR 97058
Ph# 541 298.7255 ext. 22
WASCO COUNTY LANDFILL - THE DALLES, OR
Wasco County Landfill (WCL) IS a Subtitle D RegIOnal Landfill located about five miles
southeast of The Dalles, OR. WCL was initiated in the 1940s when area farmers began using the
locatIOn as a disposal site A tepee burner was added In the 1950s, With ash from the burner gOIng
Into a small canyon ThiS canyon was closed, capped, and permanently sealed when Wasco
County took over operatIOn of the landfill In the early 1970s The Oregon Department of
Environmental Quality (ODEQ) began regulating the landfill In 1972 and has contInued to work
With Wasco County In supervising ItS operation. In 1999, Waste ConnectIOns, Inc acqUIred the
Wasco County Landfill. WCL IS the designated landfill for Wasco County under the county's
Comprehensive Plan.
.
WCL consIsts of 511 acres of property, of whIch 160 acres are currently permitted for landfill
operation The Wasco landfill has a currently approved design capacity of over 30 million tons
The landfill currently averages 950 tons per day In daily gate receipts This landfill received
October 29, 2004 Waste ConnectIOns of "~l..
Washington, !nc ~ ".
6 3-1
CIty of Port Angeles
.
232,452 tons of waste during 2003. At this rate of fill, the landfill will have a site life of
approximately 70 additional years. Waste Connections, Inc is the sole operator and responsible
for all levels of daily operation and compliance with applicable regulations.
Owner Contact:
John Rodgers, District Manager
Wasco County Landfill
2550 Steele Road
The Dalles, OR 97058
Ph# 360.695 4858 ext 319
Regulatory Agency Reference:
Lissa Druback, Eastern Region Manager
Oregon Department of Environmental Quality
400 East Scenic Dnve, Suite 307
The Dalles, OR 97058
Ph# 541.298 7255 ext 22
Long Haul Transportllntermodal Experience
WCI's newest subsidiary, Northwest
Container Services Inc. (NWCS),
(purchase to close on or before December
1, 2004), is a PaCific Northwest regIOnal
rail services provider based in Portland,
Oregon With rail facilities located in
Portland, Oregon, Tacoma, Washington
and Seattle, Washington.
.
NWCS has been providIng northwest ports
with short haul rail logistics transportatIOn
services since 1985 NWCS is a key
component of the Pacific Northwest's effort to improve freight mobility by converting highway
back to rail. NWCS assists steamship lines and shippers by transportIng over 60,000 containers
annually The NWCS's Tacoma Intermodal Facility is a 15-Acre lntermodal rail yard facility with
container storage and maintenance and repair capabilities
WCWI's second Tacoma Intermodal IS operated by Pierce County Recycling, Composting and
Disposal LLC dba LRI, currently ships 90,000 tons of mUniCipal solid waste per year from Pierce
County to the Roosevelt Regional Landfill, located in Roosevelt, WashIngton, via our LRI
Tacoma lntermodal Facility with service provided by the Burlington Northern Santa Fe Railroad.
LRI's Tacoma lntermodal Facility has 2,400 feet of rail to load and off-load empty and full
municipal solid waste containers The facility is equipped to handle 100 plus containers per day
We have two top picks for contaIner handlIng, a Caterpillar VIIOO and a V900. ThiS facility has
been in operation and shipping a portIOn of Pierce County's waste by rail SInce 1993
63-2
Waste Connectzons of ..hilt.
Washzngton, !nc ,,~,.
.
October 29. 2004
City of Port Angeles
. Long Haul Transport and Disposal Experience
Clark County, WA to Finley Buttes LF
In 1999, Waste Connections acquired Columbia Resource Company (CRe) which had been
established to design, construct and operate solid waste, recycling, transfer, transportation and
disposal facilities. In 1991, CRC entered into a 20 year contract with Clark County, Washington
to transition from in-county processing and disposal of solid waste to an export waste system at
Finley Buttes. Waste residual from both Vancouver WCWI transfer stations, Central Transfer &
Recycling and West Van Materials Recovery, is compacted and containerized on-site, loaded
onto transfer trailers and transported to the Tidewater interrnodal facility in Vancouver, W A. The
loaded containers are then shipped via barge to the Port of Morrow in Boardman, OR. Once the
containers reach the Port of Morrow Interrnodal facility, they are transferred onto over-the-road
chassis and trucked to Finley Buttes for disposal. Under the Clark County contract approximately
250,000 tons per year are exported for disposal at Finley Buttes.
County Contact:
Mike Davis - (360) 397.6118 ext 4920
ClarK County Waster Production Specialist
515 W 15th Street, Vancouver, WA 98666
Port Townsend Paper- Port Townsend, WA
.
Waste Connections of Washington serves the Port Townsend Paper Mill for the transport and
final disposal of their mill rejects, providing service from the Port Townsend Mill to LRI's
Tacoma Interrnodal Facility by truck. Once loaded containers arrive at the Tacoma Interrnodal
Facility they are transferred to rail for shipment to the Roosevelt Regional Landfill. The estimated
total annual volume of waste handled for the Port Townsend Paper Mill is approximately 13,000
to 15,000 tons.
Port Townsend Paper Port Townsend, Wa 98368. contact is Greg Knowles 360 379 2032,
City of KIa wack - Klawock, AK
WCWI is contracted to provide long haul waste transportation and disposal services to the City of
Klawock, located on Prince of Wales Island, Alaska. An estimated 2,200 tons of solid waste is
shipped annually by barge to Seattle, transferred directly to trucks and transported to WCWI's
Interrnodal Facility in Tacoma, Washington for shipment via rail to Roosevelt Landfill.
City of Klawock P.O. Box 469, Klawock, Alaska 99925. contact is Duane Gasaway 907 755
2261.
Pacific County, WA to Wasco County LF and Finley Buttes LF
.
Waste Connections of Washington, Inc. is providing the waste transport and disposal services for
Pacific Solid Waste, Inc. in Pacific County, Washington. A WCWI subcontractor, D&R Dietrich
and Sons, Inc., provides operational services including the pick up of containerized waste from
Long Beach Recycling and Transfer Station and transporting it via tractor trailer 250 miles to
Wasco County Landfill located in The Dalles, OR, and 340 miles to Finley Buttes Landfill. ThIS
~~~~ ~~~if.'~
Washington, Inc. ~ .".
6.3-3
City of Port Angeles
1991 contract has been renewed several times in 13 years and involves the transport and disposal
of about 13,000 tons per year.
.
Solid Waste Contact: Jay Alexander Pacific Solid Inc. P.O. A, Illwacho, W A 98624- ph#
360.642.2541
Skamania County, WA to Wasco County LF
In 2000, WCWI was selected to provide transport and disposal for Skamania County.
Transportation services are provided via WCWI subcontractor D&R Dietrich and Sons, Inc. and
hauled to Wasco County Landfill. This contract involves the transportation and disposal of
approximately 2,500 tons annually.
Skamania County Contact:
Brad Uhlig, Solid Waste Division
PO Box 790
Stevenson, W A 98648
ph#: 509.427.9456
Potlatch -Lewiston, 10 to Finley Buttes
WCWI was selected in 2002, to provide an on-site reload facility, collection, transport and
disposal of industrial solids from Potlatch Corporation in Lewiston, Idaho to Finley Buttes
Regional Landfill. The contract requires the collection, transport and disposal of approxImately
50,000 annual tons.
Solid Waste Contact: Larry Neal, Potlatch Corporation, 803 Mill Road, Lewiston, ill 83501 -
ph# 208.799.1691
.
.
6.3-4
Waste Connections of ..h..
Washington, Inc. "'+'
October 29, 2004
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City of Port Angeles
.
6.4 PROPOSER'S RECYCLABLE MATERIALS COLLECTION AND PROCESSING
EXPERIENCE
LOCATION OF RECYCLING EXPERIENCE
WCWI conducts a full range of recycling curbside and consolidated collection and processing operations
throughout Washington State, including the cIties of Vancouver, Puyallup, Sumner, Bonney Lake, Orting,
Carbonado, Port Townsend, Coupeville, Milton, Tacoma and Moses Lake, as well as in Clark and Pierce
Counties. We provide turn-key curbside collection, regional drop box and transfer facility service, as well
as processing and marketing of recyclables.
We have selected two local facilities to demonstrate our recyclables processing and marketing expertise:
I) Tacoma Recycling Company, Inc. for recyclables processing and marketing and 2) Pierce County
Compost Factory for yard debris composting and marketing. TRC operates a large-scale material recovery
facility located at 2318 South Tacoma Way in the Nalley's Valley area. TRC accepts/remarkets an average
of 4,200 tons per month of household and commercial recyclable materials. Pierce County Compost
Factory, part of Pierce County Recycling, Compo sting and Disposal LLC, dba LRI, operates a
composting facility at adjacent to the closed Hidden Valley Landfill in Pierce County at 17925 Meridian
Street East, Puyallup, WA 98373.
NAME OF FACILITY AND OWNERSHIP INFORMATION
Tacoma Recycling Company, Inc. is a wholly owned subsidiary of Waste Connections, Inc. WCWI has a
majority interest in the Pierce County Compost Factory, part of Pierce County Recycling, Compo sting
. and Disposal LLC, dba LRI.
DESCRIPTION OF RECYCLING MATERIALS PROCESSED, INCLUDING QUANTITY AND TYPE
TRC collects, processes, transports and markets approximately 50,000 tons of mixed recyclables annually
to secondary market customers around the world including all paper fiber grades, assorted grades of
plastic, glass, aluminum, and tin. LRI receives yard waste from residential curbside collectIOn programs
for all incorporated and unincorporated areas in Pierce County, and will soon be under contract to accept
yard debris from the City of Tacoma. Self-haul clients include residential customers, commercial land-
clearing services, commercial landscapers, and commercial lawn mowing services. The Compost Factory
receives about 70,000 tons of compostable materials a year for processing.
YEARS OF OPERATION
TRC has provided commingled recycling processing and marketing services to the City of Tacoma for the
past 14 years. The business was started in 1975 as a regional buy-back facility. The City has received
numerous awards and recognition for the program's success, whIch has become a statewide model of
municipal and private cooperation on recycling operations. LRI's Compost Factory operations began in
and has 10 years of experience using forced-air, turned, mass-bed compo sting technology for aerobic
processing of organic wastes.
.
6.4-1
Waste Connections of ..h.
Washington, Inc. ".r
October 29, 2004
City of Port Angeles
MARKET FOR DISPOSITION OF RECYCLABLE MATERIALS
.
Newspapers are marketed to more than 25 different domestic and international paper mills to make new
newspaper. Newspaper is also brokered to boxboard mills, medium and liner board manufacturers, tissue
mills, and for use in making formboard, insulation, and numerous other products.
Mixed waste paper is marketing to more than 25 different domestic and international paper mills to make
boxboard, medium and liner board, tissue, formboard, insulation, and numerous other products.
Corrugated cardboard is marketed to manufacturers of corrugated cardboard, liner board, chip board,
Kraft sheet, and millwrap.
Clear. brown and green glass bottles and jars are marketed to two regional glass mills.
Aluminum Cans or Used Beverage Containers and aluminum foil are marketed to domestic mills and
overseas markets.
Tin or steel cans are marketed to domestic and overseas steel mills.
Mixed plastic bottles are marketed to overseas markets that can use multiple grades of number 1 and 2
plastics with various melt indices. These are primanly overseas markets.
Plastic Film is shipped mostly to domestic markets although there is increasmg interest from overseas
mills to purchase this material.
Composted yard debris (typically either a fine compost 5/16th inch or less and a coarser product 7/16th .
inch or less) are used for topsoil mixes and dIrect applications for incorporation or fine mulch. Woody
overs are sold as an erosion control mulch, filter berm material, or hogged fuel. We sell composted
product under the brand name PREP Compost. Sixty to seventy percent of our products are currently
marketed through Vern's Organic Topsoils and Randles Sand & Gravel. These firms move the product as
it is screened to reduce our storage requirements. We agree to sell to them and not their customers, and
they do all the blending, marketing and trucking in exchange for a reduced pnce. The other 30 to 40
percent is sold by LRI directly to landscapers and the general public at our Sales Road site or to Pierce
County for their public work projects.
WCWI's success in recyclables collection experience is demonstrated through our City of Puyallup, W A
contract (1976 to 2008). The contract requires WCWI to provide solid waste, recycling and yard debris
collection service.
Annual Revenues:
Annual tonnages
Overall customers:
Collection System:
$4,431,692
8,508 Solid waste, 2,045 Recyclables, 7,543 Yard Debris
8805 residential/commercial accounts
Single-person rear-load trucks are used for residential garbage
and yard debris collection. Recyclables are collected bi-weekly in
a 35-gallon cart with two insert bins (glass/newspaper) via side
load collection trucks. Commercial garbage is collected using
rear-load, front-load and roll-off trucks. Multifamily recycling is
provided via 96-gallon carts or 2- to 30-yard steel containers.
Honorable Kathy Turner, Mayor, (253) 840-4811
Reference:
Please see attached letter of recommendation from the City of Puyallup, W A.
.
6.4-2
Waste Connections of ~hlJ!
Washington, Inc. ",.,.
October 29,2004
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. 6.5 PROPOSER'S CO-COMPOSTING EXPERIENCE
LRJ COMPOST FACTORY
WCI has majority interest in LRI, including its Compost Factory. LRI's Compost Factory is located
adjacent to the Hidden Valley Landfill and Transfer Station in Puyallup, WA. The 20-acre site is 280 feet
by 550 feet long, with stack heights ranging from 35 to 45 feet. Over 154,000 square feet (3.5 acres) of
the operational area is enclosed. The Compost Factory also includes an office and laboratory, employee
facilities, maintenance area, blower rooms and a designed wetland for treating storm water.
The Factory is capable of handling a full range of organic waste materials. Accepted materials include:
yard debris, wood waste, commercial food waste with waxed cardboard, post-consumer food wastes,
biosolids (exceptional quality municipal sewage sludge), paper products, animal manure and bedding, and
other compostable organic wastes. All must be source separated for composting and clean of any
contaminants.
The Receiving Areas, with aerated floors, can receive, grind and blend 470 tons per day of feedstock. The
universal refiner grinder, screens, and mixers are fully enclosed to reduce noise, dust and odors. The
Composting Hall is fully enclosed and can compost 130 tons per day with peaks of 250 tons per day. It
has two separate processing streams to make products with different feedstocks to meet market
preferences. The aerated floor has 10,000 ports and 18 blowers that are computer controlled to provIde the
optimum amount of oxygen and cooling air. Damper actuators change the direction of airflow to pull or
push through the pile to minimize temperature stratification.
.
The material is turned and watered using a SCAT4932, which turns over 2,000 cubic yards per hour.
Water is re-circulated using two 13,OOO-gallon tanks and a hose reel system attached to the SCAT. High
temperatures sanitize the material, and then the temperature is lowered to provide optimum conditions for
fast degradation. Four large ventilation fans feed building air to four biofilters that scrub and treat the
odorous air generated inside the building. The Curing and Screening Area allows the products to reach a
more finished state as desired by some markets. A double Erin Stardeck screen provides infinitely
variable product separation. The resulting high quality compost and mulch products are sold throughout
Puget Sound.
Sorting, ginding and processing of organic wastes, to create clean, homogeneous blends from diverse
feedstocks
.
. Concrete aeration floor system for receIvmg,
compo sting, curing and biofiltration activities
. Automatic blower controls for temperature and
oxygenation management
. Standard turning equipment for moving material
laterally and maintaining porosity at a rate of 1,800
cubic yards/hour
. Water makeup system attached to the turner to add
moisture throughout the process
. Automatic temperature monitoring and control
Waste Connections of ..h.
Washington, Inc. ".,..
October 29, 2004
6.5-1
City of Port Angeles
· Enclosure, collection, and treatment of odorous gases using engineered biofilters
. Collection and reuse of process water
. Covering or enclosure of all material handling operations
· Storm water management and treatment from surrounding roads and roof areas using storage
ponds and engineered filtration ponds.
. A progressive odor management program that includes responsiveness to neighbors and
regulators, process and facility modifications, and testing of modifications to assure neighbor
acceptance
The majority of LRI's experience with orgamc materials handling and processing originates from the
Pierce County yard waste collection program. The contract with the County began in 1992 and runs until
2011. The Compost Factory and the Purdy Compost Facility
receive about 70,000 tons of compostable materials a year for
processmg.
.
Self-haul clients include residential customers, commercIal
land-clearing services, commercial landscapers, and commercial
lawn mowing services, who deliver yard waste to our facllities
at Steele Street in Tacoma, Purdy Landfill in Purdy, Key Center drop box facility in Pierce County,
Prairie Ridge drop box facility in Pierce County, and the Compost Factory at Hidden Valley. This activity .
accounts for less than 5% ofLRI's total volume.
LRI receives yard waste from residential curbside collection
programs for all incorporated and unincorporated areas in Pierce
County including the City of Tacoma.
For information on the Compost Factory, Hidden Valley
Landfill and Transfer Station, please contact:
David Bosch (253) 798-6500
Tacoma-PIerce County Health Department
3629 South D Street
Tacoma, WA 98418
.
6.5-2
Waste Connections of ..hit
Washington, Inc. """.'
October 29, 2004
~,
City of Port Angeles
. 6.6 PROPOSER'S POST-CLOSURE LANDFILL EXPERIENCE
HIDDEN VALLEY LANDFILL (PIERCE COUNTY, WASHINGTON)
WCWI has managed and conducted all Post-Closure activities at this facility since 1999, in accordance
with local, state, and federal permits and regulations. The Hidden Valley Landfill encompasses
approximately 86 acres. Post closure activities include:
. Groundwater monitoring
. Gas migration monitoring
. Gas extraction system maintenance and monitoring
. Maintenance and operation of facility gas-to-energy plant
. Maintenance and operation of facility leachate treatment plant
. Landfill cover and vegetation maintenance
. Storm water management system maintenance
. Inspections, recordkeeping, and reporting
Post closure activities are conducted utilizing primarily in-house staff including engineering manager, gas
system technician, and equipment operators. Groundwater monitoring and related reporting is conducted
by a third party consulting firm.
.
PURDY LANDFILL (PIERCE COUNTY, WASHINGTON)
WCWI has managed and conducted Post-Closure activities at the Purdy Landfill since 1999. This facility
includes approximately 15 acres. Very similar to the eventual Port Angeles Operation, this closed landfill
is located on property which includes an active transfer station and composting facility. WCWI also
operates the transfer station and compost facility and is therefore, experienced in conducting post closure
activities without disruption to other facility operations. Post closure activities at the Purdy Landfill
includes groundwater and gas migration monitoring, cover maintenance, storm water management system
maintenance, inspections and reporting. The facility currently has an active gas extraction system and
enclosed flare which WCWI is assessing for possible decommissioning due to low gas flow. Post closure
activIties are conducted under the supervision of in-house engineering staff and local management.
WASCO COUNTY LANDFILL - PHASE I DISPOSAL AREA (WASCO COUNTY, OREGON)
Phase I at the Wasco County no longer receives waste yet is part of a larger, operating facility. Post
closure activitIes at the facIlity include cover maintenance, groundwater monitoring, inspections, and
reporting. WCWI is currently completing a gas generation assessment for the design of a gas extraction
system to be installed in 2005. Post closure type activities at the Wasco facility are conducted under the
supervision of the site manager and facility personnel, with oversight assistance from the engineering
manager.
.
6.6-1
Waste Connections of 4.h~
Washington, Inc. ""11I\.'
October 29,2004
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. 6.7 PROPOSER'S MRWF EXPERIENCE
.
.
As described below, Waste Connections, Inc. operates and / or is in the process of developing, several
HHW facilities in Oregon and Washington. WCI typically constructs and operates HHW facilities at
existing, operating facilities such as transfer stations. This approach, as described in the examples below,
is very similar to the requirements of the Port Angeles facility, where other operational activities will be
occurring in the vicinity of the MRW facility. WCI commonly partners with Phihps Services Corporation
(PSC) in the operation of these facilities including transport and disposal.
CLARK COUNTY, WASHINGTON
WCI, dba as Columbia Resource Company (CRC) owns and operates two solid waste transfer stations in
Clark County, Washington that serve approximately 532,000 residents. In April 1990, Clark County
awarded CRC with a twenty (20) year contract to provide solid waste services, including HHW
collection, to county residents. Both transfer stations support permanent Household Hazardous Waste
(HHW) collection units located within the permanent structures of the transfer stations. WCI partners
with Philip Services Corporation (PSC) to provide HHW collection services. The HHW facilities are
open for drop-off from 8 a.m. to 4 p.m. two days of the week. PSC provides on-site labor, manifesting,
transportation, and disposal services for both facilities. Trained WCI personnel are present at the transfer
stations to assist customers during non-scheduled drop offs. WCI personnel assist in segregating waste
streams for future bulking activities conducted by PSC personnel and educating customers on acceptable
waste streams.
WASCO, SHERMAN, AND HOOD RIVER COUNTIES, OREGON
WCI waste recently awarded a 6.5 year contract to provide HHW services for the above-captioned Tri-
County area. WCI is currently preparing facility development plans for construction of HHW facilities at
two existing transfer stations, which will serve approximately 46,000 residents. Trained WCI and PSC
personnel will partner perform and provide unloading, identification, packing, storage, transportation, and
disposal services.
PIERCE COUNTY, WASHINGTON
WCI is currently developing facility design and operating plans for an HHW facility to be located at the
Hidden Valley Transfer Station. This facility will provide HHW services for Pierce County residents as
part of our Solid Waste Services Agreement. As wIth our other HHW operations, WCI will partner with
PSC to provide unloading, identIfication, packing, storage, transport and disposal services for HHW.
October 29, 2004
Waste Connections of ..h.
Washington, Inc. ".'"
6.7-1
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. 6.8 RESUMES OF KEY OFFICERS AND PROJECT TEAM LEADERS
Eric M. Merrill
Vice President, PacIfic Northwest Region
611 SE Kaiser Avenue, Vancouver, W A 98661
(360) 695-4858
ericme@wcnx.org
Percent Available for Project: 5 - 10%
Mr. Merrill has more than 14 years' experience in the solid waste and recycling industry. He directs the
entire range of WCI's operations in Washington and Oregon, including collection contracts, landfills,
transfer stations, recycling centers, and collection companies. Before joining Waste Connections, Mr.
Merrill was Regional Vice President, Sales and Marketing, for Waste Management, where he was
responsible for sales, municipal marketing and customer service for Washington, Oregon and Idaho. As
Group Project Manager for the West Group of Waste Management from June 1995 to August 1996, he
was responsible for market development and solid waste and recycling facility permitting, design, and
construction. From October 1988 to June 1995, he held various management positions with Waste
Management, including Division President of the three operating locations in Washington and Northern
Idaho. Mr. Memll holds a BS degree in Accounting from the University of Oregon. Mr. Memll will be
acting in a supporting role to Mr. Westmoreland for the City of Port Angeles contract.
.
PROJECT MANAGER ISERVICE AGREEMENT ADMINISTRATOR
Edward L. Westmoreland Percent Available for Project: 20 - 25%
Division Vice President
2916 107th Street South
Lakewood, W A 98499
(253) 414-0349
eddiew@wcnx.org
Mr. Westmoreland has 26 years of experience in the solid waste management industry, four of which have
been spent in his current role as Division Vice President for Waste Connections, Inc. He is responsible for
the overall management of the Northern Washington Division. He has held several senior management
positions with WCI, Allied Waste Industries, Inc., and Rabanco Companies in Washington State. Mr.
Westmoreland has extensive experience with solid waste collection operations, transfer station operations,
landfill contracts, and asset management throughout Washington, Oregon, Alaska, and British Columbia.
His direct contract management experience includes managing residential and commercial collections in
King, Snohomish, and Pierce Counties.
FINANCE MANAGER
John Olnick
District Controller
2916 107th Street S.
Lakewood, W A 98499
(253) 414-0364
iohno@wasteconnections.com
Percent Available for Project: 10 %
Mr. Olnick has a Master of Business Administration and undergraduate B.S. Degree in Accountmg. His
work experience includes 12 years in the accounting field with six of those years dedicated to
manufacturing accounting and management. Mr. Olnick has been with Waste Connections since 2001. He
. serves as the District Controller for WCI's northern Washington business unit, and prepares quarterly,
6.8-1
Waste Connections of ..hI/!
Washington, Inc. ~+,.
October 29,2004
City of Port Angeles
annual and special finanCial reports required by municipal contracts and for local, state and federal
agencIes.
.
FACILITY DESIGN, CONSTRUCTION/CONSTRUCTION MANAGEMENT
John Rodgers Percent Available for Project: 25 - 30%
RegIOn Engineer
501 SE Columbia Shores Blvd, Suite 350
Vancouver, W A 98661
(360) 695-4858
iohnro@wcnx.org
Mr. Rodgers joined Waste Connections as the Regional Engineering Manager in February of 2004. He is
responsible for engineering oversight for all Waste Connections operations in Oregon and Washington.
He has 14 years of waste industry experience. His previous industry experience includes serving as Site
Engineer for Waste Management from November 1990 to March 1997 where he was responsible for
landfill design, environmental monitoring programs, and compliance. From March 1997 to February
2004, his role was with Allied Waste/Browning Ferris as Regional Engineer and Landfill General
Manager.
EQUIPMENT PROCUREMENT AND INSTAllATION
Scott Schreiber
Director of Landfill Operations
35 Iron Point Circle, Suite 200
Folsom, CA 95630
(916) 608-8200
scotts@wcnx.org
Percent Available for Project: 5 - 10%
.
Scott Schreiber has been Waste Connections, Inc.'s Director of Landfill Operations since October 1998.
Prior to joining the company, Mr. Schreiber gained extensive experience in landfill management. From
September 1993 to September 1998, Mr. Schreiber served as Director of Landfill Development and
Director of Environmental Compliance for Allied Waste Industries. From August 1988 to September
1993, Mr. Schreiber served has Regional Engineer and Director of Landfill Development for Laidlaw
Waste Systems. From June 1979 to August 1988, Mr. Schreiber held several managerial and technical
positions in the solid waste and environmental industry.
STARTUP, OPERATIONS AND MAINTENANCE
Kent W. Kovalenko
District Manager
2548 West 19th Street
Port Angeles, W A 98363
(360) 452-7278
kentk@wasteconnections.com
Percent Available for Project: 70 - 80%
Mr. Kovalenko has 14 years of waste industry experience. Mr. Kovalenko has held various management
positions with Murrey's Disposal (a Waste Connections company since 1999) from June 1990 to present.
During his years of service, he has been instrumental in the implementation of a curbside recycling
program to 60,000 customers, yard waste program, and developed and implemented a Commercial OCC
program in Pierce County. From March 1996 to March 2000, Mr. Kovalenko performed the duties of
Operations Manager for Tacoma Recycling (a Murrey's operation) where he managed 60+ employees at a
facility that received, processed, and shipped 4,500 tons per month of both post and pre-consumer .
6.8-2
Waste Connections of ..-ft.
Washington, Inc. ~+,..
October 29, 2004
.
.
.
City of Port Angeles
recycling materials. Mr. Kovalenko served as Operations Manager for Murrey's Disposal from March
2000 to March 2004 where he supervised 100+ drivers and was responsible for overseeing the day-to-day
operations to ensure quality collection service to over 13,000 residential and commercial customers per
day, as well as the daily transportation of over 400 tons from the Murrey's transfer station to the landfill
and to the intermodal yard in Tacoma. Mr. Kovalenko is currently the District Manager for Waste
Connections' two hauling operations on the OlympIC Peninsula and also the Blue Mountain Drop-Box
Operations.
RECORDS AND ADMINISTRATION
Susan K. Hurlbut
Solid Waste Operation Administration
2153 4th Street
Port Townsend, W A 98368
(360) 452-7278
susanhu@wcnx.org
Percent Available for Project: 100%
Susan Hurlbut will be responsible for collecting, maintaining and submitting all records and
administrative documents related to the contract and to transfer facility operations. She has a combined 30
years of experience in customer service, accounts payable, and accounts receivable. Ms. Hurlbut worked
with Farmer's Insurance for 22 years in various capacities ranging from Records Administrator to Claims
Customer Service, gaining a depth of knowledge in the accounts receivable and claims processing arenas.
Since joining Waste Connections in 2002, Ms. Hurlbut has been responsible for overseeing the accounts
receivable and billing functions for the WCWI operations on the Olympic Peninsula. Her responsibilities
include working extensively with customers and maintaining accurate and complete records.
Michele D. Cox
Operations Supervisor
2548 West 19th Street, Port Angeles, WA 98363
(360) 452-7278
michelec@wcnx.org
Percent Available for Project: 30 - 40%
Michele Cox will provide administrative and operations management assistance for the transfer station
operations and curbside collection components of the project. She has more than 12 years of solid waste
management operations experience. Ms. Cox served as a residential and commercial route driver from
1992 to 1997 and has since filled various operations management positions up to and including her recent
promotion to Operations Supervisor of WCWI's two Olympic Peninsula hauling facilities. Ms. Cox
brings to the table a practical working knowledge of the geographic area and nuances of successful day-
to-day operations.
Carrie Gregory
Compost Quality Manager
17926 Meridian Street East
Puyallup, W A 98373
(253) 847-7555
carrieg@wasteconnections.com
Percent Available for Project: 30 - 40%
Carrie Gregory will provide technical assistance with the co-compo sting facility operation. She holds
SW ANA certifications as both a Composting Systems Manager (2004) and a Compost Facility Operator
(1998); she achieved Level 2 Manager status in 2001. Ms. Gregory performs process monitoring and
control at the Compost Factory and Pierce County Compost Facility. She maintains the aeration
Waste Connections of ..hit.
Washington, Inc. ~+,..
October 29, 2004
6.8-3
~
~
City of Port Angeles ~-==::.]I
distribution systems, wastewater collection and re-use. Ms. Gregory determines daily mix ratios,
moisture applications, PFRP and V AR complIance, process and ventilation blower operation, process
automation settings, computer control and data logging. She provides analytical results to owners and
customers to communicate company activities and need for changes in operations, and to present project
results. She also makes adjustments to the Plan of Operations in coordination with regulators to reflect
changes in operations and new regulatory requirements. Ms. Gregory has a degree in Environmental
Sciences (1998).
.
John Pick
Landfill Technician
17925 Meridian Street East, Puyallup, W A 98373
(253) 847-7555
irpick(a)aol.com
Percent Available for Project: 10 - 15%
John Pick is WCWI's dedicated Landfill Gas Technician. He has five years of experience in the solid
waste management industry, including two years of experience in compo sting. John is recognized by the
Washington Organic Recycling Council (WORe) as a Certified Compost Facility Operator. For the past
three years John's primary focus has been in managing Landfill Gas (LFG). John's training and practical
experience includes monitoring, operation, maintenance and design of both active and closed landfill gas
systems. He also assists with the operation of a Landfill Gas-to-Energy facility at WCWI's closed Hidden
Valley Landfill.
Robert W. Carn, PE
Vice President
URS Corporation
111 SW Columbia, Suite 1500,
Portland, OR 97201-5850
(503) 948-7281
Robert Carn@URSCorp.com
Percent Available for Project: 10 - 30%
.
Bob Carn has over 40 years of industrial engineering experience. He has carried out the responsibilities of
design engineer, project engineer, project manager, resident engineer, and principal on numerous projects
involving industrial development, materials handling, solid waste, and marine facilities. Mr. Carn has 20
years of continuous involvement in design of solid waste recycling and transfer stations. Through
experience gained in the planning of over 70 different solid waste facilities, he has extensive knowledge
of the site planning process for recycling facilities and transfer stations, including permitting, site layouts,
waste processing systems, and related appurtenances. Mr. Carn received his RA.Sc. Civil Engineering
from the University of British Columbia in 1964 and is a Registered Professional Engineer in Oregon
(1968).
Terrill Chang, PE
Senior Solid Waste Engineer
URS Corporation
1501 4th Ave, Suite 1400,
Seattle, W A 98101-1616
(206) 438-2596
Terrill Chang@URSCorp.com
Percent Available for Project: 20 - 60%
.
6.8-4
Waste Connections of ..h.
Washington, Inc. "'.'
October 29,2004
.
.
.
City of Port Angeles
Terrill Chang has been involved with landfills, incinerators, and transfer stations since 1979. His
experience includes siting, planning, conceptual and final design, startup, and operations evaluations at
solid waste facilities. His design experience includes preload compactors for two City of Seattle transfer
stations and Portland's Metro South station. Mr. Chang was project manager for siting King County,
Washington's Factoria Transfer Station and provided the conceptual design for the Port Angeles Transfer
Station. He has developed Master Plans for five transfer stations and provided operational analyses on
nine other stations. He also has experience in landfill gas control and utilization systems. Mr. Chang
received his MS from Oregon State University, 1974, and his BS, Massachusetts Institute of Technology,
1972. He is a registered Professional Mechanical Engineer in Washington (1978) and Oregon (1989).
Mike O'Donnell
Philip Services Corporation -HHW Business Manager
18000 72nd Ave S. #217, Kent, W A 98032
(425) 204-7052
modonnell@contactpsc.com
Percent Available for Project: 5%
Mr. O'Donnell has worked almost exclusively with HHW programs since beginning with PSC in 1993.
His experience with HHW programs includes on-site supervision of over 200 mobile collection days,
program development and full oversight for PSC's Washington HHW accounts. Mr. O'Donnell's
extensive field experience has given him real world knowledge necessary to create solutions for his
clients. He is well versed in DOT, RCRA, and MRW regulations as pertains to both HHW and Industrial
hazardous waste generators.
October 29, 2004
Waste Connections of ..hilt
Washington, Inc. ".'
6.8-5
.
.
.
6.9
I
I
"...?~
"~~~.- .' ,-- "-' --
,
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.
Solid Waste Processing Facility
Development & Management Services
.
City of Port Angeles
Glenn A. Cutler
Director of Public Works and Utilities
1- _ ''_'_
Eric M. Merrill
.' Vice President .' .
Pacific Northwest Region
City of Port Angeles
. Tom McCabe
Solid Waste Supervisor
WCWI Project Manager/
. Service Agreement Administrator
Edward L. Westmoreland
I
Transfer Station
Design
VI
Post Closure
Landfill Monitoring
John Pick
III
Blue Mountain
. Bob Carn, PE (URS)
Terrill Chang, PE (URS)
II
Transport
Michelle Cox
PA (tbd)
WCWI Staff
LEGEND
WCWI Waste Connections of Washington, Inc. (all staffWCWI employees unless otherwise noted)
URS URS Corporation
PSC Philip Services Corporation
PA City of Port Angeles staff to be hired by WCWI
TBD To be determined
. ,
~~-'"'--'""~-.,:;
Finance Manager..
John Olnick
Records & Administration
Susan Hurlbut
Startup Operations &
Maintenance
Kent KovaJenko
IV
Recycle Collection
Michelle Cox
WCWI Staff
V
Co-Composting
Carrie Gregory
PA (tbd)
VII
MRWF
Mike O'Donnell (PSC)
PA (tbd)
~
5.717-3
~_" ~ .. n~~"..
EVERGREEN
FLEXIBLE BONOING SOLUTIONS
6140 Parkland Blvd SUite #300 Mayfield Hts, OH 44124
phone 440-995-5100 fax 440-995-5101 toll free 800-641-9222
October 13,2005
RECEIVED
OCT 1 7 2005
PORT ANGELES LEGALDEPARTIIENT
Mr. William E. Bloor
City Attorney
City of Port Angeles
321 East Fifth Street
P. O. Box 1150
Port Angeles, Washington 98362-0217
Re: Waste Connections of Washington, Inc.
Bond #850790
Solid Waste Transfer Station - City of Port Angeles
Dear Mr. Bloor:
I am in recent of a copy of your letter dated October 4,2005 to Waste Connections
regarding the above referenced bond.
The bond was executed on March 31, 2005 with an effective date of October 1, 2005.
The March 31, 2005 date represents the signed and sealed date of the bond and Power of
Attorney. The bond is in full force and effect.
If you have any questions or require any additional information please do not hesitate to
contact me at (800) 641-9222.
Cordially,
KPP:lg
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EVERGREEN NATIONAL INDEMNITY COMPANY
COLUMBUS, OHIO
POWER OF ATTORNEY
PRINCIPAL Waste Connections of Washington, Inc.
CONTRACT AMOUNT
EFFECTIVE DATE October 13, 2005
AMOUNT OF BOND $ 8, 762, 703.00
POWER NO N/ A
KNOW ALL MEN BY THESE PRESENTS. That the Evergreen National IndemnIty Company, a corporatIOn in the State of OhIO does hereby
nominate, constItute and appomt: .L.:,..f-'-'-'-'-'-'-'-'-'-'-
*"k-ki-"*KATHLEEN P. PRICE"''''''''''''''''''''''''
Its true and lawful Attorney(s)-In-Fact to make, execute, attest, seal and delIver for and on its behalf, as Surety, and as Its act and deed, where reqUIred,
any and all bonds, undertakmgs, recognIzances and wrItten oblIgatIOns m the nature thereof, PROVIDED, however, that the oblIgatIOn of the Company
under this Power of Attorney shall not exceed
EIGHT MILLION SEVEN HUNDRED SIXTY TWO THOUSAND SEVEN HUNDRED THREE AND 00/100 DOLLARS
ThIS Power of Attorney IS granted and IS signed by facsImile pursuant to the followmg ResolutIOn adopted by ItS Board of DIrectors on the 23rd day of
February, 1994.
"RESOLVED, That any two officers of the Company have the authonty to make, execute and delIver a Power of Attorney constItutmg as Attorney(s)-
m-fact such persons, firms, or corporatIOns as may be selected from tIme to time
FURTHER RESOLVED, that the SIgnatures of such officers and the Seal of the Company may be affixed to any such Power of Attorney or any
certificate relatmg thereto by faCSImIle, and any such Power of Attorney or certIficate beanng such faCSImIle signatures or faCSImIle seal shall be valId
and bmdmg upon the Company; and any such powers so executed and certIfied by facsumle SIgnatures and facsunile seal shall be valid and bmdmg
upon the Company m the future WIth respect to any bond or undertakmg to which It IS attached"
IN WITNESS WHEREOF, the Evergreen NatIOnal IndemnIty Company has caused Its corporate seal to be affixed hereunto, and these presents to be
SIgned by ItS duly authonzed officers thIS 27th day of August, 2001.
EVERGREEN NATIONAL INDEMNITY COMPANY
ILwc;! rUd
Roswell P. EllIs, PreSIdent
~
Glenn D SouthWIck, Treasurer
Notary Public)
State of OhIO)
SS
On this 27th day of August, 2001, before the subscnber, a Notary for the State of OhIO, duly commISSIOned and qualIfied, personally came Roswell
P. EllIS and Glenn D. Southwick of the Evergreen NatIOnal Indemmty Company, to me personally known to be the mdlvlduals and officers descnbed
herem, and who executed the precedmg mstrument and acknowledged the executIOn of the same and bemg by me duly sworn, deposed and saId that they
are the officers of saId Company aforesaId, and that the seal affixed to the precedmg mstrument IS the Corporate Seal of saId Company, and the Said
Corporate Seal and signatures as officers were duly affixed and subscnbed to the said mstrument by the authonty and directIOn of said Corporation, and
that the resolution of said Company, referred to m the precedmg mstrument, IS now m force
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal at Columbus, OhIO, the day and year above wntten
~lli C' Du.f#
State of OhIO )
SS
Notary PublIc State of OhIO
My CommISSIOn expIres August 6, 2004
I, the underSIgned, Secretary of the Evergreen NatIOnal Indemmty Company, a stock corporatIOn of the State of OhIO, DO HEREBY CERTIFY
that the foregoing Power of Attorney remams m full force and has not been revoked; and furthermore that the Resolution of the Board of Directors, set
forth herem above, is now In force
SIgned and sealed In Columbus, Ohio thIS 13 th day of Oc tober 2005
c;;tr/p/~
John A. Marazza, Secretary
Any reproductIOn or faCSImIle of thIS form IS VOId and mvalId.
- '.
5. -, J 7--'1
RECE\VED
SFP 2 9 2005
pORfANGELESLEGALDEPAffilAENT FORM 5.5
. JSTRUCTION PERFORMANCE and PAYMENT BOND
Bond to the City of Port Angeles Bond #
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
850790
KNOW ALL MEN BY THESE PRESENTS: W9sh:ington In:.
That we. the undersigned. Waste Connections of ' as Principal. and Evergreen National
Indemni ty Company a corporation. organized and existing under the laws of the State
of' Ohio, . as a surety corporation. and qualified under the laws of the State of Washington to become
surety upon bonds of contractors with municipal corporations as surety. are jointly and severally held and
firmly bound to the City of Port Angeles in the penal sum of $ 8 762 70 . 00 ~hh'~'~h'rln'd:'/~'n':
~h'n'~hh':-:n'n'n'n'n'n'n'~hh'n'n'n': for the payment of which sum on demand we bind ourselves and our
successors, heirs, administrators or personal representatives, as the case may be.
This obligation is entered into pursuant to the statutes of the State of Washington and the ordinances of the
City of Port Angeles.
Dated at C/~ (fa IM-; (" CJv.--.+y ,Washington, this /6+-day of 00+0 '1 ~ , 20&
The conditions of the above obligation are such that:
Waste Connections of
WHEREAS, the City of Port Angeles has let or is about to let to the saidWashington, Inc.
the above bounded Principal, a certain Service Agreement. the said Agreement providing for Solid Waste.
Processina Facility DeveJonment and Manaaement Services (which Service Agreement is referred to .
herein and is made a part hereof as though attached hereto), and
WHEREAs, the said Principal has accepted, or is about to accept, the said Agreement, and undertake to
perform the work therein provided for in the manner and within the time set forth; now, therefore,
If the said Principal, Waste Connections of Washington, Inc. , shall faithfully perform all of
the provisions of said Agreement in the manner and within the time therein set forth, or within such
extensions of time as may be granted under said Agreement, and shall pay all laborers, mechanics,
subcontractors and materialmen, and all persons who shall supply said Principal or subcontractors with
provisions and supplies for the carrying on of said work, and shall ind~mnify and hold the City of Port
Angeles harmless from any damage or expense by reason of failure of performance as specified in said
Agreement or from defects appearing or developing in the material or workmanship provided or performed
under said Agreement within a period of two years after its acceptance thereof by the City of Port Angeles,
then and in that event, this obligation shall be void; but otherwise, it shall be and remain in full force and
effect.
Signed this 31st day of March
,2005.
B
Waste Connect'ons of Washington, Inc.
Principal
By ~
j1/ce IYeS,'d~IAT
Title
1900 Corporate Boulevard, Suite 400E
Boca Raton, Florida 33431
Agent Address
Karen LoConti-Diaz (800) 641-9222
Agent Contact and Phone Number
Ka .EGn P. Price, Attorney-In-Fact
T.t! '
i...9 .
6140' Parkland Boulevard, SUlte 300
Cleveland, Ohio 44124
Surety Address '
Kathleen Price
(800) 641-9222
Surety Contact and Phone Number
March 31 200~ 5
.._-~~-,
P-7
Waste Connections of Washington, Inc.
Legal Name of Proposer
EVERGREEN NATIONAL INDEMNITY COMPANY
COLUMBUS, OHIO
POWER OF ATTORNEY
PRINCIPAL Was te Connections of Washing ton, INc.
CONTRACT AMOUNT
EFFECTIVE DATE October 1, 700')
AMOUNT OF BOND $ 8,762,703. OO~'ddnb'd~
POWERNO 850790
KNOW ALL MEN BY THESE PRESENTS. That the Evergreen National Indemmty Company, a corporatIOn m the State of OhIO does hereby
nominate, constitute and appomt
j'~'n'n'~KATHLEEN P. PRICF;tntn'~'ntn'n'(
Its true and lawful Attorney(s)-In-Fact to make, execute, attest, seal and deliver for and on Its behalf, as Surety, and as Its act and deed, where reqUired,
any and all bonds, undertakmgs, recogmzances and wntten obligatIOns m the nature thereof, PROVIDED, however, that the obligatIOn of the Company
under this Power of Attorney shall not exceed
EIGHT MILLION SEVEN HUNDRED SIXTY TWO THOUSAND SEVEN HUNDRED THREE AND 00/100 DOLlARS
This Power of Attorney IS granted and IS Signed by facsimile pursuant to the followmg ResolutIOn adopted by ItS Board of Directors on the 23rd day of
February, 1994:
"RESOLVED, That any two officers of the Company have the authonty to make, execute and deliver a Power of Attorney constItutmg as Attorney(s)-
m- fact such persons, firms, or corporatIOns as may be selected from time to time
FURTHER RESOLVED, that the signatures of such officers and the Seal of the Company may be affixed to any such Power of Attorney or any
certificate relatmg thereto by faCSimile, and any such Power of Attorney or certificate bearmg such faCSimile signatures or faCSimile seal shall be valid
and bmdmg upon the Company, and any such powers so executed and certified by faCSimile signatures and faCSimile seal shall be valid and bmdmg
upon the Company m the future With respect to any bond or undertakmg to which It IS attached"
IN WITNESS WHEREOF, the Evergreen NatIOnal Indemmty Company has caused ItS corporate seal to be affixed hereunto, and these presents to be
Signed by ItS duly authonzed officers thiS 27th day of August, 2001
EVERGREEN NATIONAL INDEMNITY COMPANY
ILdV cUd
Roswell P ElliS, PreSident
~
Glenn D SouthWiCk, Treasurer
Notary Public)
State of OhIO)
SS.
On thiS 27th day of August, 2001, before the subscnber, a Notary for the State of OhIO, duly commissioned and qualified, personally came Roswell
P Ellis and Glenn D SouthWick of the Evergreen National Indemmty Company, to me personally known to be the mdlvlduals and officers descnbed
herem, and who executed the precedmg mstrument and acknowledged the executIOn of the same and bemg by me duly sworn, deposed and said that they
are the officers of said Company aforesaid, and that the seal affixed to the precedmg mstrument IS the'Corporate Seal of Said Company, and the Said
Corporate Seal and signatures as officers were duly affixed and subscnbed to the said mstrument by the authonty and directIOn of said CorporatIOn, and
that the resolutIOn of said Company, referred to m the precedmg mstrument, IS now m force
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my offiCial seal at Columbus, OhIO, the day and year above wntten
~LU C' Duf-fd-
State of OhIO )
SS
Notary Public State of OhIO
My CommissIOn expires August 6, 2004
I, the underSigned, Secretary of the Evergreen NatIOnal Indemmty Company, a stock corporation of the State of OhIO, DO HEREBY CERTIFY
that the foregomg Power of Attorney remams m full force and has not been revoked, and furthermore that the Resolution of the Board of Directors, set
forth herem above, IS now m force
Signed and sealed m Columbus, OhIO thiS _3is t~ day of March 2005
9/W~
John A. Marazza, Secretary
Any reproductIOn or faCSimile of this form IS VOId and mvalid
l' '..~',
EVERGREEN NATIONAL INDEMNITY COMPANY
EVERGREEN NATIONAL INDEMNITY COMPANY
Certificate
2004
The following financial information was excerpted from the Statutory Annual Statement filed by
Evergreen National Indemnity Company with the Ohio Department of Insurance on March 1, 2005
Direct Wntten Premium $ 30,624,973
Reinsurance Assumed (9,896,759)
Reinsurance Ceded - 19,329,001
Net Written Premium 1,399,213
ChanQe in Unearned (6,454,555)
Net Earned Premium 7,853,768
Losses & LAE Incurred 1,190,445
CommisSion Expense 3,445,438
Other Expenses 2,488,943
UnderwntinQ (Loss) 728,942
Investment Gain 1,182,626
Other Incomel(Expense) (39,973)
Income Before FIT I 1,871,595
Federal Income Tax (94,700)
Net Income $ 1,966,295
BALANCE SHEET
Assets
I nvested Assets $ 39,992,365
Aqents' Balances 1,721,439
Reinsurance Recoverable 1,979,195
Other Assets 4,320,624
Total Assets $ 48,013,623
Liabilities & Surplus
Unearned Premium Reserve $ 2,568,178
Loss & LAE Reserves 3,391,917
Other Liabilities 12,001,090
Total Liabilities 17,961,185
Surplus 30,052,438
Total Liabilities and Surplus $ 48,013,623
STATEMENT OF INCOME
I hereby certify that the above information IS that contained In the Statutory Annual Statement
filed by Evergreen National Indemnity Company with the Ohio Department of Insurance for the year
:jzndin December31,2004 ~--~
/;~"~~ INO~...
~~ -......,.~
WC/.d:?d ! i<p!,~~\ \
Roswell P. ElliS, President & Secretary \ ~ SE~ ~ ;
\ ~,-- Jl:1
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,,~. .. OH\O~/
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2800 Corporate Exchange Dnve, SUite 130 (). Columbus,Ohlo 43231 ~ 614.8391800 Office 0 614.839.1810 Fax <> www.evergreen national com
. .
S. F. No. 190
DUPLICATE
N? 715
Certificate of Authority
STATE OF WASmNGTON
INSURANCE COMMISSIONER
OLYMPIA
THIS IS TO CERTIFY, That, pursuant to the Insurance Code of the State of Washington,
EVERGREEN NATIONAL INDEMNITY COMPANY
of._._..._...~~.~..~.~?.~.~.~. _._...g~.~..~................... _.. . .......... .... . ....... .....--.-... .. .... .. .......... ........ ............................ -) organized under the
Laws of.................. __....... ~~.~.~.. ......... ..........._.. _ ._ ...... .._..... ....... ._. _______. "'''''') having presented satisfactory evidence
of compliance) this Certificate of Authority is hereby granted, authorizing the company to
transact the folLowing dasses of insurance:
Property
Marine & Transportation
Vehicle
General Casualty
Surety
subject to aU provisions of this Certificate as su.ch classes are now or may hereafteT be defined
in the Insurance Laws of the State of Washington.
THIS CERTIFICATE is expressly conditioned upon the holder hereof now and hereafter
being in fuU compliance with aU) and not in vioLation of any, of the applicable laws and lawful
requirements made under authority of the laws of the State of Washington as long as such laws
or requirements are in effect and applicable, and as such laws and requirements now aTe, 0'1'
may hereafter be changed or amended.
-~~
.... - ~ -
IN W!TNESS WHEREOF, effective as of the....._....!?.!.~.day
of...._..~~!...._..................................., 19...~.~..., I have hereunto set my hand
and caused my official seal to be affixed this.... .........~.~9........day of
.............. ~.~. ~..~......._____....._.........., 19 ....~.~...
'-
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Deborah Senn Insurance Commisaioner
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By..........................................................................................................................
CMef Deputy
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~ ~ R:r i;F:I:ti~iE:: t);F'i N 5 U RAN t E' '~~R~~~~~~~;~;~~~
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
NO RIGHTS UPON THE CERTIFICATE HOLDER OTHER THAN THOSE PROVIDED IN THE
POLICY, THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE
AFFORDED BY THE POLICIES DESCRIBED HEREIN
PRODUCER
Marsh USA Inc \
1000 Mam Street, SUite 3000
Houston, TX 77002
COMPANIES AFFORDING COVERAGE
015079-CAS-PLL2-04/05
COMPANY
A ACE AMERICAN INSURANCE COMPANY
WASTE CONNECTIONS OF WASHINGTON
WASTE CONNECTIONS, INC
35 IRON POINT CIRCLE, SUITE 200
FOLSOM, CA 95630
COMPANY
B NATIONAL UNION FIRE INSURANCE COMPANY
INSURED
COMPANY
C AMERICAN INTERNATIONAL SPECIALTY LINES INS CO
COMPANY
D
'::seV,ERAGES' ,""u," _ _ __ ", lli;{;(;ertjf~teJ~Ljp.?r~~a_~Ji.,~DQ: E=1Qiace~','~8~d~lejnOu_~y~!ss_~E!dcertjfiQ9J!'1:.0ilh~:Pollgy Re~19,d hotEl.9.b~19,\Y,~: ._:~'_.,,, . ~". _
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE DESCRIBED HEREIN HAVE BEEN ISSUED TO THE INSURED NAMED HEREIN FOR THE POLICY PERIOD INDICATED
NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THE CERTIFICATE MAY BE ISSUED OR MAY
PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, CONDITIONS AND EXCLUSIONS OF SUCH POLICIES AGGREGATE
LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS
LTR DATE (MM/DD/YY) DATE (MMIDD/YY)
A GENERAL LIABILITY HDOG20299873 08101/04 08/01/05 GENERAL AGGREGATE $ 2,000,000
I---
X COMMERCIAL GENERAL LIABILITY PRODUCTS - COMP/OP AGG $ 1,000,000
~ ~ CLAIMS MADE [8] OCCUR PERSONAL & AOV INJURY $ 1,000,000
I--- OWNER'S & CONTRACTOR'S PROT EACH OCCURRENCE $ 1,000,000
FIRE DAMAGE (Anyone fire) $ 1,000,000
MED EXP (Any ane aerson) $ 5,000
A AUTOMOBILE LIABILITY ISAH07671350 08/01/04 08/01/05 $ 5,000,000
- COMBINED SINGLE LIMIT
~ ANY AUTO
- ALL OWNED AUTOS BODILY INJURY $
SCHEDULED AUTOS (Per person)
-
- HIRE,D AUTOS , ~ .,.J BODILY INJURY $
NON-OWNEb AUTOS (Per aCCident)
-
, -+- PROPERTY DAMAGE $
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
- ,t~~;" :;,,; '~, ',." r;0
_ ANY AUTO OTHER THAN AUTO ONLY
EACH ACCIDENT $
-
AGGREGATE $
EXCESS LIABILITY EACH OCCURRENCE $ 5,000,000
B ~ UMBRELLA FORM 2978173 08/01/04 08/01/05 AGGREGATE $ 5,000,000
OTHER THAN UMBRELLA FORM $
A WORKERS COMPENSATIDN AND WLRC43496748 (AOS) 08/01/04 08/01/05 I IIvC STATU- I I OJ~;'~;~;S,'",:", ,:,;./~:~
EMPLOYERS' LIABILITY X TORY LIMITS
EL EACH ACCIDENT $ 1,000,000
THE PROPRIETOR! RINCL EL DISEASE-POLICY LIMIT $ 1,000,000
PARTNERS/EXECUTIVE $
OFFICERS ARE EXCL EL DISEASE-EACH EMPLOYEE 1,000,000
OTHER
C POLLUTION LEGAL PLS 4177838 11/19/02 11/19/05 EACH OCCURANCE 10,000,000
LIABILITY AGGREGATE 20,000,000
DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLES/SPECIAL ITEMS
City of Port Angeles, Clallam County and the Washmgton State Department of Natural Resources are Included as an Additional Insured (except as respects
all coverage afforded by the Workers Compensation Policy) and IS granted a waiver of subrogation as reqUired by written contract, but only for the liability
ansmg out of the operations of the Named Insured
:A~~I,!~'-S~TE~H0G[),I;~:;"",; "=~ "::',Y':","'.'01.~,:?".;,,:,;;:,:,~,.:,' , ,'>.F'-j'~,?1::'1':, ,-
IN( ;;,~ "",.t.._"li"><;,..#,~;t""":;nw ~ T"Th,&.%J~A,JJ\\..Ah.'~H~)t, _ .. _~"M'"'.'"
t.,.
h, ',. ~~(~:;1:"\17".,;<:c:i<-:'~,i';;I.j~f. '.1;:;'i,'j"i;:'j~.;{t;rf';{
,.-;- ;:
,- . .":;::?;~;,t}~~I;(~;' , " ,:;,.'/iZ\:- -'?; ~ -,
, ,',:.I';,JJ~"L>;"; ,
';'.~:;~~' $'"~;>''' ;') .}. ~ 'Jf,\;m,;; Ii, .
SHOULD ANY OF THE POLICIES DESCRIBED HEREIN BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF
THE INSURER AFFORDING COVERAGE WILL ENDEAVOR TO MAIL -AS DAYS WRITTEN NOTICE TO THE
CERTIFICATE HOLDER NAMED HEREIN, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR
LIABILITY OF ANY KIND UPON THE INSURER AFFORDING COVERAGE, ITS AGENTS OR REPRESENTATIVES, OR THE
ISSUER OF THIS CERTIFICATE
MARSH USA INC
BY: Barry N. Smith ~~
;y~;;';-; \~~~'J< 'j,';:';,j:i:1::~' \,K>;~;\/' ". "~' -VALlO-AS'OF:"\05/T3765
_,:\~:,!z;;r., ", .',' . "',,' ;/(~(:"Cg'~,:" " ',' [i;:;:';r';J;:~"'.'~:;;ri-:" ,';,
.h
'"y\'1'
City of Port Angeles
Attn Bill Bloor
321 East 5th Street
Port Angeles, WA 98362
',""
'II- ... ; .. ...
PRODUCER
Marsh USA Inc
1000 Main Street, SUite 3000
Houston, TX 77002
_h. -~~LC:}~~~T~; ~- _:~;_~~t7~?::~'t~>~:-'*~t;) DATE (MM/DDNY)
.~ ,::H9~-0006~~~~?~~93" . ,Q 5 / 13/05
COMPANIES AFFORDING COVERAGE
f5;':~ (-"~~:;f~?,J^~tt~1~ -~~- _!>\;;~'~~~N:'" .-'_;~~':.~:)r, ~ ~ _::Y"":! ~V''+~~,- <-^> ;:
~AD8;1W'II;e;~,~1~'vtN F Q:RrMA TH~jN"
<"h~,,_ __~"'-~_~- ~->~$,,;;t-"{/~"i;r<" t,t3>.{'i'",:;b>l:.. _ :-_ ~~<_\;;:~"::. _- ".,t",~~<.""_,,;..
COMPANY
E
COMPANY
F
015079-CAS-PLL2-04/05
INSURED
WASTE CONNECTIONS OF WASHINGTON
WASTE CONNECTIONS, INC
35 IRON POINT CIRCLE, SUITE 200
FOLSOM, CA 95630
COMPANY
G
COMPANY
H
~?fE~;;}~
The Insurance afforded to the Additional Insured as described in this Certificate of Insurance for work performed by the Named Insured, IS pnmary and
non-contributory to any similar coverage maintained by the AddJtlonallnsured
The Insurance limits as Indicated herein do satisfy the requirements of the Agreement between the City of Port Angeles and Waste COlnnectlons of
Washington, Inc dated Apnl 5, 2005 as specified In Section 5 1 (d) II of the Agreement which requires limits of $3,000,000 per occurrence and $6,000,000
aggregate.
'~"'ER"'I""ICA"'E HOLDE' R" , .~;r:g""~'d"'h""'" ,.,./c' ,jP""""" '. ,':";f;&Jl',",,"'c"T'" " ' ...'
~~'i' ill r~ r ~~( ',-< 'tf <1f~': -~, .::~~,; T.:}iI'~~$'}it~:f:"~'t ..' < ~~ <l~1:?lf^l'l-,~~~~ ":~ T -~:.~ft:(~""&~:A:. :
~.f~1~_",'>W..J^'t<!<\"C ~ d.~" ~'"""'~~ ~ ~ ~ ~ .~~."""'~'W"'^",~...l__ ~ _ ..:;t>~r1.~.!i!O...< _CIJ ^_ ~ r~_.._~_d ~""~~....... -~
City of Port Angeles
Attn Bill Bloor
321 East 5th Street
Port Angeles, WA 98362
, i 0 ~ ~
",
MARSH USA INC BY
Barry N. Smith
~~
T' WW'7~"<'-~r''fl,,'?1j''
P,ag!,!i1
LEGAL
DEPARTMENT
William E. Bloor
City Attorney
[4531 ]
Dennis Dickson
Sr. Assistant City
Attorney
[4532]
Heidi L. Greenwood
Assistant City Attorney
[4562]
Candace Kathol
Legal Assistant
[4536]
Diana Lusby
Legal Administrative
Assistant
[4530]
Jeanie DeFrang
Legal Administrative
Assistant
[4530]
Randi Felton
Legal Records
Specialist
[4576]
5. -, 17
120RT ANGELES
WAS H I N G TON, U. S. A.
DATE: v August 25,2008
TO:
Becky Upton, City Clerk
FROM:
William E. Bloor, City Attorney
RE:
Waste Connections - Certificate of Liability Insurance
Attached for safekeeping is the original Certificate of Liability Insurance from
Aon Risk Insurance Services West, Inc. for Waste Connections, Inc. dated
07/30/2008.
WilI~r,
City Attorney
Attachment
cc: Glenn A. Cutler, Director of Public Works & Utilities
Bob Coons, Risk Manager
WEB\dl
G ILEGALIMEMOSIMEMOS 20081Waste Conneclions Insurance 082508 Upton wpd
~_jfcoRiJ~~"__RTIFi~A~ ' -..-..,* ,~\,p,,~ DATE (MM/DD/YVYV) i
, ,,' ,'}" ,~0?~~/2008
PRODUCER TIDS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY
Aon Risk Insurance services west, Inc.
fka Aon Risk services, Inc. of oregon AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. TIDS
1211 s.w. 5th Avenue CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE
suite 600 COVERAGE AFFORDED BY THE POLICIES BELOW.
portland OR 97204-3799 USA
PHONE.(503) 224-9700 FAX- (503) 295-0923 INSURERS AFFORDING COVERAGE NAIC#
INSURED RECEIVED INSURER A ACE American Insurance company 22667
waste Connections, Inc. INSURER B Indemnity Insurance Co of North America 43575
35 Iron point Circle
SUlte 200 AUG 1 1 2008 INSURER C
Folsom CA 95630-8589 USA
INSURER D
PORT ANGELES LEGAL OEPARTME INSURER E
r'CGVER:A:GESI!"":,, f,,,f',. ' v"'"", ':~.J' "~'J)'\~'-'-"'''' ; ~ " ,'>"'''"' ' 'ttLPBP ' '~N~->if%Y-"v ... '-, '- ~ SIR-Ma I"~-APP Iy
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING
ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAYBE ISSUED OR MAY
PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRffiED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES
AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS LIMITS SHOWN ARE AS REQUESTED
INSR ADD'l POLICY EFFECTIVE POLICY EXPIRATION
LTR INSRD TYPE OF INSURAI\'CE POLICY NUMBER DATE(MM\DDlYY) DATE(MMIDDlYY) LIMITS
A ~~"~= HDOG23744065 08/01/08 08/01/09 EACH OCCURRENCE $1,000,000
X COMMERCIAL GENERAL LIABILITY DAMAGE TO RENTED $5,000
CLAIMS MADE ~ OCCUR PREMISES (Ea occurence)
MED EXP (Anyone person) Excluded
PERSONAL & ADV INJURY $1,000,000
D GENERAL AGGREGATE $2,000,000
GEN'L AGGREGATE LIMIT APPLIES PER
PRODUCTS - COMP/OP AGG $1,000,000
~ POLICY D PRO- 0 LOC
JECT
A AUTOMOBILE LIABILITY ISAH08246403 08/01/08 08/01/09 COMBINED SINGLE LIMIT
'X ANY AUTO (Ea aCCIdent) $5,000,000
f-- ALL OWNED AUTOS
I- BODILY INJURY
SCHEDULED AUTOS ( Per person)
f-- HIRED AUTOS
BODILY INJURY
f-- NON OWNED AUTOS (Per aCCIdent)
I-
PROPERTY DAMAGE
- (Per accIdent)
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT
B ANY AUTO OTHER THAN EA ACC
AUTO ONLY
AGG
EXCESS /UMBRELLA LIABILITY EACH OCCURRENCE
D OCCUR D CLAIMS MADE AGGREGATE
BDEDUCTIBLE
RETENTION
B WLRC44344920 08/01/08 X IwC STATU-I I?TH-
WORKERS COMPENSATION AND All Other States TnRY LIMITS ER
EMPLOYERS' LIABILITY E L EACH ACCIDENT $1,000,000
A WLRC44344968 08/01/08 08/01/09
\", PROPRJETOR/PARTNER/EXECUTIVE AZ & CA only
UI'F1CERlMEMBER EXCLUDED? E L DlSEASE-EA EMPLOYEE $1,000,000
If yes, descnbe under SPECIAL PROVISIONS E L DISEASE-POLICY LIMIT $1,000,000
below
A WCUC44344889 08/01/08 EL Each Acel dent $1,000,000 -
OTHER WI V~I '"
WA EL D1 sease - polley $1,000,000
Excess we
EL Dl sease - Ea Emp 1 $1,000,000
DESCRJPTION OF OPERATIONS/LOCATIONSNEillCLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS
Named Insured Includes: waste connections of WA. -
The Clty of port Anfeles is included as an Additional Insured with respect to the General and Automobile Liability
policies. waiver 0 subrogatlon applles for General Liability, Auto Llability, and workers' Compensation. -
CERTIFICATE HOtDER5.t~li;::-LI,=;;;,;:;k~,~- :'801;. ;;'P6,;mGELLATI<), k ' I't, ..;" ",;' ,:::,;_~ '0;\@.~ ;;li"'; ''t\'~:'
city of Port Angeles SHOULD ANY OF THE ABOVE DESCRJBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
Attn: wllliam Bloor, Clty Attorney DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAlL
P.O. Box 1150 45 DAYS WRJTTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT
port Angeles WA 98362-0217 USA BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY
OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATNES
AUTHORJZED REPRESENTATIVE dn ~f~,..... g.-.... ~k
, lID';' ~OOifOlnW%II&> ,'c wp~ \~,,~ // ~A "~,'_:',J,Q. ia ArORD' "" , RATION 1988
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,
WAS H I N G TON, 'U,. S. A.
CITY ATTORNEY
May 16, 2005
Edward L. Westmoreland,
Division Vice President
VI aste Connections Inc. ,
,.,,. ^, Northern Washingtoil Division
P.O. Box 399
Puyallup~ WA 98371-0158
,[~; -', -)'~.:,,:<-;
, ~~ " ' "~~~I ;-
J "L. ~
\<>~. ,I 4, , '-
~t ,,", '.
. .......
, .- ''''
~ ~ .:.'.:-,;.,.. , \
Re: Construction Perfo~anc~ 'and Payment Bond
-, Dear Mr. Westmorel1and:
'_5.7 t1.4,
c,:-r
~"., ,;t"",,,,,,.y)/,:t"~~'_:~"';'t/:':J','t ~ h'
Enclosed is the original.Constructiol1 Performance and PaymeritBond, Bond Number 850790:
Pat Shea and I have disctis~ed this subject, and he_probablyhas'.al~e(ldy contacted you. In,.
short, the City camiot accepUhis post-dated bond-as presented. Iunqerstand ~hat 'it will be
re-issu~d'on or near October 1,2005. -, "-' '
T~ank you for your continued courtesy and co?p~ration_
. William,E. Bloor
City Attorney
WEB:jd
cc: Glenn Cutler
Larry Dunbar
Bob Coons
Becky Upton
G,\LEGAL\LETIERS 2005\Westrnoreland5-16-05.1tr wpd
EAST FI FTH ~TREET e P O. BOX 1 150 e PORT ANGELES, 'WA98362-0217
PHONE 360-417-4530 e FAX' 360-417-4529 eTTY 360-417-4645
E-MAIL attorney@cltyofpa us
CITY ATTORNEY
William E. Bloor
City Attorney
[4531]
Dennis Dickson
Sf. Assistant City
Attorney
[4532]
Candace Kathol
Legal Assistant
[4536]
DIana Lusby
Legal Administrative
Assistant
[4530]
Jeanie DeFrang
Legal Administrative
AssIstant
[4530]
Teresa L. Pierce
Legal Records
Specialist
[4576]
5.7/7
~ORT ANGELES
WAS H I N G TON, U. S. A.
TO:
Becky Upton, City Clerk
FROM:
William E. Bloor, City Attorney
DATE:
May 16, 2005
RE:
Solid Waste Performance and Payment Bond
Attached please find the original Solid Waste Performance and Payment Bond for
filing. fW
William E. Bloor
City Attorney
WEB:jd
cc: Bob Coons
Larry Dunbar
G ILEGALIMEMOS 2005\Upton5-16-05 wpd
~.
-./
,(
CITY OF PORT ANGELES
SOLID WASTE PROCESSING FACILITY
DEVELOPMENT AND MANAGEMENT SERVICES
FORM 5.6
PERFORMANCE and PAYMENT BOND
Bond to the City of Port Angeles Bond # 554860
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, W3ste C'onnEctigns of W3sh:i.ngtaJ Ire as Principal, and Evergreen
National Indemnity Company a corporation, organized and existing under the
laws of the State of Ohio, . as a surety corporation, and qualified under the laws of the State
of Washington to become surety upon bonds of contractors with municipal corporations as surety.
$are1j01in6tlY a6n4d2seOveO~!!~_~~!9.,~~~,!.!!.~,~~*29.~!}~,.!~.,!~~.~,!~ of Por; A"thgeles in thet Pfenha~ Shum of
, 7 , . ,.. ,.. ,,, ,.. ,.. ,.. ,,, " '" " ,,, ,.. ,.. ,,, ,,, ,.. '\ ,,, ,,, ,.. ,,, '" ,.. ,,, ,,, ,.. .or e paymen 0 W Ie sum on
demand we bind ourselves and our successors, heirs, administrators or personal representatives,
. as the case may be.
This obligation is entered into pursuant to the statutes of the State of Washington and the
ordinances of the City of Port Angeles.
Dated at CIt(,UCL~ C&~1-v, Washington, this eday of /1Jl.a L/ ,200j--.
I I /
The conditions of the above obligation are such that:
WHEREAS, the City of Port Angeles has let or is about to let to the said Was te Connec tions
of Washin~ ton, Inc. the above bounded
Principal, a certain Service Agreement, the said Agreement providing for Solid Waste Processina
Facility Development and Manaaement Services (which Service Agreement is referred to
herein and is made a part hereof as though attached hereto), and
WHEREAS, the said Principal has accepted, or is about to accept, the said Agreement, and
undertake to perform the work therein provided for in the manner and within the time set forth; now,
therefore,
If the said Principal,Was te Connee tions of Washington, Inc. , shall faithfully
perform all of the provisions of said Agreement in the manner and within the time therein set forth,
or within such extensions of time as may be granted under said Agreement, and shall pay all
laborers, mechanics, subcontractors and materialmen, and all persons who shall supply said
Principal or subcontractors with provisions and supplies for the carrying on of said work, and shall
indemnify and hold the City of Port Angeles harmless from any damage or expense by reason of
failure of performance as specified in Section 7 of said Agreement or from defects appearing or
developing in the services provided or performed under said Agreement, then and in that event,
this obligation shall be void; but otherwise, it shall be and remain in full force and effect.
~':SUBJEcr 'IHE ATTACHED ADDENDlJM;':
Signed this31s t day of March ,20~
Waste Connect ons of Washin ton9 Inc.
Principal
, leen P. \iice, Attorney-In-Fact
Title'
6340 Parkland Boulevard, Suite 300
lie~aJ~Dd, Ohio 44124
Surety Address
Ka th"leen Price
(800) 641-9222
Surety Contact and Phone Number
By
V,.c~ fp-es,'JelA. r
Title
1900 Corporate Boulevard,
RorR RRton, Florida 33431
Agent Address
~J:!
Suite 400E
March 31 ,20045 P-8
Karen LoConti-Diaz (800) 641-9222
Agent Contact and Phone Number
Waste Connections of Washington, Inc.
Legal Name of Proposer
J'
ADDENDUM
As stated in the Contractual Provisions Section 5.4 Performance Bonds and Financial
Guarantee: It is hereby understood and agreed that this bond may not be canceled by the
surety nor any intention not to renew be exercised by the surety until after thirty (30) days
written notice to the City Attorney of such intention to cancel or not to renew.
EVERGREEN NATIONAL INDEMNITY COMPANY
COLUMBUS, OHIO
POWER OF ATTORNEY
PRINCIPAL Waste Connections of Washington, Inc.
CONTRACT AMOUNT
EFFECTIVE DATE
May 1, 2005
AMOUNT OF BOND $ 1,167, 642.00~'dddd~
POWER NO 5 5 4 8 6 0
KNOW ALL MEN BY THESE PRESENTS That the Evergreen NatIOnal Indemmty Company, a corporatIOn m the State of OhIO does hereby
nommate, constitute and appomt. Kathy J Goe, Mana Jackson, Kathleen P Pnce, Patncla A Temple and NIcole Skedellts true and lawful Attorney(s)-
In-Fact to make, execute, attest, seal and delIver for and on Its behalf, as Surety, and as Its act and deed, where reqUIred, any and all bonds, undertakmgs,
recogmzances and wntten oblIgatIOns m the nature thereof, PROVIDED, however, that the oblIgation of the Company under thIS Power of Attorney shall
not exceed One MIllIon FIve Hundred Thousand Dollars ($1,500,000.00)
ThIS Power of Attorney IS granted and IS SIgned by faCSImIle pursuant to the followmg ResolutIOn adopted by ItS Board of DIrectors on the 23rd day of
February, 1994
"RESOLVED, That any two officers of the Company have the authonty to make, execute and dehver a Power of Attorney constItutmg as Attorney(s)-
m- fact such persons, firms, or corporatIOns as may be selected from time to time
FURTHER RESOLVED, that the sIgnatures of such officers and the Seal of the Company may be affixed to any such Power of Attorney or any
certIficate relatmg thereto by faCSImIle, and any such Power of Attorney or certificate beanng such faCSImIle sIgnatures or faCSImIle seal shall be valId
and bmdmg upon the Company, and any such powers so executed and certIfied by facslmlle sIgnatures and faCSImIle seal shall be vahd and bmdmg
upon the Company m the future WIth respect to any bond or undertakmg to whIch It IS attached"
IN WITNESS WHEREOF, the Evergreen NatIOnal Indemmty Company has caused ItS corporate seal to be affixed hereunto, and these presents to be
SIgned by ItS duly authonzed officers thIS 27th day of August, 2001
~-~
.()"",\..'NO~4Jl
~~!;)\\;;A~-i \
! $ (J~.....~ )~\
i ~ SEAL ~ i
\\~~:Jfj
'It-OHIO;/'
'-..-...--
EVERGREEN NATIONAL INDEMNITY COMPANY
ildVcitd
Roswell P EllIs, PreSIdent
~
Glenn D SouthWICk, Treasurer
Notary PublIc)
State of OhIO)
SS
On thIS 27th day of August, 2001, before the subscnber, a Notary for the State of OhIO, duly commIssIOned and qualIfied, personally came Roswell
P EllIs and Glenn D SouthWIck of the Evergreen National Indemmty Company, to me personally known to be the mdlvlduals and officers descnbed
herem, and who executed the precedmg mstrument and acknowledged the executIOn of the same and bemg by me duly sworn, deposed and SaId that they
are the officers of SaId Company aforesaId, and that the seal affixed to the precedmg mstrument IS the Corporate Seal of saId Company, and the SaId
Corporate Seal and sIgnatures as officers were duly affixed and subscnbed to the saId mstrument by the authonty and dIrectIOn of said CorporatIOn, and
that the resolutIOn of SaId Company, referred to m the precedmg mstrument, IS now m force
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my offiCIal seal at Columbus, OhIO, the day and year above wntten
~LU C' Duftct
Notary PublIc State of OhIO
My CommIssIOn expIres August 6, 2004
State of OhIO )
SS
I, the underSIgned, Secretary of the Evergreen NatIOnal Indemmty Company, a stock corporatIOn of the State of OhIO, DO HEREBY CERTIFY
that the foregomg Power of Attorney remams m full force and has not been revoked, and furthermore that the ResolutIOn of the Board of DIrectors, set
forth herem above, IS now m force
SIgned and sealed m Columbus, OhIO thIS _ 31~,J~___ day of March 2005
~-'~'
,n""'\.. 'Nt:.~~. ~
~... -~ ""1<
! (,<;)l?-l'OAA~~ \
"" .......... \ (l i
,,-ILl '"I:' -"T ,I ~!
I ~ S~i~";
~~ '9Sg .fl
.,~ - ~ ....
It- OHIO Y
-
9/);p~
John A Marazza, Secretary
Any reproductIOn or faCSImIle of thIs form IS VOId and mvahd
....
EVERGREEN NATIONAL INDEMNITY COMPANY
EVERGREEN NATIONAL INDEMNITY COMPANY
Certificate
2004
The following financial information was excerpted from the Statutory Annual Statement filed by
Evergreen National Indemnity Company with the Ohio Department of Insurance on March 1, 2005
Direct Wntten Premium $ 30,624,973
Reinsurance Assumed (9,896,759)
Reinsurance Ceded 19,329,001
Net Written Premium 1,399,213
Chanae In Unearned (6,454,555)
Net Earned Premium 7,853,768
Losses & LAE incurred 1,190,445
CommisSion Expense 3,445,438
Other Exoenses 2,488,943
Underwntlna (Loss) 728,942
Investment Gam 1,182,626
Other Income/(Exoense) (39,973)
Income Before FIT 1,871,595
Federal Income Tax (94,700)
Net Income $ 1,966,295
BALANCE SHEET
Assets
Invested Assets $ 39,992,365
Aaents' Balances 1,721,439
Reinsurance Recoverable 1,979,195
Other Assets 4,320,624
Total Assets $ 48,013,623
Liabilities & Surplus
Unearned Premium Reserve $ 2,568,178
Loss & LAE Reserves 3,391,917
Other Liabilities 12,001,090
Total Liabilities 17,961,185
Surplus 30,052,438
Total Liabilities and Surplus $ 48,013,623
STATEMENT OF INCOME
I hereby certify that the above information IS that contained In the Statutory Annual Statement
filed by Evergreen National Indemnity Company With the Ohio Department of Insurance for the year
~ndln December31,2004 ~--~~
/ _t'\",,\.INO~i_
/./,'t" .... ..,.~
U/-I ~d f l..~~~~ \
Roswell P. Ellis, President & Secretary ~ ~ S"ll'~ ~ J
\ \ I~ .);1
\\~ 79~g. ~
,,~ *OH\O'i
.~..........,...."..
2800 Corporate Exchange Dnve, Suite 130 0 Columbus, Ohio 432310614.8391800 Office 0 614.839.1810 Fax <> www.evergreen-natlonal com
S. F. No. 190
DUPLICATE
N? 715
Certificate of Authority
STATE OF WASmNGTON
INSURANCE COMMISSIONER
OLYMPIA
THIS IS TO CERTIFY, That, pUl"suant to the Insurance Code of the State of Washington,
EVERGREEN NATIONAL INDEMNITY COMPANY
of.........._. .~~.~..~~?~.~..~.._......g..~..~.~........_.._......._. ....m.um ................... __u... .. u............muuuu .__um......................, organized under the
laws of.............................g~ ~.?. .............. .............. u.....u....__mmu..u__u... .._____n... ...., having presented satisfactory evidence
of compliance, this Certificate of Authority is hereby granted, authorizing the company to
transact the following classes of insurance:
Property
Marine & Transportation
Vehicle
General Casualty
Surety
subject to all provisions of this Certificate as such classes are now or may hereafter be defined
in the Insurance Laws of the State of Washington.
THIS CERTIFICATE is expressly conditioned upon the holder hereof now and hereafter
being in full compliance with all, and not in violation of any, of the applicable laws and lawful
requirements made under authority of the laws of the State of Washington as long as such laws
or requirements are in effect and applicable, and as such laws and requirements now aTe, 0'1'
may hereafter be changed or amended.
._~~.
IN WITNESS WHEREOF, effective as of the........J?.!~..day
of....._..~~r...._. ......... ......................., 19...?.~..., I have hereunto set my hand
and caused my official seal to be atJixed this..............?_~~.......day of
....._...._.~.~~_~.................._.........., 19....~~...
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Deborah Senn Insurance Commisai01ler
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By...................................................................... ....................................................
CMef Depufl/
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ColumbIa Resource Company
~ 1. ...
Rate Schedule
Effective Janu~ry.1, 2003
West Van Materials Recovery Center
6601 NW Old Lower River Road
(360) 737-1727
Househ'old
Hazardous
Monday-Friday 6:00 a.m. to 6:00 p.m.
Saturday 8:00 a.m. to 4:00 p.m. .
The rates and hours established at the West Van Materials
Recovery Center (West Van) are governed by contract
between Clark County and Columbia Resource Company
Waste
..... ~ ~
Solid Waste Disposal Rates
Transaction Fee (per trip) , $1'0.00
The Transaction Fee above will be charged in
addition to the following Disposal Rates:
Rate per Ton $69.77
Rate per Cubic Yard (if applicable) $ 8.72
360 - 695 - 4858
Special handling fees will apply to the following:
Refrigerator, Freezer or Air Conditioner $15.00 ,
Car Tire $ 2.30*.
Car Tire with Rim $ 4.60*
Truck Tire $ 9.20*
Truck Tire with Rim $18.40*
*A Transaction Fee will not be charged on the FIRST FOUR
TIRES brought In separately A $5 00 minimum applies.
As required by Washington State, a 3.6% State GRT tax will be
charged on el'ery disposal transaction at West Van.
Special Rates (per ton):
(No Transaction Fee will be charged)
100% Yard Debris
100% Wood
$48.00
$48.00
Recycling Rebate
Weight basIs customers will receive a $2 00 recyclmg rebate
when dellVermg 30 gallons or more of recyclables that are
separated, sorted and Identifiable m loads of mixed waste
Please note: ThiS rebate will be applied to your total solid waste
disposal charge, but will not reduce [he total transaction to less
than the $1000 solid waste transaction fee
(OVER)
@PrInted on Recycled Paper
~~~~,~~
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Col,!mbia Resource Company
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U~i.>ecause hazardous waste can be
1'\, :;/'harmful to you and the envi-
ronment, it is important that it
be dispose~ of properly. Columbia
Resource Company and Burlington
Environmental, Inc. offer three sites
in Clark County where public cus-
tomers may drop off their household
hazardous wast~ f:ee of charge.
... -...
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Columbia Resource Company
'~l.~
Rate Schedule
Effect!ve January 1, 2003
Central Transfer & Recycling Center
. 11034 NE 117th Avenue
(360) 256-8482
Monday-Friday 6:00-a.m. to 6:00 p.m.
Saturday-Sunday 8:00 a.m. to 4:00 p.m.
The rates and hours established at the Central Transfer &
Recycling Center (CTRC) are governed by contract
between Clark County and Columbia Resource Company
Central Transfer
and 'Recycling Center
11034 NE 11 7th Avenue
(360) 256-8482 '
Saturday-Sunday 8:00 a.m. to 4:00 p.m.
West Van Materials
Recovery Center
6601 NW Old Lower River Road
(360) 737-1727
Friday & Saturday 8:00 a.m. to 4:00 r.m.
. Solid Waste Disposal Rates
Transaction Fee (per trip) $10.00
The Transaction Fee above will be charged in
addition to the following Disposal Rates:
Rate per Ton $69.77
Rate per Cubic Yard (if applicable) $ 8.72
. CENTIlAllAANS~[A'
RECVCL'''GCENTtA
Special handling fees will apply to the following:
Refrigerator, Freezer or Air Conditioner $15.00'
Car Tire $ 2.30*
Car Tire with Rim $ 4.60*
. Truck Tire $ 9.20*
Truck Tire with Rim $18.40*
*A Transaction Fee will not be charged on the FIRST FOUR
TIRES brought In separately A $5 00 minimum applies
As required by Washington State, a 3.6% State GRT tax will be
charged on every disposal transaction at CTRC.
N
A
Burlington Environmental Inc.
625 S. 32nd
(360) 835-8594
First Tuesday of the month
10:30 a.m. to 3 p.m.
Special Rates (per ton):
(No Transaction Fee WIll be.charged)
100% Yard Debris
100% Wood
100% Sheetrock (Monday - Friday)
** All other times accepted as solid waste
Recycling Rebate
WeIght baSIS customers will receIve a $2 00 recycling rebate
when deltverln"g 30 gallons or more of recyclables that are
separated, sorted and IdentIfIable In loads of mIxed waste,
Please note: ThIS rebate WIll be applIed to your total soltd waste
dIsposal charge, but WIll not reduce the total transactIon to less
than the $10.00 solId waste transaction fee.
(OVER)
* Printed on Recycled Paper
$55.00
$55.00
$60.00**
Central Transfer and Recycling Center
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WASTE CONNECTIONS INC.
COli/leet wltl] the Future
9411 NE 94th Ave.
Vancouver, WA 98662
pqmea on
POq conSUMer ~'OYi;;'
lec)Cled pa~'er S I\.
HERE TO C Ll FOR
ORE INFO MAllON:
curbside Recycling
\\Taste Connections Inc. - 892-5370
Household Hazardous Vlaste Drop Off
/pJJ~rp /"/^ 7'~Fy?A.j .
l~ .:[u_~~ C.i (..!l~vdA,
Test
Jiai Recovery Center
,~ R..--. '1'1 II ~ "'V\ 77.7 1""'(2""'(
L.. c a.H,. - '-i V.llL 'L) - .
r RIver Rd. j Vancouver
Yard Debris Recycling
\/Vaste IVlanagemenr"' - 737-2425
Garbage Collection
\Naste Connections Ine. - 892-5370
6601
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., 0 ct. 1. . - J,. t .111. L",j\.)-.1 -
. Ave q 'Vancouver
For Additional VV'aste Reduction St Recycling llnformation
CaU City of'lancouver - 696~g 186
L
VANCOUVER CURBSIDE RECYCLING INSTRUCTIONS
Materials
Collected in
GREEN BIN
'.
Materials
Collected in
BROWN BIN
Materials
Collected in
TAN BIN
OTHER.
ITEMS
COLLECTED
NEXT TO
YOUR BINS
~
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Aluminum
. MATERIAI2S', ':- '! ':"'" . '''. ~DO'S" "~:", . DONI'S
o Rinse
o No cans used for paint
/ or chemicals
o No foil WI th food on It
Tin Cans
o Rinse
,0 Remove Labels
o No cans used for pamt
or chemicals
Glass Bottles & Jars
o Don't break'glass
o Rinse
o Remove hds
o No broken glass or
wmdow glass
o No hght bulbs, mirror
or ceramics
Plastic Screw-Top Botlles with
a Neck Smaller than its Base
o Rmse
o Remove hds
'0 Flatten or crush
. No plastiC tubs, wrap, film,
styrofoam, motor oil bottles
or toxic bottles
Milk Cartons & Drink Boxes'
o Rmse
o Flatten or crush
o No frozen food or JUIce
concentra te containers
Newspapers ..
o Advertisements are OK
o Leave loose
o Don't bundle or lIe
o No plastlce bags or
rubber bands
o No brown paper grocery
bags with the newspaper
o No Junk mail
Mixed Paper
o Junk mail, magazmes,
phone bO,oks, paper
. bags, cereal and gift
, boxes and other
clean paper
o No lIssues, paper towels,
napkms, paper plates or
disposable dIapers
o No foil wrapping paper,
pel food bags with plastIc
liners, or waxed paper
liners as in cereal boxes -
o No frozen food or JUIce
concentrate containers
Corrugated Cardboard
. Flatten boxes
o No larger than 3' x 3'
o Cut down to appropnate
Sl7e If larger than 3' x 3'
o No waxed cardboard
o No food contammated
cardboard
o No food
Motor Oil
L/
o Pour mto secure one
gallon plastic milk Jugs
wJth tight fittmg lids
. No Oil mIxed or contaminated
with anllfreeze or solvents
Scrap Metal
o No larger than 24" many
directIOn and less than
35 pounds
o Remove any attached
pJasllc, wood or rubber
o No plasllc, wood or rubber
o No automobile pans
o No loose nuts, bolts
(m sealed con tamer only)
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" On collection day, place your recycling bins at the curb by 6:30 A,M.
" Recycling collection will take place on the same day as garbage collection.
e Place full recycling bins within five feet of your curb or road's edge.
yon::: .Veighbod1Oods 1J',7lth alleys set garbage. '-c()dab/es al/c( deh-;s
~ Holiday collection schedules will coincide with garbage collection schedules. The following
three holidays are observed each year: New Year's;'Thanksgiving and Christmas.
NO'.rE' one of these holido.y,:.- falls on ({ 1 yltt ,-z,,:rz ~}n('
<-J ..../ ....1
z17c veln:l r of rllar vv~eel(
(; Special recycling pick-up service is available to elderly and handicapped residents who
oualifv. Call 592-':=;370 for details.
J. -
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.
WASTE CONNECTIONS INC.
Connect with the Future@
,;~ 9411 NE 94th Ave., Vancouver, WA 98662
360-892-5370
CONTAINERS"' "
-
V Aluminum and Tin Cans
Rinse and remove labels
VGlassBottles and,Jars
" Rinse and remove lids '
VPlastic Bottle~ and Jugs
, Rinse, throwaway lids, flatten,
VMilk Cartons, Drink Boxes
Rinse, throwaway straws, flatten
~
NO Cans used for paint, chemicals .
NO Broken glass, window glass,
light bulbs, mirrors, ceramics
NO Plastic bags, tubs, styrofoam,
motor oil bottles or toxic
wastes
MIXED PAPER
r
~
V Junk Mail, Magazines
VPaper Bags
VPaperback/Phone Books
VCereal/Gift Boxes
VOther Clean Paper
~
NO Tissues, paper fowels and plates
NO Foil wrapping paper, plastic/Wax
liners, juice concentrate
containers
- - , ~
iNEWSPAPE'"RS.~
CORRUGATED.,'
CARDBOARD
-
:;:rjTJT.tT.tT.tT.T.T..l"Y1T,jTiJ.lT..I!!I! .
!';'jf'l'l'l'.T.tT.f.f.tf.f.'.t'..l'..lq~
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-"
" VNe\vspaper' QNLY' .' :'. :::" ~
,.; ,l:oose and flattenell;' do 'riot ,';' ~ :
~'. 'bu~OJe:ortl~:~d'ln~'erts'~re?:(~.t
'~"
NO Plastic~bagsoHubbei' bands
NO Brown'paperj'gfocer{i1ags ~.~: ,:'
. " or magazines (those go in;':"'"
, '''Mixed Paper:J , ',.' ,J,'~: \: ,;
-
.,ICard board
, Flatten boxes, Cut to 3'x3', Put
next to roll carts or In special binS
~
NO Waxed cardboard
NO Food contaminated cardboard
RECYCLING ONLY!
One wrong material may contaminate an
entire load of recyclables. This results in
garbage, rather than recycling. For recy-
NO GARBAGE cling information, call 892.2025.
VANCOUVER (360) 892=5370
CURBSIDE
RECYCLING WASTE CONNECTIONS INC
Connect wlfh the Future
We appreciate your recycling efforts. If your recyclables were not collected,
please prepare them as indicated below, and we will collect them on you.r
next pick-up day at NO EXTRA CHARGE.
!it' PLEASE NOTE THE FOLLOWING:
o PLASTIC BOTTLES We can only accept plastIc bottles wIth necks smaller than
then- base RINSE CLEAN AND SMASH FLAT. We cannot accept plastIc tubs.
wrap. film. styrofoam. motor oil or tOXIC plastic bottles
o 2 METAL We can only accept clean alummum. tm and steel food beverage cans.
RINSED CLEAN WITH LABELS REMOVED We can only accept clean scrap
metal smaller than 24" many dlrectlOn and weIghmg less than 35 pounds
Nuts and bolts must be m a contamer with a secure hd. \Ve cannot accept pamt cans
fuel cans, plOpane tanks. aelOsol cans o~ metals WIth foreIgn matenals attached
(Please contact ColumbIa Resource Company at 256-8482 or 737- i 727 for
mformatlOn on the safe dIsposal of household hazardous waste Ol medIcal waste)
o 3 GLASS We can only accept UNBROKEN glass bottles and Jars. nnsed clean. We cannot
accept dishes. wmdow glass. Il11ITOrS or another type of glass or porcelain
o 4 MIXED PAPER We can only accept clean. food-free mIxed paper, phone books.
magazmes. grocery bags. cereal boxes etc We cannot accept napkms, tissues, pape!
towels, pet food bags WIth lmers. waxed papel 01 wrappmg paper WIth fOliar plastIC
attached
0,
5 NEWSPAPER Please put newspaper m BRO\VN bm (advertIsements are OK) We
cannot accept newspaper m plastrc bags 01 with rubber bands.
o 6 CARDBOARD Please flatten all boxes and cut mto 3x3 foot sectlOns We can only
accept clean cardboard flattenec and SIzed cOITectly We cannot accept wax coated or
food contammated cardboard
n 7 MOTOR OIL We can only accept moral' OJI m plastIC nulk Jugs wIth'tIght fittl11g hds
Jugs must be safe for transpOlt We cannm accept othel contamers 01 flUIds such as
solvents Ol degreasers
o 8 COLLECTION TIME Please have bms at the curD leady for collecnon by 6 30 am
D 9 USE BINS AS FOLLOWS (Please do notll11x tecycJab!es between blllS)
o GREEN - MIlk cartons. dnnk boxes. glass metal. plastIC bottles
& TAN - MIxed Papel e BROWN - Newspaper
o 10 OTHER
Account Number
Date
Address
Driver
For questIOns j egardmg thiS notIce please caH (360) 892-5370
THANK YOU FOR YOUR COOPERATIO~:
NORTH STAR SERVICES. (360) 9(jL0492
FORM NO 254
You're doing a great job recycling your Yard Debris!
However, we can provide the most efficient service
if you follow these instructions.
Yard Debns Only - No Dirt, Vegetation with Dirt. Rocks,
Sod, Plastic Bags or Garbage.
Yard Debris must be placed In properly approved contain-
ers 90 gallon rollercans are prOVided for collection.
Extra Yard Debns must be placed In cans up to 32 gal-
lons/75 Ibs max. or double walled Kraft paper 30 gallon
bags/40 Ibs max
No loose piles of Yard Debns. Brush must be cut, tied, and
bundled no more than 4 Inches In diameter and 5 feet In
length. Please tie with tWine or stnng only
Yard Debns must be placed on curb by 6 30 AM on your
scheduled Yard Debns collection day.
Please place your cans as close to the curb or street edge
as pOSSible Be sure the front of can faces the street.
Please keep your can at least (2) two feet from any
obstructions, including: mailboxes, recycling containers,
garbage cans, fences, cars, boats, trailers, lamp posts,
etc to avoid nsk of damage If pOSSible, park off street on
collection day.
Y-8 0 Please tnm trees or bushes, we are unable to service
your location
Y-9 0 Other
Y-1 0
Y-2 0
Y-3 0
Y-4 0
Y-5 0
Y-6 0
Y-7 0
If your Yard Debns has not been collected, please prepare as
indicated and we Will collect on your next regularly scheduled
collection day. No extra charge will be assessed If you set out
90 gallons of extra matenal on your next collection day If you
need service sooner than that, please prepare materials cor-
rectly and call 892-5370 for a speCial pick-up. For questions
or information please call.
WASTE CONNECTIONS INC.
Connect wzth the Future
94] 1 N E 94th AYE' Y'-NCOU\'ER, "'fA 98662
(360) 892-5370
t\!ortr Star Ser\'IC€~ t (360) fO'::;-Qt:2L
=0. r.~ 25Z
~tp
WASTE CONNECTIONS INC
9411 NE 94th Ave
Vancouver, WA 98662
3605149009
CIty of Vancouver
Automated
Garbage ServIce
5516
Date ___1___1___ Account
Route ________________
Address_________________________________________
Thank you for doing your part In helping
wIth the collection of your refuse!
Please revIew the Instructions below for more efficIent service.
A 1 D On Collection day, place your cart on the street or at
the curb by 6:30 am.
A2 D Please place your cart at least 3 feet from any
obstructions, Including. other garbage, recyclmg or yard
debris receptacles, cars, trailers, boats, fences,
mailboxes, lamp posts, etc., to aVOid risk of damage to
those Items If possible, park off the street on
collection day.
A3 D Please place all garbage in the cart provided to you
If you have extra garbage, place It m plastic ,bags and at
least one foot from your cart. Please do not overfill
your cart.
A4 D Extra garbage has been serviced at this location and
it may be more cost efficient to upgrade your service.
Please call our office to mqulre about the many service
options available Call 360.514.9009.
A5 0 Please do not place your cart under low hanging
trees or wires. The truck needs at least 12 feet of over
head clearance to empty your cart
A6 0 Please tnm overhanging branches to at least 12 feet.
If your garbage has not been collected, please prepare It as
mdlcated and we wIll collect double your standard service at
no addItIOnal charge on your next regularly scheduled
collectlOn day. For questIOns, addItIOnal mformatlOn or If
you need servIce sooner than that, please prepare your
garbage and cart as mdicated above and call 360.514.9009
for a speCIal pick up (return tnp charge may apply)
t-JOFrTh ST A8 SEFNICES ~ (~50; S;:'4-(1482
FORfvl NC 259
A CHilD'S ACTIVITY,' ,BOOK OF
WASTE CONNECTIONS INC.
9411 NE 94th Ave.
Vancouver, WA 98662
(360) 892-5370
Reuse. . . Reusing means saving items that would
often be thrown out and using them again. This saves
money, saves landfill space and saves resources.
. . .On a piece of scrap paper make a list of things
that you can reuse. Ask each person in your family
to come up with an idea, tool
You can conserve our natural resources by making
small changes in your daily activities. . .
~ (~\
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You can take an active role in
your environment. . .
SPRING 2002 ,
VANCOUVER #W CLARK COUNTY
GO RECYCLE!
Protect Yourself - Protect Your
Environment ~ ,
If you have unwanted household chemicals or paints ~1
lurking be~~ath. yo~; ~ink o.r i~, y~ur. stor~ge area that say ~W-
"danger," cautIOn, warmng, pOlson, "flammable" or
"combustible," please dispose of them in a safe manner. Dumping chemicals
down your drains or on the ground outside can harm you, your family, your
neighbors and the environment. Here's what you can do to properly dispose
of unwanted chemicals:
:l Give these products to someone who may want to use them as in-
tended. If the products can't be used, take the waste to anyone of three
Household Hazardous Waste facilities The times and locatIOns for FREE
Household Hazardous Waste drop-off are listed on the back page We ac-
cept up to 25 gallons of household hazardous waste per visit in containers no
larger than 5 gallons from residential sources.
:l For more information on handling household hazardous waste or
brochures on safer alternatives to household chemicals, call the Clark County
PHONE: 360.892.2025 Solid Waste Program @ 360.397.6118 ext. 4352.
r-----------------L----------------------------------l
0 PLEASE RECYCLE 0
Look for contest details InSide
, .,.
,C/
V
WASTE CONNECTIONS INC.
C(;/11ti'1 I 'iJI!h lh( FlltUl ('
941 1 NE 94TH AVENUE
VANCOUVER, WA98662
CONTAINERS
MIXED PAPER
NEWSPAPER
CORRUGATED
CARDBOARD
~~~~
,/ Aluminum & Tin Cans ,/ Junk Mail, Magazines ,/ Newspaper ONLY
Rinse and remove labels Loose and flattened: do not
./ Glass Bottles & Jars ,/ Paper Bags bundle or tie Ad Inserts are
Rinse and remove lids / OK,
v PaperbackslPhone Books
./ Plastic Bottles & Jugs
Rinse, discard lids, flatten ,/ Cereal/Gift Boxes
./ Milk Cartons, Drink Boxes ./ Other Clean Paper
Rinse, discard straws, flatten
,/ Cardboard
Flatten boxes. Cut or fold to
3'x3'. Put next to roll carts or
In speCial bins
~~
NO PlastiC bags or rubber
bands
NO Brown paper grocery
bags or magazines (those
go In the ''MIxed Paper')
~iLrn ~
NO Waxed Cardboard
NO Food contaminated
cardboard like pizza boxes
NO Cans used for paint, NO Tissues, paper towels and
chemicals plates
NO Broken glass, Window NO Foil wrapping paper, RECYCLING ONt.. Y !
glass, light bulbs, mirrors, plastic/wax liners, JUice One wrong matenal may contaminate an
ceramics concentrate containers . I d f
NO PlastiC bags, tubs. entire oa 0 recyclables.. ThiS results In
styrofoam, motor 011 bottles or garbage, rather than recycling. For recycling
tOXIC wastes information, call 360.892.2025
L___________=_===__=====___=_======__________________
o Prmted on recycled paper With 20% post-consumer content
EarthSAVER coming to a school
near you!
Clark County Solid Waste Program has started an
ambitious program created specifically for science classes
in Clark County middle schools.
Over several weeks, students will get the
opportunity to talk with local utility professionals in water,
energy, natural gas and solId waste fIelds. Students will
learn how those resources come mto the school and where
they go when they leave the school. Aft e r
intervIews with school staff, reVIews of
energy, water and waste bills, and actual
audIts of energy, water and waste
consumptIon and disposal, students wIll make
recommendations to their class and school on
ways to use their resources more efficiently.
S E PAR ATE, don't contaminate
__L_______________________,
1
1
I
I
I
I
I.
1
1
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r- - - - - - - - - - -.- - _ - - - _ _ - J
Gain knowledge!
Win a prize?
Enter the
CONTEST!
Help make your recycling efforts count by putting your recyclables in the correct container. If your children
help take out the trash or recycling, please make sure they are tall enough to get the materials in the correct containers
and they understand what goes where. Unfortunately, when trash or the wrong materials get mixed in with
recyclables, the recyclables become trash also.
Please clIp the recyclIng instructions on the front page and post them on your refrigerator as a handy
reminder, and remember...S E PAR ATE, don't contaminate.
Read this
newsletter and answer the questions
below. Entries fostmarked by August29,
2002 will be entered in a drawing to win
a $100 gift certificate to WestfIeld
Shoppingtown Vancouver. Winnmg
entry must have correct answers to all
G: questIOns.
1. What happens to recyclable materials
that are contaminated with trash?
2. List recycling connections to clean air,
land and water.
3. Where would you take Household
Hazardous Waste? Give the address.
~
Special pick up of Household
Hazardous Waste available to elderly
and disabled at no charge
You may be eligible for this pilot program if you can
certify that you are disabled or over the age of 65 and have no
other means to dIspose of household hazardous waste. This
offer does not extend to medIcal waste.
For details or to request a pIck up. call 1.800.449.7587
'-"
Send your answers with your name,
address, and phone number to:
Waste Connections Recycling Quiz
PO Box 61726, Vancouver, W A 98666 I
L___________________J
2003 Every:Other~Week Service Schedule
Thank you for signfng up for Every Other Week Garbag~- Collec:tion. Weeks scheduled for collection
'~ are highlighted. please,posrthe calendar in a'convenient location for future reference.
"., -..,". ~ \. ~
JANUARY FEBRUARY
S M T W Th F S M T W Th F S ,
1 2 3 4 1
,5,:,' 6 ~"7 8 <) :10,:11. ;2" ':3 >,:4"',5 6 -,'7 8"
12 13 14 15 16 17 18 9 10 11 12 13 14 15
19 20 "21 22 23"24'25 j,6 '-17,,' ,18 -"19 20 21 -_ 22
26 27 28 29 30 31 23 24 25 26 27 28
"
-,
MARCH
S M T W Th F S
1
2 3 A 5' 6 _-7 8
9 10 11 12 13 14 15
16 t7, 18 -19_ 20 -21: _22
23 24 25 26 27 28 29
30 ' 31
S M
"
4 5 6 7 8 9 10 -.
11, 12 _ 13 ' 14 ' IS, 16 E> -
18 19 20 21 22 23 24
25 26 ,2'1'.':28 29 30 ,31:
SEPTEMBER
S M T W Th F S
L 2 3- 4, 5, 6,
7 8 9 10 11 12 13
'.14 15,' 16' 17 18 19 20,
21 22 23 24 25 26 27
-'28 29 3Q -
JUNE
S M T W Th F S
1 2 3 4 5 6 7
8 -9 10 11 '12 .13 14
15 16 17 18 19 20 21
,22 -23, 24 25 26 27 28_
29 30
-' ....
JULY
S M T W Th F S
1 2 3 4 5
6 7 8 9 10. 11 _ 12;
13 14 15 16 17 18 19
20 -21 -22 ,23 2;4 2;5 26
27 28 29 30 31
OCTOBER NOVEMBER
-
S M T W Th F S S M T W Th F S
1 2 3 4 1
5 6 7 8 9 10 11 2 3 4 5 6 7 8
12':' 13 ; 14 15 ',16 17 18 9 10 11 12 13 14 15
19 20 21 22 23 24 25 16 17 18 19 20 21 22
,26 ~_,27-. ',28, 29 . 30 31 23 24, 25 26 27 28 29
30
APRIL
S M T W Th F S
1 2, :-3 4 5
6 7 8 9 10 11 12
'13 14 15 ,ll' 17- 18" ,19
20 21 22 23 24 25 26
27 _28 29 30:
r
AUGUST
S M T W Th F S
1 2
3 4 ' '5 ,6 - 7 -,8 - 9-
10 11 12 13 14 15 16
1-7 18 ' 19 20 ,-21 22 zq
24 25 26 27 28 29 30
31 '. - -
DECEMBER
S M T W Th F S
1 2 3 4 5 6
7 8 ft 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27-
28 29 30 31
For additional service options please call 892-5370
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3.I11J1Y 3[jJ (fJun ;:JiJuuo:J
":JNI SNOI.L:J3NNO::> 3:.LSV A.\
YARD DEBRIS COLLECTION CALENDAR
:5 4 5
~ 4 5 6
15 16 1, 18 19
11 18 19 20
29 30 31
i 8 9 10 11 12 1:5 5 6 7 8 " 10
21 22 23 24 25 26 2, 19 20 21 22 23 24
1-.
Drop Box Service?
Fo! Jarpl !'lo]('cts-2Cl 30,40 \ard dJop box
SelVI(C IS J.\aIldole Call to! larc~
Cost?
2
9 10 11 12 13
12 13 14 15 16 17
23 24 25 26 27 28
26 27 28 29 30 31
Service Cancellation?
5dSJC Yard Debll:::: SelV1Cf 15 Sf l':: ,)t, Jrl('nrh fOI
96 gallo 15 ~\.tlas \~ III tt nialged d, :::2 77 pel
:-2 galJ...1lls eQlll\,a!eJ1t
Than!cs agalliJor slgmng upJoryard debris collectIOn
ILIl qw S[1or~~ 0/ 17(1)lC !llfi~J lld1(c{,n JI/Ca.:-( C(N!
WASTE CONNECTIONS INC. 892-5370
vancustsvc@wcnx.org
1 (866) 892-9269
Regular subscnbers ma) >rgn up for or cancel
)ard debns servIces at anv tIme If a subscnber
chooses to cancel and restan collecllon selvlces
withIn a vear of cancellallon, an $8 51 restal t
fee WIll be assessed Consldel gOIng "on-call
Instead of cancellIng YOU! servIce dunng Ille
\\ Inter You \I rll pay $ 1 41 pel month cal t I ental.
$4 64 per pIck up and avoid the lestart and can
re-dlllver) fees
A
WASTE CONNECTIONS INC.
Connect wzth the Future
WASTE CONNECTIONS INC.
Connect wzth the Future
IMPORTANT NOTICE
Starti ng March 1 st
, , , ,
. . . .
As Clark County continues to grow, it has become
necessary for your garbage, recycling and yard debris
companies to change your pickup day. Waste
Connections and Waste Management Will be changing .the
day we service your containers for:
· Garbage
· Recycling
· Yard Debris (optional Waste Management service)
In order to make thiS change, Waste Connections and
Waste Management will begin collecting on a NEW DAY!!!
for:
· Garbage
· Recycling
· Yard Debris (optional Waste Management service)
Starting March 1 st your NEW collection
day will be:
MONDAY
Your pickup time may change. Please have everything out
by 6:30 am on your scheduled service day.
For Garbage & Recycling call Waste Connections at
360-892-5370 or 866-892-9269 if you have questions.
For Yard Debris call Waste Management at 360-737-2425 if
you have questions.
If you currently do not have garbage and or yard
debris service please disregard this notice.
).." , ~, ,~'" ,,'
RECIKURAMO
""'~"~'''' ,"" ~ ""f~,
:~r:,'A:I~lske,1 )lmen. konz~,rv^.':" '; ,
'~~t~,!_~,~,~~,,:~~:~~f"~ '!/:'
,'~ ~~.ne boCe I legl. ~~'<:' ',,~:< ,
~\:';:I~~ !,,~,>~ket!,}:~/< :':<
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~f,'${IIpraIl;OdsIninltI ~I ~tftk ",
,r~ ,-r.. ,.-;:...,::.....",' " , 'v -' >'
::1./~~ ~ inu)eki I aokOva ,," ,':',;"
,~!,~'bspcall; 'odstranJti sIamke I splJo!tttI : ,
...,~,~ )..;:,V~ ,_~~ , ~',~v", ,::,"", ',~'''~ 'W,')
NE STAVLJAJTE...
'.. .....,"~'~:t.'&.....~).,:,;;......,'~,~ v ,'^ <H,~./..-"<,,,.;.''''''#',,...''A.:
:: tlt i<onZeiV.'k.0riit8ne za bOju:r>:~;
,:~t~1~ k8~ ';~~{ :~f\;:~;'Y?J~":..~{ :(i<,;:~
':i(S;;~fe~'~~. ~~oz~rskD~,
,~{,~SiJallce; pgledala, keramika ":it<>;
,'tlE ~~'~~ ~~Poi;"~ cd ,::;
~<,~~~mog ulla m otraVnill otpada,':
~ ::'::<,<~~t-:':"'~"'l-~?""\.'~'-::""-:' <<~,~ )'~'::;~-;.-::,-=.~~ ~ ,::,,'..}'-:,>>~~'
,:""RAZNE VRSTE "(,,
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, ,"' '~ ' '\' ~ ,~,""~ ..", ...
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RECIKLlRAMO
tI Staru poitu, magazine
, ~ -:.' "'<-", }:v;"'
tI Paplrne kese ":' ,,'
,tI Telefonske Imenlke paplrnlh
korlca" " :' <,< .:: ':'
:' ~ ' "',' <"
tI, Kutl)e od fltarlca/poklo~
'tI D~Ug~ ~j~t pa~l~ <, : , ", ,
NE STAVLJAJTE...
.... ' ',)-:-."
"E T calml paplr, paplrnl' n;a,1cI i ianPrI
tl E Papime loIije za umotavanje, -:::
pIastlW~ paplrl ,%8 pakcvanje.
'<<, illlntej1'!! od ko~ta 8O,kcVa ,,'
",:,,):, ~ g:~'~:;r:;:^,;: "~:~\:~~;,~?",""
RECIKLlRAMO
~::tfKArton7;';" <,' " ::"" '-' ~,"
d;:j~ Iclmje.lzre1jle Ih na illlmade
'>:;'olllib3'x:r: Stavieptnd kanlIsa ~
;',/'toclcovima II u,SpecijaJo. illlrpe. " '
NE STAVLJAJTE...
::".... ~, ~ ~~::..::':.~~..} ~~'':-J"',;: ~*(..
'~tltPJastlCn.k&$t I
, :ll E ~rn!,d. papl~d! ,~s'
~~'f~)rgovlne III magul
,~~t',f(.du'urflaii1~Vr8t8 p':.';,tra;
"~~ ,'-" ,'~'" ~ ...
J~"'::,""','f;..,'3f:\~~";~~~Y:",~" "'/ F.{?...../"~ /../ \., X/'''', .....
'ltll'ffVo!t8nllWtonl" I:,' ,:'" >'
, i: Ki!rtonf %aPrljarn hranom :
, ,', ~~tc;!~;<~':':;;i,~'~::,' ~
SAMO MATERIJAL
ZA RECIKLAZU
Jedan pogre!an materl)al moze kontamlnlratl
el)ell tovar materl)als za reclkluu. Ova
rezultlra smecem, radl)e nego reclkllran)em.
Za Informael)e 0 reclklul, nazovlte 892-2025.
NE SMECE
NHUNG DO DUNG
.
CHUNG Till Tiu CHE 81EN
t/ Lon Nhllm ri Thllfc
Trang ~h va tMo nhiln ra '
t/ thai ri l(I BAnp Thliy Tlnh
Trang ~ch va thao nAp ra
V thai va Blnh BAng Hhlla
Trang ~eh, bO nAp, lam eho d~p
V H~p Sila TltO'l, Hltd'c Ulfng
Trang $;Jch. bO il'ng hUt, lam eho d~p
KHONG BIIgC 80 vAo...
~~ Lon ollng alln, ollng h6a ch{t
Vl\1'A'q Kllng bt, kllnJl cdl a~, b6ng
v,Q oiln, gltllng, 04 bhg all
Vl\1'A!l- Bao ny lOng, h4p bhg nhlll, cac
.... 10~1 phom, blnh olj'ng nhdt 18
bo~c cb{lthal o4c
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CHUNG rOI rAI CHE 81EN
V' Thlt Quang Cao, T,p Chi
V' Baa Glay
V' Sach Bla Glay/Sach Hlen
Glam Dlen Tho,.
V' H~p CerelllH~p D\lng Qua
V' Cae La,. Glay S,eh Khac
KHONG Dl/(lC 80 vAo...
Vlil"~ Cac loai kh;ln gify, gl{y lau lay
~" va lIla glay
~il"'h GI{ gdl c6 chil klm 10~I,
~ Ch~ nhl/a/Chat sap ong (wax),
cac hOp gliy Iron olj'ng nudc lral
c;ly nguy4n chit
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CHUNG TOI TAl CHE BIEN
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9Ocm, D~ ben C9I1h thittg co banh xe d~
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KHONG DII(lC 80 vAo...
KRONG BIIgC 80 vAo...
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""";,0 ~p chi (nhiJn(1/a~ nay bo vola trong ,~.
''!l';,-;;?;G.!!Y. ~~j .$':~1~i~~~~
Vl\1'A~ Bla cang c6 ~h{t'sap ong (WIJ)
~\1'A'q Cac 10'. h4p o1/llg thac In oi bl hit
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CHI DANH CHO 00
rAI CHE BIEN!
Bo vila mOl chat lieu sai CD thillllm hit ea 16 chat lieu lai che bien.
Khl do thi chllhilnh rac, chu khOng con tai ehe' bien dlf\le nw.
Mu6n blel them chi uet ve vlec lal che bien, xm g91 s6 892-2025,
ENVASES
VLatas de aluminlo y hojalata
Enjuague y quitele las etiquetas
VBotellas y frascos de vidrio
Enjuague y quitele las tapas
VBotellas y jarras de plastico
Enjuague, tire las tapas, aplastelo
VCartones de leche, cajas de
bebida
Enjuague, tire las pajitas, aplastelo
NO PONGA 0
NO Latas usadas para pintura, quimicos
NO Vidrios rotos, vidrios de ventana, ~
bombillas electriCaS, espejos, ",r,:,
ceramicas ." , :'-",
NO Bolsas y envases de plastico,
poliestireno, botellas de lubricante de
motores, 0 desperdlcios tOlicos '
PAPEL MEZCLADO
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tI Correspondencia
desperdiciada, revistas
VBolsas de papel
VLibros rusticos/guias
de telt'ifono
VCajas de cereal/de regalo
VOtro papellimpio
NO PONGA
NO Pafiuelos de papel, servilletas y platos
de papel
NO Papel de envolver de aluminio, 'orros
de papel acerado y de pllistico,
envases de jugo concentrado
CARTON
ARRUGADO'::
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VCart6n ty::, r, "'f:",;:::::,,^,
Cajas aplastadas. 'COrtelas en 3'x 3',
pongalas a11ado del carrito de' '"
ruedas 0 en recipientes especiales
NO PONGA
NO Carton acerado
NO Carton contaminado con comida "
jARTiCULOS PARA
RECICLAR SOLAMENTE!
Un material erroneamente colocado puede
contaminar toda la carga de articulos
reciclados. .Esto resultarci en basura, en
vez de reciclaje. Para obtener informacion,
acerca del reciclaje lIame al 892-2025.
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Service Provided by;
WASTE CONNECTION
892-5370
MAKE SYRE STICKER IS VISIBLE FROM STREET
Do not include: dirt, sod, stumps, metal, rocks, oversized branches, ashes, pet waste, food, or household garbage.
MAXIMUM WEIGHTS: 96-Gallon rollcart - 195 Ib max 64-Gallon rollcart - 130 Ib max 32-Gallon can - 65 Ib max
30-Gallon Kraft or Eco-Bag™ - 451b max Bundles - 45 Ib max
CAUTION: Wet grass is extremely heavy and can easily put you over the weight limit.
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Yard Debris/Composting
Page 2
Community Recycling
Efforts
Paae 3
~
~
III ~
Recycling at Home
Page 4
I've heard some people say, "Why recycle, it's not worth it...it takes too much time...it's not
convenient. . ." Here are a few of the reasons millions worldwide make recycling a daily habit:
; WATER * Every ton (2,000 pounds) of pa- * When a glass bottle is recycled,
per made from recycled paper 500/0 less water pollution is pro-
and cardboard saves about 7.000 duced than when a glass bottle
gallons of water. is made from virgin materials.
Household Hazardous
Waste
Page 5
Waste Prevention
Page 6
Educational Opportunities
Kid's Page I
Page 7 i
What's New I
Page 8 I
___ ________ ________~___ _ ____ __ _ J
* Recycling a one-foot high stack
of newspapers saves enough
energy to heat a home for 17
hours.
* One recycled aluminum can
saves enough energy to power a
computer for three hours or a
1 DO-watt light bulb for 20 hours.
* Recycling 23 aluminum cans con- * Recycling one ton of plastic
serves one aallon of aasoline. saves the equivalent of 3.85
barrels of oil.
ECONOMY
* There are about 26,000 facilities
in the reuse industry (thrift
stores) which emplov over
170.000 people.
THE INFORMATION ABOVE IS COURTOUSY OF THE WASHINGTON STATE RECYCLING ASSOCIATION EDUCATION COMMITTEE..
You CAN GET MORE INFORMATION ON THESE TOPICS FROM THEIR WEB SITE @ WWW.WSRA.NET OR CA~L ~_~~.~~4.~~_1.~.. _' _' _. X _. _ _ _ _. _ __. _ _,
* The US recycling industry has
over 29,000 establishments and
emplovs over 950.000 people.
FOR YOUR FUTURE,
FOR YOUR CHILDREN'S
FUTURE...
,,~
-1;'7
Recycling saves 4.,?- energy,
p .~
\\;l
Recycling saves ~ ) I clean water
J~
A~-'''''
Recycling reduces I~t1 air pollution
Recycling saves
natural
resources
""......'
I~cycllnl Contac~:
.. Holida~ Collection Schedule 2002"
Recycling and trash collectors observe the following
three holida s each year
Dee DJan
25 1
Wed Wed
x
Nov
28
Thurs
Thanksgl\llng
(])1 \~tlll,)S
'J(..\ Yt',\I ~ n,r\'
For these three holidays only, there is no collection
service. Collection will run one day late for the
remainder of these holiday weebs.
Unincorporated lh'ball'1l
C~arlh> COUE1\ty
(Also La Center, Yacolt, Battle Ground and Ridgefield)
I ~ Waste Connections Inc. Email: vancustsvc@wcnx org
I Curbside Recycling 360.892.5370
I ~ Waste Management of Vancouver (www wmnorthwest.com)
\ Yard Debris Recycling 3607372425
Unincorporated Urban Clark County & Battle Ground
I ~ Waste Connections Inc. Email' vancustsvc@wcnx org
I Yard Debns Recycling 360.8925370 I
City of Ridgefield
City ot VcmCCn,lll\per
Recycling instructions are now available in ,!l1bf;Js~f!n! Sluuys!J:", Viet-
t!:.f!Jl!eJ~~~ f1J1d BQsrd@: If you know someone who could be helped by
this information, please call 360.892.5370 and leave a message with
their name and/or address. We will mail the information to them.
~~-- ~--
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Paid
AMI
I ~ Waste Connections Inc. Emall: vancustsvc@wcnx.org
Curbside Recycling 360 892 5370
I ~ Waste Management of Vancouver (www.wmnorthwest.com) ;
I Yard Debns Recycling 3607372425 - I
All CU~_l!'b_ COU~ Multifamilyl
Apartments
I ~ Waste Connections Inc. Emall' vancustsvc@wcnx org
I Curbside Recycling 360.892.5370
Transfer $tati@ns
I
; ~ Central Transfer and Recycling 360.256.8482
11034 NE 1171h AVE, Vancouver
OPEN. Mon-Fn 6am to 6pm & Sat-Sun 8am to .1prn
CLOSED: Memorial Day. 4th of July, Labor Day, ThanksQivina, I
I Chnstmas and New Year's Day
i ~ West Van Materials Recovery Center 360 737.1727
\1_ _ _ _6.6_01 _NW_Old Lower River Road, Vancouver
OPEN: Mon-Fri: 6am to 6pm & Sat: 8am to 4pm
CLOSED: All Sundays and ThanksaivinQ, Christmas and
New Year's Dav
_.- - - -.'- - -
i -
- - - -.-.- -.- - -.-.-.-.-
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freq ent5y Asked
; 1J What should I do if I hav\.' extn\ trash om:!; in awhile? ~)> ~ (~~ i
... _ L <~;,rj>-)
"Ai If you occasionally have extra garbage, call your garbage company for curbsIde rates on extra cans or
I~ large items. If you decide to take your waste to one of the two transfer stations in Clark County, you -
must cover and secure your load and pay the following fees: a transaction fee of $10.00 per visit plus a per -
ton charge for the trash (or a portion of a ton measured in 20 pound increments), plus a 3.6% State GRT
tax.
[1] Why can't J recycle lUY margarine and yogurt tubs?
I~ Regardless of the recycle symbol and number on the bottom of the container, tubs
~ are a different type of plastic resin than bottles. There are very few markets that will
take tubs for recycling, but plenty of markets for plastic bottles.
\ 1,) Can I get recycling service in rural Clarl{ County'?
14I Of course you can! Residential collection service is available on public roads throughout Clark
. county, and on private roads jf all owners of the road agree to allow the trucks on their road and if the
truck can physically and safely navigate the road. Rural customers receive large bins and recyclmg service
every 2 weeks. Trash service is available more often if needed.
fj'iWhat do I do when I have more recyclables than will t1t in my bin?
.Ill Residents can set out extra recyclables at no charge if they are contained in a clearly marked containel.
~ For example, put extra paper in a paper bag. If this is a regular occurrence, residents are encouraged to
designate a durable container, such as a 5 gallon pickle bucket, for extra recyclables. Make sure you label
the container so it won't be mistaken for extra garbage.
ril How can I recycle myoid computer?
<' ,..fu4e.lt.w4e.""
lt~J1U'_~ ""e.
W\!Iit11a\t ~ir&i'@~!re:BsgQ:n ~rr~ YU~J'\
h;~alr~rf~g O~lI
A '~i'\ WK''\} ft." L.)
<!:.C';~PAi:l 'f2:/;~ h !tt
''!'' It's hard to imagine how
much impact one person
can have on our global en-
vironment. But every
choice we make about what
we buy, how we use trans-
portation, how we build
and heat our homes and
how we dispose of things, leaves an ecological
footprint. When you make choices to buy less,
drive less and responsibly dispose of unusable
material, you leave a smaller footprint.
Use these web sites to measure the foot-
print you and your family are leaving on the
earth.
(!) VI' Nw.':';lr!hi\HY.net, click on "Check Out the
Ecological Footprint Quiz"
(!l www lead org/lc;tdllel/toolprlllt and click on
"Start"
(!l W\VW .t:l'olugicalfonlpnllI.CUlll. and click on
"Estimate Your Footprint"
Many of these websites will show you just
how many earths it would take to sustain life if
everyone lived your lifestyle ~ the results can be
surpnsmg.
rrr""=-=""="'_:-:~''':;:''=-;-'::-_~=-~=:;:-:=''''';:;::=-':-'':'::';=='-"'=''''==''''""'-'Z.:'''l"!
1\\ Answe.rs ]'0 "Comple\'2, l+H~ Sentences" \1
I 1. Bottles \1
I 2. Red Wigglers II
113. Household Hazardous - II
\14. Recycled I
IL_=",,,:::,=,;;,'=;::C~="""'~':::;:,""-"'-=_-:-_'=L'=-":::"'==';:='-"='''--'~~'
If you want recycling to be picked up at your pusiness, contact the City of Vancouver Solid Waste
Services @ 360.696.8186 to receive a list of permitted recycling haulers in this area. Businesses can
also self-haul recyclables to a transfer station for FREE (See Recycling Contacts on page 1, for locations
and operation times of transfer stations.)
!
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Your recycling and trash will not be picked up on Thanksgiving, Christmas and New Year's Day. If
_ ,," one of these holidays falls on a weekday, collection will be one day later for the remainder of the
week.
t~}, ~
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VISIT ANY OF THESE FOUR SITES:
CASEE Centelf
11104 NE 149th Street, Brush Prai-
ne
Clark County Fairground:;:
17402 NE Delfel Road, RidgefidJ
H & H Wood Rccydill~g
8401 NE 11 7th Avenue, V allCOU vel
Natural Gardens at Burnt Bd.dge
Clree~(.
4505 East 18th Stfed, Vancouvel
NATURAL GARDENS AT BURNT BRIDGE CREEK
Backyard Compost Demo Site
America Recycles Day - November 15th 2002
Look for information about America Recycles Day at
www.americarecyclesday.org
Curbside Yard Debris Is...
.:' JA < "
Leaves, weeds, prumngs, grass clIppings, brush and woody material,
lip to 4 lllchcs IJ1 ~tlamctc~1 Hlld 5 teellll length
Curbside Y~fa~Debris Is NQt...
'\ -'
" I..,f" \ '
Dirt, sod, rocks, stumps, (ood or vegetables wastes, gal bage, ammal
waste or hazardous w!Istes~ COllst~llCtlOn :d!lbr~s o~ branches more than
4 Illch((s III dIameter or S,feet in length
Curb your yard debris
If you have too much yard debris to compost at home, don't throw
It III the garbage or bum It, subscribe to curbside yard debris collection
, Waste Management of Vancouver, 360.737.2425, provides optlOnal vard
, debriS collection services to residents m and around the cIties of Vancou-
ver, Battle Ground, and eastern Clark County Waste Connections,
360.892.5370, provides curbSide yard debriS service to residents in the Cit-
Ies of Ridgefield, Camas and Washougal
For Waste Management customers, the cost per residence IS Just
$6.02 per month (every other week pick up) m the City of Vancouver and
$6 39 per month III the City of Battle Ground and III the unmcorporated ar-
eas of Clark County that are served A 64-gallon rollIng cart is provided
along With a specml,"stjcker for an additIOnal 32-gallon can You may set
out up to 96 i111oJIS,o'rS:ard debriS every other week You may also sign up
for on-call s<:rV~c:e Withlll 10 days of slgnmg up for service, Waste Man-
agement wilr'~eliver..yo'ur. special yard debriS cart and sticker. Buslllesses
al}q-'apartm~m;~d\l,nple~~s can also call Waste Management to find out
about rates. \?,,: . ,
, ',~"-,v~"'1t,~..,\, ~~
~~ste C<?nn~ctlOns customers m Rldgefield Will pay $7 00 per
month arid wIlL be..provld:d With a 96 gallon yard debris cart (an extra set
out of 32 galIonsf,of0yard debriS IS accepted at an additional charge of
$2 OO).,Ya!i!isleb~is:~~ifection IS everv Tuesday
Recycling yard debriS IlltO compost makes good sense, It'S cheaper
than throwing It away as trash and It plOduces an earth friendly product
Recipe "far Healt.hy SoU
The perfect yard debris set out. If you sign up for yard debris ser-
vice with Waste Management, you can set out a 54-gallon roiling
cart as shown In the middle, plus one additional 32-gallon labeled
can of yard debris as shown at the left or one kraft bag, shown at
the right. Yard debriS is collected every other week on the same
day as trash and recycling collection.
Become a Master Composterl
Recycler Volunteer
The Master Composter/Recyc1er program offers FREE
educational materials, compo sting workshops and train- _
ing throughout the year. Classes start in the spring, 11
but you may SIgn up anytime. For details on class ";
dates and tlmes, call the Master Composter/Recycler ,,' ~ '-I "'-
program @ 360.397.6060 ext 7710. -:..
Worms at work!
Ingredients for compost:
1 Large wheelbarrow full of brown stuff (fallen leaves, straw, etc )
1 Large wheelbarrow full of green stuff (lawn clippings, yard tnmmlngs, etc )
Mix:
Mix thoroughly and mOisten slightly so entire pile feels like a wrung out sponge.
Pile.
Your pile should reach 3 feet high by 3 feet Wide In all directions
Heat:
Naturally, your pile will begin to heat as microSCOpiC critters and fungi begin their work
,..^^n r-, _ ...,..n(l r-\ __ _ ._ _ ____'-_..1 '_
Over 14 % of the trash fillmg our landfill IS food
waste and It doesn't break down qUickly m the landfill as
some people might thmk In fact, some landfills that were,
excavated revealed whole fruns and-veg~tables;even after 30!
-^"'- \'. \ / I /f(' \\
years o~,bunal '-"", \ \/>/ c::_~-;:-,";;.. I
// Instead of landfilhI)g'?Vr 'fnllts'an~ veg~tab\es, let}~~ I
red wiggler worms go to"work and turn tho'se 'imwa,nted,
scraps mto black gold (worm compost) fir your gar,dJ'~'/ I
! ",;flY
I You 9illJeed your worrqs'1:-!f f
ll.... l !
Ingredients for compost:
1 Large wheelbarrow full of brown stuff (fallen leaves, straw, etc )
1 Large wheelbarrow full of green stuff (lawn clippings, yard trimmings, etc.)
MIX:
Mix thoroughly and mOisten slightly so entire pIle feels like a wrung out sponge,
Pile' I
Your pile should reach 3 feet high by 3 feet wide In all directions
Heat' I
Naturally, your pile will begin to heat as microscopic crrtters and fungi begin their work
decomposing your pile. The highest temperatures (1300 F to 1600 F) may be reached In
3 to 5 days Keep your pile mOist Irke a wrung out sponge and turn your pile and it will
begin to reheat, continue turning once a week for several months I
~PPIY' .
Add finished compost to garden or flower beds ThiS will Improve your SOil by Increasing I
organic matter which Increases water and nutrrent retention J
.~~~~~~:~~~~~~~~~~~~~es and.~:~~~~,:':~~::~3~~:~~~~::,~:~./
SeHf~ha"d yard debris
~'What do I do With the bl[j stuff?"
~()"
Worms at work!
Over 14 % of the trash fillmg our landfill IS food
waste and It doesn't break down qUickly m the landfill as
some people might thmk In fact, some landfills that were
excavated reve~~~whole, ~~s and ve~~ta9~~s,;,:~\ven after 30 [
years o(bunal. ' "~, \ \ / / I /! { __ , ';:," I
/ . Instead of landfillmg'oilr ,fnuts/and ;egetables, let the I
re9" wiggler worms go t~'\ ~brk and tyin th~~e ~~13w~r;ted I
scraps Into black gold (worm compost) fgr your gar~en .
/ \.'''> /1 ,/ ~ ,
i You ca!.LfGed your worrryt.,.';' : !
' if ^, I
A(ll vegetables (cooked or Bread.>' \\;. !
raw) Noodles" ,.' \
AIIJrUlts (cooked or raw) Rice \
Coir~e grounds Egg sh~II~"
D f. i ;'
\ 0 !lQJ flea your wQrms. '" \
\ -., \...
Meat (cook~<i or raw) Dairy Pniducts " "
Cheese' '-, ,Fatty or'buttered foods I
To learn more about worm bms and classes, call the) Master i
Composter/Recyclers at 360.397.6060 ext 7710.
p~ eVel'~t fioodbag - DOI1i~'ii: place leaves itrlJ the
Unwanted vegetatIOn belongs back In the natural nu- If you see leaves causIng a flooding problem In Ihe City of Vancouver, call~0.696.8177. For as,lslance
tnent loop If you have too much yard debns to compost wllh flooding In unincorporated Clark County, call 360.397.2446.
yourself or you hve outside areas where curbSide service IS - _ _ _ _ '_' _ . _ , _ . _ _ _ _ _ _ _ __. _ _. _ '_ __, __ _ . _ _ _. _ , u
available, cover your yard debns load and bnng It to a com- I
merclalcompostmgfaclhtymClarkCounty West Van Mate- RECYCLE ONE LOAD OF LEAVES FREE WITH THIS COUPON
nals Recovery Center at "~~PJ,,. ~~ Old Lower River Road '"The City of Vaneout"~r and Clark County are offenng FREE leaf disposal from Oct 10 to Dee 22, 2002
(360737 1727) chargeS"~'$fee~;fotAJOO%1:yard debns that IS "', ,of!-'''-'''' /' C/ip this Coupon and present it at:
lower than the regular':'s'oll'dlw\i.;aste:dlsposal rate For $4800 ." .,.. 'c"
I H & lhWood RecyeIcrs WI'S! V ~n MlItfll.lb RftOVcrv iVIcF.lr1!!!.~
per ton (proportlOniilly.~harged:ih 20,pound Increments), you . 8401 NE h7th'Ave 360.892.2805 6601 NW Old Lower RIver Rd 360 7371727 8806 NE 1I71h Ave 360.892.6125
can bring 111 all the mateEal~ ~s d,~sEi-I~ed ~bove In curbSide I Mon-S;;t~8 a"in"'''':S:Rm '\" Mon-Fn 6 am-6 pm Mon-Sun 8 am-S pm
yard debns as well as,soCl;' roo'(baIls, brancIies up to 8 feet 111 I ,silii 9am'-:-4,p"U1 ." ,0/ "";,,,, Saturday 8 am-4 pm Cloud SlIlIdays III De<. alld
length and stumps up"t6 3,:ieer in ;dl~m'e;ter' 'Jil~ase do 1I0t ;11- Closed TllanksglVlc;,g D~y'1)'d De<.,8 Cloud SlIndoys and TllanksglvlIIg Day Tllank,gll'lngDay
-<: ~>:'. ,~'V"":;' '; \, ,,\. '~ 1fu ....\;~t,
elude dirt, rocks, or'oveisiz,e4'~afenalsand be prepared to , Clark tounty residents only _ FREE recychng IS for leaves only!
tear open plastic bags',:a'nd:eriipty~them yourself If you used 1 , 'Ya'(d":;debns or mixed loads Will be charged at regular rates.
them. Central Transfer 'and' Recycling at I 1034 NE I17th . Leav~s Irhplasiic~bags must be emptied out and you must take the bags With you.
Ave m Orchards (360~256 8482) charges $55 00 per ton for I "Pleas" 'om~lete the followlflg information
yard debns. ThiS mater~al is composted at West Van and used I My street address IS:<;':
by the City of Vancouver, Clark county Pubhc Works depart- I Th'HOOpo"h~"o
ment and others , . m~,"'''~''': _ P~~s.e~~ th~s o:lg~.na~. c~up~n ~t ~~e_d:~?-~ff~lt:: G.oo_~ for one load.
My Zip code 1S.
I
j~
<I I
e
Neighborhood Recycling Champions brush up
on their recycling skills and earn cash for
their neighborhood associations
Forty-three neighborhoods participated m the Recycling-est Neighbor-
hood Program this year and most will be recoglllzed with a cash award at the
annual City of Vancouver Neighborhood Resource Fair To participate, each
neighborhood associatIOn sent a Recyclmg ChampIOn to one of four trammg
sessions that lasted from I 5 to 2 hours Two of the sessIOns mcluded a tour of
West Van Matenals Recovery Ccnter (pictured above) After the trammg, mdl-
vlduals wrote or used a pre-wntten recyclmg mformatlOn article for their own
neighborhood newsletter
If yoU! city neighborhood aSSOCla110n IS mterested m bell1g ll1volved m
the Recycling-est Neighborhood Program next year, let your neighborhood chair
know that you'd like to parl1CIpate and make sure you regIster next sprmg With
Elsie Deatherage, City of Vancouver Solid Waste, 360.735.8842.
On Apo120, 2002, the City of Vancouver, Washmgton State Depart-
ment ~ of TransportatIon and Waste ConnectIOns teamed up with Oregon's
SOLV program to pick up litter along 6 miles of Highway 14. In Just four
hours, 46 volunteers collected over 880 pounds of litter that was thrown out
or blew 0\11 ofsomeone's,vehlcle.
YOI). can help:,,"
~ Make surejfyou are hauling anything m an open vehicle that your load
is covered with a tarp or net.
~ If you see'sgmeone Ilttermg from their vehicle, record the time, day, 10-
'cation; cross street or Inlle post, directIOn the vehicle was traveling, li-
;. ',j .. ......
Ji
~;;-----~---
-\';;:.1
ens
l2a,tA S
Commg soon to a middle school near you .last
year, 530 students from 18 middle school sCience classes m
the Evergreen School Dlstnct completed the Earth SAVER curnculum The
Vancouver School Dlstnct participated With 390 students from 13 class-
rooms
. Each class had the opportulllty to talk with local professionals m the
garbage/recyclmg, water and energy fields learnmg about how resoU!ces
arrive at then schools, and where they go when they leave.
. Then students examined the schools' utility bills and created spread-
sheets to help track the utility use and expense
. Classes were then diVided mto three groups to perform utility audits
One of the thmgs the Water Wizards noted was the locatIOn of storm
drams and whether they dramed directly to a stream or the sewer The
Enerev Emissaries counted light fixtures and any energy usmg deVice
m the school such as computers and vendmg machmes Waste Warri-
~ had a rare OppOrtulllty to do some dumpster divmg - they sorted and
recorded by category one full day's worth of garbage (yes, even the
cafetena garbage).
. Interviews proVided the students the OppOrtulllty to question the staff
about resource use with probmg questIOns like, "How much of the
schools' office paper has recycled content?"
. A final presentation was developed by each group to summanze what
they learned and to offer recommendations for conservmg resources
. Then the entire class developed an action plan that the school could use
to Implement some of the recommendatIOns
Many surpnsmg statistics were uncovered
'I" Each school disposes of 'I" Average utility costs per school
approximately 20,000 recy- exceed $120,000 per year.
clable plastic beverage bot-
tles a year 'I" Each school disposes of approxI-
'I" Each school uses I million mately 1,185 cubiC yards of trash
gallons of water a year. per year.
The goal of this project is to enlIghten the students,
teachers and school dlstncts about resource use and '1
abuse Starting With the new 2002/2003 school year,
more Earth SAVER programs will start III the schools '\
and more students WIll learn how wise resource use
today can Improve their future.
The Clark CountyNancouver Busmess Assistance program recog-
nIzes businesses that make recycling, waste reduction and purchasing
recycled content products part of their regular busmess practices These
businesses are elIgible to become members of the Business Recycling
Awards Group (BRAG).
The following businesses have achieved the right to BRAG about
their accomplIshments. They recognize that conservmg resources IS good
for business and for our community. To fmd out more about BRAG and
............ ...'-..........J""........O V..J~ ..L'tV.l5.l.UJV.l.l.lVVU.I. .Lv5.La.ul_u\..oAL J""O.l, Jt;;L YUUJ UC;jb~JUVJ.U.VVU ""uau
know that youYd like to participate and make sure you register next spnng with
Elsie Deatherage, City of Vancouver Solid Waste;360.735.8842.
(-"3
more barth SA V bR programs Will start m the schools
and more students Will learn how wIse resource use
today can improve theIr future.
~ pn;~ptjI20, 2002, the City of Vancouver, Washmgton State Depart-
ment' of TransportatIOn imd Waste ConnectIOns teamed up wIth Oregon's
SOLV'pr~ir~"to pick~up litter along 6 mIles of HIghway 14 In just four
hours,' 4~ volunteers collected over 880 pounds of litter that was thrown out
or blew out'of someone's vehIcle
,) { f '
You c)m help: ; ,
:>: ,Makesurdfyou are hauling anythmg in an open vehicle that your load
.' 'rs:~overed ~ith a tarp' or net.
:> ' :ri you':see '~omeone IIttenng from their vehicle, record the time, day, 10-
" ~; cation cross street or mde post, direction the vehicle was traveling, li-
cense ~lat~'humber, writodel' and color of car, and what was thrown from
,the. v~h~c~~: Th~,1). ~!lI.1J.8~~.~I'f~,PU, , ..
The Clark CountyNancouver Busmess ASSistance program recog-
mzes busmesses that make recycling, waste reduction and purchasing
recycled content products part of their regular business practices. These
businesses are ehgible to become members of the Business Recycling
Awards Group (BRAG).
The following busmesses have achieved the right to BRAG about
their accomphshrnents. They recogmze that conservmg resources is good
for business and for our commumty. To find out more about BRAG and
how your company can become a member, call Clark County Sohd Waste
at 360.397.6118, ext. 4493 or Clark County Busmess EnVironmental Assis-
tance at the Greater Vancouver Chamber of Commerce @ 360.694.2588.
Sc~~ools e:md Special lE'\fen~s
Thanks to the efforts of Solid Waste Analyst Elsie Deatherage With the
City of Vancouver, and Waste Reduction Speciahst Pete DuBois With Clark
County, grants were obtamed to buy recychng contamers
Clark County schools have long recycled paper thanks to the hard work-
mg'custodIans, students and teachers who collect the material. Now schools wlll
have help settmg up plastic bottle and aluminum can recychng. Pete DuBois,
With the help of Recycling Educator Gmger May (Waste Connections), IS work-
ing With Clark County schools to implement bottle and can recycling by provid-
mg recycling cans and technical assistance.
These big blue recycle cans have also been showmg up at Special
Events around Clark County Between the 4th of July Celebration at Fort Van-
couver, concerts at Esther Short Park and the Clark County Fair, these cans have
helped us collect and divert almost 900 lbs of cans and bot-
tles from the garbage thiS year.
Recovering cans and bottles for recychng helps keep
the precIous resources that made the contamers m the manu-
factunng loop, .savmg energy, reducmg pollutIOn and savmg
landfill space
For more mformatlOn on School Recycling contact
Gmger May at 360 695 4858 or Pete DuBOIS at 360.397 6118
ext. 4961.
\tJl.NCOUVEf~ OISTINUUISHfD
BRAG MEMBERS
Columbia Machine, Inc.
Columbia Resource Co.
First Independent Bank
Frito Lay, Vancouver Plant
Gen Tech Dentist
Hewlett-Packard
Matsushita Kotobuki Electronics
Industries of America, Inc.
Nature's Marketplace
North Shore Coffee Co.
Pac Paper Inc.
Ronen Chiropractic
VANCOUVER GONTii'JUED'
Evergreen School Dist. #114 -
Transportation Shop
Farmers Ins. Group
Kyocera Industrial Ceramics Corp.
Vancouver
Micropump, Inc.
Quantum Residential
Vancouver Business Journal
Western Nugget Transport Inc.
CLAm, COUNTy DISTINGUISHED
BRAG MEMBERS
East Ridge Business Park
Furuno USA Inc
S & W Manufacturing, Inc.
Waste Connections Inc
VANCOUVER BRAG MEMBERS
BizTek Enterprises Inc.
C-Tran
Environmental Technology
Consultants
CLARK COUNTY BRAG MEMBERS
Rex PlastiCS
Lmear Products, Inc., a H 8. Fuller
Co.
Neighborho-od Recycling Champions brush up
On their recycling skills and earn cash for
their neighborhood associations
.' "~" OJ",;"":; -, ;: '1"
, ,,:.~'~l'. ,~;" J:::~< t;"I~~d'4r" , )"~'t ~ Ji' (\.J(
'~W", ""'~'~' .,", :',;;;",' r ,1'
" ~-,' i6I (<So 61 f'Fih. ,,' ,'^ . I ,l,
)h~ >~ ~" < . \ _'> ,,-\.g~ '~. -. I ~ U ~,..;\: ~'1>.,y'~l1 f
:1:iri~;~~~[f :'S3~~~D265Lnl;:
~,;<},."' ",f~"'"^"~, J1~'f '~~" ~ ~-jJ"" '.l:'.IP' ,'v04,;~j~
Forty-three neighborhoods participated m the Recychng-est Neighbor-
hood PlOgram this year and most WIll be recognIzed wIth a cash award at the
annual CIty of Vancouver NeIghborhood Resource FaIr To partICIpate, each
neIghborhood aSSOCIatIOn sent a Recychng ChampIOn to one of four trammg
seSSIOns that lasted from I 5 to 2 hours Two of the sessIOns mcluded a tour of
West Van Matenals Recovery Center (pIctured above) After the trammg, mdl-
vlduals wrote or used a pre-wntten recychng mformatlOn article for their own
neighborhood newsletter
If your City neIghborhood associatIOn IS mterested m being 1l1volved m
the Recyclmg-est Neighborhood ProgIam next year, let your neighborhood chair
know that you'd hke to participate and make sure you register next spnng WIth
Elsie Deatherage, City of Vancouver Sohd Waste, 360.735.8842.
()3
ey-'
, ',On ApnqO, 2002, the City of Vancouver, Washmgton State Depart-
men6~{ Tian~p'oi{a~bJ;1and Waste ConnectIOns teamed up With Oregon's
SOL\, program;tb 'pkk;up lItter along 6 miles of Highway 14 In just four
hou;s~ 4'('i voi~~t~brs c~iiected over 880 pounds of litter that was thrown out
or blew:out' ofSomeone' s, vehicle.
,Y,ou::~~ri h,~ip:t,j
, ~ :"Make 'silie'if,you are hauhng anything m an open vehIcle that your load
. ';,: :is':coverediWith a tarP or net.
',~ ~"Tf~~;l,<c:'~p'''c::nmpnnp littpnna frnm thplr \/phu'l". rprnrn thp hmp iI~v In_
tJ1,t4 S
RS
Coming soon to a middle school near you last
year, 530 students from 18 middle school sCience classes m
the Evergreen School Dlstnct completed the Earth SAVER curnculum The
Vancouver School Dlstnct particIpated With 390 students from 13 class-
rooms
. Each class had the opportumty to talk with local professionals m the
garbage/recyclmg, water and energy fields learnmg about how resources
arrive at their schools, and where they go when they leave
. Then students examined the schools' utility bills and created spread-
sheets to help track the utlhty use and expense.
. Classes were then dIVIded mto three groups to perform utility audits
One of the thmgs the Water Wizards noted was the locatIOn of storm
drams and whether they dramed directly to a stream or the sewer The
Enerev Emissaries counted hght fixtures and any energy usmg deVice
m the school such as computers and vendmg machmes Waste Warri-
lli had a rare OppOrtuOlty to do some dumpster dlvmg - they sorted and '
recorded by category one full day's worth of garbage (yes, even the
cafetena garbage)
. Interviews proVIded the students the OppOrtuOlty to question the staff
about resource use with probmg questIOns hke, "How much of the
schools' office paper has recycled content?"
. A final presentation was developed by each group to summanze what
they learned and to offer recommendatIOns for conservmg resources
. Then the entire class developed an action plan that the school could use
to Implement some of the recommendatIOns
Many surpnsmg statIstics were uncovered.
<#" Each school dIsposes of <r Average utIhty costs per school
approximately 20,000 recy- exceed $120,000 per year.
clable plastic beverage bot-
tles a year. <r Each school disposes of approxI- ,
<r Each school uses I rnllhon mately 1,185 cubiC yards of trash
gallons of water a year. per year.
The goal of thiS project IS to enhghten the students,
teachers and school distncts about resource use and ,
abuse. Startmg with the new 2002/2003 school year,
more Earth SA VER programs Will start m the schools~:
and more students Will learn how wIse resource llse
today can Improve theIr future.
The Clark CountyNancouver Busmess ASSistance program recog-
Olzes businesses that make recycling, waste reduction and purchasing
recycled content products part of their regular business practices. These
businesses are ehgible to become members of the Business Recycling
Awards Group (BRAG).
The following busmesses have achieved the nght to BRAG about
~ ----g ~- - --g---------- ---0-----+----- ,/---:0.--',/--------0----------------
know that you'd like to participate and make sure you register next spnng with
Elsie Deatherage, City of Vancouver Solid Waste, 360.735.8842.
C~
.. '.,.P' ., '. ... ... ....... ....... ........... .. . ...... ... .... .
l- tt e V t-t-l,,~ It-t:.s ;
I1IUIl;; .L.c1UU ..:Jrt V.L.1.\.. VIU!:)Ic111Ii) Will j)Lc1U 111 LUl;; i)\".UUUli)
and more students will leam how wise resource use
today can Improve their future.
IDIJ
~~ng
ig' ~ hts
~,
- ..~t:Gl1.ApriI29,:.2002, the City of Vancouver, Washmgton State Depart-
ment'.~<Jr~sport~~q~ imd Waste Connections teamed up with ?regon's :
SO~X'i:!rogr~ft!>' piC~~p htter along 6 miles of Highway 14 In Just four:
hours" 46 volunteers collected over 880 pounds of litter that was thrown out :
.or.ble~6u't'ofs~meone's.vehlcle .
'Yo;;: ~~ri h~I~:' :'
"~!';Make s~r::;-'ifyou are'haulmg anythmg m an open velucle that your load
; :\; c':. js~~qy~~ed With a tari> or net ;
: . :>;. Ifyoujee' someone littenng from their vehicle, record the time, day, 10- ;
't catio~, cross street or rmle post, direction the vehicle was traveling, h- :
cense; plate" humber; model and color of car, and what was thrown from :
!h~ ~eh~cle. Th-~p..!:l,l~q:~6~.~I:I:TERl . .. . ........
The Clark CountyNancouver Business Assistance program recog-
nizes businesses that make recycling, waste reduction and purchasing
recycled content products part of their regular business practices. These
businesses are eligible to become members of the Business Recycling
Awards Group (BRAG).
The follOWIng bUSInesses have achieved the right to BRAG about
their accomplishments. They recogrnze that conserving resources is good
for busIDess and for our community. To find out more about BRAG and
how your company can become a member, call Clark County Solid Waste
at 360.397.6118, ext. 4493 or Clark County Business Environmental Assis-
tance at the Greater Vancouver Chamber of Commerce @ 360.694.2588.
SchooDs and Special Events "get" Recycliul!;J
Thanks to the efforts of Solid Waste Analyst Elsie Deatherage With the
City of Vancouver, and Waste Reduction Speclahst Pete DuBOIS With Clark
County, grants were obtained to buy recychng containers. _
Clark County schools have long recycled paper thanks to the hard work-
ing custodians, students and teachers who collect the material. Now schools wIll
have help setting up plastic bottle and alummum can recyclmg. Pete DuBois,
With the help of Recycling Educator Gmger May (Waste Connections), is work-
mg With Clark County schools to Implement bottle and can recycling by provld-
mg recycling cans and techmcal assistance.
These big blue recycle cans have also been showing up at Special
Events around Clark County. Between the 4th of July CelebratIOn at Fort Van-
couver, concerts at Esther Short Park and the Clark County Fair, these cans have
helped us collect and divert almost 900 lbs of cans and bot-
tles from the garbage this year.
Recovenng cans and bottles for recychng helps keep
the precIous resources that made the contamers in the manu-
facturing loop. saVIng energy, reducmg pollution and savmg
landfill space.
For more mformatlOn on School Recychng contact
Gmger May at 360.695.4858 or Pete DuBOIS at 360.397.6118
ext 4961
VANCOUVEr< DISTINGUlbHED
SHAG MEMBEHS
Columbia Machine, Inc.
Columbia Resource Co.
First Independent Bank
Frito Lay, Vancouver Plant
GenTech Dentist
Hewlett-Packard
Matsushita Kotobuki Electronics
Industries of America, Inc.
Nature's Marketplace
North Shore Coffee Co.
Pac Paper Inc
Ronen Chiropractic
VANCOUVER CON rlNUED
Evergreen School Dist. #114 -
Transportation Shop
Farmers Ins. Group
Kyocera Industrial Ceramics Corp.
Vancouver
Micropump, Inc.
Quantum Residential
Vancouver Business Journal
Western Nugget Transport Inc.
CLARK COUNTY DISTINGUISHED
BRAG MEMBERS,
East Ridge Business Park
Furuno USA Inc.
S & W Manufacturing, Inc
Waste Connections Inc
VANCOUVER BRAG MEMBERS
BizTek Enterprises Inc.
C-Tran
Environmental Technology
Consultants
CLAHK COUNTY BRAG MEMBERS
Rex Plastics
Linear Products, Inc , a H.B. Fuller
Co
i:iag~ ,> '. " , ,,,,',,,' R' ~', , '~" l ,"' '-. : 'I' '~'~;{f," r~~';~~I~,{1,~,:;':~':;::!!;~t': " 'e"", 'lit", '~': ,,:;;,~<,f~"), --,,',;',' :~,~ ;~;'Y",:;*>',:~''YiJ.j\
" 4 ','; ,,; ", ,~e~C~ING ",tiA,i,l~<I,;~~"JO,rt+lS< i':~c',':,:>: ~';~, ':: ' ~':,~~\,<::,:~:<.:~i
" " ,~, 0' ~. " "'/.~7i")f;,,,'Iit~t;;,;"ii~~!Fi(.'S!:.'!i$":'ti,~',",,' , ..," ~ \,~,^ '" I ," \. , ,!, """ (if. ~.1i'
!!\/I
:il'{l'j'''
"
, ,
J'
.. ,~
",,/1
11,,"
";);"0
"~'
DO nnse, flatten or crush Check the neck' Only recycle plastic bottles with necks
smaller than their bases
DON'T Include other plasllcs, such as plastic bags, tubs, plastic wrap or bottle
lids Please NO motor 011 bottles or bottles that contained tOXICS It they are empty,
put the lid on the bottles and put them 10 the trash
TIN CANS
DO nnse cans, remove labels and recycle labels With mixed paper If labels are
paper Place lid inSide can and flatten open end of can
DON'T Include aerosol spray cans (they can go to an HHW facility for recycling)
or empty pamt cans (Empty paint cans can be put In the trash)
ALUMINUM
DO nnse aluminum cans, pie plates, food contamers and fOil Remove labels
,,,0;',
,0;',;,; ~J
..."./ ...
"'~~...
,jj
t ~., ~ " ~ &
",I'''' ' ,
~~!Jf,.~ ,Ii" I J,
DON'T flatten cans or mclude cans used for pamt or chemicals Please NO fOil
With food on It
GLASS BOTTLES AND JARS
DO RINSE Remove lids and recycle them With tin cans If the lids are metal Paper
labels are OK
DON'T mclude dnnkmg glasses or Window glass, light bulbs, mirrors or ceramics
NO broken glass of any kmd
, '.' ,',~ MILK CARTONS AND DRINK BOXES
~~'""~ :~~ DO nnse and flatten Even though cartons are mostly paper, they go In the bm With
~11 ~ i~:~' other containers
~' 1,0
. '*i;Jl:' DON'T Include straws
W~1f )~~]E~[J:f: '[pJAlJ2) IE l~"~',~ "~i
MIXED PAPER
~'
'~ ~~ 'I'
..
,~,:"-~,,
!ill
"_~ '''''C ~.,;~ "
t '.
~~ ~
ifii _,
-J~
DO leave loose - Junk mall (envelope wmdows are OK), magazines, phone books, paper
bags, cereal and gift boxes, brochures, note paper, paperback books & other clean paper
DON'T mclude tissues, paper towels, napkins, paper plates or disposable diapers NO
foil wrappmg paper, photographs, plasllc bags or waxed paper liners, as found In cereal
boxes NO frozen food or JUice concentrate containers NO pet food bags
CORRUGATED CARDBOARD
DO flatten boxes Cut down to 3 teet x 3 teet Be sure they have a wavy Inner
layer Secure under or next to binS or roller carts so cardboard doesn't blow away
DON'T Include waxed cardboard or food contaminated cardboard NO pizza
boxes (Please recycle gift boxes and shoe boxes With mixed paper)
MOTOR OIL {Some mulllfamily complexes prohibit dO-It-yourself 011 changes
- check With your manager)
DO place 10 a one gallon milk Jug With a tight fittmg lid
DON'T mix motor 011 With ill!:i other matenal (no water, antifreeze, brake flUid,
solvents )
SCRAP METAL (ThiS service may not be available at your mullilamily complex -
check With your manager)
DO remove and discard any attached plastiC, wood or rubber Contam loose nuts and
bolts In a tm can
DON'T set out any pieces larger than 24 Inches In any direction or heaVier than 35
SEPARATE your
CONTAINERS from your
MIXED PAPER and your
NEWSPAPER
Place those matenals In thelf
respective SinO Ie tamllv bins or
mulllfamllv roller carts
STACK your sino Ie famllv bIOS as indicated below
I With CONTAINERS on IQf, ,
~ MIXED PAPER In the MIDDLE, &
NEWSPAPER on the!iQllQM
. SET OUT your smole famllv bIOS by 6 30 a m on the morning at collection 'same day
L . _ . _ . ,:s !r,::h P'~ up .!:L~.2E. p~c: n~ ~o~ ~a~5 !e:!, fr?~~u~u~b:.. . _ . _ . _ . _ . _
Recycling Plastics
Why you can recycle some plastics,
but not all plastics
In Clark County, we
have an "All Plastic Bot-
tles" recycling program,
whIch means you can recy-
cle all plastic bottles re-
gardless of color or number.
The only exceptIOn to thiS
r'l11t:lo 1(" ,f' ",....111"' 1-,.l"'\tt1o. ............,,0.
COMING SOONulIWINTER WEATHER
ICY-SNOWY WEATHER:
* If service IS delayed by one day, recy-
cling and garbage service Will pick up
one day late for the rest of the week
* If service IS delayed two or more
days, recycling and garbage Will be
picked up the followmg week on your
regular schedule. In thiS case, there is
no extra charge for tWICt; as much
recyclil!g.~nd garbage.'
WINDY-WET WEATHER:
Please stack your bms as mdlcated above With
CONTAINERS on top, MIXED PAPER m the mid-
dle and NEWSPAPER on the bottom. ThiS pro-
tects your recyclable paper from wmd and wa-
ter
Please place your shredded paper m a paper
bag, mSlde your tan MIXED PAPER bm, ThiS
Will keep the paper from blowmg around when
the bm IS emptied
If vou know the weather IS !1OInI! to he hac!. ~et
V~~_.' _. ~~p~~p !L~~E.p!:.~~n~~o~t~a~5~e~fr?~~U~~b_. _' _' _. _. _ .........n.....-..-..
__a
COMING SOON.a.WINTER WEATHER
, Recycling Plastics
Why ~ou can recycle some plastics,
but not all plastics
In Clark County, we
have an "All Plastic Bot-
tles" recycling program,
which means you can recy-
cle all plastic bottles re-
gardless of color or number.
The only exceptIon to this
rule IS If your bottle once
held a tOXIC substance such as motor oil, pesti-
CIdes, etc.
We don't recycle marganne tubs, yogurt
cups, clear plastIc muffin containers or any of
those other plastIc contamers that are not bottles,
even though they have the recycle symbol on
them with a number on the mSlde that matches
the number on a recyclable bottle.
PlastIc bottles are made in a blow molding
process and the resin for the bottle (regardless of
recycle symbol and number) is thIck and tacky.
Most other contamers are made m an mjectlOn or
thermal moldmg process and the resin for those
con tamers (regardless of recycle symbol and
number) IS generally thm and runny Because of
this dIfference m consIstency of resin, the two
types of plastIcs (regardless of recycle symbol
and number) cannot be recycled together
Currently'there are good markets for the
plastIC bottle resms and very few or far away
markets for the other resms So, all plastIc bottles
are taken at your curb or at your apartment recy-
chng depots and at the transfer statIOns for recy-
clIng
WINDY-WET WEATHER:
Please stack your bms as mdlcated above With
CONTAINERS on lOp, MIXED PAPER m the mid-
dle and NEWSPAPER on the bottom ThiS pro-
tects your recyclable paper from wmd and wa-
ter
Please place your shredded paper m a paper
bag, mSlde your tan MIXED PAPER bm ThiS
Will keep the paper from blowmg around when
the bm IS emplied.
If you know Ihe weather IS gomg to be bad, sel
out your recyclables and trash by 6'30 am the
day of collectIOn.
For recvclmf! only you may skip the wmdy
days, there'ls no penalty for settmg out extra the
next week
For trash, use a bungee cord to hold the lid on
Waste Management customers can rent a 32-
gallon roll cart With a hmged lid for an addl-
lional $1 37 per month
Tie your trash bags closed and place them m
your can
ICY-SNOWY WEATHER:
* If service IS delayed by one day, recy-
cling and garbage service Will pick up
one day late for the rest of the week.
* If service IS delayed two or more
days, recyclmg and garbage Will be
picked up the followmg week on your
regular schedule. In thiS case, there IS
no extra charge for tWice as much
recycling and garbage"
""()
~
~~
Don't let scavengers ll'd.ess up VOUI' ll.'II.eighbollt'hood
Stealing from your recycle bm may lead to other cnmes such as Identity or material theft
To help discourage late night scaveng-
mg, set your recyclables out' by 6:30 am the
morning of collection. The scavengers are
probably looking for aluminum cans thlJt they
can take across the river tO'cash mfol- the de-
posit. While clUshmg your"cans may make
them imposSible to return for a deposit, those
crushed cans may also fall through the sorting
screens at the transfer station and be tossed' as
trash. Please don't completely crush your
cans.
I f you see someone stealing aIUlTIl-
num cans from your recycle bin, call
911 with the location, physical de-
scnption of the scavenger and license
plate number if possible.
If the scavenger has come and gone,
report the activity to the Clark County
Solid Waste Division, 360.397.6118
x. 4352. If you live in the City of
Vancouver, call the City of Vancou-
ver Solid Waste Division,
360.696.8186.
. ..,~ .-~~ /"tJ""{'L;MP"l~~''''> ,,~, 'F ~ ,_ ., ,"
H H' """"""'.~','/~,W'/"(',_"~,",, , , , ,,' D' '. ,
'", '~\' "" ' "~{:r!iA ,,' r::AGE
'C, "", '.. ,,". :-" ,,9USEtlOLD , ,~~AR~l~~'~~f",,",~,~<S]t;,~.. " .,"".', ''':' ,,',,' <, :S'C,'
Did you know that Chrysler, General
Motors, Volvo, and Mercedes-Benz all endorse
the use of re-refined motol Oil, certified by the
Amencan Petroleum Institute (API)? It's true'
Clark County, the Vancouver School Dlstnct,
Northwest Natlllal Gas, C-Twn, and Waste Man-
agement all use re-refined motor Oil m their vehi-
cles Usmg re-refined motor oil conserves 011 le-
sources and reduces our dependency on fOlelgn
Oil
You may purchase re-refined motor oil,
or have your vehicle's oil changed with
re-refined motor oil at
either of these two locations.
Larkin's Garage 1708 ,Washmgton St, Van-
couver 360.693.4881
:> Zinda and Sons 9014 St Johns Blvd., Van-
couver 360.573.1622
If you change your own motor Oil you may recycle It at your curb with
your other recyclables, as well as at the Household Hazardous
Waste facilities listed on the nght. When you set your 011 out for
recycling, It must be 111 a one gallon plastic milk iuS! with a screw
top lid These Jugs fit 111 a special grId on the Side of the recycle
truck and allow the drIver to visually check for contam111atlOn.
Do not mix any other liqUid with your motor oil, no anti-
freeze, no brake flUid, no water When other liquids are mixed with
Oil, the oil becomes a non-recvclable hazardous waste The Household Hazardous
Waste facilitIes at the transfer stations Will take all automotIve flUids and oil fil-
ters FREE of charge. Oil is accepted 111 quantities of 5 gallons or less, per VISIt.
Look for other motor 011 recycling locatIOns 111 the Recycling Directory.
Call the Chirk Coun~y Solid Waste Program for yoUr free copy of the Directory
@ 360.397.6118 ext.4352
Changing your oil
is good for your car
, Using're~r~fined oil
Js good for the earth
Eligible* S~~ior and Disabled Residents
, ,()f ,cl~rk Cou,.ty can get help with
. Household Hazardous Waste
*".,...."'i>' \'~
. '.: You can now have your Household Hazardous Waste
~, ' picked up nght from your home!
-" -., _,_Lltt~.xJ.oiJJ!aJi,~.d--Raj!!t.""",,"~P~o,oJ.fJ1!!J!!i!=.l!ts,_ ~,_ ",...:,.;t.",~ ' Pes~h;jc:les",_.
Beware of T6X!C Trash
It may be difficult to aVOid accumulatmg some household hazard-
ous wastes such as used motor Oil, old pamt, pamt thmners, pestiCides, etc
But these Items lliL!!!!! belong m trash cans, down your dram, m storm
drams or m the ground If your unwanted cherrucals say "danger, cautIOn,
warlllng , pOIson, jlammable or combustIble ", take them to a Household
Hazardous Waste faCility at the transfer stations m Clark County, or to
Philip Services m Washougal (See below for times and locatIOns)
Try some alternatives to household hazardous wastes Use vmegar
and bakmg soda as a c1eanmg solutlOn, compost as a fertilizer (see page 2),
and soapy water as a pestiCide For more mfollnatlOn on alternatives, call
the Clark County Solid Waste Program, 360.397.6118 ex!. 4352
If you can't aVOid accumulatmg household hazardous wastes, you
can reduce the nsk of exposure to yourself, your pets and the environment
by usmg the chemicals as mtended, glvmg them to someone who can use
them up, or properly dlsposmg of them at a Household Hazardous Waste
Facility* You can take up to 25 gallons of waste per VISIt' (5 gallons' of
motor 011 maximum) FREE of charge on deSignated days Transjer statIOns
will charge a handlmg fee for drop off of household hazardous waste on
non-deSignated days '
CENTRAL CLARK COUNTY
Central Transfer & Recycling - 360.256.8482
11034 NE 117th Ave., Vancouver '
*FREE Household Hazardous Waste Drop-off
Sat & Sun, 8am to 4pm ONLY
See page 1 for regular hours
WEST CLARK COUNTY
West Vancouver Materials Recovery Center - 360:737.1727
6601 NW Old Lower River Road, Vancouver
*FREE Household Hazardous Waste Drop-off
Fri & Sat, 8am to 4pm ONLY
See page 1 for regular hours
EAST CLARK COUNTY
Phillip Services - 360.835.8594
625 S 32nd St, Washougal
*FREE Household Hazardous Waste Drop-off
First Tuesday of the month, 10:30am to 3pm ONLY
~>o_
~erosols
Batteries
Garden Chemicals Cleaners -
Aut9f!1~tive .Fluids Hobby Chemicals
Call 1.800.449.7587 for FREE pick up
* To be ehglble, residents must certify that they are a disabled cll1zenlsemor cll1zen (a
semor cll1zen IS anyone over the age of 65) and that they cannot dove to the Household
Hazardous Waste CollectIOn faclhl1es or satelhte collectIOn events nor do they have any
other way to dispose of their hazardous waste
Don't get stuck with "s ,
"Sharps" mclude hypodermic needles, synn t\
tached, scalpel blades, etc. They should never be thro
cause they can hurt the people handlm~~1f tr.
For safe disposal of sharps: ' d1;\
qr Return to a 1?artlclOatmg pharmacy: COi:itA
@ 360.397.6118 ext. 435i for 'a brochure
listed
qr Contact your physIcian. They may accept yo
sharps for disposal.
Persistent, Hioaccummulative 'l'oxins
PBTs are pOIsonous chemicals or pollutants found in clean-
ers, solvents, yard and garden supplements, pesticides, and
other household products. When released into. the.._ environ-
ment, PBTs accumulate in animals and pe6pfe-;<becommg
more concentrated as they move up the food chain, causmg
harm to people and the environment.
AVOId use of products containmg PBTs when possible. I
they must be used, look for the following chemical names on
product labels to Identify which ones contain PBTs, then diS-
pose of them at a Household Hazardous
Waste faCility listed above
Aldnn - Benso(a)pyrene - DDT
DDD - DDE - Dieldrin - DlOxms - Fu-
rans
Hexachlorobenzene - Mercury - PCBs -
Toxaphene
Call the Clark County Sohd Waste DIVISIOn at 360.397.6118 ext. 4352
for more mformal1on on how you can protect yourself and Clark County
by recyclmg or safely dlsposmg of hazardous wastes
Don't DUMP your responsibility on someone else
Computers are wonderful when they are working ..when they become outdated, they may become a toxic burden. It's esti-
mated that 300 million computers will be obsolete in the next couple of years. Almost every umt contains lead, cadmIUm and mer-
cury, three of the EPA's top 25 most hazardous substances known to humans. It seems like everyone has a computer or two (or
three) m their closet or office that is no longer bemg used Unfortunately, the longer you hold on to it, the less likely It Will be reused
as technology advances so rapidly Some thrift stores and many non-profit orgamzatlOns welcome usable eqUipment, but If your
computer IS no longer functional, please don't burden these agencies With your tOXIC scrap Instead, look for other reuse or recy-
cling optIOns Please call the Clark County Solid Waste DIVISIOn for updated mformatlon and a FREE copy of the Recyclmg
Directory @ 360.397.6118 ext. 4352 which lists compames that will reuse or recycle your old computer
----~----~---..------~~---------~------ --~-------- -------~ --~.~ ---
Overwhelmed by-JUAkMilll?
Credit Cars! Offers ~; ~ ..,c..~-...----::---
If your credit IS good, many compames provide .' "\ ;:"~>J
your name, address and credit history to credit .-' - . ~ _ ~O D )
credit card and msurance offers, call :0
1.888.5.0PTOUT When given the options, press ! A ~ 'i':\ ~/)
1 to have your name removed from the list for two V, \j \'1 '\
years, and press 3 to have your name removed per- Itwnk /t(aif
manently F
_ lL-._-_,_ <::::~
Cata!Qg~.,Jlt:g.adQ(,!~t Ad\[~li~~m~..nlli
The Direct Marketmg ASSOCiatIOn mamtams a huge
maIlmg lIst to which bus messes and other orgamza-
tlOns subscribe. To dramatically reduce your Junk
mall, send a post card with all variatIOns of your
name to the address below, and ask to be removed
from the maIlmg list
Direct Marketing Association
Mail Preference Service
PO Box 9008
Farmingdale, NY 11735
LI~tBrokllrs
Government records, phone books, membership
rosters and other sources are used by compames
to compIle maIlmg lIsts The followmg IS a lIst of
major data compilers - you may call them to have
your name removed from their maIlmg lists
W Acxiom 1.887.774.2094
W Donnelley Marketing 1.888.633.4402
W Equlfax 1.800 873 7655
W Expenan Consumer Services 1800.407.1088
W Trans Union 1 888.567 8688
" ;;\ (~,/, "^A,!",j,..t}< '" ~~:::< ~<<.-<~ >-~> -> / ;'(':"" x:,
"oli'day 'Carel Rejuvenation.
cA' JkJ... ~ '" :,
, '<::".:,~~any holiday' cardsSare .not recyclable be-
< V,/ -.?t/::/f?;J/' . i} ,~<'", '.-
catise;,ofothe shmy fOIl 'decoratIOns;. biIt'almost all
"~"~''';-.M'fYx''>. ^'Y~~ ^,'
11Q" ", f e reusable through ,a, program that
, Ildren St. Jude's Ranch' for Chil-
. ilre~ . . ;,~Utt.w& and glumgol~ cards to mak,e
, rds 'ph;"th;~y',then st<V to help raise funds
ff II ", '" s and"other projects Tliev
an time of the ear. "
'Ut off imd1 recycle any perso'nal
nd:ih~'rest'6ttb.e,card to. .
, ,.' , ~i < ~:~~ , !ir~> ^
:S~. Jude;scJilinclUor Children
~ ~^" < -.. < "" t t'
"~":::\;, J O~ 'Spuae, ~tj-~et" ~~ '1,"..
o,~, ~<'t"!.. B9~ld~J: .€itY:\~;Vt8!~9,OkO l OQ :' C
. ,,",ii' tVi,'Phoriel'''t:SOO.492:3562 ";",
Send those peanuts packing!
Styrofoam" peanuts, popcorn, ghosl poo , call 'em what you
Will, they can sure pile up Send those peanuls back for reuse
by callIng a commercial mall service center near you such as
Mall Boxes Etc or The Leller Box
U:~s time to recyde :your old phone book:
Brus!hJ ~p on Recyc;~ed flairilt.
r~\i:i'}"j;"::-i-=~'&~ I The best way to keep your phlone book dry and recy-
1~.q~ (t ';, c able IS to take It to a phone book col ectlOn box m your near-
,#;,'f ,.",,,"''''''''''', \ est Clark County Fred Meyer Parkmg lot. SpeCial phone book
\\!I h i,_;:;' ~'( I dropboxes wIll also be available at the West Van and Central
IIll\ o! ;-"""~~::. ~:J\ Transfer StatIOns (see Recyclmg Contacts on page I for the
\1'\ oi ~-',,,--o;;;::.;--- I: transfer statIOn locatIOns and hours of operatIOn) Recycle
\: \. ';;:;::,i:::::.. I I phone books at these locatIOns from mid-December through
~'- -"'''~~''';":i' February
--~"~~:-_-----_.- . ---1
'LREE Recycling Directory - Call Clark County Solid Waste
Program for your free copy 360.397.6118 ext. 4352
_~ Will help !OU fl:~~:es ~~~ your reusabl~ and ~~rd to r~cy~~.~_~~___
When you use recycled pamt, you are creatIng a market for a material
that otherwise would be disposed of and you are usmg a high qual-
Ity, low cost product that IS good for the environment. , ..
When you take latex pamt m to a Household Hazardous rl:'10'
Waste faCility, It may be recycled mto new pamt by Portland I'
Metro. Their mdoor/outdoor pamt IS sold m 5 gallon quantIties, 'jl ' II
and mixed m 300 gallon batches to ensure consistent color '"""----..
If you represent a non-profit orgamzatlOn, contact Jim
Mansfield, Clark County Solid Waste at 360.397.6118 ext 4016 to
see If you qualify for FREE pamt
Call Portland METRO for a brochure and mformatlOn
about colors, prices and sales locatIOns @ 503.234.3000
premier REUSE FAIR or One Man's
Trash...
A waste reduction success
On a sunny Saturday m September 2002, a Reuse Fair was held at Vancou-
ver City Hall. The City of Vancouver Solid Waste Program researched and organ-
Ized this event, based on a successful program run in Kmg County. Residents were
encouraged to drop offreusable Items mcludmg sports equipment, books and furni-
ture, and were also encouraged to dig through the goodies left by other particI-
pants All Items were available to any person who could use them and you didn't
have to bnng anything for drop-off to pick through the pile.
ElSie Deatherage from the City of Vancouver said that the amount of mate-
rial dropped off would have filled at least two 40-yard dumpsters (the BIG boxes
you see at construction Sites), but at the end of the event, they had only 320 pounds
of material to dispose of. Everyone was pleased with the success of the event and .
there are tentative plans to schedule another Reuse Fair for Spnng 2003 - Just in
time for spnng cleaning.
1'<
:'~":~~J ;,~
,
'.
;):
., '
/~
~. ~ If you have usable items such
a s clothes, appliances and furniture that
no longer fit III your house, sell them at a ga-
rage sale or to a consignment shop, give them
to a friend, donate them to a non-profit or-
ganization...just don't throw them in the trash.
Making items available for reuse helps reduce
waste going to the landfill and may help out
someone in need.
Clark County Solid Waste Program has
just printed a new Recycling Directory WhlCh
provides you with a list of organizations and
businesses that specialize in reuse, repalr and
recycling. For a FREE copy of the directory,
call Clark County Environmental Services at
360.397.6118 ext. 4352.
;y
It may be unfair to put everyone In the same basket, but Americans as a whole are hUf!e consumers. Some say that with our consumptIOn comes Industry and
prospenty. However, If everyone on earth consumed food and material goods at the same rate as Amencans, we would need four earths worth of natural resources
to sustaIn that consumptIOn You can personally reduce your dependence on limited natural resources such as OIl, clean water and mmerals by conSidering the hierar-
chy of Reduce - Reuse - Recycle Reducinf! what you buy and reus/nf! what you have Will ultimately save more natural resources, create less pollution and consume
less energy than recyclIng alone. Here are some tIps for REDUCING and REUSING'
REDUCE :l BUY IN BULK - Reduce the packaging you throwaway or REUSE:l
recycle.
:l BUY LESS STUFF - If you can buy less stuff you Will benefit
by enJoYIng a cleaner environment and redUCIng your expenses
DURABLE GOODS - Use durable cups, dishes, Silverware and
cloth napkInS rather than disposable paper and plastIc goods,
:l HOUSEHOLD ITEMS - Check secondhand and consignment
stores for Items you need lIke furniture or kitchen applIances,
,+
- - _.- -.- - - - - - - - - - -
;M,.....,~
Z~__
--------------~----.
FREE Recycling I Environmerd:al
Conservation Information
TOUR A TRANSFER STATION
Ever wonder what happens to the recyclables and trash once they leave
your curb? Do the recyclables really get recycled? Come see for yourself' Tours of
\the West Van Matenals Recovery Center and Transfer StatIOn are offered by ap-
pOll1tment to mdlvlduals and groups 3rd grade and older Come see the fascinatmg
story of solid waste and recycling as It literally unfolds before your eyes
Waste ReductlOn and Recyclmg presentatIOns are also available to schools
and organized groups To schedule a tour or presentation, contact the Recycling
- Educator or Coordmator at Waste COlmectlOns @ 360.695.4858
The following are comments overheard from students who have
taken the transfer station tour or have had a classroom presentation:
ff(fjlaJ' j!, I \\\~t:\
I>'CO 'WOWI' 'fk!IZl11ll' \'\~~~ ~~.
'Of '/ . J ,f ~~'JJ
ENVIRONMENTAL INFORMATION COOPERATIVE \/'\
~
,~~
The Environmental InformatlOn Cooperative (EIC) offers teachers and the
public access to a vanety of commumty environmental resources. ThiS partnership
of local agencies proVides contact mfonnatlOn, teachmg kits, speakers, a I1st of
field tnps and books, curncula and videos, all on loan through Washmgton State
Umverslty (WSU) at the WSU/Vancouver I1brary. The EIC IS a cooperative effort
of the City of Vancouver, Clark County, Clark Public Utilities, Southwest Clean
Air Agency, WSU Cooperative ExtenslOn and WSU Vancouver For more mfor-
mati on, call Tim Lichen at 360.546.9509 or send an emml to 11-
chen@vancouver.wsu.edu
.,
-----_._-_._-----~---
WHAT: One drawing on an 8.5 x 11" page, turned
---7~ _ sideways (Iandscape*). The tOpiC should be
~^.:,/:t' Waste Reduction, Recycling, Composting,
.'~ Litter Control or Household Hazardous
Waste.
* Landscape means to turn your page sideways before
you color
WHERE: Send your entry, name of the school you at-
tend, name, address, phone number and age
to: City of Vancouver Solid Waste Services
Recycling Contest
PO Box 1995
Vancouver, WA 98668-1995
PRIZES: Judges will pick two winners from each age
group.
iI First Prize: Waste-free lunch kit with dura-
ble bag and reusable containers.
Second Prize: School supplies made from re-
cycled materials, like paper, pencils and fold-
ers.
RULES: * Only one entry per person
* Contest deadline: November 30. 2002
~ * Familv members of employees of Waste
Help the -recycle truck dnver find the household recydables
In this word search puzzle Look forwa-rds, backwards,
diagonally- and up and down for these words
Oil aluminum can cardboard tin
Glass - newspaper plastic paper
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Complete these sentences
Read this newsletter and find the words that finish the fol-
lOWing sentences.
1. Recycle only plastic _ _ _ _ _ _ _ in Clark County.
2. _ _ _ _ _ _ _ _ _ _ worms are the kind that love to eat
your food scraps
3. Pesticides, paints and cleaners are all_________
_________ Wastes.
4 You can buy _ _ _ _ _ _ _ _ paint from Portland Metro.
+--_____~nswe~s..2!.'!wa9~__
~''''
. J/
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AGE
GROUP:
l"onnecTlons J.nc., vvaSTe Iv\unug~rr\l:::n I,
City of Vancouver Solid Waste Services,
and Clark County Solid Waste Program
are not eligible to enter this contest.
04 & under
08-to
011-13
05-7
AT[ENT:f.9JY._fARt"NTS! If you would likE' 'rour'
child's poster' i 0 be conslder'ed for' I11c1USlCn In a Ul!c.n~
dar' N plea:;;e sign the back 0 f the poster' Your signa-
ture constitutes permissIOn for' us io potentially In~
elude tho t poster' 111 0 calendm' If your' child's pas tel"
oppear's, It wdlmclude: your' child's nome, oge, orld
which school they atiend
, - - - - - - - - - - - - - - - - - - - - - - - - - . ~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . i
You can do your part to keep the earth clean, green and happyl Take
the Recycle Pledge; read It aloud to a parent or friend...slgn
it...display It on your wall as your commitment to
waste reduction and recycling.
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To THE EARTH
I will help keep
the earth clean,
green and happyl
MY PLEDGE
I'
I, , do hereby prom- ::
lse to do my part to the best of my abilities l!
r,
to love and respect the earth. I will:
~ Reduce waste
'1> Reuse what I can
<& Recycle all I can
~ Repair what I can
'1> Refuse to litter
<& AVOid excess packaging
~ Talk to others about recycling
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