January 9, 2006

Grand Sanitation
PO Box 359
Scotch Plains, NJ 07076

Re: Non-Contract Solid Waste Disposal

Dear Sir or Madam:

In its role as the implementing agency for the Union County District Solid Waste Management Plan (“County Plan”), the Union County Utilities Authority (“UCUA”) recommended to the Union County Board of Chosen Freeholders (“Freeholders”) the adoption of an amendment to the County Plan in February 2003. The Plan Amendment provided for the re-establishment of regulatory waste flow control over Solid Waste Types ID 10 and 25 (both residential and commercial) generated within Union County and not currently disposed of at the Union County Resource Recovery Facility (“UCRRF”) in Rahway, New Jersey pursuant to voluntary contracts (“Non-Contract Waste”). Upon adoption by the Freeholders, the Plan Amendment for Non-Contract Waste was approved by the NJDEP in a Certification issued on June 13, 2003. The system of regulatory flow control for Non-Contract Waste was placed into operation on July 21, 2003, whereby Non-Contract Waste has been directed to one of three facilities for disposal: the UCRRF and the Waste Management transfer stations in Elizabeth and Linden, New Jersey.

The rate for disposal of Non-Contract Waste at each facility has been $86.69 per ton since the inception of the program. Recently, the UCUA received approval in an Order issued on December 29, 2005 by the NJDEP to increase this rate to $99.00 per ton. in accordance with New Jersey law, the NJDEP conducted a duly noticed public hearing at the offices of the UCUA in Rahway to solicit public comment on the request for an increase in the rate for Non-Contract Waste prior to issuing its Order. The rate is comprised of the cost of disposal services obtained through public bidding, outstanding debt service associated with the Union County solid waste system, and UCUA administrative costs, including host community benefits.

The purpose of this letter is to notify users of the Union County solid waste system that the UCUA intends to implement an increase in the rate for the disposal of Non-Contract Waste as of February 1, 2006 to $94.00 per ton. The peak rate of $99.00 approved by NJDEP for Non-Contract Waste disposal in the County also included a tax of $5.00 per ton that is expected to be implemented by the State of Pennsylvania for the use of landfills in the state for the disposal of solid waste. The UCUA does not intend to charge the $5.00 per ton tax until such time as the Pennsylvania Legislature enacts legislation authorizing the imposition of the tax on all landfill disposal in Pennsylvania. Therefore, the disposal rate of $94.00 per ton does not include a component for the additional tax. It is currently reported that the tax may be placed into effect on July 1, 2006. Should the Pennsylvania Legislature enact legislation authorizing the imposition of the tax for disposal in the State, the UCUA will be forced to increase the Non-Contract Waste disposal rate consistent with the approval received from the NJDEP.

In the event there may be any questions pertaining to the contents of this letter, kindly contact me at this office.

Very truly yours,

Union County Utilities Authority

Joseph A. Spatola, Executive Director