HomeMy WebLinkAboutslogarbagefranchiseagmtAttachment 2
ORDINANCE NO . 1319 (1997 SERIES )
AN ORDINANCE_OF THE CITY OF SAN LUIS OBISP O
GRANTING A FIFTEEN YEAR FRANCHISE TO SAN LUIS GARBAG E
COMPANY FOR COLLECTING, PROCESSING AND DISPOSING OF SOLID
WASTE WITHIN THE CITY OF SAN LUIS OBISPO
WHEREAS, public health and safety demand the orderly and periodic collection an d
disposal of solid waste from properties with the City of San Luis Obispo (City); an d
WHEREAS, the City has determined that an exclusive franchise granted to a private
company is the most effective and efficient way to collect and remove solid waste within the City ;
and
WHEREAS, the current franchisee, San Luis Garbage Company, has provided solid wast e
collection and disposal service within the City for more than 45 years without interruption ; and
WHEREAS, continuing the franchise held by San Luis Garbage Company would ensure th e
continuation of effective and efficient solid waste collection, processing and disposal service ;
BE IT ORDAINED by the City Council of the City of San Luis Obispo as follows :
SECTION 1 . An exclusive franchise shall be granted San Luis Garbage Company fo r
services to collect, process and dispose of solid waste subject to the terms and conditions presente d
in Exhibit 1, Solid Waste Franchise Agreement .
SECTION 2 . Ordinance No . 1177 (1990 Series) shall be repealed upon the effective date o f
this ordinance .
SECTION 3 . A synopsis of this ordinance, approved by the City Attorney, together with th e
names of the Council Member voting for and against, shall be published at least five days prior t o
its final passage, in the Telegram-Tribune, a newspaper published and circulated in this City . Thi s
ordinance shall go into effect at the expiration of thirty (30) days after its final passage .
INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obisp o
at a meeting held on the 4th day of March on motion ofCouncilP'ember Romero ,seconded by councilMather Williams ,and on
the following roll call vote :
AYES :Council Members Romero, Williams, Smith and Mayor Settle
NOES :Vice mayor Roalma n
ABSENT:None
ATTEST :
Mayor Allen Settl e
APPROVED AS TO FORM :
Ordinance No . 1319 (1997 Series)
FINALLY PASSED this 25th day of March, 1997, on motion of Counci l
Member Romero, seconded by Council Member Williams, and on the following roll cal l
vote :
AYES :
Council Members Romero, Williams, Smith and Mayor Settl e
NOES :
Vice Mayor Roalma n
ABSENT :None
Mayor Allen K . Settle
ATTEST:
City of San Luis Obispo
Solid Wast eFranchise
An agreement wit h
San Luis Garbage Company
Franchise Agreement - Solid Wast e
TABLE OF CONTENTS
ARTICLE 1 . DEFINITIONS 5
ARTICLE 2 . REPRESENTATIONS AND WARRANTIES OF THE FRANCHISEE 9
2 .1 Corporate Status 9
2 .2 Corporate Authorization 9
2 .3 Compliance with Laws and Regulations :
9...................................................
2 .4 Financial Representation 9
2 .5 Absence of Litigation 9
ARTICLE 3 . TERM OF AGREEMENT
1 0................................................
3 .1 Effective Date 1 0
3 .2 Term of Agreement 1 0
3 .3 Option to Extend 1 0
3 .4 Conditions to Effectiveness of Amendment 10
ARTICLE 4 . SCOPE OF AGREEMENT 1 1
4 .1 Grant and Acceptance of Exclusive Franchise for Solid Waste Collection and Disposal 1 1
4 .2 Limitations to Scope 1 1
4 .3 Administration of Franchise 1 2
4 .4 Serve Without Interruption 1 2
4 .5 Permits and licenses 1 2
4 .6 Preservation of City Property 1 2
4 .7 Franchise as Arranger 1 2
4 .8 Use of City Streets 1 2
4 .9 Annexations 1 2
4 .10 Ownership of Solid Waste 1 3
ARTICLE 5 . DIRECT SERVICES 1 4
5 .1 General 1 4
5 .2 Single Family Residential Solid Waste Collection Service 1 4
5 .3 Other Solid Waste Solid Waste Collections Service 1 4
5 .4 Public Facilities Collection 1 5
5 .5 Missed Pick-up 1 5
5 .6 Bulky Waste Collection 1 5
5 .7 Semi Annual Clean-up Weeks 1 5
5 .8 City's Right to Request Changes 1 6
5 .9 Report Accumulation of Solid Waste ; Unauthorized Dumping 1 6
5 .10 City directed Removal of Solid Waste 1 6
5 .11 Processing of Solid Waste 1 7
5 .12 Designated Disposal Facility 1 7
5 .13 Hazardous Waste Handling and Disposal 1 7
ARTICLE 6 . COLLECTION SERVICE STANDARDS 1 9
6 .1 Operations 1 9
6 .2 Service Complaints 2 1
6 .3 Periodic Performance Audit 2 2
6 .4 Performance Hearing 22
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Franchise Agreement - Solid Waste
ARTICLE 7.OTHER SERVICES : BILLING, REPORTING, RECORD-KEEPING AN D
PUBLIC EDUCATION 2 3
7 .1 Billing 2 3
7 .2 Owner Responsible for Payment- 23
7.3 Collection of Bills from Delinquent Customers 23
7 .4 Records 23
7 .5 Waste Generation/Characterization Studies 24
7 .6 Report Formats and Schedule 2 4
7 .7 Monthly Reports : 2 5
7 .8 Quarterly Report 2 5
7 .9 Annual Financial Audit 2 5
7 .10 Maintenance of Accounting Records 2 6
7 .11 Right to Audit Records 2 6
7 .12 Inspection by City 2 6
7 .13 Office 2 6
7 .14 Customer Information 2 6
7 .15 Regulatory Reporting 2 7
7 .16 Public Education 2 7
7 .17 Records Retention 2 7
ARTICLE 8 .PAYMENTS TO CITY 2 8
8 .1 Franchise Fee Payment 2 8
8 .2 Schedule of Payment 2 8
8 .3 AB 939 Fee Amount 2 8
8 .4 Other Fees 2 8
8 .5 Time and Method of Payments 2 8
8 .6 Review of Fee Payments 2 8
8 .7 Business License Tax 2 8
ARTICLE 9 . SERVICE RATES AND REVIEW 2 9
9 .1 General 2 9
9 .2 Service Rates 2 9
9 .3 Rate Review 2 9
9 .4 Special Interim Rate Review 2 9
9 .5 Allowable Profit 2 9
9 .6 Publication of Rates 3 0
ARTICLE 10 . INDEMNITY, INSURANCE AND BOND 3 1
10 .1 Indemnification 3 1
10 .2 Insurance 3 1
10 .3 Performance Bond 3 3
ARTICLE 11 . CITY'S RIGHT TO PERFORM SERVICE 3 4
11 .1 General 3 4
11 .2 Temporary Possession of Franchisee's Property 3 5
11 .3 Billing and Compensation to City During City's Possession 3 5
11 .4 City's Right to Relinquish Possession 3 5
11 .5 Duration of City's Possession 3 5
ARTICLE 12 . DEFAULT AND REMEDIES 3 6
12 .1 Events of Default 3 6
12 .2 Right to Terminate Upon Default 3 7
12 .3 Possession of Property, Billing Records and Systems Upon Termination 3 7
12 .4 City's Remedies Cumulative ; Specific Performance 3 7
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Franchise Agreement - Solid Waste
12 .5 Excuse from Performance 3 7
12 .6 Liquidated Damages 3 8
12 .7 Notice, Hearing and Appeal 4 0
12 .8 Financial Material Errors, Omissions or Irregularities 4 1
ARTICLE 13 . ASSIGNMEN T
13 .1 Assignment 42
ARTICLE 14 . OTHER AGREEMENTS OF THE PARTIES 44
14 .1
Relationship of Parties 44
14 .2 Governing Law 44
14 .3
Jurisdiction 44
14 .4 Subcontracting 44
14 .5 Interests of Franchisee 44
14 .6 Binding on Successors : 44..................................................................................
14 .7 Transition to Next Franchisee 44
14 .8
Parties in Interest 4 5
14 .9 Waiver 4 5
14 .10 Condemnation 4 5
14 .11 City Free to Negotiate with Third Parties 4 5
14 .12 Immigration Act of 1986 4 5
14 .13 Non-Discrimination 4 5
14 .14 Public and Employee Safety 4 5
14 .15 Recycled Products 4 5
14 .16 Notice 45
14 .17 Representatives of the Parties 4 6
14 .18 Entire Agreement 46
14 .19 Section Headings 46
14 .20 References to Laws 4 6
14 .21 Interpretation 4 6
14 .22 Amendment 4 6
14 .23 Severability 4 7
14 .24 Counterparts 4 7
14 .25 Use of "Will" 4 7
14 .26 Surviving Provisions 4 7
14 .27 Investigations 4 7
APPENDICE S
Appendix I- Landfill Disposal Capacity Agreement
Appendix II- Container Replacement Guideline s
Appendix III-City Solid Waste Collection Services
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Franchise Agreement - Solid Waste
FRANCHISE AGREEMENT
BETWEE N
THE CITY OF SAN LUIS OBISP O
AND
SAN LUIS GARBAGE COMPAN Y
For Collection, Diversion, and Disposal of Solid Wast e
Within the City of San Luis Obisp o
This Agreement is made and entered into as of the 23 rd day of April, 1997 in the State of California b y
and between the City of San Luis Obispo, a Charter Municipal Corporation of the State of California ,
(hereinafter the "City") and San Luis Garbage Company, Inc ., a California corporation (hereafter
referred to as the "Franchisee").
RECITAL S
This Agreement is entered into with reference to the following facts and circumstances :
1.The Legislature of the State of California, by enactment of California Integrated Waste Managemen t
Act of 1989, Division 30 of the California Public Resources Code, commencing with Section 4000 0
(CIWMA), declares that it is within the public interest to authorize and require local agencies t o
make adequate provisions for solid waste handling within their jurisdictions . The law, AB 93 9
requires a 50 percent reduction in the amount of waste which is landfilled by 2000 ; an d
2.The City has authority to grant a franchise for collection, diversion, and disposal of solid wast e
within the City of San Luis Obispo pursuant to City Charter Article X and Chapter 8 .04 of the Sa n
Luis Obispo Municipal Code ; an d
3.The City Council has determined that solid waste, including discards from residential and non -
residential properties, must be regulated to protect public health, safety and welfare ; to conserv e
landfill disposal capacity ; and to develop and maintain effective resource management programs ;
an d
4.The City Council has determined that all occupied developed properties in the City must participat e
in the City's solid waste collection and disposal service ; and
5.The City Council has determined that an exclusive franchise granted to a private company is th e
most effective and efficient way to collect and remove solid waste within the City ; an d
6.The City Council has determined that the Franchisee can provide needed solid waste services ; and
7.Franchisee is responsible for arranging for solid waste collection and disposal service, and an
appropriate landfill destination for collected solid waste ; and
8.Upon passage by the City Council, Ordinance 1319, pursuant to the authority granted by City
Charter Article X and Chapter 8 .04 of the San Luis Obispo Municipal Code ; and
9.This Agreement has been developed by and is satisfactory to the parties .
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, it i s
hereby agreed by and between the City and Franchisee as follows :
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Franchise Agreement - Solid Waste
ARTICLE 1 .DEFINITIONS
For purposes of this Agreement, unless a different meaning is clearly required, the following terms shal l
have the following meanings :
1 .1
"AB 939"means the California Integrated Waste Management Act of 1989, as it may b e
amended from time to time .
1 .2
"Affiliate" means all businesses (including corporations, limited and general partnerships ,
and sole proprietorships) which are directly or indirectly related to Franchisee by virtue of a
common ownership interest or common management shall be deemed to be "Affiliated with "
Franchisee and included within the term "Affiliate" as used herein . An Affiliate shall includ e
a business in which Franchisee owns a direct or indirect ownership interest, a business whic h
has a direct or indirect ownership interest in Franchisee and /or a business which is als o
owned, controlled or managed by any business or individual which has a direct or indirec t
ownership interest in Franchisee . For purposes of determining whether an indirect ownershi p
exists, the constructive ownership provisions of Section 318(a) of the Internal Revenue Cod e
of 1986, as in effect the date of this Agreement, Shall apply ; provided, however, that (i) "te n
percent (10%)" shall be substituted for "fifty percent (50%)" in Section 318(a)(2)(C) and i n
Section 318(a)(3)(C) thereof; and (ii) Section 318(a)(5)(C) shall be disregarded . Fo r
purposes of determining ownership under this paragraph and constructive or indirec t
ownership under Section 318(a), ownership interest of less than ten percent (10%) shall b e
disregarded and percentage interests shall be determined on the basis of the percentage o f
voting interest or value which the ownership interest represents, whichever is greater .
1 .3
"Agreement" means this agreement the between the City and Franchisee for arranging fo r
the collection, diversion, and disposal of solid waste, and collection and any futur e
amendments hereto .
1 .4
"Arranger" means any person that arranges for the collection, diversion, transfer, burning ,
disposal or processing of any solid waste .
1 .5
"Bulky Waste" means discarded, large household appliances, furniture, tires, carpets ,
mattresses, and similar large items which require special handling due to their size, but ca n
be collected without the assistance of special loading equipment (such as forklifts or cranes )
and without violating vehicle load limits . It does not include abandoned automobiles .
1 .6
"CERCLA" means the Comprehensive Environmental Response, Compensation an d
Liability Act, 42 U .S .0 Section 9601, et seq .
1 .7
"City" means the City of San Luis Obispo, a Charter municipal corporation, and all th e
territory lying within the municipal boundaries of the City as presently existing or as suc h
boundaries may be modified during the term of this Agreement .
1 .8
"Collect"or "Collection"means to take physical possession of, transport, and remove Soli d
Waste within and from the City .
1 .9
"Commercial and Industrial Property"means property upon which business activity i s
conducted, including, but not limited to, retail sales, services, wholesale operations ,
manufacturing and industrial operations, but excluding businesses conducted upon residentia l
properties which are permitted under applicable zoning regulations and are not the primar y
use of the property .
1 .10 "Construction Debris"means used or discarded construction materials removed from a
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Franchise Agreement - Solid Wast e
premises during the construction, repair or renovation of a structure .
1 .11 "Container"means any bin, vessel, can or receptacle used for collecting and storing soli d
waste before removal .
1 .12 "Demolition Debris"means used construction materials removed from a premises durin g
the razing or renovation of a structure .
1 .13 "Designated Collection Location"means the place where an authorized recycling agent o r
a solid waste collector has contracted with either the City or a private entity to collect soli d
waste .
1 .14 "Disposal Site(s)"means any properly licensed and permitted solid waste facility o r
facilities arranged by Franchisee after consultation with City for the ultimate disposal of solid
waste collected by Franchisee .
1 .15 "Designated Processing Facility"means any properly licensed and permitted plant or sit e
used for the purpose of sorting, cleansing, treating, reconstituting, processing and marketin g
recyclable materials, which has been arranged by Franchisee after consultation with City .
1 .16 "Disposal"means the ultimate disposition of solid waste collected by Franchisee at a landfil l
in full regulatory compliance or other fully permitted disposal site .
1 .17 "Facility"means any plant or site, owned or leased and maintained and/or operated or use d
by Franchisee for purposes of performing under this Agreement .
1 .18 "Franchise"means the special right granted by the City of San Luis Obispo to operate a
solid waste collection company providing such services within the City .
1 .19 "Franchisee"means San Luis Garbage Company, a corporation organized and operatin g
under the laws of the State of California, and its officers, directors, employees, agents ,
companies .
1 .20 "Full Regulatory Compliance"means compliance with all applicable permits for a facilit y
and with other applicable regulations such that the Franchisee will at all times maintain th e
ability to fully comply with its obligations under this Agreement .
1 .21 "Green Waste"means tree trimmings, grass cuttings, dead plants, leaves, branches and dea d
trees (no more than six (6) inches in diameter) and similar materials generated at th e
premises .
1 .22 "Gross Revenues"means the sum of the cash receipts derived by Franchisee from custome r
billings for solid waste collection services and orange bag sales provided in the City .
1 .23 "Hazardous Waste"is as defined in Article 2, Chapter 6 .5, Section 25117 of the Health an d
Safety Code and Public Resource Code Section 40141 . For the purposes of this Agreement ,
however, hazardous waste shall not include Household Hazardous Waste which may b e
contained in solid waste .
1 .24 "Household Hazardous Waste"means hazardous waste generated at residential premises .
1 .25 "Interruption of Service"means (a) any period during which Franchisee's operations ar e
diminished or discontinued by circumstances beyond its control, or (b) any period durin g
which operations are diminished or discontinued as a result of any breach of the Agreemen t
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Franchise Agreement - Solid Wast e
by Franchisee or (c) any period after the City has terminated the franchise and until the Cit y
can reasonably acquire other suitable service and/or enter into a new franchise agreement .
1 .26 "Materials Recovery Facility"means a permitted Facility where solid wastes are sorted o r
separated for the purposes of recycling or reuse .
1 .27 "Medical Waste"means biohazardous waste, sharp wastes, waste which is generated o r
produced as a result of the diagnosis, treatment or immunization of human beings or animals ,
in research pertaining thereto, or in the production or testing of biological products, pursuan t
to California Health and Safety Code, Section 25023 .2 .
1 .28 "Multi-Family Dwelling Unit"means any premises, other than a single family dwellin g
unit, used for residential purposes, irrespective of whether residence therein is transient ,
temporary or permanent .
1 .29 "Occupied"means when a person or persons has taken or is/are holding possession of a
premises for temporary or permanent use . For the purpose of determining whether a
premises was occupied during periods when solid waste collection service was available t o
such premises, the premises shall be presumed to have been so occupied unless evidence i s
presented that no gas, electric, telephone or water utility services were consumed on suc h
premises during such periods or such other evidence is presented to the satisfaction of th e
City Administrative Officer .
1 .30 "Owner" means the person or persons record title to the property constituting the premise s
to which solid waste collection service is to be provided under this Agreement or the perso n
holding legal title to a facility used by Franchisee under this Agreement .
1 .31 "Person"means any individual, firm, association, organization, partnership, corporation ,
business trust, joint venture, the United States, the State of California, the County of San Lui s
Obispo, local agencies and special purpose districts .
1 .32 "Premises"means any land, or building where solid waste is generated or accumulated .
1 .33 "Recyclable Materials"means residential and non-residential by-products or discards o f
economic value which include, but are not limited to, aluminum, glass, paper, plastic, metal ,
and green or woody debris .
1 .34 "Related Party Entity"means any affiliated entity which has financial transactions with th e
Franchisee .
1 .35 "Residential Property"means property used for residential purposes, irrespective o f
whether such dwelling units are rental units or are owner-occupied, and includes both singl e
family and multi-family dwelling units .
1 .36 "Rubbish"means all waste wood, wood products, printed materials, paper, paste board ,
rages, straw, used and discarded clothing, packaging materials, ashes, floor sweepings, glas s
and other materials not included in the definition of Garbage, Hazardous Substance, o r
Recyclable Materials .
1 .37 "Single Family Dwelling Unit"means each premises used for or designated as a single
family residential dwelling, including each unit of a duplex or triplex in all cases in whic h
there is separate or individual solid waste collection service .
1 .38 "Solid Waste" means all putrescible and non-putrescible residential refuse, commercia l
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Franchise Agreement - Solid Waste
solid waste, institutional solid waste, garbage, recyclable material, yard waste, and rubbish ,
and as otherwise defined in Public Resources Code §40191 . Solid waste which is not
required to be collected includes :
(a)Demolition and construction debris which are not offered by persons performing th e
work and which may be legally collected and disposed of by some alternate means ;
(b)Recyclable materials separated from solid waste by the waste generator and for which
waste generator sells or is otherwise compensated by a collector in a manner resultin g
in a net payment to the Waste generator ;
(c)Recyclable materials separated from solid waste by the waste generator and which th e
waste generator donates to a charitable organization such as the Boy Scouts;
(d)Materials removed by householders or occupants and transported by them to disposa l
facilities or recycling centers ;
(e)Residential recyclable materials source separated by the waste generator for th e
purposes of scheduled collection with the recyclable materials collection Franchisee .
1 .39 "Term"means the term of the Agreement, as provided for in Article 3 .
1 .40 "Waste Generator"means any person as defined by the Public Resources Code, whose ac t
or process produced solid waste as defined in the Public Resources Code, or whose act firs t
causes solid waste to become subject to regulation .
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Franchise Agreement - Solid Waste
ARTICLE 2 .REPRESENTATIONS AND WARRANTIES OF THE FRANCHISE E
2 .1
Corporate Statu s
Franchisee is a corporation duly organized, validly existing and in good standing under th e
laws of the State of California . It is qualified to transact business in the State of Californi a
and has the corporate power to own its properties and to carry on its business as now owne d
and operated and as required by this Agreement .
2 .2
Corporate Authorizatio n
Franchisee has the authority to enter into and perform its obligations under this Agreement .
The Board of Directors of Franchisee (or shareholders if necessary) have taken all action s
required by law, its articles of incorporation, its bylaws or otherwise to authorize th e
execution of this Agreement . The persons signing this Agreement on behalf of Franchise e
have authority to do so .
2 .3
Compliance with Laws and Regulation s
Franchisee shall comply with all existing and future City, County, other local agencies, State ,
and Federal laws and regulations with particular note of Article X of the City Charter an d
Chapter 8 .04 of the City Municipal Code .
2 .4
Financial Representatio n
Franchisee represents that it has the financial ability to full perform its obligations as set fort h
in this Agreement .
2 .5
Absence of Litigatio n
Franchisee represents that there are no suits or threatened suits which would impair th e
financial or legal ability of Franchisee to perform its obligations under this Agreement an d
that the entering into this Agreement by Franchisee will not in any was constitute a breach o f
any other agreement entered into by Franchisee with other parties, or constitute a violation o f
any law .
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Franchise Agreement - Solid Waste
ARTICLE 3 . TERM OF AGREEMEN T
3 .1
Effective Dat e
The effective date of this Agreement shall be April 23, 1997 ("Effective Date").
3 .2 Term
The term of this Agreement shall be fifteen years, commencing at 12 :01 a .m., April 23, 1997,
and expiring at midnight, April 23, 2012, subject to extension as provided in paragraph 3 .3
(Option to Extend).
The City Council may elect to renew this franchise at any time during the three year perio d
prior to the end of the franchise .
3 .3
Option to Exten d
The City shall have the sole option to extend this Agreement up to 36 months in periods of a t
least twelve (12) months each . If City elects to exercise this option, it shall give writte n
notice not later than ninety (90) days prior to the initial termination date, or, if one extensio n
has been exercised, ninety (90) days prior to the extended termination date .
3 .4
Conditions to Effectiveness of Amendmen t
The obligation of City to permit this Agreement to become effective and to perform it s
undertakings provided for in this Agreement is subject to the satisfaction of each and all o f
the conditions set out below, each of which may be waived in whole or in part by the City, i n
its sole direction .
(1)
Accuracy of Representations .The representations and warranties made b y
Franchisee in Article 2 of this Agreement are true and correct on and as of th e
effective date.
(2)
Effectiveness of City Council Action .The City's Ordinance No . 1319, approving
this Agreement, shall have become effective pursuant to California law on or prior t o
the effective date .
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Franchise Agreement - Solid Waste
ARTICLE 4 . SCOPE OF AGREEMENT
4 .1
Grant and Acceptance of Exclusive Franchise for Solid Waste Collection and Disposa l
Subject to paragraphs 3 .4 (Conditions to Effectiveness of Agreement) and 4 .2 (Limitations t o
Scope), this Agreement grants the Franchisee the exclusive right to arrange for the collection ,
processing, diversion and disposal of Solid Waste from residential and non-residentia l
properties placed in the designated collection location for regular or scheduled collection i n
accordance with the City's Municipal Code and Ordinances, except where otherwis e
precluded by law. Franchisee accepts the grant of the Franchise under the terms an d
conditions as set forth in this Agreement . Franchisee agrees to perform and be bound b y
each of the conditions proposed in the grant and by procedural ordinance and the
requirements of Acceptance on file with the City Clerk's office (Article X of the City Charter ,
Section 1006, Duties of Grantee).
4 .2
Limitations to Scop e
This Agreement for the collection, processing, diversion and disposal of Solid Waste fro m
residential and non-residential properties shall be exclusive except as to the followin g
categories of solid waste, which the Franchisee may, but shall not be obligated to collect ,
transfer, process, divert or dispose of :
A .
To the extent allowable by law, all residential recyclable materials whethe r
1.source separated by the waste generator for the purpose of placing fo r
scheduled collection with the recycling collection franchisee, o r
2.separated from solid waste by the waste generator and which the wast e
generator either donates to a charitable organization, or sells or is otherwis e
compensated by a collector in a manner resulting in a net payment to the wast e
generator ; o r
3.separated at any premises and transported by the owner or occupant of suc h
premises (or by his or her full-time employees) to a processing facility .
B .
All green waste material whethe r
1.source separated by the waste generator for the purpose of placing fo r
scheduled collection with the green waste collection franchisee, o r
2.separated from solid waste by the waste generator and which the wast e
generator either donates to a charitable organization, or sells or is otherwis e
compensated by a collector in a manner resulting in a net payment to the wast e
generator; or
3.separated at any premises and transported by the owner or occupant of suc h
premises (or by his or her full-time employees) to a processing facility .
4.Green waste removed from a premises by a gardening, landscaping, or tre e
trimming company as an incidental part of a total service offered by tha t
company rather than as a hauling service ;
C .
Animal waste and remains from slaughterhouse or butcher shops ;
D .
By-products of sewage treatment, including sludge, sludge ash, grit and screening ;
E .
Hazardous waste, liquid waste and medical waste .
Franchisee acknowledges and agrees that City may permit other persons besides Franchise e
to collect any or all types of the solid waste listed in paragraph 4 .2 without seeking o r
obtaining approval of Franchisee under this Agreement .
This grant to Franchisee of an exclusive Franchise, right and privilege to collect, transfer ,
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Franchise Agreement - Solid Waste
process, divert and dispose of Solid Waste shall be interpreted to be consistent with state an d
federal laws, now and during the term of this Franchise, and the scope of this exclusive
franchise shall be limited by current and developing state and federal laws with regard to
solid waste handling, exclusive franchise, solid waste flow control, and related doctrines .
In the event that future interpretations of current law, enactment or developing legal trend s
limit the ability of the City to lawfully provide for the scope of Franchise services a s
specifically set forth herein, Franchisee agrees that the scope of the Franchise will be limite d
to those services which may be lawfully provided for under this Agreement . Further, th e
Franchisee agrees that the City shall not be responsible for any lost profits or damage s
claimed by the Franchisee to arise out of further limitations of the scope of the Agreement se t
forth herein . It shall be the responsibility of Franchisee to minimize the financial impact to
other services being provided .
4 .3
Administration of Franchis e
The City Administrative Officer shall administer the City's solid waste franchise and th e
City's Utility Director shall supervise Franchisee's compliance with the Agreement's term s
and conditions .
4 .4
Serve Without Interruptio n
Franchisee shall continue to collect and dispose of solid waste throughout the term of it s
franchise without interruption .
4 .5
Permits and License s
Franchisee shall procure all permits and licenses, pay all charges and fees, and give all
notices as necessary .
4 .6
Preservation of City Property
Franchisee shall pay to the City, on demand, the cost of all repairs to public property mad e
necessary by any of the operations of Franchisee under this Agreement .
4 .7
Franchisee as Arrange r
The City and Franchisee mutually agree that the City's granting of this franchise shall not b e
construed as the City "arranging for" the collection and disposal of solid waste or recyclable s
within the meaning of CERCLA . The parties further mutually agree that the granting of th e
Franchise by City shall be construed as an action whereby the Franchisee is granted, an d
accepts the rights, responsibilities, benefits and liabilities of collection and disposal of soli d
waste . Commencing on the effective date of this Agreement and, to the extent tha t
Franchisee's performance under this Agreement requires the collection and disposal of soli d
waste, and may be construed as "arranging for" collection and disposal of solid waste withi n
the meaning of CERCLA, such actions shall be the sole responsibility of Franchisee an d
Franchisee expressly agrees to be solely responsible for all such actions .
4 .8
Use of City Street s
Such grant of franchise shall give Franchisee the right and privilege to operate solid wast e
collection vehicles and equipment on such streets, public ways, rights-of-way, or easement s
of the City .
4 .9
Annexation
The Franchisee shall automatically extend all services herein described to any area annexe d
to the City, except that the City may permit a firm franchised by the County of San Lui s
Obispo before the annexation to continue serving the area for a period not to exceed five (5 )
years .
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Franchise Agreement -Sal ii Wast e
4 .10 Ownership of Solid Wast e
Once solid waste is placed in containers and properly presented for collection, ownership an d
the right to possession shall transfer directly from the waste generator to Franchisee b y
operation of this Agreement .-Franchisee is hereby granted the right to retain, process, divert ,
dispose of, and otherwise use such solid waste, or any part thereof, in any lawful fashion o r
for any lawful purposed desired by franchisee .
Subject to this Agreement, Franchisee shall have the right to retain any benefit resulting fro m
its right to retain, process, divert, dispose of, or use the solid waste which it collects . Any
cost savings resulting from decreased disposal shall off-set Franchisee's operating expense s
in accordance with the "City of San Luis Obispo Rate Setting Process an d
Methodology Manual for Integrated Solid Waste Management Rates".
Solid waste, or any part thereof, which is disposed of at a disposal site or facility (whethe r
landfill, transformation facility, transfer station, or materials recovery facility) shall becom e
the property of the Owner or operator of the disposal site(s) or facility once deposited ther e
by Franchisee.
The City may obtain ownership or possession of solid waste placed for collection upo n
written notice of its intent to do so . However, nothing in this Agreement shall be construe d
as giving rise to any inference that the City has such ownership or possession unless suc h
written notice has been given to Franchisee .
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March 24, 1997
Franchise Agreement - Solid Wast e
ARTICLE 5 . DIRECT SERVICE S
5 .1
Genera l
The work to be done by the Franchisee pursuant to this Agreement shall include th e
furnishing of all labor, supervision, equipment, materials, supplies, and all other items an d
tasks necessary to perform the services required .
It is mandatory that the work to be done by Franchisee pursuant to this Agreement shall b e
accomplished in a thorough and professional manner so that all occupied develope d
properties within the City are provided reliable, courteous, prompt and high-quality service s
for collection of solid waste . All collection activities shall be conducted in such a manner
that public and private property will not be damaged . Franchisee shall replace containers and
covers in designated collection locations and shall not place them in the street or on adjoinin g
property .
The City reserves the right to revise its laws and regulations pertaining to solid wast e
collection and disposal in order to protect public health, safety and welfare . The Franchis e
Agreement is subject to any such future revisions of the City's laws and regulations, an d
Franchisee agrees to comply with any such changes in said laws and regulations as i f
incorporated into the Agreement .
5 .2
Single Family Residential Solid Waste Collection Servic e
For residential customers, Franchisee shall collect solid waste at the curbside at a minimu m
of once a week, Monday through Friday, except as specified below . The Franchisee wil l
notify solid waste customers of holiday collection schedules .
Handicapped residents shall have the option of placing their containers near their . dwelling ,
visible from the curb, and the Franchisee will collect their containers at this location an d
return container to same location . Franchisee will notify residents annually, beginning withi n
thirty (30) days of execution of this Agreement, of this collection option . To be eligible fo r
this collection option, residents must present proof of their physical incapacity to th e
Franchisee .
5 .3
Other Solid Waste Collection Servic e
5 .3 .1 Multi-family Solid Waste Collection Servic e
Franchisee shall collect Solid Waste from all Multi-Family dwelling units within the City ,
using containers of a size and shape acceptable to Franchisee, not less than once per week .
The Franchisee and each customer shall agree on the designated collection location . Special
consideration shall be given when determining the designated collection location for multi -
family accounts to ensure that the flow of traffic is not impeded and that it does not result i n
aesthetic degradation of an area. The designated collection location, if disputed by custome r
or Franchisee, shall be determined by the City .
5 .3 .2 Commercial, Industrial and Institutional Solid Waste Collection Service s
Franchisee shall collect Solid Waste from all commercial, industrial and institutiona l
properties within the City, using containers of a size and shape acceptable to Franchisee, no t
less than once per week . To the extent allowable by law, Franchisee shall collect from al l
occupied commercial, industrial and institutional properties in the City recyclable materials ,
arranged for Collection by the Franchisee with the Waste Generator, that have been placed i n
recycling containers provided by the Franchisee and placed in the designated collectio n
location for regular collection by Franchisee . To the extent allowable by law, nothing in thi s
Agreement shall preclude any organization from collecting recyclable materials fro m
commercial and/or industrial customers within the City .
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March 24, 1997
Franchise Agreement - Solid Waste
The Franchisee and each customer shall agree on the designated collection location . Special
consideration shall be given when determining the designated collection location fo r
commercial and/or industrial accounts to ensure that the flow of traffic is not impeded and
that it does not result in aesthetic degradation of an area . The designated collection location ,
if disputed by customer or Franchisee, shall be determined by the City .
Additionally, if in the City's opinion, the location of an existing collection location fo r
particular multi-family dwelling unit or commercial, industrial or institutional property i s
inappropriate, the City may direct the customer or Franchisee to relocate the collectio n
location . If a customer refuses to comply with said directive, Franchisee shall decline t o
collect solid waste from said mis-located containers .
5 .4
Public Facilities Collectio n
When requested by the City, the Franchisee shall collect and dispose of all Solid Wast e
generated at premises owned and/or operated by the City . Franchisee shall make collections
from City solid waste containers, not less than once per week, Monday through Friday or o n
Saturdays following non-working holidays . Collections shall be scheduled at a tim e
mutually agreed upon by Franchisee and the Waste Generator .
Franchisee shall provide, at City's direction, additional solid waste collection and disposa l
and consulting services including :
Collection of solid waste from all sidewalk litter containers ;
Collection of solid waste from City-sponsored special events as specified by the City ;
Collection of solid waste from containers in City parks as mutually agreed upon b y
the Franchisee and the City ;
Review of plans for land use or property developments with regard to solid wast e
service issues ; and
Residual solid waste remaining from temporary household hazardous waste collectio n
events .
5 .5
Missed Pickup s
Upon notification, Franchisee, shall collect any missed pickup which had been properly an d
timely placed for collection within 24 hours of said notice .
5 .6
Bulky Waste Collectio n
Franchisee shall make special collection arrangements with Waste Generators within seven
(7) days after waste generators' written or verbal request for the collection of bulky waste fo r
a fee established by the City and updated by resolution when the City adjusts rates . Any
single item is not to exceed 200 pounds .
5 .7
Semi-Annual Clean-up Weeks
At least twice per year throughout the term of this Agreement, Franchisee shall provide, i n
addition to regularly scheduled service, two clean-up events pursuant to guideline s
established by the Franchisee and approved by the City, for solid waste placed at the curb b y
single family dwelling units and at pre arranged locations for multi-family residentia l
properties in addition to each customer's normal collection service . The dates for each even t
shall be proposed by Franchisee and approved by the City prior to September 1 st of each year.
Franchisee shall record by class and weight (in tons) the solid waste, white goods, etc .,
collected during the clean-up events . Franchisee shall record the kinds and weights (in tons)
of solid waste diverted during these clean-ups from the landfill through recycling, reuse ,
transformation or other means of diversion .
(5)
15 March 24, 1997
Franchise Agreement - Solid Waste
5 .8
City Right to Request Change s
5 .8 .1 General
City may request Franchisee to perform additional services (including new diversio n
programs, billing services, etc .) or modify the manner in which it performs existing services .
Pilot programs and innovative services which may entail new Collection methods, differen t
kinds of services and/or new requirements for Waste Generators are included among th e
kinds of changes which City may request . Franchisee shall present, within 30 days of a
request to do so by City, a proposal to provide additional or expanded diversion service s
pursuant to the terms of Section 5 .8 .2 . Franchisee shall be entitled to an adjustment in it s
compensation in accordance with Section 9 .4, for providing such additional or modifie d
services .
5 .8 .2 New Programs
Franchisee shall present, within 30 days of a request to do so by City, a proposal to provid e
additional or expanded services . The proposal shall contain a complete description of th e
following :
o Collection methodology to be employed (equipment, manpower, etc .)
o Equipment to be utilized (vehicle number, types, capacity, age, etc .).
o Labor requirements (number of employees by classification).
o Type of Containers to be utilized .
o Provision for program publicity/education/marketing .
o A projection of the financial results of the program's operations for the remaining Term o f
the Agreement in a balance sheet and operating statement format including documentation o f
the key assumptions underlying the projections and the support for those assumptions .
o Materials processing facility to be utilized .
5 .8 .3 City's Right to Acquire Service s
Franchisee acknowledges and agrees that City may permit other Persons besides Franchise e
to provide additional services not otherwise contemplated under Section 5 .8 (City's Right to
Request Changes). If pursuant to Section 5 .8 .2 (New Programs), Franchisee and City canno t
agree on terms and conditions of such services in ninety (90) days from the date when Cit y
first requests a proposal from franchisee to perform such services, Franchisee acknowledge s
and agrees that City may permit Persons other than Franchisee to provide such services .
5 .9
Report of Accumulation of Solid Waste ; Unauthorized Dumpin g
Franchisee shall direct its drivers to note the addresses of any premises at which they observ e
that solid waste is accumulating and is not being delivered for collection ; and the address, o r
other location description, at which solid waste has been dumped in an unauthorized manner.
Franchisee shall report the address or description to the City within twenty-four (24) hour s
of such observation .
5 .10 City Directed Removal of Solid Wast e
Franchisee shall arrange for the removal of all accumulated solid waste and recyclables o n
any developed or vacant property in the City as directed by the City Utilities Director . The
Franchisee shall make a good faith effort to recover the cost of disposal from the wast e
generator, and the costs of this effort, as well as the cost of disposal shall be chargeable to th e
waste generator . The Franchisee shall be entitled to include the costs incurred and no t
collected under this Section as an operating expense for purposes of rate setting .
5 .11 Processing of Solid Wast e
The City reserves the right, prior to disposal, to direct portions of the waste stream collecte d
under this franchise, to a designated processing facility for separation and recycling of an y
recyclable materials contained therein . City shall provide Franchisee with reasonable prio r
16 March 24, 1997
Franchise Agreement - Solid Waste
written notice concerning any change of service location .
5 .12 Designated Disposal Facilit y
Franchisee shall arrange wit h-the operator of a disposal site situated outside the city limits for
disposal of solid waste collected within the City . All solid waste collected within the City
and not separated for recycling shall be delivered to the designated disposal site and dispose d
of according to the regulations of the designated disposal site .
Franchisee shall secure within 90 days of the effective date of this Agreement, sufficien t
disposal site capacity commitment including landfill disposal site capacity commitment, t o
adequately serve the reasonably anticipated solid waste disposal needs of the City and it s
customers during the term of this Agreement, including any extensions provided for herein .
City reserves the right to review said disposal capacity commitments . Prior to entering int o
any capacity commitment, Franchisee shall give prior written notice to the City concernin g
negotiations . The disposal site capacity commitment contract for the designated disposa l
facility shall be incorporated into this Agreement as Appendix I .
If Franchisee receives notice from the landfill operator or otherwise expects, during the term
of this Agreement, to be prevented from delivering solid waste to the designated disposa l
site, Franchisee shall immediately notify in writing the City's Utilities Director, stating th e
reason(s) Franchisee is prevented, or expects to be prevented, from disposing of solid wast e
in the designated disposal facility . Franchisee shall in good faith expeditiously identify an d
evaluate alternative disposal sites . An alternative designated disposal site or sites shall b e
arranged for and secured by Franchisee, after consultation with the City's Utilities Director .
Franchisee shall provide City with adequate written notice prior to contracting for an y
alternate disposal site . City reserves the right to direct the waste stream to other disposal sit e
selected by Franchisee .
City in addition, reserves the right to direct the waste stream to any disposal facility or site .
Absent such direction by the City, nothing contained herein shall be construed to mean that
the City has arranged for site selection or waste disposal .
Section 12 .5, "Excuse From Performance", does not relieve Franchisee from the good fait h
obligation to find and secure alternate disposal sites . Absent a Section 12 .5 event, Franchise e
shall be responsible for any increased costs, including transportation, with respect to th e
alternate disposal site .
5 .13 Hazardous Waste Handling and Disposa l
If the Franchisee determines that solid waste placed in any container for collection is a
Hazardous Waste or Medical Waste, or other solid waste that may not be legally disposed o f
at the designated disposal site or presents a hazard to the Franchisee's employees, th e
Franchisee shall have the right to refuse to accept such solid waste . The Franchisee wil l
contact the waste generator and request that the waste generator arrange for proper disposal .
If the Waste Generator cannot be reached immediately, the Franchisee shall, prior to leavin g
the premises, leave a tag at least two inches by six inches indicating the reason for refusing t o
collect the solid waste, in which case, a copy of the tag, along with the address of th e
premises (and the name of the waste generator, if known) shall be delivered to the City on th e
following business day .
If the Hazardous waste or medical waste or other unauthorized waste is collected before it s
presence is detected by Franchisee, and if the waste generator cannot be identified or fails t o
remove the solid waste after being requested to do so, the Franchisee shall arrange for it s
legal disposal . The Franchisee shall make a good faith effort to recover the cost of disposa l
17
March 24, 1997
Franchise Agreement - Solid Waste
of such waste from the waste generator, and the costs of this effort, as well as the cost o f
disposal shall be chargeable to the waste generator . Provided the failure to detect th e
hazardous waste, medical wastes or other unauthorized wastes prior to collection and/or thei r
delivery to the designated disposal site is not due to the negligence of the Franchisee or it s
employees or due to failure of the Franchisee to have an adequate in place inspectio n
program, the Franchisee shall be entitled to include the costs incurred under this paragraph a s
an operating expense for purposes of rate setting .
18 March 24, 1997
Franchise Agreement - Solid Wast e
ARTICLE 6 . COLLECTION SERVICE STANDARD S
6 .1
Operation s
6 .1 .1 Schedule s
To preserve peace and quiet, solid waste shall not be collected within two-hundred (200) fee t
of residential premises between 6 :30 p .m . and 6 :30 a .m . on any day, Monday through Friday .
When the regularly scheduled collection day falls on a holiday, collection shall take place o n
the following regularly scheduled collection day . Franchisee will promptly resolve an y
complaints of noise to the satisfaction of the City Administrative Officer or the Cit y
Administrative Officer's designee .
6 .1 .2 Vehicles
A.
General .Franchisee shall keep a fleet of collection trucks sufficient in number an d
capacity to efficiently perform the work required in the Agreement in stric t
accordance with the terms of this Agreement . Franchisee shall provide a detaile d
description concerning the number and type of vehicles necessary for performance .
Franchisee shall have available on collection days sufficient back-up vehicles for eac h
type of collection vehicle (i .e ., rear loader, front loader, and roll-off) used to respon d
to complaints and emergencies . The fleet shall be maintained according to th e
requirements of Municipal Code § 8 .04 .030 .
B .
Specifications .All vehicles used by Franchisee in providing solid waste collectio n
services shall comply with all federal, state, and local requirements for such vehicle s
as they now exist or may be amended in the future, and be registered with the
California Department of Motor Vehicles . All such vehicles shall have water-tigh t
bodies designed to prevent leakage, spillage, or overflow . All such vehicles shal l
comply with U .S . Environmental Protection Agency noise emission regulations and
other applicable noise control regulations .
C .
Condition .
1)Franchisee shall maintain all of its properties, facilities, and equipment used i n
providing service under this Agreement in a safe, neat, clean and operabl e
condition at all times .
2)Franchisee shall inspect each vehicle daily to ensure that all equipment i s
operating properly . Vehicles which are not operating properly and represent a
safety hazard shall be taken out of service until they are repaired and d o
operate properly and safely . Franchisee shall perform all schedule d
maintenance functions in accordance with the manufacturer's specification s
and schedule . Franchisee shall keep accurate records of all vehicl e
maintenance, recorded according to date and mileage, and shall make such
records available to City upon request .
Franchisee shall repair, or arrange for the repair of, all of its vehicles an d
equipment for which repairs are needed because of accident, breakdown o r
any other cause so as to maintain all equipment in a safe and operabl e
condition. Franchisee shall maintain accurate records of repair, which shal l
include the date/mileage, nature of repair and the signature of a maintenance
supervisor that the repair has been properly performed .
D .
Vehicle Identification .Each truck shall display in a prominent place a sign a s
required in Municipal Code §8 .04 .090 .
E.
Operation .Vehicles shall be operated in compliance with the California Vehicl e
19 March 24, 1997
Franchise Agreement - Solid Waste
Code, and all applicable safety and local ordinances . Franchisee shall not load
vehicles in excess of the manufacturer's recommendations or limitations imposed b y
state or local vehicle weight restrictions .
6 .1 .3 Containers
A.Residential Solid Waste Containers .When requested, Franchisee shall supply eac h
Single Family Dwelling Unit with a waste wheeler in size consistent with the Cit y
approved Solid Waste collection program . Franchisee shall supply each multi-family
complex with the appropriate type of container to adequately service the needs of th e
complex per the solid waste handling location . Franchisee agrees to provid e
additional appropriate Containers, as required .
City and Franchisee acknowledge that from time to time, a customer may damage o r
destroy a Container . City and Franchisee also acknowledge that from time to tim e
Containers may be stolen from the curb or damaged due to normal use . Whe n
notified of such occurrence, Franchisee shall replace the Container, at no charge to th e
customer pursuant to the guidelines established by the Franchisee and approved b y
the City . The container replacement guidelines are presented in Appendix II of thi s
Agreement .
B.Non-Residential and Multi-Family Dwelling Unit Solid Waste Containers .
Franchisee shall furnish to all customers appropriate containers to collect solid wast e
at multi-family dwelling units, commercial and industrial properties, and othe r
premises upon customer request . Containers with a capacity of one cubic yard or
more shall be available in standard sizes . The kind, size and number of container s
furnished to particular customers shall be as determined mutually by the customer an d
Franchisee . Containers which are front loading bins shall have lids . All containers
with a capacity of one cubic yard or more shall meet applicable regulations for Soli d
Waste bin safety and shall be maintained in good repair with neatly and uniforml y
painted surfaces and shall prominently display the name and telephone number o f
Franchisee. Additionally, one cubic yard or more bins in public right-a-ways shal l
have reflectorized markings . Bins shall be clearly marked and identified as belongin g
to Franchisee . Franchisee shall not be obligated to provide customers with compacto r
units, but will be obligated to charge the rates set by the City for the collection o f
compacted solid waste .
Each customer shall be responsible for excess damage to any such containers no t
caused by Franchisee .
20 March 24,1997
Franchise Agreement - Solid Wast e
6 .1 .4 Personne l
A.
General .Franchisee shall furnish such qualified drivers, mechanical, supervisory ,
clerical, and other personnel as may be necessary to provide services required by thi s
Agreement in a safe and efficient manner .
If Franchisee needs to provide additional personnel, Franchisee shall be responsibl e
for all costs related to provision of such additional personnel . Franchisee may onl y
reduce the number and type of personnel required with prior approval of City . If
quality of service declines following such reduction in type and number of personnel ,
the City at its discretion, may require the Franchisee to increase the number and typ e
of personnel utilized, at no additional cost to the City .
Identification .Franchisee shall ensure that while on duty each collection worke r
wears a clean uniform with conspicuous insignia displaying Franchisee's compan y
name and the worker's name or identification number .
C.Fees &Gratuities .Franchisee shall not, nor shall it permit any agent, employee, o r
subcontractors employed by it to request, solicit, demand, or accept, either directly o r
indirectly, any compensation or gratuity for any services performed under thi s
Agreement, except as provided in Article 8 of this Agreement .
D.Training .All drivers shall be trained and qualified in the operation of vehicles the y
operate and must possess a valid license of the appropriate class, issued by the
California Department of Motor Vehicles .
Franchisee shall provide adequate operations, health and safety training, an d
Hazardous Waste identification and handling training for all of its employees who us e
or operate equipment or who are otherwise directly involved in collection or othe r
related operations .
E.Customer Courtesy .Franchisee shall train its employees in customer courtesy ; shall
prohibit the use of loud or profane language ; and shall instruct collection crews t o
perform the work quietly . Franchisee shall use its best efforts to ensure that al l
employees present a neat appearance and conduct themselves in a courteous manner .
If any employee is found to be discourteous or not to be performing services in th e
manner required by this Agreement, Franchisee shall take all necessary correctiv e
measures . If City has notified Franchisee of a complaint related to a discourteous or
improper behavior, Franchisee will reassign the employee to duties not entailin g
contact with the public while Franchisee is pursuing its investigation and correctiv e
action process .
6 .2
Service Complaint s
Franchisee shall maintain and provide copies of all written service complaints and summarie s
of all oral service complaints and the Franchisee's response to those complaints for the ter m
of one year and shall allow City officials to inspect these records during the required offic e
staffing hours after the City has requested such inspection with reasonable notice .
If a disagreement arises between Franchisee and a customer, the customer may request a n
administrative hearing . The City's Utilities Director shall conduct an investigation, and giv e
notice of that decision . The customer may elect to appeal this decision to the City Integrate d
Waste Management Appeals Committee made up of representatives from the Utilitie s
Department, the Finance Department and the Administrative Office .
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March 24;1997
Franchise Agreement - Solid Waste
6 .3
Periodic Performance Audi t
The City shall have the right to periodically,. not less than annually, request a performanc e
audit or billing audit be completed by the Franchisee, the City or an independent third party .
The City shall be entitled to select the type of consultant that it deems qualified to conduc t
said audits . The cost of such audits will be an allowable cost under the rate settin g
methodology unless there are findings pursuant to Section 12 .8 .
6 .4
Performance Hearin g
The City maintains the right to hold a public hearing at any time, not more than once eac h
year, at which the Franchisee shall be present and shall participate, to review Franchisee s
services and performance . The purpose of the hearing shall be, in part, to provide for a
discussion and review of technological, economic and regulatory changes and quality o f
service provided to date . The goal of the performance hearing is to strive for an ever -
advancing solid waste management system, and to ensure services are provided wit h
adequate quality, efficiency and economy .
Sixty (60) days after receiving notice from City of a performance review hearing, Franchise e
shall, at a minimum, submit a report to City indicating the following :
q
Changes recommended and/or new services to improve City's ability to meet th e
goals of AB 939 and to contain costs and minimize impacts on rates ; an d
q Any specific plans for provision of changed or new services by Franchisee .
The reports required by this Agreement regarding customer complaints shall be used as on e
basis for review . Franchisee may submit other relevant performance information and report s
for consideration . City may request Franchisee submit specific information for the hearing .
In addition, any customer may submit comments or complaints during or before the hearing ,
either orally or in writing, and these shall be considered .
Topics for discussion and review at the performance review hearing shall include, but shal l
not be limited to, quality and adequacy of services provided, feasibility of providing ne w
services, application of new technologies, customer complaints, amendments to thi s
Agreement, developments in the law, new initiatives for meeting or exceeding AB 939's
goals, regulatory constraints and Franchisee performance . City and Franchisee may eac h
select additional topics for discussion at any performance review hearing .
Not later than sixty (60) days after the conclusion of each performance review hearing, Cit y
may issue a report . As a result of the review, City may request Franchisee to provid e
expanded or new services . Franchisee shall present, within 30 days of a request to do so b y
City, a proposal to provide additional or expanded diversion services . The proposal shal l
contain a complete description of the following :
o Collection methodology to be employed (equipment, manpower, etc .)
o Equipment to be utilized (vehicle number, types, capacity, age, etc .).
o Labor requirements (number of employees by classification).
o Type of Containers to be utilized .
o Provision for program publicity/education/marketing .
o A projection of the financial results of the program's operations for the remaining Term o f
the Agreement in a balance sheet and operating statement format including documentation o f
the key assumptions underlying the projections and the support for those assumptions .
o Materials processing facility to be utilized .
22 March 24,1997
Franchise Agreement - Solid Waste
ARTICLE 7 .OTHER SERVICES : BILLING, REPORTING, RECORD-KEEPING AN D
PUBLIC EDUCATION
7.1
Billing
By resolution of the City Council, the City shall establish rates for the services provided b y
the Franchisee . Franchisee shall bill and collect these rates . Franchisee billing format an d
billing frequency shall be subject to approval of the City and City shall have the right t o
revise the billing format to itemize certain charges .
The City may also direct Franchisee to insert mailers relating to Franchisee provided servic e
with the billings at no additional cost to the City . The mailers must fit in standard envelope s
and not increase the required postage . The City will provide not less than thirty (30) days
notice to Franchisee prior to the mailing date of any proposed mailing to permit Franchisee t o
make appropriate arrangements for inclusion of City materials .
Franchisee shall maintain copies of said billings and receipts, each in chronological order, fo r
a period of three (3) years after the date of service for inspection by the City, or for suc h
longer term as the City directs . Franchisee may, at its option, maintain those records i n
computer form, on microfiche, or in any other manner, provided that the records cannot b e
altered, and can be preserved and retrieved for inspection and verification in a timely manner .
Franchisee shall, in addition, provide an adequate backup system for billing records ,
regardless of the form in which the records are maintained . Any such backup system shall b e
subject to approval by the City .
7.2
Owner Responsible for Paymen t
The owner of occupied developed property shall be responsible and liable for paying th e
solid waste collection and disposal fees for that property .
7.3
Collection of Bills from Delinquent Solid Waste Customers .
Bills shall be considered delinquent if not paid within 30 days of the date due . Once each
year, prior to a date established by the City, Franchisee may take actions pursuant to Chapte r
8 .04 of the Municipal Code to collect delinquent solid waste collection and disposa l
accounts .
7 .4
Record s
Franchisee shall maintain records required to conduct its operations, to support requests it
may make to City, and to respond to requests of the City . Adequate record security shall be
maintained to preserve records from events that can be reasonably anticipated such as a fire ,
theft and earthquake . Electronically maintained data and records shall be protected and a n
adequate backup system shall be provided for such data and records . The protection an d
backup systems shall be subject to approval by the City .
The following records shall be maintained for the City in form and detail satisfactory to th e
City, relating to :
Customer services and billing ;
Weight of solid waste, especially as related to reducing and diverting solid waste .
Information is to be separated by kind of account (including multi-family dwellin g
units with residential);
q Special annual clean-up event results ;
q Routes ;
q Facilities, equipment and personnel used ;
q Facilities and equipment operations, maintenance and repair ;
0
23
March 24,1997
Franchise Agreement - Solid Waste
q Processing and disposal of solid waste ;
q Complaints ; and
q Missed pick-ups .
Franchisee shall maintain records of transfer, diversion and disposal of all solid wast e
collected in the city for the period of this Agreement and all extensions to this Agreement o r
successor Agreements . In the event Franchisee discontinues providing solid waste service s
to City, Franchisee shall provide all records of diversion and disposal of all solid wast e
collected within the City to City within thirty (30) days of discontinuing service . Record s
shall be in chronological order, and organized in a form readily and easily interpreted .
Records for other programs shall be tailored to specific needs . In general, they shall include :
q Plans, tasks, and milestones ; and,
q Accomplishments in terms such as dates, activities conducted, quantities of product s
used, produced or distributed, and numbers of participants and responses .
7 .5
Waste Generation/Characterization Studie s
Franchisee acknowledges that the City must perform solid waste generation and disposa l
characterization studies periodically to comply with AB 939 requirements . Franchisee agree s
to participate and cooperate with the City and its agents, at no cost to the City, to accomplis h
studies and data collection, and prepare reports, as needed, to determine weights and volume s
of solid waste and characterize solid waste generated, diverted, disposed, transformed, o r
otherwise handled or processed to satisfy AB 939 requirements .
7 .6
Report Formats and Schedul e
Records shall be maintained in forms and by methods that facilitate flexible use of dat a
contained in them to structure reports, as needed. Reports are intended to compile recorde d
data into useful forms of information that can be used to, among other things :
q Determine and set rates, and evaluate the financial efficacy of operations ; and
q Evaluate past and expected progress towards achieving goals and objectives ; an d
q Determine needs for adjustment to programs ; and
q Evaluate customer service and complaints .
The City may at no cost to itself request that Franchisee provide such additional informatio n
in the reports set forth below as the City deems necessary or appropriate to meet its needs ,
including provision of AB 939 report information .
Franchisee may propose report formats that are responsive to the objectives and audiences fo r
each report . The format of each report shall be subject to approval by the City .
Monthly reports shall be submitted within ten (10) calendar days after the end of the repor t
month. Quarterly reports shall-be submitted within fifteen (15) calendar days after the end o f
the quarter. Quarters end on November 30, February 28, May 31, and August 31 .
All reports shall be submitted to :
24
March 24,
Franchise Agreement - Solid Waste
Utilities Directo r
City of San Luis Obisp o
955 Mono Stree t
San Luis Obispo, CA 93401 '
7 .7
Monthly Report s
The information listed shall be the minimum reported for each service :
q Solid Waste, collected, transferred, diverted and disposed of, by sector (commercial ,
industrial, residential) of waste generator--collected by Franchisee, in tons, by month .
q Complaint summary, for month and cumulative for report year, as above .
Summarized by nature of complaints .
q Narrative summary of problems encountered and actions taken with recommendation s
for the City, as appropriate .
7.8
Quarterly Report
Quarterly reports shall be quarterly summaries of the monthly information in addition to th e
following :
q Status report on applications for renewals of existing permits or any new permit s
which may be required to continue operations at the designated disposal site withi n
existing permitted areas .
q Solid Waste, collected, diverted and disposed of, in tons, during the semi-annua l
residential clean-up weeks, if applicable .
q For each new program, provide activity related and narrative reports on goals and
milestone and accomplishments . Describe problems encountered, actions taken an d
any recommendations to facilitate progress .
q Provide a summary assessment of the overall solid waste program from Franchisee's
perspective relative to financial and physical status of program . The physical status i s
to relate to how well the program is operating for efficiency, economy and
effectiveness relative to meeting all the goals and objectives of this Agreement .
Provide recommendations and plans to improve . Highlight significan t
accomplishments, problems and proposed solutions .
7 .9
Annual Financial Audi t
Franchisee shall submit to the City annual audited financial statements prepared a t
Franchisee's expense by an independent Certified Public Accountant not later than 180 days
following the expiration of the Franchisee's fiscal year . Pursuant to the "Rate Settin g
Process and Methodology Manual for Integrated Solid Waste Management Rates",
dated June 1994, at the time a rate application request is submitted to City, the financial
forms contained in the rate application must be reconciled to the audited financial statement s
to provide assurance that all of the company's activities are accounted for .
The annual report shall separate out information with respect to revenues and expenses i n
relation to performance of this Agreement, including detailed information concernin g
overhead claimed by Franchisee . Operations by Franchisee concerning activities not related
to performance of this Agreement shall be maintained in a separate portion of the annua l
financial statement.
City shall have the right to inspect or review the payroll tax reports, specific documents o r
records required expressly or by inference pursuant to this Agreement, or any other simila r
records or reports of Franchisee that City shall deem, in its sole discretion, necessary t o
evaluate annual reports, compensation applications provided for in this Agreement an d
Franchisee's performance provided for in this Agreement . The City retains the right to hav e
an independent third party or agent of the City's choosing, such as a CPA, participate in th e
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March 24, 1997
Franchise Agreement - Solid Waste
records inspection . The cost of such inspection or review will be an allowable cost under th e
rate setting methodology unless there are findings pursuant to Section 12 .8 .
The Franchisee shall provide to the City a copy of Cold Canyon Landfill's request for a n
increase in tipping fees no later than five (5) days following submittal of said request to th e
County of San Luis Obispo . Additionally, the Franchisee shall notify the City of the actio n
taken by the Board of Supervisors regarding said request within five (5) days following sai d
action, including letter to the Board of Supervisors and related executed resolution . The City
retains the right to have an independent third party or agent of the City's choosing, such as a
CPA, participate in the review . The cost of such inspection or review will be an allowabl e
cost under the rate setting methodology unless there are findings pursuant to Section 12 .8 .
7 .10 Maintenance of Accounting Record s
Franchisee shall maintain accounting records in accordance with generally accepte d
standards and principles of accounting . In its accounting records, Franchisee shall discreetl y
maintain and clearly identify all items of revenue and expense pertaining to the City's
franchised operations . Cost and revenue information for the City shall be segregated fro m
other geographical areas served by Franchisee . Cost and revenue information for the City, in
addition, shall be segregated from other business activities of the Franchisee . Separat e
detailed records shall be maintained by Franchisee with respect to all transactions wit h
affiliated entities that affect the cost and revenue of Franchisee in providing the franchis e
collection services .
7 .11 Right to Audit Records
In addition to other reporting requirements in this Agreement, the City may review, test an d
audit the books and records of the Franchisee or may engage a Certified Public Accountan t
for this purpose . The cost of such inspection or review will be an allowable cost under th e
rate setting methodology unless there are findings pursuant to Section 12 .8 .
7 .12 Inspection by City
The designated representatives of the City shall have the right to observe and revie w
Franchisee operations and enter Franchisee's premises for the purpose of such observatio n
and review at all reasonable hours with reasonable notice .
7 .13 Offic e
Franchisee shall maintain an office with telephone within the City limits where customer s
may apply for service, pay bills, and register complaints . At a minimum, Franchisee shal l
staff this office from 8 :00 a .m . to 5 :00 p .m ., Monday through Friday, except legal holiday s
observed by the City . A representative of Franchisee shall be available during office hours t o
communicate with the public in person and directly by telephone .
7.14 .Customer Informatio n
Franchisee shall prepare and keep current a flier acceptable to the City which summarize s
solid waste regulations, all services provided by Franchisee, solid waste collection an d
disposal rates, telephone numbers, special collection events, collection schedules, complain t
procedures, and other pertinent information . Franchisee shall have copies of this flie r
available at all times in Franchisee's office ; shall distribute copies to all new customers ; shal l
annually mail copies to all of its current customers ; and shall mail updated copies to al l
customers as notification of changes in service or rates, prior to such changes .
7 .15 Regulatory Reporting
Franchisee shall promptly provide the City copies of each adverse report from, and eac h
regulatory action from local, state or federal regulatory agencies . In addition, Franchise e
shall send copies to City of any reports that Franchisee submits to regulatory agencies wit h
26 March 24, 1997
Franchise Agreement - Solid Wast e
respect to performance of this Agreement .
Franchisee shall provide City promptly with copies of any notices and correspondence fro m
other facilities, including disposal sites, utilized by Franchisee in performance of thi s
Agreement, concerning any breach of agreement with such facility or violation o f
regulations, including delivery of unauthorized wastes . Franchisee shall direct such facilitie s
to at all times simultaneously send copies of such notices and correspondence to City .
Franchisee shall promptly provide City with copies of any reports and correspondenc e
concerning the status of permits with respect to Franchisee and such disposal sites an d
facilities referenced above .
7 .16 Public Educatio n
Franchisee acknowledges and agrees that education and public awareness are critical, key and
essential elements of any efforts to achieve AB 939 requirements . Accordingly, Franchise e
agrees to take direction from City to exploit opportunities to expand public and customer
knowledge concerning needs and methods to reduce, reuse and recycle solid waste and t o
cooperate fully with City in this regard .
Franchisee shall maintain its own program of providing information relevant to billing an d
solid waste services, issues and needs with its bills . Franchisee shall also include in custome r
bills additional information, including information on recycling programs, as directed by th e
City. Franchisee shall bear all labor costs with respect to inserting public education material s
with the billings . City shall bear any additional postage expense resulting from the City's
inserts and shall bear other expenses related to the inserts to the extent said expenses ar e
clearly in excess of the Franchisee's normal billing costs . All public education materials shal l
be approved in advance by the City .
At the direction of the City, Franchisee shall participate in and promote AB 939 activities an d
other solid waste management techniques at community events and local activities . Such
participation would normally include providing, without cost, educational and publicit y
information promoting the goals of the City's solid waste program .
7 .17 Records Retentio n
Franchisee shall maintain the above records, reports and data set forth in this Article for such
time as City may direct . Franchisee agrees to make all such records, reports and dat a
available for inspection by City or City's authorized representatives, upon reasonable notice
by City .
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Franchise Agreement - Solid Waste
ARTICLE 8 . PAYMENTS TO CITY
8 .1
Franchise Fee Payment s
In consideration of the exclusive franchise provided for in Article 4 of this Agreement ,
Franchisee shall pay the City six percent (6%) of Franchisee's gross revenues for collectio n
and disposal of solid waste within the City . Such franchise fee shall be a "pass-through "
expense for purposes of rate review and setting . Each monthly remittance of fees to Cit y
shall be accompanied by a statement detailing gross revenues for the period covered from al l
operations conducted or permitted pursuant to this Agreement .
8 .2
Schedule of Paymen t
Franchise fees described in Section 8 .1 are due on the 15th day of each month for receipt s
from the previous month . The remittance will be accompanied by a report setting forth th e
basis, and calculations used for computing the amount due .
8 .3 AB 939 Fee Amoun t
In consideration of the exclusive franchise provided for in Article 4 of the Agreement ,
Franchisee shall pay when directed by the City, a percentage of Franchisee's gross revenu e
for an AB 939 fee(i .e . the cost that the City incurs in managing and addressing AB 939 issue s
regarding diversion, recyclable materials, source reduction, etc .), on a monthly installmen t
basis, based on cash receipts from customers provided residential and non-residential service s
during the prior month . All AB 939 fees paid to the City shall be considered a pass throug h
cost for purposes of rate setting under Article 9 . The monthly AB 939 fee is due on the 15th
day of each month for receipts from the previous month .
8.4
Other Fee s
The City shall reserve the right to set such other fees, as the City deems necessary. Thes e
fees will be treated as a pass-through expense . The amount, time and method of payment
shall be similar to section 8 .2 .
8.5 Time and Method of Paymen t
If Franchisee is directed to pay an AB 939, Franchise Fee or "Other" Fee, it shall do so on o r
before the fifteenth (15th) day of each month during the Term . Franchisee shall remit to Cit y
a sum of money equal to the designated percentage of the gross revenue or a flat monthly fe e
as determined by the City . If any fees are not paid on or before the fifteenth (15th) day o f
any month, Franchisee shall pay to City a late payment penalty in an amount equal to on e
percent (1%) of the amount owing for that month . Franchisee shall pay an additional lat e
payment penalty of one percent (1%) owing on any unpaid balance for each following thirt y
(30) day period the fee remains unpaid . Late payment penalty amounts shall not be include d
in any revenue requirement .
8 .6 Review of Fee Payment s
The City, or its agent, reserves the right to annually perform an independent review of fee
payments to verify that fees are being paid in accordance .with this Agreement . The cost o f
such inspection or review will be an allowable cost under the rate setting methodology unles s
there are findings pursuant to Section 12 .8 .
8 .7
Business License Ta x
Franchisee shall pay each year the annual business license tax .
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Franchise Agreement - Solid Waste
ARTICLE 9 . SERVICE RATES AND REVIEW
9 .1
Genera l
Franchisee's compensation provided for in this Article shall be the full, entire and complet e
compensation due to Franchisee pursuant to this Agreement for all labor, equipment ,
materials and supplies, taxes, insurance, bonds, overhead, transfer and transport, processing ,
division, disposal, profit and all other things necessary to perform all the services required b y
this Agreement in the manner and at the times prescribed, Franchisee will not be entitled t o
any further rate adjustments as a result of customer delinquencies and other bad debt issues .
Franchisee does not look to the City for payment of any sums, except for solid wast e
collection services provided to the City and presented in Appendix III, under this Agreemen t
in consideration of the right to charge and collect from customers for services rendered a t
rates fixed by the City from time-to-time . The City shall have the right to structure thos e
rates as it deems appropriate so long as the revenues forecasted to be received by Franchisee
from charging such rates can reasonably be expected to generate sufficient revenues t o
provide for Franchisee's compensation as calculated in accordance with the "City of Sa n
Luis Obispo Rate Setting Process and Methodology Manual for Integrated Soli d
Waste Management Rates".
9 .2
Service Rate s
Service rates are those established by Resolution adopted by City Council . Franchisee shal l
provide the services required by this Agreement and charge no more than the rates authorize d
by City Resolution .
9 .3
Rate Review
Franchisee shall submit to the City an application for rate review annually, in accordanc e
with the procedures described in the "City of San Luis Obispo Rate Setting Process an d
Methodology Manual for Integrated Solid Waste Management Rates,"dated June 1994 ,
except as that may be modified by the City from time to time . In addition to the procedure s
contained in the above referenced manual, Franchisee shall submit any and all data requeste d
by and in the format prescribed by the City . In the event Franchisee shall fail to meet th e
schedule set forth in the above referenced manual, a revision of rates for the following yea r
shall not be authorized until the 1st day of the first calendar month following a 120 da y
period from the date that the complete application is submitted and such revision shal l
contain no consideration for Franchisee's failure to submit the application in accordance wit h
the schedule set forth in the above-referenced manual .
9 .4
Special Interim Rate Revie w
The City or franchisee may request an extraordinary or consequential adjustment outside o f
the base year and interim year adjustment schedules, as set forth in the "City of San Lui s
Obispo Rate Setting Process and Methodology Manual for Integrated Solid Wast e
Management Rates,"dated June 1994 . To be extraordinary and consequential, cost change s
must be significant enough to require a greater than five percent (5%) decrease or increase in
monthly rates for basic residential service .
9 .5
Allowable Profi t
When performing the procedures described in the "City of San Luis Obispo Rate Setting
Process and Methodology Manual for Integrated Solid Waste Management Rates,"date d
June 1994, the allowable profit on expenses shall be calculated using targeted operating rati o
of ninety-two percent (92%), with a range of ninety percent (90%) to ninety-four percent
(94%), applied to Franchisee's reasonable and necessary allowable costs, as these costs ar e
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March 24, 1997
Franchise Agreement - Solid Waste
defined in the rate setting manual, incurred in the performance of its obligations under thi s
Agreement .
9 .6
Publication of Rate s
Franchisee shall provide written notice to subscribers of all rate changes, prior t o
implementation . If appropriate, this notice should include reasons and background for th e
rate change .
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Franchise Agreement - Solid Waste
ARTICLE 10 . INDEMNITY, INSURANCE, AND PERFORMANCE BON D
10 .1 Indemnificatio n
10 .1 .1 General .Franchisee agrees to defend, indemnify, protect and hold the City and it s
Council members, agents, officers and employees harmless from and against any and al l
claims asserted or liability established for damages or injuries to any person or property ,
including, but not limited to, injury to the Franchisee's employees, agents or officers whic h
arise from or are connected with or are caused or claimed to be caused by the acts o r
omission of the Franchisee, and its agents, officers, directors or employees, in performing th e
services herein, and all expenses of investigating and defending against same ; provided ,
however, that the Franchisee's duty to indemnify and hold harmless shall not include an y
claims or liability arising from the established sole negligence or willful misconduct of the
City, its agents, officers or employees .
10 .1 .2 CERCLA .Franchisee agrees to defend and indemnify the City, Council members ,
officers, employees and agents for all actions of the Franchisee associated with th e
Franchisee's role as the arranger of solid waste service, or as a "potentially responsible party "
within the meaning of CERCLA in performing solid waste service under any Federal, Stat e
or local laws, rules or regulations . The Franchisee shall further defend and indemnify Cit y
from any and all legal actions against City on the basis of the assertion that the City is a n
arranger of solid waste services as a result of this Agreement .
10.1 .3 Integrated Waste Management Act .Franchisee agrees to defend and indemnify th e
City, Council members, officers, employees and agents for any fines or penalties imposed b y
the California Integrated Waste Management Board or its agents in the event tha t
Franchisee's delays in providing information or reports required pursuant to this Agreemen t
prevent the City from submitting reports or attaining goals in a timely manner as required b y
the Integrated Waste Management Act .
10 .2 Insuranc e
Franchisee shall procure and maintain for the duration of the franchise insurance agains t
claims for injuries to persons or damages to property which may arise from or in connectio n
with the performance of the services hereunder by the Franchisee, its agents, representatives ,
employees or subcontractors .
A .
Minimum Scope of Insurance .Coverage shall be at least as broad as :
(1)Insurance Services Office Commercial General Liability coverage (occurrenc e
form CG 0001).
(2)Insurance Services Office form number CA 0001 (Ed . 1/87) covering
Automobile Liability, code 1 (any auto).
(3)Workers' Compensation insurance as required by the State of California an d
Employer's Liability insurance .
(4)Pollution Legal Liability
B .
Minimum Limits of Insurance .Franchisee shall maintain limits no less than :
(1)
Commercial or Comprehensive General Liability :Five Million Dollar s
($5,000,000) combined single limit per occurrence for bodily injury, persona l
injury, and property damage . If Commercial General Liability or other for m
with a general aggregate limit is used, either the general aggregate limit shal l
apply separately to this Agreement or the general aggregate limit shall b e
twice the required occurrence limit .
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March 24, 1997
Franchise Agreement - Solid Waste
(2)Automobile Liability :Five Million Dollars ($5,000,000) combined singl e
limit per accident for bodily injury and property damage .
(3)Workers' Compensation and Employers Liability :Workers' compensation
limits as required by the Labor Code of the State of California and employer s
liability with limits of $1,000,000 per accident for bodily injury or disease .
(4)Pollution Liabilities :One million Dollars ($1,000,000) each loss/Tw o
Million Dollars ($2,000,000) annual aggregate all losses .
C.Deductibles and Self-Insured Retentions .Any deductibles or self-insure d
retentions must be declared to and approved by the City . At the option of the City,
either : the insurer shall reduce or eliminate such deductibles or self-insured retentions
as respects the City, Council members, its officers, officials, employees, agents an d
volunteers ; or the Franchisee shall procure a bond guaranteeing payment of losses an d
related investigations, claim administration and defense expenses . Any insuranc e
policies providing for self insured retentions shall further provide that legal costs an d
costs of investigation, including consultant fees, with respect to any claim or suit ,
shall apply to the self insured retention amount .
D.Other Insurance Provisions .The general liability and automobile liability policie s
are to contain, or be endorsed to contain, the following provisions :
(1)
The City, Council members, its officers, officials, employees, agents an d
volunteers are to be covered as insurers as respects : liability arising out o f
activities performed by or on behalf of the Franchisee ; products an d
completed operations of the Franchisee ; premises owned, occupied or used b y
the Franchisee ; or automobiles owned, leased, hired or borrowed by th e
Franchisee . The coverage shall contain no special limitations on the scope of
protection afforded to the City, its officers, officials, employees, agents o r
volunteers .
(2)For any claims related to this project, the Franchisee's insurance coverag e
shall be primary insurance as respects the City, Council members, its officers ,
officials, employees, agents and volunteers . Any insurance or self-insuranc e
maintained by the City, its officers, officials, employees, agents or volunteer s
shall be excess of the Franchisee's insurance and shall not contribute with it .
(3)Any failure to comply with reporting or other provisions of the policie s
including breaches of warranties shall not affect coverage provided to the
City, Council members, its officers, officials, employees, agents or volunteers .
(4)The Franchisee's insurance shall apply separately to each insured against
whom claim is made or suit is brought except with respect to the limits of th e
insurer's liability .
(5)Each insurance policy required by this clause shall be endorsed to state tha t
coverage shall not be suspended, voided, canceled by either party, reduced i n
coverage or in limits except after thirty (30) days' prior written notice by
certified mail, return receipt required, has been given to the City .
(6)The Automobile Liability Policy shall be endorsed to delete the Pollutio n
exclusion and add the Motor Carrier Act endorsement (MCS-90), TL 1005 ,
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March 24, 1997
Franchise Agreement - Solid Waste
TL 1007 and/or other endorsements required by federal or state authorities .
(7)Pollution, if on a Claims Made form :
a.The-"Retro Date" must be shown, and must be before the date of th e
contract or the beginning contract work .
b.Insurance must be maintained and evidence of insurance must b e
provided for at least five (5) years after completion of the contract o f
work .
c.If coverage is canceled or non-renewed, and not replaced wit h
another claims made policy form with a "Retro Date" prior to th e
contract effective date, the Franchisee must purchase "extended
reporting" coverage for minimum of two years after completion o f
contract .
Acceptability of Insurers .Insurance is to be placed with insurers with a curren t
A .M . Best's rating of no less than A :VII . Insurers selected by Franchisee shall b e
admitted to issue insurance in the State of California .
F.Verification of Coverage .Franchisee shall furnish the City with Certificates o f
insurance and with original endorsements effecting coverage required herein . The
certificates and endorsements for each insurance policy are to be signed by a perso n
authorized by that insurer to bind coverage on its behalf . The certificates an d
endorsements are to be on forms provided by or acceptable to the City and are to b e
received and approved by the City before performance under this Agreemen t
commences . The City reserves the right to require complete certified copies of al l
required policies at any time, and Franchisee shall provide said copies upon request .
G.Subcontractors .Franchisee shall include all subcontractors as insurers under it s
policies or shall furnish separate certificates and endorsements for each subcontractor .
All coverages for subcontractors shall be subject to all of the requirements state d
herein .
H.Occurrence Based Coverage .All policies secured by Franchisee shall b e
occurrence and not claims based unless City so Consents in writing .
10 .3 Performance Bond
Simultaneously with the execution of this Agreement, Franchisee shall file with the City a
bond, payable to City, securing Franchisee's faithful performance of its obligations under thi s
Agreement . The principal sum of the bond shall be One Half Million Dollars ($500,000).
The bond shall be executed as surety by a corporation authorized to issue surety bonds in th e
State of California, with a financial condition and record of service satisfactory to City . The
bond shall be in a form approved by the City . If such bond at any time ceases to be effectiv e
for any reason, this shall be deemed a breach of this Agreement by Franchisee and the City
shall be entitled to proceed as hereinafter provided .
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March 24,1997
Franchise Agreement - Solid Wast e
ARTICLE 11 . CITY'S RIGHT TO PERFORM SERVIC E
11 .1 General
In the event that Franchisee, for any reason whatsoever, fails, refuses or is unable to Collect ,
transport or process any or all Solid waste materials which it is required by this Agreement t o
Collect and process, at the time and in the manner provided in this Agreement, for a period o f
more than seven (7) calendar days, and if, as a result thereof, Solid Waste should accumulate
in the City to such an extent, in such a manner, or for such a time that the City Administrativ e
Officer should find that such accumulation endangers or menaces the public health, safety o r
welfare, then City shall have the right, but not the obligation, upon twenty-four (24) hou r
prior written notice to Franchisee during the period of such emergency as determined by the
City Administrative Officer, (1) to perform, or cause to be performed, such services itsel f
with its own or other personnel without liability to Franchisee, and/or (2) to take possessio n
of any or all of Franchisee's land, equipment and other property to Collect, transport o r
process any Solid Waste generated within the City which Franchisee would otherwise b e
obligated to Collect, transport, process or market pursuant to this Agreement . In the even t
the City takes possession of the Franchisee's equipment and other property, the City shall b e
entitled to have another Franchisee operate such equipment and property under Cit y
direction . Additionally, in the event the City takes possession of the Franchisee's equipmen t
and other property, the City does not guarantee repair of existing problems with equipmen t
and facilities .
Notice of Franchisee's failure, refusal or neglect to Collect, transport or process Solid Wast e
may be given orally by telephone to Franchisee at its principal office and shall be effectiv e
immediately . Written confirmation of such oral notification shall be sent to Franchise e
within twenty-four (24) hours of the oral notification .
Franchisee further agrees that in such event :
o It will take direction from City to effect the transfer of possession of property to City fo r
City's use .
o It will, if City so requests, keep in good repair and condition all of such property, provid e
all motor vehicles with fuel, oil and other service, and provide such other service as may b e
necessary to maintain said property in operational condition .
o City may immediately engage all or any personnel necessary or useful for the Collection ,
transportation and processing Solid Waste, including, if City so desires, employee s
previously or then employed by Franchisee, Franchisee further agrees, if City so requests, t o
furnish City the services of any or all management or office personnel employed b y
Franchisee whose services are necessary or useful for Solid Waste Collection, Transportatio n
and processing operations and for the billing and collection of fees for these services .
City agrees that it assumes complete responsibility for the proper and normal use of suc h
equipment and facilities while in its possession .
If the interruption or discontinuance in service is caused by any of the reasons listed i n
Section 12 .4 (Excuse From Performance), City shall pay to Franchisee the reasonable renta l
value of the equipment and facilities, possession of which is taken by City, for the period o f
City's possession, if any, which extends beyond the period of time for which Franchisee has
rendered bills in advance of service .
Except as otherwise expressly provided in the previous paragraph, City's exercise of its right s
under this Article 11 (1) does not constitute a taking of private property for whic h
compensation must be paid ; (2) will not create any liability on the part of City to Franchisee ;
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March 24,1997
Franchise Agreement - Solid Waste
and (3) does not exempt Franchisee from the indemnity provisions of Article 10 ,
Indemnification, Insurance and Bond, which are meant to extend to circumstances arisin g
under this Section, provided that Franchisee is not required to indemnify City against claim s
and damages arising from the sole negligence of City officers, employees and agents in th e
operation of Collection vehicles during the time City has taken possession of such vehicles .
11 .2 Temporary Possession of Franchisee's Propert y
If the City suffers an interruption or discontinuance of service as described in Section 11 .1
(including interruptions and discontinuance due to events described in Section 12 .4, Excus e
from Performance), City may take possession of and use all of Franchisee's propert y
described above until other suitable arrangements can be made for the provision of Soli d
Waste Services which may include the grant of a Contract to another company . The sam e
notice requirements of Section 11 .1 are applicable .
11 .3 Billing and Compensation to City During City's Possessio n
During such time that city is providing Solid Waste services, as above provided, Franchise e
shall continue to bill and collect payment from all users of the above-mentioned services .
Franchisee further agrees that, in such event, it shall reimburse City for any and all costs an d
expenses incurred by City in taking over possession of the above-mentioned property fo r
Solid Waste service in such manner and to an extent as would otherwise be required o f
Franchisee under the Terms of this Agreement . Such reimbursement shall be made fro m
time to time after submission By City to Franchisee of each statement listing such costs an d
expenses, but in no event later than five (5) working days from and after each suc h
submission . The City shall have the right, at its sole discretion, to take over billing an d
payment collection activities . The City shall then pay any net revenues to the Franchisee ,
after deducting all expenses, including City-incurred expenses .
11 .4 City's Right to Relinquish Possessio n
It is further mutually agreed that City may at any time at its discretion relinquish possessio n
of any or all of the above-mentioned property to Franchisee and thereupon demand tha t
Franchisee resume the Solid Waste services as provided in this Agreement, whereupo n
Franchisee shall be bound to resume the same .
11 .5 Duration of City's Possessio n
City's right pursuant to this Article to retain temporary possession of Franchisee's facilitie s
and equipment, and to render Collection services, shall terminate when City determines tha t
such services can be resumed by Franchisee, or when City no longer reasonably requires suc h
facilities or equipment . In any case, City has no obligation to maintain possession o f
Franchisee's property and/or continue its use for any period of time and may at any time, i n
its sole discretion, relinquish possession to Franchisee .
35 March 24, 1997
Franchise Agreement - Solid Waste
ARTICLE 12 . DEFAULT AND REMEDIE S
12 .1 Events of Defaul t
All provisions of this Agreement to be performed by Franchisee are considered material .
Each of the following shall constitute an event of default .
A.Fraud or Deceit .If Franchisee practices, or attempts to practice, any fraud or deceit upo n
city .
B.Insolvency or Bankruptcy .If Franchisee becomes insolvent, unable, or unwilling to pa y
its debts when due, or upon listing of an order for relief in favor of Franchisee in a
bankruptcy proceeding . The Franchisee is also in default if there is an assignment of thi s
contract for the benefit of its creditors .
C.Failure to Maintain Coverage.If Franchisee fails to provide or maintain in full forc e
and effect the Workers' Compensation, liability, indemnification coverage or any insuranc e
coverage or bond required under this Agreement .
D.Violations of Regulation .If Franchisee facilities fall out of full regulatory compliance o r
if Franchisee violates any orders or filings of any regulatory body having jurisdiction ove r
Franchisee relative to this Agreement, provided that Franchisee may contest any such order s
or filings by appropriate proceedings conducted in good faith, in which case no breach of th e
Agreement shall be deemed to have occurred .
E.Failure to Perform .If Franchisee ceases to provide Solid Waste services as require d
under this Agreement for a period of two (2) days or more, for any reason within the contro l
of Franchisee .
F.Failure to Pay/Report .If Franchisee fails to make any timely payments, includin g
liquidated damages and penalties, required under this Agreement and/or fails to provide Cit y
with required information, reports, and/or records in a timely manner as provided for in th e
Agreement.
G.Acts or Omissions .Any other act or omission by Franchisee which violates the terms ,
conditions, or requirements of this Agreement, the California Integrated Waste Managemen t
Act of 1989, as it may be amended from time to time, or any order, directive, rule, o r
regulation issued thereunder and which is not corrected or remedied within the time set in th e
written notice the violation or, if Franchisee cannot reasonably correct or remedy the breac h
within the time set forth in such notice, if Franchisee should fail to commence to correct o r
remedy such violation within the time set forth in such notice and diligently effect suc h
correction or remedy thereafter .
H.False or Misleading Statements .Any representation or disclosure made to City b y
Franchisee in connection with or as an inducement to entering into this Agreement, or an y
future amendment to this Agreement, which proves to be false or misleading in any materia l
respect as of the time such representation or disclosure is made, whether or not any suc h
representation or disclosure appears as part of this Agreement .
I.Attachment .There is a seizure of attachment of, or levy on, the operating equipment o f
Franchisee, including without limits its equipment, maintenance or office facilities, or an y
part thereof.
J.Suspension or Termination of Service .There is any termination or suspension of th e
transaction of business by Franchisee, including without limit, due to labor unrest includin g
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March 24, 1997
Franchise Agreement - Solid Waste
strike, work stoppage or slowdown, sickout, picketing, or other concerted job action lastin g
more than two (2) days .
Upon default by the Franchisee, the City Administrative Officer shall provide written notic e
to Franchise of the violation . The City Administrative Officer shall include in the notice,a
demand that the Franchisee correct the violation within 10 days following the delivery of sai d
notice . If the violation is not corrected within the 10 days, the City shall have the right t o
terminate the Agreement per the provisions provided in Section 12 .2 . For purposes of thi s
Agreement and any notice required thereunder, the term "days" shall mean calendar days .
12 .2 Right to Terminate Upon Defaul t
Upon a default by Franchisee, City shall have the right to terminate this Agreement upon a
ten (10) days notice if the public health or safety is threatened, or otherwise a thirty (30) day s
notice, but without the need for any hearing, suit or legal action . This right of termination i s
:in addition to any other rights of City upon a failure of Franchisee to perform its obligation s
'under this Agreement .
12 .3 Possession of Property and Billing Records and Systems Upon Terminatio n
In the event of termination for default, the City shall have the right, subject to the obligation s
contained in Article 12 hereof, to take possession of any and all of Franchisee's land ,
equipment, and other property used or useful in the collection, diversion and/or disposal o f
solid waste and to conduct all activities concerning billing and collection of fees for thes e
services and to use such property . The City shall have the right to retain the possession o f
such property until other suitable arrangements can be made for the provision of solid wast e
collection services, which may include the award of an agreement or franchise to another
waste hauling company . If the City retains possession thereof after the period of time fo r
which Franchisee has already been paid by means of bills issued in advance of providin g
service for the class of service involved, Franchisee shall be entitled to the reasonable renta l
value of such property (which shall be offset against any damages due the City for th e
Franchisee's default).
Franchisee shall provide the City immediate access to all of its business records and billin g
system related to its billing of accounts for services and shall take direction from the City
regarding the billing of customers during the period between the City's termination of th e
Agreement for default until other suitable arrangements can be made for the billing of soli d
waste collection services . The provisions of this Section 12 .3 shall survive the termination of
this Agreement .
12 .4 City's Remedies Cumulative ; Specific Performanc e
The City's right to terminate the Agreement under Section 12 .1 and to take possession of th e
Franchisee's properties under Section 12 .3 are not exclusive, and the City's termination of th e
Agreement shall not constitute an election of remedies . Instead, they shall be in addition t o
any and all other legal and equitable rights and remedies which the City may have .
By virtue of the nature of this Agreement, the urgency of timely, continuous and high qualit y
service, the lead time required to effect alternative service, and the rights granted by the Cit y
to Franchisee, the remedy of damages for a breach hereof by Franchisee is inadequate and the
City shall be entitled to injunctive relief and/or specific performance if it so desires .
12 .5 Excuse from Performanc e
The parties shall be excused from performing their respective obligations hereunder in th e
event they are prevented from so performing by reason of floods, earthquakes, other "acts of
God", war, civil insurrection, riots, acts of any government (including judicial action), an d
other similar catastrophic events which are beyond the control of and not the fault of th e
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Franchise Agreement - Solid Wast e
party claiming excuse from performance hereunder . Labor unrest, including but not limite d
to strike, work stoppage or slowdown, sick-out, picketing, or other concerted job actio n
conducted by Franchisee's employees or directed at Franchisee or its selected facilities is no t
an excuse from performance and Franchisee shall be obligated to continue to provide servic e
notwithstanding the occurrence of any or all such events .
The party claiming excuse from performance shall, within two (2) days after such party ha s
notice of such cause, give the other party notice of the facts constituting such cause an d
asserting its claim to excuse under this Section .
The interruption or discontinuance of Franchisee's services caused by one or more of the
events excused shall not constitute a default by Franchisee under this Agreement .
Notwithstanding the foregoing, however, if Franchisee is excused from performing it s
obligations hereunder for any of the causes listed in this Section for a period of seven (7)
days or more, City shall have the right to review the circumstances under which the excus e
from performance was granted . After such review, if the City determines the excuse fro m
service is no longer valid, the City shall notify the Franchisee in writing to resume servic e
within two (2) days from the receipt of such notification . If the Franchisee fails to resum e
service within the two (2) days, the City shall have the right to terminate this Agreement b y
giving ten (10) days notice, in which case the provisions relative to taking possession o f
Franchisee's land, equipment and other property and engaging Franchisee's personnel i n
Article 11, City's Right to Perform Services, and this Article 12 shall apply .
12 .6 Liquidated Damages
City finds, and Franchisee agrees, that as of the time of the execution of this Agreement, it i s
impractical, if not impossible to reasonably ascertain the extent of damages which shall b e
incurred by City as a result of a breach by Franchisee of its obligations under this Agreement .
The factors relating to the impracticability of ascertaining damages include, but are no t
limited to, the fact that :
q substantial damage results to members of the public who are denied services or
denied quality or reliable service ;
q such breaches cause inconvenience, anxiety, frustration, and deprivation of th e
benefits of the Agreement to individual members of the general public for whos e
benefit this Agreement exists, in subjective ways and in varying degrees of intensit y
which are incapable of measurement in precise monetary terms ;
q that services might be available at substantially lower costs than alternative services
and the monetary loss resulting from denial of services or denial of quality or reliabl e
services is impossible to calculate in precise monetary terms ; an d
q the termination of this Agreement for such breaches, and other remedies are, at best,a
means of future correction and not remedies which make the public whole for pas t
breaches . However, substantial breaches may result in the termination of thi s
Agreement as described in Section 12 .1 .
The parties further acknowledge that consistent, reliable solid waste collection service is o f
utmost importance to City and that City has considered and relied on Franchisee's
representations as to its quality of service commitment in awarding the Franchise to it . The
parties further recognize that if Franchisee fails to achieve the performance standards, or fail s
to submit required documents in a timely manner, City and its residents will suffer damage s
and that it is and will be impractical and extremely difficult to ascertain and determine th e
exact amount of damages which City will suffer . Therefore, without prejudice to City's righ t
to treat such non-performance as an event of default under this Article 12, the parties agre e
that the following liquidated damage amounts represent a reasonable estimate of the amoun t
of such damages considering all of the circumstances existing on the date of this Agreement ,
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Franchise Agreement - Solid Wast e
including the relationship of the sums to the range of harm to City that reasonably could b e
anticipated and the anticipation that proof of actual damages would be costly or inconvenient .
Franchisee agrees to pay (as liquidated damages and not as a penalty) the amounts set fort h
below:
Collection Reliability and Quality
o For each failure over five (5) annually to commence service t o
a new customer account within seven (7) days after order :
$150 .0 0
o For each failure over ten (10) annually to Collect Solid Waste ,
which as been properly set out for Collection, fro m
an established customer account on the scheduled Collection day :
$150 .0 0
o For each failure to Collect Solid Waste which hav e
been properly set out for Collection, from the same customer o n
two (2) consecutive scheduled pickup days :
$150 .00
o For each occurrence over five (5) annually of damage to privat e
property :
$250.0 0
o For each occurrence of discourteous behavior : $250 .0 0
o For each failure over ten (10) annually to clean up Solid Waste spilled from Bins :
$150 .0 0
o For each occurrence over five (5) annually of Collectin g
Solid Waste during unauthorized hours :
$250 .0 0
o For each failure to respond to a customer complaint withi n
twenty-four (24) working hours :
$100 .0 0
o For each failure to prepare for or properly conduct twice annual clean-ups includin g
advertising and press releases ;$250 .0 0
o For each failure to perform and submit billing reviews :$250 .00
o For each occurrence over ten (10) annually of failure to properly return container s
to avoid pedestrian or vehicular traffic impediments or to place cans upright wit h
lid secured :
$150 .0 0
o For each occurrence of excessive noise above the limits specified in thi s
Agreement :
$250 .0 0
Customer Responsivenes s
o For each failure to respond to a customer complaint within sixteen (16 )
working hours :
$100 .0 0
o For each failure to process customer complaints to City : $500 .0 0
q For each failure to carry out responsibilities for establishing service : $500 .0 0
39 March 24, 1997
Franchise Agreement - Solid Waste
Timeliness of Submissions to Cit y
REPORTS
Any report shall be considered late until such time as a correct and complet e
report is received by City . For each calendar day a report is late, the dail y
assessment shall be :
Monthly Reports :
For each infraction
$100 per da y
Quarterly Reports
For each infraction
$250 per da y
Annual Reports :
For each infraction
$500 per da y
Liquidated damages will only be assessed after Franchisee has been given the opportunity but
failed to rectify the damages, as described in this Agreement (e .g ., twenty-four (24) workin g
hours to respond to a complaint). City may determine the occurrence of events giving rise t o
liquidated damages through the observation of its own employees or representative o r
investigation of customer complaints .
Prior to assessing liquidated damages, City shall give Franchisee notice of its intention to d o
so . The notice will include a brief description of the incident(s)/non-performance .
Franchisee may review (and make copies at its own expense) all information in th e
possession of City relating to incident(s)/non-performance . Franchisee may, within ten (10)
days after receiving the notice, request a meeting with City . If a meeting is requested, it shal l
be held by the City Administrative Officer or his/her designee . Franchisee may presen t
evidence in writing and through testimony of its employees and others relevant to th e
incident(s)/non performance . The City Administrative Officer or designee will provid e
Franchisee with a written explanation of his or her determination on each incident(s)/non-
performance prior to authorizing the assessment of liquidated damages . The decision of the
City Administrative Officer or designee shall be final .
C.Amount.The City Administrative Officer may assess liquidated damages for eac h
calendar day or event, as appropriate, that Franchisee is determined to be liable in accordanc e
with this Agreement .
D.Timing of Payment .Franchisee shall pay any liquidated damages assessed by Cit y
within ten (10) days after they are assessed . If they are not paid within the ten (10) da y
period, City may proceed against the performance bond required by this Agreement or orde r
the termination of this Agreement, or both pursuant to the terms of this Agreement .
12 .7 Notice, Hearing and Appea l
Should the Franchisee contend that the City is in breach of the Agreement, Franchisee shal l
file a written request with the Utilities Director for a consultation regarding the allegations .
Such consultation shall be held within thirty calendar days of the receipt of Franchisee's
request . Franchisee shall present its position and all relevant facts to the Utilities Director .
Franchisee shall be notified of the Utilities Director judgment within ten calendar days of th e
consultation .
If the Franchisee is not in agreement with the ruling issued by the Utilities Director, it shal l
have the right to appeal the decision to the City Administrative Officer . This appeal shall b e
made in writing to the City no later than fourteen days after the notification is mailed b y
Utilities Director of the judgment . The City Administrative Officer shall notify Franchisee o f
the time and date of the review of allegation within thirty calendar days of the request .
Franchisee shall present its position and all relevant facts to the City Administrative Officer .
Franchisee shall be notified in writing within fourteen calendar days of the Cit y
Administrative Officer's ruling . The decision of the City Administrative Officer can b e
appealed to City Council per Municipal Code Section 1 .20 .020 .
40 March 24,1997
Franchise Agreement - Solid Wast e
12 .8 Financial Material Errors, Omissions or Irregularitie s
The City may review, test and audit the books and records of the Franchisee for the purpos e
of determining whether the Franchisee is complying with the terms of the Agreement . In the
event that material errors or omissions or irregularities are identified, then the cost associate d
with the audit, test or review shall be paid by the Franchisee to the City . In the case o f
financial errors, materiality shall be deemed to be two percent (2%) or greater of the gros s
revenues of the Franchisee from activities performed under this agreement . Recovery of any
overpayment will be negotiated on a case by case basis, either immediately or through th e
next rate setting evaluation .
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Franchise Agreement - Solid Wast e
ARTICLE 13 . ASSIGNMENT
13 .1 Assignmen t
Except as provided in Article 11, "City's Right to Perform Service", neither party shall assig n
its rights nor delegate or otherwise transfer its obligations under this Agreement to any othe r
person without the prior written consent of the other party . Any such assignment mad e
without the consent of the other party shall be void and the attempted assignment shal l
constitute a material breach of this Agreement . The City may, however, assign its rights an d
delegate its obligations under this Agreement to a joint powers authority without the prior
written consent of Franchisee .
For purposes of this section, "assignment" shall include, but not be limited t o
(1)
a sale, exchange or other transfer to a third party of at lease fifty-one percent o f
Franchisee's assets dedicated to service under this Agreement ;
(2)a sale, exchange or other transfer to a third party, including other shareholders, o f
outstanding common stock of Franchisee which may result in a change of control o f
Franchisee ;
(3)any dissolution, reorganization, consolidation, merger, recapitalization, stock issuanc e
or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation o r
other transaction which Franchisee or any of its shareholders is a party which result s
in a change of ownership or control of Franchisee ; and
(4)any assignment by operation ; of law, including insolvency or bankruptcy, assignmen t
for the benefit of creditors, writ of attachment for an execution being levied agains t
this Agreement, appointment of a receiver taking possession of Franchisee's property ,
or transfer occurring in the probate proceeding ; and
(5)any combination of the foregoing (whether or not in related or contemporaneou s
transactions, which has the effect of any such transfer or change of ownership, o r
change of control of Franchisee .
Franchisee acknowledges that this Agreement involves rendering a vital service to Cit y
residents and businesses, and that City has selected Franchisee to perform the service s
specified herein based on :
1.Franchisee's experience, skill and reputation for conducting its solid wast e
management operations in a safe, effective and responsible fashion, at all times in keepin g
with applicable environmental laws, regulations and best waste management practices, an d
2.Franchisee's financial resources to maintain the required equipment and to support it s
indemnity obligations to City under this Agreement . City has relied on each of these factors ,
among others, in choosing Franchisee to perform the services to be rendered by Franchise e
under this Agreement .
If Franchisee requests City's consideration of and consent to an assignment, City may deny o r
approve such request in its complete discretion . The City is concerned about the possibility
that assignment could result in significant rate increases, as well as a change in the quality o f
service . Accordingly, the following standards have been set to ensure that assignment wil l
result in continued quality service . In addition, the City reserves the right to solici t
competitive bids for these services if the assignment results in a request by the assignee fo r
rate increases that are higher than the inflationary index and do not reflect value changes i n
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March 24, 1997
Franchise Agreement - Sahli Wast e
service standards . At a minimum, no request by Franchisee for consent to an assignmen t
need be considered by City unless and until Franchisee has met the following requirements :
A.Franchisee shall undertake to pay City its reasonable expenses for attorney's fee s
and investigate the suitability of any proposed assignee, and to review and finaliz e
any documentation required as a condition for approving any such assignment ;
B.Franchisee shall furnish City with audited financial statements of the propose d
assignee's operations for the immediately preceding three (3) operating years ;
C.Franchisee shall furnish City with satisfactory proof :
1.
that the proposed assignee has at least ten (10) years of solid wast e
management experience on a scale equal to or exceeding the scale o f
operations conducted by Franchisee under this Agreement ;
2.
that in the last five (5) years, the proposed assignee or affiliates has no t
suffered any significant citations or other censure from any federal, state o r
local agency having jurisdictions over its waste management operations due t o
any significant failure to comply with state, federal or local environmenta l
laws and that the assignee has provided City with a complete list of suc h
citations and censures ;
3.
that the proposed assignee has at all times conducted its operations in a n
environmentally safe and conscientious fashion ;
4.that the proposed assignee conducts its solid waste management practices i n
accordance with sound waste management practices in full compliance wit h
all federal, state and local laws regulating the collection and disposal of soli d
waste, including hazardous wastes ; and ,
5.
of any other information required by City to ensure the proposed assignee ca n
fulfill the terms of this Agreement in a timely, safe and effective manner .
Under no circumstances shall the City be obliged to consider any propose d
assignment by Franchisee, if Franchisee is in default at any time during the period o f
consideration .
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Franchise Agreement - Solid Waste
ARTICLE 14 . OTHER AGREEMENTS OF THE PARTIE S
14 .1 Relationship of Partie s
The parties intend that Franchisee shall perform the services required by this Agreement as a n
independent Franchisee engaged by the City and not as an officer or employee of the City nor as a
partner of a joint venture with the City . No employee or agent of Franchise shall be nor shall b e
deemed to be an employee or agent of the City . Except as expressly provided herein, Franchise e
shall have the exclusive control over the manner and means of conducting the solid waste collectio n
and disposal services performed under this Agreement, and over all persons performing suc h
services . Franchisee shall be solely responsible for the acts and omissions of its officers, directors ,
employees, subcontractors, and agents . Neither Franchisee nor its officers, employees ,
subcontractors and agents shall obtain any rights to retirement benefits, workers compensatio n
benefits, or any other benefits which accrue to City employees by virtue of their employment wit h
the City .
14 .2 Governing La w
This Agreement shall be governed by, and construed and enforced in accordance with, the laws o f
the State of California .
14 .3 Jurisdictio n
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded in th e
courts of the State of California, which shall have exclusive jurisdiction over such lawsuits .
With respect to venue, the parties agree that this Agreement is made in and will be performed in San
Luis Obispo County .
14 .4 Subcontractin g
Except as approved in writing by the City, Franchisee shall not enter into an agreement to hav e
another Person perform Franchisee's duties of this Agreement . Franchisee shall undertake to pay
City its reasonable expenses for attorney's fees and investigation costs necessary to investigate th e
suitability of any proposed subcontractor, and to review and finalize any documentation required as a
condition for approving any such subcontracting agreement .
14 .5 Interests of Franchise e
Franchisee covenants that it presently has no interest, and shall not acquire any interest direct o r
indirect or otherwise, which would conflict in any manner or degree with the performance of th e
work hereunder . The Franchisee further covenants that, in the performance of this work, n o
subcontractor of any person having such an interest shall be employed . The Franchisee certifies tha t
no one who has or will have any financial interest in performing this work is an officer or employe e
of the City .
14 .6 Binding on Successor s
The provisions of this Agreement shall insure to the benefit of and be binding on the successors an d
permitted assigns of the parties .
14 .7 Transition of Next Franchis e
At the point of transition to a new franchise, Franchisee will cooperate with the City and subsequent
franchisee(s) to assist in an orderly transition which will include Franchisee providing route lists an d
billing information . Franchisee will not be obliged to sell collection vehicles, bins, and containers t o
the next franchise . The Franchisee, at its option, may enter into negotiations with the next franchise e
to sell (in part or all) collection vehicles, bins and containers .
14 .8 Parties in Interest
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March 24, 1997
Franchise Agreement - Solid Waste
Nothing in this Agreement, whether express or implied, is intended to confer any rights on an y
persons other than the parties to it and their representatives, successors and permitted assigns .
14 .9 Waiver
-
The waiver by either party of any breach or violation of any provision(s) of this Agreement shall no t
be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent
breach or violation of the same or any other provision . The subsequent acceptance by either party o f
any monies which become due hereunder shall not be deemed to be a waiver of any pre-existing o r
concurrent breach or violation by the other party of any provision of this Agreement .
14 .10 Condemnation
The City fully reserves whatever rights it may have to acquire Franchisee's property utilized in th e
performance of this Agreement, by negotiated purchase or failing that, through the exercise of th e
right of eminent domain .
14 .11 City Free to Negotiate with Third Partie s
The City may investigate, during the term and thereafter, all options for the collection, diversion, an d
disposal of solid waste after the expiration of the term . Without limiting the foregoing, the City ma y
solicit proposals from Franchisee and from third parties for the provision of collection services ,
disposal services, recycling services, Solid waste collection and composting, and any combinatio n
thereof, and may negotiate and execute agreements for such services which will take effect upon th e
expiration or earlier termination under Section 11 .1 of this Agreement .
14 .12 Immigration Act of 198 6
The Franchisee warrants on behalf of itself and all subcontractors engaged for the performance o f
this work that only persons authorized to work in the United States pursuant to the Immigratio n
Reform and Control Act of 1986 and other applicable laws shall be employed in the performance o f
this work .
14 .13 Non-Discriminatio n
In the performance of this work, the Franchisee agrees that it will not engage in, nor permit suc h
subcontractors as it may employ, to engage in discrimination in employment of persons because o f
age, race, color, sex, national origin or ancestry, sexual orientation, physical disability, menta l
condition or religion of such persons .
14.14 Public and Employee Safet y
Whenever the Franchisee's operations create a condition hazardous to the public or City employees ,
it shall, at its expense and without cost to the City, furnish, erect and maintain such fences ,
temporary railings, barricades, lights, signs and other devices, and take such other protectiv e
measures as are necessary to prevent accidents or damage or injury to the public and employees .
14 .15 Recycled Products
The City encourages the Franchisee's use of recycled products .
14 .16 Notice
All notices, demands, requests, proposals, approvals, consent, and other communications which thi s
Agreement requires, authorizes or contemplates, except as provided in Section 12 .1, shall be i n
writing and shall either be personally delivered to a representative of the parties at the address belo w
or be deposited in the United States mail, first class postage prepaid, addressed as follows :
If to City :
Utilities Directo r
City of San Luis Obisp o
955 Morro Street
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March 24, 1997
Franchise Agreement - Solid Wast e
San Luis Obispo, CA 9340 1
If to Franchisee :
San Luis Garbage Company
970 Monterey Street
San Luis Obispo, CA 9340 1
The address to which communications may be delivered may be changed from time to time by a
notice given in accordance with this Section .
Notice shall be deemed given on the day it is personally delivered or, if mailed, three days from th e
date it is deposited in the mail .
14 .17 Representatives of the Partie s
References in this Agreement to the "City" shall mean the City Council and all actions to be taken b y
the City shall be taken by the City Council except as provided below . The City Council ma y
delegate, in writing, authority to the City Administrative Officer, the Director of Utilities and/or t o
other City officials and may permit such officials, in turn, to delegate in writing some or all of suc h
authority to subordinate officers . Franchisee may rely upon actions taken by such delegates if the y
are within the scope of the authority properly delegated to them .
Franchisee shall, by the effective date, designate in writing a responsible officer who shall serve a s
the representative of Franchisee in all matters related to the Agreement and shall inform the City in
writing of such designation and of any limitations upon his or her authority to bind Franchisee . The
City may rely upon action taken by such designated representative as actions of Franchisee unles s
they are outside the scope of the authority delegated to him/her by Franchisee as communicated t o
the City .
14 .18 Entire Agreemen t
This Agreement represents the full and entire Agreement between the parties with respect to th e
matters covered herein .
14 .19 Section Heading s
The article headings and section headings in this Agreement are for convenience and reference only
and are not intended to be used in the construction of this Agreement nor to alter or affect any of it s
provisions .
14 .20 References to Law s
All references in this Agreement to laws shall be understood to include such laws as they may b e
subsequently amended or recodified, unless otherwise specifically provided .
14 .21 Interpretatio n
This Agreement shall be interpreted and construed reasonably and neither for nor against eithe r
party, regardless of the degree to which either party participated in its drafting .
14.22 Amendmen t
This Agreement may not be modified or amended in any respect except by another Agreement i n
writing signed by the parties .
14 .23 Severability
If any non-material provision of this Agreement is for any reason deemed to be invalid and
unenforceable, the invalidity or unenforceability of such provision shall not affect any of the
46
March 24, 1997
Franchise Agreement - Solid Waste
remaining provisions of this Agreement which shall be enforced as if such invalid or unenforceabl e
provision had not been contained herein .
14.24 Counterparts
This Agreement may be executed in counterparts each of which shall be considered an original .
14 .25 Use of"Will "
The use of the word "will" shall be construed as interchangeable with the word "shall ."
14 .26 Surviving Provision s
Paragraphs 7 .11, 7 .16, 8 .5, 10 .2, and other provisions of this Agreement so providing, shall surviv e
termination of this Agreement .
14 .27 Investigatio n
Franchisee has relied on its own investigations in deciding to enter into this Agreement and has no t
relied upon any representations of the City, its Council members, officers, directors, employees o r
agents .
47
March 24, 1997
Franchise Agreement - Solid Wast e
By :SAN LUIS GARBAGE CO .
By : CITY OF SAN LUIS OBISP O
Oarles Cattaneo
ATTEST :
48 March 24, 1997
APPENDICES
APPENDIX I
OUTPUT AGREEMENT WITH HAULE R
Betwee n
COLD CANYON LAND FILL, INC .,
a California Corporation
("Operator")
and
SAN LUIS GARBAGE COMPAN Y
a California Corporatio n
("Hauler")
F 1NETCICU LDCA011 HAULER. SLG
OUTPUT AGREEMENT WITH HAULER
This Output Agreement With Hauler ("Agreement") is made and entered into this 16t h
day of May, 1995, to be effective as of January 1, 1995, by and between COLD CANYO N
LAND FILL, INC ., a California corporation ("Operator"), and SAN LUIS GARBAG E
COMPANY, a California corporation ("Hauler"), with reference to the following facts :
RECITAL S
A.Operator operates a sanitary landfill disposal site for the receipt of solid waste o n
certain real property commonly known as the Cold Canyon Landfill, located on Highway 22 7
in the County of San Luis Obispo, California (the "Landfill");
B.Hauler has an agreement with the City of San Luis Obispo (the "City") and a n
agreement with the County of San Luis Obispo (the "County"), for the collection, hauling an d
disposition of solid waste (these agreements are collectively referred to as the "Franchis e
Agreements");
C.Operator and Hauler have previously entered into an oral agreement pursuant t o
which Operator accepts and receives from Hauler, and Hauler delivers to the Landfill, all of th e
solid waste collected by Hauler pursuant to the Franchise Agreements, at the tipping fee an d
other applicable rates as from time to time in effect at the Landfill ; an d
D.Operator and Hauler now desire to folLualize and memorialize their existing ora l
agreement with respect to the foregoing, and to modify their oral agreement on the terms and
conditions herein contained .
NOW, THEREFORE, in consideration of the mutual covenants and promises containe d
herein, Operator and Hauler agree as follows :
AGREEMEN T
1.Purpose of Agreement .Hauler requires a fully authorized and licensed disposa l
site that will assure the prompt and regular ability of Hauler to deliver all solid waste whic h
Hauler collects pursuant to the Franchise Agreements and not otherwise separated for recycling ,
and Operator agrees to provide the Landfill for such purpose, all on the terms and condition s
set forth in this Agreement .
2.Quantity .Operator shall receive and accept from Hauler, and Hauler shall delive r
to and deposit in the Landfill, all of the solid waste collected by Hauler and not otherwis e
separated for recycling .
F:\NET.C\COLDCA011HAULER.SLO
3.Term .The term of this Agreement commenced on January 1, 1995, and shal l
continue for the duration of Hauler's Franchise Agreements, and any extensions, renewals ,
modifications, or similar arrangements between Hauler and the City or County with respect t o
the collection, hauling and disposition of solid waste .
4.Payment .As consideration for Operator's acceptance at the Landfill of all of -
Hauler's solid waste hereunder, Hauler shall pay to Operator compensation in a sum equal to :
ten dollars ($10 .00) per year as an Availability Fee to fairly and reasonably compensate Operato r
for reserving capacity at the Landfill to accommodate and receive all of Hauler's anticipate d
solid waste collections ; and (b) the applicable tipping fees and other Landfill charges at the rate s
which are from time to time in effect at the Landfill . The foregoing compensation shall b e
payable (i) annually with respect to the Availability Fee and (ii) monthly with respect to th e
tipping fees and other associated Landfill charges . Operator will periodically bill Hauler for the
foregoing fees and charges . Hauler . shall pay the bills within thirty (30) days followin g
submission of the bill .
4 .1 Late Charges .Hauler acknowledges that late payment by Hauler t o
Operator will cause Operator to incur costs not contemplated by this Agreement, the exact
amount of such costs being extremely difficult and impracticable to fix . Such costs include ,
without limitation, processing and accounting charges, and late charges that may be imposed o n
Operator by the terms of its agreements with third parties . Therefore, if any payment du e
hereunder is not received by Operator when due, then Hauler shall pay to Operator an additiona l
sum of five percent (5 %) of the overdue amount as a late charge . The parties agree that thi s
late charge represents a fair and reasonable estimate of the cost that Operator will incur b y
reason of a late payment by Hauler . Acceptance of any late charge shall not constitute a waive r
of Hauler's default with respect to the overdue amount, or prevent Operator from exercising an y
of its other available rights and remedies .
5 .
Specifications and Restrictions .
5 .1 Solid Waste ,.The solid waste which Operator agrees to accept and deposi t
in the Landfill pursuant to this Agreement means and includes all solid waste, including garbage ,
rubbish, and refuse, as more particularly set forth and/or referenced in the Franchise Agreement s
and any applicable laws, regulations or statutes . Notwithstanding anything to the contrar y
contained in this Agreement or in the Franchise Agreements, Operator shall have no obligatio n
to accept any solid waste other than that which Operator is permitted to accept unde r
Operator's Solid Waste Facilities Permit or under any applicable federal, state or local laws ,
regulations, ordinances and orders .
5 .2 Compliance with Laws .Hauler shall comply, at its sole cost and expense ,
with all federal, state and local laws, codes, regulations, ordinances and orders relating to th e
collection, storage, accumulation, and transportation, of any solid waste, as these laws ma y
apply to the solid wastes which are hauled to the Landfill .
F.\EV.0 COLDCAOIIHAULER.SLG
5 .3 Indemnity .Hauler shall be solely responsible for and shall indemnify .
protect, defend and hold harmless Operator and its agents, employees, representatives, director s
and officers (collectively referred to as the "Indemnitees" from and against any and all claims ,
costs, penalties, fines, losses, liabilities, attorneys' fees, damages, injuries, causes of action ,
judgments, and expenses which arise, directly or indirectly, in connection with or related t o
Hauler's collection, handling, transportation and disposal of solid wastes, hazardous or toxi c
materials by Hauler or its agents, employees, contractors, or licensees . The Indemnitees wil l
not be liable to Hauler for any damage to Hauler or Hauler's property from any cause . Haule r
waives all claims against Operator for damage to person or property arising for any reaso n
except the willful acts or omissions of Operator or its authorized representatives . The
indemnification by Hauler under this paragraph shall survive the termination of this Agreement .
6.Noncompetition .Hauler agrees that during the period of this Agreement it shal l
deliver all solid waste collected by Hauler to Cold Canyon Landfill . This section shall no t
prohibit Hauler from delivering the following materials to other destinations : (1) wastes whic h
cannot be deposited in the Landfill under the terms of Operator's Solid Waste Facilities Permit ;
and (2) recyclables collected by Hauler .
7.Access to Records .Upon request, Operator and its representatives shall hav e
access during regular business hours to records of Hauler related to Hauler's collection ,
transport, handling and disposition of Hauler's solid waste, and to any records of Haule r
pertaining to this Agreement or to the performance of this Agreement .
8.Estimate of Output .It is agreed that the estimate of Hauler's collected solid wast e
output to be delivered to Operator's Landfill is approximately three thousand ten (3,010) ton s
per month . This estimate is based upon Hauler's historic collection experiences .
9.Remedies .Operator and Hauler agree that the services to be rendered b y
Operator pursuant to this Agreement, and the rights and privileges granted to Hauler pursuan t
to this Agreement, are of a special, unique, and extraordinary character, which gives them a
peculiar value, the loss of which cannot be reasonably or adequately compensated in damage s
in any action at law, and that a breach by Hauler of any of the terms of this Agreement wil l
cause Operator great and irreparable injury and damage . Hauler hereby expressly agrees tha t
Operator shall be entitled to the remedies of injunction, specific performance and other equitabl e
relief to prevent a breach of this Agreement by Hauler . This Section shall not be construed a s
a waiver of any other rights or remedies which Operator may have for damages or otherwise .
10.Severability .If any provision of this Agreement is held to be unenforceable fo r
any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the partie s
to the extent possible . In any event, all other provisions of this Agreement shall be deemed vali d
and enforceable to the extent possible .
11.
Succession .This Agreement shall inure to the benefit of and be binding upon th e
Hauler and its successors and assigns and any such successor or assignee shall be deeme d
F'ET.CCOLDCAOIH.AULER . SLG
3
substituted for the Hauler under the terms of this Agreement for all purposes . As used herein ,
"successor" and "assignee" shall include any person, firm, corporation or other business entit y
which at any time, whether by purchase . merger or otherwise, directly or indirectly acquires th e
stock of Hauler or to which Hauler assigns this Agreement, or its Franchise Agreements, b y
operation of law or otherwise . Notwithstanding the foregoing, this Agreement shall not b e
assignable by Hauler without Operator's prior written consent, which may be given or withhel d
in the sole and absolute discretion of Operator .
12.Notices .Any notice or other communication provided for in this Agreement shal l
be in writing and sent :
if to Operator at :
Cold Canyon Land Fill, Inc .
2268 Carpenter Canyon Roa d
San Luis Obispo, CA 9340 1
Attention : Chas Cattaneo, President
and if to Hauler at :
San Luis Garbage Compan y
970 Monterey Stree t
San Luis Obispo, California 9340 1
Attention : Al Rizzoli, Vice Presiden t
or at such other address as the Operator or Hauler may designate, from time to time, in writing .
Each such notice or other communication shall be effective (i) if given by telecommunication ,
when transmitted to the applicable number so specified in (or pursuant to) this Section and a
verification of receipt is received, (ii) if given by mail, three (3) days after such communicatio n
is deposited in the mails, sent certified mail with first class postage prepaid . addressed a s
aforesaid or (iii) if given by any other means, when actually delivered at such address .
13.Entire Agreement .This Agreement contains the entire agreement of the partie s
relating to the subject matter hereof and supersedes any prior agreements, undertakings ,
commitments and practices relating thereto .
14.Amendments .No amendment or modification of the terms of this Agreemen t
shall be valid unless made in writing and duly executed by both parties .
15.Waiver .No failure on the part of any party to exercise or delay in exercising an y
right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single o r
partial exercise preclude any further or other exercise of such right or any other right .
F:I N ETC.COLDCAO flHA ULER. SLO
16.Governing Law .This Agreement, and the legal relations between the parties ,
shall be governed by and construed in accordance with the laws of the State of California, an d
any court action arising out of this Agreement shall be brought in any court of competen t
jurisdiction within the State of California, County of San Luis Obispo .
17.Attorneys' Fees .In the event of any controversy, claim or dispute relating to thi s
Agreement, the prevailing party will be entitled to recover all costs of suit, including reasonabl e
attorneys' fees and court costs . In addition to the foregoing award of attorneys' fees, th e
prevailing party shall be entitled to its attorneys' fees incurred in any post judgment proceeding s
to enforce any judgment in connection with, this Agreement ; this provision is separate an d
several and shall survive the merger of this provision into any judgment .
18.No Partnership .Nothing contained in this Agreement shall be deemed o r
construed for any purpose as creating between the parties any relationship with one another a s
a partner, principal or agents .
19.Counterparts .This Agreement and any amendment hereto may be executed i n
one or more counterparts . All of such counterparts shall constitute one and the same agreemen t
and shall become effective when a copy signed by each party has been delivered to the othe r
party .
20.Headings .Section and other headings contained in this Agreement are fo r
convenience of reference only and shall not affect in any way the meaning or interpretation o f
this Agreement .
21.
Representation By Counsel : Interpretation .
Operator and Hauler eac h
acknowledge that each party to this Agreement has been represented by counsel of its choice i n
connection with this Agreement and the matters contemplated by this Agreement . Accordingly ,
any rule of law, including but not limited to Section 1654 of the California Civil Code, or an y
legal decision that would require interpretation of any claimed ambiguities in this Agreemen t
against the party that drafted it has no application and is expressly waived . The provisions o f
this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties .
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date firs t
above written .
"Operator "
COLD CANYON LAND FILL, INC .,
a California corporation
"Hauler "
SAN LUIS GARBAGE COMPANY ,
a California corporatio n
Charles Cattaneo, Presiden t
By :
Al Rizzoli, Vice-Presiden t
F:`.`ET,C.COLDCA01 HAULER.SLG
APPENDIX II
San Luis Garbage Co.
970 Monterey Street
•
San Luis Obispo, California 93401
Telephone (805) 543-087 5
SAN LUIS GARBAGE CO ., INC .
WASTE WHEELER REPLACEMENT POLIC Y
effective 1-1-9 7
All waste wheelers have a serial number imprirn do XAGAI
Our office staff will give the serial number t"v '4i Gd~~b/jlCd"
and ask that they look around the 4 houses on erI4{sf br/e&
to see if it just got set back at the wrong atat'e.h .
If the customer can't locate it, then San Luis 6A-i twit )deliver another waste wheeler at no charge .
APPENDIX III