Request for Proposals For Single Stream Recycling Processing Housatonic Resources Recovery Authority HRRA Housatonic Resources

Recovery Authority (HRRA) is a regional, government, waste management and recycling authority, established pursuant to the provisions of Chapter 103b of the Connecticut General Statutes, serving eleven municipalities in western Connecticut with a population of more than 225,000 people. Those municipalities, which are members of HRRA, are Bethel, Bridgewater, Brookfield, Danbury, Kent, New Fairfield, New Milford, Newtown, Redding, Ridgefield and Sherman. The Towns of Redding and Ridgefield are HRRA members for solid waste services only, but not for recycling. Program recyclables generated within the HRRA region are currently processed at Recycling Technologies, Inc. (RTI). RTI is a state-permitted Intermediate Processing Center (IPC), Solid Waste Permit to Operate No. SW0340199, located at 307 White Street in Danbury (White Street Facility), permitted to process up to 52,000 tons per year of residential and commercial source separated comingled waste for recycling, including newspaper, cardboard, magazines, office paper, glass, cans, aluminum and plastic. RTI accepts source separated residential, municipal and small commercial recyclables generated within HRRA member communities as well as from other Connecticut and New York communities. The Request for Proposals HRRA seeks proposals from vendors who will accept recyclable materials transported from the White Street Facility (which would act solely as a transfer facility) to the vendors permitted IPC or materials recovery facility (MRF) and the processing and sale of the recyclable materials in a manner compatible with the facts and desires of HRRA as set forth herein. The Existing Contract HRRA owns the recycling processing equipment located at RTIs White Street Facility and contracts with RTI to operate and maintain the White Street Facility, to accept recyclables from the HRRA program collected by haulers at curbside, or delivered directly by small commercial generators or collected at local municipal transfer stations and hauled to RTI, or dropped off by residents at the City of Danbury/AWD Mom & Pop Recycling Center. Under the existing

contract, RTI sorts/processes the recyclables, bales the commodities, markets and sells the recycled commodities and in some cases transports the commodities to the buyer. The HRRA/RTI contract terminates in February 2013. The Regional Recycling Center Service Agreement by and between RTI and HRRA dated as of March 13, 1991 and amended by Amendment No. 1 and Amendment No. 2, dated as of October 21, 1994 (collectively the Recycling Service Agreement) is available for review on the HRRA website at http://hrra.org/municipal_handbooks/Bethel%20Handbook/Contracts%20and%20Ordinances/H RRA%20RTI%20Contract.pdf Flow Control and RTI Ownership Because RTI was privately owned, recyclables are not flow controlled to the facility except for those recyclables under municipal control, i.e. from municipal transfer stations, municipal buildings, playing fields and other municipal facilities, including public schools. RTI is currently owned by the United States Government, seized as a result of the successful criminal prosecution of the owners of RTI and its affiliated companies. The United States Marshals Office is in the process of attempting to sell all the seized assets, including RTI, but it is unclear how long the sale process will take. The City of Danbury is one of the parties interested in purchasing the transfer station operations located at 307 White Street, in Danbury, a location at which not only RTI and the White Street Facility but also Advanced Recycling Corporation, a single item (fiber) recycling facility, are permitted to operate. If the City or another public entity eventually becomes the owner of RTI and the White Street Facility, HRRA member municipalities could use flow control, to the extent legally permissible, to direct all program recyclables generated within the HRRA region to RTI at the White Street Facility. Program Recyclables The equipment at RTI is capable of processing only dual stream recycling. The program recyclables included in the HRRA/RTI contract are newspapers & inserts, magazines & catalogs, corrugated cardboard (all these bundled and tied separately or placed in brown paper bags) and #1 and #2 plastics, glass food and beverage containers, clean foil and metal food and beverage containers (all co-mingled in a blue or clear bag) and office paper collected separately. These are the only items now accepted for recycling at the RTI White Street Facility. Current Tonnage Over the past six years the tonnage of program recyclables tipped at RTI has ranged between 11,000 and 12,000 tons per year. Based on DEP reports from other IPCs and MRFs in Connecticut, as well as reports made to some HRRA member municipalities from haulers using MRFs in New York State, we estimate that another 8,000 tons per year of program recyclables are diverted from the HRRA region and from RTI. We estimate that ARCs commercial fiber recycling operation also located at 307 White Street, takes in approximately 12,000 tons per year generated within HRRA member municipalities. We do not anticipate the tonnage coming into ARC being diverted to RTI. Responders to this RFP should not rely on ARC tonnage for the purpose of proforma calculations.

We currently estimate that tonnage coming into RTI would increase by as much as 25% over the existing tonnage if additional items were added to the program recyclables as outlined below and single stream recycling services were available to the regions residents and haulers, but that estimate cannot be relied upon by proposers as a representation by HRRA Current Financial Terms The financial terms of the RTI/HRRA Agreement are complex, and proposers should refer to the Recycling Service Agreement for the precise financial terms. In a nutshell, however, from the chart below, RTI receives the sliding scale tip fee in the chart below for each ton tipped at RTIs White Street Facility. For example, in FY 09-10, RTI is receiving $49.68 per ton for each ton of program recyclables tipped at the White Street Facility. The hauler pays $39/ton and HRRA subsidizes the difference to reach the sliding scale tip fee by taking less revenue sharing per ton than the Authority is entitled to receive pursuant to the Recycling Service Agreement. In addition RTI receives all the revenue from the sale of recycled commodities up to $38/ton, plus half of all revenues from commodity sales over the $38/ton base.
RECYCLING Sliding Scale tip fee Less HRRA Subsidy HRRA Revenue Sharing RTI Hauler Tip Fee FY 00/01 $36.68 -2.24 4.07 $38.51 FY 01/02 $ 37.58 -17.38 18.31 $38.51 FY 02/03 $38.16 -0.49 0.84 $38.51 FY 03/04 $42.70 -6.07 1.88 $38.51 FY 04/05 $39.96 -5.25 3.80 $38.51 FY 05/06 $41.05 -16.00 13.46 $38.51 FY 06/07 $46.08 -18.94 11.37 $38.51 FY 07/08 $47.16 -16.50 8.34 $39.00 FY 08/09 $44.88 -29.07 23.19 $39.00 FY 09/10 $49.68 -39.24 28.56 $39.00 FY 10/11 $50.27 -9.41 -1.86 $39.00

HRRA receives monthly $1 for each ton of program recyclables tipped at the White Street Facility from non-HRRA municipalities in NY and CT, and $7 per ton for tonnage tipped from Redding and Ridgefield (since those two municipalities are not a part of the HRRA recycling region). In addition HRRA receives the dollar amount each month in the HRRA Revenue Sharing line in the chart above for each ton of program recyclables tipped from HRRA municipalities. For example, in the current fiscal year HRRA is receiving $28.56 per ton for the approximately 8,000 tons of program recyclables that will be tipped at the White Street Facility in FY 09/10. This financial arrangement is problematic for HRRA since the fiscal year revenue sharing is based on a formula that includes the number of tons delivered the previous calendar year, and half the revenue from commodity sales RTI received the previous calendar year above a set revenue base. Thus, when the commodity markets are good, HRRA will not receive the revenue sharing bounty from the good market for up to 18 months, and when commodity markets fall, HRRA does not feel the revenue sharing reduction for up 18 months. Below for reference are the total revenue sharing and royalties that HRRA has been paid over the past seven calendar years and the total revenue from commodity sales as reported by RTI for those same years.

Calendar Year 2003 Total 2004 Total 2005 Total 2006 Total 2007 Total 2008 Total 2009 Total

Amount Paid to HRRA $73,891.80 $30,251.08 $75,232.46 $98,205.69 $83,980.80 $124,285.74 $216,959.96

RTI Total Commodity Sale Revenue $561,865 $790,212 $846,792 $754,396 $1,006,359 $1,010,929 $471,026

Changes Desired for Regional Recycling System 1. HRRA seeks to expand the program recyclables collected at curbside and at local municipal transfer stations to include at least plastics #3-#7, all fiber, i.e. junk mail, home office paper, wrapping paper, fiber packaging, chip board, box board, greeting cards, aseptic packaging such as juice boxes, milk cartons, etc. and even perhaps textiles. 2. HRRA wants to offer the HRRA regions residents, as well as our solid waste haulers, the option for single stream recycling processing as well as the current dual stream. 3. While we eventually prefer to phase out collecting curbside recycling in blue or clear bags, whether single stream or dual stream, HRRA wants to provide a reasonable and mutually agreeable period of time for our permitted haulers to make equipment changes and to offer their customers recycling collection container options rather than bags. 4. Because HRRAs recycling processing equipment is almost twenty years old and is expensive to maintain and repair, the HRRA seeks assistance with removing the equipment and recycling it for whatever scrap metal price it might bring. 5. HRRA seeks a more consistent revenue stream from the regional recycling program. However, the Authority believes that there is value in having at least some financial incentive for increasing recycling rates in the region. Any revenue stream from such an incentive, however, must bear a closer temporal connection to the current market price for recycling commodities than the current system. 6. HRRA seeks a regional recycling system that is so cost effective and easy for haulers to use, and so convenient and easy to understand for consumers, that there will be a significant financial incentive, thereby making flow control unnecessary regardless of the ownership of the White Street Facility, for recycling tonnage now leaving the region to return to RTI, for Ridgefield and Redding to become part of the HRRA recycling region and for additional communities in Connecticut and New York to use RTI. 7. HRRA seeks to amend the existing Recycling Service Agreement with RTI, at least through the end of its current term of February 13, 2013, to accomplish the above changes, including that RTI would no longer process and market the recyclables tipped at the White Street Facility but rather would simply act as a recycling transfer facility.

What Proposers are Requested to Provide Vendors interested in providing transport from RTI, processing HRRA program recyclables at a permitted IPC or MRF capable of processing single stream and dual stream recycling, and final marketing and sales of the recycled commodities, given the expected tonnage described above, are requested to provide a written proposal outlining how they can assist HRRA in meeting the changes we seek in our regional recycling program. The proposal should include an estimate of the vendors charge for each ton of recyclables delivered to the vendors facility for processing and marketing, if the charge is different for dual stream from single stream deliveries, and if the charge is different for co-mingle received in blue/clear recycling bags. The proposal should include an estimate of the tip fee required to cover the cost of weighing, billing, transferring, transporting, processing, marketing, and paying HRRA a revenue sharing and/or program fee for each recycling ton delivered to RTI. The proposal should also include an estimated effective date for acceptance of material from RTI. Proposals should include standard contracting informational items such as information on the owners, background of the company, years of experience in the recycling business, the type and amounts of insurance maintained by the company on which RTI, HRRA and all HRRA member municipalities shall be listed as additional insureds, location of the IPC/MRF and its distance from 307 White Street in Danbury, any recycling public education programs available from the vendor for use within the region, compliance with standard Connecticut and Federal contracting requirements, references from other recycling regions or municipalities in Connecticut or New York that the proposer currently serves, etc. In addition, the proposal must disclose whether the company and any owner or shareholder of the company or any management employees of the company have been convicted of any crime, both misdemeanors and felonies, and whether the company and/or any individual within the company has been cited for a violation of any environmental laws or regulations of the United States or any State. Such disclosures should provide some detail about the violation, date, crime and the eventual resolution. Failure to disclose such information will be grounds for HRRA to immediately terminate consideration of vendors proposal. Prior to entering into a contract with any vendor an in depth criminal background check will be conducted. Caveats The HRRA reserves the right to reject any and all proposals without cause. A successful proposal will be based not only on the written proposal presented but also on an interview and negotiation of a written agreement between the proposer, HRRA and RTI. HRRA reserves the right to interview and negotiate with more than one proposer in order to choose the proposal and the vendor that best serves the public interest and is consistent with the State Solid Waste Management Plan. Although this RFP is issued by HRRA, proposers should note that RTI, which is currently owned by the United States of America, will be a necessary party to any agreement with the vendor ultimately chosen by HRRA, if any. Although RTI has reviewed this RFP, HRRA cannot represent to any proposer that RTI will agree to any particular terms or conditions with respect to any transfer fee for RTI proposed by the proposer or the operational terms and conditions applicable to the transfer function at the White Street Facility.

Proposal Submission and Due Date Companies wishing to respond to this RFP must attend a mandatory pre-bid meeting to be held on Wednesday, May 12, 2010, 10:00 a.m. at Danbury City Hall, 155 Deer Hill Avenue, Danbury, CT, third floor , Room 3C near the City Council Chambers. The meeting will conclude with a site visit to RTI. Companies should advise HRRA of their anticipated attendance and the number of person attending by e-mail to cherylreedy@hrra.org no later than Tuesday, May 11, 2010 at Noon. Final proposals will be due no later than 4:00 p.m. EDT on Tuesday, June 1, 2010, only by email to cherylreedy@hrra.org in the form of a single .pdf file. Any questions or requests for additional information must be submitted by e-mail to cherylreedy@hrra.org and responses will be provided to all respondents who attend the pre-bid meeting. PLEASE, NO PHONE CALLS ABOUT THE RFP.

Proposal Term Sheet

Company Information Company Name: Owner(s): Shareholders and their percentages of ownership:

Physical Address:

Mailing Address:

Website: Contact Person(s) for this RFP: Address: Telephone: Fax: Mobile: E-mail: Companys years of experience in the recycling business: Will any subcontractor be involved? If so, who is that subcontractor and what would the subcontractor do? Is recycling the sole business of the company or is the company involved in other aspects of the solid waste system, e.g. collection, MSW transfer station operation, VRF operation, etc.? Please list all:

Total Number of Employees: Number of Employees in Management Positions: Does the company have any public recycling education programs for use within the HRRA region? If so, please describe briefly below and/or append samples to the Response:

Facility Information Location of recycling processing facility: Distance from RTI: DEP permit number and/or DEC recyclables handling and recovery facility registration number and expiration date: Facility tonnage capacity limitation, if any: Facility tonnage capacity available: Is the facility able to process both dual stream and single stream recycling? References List municipalities, solid waste regions and other governmental agencies for which the Company currently provides recycling processing and marketing services with a contact person and phone number for each (to a maximum of ten):

State and Federal Contracting Information Is the Company certified as a Small Business Enterprise and/or a Woman or Minority Owned Business? Y or N Does the Company have an Affirmative Action Plan? Y or N Does the Company have a Sexual Harassment Prevention Plan? Y or N Has the Company been cited for three or more willful violations of any occupational health and safety law and/or regulation? Y or N Does the Company have a Non-Discrimination Policy? Y or N Does the Company have a Drug-Free Workplace Policy? Y or N Has the Company ever been or is it presently debarred from participation in government contracting? Y or N Does the Company have a paid Lobbyist working on its behalf in any State or with the Federal government? Y or N Does the Company have an Environmentally Preferable Purchasing Policy? Y or N Disclosure of Criminal, Regulatory and/or Contractual Violations Failure to Disclose Any of the Requested Information Will Result in the Companys Proposal Receiving No Further Consideration Is the Company currently in violation or claimed to be in violation of any municipal or governmental contract or agreement with respect to recycling? If so, please provide a brief explanation.

Has the Company, any owner, any shareholder or any management employee been convicted of any crime, either misdemeanors or felonies, either federal or state? If so, please provide a brief description of the violation, date, the charge, the sentence and/or eventual resolution.

Has the Company, any owner, any shareholder or any management employee been cited for violation of any environmental laws or regulation of the United States or any State? If so, please provide a brief description of the violation, date, charge, and eventual resolution.

Insurance Please append a sample of the Certificate of Insurance the Company would provide, in the event its proposal is accepted, that would name HRRA, all HRRA member municipalities, and RTI as additional insureds. Estimated or Proposed Charges and Payments Estimated per ton charge to transport program recyclables from RTI to Company's facility: Estimated per ton charge to process and market recyclables delivered to Companys facility: o For dual stream recyclables: o For co-mingle in blue/clear bags: o For single steam recyclables: Estimated per ton revenue share or program fee payment to HRRA: Estimated all in tip fee necessary to cover tipping, weighing, billing, transferring, transporting, processing, marketing and HRRA payment: Any other charges or costs for Company to process and market recyclables generated with HRRA member municipalities: Any other payments or incentives proposed:

Commencement Date Estimated date Company can accept recyclables from RTI:

Program Recyclables List (or append a list of) all items Companys facility accepts for recycling:

Brief Background on the Company

Proposal Outline Provide a brief description of how your Company would propose to assist HRRA to meet its goals for a changed regional recycling system: