1 Diversion Rate Estimate One Indicator of Diversion Program Success

2 Three Primary Components of Measurement System BASE YEAR ADJUSTMENT METHOD DISPOSAL REPORTING

3 BASE YEAR The base year is the foundation for diversion rate measurement An accurate base year is critical for accurate diversion rate estimates Each jurisdiction (city, county, or regional agency) is required to establish a base year Over 250 jurisdictions updated their base years since original 1990 studies

4 ADJUSTMENT METHOD More People? More Jobs? More Sales?

5 Statute required the Board to develop an adjustment method The Board adopted the method developed by a working group Uses readily available data to keep costs low The adjustment method estimates changes in waste generation due to changes in population and the economy without having to measure both diversion and disposal in the measurement year Saves jurisdictions time and money Depends on an accurate base year ADJUSTMENT METHOD

6 Adjustment Method Premise X PRC &

7 Residential vs. Non-Residential Measurement year residential and non- residential generation amounts are estimated separately Affected differently by changes in population and the economy. Population is used only with the residential estimate. The residential and non-residential estimates are added to find total measurement year generation tonnage.

8 Adjustment Method Formula Adjustment Method Formula Steps: (1) IM = Inflation Multiplier: CPIB/CPIR (2) CTR = Corrected Reporting—Year Taxable Sales in Dollars: TR x IM (3) NRAF = Non—Residential Adjustment Factor: (ER/EB + (CTR/TB)/2 (4) RAF = Residential Adjustment Factor: (PR/PB) + NRAF/2 (5) Estimated Reporting Year Generation: (RWGB x RAF) + (NRWGB x NRAF) Glossary of Terminology: RWGB=Base-Year Residential Waste Generation in Tons NRWGB=Base-Year Non-Residential Waste Generation in Tons PR=Reporting-Year Population in Persons PB=Base-Year Population in Persons ERLF=Reporting-Year Labor Force Employment in Jobs ERIN=Reporting-Year Industry Employment in Jobs EBLF=Base-Year Labor Force Employment in Jobs EBIN=Base-Year Industry Employment in Jobs TR=Reporting-Year Taxable Sales in Dollars TB=Base-Year Taxable Sales in Dollars CPIR=Reporting-Year Consumer Price Index CPIB=Base-Year Consumer Price Index

9  Population -(CA Department of Finance)  Employment -(CA Employment Development Department)  Taxable Sales -(CA Board of Equalization)  Inflation Index -(provided on another slide) Adjustment Factors (and Sources)

10 Adjustment Factor Trends This graph shows percent change in population, employment, inflation-adjusted taxable sales, and waste disposal for California, (base year = 1990).

11 Taxable Sales Inflation Adjustment Factors (and sources) Inflation Adjustment Factor adjusts taxable sales amounts for inflation Consumer Price Index (CPI) -(CA Department of Industrial Relations) Taxable Sales Deflator Index (TSDI) -(CA State Board of Equalization) Note: Board Item in September 2005 authorized future use as alternative factor

12 Comparison of Inflation Indexes: CPI vs. TSDI

New Employment Adjustment Factors Employment Development Department total employment by jurisdiction for 2005 and subsequent years is now available May be used to calculate diversion rates when using a 2005 or later base year 13

14 Web Tools Perform Adjustment Method Calculations

Adjustment Factor Impact vs Base Year on Diversion Rates Ridgecrest Diversion Rate 2006 Diversion Calculation InputRate Estimate Double B-Y Generation Tons82% Halve B-Y Generation Tons27% Double City Population % Growth64% Halve City Population % Growth64% Double County Employment % Growth67% Halve County Employment % Growth62% Double City Taxable Sales % Growth69% Halve City Taxable Sales % Growth60% Double TSDI % Growth62% Halve TSDI % Growth 65% 15

16 Diversion Rate Estimate One Indicator of Diversion Program Success

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