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88 Page 126 APPENDIX A SBR will provide market price transparency to SBWMA for approximately 90% of the value of TRM at the MRF and buyback. This will be done by providing documentation to support California Redemption Value (CRV) payments (refund, processing, administration, and quality incentive program) and Fiber (Old Newspaper, Old Corrugated Containers, Mixed Paper) payments. Based on February 2009 market values, CRY payments constitute approximately 45% of the projected material value and Fiber (ONP, OCC, and Mix Paper) constitute approximately 45% of the projected material value. All CRY Refund, Processing, Administrative, and Quality Incentive Program payments will flow through SBR to SBWMA. When the Revenue Guarantee is met then 25% of those payments will be retained by SBR. SBR will need SBWMA assistance to ensure that when Curbside Programs (CS) registration is chartged from Allied to SBR that the Individual Commingled Rate (ICR) for PET remains in effect. SBR requests that SBWMA continue to pay for sampling, sorting, ~nd documenting ICR for PET and also for other material types so that aluminum, glass, and hdpe can also achieve ICR rates that are higher than statewide averages. SBR proposes that SBWMA use Official Board Markets (OBM) The YeHow Sheet Transacted Paper Stock Export Prices for Los Angeles as the "Baseline" for checking monthly prices of Mixed Paper #1, Old Newspaper De-Ink #7-#8, and OCC #11. The monthly price range for the three grades could be established as follows; use the average Los Angeles export OBM price from the second week of the month, adjust the price to reflect the prevailing ocean freight differential for shipments to main Asia ports from Oakland v. Los Angeles, adjust the price to reflect the prevailing market trucking rate for transporting ocean containers from San Carlos to Oakland, and establish a range +/- 30/0 from that baseline. If monthly pricing is above or below the baseline range, then a set off balance will be calculated. A current example of how this mechanism works is found in the attached spreadsheet SBWMA_SBR_ YS_Index_Example.xls. DIVERSION AND RECYCLING OF NON TARGETED RECYCLABLE MATERIAL Non targeted recyclable materials and other materials delivered to the MRF by the Collection Contractor will accompany Targeted Recyclable Materials. SBR will incur costs to recycle and divert non targeted recyclable materials delivered to the MRF by the collection contractor and as a result SBWMA and Member Agencies will benefit from higher diversion levels. There are two types of such materials; materials which can be recycled, and materials which can be diverted. Materials which can be recvcled - SBR will have an opportunity, but not an obligation, to sort and recycle materials which are not TRM. SBR will be responsible for all costs of sorting and preparing such materials, and as such will also be entitled to receive all revenues from the sale of such non- TRM recyclable materials.