1 Diversion Rate Measurement System April 4, 2006

2 Diversion Rate Measurement System Diversion, Planning & Local Assistance Staff: Collect, verify and maintain data Provide Automated Tools Review Annual Reports Conduct Biennial Reviews Provide Technical Assistance to Jurisdictions

3 Diversion Rate Estimate One Indicator of Diversion Program Success

4 BACKGROUND INFORMATION

5 Jurisdictions conducted solid waste generation studies Quantified amounts and types of both diversion & disposal Submitted studies in Source Reduction & Recycling Elements (SRRE) The Board reviewed, corrected and approved studies First time generation was quantified statewide for each jurisdiction Jurisdictions were to measure generation again in 1995 & 2000 Diversion Rate Estimation in the Beginning (AB 939) AB 939 (Sher), Stats. 1989, c. 1095

6 For measuring achievement of 1995 and 2000 diversion mandates: Generation study data became starting point (Base- Year) for all future measurement Required “standard” methodology for estimating waste generation Required new disposal reporting system (DRS) New Role for Original Waste Generation Studies (AB 2494) AB 2494 (Sher), Stats. 1992, c. 1292

7 THE “BIG PICTURE”

8

9 Three Primary Components of Measurement System Base Year Generation Base Data from Jurisdiction Generation Studies Adjustment Method To correct base data for changes over time Measurement Year Disposal Measurement Year Data from Disposal Reporting System

10 BASE YEAR GENERATION + Disposal Diversion

11 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 Many jurisdictions have updated their base years since the original studies

12 Disposal of Waste Generated within Jurisdiction Borders

13 Diversion of Waste Generated within Jurisdiction Borders

14 Issues with Base Year Data More accuracy issues have been identified over time Initially generation based Less generation viewed as less to divert Limited diversion data Disposal data issues No disposal data by jurisdiction Missed self haul disposal Missed seasonal variations in disposal

15 Issues with Base Year Data (cont’d.) Lack of scales at facilities Complex waste flows/significant changes to waste stream over time No statutory requirement to periodically establish new base year data to reflect changes

16 ADJUSTMENT METHOD More People? More Jobs? More Sales?

17 The IWMA required the Board to develop an adjustment method (AM) The Board adopted the method developed by a working group The adjustment method estimates changes in 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

18 Adjustment Method Premise X PRC &

19 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

20 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.

21  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)

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

23 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

24 Comparison of Inflation Indexes: CPI vs. TSDI

25 Web Tools Perform Adjustment Method Calculations

26 Jurisdictions are Diverse 2004 Population Smallest: 95 Middle: 38,597 Largest: 4,684, Taxable Sales (x$1,000) Smallest: 105 Middle: 464,571 Largest: 45,664,110 % Residential Minimum: 0% Middle: 37% Maximum: 97%

27 Review of the Adjustment Method The Board reviewed the AM during SB2202 An AM Review Working Group also met in Taxable Sales Deflator Index recommended Multiple reviews with many participants indicated there is no alternative method for the current diversion rate measurement system that Uses readily available data for all jurisdictions And is more accurate

28 Issues with the Adjustment Method Seldom well understood Data from other agencies not available until December of the following year Long delay in diversion rate estimates May not work well for: Small jurisdictions Fast growing jurisdictions Industrial jurisdictions

29 DISPOSAL REPORTING SYSTEM

30 All sources of solid waste Residential, commercial, industrial, self-haul, construction & demolition, military, institutional, marine, etc. From all types of haulers Franchised, public and private, commercial, self-haulers, etc. Disposed anywhere Within same county or in other counties, states or nations Export is not disposal reduction Disposal Includes:

31 Disposal Reporting System (DRS) Uniform system to determine where waste is from Extensive stakeholder input in the development of regulations System requires tracking of information on an ongoing basis Reported information is summary data based on the tracked information

32 Who Reports in the Disposal Reporting System (Tracks tons by Jurisdiction-of-Origin)

33 2 weeks 4 weeks Summer/Fall

34 Issues with Disposal 2004 Disposal (Tons) Smallest: 486 Middle: 43,617 Largest: 4,747,081 Self-Haul Sector – More difficult to track by jurisdiction

35 Waste Flows Beyond Boundaries Los Angeles County: Waste Outflow to Landfills in 2003

36 Revisions to Disposal Reporting Regulations (Effective 1/1/06) Based on SB2202 recommendations and public input process Revised regulatory requirements: Scales & weighing Training of staff Origin survey frequency Methods for determining jurisdiction of origin Tracking/reporting tons & origin Records & access to records

37 PUTTING IT ALL TOGETHER BASE YEAR ADJUSTMENT METHOD DISPOSAL REPORTING

38 Jurisdiction Base Year Data Standard Diversion Rate Calculation 80 Tons Base Year Generation Disposal: All Landfilled and Transformed Waste 20 Tons Diverted 60 Tons Disposal BaseYear Generation Diversion: All Source Reduction, Recycling, & Composting = + BASE YEAR

39 Adjusting Base-Year to Estimate Measurement Year Generation = 80 Tons Adjusted Generation = 100 Tons MEASURED IN BASE YEAR ESTIMATED IN MEASUREMENT YEAR

40 Jurisdiction Measurement Year Disposal Data e.g., Documented: -disaster waste -allocation errors 200X

41 Estimating Measurement Year Disposal Rate

42 Estimating the Measurement-Year Diversion Rate

43 Transformation and Biomass Diversion Credits Jurisdictions are allowed to claim two types of diversion credits (transformation or biomass) that modify the measurements. If a jurisdiction claims one of these types of diversion credit, it may not claim the other type of credit.

44 Biomass Diversion Credit Biomass Credit Limit—10% of Generation If the estimated measurement-year generation (without biomass) is 100 Tons And the tonnage sent to the biomass facility is 20 Tons (20%) of measurement-year generation And the diversion rate without biomass is 40% Then the biomass credits allotted are 10% (max.) And the biomass-adjusted diversion rate is 50%

45 Optional Transformation Diversion Credit Waste sent to permitted transformation facilities counts as disposal Transformation is also called waste-to-energy 3 permitted transformation facilities in California Starting in 2000, a portion of waste sent to transformation may count as diversion Up to 10% of a city’s waste generation that is sent to transformation may count as diversion each year

46 Landfilled = Disposal Transformed = Disposal Source Reduced, Recycled, or Composted = Diversion Estimated 200X Generation Traditional Diversion Disposal 100 Tons Generated – 50 Tons Disposed = 50 Tons Diverted 40 Tons 100 Tons 50 Tons Transformed = Diversion 200X DIVERSION RATE: Up to 10% Transformation Credit Transformation Credit 10 Tons 10%Credit Limit

47 Diversion Rates are Indicators The estimated diversion rates are only one indicator of jurisdiction’s compliance with AB 939 Diversion rates cannot be calculated until all adjustment factor data is available

Report Year Population (May 2004) CPI (March 2005) Employment (June 2005) Taxable Sales (December 2005) Statute Due Date: August 1, 2005 Disposal Data Available (September 2005) Extended Due Date: March 1, /04 Biennial Reviews Begin: September, 2006

49 Statewide Diversion Rate Estimate

50 SYSTEM REVIEW & IMPROVEMENTS

51 System Review & Improvements Background Diversion rate measurement accuracy and compliance have been issues since early 1990’s Diversion rate measurement system is complex Several Board efforts over time to improve measurement accuracy and impact on compliance All involved extensive stakeholder input Statutory and regulatory revisions have been made to improve accuracy

52 Current Efforts Fall started public process to identify options for an alternative system Issues with existing system: Measurement system is complex Some data needed to calculate diversion rates (adjustment factors) not available until 1 year after measurement year About ½ of jurisdictions have 1990 base years (used in calculations) that may no longer be accurate Disposal data more accurate for larger areas with fewer boundaries rather than individual jurisdictions Small, rural jurisdiction disposal data has large annual fluctuations Addressing accuracy issues is time consuming

53 Current Efforts (cont’d.) Stakeholders wanted: Timely measurement Flexible system Accountability Simple system Cost-effective system Use measurement as indicator and focus on diversion program implementation

54 Option for Alternative Compliance System Staff developed option to meet criteria Option distributed to stakeholders, discussed at public workshops Option built on existing system Legislature will set new goal/requirement Relies on countywide disposal data as indicator Consistent with statutory intent to reduce waste disposal and Board’s zero waste goal More accurate disposal data with newly revised regulations Focus on diversion programs – they reduce waste disposed Reduce time spent on measurement issues and progress reports to Board Keep Board’s existing Biennial Review framework for reviewing jurisdiction progress with some changes

55 Comparison of Systems Existing System Jurisdiction adopts plan to achieve 50% diversion Jurisdiction implements diversion plan Jurisdiction submits annual progress report Diversion rate Adjustment method accounts for growth Diversion program implementation Board Option Jurisdiction adopts plan to achieve new disposal requirement Jurisdiction implements diversion plan Jurisdiction submits biennial progress report Countywide disposal as indicator Describe growth Diversion program implementation

56 Comparison (cont’d.) Existing System Biennial Review (cont’d.) Allows “good faith effort” if diversion programs fully implemented, but diversion rate is not met Compliance order based on diversion program implementation Board Option Biennial Review (cont’d.) Allows “good faith effort,” including consideration of growth, if diversion programs fully implemented, but countywide disposal requirement is not met Compliance order based on diversion program implementation

57 Comparison of Systems (cont’d.) Existing System Board reviews jurisdiction progress every two years (Biennial Review) Diversion rate Evaluate diversion program implementation Increased scrutiny of diversion program implementation if diversion rate not met Board Option Board reviews jurisdiction progress every two years (Biennial Review) Countywide disposal as indicator Evaluate diversion program implementation Increased scrutiny of diversion program implementation if countywide disposal requirement is not met

58 Statewide Diversion Rate Estimate

59 Status of Alternative Compliance System Board directed staff to submit option for an alternative compliance system to Legislature Board and stakeholders will have opportunity to participate in development of any legislation dealing with the option and the new disposal goal/requirement

60 “WRAP-UP” SUMMARY

61 Summary of Key Points Diversion rate estimate is an indicator Jurisdiction progress is based on Diversion rate estimate, AND Program implementation Several adjustment method reviews concluded there is no alternative method that: Uses readily available data for all jurisdictions And is more accurate

62 Summary of Key Points (Cont.) Many diversion rate estimate problems relate to base year data accuracy 192 jurisdictions (45%) have base-years 232 jurisdictions (55%) have base-years

63 Summary of Key Points (Cont.) DRS accuracy should improve beginning with 2006 data Board will be reviewing jurisdiction progress in upcoming biennial reviews starting September 2006 Legislative discussions will be starting on an alternative compliance system that addresses many issues

64 Questions? For more information on the diversion rate measurement system, see