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Home My WebLink About2002-140ORDINANCE NO.,? day -14 AN ORDINANCE OF THE CITY OF DENTON, TEXAS ACCEPTING COMPETITIVE BEST VALUE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF RESIDENTIAL CURBSIDE RECYCLING AND PROCESSING SERVICES TO THOSE DENTON RESIDENTIAL SOLID WASTE CUSTOMERS AS DETERMINED BY THE CITY COUNCIL; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (REQUEST FOR BIDS NO. 2832 — RESIDENTIAL CURBSIDE RECYCLING AND PROCESSING SERVICES; AWARDED TO TRINITY WASTE SERVICES.) WHEREAS, the City has heretofore solicited, received and tabulated competitive best value bids, as well as alternate bids, for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and the City of Denton, Texas ordinances; and WHEREAS, the City Manager or a designated employee of the City with authority, have reviewed and recommended that the herein described bids are the best value bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore based on the selection criteria set forth in the requests for bids; and WHEREAS, the City Council hereby finds the bid of Abitibi Consolidated, Inc. does not meet the minimum qualifications requirements set forth in the request for bids, and is therefore rejected; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and conclusions set forth in the preamble of this ordinance are incorporated within the body of the ordinance. SECTION 2. That the numbered option in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, is hereby accepted and approved as being the best value bid for such items: BID NUMBER SERVICE VENDOR AMOUNT 2832 Base Bid — Residential Curbside Trinity Waste Services $1.47* Recycling and Processing Services 2832 Recyclables — Payment Schedule** (**City also accepts Bidder's Recyclables — Payment Schedule; City may sell certain recyclables to Bidder from time -to -time as specified therein) k7 *Collection of residential curbside recycling and processing services based on one day per week, selected by Bidder; amount shown is per customer, per month; exclusive of City container/contract administration fee. SECTION 3. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents. SECTION 4. That the City Manager is hereby authorized to execute any and all necessary written contracts for the performance of the services in accordance with the bids accepted and approved herein, provided that such contracts are made in accordance with and relating to the items specified in Section 1, which written contract(s) shall be attached hereto; provided that the written contract is in accordance with the above Request to Submit Bids, Bid Proposals, and documents relating thereto specifying the terms, conditions, plans and specifications, standards, quantities and specified sums contained therein. SECTION 5. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 6. That this ordinance shall become effective immediately upon its passage and approval. / /, PASSED AND APPROVED this ad, day of 2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, QITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PR TY, C ATTORNEY By: 510ur Documents\Ordinances\02\Residendal Recycling and Processing Bid No, 2832-Ord.doc Page 2 STATE OF TEXAS COUNTY OF DENTON CONTRACT FOR RESIDENTIAL CURBSIDE RECYCLING AND PROCESSING SERVICES THIS CONTRACT is made and entered into as of the 14th day of May, 2002, by and between the City of Denton, Texas, a Texas Municipal Corporation, with its principal offices at 215 East McKinney Street, Denton, Texas 76201 (hereinafter "OWNER"); and Allied Waste Systems, Inc., a Delaware Corporation, d/b/a Trinity Waste Services, with its Division office at 4200 East 10 Street, Plano, Texas 75074, (hereinafter "RECYCLING PROVIDER"); the parties acting herein by and through their respective duly -authorized representatives and officers: PREAMBLE WHEREAS, the City Council has carefully studied and evaluated the issue of the need for residential curbside recycling and processing services; and the City Council has decided to move forward with the residential recycling program and has instructed the Solid Waste Department to implement such a program utilizing an outside RECYCLING PROVIDER; accordingly the Solid Waste Department Staff has therefore assembled Request for Best Value Bids No. 2832, to provide the City of Denton with Bid Proposals respecting the provision of residential curbside recycling and processing services by outside recycling providers; and WHEREAS, the City has lawfully put the proposal out for bid, and accordingly has solicited, received, reviewed, and evaluated the applicable bids; the City Council has accepted and approved the Bid Proposal of RECYCLING PROVIDER, as determined by recommendation of Staff, following the lawful evaluation and determination of the successful bidder; and WHEREAS, the City Council desires to promote residential curbside recycling and processing services utilizing the services of an outside RECYCLING PROVIDER, within the City of Denton, Texas, and to enjoy and to reap the environmental benefits and other benefits of curbside recycling and processing in several ways; and WHEREAS, the City Council desires to enter into a Contract to engage the services of RECYCLING PROVIDER m order to execute the City's planned residential curbside recycling and processing program; and the RECYCLING PROVIDER is willing to do so, and is willing to enter into the following Contract with the OWNER; and WHEREAS, RECYCLING PROVIDER and OWNER stipulate that they shall be bound by the terms and provisions of the accepted Bid Proposal of RECYCLING PROVIDER and the Request for Best Value Bids No. 2832 (hereafter the "Bid Request') ,of the OWNER as to the particulars of the General Scope of Services (Section II of the Bid Request); the particulars of the Cost of Services (Section III of the Bid Request) and the particulars of the General Requirements (Section IV of the Bid Request) provision regarding the recycling and processing services engagement; and that said Bid Proposal and Bid Request documents shall prevail in the event there is any conflict that arises between the parties in interpreting the meaning of this CONTRACT, as it 5 Wiv LbcumauMm�wcisW3Vteddmdd CLhdde RC,UM-T =Ing Swdcc CoaftU-3000 Find 3.x Page 1 of 19 pertains to those three (3) areas solely; NOW THEREFORE WITNESSETH, that in consideration of the terms, conditions, mutual promises, mutual covenants and the mutual agreements herein contained, the parties hereto do hereby AGREE as follows: TERMS AND PROVISIONS ARTTCI A I - INCORPORATION OF PREAMBLE The RECYCLING PROVIDER and the OWNER hereby agree and stipulate that the recitations and provisions set forth and expressed above in the Preamble to this Contract, are true and correct and are hereby incorporated by reference into this Contract for all purposes. The OWNER hereby contracts with the RECYCLING PROVIDER, as an independent contractor, and the RECYCLING PROVIDER hereby agrees to perform the services herein in connection with the Project as stated in the Articles to follow. The RECYCLING PROVIDER shall perform all services provided for hereunder promptly, with diligence, and in accordance with the standards customarily obtained for such services in the State of Texas. The services set forth herein are in connection with the following described project (the "Project"): Providing residential curbside recycling and processing services throughout the City of Denton, Texas as specified in the Bid Proposal and the Request for Best Value Bids No. 2832 for the period beginning on the effective date of this Contract and ending five (5) years thereafter, unless otherwise extended or earlier terminated, as provided for in this Contract. ARTTCT.F. TV. SCOPE OF SERVICES The RECYCLING PROVIDER shall perform the following Basic Services in accordance with the Standards provided for in Article III. hereinabove, to wit: A. To perform all those services that are set forth in the RECYCLING PROVIDER'S "Bid Proposal" (hereafter the `Bid Proposal") under Request for Best Value Bids No. 2832 (her fter the "Request for Bids") to the City of Denton, Texas, signed by / (Name)(Title) of RECYCLING PROVIDER, dated (Mon th/Date) //J,Z, , 2002; which Bid Proposal is attached hereto as Exhibit "A' and is incorporated herewith by reference. S:W mwmnua nfLL'inwPRf dWL 66&x=Aft-Fm n, Sw= CaWn WW2 Final]d Page 2 of 19 B. To perform all those services that are set forth in the OWNER'S "Request for Best Value Bids No. 2832 " which is dated March 17, 2002, together with all Addenda which are issued in connection therewith by the OWNER; which "Request For Best Value Bids No. 2832" document is attached hereto as Exhibit `B" and is incorporated herewith by reference. C. Exhibits "A" and `B" hereto shall govem, in the event that there is any conflict regarding the interpretation of the provisions of the Contract respecting those matters set forth in the Preamble hereto. D. If there is any conflict that arises between the terms of this Contract and any other provision of Exhibit "A" and/or Exhibit `B," then the terms and conditions of this Contract shall control over the terms and conditions of the attached Exhibits. ARTICLE V_ ACCEPTABLE RECYCLABLE MATERIALS A. The Contractor shall collect the following acceptable recycling materials under this Contract: • All classes of paper (including, but not limited to newspaper; office paper; junk mail; magazines; telephone books; and catalogs); • Corrugated cardboard and chipboard (including, but not limited to cereal boxes); • Aluminum, steel, tin food and beverage cans and containers; • Glass bottles, jugs, and jars (excluding ceramic containers); • Plastic bottles, jugs, and jars; • Such other materials that may be added by the mutual consent of OWNER and RECYCLING PROVIDER. B. The residents of OWNER are not required to pre -crush recycled cans or other recyclable materials. C. The RECYCLING PROVIDER, at any time, may propose that other recyclable materials be included by the OWNER and RECYCLING PROVIDER for residential pickup, in addition to those materials specified in Article V.A. above. F-Mlyffifir"I A. The RECYCLING PROVIDER shall not collect those materials that are not on the acceptable recycling materials list set forth in Article V.A. hereinabove. When RECYCLING PROVIDER does not collect a product set out at a residence, the RECYCLING PROVIDER will provide the residential recycling customer with a written explanation explaining the reason(s) why RECYCLING PROVIDER did not collect the product. The written explanation shall be in the form of RECYCLING PROVIDER'S "Notice of Non -Collection" and shall be attached either to the front door of the recycling customer, or alternatively to the recycling container. This form shall specify the nature of the problem or violation, as well as any action necessary to correct the problem or violation. For example: Items set out for collection which would not be collected by RECYCLING S!Wur4um=l nwcUW%l Wd W L1u8siJe Recyeline-Procemine S cm CmveWMFW1].tl Page 3 of 19 PROVIDER would include pizza boxes; plastic furniture; window glass. B. The RECYCLING PROVIDER'S drivers shall record all "Notice of Non -Collection" documents that are delivered to OWNER'S residential recycling customers, as well as any verbal resident communications received by RECYCLING PROVIDER concerning recycling service in a "Driver Communication Summary Log." This Log shall be completed and submitted by RECYCLING PROVIDER to OWNER on a monthly basis. ARTICLE. VIT- RECYCLING MATERIALS PERFORMANCE REQUIREMENTS OWNER requires the RECYCLING PROVIDER to collect 100% of acceptable recycling materials (as defined in Article V.A. above) that are properly placed out for collection. RECYCLING PROVIDER shall process at least 95% by weight of the recyclables collected, with no greater than 10% of the collected recyclables being allowed for disposal. RECYCLING PROVIDER shall comply with these three (3) requirements for each calendar month of this Contract. In the event that the market changes for a specific processed material to the point that the material is not marketable for the processing facility processing Denton's recyclables, that specific material shall be excluded from this Article's disposal performance requirements for the period of time that the material has no market value. Processed material which is used as an alternate daily cover ("ADC") in a landfill, will not be considered material disposed of, for purposes of this Article, provided that it has been approved through a permit modification from the Texas Natural Resources Conservation Commission ("TNRCC") to use the material as an ADC. RECYCLING PROVIDER shall maintain adequate written records to substantiate monthly compliance with these three (3) requirements. The OWNER may periodically audit the RECYCLING PROVIDER'S compliance with the three (3) requirements of Article VH. The parties agree that a failure of RECYCLING PROVIDER to meet these three (3) requirements shall be an act of default and shall also be grounds for terminating this Contract. ARTICLE VM BUYER AUTHORIZATION/RECYCLABLE MATERIALS PROCESSING SITE RECYCLING PROVIDER shall complete, comply with, and provide information to the OWNER as required in the OWNER'S Bid Request, Section 11.5. "Buyer Authorization'; and Section II.7. "Recycling Materials Processing Site and Information." OWNER acknowledges that RECYCLING PROVIDER has complied with this Article. ARTICLE TX IMPLEMENTATIONAND OPERATIONS PLAN RECYCLING PROVIDER shall complete, comply with, and provide information to the OWNER, as required in the OWNER'S Bid Request, Sections 11.8.1. through H.8.9. "Implementation and Operations Plan." OWNER acknowledges that RECYCLING PROVIDER has complied with this Article. S:W O umm4 nlnGeWNms flgQ ddn 0.s,sIWp m gS =Ca -M Final ldrc Page 4 of 19 ARTTCT.F. X_ CURBSIDE COLLECTION METHODOLOGY RECYCLING PROVIDER shall complete, comply with, and provide for all of the requirements stated in OWNER'S Bid Request, Section II.9.1. through H.9.12. entitled "Curbside Collection Methodology — Bins, Carts," and shall submit all other required information to OWNER. RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Section H.10.1., "Container Inventory Levels." ARTICLE XTT, PROPOSED SERVICE AREA ROUTE PLAN RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Section 11.11., "Proposed Service Area Route Plan." ARTICLE XM- HOURS AND DAYS OF COLLECTION RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Section 11.12.1. through H.12.4., "Hours and Days of Collection." ARTTCT.F XTV. PUBLIC EDUCATION PLAN OF RECYCLING PROVIDER RECYCLING PROVIDER shall provide and shall agree to fund the annual Public Education Plan as required, and shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Sections 11.14.1 through H.14.4., "Public Education Plan." ARTICLE XV- RECYCLING PROVIDER'S CUSTOMER SERVICE PLAN A. RECYCLING PROVIDER shall provide OWNER a detailed description of its Customer Service Plan as required by OWNER'S Bid Request, Section II.15.1., "Customer Service Plan." OWNER acknowledges that RECYCLING PROVIDER has provided its Customer Service Plan. B. RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Sections 11.15.2. through H.15.5. These requirements expressly include the "City of Denton Telephone Log" which shall be prepared by RECYCLING PROVIDER and submitted to the OWNER along with each monthly invoice for services rendered under the Contract, as provided in OWNER'S Bid Request, Section H.15.4. S:Wur Du=wWUnwg 2N idatiil UA eRayulio8-Auuusiue Sm wUnmt-M Fwl Jd Page 5 of 19 ARTTCT.F. XVT_ MISSED COLLECTIONS OF CURBSIDE RECYCLING RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Sections H.16.1. through H.16.4., "Missed Collections." ARTTCT.F XVIT_ REQUIRED REPORTING REQUIREMENTS BY RECYCLING PROVIDER RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Sections 11.17.1. through 11.17.6., "Reporting." This Article expressly includes all reports, whether monthly, quarterly, annual, or special, referred to in OWNER'S Bid Request. RECYCLING PROVIDER shall submit the required monthly reports to OWNER along with each of its monthly invoices for services rendered, as provided in OWNER'S Bid Request, Section H.17.2. ARTTC T.F. XVTTT- CITY DESIGNATED HOLIDAYS RECYCLING PROVIDER shall comply with all of the requirements stated in OWNER'S Bid Request, Sections H.18.1. through U.18.3., "City Designated Holidays." ARTTCLF. XTX. INCLEMENT WEATHER DAYS RECYCLING PROVIDER shall comply with all of the requirements stated in OWNER'S Bid Request, Sections 11.19.1 through II.19.4. "Inclement Weather Days." RECYCLING PROVIDER understands that if no curbside recycling collection service is provided due to inclement weather on a given day or days, then that will accordingly result in a reduction of revenue paid by OWNER to RECYCLING PROVIDER, calculated as specified, in accordance with OWNER'S Bid Request, Section 11.19.4. ARTTCT .F XX- ADDITIONAL SERVICES Any Additional Services to be performed by RECYCLING PROVIDER, if authorized by OWNER, which are not included as basic services in the above -described scope of services, set forth in Article IV above, shall be later agreed -upon by OWNER and the RECYCLING PROVIDER, who shall determine, in writing, and upon City Council approval, the scope of such Additional Services, the amount of compensation for such additional services, and other essential terms pertaining to the provision of such Additional Services by RECYCLING PROVIDER. s:wur a mk Rmns $-rto 09 scans aw I-M F+ zaw Page 6 of 19 The parties hereto hereby agree that this Contract shall be effective on the 4 h day of November, 2002, the first date upon which the RECYCLING PROVIDER provides residential recycling collection services under the Contract. This Contract shall remain in effect for a term of five (5) years following its effective date. This Contract may be sooner terminated in accordance with the other provisions of this Contract. ARTICLE XXTT. EXTENSIONS OF TERM This Contract may further be renewed for two (2) additional two (2) year renewal terms. Following the initial five (5) year Contract term provided for in Article XXI, and with the agreement of the OWNER and RECYCLING PROVIDER, this Contract may be renewed in writing. There may be two (2) separate renewal terms of two (2) years each. If either party elects to not extend the Contract under the renewal term provision stated in Article XXII herein, the party not wishing to renew the Contract must provide written notice to the other party at least six months in advance of the expiration of the existing Contract term, or applicable renewal term. If either party does not wish to renew the Contract for any reason, then the Contract shall not be extended. Both parties understand that the two (2) renewal terms are optional. This Contract may only be renewed if the parties are not in default at the time of the commencement of the renewal term. The terms of the Contract, if extended, shall remain the same, with the exception of "Compensation," as well as any other provisions to which OWNER and RECYCLING PROVIDER may agree. "Compensation" shall be adjusted by the parties by the index specified in Paragraph 111.1.5. of the Bid Request, in the event of any renewal of this Contract. ARTICLE XXM TIME IS OF THE ESSENCE TIME IS OF THE ESSENCE IN THE PERFORMANCE AND COMPLETION OF THIS CONTRACT. RECYCLING PROVIDER shall make all reasonable efforts to complete the services set forth herein as expeditiously as possible and to meet the schedule(s) reasonably established by the OWNER, acting through its Director of Solid Waste or his designee. I W • &I' • I A. COMPENSATION TERMS: 1. The RECYCLING PROVIDER shall provide Required Residential Curbside Recycling Services ("Recycling Services") in the City of Denton, Texas. Recycling Services requires that all single family, duplex, triplex, and fourplex residents of the City (Rate Codes SWR and RPT) shall pay OWNER for Recycling Services. OWNER shall provide all customer billing services. 2. The amount of the RECYCLING PROVIDER'S monthly invoice for Recycling Services shall be calculated as follows: S:bur �==m Utr tl\OEVU dmdW QubsiEe R¢ fuH'�¢ USA ��1-2=Fmllda Page 7 of 19 . Number of Accounts X the Monthly Unit Rate = Invoice Amount . RECYCLING PROVIDER'S Monthly Unit Rate for the initial term of this Contract is $1.47 per calendar month 3. For purposes of determining RECYCLING PROVIDER'S monthly invoice, the number of accounts shall be determined and provided by the OWNER to the RECYCLING PROVIDER within ten (10) days of the last day of the month for which Recycling Service was provided. The number of accounts shall be the number of active residential solid waste accounts, charged at a Solid Waste residential rate (Rate Codes SWR and RPT) in OWNER'S applicable rate ordinance on the last business day of the calendar month for which service was provided, and is being billed. For example: the number of accounts for calculating the invoice for January shall be the number of accounts at the close of business on the final business day of January. It is further agreed that no monthly adjustments or allowances shall be made for accounts due to residents moving in or out during the month. Also no monthly adjustments or allowances shall be made on accounts written off by OWNER for non-payment. OWNER'S Customer Service Department's count of accounts shall be reduced by the Solid Waste Department's most current list of "Residential Customers Not Receiving Solid Waste Services" on the last day of the calendar month for which service was invoiced. The final figure obtained in this Subparagraph 3, is termed the "Number of Accounts" for purposes of establishing the monthly invoice amount. B. BILLING AND PAYMENT: 1. OWNER shall pay RECYCLING PROVIDER monthly. RECYCLING PROVIDER shall invoice and shall submit to OWNER along with the billing invoice, all required monthly reports, by twenty (20) calendar days following the month for which RECYCLING SERVICE was provided. OWNER will pay to RECYCLING PROVIDER the amount of the monthly invoice, less all penalties or disputed amounts, within fifteen (15) business days of the OWNER'S receipt of the monthly invoice as well as all required monthly reports. OWNER is under no obligation to pay for a monthly invoice until all of the required monthly reports have been submitted, along with the monthly invoice. 2. OWNER and RECYCLING PROVIDER agree that Recycling Services which are not provided due to inclement weather, will result in reductions of normal monthly ratepayer revenue paid to the OWNER, and will therefore result in lower monthly invoices, and lower amounts of payments from OWNER to RECYCLING PROVIDER. Revenue reductions shall be based upon calculations utilizing the number of normally scheduled pick-up days that RECYCLING PROVIDER would perform Recycling Services during the month, versus the number of actual days that service was provided. For example: Inclement Weather Monthly service days during the month = 18 Actual days service was provided = 17 (due to one inclement weather day) Normal monthly payment per residence to RECYCLING PROVIDER = $1.47 17 days / 18 days = 94% $1.47 x 94% _ $1.38 Actual monthly payment per residence to RECYCLING PROVIDER = $1.38 g:Wer W[umaYMnnn¢WgiVte®dmug WNdtlg R=,Ilg-Renagogg ca Cantl WW2 Ping 3Aw Page 8 of 19 3. OWNER and RECYCLING PROVIDER agree that the Monthly Unit Rate established in this Contract, and utilized in this Article XXIV shall be the rate established, exclusive of any sales tax; exclusive of any future state or federal fees which could possibly be imposed on Recycling Services during the term of this Contract; and exclusive of any local administrative fees for Recycling Services. In the event that a Contract extension is agreed upon the Monthly Unit Rate will adjust one time, commencing with the first year of the Contract extension. C. PAYMENT FOR CONTRACT EXTENSION(S): 1. The Monthly Unit Rate per residence, per month for Recycling Services will increase or decrease for any Contract extension beyond the initial contractual term. The effective date of the new rate will be the first day of the first month of the Contract extension. The new rate shall be effective, and shall remain in effect for the balance of the Contract extension term(s). The Monthly Unit Rate shall be determined by utilizing the "U.S. City Average Consumer Price Index — All Urban Consumers (CPI-U) from the Bureau of Labor Statistics, Southwestern Statistical Summary, Special Index — All Items Less Shelter." The formula for calculation of the new Monthly Unit Rate for periods after the initial Contract term, shall be calculated by using the following stated methodology: CPI for the current period 185.00 Less CPI for the previous period 170-00 Index point change 15.00 Divided by the previous period CPI 170.00 Equals (quotient plus 1.0) 1.088 Initial Contract Monthly Unit Rate = $1.47 (for five years) Example — Contract Extension Monthly Unit Rate = $1.47 x 1.088 = $1.60 (rounded to the nearest penny) For purposes of calculating the new Monthly Unit Rate, OWNER and RECYCLING PROVIDER agree to use the most current month's CPI-U Index data available from six (6) months prior to the end of the initial Contract term (in other words from April 2007 for the first extension of the Contract). This would be the current period CPI-U. The previous period CPI-U will be for the month that is 24 months prior to the "current period" CPI-U (i.e. April 2005). 2. Once determined, the new Monthly Unit Rate shall apply for all renewal term(s) of the Contract. No other materials collection charges are allowed pursuant to this Contract. 3. OWNER and RECYCLING PROVIDER agree that no penalty charges and no interest charges shall be paid on any outstanding invoices or for any disputed invoice amounts. D. ADDITIONAL SERVICES: The provisions of OWNER'S Bid Request, Section 111.3. shall apply to the Recyclables Payments Schedule listed in this paragraph, for all listed recyclables delivered to RECYCLING PROVIDER by the OWNER or OWNER'S agents, during the term of S:b rDxommWGnux4WNlmidmid C gdc RrinSAm Mw% Swcc Cnnve-2=FM 3.dm Page 9 of 19 this Contract. The OWNER may, from time to time, have available recycled materials collected from the City of Denton's drop-off collection sites. The OWNER shall have the option to deliver pre-sorted and commingled recycling materials to the processing facility of the RECYCLING PROVIDER. RECYCLING PROVIDER'S payments to OWNER for recyclables received, processed, and recycled are: Commingled paper (mixed) 50% of Average Houston Listing — Waste News OCC 50% of High Side Southwest Listing OCC — OBM #6 ONP 50% of High Side Southwest Listing #6 News — OBM #8 ONP 50% of High Side Southwest Listing #8 News — OBM Office paper 50% of Average Houston Listing — Waste News Steel 50% of High Side Houston Listing — Waste News Aluminum Price sold less $0.05 per pound Flint glass 25% of Low Side Houston Listing — Waste News Amber glass 25% of Low Side Houston Listing — Waste News Green glass 25% of Low Side Houston Listing — Waste News RECYCLING PROVIDER shall pay over to OWNER the amount due and owing to OWNER for the above listed recyclables received, processed, and recycled on a once monthly basis, and shall include a separate remittance to: "City of Denton, Texas Solid Waste Department," for such payment along with the monthly invoice for Recycling Services and the required monthly reports. RECYCLING PROVIDER agrees to recycle the above materials within sixty (60) days after receipt of same from the OWNER. RECYCLING PROVIDER agrees to maintain an accurate log, open to OWNER'S reasonable inspection, stating how and where the type of material was received; the name of the OWNER'S agent transmitting the material to RECYCLING PROVIDER; the weight of the material processed; where the material was taken by RECYCLING PROVIDER; the date recycled. ARTICLE XXV_ RECYCLING PROVIDER PENALTIES RECYCLING PROVIDER shall complete and comply with all of the requirements stated in OWNER'S Bid Request, Section IV. 1.1 through IV.1.3. RECYCLING PROVIDER shall provide services to OWNER as an independent contractor, not as an employee of the OWNER. RECYCLING PROVIDER shall not have or claim any right arising from employee status. S:Wur Weumrn4MnoltuWOMeotlmdW(L mde Pe fw&Aatt®eg Swcm CwV -M Fi J.dw Page 10 of 19 ARTICLE XXViT_ OBSERVATION AND REVIEW OF THE WORK The RECYCLING PROVIDER will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of RECYCLING PROVIDER. INE II I 19 1 P1 9UV 1 The RECYCLING PROVIDER shall indemnify and save and hold harmless the OWNER and its officials, officers, agents, attorneys, employees, and recycling customers of the OWNER, from and against any and all liability, claims, demands, damages, losses and expenses, including but not limited to court costs and reasonable attorney fees incurred by the OWNER, and including without limitation damages for bodily and personal injury, death, or property damage, resulting from the negligent acts or omissions of the RECYCLING PROVIDER or its officers, shareholders, agents, attorneys and employees in the execution, operation, or performance of this Contract. Nothing in this Contract shall be construed to create a liability to any person who is not a party to this Contract and nothing herein shall waive any of the party's defenses, both at law or equity, to any claim, cause of action or litigation filed by anyone not a party to this Contract, including the defense of governmental immunity, which defenses are hereby expressly reserved. F-VI YMO:A:4►:M As soon as is practicable after notification of the bid award, and prior to the signing of this Contract, the RECYCLING PROVIDER shall file with the Purchasing Department of the City, the certificates of insurance as set forth below. During the performance of the curbside recycling and processing services under this Contract, RECYCLING PROVIDER shall also maintain the following insurance, set forth in Article XXX, with an insurance company licensed to do business in the State of Texas by the State Insurance Board or any successor agency thereto, that has a rating with A. M. Best Rate Carriers of at least an "A" or above. Further, all deductibles and self -insured retentions, if any, shall be declared in the Bid Proposal. If the OWNER requests, the insurer shall reduce or eliminate such deductibles or self - insured retentions with respect to the City; or the RECYCLING PROVIDER shall provide a bond guaranteeing the payment of losses and related investigations, claim administration, and defense expenses. Liability policies shall be endorsed to provide that the City of Denton, Texas, its officials, agents, employees, and volunteers are named as additional insured. Such liability policies shall contain a provision that it is primary to any other insurance available to the additional insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. All policies of insurance required to be maintained hereunder shall be endorsed to read: "Said policy shall not be cancelled, non -renewed or materially changed without thirty (30) days advance S:buO umenliTno4e[WONfzd=UO O rude Rtt 18-Mattuin85w=c n4 t-203 Fwl 3.dm Page 11 of 19 written notice being given to the OWNER [the City of Denton, Texas] except when the policy is being cancelled for non-payment of premium, in which case ten (10) days advance written notice is required." Should any policy of required insurance be provided under a form of coverage that includes a general annual aggregate limit, providing for claims investigation or legal defense costs to be included in the general annual aggregate amount, then RECYCLING PROVIDER shall either double the occurrence limits, or shall obtain "Owner's and Contractor's Protective Liability Insurance." Should any required insurance lapse during the term of this Contract, or any extension thereof, requests for payments made by the RECYCLING PROVIDER originating after such lapse of coverage shall not be processed unless and until OWNER receives satisfactory written evidence of the coverage being reinstated, as required hereunder. In the event the policy or policies of insurance are not reinstated, OWNER may, at its sole option, terminate this Contract, effective on the date of the lapse of coverage. 10 :MN 1 N 91 IN ILI ME MI 0 LOMMMA RECYCLING PROVIDER shall maintain the listed insurance coverage for the benefit of the OWNER as required, and in accordance with Article .XXIX above, which specifically includes the following minimum coverage: A. General Liability Insurance with combined single limits of not less than $1,000,000 shall be provided and maintained by the RECYCLING PROVIDER. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. In the event that Commercial General Liability Form (ISO Form CG 0001 or other current edition) is used, coverage shall include Coverage A (including the premises; operations; products; completed operations; independent contractors; contractual liability covering this Contract; and broad form property damage coverage) and Coverage B (including personal injury). In the event that Comprehensive General Liability Form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used it shall include at a minimum, the following coverage: (1) Bodily Injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse, or underground (XCLI) exposures; and (2) Broad Form Contractual Liability (preferably by endorsement) covering this Contract; with personal injury liability and broad form property damage liability. B. Commercial Automobile Liability Insurance with Combined Single Limits (CSL) of not less than $1,000,000 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles, trucks, and other mobile equipment used in conjunction with this Contract. C. Worker's Compensation Insurance in accordance with statutory requirements, and in addition to meeting the minimum statutory requirements for issuance of such insurance, shall provide Employer's Liability Insurance with limits of not less than $100,000 for each accident; S:W rS Cft Co-2= 81ml l.tl Page 12 of 19 $100,000 per each employee; and a $500,000 policy limit for occupational disease. The OWNER need not be named as an "Additional Insured," but the insurer shall agree to waive all rights of subrogation against the OWNER, its officials, agents, employees, and volunteers for any work performed for OWNER by RECYCLING PROVIDER. D. Excess Liability Coverage (or Umbrella Coverage) with a minimum policy limit of $1,000,000, covering in excess of the insurance policies listed in Article XXX.A., XXX.B. and XXX.C., above. �:17�1 r•r The RECYCLING PROVIDER shall file with the City of Denton Purchasing Department, as soon as practicable following notification of the bid award, subsequent to City Council approval, and prior to the signing of this Contract, a performance bond in the minimum amount as determined in this Article below. The performance bond shall be in an amount equal to: the product of the Number of Accounts times the Monthly Unit Rate times the Number of Months Remaining in the Contract term (however, not to exceed 24 months in any event), plus ten (10%) percent; such bond to be adjusted one (1) year later, and upon each subsequent annual contract anniversary date thereafter. For purposes of this initial calculation, the number of units to be used is 19,900. The RECYCLING PROVIDER shall be required to keep and maintain at all times, throughout the Contract term and any renewal(s) thereof, a performance bond, in full force and effect. The performance bond is intended to serve as further security held by the OWNER for RECYCLING PROVIDER'S faithful performance of the Contract. RECYCLING PROVIDER shall pay all premiums for the performance bond. A certificate issued by a lawfully -authorized representative of the bonding company, showing that all required premiums have been paid in full, will accompany the bond and any replacement thereof, before its filing with OWNER is effective. The performance bond shall be issued by a duly authorized corporate surety company presently authorized to do business in the State of Texas. Before its filing is effective, the performance bond will require the written approval of the City Attorney of the City of Denton, Texas as to form and content. ARTTCT.F. XXXTT. WRITTEN GENERAL ASSURANCES RECYCLING PROVIDER represents that all of the statements made by its officers, employees, attorneys, or other representatives regarding the "Written General Assurances" to the Bid Request in Articles .IV.5.1. through IV.5.5.; Article IV.6., "List of Recently Disposed and Pending Recycling Services List"; and Article IV.7., "History of Regulatory Compliance" are each true and correct and shall constitute representations made to the OWNER to induce OWNER'S acceptance of RECYCLING PROVIDER'S competitive bid. These representations shall expressly survive the bid process and the signing of the Contract. Further, RECYCLING PROVIDER agrees to promptly supplement or to otherwise continuously update these representations promptly in writing, following the signing of this Contract, whenever there is a material change of S:WrO ==MkCnMi M®d Wm MftR Iwg-Ro fl5 Sw= Covv,cl-M Fi l]dm Page 13 of 19 circumstances, so long as this Contract, or any extension thereof, is in force and effect ARTIC I .F. XXXIII_ ACTS OF DEFAULT AND TERMINATION OF CONTRACT A. An act of default shall arise when RECYCLING PROVIDER and/or OWNER shall substantially fail to fulfill its obligations under this Contract. Once an act of default has occurred, the non -defaulting party shall provide the defaulting party with twenty (20) days written notice, specifically describing the default, the curative action necessary, and an opportunity to cure the default. If the default is cured within the time provided in the notice, then no further steps may be taken toward terminating this Contract. If however, the default is not cured within that time, and no extension of time is obtained in writing by the defaulting party, then the non -defaulting party may proceed with termination of the Contract, if that party so elects. B. This Contract may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Contract. No such termination shall be effected unless: (1) the defaulting party is given written notice of default as set forth in Article XXXIII.A., above and the alleged breach is not cured to the non -defaulting party's satisfaction; (2) written notice shall be delivered to the defaulting party at the notice address provided herein in Article XXXVI, by means of certified mail, return receipt requested, of the non -defaulting party's intent to terminate the Contract, and setting forth specifically, the reason(s), and specifying the non-performance (if applicable) of provisions of the Contract, or other reasons, and a period of not less than thirty (30) days to fully cure such failure; and (3) an opportunity for consultation between the parties, to take place in Denton, Texas, prior to any termination of the Contract [the consultation is to take place within the thirty (30) days following issuance of the termination letter specified in Article XXXIII.B. hereinabove.] ARTICLE XXXiV. RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval of the work described herein by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the RECYCLING PROVIDER, its officers, agents, or employees, for the completeness and competency of their work performed pursuant to this Contract; nor shall such approval by the OWNER be deemed as any assumption of such responsibility by the OWNER for any defect in the work prepared by the RECYCLING PROVIDER, its officers, agents, or employees. ARTICLE XXXV_ ALTERNATE DISPUTE RESOLUTION The parties shall first make efforts to settle any disputes arising under this Contract, except as to disputes specifically otherwise provided for by this Contract (or by the Bid Request and Bid Proposal), by submitting the dispute to arbitration, mediation, or other means of alternate dispute resolution. If the parties should fail to agree on the form of dispute resolution within ten (10) days, then they shall be deemed to have selected mediation. The parties shall diligently pursue and cooperate in achieving a resolution of the problem. Each party shall be responsible for one-half of the reasonable costs of alternate dispute resolution. 5 bur UorvmrnWGnhrnub3lRe®tlmYJ NMitle Nsyxlmg-Hrceuine Swine Qn.,I-M Pod 3. m Page 14 of 19 F-11,411am All notices, communications, and reports required or permitted under this Contract shall be personally delivered to; or telecopied to; or mailed to the respective parties by depositing same in the United States mail at the addresses shown below, postage prepaid, certified mail, return receipt requested, unless otherwise specified herein. To RECYCLING PROVIDER: Trinity Waste Services Attn.: General Manager 4200 East 10 Street Plano, Texas 75074 Fax: (972) 422-5683 To OWNER: City of Denton, Texas Attn: City Manager 215 East McKinney Street Denton, Texas 76201 Fax: (940) 349-8596 and Shirlene Sitton Recycling Manager City of Denton, Texas 901-A Texas Street Denton, Texas 76209 Fax: (940) 349-7117 All notices under this Contract shall be effective upon their actual receipt by the party to whom such notice is given, or three (3) days after mailing of the notice, whichever event shall first occur. RECYCLING PROVIDER and/or OWNER shall promptly notify the other party in writing of any change of name, business address, representative, fax number, or other identifying information. _\71YCi D .�.1 I'ZJ 9 RM l" This Contract consisting of nineteen (19) pages and two (2) Exhibits constitutes the complete and final expression of the Contract of the parties and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, understandings, and agreements which may have been made in connection with the subject matter of this Contract; SAVE AND EXCEPT the Bid Proposal and Bid Request (including any and all Addendums issued by OWNER in connection therewith) of the parties as stated herein. ' .RIII M11 WAR loll 6 If any provision of this Contract is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Contract, and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform s:w D umm�ntruaWae dwfiOo gde aec IW-vnk gsa.;om coe ,-tare F"1as Page 15 of 19 this Contract, to the extent reasonably possible, to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the original intentions of the parties respecting any such stricken provision. ARTICLE XXXIX_ COMPLIANCE WITH LAWS RECYCLING PROVIDER shall comply with all federal, state, local laws, rules, regulations, and ordinances applicable to the work performed by RECYCLING PROVIDER hereunder, expressly including, without limitation, those dealing with employment, personal safety, fire code safety, and environmental issues, as they may now read or as they may hereafter be amended. a\:71Y[N/IDi� • ' I I • ' ' • 11' In performing the services required hereunder, RECYCLING PROVIDER shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. A. RECYCLING PROVIDER represents that it has or will secure at its own expense all personnel required to perform all the services required under this Contract. Such personnel shall not be employees or officers of, nor have any contractual relations with the OWNER. RECYCLING PROVIDER shall immediately inform the OWNER in writing of any conflict of interest or potential conflict of interest that RECYCLING PROVIDER may discover, or which may arise during the term of this Contract. B. OWNER requires that RECYCLING PROVIDER carefully safeguard all documents, data, and information provided by OWNER to RECYCLING PROVIDER incident to this engagement. RECYCLING PROVIDER recognizes that such documents; data; and information; possibly involve sensitive, competitive issues; in some cases, confidential information; and in some cases proprietary information; and the disclosure of such information by RECYCLING PROVIDER to any third party, without the express written consent of OWNER, is expressly prohibited by OWNER, and would likely cause economic loss and detriment to OWNER. Any such unauthorized disclosure of information by RECYCLING PROVIDER shall constitute an act of default respecting this Contract. RECYCLING PROVIDER represents to OWNER that it will safeguard OWNER's information and will, upon OWNER'S reasonable request, provide OWNER with RECYCLING PROVIDER'S policies regarding its procedures for identifying conflicts of interest, and its procedures and safeguards which are in place which would apply to RECYCLING PROVIDER'S treatment and handling of OWNER'S documents, data, and information. C. OWNER agrees that it will safeguard all documents, data, and information provided by RECYCLING PROVIDER incident to this engagement. OWNER recognizes that such documents, data, and information, possibly involve sensitive, competitive issues; in some SM1 urOmwumlSUwutd02Uleei0muul QiMiEc Rm Iin8-Rucc gSmcm G0Y 1-2002 Fi 3. rc Page 16 of 19 cases, confidential information; and in some cases, proprietary information; and the disclosure of such information by OWNER to any third party, without the express written consent of RECYCLING PROVIDER, is expressly prohibited by RECYCLING PROVIDER, and would likely cause economic loss and detriment to the RECYCLING PROVIDER. Any such unauthorized disclosure of information by OWNER shall constitute an act of default respecting this Contract. D. All services required hereunder will be performed by RECYCLING PROVIDER or under its direct supervision. All personnel engaged in perfomvng the work provided for in this Contract, shall be qualified; shall meet all the requirements of an employee of the City of Denton, Texas; and shall be authorized and permitted under applicable state and local laws to perform such services. ARTTCT E XT .TT_ ASSIGNABILITY The RECYCLING PROVIDER shall not assign any interest in this Contract and shall not transfer any interest in this Contract (whether by assignment, novation or otherwise) without the express written consent of the OWNER. No assignment of this Contract shall be approved by the OWNER unless the transferee entity shall have financial worth and resources equal to or greater than RECYCLING PROVIDER. RECYCLING PROVIDER shall also promptly notify OWNER of any change of its name as well as of any material change in its corporate structure, its location, and/or in its operations. ARTICLE XT.TTT_ MODIFICATION No waiver or modification of this Contract or of any covenant, condition, limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. No evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Contract, or the rights or obligations of the parties hereunder, unless such waiver or modification is in writing, duly executed. The parties further agree that the provisions of this Article will not be waived unless as herein set forth. ARTTCT.F. XT.TV_ RIGHT TO ACCESS AND RIGHT TO EXAMINE BOOKS AND DOCUMENTS RECYCLING PROVIDER agrees that OWNER shall, until the expiration of three (3) years after the final payment made by OWNER under this Contract (or any lawful extension thereof), have access to and the right to examine any directly pertinent books, documents, papers and records of the RECYCLING PROVIDER involving transactions relating to this Contract. RECYCLING PROVIDER agrees that OWNER shall have access during normal working hours to all necessary RECYCLING PROVIDER facilities and shall be provided adequate and appropriate working space in order to conduct examinations or audits in compliance with this Article. OWNER shall give RECYCLING PROVIDER reasonable advance notice of all intended examinations or audits. s:wur ooaum ou�coo�uwzuuiamun cvmeic x:nf+oa-eo=inSwma moo- t-M2Fa3.a Page 17 of 19 ARTTCT.F. XT.V. JURISDICTION, CHOICE OF LAW, AND VENUE This Contract shall be governed by and construed in accordance with the laws of the State of Texas. Jurisdiction over this Contract, in all cases, shall be in the District Courts of Denton County, Texas. Venue of any suit or cause of action under this Contract shall lie exclusively in Denton County, Texas. ARTTCT.F. XT.VT_ THE PROJECT/COORDINATION OF WORK RECYCLING PROVIDER shall commence, carry on, and complete its work on the Project with all applicable dispatch, and in a sound, economical, efficient manner, and in accordance with the provisions hereof. In accomplishing the Project, the Contractor Representative shall take such steps as are appropriate to ensure that the work involved is properly coordinated with any related work being carried on by the OWNER. ARTICLE XT.VIT. OBLIGATION OF OWNER TO ASSIST The OWNER shall assist and fully cooperate with the RECYCLING PROVIDER by placing at the RECYCLING PROVIDER'S disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project and arranging for the access to, and making all provisions for the RECYCLING PROVIDER to enter in or upon, public and private property as required for the RECYCLING PROVIDER to perform services under this Contract. OWNER and RECYCLING PROVIDER agree that RECYCLING PROVIDER is entitled to rely upon any background information finished to it by OWNER without the need for firther inquiry or investigation into such information. The captions of this Contract are for informational purposes only and shall not in any way affect the substantive terms or conditions of this Contract. ARTICLE _Xl JX_ AUTHORITY TO SIGN CONTRACT OWNER is represented by its duly authorized City Manager, who is empowered to execute this Contract as the act and deed of the City Council of the City of Denton, Texas, OWNER. RECYCLING PROVIDER is represented by its duly authorized officer, who is empowered to execute this Contract as the act and deed of the RECYCLING PROVIDER. ARTICLE T.. COUNTERPARTS OWNER and RECYCLING PROVIDER shall execute four (4) originals of this Contract, S.Wr Nummu\CYOYYIWUiRmA flW N66& Rtt,UM-flo[ agSw=Go t-2M Pmul3Am Page 18 of 19 each of which shall have the effect of an original. IN WITNESS WHEREOF, the City of Denton, Texas, OWNER, has executed this Contract in four (4) original counterparts, by and through its duly authorized City Manager; and RECYCLING PROVIDER has cuted this Contract by and through its duly authorized undersigned officer, on this the % day of %1, 2002, but effective as of May 14, 2002. 0 3 CITY OF DENTON, TEXAS A Municipal Corporation WA By: (M{/ � &- MICHAEL A. COND , City Manager ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY By: "RECYCLING PROVIDER" ALLIED WASTE SYSTEMS, INC. A Delaware Corporation d/b/a Trinity Waste Services By do JOSEPI NOORLAG District Manager ATTEST: By: NA SECRETARY Maw ummm Pn Uwx�a do sword Gomm-2=amm 3.� Page 19 of 19 TO PROVIDE THE CITY OF DENTON WITH RESIDENTIAL CURBSIDE RECYCLING AND PROCESSING SERVICES Prepared by Denton Municipal Utilities Solid Waste Department Director of Solid Waste, A. Vance Kemler "Dedicated to Quality Service" TABLE OF CONTENTS SECTION I - INTRODUCTION / BACKGROUND I.1. Solid Waste Master Plan — City of Denton L2. Solid Waste Residential Customers and Recycled Tonnage I.3. City of Denton Existing Recycling Services I.4. Bidder Contact Information I.5 Bid Opening I.6 Bid Documents SECTION II — GENERAL SCOPE OF SERVICES II.1.Overview II.2. Best Value Bid Request 11.3. Acceptable Recyclable Materials 11.4. Materials Not Collected 11.5. Buyer Authorization II.6. Recycling Materials Performance Requirements 11.7. Recyclable Materials Processing Site and Information 11.8. Implementation and Operations Plan 111.9. Curbside Collection Methodology — Bins, Carts II.10. Container Inventory Levels II.11. Proposed Service Area Route Plan II.12. Hours and Days of Collection II.13. Contract Term II.14. Public Education Plan II.15. Customer Service Plan II.16. Missed Collections 11.17. Reporting II.18. City Designated Holidays II.19. Inclement Weather Days SECTION III — COST OF SERVICES (Bids, Materials) III.1. Base Bid -Residential Curbside Recycling Services 111.2. Alternate Bid #1- Residential Curbside Recycling Services, with Senior Citizens Voluntary exemption 111.3. Materials Payments SECTION IV — GENERAL REQUIREMENTS IV.1 _ Contractor Penalties IV.2. General Compliance Requirements IV.3. Insurance Requirements IVA. Bond Requirements IV.5. Written General Assurances IV. 6. List of Recently Disposed and Pending Recycling Services Litigation 1 1 1 2 2 2 4 4 5 5 6 6 6 7 8 10 11 11 11 12 13 14 14 16 17 20 20 22 22 22 25 26 27 TABLE OF CONTENTS (Continued) Page IV.7. History of Regulatory Compliance 27 IV.8. City of Denton Visits / Designated Representatives 27 IV.9. Disqualification of Bidders 28 28 IV.10. Contract Termination 28 IV.11. Proposal Evaluation and Selection Criteria SECTION V — BID SHEET AND ACKNOWLEDGEMENT Bidder's Curbside Recycling Collection Charges 30 Recyclables Payment Schedule 31 Contractor Acknowledgement 32 BID SUBMITTAL ATTACHMENTS 33 1. Buyer Authorization Forms 34 2. Recycling Materials Processing Site Information 35 3. Implementation and Operations Plan 36 4. Vehicle Master List Form 37 5. Alternate Plan of Action 38 6. Proposed Service Area Route Plan 39 7. Customer Service Plan 40 8. Monthly, Quarterly, and Annual Reports 41 9. Written General Assurances 10. List of Recently Disposed and Pending Litigation 42 11. History of Regulatory Compliance 43 . 44 12. Designated Representative 45 13. Full Bid Understanding and Compliance Agreement ATTACHMENTS 46 1, Denton Street Map and Demographic Report 60 2. Contractor Minimum Employee Requirements 62 3. Recycling Container Text Imprint SECTION I INTRODUCTION BACKGROUND Ll Solid Waste Master Plan — City of Denton ' The City Council recognized that the benefits of a comprehensive solid waste management plan would result in the cost-effective management of the community's solid waste system, provide for the conservation of natural resources and energy, improve air and water quality, and ensure compliance with state and federal regulations. In January 1994, the Denton City Council and the Public Utilities Board directed the City staff to initiate a community developed and supported solid waste management plan. The Denton City Council appointed a Solid Waste Advisory Committee that began the task of developing the Solid Waste Master Plan in February, 1994. The Committee completed its task and published its Master Plan in March, 1995. The Plan calls for a comprehensive and integrated approach to managing Denton's solid waste over the next twenty years based on the following guiding principles: • cost • educational opportunities • flexibility • economic development opportunities • risk • environmental stewardship The plan goal is to acheive a 50% diversion of waste from disposal and increase landfill life. The plan strategies include public education, source reduction, composting, landfill optimization and recycling. L2. Solid Waste Residential Customers and Recycled Tonnage I.2.1 Denton is located approximately thirty miles north of Dallas along Interstate 35- East. The city has a population currently estimated at over 81,000 within a 62 square mile area. Its 335 miles of streets provide access to over 19,500 single family residential accounts (Code SWR and RPT) that receive City of Denton residential curbside solid waste collection service. During fiscal year 2001 the City collected 2,858 tons of recyclables through its drop off recycling facilities. I.2.2 All Bidders will be provided a City of Denton Street Map and Demographic Report, Attachment 1, for bid preparation purposes. Denton's solid waste residential customer address listings will be provided to the successful bidder if requested. L3. City of Denton Existing Recycling Services The City of Denton's residences and businesses currently receive the following recycling services: -1- City of Denton , Bid Number 2832 • Multi -material and single material drop off centers • Selected white paper collections • .Used oil and oil.Slter collection centers • Weekly yardwaste collections . • Composting and composting materials sales • Curbside appliance collections for appliance reuse and recycling L4. Bidder Contact Information Any Bidder questions concerning this bid document should be provided in writing by mail or fax to the City of Denton Purchasing Department. Address mail or send faxes to: Mr. Tom Shaw, Purchasing Agent City of Denton 901 A Texas Street Denton. Texas, 76209 Purchasing Department Fax Number: 940-349-7302 Attn: Mr. Tom Shaw Please reference bid number 2832 in all correspondence. A pre -bid conference will be held on Friday, March 22, 2002 at 2:00 PM on the second floor of the City's Municipal Service Center, in the conference room, 901-A Texas Street, Denton, Texas. L5 Bid Opening The Bid opening will occur on Thursday, April 11, 2002 at 2:00 PM on the second floor of the City's Municipal Service Center, in the conference room, 901-A Texas Street, Denton, Texas. Bid documents shall be submitted to Mr. Shaw, in the City of Denton Purchasing Department, at the address listed below prior to the 2:00 PM bid opening on April 11, 2002. Late bids will not be accepted. Mr. Tom Shaw, Purchasing Agent City of Denton 901 A Texas Street Denton. Texas, 76209 L6 Bid Documents I.6.1 Bid documents submitted are to be organized in a format that includes section tabs labeled as "Bid Sheet", "Bid Submittal Attachment 1", "Bid Submittal Attachment 2", etc. These sections shall contain and discuss all relevant information applicable to each Bid 2 City of Denton Bid Number 2832 Submittal number. All additional bid document infoi-mationprovided, which.is in addition to that requested through the Bid specifications, is to be arranged in the document under appropriately labeled section tabs, following the Bid; Submittal section tabs I.6.2 Bidders shall submit five complete sets, one original set and four copies, of bid documents to Mr. Shaw, Purchasing Agent, prior to the bid opening. City of Denton Bid Number 2832 SECTION H SCOPE OF SERVICES YL1. Overview A major emphasis of Denton's Solid Waste Master Plan is on the extension of the landfill's life, located at 1100 S. Mayhill Road, Denton, Texas 76208. The Plan cites recycling activities as a key component in reducing the amount of landfill space consumed. Consequently, one of the Plan's primary strategies to prolong landfill life is for the City to provide residential curbside recycling services. The City of Denton is requesting bids from responsible recycling firms to provide Denton's residential solid waste customers with curbside recycling services as described within this bid document. Qualified bidders must have a minimum of five years experience in recycling materials collection and processing comparable in scope to the services specified. The City of Denton has developed this bid in order to select a private sector recycling Contractor to provide Denton's residential solid waste customers with curbside recycling collection services. Following an evaluation of bids submitted, the City Council is expected to award the bid for the provision of curbside recycling services in the City of Denton. This schedule anticipates that residential curbside recycling services would begin in late calendar year 2002, tentatively November 4, 2002. 11.2. Best Value Bid Request II.2.1 Each Bidder is requested to bid on providing once per week curbside recycling services to each Denton residential customer on one of their regular waste collection days, currently Monday, Tuesday, Thursday, or Friday. In the future, intergovernmental agreements with other government entities in the area may allow for the provision of residential curbside recycling services. The bidder agrees to provide these services at the same price or below, and under the same conditions to these entities, if the community is no greater distance from their processing facility. The City provides both twice per week collection of bagged refuse and once per week automated collection of refuse contained in various sizes of carts. The successful bidder will collect recyclables from one-half of the customers on twice per week refuse routes on their first collection day of the week, and the other half on the second collection day of the week. For once a week automated refuse collection routes, recyclables will be collected on their regular refuse collection day. II.2.2 One curbside recycling bid will be considered, with one alternate bid. They are: Base Bid — The Contractor will provide Required Residential Curbside Recycling Services with the City providing all customer billing services. This bid requires all City of Denton Bid Number 2832 single family, duplex, and triplex residents (Account Codes 'SWR or RPT) to pay for ' curbside recycling services. Alternate Bid #1— The Contractor will provide Residential Curbside Recycling Services as in the Base Bid, except Senior Citizens will be able to Voluntarily request : Exemption from curbside recycling fees and services for themselves if they are age 65 or older. These services are discussed in additional detail within this document. All general specifications provided under the Introduction/Background, Scope Of Services, General Requirements, and Bid Submittal Attachments within this document apply to the Base Bid and Alternate Bid #1, unless specifically described differently within the document. II.3. Acceptable Recyclable Materials II.3.1 The Contractor will collect the following Acceptable Recyclable Materials under this contract: • All Classes of Paper (including but not limited to; Newspaper, Office Paper, Junk Mail, Magazines, Telephone Books, and Catalogs) • Corrugated Cardboard & Chipboard (i.e. Cereal boxes, etc.) • Aluminum, Steel, and Tin food and beverage cans / containers • Glass Bottles, Jugs, and Jars (excluding ceramic containers) • Plastic Bottles, Jugs, and Jars Other materials may be added by mutual consent of the City and Contractor H.3.2 Denton's citizens are not required to pre -crush recycled cans or other materials. II.3.3 The Contractor may request approval from the City to add additional recyclable materials for curbside collection. 114. Materials Not Collected II.4.1 Materials which are placed out for collection which are not on the Acceptable Recyclable Materials fist provided in Section 3.1 should not be collected. When non - collection of a set out product occurs, the Contractor will provide the resident with an explanation why the product wasn't collected. The Contractor's Notice Of Non -Collection shall be in writing and attached to the front door of the residence or to the recycling container. The Contractor's notice shall indicate the nature of the problem or violation and the correction required. Examples of items set out for collection which would not be collected include window glass, plastic furniture, and pizza boxes. I1.4.2 The driver will record all Notice's of Non -Collection delivered to Denton's residents, and all verbal communications from Denton's residents concerning the City of Denton Bid Number 2832 collection services in a Driver Communication Summary Log. The Driver ; Communication Summary Log will be submitted monthly to the City is,a standard report. II.5. Buyer Authorization The Bidder is requested to complete Bid Submittal Attachment 1, Buyer Authorization Form, for all commodity buyers that the Bidder sold recyclable commodities, from the facility that processed Denton's recyclables, over the previous two calendar years. The Bidder may make the necessary copies of this form in order to submit completed forms with the bid submittal. This form provides the Bidder's authorization for each commodity buyer to provide information to the City of Denton about the quantities of recyclable materials sent to these buyers over the previous two years. Submittal of this completed document(s) authorizes the City of Denton to contact each commodity buyer that the Bidder Company has sold recyclable products to over the previous two calendar years and only obtain Bidder historical materials tonnage information. Bidders that consider their Buyer Authorization Form information to be proprietary must preface their proprietary information with the statement "The following information is proprietary and exempt from the Public Information Act". This proprietary information will be returned to the bidder after the City Council has acted on this bid. IL6. Recycling Materials Performance Requirements Denton requires the Contractor to collect 100% of acceptable recyclable materials placed out for collection. The Contractor must process at least 95% (by weight) of the recyclables collected with no greater than 101/6 of the collected recyclables being allowed for disposal. The Contractor must maintain adequate records on a monthly reporting basis to substantiate compliance with these requirements. Failure to comply with these requirements will be grounds for termination of this contract. Compliance is met by the Contractor achieving all three performance criteria every calendar month. The City will periodically audit the Contractor's records to determine compliance for all three performance criteria; 100% recyclable materials collections, greater than 95% (by weight) processing, and less than 10% disposal. In the event that the market changes for a specific processed material to the point that the material is not marketable for the processing facility processing Denton's recyclables, that specific material will be excluded from this section's disposal performance requirements for the period of time that the material has no market value. Processed material used as an alternate daily cover (ADC) in a landfill will not be considered material disposed of, for the purposes of this section, if it has been approved through a permit modification from the TNRCC to use the material as ADC. 110. Recyclable Materials Processing Site and Information The Contractor is required to provide information in Bid Submittal Attachment 2 regarding the processing site where Denton's recyclable materials will be processed; its location, permit/license information, annual materials tonnages processed for the previous two years, materials capable of being processed, and any other site information that may be City of Denton Bid Number 2832 descriptive of the facility's ability to meet the performance requirements 'of this bid and contract. 11.8. Implementation and Operations Plan 11.8.1 The Contractor will provide an Implementation and Operations Plan, Bid Submittal Attachment 3, detailing the number and type of vehicles to be used, number of personnel, operational procedures, etc. that the Contractor will employ to comply with the requirements set forth in this bid specification and contract to provide residential curbside recycling collection services. II.8.2 Denton County is currently included in the Dallas/Fort Worth nonattainment area under the Clean Air Act by the Texas Natural Resource Conservation Commission. As a result, the City of Denton Solid Waste Department has made a commitment to only purchase low emissions vehicles (LEV) when available. LEV usage by the Contractor is recommended by the City of Denton. The Contractor must comply with the Clean Air Act and associated TNRCC requirements for the Dallas/Fort Worth non -attainment area in the performance of this contract. 11.8.3 The Contractor will submit a Vehicle Master List, provided as Bid Submittal Attachment 4, which lists all vehicles planned for use in Denton under this contract, both front line and back-up vehicles. Front line vehicles specified for use in Denton are to be clearly identified as such. Vehicle information provided in the Vehicle Master List will reflect the current fleet only at the time of the anticipated implementation date provided. As vehicles are deleted or added to the Contractor's recycling fleet for use in Denton, the City will be provided an updated Vehicle Master List within ten (10) business days so Denton's on file Vehicle Master List will continually remain current. II.8.4 The Contractor will provide an Alternate Plan of Action, Bid Submittal Attachment 5, describing their Plan to provide replacement personnel and/or vehicles for the completion of routes in case of vehicle breakdown or labor shortages. II.8.5 The Contractor will clearly identify the Company Name, and Telephone Number of the, company's local office, Denton or Dallas/Fort Worth metroplex area, on each of it's vehicle cab doors or equally conspicuous location on all curbside recycling collection vehicles. All text, letters and numbers, will be at least two inches in height and in a contrasting color from its background that can easily be distinguished from the cab or body color. II.8.6 Each collection vehicle shall be kept in good operating condition at all times, meeting all Department of Transportation (DOT) requirements. The City of Denton reserves the right to inspect any Contractor vehicle that may be used in the performance of this contract at any time. If the vehicle is determined by City personnel to be unsafe, or does not meet DOT requirements, the driver shall immediately discontinue operating the vehicle, and telephone the Contractor's local office to repair the vehicle. If the repair cannot be completed within thirty (30) minutes the Contractor will provide a replacement City of Denton Bid Number 2832 vehicle. In repairing a flat tire, if the local repairman cannot be at the truck site within one hour, a replacement vehicle will be required for completion.ofthe route. H.8.7 . Each collection vehicle shall be kept clean at all times, requiring a minimum of one complete washing each week. If the vehicle is determined by City personnel to be noticibly ' dirty, or having not been washed within the prior week, the Contractor's representative shall be notified, and the Contractor shall clean the vehicle prior to the next day that the vehicle returns to service within the City of Denton. 11.8,8 All the Contactor's work personnel operating in Denton shall be required to meet the City of Denton employee minimum hiring qualifications for drivers and background check standards, provided in Attachment 2 H.8.9 The Contractor's employees that drive collection vehicles are required to possess a commercial drivers license (CDL) which meets all DOT requirements for the vehicles being operated. The Contractor will provide a certification that all drivers operating vehicles requiring a CDL used in the performance of this contract possess a valid CDL. This certification will be provided prior to the implementation date of the program and annually thereafter. IL9. Curbside Collection Methodology - Bins, Carts 11.9.1 All Denton residences covered under the scope of this contract are initially planned for service utilizing a curbside recycling eighteen gallon bin. 11.9.2 The City will provide eighteen gallon bins for curbside recycling usage by Denton's solid waste residential customers. The bins delivered by the Contractor to Denton's residences will be clearly marked on one side with City of Denton approved text and the recycling logo on the opposite side, of adequate size and being of heat imprinted permanent markings identifying the container as a City of Denton curbside recycling container. All bins are the property of the City of Denton. The bins will not be provided with lids. 11.9.3 The City will provide sixty-four gallon carts with the approved recyclables imprinted on the lid using black text on a tan background, similar to that shown in Attachment 3. The carts will be clearly marked with City of Denton text of heat imprinted permanent markings identifying the cart as a City of Denton curbside recycling container. All carts will be heat imprinted with serial numbers. All carts are the property of the City of Denton. II.9.4 The Contractor's designated representative(s) will be required to sign for the receipt of specific quantities of bins and carts accepted from Denton's bin and cart inventory stock for use and distribution to Denton's customers. The Contractor will store them, and then deliver the bin(s) and/or carts to Denton's curbside customers beginning no later than one week prior to program implementation. The service addresses to receive containers will be provided by the City. All additional bins delivered, in excess of one per City of Denton Bid Number 2832 residence, will be recorded by the Contractor on the Container Distribution List. All carts delivered will be recorded by the Contractor on the Container Distribution List, as further described in 11.9.5. II.9.5 The Contractor will deliver carts, and additional bins, upon request by Denton's recycling customers, to Denton's residences. Cart serial numbers will be recorded by the Contractor and forwarded to the City by facsimile within five business days of the date a cart is placed in service, for recording on the resident's utility account record (Required for billing purposes). The Contractor shall maintain a Container Distribution List of all carts and additional bins in service, by serial number which will include at a minimum the customer's name, address, delivery date, quantity delivered, retrieval date, container condition, etc. Additional bins delivered will be recorded by the Contractor and forwarded to the City by facsimile within five business days of the date an additional bin is placed in service, for recording on the resident's utility account record (Required for billing purposes). The Contractor shall submit their current Container Distribution List quarterly in the months of January, April, July, and October, and at the end of each contract term, or as often as requested by the City of Denton. II.9.6 The Contractor will request and receive from the City of Denton, for the initial distribution of curbside recycling containers, and on a monthly basis thereafter, the City's list of Residential Customer's Not Receiving Solid Waste Service. These residences are not provided with City of Denton refuse collection services, and the Contractor will not provide curbside recycling containers or services to these residents, nor will the Contractor be paid for services to these residences. Before any curbside recycling containers are distributed to Denton's residents, the current list should always be in the possession of the dehveryman and reviewed in order to ensure curbside container distribution remains in compliance with the City of Denton solid waste service procedures. 11.9.7 A minimum of thirty days prior to implementing the curbside recycling program, the Contractor will advertise in the local newspaper that sixty-four gallon carts are available in lieu of or in addition to the standard eighteen gallon bin, and/or multiple bins are available. The conspicuous bilingual newspaper advertisement (5" x 7" minimum), requires prior approval by the City, and must be inserted a minimum of twice per week in the major local newspaper with one day each week being a Sunday. The Contractor will provide a local or toll free telephone number for Denton's residential customers to call to place additional bin or cart orders. Sample bins and carts for public viewing and handling are to be placed by the Contractor in at least six City selected locations, but less than ten, where Denton's residents will have the opportunity to view and manuver the bin and cart. Over this thirty day time period, the Contractor will document all resident's telephoned container requests, and provide their requested containers during the container distribution process. During the container distribution process, the Contractor will document all residents receiving carts and/or additional bins on the Container Distribution List of any quantity or combination requested. Prior to the Contractor's delivery of recycling containers to Denton's residents, all containers must be fully assembled by the Contractor and ready for use. City of Denton Bid Number 2832 U.9.8 If a resident elects to receive a container(s) (bin or cart) which is of a size or quantity greater than the standard eighteen gallon bin, the resident will agree to pay a rental and, maintenance fee per 30 day billing period to the.City, to be charged, on their utility bill, for each additional container provided. H.9.9 During the term of the contract, when 'a new Denton resident moves into a residence, they will be contacted by the Contractor and offered a standard recycling bin(s) or cart from the Contractor. The Contractor is to be aware that there may be existing recycling containers in the home, left there from the prior occupants, once the Contractor develops and implements this procedure. If the new customers request an additional bin(s) or cart(s), the Contractor will update the Container Distribution List. The City will provide the Contractor with the name and address of new customer solid waste accounts by facsimile within five business days, and the Contractor will provide the new account customer with a recycling container(s), if not already present in the residence, within five business days of receipt of the facsimile. If the new account customer moves into a residence with an existing cart, and the new customer wants a bin in lieu of the cart, the Contractor will provide a bin, collect the cart and return the cart to their storage facility or the City, adjust the container inventory, and forward the facsimile to the City within five business days. II.9.10 The Contractor will be responsible for educating and informing Denton's residents that recycling containers remain with the residences upon moving. The Contractor will develop and recommend procedures, within two months of program implementatin, for City approval, enabling the recycling containers to remain inside the residence for utilization by the next occupant of the home, following a customer move out. 11.9.11 Containers lost or damaged by the resident will be replaced by the Contractor upon receiving a request for replacement by the resident. The Contractor will deliver the replacement container requested, record the information on the Container Distribution List, and forward this information to the City by facsimile within five business days of the date a replacement container is placed in service, for recording on the resident's utility account record (Required for billing purposes). The facsimile the Contractor sends will separately identify these containers as replacments for lost or damaged containers. 11.9.12 The Contractor will provide front door service to residents incapable of transporting their container(s) to the curb. II.10. Container Inventory Levels II.10.1 The Contractor will maintain, for customer distribution, the following minimum container inventory at their storage facility at all times, except during the final ninety days of the initial contract term or any renewal term. Bins — 50 Carts — 5 10 City of Denton Bid Number 2832 H.11. Proposed Service Area Route Plan The Contractor will establish its own collection routes for the, collection of recyclable materials; and submit the Proposed Service Area Route Plan,13 Submittal Attachment 6, and schedule to the City`at bid submittal. At least three weeks prior to curbside recycling implementation, the Contractor will submit to the City for approval their Proposed Detailed Route Plan. Following City approval of the Contractor's Detailed Route Plan, any changes in collection routes or days of collection will require prior approval by the City. The Contractor will also be required to notify all affected residents at least two weeks in advance of a route change through a mailing to each affected resident and a bilingual public notice (5" x T') in the major local Sunday newspaper. The proposed route plan submitted with Bid Submittal Attachment 6 will be a "service area route plan", not the "detailed route plan" by street. H.12. Hours and Days of Collection H.12.1 Unless otherwise approved by the City, the Contractor must conduct curbside recycling collections between the hours of 7:00 A.M. and 6:00 P.M. on one of the resident's regular waste collection days, currently Mondays, Tuesdays, Thursdays, or Fridays, for Denton's manual collection residents. 11.12.2 Those Denton residents receiving residential automated containerized service one time per week will receive curbside recycling collection service on their collection day. H.12.3 The Contractor agrees that no collections will be made on Saturdays, Sundays, or City designated holidays on which refuse collection is not provided. H.12.4 All Denton's residents will receive curbside recycling collections on City of Denton designated holiday weeks. The Contractor will provide residential customer notification in the major local newspaper with a minimum 5" x 7" bilingual advertisement to Denton's residents on the Wednesday of the week prior to the holiday, of their curbside recycling collection day for the upcoming holiday week. During holiday weeks the Contractor may collect recycling materials on Wednesdays, if the City also provides refuse collection service on that same day. H.13. Contract Term H.13.1 The initial contract term will be for five years, beginning on the first day the Contractor provides collection servcies under this contract, or one -hundred twenty (120) days from the date the City Council makes an award of this bid, whichever is earlier. H.13.2 There may be two renewal terms of two years each. Six months prior to the end of the initial contract term, and with the agreement of both parties, the contract may be renewed for one renewal term of two additional years (seven year contract total). Six months prior to the end of the first renewal term, the contract may be renewed for the final two year renewal term period, if agreed by both parties (nine year contract total). 11 City of Denton Bid Number 2832 II.13.3 If either party elects to not extend the contract under the renewal tern provision of the contract, the Party not wishing to renew the contract must provide written notice to the other party at least six months in advance of the expiration of the existing contract `term. Both renewal terms are optional by either party. II.14. Public Education Plan H.14.1 The City, schools and other community groups currently are involved in public education programs, some of which include recycling education. In addition to those current programs the Contractor is responsible for providing support for the Denton recycling educational program as a requirement of this contract. The Contractor will provide $32,000 of financial support during the first year of the contract, and $22,000 annually for all subsequent years of the contract. This financial support, the Community Public Education Fund, will provide funding to acquire educational materials, publications, and supplies as directed by the City representative. II.14.2 Prior to the implementation of recycling collection, the Contractor will develop in conjunction with the City representative and approved by the City representative a brochure to be distributed with the recycling container(s). The brochure will fully describe the upcoming residential curbside collection services to be provided. The brochure, delivered to each residential address during container distribution by the Contractor, must clearly inform Denton's residents of the curbside collection start date, recyclables collected, recyclables not collected, collection procedures, container guidelines, customer's collection days, the problem resolution process, the Contractor's toll free customer contact telephone number, and any other relevant information. Additional copies of the introductory brochure will be provided by the Contractor to new residents upon move in and others upon request over the life of the contract. All publications will be bilingual (English and Spanish). Brochure costs will be funded by the Contractor, and will be funded from the Community Public Education Fund discussed in Section 11.14.1. H.14.3 The Contractor will participate in Denton's Texas Recycles Day, Arts and Jazz Festival, Cinco-de-Mayo celebration, and the Great American Cleanup. The City will pay for booth space at the Arts and Jazz Festival and the Cinco de Mayo celebration, which will be staffed by the Contractor's representative(s). Materials distributed to the public that are specifically produced for Denton's curbside recycling program will be funded from the Community Public Education Fund. At a minimum, the contractor is expected to be present during these events, provide for the collection of recyclable materials, and process these materials, as directed by the City representative. II.14.4 The Contractor will be a sponsor for the Keep Denton Beautiful (KDB) organization with a minimum contribution of $3,000 per calendar year payable no later than January I st of each year to support their recycling education program. Failure to provide this contribution to KDB by January 1 st of each year will result in a Notice of 12 City of Denton Bid Number 2832 Non-compliance and may be cause for contract termination.. -The Contractor's contribution ` will be funded from the Contractor Public Education Fund as discussed in Section II 14:1. II.15. Customer Service Plan II.15.1 The Contractor will provide the City a detailed description of the Contractor's Customer Service Plan, Bid Submittal Attachment 7, including the number of available office customer service personnel, average tum-around time on customer service complaints/inquiries, sample City of Denton customer service reports, customer service ry or center location, customer service telephone policies, and any other pertinent, applicable, related customer service information which may be beneficial to the City and the understanding of the Contractor's Customer Service Plan and procedures. II.15.2 The Contractor shall provide a toll free customer contact telephone number a minimum of thirty days prior to initiating curbside recycling services. Using this telephone number, Denton's residential customers may contact the Contractor regarding all customer service questions, service delivery concerns and problems, complaints, container ordering, materials collected, and/or any other curbside recycling or educational issues. During this thirty day period, and following for the duration of the contract, the Contractor shall record all telephone conversations, either initiated by Denton's residents or the Contractor, on the City of Denton Telephone Log. 11.15.3 The Contractor agrees upon award of the contract to immediately secure an annual toll free listing in the major Denton telephone directory under the name by which it conducts business in Denton. The Contractor agrees to keep the telephone staffed for residents calls during the hours of 7:00 A.M. through 6:00 P.M., Monday through Friday. The Contractor will keep the telephone staffed with sufficient personnel, and identify the number of personnel available to service telephone calls from Denton's residents during the hours listed. II.15.4 All Denton resident telephone communications are to be recorded on a dedicated City of Denton Telephone Log, which along with other reports, is to be submitted monthly to the City along with the Monthly Residential Billing Invoice. Contractor recorded communication information on the City of Denton Telephone Log should, at a minimum, include the following data: • Date and Time of telephone call • Customer's name • Customer's address • Customer's telephone number • Customer's reason for calling (List comment, request, complaint, concernetc.) • Was resolution required? • When was the issue resolved? • How was the issue resolved? • Was the customer satisfied? 13 City of Denton Bid Number 2832 Was a foltowup contact required, did it,occut, and when? H.15.5 . Customer communications and/or complaints not responded too and resolved by the Contractor within twenty-four hotKs,will be charged a penalty per occurrence, for each day over 24 hours that the noncommunication or nonresolufion continues. The City will be the sole determinant as to whether a timely response occurred by the Contractor, within twenty-four hours, and if a penalty is due. (Sec. IV.1. Contractor Penalties) 1116. Missed Collections II.16.1 Upon the timely notification of a missed collection, and if the Contractor has a collection vehicle in Denton at the time of a missed collection notification, the Contractor shall contact the route driver in Denton and instruct the driver to return to the missed collection location and collect the missed materials prior to ending work for the day. H.16.2 If a missed collection occurs, and it is determined that the route driver has already left Denton for the day, the Contractor shall arrange for the collection of the customers recycling materials no later than the next day the Contractor is serving a collection route in the City. II.16.3 If the customer fails to place their recycling materials out for collection by 7:00 A.M. on their designated collection day, this does not constitute a missed collection. If the route driver has already completed the route in question, it will not be the fault of the route driver, and will not require the route driver to return to the address in question to provide recycling collection services on the day in question. H.16.4 If a dispute arises -between the Contractor and a customer as to whether the Contractor actually failed to make a collection when materials were at the curb, i.e. missed collection, the decision by the City designated representative shall be final. The Contractor agrees to abide by the City's decision. In the event of City determination of a missed collection, and City notification, the route driver shall return to the address and collect the recycling materials the same day, if the Contractor's designated representative is notified by 1:00 P.M. of the same collection day. II.17. Reporting H.17.1 Monthly, quarterly, annual, and special reports will be provided to the City of Denton Solid Waste Department to the Designated Representative address listed within this document. The Bidder will provide saniples of all required reports in their Bid Submittal Attachment S. These sample City of Denton required monthly, quarterly, annual, and special reports will provide all information required in this specification. The City, not the Contractor, will establish acceptable formats for these reports. The Contractor will provide the following information for the required monthly, quarterly, annual, and special reports listed. 14 City of Denton Bid Number 2832 Monthly Reports Required: 1. Driver Communication Summary Log- Sec. II, 4.2 2. City of Denton Telephone Log —Sec. II, 15.4 Monthly Reports Required: - Sec. II.6? ' 3. Collected weight of recyclables from Denton, by day and route 4. Recycled weight, by material from the processing facility 5. Weight of rejected/residue material from the processing facility that, will be disposed of 6. Number of Billing Addresses Served, as of the last day of the month 7. Average Weight of Recyclables Per Residence Per Route Served Per Month The above monthly reports will be rolled up quarterly into a Quarterly Report and rolled up annually into an Annual Report. Quarterly Reports Required: 8. Container Distribution List — Sec. II, 9.4 Annual Reports Required: 9. COD Curbside Recycling Summary - Sec. II, 17.5 The City may delete, or modify reporting information from time to time. IL 17.2 The Contractor will submit to the City all monthly reports with each monthly billing invoice. They are to be mailed together. Quarterly and annual reports will be submitted to the City within four weeks after the end of the reporting period. H.17.3 The Contractor agrees to provide the reporting information listed above to the City of Denton staff at monthly, quarterly, and annual frequencies, or as requested by the City. The Contractor is required to provide, Bid Submittal Attachment 8, samples of the Contractor's designed monthly, quarterly, annual, and special reports to serve Denton and to be provided monthly to the City of Denton's designated representative. 11.17.4 As previously stated, Denton expects a very high percentage of materials collected to be recyclable and deliverable to markets. The Contractor should make every effort to attain high materials processed, high materials sales, and minimal rejects landfilled. (Sec. II.6.) 11.17.5 The Contractor will provide an annual City of Denton Curbside Recycling Summary document delivered to the City of Denton's residents as a tri-folded one page report for inclusion as a utility bill "stuffer", reporting the results of Denton's residents recycling efforts on a fiscal year by year comparison basis. This document will be provided to the City during the fourth quarter of each calendar year, for the City's fiscal year, and becomes due following completion of the first partial fiscal year, and each year thereafter for the term of the contract. The contractor will obtain prior City approval in the design, format, and presentation data included within this document. The most recent count of 15 City of Denton Bid Number 2832 utility bills was 39,000 per monthly billing cycle. The City will provide. the- most current number of monthly billings to the Contractor annually. U.17.6 The City will conduct two Participation Surveys per fiscal year to determine the number of residential units that are participating in the recycling program. (setting out recyclables). The City will survey four areas established by the Director of Solid Waste. Each area will contain a minimum of 300 homes. Each survey will be conducted for five full weeks. The city will record all residential units placing recyclables out for collection, by address, and date. The city will provide a report of the number of different residential units participating in the program on a (1) weekly, (2) bi-weekly, (3) monthly and (4) five - week period. This report will be provided to the Contract Manager within 30 calendar days after the completion of the survey period. The surveys will be started on the second Monday of the following calendar months: January, and July. H.18. City Designated Holidays 11.18.1 The Contractor will adjust the residential curbside recycling pickup schedule for the seven holidays listed below. During weeks which contain these holidays, the Contractor will perform pickup services on the remaining days of the week during the hours of 7:00 A.M. and 6:00 P.M., Monday through Friday. Residential curbside recycling shall not occur on the holidays listed. All residential curbside recycling customers will receive a weekly pickup for all weeks, including holiday weeks. 11.18.2 City of Denton Curbside Recycling Holidays: • New Year's Day (January 1 st) • Martin Luther King Day • Memorial Day • Independence Day (July 4th) • Labor Day • Thanksgiving Day • Christmas Day (December 25th) H.18.3 All Denton's residents will receive curbside recycling collections on City of Denton designated holiday weeks. The Contractor will provide written notification in the major local Denton newspaper, Wednesday edition, with a 5" x T' bilingual advertisement to Denton's residents on the week prior to the holiday, of their curbside recycling collection day for the upcoming holiday week. The City designated representative must be provided sufficient time, two work days, to review and approve the proposed newspaper notification prior to the Contractor submitting and scheduling for printing the notification of the revised pickup schedule, so that Denton's residents are informed of the schedule revision on Wednesday of the week prior to the holiday. During holiday weeks the Contractor may collect recycling materials on Wednesdays, if the City provides refuse collection service on that day. 16 City of Denton Bid Number 2832 1119. Inclement Weather Days 1[,19.1 On days that the Denton Independent School District closes the schools due to inclement weather, the Contractor may,request to the City representative to suspend service for that day, subject to notification and approval from the City. 11.19.2 An event sufficiently serious to prevent the collection of recyclables would be rare and unplanned. The Contractor will fax a notice to the City's designated representative as early as possible to notify the City of their inability to collect recyclables on such a day. The Contractor will include the reason for non -collection and this record will be placed in the City's contract management file for this project. Collection service for the area not collected under this section will resume on the next scheduled collection day. Immediately following the faxing to the City of the notification of suspended services, the Contractor's representative will telephone the City's representative to discuss the collection schedule and obtain approval. 11.19.3 No make up day will be required for suspended service on City approved inclement weather days. If service is suspended due to inclement weather, curbside volumes collected on the citizens next collection day should generally be greater. Under these conditions, the route driver must be prepared to collect high amounts of recyclable products on this heavier than normal collection day in containers other than those provided by the Contractor. I1.19.4 Curbside collection services not provided due to inclement weather will result in reductions of normal monthly citizen revenue paid to the Contractor. Revenue reductions will be based on calculations performed using the number of normally scheduled pickup days the Contractor would perform services during the month, versus the number of actual days service was provided. Inclement Weather Example: Monthly service days during the month = 18 Actual days service was provided = 17 (Due to an Inclement Weather Day) Normal monthly payment per residence to the Bidder = $1.50 17 days / 18 days = 94% $1.50 x 94% _ $1.41 Actual monthly payment per residence to the Bidder = $1.41 17 City of Denton Bid Number 2832 SECTION III COST OF SERVICES The City will consider one curbside recycling bid, with one alternate bid. Bidders may bid on one or both bids. They are: Base Bid — The Contractor will provide Required Residential Curbside Recycling Services with the City providing all customer billing services. This bid requires all single family, duplex, and triplex residents (Code SWR and RPT) to pay for curbside recycling services. Alternate Bid #1— The Contractor will provide Residential Curbside Recycling Services as in the Base Bid, except Senior Citizens will be able to Voluntarily request Exemptions from curbside recycling fees and services for themselves if they are age 65 or older. Both bids listed above are to be bid as the monthly rate to be charged per residential household to provide full residential curbside recycling collection and processing services described above, exclusive of any franchise fees, sales tax, or other City administrative fees. IILI. Base Bid — The Contractor will provide Required Residential Curbside Recycling Services to all residential solid waste customers. This bid requires all single family, duplex, and triplex residents (Account Codes SWR and RPT) to pay for curbside recycling services. M.1.1 In the area provided within this bid document, Section V, the Contractor must specifically state in dollars and cents the Monthly Unit Rate per residential customer that they will charge the City to collect curbside recyclables from each residential solid waste customer as detailed in Section II General Scope of Services. Denton's residential solid waste customers are identified under account codes SWR and RPT. Such fee charged by the Contractor to collect curbside recyclables exclusive of any taxes, franchise fee, other fees or charges as approved by the City of Denton must be the only collections fee invoiced the City. Ill. 1.2 The amount of the Contractor's monthly invoice for residential curbside recycling collection and processing services will be calculated as follows: Number of Accounts multiplied by the Monthly Unit Rate = Invoice Amount For the purposes of this calculation the number of accounts will be provided by the City of Denton to the Contractor within ten calendar days of the last day of the month for which service was provided. The number of accounts will be the number of active residential solid waste accounts, charged at a Solid Waste Residential Rate (Account Code SWR and RPT) in the City's rate ordinance, on the last business day (close of business) of the calendar month for which service was provided and is being billed. (i.s., number of 18 City of Denton Bid Number 2832 accounts for calculating January's invoice will be the number of accounts at the close of business on the last business day of January) No monthly adjustments will be made for accounts due to residents moving in or out during the month or accounts written offfof non-payment. The Customer Service Department's count of accounts will be reduced by the Solid Waste Department's most current list of Residential Customers Not Receiving . Solid Waste Service on the last day of the calendar month for which service was invoiced. This final figure is termed the Number of Accounts for the purpose of establishing the monthly invoice amount. in.1.3 The Contractor will be paid monthly. The Contractor will invoice and submit together with the billing invoice all required monthly reports to the City for services provided under this contract by the twentieth calendar (20th) day of the following month for which service was provided. The City will pay the Contractor's monthly invoice, less any penalties or disputed amounts, within fifteen (15) business days of the receipt of the invoice and all required monthly reports. Ill.1.4 The Monthly Unit Rate will be the rate established in the contract for the initial term of the contract, exclusive of any sales tax, any future state or federal fees which may be imposed on this type of service during the term of this contract, or local administrative fees. If a contract extension(s) is granted, the Monthly Unit Rate will adjust one time during the full life of the contract, beginning with the first year of the contract extension. 111.1.5 Price adjustments to the Monthly Unit Rate per residence per month for residential curbside recycling will increase or decrease for any contract extension beyond the initial contract term. The new rate will become effective beginning in the first month of a contract extension and remain in effect during the balance of any Contractor's contract extension term with the City of Denton. The formula for the new rate will utilize the US City Average Consumer Price Index — All Urban Consumers (CPI-U) from the Bureau of Labor Statistics Southwestern Statistical Summary, Special Index "All Items Less Shelter".The formula for calculation of the new Monthly Unit Rate for periods beyond the initial contract term will be calculated using the following methodology: CPI Example Calculation: CPI for Current Period 185.00 (All Items Less Shelter) Less CPI for Previous Period 170.00 (24 months prior to "Current Period") Equals index point change 15.00 Divided by previous period CPI 170.00 Equals (Quotient plus 1.0) 1.088 (Rate Adjustment Multiplier) Initial Contract Monthly Unit -Rate = $1.50 (For 5 years) - Contract Extension Monthly Unit Rate = $1.50 x (1.088) = $1.63 The most current month's cumulative CPI-U index data available from data six months prior to the end of the initial contract will be used in the calculation to determine the new Monthly Unit Rate. 19 City of Denton Bid Number 2832 The new Monthly Unit Rate calculated will apply through any contract renewal, terms of the remainder of the contract. JUL 1.6 No other materials collection charges are allowed under the contract. No penalty and interest charges will be paid on outstanding invoices or disputed invoice amounts. Ill.1.7 If new Denton citizens move into a home where the recycling container is not present on the property, the citizen will receive a standard recycling bin(s) or cart from the Contractor. Additional bins and carts will be recorded on the Container Distribution List by the Contractor. Prior to container delivery, the Residential Customer's Not Receiving Solid Waste Service fist should be checked by the Contractor. Ill. 1.8 The Contractor will be responsible for educating and informing residents that the recycling containers remain at the residence following a customer move out. The Contractor will develop and submit written procedures to the City designated representative for approval within two months of program implementation. III.1.9 Denton residents may request replacement for lost or damaged containers. The resident will be charged for the replacment container. The Contractor will report within five days, to the City representative, the customer's name and address, to be charged for the container. They will be provided by the Contractor and all procedures apply as if they were new customers. (Sec. Ill. 1.7) HL2. Alternate Bid #1— The Contractor will provide Residential Curbside Recycling Services as in the Base Bid, except Senior Citizens will be able to Voluntarily request Exemptions from curbside recycling fees and services for themselves if they are age 65 or older. 11I.2.1 The Contractor is requested to bid for the provision of Required Residential Curbside Recycling Servcies with Senior Citizens able to Voluntarily Exempt themselves from curbside recycling fees and services if they are age 65 or older. The bid discussion stated within this document under the General Scope of Services, General Reequirements, and Bid Submittal Attachments and the Base Bid will similarly apply to this alternate bid, except that resident's age 65 and older will have a choice to voluntarily participate or not participate in the residential curbside recycling program. 111.2.2 The City currently has approximately 3,000 homeowners age 65 or older. M3. Recyclables Payments The City may from time to time have available recycled materials collected from Denton's drop-off collection sites. The City would like the option to deliver pre-sorted and comingled recycling materials to the Contractor's processing facility. The City requests the Contractor provide the rates they would pay the City for these materials: 20 City of Denton Bid Number 2832 Denton's Drop -Off Site Materials: Comingled Paper (Mixed Paper) OCC #b ONP #8 ONP Office Paper Steel Aluminum Flint Glass Amber Glass Green Glass 21 City of Denton Bid Number 2832 SECTION IV GENERAL REQUIREMENTS IIVA. Contractor Penalties W.1.1 Contractor Penalties will be assessed for resident complaints which are not responded to and resolved within twenty-four hours , if there are over ten unresolved complaints within one billing month. Prompt problem resolution (within twenty-four hours) for Denton's residents is required. W.1.2 Contractor Penalties assessed will be charged through a reduction in the monthly invoice amount paid to the Contractor. IV.1.3 Penalties will be assessed if more than ten (10) separate incidences of customer complaints are made during each calendar month which are not resolved within twenty- four hours of the customers notification to the Contractor. If an excess of ten penalties are reported which were not resolved within twenty-four hours, the Contractor will be charged a penalty of $5.00 per unresolved complaint for all complaints during the month that were not resolved within twenty-four hours. IV.2. General Compliance Requirements The Contractor must comply with all Federal, State, and Local laws and regulations including, without limitations, those regarding employment, personal safety, vehicular safety, fire code safety, and environmental issues. IV.3. Insurance Requirements IV.3.1 Bidder's attention is directed to the insurance requirements below. It is highly recommended that bidders confer with their respective insurance carriers or brokers to determine in advance of Bid submission the availability of insurance certificates and endorsements as prescribed and provided herein. If an apparent low bidder fails to comply strictly with the insurance requirements, that bidder may be disqualified from award of the contract. Upon bid award, all insurance requirements shall become contractual obligations, which the successful bidder shall have a duty to maintain throughout the course of this contract. IV.3.2 Standard Provisions Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. As soon as practicable after notification of the bid award, and prior to contract signing, the Contractor shall file with the Purchasing Department satisfactory certificates 22 City of Denton Bid Number 2832 of insurance, containing the bid number and title of the project. ' Contractor may, upon written request to the Purchasing Department, ask for clarification of any insurance ...requirements at any time; however, Contractors are strongly advised to make such requests prior to bid opening, since the insurance requirements may not be modified or waived after bid opening unless a written exception has been submitted with the bid. Contractor shall ` not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted: Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A. Any deductibles or self -insured retentions shall be declared in the bid proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self - insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Liability policies shall be endorsed to provide the following: Name as additional insured the City of Denton, its Officials, Agents, Employees and volunteers. That such insurance is primary to any other insurance available to the additional insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. All policies shall be endorsed to read: "Said policy shall not be cancelled, nonrenewed or materially changed without 30 days advanced written notice being given to the owner (City) except when the policy is being cancelled for nonpayment of premium in which case 10 days .advance written notice is required." Should any of the required insurance be provided under a claims -made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made. after expiration of the contract shall be covered. Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal 23 City of Denton Bid Number 2832 defense costs to be included in the general annual aggregate. limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance. - Should any required insurance lapse during the contract term; requests for'payments originating after such lapse shall not be processed until the, City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. IV.3.3 Specific Additional Insurance Requirements All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: General Liability Insurance: General Liability insurance with combined single limits of not less than $1.000.000 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used: Coverage A shall include premises, operations, products, and completed operations, independent contractors, contractual liability covering this contract and broad form property damage coverage. Coverage B shall include personal injury. Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least: Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse or underground (XCU) exposures. Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $1,000.000 either in a single policy or in a 24 City of Denton Bid Number 2832 combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. - Satisfaction of the above requirement shall be in the form of a policy endorsement for: Any auto, or All owned, hired and non -owned autos. Workers Compensation Insurance: Contractor shall purchase and maintain Worker's Compensation insurance which, in addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least 10$ 0.000 for each accident, $100.000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured IV.3.4 Additional Insurance Excess (or Umbrella) Liability Insurance with a minimum limit of $1.000.000 covering in excess of the proceeding insurance policies. IIVA. Bond Requirements IVAJ Bid Bond Requirements Each bid must be accompanied by a cashier's check, certified check or acceptable bidders bond payable without recourse to the City of Denton, Texas in amount not less than Five Thousand Dollars ($5000) submitted as a guarantee that the bidder will enter into a contract and execute any required bonds, and insurance certificate, within fifteen (15) days after the notification of the award of the contract to the Bidder. The Bid bond will require approval by the City Attorney. IV.4.2 Performance Bond Requirements As soon as practicable after notification of the bid award, and prior to contract signing, the Contractor shall file with the Purchasing Department a performance bond in the.amount required by the City. During the term of this agreement and for the term of any renewals, the successful Bidder will be required to famish and keep in full force and effect a performance bond as further security for the performance of the curbside recycling contract. The performance bond will be in an amount equal to the product of the Number of Accounts times the 25 City of Denton Bid Number 2832 Monthly Unit Rate times the number of months remaining in the contract term plus 10%, adjusted on each contract anniversary date. The Bidder will pay all premiums for the bond. A certificate for the surety showing that the bond premiums are'paid in full will • , accompany the bond. The performancq bond will be issued by.a duly authorized corporate surety company authorized to do business in the State of Texas. The Performance bond will require approval by the City Attorney. IV.5. Written General Assurances IV.5.1 The Contractor is required to provide assurance, Bid Submittal Attachment 9, that it has or will acquire the personnel and equipment resources necessary to render timely and efficient collections and associated services as stated in this bid and that it has the management and financial ability to perform such services. IV.5.2 The Contractor is required to provide written assurance, Bid Submittal Attachment 9, that it will conduct collections and associated activities in compliance with generally accepted business practices and ethics, as well as abiding by all local, state, and federal laws and regulations governing solid waste, recycling, collection and processing operations. IV.5.3 The Contractor must state, Bid Submittal Attachment 9, whether or not it intends to subcontract out all or any portion of the services required in this specification and subcontract at any time during the contract term. IV.5.4 The Contractor is required to provide the City with the two most recent professionally prepared and audited annual financial reports, Bid Submittal Attachment 9, at the time of bid submittal. If the Bidder considers this information to be proprietary, the Bidder must preface their proprietary information submitted in this attachment with the statement "The following information is proprietary and exempt from the Public Information Act". This proprietary information will be returned to the bidder after the City Council has acted on this bid. IV.5.5. The Contractor is required to provide a list of all Cities in the North Central Texas Council of Governments area, Bid Submittal Attachment 9, that the Contractor currently provides curbside recycling services too. In addition, the Contractor will provide the City of Denton a contact name and telephone number. The Contractor grants the City of Denton permission to contact the cities on their fist to discuss curbside recycling services provided by the Contractor. If the Bidder considers this information to be proprietary, the Bidder must preface their proprietary information submitted in this attachment with the statement "The following information is proprietary and exempt from the Public Information Act". This proprietary information will be returned to the bidder after the City Council has acted on this bid. 26 City of Denton Bid Number 2832 IVA. List of Recently Disposed and Pending Recycling Services Litigation The Contractor is required to provide information, Bid Sulimittal_Attachment 10, for all recycling issues in the North Central Texas Council of Governments. area on Iany. current and/or pending litigation and/or any litigation settled or disposed .within the previous two years against the Contractor, including its parent company which involved performance or compliance under a contract to provide recycling services. IV.7. History of Regulatory Compliance The Contractor will provide a list of current pending administrative orders or violations of local, state, and federal laws, Hiles, and codes for any recycling operations in the North Central Texas Council of Governments area operated or owned by the Contractor which the Contractor has been cited, reprimanded, or punished, Bid Submittal Attachment 11, including its parent company. Include documentation regarding any recycling operations violations documented, settled, or disposed of within the previous two years. 1V.& City of Denton Visits / Designated Representatives IV.8.1 The Contractor is invited to visit the City of Denton and meet with the Solid Waste Department's administrative staff to familiarize themselves with Denton in general and the City's residential solid waste and recycling operations. To arrange a visit, please contact the City of Denton's designated representative for the Curbside Recycling Contract: City of Denton Representative: Shirlene Sitton City Representative (Print Name) Recycling Manager Title 901 A Texas Street Street Address Denton Tx. City State 940 — 349 - 8467 Office Telephone Number 940 — 390 - 3412 Mobile Telephone Number 76209 Zipcode 940 — 349 — 7117 Fax Number Shirlene.Sitton@CiI3LofDenton.com E-mail Address 27 City of Denton Bid Number 2832 IV.8.2 The Contractor will provide the City a liaison name, address, and telephone number of a designated representative, Bid Submittal Attachment 12, in charge of City of Denton services whom the City may contact as needed for any recycling purposes. The City requires that telephone calls to the Contractor's designated respresentative shallbe returned within the same day if called prior to 3:00 PM. IV.9. Disqualification of Bidders Bidder's may be disqualified for any of the following reasons: • The Bidder is involved in litigation with the City of Denton • Failure to provide all of the requested information in the Bid Document • Failure to comply and agree to conform to the City's requested procedures IV.10. Contract Termination IV.10.1 An act of default shall arise when Contractor and/or City shall substantially fail to fulfill its obligations under this Contract. Once an act of default has occurred, and Notice of Default is provided, which specifically describes the default, the non -defaulting party shall provide the defaulting party twenty (20) days from the receipt of such written notice, to provide the curative action necessary, and an opportunity to cure the default. If the default is cured within the time provided in the notice, then no further steps may be taken toward terminating this Contract. If however, the default is not cured within that time, and no extension of time is obtained in writing by the defaulting party, then the non -defaulting party may proceed with termination of the Contract, Notice of Termination, if that party so elects. IV.10.2 This Contract may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Contract. No such termination shall be effected unless: (1) the defaulting party is given written notice of default as set forth in the contract and IV. 10.1 above and the alleged breach is not cured to the non -defaulting parry's satisfaction; (2) a written Notice of Default shall be delivered to the defaulting party at the notice address provided herein in the contract, by means of certified mail, return receipt requested, of the non -defaulting parry's intent to terminate the Contract, and setting forth specifically, the reason(s), and specifying the non-performance (if applicable) of provisions of the Contract, or other reasons, and a period of not less than thirty (30) days to fully cure such failure; and (3) an opportunity for consultation between the parties, to take place in Denton, Texas, prior to any termination of the Contract. [Any consultation is to take place within the thirty (30) days following issuance of the Notice of Default specified in the contract.] IV.11. Proposal Evaluation and Selection Criteria IV. 11.1 The Bidder's submitted documentation to provide residential curbside recycling services within the City of Denton will be evaluated in the following areas, and weighted by the City based upon the percentages listed. 28 City of Denton Bid Number 2832 • Cost — 72.5% • Implementation and Operations Plan —10% • Customer Service Plan — 5% • Recyclable Materials Sales Program — 5% • Company experience and performance — 2.5% • Client satisfaction — 2.5% • Processing site capabilities and performance — 2.5% IV.11.2 None of the areas listed above will be the sole basis for Contractor selection, but Cost is the single most important item. Each bid submittal will be considered on all items provided above. IV. 11.3 All City of Denton bid evaluative and submittal materials containing proprietary information will remain private and confidential with the City of Denton. The proprietary information will be returned to the Bidder at the end of the evaluation and selection process, if requested by the Bidder. IV.11.4 The City may choose to conduct telephone or in -person interviews with any or all bidders as part of the bid evaluation and selection process. The City is under no obligation to interview any Bidder, and if it chooses to do so, will do so of its own decision. An interview is for information and clarification purposes only and does not mean or imply any obligation on the part of the City. 29 City of Denton Bid Number 2832 SECTION V BID SHEET AND ACKNOWLEDGEMENT Bidder's Curbside Recycling Collection Charges Bidders must bid on the Base Bid. Bidders are not required to respond, but are encouraged to respond to Alternate Bid #1, and the Recyclables Payment Schedule. The Bidder fully agrees to provide the stated curbside recycling services clearly defined herein for the following monthly charge per solid waste residential account. Prices are to be recorded per residential unit per month, both numerically and in writing. Base Bid — The Contractor to provide Required Residential Curbside Recycling Services with the City providing all customer billing services. This bid requires all single family, duplex, triplex, and fourplex residents (Code SWR and RPT) to pay for curbside recycling services. Unit Price: Number Written Amount Alternate Bid #1 — The Contractor to provide Residential Curbside Recycling Services as in the Base Bid, except Senior Citizens will be able to Voluntarily request Exemptions from curbside recycling fees and services for themselves if they are age 65 or older. Unit Price: Number Written Amount The City reserves the right to select one of the bids listed above as either the Base Bid, or Alternate Bid #1, or to reject both bids. 30 City of Denton Bid Number 2832 Recyclables Payment Schedule fo The City may from time to time have available recycled materials collected from Denton's drop-off collection sites. The,City would like the option to.deliver pre-sorted and comingled recycling materials to the Contractor's processing facility. The Cityrequests the Contractor provide the rates they would pay the City for these materials. Bidder's may bid an any or all commodities delivered by the City to the Contractor's. processing facility. Denton's Drop -Off Site Materials: Payment to City Comingled Paper (Mixed Paper) OCC #6 ONP #8 ONP Office Paper Steel Aluminum Flint Glass Amber Glass Green Glass The Bidder should provide pricing or the percentage (%) of an index price which they will pay for materials. Example: OCC 50% of High Side Southwest Listing 31 City of Denton Bid Number 2832 Contractor Acknowledgement Full Bid Understanding and Compliance Agreement The Contractor hereby acknowledges that it understands and will comply with all terms,' conditions, requirements, fees, and specifications contained in and as a part of this bid document. Based on its compliance with all terms, conditions, requirements, fees, and specifications contained herein and as a part of this bid document, the Contractor's authorized representative shall sign and submit Bid Submittal Attachment 13. 32 City of Denton Bid Number 2832 Bid Submittal Attachment 1 Buyer Authorization Form Please duplicate and complete this form for each commodity buyer. Bidder Company Name Bidder's Authorized Representative (Printed Name, Title) Bidder's Signature) hereby grants the Solid Waste Department Representative of the City of Denton, Texas authorization to contact, Commodity Company Name to obtain historical information related to recyclable materials sales from the Bidder Company to the Commodity Buyer Company over the previous two years. Information requests to the Bidder's recyclable materials commodity buyers will consist of the following information on an annual basis for up to two years. • Tonnages Sold by Product Class Commodity Buyer Information Requested: Please complete the information below. Company Name City and State (Location) Company Contact (Person) Contact Telephone Number Recycled Products Buyer Accepts Comments: 33 City of Denton Bid Number 2832 Bid Submittal Attachment 2 Recycling Materials Processing SiteInformation 34 35 City of Denton Bid Number 2832 Bidder Company Name Bid Submittal Attachment 4 Vehicle. Master List Form Front Line = FL fvV Q6wle / R..IA An.h %An.n = R 1 2 3 4 5 6 7 8 9 10 Example: Vehicle Number 810 Vehicle Make TyQe Year Body Size (CY) QMC Rearload 1998 25 CY Single / Soli( Body Single Front Line = FL Backup = B FL 36 City of Denton Bid Number 2832 Bid Submittal Attachment.5 Alternate Plan of Action 37 City of Denton Bid Number 2832 38 City of Denton Bid Number 2832 Bid Submittal Attachment 7 Customer Service Plan 39 City of Denton Bid Number 2832 Bid Submittal Attachment 8 Monthly, Quarterly and Annual Reports 40 City of Denton Bid Number 2832 Bid Submittal Attachment 9 Written General Assurances 41 City of Denton Bid Number 2832 Bid Submittal Attachment 10 List of Recently Disposed and Pending Litigation 42 43 City of Denton Bid Number 2832 Bid Submittal Attachment 12 Designated Representative' Contractor Respresentative: The Contractor will provide the following information in Bid Submittal Attachment 14. Contractor Representative (Print Name) Title Street Address City State Zipcode Office Telephone Number Fax Number Mobile Telephone Number E-mail Address 44 City of Denton Bid Number 2832 Bid Submittal Attachment 13 Full Bid Understanding and Compliance Agreement The Contractor hereby acknowledges that it understands and will comply with all terms, conditions, requirements, fees, and specifications contained in and as a part of this bid document. Based on its compliance with all terms, conditions, requirements, fees, and specifications contained herein and as a part of this bid document, the Contractor's authorized representative shall sign and submit Bid Submittal Attachment 15. Company Name Company Authorized Representative (Printed Name, Title) Company Authorized Representative (Signature) 45 City of Denton Bid Number 2832 Attachment 1 Denton :Street Map and Demographic Information Economic DeveloQment Welcome to the City of Denton's Economic Development Department. In addition to Economic Development, Community Development and the Main Street Program report to the Economic Development Director. The office of Economic Development serves as the City's customer service contact for new and existing businesses. The focal points of our office are job creation, business recruitment and expansion, small business formation and assistance, and international trade and relations. Our services span from assisting qualified businesses in obtaining HUB (Historically Underutilized Business) status to development facilitation and incentive negotiations. Economic Development places strong emphasis on economic restructuring based on business retention and recruitment. With monthly business retention visits and the quarterly Mayor and Council Breakfast Program, the City has developed a greater understanding and awareness of the needs, challenges and future direction of local businesses. Our office is currently working with the Planning Department Small Area Plan staff to develop and implement small area plans in the Fry Street Area, the Southeast Denton Area and Dema Area. Economic Development is also implementing the newly established Neighborhood Empowerment Program. The City's opportunities in the international marketplace continue to strengthen through the City's participation in the North American International Trade Corridor Partnership, Sister Cities and District Export Council initiatives. Economic Development also hosts an ever-increasing number of international delegations interested in Denton's business climate, award -winning municipal programs and university research capabilities. The Main Street Program is a worldwide program to revitalize downtown areas. The Denton Main Street Program began in 1989. Since then, there have been marked physical and financial improvements in the area. Over $24 million have been reinvested in Denton's Historic Downtown since 1989. The Denton Main Street Association is a 501 (c) (6) non-profit organization. While the City of Denton supports the Main Street Program by funding administrative costs, all promotion, advertising and events are funded by the private sector through the Main Street Association. Downtown management in Denton is truly a public -private partnership. The mission statement of the Denton Main Street Program is "Through the combined efforts of public/private partnerships will preserve and market the downtown area as a community treasure, focusing on historic preservation, continuing reinvestment and developing heritage tourism." Our vision is to maintain Denton's downtown area as the focus of the community where history is preserved, businesses thrive and citizens and visitors dine, shop, live and enjoy the arts and entertainment. For information on Main Street, visit www dentontnainstrcet.ore. The Community Development Division administers funding designated to assist low and moderate -income citizens. Various funding sources are used to provide these services including Federal Community Development Block Grant (CDBG) and HOME funding. Community Development's programs include: Home Improvement Loans, Homebuyer's Assistance, Emergency Repair and Micro -Enterprise Loans. Staff works with more than 25 social service agencies that receive funding support from the City of Denton. Community Development's funding is also used to demolish substandard buildings and complete public facilities projects, which improve water and sewer services, streets and drainage services and sidewalks and 46 City of Denton Bid Number 2832 parks services. For more information on Community Development, please contact their office at (940) 349- 7726. Economic Development Partnership The City of Denton and the Denton Chamber of Commerce formed an economic development partnership in 1987. Under the contract, The Chamber's economic development office performs the industry recruiting and marketing activities, which focus on targeted industries. The offices work together to provide information to prospective businesses, allies and citizens. For more information on Denton Chamber of Commerce, please visit www.dentonchamber.ore. Location An independent community of 64.428 square miles, Denton is only 38 miles north-northwest of Dallas and 36 miles north-northeast of Fort Worth Denton is strategically located on the Interstate 35 Corridor, the North American Free Trade Agreement (NAFTA) I-lighway, at the junction where I-35E and I-35 W join to continue north to Canada. Proximity to the DFW International Airport, Alliance Airport and to the major highways and railways of the region makes Denton an ideal location for citizens, businesses and industry. I-35 DFINI0N 21 'T 1-351W 1-63; ti1L�::u<r 1-3i l l'-•t5 1-1. 1''�r[ ROT I I [-emu Quality of Life Denton is a unique community whose diversity gives it strength. Although Denton is no longer a small town, there are certain qualities of small town life that our citizens hold dear. The historic downtown is the heart of Denton; the square and surrounding streets are used every day and night as a gathering place for commerce, civic events and entertainment. M, City of Denton Bid Number 2832 Not only is Denton the county scat of Denton County, but it is also the home of two major universities - the University of North Texas (UN1) and Texas Woman's University (TWU)- These two institutions significantly contribute to the economic base (two of the city's largest employers) and to the diverse cultural activity Denton enjoys. More than 35,000 students are enrolled in undergraduate and graduate programs on university campuses in Denton. UNT has been recognized since1976 by the Carnegie Foundation as a Doctoral Research University. UNT operates a Health Science Center in Fort Worth and opened a third campus recently in southern Dallas. Named as one of the "10o Best College Buys" and "100 Most Wired College Campuses," UNT is also internationally acclaimed for its Grammy -winning music program. TWU, the largest university in the world primarily serving women, offers bachelors, masters and doctoral degrees in more than 100 fields of study. TWU's Denton campus is one of three campuses dedicated to health service fields. The other two campuses are located in Dallas and Houston The university library houses the vast women's Collection — the largest source of research material about Southern and Southwestern women in the nation. Many performing groups provide Denton with an endless supply of cultural and entertainment opportunities. The Greater Denton Arts Council, Denton Community Theater, Denton Civic Ballet, Denton Light Opera Company, Bach Society, UNT College of Music, UNT Dance and Drama Department and TWU Dance and Theater Arts Department top the list. In addition, year-round festivals and events draw thousands of visitors from outside the Denton area. The City maintains 25 parks and open spaces and 8 recreational facilities that offer expansive leisure opportunities and appeal to everyone from rock climbers to jazz enthusiasts. The City's Parks and Recreation Department has won the National Gold Metal Award for Excellence twice. In the near future, Denton is expecting the addition of an Aquatics Center to include indoor and outdoor pools and a water recreation park. The Aquatics Center is a partnership between the City of Denton and the Denton Independent School District. June 5, 1999 marked the exciting grand opening of the Greenbelt Corridor. Running north and south along the Elm Fork of the Trinity River, the Greenbelt connects Lake Ray Roberts and lake Lewisville. The Greenbelt preserves the natural habitat of the river, protects water quality and creates many unique recreational opportunities, such as hiking, biking, canoeing, horseback riding, fishing and wildlife viewing. 48 gwg Ziy V�g City of Denton Bid Number 2832 PoDulation y y Fs v 4A4a 'S1 I , s, to 1+ zg �, 1 y x' rL � Source: National Decision Systems Report, May 1999, U.S. Human of Cessna, Census 2000 & North Central Council o Govemmems Estimates calculated fiom City of Demon's Planning Deportment. Land Area and Poni lation Fstimates r dl p ..m FSs City Limits (2001); 64.4 75,000 122,498 184,955 5 Mile ETJ 2020) 181 9,009 15,329 27,950 JWIGe: KU.I'r, null, l ny or Usavon urowm Management r.an, 1"6, ..ny or uemrn. n na®mg m ucvwuprnvn L'Pc *Current land area is 64.429 square miles. Ponulation by Race e'Ft�L"1 hF?'Zq�^ 5{Av- 9�. I.,L�e - ,t Cat 4 ,'j}S. IGf{{ry.,�vjil o,�,�}'rci 3 .0 -k rv°ry �s�ABC- 1:4�z+1;.` 4t fiS3'�QYO{ye'earg 'vet ly'T t' Ry '� ok °+�a'��C, ✓y �, �gPEph`� ��hk +�z e ,, f .Y taS�o;+' �'v,} i 1 yy White 58,132 77.2 349,999 87.3 60,886 75.6 358,739 88.5 Black or African American 7,907 10.5 17,239 4.3 7,329 9.1 20,116 5.0 Asian 3,389 4.5 12,428 3.1 2,738 3.4 10,185 2.5 All Other (not Hispanic) 5,873 7.8 21,248 5.3 9,584 11.9 16,461 4.0 Hispanic Origin 1 13,151 1 21.6 1 28,187 1 7.0 13,151 21.6 1 28,187 7.0 Source: National Decision Systems Report, May 1999, U.S. Census Hureau, Census MUM Note: The Census includes Hispanic population in White. The figures have been separated for clarification. Due to the Census format which allowed participants to select more than one race/eth icity, these figures, will act balance to the total to the overall population figure. 50 M".r i— I 4w�" 6'�'c"u1a� s sl 4 $T `dr^L�s' +$�r�r � �'��r xJ� �d �YwkLi ..�.'d �.:r.:� fF ��'`r✓h } I'd f� L�I�Ar} ' .t��.,�� ss.; 1�1 1_® ' 1 Do, City of Denton yam. .,. .,,�, .y w.* $ 12,057 $ 18,474 Denton County $16,114 $ 26,334 swu : U.S. CR Bureau, lRR9aa L°w. Household Income f';+., , Ir Tlne,4n„ l)entnn C:nunty $ 0 - 24,999 44% $ 0 - 24,999 20% $ 25,000 - 49,999 26% $ 25,000 - 49,999 25% $ 50,000 - 99,999 22% $ 50,000 - 99,999 36% $ 100,000 - 149,999 5% $ 100,000 - 149,999 12% $ 150,000 and Over 3% $ 150,000 and Over 7% Source: Markdt M LonT nano KePOfk a:uunaa, Inc. Lwr- 51 City of Denton Bid Number 2832 Economic indicators �•y Fi`S.t.'.w{%J%.s..w5�^1u:ti�A:'u!��'w�daifl.u2.'i:. 'N V1�4'1 l'F ELV�.. A�...Y �P.dl.er'vr+.5n' °Y d y w"i � r.,,_ ix�i •:L!5:.1�.�r.aG:-t�� 1 i � f r,� , ,{t -'� 1 •.r v 1 ?'e,� ..o5v.?.1.•w....f�e.J..A.�u�5.uu' v�il3:i� 1 li 1 I' I�111' r i 1,246,265,000 Medim Household Effective co I BuyingPercentage of HousefioWbjW „' 41111 Ili I' •1• 11' �1�' 1 � � � 1 111 Retail Sales by Store Group `� . k. �� - 'i •F `1 }Y . 1� Y hN Sd. @ �'i'.i .5 mR [ � q�1'YIYi Total Retail $1,178,688,000 $1,309,768,000 $5,501,681,000 Food & Beverage Stores $125,282,000 $86,461,000 $708,538,000 Food Services & Dfinldng Establishments $99,086,000 $161,474,000 $403,117,000 General Merchandise $186,206,000 $217,685,000 $913,071,000 Furniture & Home Furniture and Electronics & Appliances $51,149,000 $88,876,000 $387,616,000 Motor Vehicle & Parts Dealers $451,553,000 $368,836,000 $1,532,842,000 Other (Apparel, gasoline, building materials, etc. $265 412 000 $386 436 000 $1 556 497 000 snake: sales M Mmx g management, bI ey of mymg rower, Jepia /Yw and Jeptancer 211nn. Ufa City of Denton Bid Number 2832 A f'fl T) A 0-.d- ..FT i�nnn Tn/1PY U.S. Average= 100 - Composite (All Items) Grocery Items 100.6 97.9 101.1 99.2 ` 99.5 96.2 Housing 99.2 96.9 96.6 Utilities 97.9 107.2 99.0 Transponation 104.1 104.7 104.4 health Care 107.3 1 106.8 102.2 Miscellaneous Goods &Services 101.6 102.2 101.7 SOII[ce: AlA:KA(Amaiwua.mmw A.,PraoP (.net of Anartments in Denton Effrcien $ 400 1 Bedroom 1,530 2 Bedroom $ 648 3 Bedroom $850 Source: Community Development Department, City of Denton - March 2000. Information herein deemed reliable but not guaranteed. Provided by the Greater Denton Wise County Association of Realtors. Copyright: 1999 by North Texas Real Estate Information Systems, Inc. Laborforce 117-- Dorno f^r CP1PrtPr1 (lcennatinnc $ 12.08 $ 36.48 $ 19.16 Accountant Bookkeeper 7.10 17.57 11.53 Chemical Plant Operator 12.34 25.23 18.88 Common Laborer 5.99 14.34 8.75 Electronics Technician 10.07 26.74 16.79 ator 7.76 18.41 11.49 tor 895 20.52 13.65 rator 19.84 12.00 r 21.12 14.30 Electrician 31.81 19.13 Mechanic 67.81 22.17 13.62 - ist 15.14 9.77 Office Mans er 19.02 11.14 Order Clerk (Material, Merchandise) 1671 10.78 Porter/Custodian/Jamtor . 13.44 7.90 Production Assembler 6.76 20.27 10.75 -9i=tary 7.20 16.62 11.18 Shipping and iving Clerk 6.70 15.63 9.99 Tool and Die Marker 11.84 27.45 18.60 Truck Driver, Li t 6.40 18.05 10.33 Warehouse 5.90 15.39 8.35 Welder 8.34 1 19.71 1 12.58 Source: U.S. Department of Labor,1JUreau of LSDor arausncs, jury cwr. W City of Denton i Number AverapeAnnual 1 I I 1 1 I I I ' U.S. 5.5% 6.7% 7.4% 6.8% 6.1% 5.5% 5.0616 *40/6 4.0% ' 3.7% 3.7% ' 4.7% Texas - 6.2% 6.6% 7.5% 7.0%' 6.4% 5.9% 5.0% 4.5%" 4.4% 4.2%` '4.3% 5.4% Denton County 4.8% 5.6% 5.3% 4.3% 4.2% 3.7% 3.0% 2.00/6 1.6% 1.8% 2.1% 3.3% City of Denton 6.5% 1 7.5% 17.5% 1 6.2% 6.0% 5.4% 4.3% 2.8% 2.4% 2.7% - :3.1% 4.70/6 Source: Texas Workforce Commission, July 2001. Current Available Laborforce 1211 City of Denton Source: Texas Workforce Commission, June 2001. Maior Public Emnlovers University of North Texas 5,900 Denton Independent School District 2,000 Denton State School 1,353 Denton County (County Government) 1,227 City of Denton (Municipal Government 1,200 Texas Woman's University 1,131 FEMA (Federal Emergency Management Agency) 750 Source: Chamber of Commerce, January 2001. *Does not include retail. Maior Private Emalovers x•,�y��"-�,�}�� ,r`'ary��,,;.�'�r ",��r'� ��;�1y+`�,��4 � sus r �E ��'yN�um�r;oii��` Peterbilt Motors (Diesel Trucks) 1,325 Boeing Com an -Corinth (Militwy & Commercial Electronics) 1,733 Denton Regional Medical Center (Hospital) 865 Victor Equipment Company (Welding Equipment) 500 Denton Community Hospital (Hospital) 500 General Telemarketing, Inc. (Call Center) 390 Sally Beauty Supply (Corporate Office 361 Jostens, Inc. Class Rings) 350 First State Bank(Bank) 350 Anderson Merchandisers(Distribution/Warehouse) MO Andrew Corporation (Microwave Antennae) 310 CBS Mechanical Construction Services 275 54 City of Denton Bid Number 2832 The Infinity Partners Custom Interior"er. Tetra Pak, Inc. - tic Pack . Verizon Tel hone Company) Morrison Millie (Flour and Grain Mil Denton Publishin Company (Dail NAcme Brick rick Manufacturer The Associates (Call Center 160 SCI Enclosures (Plastic Molding)150 Saf -Kleen cled Solvents and Blended Fuels 140 Denton Good Samaritan Will a etirement Cotnmuni 140 Skyfab (Sheet Metal Work) 130 United Copper Industries (Copper Wire Manufacturin 126 Russell -Newman Manufactunn adies' Lingerie 120 Radisson Hotel & Eagle Point Golf Course otel 120 Ma day Manufacturin Aeros ace Machined Parts 100 Source: Denton Chamber of uOmmerce, January tvul. *Does not include retail. [ ♦ T O_.__..... ,7Lil ObVIGJ Math ,.: ,: Total Verbal Denton Independent School District 514.0 512.0 1026.0 Texas 494.0 499.0 993.0 U.S. 506.0 513.0 L 1019.0 Source: Denton Indepenaent bcnoof Lismcc 55 City of Denton Bid Number 2832 Building Permits Activity for Year -To -Date -June 2001 , b: « 21,21Q 116M 9Q6R 7549Q QvW-cy iy Dutdlirg 1511 MJ&FatiyDedift 24C 1 2111 1416AR W1,6M 141A 143g,, if MM " n AdId"anelAl6enilarts ic 61,1 mg 74 1,03/,1 7heavertWt 1SE81BWIItrodYMfarsf BTmfl7SunblaZON i lhaaveraL,p11Gf8 s*mfedunebrmdYMfor 1x"mywftis 63 '71BaVmpmgtEdUftYlDtoradfgfEtlU*is$M7i1S ( _ _ ._._.. _1 ...__. _.. _ The averaW %Wte of tritYIDtnra mil-famlyis$6%03f A'!' 4 }ii'dh Zit ><ifilk 6i' 3 hL Y.I� llf, 3o�'i5 &'.�15'xr�l t.�"'' `V' dinj_4« %i !# 1Jg�c+i 4.Y�yR h. t 4t i.p. )�l'.e... i�n}�i`v�1 ��Sk1`dt�:h� IA�.a HSdh�3t•�.E.��•�'a sr+�i�1+��.�!'a��,�d"�4��:,8i» �k�C#1§�ik i!Mri, .. �.. :,_�s _. ,.� Hold C 1 C 514, a rrv�rr,� fin' 4t ax •F&J�C ,9w, �. 2 °tft !'vim..__. i �.�t r �R rax 1 '�La. s va,'p et+..: .��okY.fF3,L�s'iz�;.. d� �.Y9w,sx�`s'� w ,`;;�:.: ax: �i.:.�°5.�:�`t�ti4 :"t�'' (ii�ah Irdstrial 1 Z124 667 2,47$ 1,34Q7 �?J.��4.�! V-$ �1�.. �'iiSA � ..:�-`.��Gth IWw?'�Ftifl Y,-�Y �'a�: \G�'� 1�'.ti iLl wfvlw.r't� ^•fG.1'�t1 1:N'. ��. .�... ens QTW,, Bait, Rafesscrd a 1 Z331,EZ z,146s67 •c,,r+v,w. '^ (Ttl'}.�ilG: r+'�B.yLL �Nv3i'.rvw ry Y 50'F'`i..: i3},f!w� �.5 t`^yFIU SI _ xS n(`=1�Pi4T la+ti.ris' kXy«4P :.i:c.fU�. SY?F�"ai:J5J1 rvna..ri«nS}.� Stores adk43catile Wiu5 Mww Oahy Hlldrgs C 14871, 5 ' x°)1 r 3"'`�- V ' Chid s :11 - aYdfF,1B111Hs Source: City of Denton Planning and Development Department Monthly Report, June 2001. 56 City of Denton Bid Number 2832 Tax Rates Prnnerty Tax Rates Ia�1s i!5 u ?a(.y..'. • aatli -'" t "% i t � i...;u"j�a.rkc.yt,:;fl�7i>6;1 K�: rY r, "5 City of 1 . 1 1. 1 1.EXT1110 1� � . 1 •1 � 1 1� 1 ' Denton Independent SchoolDistrict 11 111 Ills 11 i -MMM $2.6040800, Source: Denton County Appraisal District Sales Tax Rates t8 State 6.25% city 1.50% Total 7.75% Source: City of Denton Fiscal Operations Department Distribution of Tax Base %of 7NetTax %of %of Net Tax Net Tax % of Net Tax Tota Value Total Value TotalTotal Value 1 Single - Family $ $ Residentia $ 45.6 $ 46.0 1,106,696,1 927,309,73 31.5 1 886,082,653 0 974,098,608 5 84 47.13 4 0 -14.10 Multi - Family Residentia 10.2 470,074,99 15.9 1 198,126,763 0 210,816,212 9.97 257,579,624 10.97 4 7 5.77 Commerci 39.6 39.5 11185,788,3 40.2 al 769,593,426 1 835,681,543 0 877,139,393 37.35 74 8 0.67 Undevelo 134,844,79 ed 78,431,483 4.04 78,722,045 3.77 94,987,359 4.05 1 4.58 0.54 Other 10,809,952 0.55 14,995,586 0.71 11,796,338 0.50 14,708,604 0.50 -0.05 $1,943,044, 100. $2,115,313, 100. $2,348,198, 100.0 $3,059,636, 100. Total 277 00 994 1 001 898 0 733 00 Source: City of Denton Finance Department 57 City of Denton Bid Number 2832 Economic Development Incentives Tax Abatement: The City of Denton adopted a tax abatement policy that is available to new and expanding businesses, corporate office headquarters and distribution centers. The policy provides between 25% and 5010 in abatement for up to ten years. I4istory and philosophy of the firm, project specifications, and the potential impact on the community are factors that are considered during the application approval process. Freeport Exemption: The City of Denton, Denton County and Denton Independent School District passed the Freeport Amendment, which exempts certain business personal property from ad valorem taxes. Goods, wares, merchandise, other tangible personal property and ores (other than oil, natural gas and other petroleum products) are exempt from ad valorem taxation if the property is (1) used for assembling, storing, manufacturing, processing or fabricating and (2) is shipped outside the state no longer than 175 days after it is acquired. For additional information, contact the Denton Central Appraisal District at www.dentoncad.com. Infrastructure Assistance: The City of Denton promotes economic growth through a program of infrastructure financing. This program is available to industrial, distribution and corporate headquarter prospects which have committed to building facilities in Denton. Commercial and retail prospects which sell a majority of their goods and services to individuals or businesses outside of Denton may also qualify. An economic analysis is performed on each project to determine project costs and benefits over a five-year period. The results of the analysis are an important factor in the project approval process. Denton Municipal Electric Industrial Development Rider: New and existing industrial and commercial service customers may receive a reduction in their demand billing. The incentive is available to those customers whose electric service represents demand not previously served by the City at any location in the City's service area in the last 12 months and where such metered demand is in excess of 225 KVA or 200 KW per month. The monthly demand billing will be adjusted in accordance with the following table: Reduction to Billine or Svstem Demand First Year 50% Second Year 40% Third Year 30% Fourth Year 20% Fifth Year 10% 58 City of Denton Bid Number 2832 Industrial Revenue Bonds: The City of Denton has established a non-profit industrial development corporation authorized to issue tax-exempt or taxable revenue bonds under Texas' Development Corporation Act of 1979.' Eligible•projects must s. promote the development or expansion of manufacturing facilities in, Denton''.Bond proceeds may be used for land, depreciable property, inventory, raw materials; finance . charges and research and development costs. 59 City of Denton Bid Number 2832 Attachment 2 Contractor Minimum Employee Requirements The Contractor's employees are requtked to meet the minimum City of Denton employee requirements listed below: • Pass a drug screen test • Possess a Class "C" Texas driver's license or a CDL commensurate with the vehicles to be operated, meeting all DOT requirements and agree to a review of your driving record • Produce information required under the Immigration Reform and Control Act (1-9 Form) • Pass a criminal history background check • Show proof of automobile liability insurance (for employees that will be required to drive their personal vehicle to conduct city business) Standards of Review on Background Checks As a part of the application process, the City of Denton conducts pre -employment criminal history background checks for all positions and driving record history checks for all positions requiring a driver's license. The applicant's failure to identify any incidents as requested on the employment application, unless allowed by law, and the subsequent revelation of the incident pursuant to the criminal history and driving record background checks will automatically disqualify the applicant from employment with the City of Denton. Criminal 9story Background Checks: A criminal history background check that reflects the following will automatically disqualify an applicant from employment with the City of Denton: ❑ Conviction* of a crime involving violence (including, but not limited to, murder, attempted murder, felony assault, sexual assault, indecency with a child, etc.) ❑ Conviction* of a crime involving the use of a deadly weapon A criminal history background check that reflects conviction(s)* of the following may disqualify an applicant from employment with the City of Denton. Each incident will be evaluated on a case by case basis and factors such as the job applied for, time elapsed, frequency, age of applicant at the time of commission and circumstances surrounding the offense will be considered: ❑ Theft, fraud, or burglary ❑ Arson or criminal mischief ❑ Criminal trespass ❑ Kidnapping/Enticing a child City of Denton Bid Number 2832 ❑ Public lewdness/Disorderly conduct/Indecent Exposure ❑ Driving under the influence or driving while intoxicated ❑ Possession, manufacture, or distribution of a controlled substance ❑ Stalking or harassment ❑ Deadly conduct or terroristic threat ❑ Misdemeanor assault ❑ Any other felony not previously listed above The above is intended to be illustrative and is not inclusive of all offenses that could be included in these criteria. The City of Denton reserves the right to reject an applicant based upon the applicant's criminal history if the applicant's history is inconsistent with the functions of the position applied for or if employment of the applicant will place the City of Denton's reputation in a negatively viewed position. Driving Record History Checks: A driving record that reflects the following will automatically disqualify an applicant from a position requiring a driver's license: ❑ Three (3) or more moving violations, accidents, or any combination in the previous 12 months. ❑ Four (4) or more moving violations, accidents, or any combination in the previous 36 months. ❑ D.W.I. or D.U.I. conviction in the previous 36 months, including probated sentence. ❑ Suspended, expired, or non -Texas license within 30 days of hire. 61 Citv of Dcnton umber 2832 Recyclable Not recyclable News/office paper/junk mail Food soiled material(pizza • Magazines/catalogs boxes, ect.) • Chipboard/cereal boxes • Corrugated cardboard • Plastic bottles, jugs, and jars • Aluminum, steel, and tin food and beverage cans/containers • Glass bottles, jugs, and jars • Styrofoam of any description • Plastic take out containers/Tupperware • Disposable diapers • Frozen food bags/zip lock bags • Milk cartons & juice boxes • Toxic containers • Window glass • Light bulbs 62 CITY OF DENTON, TEXAS REQUEST FOR BEST VALUE BIDS Bid Number 2832 Addendum # 1 March 28, 2002 The Pre -bid meeting was held on Friday, March 22, 2002. This addendum is provided to the meeting's attendees and vendors that have been sent bid documents. The first portion of this addendum addresses vendor questions and responses. In addition, changes and corrections to the specification and a copy of the contract are included in this addendum and become a part of the bid specifiction. Questions, Clarifications and Responses 1. Will the mailing of public notices in Section H.I 1 be paid for by the Community Public Education Fund? The fund will pay for the first two notices during the initial contract term. This question relates to Section 11.9.7, Section 11.17.5 concerning funding of the annual recycling summary and Section 11.18.3 concerning notice for holidays. See the addendum for language clarifying the funding. 2. "Does the City have and will the City provide an estimated number of households to be serviced in each of the "zip code" areas as set forth on the City of Denton map provided with the bid document?" The Solid Waste Department recently re-routed its residential collection routes to accomodate growth. We don't route or count customers by zip code, since the Contractor will be collecting recyclables on the four days of the week that the City collects refuse, we have provided the house counts for those four quadrants that will correspond to a recycling collection.day. See the addendum for the count in Section H.11. 3 .a."Since customers will have a choice between the 18 gallon bin and a roll -out cart, it appears that this would cause several problems for a proposed contractor that intended to or wanted to source seperate the recycling at the curb, because with the roll -out cart, you cannot seperate at the curb." The Contractor can seperate recyclables at the curb from a bin or a cart, if they wish to use that kind of collection system. Others vendors at the pre -bid meeting did not see this as a problem. F:\Sharcd\Dept\Solid Waste\RECYCLING\Curbside\3rd Curbside Bid 42832\Curbside Recycling Addendum 4 Mid 2832 .doc b."when using the roll -out carts, the material put into the collection vehicle cannot be viewed and unacceptable materials cannot be rejected and tagged. If seperating at the curb as described in 3.a. above, your representative would be able to detect unacceptable materials. Since the preponderence of containers will be 18 gallon bias; it: does not appear likely that a Contractor will be using automated collection equipment to collect the few cans that may be used in the City. if the Contractor is manually tipping carts into a rear loader or side loader, they will be able to see unacceptable material in the hopper as they would when emptying bins into the same hopper. c."In addition having the material co -mingled will also cause greater contamination of the materials from crushed glass, thus reducing the amount of material that can be recycled. This would interfere with the requirements of Sec. II.6 requiring 95% of the materials collected (by weight) to be recycled. Having the cans will also require additional types of vehicles and additional personnel to service what could be a very small number of households, thus increasing the basic service cost. Will the City consider deleting this option of having carts?" All other vendors say they can meet the performance requirements of Section H.6 as the specifications are written. Carts do not require special trucks to service them. Cans will not be deleted from the specification. 4. a"lf the City continues to offer this cart option, are the roll -out carts the type that are divided for paper products on one side and all other products on the other side, or is all material co - mingled in the cart? The carts have no internal divders, all materail is co -mingled. b."Does the City have any preliminary figures on how many households may opt for the roll -out cart?„ The City has no information on how many residents may wish to opt for cans. 5. Does the City have an estimate of the number of households that will require "front door" pickup as per Sec. II.9.12T Currently the City provides about fifty (50) residents with "front door" refuse collection service. 6. "Sec. HA dealing with the Public Education Fund, requires that the Contractor provide $32,000.00 the first year and $22,000.00 each year anually. If the contract period is scheduled to begin Nov. 1, 2002, will this $32,000 fund period begin from Nov. 1, 2002 to Oct. 31, 20037 Yes, the funds will be used during each 12 month period of the contract term beginning on the effective date of the contract. 7. "Does the City have the approximate dates of when each of the events stated in Sec. H.14.3 occur?" Texas Recycle Day is in the Fall, The Great American Clean up is in the Srping, the Arts and Jazz Festival in usually in April and Cinco de May is in May. 8 .a.Will vendors receive questions and answers proposed by other vendors?" Yes, all vendors are provided with the same information. b."If any amendments are issued to this Bid document will they be mailed or faxed or posted to a website, if posted to a website,which website do we need to review for amendment?" FAShared\Dept\Solid Waste\RECYCLING\Curbside\3rd Curbside Bid #2832\Curbside Recycling Addeofimm # Mid 2832 .doe All Addenda will be mailed or "FEDEXed to those vendors that were provided with bid documents. 9. If a person move out and takes a bin, are we (the vendor/contractor) stuck with the cost of the bin (Section 1I.9.10)? In those situations where a bin or cart is not left at the residence after a "move out' the new resident will call and ask for a container. 1) If there was a bin at the residence, the City will provide a replacement container for the Contractor (at no cost to the Contractor) and the Contractor will deliver the bin. 2) If there was a cart at the residence, the contracor will notifiy the City of the missing cart and its serial number. The City will bill the previous resident for the cart. TheCity will provide a replacement container for the Contractor (at no cost to the contractor) and theCcontractor will deliver the bin. In the situation where a resident moves into a residence with a cart and they don't want to use the cart, but want a bin. The Contaractor will eschange the cart for a bin adjust the cart inventory to reflect its new location(i.e. to inventory or returned to City, or a new address...) 10. Do we report everything (Section II.15.4)? Include in your bid submittals samples of all required reportsset up specifically for the City of Denton which include all required information. 11 .Do we need to submit the Bid Bond to the City Attorney prior to the bid due date (Section IVA.1)? No, just meet the requirements of the cited section. If submitting a cashier's check, that check will be returned when the City Council awards the bid. Nowhere in the material does it talk about rebates? TThe Contractoer is not expected to share or rebate any portion of the revenue from the sale of processed Denton recyclables. General Comments Reviewed with Pre -Bid Attendees ♦ This is a Best Value Bid and will be evaluated based on the criteria described in the bid specification. ♦ Inital contract term is five (5) years - Provide all completed Bid Submittal Attachmentsin order, behind the Bid Sheet, with bid submittal. ♦ Provide sample reports for all required reports, meeting requirements of the bid specification, as part of the bid submittal package. ♦ Sign acknowledgement of receipt of all addenda issued for this bid. ♦ Performance requirements will be audited. ♦ Base bid response is required, though a response to the alternate is optional. ♦ Proprietary information should be provided in a seperate envelope with the bid submittal and identified as such. This proprietary information will be kept confidential and returned to the bidder, if requested, following City Council action on the bid. F:\SharcdUDepflSolid Waste\RECYCUNG\Curbsidel3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2932 .doc I.Cover Sheet and Table of Contents Add the following to the front cover page of the bid: "March 17, 2002 Includes Addendum # 1" Add Attachment 4 to the Table of contents. The cover and Table of Contents should read: FAShared\Dept\SOhd Waste\RECYCLING\CurbsideX3rd Curbside Bid #2832\Curbside Recycling Addendmm # Mid 2832 .doe CITY OF DENTON, TEXAS REQUEST FOR BEST VALUE BIDS Bid Number 2832 TO PROVIDE THE CITY OF DENTON WITH RESIDENTIAL CURBSIDE RECYCLING AND PROCESSING SERVICES Prepared by Denton Municipal Utilities Solid Waste Department Director of Solid Waste, A. Vance Kemler March 17, 2002 Includes Addendum # I "Dedicated to Quality Service" FASbared\Dept\Solid Wasle\RECYCUNG\Curbside\3rd Curbside Bid 112832\Curbside Recycling Addendum # 1Bid 2832 .&x TABLE OF CONTENTS SECTION I — INTRODUCTION / BAC$GROUND I]TM I.1. Solid Waste Master Plan — City of Denton 1 I.Z. Solid Waste Residential Customers and Recycled Tonnage 1 I3. City of Denton Existing Recycling Services 1 I.4. Bidder Contact Information 2 I.5 Bid Opening 2 I.6 Bid Documents 2 SECTION II — GENERAL SCOPE OF SERVICES H.1. Overview 4 111.2. Best Value Bid Request 4 U.3. Acceptable Recyclable Materials 5 IIA. Materials Not Collected 5 11.5. Buyer Authorization 6 11.6. Recycling Materials Performance Requirements 6 11.7. Recyclable Materials Processing Site and Information 6 R.8. Implementation and Operations Plan 7 II.9. Curbside Collection Methodology —Bins, Carts 8 II.10. Container Inventory Levels 10 U.11. Proposed Service Area Route Plan 11 U.12. Hours and Days of Collection 11 11.13. Contract Term 11 H.14. Public Education Plan 12 U.15. Customer Service Plan 13 11.16. Missed Collections 14 II.17. Reporting 14 11.18. City Designated Holidays 16 U.19. Inclement Weather Days 17 SECTION III — COST OF SERVICES (Bids, Materials) III.1. Base Bid -Residential Curbside Recycling Services 18 111.2. Alternate Bid #I- Residential Curbside Recycling Services, with Senior Citizens Voluntary exemption 20 111.3. Materials Payments 20 SECTION IV — GENERAL REQUIREWNTS IV.1. Contractor Penalties 22 TV.2. General Compliance Requirements 22 IV.3. Insurance Requirements 22 IVA. Bond Requirements 25 IV. 5. Written General Assurances 26 TV.6. List of Recently Disposed and Pending Recycling Services Litigation 27 F:\Shsred\Dept\Solid Wa.4e\RECYCLJNG\Curbside\3rd Curbside Bid #2832kCurbside Recycling Addendum # Mid 2832 .doe TABLE OF CONTENTS (continued) IV.7. History of Regulatory Compliance ' ` 27 IV.8. City of Denton Visits / Designated Representatives 27 IV.9. Disqualification of Bidders 28 IV.10. Contract Termination 28 IV.11. Proposal Evaluation and Selection Criteria 28 SECTION V — BID SHEET AND ACKNOWLEDGEMENT Bidder's Curbside Recycling Collection Charges 30 Recyclables Payment Schedule 31 Contractor Acknowledgement 32 BID SUBMITTAL ATTACHMENTS 1. Buyer Authorization Forms 33 2. Recycling Materials Processing Site Information 34 3. Implementation and Operations Plan 35 4. Vehicle Master List Form 36 5. Alternate Plan of Action 37 6. Proposed Service Area Route Plan 38 7. Customer Service Plan 39 8. Monthly, Quarterly, and Annual Reports 40 9. Written General Assurances 41 10. List of Recently Disposed and Pending Litigation 42 11. History of Regulatory Compliance 43 12. Designated Representative 44 13. Full Bid Understanding and Compliance Agreement 45 ATTACHMENTS 1. Denton Street Map and Demographic Report 2. Contractor Minimum Employee Requirements 3. Recycling Container Teat Imprint 4. Contract for Curbside Recycling and Processing Services FAShared\Dept\Solid Wastc\RECYCLtNG\CnrbsidcUrd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 .doc 2.Section IT.9.10. The word "residences" on line two and" implementatin" on line three are . mispelled. Section should read: ". II.9.10 The Contractor will be responsible for educating and informing Denton's residents that recycling containers remain with the residence upon moving. The`Contractor will develop and recommend procedures, within two months of program implementation, for City approval,' enabling the recycling containers to remain inside the residence for utilizationby the next occupant of the home, following move out. 3.Sectiion ILII. Is expanded to clarify the use of Community Public Education Funds. Section IL11. should read: Section EL11 Proposed, Service Area Route Plan The Contractor will establish its own collection routes for the collection of recyclable materials, and submit the Proposed Service Area Route Plan, Bid Submittal Attachment 6, and schedule to the City at bid submittal. At least three weeks prior to curbside recycling implementation, the Contractor will submit to the City for approval their Proposed Detailed Route Plan. Following City approval of the Contractor's Detailed Route Plan, any changes in collection routes or days of collection will require prior approval by the City. The Contractor will also be required to notify all affected residents at least two weeks in advance of a route change through a mailing to each affected resident and a bilingual public notice (5" x 7") in the major local Sunday newspaper. The proposed route plan submitted with Bid Submittal Attachment 6 will be a "service area route plan", not the "detailed route plan" by street. The Community Public Education Fund will pay for the public notices of the first two routing changes during the initial term of the contract and one public notice during any renewal term(s). The Contractor will be responsible for funding all other public notices of routing changes during the contract. The most recent physical house counts per quadrant are: Quadrant 1- 5,422, Quadrant 2 — 5,243, Quadrant 3 — 4,392 and Quadrant 4 — 4,261. Of these homes, 15 mobility impaired customers receive front door service. 4.Section II.17.5 Is expanded to clarify the use of Community Public Education Funds. Section 1117.5 should read: SectionlI.17.5 The Contractor will provide an annual City of Denton Curbside Recycling Summary document delivered to the City of Denton's residents as a tri-folded one page report for inclusion as a utility bill "stuffer", reporting the results of Denton's residents recycling efforts on a fiscal year by year comparison basis. This document will be provided to the City during the fourth quarter of each calendar year, for the City's fiscal year, and becomes due following completion of the first partial fiscal year, and each year thereafter for the term of the contract. The contractor will obtain prior City approval in.the design, format, and presentation data included within this document. The most recent count of utility bills was 39,000 per monthly billing cycle. The City will provide the most current number of monthly billings to the Contractor annually. The Community Public Education Fund will pay for the annual Curbside Recycling Summary "bill" stuffer. F:\.Shared0epASotid WasteWCYCLING\Curbside\3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 .doc 5.Section 11.18.3 Is expanded to clarify the use of Community Public Education Funds. Section IL18.3 should read: Section fl.18.3 All Denton's residents will receive curbside recycling collections on City of . Denton designated holiday weeks. The Contractor will provide written notification in the major' local Denton newspaper, Wednesday edition, with a 5" x T' bilingual advertisement to Denton's residents on the week prior to the holiday, of their curbside recycling collection day for the upcoming holiday week. The City designated representative must be provided sufficient time, two work days, to review and approve the proposed newspaper notification prior to the Contractor submitting and scheduling for printing the notification of the revised pickup schedule, so that Denton's residents are informed of the schedule revision on Wednesday of the week prior to the holiday. During holiday weeks the Contractor may collect recycling materials on Wednesdays, if the City provides refuse collection service on that day. The Community Public Education Fund will pay for each notice of the holiday schedule. 6.SectionIL9.7 Is expanded to clarify the use of Community Public Education Funds Section 111.9.7 should read: II.9.7 A minimum of thirty days prior to implementing the curbside recycling program, the Contractor will advertise in the local newspaper that sixty-four gallon carts are available in lieu of or in addition to the standard eighteen gallon bin, and/or multiple bins are available. The conspicuous bilingual newspaper advertisement (5" x T' minimum), requires prior approval by the City, and must be inserted a minimum of twice per week in the major local newspaper with one day each week being a Sunday. The Contractor will provide a local or toll free telephone number for Denton's residential customers to call to place additional bin or cart orders. Sample bins and carts for public viewing and handling are to be placed by the Contractor in at least six City selected locations, but less than ten, where Denton's residents will have the opportunity to view and manuver the bin and cart. Over this thirty day time period, the Contractor will document all resident's telephoned container requests, and provide their requested containers during the container distribution process. During the container distribution process, the Contractor will document all residents receiving carts and/or additional bins on the Container Distribution List of any quantity or combination requested. Prior to the Contractor's delivery of recycling containers to Denton's residents, all containers must be fully assembled by the Contractor and ready for use.. The Community Public Education Fund will pay for this notice. 7.SectionIV.4.2 A change in the maximum number of months used to determine the amount of the performance bond has been made. Section IV.4.2 should read: Section IV.4.2 Performance Bond Requirements As soon as practicable after notification of the bid award, and prior to contract signing, the Contractor shall file with the Purchasing Department a performance bond in the amount required by the City. During the term of this agreement and for the term of any renewals, the successful Bidder F:\SLered\Dept\Solid Waste\RECYCL NG\Cucbside\3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 .doc will be required to furnish and keep in full force and effect a performance bond as further security for the performance of the curbside recycling contract. The performance bond will be in an amount equal to the product of the Number of Accounts times the Monthly Unit Rate times the number of months remaining in the contract term (not to exceed 24 months) plus 10%, adjusted , on each contract anniversary date. The Bidder will pay all premiums for the bond. A certificate for the surety showing that the bond premiums are paid in fiill will accompany the bond. The performance bond will be issued by a duly authorized corporate surety company authorized to do business in the State of Texas. The Performance bond will require approval by the City Attorney. 8. Bid Sheet and Acknowledgement . Make changes and provide for acknowledgement of receipt of addendum # 1. Bid Sheet and Acknowledgement should read: F:\Shared\Dept\.Solid Waste\RECYCLING\Curbside\3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 Aoc BID SHEET AND ACKNOWLEDGEMENT Bidder's Curbside Recycling Collection Charges Bidders must bid on the Base Bid. Bidders are not required to respond, but are 'encouraged to respond to Alternate Bid #1, and the Recyclables Payment Schedule. The Bidder fully agrees to provide the stated curbside recycling services clearly defined herein for the following monthly charge per solid waste residential account. Prices are to be recorded per residential unit per month, both numerically and in writing. Base Bid — The Contractor to provide Required Residential Curbside Recycling Services with the City providing all customer billing services. This bid requires all single family, duplex, triplex, and fourplex residents (Code SWR and RPT) to pay for curbside recycling services. Unit Price: Number Written Amount Alternate Bid #1 — The Contractor to provide Residential Curbside Recycling Services as in the Base Bid, except Senior Citizens will be able to Voluntarily request Exemptions from curbside recycling fees and services for themselves if they are age 65 or older. Unit Price: Number Written Amount The City reserves the right to select one of the bids listed above as either the Base Bid, or Alternate Bid #1, or to reject both bids. Recyclables Payment Schedule The City may from time to time have available recycled materials collected from Denton's drop-off collection sites. The City would like the option to deliver pre-sorted and comingled recycling materials to the Contractor's processing facility. The City requests the Contractor provide the rates they would pay the City for these materials. Bidder's may bid an any or all commodities delivered by the City to the Contractor's processing facility. M MITWI 1 .i i # I i CT FWA: .: . i I M, rNT.J Comingled Paper (Mixed Paper) OCC #6 ONP #8 ONP Office Paper F:\Sbared\Dept\Solid Waste\RECYCLING\Curbside\3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 Am Steel Aluminum Flint Glass Amber Glass Green Glass The Bidder should provide pricing or the percentage (%) of an index price which they will pay for materials. Example: OCC 50% of lfigh Side Southwest Listing Contractor Acknowledgement Full Bid Understanding and Compliance Agreement The Contractor hereby acknowledges that it understands and will comply with all terms, conditions, requirements, fees, and specifications contained in and as a part of this bid document. Based on its compliance with all terms, conditions, requirements, fees, and specifications contained herein and as a part of this bid document, the Contractor's authorized representative shall sign and submit Bid Submittal Attachment 13. (Bidder Company Name) (Signature of Authorized Representative) Notice of Receipt of Addendum # 1: The undersigned acknowledges receipt of Addundum # 1. (Signature of Authorized Representative) F:\Sbared\Dept\Solid Waste\RFCYCLING\Curbside\3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 .doc 9. Correct Bid Attachment number in teat. Page should read: Bid Submittal Attachment 12 Designated Representative . Contractor Representative: The Contractor will provide the following information in Bid Submittal Attachment i2. Contractor Representative (Print Name) Title Street Address City Office Telephone Number Mobile Telephone Number State Zipcode Fax Number E-mail Address F:\Shared0ept\Solid Weste\RECYCLING\CurbsideUrd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 .doc 10. Correct Bid Attachment number in text Page should read: Bid Submittal Attachment 13 Full Bid Understanding and Compliance Agreement The Contractor hereby acknowledges that it understands and will comply with all terms, conditions, requirements, fees, and specifications contained in and as a part of this bid document. Based on its compliance with all terms, conditions, requirements, fees, and specifications contained herein and as a part of this bid document, the Contractor's authorized representative shall sign and submit Bid Submittal Attachment 13. Company Name Company Authorized Representative (Printed Name, Title) Company Authorized Representative (Signature) It. Add as Attachment 4, the Contract for Residential Curbside Recycling and Processing Services. F:\Shared\Dept\Solid Waste\RECYCLING\Curbside\3rd Curbside Bid #2832\Curbside Recycling Addendum # Mid 2832 .dce 4 W TE D13 �G6B 1 1 CITY OF DENTON BID NUMBER 2832 RESIDENTIAL CURBSIDE RECYCLING AND PROCESSING SERVICES FOR CITY OF DENTON BID DUE DATE: APRIL I I, 2002 2:00 p.m. PRESENTED BY: TRINITY WASTE SERVICES 4200 E. 14TH STREET PLANO, TEXAS 75074 972-422-2341 * 800-766-1758 fax - 972-4220-5683 N- April 11, 2002 Tom D. Shaw, CPM City of Denton Purchasing Department 901-B Texas Street Denton, Texas 76201 RE. Bid for Residential Curbside Recycling & Processing Services Dear Mr. Shaw, Trinity Waste Services wishes to thank the City of Denton for the opportunity to offer the enclosed proposal for: REQUEST FOR BIDS RESIDENTIAL CURBSIDE RECYCLING & PROCESSING SERVICES Due: April 11, 2002 2:00 p.m. Throughout this proposal, Trinity Waste Services will demonstrate our capabilities in operations, customer service and financial stability to provide Denton the absolute best service available. Being a part of one of the largest solid waste / recycling company's in North America, as well as one of the largest solid waste companies in Fort Worth and surrounding counties, Trinity Waste Services will be able to provide the expertise and professionalism to successfully carry out the requirements of the contract and meet any extraordinary circumstances that may arise. That added to the fact of our current knowledge of the area can guarantee you the most effective service. Finally, Trinity Waste Services has provided solid waste and recycling services to the DFW area since 1960, and has the knowledge and experience to institute and provide a seamless recycling program to the residents of Denton. Trinity Waste Services will provide Denton a well-defined, efficient and practical program to meet the resident's needs while at the same time presenting the most cost effective approach available. Given our extensive experience hauling solid waste and recycling Trinity fully understands the requirements of the city and is prepared to meet those obligations as outlined in this proposal. The number of other municipalities Trinity services throughout the metroplex demonstrates our commitment to service. Trinity Waste Services TRINITY WASTE SERVICES, 6100 Elliott Reeder Road, Fort Worth, Texas 76117 Tel: (817) 332-7301 Fax: (817) 831-2020 Customer Service Fax (817) 831-7489 Printed on recycled pap currently has sixty-seven (67) solid waste and / o.r recycling franchise agreements m`effect as of this date. We are confident in our ability to provide superior service for Denton now, and far into the future. Trinity Waste Services owns and operates our three area Material Recovery Facilities (Recycling centers) as well as, one transfer station, and seven permitted landfills_ that service Dallas, Tarrant, Collin, and surrounding counties. We respectfully submit this bid for your consideration while bearing in mind, "there's more to recycling collection and processing than a cheap price". Anyone can offer a low rate. The difference is whom can you trust? Who can deliver what they promise? Who can maintain the enormous task of recycling collection and processing over the duration of the contract? We feel our history of performance for the cities listed in this bid proves our claim to provide superior service, competitive rates, and the assurance that your recyclable materials are processed for return to commerce in a responsible manner. Trinity Waste Services agrees to be bound by the bid submitted and to provide the services specified in the contract Sincerely, Trinity Waste Services er-�.) s.t-" Tom Sellers General Manager jdh/04/! Cal" Grtativery Municipal Marketing Manager N KNOW ALL MEN BY THESE PRESENTS, THAT WE Trinity Waste Services 6100 Elliot Reeder Road Fort Worth, TX 76117 as Principal, hereinafter called the Principal, and Travelers Casualty and Surety Company of America One Tower Square -13 CZ Hartford, CT 06183-6014 a corporation duly organized under the laws of the State of as Surety, hereinafter called the Surety, are held and firmly bound unto City of Denton 901A Texas Street Denton, TX as Obligee, hereinafter called the Obligee, in the sum of Five Thousand Dollars Dollars ($ $5,000.00 ), for the payment of which sum well and truly to be made, the said Principal and the said Surety, bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. WHEREAS, the Principal has submitted a bid for Recycling Contract - Curbside Single Stream Collection - Bid #2832 NOW, THEREFORE, if the Obligee shall accept the bid of the Principal and the Principal shall enter into a Contract with the Obligee in accordance with the terms of such bid, and give such bond or bonds as may be specified in the bidding or Contract Documents with good and sufficient surety for the faithful performance of such Contract and for the prompt payment of labor and materials furnished in the prosecution thereof, or in the event of the failure of the Principal to enter such Contract and give such bond or bonds, if the Principal shall pay to the Obligee the difference not to exceed the penalty hereof between the amount specified in said bid and such larger amount for which the Obligee may in good faith contract with another party to perform the Work covered by said bid, then this obligation shall be null and void, otherwise to remain in full force and effect. Signed and sealed this 11 th day of April 2002 Waste Services 11 (Principal) Travelers Casualtv and of America Dawn L. Morgan rW'mes+l LJL- V ' V es L Moore e: Acton y-tn-F ct des I. Moore (Title) S Phone No. 860-277-0111 AIA DOCUMENT A310 • BID BOND • ALA • FEBRUARY 1970 ED. • THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 N.Y. AVE, N.W., WASHINGTON, D.C. 20006 TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA TRAVELERS CASUALTY AND SURETY COMPANY FARMINGTON CASUALTY COMPANY Hartford, Connecticut 06183-9062 `? POWER OF ATTORNEY AND CERTIFICATE OF AUTHORITY OFATTORNEY(S)-IN-FACT KNOW ALL PERSONS BYrTHESE. PRESENTS; THAT TRAVELERS CASUALTY AND SURETY COMPANY"UF AMERICA, TRAVELERS CASUALTY. AND SURETYCOMPANY and FARMMGTON CASUALTY :_COMPANY, corporations duly organized under the laws of the State of Connecticut, and having their principal offices in the City of Hartford, County of Hartford, State of Connecticut, (hereinafter the "Companies") hath made, constituted and appointed;and do by these presents make, constitute and appoint: James I Moore, Stephen T. Kazmer, of Countryside, Winois, their true and lawful Attorneys) -in Fact, with full power and authority hereby conferred to sign, execute and acknowledge, at any place,witilin the United States, the following inshtnnent(s): by his/her sole signature and act any and all bonds, recognizan= conttacts'offndemnily, and other writings obligatory in the nature of a bond, recognizance, or conditional undertaking and any and all consents incident thereto and to bind the Companies, thereby as fully and to the same extent as if the same were signed by the duly authorized officers of the Companies, and all the acts of said Atmrney(s)-m-Fact, Pursuant to the authority herein given, are hereby ratified and confirmed - This appointment is made under and by authority of the following Standing Resolutions of said Companies, which Resolutions are now in full force and effect: VOTED: That the Chairman the President, any Vice Chairman, any Executive Vice Second vice Presidenty �+d�. any senior Vrce President any Vice President any the Treasurer, an Assistant Treasurer, the Corporate Secretary or any Assistant Secretary may appoint Attomeys in Fact and Agents to act for and on behalf of the company and may give such appointee such authority as his or hercertificate of authority may prescribe to sign with the Company's name and seal with the Company's seal bonds, recoguvances, contracts of the nature of a bond, recognizance, or conditioual undertaking indemnity, a and other writings obligatory such is �, end any of said officers or the Board of Directors at any time may remove any such appointee and revoke the power given him or her. VOTED: That the Chairman, the President, any Vice Chairman, any Executive Vice President, any Senior Vice President or any Vice President may delegate all or any part of the foregoing authority to one or more officers or employees of this Company, provided that each such delegation is in vaiting and a copy thereof is filed in the office of the Secretary. VO` That any bond, recognizance, contract of indemnity, or writing obligatory in the nature of a bond recognizance, or conditional undt,.. jdug shall be valid and binding upon the Company when (a) signed by the President, any Vice Cbsirman any Executive Vice President, any Senior Vice President or any Vice President, any Second Vice President, the Treasurer, any Assistant Treasurer, the Corporate Secretary or any Assistant Secretary and duly attested and sealed with the Company's seal by a Secretary or Assistant Secretary, or (b) duly executed (under seal, if required) by one or more Attomeys-in Fact and Agents pursuant to the power prescribed to his or her certificate or their certificates of authority or by one or more Company officers pursuant to a written delegation of authority. - This Power of Attorney and Certificate of Anthority is signed and sealed by facsimile (mechanical or printed) under and by authority of the following Standing Resolution voted by the Boards of Directors of TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, TRAVELERS CASUALTY AND SURETY COMPANY and FAR117QTGTON CASUALTY COMPANY, which Resolution is now in full force and effect: VOTED: That the signature of each of the following officers: President, any Executive Vice President, any Senior Vice Presideut, any Vice President, any Assistant Vice President any Secretary, any Assistant Secretary, and the seal of the Company may be affixed by facsimile to any Power of attorney or to any certificate relating thereto appointing Resident Vice Presidents, Resident Assistant Secretaries or Attorneys -in Fact for Purposes only of executing and attesting bonds and undertakings and other writings obligatory in the nature thereof, and any such power of attorney Of certificate bearing such facsimile signature or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by such facsimile signature and facsimile seal shall be valid and binding upon the Company in the future. with respect to any bond or undertaking to which it is attached. :11.00standard) IN WITNESS WHEREOF; TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, TRAVELERS CASUALTY AND SURETY COMPANY and FARMINGTON CASUALTY COMPANY have caused this instrument to be signed by their Senior Vice President and theit corporate seals to be hereto affixed this 27th day of March 2001.., STATE OF CONNECTICUT•; TReIVI - � }SS. Hartford COUNTY OF HARTFORD 90(a A/S�Ofp/,��L�t George W. Thompson Senior Vice President On this 27th day of Mazch, 2001 before me.personally came GEORGE W. THOMPSON to me (mown, who, being by me duly swam, did depose and say: that he/she is Senior Vice President of TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, TRAVELERS CASUALTY AND SURETY COMPANY and FARMINGTON CASUALTY COMPANY, the corporations descnbod in and which executed the above instrument; that he/she knows the seals of said corporations; that the seals affixed to the said instrument are such corporate seals; and that he/she executed the said instrument on behalf of the corporations by authority of his/her office under the Standing Resolutions thereof. xorurr �} a e Muc `bwecch'` CERTIFICATE My commission opine December31,2002 Notary Public Carol A. Thompson I, the undersigned, Assistant Secretary of TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, TRAVELERS CASUALTY AND SURETY COMPANY and FARMINGTON CASUALTY COMPANY, stock corporations of the State of Connecticut, DO HEREBY CERTIFY that the foregoing and attached Power of Attorney and Certificate of Authority remains in full force and has not been revoked; and furthermore, that the Standing Resolutions of the Boards of Directors, as set forth in the Certificate of Authority, are now in force. Signed and Sealed at the Home Office of the Company, in the City of Hartford, State of Connecticut. Dated this 11 th day of April .20 02 ry� �• Ly 0�1i A !L s HAairoaD, + 0 1982f' o >�bf �a! 6•iy • F� m Kod M.Johanson Assistant Secretary, Bond G-23208-B ss. in the State of Illinois do hereby certify that James I. Moore Attorney -in -Fact, of the Travelers Casualty and Surety Company of America who is personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person, and acknowledged that he signed, sealed and delivered said instrument, for and on behalf of the Travelers Casualty and Surety Company of America for the uses and purposes therein set forth. Given under my hand and notarial seal at my office in the City of Countryside in said County, this 11th day of April A.D., 2002 LL ICIAL.N L MORGANUSLIC, STATE Oi ILLINOIS ISSION EXPIRES:05149104 is�ctr� Notary Public Dawn L. Mbfban My Commission expires: March 29, 2004 POWER OF ATTORNEY Allied Waste Industries, Inc., incorporated under the laws of the State of Delaware, and having its chief place of business at 15880 N. Greenway-Hayden Loop, Suite 100, Scottsdale, Arizona, 85260, hereby makes, constitutes and appoints Weible, Cahill & Forker, LLC acting through and by William P.. Weible, William F. Cahill, Molly Moran, Esther C. Jimenez, Patricia J. Kenis, Phyllis Boyd, Laura E. Fish, Kimberley K. Libers or Melissa Newman, its true and lawful attorney and affix its corporate seal to and deliver for and on behalf as surety thereon or otherwise, bonds of any of the following Gasses, to wit: Surety bonds and/or bid bonds to the United States of America or agency thereof , including those required or permitted under the laws or regulations relating to Customs or Internal Revenue; license and permit bonds or other indemnity bonds under the laws, ordinances of regulations of any state, city, town, village, board, other body organization, public or private; fonds to transportation companies; lost instrument bonds; lease bonds, worker's compensation bonds; miscellaneous surety fonds; and bonds on behalf of notaries public; sheriffs, deputy sheriffs and similar public officials. 2. Surety bonds and/or bid bonds on behalf of Allied Waste Industries, Inc. and its subsidiaries, included, but not limited to, Allied Services, LLC, Allied Waste Systems, Inc. , Allied Waste Transportation, Inc., American Disposal Services of Missouri, Inc. and BFI Waste Systems of North America, Inc., BFI Waste Services, LLC in connection with bonds, proposals, or contracts. To sign and seal all bid bonds and surety bonds on behalf of Allied Waste Industries, Inc. and its subsidiaries, relating to the provision of solid waste collection, transportation, recycling, or disposal services by Allied Waste Industries, Inc. and its subsidiaries. Allied Waste Industries, Inc. hereby agrees to ratify and confirm whatsoever Weib(e, Cahill & Forker, LLC shall lawfully do pursuant to this power of attorney and the procedural guidelines set forth to Weible, Cahill & Company, LLC, and until notice or revocation has been given by Allied Waste Industries, Inc. the acts of the said attorney shall be binding on the undersigned. IN WITNESS WHEREOF this POWER OF ATTORNEY has been signed this 2 Ul'day of Fchruryy , on behalf of Allied Waste industries, Inc. by its Vice President, Legal, Mr. Steven M. Helm. State of 14ri Z c n &_ ) _ ) ss. County of 11VI&y; cc) ) Subscribed and sworn before me this � day of C Y Qf 20 02 by Steve M. Helm. 11jP8 , NFot 1llllNotary Public Jl!!!l ! 15880 N. Greenway-Hayden Loop, Ste 200 / Scottsdale, AZ 85260 / 480.627.2700 4w orau��E= Executive Summary Trinity Waste Services as part of this Executive Summary will provide the City with a brief explanation of our Bid for Recycling Processing. In order to meet the objectives as defined by the City, Trinity will address each aspect of the Bid and adhere to the guidelines set forth. Trinity Waste Services desires to transport all recycling materials from residential units within the City to our Material Recovery facility in Plano. Trinity will maximize the aesthetic living conditions for Denton residents and maintain and improve positive communication between the City, the residents, and our company. This Bid contains several major components. We will describe each portion in order of their relative position in the RFB. SEALED PACKAGE Trinity Waste Services has provided the City one original & four copies of the Bid for their evaluation and consideration. `1 Item 1 Cover Letter — Trinity Waste Services has provided a cover letter containing the specific information requested. Item 2 Appropriate Bid Security — Trinity Waste Services has provided its Bid Bond, payable unconditionally to the City of Denton, in the amount of $5,000 to guarantee our appropriate participation if selected. Item 3 Executive Summary — Trinity Waste Services has provided an Executive Summary. Item 4 Bidder Price Schedule — Bidder's Curbside Recycling Collection Charges Item 5 Recyclables Payment Schedule — Bidder's proposed prices for Denton's Drop-off Site Materials. Item 6 Bid Submittal Attachment 1— Buyer Authorization Form Item 7 Bid Submittal Attachment 2 — Recycling Materials Processing Site Information Item 8 Bid Submittal Attachment 3 — Implementation & Operations Plan Trinity Waste Services is offering the City of Denton a complete and efficient package for recycling services as explained in Attachment 15. M TRummuffry. Item 9 Bid Submittal Attachment 4 — Vehicle Master List Item 10 Bid Submittal Attachment 5 — Alternate Plan of Action Item 11 Bid Submittal Attachment 6 — Proposed Service Area Route Plan Item 12 Bid Submittal Attachment 7 — Customer Service Plan Trinity Waste Services has the most comprehensive customer service program of any company of our kind in the industry. In 1995, Trinity undertook a corporate wide reformation of our customer service policies. The program described in this Bid details the efforts, accomplishments and results of our state-of-the-art Customer Service Program. Every aspect of our business is monitored and the resulting service level to the customer has never been better. In the last 18 months Trinity has sent out many individual pieces of direct mail and postcards to our residential customers with information about recycling service related issues and governmental regulations. Item 13 Bid Submittal Attachment 8 — Monthly, Quarterly & Annual Reports Item 14 Bid Submittal Attachment 9 — Written General Assurances Firm Background — Trinity Waste Services has provided a brief history and description of our company including size, personnel, qualifications, years of experience and other detailed information relating to our background and competency. Financial History — Trinity Waste Services has provided the annual reports for 1999 and 2000 of parent -corporation Allied Waste Industries certified by a nationally recognized firm of independent certified public accountants. Item 15 Bid Submittal Attachment 10 — List of Recently Disposed & Pending Litigation Item 16 Bid Submittal Attachment 11— History of Regulatory Compliance Item 17 Bid Submittal Attachment 12 — Designated Representative Item 18 Bid Submittal Attachment 13 — Full Bid Understanding & Compliance Agreement Item 19 Experience and References — Trinity Waste Services has provided a reference list of all cities in the North Central Texas COG area in which we currently provide service. The recycling contracts are noted. _1 4 � . uXXEs Item 20 Disposal and Processing Sites — Trinity Waste Services currently owns and operates six (6) Subtitle D compliant MSW landfills in the Dallas/Fort Worth market. Our total capacity and combined life of sites add up to more than 100 years of existing and usable landfill space. Trinity also was the first Recycler in Dallas/Fort Worth to offer curbside recycling. Since that time, Trinity has maintained the cutting competitive edge of recycling by owning and operating our own Material Recovery Facility at 2550 Austin Road, Fort Worth, Texas. We were the first to offer mixed paper and cardboard into the curbside program and our list of acceptable materials has continued to grow and expand without additional cost passed through to the customer. We have just recently completed and placed in operation the new Trinity Waste Services Fort Worth Transfer Station / Material Recovery Facility. This $6.5 million investment now provides a front door to our disposal sites as well as a large-scale recycling center to divert usable portions of the waste stream. This facility assures long-term cost effective disposal for our customers. City of Denton Bid Number 2832 SECTION V BID SHEET AND ACKNOWLEDGEMENT Bidder's Curbside Recycling Collection Charges Bidders must bid on the Base Bid. Bidders are not required to respond, but are encouraged to respond to Alternate Bid #1, and the Recycables Payment Schedule. The Bidder fully agrees to provide the stated curbside recycling services clearly defined herein for the following monthly charge per solid waste residential account. Prices are to be recorded per residential unit per month, both numerically and in writing. Base Bid — The Contractor to provide Required Residential Curbside Recycling Services with the City providing all customer billing services. This bid requires all single family, duplex, triplex, and fourplex residents (Code SWR and RPT) to pay for curbside recycling services. Unit Price: $1.47 One dollar and forty-seven cents Number Written Amount Alternate Bid #1 — The Contractor to provide Residential Curbside Recycling Services as in the Base Bid, except Senior Citizens will be able to Voluntarily request Exemptions from curbside recycling fees and services for themselves if they are age 65 or older. Unit Price: $1.72 One dollar and seventy-two cents Number Written Amount The City reserves the right to select one of the bids listed above as either the Base Bid, or Alternate Bid #1, or to reject all bids. C:\WINWORD\DATA\CONTRACnPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton _ Bid Number 2832 Recyclables Payment Schedule The City may from time to time have available recycled materials collected from Denton's drop-off collection sites.The City would like the option to deliver pre-sorted and commingled recycling materials to the Contractor's processing facility, The City requests the Contractor provide the rates they would pay the City for these materials.. Bidder's may bid any or all commodities delivered by the City to the Contractor's processing facility. Denton's Drop -Off Site Materials: Commingled Paper (Mixed Paper) OCC #6 ONP #8 ONP Office Paper Steel Aluminum Flint Glass Amber Glass Green Glass Payment to City 50% of the Average Houston Listing Waste News 50% of High Side Southwest Listing OCC — OBM 50% of High Side Southwest Listing # 6 News — OBM 50% of High Side Southwest Listing # 8 News — OBM 50% of the Average Houston Listing Waste News 50% of High Side Houston Listing — Waste News Price sold less $ 05 per pound 25% of the Low Side Houston Listing Waste News 25% of the Low Side Houston Listing Waste News 25% of the Low Side Houston listing Waste News The Bidder should provided pricing or the percentage (%) of an index price which they will pay for materials. Example: OCC 50% of High Side Southwest Listing C:\WINWORD\DATA\CONTRACnPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forrns.doc City of Denton Bid Number 2832 "The following information is proprietary and exempt from the Public Information Act" Bid Submittal Attachment 1 Buyer Authorization Form Please duplicate and complete this form for each commodity buyer. Trinity Waste Services Bidder Company Name Tom Sellers_ General Manager Bidder's AuthorizedRepresentative(Printed Name, Title) (Bidder's Signature) hereby grants the Solid Waste Department Representative of the City of Denton, Texas authorization to contact, Materials Marketing Group, Allied Waste Industries, Commodity Company Name =' to obtain historical information related to recyclable materials sales from the Bidder Company to the Commodity Buyer Company over the previous two years. Information requests to the Bidder's recyclable materials commodity buyers will consist of the following information on an annual basis for up to two years. • Tonnages Sold by Product Class Commodity Buyer Information Requested: Please complete the information below. Company Name MMG, Allied Waste Industries City and State (Location) Houston. Texas Company Contact (Person) Jeff Boyd Contact Telephone Number 281-870-7405 ofc / 281-460-7060 cell Recycled Products Buyer Accepts All Paper Grades Corrugated Boxes. Newspapers, Chipboard Plastics Glass and Metals Comments: See attached sheet C:\WINWORD\DATA\CONTRACT\PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 "The following information is proprietary and exempt from the Public Information Act" Trinity Waste Services Material Marketing Trinity Waste Services and Allied Waste Industries Company, employees a unique and successful approach to marketing recyclable materials. All of the materials collected from Allied Waste recycleries are brokered from the Materials Marketing Group. This group is comprised of several marketing managers. These managers have a minimum of ten years recycling/marketing experience each. Allied Waste Industries markets over 1.5 million tons/year of recyclables domestically, as well as in Canada, Asia, South America and Mexico. Allied Waste is currently the largest marketer by volume of recyclables in the U.S. Although Allied Waste has many national and international contracts for the disposition of recyclables around the world, we are constantly upgrading and updating our market contracts to meet the volatile nature of the marketplace. Closing the Loop True recycling does not take place until the collected and processed materials re-enter the manufacturing cycle. To "close the loop" in the recycling process, Trinity has entered into agreements with numerous major manufacturing companies on a local, regional and/or national basis, that consume recyclable materials as a primary feedstock, thus assuring the City of Denton market continuity. Because of the changing markets, materials and demands, Trinity is constantly exploring and developing new marketing opportunities in order to deliver the highest degree of service. We pride ourselves on our ability to be flexible and reactivate to the changes in a municipality's needs. Trinity is committed to "closing the loop" of recycling through identification and development of new markets for recyclables. Unfortunately, there are materials in the marketplace identified as recyclable, when in fact the costs and processes required render them unattractive for re -use. Trinity will assure the City of Denton marketability of all recyclables collected. It would be fiscally irresponsible for any contractor to collect, sort, or store "recyclables" without market availability. C:\WINWORD\DATA\CONTRACT�PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 x ° Bid Submittal Attachment-2 Recycling Materials Processing Site Information Trinity Waste Services currently owrs and operates a total of (3) Material Recovery Facilities in the Dallas/Fort Worth market. The recycling needs of the City of Denton will be served primarily at our Plano Recyclery. With the completion to a $1.5 million dollar capital building project in April 2001 to the existing $5.5 million dollar structure, the capabilities of our Plano Recyclery have increased tremendously. Our new single stream processing line, believed to be the only one of its kind in use today, includes the latest innovations in automated material processing. The elevated line is housed in a 80,000 square foot facility on property adjacent to our Plano hauling operations. The system is able to recycle many items once destined for disposal in landfills. Redundancies built into our process allow for increased capture rates and ensure a cleaner, more marketable product. The facility currently processes in excess of 4,500 tons of material each month. Material separation is accomplished, in part, through the use of five fast-moving, spinning, classifying screens of various sizes and dimensions. An air classifier is used to further separate light items such as plastic containers from heavy items such as glass and cans. An Eddy current separates aluminum from commingled containers and a magnetic field pulls tin and steel containers out of the stream, depositing them in a storage bunker. Paper, magazines, junk mail, corrugated cardboard and newsprint are all sorted, separated and stored prior to being baled and packaged for transport. A high-pressure glass crusher reduces bottles and containers to the consistency of sand, fine enough to be safely handled with gloves. The sand will be used as a soil amendment for compost and for sanding icy roads. Additional uses for the product in the building and construction arenas are being pursued. By expanding the types of items accepted at the Plano facility and eliminating the need to presort recyclables, we hope to encourage participation by homeowners and businesses. Increased participation will lead to greater diversion and a cleaner environment. The Plano Recyclery is located at: Trinity Waste Services (MRF) 4200 East 14' Street Plano, Texas 75074 972-422-2341 Contact: Frank Sienkiewicz C:\WINWORD\DATA\CONTRACnPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Items Processed: Plastic Bottles Jugs & Jars _ Catalogs Glass Bottles Jugs & Jars (any color) junk Mail Steel Cans Magazines = Tin Cans Newspapers Corrugated Containers Magazines Chipboard (cereal boxes) Aluminum Cans All other classes of Paper — includes, but not limited to: Office paper, magazines and telephone books In addition to the Plano Recyclery, Trinity operates a Material Recovery Facility (MRF) in Richland Hills that is 25,000 square feet and processes approximately 40,000 tons monthly. Trinity Waste Services long range plan is to continue to expand the list of acceptable material as markets permit, along with future site modifications and expansions to accommodate the projected increases in volume. This facility is currently operating at less than half of the maximum total capacity it was designed to process. Trinity also owns and operates the largest recycling facility ever constructed in Dallas County. The 76,000 square foot plant can process approximately 5,000 tons of fibers each month. A sort line for high grade fiber recovery is also housed in the facility. A commercial Material Recovery Facility is operated at the Fort Worth Hauling Company site. The facility was primarily designed to recover corrugated cardboard from all commercial front loads and compacted industrial recycling accounts in Tarrant County. The facility has a total capacity of over 3,000 tons per month. C:\WINWORD\DATA\CONTRACIIPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc g4rlt ,x�y, +xJlh'sr ., � wY�. ,•r,'..,,a ,wwarRi �. I w ry 31 v}> 1 Ylli: mom Axm _ l _ t A '�37b k, did it _ k ' 4.t 1 .�[4Y��•L �'� �:w.yM� r�x. Lo �.. .P.. ,O e n ti ^ t r' o l_ v .r n AK � ``11CC ZX S a•r• • 1 4,4kiL r:ti i F r� r_ '�ryro 3 4 T i .49 ,Ask 41. City of Denton Bid Number 2832 Bid Submittal'Ai ttachment 3 Implementation and Operations Plan Trinity Waste Services will utilize two to four sideload automators to collect commingled recyclables to service the city. These vehicles will allow us to service either carts or bins in a proficient manner, whichever we are picking up. We anticipate ordering these trucks upon successful award of this contract, but reserve the right to utilize other collection equipment as deemed appropriate. This equipment will allow us to service the City using only our own fulltime employees with a one man per truck operation. Our Operations Manager and Residential Supervisor will have daily involvement with maintaining our quality of service to the City. Our entire fleet is equipped with modern radio communications with our office and supervisors. Trinity Waste Services will service the City's residences as mandated in the City's contract on one of their existing service days for their trash service. We will use the City's four quadrants as they currently exist for trash service. Our hours of operation will be from 7:00 a.m. to 6:00 p.m. C:\WINWORD\DATA\CONTRACTNPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Fonns.doc City of Denton Bid Number 2832 Bid Submittal Attachment 4 Vehicle Master List Unit # V.I.N. Number Year/Make/Model Body New Pending Denton Contract Unknown Briddgeport New Pending Denton Contract Unknown Bridgeport New Pending Denton Contract Unknown Bridgeport 401576 1HTSHAAR81H331371 00INTERNATIONAL MCNEILUS 467315 1M2K195CXTM007544 96 MACK MR688S HEIL 457316 1M2AC07C8TM001756 96 MACK LE613 MCNEILUS 421577 1 1HTSHADT221-1536645 02INTERNATIONAL PAK MOR C:\WINWORD\DATA\CONTRACT\PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Bid Submittal Attachment 5 Alternate Plan of Action We have sufficient spare equipment in our existing fleet to service the city should any situations occur which could cause a volume spike in activity, or when mechanical difficulties do occur. Our fleet list as submitted is only for our Plano location w]JW have additional equipment at our other two larger facilities in the N.E. Texas District should an occasion arise where the need exist for further resources. In case of employee illness or emergency, we have sufficient employees to cover any shortage. We are not currently a union workplace. However, if ever a union is voted in and a strike were to take place, we have a contingency plan in which management would be pulled in to cover all routes. Given the experience, size, and resources of Trinity Waste Services we are well equipped and our people are dedicated to ensuring your service needs are met when operational challenges occur. C:\WINWORD\DATA\CONTRACT\PROPOSAL\Denton 4-I1-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Bid Submittal Attachment 6. Proposed Service Area Route Plan Trinity Waste Services will service the residents in each Quadrant according to their appropriate Trash Service Day. A detailed route plan will be devised and implemented if Trinity Waste Services is chosen to be the service provider of Denton. C:\WINWORD\DATA\CONTRACTIPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Bid Submittal Attachment 7 Customer Service Plan Trinity Waste Services is committed to providing the best service in the industry by consistently meeting or exceeding our customers' expectations. We pledge that any complaints or requests will be addressed immediately and every reasonable effort will be taken to resolve the situation as soon as possible. A special 800 number will be established for Denton residents. This procedure applies to all complaints or requests for service that come directly to Trinity Waste Services, Customer Service Department: ✓ Complaint or request is logged and an open file is created ✓ Complaint or request is then sent to the appropriate department for resolution ✓ Once the complaint or request has been resolved, the file is closed ✓ A log will be kept for the City of Denton This procedure applies to all complaints or requests for service that are first directed to the City of Denton: ✓ Complaint(s) or request(s) are to be faxed to Trinity Waste Services, Customer Service Department at 972-422-6456 or 1-800-766-1758 ✓ Complaint or request is logged and an open file is created ✓ Complaint or request is sent to the appropriate department for a resolution ✓ Once the complaint or request has been resolved, the file is closed ✓ A log will be kept for the City of Denton The City of Denton will be promptly notified of any extraordinary situation that cannot be resolved in a reasonable manner or time period. Trinity Waste Services personnel will communicate and work closely with City officials until any such situation has been resolved Trinity Waste Services will periodically check in with the City designated representative to address any unresolved extraordinary situations as well as any on going or reoccurring problems. Trinity Waste Services delivers great customer service; guaranteed. In the event of a missed service, we agree to correct the situation promptly or assume the appropriate penalty. C:\WINWORD\DATA\CONTRACT\PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Customer Service Customer Service is part of almost every organization. Some companies realize its importance and focus on value, need, and results while others simply call their receptionist a customer service representative. At Trinity Waste Services customer service is a core value. Over the last three years, we at Trinity Waste Services in the Plano, Dallas and Fort Worth market have made a direct investment of over $250,000 in our customer service department toward the goal of providing exceptional value to our customers and partners. At Trinity, every single associate is a customer service representative to one degree or another. Professional uniformed drivers, courteous and helpful accounts receivable personnel, and all members of our management team are dedicated to providing quality service and addressing problems or concerns expeditiously, fairly and professionally. Experienced, full-time Customer Service Representatives (CSR's) are dedicated to responding to Commercial / Industrial and Residential requests and concerns. These associates have been trained to listen, evaluate, and respond to any situation that may arise. Each Trinity route truck and supervisor vehicle is equipped with a closed channel two-way radio, which allows drivers to be contacted promptly. Our Customer Service Center (CSC) is located in the Plano office and is accessible by dialing: (972) 422-2341 or1-800-766-1758 Our Customer Service fax number is: (972)422-6456 The majority of complaints from residential customers concern missed service. Our customer service representatives will first correct the problem. Following up with customer education is a key component in eliminating reoccurring problems. Our CSR's will work with customers on issues such as proper preparation of recyclables, pickup schedules and other recycling and collection issues. 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'm m N m m m m 0 cNi v a a o o f 0 m1 a v o$ 3 N N OOn 0�4 N O y ry? m � .> O 0 N O. C C O N y N n 0 a c 3 0 0 m of m£Ig » - x v 0 0. oc 5'3 m 3-c am mm - n .o� �.a �.o o..m 3 v c 0 tmt m? on n. m ma m N m A. Jim �. W I� C k 1 11 O (� rn� r I\ �e `: z] t x rr 1� JI B p III III e 1tluIRYu ue a During 1999 Allied Waste undertook several strategic initiatives to further its `growth and firmly.position the company for the .future. This included the acquisition of Browning -Ferris Industries, Inc., which transformed Allied Waste into the second largest solid waste company in the nation. As a result, the company experienced a few growing pains — all part of the territory when you raise your sights and triple the size of your company in six months. Growing pains aside, solid waste management is still an essential service and it's nearly recession proof. Regardless of the economy, Americans will always generate garbage, and they will always need someone to haul it off and dispose of it responsibly. With this simple truth in mind, we have refined our proven business model and laid out a long-term plan for unlocking the value of the tremendous asset base that is Allied Waste. So... let's talk trash with Allied Waste Chairman and Chief Executive Officer Tom Van Weelden. ® 1999 has been a pretty rough year for the solid waste industry overall. Allied Waste has R drawn a fair amount of scrutiny. How do you intend to overcome the skepticism moving forward? A: At this point, there is no catalyst in the industry or the company that is fundamentally going to change anybody's mind. That's certain. We could produce the world's greatest annual report, but it would not change anybody's mind. Our goal with this annual report is to help investors better understand who we are and what we're doing. At the end of the day, we realize the only thing that is going to change anybody's mind is for us to deliver results. And that's what we intend to do. In last year's annual report, we stated that Allied Waste is a forward -looking company with a convincing vision and dedicated plan for the future. We looked at 1998 not as the peak, but as the foundation from which we could take the company to new heights. Even though we traveled down a bumpy road in 1999, we still believe this to be true. 1 5 r,y, Now that Allied has shifted from a fast-moving growth -oriented company to a cash -flow driven company, how will you continue to create value for investors? A: We have always told investors that our rapid consolidation -led growth would slow at some point. With the completion of the BFI acquisition, and the pending divestitures and asset swaps, we have reached that point. I believe we have assembled,the most outstanding';" ;collection of assets in the solid waste industry, bar bone. Now, we intend to unlock the value of these assets. Going forward, it all comes down to our ability to control costs and deliver•' margins on a much larger,asset,base than before. The focus will be on operating effiaently_ and ongoing rationalization of the asset base to deliver steady; predictable cash flow e X With the BFI purchase, Allied now has about three times the assets to manage. How, will the 9 company's new size impact the business strategy? A: It's important to emphasize that the acquisition of BFI was consistent with the strategic plan we have articulated for the last six years. We have always had a very pragmatic ; , approach to growth. We have always acquired to operate and always to deliver long-term value to our investors. Therefore, our plan will remain the same as it was when we had $9 million in revenue, 10 years ago. Our strategy is relatively simple: we want to own and manage vertically integrated solid waste operations in the United States and to be number one or number two in every market that we're in. It's all about understanding what we own and how these assets fit with our long-term objec- tives. What contributes? What doesn't? The goal is to maximize the value of those assets that contribute and eliminate those assets that don't. You fine-tune your operations, and you don't allow the new size of the company to change the fundamental business strategy. This was a cash flow -driven business before the industry consolidation. Going forward, it will remain a cash flow -driven business. P. Part of your business strategy in the past has been taking a disciplined approach to growth. Going 11 forward, do you need to demonstrate a different kind of discipline? A: It's the same discipline, only now our focus is on internal growth instead of external growth. It's much like a ball team owner who decides to trade his star player to get three guys who he thinks — from a chemistry perspective — will do better as a team. In a way that's what we did when we acquired BFI's assets. We saw good chemistry in the assembled asset base. Yet, if you're out to build a winning team — that team being the best company out there — you have to make tough choices and disciplined decisions. There's no doubt the BFI acquisition definitely took discipline. But having the confidence to know we can deliver the potential value of that acquisition also requires discipline, and that doesn't necessarily mean stopping future acquisitions. Although the company's top strategic goal now is to delever the balance sheet, strategic acquisitions will continue to be used to fur- ther improve the returns of our asset base. 0 B Does deleveraging require the same type of discipline? - A: Discipline, yes, as well as a plan. There are three primary ways to pay down debt. Either you generate free cash flow from operations, sell assets or issue equity. We intend to do the fast two. And we will rely primari- ly on the discipline and expertise of our management team to do this. The majority of our senior operating management team were formerly private operators. And, as a private opera- tor, the focus is always on cash maximization. We are drawing upon that experience in our f{ renewed focus on operational excellence through reduced spending and increased cash flow. ='t AAnother important component is to control expenditures. Historically capital expenditures -in this industry have been about 13 percent of revenues. Our goal is to bring capital ;F expenditures down to-10.percent of. -revenue in 2000. E. And the integration of assets and internalization of waste will continue to be key components to unlocking the value of the company?' A-:' Yes. The concept is straightforward By disposing of the waste we collect at landfills we own or operate, we are able to capture the,profits from all segments of the solid waste ,t services. This improves margins, and marginymprovements drive earnings and cash flow. On the other hand, in instances where waste flows are diverted to landfills we do not own or operate, we are not capturing those incremental margins. At the end of 1999, approximately 61 percent of the waste collected by Allied Waste was disposed of at land- fills we own and/or operate. Our goal is to achieve a company -wide internalization rate of 70 percent in the next two to three years. We expect to accomplish this through tuck -in acquisitions, by completing divestitures in markets that don't fit our business model, and by developing additional transfer station and landfill capacity. Shortly after we acquired Laidlaw in 1996, our internalization rate dropped to 50 percent. In the wake of that transaction, we continually improved operating cash flow and the capital structure by selling and buying assets to integrate the company's core markets. Within the next two years, we brought it back up to nearly 70 percent. It's something we've done before, and something we know we can do again. 1 ll How would you summarize Allied's performance in 1999? A: It was a year coupled with great successes and some pretty big disappointments. Our -� biggest success was the strategic acquisition of BFI, which was completed on July 30, ; 1999, and the significant progress made on the integration process in just five short months. The biggest disappointment was the challenges that were created from problems within the industry and the impact this had on Allied Waste's divestiture program. While the company's performance for the year was mixed, we are confident that we have established a base for strong performance in the future. @ What are your plans for the next 12 months? A: Our top priority is to execute the business strategy now underway, and that means fulfilling the promise of 1999 strategic moves. Our primary objectives are to achieve operational excellence throughout our business and to reduce the company's debt. Multiple initiatives are currently underway to ensure that these objectives are achieved. These initiatives focus on optimizing our core businesses through operating improvements, an intensified focus on asset utilization and prudent capital allocation. A top priority for 2000 is to complete the pending asset divestiture program now underway. Reducing costs, while maintaining high levels of customer service, is another integral part of our business strategy and how we do business. We expect these initiatives to contribute to Allied Waste's performance in 2000 and lead to greater free cash flow in the following years. '.J RWhat do you porisider to be Allied'sbiggest challenge going forward?_ A: We need to demonstrate to investors our ability not only to set expectations, but to better manage and achieve them. For example, one factor that impacted the company's results last year and which has challenged us moving into 2000 is our underestimation of the time that would be required to - complete the asset divestitures and fully realize'theoperating benefits of the BFI acquisition. ' While we realized approximately $926 million in net cash proceeds ;from asset sales in 1999, it is now clear that certain components of the divestiture program were based on some very _ optimistic timing assumptions. As a result, we are giving ourselves some extra time in 2000 to fully refine our operating and financial plans. M So what should investors expect from Allied Waste in the future? A: Investors can expect a return to a focus on cash flow and debt reduction. Our goal is to move Allied Waste's debt to a level that is more consistent with a value driven company. At the same time, the company will become more focused on delivering above average bottom - line growth and less focused on growing the top -line. Free cash flow and the concept of cash earnings per share will be the major financial performance objectives used by Allied to bench- mark the company's performance. If investors take a longer -term view of the company — looking three to five -years out — I think they will better understand the inherent value we saw in the BFI transaction and the long-term potential of the combined company. r R What would you like to say to Allied Waste's investors and others who may be interested in the company? 0 P A: First, I'd like to assure investors that all of our plans and all of our actions are designed to g grow shareholder value — both over the long-term and short-term. During this past year, we faced a number of uncertainties, skeptics and changing market dynamics. Our company will continue to face challenges. But I am convinced that our focus is right and with vigorous execution of our business plan we can achieve the goals we've set. We have a lot of bright people with the wherewithal to make a difference —people who understand the stakes, the demands, the pace of what we're trying to achieve. In many ways, 1999 was not easy, and I am immensely grateful for their dedication and perseverance in difficult times. And, I'm grateful to those shareholders who've stayed with Allied Waste throughout this exciting and challenging period. I also want to express my personal thanks to Henry Hirvela, our Chief Financial Officer, who made the decision to leave the company about the time of this writing. His many years of support and service have been an asset to Allied Waste and he will be missed. I was also deeply saddened during this past year by the deaths of Josie and Warren Razore, the father and son team who founded and built Rabanco Companies into a premier solid waste company in the Pacific Northwest. I would like to recognize the Razores for their combined contributions to the solid waste industry in Washington and nationally, and especially to Allied Waste. Thanks to the contributions of many individuals, today Allied is well positioned as a multi - regional, integrated company with geographic, operational and financial diversity. Regaining investor confidence and restoring credibility for Allied Waste, and the solid waste industry, is the next step and it requires a long-term focus. We're in this for the long-term. Tom Van Weelden Chairman and Chief Executive Officer 'V 8 �r Ci ftsg{`y i�. :::_Av. 'i � '�::Yi '^t X�+ti:.!}1`Y.FXiif�R9f`teY}':?.iY.C<G '1Si�t3'�RS.S7.5• •• :, ,. What we accomplished • Completed acquisition of the industry's second-largest company, Browning Ferris - Industries, Inc. - • Made measurable progress toward the task of integrating two diverse cultures into a single, cohesive operating enterprise. . • Successfully integrated business processes and systems company -wide. • Removed more than $330 million of costs by eliminating routes and closing facilities. • Began the process of rationalizing assets within our key markets. • Completed a comprehensive internal review of the company's balance sheet, asset valuations, accounting processes and systems changes. • Generated approximately $926 million in net proceeds from asset divestitures, which was used to pay down debt. 0 Where we go from here • It's time to unlock the value of the tremendous asset base we have assembled. We have reformulated our long-term business plan to incorporate the BFI assets. We have identified several short- and long-term goals, as well as specific plans of action to get us there. Now, the successful execution of those plans will require dedicated focus, continued discipline and, most importantly, time. :1 10 �e Maximize operational, leverage This'refers to initiatives that demand ongoing success in controlling operation -an d mainte- nance expenses; reducing capital costs,improv- ing the capital structure and continued improvement in all areas of operations, while maintaining high levels of customer service. ocking the Value Decrease financial leverage Net proceeds from divestitures will be used to repay debt. In addition, manage- ment will focus on increasing cash flow by controlling capital expenditures and optimizing operating cash flow. ow, that;Allied's prim ary"focus has shifted backao running the business, as opposed to growing the busiliess, Its greatest strength will be in its operational leadership. With that in mind, here's an operational perspective from Allied Waste's Vice President and Chief Operating Officer Larry Henk Allied Waste has undergone tremendous growth in the past several years. What impact has this had on the company's basic philosophies of local management accountability and marketplace execution? A: These philosophies have been critical to our success in the past. They are firmly intact and remain the operating foundation of our company. In fact, as we grow, local accountability and marketplace execution become even more important. We operate a decentralized business model, with centralized control. For example, our corporate operations oversee financial reporting, internal audits, regulatory and environmental compliance, accounting systems, treasury and legal issues, and human resources. Then we push accountability and responsibility down to the regional operations with regard to business planning and development and the evaluation and integration of acquisitions. And, on the district operations level, responsibility and accountability lie in areas such as customer service, employee motivation, internal growth, profit and loss results, productivity, and sales and marketing. This approach allows us to maintain control of the overall business on a corporate level by establishing effective controls and accountability. Yet, it also fosters growth and a spirit of entrepreneurism on a local level. It also maximizes our resources and creates higher levels of operating efficiency. Regardless of our size, we are and will remain a local company. We are in the local market, working for our customers and ourselves every day. How important are more acquisitions to the company's success? Do you need more mass to achieve greater success? A: Bigger is not necessarily better. When we set out to build our company in 1992, our goal was not to be the biggest— but rather to run vertically integrated solid waste operations and build density and volume in key markets. Even though BFI was the culmination of a growth strategy that relied heavily on acquisitions, our focus was always on buying to operate, rather than buying just for growth's sake. Acquisition decisions have always been based upon the value each asset could add to the company. Today, acquisitions will be the icing on the cake, rather than the cake itself. As we identify new opportunities, we'll gauge the operating benefits, the synergies and the advantages for our customers and ourselves just as we have in the past. We will judge each opportunity by the return we can achieve, by the increased value the acquisition can bring to our share- holders. We recognize that shareholder value remains the critical objective. If an acquisition increases shareholder value, meaning it fits our business model and can help deliver cash flow, then we'll move forward. Otherwise, we will pass. C 13 City of Denton Bid Number 2832 Bid Submittal Attachment 8 Monthly, Quarterly and Annual Reports See attached C:\WBIWORD\DATA\CONTRACT\PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc � k � � 0 § 0 � � 0 u � z 0 ■ k 0 0 § � k � � .: - + / � \ � { � ® / � $ < � k � kw a / CD - ®� 7 « aL4 31 2 L.L \ I co � z� � { : % \ �\ � \ m� � § �a s\ � } � ) �$ �/ � 2 �\ k �- d\ � � \ & & � s Z§ §ƒ w R� aL) ro co q � > �§. �\ � § a / x� � \ �f �f � \ A� � \ �f� a J k k k of i 0 0 � � §§ §w kLL 0 0 0 w > K 19z 00 � jZ z � © §o � \ f � m �+ � } . . � {' \ ; } � G ] / ; \ AO � ƒ � m � \� Q : Aviv � q � / � \ � ■� ƒ � k � 2 . § z oz �o §Lu §LL 80 lz kL) k u : y '� © -- � � ƒ - � ƒ «p � »2 f . J . � � m 20 ^ $ � Co. 10 c. : k � $ � 7 . � � � \ � 10 E . � f � & City of Denton Bid Number 2832 ■ Full service. Single vendor supplies all recycling services to the City, including . collection, processing and disposal of contamination, no subcontracting ■ Established Customer Service Center and Procedures ■ Proven service provider with track record of responsiveness to customer concerns ■ Trinity provides direct supervision of crews working in Denton ■ State-of-the-art single stream recyclable processing center ■ Expanded list of recyclable commodities accepted in the curbside program ■ Vast network of disposal capabilities; no reliance on disposal agreements ■ Fleet upgrades, communications equipment, truck appearance standards / wash program C:\WINWORD\DATA\CONTRAC'nPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc a City of Denton Bid Number 2832 Firm Background Trinity Waste Services and or our predecessors have been faithfully providing solid waste . , service to the DFW Metroplex and the surrounding counties since 1960. Since thattime we have maintained steady growth through additional' acquisitions,: expansion, ., and the addition of new cities to our list of satisfied customers. Trinity was the first company to offer curbside recycling in Dallas/Fort Worth. We currently provide curbside to over 250,000 homes in the D/FW area. Our Material Recovery Facilities located in Duncanville, Plano, Fort Worth and Richland Hills are equipped with state of the art processing equipment and each is capable of processing over 4,000 tons of material each month. Trinity has established long-term contracts with numerous manufacturers to ensure the marketability of the material processed. Trinity Waste Services in the Dallas/Fort Worth market has an estimated annual gross revenue of more than $240,000,000. We currently employ over 950 people locally and over 28,000 nationwide, with our parent corporation, Allied Waste Industries. Approximately 87% of our work force are directly engaged in solid waste or recycling collection, processing or disposal. Every manager, driver, maintenance person or staff assistant has undergone extensive training on a variety of issues all relating to serving the customer better. Our commitment to community service is apparent by the number of local activities we support both financially and with our time and talents. Our commitment to education is expressed in the number of area students who have taken advantage of our Mobius curriculum and program. Since its inception, thousands of children in the D/FW area have had the opportunity to learn more about our environment, recycling and their role in preserving their own future. Trinity's devotion to safety is and always will be a top priority. We have a full time Safety Manager who's sole responsibility is total compliance with all local, state, and federal laws with regards to solid waste and recycling services. 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'. �. �, OG � — - i n � ;C. ~ d m d n �- .di �yl y r. c M N n � � � n o '° » " w °i p = � y E c a o e w m .s = =,yam -.: x i ., ,.ors _ - fig.._. �-. — _ lz eoa FA a P°f a ae � Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should he read in conjunction with our Consolidated Financial o, Statements and the notes thereto, included elsewhere herein s� letlOdUCt10e ' 1 We have experienced significant growth, primarily resulting from the acquisition of solid waste businesses. Since January 1, 1993, we have completed 225 acquisitions Including 55 acquisitions in 1999. Our Consolidated Financial Statements.have been gestated 'tii reflect the acquisition of companies accounted for using the pooling of interests method for business combinations in 1997 and 1998. The results of operations for'the acquisitions accounted for under the purchase method for business combinations are included in our financial statements only from the applicable date of acquisition." As a result, we believe ! our historical results of operations for the periods presented are not directly comparable to our current results of operations. In June 1998, we. acquired the Rabanco Companies ("Rabanco") in a transaction accounted for using the pooling -of -interests method for business combinations. Rabanco provided solid waste collection, recycling, transportation and disposal services in the Pacific Northwest and generated annual revenue of approximately $160 million, excluding the effects of the internalization of waste volumes. j In August 1998, we acquired Illinois Recycling Services, Inc. and its affiliates ("Illinois Recycling") in a transaction accounted for using the pooling -of -interests method for ` business combinations. Illinois Recycling provided solid waste collection, recycling and �- - - transportation services primarily in the Chicago metropolitan area and northern Indiana and generated annual revenue of approximately $80 million, excluding the effects of the internalization of waste volumes. jIn October 1998, we acquired American Disposal Services, Inc. ("ADSI") in a transaction accounted for using the pooling -of -interests method for business combinations. ADSI was a vertically integrated solid waste management company providing collection, -.� transfer, recycling and disposal services to approximately 485,000 customers in 12 states, primarily in the Midwest and Northeast United States and generated annual revenue of approximately $240 million, excluding the effects of the internalization of waste volumes. I In December 1998, we completed a private offering of an aggregate of $1.7 billion of senior notes. The proceeds were used to retire indebtedness and leases and for general _ corporate purposes. On July 30, 1999, we completed the acquisition of BFI in a transaction accounted for as a purchase. As a result of the acquisition, each share of BFI common stock was converted into the right to receive $45 in cash. Including assumed and refinanced debt, the cost of acquiring BFI was approximately $9.6 billion. Financing for the acquisition was obtained from draws $4.7 billion from credit facilities with a capacity of $7.1 billion (the "1999 Credit Facility"), the sale of $1.0 billion of newly issued senior convertible preferred stock (the "Preferred Stock") and the sale of $2.0 billion of 10% Senior Subordinated Notes due 2009 (the "1999 Notes"). With the completion of the acquisition of BFI, we operate in 42 states and serve approximately 9.9 million commercial and residential customers from a base of assets including 151 active landfills, 148 transfer stations, 95 recycling facilities and 340 collection companies. In connection with the acquisition of BFI, we initiated an asset divestiture program,-�. -.. whereby we would sell, for cash or through simultaneous buy and sell transactions, certain non -core assets that do not fit -with our vertical integration operating strategy. The net I8 7 Allied Waste Indusnim In. 1M Annual Repon _ proceeds from this initiative are expected to generate approximately $1.6 billion (net of approximately $150 million of tax). As of December 31, 1999,-we had completed - divestitures, which generuer ated $926million of proceeds and were comprised of the sale of the shares of SITA, S.A., the sale of the BFI medical waste operations and the sale of certain non core, non-integrated assets Additionally, we have entered into various agreements to divest of BFI's Canadian .. - a.. operations, BFI Gas Services and other non -,core, non-integrated assets, which are expected to generate approximately$892 million of proceeds. These divestitures are - recorded as "Assets Held for Sale". in,the Consolidated Financial Statements as of December 31, 1999 and are expected, to be completed during 2000. In connection with the sale of these identified assets, we anticipate. entering into definitive agreements to acquire certain assets which would further integrate existing markets. We anticipate spending approximately $575 million on such acquisitions during 2000. We also intend to divest other non -core assets during 2000 which we would anticipate generating approximately $535 million of proceeds. These assets have not been specifically identified and approved for sale by management and the board of directors and are not classified as Assets Held for Sale at December 31, 1999. As of February 22, 2000, we had completed the sales of assets subsequent to year end for approximately $137 million and acquired assets for approximately $107 million, which were pending as noted above. Status of Integration of BFI. In connection with the acquisition of BFI on July 30, 1999, we anticipated annual cost savings of approximately $360 million by the end of 2000 resulting from corporate and field SG&A savings, operations labor cost savings, market cost savings and asset buy and sell agreements. As of December 31, 1999, we had achieved approximately $335 million in annual cost savings through headcount reductions of approximately 2,900 employees, the closure of 51 facilities, 96 route rationalizations and other cost savings. Internalization increased from 57% at the time of the acquisition to 61 % at December 31, 1999. The remaining $25 million of cost savings is expected to be achieved in 2000 in connection with the completion of the divestiture initiative, which includes asset buy and sell agreements. Additionally, as of December 31, 1999, we have completed the management information systems conversions from BFI's systems to Allied's systems for financial reporting, payroll, fixed assets and maintenance tracking. Subsequent to December 31, 1999, we completed the conversion of the general ledger and accounts payable from BFI's SAP system to Allied's system. We have not experienced any significant operational, accounting or reporting issues related to these conversions. Accounting Policies. Subsequent to the acquisition of BFI, we evaluated our capitalized interest policy to assess the methodology of the calculation with the change in the business strategy resulting from the acquisition. Under the new methodology, the area of the landfill under development is defined as only the portion of the permitted acreage currently undergoing active cell development. The costs upon which interest is capitalized continue to include the actual acquisition, permitting and construction costs incurred for cell development. Consistent with the prior policy, as construction of an area is completed and the area becomes available for use, the cell no longer qualifies for interest capitalization. The adoption of this method, which was accounted for as a change in accounting principle, reflects the change in our operating strategy as a result of the BFI acquisition. The impact of the change in accounting principle was a cumulative charge in 1999 of approximately $64.3 million, net of related income tax benefit. ter% Allied Wene Industries, Ina. 1M Annual Report C 19 General , Revenues. Our revenues are attributable primarily to fees charged to customers for waste collection, transfer, recycling and disposal services. We generally provide collection services under direct agreements with our customers or pursuant to contracts with . municipalities. Commercial and municipal contract terms, generally range from one to five years and commonly have automatic renewal options. Our, landfill operations include both company -owned landfills and those operated for municipalities for a fee. In each -geographic region in which we'are located, we provide collection, transfer and disposal services. The following tables show for the periods indicated the percentage of our total reported revenues attributable to services provided and revenues attributable to geographic regions. The data below has been restated to give effect to acquisitions that were accounted for using the pooling -of -interests method for business combinations. Year Faded December 31, 1999 1998 1997 Collection") 60.7% 55.7% 57.2% Transfer 5.6 7.1 6.7 Landfill)') 25.3 29.9 26.4 Other 8.4 7.3 9.7 Total revenues 100.0% 100.0% 100.0% Year Ended December 31, _ 1999 1998 1997 Atlantic 10% 7% 6% Central 12 19 19 . Great Ickes 13 19 15 Midwest 10 10 10 Northeast 16 11 14 - Southeast 9 4 4 Southwest 12 9 11 West 18 21 21 Total revenues 100% 100% 100% (1) The portion of collection and third -party transfer revenues attributable to disposal charges for waste collected by us and disposed at our landfills has been excluded from collection and transfer revenues and included in landfill revenues. Our strategy is to develop vertically integrated operations to ensure internalization of the waste we collect and thus realize higher margins from our operations. By disposing of waste at company -owned and/or operated landfills, we retain the margin generated through disposal operations that would otherwise be earned by third -party landfills. i Approximately 61 % of the waste we collect as measured by disposal volumes was disposed of at landfills we own and/or operate in 1999 which includes the results of operations of BFI since July 30, 1999. In addition, transfer stations are an integral part of the disposal process. We locate our transfer stations in areas where our landfills are outside of the population centers in which we collect waste. Such waste is transferred to long -haul trailers and economically transported to our landfills. tom,' 20 ] Allied Waste fndushles, Int. 1999 Annual Report Expenses. Cost of operations includes labor, maintenance and repairs, equipment and facility rent; utilities and taxes, the costs of ongoing environmental compliance, safety . and insurance,, disposal costs and,.cos[s of independent haulers transportingourwaste ' - - to the disposal site. Disposal costs include certain landfill taxes, host community fees, payments under agreements with respect to landfill saes that are not owned, landfill site y r maintenance; fuel and other equipment operating expenses and accruals for estimated _..- d' closure and post closure monitoring;expenses anticilw,pated to be incurred in the future. We use a life'cycle accounting method for landfills and the'[elated closure and.post ;V :;.closure liabilities. This method applies the costa associated, with acquiring; developing, Closing and monitoring the landfills'over'the associated landfill capacity based on consumption. On an annual basis, we update the development cost estimates. (which include the costs to develop the site as well as the individual cell construction costs), .,closure and post -closure cost estimates,and future capacity estimates -for each'landfill. The cost estimates are prepared by local company and third -party engineers based on the applicable local, state and federal regulations and site specific permit requirements. Future capacity estimates are updated,,using aerial surveys of each landfill performed annually, by third -party engineers to estimate utilized disposal capacity and remaining disposal capacity. These cost and capacity estimates are reviewed and approved by senior operations management annually. Selling, general and administrative expenses include management, clerical and administrative compensation and overhead, sales cost, community relations' expenses and provisions for estimated uncollectible accounts receivable. Depreciation and amortization includes depreciation of fixed assets and amortization of other intangible assets and landfill airspace. We use the units of production method for purposes of calculating the amortization rate at each landfill. This methodology divides the costs associated with acquiring, permitting and developing the entire landfill by the total remaining capacity of that landfill. The resulting per unit amortization rate is applied to each unit disposed at the landfill and is recorded as expense for that period. Costs associated with developing the landfill include direct costs such as excavation, liners, leachate collection systems, engineering and legal fees, and capitalized interest. Estimated total future development cost for our 151 active landfills is approximately $2.6 billion, excluding interest to be capitalized, and we expect that this amount will be spent over the remaining operating lives of the landfills. We have available disposal capacity of approximately 2.7 billion cubic yards of capacity as of December 31, 1999. Goodwill amortization includes the amortization of costs paid in excess of the net assets acquired in purchase business combinations. In connection with potential acquisitions, we incur and.capitalize certain transaction costs and integration costs, which include stock registration, legal, accounting, consulting, engineering and other direct costs. When an acquisition is completed and is accounted for using the pooling -of -interests method for business combinations, these costs are charged to the statement of operations as acquisition related costs. When a completed acquisition is accounted for using the purchase method for business combinations, these costs are capitalized. We routinely evaluate capitalized transaction and integration costs, and we expense those costs related to acquisitions not likely to occur. We expense indirect acquisition costs, such as executive salaries, general corporate overhead and other corporate services, as incurred. We capitalize certain direct landfill development costs, such as engineering, construction and permitting costs, and amortize based on consumed airspace. We believe that the costs associated with engineering, owning and operating landfills will increase in the future as a result of federal, state and local regulation and a growing community Allied Waste IndusMa, Inc. 1999 Annual Repart 21 awareness of the landfill permitting process. We cannot assure you whether we will _ be able to raise prices sufficiently to offset these increased expenses. We expense all indirect landfill development costs, such as executive salaries, general corporate overhead, public affairs and other corporate services, as incurred. Closure and post -closure costs represents our financial commitment for the regulatory required costs associated with our future.obligations for final closure, which is the closure of a cell of a landfill once. the cell is no longer receiving waste, and,post-closure monitoring and maintenance -of landfills, which is.usually required for upao 30 years after a landfill's final closure. We establish closure and post-elosure:requiiements based on the standards of Subtitle D as implemented on a state -by -state basis. We base closure and post -closure accruals on cost estimates for capping and covering a landfill, methane gas control, leachate management and groundwater monitoring, and other operational and maintenance costs to be incurred after the site discontinues accepting waste. We prepare site -specific closure and post -closure engineering cost estimates annually for landfills owned and/or operated by us for which we are responsible for closure and post -closure. We accrue and charge closure and post -closure costs based on accepted tonnage as landfill airspace is consumed to ensure that the total closure and post -closure obligations are fully accrued for each landfill at the time that the site discontinues accepting waste and is closed. For landfills purchased, we assess and accrue the closure and post -closure liability at the time we assume closure responsibility based upon the estimated closure and post -closure costs and the percentage of airspace utilized as of the date of acquisition. After the date of acquisition, we accrue and charge closure and post -closure costs as airspace is consumed. We update and approve estimated closure and post -closure liabilities annually based on assessments performed by in-house and independent environmental engineers. Such costs may change in the future as a result of permit modifications or changes in legislative or regulatory requirements. We accrue closure and post -closure cost estimates based on the present value of the future obligation. We discount future costs where we believe that both the amounts and timing of related payments are reliably determinable. We annually update our estimates of future closure and post -closure costs. We account for the impact of changes, which are determined to be changes in estimates, on a prospective basis. In 1999, we calculated the net present value of the closure and post -closure commitment assuming inflation of 2.5% and a risk -free capital rate of 7.0%. We accrete discounted amounts previously recorded to reflect the effects of the passage of time. We currently estimate total future payments for closure and post -closure to be $2.7 billion. The present value of such estimate is $1.0 billion. At December 31, 1999 and 1998, accruals for landfill closure and post -closure costs (including costs assumed through acquisitions) were approximately $517.3 million and $154.5 million, respectively. The accruals reflect a portfolio of landfills with estimated remaining lives, based on current waste flows, that range from one to over 150 years, and an estimated average remaining life of approximately 39 years. 22 Allied Wane Induslrles. Ine. 19119 Annual Report Ended December Year 2000 Update. We did not"experience any significant malfunctions or errors in " our operatingfor business systems when the date changed from 1999 to 2000. Based on operations since.Januarydy 20.00, we do not expect any significant impact to our ongoing business as a result of the ".Year 2000 issue." However; it is possible that the full impact of the date change, which was of concern. due to computer programs that use two digits, instead of four digits to define years,' has not been fully recognized. h t f t bl m are l'kel to burn d' t bl '1 " ddit e teve t o ,any u ute pro e, s t y minor an ,correc a e, n a t ton, we could still be negatively affected if the Year"2000 or"imilar issues -adversely affect our customers'or suppliers. We currently are not aware"of any significant Year 2000 or similar problems that have arisen for our customers and suppliers. We will continue to monitor Year 2000 matters in our ongoing operations and as a 'part of our acquisition due diligence. We spent less than $500,000 on Year 2000 readiness efforts. Results of Operations The following table sets forth the percentage relationship that the various items bear to revenues and the percentage change in dollar amounts for the periods indicated. We have restated the statement of operations data to give effect to acquisitions that were accounted for using the pooling -of -interests method for business combinations. See Note 2 to our Consolidated Financial Statements. 1999 1998 Compared to Compared tr 1998 1997 % Change in % Change it 1999 1998 Amounts 1997 Amounts Statement of Operations Data Revenues 100.0% 100.0% 112.0% 100.0% 17.5% Cost of operations 58.3 56.6 118.4 58.0 14.8 Selling, general and administrative expenses 6.9 9.9 48.5 13.2 (12.2) Depreciation and amortization 8.2 9.5 83.1 9.8 13.4 Goodwill amortization 3.3 1.9 260.6 2.0 15.5 Acquisition related and unusual costs 17.7 20.1 85.4 0.3 7,973.6 Operating income (loss) 5.6 2.0 527.6 16.7 (86.6) Equity in earnings of unconsolidated affiliates (0.6) - 100.0 - - Interest expense, net 13.0 5.4 416.4 7.9 (20.6) Income (loss) before income taxes (6.8) (3.4) (317.1) 8.8 (146.4) Income tax expense (benefit) (0.3) 2.8 - 3.0 8.7 Minority interest 0.1 - 100.0 - - Income (loss) before extraordinary losses and cumulative effect of change in accounting principle (6.6) (6.2) (125.2) 5.8 (227.2) Extraordinary losses, net of income tax benefit 0.1 7.9 (97.4) 4.0 134.6 Cumulative effect of change in accounting principle, net of income tax benefit 2.0 - 100.0 - - Net income (loss) (8.7) (14.1) (29.4) 1.8 (1,027.8) Dividends on Preferred Stock 0.8 - 100.0 - (100.0) Net income (loss) available to common shareholders (9.5)% (14.1)% (41.9)% 1.8% (1,027.8)% Years Ended December 31, 1999 and 1998 Revenues. Revenues in 1999 were $3.3 billion compared to $1.6 billion in 1998, an increase of 112%. The increase in revenues is primarily attributable to the acquisition ` of BFI on July 30, 1999 and the inclusion in our results of BFI revenues for the period July 31, 1999 through December 31, 1999. BFI's 1998 pro forma revenue adjusted to reflect the sale of BFI's Canadian operations and Medical Waste operations was approximately $3.8 billion. Alied Waste Industries, Inc. 1999 Annual Raped 23 r Cost of Operations. Cost of operations in 1999 was $1.9. billion compared to $892.3 million in-1998,"an mcrease,of 118.4%: The increase in cost of operations was primarily attributable to the inclusion of BFI's cost of operations associated with the revenues from July 31, 1999 through December 31, 1999. As apercentage of revenues, cost of operations increased to 58.3% In 1999 . in 6.6% in 1998, primarily_due to the'change in revenue mix resulting from the'acquisitioii of BFI. BFI's revenue mix was more heavily weighted towards collection revenue,'which hds lower margins than landfill revenues. Selling, General and Administrative Expense's., SG&A expenses -in 1999 were $231.4, million compared to $155.8 million in 1998,.an increase of 48.5%, and reflects our acquisition of BFI. As a percentage of revenues, SG&A decreased to 6.9% in 1999 from 9.9% in 1998. This decrease is the result of achieving the cost savings associated with the acquisition of BFI and significantly increasing the revenues as noted above. Depreciation and Amortization. Depreciation and amortization in 1999 was $273.4 million compared to $149.3 million in 1998, an increase of 83.1%, and reflects our acquisition of BFI. As a percentage of revenues, depreciation and amortization expense decreased to 8.2% in 1999 from 9.5% in 1998. The decrease is primarily due to the significant increase in revenues from our acquisition of BFI which more than offset the corresponding increase in depreciation due to the acquisition of BFI. Additionally, as required by generally accepted accounting principles, we ceased recording depreciation on assets held for sale during 1999. Such depreciation would have been approximately $6.3 million. Goodwill Amortization. Goodwill amortization in 1999 was $110.7 million compared to $30.7 million in 1998, an increase of 260.6%. The increase in goodwill amortization was due to an increase in goodwill of approximately $7 billion primarily resulting from the acquisition of BFI. Acquisition Related and Unusual Costs. During the year ended December 31, 1999, we recorded $588.9 million of acquisition related and unusual costs primarily associated with the $9.6 billion acquisition of BFI, which was accounted for as a purchase. The costs primarily relate to environmental related matters, litigation liabilities, risk management liabilities, loss contract provisions, transition costs, the write-off of deferred costs relating to the acquisition. 'These costs are comprised of the following: We recorded a charge of approximately $267.0 million related to changes in estimates of environmental liabilities associated with BFI's operations. In connection with our due diligence and integration process, assessments of the acquired operations were performed by third -party and in-house engineers. Based on these assessments, we made changes in accounting estimates of approximately (i) $133.7 million associated with the Superfund accrual for over ISO CERCLA cases in which BFI was involved, (ii) $30.3 million associated with the remedial accrual for sites in which BFI was involved with remedial action plans, (iii) $56.3 million associated with the environmental accrual for various containment and treatment matters at 76 active or closed BFI landfills, and (iv) $46.7 million associated with the accrual for the remedial and closure requirements of four BFI hazardous waste facilities. Management believes the environmental accrual as of December 31, 1999 represents the most probable outcome of these matters. We do not expect that adjustments to these estimates, which are reasonably possible in the near term and that may result in changes to recorded amounts, will have a material effect on our consolidated liquidity, financial position or results of operations. As of December 31, 1999, we believe that it is possible that the ultimate outcome of the environmental matters could result in approximately $33 million of additional liability. 24 ] Allied Waste Industries, Inc. 1999 Annual Report We recorded a charge of approximately $93.5 million related to changes in estimates ` of litigation liabilities associated with BFI's operations. In connection with our due diligence and integration.process, assessments of 11 the acquired operations and outstanding litigation were performed by third -party and in-house legal counsel. We evaluated over 150 cases involving employee -related matters, insurance related matters, regulatory f matters, collection matters and contract disputes. Accordingly, we increased the litigation accrual based on the most probable loss to, be incurred . _ Managemennbeheve�sthe litigation accrual as of December ,31, 1999.represents the most probable outcome of outstanding assessments, claims and cases, We'do'not expect that adjustments to estimates, which are reasonably possiblein the near term and that may result in changes to recorded amounts, will have a material effect oir'our consolidated liquidity, financial position or results of operations. As of December 31, 1999, we believe that it is possible that the ultimate outcome of the litigation matters could result in approximately $10 million of additional liability. " ' We recorded an increase of approximately $20.0 million to the self-insurance accruals based on the results of a third -party actuarial review performed in connection with due diligence and integration of the BFI acquisition. As of September 30, 1999, we instituted a guaranteed cost insurance program for all casualty insurance coverages. As a result, we are fully insured for any such claims occurring subsequent to that date. In connection with the integration of the BFI acquisition, we reviewed the existing contracts of the business for recoverability. Several contracts were identified which were in a loss position when the direct costs (excluding any non -variable costs) attributable to the contract were deducted from the revenue to be generated by the contract. Consistent with our accounting policies, we recorded a charge of approximately $32.6 million to operations for the anticipated excess of costs over revenues of the identified contracts. . - As a result of the acquisition of BFI, management reassessed the level of acquisitions that it would pursue in the future and decided that certain companies that were being considered will no longer be pursued. Accordingly, we wrote off $26.1 million of deferred charges previously incurred in connection with these potential acquisitions. Additionally, we wrote off $33.8 million of commitment fees paid in connection with a portion of the financing of the BFI acquisition. These fees were associated with funds that were not ultimately drawn due to alternative sources of financing becoming available. However, as secured financing for the entire purchase price of the acquisition was a condition of the signing of the merger agreement with BFI, and the debt associated with these fees was not incurred, the cost was written off at the time of the acquisition. In connection with the integration plan for BFI, we identified and notified approximately 1,500 employees that they would be retained for a specified period, generally not exceeding 12 months from the acquisition date, to perform transition related functions. Subsequent to the specified time period, they will be terminated. Additionally, we identified certain offices and operations, which are duplicative, and we are in the process of consolidating these operations. As these transition costs are not accruable until committed or paid, approximately $67.4 million of transition costs were expensed during 1999. Additionally, we accrued approximately $10.0 million of committed transition costs during the year. We estimate that we may incur approximately $115 million of additional transition expenses associated with the integration of BFI through the completion of our plan. Additionally, we recorded approximately $43.5 million of non -cash asset impairments related to the valuation of Allied Assets Held for Sale, approximately $1.8 million of non -cash asset impairments related to duplicate facilities, and approximately $0.4 million of restructuring and abandonment costs related to other 1999 acquisitions. Allied Wash Indesnlee, Ina 1299 Anneal Roped 25 Any subsequent changes in estimates of acquisition related and unusual costswillbe - included in the acquisition related and unusual costs caption of the statement of operations in the period in which the change in estimate is made. During 1999, approximately $7.2 million of accrued acquisition related costs associated with 1998 acquisitions were reversed to acquisition related and unusual costs. The following table reflects the cash activity related to the acquisition related and unusual costs accrued during 1999: Additions 1999 - Balance (in thousands) through Non -Cash 1999 Remaining Year Faded December 31, - Expense"'- Charges Expenditures Dec 31, 1999 Transition costs $ 77,350 ' $ — $(74,654) $ 2,696 Restructuring and abandonment costs 387 — . — 387 Loss contracts 32,643 — (6,058) 26,585 Environmental, litigation, and regulatory compliance costs 380,500 — (9,455) 371,045 Asset impairments 105,186 (105,186) — — Total $596,066 $(105,186) $(90,167) $400,713 In Additionally during 1999, we reversed approximately $7.2 million of acomals to acquisition related and unusual costs related to 1998 acquisitions. Interest Expense, Net. Interest expense, net of interest income was $435.8 million in 1999 compared to $84.4 million in 1998, an increase of 416.4%. The increase in interest expense is primarily due to the increase in debt of approximately $8 billion from the acquisition of BFI, which was outstanding for five months in 1999. Additionally, capitalized interest decreased to $25.5 million in 1999 from $67.5 million in 1998 due to the change r= in accounting principle. Income Taxes. Income taxes reflect an effective tax rate of (3.9)% in 1999 and 80.3% in 1998. The effective income tax rate in 1999 deviates from the federal statutory rate of 35% primarily due to the non -deductible nature of certain acquisition related charges and the non -deductibility of the amortization related to $6.7 billion of goodwill recorded in connection with the acquisition of BFI. The effective income tax rate in 1998 deviates from the federal statutory rate primarily due to applying the pooling -of -interests method of accounting for business combinations (including the initial recording of deferred income taxes and non -deductible transaction costs, partially offset by the absence of income taxes on S-Corporation pre -combination earnings). Without considering the effect of the acquisition -related charges the 1999 effective tax rate is 47.5%. Extraordinary Loss, Net. In July 1999, in connection with our financing of the BFI acquisition, we replaced our credit facility and recognized an extraordinary charge of approximately $5.3 million ($3.2 million net of income tax benefit) related to the write-off of previously deferred debt issuance costs. Cumulative Effect of Change in Accounting Principle, Net. In connection with the acquisition of BFI, we changed our capitalized interest policy to more accurately reflect our long-term business strategy. As a result, we recorded a charge of $64.3 million, net of related tax, during 1999, to reflect the cumulative effect on prior years of the change in the method of interest capitalization. Dividends on Preferred Stock. Dividends on Preferred Stock were $27.8 million in 1999 and reflect the 6.5% dividend on the Preferred Stock issued on July 30, 1999 in connection with the financing of the acquisition of BFI. Dividends were not paid in cash, instead,:,:. the liquidation preference of the Preferred Stock increased by accrued, but unpaid dividends. 26 Allied wade In luddet, Inc. 1999 Annual Repart Years. Ended December.31, 1998 and 1997 - Revenues. Revenues in 1998 were $1.6 billion compared to $1.3 billion in 1997, an ' - - increase of 17.5%. The increase in revenues attributable to existing operations .("Internal Growth") was 8%.with approximately 5% attributable to net volume increases and approximately 3%'attributable to priciinc eases. The additional revenue growth is attributable to companies acquired net of revenues sold'susegtient to the same period in the prior year . Cost of Operations ,Cost of operations to 1998 was $892.3 million compared to $7773 million in 1997, an increase'of 14.8%. This increase to cost of operations was primarily attributable tri theIincrease in'revenues-described above.Asa percentage of revenues, cost of operations decreased -to 56.6% in 1999 from 58.0% in 1997. The 1997 operating margin decreased from the previously reported margin due to the restatements for companies acquired subsequent to December 3111997 and accounted for using the pooling -of -interests method for business combinations. The 1998 operating margin was favorably impacted by an increase in internalization of third -party disposal volumes to 68% in 1998 from approximately 53% in 1997, as restated, increased volumes at the landfills, and other cost savings from the integration of acquisitions. Selling, General and Administrative Expenses. SG&A expense in 1998 was $155.8 million compared to $177.4 million in 1997, a decrease of 12.2%. As a percentage of revenues, SG&A decreased to 9.9% in 1998 from 13.2% in 1997. The 1997 SG&A expense increased from the previously reported amount due to the restatements for companies acquired subsequent to December 31, 1997 and accounted for using the pooling -of -interests method for business combinations. The 1998 SG&A expense decreased due to a reduction in certain sales and administrative functions and related facilities completed at the beginning of the second quarter of 1998 in accordance with _-\ our continuing acquisition integration plan. Additionally, the decrease in SG&A as a percentage of revenues is due to the continued increase in revenues while reducing overhead costs. Depreciation and Amortization. Depreciation and amortization in 1998 was $149.3 million compared to $131.7 million in 1997, an increase of 13.4%. In addition to the depreciation and amortization of acquired companies, the increase in depreciation and amortization was due to a 7.6% increase in internalized landfill tonnage and an 11.1% increase in capital expenditures. As a percentage of revenues, depreciation and amortization did not change significantly. Goodwill Amortization. Goodwill amortization in 1998 was $30.7 million compared to $26.6 million in 1997, an increase of 15.5%. The increase in goodwill amortization was due to a 22.6% increase in goodwill. As a percentage of revenues, goodwill amortization did not change significantly. Acquisition Related and Unusual Costs. During the year ended December 31, 1998, we recorded acquisition related and unusual costs in the amount of $317.6 million. These costs consist of transaction and deal costs, employee severance and transition costs, environmental related matters, litigation liabilities, regulatory compliance matters, jrestructuring and abandonment costs, and loss contract provisions and non -cash asset impairment charges. We do not anticipate that future costs to be incurred in connection with the 1998 acquisitions will be significant as restructuring and transition activities associated with these acquisitions had been substantially completed as of December 31, 1998. The 1998 acquisition related and unusual costs discussed below predominantly relate to acquisitions accounted for as poolings-of-interests and consist of the following: Allied Wane IndnWM In. IM annual Report C 27 -- Direct transaction and deal costs of $51.2 million including investment banker , -attorney, accountant, environmental assessment and other third -party fees. Approximately $11.7 million was accrued at December 31, 1998 and was paid in the first six months of 1999. Employee severance and transition costs of $73.6 million consist of $39.3 million in termination payments made to employees of acquired companies based on change of control provisions in preexisting contracts and $34.3 million *of costs associated with severance payments under exit or integration -plans implemented its connection with acquisitions made during 1998. Exit plans primarily related to the elimination of. duplicate corporate and administrative offices of companies acquired. Integration plans' included the combination of field activitieslor human resource, accounting, facility maintenance, health and safety compliance and customer service activities of companies acquired with field activities similar to ouis. The exit and integration plans called for the termination of approximately 800 employees who performed managerial, sales, administrative support, maintenance and repair, or hauling and landfill operations duties. All employees were identified and notified of their severance or transition benefits at the time management approved the plan, which occurred at or around the time of the acquisitions. Approximately $10.1 million was accrued at December 31, 1998, the majority of which has been paid in 1999. Environmental related matters, litigation liabilities and regulatory compliance matters assumed in acquisitions totaled $73.4 million. Subsequent to the acquisitions, we made certain changes in accounting estimates due to events and new information becoming available for environmental liabilities of approximately $41.1 million, litigation liabilities of approximately $20.8 million and regulatory compliance liabilities of approximately $11.5 million. As part of our acquisition due diligence process, environmental assessments were performed at the time of acquisition by third -party and in-house engineers. The assessments were performed at over 150 operating sites owned or used by the 54 companies acquired by Allied in 1998. Additional environmental liabilities were accrued based on the results of the assessments and represent the most probable outcome of these identified contingent matters. Additional accrued environmental liability of $27.1 million was comprised of required remedial activities identified at 28 separate locations. These locations include eight landfills acquired by Allied, 15 landfills not owned by Allied, but used for disposal by collection companies acquired, and transfer stations and maintenance facilities acquired. Required remedial activities include containment, the removal of waste improperly disposed of, extraction and treatment of landfill gas removal and disposal of contaminated soil and groundwater treatment and legal and administrative costs of the settlement of Superfund claims. The additional $14 million of environmental accruals related to removal and treatment of leachate at landfills, the level of which exceeded permitted amounts at seven of the acquired landfills. At December 31, 1998, approximately $41.1 million and $15.8 million was accrued for environmental matters and legal and regulatory compliance matters, respectively, which are expected to be disbursed in future periods. The change in estimate relating to litigation and regulatory compliance liabilities was accrued based on legal due diligence performed_ by in-house and outside legal counsel for acquired companies at the time of acquisition and the determination of the most probable loss incurred. As a result of this legal due diligence, we identified 14 companies acquired in business combinations accounted for as poolings-of-interest which had an aggregate of 54 asserted and unasserted claims involving matters such as contract disputes, employment related disputes, real and personal property and sales tax issues and billing disputes. Additionally, we identified regulatory compliance issues related 28 ] Allied Wavle Industries. Inc. lade Anneal Report to 12 companies acquired, which included citations for certain state and federal health, safety and transportation violations and the associated costs of fines, assessments and required maintenance costs 'to'bring facilities and equipment into compliance. Restructuring and abandonment costs were $42A million in business combinations accounted_ for as pooling=of-interests. Costs to' relocate redundant operations and to transition them to common information. systems were •$23.1, million: Redundant operations consisted primanly of acnvttles for human resources, accounting, facility maintenance' health and safety compliance and customer service which were performed in field offices of companies acquired.Abandonment costs and losses on the disposal of duplicate revenue producing assets relating to specifically identified transfer stations -and recycling facilities were $8.8 million. Revenue and net operating income of the abandoned operations represented less than one percent of our consolidated amounts. Additionally, $10.2 million of costswereincurred for the disposition of redundant non - revenue producing assets. This includes $7.6 million that was accrued at December 31, 1998 in accordance with exit and integration plans and is expected to be paid in 1999. This accrual is for payments under non -cancelable lease agreements for corporate offices to be vacated and other costs to close corporate facilities after operations have ceased under exit plans implemented during 1998 at five companies acquired. j Loss contract provisions were $7.6 million for losses associated with collection contracts and other contractual obligations assumed in acquisitions. Approximately $5 million was accrued at December 31, 1998 and was paid as of September 30, 1999. Non -cash asset impairment charges aggregating $69.7 million were recorded during the fourth quarter of 1998, related to assets held for future use and assets, which were disposed of, in the first and second quarters of 1999. Interest Expense, Net. Interest expense net of interest income was $84.4 million in 1998 as compared to $106.3 million in 1997, a decrease of 20.6%. The decrease in net interest expense was due to an increase in capitalized interest to $67.5 million in 1998 from $37.6 million in 1997. The increase in capitalized interest is a result of the acquisition of 21 landfills during 1998 primarily financed with our common stock instead of cash. Therefore, we had a significant increase in assets under development without a corresponding increase in interest bearing debt. Additionally, net interest expensewas impacted by an overall - reduction in the average.interest rate partially offset by a net increase in outstanding debt. Income Taxes. Income taxes reflect an effective tax rate of 80.3% in 1998 and 34.3% in 1997. The increase is primarily caused by the income tax accounting effects of asset write -downs and applying the pooling -of -interests method of accounting for business combinations (including the initial recording of deferred income taxes and non -deductible transaction costs, partially offset by the absence of income taxes on S-Corporation pre -combination earnings). This resulted in a one-time income tax provision of $61.1 million. Without considering the effect of pooled companies and asset write -downs, the 1998 effective tax rate is 40.5%, which deviates from the federal statutory rate of 35%, due to the effects of differences in the treatment of goodwill for book and tax purposes, state income taxes, and other permanent differences. Extraordinary Loss, Net. In December 1998, we replaced our 1996 Notes and Senior Discount Notes with $1.7 billion in senior notes and recognized a charge of approxi- mately $201.2 million ($121.7 million net of income tax benefit) related to premiums paid for the early payment of the 1996 Notes and the Senior Discount Notes and the write-off of previously deferred debt issuance costs. In June 1998, we replaced our credit facility and recognized an extraordinary charge of approximately $5.1 million ,l ($3.1 million net of income tax benefit) related to the write-off of previously deferred debt issuance costs. Allied Wane Industries, Ina 1999 Annual Raped C 29 In September 1997, we sold 18.6 million shares of common stock -with net proceeds -- of approximately $327.4 million (the "Equity Offering"). We used $203 million of the net proceeds to retire a portion of the term loan facility of the 1997 Credit Agreement (as defined below) and $71 million to repay the entire amount outstanding on the revolving credit facility. As a result of the early repayment of debt outstanding under the term loan facility, we recognized an extraordinary charge in the third quarter of, 1997 of approximately $1.3 million ($0.8 million net of income tax benefit) for the wri[e-off rr of previously defeed debt issuance costs. In May 1997, we repurchased from Laidlaw, Inc. two junior subordinated debentures with an aggregate face amount of $318 million and a warrant to acquire 20.4 million shares of common stock, used as partial consideration for the acquisition of the solid waste operations of Laidlaw, Inc., for an aggregate purchase price of $230 million in cash. An extraordinary charge to earnings related to the repurchase of approximately $65.7 million ($39.4 million net of income tax benefit) was recorded. In addition, we replaced our $1.275 billion bank agreement with the $900 million senior credit facility (the "1997 Credit Agreement") in June 1997 and recognized an extraordinary charge Of approximately $21.6 million ($13.0 million net of income tax benefit). Liquidity and Capital Resources Historically, we have satisfied our acquisition, capital expenditure and working capital needs primarily through bank financing and public offerings and private placements of debt and equity securities. Between January 1992 and December 1999, we completed total debt financings in excess of $14.3 billion and equity financings in excess of $1.4 billion, excluding stock issued for consideration in business combinations. Due to acquisitions and the capital requirements of our previous business strategy, we have used amounts in excess of the cash generated from operations to fund acquisitions and capital expenditures. In the future we anticipate that cash flow from operations, less acquisitions and capital requirements, will be sufficient to service our long- and short-term debt. However, over the next several quarters, transition and integration costs associated with the BFI acquisition may cause us to have negative cash flow from operations or may cause us to incur additional amounts of debt. In connection with acquisitions, we have assumed or incurred indebtedness with relatively short-term repayment schedules, thereby increasing our current and medium -term liabilities. Also, for certain acquisitions, current liabilities are recorded for acquisition related and unusual costs that require payment in the near term. Current liabilities periodically include scheduled payments required under our 1999 Credit Facility. In addition, we have acquired operating equipment using financing leases, which have short, and medium -term maturities. Also we use excess cash generated from operations to pay down amounts owed on our revolving line of credit, which is classified as long-term debt. As a result, we periodically have low levels of working capital or working capital deficits. 30 ] Allied Waste Industries, Inc 1999 Annual Report - - During the years -ended December. 31, 1999,.1998 and 1997, our cash flows from operating, investing and financing were as follows.- - (in millions) Year Ended December 31, ...4999 - 1998 1997 Operating Activities Net income (loss) $ (288.7) $ .(223 1) :$ 24.0 Noniiash acquisition related and unusual.costs and asset impairments „ -: ^ 105.2 88 2 Non -cash operating expenses°1 318.8 245.8 187.3 Cumulative effect of change in accounting principle - 64.3 - - Gain on sale of assets (5.3) - (3.S) (7.2) Extraordinary losses due to early extinguishments of debt, net of income tax benefit and cash premium paid 3.2 119.0 50.5 Cash premium paid due to early extinguishments of debt - (173.2) (64.4) Change in operating assets and liabilities, net 291.5 116.2 (62.7) Cash provided by operating activities - 489.0 169.4 127.5 Investing Activities Cost of acquisitions, net of cash acquired (7,574.4) (313.0) (498.7) Capital expenditures, and net contributions to unconsolidated subsidiaries (356.2) (301.7) (188.0) Capitalized interest (25.5) (67.5) (37.6) Proceeds from sale of assets 522.1 12.1 530.1 Change in deferred acquisition costs and notes receivable (28.5) (8.2) (7.9) Cash used for investing activities (7,462.5) (678.3) (202.1) Financing Activities Net proceeds from sale of common stock and exercise of stock options and warrants 10.2 11.3 329.0 Net proceeds from sale of Preferred Stock 973.9 - - Net proceeds from long-term debt, pet of issuance costs 9,672.3 2,725.3 1,336.8 Repayments of long-term debt (2,601.2) (2,265.7) (1,791.8) Other - 44.4 163.9 Cash provided by financing activtes 7,055.2 515.3 37.9 Increase (decrease)in rash and cash;squivalents $ 81.7 $ 6.4 $ (36.7) (1) Consists principally of provisions for depremtion and amortization, undistributed ea rings of equity investments, allowance for doubtful accounts, accretion of debt and amortization of debt ifivanoe cons, and deferred income m m As of December 31, 1999, we had cash and cash equivalents of $121.4 million. Our capital expenditure and working capital requirements have increased significantly, reflecting our rapid growth through acquisition and development of revenue producing assets, and will increase further compared to the years ended December 31, 1999 and _- 1998 due to the acquisition of BFI. During 1999, we acquired solid waste operations, excluding the BF1 acquisition, representing approximately $381.2 million in annual revenues ($332.7 million net of intercompany eliminations), and sold operations representing approximately $372.5 million in annual revenues. Subsequent to December 31, 1999, we sold certain assets with annual revenues of approximately $120 million for consider- ation of approximately $137 million. For the calendar year 2000, we expect to spend approximately $675 million for capital expenditures, closure and post -closure; and additional remediation expenditures relating to our landfill operations. We also expect to spend approximately $300 million after tax, for non -recurring integration and transaction costs primarily related to the acquisition of BFI. The acquisition of additional waste operations would require additional capital amounts and capital expenditure requirements. Allied Waste Induatdea, Inc. 1999 Annual Raped C 31 -- „ As of December 31, 1999, our debt structure consisted primarily of $5.2 billion outstanding under the 1999 Credit Facility, $2.0 billion of the 1999 Notes, $1.7 billion of the 1998 Senior Notes and $1.3 billion of debt assumed in connection with the BF1 acquisition. As of December 31, 1999 there is aggregate availability.under the revolving - - - credit facility of the 1999 Credit Facility of approximately $1.0 billion to be used for working capital, letters of credit, acquisitions and other general corporate purposes. The indentures relating to the 1999 Credit Agreement, the, 1999 Notes and the 1998 Senior Notes contain financial and operating coven ants aiid restrictions on our ability - to complete acquisitions, pay dividends, incur indebtedness; "make'•investments and take certain other corporate actions. A substantial portion of our available Cash will be required to service this indebtedness. For fiscal 2000, our debt service is expected to be approximately $1.2 billion consisting of approximately $371 million in principal repayments and approximately $870 million in annual interesrpayments. These amounts may vary depending upon changes in interest rates. We are also required to provide financial assurances to governmental agencies under applicable environmental regulations relating to our landfill operations and collection- ` contracts. We satisfy these financial assurance requirements by issuing performance bonds, letters of credit, insurance policies or trust deposits as they relate to landfill closure and post -closure costs and performance under certain collection contracts. At December 31, 1999, we had outstanding approximately $1.5 billion in financial assurance instruments, represented by $701.7 million of performance bonds, $656.6 million of .. insurance policies, $52.1 million of trust deposits and $105.8 million of letters of credit. During the calendar year 2000, we expect to be required to provide approximately $1.5 billion in financial assurance instruments relating to our landfill operations. ! We have lease facilities (the `Lease Facilities") that allow us to enter into equipment leases at rates ranging from similar term treasury note rates plus 1.55% for terms of 36 to 84 months. We had equipment leases outstanding at December 31, 1999 and 1998 of $14.8 million and $36.6 million, respectively. -� Subtitle D and other regulations that apply to the non -hazardous waste disposal industry have required us, as well as others in the industry, to alter operations and to modify or replace pre -Subtitle D landfills. Such expenditures have been and will continue to be substantial. Further regulatory changes could accelerate expenditures for closure and - post -closure monitoring and obligate us to spend sums in addition to those presently reserved for such purposes. These factors, together with the other factors discussed above, could substantially increase our operating costs and our ability to invest in our facilities. Our ability to meet future capital expenditure and working capital requirements, to make scheduled payments of principal, to pay interest, or to refinance our indebtedness, and to fund capital amounts required for the expansion of the existing business depends on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors beyond our control. On the basis of historical financial information, including recent operating history of both Allied and BF1, we believe that available cash flow, together with available borrowings under the new credit facility, our lease facilities and other sources of liquidity, will be adequate to meet our anticipated future requirements for working capital, acquisition related and integration costs, letters of credit, capital expenditures, scheduled payments of principal and interest on debt incurred under the new credit facility, the assumed BF1 debt, the 1998 Senior Notes, the 1999 Notes and other debt, and capital amounts required for growth. However, we may have to refinance the principal payment at maturity on the 1998 Senior Notes, the 1999 Notes and other debt. We cannot assure you that our business will generate sufficient cash flow from operations, that we will be able to avail 4,r 32 ] Allied Waste Indusales, Inc. 1999 Annual Raped ourselves to future. financings in_an amount sufficient to enable us to service our. indebtedness or to make necessary capital expenditures, or that any refinancing would ' '-be available ,on. commercially, reasonable terms, if at all. Further, depending on the timing, amount and structure of any possible future acquisitions and the availability of funds under the new credit facility, we may need to raise additional capital. We may raise such funds through additional bank'financmgs'or public or'private offerings of our debt F s and equity securities We cannot assure you that we will be able to.secure such funding, _. "if necessary, on favorable Terms, if 5f`all If we are not successful in securing `such funding, our ability to pursue our business strategy may; be impaired and results of operations for future periods'may:be negatively affected..(See Note 6 id Allied's Consolidated Financial Statements). ., .. .. Significant Financing Events In July 1999, in connection with the completion of the acquisition of BFI, we entered into new financing arrangements and repaid all amounts borrowed under the then existing credit facility and all amounts borrowed by BFI under its commercial paper program. The new financing arrangements were (i) the 1999 Credit Facility for Allied Waste North America, Inc. ("Allied NA"; a wholly owned consolidated subsidiary of Allied), which is guaranteed by us and substantially all of our subsidiaries (including BFI and its subsidiaries), from a bank group for $7.1 billion to provide financing for the acquisition of BFI and working capital for us following the acquisition, (ii) the sale of the $2.0 billion principal amount 1999 Notes by Allied NA which are guaranteed by us and substantially all of our subsidiaries (including BFI and its subsidiaries), and (iii) the sale for $1.0 billion of the Preferred Stock. In connection -with the completion of the acquisition of BFI, we also guaranteed certain of BFI's remaining debt and, for the 1998 Senior Notes and for certain of BFI's remaining debt, provided collateral (pari passu with the 1999 Credit Facility) consisting of certain of BFI's assets. Both the New Credit Facility and the 1999 Notes contain restrictions on Allied's ability to make -- acquisitions, purchase fixed assets above certain amounts, pay dividends, incur additional indebtedness, make investments, loans or advances, enter into certain transactions with affiliates or enter into a merger, consolidation or sale of all or a substantial portion of Allied's assets. The 1999 Credit Facility, the 1999 Notes and the Preferred Stock contain provisions, which could require repayment, in some cases at a premium upon a defined "change of control" of Allied and the Preferred Stock also contain restrictions on Allied's ability to pay cash dividends on common stock. In December 1998, Allied NA issued an aggregate principal amount of $1.7 billion of senior notes in a Rule 144A offering which was subsequently registered for public trading with the SEC in January 1999. We used the net proceeds from the 1998 Senior Notes to fund the purchase of all of the outstanding 1996 Notes and Senior Discount Notes, to repay borrowings outstanding under the Senior Credit Facility and certain capital lease obligations and for general corporate purposes. We guarantee the 1998 Senior Notes and substantially all of Allied NAs current and future subsidiaries, the guarantees of which are expressly subordinated to the guarantees of Allied NA's Credit Agreement. In June 1998, we repaid $486.8 million outstanding under the 1997 Credit Agreement and entered into a new credit agreement (the "Credit Agreement"). The Credit Agreement provides an $800 million five-year senior secured revolving credit facility and a $300 million five-year senior secured term loan facility (together with the revolving credit facility, the "Senior Credit Facility"). The term loan facility is a funded, amortizing senior secured term loan with annual principal payments increasing from $75 million in 2001, to $105 million in 2002, and to $120 million in 2003. Principal under the revolving credit facility is due.upon maturity. Allied Wane Industries, In. 1M Aneual Retied 33 On September 30, 1997,:we:repaid $203 million outstanding under the term loan facility and $71 million outstanding under the revolving credit facility of the 1997 - - Credit Agreement. In connection with this repayment, we amended the 1997 Credit Agreement in October 1997, providing fora six and one-half year senior secured $297 million funded term loan facility a senior secured $200 million delayed draw term loan facility to finance certain acquisitions prior to March 31, 1998, and a senior secured $600 tndlion revolving credit facility due December 2003 ..:In June 1997, we ?epaid our senior credit facility and entered into the,1997 Credit -Agreement. The 1997 Credit Agreement provides a six and one-half year senior secured $500 million term loan facility and a six and one-half year senior secured $400 million revolving credit facility. - In May 1997, Allied, puts uantlto the Laidlaw Securities Purchase Agreement with the Laidlaw Group and certain private securities investment funds affiliated with either (i) Apollo Advisors II, L.P., or (ii) the Blackstone Group (the `Apollo/Blackstone Investors"), repurchased from the Laidlaw Group, the Allied Debentures and the Warrant for an aggregate purchase price of $230 million in cash. Also pursuant to the Laidlaw Securities Purchase Agreement, the Apollo/Blackstone Investors purchased all of the common stock held by Laidlaw. In connection with the Repurchase, Allied issued $418 million aggregate face amount of the Senior Discount Notes in a private offering on May 15, 1997. The net proceeds of $230 million realized from the sale of the Senior Discount Notes were used to pay the cash consideration in the Repurchase. New Accounting Standards In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 137, Accounting for Derivative Instruments and Hedging Activities — Deferral of the Effective Date of FASB Statement No. 133, an amendment of SFAS No. 133. This statement defers, for one-year, the effective date of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to those fiscal years beginning after June 15, 2000. SFAS No. 133 requires all derivatives to be recorded as either assets or liabilities and the instruments to be measured at fair value. Gains or losses resulting from changes in the values of those derivatives are to be recognized immediately or deferred, depending on the use of the derivative, and whether or not it qualifies as a hedge. We will adopt SFAS No. 133 by January 1, 2001, as required. We are currently assessing the impact of this statement on our results of operations and financial position. Disclosure Regarding Forward Looking Statements This annual report includes forward -looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Forward Looking Statements"). All statements other than statements of historical fact included in this report, are Forward Looking Statements. Although we believe that the expectations reflected in such Forward Looking Statements are reasonable, we can give no assurance that such expectations will prove.to be correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, number of acquisitions and projected or anticipated benefits from acquisitions, including whether and when the acquisitions will be accretive to earnings, made by or to be made by us, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results and the underlying assumptions including internal growth as well as general economic and financial market conditions. All phases of our operations are subject to a number of uncertainties, risks and other influences, many 34 1 Allied Wane Industrles, Inc. 1999 Annual Reperl of which are outside of our control and anyone of which, or a combination of which, could materially affect the results of .our operations and whether Forward Looking Statements made•by.us�ultimately.prove to be accurate. Such important factors ("Important Factors") that could cause actual results to differ materially from our expectations are disclosed inthis section and elsewhere in this report. All subsequent written and oral Forward Looking Statements'attributable'ti.o us or persons, acting on our behalf'are expressly qualified ip their entirety by the Important Factors described below that could cause'arnial results to differ"from our expectations."Shareholders, ^potential investors and other readerslare urged, to consider ,these factors in evaluating Forward Looking Statements and arelcautioned not to place undue reliance on these " Forward Looking Statements. The Forward Looking Statements made herein are only made as of the date of this filing and we undertake no obligation to publicly update such Forward Looking Statements to'reflect subsequent events or circumstances. Leverage Ability to Service Debt. We have substantial indebtedness with significant debt service requirements. At December 31, 1999,. our consolidated debt was approximately $10.2 billion. The degree to which we are leveraged has important _ - consequences, including the following (i) our ability to obtain additional financing in the future may be impaired, (ii) a portion of our cash flow from operations is required to be dedicated to the payment of principal and interest on our debt, thereby reducing funds available to us for other purposes, (iii) we may be vulnerable in the event of an economic downturn in our business, and (iv) to the extent our outstanding debt under our 1999 Credit Facility is at variable rates that have not been hedged, we will be vulnerable to increases in interest rates. In addition, a portion of our bank debt provides for increasing interest rates if that portion is not repaid by July 30, 2000. Accordingly, if we are unable to repay this portion from the proceeds of asset divestitures or otherwise, our vulnerability to changes in interest rates will be greater. -'� Our ability to meet our debt service obligations will depend on our future operating performance and financial results, which will be subject in part to factors beyond our control. Although we believe that our cash flow will be adequate to meet our interest payments, we cannot assure that we will continue to generate earnings in the future sufficient to cover our fixed charges and if we are unable to borrow sufficient funds under either the 1999 Credit Facility or from other sources, we may be required to refinance all or a portion of our assets. There can be no assurance that a refinancing would be possible, nor can there be any assurance as to the timing of any asset sales or the proceeds, which we could realize therefrom. If for any reason, including a shortfall in anticipated operating results or proceeds from asset sales, we were unable to meet our debt service obligations, we would be in default under the terms of certain of our debt agreements. In the event of such a default, the holders of such debt could elect to declare all of such debt immediately due and payable, including accrued and unpaid interest, and to terminate their commitments with respect to funding obligations under such debt. In addition, 'such holders could proceed against any collateral which, in the case of the 1999 Credit Facility, consists of the capital stock of our subsidiaries and substantially all of our assets and the assets of our subsidiaries. Any default with respect to any of our debt could result in a default under other debt or result in bankruptcy. Competition. The solid waste collection and disposal business is highly competitive and requires substantial amounts of capital. We compete with numerous waste manage- ment companies, one of which has significantly larger operations and greater resources. _ We also compete with those counties and municipalities that maintain their own waste collection and disposal operations. Forward Looking Statements assume that we will be able to effectively compete with the other waste management companies and Allied Wane Indusides. Ina 1999 Annual Report C 35 municipalities and that we will be able to maintain or improve margins (or pricing of services) on existing or acquired_ operations and effectively compete with government owned and operated landfills which enjoy certain competitive advantages from tax-exempt financing and tax revenue subsidies.' Availability of Acquisition Targets. Our ongoing acquisition program is part of our ;growth strategy, In addition, obtaining landfill permits has become 1. increasingly difficult, ,,.time consuming and expensive, We cannot assure that we will succeed in obtaining landfill permits,oO locating appropriate acquisition candidates that can be acquired at price levels that we consider appropriate. The Forward Looking Statements assume that a number of acquisition candidates and landfill properties sufficient to meet our goals will be available and that we will be able to complete the acquisitions at prices that we have experienced in the past two years. In addition, federal and state antitrust and similar policies may limit our ability to pursue acquisitions. Divestitures. Our Forward Looking Statements assume that we will be able to exit certain regional markets and sell certain non -strategic businesses. There can be no assurance as to whether or when transactions will close or the amounts to be received in such transactions, including transactions under definitive agreement, and whether we will be successful in negotiating asset sales at a pace and on terms sufficient to achieve our goals. Integration. Our financial position and results of operations depend to a large extent on the integration of recently acquired businesses including the acquisition of BFI completed on July 30, 1999. Before the acquisition of BFI, Allied and BFI operated as separate entities. We may not be able to maintain the levels of operating efficiency that Allied or BFI had achieved or might achieve separately. Successful integration of BFI's operations will depend upon our ability to manage those operations and to eliminate redundant and excess costs. Because of difficulties in combining operations, we may not be able to achieve the cost savings, increases in internalization rates, and other size related benefits that we hope to achieve after the acquisition. Failure to achieve effective integration in the anticipated time period or at all could have an adverse effect on our future results of operations. Ongoing Capital Requirements. To the extent that internally generated cash and cash available under our existing credit facilities are not sufficient to provide the cash required for future operations, capital expenditures, acquisitions, debt repayment obligations and/or financial assurance obligations, we will require additional equity and/or debt financing in order to provide such cash. We have incurred significant debt obligations in the last two years, which entail substantial debt service costs. The Forward Looking Statements assume thatwe will be able to raise the capital necessary to finance such requirements at rates that are as good as or better than those we are currently experiencing. We cannot assure, however, that such financing and hedging and other means of fixing interest rates on our debt will be available o, if available, that we will find such terms regarding debt service costs and interest rates consistent with the assumptions of Forward Looking Statements or otherwise satisfactory. See "Liquidity and Capital Resources'. Economic Conditions. Our business- is affected by general economic conditions. The Forward Looking Statementsassumethat we will be able to achieve internal volume and price growth, which is not impacted by an economic downturn. As our revenue continues to grow it is likely that the rates of internal growth will reflect growth rates, which are less than those experienced in 1999. We cannot assure that an economic downturn will not result in a reduction in the volume of waste being disposed of at our operations and/or the price that we can charge for our services. 36 ] Allied Wade lodusides, Inc. 1999 Annual ae9on Weather Conditions. Protracted periods of inclement weather may.. adversely affect our operations by interferingwith collectionandlandfill operations, delaying the development of landfill capacity and/or reducing the volume of waste generated by our customers. In addition, particularly harsh weather conditions_ may result in the,temporary suspension of certain of our operations. The Forward Looking Statements do not assume that such i .weather conditions will occur. t We Dependenoion Senior: Management. are highly�dfipendent upon our senior, . -'.: .. --`.management�eam. In'addition,"as we continue to grow, our requirements for operations management with waste industry experience will alsoAtricrease The availability -of such experienced management is not known. Our Chief Financial Officer announced'his forthcoming resignation in February 2000. The Foiward'Looktng Statements assume that experienced management will be available when needed by us a[ compensation levels that are within industry norms. We may also encounter difficulty in the assimilation and retention of employees. The loss`of the services of any member of senior manage- ment or the inability to hire experienced operations management could have a material adverse effect on us. Influence of Government Regulation and Other Third Party Actions. Our operations are subject to and substantially affected by extensive federal, state and local laws, regulations, orders and permits, which govern environmental protection, health and safety, zoning and other matters. These regulations may impose restrictions on operations that could adversely affect our results, such as limitations on the expansion of disposal facilities, limitations on or the banning of disposal of out-of-state waste or certain categories of waste or mandates regarding the disposal of solid waste. Because of heightened public concern, companies in the waste management business may become subject to judicial and administrative proceedings involving federal, state or local agencies. These governmental agencies may seek to impose fines or to revoke or deny renewal of operating permits or licenses for violations of environmental laws or regulations, or to require remediation of environmental problems at sites or nearby properties, resulting from transportation or predecessors' transportation and collection operations, all of which could have a material adverse effect on us. Liability may also arise from actions brought by other third parties such as individuals or community groups in connection with the permitting or licensing of operations, any alleged violations of such permits and licenses or other matters. The Forward Looking Statements assume that there will be no materially negative impact on our operations due to government regulation or other third -party actions. Potential Environmental Liability. We may incur liabilities for the deterioration of the environment as a result of our operations. Any substantial liability for environmental damage could materially adversely affect our operating results and financial condition. Due to the limited nature of our insurance coverage of environmental liability, if we were to incur substantial financial liability for environmental damage, our business and financial condition could be materially adversely affected. The Forward Looking Statements assume that we will not incur any material environmental liabilities other than those for which a provision has been recorded in the Consolidated Financial Statements and disclosed in the notes thereto. Allied Waste Industries, Inc. 1999 Anneal Repnn 37 Allied Waste Industries; Inc. Consolidated Statements of Operations (in thousands, except per share amounts) Year Ended December 31, - 1999 1998 :1997 Revenues $3,341,071 $1,575,612 -U,340,661 Cost of operations excluding acquisition related and unusual costs. _ 1,948,964, '.. �892,273 �, . 777,289 $elling,`general and administrative expenses excluding' acquision related and unusual costs 231,366 155,835 '-177,396 Depreciation and amortization 273,368 14.9,260 --131,658 Goodwill amortization 110,726 30,705 26,580 Acquisition related and unusual costs - 588,855 317,616 3,934 Operating income 187,792 29,923 223,804 Equity in earnings of unconsolidated affiliates (20,785) - - Interest income (7,212) (4,030) (1,765) Interest expense 443,049" 88,431 108,045 Income (loss) before income taxes (227,255) (54,478) 117,524 Income tax expense (benefit) (8,756) 43,773 40,277 Minority interest 2,751 - - Income (loss) before extraordinary losses and cumulative effect of change in accounting principle (221,250) (98,251) 77,247 Extraordinary losses, net of income tax benefit 3,223 124,801 53,205 Cumulative effect of change in accounting principle, net of income tax benefit 64,255 - - Net income (loss) (288,728) (223,052) 24,042 Dividends on preferred stock 27,789 - 381 Net income (loss) available to common shareholders $ (316,517) $ (223,052) $ 23,661 Basic EPS Income (loss) available to common shareholders before ... extraordinary losses and cumulative effect of change in accounting principle, net of income tax benefit $ (1.33) $ (0.54) $ 0.47 .�,. Extraordinary losses, net of income tax benefit (0.02) (0.68) (0.33) Cumulative effect of change in accounting principle, net of income tax benefit (0.34) - - Net income (loss) available to common shareholders $ (1.69) $ (1.22) $ 0.14 Weighted average common shares 187,801 182,796 164,888 Diluted EPS Income (loss) available to common shareholders before extraordinary losses and cumulative effect of change in accounting principle, net of income tax benefit $ (1.33) $ (0.54) $ 0.44 Extraordinary losses, net of income tax benefit (0.02) (0.68) (0.30) Cumulative effect of change in accounting principle, net of income tax benefit (0.34) - - Net income (loss) available to common shareholders $ (1.69) $ (1.22) $ 0.14 Weighted average common and common equivalent shares 187,801 182,796 172,958 Pro forma amounts, assuming the change in accounting principle is applied retroactively: Net income (loss) available to common shareholders $ (256,265) $ 5,085 Diluted earnings (loss) per share $ (1.40) $ 0.03 The accompanying Notes to CoosoRdated Financial 5mtttoents are an integral part of these statements. 4 38 ] Allied Waste Industries, Inc. 19" Annual Report Allied Waste. industries, Inc. Consolidated Balance Sheets (in thousands, except per share amount) As of December 31, - . 1999 1998 Assets _ .. . Current Assets: -Cash and cash equivalents`-'- $ `i 121,405, $ 39,742_ Accounts receivable, net of allowance of $59,490 and $13,907 867,667 225,087 Prepaid and other current assets 252,187•. �. 47,184 Deferred income taxes, net - - -� ;115;263 44,141 Assets held for sale 891,900 143,750 Total current assets 2,248,422 499,904 Property and equipment, net 3,738,388 _ 1,776,025 Goodwill, net " '8,238,929 1,327,470 Other assets, net 737,362 149,193 Total assets $14,963,101 $3,752,592 Liabilities and Stockholders' Equity Current Liabilities: Current portion of long-term debt $ 1,002,928 $ 21,516 Accounts payable 481,318 106,082 Accrued closure, post -closure and environmental costs 134,968 41,938 Accrued interest 158,251 7,892 Other accrued liabilities 613,663 228,934 Unearned revenue 238,371 48,511 Total current liabilities 2,629,499 454,873 Long-term debt, less current portion 9,240,291 2,118,927 Deferred income taxes 204,786 - Accrued closure, post -closure and environmental costs 860,574 205,982 Other long-term obligations 388,396 42,736 Commitments and contingencies Series A senior convertible preferred stock, 1,000 shares authorized, issued and outstanding, liquidation preference of $1,028 per share 1,001,559 - Stockholders' Equity: Common stock 1,885 1,845 Additional paid -in capital 1,205,399 1,208,906 Retained deficit (569,288) (280,677) Total stockholders' equity 637,996 930,074 Total liabilities and stockholders' equity $14,963,101 $3,752,592 The accompanying Notes to Consolidated Financial statements are an integral part of these balance sheets. _Allied Waste Industries, Inc 1999 Annual Report C 39 Allied Waste Industries, Inc. Consolidated Statements of Stockholders' Equity Additional Preferred 6narnon Paid -in Stock Stock Capital Retained Deficit Total Balance as of December 31, 1996 $ 11 0,501' $ 439,060;,tj55,344)' $S85,218 -Common stock issued, net 221 358,019 'j Warrants repurchased 90) (49,0 (49,000) Stock grant amortization 381 381- Stock options and warrants exercised 13 41195 4,208 9% Cumulative Convertible preferred stock and convertible notes converted .17 2,174 2,190 Dividends declared on preferred stock — (381) (381) Equity transactions of pooled companies 62 245,050 (7,324) 237,788 Net income — — 24,042 24,042 Balance as of December 31, 1997 — 1,814 999,277 ...,-(38,626) 962,465 Common stock issued, net — 13 26,474 — 26,487 Stock grant amortization — — 1,251 — 1,251 Stock options and warrants exercised — 18 23,547 — 23,565 Equity transactions of pooled companies — — 158,357 (18,999) 139,358 Net loss — — (223,052) (223,052) Balance as of December 31, 1998 — 1,845 1,208,906 (280,677) 930,074 Common stock issued, net — 2 220 — 222 Stock options and warrants exercised — 14 20,480 — 20,494 Dividends declared on Series A Senior Convertible Preferred Stock — — (27,789) — (27,789) Equity transactions of pooled companies — 24 3,582 117 3,723 Net loss — — — (288,728) (288,728) Balance as of December 31, 1999 $— $1,885 $1,205,399 $(569,288) $ 637,996 The accompanying Notes to Consolidated Financial Statements are an integral Fort of these statements. 40 ] Allied Waste industries, Ine. 1999 Annual Report Allied Waste Industries, Inc. Consolidated Statements of Cash Flows (in thousands) - - Year Ended December 31, - 1999 1998 1997 Operating Activities Net income (loss) $;,(288,728) $ {223,052) .$ ' 24,042 . .Adjustments to. Reconcile Net Income (loss) - s - to Cash Provided by Operating Activities: _ ,Provisions for:.. - Depreciation and amortization 384,09.4 179,96S T' 158,238 Non -cash acquisition related and unusual costs and asset impairments 1051186 '- `, 88;228 - Cumulative effect of change in accounting principle, net of income tax benefit - - 64,255 - - Undistributed earnings of equity investment in unconsolidated subsidiary 13,217 - - Doubtful accounts ' 10,305 8,086 4,228 Accretion of senior discount notes and amortization of debt issuance costs 27,155 33,057 26,630 Deferred. income tax provision (benefit) - (115,964) 24,636 (1,794) Gain on sale of assets (5,346) (3,521) (7,250) Extraordinary losses due to early extinguishments of debt, net of income tax benefit and cash premium paid 3,223 118,957 50,518 Cash premium paid due to early extinguishments of debt - (173,159) (64,439) Change in Operating Assets and Liabilities, Excluding the Effects of Purchase Acquisitions: Accounts receivable, prepaid expenses, inventories and other (100,586) (58,517) (131,840) Accounts payable, accrued liabilities, unearned income 13,099 159,862 70,803 Acquisition accruals related costs 382,643 20,244 - Closure and post -closure provision 35,242 17,607 12,920 Closure, post -closure and environmental expenditures (38,784) (23,000) (14,590) Cash provided by operating activities 489,011 169,393 127,466 Investing Activities Cost of acquisitions, net of cash acquired (7,589,597) (312,986) (498,706) Accruals for acquisition price 15,171 - Net contributions to unconsolidated subsidiaries (17,011) - - Capital expenditures, excluding acquisitions (339,192) (301,742) (188,005) Capitalized interest (25,474) (67,499) (37,568) Proceeds from sale of assets 53,246 12,070 5,404 Proceeds from sale of assets held for sale 468,880 - 524,716 Change in deferred acquisition costs and notes receivable (28,555) (8,184) (7,926) Cash used for investing activities (7,462,532) (678,341) (202,085) Financing Activities Net proceeds from sale of common stock, and exercise of stock options and warrants 10,198 11,324 329,019 Net proceeds from sale of preferred stock 973,881 - - Proceeds from long-term debt, net of issuance costs 8,672,295 2,725,262 1,336,780 Repayments of long-term debt (2,601,190) (2,265,741) (1,791,799) Repurchase of warrant - - (49,000) Other long-term obligations - 2,745 12,886 Dividends paid - - (525) Equity transactions of pooled companies - 41,780 200,563 Cash provided by financing activities 7,055,184 515,370 37,924 Increase (decrease) in cash and cash equivalents 81,663 6,422 (36,695) Cash and rash equivalents, beginning of period 39,742 33,320 70,015 Cash and cash equivalents, end of period $ 121,405 $ 39,742 $ 33,320 The accompanying Notes to Consolidated Financial Statements are an integral part of these tmtemrnts Allied Waste Indusules, Inc 1999 Annual Rupert [ 41 Notes to Consolidated Financial Statements 1. Organization and Summary of .Significant Accounting Policies - Allied Waste Industries, Inc., a Delaware corporation, ("Allied" or "we") is the second largest, non -hazardous solid waste management company in the United States, as measured by revenues. We provide noti hazardous waste collection; `transfey recycling and disposal services in 42 states located primarily in the Ailanttc, Central, Great Lakes, Midwest, Northeast, Southeast, Sotithweii'and West 'regions of the United States. _ On July 30, 1999, we completed the acquisition of Browning -Ferris Industries, Inc. ("BFI") for approximately $7.7 billion of cash and the assumption of approximately $1.9 billion of BFI debt. Prior to the acquisition, BFI was the second largest non -hazardous solid waste company in North America and provided integrated solid waste management services, including residential, commercial and industrial collection, transfer, disposal and recycling. As of the date of acquisition, BFI serviced approximately 7.3 million customers through a network of 221 collection companies, 86 transfer stations, 84 landfills, and 102 recycling facilities and had annual revenues of approximately $4.2 billion. Principles of Consolidation and Presentation. The Consolidated Financial Statements include the accounts of Allied and our subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. The Consolidated Financial Statements and accompanying notes have also been restated to reflect material acquisitions accounted for as poolings-of-interests (See Note 2). Certain reclassifications have been made to the prior period financial statements to conform to the current presentation. Cash and Cash Equivalents. Cash equivalents are investments with original maturities``,='`.> of less than 90 days and are stated at quoted market prices. Cash and cash equivalents are net of approximately $169.2 million and $32.7 million of outstanding checks and deposits in transit at December 31, 1999 and 1998, respectively. Concentration of Credit Risk. Financial instruments that potentially subject us to concentrations of credit risk consist of cash and cash equivalents and trade receivables. We place our cash and cash equivalents with high quality financial institutions and limit the amount of credit exposure with any one financial institution. We provide services to approximately 9.9 million residential, commercial and industrial customers throughout the United States. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising our customer base. We perform ongoing credit evaluations of our customers, but do not require collateral to support customer receivables. We establish an allowance for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends and other information. Property and Equipment. Property and equipment are recorded at cost, which includes interest to finance the acquisition and construction of major capital additions during. the development phase, primarily landfills and transfer stations, until they are completed and ready for their intended use. Depreciation is provided on the straight-line method over the estimated useful lives of buildings (30-40 years), vehicles and equipment (3-15 years), containers and compactors (5-10 years) and furniture and office equipment (3-8 years). Statement of Financial Accounting Standard No. 121 ("SFAS 121"), Accountin for the Impairment of Long-lived Assets and Long-lived Assets to be Disposed of, 42 7 Allied Wane Industries. Inc 1999 Annual Report requires that long-lived assets, such as property and equipment, and certain identifiable_, intangibles be reviewed for impairment, whenever events or changes in circumstances indicate the carrying amount"of an'asset in ay be recoverable. ' The cost of landfill airspace, including prigmal acquisition cost and incurred and projected landfill,construction-costs, is amortized over the capacity of the landfill based 1. on a.,per unit basis as landfill .airspace is consumed. We periodically review the realiz- . ability of our investment in'opeiating landfills. Should events and circumstances indicate that any of our landfills' be reviewed for possible impairment, such review for recoverability will;be;made in accordance;with:Emerging Issues Task Force'Discussion Issue No. 95-23 ("EITF 95-_23") The Treatment of Certain Site Restoration/ Environmental Exit Costs When Testing a Long-lived Asset for Impairmemt..The EITF outlines how cash flows for environmental exit costs should be determined and measured. Expenditures for major renewals and betterments are capitalized, while expenditures for maintenance and repairs, which do not improve assets or extend their useful lives, are charged to expense as incurred. For the years ended December 31, 1999, 1998 and 1997, maintenance and repair expenses charged to cost of operations were $275.6 million, $99.8 million and $80.9 million, respectively. When property is retired, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. Goodwill. Goodwill is the cost in excess of fair value of identifiable assets in purchase business combinations and is amortized on a straight-line basis over 40 years. We allocate goodwill when appropriate, to the district operating the assets based on a percentage of acquired assets' earnings before interest, taxes, depreciation and amortization ("EBI TDA") to the total acquired EBITDA. In accordance with SFAS 121, we continually review for - impairment whenever events or changes in circumstances indicate that the remaining estimated useful life of goodwill might warrant revision or that the balance may not be recoverable. We evaluate possible impairment by comparing estimated future cash flows, before interest expense and on an undiscounted basis, and the net book value of assets including goodwill. If undiscounted cash flows are insufficient to recover assets, further analysis is performed in order to determine the amount of the impairment. We record an impairment loss equal to the amount by which the carrying amount of the assets exceeds their fair market value. Fair market value is usually determined based on the present value of estimated expected future cash flows using a discount rate . commensurate with the risks involved. In instances where goodwill is identified with assets that are subject to an impairment loss, the carrying amount of the identified goodwill is reduced before making any reduction to the carrying amounts of impaired long-lived assets. See Note 1 — Acquisition related and unusual costs for a discussion of current year asset impairments recorded. Goodwill amortization of $110.7 million, $30.7 million and $26.6 million was recorded for the years ended December 31, 1999, I 1998 and 1997, respectively. Accumulated goodwill amortization was $185.3 million and $74.6 million at December 31, 1999 and 1998, respectively. Other Assets. Other assets include notes receivable, landfill closure deposits, deferred charges, investments in unconsolidated subsidiaries, prepaid pension costs and miscella- neous non -current assets. Deferred charges include costs incurred to acquire businesses and to obtain debt financing. Upon consummation of an acquisition, deferred costs relating to acquired businesses accounted for as purchases are allocated to goodwill or landfill airspace while costs relating to acquired businesses accounted for as poolingsof-interests are expensed. Direct costs related to acquisitions under evaluation are capitalized and �I reviewed for realization on a periodic basis. These costs are expensed when management determines that the capitalized costs provide no future benefit. Upon funding of debt offerings, deferred costs are capitalized as debt issuance costs and amortized using the interest Allied Waste Indaatrla; lea 1999 Annual Italian C 43 -�r method over the'life of the related.debt. Miscellaneous assets include. consulting and non -competition agreements, which are amortized in accordance with the terms of the respective agreements and contracts, generally not exceeding five years. Accrued Closure and Post closure Costs. Accrued closure and post -closure costs represe -- an estimate of the present value of the future obligati n associated with closure and post-clostire'momtoring of non-hazardous'solid waste landfills we currently own and/or operate.. Sitispecific closure:and posvtlosluec4ngmeermg cost estimates are prepared annually for landfills owned and/or operated b ps for which we are responsible _ y p y _-for closure and post -closure. The impact of changes determined to be changes in estimates, based on the annual update, are accounted for on a prospective basis. The present value of estimated future costs are accrued on a per unit basis as landfill airspace is consumed. Discounting of future costs is applied where we believe that both the amounts and timing of related payments are reliably determinable. Environmental Costs. We accrue for costs associated with environmental remediation obligations when such costs are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value as the timing of cash payments is not reliably determinable. Recoveries of environmental remediation costs from other parties are recorded when their receipts are deemed probable. Environmental liabilities and apportionment of responsibility among potentially responsible parties are accounted for in accordance with the guidance provided by the AICPA Statement of Position 96-1 ("SOP 96-1") "Environmental Remediation Liabilities.' Other Long-term Obligations. Other long-term obligations include the non -current �-- portions of insurance accruals, legal accruals, loss contract and restructuring accruals and other obligations not expected to be paid within the following year. Revenue. Advance billings are recorded as unearned revenue, and revenue is recognized when services are provided usually within 90 days. Loss Contracts. We review our revenue producing contracts in the ordinary course of business to determine if the direct costs, exclusive of any non -variable costs, to service the contractual arrangements exceed the revenues to be produced by the contract. Any resulting excess direct costs over the life of the contract are expensed at the time of such determination. Change in Accounting Principle. We evaluated our capitalized interest policy to assess the comparability of the calculation with the change in the business strategy resulting from the acquisition of BFI. As a result of this assessment, we changed the method of calculating capitalization of interest under Statement of Financial Accounting Standard No. 34, Capitalization of Interest Cost ("SFAS 34"). Previously, interest was capitalized using a_ method that defined the area of a landfill under development as all acreage considered available for development. Actual acquisition, permitting and construction costs incurred related to the area under development qualified for interest capitalization. Any costs incurred related to areas already developed and accepting waste no longer qualified for interest capitalization. Under the new methodology, the area of a landfill under development is defined as only the portion of the permitted acreage currently undergoing active cell development. The effect of this change in definition is to substan- tially reduce the acreage qualifying for interest capitalization. The costs upon which interest,..>, is capitalized continue to include the actual acquisition, permitting and construction costs incurred for cell development. Consistent with the prior policy, as construction �Y of an area is completed and the area becomes available for use, the cell no longer qualifies for interest capitalization. 44 ] Allied Waste industries. In. 1999 Annual Report _ The adoption of this method, which is accounted for as a change in accounting principle, - .. ..reflects_ the change in our operating strategy as a result of the BFI acquisition. Previously -. - our strategy was focused 6&the acquisition and development of waste disposal capacity. Through the BFI acquisition, we substantially achieved our previous strategy and are ( f now focusing on the increased utilization of landfill capacity. `Z The impactof thechange in,accounting.pnnctple is a cumulative charge, of approximately ;$106.2 mdhon;($64.3 million net of income taxes)., The effect of the change on the year. ended December 31, 1999 was to decrease net income before cumulativeeffeet of a change in accounting principle by $14.8 million ($0.08 per share) and net income after 'cumulative effect of a change iri'iccounting principle $79.1 million ($0.42 per share). `The pro forma amounts shown on our Consolidated Statements of Operations reflect the effect of retroactive application on capitalized interest in the prior periods that would have been recorded had the new method been in effect during these periods and the related income tax benefit. - Acquisition Related and Unusual Costs. 1999 During the year ended December 31, 1999, we recorded $588.9 million of acquisition related and unusual costs primarily associated with the $9.6 billion acquisition of BFI, which was accounted for as a purchase (See Note 2). The costs primarily relate to environmental related matters, litigation liabilities, risk management liabilities, loss contract provisions, transition costs and the write-off of deferred costs relating to the acquisition. These costs are comprised of the following: We recorded a charge of approximately $267.0 million related to changes in estimates _ of environmental liabilities associated with BFI's operations. In connection with our due diligence and integration process, assessments of the acquired operations were performed - by third -party and in-house engineers. Based on these assessments, we made changes in accounting estimates of approximately (i) $133.7 million associated with the Superfund accrual for over 150 CERCI A cases in which BFI was involved, (ii) $30.3 million associated with the remedial accrual for sites in which BFI was involved with remedial action plans, (iii) $56.3 million associated with the environmental accrual for various containment and treatment matters at 76 active or closed BFI landfills, and (iv) $46.7 million associated with the accrual for the remedial and closure requirements of four BFI hazardous waste facilities. Management believes the environmental accrual as of December 31, 1999 represents the most probable outcome of these matters based on our intended remediation plans. We do not expect that adjustments to these estimates, which are reasonably possible in the near term and that may result in changes to recorded amounts, will have a material effect on our consolidated liquidity, financial position or results of operations. We recorded a charge of approximately $93.5 million related to changes in estimates of litigation liabilities associated with BFI's operations. In connection with our due diligence and integration process, assessments of the acquired operations and outstanding litigation were performed by third -party and in-house legal counsel. We evaluated over 150 cases involving employee -related matters, insurance related matters, regulatory matters, collection matters and contract disputes. Accordingly, we increased the litigation accrual based on the most probable loss to be incurred. Management believes the litigation accrual as of December 31, 1999 represents the 1 most probable outcome of outstanding assessments, claims and cases. We do not expect — . that adjustments to estimates; which are reasonably possible in the near term and that may result in changes to recorded amounts, will have a material effect on our consolidated Allied Waste Industries, Im 1299 Annual Report C 45 liquidity, financialposition or results of operations. As of December 31, 1999, we believe that it is possible that the ultimate outcome -of the litigation matters could result in approximately $10 million of additional liability. - - We recorded an increase of approximately $20.0 million to the self-insurance accruals' based on the results of a third -party actuarial review performed in connection with � due'ddtgeitce and integration of the BFI acquisition As of_September;30, 1999, we _ instituted a guaranteed cost insurance program'for all casualty insurance coverages. As a result; w$ are fully insured for arty suc(t'claims occurring subsequent to that date. In connection with the the BFI acquisition, we reviewed - the existing contracts of the business for recoverability. Several contracts were identified which were in a loss position when the direct costs (excluding any non -variable type costs) attributable to the contract were deducted from the revenue to be generated by the contract. Consistent with our accounting policies, we recorded a charge of approximately $32.6 million to operations for the excess of costs over revenues of the identified contracts. As a result of the acquisition of BFI, management reassessed the level of acquisitions that it would pursue in the future and decided that certain companies that were being targeted will no longer be pursued. Accordingly, we wrote off $26.1 million of deferred charges previously incurred in connection with these potential acquisitions. Additionally, we wrote off $33.8 million of commitment fees paid in connection with a portion of the financing of the BFI acquisition. These fees were associated with funds that were not ultimately drawn due to alternative sources of financing becoming available. However, as secured financing for the entire purchase price of the acquisition was a condition of the signing of the merger agreement with BFI, and the debt associ- ated with these fees was not incurred, the cost was written off in the third quarter. In connection with the integration plan for BFI, we identified and notified approximately;F 1,500 employees that they would be retained for a specified period, generally not exceeding nine months from the acquisition date, to perform transition related functions. Subsequent_..% to the specified time period, they will be terminated. Additionally, we identified certain offices and operations, which are duplicative, and we are in the process of consolidating these operations. As these transition costs are not accruable until committed or paid, approximately $67.4 million of transition costs were expensed during 1999. Additionally, we accrued approximately $10.0 million of committed transition costs during the year. We estimate that we may incur approximately $115 million of additional transition expenses associated with the integration of BFI over the subsequent quarters. Additionally, we recorded approximately $43.5 million of non -cash asset impairments related to the valuation of Allied assets held for sale, approximately $1.8 million of non -cash asset impairments related to duplicative facilities, and approximately $0.4 million of restructuring and abandonment costs related to other 1999 acquisitions. Any subsequent changes in estimates of acquisition related and unusual costs will be included in the acquisition related and unusual costs caption of the statement of operations in the period in which the change in estimate is made. During 1999, approximately $7.2 million of accrued acquisition related costs associated with 1998 acquisitions -� were reversed to acquisition related and unusual costs. 46 ] Allied Waste lnduddo% let. 19" Annual Report The following table reflects the cash activity related to the acquisition related and - - unusual costs accrued during 1999 - - _ _ `19i; - x'T Additions 1999 + Balance ' '"thiough '"Non Cash .i;. .. - 1999 Aem6ining _ " . (in Thousands) ". ; <, ..! •;,- ,.:; ., ---: - �„ 'r .—..:,.Expenseul " ji _. "Charges ; Expendimm , Dec. 31; 1999 ";Translnon costs " $ 77350{ $ $(7,4,654) , $ 2,696 Restructuring and abandonmenrcosts 387 Lossconfracts'' 32;643 (6,058) .= 26;S85 Enviionmeotal;'litigarIon, - and regulatory compliance costs 38C,500 ?'` — (9,455) .. 371,045 Asset impairments '- 105,186 (105,186)— Total $596,066 $ (105,186) _..$(90,167) $400,713 hi Additionally during 1999, we mersed approximately $7.2 million of accruals to acquisition related and unusual costs [elated to 1998 acquisitions. 1998 During the year ended December 31, 1998, we recorded acquisition related and unusual costs in the amount of $317.6 million. These costs consist of transaction and deal costs, employee severance and transition costs, environmental related matters, litigation liabilities, regulatory compliance matters, restructuring and abandonment costs, loss contract provisions and non -cash asset impairment charges. We do not anticipate that future costs to be incurred in connection with the 1998 acquisitions will be significant as restructuring and transition activities associated with these acquisitions had been substantially completed as of December 31, 1998. The 1998 acquisition related and unusual costs discussed below predominantly relate to acquisitions accounted for as poolings-of-interests and consist of the following: Direct transaction and deal costs of $51.2 million including investment banker, attorney, accountant, environmental assessment and other third -party fees. Approximately $11.7 million was accrued at December 31, 1998 and was paid during the first six months of 1999. Employee severance and transition costs of $73.6 million consisted of $39.3 million in termination payments made to employees of acquired companies based on change of control provisions in preexisting contracts and $34.3 million of costs associated with severance payments under exit or integration plans implemented in connection with _ acquisitions made during 1998. Exit plans primarily related to the elimination of duplicate corporate and administrative offices of companies acquired. Integration plans included the combination of field activities for human resource, accounting, facility maintenance, health and safety compliance and customer service activities of companies acquired with field activities similar to ours. The exit and integration plans called for the termination of approximately 800 employees who performed managerial, sales, administrative support, maintenance and repair, or hauling and landfill operations duties. All employees were identified and notified of their severance or transition benefits at the time management approved the plan, which occurred at or around the time of the acquisitions. Approximately $10.1 million was accrued at December 31, 1998, substantially all of which has been paid in 1999. - Environmental related matters, litigation liabilities and regulatory compliance matters assumed in acquisitions totaled $73.4 million. Subsequent to the acquisitions, we made certain changes in accounting estimates due to events and new information becoming available for environmental liabilities of approximately $41.1 million, litigation liabilities of approximately $20.8 million and regulatory compliance liabilities of approximately $11.5 million. Allied Waste Industries, Inc. 19a9 Annual Report C 47 'As part of our acquisition due diligence process, environmental assessments were performed at the time of acquisition by third -party and in-house engineers. The assessments were performed at over 150 operating sites owned or used by the 54 companies acquired by Allied in 1998. Additional environmental liabilities were accrued based on the results of the assessments and represent the most probable outcome of these identified contingent Q�'.' matters. Additional accrued environmental liability of $27:1 million was comprised of required remedial activities identified at 28 separate locations, These locations include eight landfills acquired by Allied, 15 landfills not owned by,'Alhed, but used for disposal by collection companies acquired, and transfer stations and rmuntenance facilities acquired. Required remedial activities include the removal and treatment of Waste irmpoperly disposed of, containment and abatement of landfill gas migration, removal and disposal of contaminated soil and hazardous waste and legal and administrative costs, of the settlement of Superfund claims. The additional $14 million of environruental'accruals related to removal and treatment of leachate at landfills, the level of which exceeded permitted amounts at seven of the acquired landfills. At December 31, 1998, approxi- mately $41.1 million and $15.8 million was accrued for environmental matters and legal and regulatory compliance matters, respectively, which are expected to be disbursed in future periods. The change in estimate relating to litigation and regulatory compliance liabilities was accrued based on legal due diligence performed by in-house and outside legal counsel for acquired companies at the time of acquisition and the determination of the most probable loss incurred. As a result of this legal due diligence, we identified 14 companies acquired in business combinations accounted for as poolings-of-interest which had an aggregate of 54 asserted and unasserted claims involving matters such as contract disputes, employment related disputes, real and personal property and sales tax issues and billing disputes. Additionally, we identified regulatory compliance issues related to 12 companies acquired, which included citations for certain state and federal health.,r-^ -, safety and transportation violations and the associated costs of fines, assessments and - required maintenance costs to bring facilities and equipment into compliance. i Restructuring and abandonment costs were $42.1 million in business combinations accounted for as pooling -of -interests. Costs to relocate redundant operations and to transition them to common information systems were $23.1 million. Redundant operations consisted primarily of activities for human resources, accounting, facility maintenance, health and safety compliance and customer service which were performed in field offices of companies acquired. Abandonment costs and losses on the disposal of duplicate revenue producing assets relating to specifically identified transfer stations and recycling facilities were $8.8 million. Revenue and net operating income of the abandoned operations represented less than one percent of our consolidated amounts. Additionally, $10.2 million of costs were incurred for the disposition of redundant non -revenue producing assets. This includes $7.6 million that was accrued at December 31, 1998 in accordance with exit and integration plans, substantially all of which has been paid in 1999. This accrual was for payments under non -cancelable lease agreements for corporate offices that were vacated and other costs to close corporate facilities after operations have ceased under exit plans implemented during 1998 at five companies acquired. Loss contract provisions were $7.6 million for losses associated with collection contracts and other contractual obligations assumed in acquisitions. Approximately $5 million was accrued at December 31, 1998 and was paid during 1999. 48 ] Allied Waste Industries, Ins. 1999 Annual Report - During the fourth quarter of 1998, we recognized non -cash asset. impairment charges - - aggregating $69.7 million. These charges related to assetsheldfor future use and assets - - which were disposed of during the first six'months of 1999. An impairment charge of $4S.9 million, with no associated tax benefit, was recorded relating to goodwill �✓ recorded by American Disposal Services `Inc' ("ADSI") in connection with ADSI's September 1997 acquisition of Fred Barbara Trucking, a private waste transportation business Additionally, an impairment charge of $23.8 million was recorded for the write=down to net realizable value less cost of disposal of asset to be sold relating to non -core or non-integrated operating districts Any subsequent changes in estimates of acquisition related and unusual costs will be included in the acquisition related and unusual costs caption of the statement of operations in the period in which the change in estimate is made. During 1999, approximately $7.2 million accrued acquisition -related costs associated with 1998 acquisitions were reversed to acquisition related and unusual costs. The following table reflects the activity related to the 1998 acquisition related and unusual costs: 1998 Balance 1998 Non -Cash 1998 1999 1999 Remaining (in thousands) Expense Charges Expenditures Expenditures Adjustments Dec. 31, 1999 Transaction and deal costs $ 51,200 $ — $ (39,529) $(10,952) $ (719) $ — Severance and transition costs 73,619 — (63,493) (8,800) (854) 472 Restructuring and abandonment costs 42,098 (18,514) (15,954) (2,353) (4,680) 597 Loss contracts 7,569 — (2,587) (4,623) (359) — Environmental, litigation and regulatory compliance costs 73,416 — (16,482) (16,589) (599) 39,746 Asset impairments 69,714 (69,714) — — — — Total $317,616 $(88,228) $(138,045) $(43,317) $(7,211) $40,815 Extraordinary Losses. 1999 In July 1999, we replaced our credit facility and recognized an extraordinary charge of approximately $5.3 million ($3.2 million net of income tax benefit) related to the write-off of previously deferred debt issuance costs. 1998 In December 1998, we replaced our 1996 Notes and Senior Discount Notes with $1.7 billion in senior notes and recognized a charge of approximately $201.2 million ($121.7 million net of income tax benefit) related to premiums paid for the early payment of the 1996 Notes and the Senior Discount Notes and the write-off of previously deferred debt issuance costs. In June 1998, we replaced our credit facility and recognized an extraordinary charge of approximately $5.1 million ($3.1 million net of income tax benefit) related to the write-off of previously deferred debt issuance costs. Allied Wane Industries, Inc. 1999 Annual Report C 49 1997 In May 1997, we repurchased from the Laidlaw, Inc. two junior subordinated debentures - with an aggregate face amount of $318 million and a warrant to acquire 20.4 million shares of common stock, used as partial consideration for the acquisition of the solid waste operations of Laidlaw, Inc., for an, aggregate purchase "price of $230 million in " .cash. An extraordinary charge to earnings related to the repurchase of approximately $65 7 milliou'($39 4,million net of income tax benefit) was recorded. In'addition, we replaced our $I. 275 billion Bank Agreement with the $900 million seniorcredit facility (the "1997 Credit Agreement") in June 1997 and recognized an extraordinary charge of approximately $21.6 million"($13.0 million net of income tax benefit). In September 1997, we sold 18.6 million shares of common stock with net proceeds from the equity offering of approximately $327.4 million. We used $203 million of the net proceeds from the equity offering to retire a portion of the term loan facility of the 1997 Credit Agreement and $71 million to repay the entire amount outstanding on the revolving credit facility. As a result of the early repayment of debt outstanding under the term loan facility, we recognized an extraordinary charge in the third quarter of 1997 of approximately $1.3 million ($0.8 million net of income tax benefit) for the write-off of previously deferred debt issuance costs. Statements of Cash Flows. The supplemental cash flow disclosures and non -cash transactions for the three years ended December 31, 1999 are as follows: (in thousands) Year Ended December 31, 1999 1998 1997 Supplemental Disclosures: Interest paid (net of amounts capitalized) $ 312,623 $ 62,386 $ 86,125 Income taxes paid (proceeds received) (74,855) 33,653 17,244 Non -cash Transactions: Common stock, preferred stock or warrants issued in acquisitions or as commissions $ 1,573 $124,854 $ 73,570 Capital leases — 1,187 38,693 Debt and liabilities incurred or assumed in acquisitions 1,850,162 65,409 207,806 Debt converted to common stock — — 2,265 Non -cash purchase and sale of operating business — — 181,434 Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Final settlement amounts could differ from those estimates. Interest Rate Protection Agreements. Interest rate protection agreements are used to reduce interest rate risks and interest costs of our debt portfolio. We enter into these agreements to change the fixed/variable interest rate mix of the portfolio to reduce our aggregate exposure to increases in interest rates. We do not hold or issue derivative financial instruments for trading purposes. Hedge accounting treatment is applied to interest rate derivative contracts that are designated as hedges of specified debt positions. Amounts payable or receivable under interest rate swap agreements are recognized as adjustments to interest expense in the periods in which they accrue. Net premiums paid for derivative financial instruments are deferred and recognized ratably over the life of the instruments. Under hedge accounting treatment, current period income is not 50 Allied Waste Industrisu, Ina 19" Annual Report affected by the increase or decrease in the fair market value of derivative instruments as interest rates change because these instruments are not reflected in the financial statements at fair market value - - _ - Fair Value of Financial Instruments. The following disclosure of the estimated fair value of financial instruments is made in accordance ,with the requirements of Statement of Financial Accounting Standards No 107, ("SFAS 107". ), Disclosures"About Fair Value ur. of Financial Instruments. Our.financial instruments as defined by SFAS 107, include'.- - cash, money market funds, accounts receivable, accounts payable and long-term,debt. We have determined the estimated fair value amounts at Decembei 31 I using available market information and valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of. fair value. Accordingly, the estimates may not be indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions or valuation methodologies could have a material effect on the estimated fair value amounts. The carrying value of cash, money market funds, accounts receivable and accounts payable approximate fair values due to the short-term maturities of these instruments (See Note 6 for fair value of debt). Stock -based Compensation Plans. We account for our stock -based compensation plans under Accounting Principles Board Opinion No. 25, ("APB 25") which does not require a charge to the statement of operations for the estimated fair value of stock options issued with an exercise price equal to the fair value of the common stock on the date of grant. Statement of Financial Accounting Standards No. 123 ("SFAS 123"), Accounting for Stock -based Compensation requires that companies, which do not elect to account for stock -based compensation as prescribed by this statement, disclose the pro forma effects on earnings and earnings per share as if SFAS 123 had been adopted. Additionally, certain other disclosures with respect to stock compensation and the related assumptions are used to determine the pro forma effects of SFAS 123 (See Note 11). Recently Issued Accounting Pronouncements. In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 137, Accounting for Derivative Instruments and Hedging Activities —Deferral of the Effective Date of _ FASB Statement No. 133, an amendment of SFAS No. 133. This statement defers, for one year; the effective date of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to those fiscal years beginning after June 15, 2000. SFAS No. 133 requires all derivatives to be recorded as either assets or liabilities and the instruments to be measured at fair value. Gains or losses resulting from changes in the values of those derivatives are to be recognized immediately or deferred, depending on the use of the derivative, and whether or not it qualifies as a hedge. We will adopt SFAS No. 133 by January 1, 2001, as required. We are currently assessing the impact of this statement on our results of operations and financial position. 2. Business Combinations and Divestitures Acquisitions accounted for under the poolings-of-interests method are reflected in the results of operations as if the acquisition occurred on the first day of the earliest year presented. Acquisitions accounted for under the purchase method are reflected in the results of operations since the effective date of the acquisition. For those acquisitions accounted for using the purchase method, we allocate the cost of the acquired business to the assets acquired and liabilities assumed based upon their estimated fair values. These estimates are revised during the allocation period as necessary when, and if, information regarding contingencies becomes available to further define and quantify •�' assets acquired and liabilities assumed. The allocation period varies but generally does not exceed one year. To the extent contingencies are resolved or settled during the Allied Waste Industries, Inc. 1999 Annual Report [ 51 allocation period, such items are included in the revised. allocation of the purchase price. Purchase accounting adjustments, acquisition related costs and other possible charges that may arise from the acquisitions may materially impact our future consolidated financial position and consolidated financial results of operations. The acquisition of BFI has been accounted for as a purchase and, accordingly, the operating results of BFI have been included in our Consolidated Financial Statements since the date of acquisition. The excess of the aggregate purchase price over the fair market value of net assets was acq-Wred of approximately $6.7.billion. The following table reflects the allocation of purchase price for the acquisition of BFI, _. giving effect to asset divestitures described .I Note 3: (in thousands) - Current assets, including assets classified as held for sale $ 2,584,387 Property and equipment, net 1,943,906 Goodwill 6,672,992 Noncurrent assets 678,139 Current liabilities (1,142,469) Long-term debt (1,755,501) Other long-term obligations (1,327,003) Total net assets $ 7,654,451 Included in current liabilities above is approximately $139.7 million of transactions, severance and transition costs of which $99.0 million remains to be paid as of December 31, 1999. During 1999, we acquired two companies in transactions accounted for as poolings- ,� _ of -interests. As the impact of these poolings on net assets, revenues and net income was�rv" less than one percent of our consolidated net assets, revenues and net income, prior period financial statements were not restated to include historical operating results of ithe acquired companies. _ The following table summarizes acquisitions for the three years ended December 31, 1999, j excluding the acquisition of BFI: 1999 1999 1997 Number of businesses acquired accounted for as: Poolings-of-interests "2 19 9 Purchases 52 35 26 Total acquisitions 54 54 35 Total consideration (in millions) $467.5 $2,329.0 $730.8 Shares of common stock issued (in millions) 1.6 79.5 7.0 Unaudited Pro Forma Statement of Operations Data. The following table compares, for the years ended December 31, 1999 and 1998, reported consolidated results of operations to unaudited pro forma consolidated data as if all of the companies acquired in 1999 and 1998 accounted for using the purchase method for business combinations were acquired as of January 1, 1998: 52 7 Allied Waale Induetrim Inc. 1999 Annual Report . „ (in thousands, except per share data) ,: -�: .r1999 Reported 1999.... - Pro Forma in : 1998 Reported 1998 Pro Formal) 'Revenues - - $3,341,071 $5,434,956 -$1,575,612 $5,179,803 Net loss before extraordinary losses and cumulative effett of change in accounting principle (221,250) (383,870) , (98,251) (347,633) Net loss available to con igon shaieholders before extraordinary losses and'cumulative effectof change in accounting principle ' j (249039) (45j,286). (98,251) (414,235) Nei loss available to coinmori shareholders before ` extraordinary losses and cumulative effect of change = in accounting principle per common share -basic (1.33). (2.42) (0.54) . _ (2.25) Na loss available to common shareholders before extraordinary losses and cumulative effect of change ` in accounting principle per common share -diluted - (1.33) (2.42) (0.54) (2.25) M The pro forma results of operations exclude planned divestitures of certain BFI operations resulting from the acquisition of BFI and exclude any projected annual cost savings. This data does not purport to be indicative of our results of operations that might have occurred, nor which might occur in the future. 3. Assets Held for Sale The ability to successfully implement our vertical integration business plan is a key consideration in determining whether we will continue to operate in a specific market. In the normal course of business, we have exited markets in which the execution of the vertical integration business plan was not practicable. In October 1998, we formalized plans to dispose of certain operating districts (the "Operating Districts”) that represented non -core or non-integrated operations. We entered into agreements to sell these operations and in accordance with SFAS 121 recorded an impairment loss to reduce the carrying value of the assets to net realizable value including an accrual for the cost of disposal. We completed the sale of these assets during the first six months of 1999. In July 1999, management formalized plans to dispose of certain operations required to be divested by governmental order as a condition for approval of the acquisition of BFI (the "Allied Divestitures"). Additionally, management identified other Allied operating districts (the "Allied Operations") in which our vertical integration plan was not practicable as a result of the BFI transaction and therefore these districts were identified for divestiture. All of these operations had been owned prior to the acquisition of BFI. In accordance with SFAS 121, an impairment loss of $43.5 million was recorded during 1999 to reduce the carrying value of the assets to the net realizable value including an accrual for the cost of disposal. We completed the sale of certain assets of the Allied Divestitures for approximately $23.0 million during the fourth quarter of 1999. Accordingly, this amount is not included in assets held for sale in the consolidated balance sheets at December 31, 1999. The results of operations before depreciation and amortization, acquisition related expenses and other incometexpense of the Operating Districts, the Allied Divestitures and Allied Operations included in consolidated operating income, in accordance with SFAS 121, was approximately $11.1 million during the 12 months ended December 31, 1999. From _ 1 the date the assets were classified as held for sale, we excluded from our Consolidated Statements of Operations, in accordance with SFAS 121, depreciation and amortization in the amount of $6.3 million. - Allied Waste Industries, Inc. 1999 Annual Raped C 53 BFI Assets iConcurrent with the acquisition of BFI certain BFI o erations were id 'f d p enn le by management as non -core or non-integrated operations and are expected to be divested along with certain operations required by governmental order to be divested. These operations include BFI's Canadian operations ("BFI Canada'% medical waste operation ("BFI Medical Waste"), gas systems operat0. ions,("BFI Gas") and certain solid waste operations ("BFI Solid Waste Divestitures") (collectively, the BFI Divestitures"). The sales of these operations are being accounted, for in accordance with EmergingIssues Task Force Issue 87-11 - Allocation of Purchase Price to Assets to Be Sold. The BFI Divestitures are being carried at the net realizable value -based on the current terms of transactions expected to be closed in 2000 including accruals for cost of disposal, operating income and allocable interest expense. Accordingly, -approximately $49.7 million of consolidated operating income excluding acquisition related charges and other income and approximately $45.5 million of allocable interest expense related to the BFI Divestitures were excluded from the consolidated statements of operations for the 12 months ended December 31, 1999 and was included in assets held for sale on the consolidated balance sheet. We completed the sale of BFI Medical Waste to Stericycle, Inc. for approximately $410.5 million in cash and certain assets of the BFI Solid Waste Divestitures for approximately $27.7 million during the fourth quarter of 1999. Accordingly, these amounts are not included in assets held for sale in the consolidated balance sheets at December 31. 1999. At December 31, 1999, and 1998, the assets held for sale totaled $891.9 million and $143.8 million, respectively, and are classified as current assets on the Consolidated Balance Sheets and are summarized as follows: (in thousands) December 31, 1999 December 31, 1998 Accounts receivable, net $ 90,396 $ 16,608 Other current assets 16,478 4,460 Property and equipment, net 616,973 55,869 Goodwill, net 247,383 106,214 Other long-term assets 5,405 1,595 Current liabilities (64,682) (1,785) Long-term liabilities (20,053) (39,211) Total net assets $891,900 $143,750 4- Property and Equipment Property and equipment at December 31, 1999 and 1998 is as follows: (in thousands) 1999 1998 Land and improvements $ 437,119 $ 168,569 Land held for permitting as landfillst'I 98,914 95,463 Landfills 1,637,782 1,063,598 Buildings and improvement Vehicles and equipment Containers and compactors 454,416 162,989 1,114,130 500,811 611,889 247,173 Furniture and office equipment 120,636 18,655 4,474,886 2,257,258 Accumulated depreciation and amortization (736,498) (481,233) $3,738,388 $1,776,025 to These properties have been approved for use as landfills, and we arc currently in the process of obtaining the necessary permits 54 ] ' Allied Waste Industries, Ins. 1999 Annual Report 5. Investments In Unconsolidated. Subsidiaries We use the equity. method of accounting for investments in unconsolidated subsidiaries' over which we exercise control through a 20% to 50% ownership. interest. The summarized combined balance sheet and the statement of operations data presented in the table below indicates amounts related to the following equitymvestees acquired in the BFI acquisition in which we exercise control through a 50% ownership interest: . American Ref -Fuel Company, American`Ref-Fuel Company bf Hempsiead, American' Ref -Fuel Compariy'of Essex,'American Ref -Fuel Company'of Southea's`tern Connecticut, American Ref -Fuel Company of Niagara, AmericanlRef-Fuel Company of SEMASS, LP, American Ref -Fuel Operations of SEMASS, LP. There were no investments in unconsolidated subsidiaries prior to the acquisition of BFL Summarized Combined Balance Sheet Data. (in thousands) As of December 31, 1999 Current assets $ 147,863 Property and equipment, net of accumulated depreciation 1,116,711 Other non -current assets 248,378 Current liabilities 127,989 Long-term debt, net of current portion 1,123,414 Other long-term liabilities 199,828 Retained earnings 61,721 Summarized Combined Statement of Operations Data. (in thousands) For the Period July 31, 1999 through December 31, 1999 (unaudited) Totalrevenue $146,940 Operating income 52,216 Net income 27,328 Our investments in and advances to equity investees approximates $274.7 million at December 31, 1999, consisting of investments in excess of underlying equity of $170.1 million, subordinated note and other receivables of $73.7 million, and our proportional share of net assets of $30.9 million. For the period from July 31, 1999 through December 31, 1999, our equity in earnings of equity investees and dividends received from equity investees were approximately $20.8 million and $34.0 million, respectively. Differences between the equity in earnings of equity investees we reported and our proportionate share of the combined earnings of the related investees have resulted principally from accounting differences in the recognition of expenses, goodwill amortization and the elimination of intercompany transactions. Allied Waste Industries, Inc. 1999 Annual Report [ 55 6.Lony-term'Debt ;..- . - - - - Long-term debt at December 31, 1999 and 1998 consists of the following: (in thousands) - - .1999 1998..;;' _ Senior credit facility, weighted, average interestand effective rate of 6 00% $ - : $ 300,000 Revolving credit facility, effective rate of 9.00% 65,000 - - Senior notes, interest at 7.38%,effective fate. of 7.41% net of unamortized discount of $274 and $331 , -:. 224,726 : 224,669 Senior notes, interest and effective rate of 7.63% _ 600,000 600,000 Senior notes, interest at 7.88%, effective rate of 7.91%,net of unamortized discount of $1,417 and $1,522 873583 873,478 Asset sale term loan facility, effective rate of 9.00% - 99,496 - Tranche A term loan facility, effective rate of 8.68% 1,750,006 - Tranche B term loan facility, effective rate of 8.88% 1,250,000 - Tranche C term loan facility, effective rate of 9.13% 1,500,000 - Tranche D term loan facility, effective rate of 10.50% 500,000 - Senior subordinated notes, interest at 10.00%, effective rate of 9.92%, .__ including unamortized premium of $8,119 2,008,119 - Senior notes, interest at 6.10%, effective rate of 8.63%, net of unamortized discount of $10,671 146,018 - Senior notes, interest at 6.38%, effective rate of 9.78%, net of unamortized discount of $25,446 135,754 - Senior notes, interest at 7.88%, effective rate of 9.08%, net of unamortized discount of $3,240 66,261 - Debentures, interest at 7.40%, effective rate of 10.38%, net of unamortized discount of $81,526 278,474 - Debentures, interest at 9.25%, effective rate of 9.95%, net of unamortized discount of $4,778 94,722 - Market value put securities, interest at 6.08%, effective rate of 6.32%, net of unamortized discount of $295 249,705 - Solid waste revenue bond obligations, weighted average interest rate of 6.30% and 7.02%, weighted average effective rate of 6.50% and 7.02% at December 31, 1999 and 1998, respectively, net of unamortized discount of $5,131 and $0, respectively 316,299 81,050 Notes payable to banks, finance companies, and individuals, weighted average interest rates of 5%-10% and principle payable through 2007, secured by vehicles, equipment, - real estate, accounts receivable or stock of certain subsidiaries - 54,648 6,326 - Notes payable to individuals and a commercial company, interest of 5%-10%, principal and interest payable through 2006, unsecured 15,624 18,296 Obligations under capital leases of vehicles and equipment, weighted average interest of 8.00% and 8.10% at December 31, 1998 and 1999, respectively 14,790 36,624 10,243,219 2,140,443 Current portion 1,002,928 21,516 $ 9,240,291 $2,118,927 56 Allied Waste Industries, Inc. 1999 Annual Pepart In connection with the BFI acquisition igJuly 1999, we repaid.the Senior Credit Facility. and entered into a new credit facility' (the "1999 Credit Facility"). The 1999 Credit Facility provides a $1:5-.billion.six-year revolving credit facility, a $556 million two- year asset sale term loan (the Asset Sale Term Loan".), a $1,750 million six -year. � I Tranche A term loan (the""Tran'che A'Term.Loan"), a $1,250 million seven-year - - Tranche B term loan (the•."Tranche B Term Loan"), a $1,500 million eight -year. .Tranche C term loan (the:..";Tranche C,.Term Loan") and a $500 mtllion eight year Tranche D term IQan (the "Tranche D:Term Loan"). ...c. The 1999 Credit Facility bears interest; at' (a) an Alternate Base Rate or-(b) a a Eurodollar Rate, both terms defined in the 1999 Credit Facility, plus in either, case, an applicable margin and may be used for acquisitions, the issuance of letters of credit, working capital and other general corporate purposes. Of the $1.5 billion available under the Revolving Credit Facility, no more than $800 million may be used to support the issuance of letters of credit. As of December 31, 1999, approximately $1.0 billion was available on this facility. We are required to make prepayments on the 1999 Credit Facility upon completion of certain asset sales and issuances of debt or equity securities. Proceeds from asset sales are to be applied first to reduce borrowings under the Asset Sale Term Loan, second to reduce the borrowings under the Tranche A, B and C Term Loans on a pro rata basis or the Tranche D Term Loan. Required prepayments are to be made based on a percentage of the net proceeds of any debt incurrence or equity issuance. Proceeds of an issuance of debt or equity are first applied to reduce borrowings under the Tranche D Term Loan, second to reduce borrowings under the Asset Sale Term Loan and third to reduce the borrowings under the Tranche A, B and C Term Loans on a pro rata basis. In July 1999, Allied Waste North America, Inc. ("Allied NA"; a wholly owned consoli- dated subsidiary of Allied issued $2.0 billion of senior subordinated notes (the "1999 _ - Notes") in a Rule 144A offering. In January 2000, these notes were exchanged for substantially identical notes (which are also referred as the 1999 Notes) registered under the Securities Exchange Act of 1933. Interest accrues on the 1999 Notes at an interest rate of 10% per annum, payable semi-annually on May 1 and November 1 beginning on November 1, 1999. We used the proceeds from the 1999 Notes as partial financing of the acquisition of BEL We, together with substantially all of our subsidiaries, guarantee the 1999 Notes. In connection with the BFI acquisition on July 30, 1999, we assumed all of BFI's debt securities with the exception of commercial paper that was paid off in connection with the acquisition. BFI's debt securities were recorded at their fair market values as of the date of the acquisition in accordance with Emerging Issues Task Force Issue 98-1 — Valuation of Debt Assumed in a Purchase Business Combination. The effect of revaluing the debt securities formerly owned by BFI resulted in an aggregate discount from the face amount of $137.0 million. The debt assumed in connection with the acquisition, includes 6.08% Market Value Put Securities ("MVPs") with a face amount of $250.million due January 18, 2002, 6.10% Senior Notes with a face amount of $156.7 million due January 15, 2003, 6.375% Senior Notes with a face amount of $161.2 million due January 15, 2008, 7.875% Senior Notes with a face amount of $69.5 million that mature on March 15, 2005, 9.25% Debentures with a face amount of $99.5 million that mature on May 1, 2021, 7.40% Debentures with a face amount of $360.0 million due September 15, 2035 and solid waste revenue bond obligations with an aggregate face amount of $236.2 million, a weighted average interest rate of approximately 6.06% and various maturity dates through the year 2027. Allied Waste Ineusalee, Inc. 1999 Wmnal Re9un [ 57 (in thousands( 2000 2001 2002 2003 2004 Thereafter .- -The MVPs have a mandatory put on January 18, 2000. First National Bank of Chicago holds an option to purchase'the MVPs. We repaid the MVPs on January 18, 2000 when First National Bank of Chicago did not exercise its option to purchase the MVPs. The 6.10% Senior Notes, 6,375% Senior Notes and 9.25% Debentures are not redeemable prior to maturity and are not subject to any sinking'fund.: The 7.46%Debentures are not subject to any sinking1tuid and may be redeemed as a whole or in part, at ourbption atany`time. The redecaption price. is equal to the greater of (i) the principal amount of the debentures, and (ii) the present value of future prin- cipal and interest payments discounted .at a rate specified under the terms of the indenture. „ In December 1998, Allied NA issued an aggregate of $1.7 billion of senior notes consisting of $225 million 7.375% senior notes due 2004, $600 million 7.625% senior notes due 2006 and $875 million 7.875% senior notes due 2009 in a Rule 144A offering which were subsequently registered for public trading with the SEC in January 1999. Interest accrued on the 1998 Senior Notes is payable semi-annually on January 1 and July 1, beginning on July 1, 1999. We used the net proceeds from the 1998 Senior Notes to fund the redemption of the 1996 Notes and the Senior Discount Notes pursuant to tender offers we commenced in November 1998 and completed in December 1998, to repay borrowings outstanding under the Senior Credit Facility and certain capital lease obligations, and for general corporate purposes. We, together with substantially all of our subsidiaries, guarantee the 1998 Senior Notes. In June 1998, we repaid $486.8 million outstanding under the 1997 Credit Agreement and entered into a new credit agreement (the "Credit Agreement"). The Credit Agreement provides an $800 million five-year senior secured revolving credit facility and a $300 million five-year senior secured term loan facility (together with the revolving credit facility, the "Senior Credit Facility"). The term loan facility is a funded, amortizing senior secured term loan with annual principal payments increasing from $75 million 'k.. in 2001, to $105 million in 2002, and to $120 million in 2003. Principal under the revolving credit facility is due upon maturity. Future Maturities of Long-term Debt. Aggregate future maturities of long-term debt outstanding at December 31, 1999: 1999 $ 1,002,928111 118,889 271,783 510,977 689,417 7,649,225 nl Consists of $111.0 million that will be repaid in 2000 based on the terms of the indebtedness and $891.9 million of other non -current debt classified as current related m the amounts to be repaid from the proceeds of the asset divestitures classified as assets held for sale in current assets on the balance sheet. 58 ] Allied Waste Industries, Ins. 1999 Annual Report Future payments under capital leases, the principal amounts of which are included - above in future maturities of long-term debt; are as follows at December 31, 1999: . (in thousands) 2000 2001 2002 2063 2004 Thereafter ,Principal `.:Intereit ' Total $ 3,495 $1,030 $ 4,525 3,585 t' -•_848 ..4,433 3,837i 480. 4,317 1,875 252 ; 2,127 " 1,216 123 1,339 782 79 861 $14,790'!:. $2,812 $17,602 Fair Value of Debt and Interest Rate Protection Agreements. We have interest rate risk relating to long-term variable rate debt. To manage the potential interest rate volatility, we enter into interest rate swaps. Interest rate swaps are used to manage the proportion of fixed and variable rate debt based on market conditions. We do not hold or issue derivative instruments for trading purposes. The fair value of our debt and hedging instruments are subject to change as a result of potential changes in market rates and prices. The table below provides information about our long-term debt and interest rate hedges by aggregate principal or notional amounts and weighted average interest rates for instruments that are sensitive to changes in interest rates. The financial instruments are grouped by market risk exposure category. Long-term Debt: Fixed Rate Debt: Principal amount Weighted average interest rate Variable Rate Debt: Principal amount Weighted average interest rate"' Interested Rate Swaps"' Callable: Notional amount Weighted average interest rate Non -callable: Notional amount Weighted average interest rate Balance at Fair Value at Dea. 31, 1999 Dec. 31, 1995 $4,725,018 $4,280,180 8.44% $5,518,201 $5,518,201 8.84% $2,650,000 $ 14,402 5.74% $ 450,000 $ 1,049 5.78% Allied Waste Industries, Inc IM Annual Report 59 (in thousands) 2000 2001 - 2002 . "2003 2004 "Thereafter - Total " Long-term Debt: - - - - - Fixed Rate Debt: - - Principal amount - ; $25,048 $6,409 $9,303 $148,497 $227,917 $4 307,844 - $4,725 018... " Weighted average interest -rate 7.63°/n 8.02% 7.95% 6,13%° 738% 8.71r% 8.44% Variable Rate Debt: Principal amount $977,880") $112,480 $262,480 $362,480 $461,500 ' j341,381 $5,518,201 Weighted average interest rateul 9.67% 8.63% 8.66% 8.67% 8.686/u 8.73% 8.84% Interest Rate Swapsn Callable: Notional amount $1,500,000 $1,150,000 — — — — $2,650,000 Weighted average interest rate 5.68% 5.81% — — — — 5.74% Non -callable: Notional amount $ 450,000 — — — — — $ 450,000 Weighted average interest rate 5.78% — — — — — 5.78% M Consists of $86 million that will be repaid in 2000 based on the terms of the indebtedness and $891.9 million of long-term debt to be repaid from the proceeds of the asset divestitures. nA Reflects the rate in effect as of December 31, 1999 and includes all applicable margins. Actual future rates may vary. Isr All interest rate swaps enable us to pay a fused interest rate in exchange for receiving variable interest rates at LIBOR We have assumed that interest rate swaps that are callable by the counterparty will be called on the exercise date. Debt Covenants. Our 1999 Credit Facility contains certain financial covenants,\ - including, but not limited to, an EBITDA ratio and an interest expense coverage ratio. Additionally, these covenants limit among other things, our ability and our subsidiaries' ability to incur additional indebtedness and liens, make acquisitions and purchase fixed assets above certain amounts, pay dividends, make optional prepayments on certain subordinated indebtedness, make investments, loans or advances, enter into certain transactions with affiliates or consummate a merger, consolidation or sale of all or substantially all of our assets. The 1998 Senior Notes and the 1999 Notes contain certain financial and operating covenants and restrictions which may, in certain circumstances, limit our ability to complete acquisitions, pay dividends, incur indebtedness, make investments and take I certain other corporate actions. - At December 31, 1999, we were in compliance with all applicable covenants. " Substantially all of our subsidiaries are jointly and severally liable for the obligations under the 1998 Senior Notes, the 1999 Notes and the 1999 Credit Facility through unconditional guarantees issued by current and future subsidiaries which are all, except in one minor case, wholly -owned by us. In addition, the 1999 Credit Facility is secured by substantially all the personal property and a pledge of the stock of substantially all of our present and future subsidiaries. 2 60 Allied Waste Industries. Inc. 1999 Annual Report 7. Landfill Accounting We have a network of 151 owned or operated active landfills with a net book value of approximately $1:4 billion it December 3.1, 1999. The landfills have operating lives 1. ranging from one to over 150 years based on available capacity using current annual volumes. The average life of our landfills approximates 39 years.,We use a life -cycle accounting method for landfills`and the related closure and post -closure liabilities. This .. method applies the, costs associated with acquiring, developing, closing and monitoring the landfills overthe associated landfill capacity and associated consumption. On an annual basis, we update the development cost estimates (which include the costs to develop the site as well as the individual mll_construction costs), closure *and post -closure cost estimates and future capacity estimates for each landfill. The cost estimates are prepared by local company and third -party engineers based on the applicable local, state and federal regulations and site specific permit requirements. Future capacity estimates are updated using aerial surveys of each landfill performed annually by third -party engineers to estimate utilized disposal capacity and remaining disposal capacity. These cost and capacity estimates are reviewed and approved by senior operations management annually. Landfill Assets. We use the units of production method for purposes of calculating the amortization rate at each landfill. This methodology divides the costs associated with acquiring, permitting and developing the entire landfill by the total remaining capacity of that landfill. The resulting per unit amortization rate is applied to each unit disposed at the landfill and is recorded as expense for that period. We expensed approximately $81.5 million, or an average of $1.28 per cubic yard consumed, related to landfill amortization during the year ended December 31, 1999. The following is a rollforward of our investment in our landfill assets excluding land held for permitting as landfills: Cumulative Na Book Value Net Book Change in of landfills Net Book Value Accounting Acquired During 1999, landfill landfill Value at _ (m thousands) at Dec 31, 1998 Principle (1) net of Divestitures nl Development Costs Amortization Dec. 31, 1999 $924,698 (85,965) 501,735 162,754 (81,549) $1,421,673 Ill Amount relates in the charge resulting from the change in amounting principle for interest previously capitalized at our active landfills (See Note 1). Rl landfills classified as assets held for sale are included as divestitures. - Costs associated with developing the landfill include direct costs such as excavation, . liners, leachate collection systems, engineering and legal fees, and capitalized interest. Estimated total future development cost for our 151 active landfills is approximately $2.6 billion, excluding capitalized interest, and we expect that this amount will be spent over the remaining operating lives of the landfills. We have available disposal capacity of approximately 2.7 billion cubic yards as of December 31, 1999. We classify this total disposal capacity as either permitted (having received the final permit from the governing - authorities) and deemed permitted. Our internal requirements to classify capacity as - deemed permitted are as follows: . 1. Control of and access to the land where the expansion permit is being sought. 2. All geologic and other technical siting criteria for a landfill have been met, or a variance from such requirements has been received (or can reasonably be expected to be achieved). Allied Waste Industries, Ino. 1999 Annual Report 61 3.The political process has been assessed and there are no indentified impediments that cannot be resolved. 4. We are actively pursuing the expansion permit and an expectation that the final local,'state and federal permits will be received_ within the next five years. G .. .:r S.Senior .operations managementapproval has been obtained. Upon successfully in the preceding criteria, the costs associated with developing, constructing, dosing and monitoring the'total additional future capacity are considered in the calculation of the amortization and closure and post -closure rates. At December 31, 1999, we had 2.11 billion cubic yards of permitted capacity, and at 37 of our landfills, 545.0 million cubic yards of deemed permitted capacity. The following table reflects landfill airspace activity for active landfills we owned or operated for the 12 months ended December 31, 1999: Additions to Additions to Changes in - Balance as of Acquisitions, net Deemed Permitted Airspace Engineering Balance as of (airspace in millions of cubic yards) Dec. 31, 1998 of Divestitures(t) Airspace Airspace Consumed Estimates Dec. 31, 1999 Permitted airspace 1,167.3 976.3 — 20.2 (63.8) 8.0 2,108.0 Number of landfills 76 75 — — — — 151 Deemed airspace 269.3 273.7 35.6 (16.2) — (16.4) 545.0 Number of landfills 21 13 3 — — — 37 Total airspace 1,435.6 1,250.0 35.6 4.0 (63.8) (8.4) 2,653.0 Number of landfills 76 75 — — — — 151 Itl Landfills classified as assets held for sale arc included as divestitures. Allied and its engineering consultants continually monitor the progress of obtaining local, state and federal approval for each of its expansion permits. If it is determined that the expansion no longer meets our criteria, the capacity is removed from our total i available capacity, the costs to develop that capacity and the associated closure and ." post -closure costs are removed from the landfill amortization base, and rates are adjusted prospectively. In addition, any value assigned to deemed permitted capacity would be written -off to expense during the period in which it is determined that the criteria are no longer met. Management periodically reviews the realizability of its investment in our landfill asset base. As part of our annual review, we will evaluate any events and circumstances which may indicate that a landfill be reviewed for impairment. Such review for recoverability will be made using undiscounted cash flows to measure recoverability in accordance with ETTP 95-23. 62 ] Allied Waste Industries, Inc. 1999 Annual Report -closure. Estimated costs and post -closure as required Closure and Post under the Environmental Protection Agency's Subtitle D regulations are compiled and updated annually for each landfill from local and regional company engineers and reviewed by senior management. The future estimated closure and post -closure costs are increased at'an inFlation rate of 2.5%, and discounted at a"risk- free capital rate of 7:0%, per annum; based on the timing of the amounts to be expended. The following fable is a summary of the closure and post closure costs ,December 31,' December 31, . (in d�ousands) - 1999 - 1998 Discounted Closure and Post -closure Liability Recorded: - Current Portion ' $ 75,316 $ - 28,938 Non -current Portion '. 442,632 125,609 Total - $ 517,348 $ 154,547 Estimated Remaining Closure and Post -closure Costs to be Expended: Discounted $1,046,538 $ 396,520 Undiscounted 2,689,485 1,227,792 Estimated Total Future Payments: 2000 $ 75,316 2001 66,652 2002 56,688 2003 68,166 2004 56,514 Thereafter 2,366,149 Our periodic closure and post -closure expense has two components. The first component is the site specific per unit closure and post -closure expense. The per unit rate is derived by dividing the estimated total remaining discounted closure and post -closure costs by the remaining disposal capacity at each landfill (consistent with the capacity used to calculate landfill amortization rates). We use the resulting site -specific rates to record expense during a given period based upon the consumption of disposal capacity during that period. The second component is the accretion expense necessary to increase the accrued closure and post -closure reserve balance to its future, or undiscounted, value. To accomplish this, we accrete our closure and post -closure accrual balance using the current risk -free capital rate and charge this accretion as an operating expense in that period. We charged approximately $35.2 million, or an average of $0.55 per cubic yard consumed, related to per unit closure and post -closure expense and periodic accretion during the year ended December 31, 1999. Changes in estimates of costs or capacity are treated on a prospective basis. Environmental Costs. In connection with the acquisition of companies, we engage independent environmental consulting firms to assist in conducting an environmental assessment of companies acquired from third parties. Several contaminated landfills and other properties were identified during 1999 and 1998 that would require us to incur costs for incremental closure and post -closure measures, remediation activities and litigation costs in the future. Based on information available, we recorded a provision of $267.0 and $41.1 million for environmental matters, in the 1999 and 1998 statements of operations, respectively, and expect these amounts to be disbursed over the next 30 years. Allied Waste Industries, Ins. 1999 anneal Report C 63 ultimate amounts for environmental liabilities cannot be determined and estimates of such liabilities made by us, after consultation with our independent environmental engineers, require assumptions about future events due to a number of uncertainties including the extent of the contamination, the appropriate remedy, the financial viability!"'1 of other potentially responsible parties and the final apportionment of responsibility among the potentially responsible parties. Where we have concluded that our estimated share of.potential liabilities is probable, a provision has been made in the Consolidated Financial Statements. Since the ultimate outcome of these matters may differ from the estimates used in our assessment to date, the recorded liabilities will be periodically evaluated, as additional information becomes available to ascertain whether the accrued liabilities are adequate. We have determined that the recorded liability for environmental matters as of December 31, 1999 and 1998 of approximately $478.2 million and $93.4 million, respectively, represents the most probable outcome of these contingent matters. We do not reduce our estimated obligations for proceeds from other potentially responsible parties or insurance companies. If receipt is probable, proceeds are recorded as an offset to environmental expense in operating income. There were no significant recovery receivables outstanding as of December 31, 1999 and 1998. We do not expect that adjustments to estimates, which are reasonably possible in the near term and that may result in changes to recorded amounts, will have a material effect on our consolidated liquidity, financial position or results of operations. However, we believe that it is reasonably possible the ultimate outcome of environmental matters, excluding closure and post -closure, could result in approximately $33 million of additional liability. The following table shows the activity and balances related to environmental accruals and for closure and post -closure accruals related to open and closed landfills from December 31, 1996 through December 31, 1999: Balance at Charges to Other Balance at. - (in thousands) 12/31/96 Expense Charges(l) Payments 12/31/97 Environmental costs $ 45,100 $ - $ 20,895 $ (2,233) $ 63,762 Open landfills closure and post -closure costs 81,572 9,579 21,287 (8,687) 103,751 Closed landfills closure and post -closure costs 41,209 3,341 - (3,670) 40,880 Balance at Charges to Other Balance at 12/31/97 Expense Charges") Payments 12/31/98 Environmental costs $ 63,762 $ 41,100 $ - $(11,489) $ 93,373 Open landfills closure and post -closure costs 103,751 15,384 3,820 (1,596) 121,359 Closed landfills closure and post -closure costs 40,880 2,223 - (9,915) 33,188 Balance at Charges to Other Balance at VJ31199 Expense Charges(r) Payments 12/31/99 Environmental costs $ 93,373 $267,034 $131,909 $(14,122) $478,194 Open landfills closure and post -closure costs 121,359 28,163 175,955 (11,677) 313,900 Closed landfills closure and post -closure costs 33,188 7,079 176,266 .(12,985) 203,548 111 Amounts consist primarily of liabilities related to acquired companies. 64 ] Allied Waste Industries, Inc. 1999 Annual Report 8. Employee Benefit Plans Effective July 30,.1999, in connection with,the acquisition of BFI, we assumed two defined benefit retirement plans covering substantially all BFI employees in.the United 5 ,;1 States, except for certain employees subject to;co11ect1ve bargaining agreements. The " BFI retirement plan was amended on July 30 1999 to freeze fufure credited service, « but interesi'credits will continue to accrue. Cetrain union participants will continue 4 to receive 2% annual service credits in'addrnoh to'ititerest credits thiough the'duration" of the current collectivebargaining agreements The benefits not frozen for this plan__ are based on years'of service and the employee's compensation.' Our general funding policy for each pension plan is to make annual contributions to the plans as determined to be required by the plans' actuary. The BFI San Mateo Pension Plan covers substantially all employees of this location. Benefits are based on the employee's years of service and compensation using the average of earnings over the highest five consecutive calendar years out of the last 15 years of service. For both plans, an actuarial valuation report was prepared as of September 30, 1999 and used, as permitted by Statement of Financial Accounting Standards No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits ("SFAS 132"), for the following disclosures: (in millions) As of 13 cember 31, 1999 Actuarial present value of projected benefit obligation $(249.1) Plan assets at fair market value, primarily commercial paper, common stocks and mutual funds 304.3 Projected benefit obligation less than plan assets (prepaid pension costs) $ 55.2 Discount rate 7.7S% -" Rate of increase in compensation levels 4.0% Expected long-term rate of return on assets 10.25% The net pension benefit for the period from July 30, 1999 to December 31, 1999 of $4.7 million is comprised of the expected return on plan assets of $13.2 million less interest cost of the $8.5 million. Actual loss on plan assets, benefits paid, and actuarial gains recognized during the period from July 30, 1999 to December 31, 1999 were $2.6 million, $2.2 million and $5.0 million, respectively. 9. Redeemable Preferred Stock In connection with the BFI acquisition, our Board of Directors adopted a resolution creating a series of one million shares of preferred stock having a par value of $0.10 per share. These shares were designated as Series A Senior Convertible Preferred Stock ("Preferred Stock") and are entitled to vote on, among other things, all matters on which the holders of Common Stock are entitled to vote. Each share of Preferred Stock has the number of votes equal to the number of shares of Common Stock then issuable upon conversion. Shares of Preferred Stock will be entitled to cumulative quarterly dividends in an amount equal to 6.5% per annum of the sum of liquidation preference plus accrued but unpaid dividends for prior quarters. If dividends are not paid in cash, the liquidation preference of the Preferred Stock increases by any accrued and unpaid dividends. Allied Waste Industries, In& 1999 Annual Raped C 65 Common stock, 570 treasury : The Preferred Stock has a redemption price of its then liquidation preference per share, together with any accrued and unpaid dividends. Redemption of the Preferred Stock is at our option in whole, but not in part, at any time on or after July 30, 2004. After July 30, 2002, we have the right to redeem the Preferred Stock in whole, but not in pa at the redeinpnon price only if the then current market. price exceeds`$27 per shale. :• The Preferred Shareholders have the right fo convert each share of Preferred Stock into oa the number of shares of Common Stock obtained by dividing the redemption price plus any accrue and unpaid dividends on the conversion date by the conversion price of $18 per share, subject to customary:anti-dilution adjustments. Upon a change in control, we are required to make an offer to;pi rchase for cash all shares of Preferred Stock at 101 % of liquidation preference plus accrued but unpaid dividends. The amounts added to the liquidation preference during the five months ended December 31, 1999 of the Preferred Stock were approximately $27.6 million or $27.61per share. ' 10. Stockholders' Equity Our authorized, issued and outstanding shares of common stock are as follows: share data) 01 pay net of Issued and Issued and Outstanding at Outstanding at Authorized December 31, December 31, Shares 1999 1998 300,000 188,519 184,495 Warrants to Purchase Common Stock Warrants to purchase common shares at .: M December 31, 1999 and 1998 are summarized as follows: 1999 1998 - Number of shares 347,827 647,827 Purchase price per share $4.60 $4.6045.25 Expiration Dates 2003 1999-2003 11. Stock Option Plans The 1991 Incentive Stock Plan ("1991 Plan"), the 1993 Incentive Stock Plan ("1993 Plan") and the 1994 Incentive Stock Plan ("1994 Plan," collectively the "Plans") provide for the grant of non -qualified stock options, incentive stock options, shares of restricted stock, shares of phantom stock and stock bonuses. During 1999, the 1991 plan was amended so that the maximum number of shares that may be granted may not exceed 8.0% of the number of fully diluted shares of common stock on the date of grant of an award. An additional maximum number of shares of 500,000 and 2,000,000 common shares may be granted under the 1993 Plan and the 1994 Plan, respectively. After taking into account previously granted awards, awards covering approximately 7,649,575 j shares of common stock were available under the Plans. The Compensation Committee of the Board of Directors generally determines the exercise price, term and other conditions applicable to each option granted. The 1994 Amended and Restated Non -Employee Director Stock Option Plan provides for the grant of non -qualified options to each member of the Board of Directors, who is not also our employee, at a price equal to the fair market value of a common share on the date of grant. The maximum number of shares, which may be granted under ��• , the plan, is 1,150,000 common shares. All options granted under the plan are fully vested and exercisable on the date of grant and expire ten years from the grant date. 66 J Allied Wash Indushies. Inc. 1999 Annual aeperl A summary of the status of our stock option plans at December 31, 199% 1998 and 1997 and for the years then ended is presented in the table and narrative below: .. 1999 -. 1998 •.,-: - 1997. Weighied - c Weighted - Weighted .. .. " Avenge - ,Average .... 1999 Exercise 1998 ' Exercise > 1997.E ' Exercise [Year Ended December 31, - - Options - Pdm - .Options Price Option.-5 Price Options outstanding, beginning of period Options granted Options exercised Options terminated Options outstanding, end of period Options exercisable, end of period 10,786,000 $ 12.97 8,831,266 $ 8.19 5,449,036 , $ 6.10 6,085,000 13.11 3,656,562 22.29 ;,:3,961,100.` 10.86 (1,231,771) 7.97 (1,701,828) 8.50 ' `' `(437,780) 6.04 (224,100) 16.88 — — (141,090) ( 9.10 15,415,129 13.37 10,786,000 12.97 8,831,266 8.19 6,628,574 12.52 6,220,735 11.02 3,498,598 6.67 We account for our stock -based compensation plans under APB 25, under which no compensation expense has been recognized, as all options have been granted with an exercise price equal to the fair value of our Common Stock upon the date of grant. The fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Year Ended December 31, 1999 1998 1997 Risk free interest rate 5.2% to 6.3% 4.7% to 5.6% 5.8% to 7.6% Expected life 5 years 5 years 5 years Dividend rate 0% 0% 0% Expected volatility 47% to 50% 44% to 46% 2S% to 50% Using these assumptions, pro forma net income (loss) and net income (loss) per share would reflect additional compensation expense recognized over the vesting periods of the options. The pro forma income for 1997 includes the impact of certain of our options whose vesting accelerated in 1997 due to a change in control related to an equity financing transaction in connection with the acquisition of the solid waste assets of Laidlaw, Inc. The pro forma loss for 1998 includes the impact of certain ADSI options that vested in 1998 due to a change in control related to the acquisition of ADSI. The resulting pro forma net income (loss), and pro forma net income (loss) per share is as follows: (in thousands, except per share data) Year Ended December 31, Net Income (loss): Net Income (loss) Per Share: 1999 1998 - 1997 As reported $(288,728) $(223,052) $24,042 Pro forma (298,184) (229,928) 11,329 As reported $ (1.54) $ (1.22) $ 0.14 Pro forma (1.59) (1.26) 0.07 Allied Waste Industries, Ina 19" annual Repent 67 The following tables summarize information about stock options outstanding of December 31, 1999 which are fully vested, partially vested and non -vested: Options Outstanding: and Exercisable _ Range of Number - Weighted Average Weighted Aver: Exercise Prices Outstanding Remaining life. 'Exercise Prim $ 4.27—$ 8.38 2,070,515 . 5 years ' $ 5.23 $AA-$12.25 ._ 1,413,399 7years: ;, $ 9.71 $16.44—$21.97 516,132 S yeazs $19.71 $22.8"27.27 933,139 1 year $26.12 Range of Number Weighted Average Weighted Average Exercise Prices Outstanding .Remaining Life - Exercise Prim $ 4.49—$10.00 2,244,144 8 years $ 9.80 $11.38—$15.88 160,000 8 years $14.75 $18.94—$21.19 2,207,800 '9years $21.06 Options Exercisable Range of Number Weighted Average Weighted Average Exercise Prices Outstanding Remaining life Exercise Price $ 4.49—$10.00 989,455 8 years $ 9.60 $11.38—$15.88 74,667 8 years $14.27 $18.94—$21.19 631,267 9 years $21.06 Non -vested Options Outstanding Range of Number Weighted Average Weighted Average Exercise Prices Outstanding Remaining Life Exercise Price $ 4.27—$ 7.31 801,067 10 years $ 7.16 $ 9.50—$13.31 3,833,300 10 years $13.24 `- $15.00—$21.19 1,235,633 12 years $20.01 J� i 68 ] Allied Waste Induslnes, Inc. 1999 Annual Report ..,;.12. Net Income (Loss) Per Common Share . .. sh Net income (loss) per cotiimod'are is'calculated by dividing net income (loss), less dividend requirements onpreferred stock, by the weighted average number of common shares and common share equivalents outstandingduring each period -as restated to reflect acquisitiac ons counted for as Pon ings of -interests The computation of baste earnings per share and diluted earntngs.per share is as follows: } �(m thousands except per ahare data( Ynr Ended December 31, ' 1999 1998 1997�• Basic Earnings per Share Computation Income (loss) before extraordinary losses and cumulative ,.. effect of change in accounting principle - Less: preferred stock dividends Income (loss) available to common shareholders before extraordinary dosses and cumulative effect of, change in accounting principle Weighted average common shares outstanding Basic earnings per share before extraordinary loss and cumulative effect of change in accounting principle Diluted Earnings per Share Computation Income (loss) before extraordinary losses and cumulative effect of change in accounting principle Preferred dividends Income (loss) available to common shareholders before extraordinary losses and cumulative effect of change in accounting principle Weighted average common shares outstanding Effect of stock options and warrants, assumed exercisable Effect of shares assumed pursuant to hold -back arrangements Weighted average common and common equivalent shares outstanding Diluted earnings per share before extraordinary losses and cumulative effect of change in accounting principle $(221,250) "$(98,251) $ 77,247 27,789 — 381 $(249,039) $(98,251) $ 76,866 187,801 182,796 164,888 $ (1.33) $ (0.54) $ 0.47 $(221,250) $(98,251) $ 77,247 27,789 — 391 $(249,039) $(98,251) $ 76,866 187,801 182,796 164,888 — — 6,657 — — 1,413 187,801 182,796 172,958 $ (1.33) $ (0.54) $ 0.44 Conversion has not been assumed for the Series A Senior Convertible Preferred Stock in 1999 into 57,099,364 common shares, as the effects would not be dilutive. Conversion has not been assumed for 7% preferred stock and convertible notes in 1997, as the effects would not be dilutive. 13. Income Taxes We account for income taxes using a balance sheet approach whereby deferred tax assets and liabilities are determined based on the differences in financial reporting and income tax basis of assets, other than non -deductible goodwill and liabilities. The differences are measured using the income tax rate in effect during the year of measurement. We file a consolidated tax return that will include BFI after July 30, 1999. The acquisition of BFI, which was accounted for as a purchase business combination, resulted in approximately $6.7 billion of goodwill, $6.5 billion of which is not amortiz- able for income tax purposes. The impact of the non -deductible amortization during 1999 is reflected in the reconciliation of the federal statutory tax rate to the effective tax rate. The tax accounts established at July 30, 1999, relating to BFI purchase accounting include approximately $100 million of net operating losses, which will result in a $35 million refund of prior period tax payments, and $768 million of capital loss carryforward. As of December 31, 1999, approximately $400 million of BFI capital lelied Waste Indusldes, Ise. las9 Annual Report [ 69 loss carryforwaid•remains unused that will expire if not used by.the end of 2003. We believe that anticipated divestitures relating to the BFI acquisition will generate suffi- cient capital gains to offset most of the capital loss carryforward and we have established a $49 million valuation allowance against the deferred tax asset for the amount of the carryforward which may not offset capital gains As of December 31, ' 1999 approximately $1.9 billion of BFI state net operating loss carryforwards remain unused that will expire at various •times between 2000 and 2019 1f not used. We have established a $78 million "Valuation allowance for the possibility that some of these state carryforwards may not be used. i In addition to the BFI carryforwards, we have state net operating losses of approxi- mately $289 million as of December 31, 1999, which will expire at various times between 2000 and 2019 if not used. We also have federal minimum tax credit of approximately $15.6 million as of December 31, 1999, which are not subject to expiration. The net current deferred tax asset includes the current benefit we expect to receive from the use of our net operating loss, capital loss and minimum tax credit carryforwards. The balance sheet classification and amount of the tax accounts established relating to BFI are based on certain assumptions that could possibly change based on the ultimate outcome of certain tax matters. As these tax accounts were established in purchase accounting, any future changes relating to these amounts will result in balance sheet reclassifications, which may include an adjustment to the goodwill relating to BFI. The increase in total valuation allowance during the year of $136 million is principally due to the BFI acquisition. Subsequent recognition of tax benefits would result in an adjustment to goodwill in an amount up to $127 million. In addition to the valuation allowance relating to the BFI capital loss and state net operating loss carryforward, the net deferred tax asset includes a valuation allowance of $12 million and $3 million as of December 31, 1999 and 1998, respectively, to reflect possible limitations on our ability to use other state net operating loss carryforwards. The components of the income tax provision (benefit) consist of the following: (in thousands) Year Ended December 31, 1999 1998 1997 Current tax provision $65,300 $ 2,000 $78,418 Deferred provision (benefit) (74,056) 41,773 (38,141) Total $(8,756) $43,773 $40,277 The reconciliation of the federal statutory tax rate to our effective tax rate is as follows Year Ended December 31, 1999 1998 1997 Federal statutory tax rate (35.0)% (35.0)% 35.0% Consolidated state taxes, net of federal benefit (0.4) 9.2 3.1 Taxes of pooled companies (0.1) 70.6 (5.1) Amortization of goodwill 11.2 3.7 0.6 Non -deductible writeoff of goodwill and business combination costs 16.2 28.8 — Other permanent differences 4.2 3.0 0.7 Effective tax rate (3.9)% 80.3% 34.3% Tax benefits for the extraordinary items in 1999, 1998 and 1997 were based on our thenle'`• ordinary combined federal and state rates of 39.5%, 39.5% and 40%, respectively. Taxes: benefit for the cumulative effect of change in accounting principle in 1999 was based on our ordinary combined federal and state rate of 39.5%. 70 7 Allied Wash Industries, Inc. 1999 Annual Region The components of the net deferred tax asset (liability) are as follows:,:,_,-„_. _.._ . (in thousands) Year Faded December 31, - - 1999 1998 j Deferred tax liability relating primarily to property consisting , -J. _. of landfill assets, fixed assets and debt basis'differences'` ' $(608,894) `, $(120,942) Deferred Tax Assets Relatmg'To: `' Environmental closure and post -closure ieserves 61,982 `' 23,995 :. Other reserves' " 317,769 _120,293' Net operating loss, capital loss and minimum tax credit carryforwards ` 278,232 " 1 3S1940 Valuation allowance (138,612) (3,076) Total deferred tax asset 519,371, 177,152 Net deferred tax asset (liability) $ (89,523) $ 56,210 The change in the non -current deferred tax liability includes deferred taxes related to 1999 acquisitions the most significant of which was BFI where the financial basis of -- assets acquired differed from the tax basis of those assets. Deferred income taxes have not been provided as of December 31, 1999, on approximately $21 million of undistributed earnings of foreign affiliates which are considered to be permanently reinvested. 14. Commitments and Contingencies We are subject to extensive and evolving laws and regulations and have implemented our own environmental safeguards to respond to regulatory requirements. In the normal course of conducting our operations, we may become involved in certain legal and administrative proceedings. Some of these actions may result in fines, penalties or judgments against us, which may have an impact on earnings for a particular period. We accrue for litigation and regulatory compliance contingencies when such costs are probable and reasonably estimable. We expect that matters in process at December 31, 1999, which have not been accrued in the consolidated balance sheet, will not have a material adverse effect on our consolidated liquidity, financial position or results from operations. In connection with certain acquisitions, we have entered into agreements to pay royalties based on waste tonnage disposed at specified landfills. The royalties are generally payable quarterly and amounts earned, but not paid, are accrued in the accompanying consolidated balance sheets. We have operating lease agreements for service facilities, office space and equipment. Future minimum payments under non -cancelable operating leases with terms in excess of one year are as follows: (in thousands) Year Faded December 31, 1999 2000 $32,749 2001 29,266 2002 26,831 2003 24,364 2004 19,263 Thereafter 58,904 Allied Wavle Iudustries, Inc. 1999 Annual Report C 71 _ - Rental expense under such operating leaseswasapproximately $26.9 million;'$13.9 million and $12.2 million for the three years ended December 31, 1999, respectively. We have entered into employment agreements with certain of our executive officers for periods up to three years. We have, agreed_ to pay severance amounts, equal to a multlpl ; of defined compensation under certain circumstances In the event of a material change in control, as defined in the employment agreements, or termination of all executive officers under such agreements, we would be required.to make payments of approximately $12.3 million, in addition to a reimbursement payment to,elimmate the'effect'of any excise taxes associated with this payment. As a condition of the merger agreement among Allied and BR, we are required to provide severance benefits to certain employees of BFI who'do not Have employment agreements and who would not otherwise receive severance pay upon termination, if terminated within 12 months following the date of acquisition. We carry a broad range of insurance coverage for protection of our assets and operations from certain risks including environmental impairment liability insurance for certain landfills. We are also required to provide financial assurances to governmental agencies under applicable environmental regulations relating to our landfill operations and collection contracts. These financial assurance requirements are satisfied by us issuing performance bonds, letters of credit, insurance policies or trust deposits to secure our obligations as they relate to landfill closure and post -closure costs and performance under certain collection contracts. At December 31, 1999, we had outstanding approximately $1.5 billion in financial assurance instruments, represented by $701.7 million of performance bonds, $656.6 million of insurance policies, $52.1 million of trust deposits and $105.8 million of letters of credit. During calendar year 2000, we expect no material increase in financial assurance obligations relating to our landfill operations and collection contracts`' We have issued bank letters of credit in the aggregate amount of approximately $539.2 million at December 31, 1999, including approximately $105.8 million relating to financial assurances to government agencies. These financial instruments are issued in the i normal course of business and are not reflected in the accompanying balance sheets. The underlying obligations of the financial instruments are valued based on the likelihood of ;.'., performance being required. We do not expect any material losses to result from these off balance sheet instruments based on historical results, and therefore, we are of the opinion that the fair value of these instruments is zero. Certain of our subsidiaries have 50% ownership interests in American Ref -Fuel partner- ships that construct, own and operate facilities which generate and sell electricity from the incineration of solid waste. Substantially all of the remaining ownership interests are held by Duke/UAE Ref -Fuel LLC, an entity indirectly owned 65% by Duke Capital Corporation ("Duke Capital") and 35% by United American Energy Corporation. The five facilities currently in commercial operation under this ownership structure are located in Hempstead, New York, Essex County in New Jersey, Preston, Connecticut, Niagara Falls, New York and Rochester, Massachusetts. Financing arrangements for four of these projects include agreements with Allied and Duke Capital to each severally fund one-half of each partnership's cash deficiencies resulting from the partnership's failure to perform. 72 ] Allied Waste Indusides, Inc. 1999 Annual aepun With respect to the facilities located in Hempstead, New York, Essex _Coun y in New . Jersey and Preston, Connecticut, Allied }and Duke Capital generally will not be required to fund cash deficiencies associated with waste deliveries by the sponsoring municipality below certain minimum levels, changes in law or termination of incineration service for ...e% - reasons other than default by the respective partnership. In'the event of a partnership default which results in termination of incineration service, we'may limit our financial obligations by partnership as followsi - - - 'Hempstead, New York.— Funding of 50% of periodic payments related to r outstanding debt. Average annual debt service on 50% of the debt over the next five years is $12 million. We have guaranteed $15 million of additional partnership debt and annual debt service on such debt is estimated to be $0.5 million. Essex County in New Jersey — Funding of 50% of cash deficiencies including debt service up to $50 to $100 million, depending upon the circumstances. Average annual debt service on 50% of the debt over the next five years is $10 million. Preston, Connecticut — Funding of 50% of periodic payments related to outstanding debt. Average annual debt service on 50% of the debt over the next five years is $5 million. With respect to the facilities located in Niagara Falls, New York and Rochester, Massachusetts, we may limit our financial obligations by partnership as follows: Niagara Falls, New York — Funding of 50% of partnership cash deficiencies relating to debt service. Average annual debt service on 50% of the debt over the next five years is estimated to be $3 million. SEMASS in Rochester, Massachusetts — Under support agreements and guarantees (i) lending up to 50% of $5 million to the SEMASS Partnership under certain circumstances, (ii) deferring up to 50% of $7 million of operating cost reimbursement, and (iii) funding up to 50% of $5 million in operating damages. These obligations have been assigned to the lenders. Average annual debt service on 50% of the debt over the next five years is approximately $20 million. 15. Related Party Transactions Transactions with related parties are entered into only upon approval by a majority of our independent directors and only upon terms comparable to those that would be available from unaffiliated parties. In connection with the receipt in April 1995 of all permits necessary to develop a landfill on certain real estate acquired in July 1992, we were obligated to pay $5.6 million to the previous owners of the real estate, which included certain of our then current stockholders. During the years ended December 31, 1998 and 1997, we paid principal of $1.7 million and $136,000, respectively, to our stockholders related to the receipt of permits. We fully repaid these promissory notes in 1998. In 1998, we sold certain assets to a relative of an officer for approximately $1.5 million. No gain or loss was recognized on this transaction. Allied Waste Industries, Inc. 1999 annual Repart [ 73 ? 16. Segment Reporting We classify our operations into eight U.S. geographic regions: Atlantic, Central, Northeast, Southeast, Great Lakes, Midwest, Southwest and West. Our revenues are . derived from one industry segment, which includes the collection, transfer, recycling t d and disposal of non -hazardous solid waste. We evaluate performance based on several factors, of which the primary financial measure is EBITDA before acquisition related and unusual costs. The accounting policies of the business segments are the same as those _ - described in the Organization and Summary of Significant Accounting Policies (See Note 1). The tables below reflect certain geographic information relating to our operations: .. - (in thousands) Atlantic Central Great lakes hEdwm Northeast Southeast Southwest West Other(l) Total 1999 Revenues learn rxtemal customers $ 313,656 S 405,557 S 437,978 S 323,984 S 516,517 S 308,742 S 400,557 S 616,799 $ 17,281 $3,341,071 Intersegment revenues 56,841 94,918 119,244 72,353 94,704 49,315 79,606 104,529 - 671,510 Depreciation and amortization 38,322 43,960 64,549 45,131 47,784 35,020 58,385 50,943 - 384,094 - EBrrDA before non -recurring charges 105,563 t24,25I 182,995 139,132 124,179 101,610 159,094 212,204 11,713 1,160,741 Total assets 1,467,231 1,005,625 1,801,617 1,464,808 2,233,476 1,670,626 1,928,064 2,065,265 11,904,199 25,540,911 Capital expenditures 49,363 57,931 64,%6 40,381 20,921 16,784 27,593 54,699 6,654 339,192 1998 Revenues from external customers $ 104,587 $ 300,183 $ 296,894 $ 159,344 S 164,701 S 57,274 $ 148,768 $ 338,058 $ 5,803 $1,575,612 Intersegment revenue 14,729 56,522 69,675 37,524 21,314 12,743 35,626 34,289 - 281,421 Depredation and amortization 11,858 29,566 41,794 22,533 13,006 5,829 20,111 28,397 6,871 179,965 EBrrDA before ....m. orig charges 31,348 89,360 132,002 67,561 33,580 14,337 59,026 116,661 (15,371) 527,.: Total assets 199,064 547,108 747,767 445,185 439,215 98,729 376,442 595,290 2,108,367 5,556;1d'- - Capital expenditure 48,752 42,416 67,987 31,023 8,064 10,302 35,142 54,149 3,907 301,742 1997 - Revenuesfromexternalcustomers $ 80,484 S 238,831 S 205,701 S 132,973 i 185,107 S- 47,320 S 148,544 S 275,721 $ 25,980 $1,340,661 Inte.segrnent revrnue 2,987 28,263 34,120 30"6 20,938 M765 28,576 17,579 - 176,224 Depredation and amortization 6,152 25,203 29,384 20,607 16,296 5,345 20,923 23,088 11,240 158,238 EBrrDA before non -recurring charge 19,104 59,134 78,864 58,988 39,050 12,345 56,642 62,000 (151) 385,976 Tom]assets 126,974 668,175 590,671 353,235 214,507 91,606 384,467 553,735 1,108,428 4,091,798 Capital expenditures 2M63 21,830 57,650 20,710 9,974 10,362 19,157 23,151 3,909 188,005 Ul Amounts relate primarily to our subsidiaries which provide services throughout the organization and not on a regional basis i i ?, 74 v'�" '' lalled Wide Indmbhia, lim: 1999 Annual Report Reconciliation of reportable segment primary financial measure and assets to operating Operating Income Total EBITDA beforenon iecuriing charges for reportable segments �, $ 11160,741 Depreciation and amortization for reportable segments 384,094 _ Acquisition related and unusual costs - - 588,855 _ Operating income - - $ 187,7921. --'I Assets Total assets for reportable segments $ 25,540,911 Elimination of investments - (10,577,810) - I Total assets $14,963,101 $ Year Ended December 31, Percentage of our total revenue attributable to services provided: 1999 1998 1997 Collection 60.7% 55.7% 57.2% Transfer 5.6 7.1 6.7 Landfill(' 25.3 29.9 26.4 Other 8.4 7.3 9.7 Total revenues 100.0% 100.0% 100.0% it) The portion of collection and third party transfer revenues attributable to disposal charges for waste collected by us and disposed at our landfills have been excluded from collection and transfer revenues and included in landfill revenues. 17. Selected Quarterly Financial Data (unaudited) The following table summarizes the unaudited consolidated quarterly results of operations as reported for 1999 and as reported and restated for poolings-of-interests for 1998. (in thousands, except per share amounts) First Quarter Second Quarter Third Quamrul Fourth Quarter 1999 Operating Revenues: $408,045 $463,357 $1,085,628 $1,384,041 Gross profit 178,031 206,345 449,937 557,794 Income (loss) before income taxes, extraordinary items and cumulative effect of change in accounting principal:"' 56,237 79,277 (432,710) 69,941 Net income (loss)"' (31,081) 46,894 (335,553) 31,012 Basic earnings (loss) per common share") (0.17) 0.25 (1.84) 0.08 Diluted earnings (loss) per common share('" (0.17) 0.25 (1.84) 0.08 (n The fast and second quarters have been restated to reflect the effect change in accounting principle (See Nor: 1) trl Includes approximately $548.7 million of acquisition related and unusual costs. Allied Waste Industries, Inc 1999 Annual ee9ea C 75 .(in thousands, e=pt per share amounts) - _ FirstQuarter Second Quarter 'Third Quarter Fourth'Quaiter 1998 Operating Revenues: As reported $223,755 $299,692 $334,290 $407,119 As restated 357,900 3941853 415,740 407,119?' ....... Gross Profit.As reported 104,504 135,096 147,379. 178,686 As"restated 152,084 _ 171,998 ''- 180,571 178,686 Income (loss) Before Income Taxes and Extraordinary Items: As reported 28,387 8156S ; - 28,245 (165,457) As restated 46,292 22,690 41,997 (165,4S7) Net Income (loss): .. As reported 16,749 (0,501) 11,123 (274,817) As restated 31,565 1,599 18,611 ' (274,817) Basic Earnings (loss) Per Common Share: As reported 0.16 (0.08) 0.08 (1.50) As restated 0.17 0.01 0.10 (1.50) Diluted Earnings (loss) Per Common Share: As reported 0.16 (0.07) 0.08 (1.50) As restated 0.17 0.01 0.10 (1.50) 18. Summarized Financial Data of Allied Waste North America, Inc. As discussed in Note 6, the 1998 Senior Notes and the 1999 Notes issued by Allied NA (our wholly -owned subsidiary) and certain debt of BFI (all of which BFI debt is no longer registered under the Securities Exchange Act of 1934) are guaranteed by us. Our guarantee is full, unconditional and joint and several of Allied NA's and BFI's debt. The separate complete financial statements of Allied NA and BFI have not been included herein as we have determined that such disclosure is not considered to be �r- material. Howevey summarized balance sheet data for Allied NA and subsidiaries as of December 31, 1999 and 1998 is as follows: Summarized Consolidated Balance Sheet Data. (in thousands) December 31, 1999 December 31, 1998 Current assets $2,248,422 $ 499,904 Property and equipment, net 3,738,388 1,776,025 Goodwill, net 8,238,929 1,327,470 Other non -current assets 737,362 149,193 Current liabilities 2,629,499 445,528 Long-term debt, net of current portion 9,240,291 2,118,927 Due to parent 2,091,951 1,083,515 Other long -tern obligations 1,453,756 268,407 Retained earnings (deficit) (452,396) (163,785) µ.' y��[� ' '_� AIIIed Wade Indpilrl9t; lnc. t999 Annual eepon Summarized Statement of Operations Data. Year Ended December 31, 1999 _ 1998 Revenue $3,341,071 $1,575,612 4� Operating costs and expenses 311S3,279 -, 1,S4S,689 .'_Operating income 187,792 d 29,923 Net loss before extraordinary loss and cumulative effect of change in accounting principle �(221450)� " (80,338) Extraordinary loss, net ,. _ 3,223 72,202 .Cumulative effeck of change in accounting principal, net - - 64,255' Net loss (288,728) (152,540) 19. Subsequent Events On January 18, 2000, we repurchased the $2S0 million 6.08% MVPs when First National Bank of Chicago did not exercise its option to purchase the securities. The proceeds to repurchase the MVPs were obtained from a draw on our revolving credit facility. . Allied Waste Industries. Inc. 1999 Annual Report 77 Report of Independent Public Accountants - To Allied Waste Industries,Inc.: " We have audited the accompanying consolidated balance sheets'of Allied Waste " Industries, Inc., (a Delaware corporation) and subsidiaries; as of December'31, 1999 and 1998, and thg related consolidated statemenfs'of operanons; stockholders' equity and cash flows for each of the three years in the period ended December-31, "1999. These financial statements and Schedule II referred 'to below'are the responsibility of the Company's management. Our responsibility is to express an opinionron'ihese financial statements and Schedule II referred to below 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 financial position of Allied Waste Industries, Inc. and subsidiaries as of December 31, 1999 and 1998, and the results of their operations and their cash Flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. As explained in Note 1 to the financial statements, effective January 1, 1999, the Company changed its method of accounting for the capitalization of interest. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule II listed in Item 14 of Part IV herein is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ate-- a /,t p Phoenix, Arizona February 22,2000 78 ] Allied Waste Industries, Inc. 1999 Annual Ae9orl : Board of Directors. _ Corporate Officers Thomas H. Van''Weelden """ Thomas H. Van Weelden Chairman, Chief Executive Officer and President ?Chairman, Chief Executive Allied Waste Industries, Inc. Officer and President ' David Blstzer, LarryDHenk r Senior; Managing Director ' Vice President The Blackstone Group Chief Operating' Officer Michael Gross Founding Principal Henry L. �Hirvela 'Apollo Advisers, L.P. Vice'President - r ; Chief Financial Officer Dennis Hendrix 11 Retired Chairman and Chief Executive Officer Pan Energy Corporation Peter S. Hathaway Vice President David B. Kaplan "' Chief Accounting Officer Limited Partner Apollo Advisors, L.P. Steven M. Helm Vice President Nolan Lehmann """ Legal and President Corporate Secretary Equus Capital Management Corporation _ ' Michael G. Hannon Howard A. Lipson 1311' Vice President Senior Managing Director Mergers and Acquisitions The Blackstone Group Roger A. Ramsey 1114) James S. Eng Former Chairman and Chief Executive Officer Controller Allied Waste Industries, Inc. Antony P. Ressler 11""" G.Thomas Rochford, Jr. - Founding Principal Treasurer Apollo Advisers, L.P. and Lion Advisors, L.P. - Warren B. Rudman - Partner Donald W. Slager Paul, Weiss, Rifkind, Wharton and Garrison Vice President Operations Vincent Tese Chairman Wireless Cable International, Inc. Richard Van Hattem, Jr. Vice President ule .�c.raM� Corporate Services and ,]IAoCUGmnsMmbv Development III M� Und� W C�C mina MmM Jo Lynn White 111 Nmdo{ Gmeh'¢ Mmhn Assistant Corporate Secretary and Corporate Counsel Allied Wash indusales, Inc 1"9 Annual Report [ 79 I Operating Management Terry Armstrong Regional Vice President, Atlantic Region Bob Doyle Regional Vice President', Southeast Region Joe Duncan Regional Vice President, Midwest Region Roger Gruen, Jr. Regional Vice President, Central Region Rick Krall Regional Vice President, Southwest Region J Denny Marchetti Regional Vice President, Northeast Region Don Swierenga Regional Vice President, West Region Jim Van Weelden Regional Vice President, Great Lakes Region Pete Lindemulder Manager, Market Integration Joe Mrjenovich Manager, Market Integration Doug Haan Manager, Market Integration Investor Information :. Corporate Headquarters Allied Waste Industries, Inc. 15880 N. Greenway-Hayden, Loop Suite 100 Scottsdale, AZ,_85260 r 480-627-2700 www.awin.com - - - Annual Meeting : The annual meeting of shareholders.will be held at the Marriott at McDowell Mountain, 16770 N. Perimeter Drive, Scottsdale, Arizona 85260, on Wednesday, May 3, 2000, at 9:00 a.m. Mountain "Standard Time. Notice of the meeting and proxy materials were sent to shareholders with this annual report. Independent Public Accountants Arthur Andersen LLP Phoenix, Arizona Registrar and Transfer Agent Shareholders with questions concerning stock certificates, account information or stock transfers should contact our transfer agent: 1,,, American Stock Transfer & Trust Attn: Shareholder Services 40 Wall Street New York, NY 10005 Phone: 718-921-8381 Fax: 718-259-1144 Toll Free: 800-937-5449 Form 10-K and Otber Investor Information A copy of the Annual Report of Allied Waste Industries, Inc. on Form 10-K, filed with the Securities and Exchange Commission, may be obtained by shareholders, without charge, by calling 480-627-2700 or upon written request to: Investor Relations Allied Waste Industries, Inc. 15880 N. Greenway-Hayden Loop Suite 100 Scottsdale, AZ 85260 6.1 . 80 Allied Wade Ind entries, Inc 1999 Annual Repon 10 t _ r!Y � r k a t ll� cp ( .! � i s ! � w >• � ! .7 _ >� F 2 r JA �', �� i i C1A "' tit � 1 i. City of Denton Bid Number 2832 Bid Submittal -Attachment. 10 List of Recently. Disposed and Pending Litigation' Trinity Waste Services has no current or pending litigation against any of the', local Divisions or our parent company, Allied Waste Industries. Trinity Waste, Services does not have any disposed or settled litigation from two years prior. C:\WINWORD\DATA\CONTRACT\PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Bid Submittal Attachment 11 History, of Regulatory Compliance Trinity Waste Services takes great pride in our commitment and our record of environmental compliance. Trinity Waste Services has no current or pending administrative orders or violations of any federal, state or local laws, rules or codes. There have been no settled or negotiated violations in the past three years. C:\WBQWORD\DATA\CONTRACT\PROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Bid Submittal Attachment 12 Designated Representatives Contractor Respresentative: The Contractor will provide the following information in Bid Submittal Attachment 14 John Osteen Contractor Representative (Print Name) Operations Manager Title 4200 E. 14' Street Street Address Plano Texas 75074 City State Zipcode 972-422-2341 ext.1019 972-633-2731 Office Telephone Number Fax Number 214-435-7197 iosteen@awin.com Mobile Telephone Number E-mail Address C:\WINWORD\DATA\CONTRACT\PROPOSAL\Denton 4-I1-02\Curbside Recycling Bid 2832 Submittal Forms.doc City of Denton Bid Number 2832 Bid Submittal Attachment 13 Full Bid Understanding and Compliance Agreement Full Bid Understanding and Compliance Agreement The Contractor hereby acknowledges that it understands and will comply with all terms, conditions, requirements, fees, and specifications contained in and as a part of this bid document. Based on its compliance with all terms, conditions, requirements, fees, and specifications contained herein and as a part of this bid document and all of its addenda, the Contractor's authorized representative shall sign below. Trinity Waste Services Company Name Tom Sellers, General Manager Company Authorized Representative (Printed Name, Title) e17 Q i n Company Authorized Representative (Signature) Acknowledgement of Receipt of Addendum The bidder must acknowledge receipt of each addendum received, with their authorized representative's signature adjacent to each addendum received, in the space below, and submit this acknowledgement as part of the bid submittal. Addendum 1 received: (Autorized Representative's Signature) C:\WINWORD\DATA\CONTRACTPROPOSAL\Denton 4-11-02\Curbside Recycling Bid 2832 Submittal Forms.doc "The following information is proprietary and exempt from the Public Information Act.'-' MUNICIPAL CONTRACTS IN NORTH CENTRALTEXAS BEING PERFORMED BY TRINITY WASTE SERVICES CITY CONTACT PHONE Alvarado Debra Howe 817 790-3351 * Argyle Michael Webb 940 464-7273 * Azle Jerry Guillory 817 444-2541 Bartonville John Mayall 817 430-4052 * Bedford Chuck Barnett 817 952-2101 * Benbrook Cary Conklin 817 249-3000 Blue Mound Frances Johnson 817 232-0661 * Colleyville Dianne McWethy 817 577-7575 Copper Canyon Chuck Wainscott 940 241-2677 * DeSoto Lynda Humble 972 230-9643 Edgecliff Village Charles Talbot 817 293-4313 Euless Bill Ridgway 817 685-1400 * Flower Mound Steve Williams 972 874-6000 * Indicates cities utilizing Trinity's curbside recycling program. "The following information is proprietary and exempt from the Public Information Act." page two Municipal Contracts in Texas * Grapevine Matt Singleton 817 410-3104 Haslet Sandy Hart 817 439-5931 * Hurst Allan Weegar 817 788-7028 * Keller Lyle Dresher 817 431-1517 * Lakeside Bill Mohr 817 237-1234 Lakewood Village Dawn Sendziak 972 294-5555 * Mansfield Clayton Chandler 817 473-9371 * Melissa Susan Bradley 972 838-2338 Mesquite Mark Hindman 972 288-7711 * Midlothian Lou Jameson 972 775-3481 Newark Sherry Edgemon 817 489-2201 * North Richland Hills Larry Cunningham 817 427-6000 * Oak Point Stacey Beard 972 294-2312 Ovilla Scott Campbell 972 617-7262 * Parker Betty McMenamy 972 442-6811 * Plano Nancy Nevil 972 964-4104 * Indicates cities utilizing Trinity's curbside recycling program. 01% "The following information is proprietary and exempt from the Public Information Act." page three Municipal Contracts in Texas * Richardson Clay Gooch 972 744-4204 * Richland Hills Jim Quin 817 299-1800 River Oaks June Wedlake 817 626-5421 Roanoke Jimmy Stathatos 817 491-2411 * Rockwall Julie Couch 972 771-7700 * Sachse Bill Atkinson 972 495-1212 * Saginaw Dolph Johnson 817 232-4640 Sanctuary Floyd Galloway 817 677-3008 * Southlake Shana Yelverton 817 481-1519 Trophy Club Bill LeGrand 817 430-1911 * Watauga Nancy Meadows 817 514-5800 Westlake Ginger Crosswy 817 430-0941 * Westover Hills Earle Shields 817 737-3127 * Wylie Biff Johnson 972 442-8100 * Indicates cities utilizing Trinity's curbside recycling program. 'T R.obIT�E= ` u "The following information is proprietary and exempt from the Public Information Act." Experience and References , Trinity Waste Services is one of the largest commercial solid waste haulers in the Metroplex. We currently provide solid waste service to over 250,000 homes in the D/FW area. We also provide curbside recycling to more than 240,000 homes from our Dallas, Plano and Fort Worth divisions. We are contracted with many local communities to provide residential solid waste collection and/or curbside recycling services. We are fully staffed with dedicated, well -trained service professionals. The average driver has been with Trinity Waste Services and its predecessors for more than ten years. References: City of Argyle On October 1, 2000, the City of Argyle renewed the contract for an additional three years. Trinity was awarded the extension based on past performance and reliability. City of Argyle P.O. Box 609 - 506 North Highway 377 Argyle, Texas 76226 Contact: Michael Webb, City Manager (940)464-7273 Approximately 744 homes Three year franchise on all residential solid waste and curbside recycling. City of Desoto On March 18, 1997, the City of Desoto voted unanimously to enter into negotiations with Trinity Waste Services for a 5 year contract. Trinity currently provides service to Desoto. The city went out for bids and Trinity was awarded the contract based on price, financial stability, and past performance. City ofDeSoto 211 E. Pleasant Run Road Desoto, Texas 75115 (972)230-9688 Contact: Lynda Humble / Acting Assistant City Manager Approximately 10,000 homes Trinity franchise for residential, commercial, and industrial solid waste, and residential curbside recycling. WEI X "The following information is proprietary and exempt from the Public Information Act." Town of Flower Mound On October 1, 1996, the Town of Flower Mound entered into a contract with BFI, Inc., now doing business as Trinity Waste Services, to provide fully automated solid waste services and curbside recycling services to the residents of the Town. RFP's are now being reviewed. Town of Flower Mound 2121 Cross Timbers Road Flower Mound, Texas 75028 (972)539-6006 Contact: Van James, Town Manager Approximately 16,700 homes Trinity franchise for residential, commercial and industrial solid waste, and residential curbside recycling. City of Grapevine On May 2, 1995, the City of Grapevine went out for bid on solid waste and recycling services. Trinity Waste Services was awarded a ten (10) year contract based on the combination of price, service, and past performance. City of Grapevine 413 South Main Street Grapevine, Texas 76051 (817) 481-0300 Contact: Matt Singleton / Public Works Director Approximately 10,000 homes Trinity franchise for all residential, commercial, and industrial solid waste, and residential curbside recycling. City of Hurst On February 13, 1996, the City of Hurst renewed the contract for an additional eight (8) year period. Trinity was awarded the extension based on service performance and reliability. Take All service was also added at this time. City of Hurst 1505 Precinct Line Road Hurst, Texas 76054 (817) 788-7000 Contact: Allan Weegar / City Manager Approximately 9,800 homes Trinity franchise for all residential, commercial, and industrial solid waste, and residential curbside recycling. T or I-T "The following information is proprietary and exempt from the Public Information Act." City of Mesquite On November 1, 1996, the City of Mesquite turned over the operation of the Mesquite owned Type I landfill to Trinity Waste Services for an operating agreement through 2006. Trinity also took over all commercial and industrial solid waste and recycling service for Mesquite for the same period. City of Mesquite 711 North Galloway Mesquite, Texas 75185 Contact: Mark Hindman Approximately 1,200 Commercial customers and landfill operating agreement City of North Richland Hills On August 1, 1997, the City of North Richland Hills renewed the contract for an additional five (5) year period. Trinity was awarded the extension based on service performance and reliability. City of North Richland Hills - 7301 NE Loop 820 North Richland Hills, Texas 76180 (817) 581-5500 Contact: Larry Cunningham / City Manager Approximately 15,900 homes Five year franchise on all residential, commercial, and industrial solid waste and curbside recycling. City of Parker On November 1, 2001, the City of Parker renewed the contract for both solid waste and curbside recycling for an additional five years. Trinity was awarded the renewal based on past performance and reliability. City of Parker 5700 E. Parker Road Parker, Texas 75002 (972)442-6811 Contact: Betty McMenamy / City Manager Approximately 482 homes Five year franchise on all residential solid waste curbside and recycling. Tr o ADMI "The following information is proprietary and exempt from the Public Information Act " City of Plano On February 1, 2000, the City of Plano renewed the recycling and commercial franchise for an additional five years. Trinity was awarded the extension based on reliability, service performance and the expansion of the Plano facility. City of Plano 4120 West Plano Parkway P.O. Box 860358(75086-0358) Plano Texas 75093 (972)964-4130 Contact: Nancy Nevil, Director of Solid Waste Approximately 54,000 homes Five year franchise on all commercial and industrial solid waste and the processing of all residential recycling. City of Sachse On August 1, 2000, the City of Sachse voted to sign a new contract for a five year period with Trinity Waste Services. We were awarded the renewal/new contract based on our ability to provide "exceptional service". City of Sachse 3033 6th Street Sachse, Texas 75048 (972)495-1212 Contact: Bill Atkinson / City Manager Approximately 2,300 homes Trinity franchise for all residential, commercial, and industrial solid waste, and residential curbside recycling. City of Saginaw On November 1, 1997, Trinity Waste Services began a new five year franchise agreement with the city. Trinity Waste Services was able to offer the city the lowest rates with the most consistent service. City of Saginaw 333 W. McLeroy Saginaw, Texas 76179 (817)232-4640 Contact: Nan Stanford / City Manager Approximately 3,300 homes Five year franchise on all residential, commercial, and industrial solid waste and curbside recycling. T . "The following information is proprietary and exempt from the Public Information Act." Town of Trophy Club On March 18, 1997, the Town of Trophy Club voted unanimously to renew the contract for all solid waste collection and disposal to Trinity Waste Services for a period of five (5) years. Town of Trophy Club 100 Municipal Drive Trophy Club, Texas 76262 (817) 430-1911 Contact: Bill LeGrand / Public Works Director Approximately 1,600 homes Trinity franchise for all residential, commercial, and industrial solid waste collection and disposal. City of Watauga On June 28, 1999, Trinity Waste Services began a new eight year franchise agreement with the City of Watauga. Trinity Waste Services was able to offer the city the lowest rates with the most consistent service. City of Watauga 7101 Whitley Road Watauga, Texas 76148 (817) 514-5818 Contact: Dale Cheatham / City Manager Approximately 7,400 homes Eight year franchise on all residential, commercial, and industrial solid waste and curbside recycling. City of Wylie On September 1, 2000, the City of Wylie renewed the existing solid waste and recycling contract for an additional five years, based on service, reliability and price. City of Wylie 2000 Highway 78 North Wylie, Texas 75098 (972)442-8120 Contact: Anthony `Riff' Johnson / City Manager Approximately 5,100 homes Trinity franchise curbside recycling. for residential solid waste, and residential R J)ALLAS/FT.WORTH AREA LANDFILLS BFI Itasca Landfill -Permit # 241C 2559 FM 66 Itasca, Texas 76055 254-687-2511 BFI Lewisville Landfill -Permit # 1749A 801 E. College Street Lewisville, Texas 75057 972-436-4217 Turkey Creek Landfill -Permit # 1417B 9100 S. IH 35 W Alvarado, Texas 76009 817-790-2912 Camelot Landfill -Permit # 1312A 580 Huffines Boulevard Lewisville, Texas 75056 972-492-3888 (special waste not accepted) ECD Landfill -Permit # 1745A f; 5703 N. IH 45 Ennis, Texas 75119 972-875-5374 Trinity Oaks Landfill -Permit # 556 11340 C F Hawn Freeway Dallas, Texas 75253 972-286-1266 BFI Mexia Landfill -Permit # 1558A 3048 LCR 460 Mexia, Texas 76667 254-562-3889 Fort Worth Transfer Station / Material Recovery Facility Fort Worth, Texas Facility Location — Approximately 4.5 miles north east of downtown Fort Worth on State Highway 121. The address for the facility is 6200 Elliott Reeder Road, Fort Worth Texas, 76117. From State Highway 121 exit Carson Street and proceed south to Elliott Reeder Road, travel east on Elliott Reeder to the site entrance. The phone number is (817) 332-7301, and the fax number is (817) 831-3189. Facility Description — The facility is a Type V Municipal Solid Waste Transfer Station and Material Recovery Facility owned and operated by Trinity Waste Services, an Allied Waste Industries Company. The facility opened in November 2001 and is designed to process up to 3,000 tons of municipal solid waste per day and recycle up to 20 tons per hour of old corrugated cardboard (OCC). Permit Boundary — Approximately 8 acres, the building footprint is approximately 42,750 square feet Zoning — The City of Fort Worth approved a Planned Development Special Use Permit for the site in July, 1998 Development Permit — The Texas Natural Resource Conservation Commission (TNRCC) issued Permit No. MSW-2275 for the site on May 9, 2000. Design Capacity — 3,000 tons per day Daily Volume Limits — no regulatory/permitted limits Hours of Operation — The facility is permitted to operate 24 hours per day, seven days per week; the current operating hours are from Monday at I2:01 a.m. to Saturday at 4:00 p.m. Design Summary — Approximately 24,100 square feet of the building footprint is used for MSW transfer operations and approximately 17,600 square feet is used for recycling operations. The remaining 1,050 square feet are used for office areas and employee facilities. The MSW transfer and recycling operations are totally enclosed. It is an "over the top" transfer facility with two loading hoppers and a two lane tunnel for transfer trailers. Loads rich in OCC are emptied on the recycling side and pushed onto a sorting conveyor. The conveyor allows for the separation of waste from the OCC stream. The separated waste falls to the floor and is pushed onto the tipping floor, the OCC continues into a baler. The baled OCC is stored inside the building until it is shipped off site for reuse. Environmental Management — The tipping floor and push walls are washed down on a weekly basis at the completion of processing. Wash water is collected in several trench drains and discharged to the sanitary sewer system under a permit with the City of Fort Worth. Litter along access roads and around the building is collected at least twice weekly. Closure Financial Assurance — In place and approved by the TNRCC State Fees - $1,25/ton or $0.25/loose cubic yard and $0.40/compacted cubic yard %u, 4w oa�u��Es Turkey Creek Landfill Alvarado, Texas Facility Location — Approx. 3.5 miles south of Alvarado, Johnson County, Texas (approx. 35 miles south of Fort Worth, Texas). Address of the facility is 9100 South 135W, Alvarado, Texas 76009. Federal Express address is 9100 South 135 W, Alvarado, Texas 76009. Phone number is (817) 790-2912. Fax number is (817) 790-2838. Facility Description — The facility is an active Municipal Solid Waste (MSW) landfill owned and operated by Turkey Creek Landfill TX, L.P., an Allied Waste Industries Company affiliated with Trinity Waste Services. Initially permitted in 1983. Laidlaw Waste Systems acquired landfill in 1994; Allied acquired site when it purchased Laidlaw in December 1996. Turkey Creek Landfill accepts MSW, special wastes, Construction & Demolition (C&D), etc. Gate Volume — 935 tons per day average over the past 12-month period. Total Property Owned — 219.6 acres Zoning and/or Local Siting Permit — none required by local (county or below) Development Permit/Permit to Construct — 150.7 acres — approved during 1989 Expansion by Texas Department of Health (now Texas Natural Resource Conservation Commission — TNRCC) Approved Disposal Capacity — 20,295,921 airspace cubic yards Daily Volume Limits — no limits established Operating Permit/Permit to Dispose — 92 acres (1983 permit) — 150.7 acres (1989 permit expansion) Remaining Disposal Capacity (1/99) — 15,680,000 cubic yards Life of Site at Current Volume — over 30 years Current Capacity without further construction (1/99)—1,007,000 cubic yards Liner Description — Pre-RCRA Subtitle D areas (prior to September 1993 — approx. 20 acres) have a 3 foot thick constructed clay liner. Since then, all liners constructed have been composite liners consisting of two foot thick constructed clay liners overlaid with 60 mil HDPE plastic liners, leachate collection systems and two feet of protective cover. Leachate Collection System — On top of the composite liner there is a drainage layer consisting of either a geonet and geotextile or one foot of shredded tire chips. The liner is sloped towards six inch perforated leachate collection lines allowing leachate to drain to the pipes. These pipes (contained within gravel chimney drains) in turn drain to sumps at the toe of the landfill's interior slope. Within these sumps there is an electric pump that automatically pumps when the leachate head on the liner reaches twenty-four inches. The leachate is pumped into a leachate storage tank with a capacity of 100,000 gallons. The leachate is then pumped into tanker trailers as needed and hauled to a local POTW for disposal. Landfill Gas System — There is no landfill gas system as it is not required or needed. Environmental Monitoring-- 27 Groundwater monitoring wells monitored semiannually 13 landfill gas probes monitored quarterly 2 surface water outfalls monitored quarterly and sampled biennially Closure/Post Closure Financial Assurance — In place and approved by the TNRCC State Fees - $1.25/ton or $0.25/loose cubic yard and $0.40/compacted cubic yard % T�I`n'I0�' """'=TE .10.1— . BFI Itasca Landfill Itasca, Texas Facility Location - Approx. 3 miles east of Itasca, Hill County, Texas. Address of the facility 2559 FM 66, Itasca, Texas 76055. From I-35W exit FM 66 and proceed east approximately I mile to the landfill entrance. Phone number is (254) 6872-2511. Fax number is (254) 684-9843. Facility Description - The facility is an active Municipal Solid Waste (MSW) landfill owned and operated by BFI Waste Systems of North America Inc., an Allied Waste Industries Company affiliated with Trinity Waste Services. The facility was originally permitted in 1977; Allied acquired site when it purchased BFI Waste Systems of North America, Inc., in 1999. The BFI Itasca Landfill accepts MSW, Class I Waste, Special Wastes, Construction & Demolition (C&D), etc. Gate Volume — 700 tons per day average over the past 12-month period. Total Property Owned — 598.8 acres Zoning and/or Local Siting Permit - none required by local (county or below) Development Permit/Permit to Construct — 269.3 acres — approved during 1997 Expansion through the TNRCC Approved Disposal Capacity — 40,700,000 airspace cubic yards Daily Volume Limits - no limits established Operating Permit/Permit to Dispose — 269.3 acres (1983 permit) Remaining Disposal Capacity (2/00) — 37,430,000 cubic yards Life of Site at Current Volume - over 100 years Liner Description - Pre-RCRA Subtitle D areas have a 3 foot thick constructed clay liner. Since then, all liners constructed have been composite liners consisting of three foot thick constructed clay liners overlaid with 60 mil HDPE plastic liners, leachate collection systems and two feet of protective cover. The three foot clay liner thickness is required for the facility to accept Class I waste. Leachate Collection System - On top of the composite liner there is a drainage layer consisting of either a geonet and geotextile. The liner is sloped towards six inch perforated leachate collection lines allowing leachate to drain to the pipes. These pipes (contained within gravel chimney drains) in turn drain to sumps at the toe of the landfill's interior slope. Within these sumps there is an electric pump that automatically pumps when the leachate head in the sump reaches approximately twenty-four inches. The leachate is pumped into a leachate storage tank. The leachate is then pumped into tanker trailers as needed and hauled to a local POTW for disposal or re -circulated over areas with an approved subtitle D composite liner. Landfill Gas System — The facility has an active gas collection system consisting of 18 vertical gas collection wells and one "candlestick" flare. The average system flow is 350 cubic feet per minute. Environmental Monitoring - 18 Groundwater monitoring wells monitored semiannually 13 landfill gas probes monitored quarterly 2 surface water out -falls monitored quarterly and sampled biennially Closure/Post Closure Financial Assurance - In place and approved by the TNRCC State Fees - $1.25/ton or $0.25/loose cubic yard and $0.40/compacted cubic yard Camelot Landfdl Lewisville, Texas Facility Location - Camelot Landfill is located in Lewisville, Texas at 580 Huffines Boulevard. It is approximately 3 miles north east of the intersection of Business Highway 121 and I-35E. Phone number is (972) 492-3888. Fax number is (972) 492-4943. Facility Description - The facility is an active Type I Municipal Solid Waste (MSW) landfill owned by the City of Farmers Branch and operated by Camelot Landfill TX, L.P., an Allied Waste Industries Company affiliated with Trinity Waste Services. The facility was originally permitted in 1979; Allied began operating the site in October of 1998. Camelot Landfill accepts MSW, and Construction & Demolition (C&D). Gate Volume — 1,500 tons per day average. Total Permitted Property — 351.6 acres Zoning — Agricultural/Open, Lewisville considers the site an acceptable non -conforming land use Approved Disposal Capacity — 24,500,000 airspace cubic yards Daily Volume Limits - no limits established Operating Permit/Permit to Dispose — 207.4 acres Remaining Disposal Capacity (5101) — 13,500,000 cubic yards Life of Site at Current Volume — approximately 15 years Liner Description - Pre-RCRA Subtitle D areas have a 3-foot thick constructed clay liner. Since then, all liners constructed have been composite liners consisting of two foot thick constructed clay liner overlaid with 60 mil HDPE plastic liners, leachate collection systems and protective cover. Leaching Collection System - On top of the composite liner there is a drainage layer consisting of either drainage geocomposite or shredded tire chips. The liner is sloped towards six inch perforated leachate collection lines allowing leachate to drain to the pipes. These pipes (contained within gravel chimney drains) in turn drain to sumps at the toe of the landfill's interior slope. Within these sumps there is an electric pump that automatically pumps when the leachate head in the sump reaches approximately twenty-four inches. The leachate is pumped into a leachate storage tank. The leachate is then pumped to a Lewisville sewer line along the western permit boundary or re- circulated over areas with an approved subtitle D composite liner. Landfill Gas System — The facility has a passive gas venting system consisting of 8 passive gas wells Environmental Monitoring - 14 Groundwater monitoring wells monitored semiannually 18 landfill gas probes monitored quarterly 6 surface water out -falls monitored quarterly Closure/Post Closure Financial Assurance - In place and approved by the TNRCC State Fees - $1.25/ton or $0.25/loose cubic yard and $0.40/compacted cubic yard ro 4w o�u4�E= BFI Lewisville Landfill Lewisville, Texas Facility Location - The BFI Lewisville Landfill is located in Lewisville, approximately 1.5 miles north east of the intersection of Business Highway 4364217. Fax number is (972) 436-8129. Texas at 801 East College Street. It is 121 and I-35E. Phone number is (972) Facility Description - The facility is an active Type IV Municipal Solid Waste (MSW) landfill owned and operated by Lewisville Landfill TX, L.P., an Allied Waste Industries Company affiliated with Trinity Waste Services. The facility was originally permitted in 1986; Allied acquired when it purchased BFI in 1999. Lewisville Landfill accepts construction & demolition (C&D) debris and some special waste in accordance with the site approved QA/QC Plan for the Disposal of Special Waste. Gate Volume — 1,700 tons per day average. Total Property Owned — 337.6 acres, the permit boundary is 84.7 acres Zoning — Heavy Industrial Approved Disposal Capacity — 7,780,000 airspace cubic yards Daily Volume Limits - no limits established Operating Permit/Permit to Dispose — 75.0 acres Remaining Disposal Capacity (5101) — 3,717,713 cubic yards Life of Site at Current Volume — approximately 5 years Liner Description - 3-foot thick constructed clay liner with a permeability of 1.0 x 10-' cm/sec overlain by one foot of protective soil cover. Leachate Collection System — None required o Landfill Gas System — None required Environmental Monitoring - 7 Groundwater monitoring wells monitored annually 4 surface water out -falls monitored quarterly Closure/Post Closure Financial Assurance - In place and approved by the TNRCC State Fees - $1.25/ton or $0.25/loose cubic yard and $0.40/compacted cubic yard u #N