HomeMy WebLinkAbout07/06/2010, PH 5 - FIFTEEN YEAR FRANCHISE AGREEMENTS FOR SOLID WASTE, RECYCLING, AND GREEN WASTE COLLECTION AND DISPOS counat
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CITY OF SAN LUIS OBISPO
FROM: Carrie Mattingly, Utilities Director
Prepared By: Ron Munds, Utilities Conservation Manager
SUBJECT: FIFTEEN YEAR FRANCHISE AGREEMENTS FOR SOLID WASTE,
RECYCLING, AND GREEN WASTE COLLECTION AND DISPOSAL
SERVICES WITH SAN LUIS GARBAGE COMPANY.
RECOMMENDATION
Introduce to print an ordinance granting San Luis Garbage Company 15-year franchise
agreements; one each for solid waste,recycling, and green waste collection and disposal services.
DISCUSSION
Background
At its June 15, 2010 meeting, the City Council was presented information relating to a request
from San Luis Garbage Company for a 15-year renewal of the existing franchise agreements for
solid waste, recycling, and green waste services. It was explained that the City has a long history
with San Luis Garbage Company dating back to the 1940s and that during this time; the City
solid waste customers have received a high level of service at a reasonable rate. At the meeting,
the Council adopted a Resolution of Intent to award San Luis Garbage Company fifteen year
franchise agreements for solid waste, recycling, and green waste collection and disposal services.
Franchise Renewal Request
The basis for the request from San Luis Garbage Company is two-fold. The first issue is that
Cold Canyon Landfill has about two years of solid waste disposal capacity remaining. In order to
secure the loans for the expansion, estimated at over $9,000,000, the bank requires Waste
Connections, the parent company of San Luis Garbage Company, to secure long-term franchise
agreements with the local communities that utilize the landfill. To-date, the cities of Pismo
Beach, Arroyo Grande, Grover Beach, Morro Bay, and the County of San Luis Obispo have
approved 15-year contract extensions in support of the landfill expansion.
The second reason for the request is the significant investment that San Luis Garbage Company
needs to make in its fleet to comply with new air pollution regulations and the mandates of AB
32, the State's greenhouse gas reduction initiative. The request expresses San Luis Garbage
Company's concern regarding the recovery of the costs associated with the investment in the
fleet and the impacts on the rates charged to the City of San Luis Obispo. The longer the term of
the contract, the lesser the impact on the rates since San Luis Garbage Company will be able to
recoup its costs over a longer period of time.
At its June 15, 2010 meeting, the Council supported the recommendation made by staff to renew
the contracts with San Luis Garbage Company and adopted a Resolution of Intent to award San
PI/S-
Franchise Agreement s for Solid Waste, Recycling, and Green Waste Collection
and Disposal Services Page 2
Luis Garbage Company fifteen year franchise agreements for solid waste, recycling, and green
waste collection and disposal services.
Overview of Agreements
The next step in the franchise renewal process is the introduction of an ordinance (Attachment 1)
granting the franchise. Exhibit A to Attachment 1 contains three separate agreements for solid
waste, recycling, and green waste collection and disposal. The recycling and green waste
franchise agreements were first negotiated in 1996 and renewed in 2001 with terms until March
2012. The solid waste franchise agreement was negotiated in 1997 with a term to March 2012.
All three agreements have served the City well in terms of providing the following provisions:
• A I%lower operating profit ratio which has provided customers significant dollar savings over
the term of the agreement.
• Semi-annual clean-up weeks for single and.multi-family properties.
• Provisions to add or change existing programs with a complete proposal to account for program
implementation and cost.
• Performance standards with liquidated damage assessment capabilities and provisions for
periodic performance review.
• Enhanced regulatory reporting requirements to ensure timely submittal to the City of progress
toward meeting the AB 939 solid waste reduction goal.
• A cooperative public education program between the franchisee and the City to take advantage
of multiple opportunities to educate the public regarding solid waste issues.
• Indemnification provisions to hold harmless the City in terms of the Comprehensive
Environmental Response,Compensation and Liability Act(CERCLA),the Integrated Waste
Management Act(AB 939) and other general liability claims related to providing service under
the agreements.
• Franchise assignment provisions which enable the City to approve any assignment.
Additionally, if an assignment should occur,provisions were inserted which protect the
customer rate base from unreasonable rate increases.
Because the existing agreements have stood the test of time and have provided the City with a
high level of service at reasonable rates, with the exception of the term of the agreement, staff is
not recommending any changes to the franchise agreements at this time.
CONCURRENCES
The San Luis Obispo County Integrated Waste Management Authority, which regionally
coordinates waste diversion activities in the County, has supported the extension of solid waste
hauling contracts in areas that utilize Cold Canyon Landfill and concurs with the
recommendation made in this report.
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Franchise Agreement s for Solid Waste, Recycling,and Green Waste Collection
and Disposal Services Page 3
FISCAL IMPACT
There are no direct fiscal impacts associated with this action. Solid waste rates are adjusted as
part of the annual solid waste rate setting process for all customers, including the City accounts,
normally in the late fall.
ALTERNATIVES
Do not introduce the Ordinance granting fifteen year franchises. Council could decide not to
introduce the Ordinance and direct staff to develop and solicit a request for proposal (RFP) or bid
package for solid waste, recycling, and green waste services. This was presented as an alternative
as part of the staff report when adopting the Resolution of Intent on June 15, 2010. At that
meeting, the Council chose not to pursue this option. It is still a viable alternative if the Council
believes it could secure better services at a more competitive rate. Because of the historical
relationship, high level of service, and reasonable rates San Luis Garbage Company has
provided, staff does not recommend this alternative.
ATTACHMENT
Ordinance granting a fifteen year franchise agreement
DSS"-3
Attachment 1
ORDINANCE NO. (2010 SERIES)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO
GRANTING A FIFTEEN YEAR FRANCHISE TO SAN LUIS GARBAGE
COMPANY FOR SOLID WASTE,RECYCLING,AND GREEN WASTE COLLECTION,
PROCESSING AND/OR DISPOSAL WITHIN THE CITY OF SAN LUIS OBISPO
WHEREAS, public health and safety demand the orderly and periodic collection of solid
waste,recyclables,and green waste from properties within the City of San Luis Obispo(City); and
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, recyclables, and
green waste within the City; and
WHEREAS, the current franchisee, San Luis Garbage Company, has provided reliable
service within the City for more than 50 years without interruption; and
WHEREAS, continuing the franchise held by San Luis Garbage Company would ensure the
continuation of effective and efficient solid waste collection, recycling, and green waste processing
and/or 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 for
services to collect, process, and dispose of solid waste, recyclables, and green waste subject to the
terms and conditions presented in Exhibit A, Solid Waste Franchise, Recycling and Green Waste
Agreements.
SECTION 2. Ordinance No. 1319 (1997 Series) shall be repealed upon the effective date of
this ordinance.
SECTION 3. A summary of this ordinance, approved by the City Attorney, together with
the names of the Council members voting for and against it, shall be published at least five days
prior to its final passage, in the Tribune, a newspaper published and circulated in this City. This
ordinance will 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 Obispo
at a meeting held on the day of on motion of
seconded by and on
the following roll call vote:
AYES:
NOES:
ABSENT:
Attachment 1
Ordinance No. (2010 Series)
Page 2
ATTEST:
Elaina Cano, City Clerk David F.Romero, Mayor
APPROVED AS TO FORM:
C5'W- s7ft-me Dietrick, City Attomey
�— Attachment 1
Exhibit A
FRANCHISE AGREEMENT
BETWEEN
THE CITY OF SAN LUIS OBISPO
AND
SAN LUIS GARBAGE COMPANY
For Collection, Diversion, and Disposal of Solid Waste
Within the City of San Luis Obispo
This Agreement is made and entered into as of the day of , 2010 in the State of
California by 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").
RECITALS
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 Management
Act of 1989, Division 30 of the California Public Resources Code, commencing with Section 40000
(CIWMA), declares that it is within the public interest to authorize and require local agencies to
make adequate provisions for solid waste handling within their jurisdictions. The law, AB 939
requires a 50 percent reduction in the amount of waste which is landfilled by 2000; and
2. The City has authority to grant a franchise for collection, diversion, and disposal of solid waste
within the City of San Luis Obispo pursuant to City Charter Article X and Chapter 8.04 of the San
Luis Obispo Municipal Code; and
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 conserve
landfill disposal capacity; and to develop and maintain effective resource management programs;
and
4. The City Council has determined that all occupied developed properties in the City must participate
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 the
most effective and efficient way to collect and remove solid waste within the City; and
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 , 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. � s�
Attachment 1
Franchise Agreement-Solid Waste
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, it is
hereby agreed by and between the City and Franchisee as follows:
2 lune.23.2010
� Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, unless a different meaning is clearly required, the following terms shall
have the following meanings:
1.1 "AB 939" means the California Integrated Waste Management Act of 1989, as it may be
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 include
a business in which Franchisee owns a direct or indirect ownership interest, a business which
has a direct or indirect ownership interest in Franchisee and/or a business which is also
owned, controlled or managed by any business or individual which has a direct or indirect
ownership interest in Franchisee. For purposes of determining whether an indirect
ownership exists, the constructive ownership provisions of Section 318(a) of the Internal
Revenue Code of 1986, as in effect the date of this Agreement, Shall apply; provided,
however, that (i) "ten percent(10%)" shall be substituted for "fifty percent(50%)" in Section
318(a)(2)(C) and in Section 318(a)(3)(C) thereof; and (ii) Section 318(a)(5)(C) shall be
disregarded. For purposes of determining ownership under this paragraph and constructive
or indirect ownership under Section 318(a), ownership interest of less than ten percent (10%)
shall be disregarded and percentage interests shall be determined on the basis of the
percentage of 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 for
the collection, diversion, and disposal of solid waste, and collection and any future
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 can
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 and
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 the
territory lying within the municipal boundaries of the City as presently existing or as such
boundaries may be modified during the term of this Agreement.
1.8 "Collect" or "Collection" means to take physical possession of,transport, and remove Solid
3 Tune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
Waste within and from the City.
1.9 "Commercial and Industrial Property" means property upon which business activity is
conducted, including, but not limited to, retail sales, services, wholesale operations,
manufacturing and industrial operations, but excluding businesses conducted upon residential
properties which are permitted under applicable zoning regulations and are not the primary
use of the property.
1.10 "Construction Debris" means used or discarded construction materials removed from a
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 solid
waste before removal.
1.12 "Demolition Debris" means used construction materials removed from a premises during
the razing or renovation of a structure.
1.13 "Designated Collection Location" means the place where an authorized recycling agent or
a solid waste collector has contracted with either the City or a private entity to collect solid
waste.
1.14 "Disposal Site(s)" means any properly licensed and permitted solid waste facility or
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 site
used for the purpose of sorting; cleansing, treating, reconstituting, processing and marketing
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
landfill 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 used
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 operating
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 fora facility
and with other applicable regulations such that the Franchisee will at all times maintain the
ability to fully comply with its obligations under this Agreement.
P)45--q
4 Tune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
1.21 "Green Waste" means tree trimmings, grass cuttings, dead plants, leaves,branches and
dead trees (no more than six (6) inches in diameter) and similar materials generated at the
premises.
1.22 "Gross Revenues" means the sum of the cash receipts derived by Franchisee from customer
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 and
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 be
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 are
diminished or discontinued by circumstances beyond its control, or(b) any period during
which operations are diminished or discontinued as a result of any breach of the Agreement
by Franchisee or(c) any period after the City has terminated the franchise and until the City
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 or
separated for the purposes of recycling or reuse.
1.27 "Medical Waste" means biohazardous waste, sharp wastes, waste which is generated or
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, pursuant
to California Health and Safety Code, Section 25023.2.
1.28 "Multi-Family Dwelling Unit" means any premises, other than a single family dwelling
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 to
such premises, the premises shall be presumed to have been so occupied unless evidence is
presented that no gas, electric, telephone or water utility services were consumed on such
premises during such periods or such other evidence is presented to the satisfaction of the
City Administrative Officer.
130 "Owner" means the person or persons record title to the property constituting the premises
to which solid waste collection service is to be provided under this Agreement or the person
holding legal title to a facility used by Franchisee under this Agreement.
131 "Person" means any individual, firm, association, organization, partnership, corporation;
business trust,joint venture, the United States, the State of California,the County of San
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AR�- Attachment 1
Franchise Agreement.-Solid Waste
Luis 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 of
economic value which include,but are not limited to, aluminum, glass, paper,plastic, metal,
and green or woody debris.
134 "Related Party Entity" means any affiliated entity which has financial transactions with the
Franchisee.
1.35 "Residential Property" means property used for residential purposes, irrespective of
whether such dwelling units are rental units or are owner-occupied, and includes both single
family and multi-family dwelling units.
136 "Rubbish" means all waste wood, wood products, printed materials, paper, paste board,
rages, straw,used and discarded clothing, packaging materials, ashes, floor sweepings, glass
and other materials not included in the definition of Garbage, Hazardous Substance, or
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 which
there is separate or individual solid waste collection service.
1.38 "Solid Waste" means all putrescible and non-putrescible residential refuse, commercial
solid waste, institutional solid waste, garbage, recyclable material, yard waste, and rubbish,
and as otherwise defined in Public Resources Code 840191. Solid waste which is not
required to be collected includes:
(a) Demolition and construction debris which are not offered by persons performing the
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 resulting
in a net payment to the Waste generator,
(c) Recyclable materials separated from solid waste by the waste generator and which the
waste generator donates to a charitable organization such as the Boy Scouts;
(d) Materials removed by householders or occupants and transported by them to disposal
facilities or recycling centers;
(e) Residential recyclable materials source separated by the waste generator for the
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.
6 Tune 23.2010
—� � Attachment 1
Franchise Agreement-Solid Waste
1.40 "Waste Generator" means any person as defined by the Public Resources Code, whose act
or process produced solid waste as defined in the Public Resources Code, or whose act first
causes solid waste to become subject to regulation.
7 Tune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE FRANCHISEE
2.1 Corporate Status
Franchisee is a corporation duly organized, validly existing and in good standing under the
laws of the State of California. It is qualified to transact business in the State of California
and has the corporate power to own its properties and to carry on its business as now owned
and operated and as required by this Agreement.
2.2 Corporate Authorization
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 actions
required by law, its articles of incorporation, its bylaws or otherwise to authorize the
execution of this Agreement. The persons signing this Agreement on behalf of Franchisee
have authority to do so.
2.3 Compliance with Laws and Regulations
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 and
Chapter 8.04 of the City Municipal Code.
2.4 Financial Representation
Franchisee represents that it has the financial ability to full perform its obligations as set
forth in this Agreement.
2.5 Absence of Litigation
Franchisee represents that there are no suits or threatened suits which would impair the
financial or legal ability of Franchisee to perform its obligations under this Agreement and
that the entering into this Agreement by Franchisee will not in any was constitute a breach of
any other agreement entered into by Franchisee with other parties, or constitute a violation of
any law.
8 Tune 23,2010
n
Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 3. TERM OF AGREEMENT
3.1 Effective Date
The effective date of this Agreement shall be August 6, 2010 ("Effective Date").
3.2 Term
The term of this Agreement shall be fifteen years, commencing at 12:01 a.m., August 6,
2010, and expiring at midnight, August 6, 2025, 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 period
prior to the end of the franchise.
3.3 Option to Extend
The City shall have the sole option to extend this Agreement up to 36 months in periods of at
least twelve (12) months each. If City elects to exercise this option, it shall give written
notice not later than ninety (90) days prior to the initial termination date, or, if one extension
has been exercised, ninety (90) days prior to the extended termination date.
3.4 Conditions to Effectiveness of Amendment
The obligation of City to permit this Agreement to become effective and to perform its
undertakings provided for in this Agreement is subject to the satisfaction of each and all of
the conditions set out below, each of which may be waived in whole or in part by the City, in
its sole direction.
(1) Accuracy of Representations. The representations and warranties made by
Franchisee in Article 2 of this Agreement are true and correct on and as of the
effective date.
(2) Effectiveness of City Council Action. The City's Ordinance No. , approving
this Agreement, shall have become effective pursuant to California law on or prior to
the effective date.
9 Tune 23,2010
` Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 4. SCOPE OF AGREEMENT
4.1 Grant and Acceptance of Exclusive Franchise for Solid Waste Collection and Disposal
Subject to paragraphs 3.4 (Conditions to Effectiveness of Agreement) and 4.2 (Limitations to
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-residential
properties placed in the designated collection location for regular or scheduled collection in
accordance with the City's Municipal Code and Ordinances, except where otherwise
precluded by law. Franchisee accepts the grant of the Franchise under the terms and
conditions as set forth in this Agreement. Franchisee agrees to perform and be bound by
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 Scope
This Agreement for the collection, processing, diversion and disposal of Solid Waste from
residential and non-residential properties shall be exclusive except as to the following
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 whether
1. source separated by the waste generator for the purpose of placing for
scheduled collection with the recycling collection franchisee, or
2. separated from solid waste by the waste generator and which the waste
generator either donates to a charitable organization, or sells or is otherwise
compensated by a collector in a manner resulting in a net payment to the
waste generator; or
3. separated at any premises and transported by the owner or occupant of such
premises (or by his or her full-time employees)to a processing facility.
B. All green waste material whether
1. source separated by the waste generator for the purpose of placing for
scheduled collection with the green waste collection franchisee, or
2. separated from solid waste by the waste generator and which the waste
generator either donates to a charitable organization, or sells or is otherwise
compensated by a collector in a manner resulting in a net payment to the
waste generator; or
3. separated at any premises and transported by the owner or occupant of such
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 tree
trimming company as an incidental part of a total service offered by that
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;
-PNS'�15
10 Tune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
E. Hazardous waste, liquid waste and medical waste.
Franchisee acknowledges and agrees that City may permit other persons besides Franchisee
to collect any or all types of the solid waste listed in paragraph 4.2 without seeking or
obtaining approval of Franchisee under this Agreement.
This grant to Franchisee of an exclusive Franchise, right and privilege to collect, transfer,
process, divert and dispose of Solid Waste shall be interpreted to be consistent with state and
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 trends
limit the ability of the City to lawfully provide for the scope of Franchise services as
specifically set forth herein, Franchisee agrees that the scope of the Franchise will be limited
to those services which may be lawfully provided for under this Agreement. Further, the
Franchisee agrees that the City shall not be responsible for any lost profits or damages
claimed by the Franchisee to arise out of further limitations of the scope of the Agreement set
forth herein. It shall be the responsibility of Franchisee to minimize the financial impact to
other services being provided.
4.3 Administration of Franchise
The City Administrative Officer shall administer the City's solid waste franchise and the
City's Utility Director shall supervise Franchisee's compliance with the Agreement's terms
and conditions.
4.4 Serve Without Interruption
Franchisee shall continue to collect and dispose of solid waste throughout the term of its
franchise without interruption.
4.5 Permits and Licenses
Franchisee shall procure all permits and licenses, pay all charges and fees, and give all
notices as necessary.
4.6 Preservation of ON Property
Franchisee shall pay to the City, on demand, the cost of all repairs to public property made
necessary by any of the operations of Franchisee under this Agreement.
4.7 Franchisee as Arranger
The City and Franchisee mutually agree that the City's granting of this franchise shall not be
construed as the City "arranging for" the collection and disposal of solid waste or recyclables
within the meaning of CERCLA. The parties further mutually agree that the granting of the
Franchise by City shall be construed as an action whereby the Franchisee is granted, and
accepts the rights, responsibilities, benefits and liabilities of collection and disposal of solid
waste. Commencing on the effective date of this Agreement and, to the extent that
11 Tune 23.2010
-- Attachment 1
Franchise Agreement-Solid Waste
Franchisee's performance under this Agreement requires the collection and disposal of solid
waste, and may be construed as "arranging for" collection and disposal of solid waste within
the meaning of CERCLA, such actions shall be the sole responsibility of Franchisee and
Franchisee expressly agrees to be solely responsible for all such actions.
4.8 Use of City Streets
Such grant of franchise shall give Franchisee the right and privilege to operate solid waste
collection vehicles and equipment on such streets, public ways, rights-of-way, or easements
of the City.
4.9 Annexation
The Franchisee shall automatically extend all services herein described to any area annexed
to the City, except that the City may permit a firm franchised by the County of San Luis
Obispo before the annexation to continue serving the area for a period not to exceed five (5)
years.
4.10 Ownership of Solid Waste
Once solid waste is placed in containers and properly presented for collection, ownership and
the right to possession shall transfer directly from the waste generator to Franchisee by
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 or
for any lawful purposed desired by franchisee.
Subject to this Agreement, Franchisee shall have the right to retain any benefit resulting from
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 expenses
in accordance with the "City of San Luis Obispo Rate Setting Process and
Methodology Manual for Integrated Solid Waste Management Rates".
Solid waste, or any part thereof, which is disposed of at a disposal site or facility (whether
landfill, transformation facility, transfer station, or materials recovery facility) shall become
the property of the Owner or operator of the disposal site(s) or facility once deposited there
by Franchisee.
The City may obtain ownership or possession of solid waste placed for collection upon
written notice of its intent to do so. However, nothing in this Agreement shall be construed
as giving rise to any inference that the City has such ownership or possession unless such
written notice has been given to Franchisee.
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12 Tune 23.2010
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Franchise Agreement-Solid Waste
ARTICLE 5. DIRECT SERVICES
5.1 General
The work to be done by the Franchisee pursuant to this Agreement shall include the
furnishing of all labor, supervision, equipment, materials, supplies, and all other items and
tasks necessary to perform the services required.
It is mandatory that the work to be done by Franchisee pursuant to this Agreement shall be
accomplished in a thorough and professional manner so that all occupied developed
properties within the City are provided reliable, courteous,prompt and high-quality services
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
adjoining property.
The City reserves the right to revise its laws and regulations pertaining to solid waste
collection and disposal in order to protect public health, safety and welfare. The Franchise
Agreement is subject to any such future revisions of the City's laws and regulations, and
Franchisee agrees to comply with any such changes in said laws and regulations as if
incorporated into the Agreement.
5.2 Single Family Residential Solid Waste Collection Service
For residential customers, Franchisee shall collect solid waste at the curbside at a minimum
of once a week, Monday through Friday, except as specified below. The Franchisee will
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 and
return container to same location. Franchisee will notify residents annually, beginning
within thirty (30) days of execution of this Agreement, of this collection option. To be
eligible for this collection option, residents must present proof of their physical incapacity to
the Franchisee.
5.3 Other Solid Waste Collection Service
5.3.1 Multi-family Solid Waste Collection Service
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 in
aesthetic degradation of an area. The designated collection location, if disputed by customer
or Franchisee, shall be determined by the City.
5.3.2 Commercial, Industrial and Institutional Solid Waste Collection Services
Franchisee shall collect Solid Waste from all commercial, industrial and institutional
properties within the City, using containers of a size and shape acceptable to Franchisee, not
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13 Tune 23.2010
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Franchise Agreement-Solid Waste
less than once per week. To the extent allowable by law, Franchisee shall collect from all
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
in recycling containers provided by the Franchisee and placed in the designated collection
location for regular collection by Franchisee. To the extent allowable by law, nothing in this
Agreement shall preclude any organization from collecting recyclable materials from
commercial and/or industrial customers within the City.
The Franchisee and each customer shall agree on the designated collection location. Special
consideration shall be given when determining the designated collection location for
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 for
particular multi-family dwelling unit or commercial, industrial or institutional property is
inappropriate, the City may direct the customer or Franchisee to relocate the collection
location. If a customer refuses to comply with said directive, Franchisee shall decline to
collect solid waste from said mis-located containers.
5.4 Public Facilities Collection
When requested by the City, the Franchisee shall collect and dispose of all Solid Waste
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 on
Saturdays following non-working holidays. Collections shall be scheduled at a time
mutually agreed upon by Franchisee and the Waste Generator.
Franchisee shall provide, at City's direction, additional solid waste collection and disposal
and consulting services including:
(1) Collection of solid waste from all sidewalk litter containers;
(2) Collection of solid waste from City-sponsored special events as specified by the City;
(3) Collection of solid waste from containers in City parks as mutually agreed upon by
the Franchisee and the City;
(4) Review of plans for land use or property developments with regard to solid waste
service issues; and
(5) Residual solid waste remaining from temporary household hazardous waste collection
events.
5.5 Missed Pickups
Upon notification, Franchisee shall collect any missed pickup which had been properly and
timely placed for collection within 24 hours of said notice.
5.6 Bulky Waste Collection
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 for q
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14 Tune 23.2010
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Attachment 1
Franchise Agreement-Solid Waste
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, in
addition to regularly scheduled service, two clean-up events pursuant to guidelines
established by the Franchisee and approved by the City, for solid waste placed at the curb by
single family dwelling units and at pre arranged locations for multi-family residential
properties in addition to each customer's normal collection service. The dates for each event
shall be proposed by Franchisee and approved by the City prior to September I'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.
5.8 City Right to Reguest Changes
5.8.1 General
City may request Franchisee to perform additional services (including new diversion
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, different
kinds of services and/or new requirements for Waste Generators are included among the
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 services
pursuant to the terms of Section 5.8.2. Franchisee shall be entitled to an adjustment in its
compensation in accordance with Section 9.4, for providing such additional or modified
services.
5.8.2 New Programs
Franchisee shall present, within 30 days of a request to do so by City, a proposal to provide
additional or expanded services. The proposal shall contain a complete description of the
following:
• Collection methodology to be employed (equipment, manpower, etc.)
• Equipment to be utilized (vehicle number, types, capacity, age, etc.).
• Labor requirements (number of employees by classification).
• Type of Containers to be utilized.
• Provision for program publicity/education/marketing.
• A projection of the financial results of the program's operations for the remaining
Term of the Agreement in a balance sheet and operating statement format including
documentation of the key assumptions underlying the projections and the support for
those assumptions.
• Materials processing facility to be utilized.
5.8.3 City's Right to Acquire Services
Franchisee acknowledges and agrees that City may permit other Persons besides Franchisee
15 Tune 23.2010
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Franchise.Agreement-Solid Waste
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 cannot
agree on terms and conditions of such services in ninety (90) days from the date when City
first requests a proposal from franchisee to perform such services, Franchisee acknowledges
and agrees that City may permit Persons other than Franchisee to provide such services.
5.9 Report of Accumulation of Solid Waste: Unauthorized Dumpine
Franchisee shall direct its drivers to note the addresses of any premises at which they observe
that solid waste is accumulating and is not being delivered for collection, and the address, or
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) hours
of such observation.
5.10 ON Directed Removal of Solid Waste
Franchisee shall arrange for the removal of all accumulated solid waste and recyclables on
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 waste
generator, and the costs of this effort, as well as the cost of disposal shall be chargeable to the
waste generator. The Franchisee shall be entitled to include the costs incurred and not
collected under this Section as an operating expense for purposes of rate setting.
5.11 Processing of.Solid.Waste
The City reserves the right,prior to disposal, to direct portions of the waste stream collected
under this franchise, to a designated processing facility for separation and recycling of any
recyclable materials contained therein. City shall provide Franchisee with reasonable prior
written notice concerning any change of service location.
5.12 Designated Disposal Facility
Franchisee shall arrange with 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 disposed
of according to the regulations of the designated disposal site.
Franchisee shall secure within 90 days of the effective date of this Agreement, sufficient
disposal site capacity commitment including landfill disposal site capacity commitment, to
adequately serve the reasonably anticipated solid waste disposal needs of the City and its
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 into
any capacity commitment, Franchisee shall give prior written notice to the City concerning
negotiations. The disposal site capacity commitment contract for the designated disposal
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 disposal
site, Franchisee shall immediately notify in writing the City's Utilities Director, stating the
reason(s) Franchisee is prevented, or expects to be prevented, from disposing of solid waste
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16 Tune 23.2010
' Attachment 1
Franchise Agreement-Solid Waste
in the designated disposal facility. Franchisee shall in good faith expeditiously identify and
evaluate alternative disposal sites. An alternative designated disposal site or sites shall be
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 any
alternate disposal site. City reserves the right to direct the waste stream to other disposal site
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 faith
obligation to find and secure alternate disposal sites. Absent a Section 12.5 event,
Franchisee shall be responsible for any increased costs, including transportation, with respect
to the alternate disposal site.
5.13 Hazardous Waste Handling and Disposal
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 of
at the designated disposal site or presents a hazard to the Franchisee's employees, the
Franchisee shall have the right to refuse to accept such solid waste. The Franchisee will
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 leaving
the premises, leave a tag at least two inches by six inches indicating the reason for refusing to
collect the solid waste, in which case, a copy of the tag, along with the address of the
premises (and the name of the waste generator, if known) shall be delivered to the City on
the following business day.
If the Hazardous waste or medical waste or other unauthorized waste is collected before its
presence is detected by Franchisee, and if the waste generator cannot be identified or fails to
remove the solid waste after being requested to do so, the Franchisee shall arrange for its
legal disposal. The Franchisee shall make a good faith effort to recover the cost of disposal
of such waste from the waste generator, and the costs of this effort, as well as the cost of
disposal shall be chargeable to the waste generator. Provided the failure to detect the
hazardous waste, medical wastes or other unauthorized wastes prior to collection and/or their
delivery to the designated disposal site is not due to the negligence of the Franchisee or its
employees or due to failure of the Franchisee to have an adequate in place inspection
program, the Franchisee shall be entitled to include the costs incurred under this paragraph as
an operating expense for purposes of rate setting.
17 Tune Tune 23.2010
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Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 6. COLLECTION SERVICE STANDARDS
6.1 Operations
6.1.1 Schedules
To preserve peace and quiet, solid waste shall not be collected within two-hundred (200) feet
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 on
the following regularly scheduled collection day. Franchisee will promptly resolve any
complaints of noise to the satisfaction of the City Administrative Officer or the City
Administrative Officer's designee.
6.1.2 Vehicles
A. General. Franchisee shall keep a fleet of collection trucks sufficient in number and
capacity to efficiently perform the work required in the Agreement in strict
accordance with the terms of this Agreement. Franchisee shall provide a detailed
description concerning the number and type of vehicles necessary for performance.
Franchisee shall have available on collection days sufficient back-up vehicles for
each type of collection vehicle (i.e., rear loader, front loader, and roll-off)used to
respond to complaints and emergencies. The fleet shall be maintained according to
the requirements of Municipal Code 8 8.04.030.
B. Specifications. All vehicles used by Franchisee in providing solid waste collection
services shall comply with all federal, state, and local requirements for such vehicles
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-tight
bodies designed to prevent leakage, spillage, or overflow. All such vehicles shall
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
in providing service under this Agreement in a safe,neat, clean and operable
condition at all times.
2) Franchisee shall inspect each vehicle daily to ensure that all equipment is
operating properly. Vehicles which are not operating properly and represent a
safety hazard shall be taken out of service until they are repaired and do
operate properly and safely. Franchisee shall perform all scheduled
maintenance functions in accordance with the manufacturer's specifications
and schedule. Franchisee shall keep accurate records of all vehicle
maintenance, recorded according to date and mileage, and shall make such
records available to City upon request.
3) Franchisee shall repair, or arrange for the repair of, all of its vehicles and
equipment for which repairs are needed because of accident,breakdown or
any other cause so as to maintain all equipment in a safe and operable
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Franchise Agreement-Solid Waste
condition. Franchisee shall maintain accurate records of repair, which shall
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 as
required in Municipal Code 88.04.090.
E. Operation. Vehicles shall be operated in compliance with the California Vehicle
Code, and all applicable safety and local ordinances. Franchisee shall not load
vehicles in excess of the manufacturer's recommendations or limitations imposed by
state or local vehicle weight restrictions.
6.1.3 Containers
A. Residential Solid Waste Containers. When requested, Franchisee shall supply each
Single Family Dwelling Unit with a waste wheeler in size consistent with the City
approved Solid Waste collection program. Franchisee shall supply each multi-family
complex with the appropriate type of container to adequately service the needs of the
complex per the solid waste handling location. Franchisee agrees to provide
additional appropriate Containers, as required.
City and Franchisee acknowledge that from time to time, a customer may damage or
destroy a Container. City and Franchisee also acknowledge that from time to time
Containers may be stolen from the curb or damaged due to normal use. When
notified of such occurrence, Franchisee shall replace the Container, at no charge to
the customer pursuant to the guidelines established by the Franchisee and approved
by the City. The container replacement guidelines are presented in Appendix II of
this Agreement.
B. Non-Residential and Multi-Family Dwelling Unit Solid Waste Containers.
Franchisee shall furnish to all customers appropriate containers to collect solid waste
at multi-family dwelling units, commercial and industrial properties, and other
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 containers
furnished to particular customers shall be as determined mutually by the customer
and 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 Solid Waste bin safety and shall be maintained in good repair with neatly and
uniformly painted surfaces and shall prominently display the name and telephone
number of Franchisee. Additionally, one cubic yard or more bins in public right-a-
ways shall have reflectorized markings. Bins shall be clearly marked and identified
as belonging to Franchisee. Franchisee shall not be obligated to provide customers
with compactor units,but will be obligated to charge the rates set by the City for the
collection of compacted solid waste.
Each customer shall be responsible for excess damage to any such containers not
caused by Franchisee.
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Franchise Agreement-Solid Waste
6.1.4 Personnel
A. General. Franchisee shall furnish such qualified drivers,mechanical, supervisory,
clerical, and other personnel as may be necessary to provide services required by this
Agreement in a safe and efficient manner.
If Franchisee needs to provide additional personnel, Franchisee shall be responsible
for all costs related to provision of such additional personnel. Franchisee may only
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 type
of personnel utilized, at no additional cost to the City.
B. Identification. Franchisee shall ensure that while on duty each collection worker
wears a clean uniform with conspicuous insignia displaying Franchisees company
name and the worker's name or identification number.
C. Fees & Gratuities. Franchisee shall not,nor shall it permit any agent, employee, or
subcontractors employed by it to request, solicit, demand, or accept, either directly or
indirectly, any compensation or gratuity for any services performed under this
Agreement, except as provided in Article 8 of this Agreement.
D. Training. All drivers shall be trained and qualified in the operation of vehicles they
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, and
Hazardous Waste identification and handling training for all of its employees who use
or operate equipment or who are otherwise directly involved in collection or other
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 to
perform the work quietly. Franchisee shall use its best efforts to ensure that all
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 the
manner required by this Agreement, Franchisee shall take all necessary corrective
measures. If City has notified Franchisee of a complaint related to a discourteous or
improper behavior, Franchisee will reassign the employee to duties not entailing
contact with the public while Franchisee is pursuing its investigation and corrective
action process.
6.2 Service Complaints
Franchisee shall maintain and provide copies of all written service complaints and summaries
of all oral service complaints and the Franchisee's response to those complaints for the term
of one year and shall allow City officials to inspect these records during the required office
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20 lune 23.2010
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Franchise Agreement-Solid Waste
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 an
administrative hearing. The City's Utilities Director shall conduct an investigation, and give
notice of that decision. The customer may elect to appeal this decision to the City Integrated
Waste Management Appeals Committee made up of representatives from the Utilities
Department, the Finance Department and the Administrative Office.
63 Periodic Performance Audit
The City shall have the right to periodically,not less than annually, request a performance
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 conduct
said audits. The cost of such audits will be an allowable cost under the rate setting
methodology unless there are findings pursuant to Section 12.8.
6.4 Performance Hearing
The City maintains the right to hold a public hearing at any time, not more than once each
year, at which the Franchisee shall be present and shall participate, to review Franchisees
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 of
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 with
adequate quality, efficiency and economy.
Sixty (60) days after receiving notice from City of a performance review hearing, Franchisee
shall, at a minimum, submit a report to City indicating the following:
■ Changes recommended and/or new services to improve City's ability to meet the
goals of AB 939 and to contain costs and minimize impacts on rates; and
■ 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 one
basis for review. Franchisee may submit other relevant performance information and reports
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 shall
not be limited to, quality and adequacy of services provided, feasibility of providing new
services, application of new technologies, customer complaints, amendments to this
Agreement, developments in the law, new initiatives for meeting or exceeding AB 939's
goals, regulatory constraints and Franchisee performance. City and Franchisee may each
select additional topics for discussion at any performance review hearing.
Not later than sixty(60) days after the conclusion of each performance review hearing, City
may issue a report. As a result of the review, City may request Franchisee to provide
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expanded or new services. Franchisee shall present, within 30 days of a request to do so by
City, a proposal to provide additional or expanded diversion services. The proposal shall
contain a complete description of the following:
• Collection methodology to be employed(equipment, manpower, etc.)
• Equipment to be utilized(vehicle number, types, capacity, age, etc.).
• Labor requirements (number of employees by classification).
• Type of Containers to be utilized.
• Provision for program publicity/education/marketing.
• A projection of the financial,results of the program's operations for the remaining
Term of the Agreement in a balance sheet and operating statement format including
documentation of the key assumptions underlying the projections and the support for
those assumptions.
• Materials processing facility to be utilized.
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- ' Attachment
Franchise Agreement-Solid Waste
ARTICLE 7. OTHER SERVICES: BILLING,.REPORTING,RECORD-KEEPING AND
PUBLIC EDUCATION
7.1 Billing
By resolution of the City Council, the City shall establish rates for the services provided by
the Franchisee. Franchisee shall bill and collect these rates. Franchisee billing format and
billing frequency shall be subject to approval of the City and City shall have the right to
revise the billing format to itemize certain charges.
The City may also direct Franchisee to insert mailers relating to Franchisee provided service
with the billings at no additional cost to the City. The mailers must fit in standard envelopes
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
to make appropriate arrangements for inclusion of City materials.
Franchisee shall maintain copies of said billings and receipts, each in chronological order, for
a period of three(3)years after the date of service for inspection by the City, or for such
longer term as the City directs. Franchisee may, at its option, maintain those records in
computer form, on microfiche, or in any other manner, provided that the records cannot be
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 be subject to approval by the City.
7.2 Owner Responsible for Payment
The owner of occupied developed property shall be responsible and liable for paying the
solid waste collection and disposal fees for that property.
7.3 Collection of Bills from Delinguent.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 Chapter
8.04 of the Municipal Code to collect delinquent solid waste collection and disposal
accounts.
7.4 Records
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 an
adequate backup system shall be provided for such data and records. The protection and
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 the
City, relating to:
Customer services and billing;
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o 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 dwelling units with residential);
o Special annual clean-up event results;
o Routes;
o Facilities, equipment and personnel used;
o Facilities and equipment operations, maintenance and repair;
o Processing and disposal of solid waste;
o Complaints; and
o Missed pick-ups.
Franchisee shall maintain records of transfer, diversion and disposal of all solid waste
collected in the city for the period of this Agreement and all extensions to this Agreement or
successor Agreements. In the event Franchisee discontinues providing solid waste services
to City, Franchisee shall provide all records of diversion and disposal of all solid waste
collected within the City to City within thirty (30) days of discontinuing service. Records
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:
o Plans, tasks, and milestones; and,
o Accomplishments in terms such as dates, activities conducted, quantities of
products used, produced or distributed, and numbers of participants and
responses.
7.5 Waste Generation/Characterization Studies
Franchisee acknowledges that the City must perform solid waste generation and disposal
characterization studies periodically to comply with AB 939 requirements. Franchisee
agrees to participate and cooperate with the City and its agents, at no cost to the City,to
accomplish studies and data collection, and prepare reports, as needed, to determine weights
and volumes of solid waste and characterize solid waste generated, diverted, disposed,
transformed, or otherwise handled or processed to satisfy AB 939 requirements.
7.6 Report Formats and Schedule
Records shall be maintained in forms and by methods that facilitate flexible use of data
contained in them to structure reports, as needed. Reports are intended to compile recorded
data into useful forms of information that can be used to, among other things:
o Determine and set rates, and evaluate the financial efficacy of operations; and
o Evaluate past and expected progress towards achieving goals and objectives; and
o Determine needs for adjustment to programs; and
o Evaluate customer service and complaints.
The City may at no cost to itself request that Franchisee provide such additional information
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
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24 Tune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
for 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 report
month. Quarterly reports shall be submitted within fifteen (15) calendar days after the end of
the quarter. Quarters end on November 30, February 28, May 31, and August 31..
All reports shall be submitted to:
Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
7.7 Monthly Resorts
The information listed shall be the minimum reported for each service:
o Solid Waste, collected, transferred, diverted and disposed of, by sector(commercial,
industrial, residential) of waste generator--collected by Franchisee, in tons, by month.
o Complaint summary, for month and cumulative for report year, as above.
Summarized by nature of complaints.
o Narrative summary of problems encountered and actions taken with
recommendations for the City, as appropriate.
7.8 Ouarterly Report
Quarterly reports shall be quarterly summaries of the monthly information in addition to the
following:
o Status report on applications for renewals of existing permits or any new permits
which may be required to continue operations at the designated disposal site within
existing permitted areas.
o Solid Waste, collected, diverted and disposed of, in tons, during the semi-annual
residential clean-up weeks, if applicable.
o For each new program, provide activity related and narrative reports on goals and
milestone and accomplishments. Describe problems encountered, actions taken and
any recommendations to facilitate progress.
o 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 is
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 significant
accomplishments, problems and proposed solutions.
7.9 Annual Financial Audit
Franchisee shall submit to the City annual audited financial statements prepared at
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 Setting
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
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25 Tune 23.2010
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Franchise Agreement-Solid Waste
forms contained in the rate application must be reconciled to the audited financial statements
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 in
relation to performance of this Agreement, including detailed information concerning
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 annual
financial statement.
City shall have the right to inspect or review the payroll tax reports, specific documents or
records required expressly or by inference pursuant to this Agreement, or any other similar
records or reports of Franchisee that City shall deem, in its sole discretion, necessary to
evaluate annual reports, compensation applications provided for in this Agreement and
Franchisee's performance provided for in this Agreement. 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
records inspection. The cost of such inspection or review will be an allowable cost under the
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 an
increase in tipping fees no later than five(5) days following submittal of said request to the
County of San Luis Obispo. Additionally, the Franchisee shall notify the City of the action
taken by the Board of Supervisors regarding said request within five (5) days following said
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 allowable
cost under the rate setting methodology unless there are findings pursuant to Section 12.8.
7.10 Maintenance of Accounting Records
Franchisee shall maintain accounting records in accordance with generally accepted
standards and principles of accounting. In its accounting records, Franchisee shall discreetly
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 from
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. Separate
detailed records shall be maintained by Franchisee with respect to all transactions with
affiliated entities that affect the cost and revenue of Franchisee in providing the franchise
collection services.
7.11 Right to Audit Records
In addition to other reporting requirements in this Agreement, the City may review, test and
audit the books and records of the Franchisee or may engage a Certified Public Accountant
for this purpose. The cost of such inspection or review will be an allowable cost under the
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 review
26 lune 23,2010
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Franchise Agreement-Solid Waste
Franchisee operations and enter Franchisee's premises for the purpose of such observation
and review at all reasonable hours with reasonable notice.
7.13 Office
Franchisee shall maintain an office with telephone within the City limits where customers
may apply for service,pay bills, and register complaints. At a minimum,Franchisee shall
staff this office from 8:00 a.m. to 5:00 p.m., Monday through Friday, except legal holidays
observed by the City. A representative of Franchisee shall be available during office hours to
communicate with the public in person and directly by telephone.
7.14. Customer Information
Franchisee shall prepare and keep current a flier acceptable to the City which summarizes
solid waste regulations, all services provided by Franchisee, solid waste collection and
disposal rates, telephone numbers, special collection events, collection schedules, complaint
procedures, and other pertinent information. Franchisee shall have copies of this flier
available at all times in Franchisee's office; shall distribute copies to all new customers; shall
annually mail copies to all of its current customers; and shall mail updated copies to all
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 each
regulatory action from local, state or federal regulatory agencies. In addition, Franchisee
shall send copies to City of any reports that Franchisee submits to regulatory agencies with
respect to performance of this Agreement.
Franchisee shall provide City promptly with copies of any notices and correspondence from
other facilities, including disposal sites, utilized by Franchisee in performance of this
Agreement, concerning any breach of agreement with such facility or violation of
regulations, including delivery of unauthorized wastes. Franchisee shall direct such facilities
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 correspondence
concerning the status of permits with respect to Franchisee and such disposal sites and
facilities referenced above.
7.16 Public Education
Franchisee acknowledges and agrees that education and public awareness are critical, key
and essential elements of any efforts to achieve AB 939 requirements. Accordingly,
Franchisee 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 to cooperate fully with City in this regard.
Franchisee shall maintain its own program of providing information relevant to billing and
solid waste services; issues and needs with its bills. Franchisee shall also include in
customer bills additional information, including information on recycling programs, as
directed by the City. Franchisee shall bear all labor costs with respect to inserting public
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Franchise Agreement-Solid Waste
education materials 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 are clearly in excess of the Franchisee's normal billing costs. All public
education materials shall be approved in advance by the City.
At the direction of the City, Franchisee shall participate in and promote AB 939 activities
and other solid waste management techniques at community events and local activities. Such
participation would normally include providing, without cost, educational and publicity
information promoting the goals of the City's solid waste program.
7.17 Records Retention
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 data
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 Payments
In consideration of the exclusive franchise provided for in Article 4 of this Agreement,
Franchisee shall pay the City ten percent(10%) of Franchisee's gross revenues for collection
and disposal of solid waste within the City; provided,however, that such franchise fee shall
not exceed the costs incurred by the City to deliver service to properties. Such franchise fee
shall be a "pass-through" expense for purposes of rate review and setting. Each monthly
remittance of fees to City shall be accompanied by a statement detailing gross revenues for
the period covered from all operations conducted or permitted pursuant to this Agreement.
8.2 Schedule of Payment
Franchise fees described in Section 8.1 are due on the 15th day of each month for receipts
from the previous month. The remittance will be accompanied by a report setting forth the
basis, and calculations used for computing the amount due.
83 AB 939 Fee Amount
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 revenue
for an AB 939 fee(i.e. the cost that the City incurs in managing and addressing AB 939 issues
regarding diversion, recyclable materials, source reduction, etc.), on a monthly installment
basis, based on cash receipts from customers provided residential and non-residential
services during the prior month. All AB 939 fees paid to the City shall be considered a pass
through 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 Fees
The City shall reserve the right to set such other fees, as the City deems necessary. These
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 Payment
If Franchisee is directed to pay an AB 939, Franchise Fee or"Other" Fee, it shall do so on or
before the fifteenth (15th) day of each month during the Term. Franchisee shall remit to City
a sum of money equal to the designated percentage of the gross revenue or a flat monthly fee
as determined by the City. If any fees are not paid on or before the fifteenth (15th) day of
any month, Franchisee shall pay to City a late payment penalty in an amount equal to one
percent (1%) of the amount owing for that month. Franchisee shall pay an additional late
payment penalty of one percent (M) owing on any unpaid balance for each following thirty
(30) day period the fee remains unpaid. Late payment penalty amounts shall not be included
in any revenue requirement.
8.6 Review of Fee Payments
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 of
such inspection or review will be an allowable cost under the rate setting methodology unless
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29 Tune 23.2010
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Franchise Agreement-Solid Waste
there are findings pursuant to Section 12.8.
8.7 Business License Tax
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 General
Franchisee's compensation provided for in this Article shall be the full, entire and complete
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 by
this Agreement in the manner and at the times prescribed, Franchisee will not be entitled to
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 waste
collection services provided to the City and presented in Appendix III, under this Agreement
in consideration of the right to charge and collect from customers for services rendered at
rates fixed by the City from time-to-time. The City shall have the right to structure those
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 to
provide for Franchisee's compensation as calculated in accordance with the "City of San
Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid
Waste Management Rates".
9.2 Service Rates
Service rates are those established by Resolution adopted by City Council. Franchisee shall
provide the services required by this Agreement and charge no more than the rates authorized
by City Resolution.
9.3 Rate Review
Franchisee shall submit to the City an application for rate review annually, in accordance
with the procedures described in the "City of San Luis Obispo Rate Setting Process and
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 procedures
contained in the above referenced manual, Franchisee shall submit any and all data requested
by and in the format prescribed by the City. In the event Franchisee shall fail to meet the
schedule set forth in the above referenced manual, a revision of rates for the following year
shall not be authorized until the 1 st day of the first calendar month following a 120 day
period from the date that the complete application is submitted and such revision shall
contain no consideration for Franchisee's failure to submit the application in accordance with
the schedule set forth in the above-referenced manual.
9.4 Special Interim Rate Review
The City or franchisee may request an extraordinary or consequential adjustment outside of
the base year and interim year adjustment schedules, as set forth in the "City of San Luis
Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste
Management Rates," dated June 1994. To be extraordinary and consequential, cost changes
must be significant enough to require a greater than five percent(5%) decrease or increase in
monthly rates for basic residential service.
31 Tune 23.2010
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Franchise Agreement-Solid Waste
9.5 Allowable Profit
When performing the procedures described in the "City of San Luis Obispo Rate Setting
Process and Methodology Manual for Integrated Solid Waste Management Rates," dated
June 1994, the allowable profit on expenses shall be calculated using targeted operating ratio
of ninety-three percent (93%),with a range of ninety-one percent(91%) to ninety-five
percent(95%), applied to Franchisee's reasonable and necessary allowable costs, as these
costs are defined in the rate setting manual, incurred in the performance of its obligations
under this Agreement.
9.6 Publication of Rates
Franchisee shall provide written notice to subscribers of all rate changes, prior to
implementation. If appropriate, this notice should include reasons and background for the
rate change.
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32 Tune 23.2010
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Franchise Agreement-Solid Waste
ARTICLE 10. INDEMNITY, INSURANCE, AND PERFORMANCE BOND
10.1 Indemnification
10.1.1 General. Franchisee agrees to defend, indemnify, protect and hold the City and its
Council members, agents, officers and employees harmless from and against any and all
claims asserted or liability established for damages or injuries to any person or property,
including, but not limited to, damages arising from or related to alleged or actual violations
of Proposition 218 and/or its implementing legislation, injury to the Franchisee's employees,
agents or officers to the extent arising from or connected with or are caused or claimed to be
caused by the acts or omission of the Franchisee, and its agents, officers, directors or
employees, in performing the 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 any 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 the
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, State
or local laws, rules or regulations. The Franchisee shall further defend and indemnify City
from any and all legal actions against City on the basis of the assertion that the City is an
arranger of solid waste services as a result of this Agreement.
10.1.3 Integrated Waste Management Act. Franchisee agrees to defend and indemnify the
City, Council members, officers, employees and agents for any fines or penalties imposed by
the California Integrated Waste Management Board or its agents in the event and to the
extent that Franchisee's delays in providing information or reports required pursuant to this
Agreement prevent the City from submitting reports or attaining goals in a timely manner as
required by the Integrated Waste Management Act.
10.2 Insurance
Franchisee shall procure and maintain for the duration of the franchise insurance against
claims for injuries to persons or damages to property which may arise from or in connection
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 (occurrence
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 and
Employers Liability insurance.
(4) Pollution Legal Liability
33 June 28,2010
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Franchise Agreement-Solid Waste
B. Minimum Limits of Insurance. Franchisee shall maintain limits no less than:
(1) Commercial or Comprehensive General Liability: Five Million Dollars
($5,000,000) combined single limit per occurrence for bodily injury, personal
injury, and property damage. If Commercial General Liability or other form
with a general aggregate limit is used, either the general aggregate limit shall
apply separately to this Agreement or the general aggregate limit shall be
twice the required occurrence limit.
(2) Automobile Liability: Five Million Dollars ($5,000,000) combined single
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 employers
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/Two Million
Dollars ($2,000,000) annual aggregate all losses.
C. Deductibles and Self-Insured Retentions. Any deductibles or self-insured 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, and agents; or
the Franchisee shall procure a bond guaranteeing payment of losses and related
investigations, claim administration and defense expenses. Any insurance policies
providing for self insured retentions shall further provide that legal costs and 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 policies are
to contain, or be endorsed to contain, the following provisions:
(1) The City, Council members, its officers, officials,employees, and agents are
to be covered as insurers as respects: liability arising out of activities
performed by or on behalf of the Franchisee; products and completed
operations of the Franchisee; premises owned, occupied or used by the
Franchisee; or automobiles owned, leased, hired or borrowed by the
Franchisee. The coverage shall contain no special limitations on the scope of
protection afforded to the City, its officers, officials, employees, or agents.
(2) For any claims related to this project, the Franchisee's insurance coverage
shall be primary insurance as respects the City; Council members, its officers,
officials, employees, and agents. Any insurance or self-insurance maintained
by the City, its officers, officials, employees, agents or volunteers shall be
excess of the Franchisee's insurance and shall not contribute with it.
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34 June 28,2010
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Franchise Agreement-Solid Waste
(3) Any failure to comply with reporting or other provisions of the policies
including breaches of warranties shall not affect coverage provided to the
City, Council members, its officers, officials, employees, or agents.
(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 the
insurer's liability.
(5) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in
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 Pollution
exclusion and add the Motor Carrier Act endorsement (MCS-90), TL 1005,
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 the
contract or the beginning contract work.
b. Insurance must be maintained and evidence of insurance must be
provided for at least five (5) years after completion of the contract of
work.
c. If coverage is canceled or non-renewed, and not replaced with
another claims made policy form with a "Retro Date" prior to the
contract effective date, the Franchisee must purchase "extended
reporting" coverage for minimum of two years after completion of
contract.
E. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.
Best's rating of no less than ANU. Insurers selected by Franchisee shall be admitted
to issue insurance in the State of California.
F. Verification of Coverage. Franchisee shall furnish the City with Certificates of
insurance and with original endorsements effecting coverage required herein. The
certificates and endorsements for each insurance policy are to be signed by a person
authorized by that insurer to bind coverage on its behalf. The certificates and
endorsements are to be on forms provided by or acceptable to the City and are to be
received and approved by the City before performance under this Agreement
commences. The City reserves the right to require complete certified copies of all
required policies at any time, and Franchisee shall provide said copies upon request.
G. Subcontractors. Franchisee shall include all subcontractors as insurers under its
policies or shall furnish separate certificates and endorsements for each subcontractor.
All coverages for subcontractors shall be subject to all of the requirements stated
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35 June 28,2010
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Franchise Agreement-Solid Waste
herein.
H. Occurrence Based Coverage. All policies secured by Franchisee shall be 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 this
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 the
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 effective
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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Franchise Agreement Solid Waste
ARTICLE 11. CITY'S RIGHT TO PERFORM SERVICE
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 to
Collect and process, at the time and in the manner provided in this Agreement, for a period of
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
Administrative Officer should find that such accumulation endangers or menaces the public
health, safety or welfare, then City shall have the right, but not the obligation, upon twenty-
four(24) hour 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 itself with its own or other personnel without liability to Franchisee, and/or(2)
to take possession of any or all of Franchisee's land, equipment and other property to Collect,
transport or process any Solid Waste generated within the City which Franchisee would
otherwise be obligated to Collect, transport, process or market pursuant to this Agreement.
In the event the City takes possession of the Franchisee's equipment and other property, the
City shall be entitled to have another Franchisee operate such equipment and property under
City direction. Additionally, in the event the City takes possession of the Franchisee's
equipment and other property, the City does not guarantee repair of existing problems with
equipment and facilities.
Notice of Franchisee's failure, refusal or neglect to collect, transport or process Solid Waste
may be given orally by telephone to Franchisee at its principal office and shall be effective
immediately. Written confirmation of such oral notification shall be sent to Franchisee
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
for City's use.
o It will, if City so requests, keep in good repair and condition all of such property,
provide all motor vehicles with fuel, oil and other service, and provide such other
service as may be 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,
employees previously or then employed by Franchisee, Franchisee further agrees, if
City so requests,to furnish City the services of any or all management or office
personnel employed by Franchisee whose services are necessary or useful for Solid
Waste Collection, Transportation 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 such
equipment and facilities while in its possession.
If the interruption or discontinuance in service is caused by any of the reasons listed in
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37 Tune 23.2010
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Section 12.4 (Excuse From Performance), City shall pay to Franchisee the reasonable rental
value of the equipment and facilities, possession of which is taken by City, for the period of
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 rights
under this Article 11 (1) does not constitute a taking of private property for which
compensation must be paid; (2) will not create any liability on the part of City to Franchisee;
and(3) does not exempt Franchisee from the indemnity provisions of Article 10,
Indemnification, Insurance and Bond, which are meant to extend to circumstances arising
under this Section,provided that Franchisee is not required to indemnify City against claims
and damages arising from the sole negligence of City officers, employees and agents in the
operation of Collection vehicles during the time City has taken possession of such vehicles.
11.2 Temporary Possession of Franchisee's Property
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, Excuse
from Performance), City may take possession of and use all of Franchisee's property
described above until other suitable arrangements can be made for the provision of Solid
Waste Services which may include the grant of a Contract to another company. The same
notice requirements of Section 11.1 are applicable.
113 Billing and Compensation to City During City's Possession
During such time that city is providing Solid Waste services, as above provided, Franchisee
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 and
expenses incurred by City in taking over possession of the above-mentioned property for
Solid Waste service in such manner and to an extent as would otherwise be required of
Franchisee under the Terms of this Agreement. Such reimbursement shall be made from
time to time after submission By City to Franchisee of each statement listing such costs and
expenses, but in no event later than five (5) working days from and after each such
submission. The City shall have the right, at its sole discretion, to take over billing and
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 Possession
It is further mutually agreed that City may at any time at its discretion relinquish possession
of any or all of the above-mentioned property to Franchisee and thereupon demand that
Franchisee resume the Solid Waste services as provided in this Agreement, whereupon
Franchisee shall be bound to resume the same.
11.5 Duration of City's Possession
City's right pursuant to this Article to retain temporary possession of Franchisee's facilities
and equipment, and to render Collection services, shall terminate when City determines that
such services can be resumed by Franchisee, or when City no longer reasonably requires
such facilities or equipment. In any case, City has no obligation to maintain possession of
38 Tune 23.2010
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Franchisee's property and/or continue its use for any period of time and may at any time, in
its sole discretion, relinquish possession to Franchisee.
-PHS-,rT
39 Tune 23,2010
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Franchise Agreement-Solid Waste
ARTICLE 12. DEFAULT AND REMEDIES
12.1 Events of Default
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
upon city.
B. Insolvency or Bankruptcy. If Franchisee becomes insolvent, unable, or unwilling to pay
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 this
contract for the benefit of its creditors.
C. Failure to Maintain Coverage. If Franchisee fails to provide or maintain in full force
and effect the Workers' Compensation, liability, indemnification coverage or any insurance
coverage or bond required under this Agreement.
D. Violations of Regulation. If Franchisee facilities fall out of full regulatory compliance or
if Franchisee violates any orders or filings of any regulatory body having jurisdiction over
Franchisee relative to this Agreement, provided that Franchisee may contest any such orders
or filings by appropriate proceedings conducted in good faith, in which case no breach of the
Agreement shall be deemed to have occurred.
E. Failure to Perform. If Franchisee ceases to provide Solid Waste services as required
under this Agreement for a period of two (2) days or more, for any reason within the control
of Franchisee.
F. Failure to Pay/Report. If Franchisee fails to make any timely payments, including
liquidated damages and penalties, required under this Agreement and/or fails to provide City
with required information, reports, and/or records in a timely manner as provided for in the
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 Management
Act of 1989, as it may be amended from time to time, or any order, directive, rule, or
regulation issued thereunder and which is not corrected or remedied within the time set in the
written notice the violation or, if Franchisee cannot reasonably correct or remedy the breach
within the time set forth in such notice, if Franchisee should fail to commence to correct or
remedy such violation within the time set forth in such notice and diligently effect such
correction or remedy thereafter.
H. False or Misleading Statements. Any representation or disclosure made to City by
Franchisee in connection with or as an inducement to entering into this Agreement, or any
future amendment to this Agreement, which proves to be false or misleading in any material
respect as of the time such representation or disclosure is made, whether or not any such
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40 Tune 23.2010
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Franchise Agreement-Solid Waste
representation or disclosure appears as part of this Agreement.
I. Attachment. There is a seizure of attachment of, or levy on, the operating equipment of
Franchisee, including without limits its equipment, maintenance or office facilities, or any
part thereof.
J. Suspension or Termination of Service. There is any termination or suspension of the
transaction of business by Franchisee, including without limit, due to labor unrest including
strike, work stoppage or slowdown, sickout, picketing, or other concerted job action lasting
more than two (2) days.
Upon default by the Franchisee, the City Administrative Officer shall provide written notice
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
said notice. If the violation is not corrected within the 10 days, the City shall have the right
to terminate the Agreement per the provisions provided in Section 12.2. For purposes of this
Agreement and any notice required thereunder, the term "days" shall mean calendar days.
12.2 Right to Terminate Upon Default
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 (3 0) days
notice, but without the need for any hearing, suit or legal action. This right of termination is
in addition to any other rights of City upon a failure of Franchisee to perform its obligations
under this Agreement.
12.3 Possession of Property and Billing Records and Systems Upon Termination
In the event of termination for default, the City shall have the right, subject to the obligations
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 of
solid waste and to conduct all activities concerning billing and collection of fees for these
services and to use such property. The City shall have the right to retain the possession of
such property until other suitable arrangements can be made for the provision of solid waste
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 for
which Franchisee has already been paid by means of bills issued in advance of providing
service for the class of service involved, Franchisee shall be entitled to the reasonable rental
value of such property (which shall be offset against.any damages due the City for the
Franchisees default).
Franchisee shall provide the City immediate access to all of its business records and billing
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 the
Agreement for default until other suitable arrangements can be made for the billing of solid
waste collection services. The provisions of this Section 12.3 shall survive the termination of
this Agreement.
PRS
41 lune 23.2010
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12.4 City's Remedies Cumulative; Specific.Performance
The City's right to terminate the Agreement under Section 12.1 and to take possession of the
Franchisee's properties under Section 12.3 are not exclusive, and the City's termination of the
Agreement shall not constitute an election of remedies. Instead, they shall be in addition to
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 quality
service, the lead time required to effect alternative service, and the rights granted by the City
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 Performance
The parties shall be excused from performing their respective obligations hereunder in the
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), and
other similar catastrophic events which are beyond the control of and not the fault of the
party claiming excuse from performance hereunder. Labor unrest, including but not limited
to strike, work stoppage or slowdown, sick-out, picketing, or other concerted job action
conducted by Franchisee's employees or directed at Franchisee or its selected facilities is not
an excuse from performance and Franchisee shall be obligated to continue to provide service
notwithstanding the occurrence of any or all such events.
The party claiming excuse from performance shall, within two (2) days after such party has
notice of such cause, give the other party notice of the facts constituting such cause and
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 its
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 excuse
from performance was granted. After such review, if the City determines the excuse from
service is no longer valid, the City shall notify the Franchisee in writing to resume service
within two (2) days from the receipt of such notification. If the Franchisee fails to resume
service within the two (2) days, the City shall have the right to terminate this Agreement by
giving ten (10) days notice, in which case the provisions relative to taking possession of
Franchisee's land, equipment and other property and engaging Franchisee's personnel in
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 is
impractical, if not impossible to reasonably ascertain the extent of damages which shall be
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 not limited to, the fact that:
o substantial damage results to members of the public who are denied services or 2
42 Tune 23.2010
�— Attachment 1
Franchise Agreement-Solid Waste
denied quality or reliable service;
o such breaches cause inconvenience, anxiety, frustration, and deprivation of the
benefits of the Agreement to individual members of the general public for whose
benefit this Agreement exists, in subjective ways and in varying degrees of intensity
which are incapable of measurement in precise monetary terms;
o 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 reliable
services is impossible to calculate in precise monetary terms; and
o 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 past
breaches. However, substantial breaches may result in the termination of this
Agreement as described in Section 12.1.
The parties finther acknowledge that consistent,.reliable solid waste collection service is of
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 firrther recognize that if Franchisee fails to achieve the performance standards, or fail
to submit required documents in a timely manner, City and its residents will suffer damages
and that it is and will be impractical and extremely difficult to ascertain and determine the
exact amount of damages which City will suffer. Therefore, without prejudice to City's right
to treat such non-performance as an event of default under this Article 12, the parties agree
that the following liquidated damage amounts represent a reasonable estimate of the amount
of such damages considering all of the circumstances existing on the date of this Agreement,
including the relationship of the sums to the range of harm to City that reasonably could be
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 forth
below:
Collection-Reliability and Quality
o For each failure over five (5) annually to commence service to
a new customer account within seven (7) days after order: $150.00
o For each failure over ten (10) annually to Collect Solid Waste,
which as been properly set out for Collection, from
an established customer account on the scheduled Collection day: $150.00
o For each failure to Collect Solid Waste which have
been properly set out for Collection, from the same customer on
two (2) consecutive scheduled pickup days: $150.00
o For each occurrence over five (5) annually of damage to private
property: $250.00
o For each occurrence of discourteous behavior: $250.00
o For each failure over ten(10) annually to clean up Solid Waste spilled from Bins:
$150.00
o For each occurrence over five (5) annually of Collecting
Solid Waste during unauthorized hours: $250.00
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Franchise Agreement-Solid Waste
o For each failure to respond to a customer complaint within
twenty-four(24) working hours: $100.00
o For each failure to prepare for or properly conduct twice annual clean-ups including
advertising and press releases; $250.00
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 containers
to avoid pedestrian or vehicular traffic impediments or to place cans upright with
lid secured: $150.00
o For each occurrence of excessive noise above the limits specified in this
Agreement: $250.00
Customer Responsiveness
o For each failure to respond to a customer complaint within sixteen (16)
working hours: $100.00
o For each failure to process customer complaints to City: $500.00
o For each failure to carry out responsibilities for establishing service: $500.00
Timeliness of Submissions to City
REPORTS Any report shall be considered late until such time as a correct and complete
report is received by City. For each calendar day a report is late,the daily
assessment shall be:
Monthly Reports: For each infraction $100 per day
Quarterly Reports For each infraction $250 per day
Annual Reports: For each infraction $500 per day
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)
working hours to respond to.a complaint). City may determine the occurrence of events
giving rise to liquidated damages through the observation of its own employees or
representative or investigation of customer complaints.
Prior to assessing liquidated damages, City shall give Franchisee notice of its intention to do
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 the
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 shall
be held by the City Administrative Officer or his/her designee. Franchisee may present
evidence in writing and through testimony of its employees and others relevant to the
incident(s)/non performance. The City Administrative Officer or designee will provide
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 each
calendar day or event, as appropriate, that Franchisee is determined to be liable in accordance
with this Agreement. ,,11 q
94415'If 1
44 Tune 23.2010
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Franchise Agreement-Solid Waste
D. Timing of Payment. Franchisee shall pay any liquidated damages assessed by City
within ten (10) days after they are assessed. If they are not paid within the ten (10) day
period, City may proceed against the performance bond required by this Agreement or order
the termination of this Agreement, or both pursuant to the terns of this Agreement.
12.7 Notice,Hearing and Appeal
Should the Franchisee contend that the City is in breach of the Agreement, Franchisee shall
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 the
consultation.
If the Franchisee is not in agreement with the ruling issued by the Utilities Director, it shall
have the right to appeal the decision to the City Administrative Officer, This appeal shall be
made in writing to the City no later than fourteen days after the notification is mailed by
Utilities Director of the judgment. The City Administrative Officer shall notify Franchisee
of 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 City
Administrative Officer's ruling. The decision of the City Administrative Officer can be
appealed to City Council per Municipal Code Section 1.20.020.
12.8 Financial Material Errors, Omissions or Irregularities
The City may review,test and audit the books and records of the Franchisee for the purpose
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 associated
with the audit, test or review shall be paid by the Franchisee to the City. In the case of
financial errors, materiality shall be deemed to be two percent(2%) or greater of the gross
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 the
next rate setting evaluation.
P�5=sa
45 Tune 23.2010
`� Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 13. ASSIGNMENT
13.1 Assignment
Except as provided in Article 11, "City's Right to Perform Service", neither party shall assign
its rights nor delegate or otherwise transfer its obligations under this Agreement to any other
person without the prior written consent of the other party. Any such assignment made
without the consent of the other party shall be void and the attempted assignment shall
constitute a material breach of this Agreement: The City may, however, assign its rights and
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 to
(1) a sale, exchange or other transfer to a third party of at lease fifty-one percent of
Franchisee's assets dedicated to service under this Agreement;
(2) a sale, exchange or other transfer to a third party, including other shareholders, of
outstanding common stock of Franchisee which may result in a change of control of
Franchisee;
(3) any dissolution, reorganization, consolidation, merger, recapitalization, stock
issuance or re-issuance, voting trust,pooling agreement; escrow arrangement,
liquidation or other transaction which Franchisee or any of its shareholders is a party
which results in a change of ownership or control of Franchisee; and
(4) any assignment by operation; of law, including insolvency or bankruptcy, assignment
for the benefit of creditors, writ of attachment for an execution being levied against
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 contemporaneous
transactions, which has the effect of any such transfer or change of ownership, or
change of control of Franchisee.
Franchisee acknowledges that this Agreement involves rendering a vital service to City
residents and businesses, and that City has selected Franchisee to perform the services
specified herein based on:
1. Franchisee's experience, skill and reputation for conducting its solid waste
management operations in a safe, effective and responsible fashion, at all times in keeping
with applicable environmental laws, regulations and best waste management practices, and
2. Franchisee's financial resources to maintain the required equipment and to support its
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 Franchisee
under this Agreement.
Pik 5_-5-
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Attachment 1
Franchise Agreement-Solid.Waste
If Franchisee requests City's consideration of and consent to an assignment, City may deny
or 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 of service. Accordingly, the following standards have been set to ensure that
assignment will result in continued quality service. In addition, the City reserves the right to
solicit competitive bids for these services if the assignment results in a request by the
assignee for rate increases that are higher than the inflationary index and do not reflect value
changes in service standards. At a minimum, no request by Franchisee for consent to an
assignment 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 fees
and investigate the suitability of any proposed assignee, and to review and finalize
any documentation required as a condition for approving any such assignment;
B. Franchisee shall furnish City with audited financial statements of the proposed
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 waste
management experience on a scale equal to or exceeding the scale of
operations conducted by Franchisee under this Agreement;
2. that.in the last five (5) years, the proposed assignee or affiliates has not
suffered any significant citations or other censure from any federal, state or
local agency having jurisdictions over its waste management operations due to
any significant failure to comply with state, federal or local environmental
laws and that the assignee has provided City with a complete list of such
citations and censures;
3. that the proposed assignee has at all times conducted its operations in an
environmentally safe and conscientious fashion;
4. that the proposed assignee conducts its solid waste management practices in
accordance with sound waste management practices in full compliance with
all federal, state and local laws regulating the collection and disposal of solid
waste, including hazardous wastes; and,
5. of any other information required by City to ensure the proposed assignee can
fulfill the terms of this Agreement in a timely, safe and effective manner.
Under no circumstances shall the City be obliged to consider any proposed
assignment by Franchisee, if Franchisee is in default at any time during the period of
consideration.
P�Es�Sa-
47 Tune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
ARTICLE 14. OTHER AGREEMENTS OF THE PARTIES
14.1 Relationship of Parties
The parties intend that Franchisee shall perform the services required by this Agreement as an
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 be
deemed to be an employee or agent of the City. Except as expressly provided herein, Franchisee
shall have the exclusive control over the manner and means of conducting the solid waste collection
and disposal services performed under this Agreement, and over all persons performing such
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 compensation
benefits, or any other benefits which accrue to City employees by virtue of their employment with
the City.
14.2 Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of
the State of California.
14.3 Jurisdiction
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded in the
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 Subcontracting
Except as approved in writing by the City, Franchisee shall not enter into an agreement to have
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 the
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 Franchisee
Franchisee covenants that it presently has no interest, and shall not acquire any interest direct or
indirect or otherwise, which would conflict in any manner or degree with the performance of the
work hereunder. The Franchisee further covenants that, in the performance of this work, no
subcontractor of any person having such an interest shall be employed. The Franchisee certifies that
no one who has or will have any financial interest in performing this work is an officer or employee
of the City.
14.6 Binding on Successors
The provisions of this Agreement shall insure to the benefit of and be binding on the successors and
permitted assigns of the parties.
14.7 Transition of Next Franchise
48 Tune 23,2010
Attachment 1
Franchise Agreement-Solid Waste
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 and
billing information. Franchisee will not be obliged to sell collection vehicles, bins, and containers to
the next franchise. The Franchisee, at its option, may enter into negotiations with the next
franchisee to sell (in part or all) collection vehicles,bins and containers.
14.8 Parties in Interest
Nothing in this Agreement, whether express or implied, is intended to confer any rights on any
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 not
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 of
any monies which become due hereunder shall not be deemed to be a waiver of any pre-existing or
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 the
performance of this Agreement, by negotiated purchase or failing that,through the exercise of the
right of eminent domain.
14.11 City Free to Negotiate with Third Parties
The City may investigate, during the term and thereafter, all options for the collection, diversion,
and disposal of solid waste after the expiration of the term. Without limiting the foregoing, the City
may 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 combination
thereof, and may negotiate and execute.agreements for such services which will take effect upon the
expiration or earlier termination under Section 11.1 of this Agreement.
14.12 Immigration Act of 1986
The Franchisee warrants on behalf of itself and all subcontractors engaged for the performance of
this work that only persons authorized to work in the United States pursuant to the Immigration
Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of
this work.
14.13 Non-Discrimination
In the performance of this work, the Franchisee agrees that it will not engage in, nor permit such
subcontractors as it may employ, to engage in discrimination in employment of persons because of
age,race, color, sex, national origin or ancestry, sexual orientation, physical disability, mental
condition or religion of such persons.
14.14 Public and Employee Safety
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,
49 Tune 23..2010
C' Attachment 1
Franchise Agreement-Solid Waste
temporary railings,barricades, lights, signs and other devices, and take such other protective
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 this
Agreement requires, authorizes or contemplates, except as provided in Section 12.1, shall be in
writing and shall either be personally delivered to a representative of the parties at the address below
or be deposited in the United States mail, first class.postage prepaid, addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
If to Franchisee: San Luis Garbage Company
2945 McMillan#136
San Luis Obispo, CA 93401
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 the
date it is deposited in the mail.
14.17 Representatives of the Parties
References in this Agreement to the "City" shall mean the City Council and all actions to be taken
by the City shall be taken by the City Council except as provided below. The City Council may
delegate, in writing, authority to the City Administrative Officer, the Director of Utilities and/or to
other City officials and may permit such officials, in turn, to delegate in writing some or all of such
authority to subordinate officers. Franchisee may rely upon actions taken by such delegates if they
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 as
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 unless
they are outside the scope of the authority delegated to him/her by Franchisee as communicated to
the City.
14.18 Entire Agreement
This Agreement represents the full and entire Agreement between the parties with respect to the
50 lune 23.2010
- Attachment 1
Franchise Agreement-Solid Waste
matters covered herein.
14.19 Section Headings
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 its
provisions.
14.20 References to Laws
All references in this Agreement to laws shall be understood to include such laws as they may be
subsequently amended or recodified, unless otherwise specifically provided.
14.21 Interpretation
This Agreement shall be interpreted and construed reasonably and neither for nor against either
party, regardless of the degree to which either party participated in its drafting.
14.22 Amendment
This Agreement may not be modified or amended in any respect except by another Agreement in
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
remaining provisions of this Agreement which shall be enforced as if such invalid or unenforceable
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 Provisions
Paragraphs 7.11, 1.16, 8.5, 10.2, and other provisions of this Agreement so providing, shall survive
termination of this Agreement.
14.27 Investigation
Franchisee has relied on its own investigations in deciding to enter into this Agreement and has not
relied upon any representations of the City, its Council members, officers, directors, employees or
agents.
51 lune 23.2010
Attachment 1
Franchise Agreement-Solid Waste
By:SAN LUIS GARBAGE CO. By: CITY OF SAN LUIS OBISPO
Ronald J Mittelstaedt, Chief Executive Officer Mayor
AP AS TO O ATTEST:
pity Attomey City Clerk
52 Tune 23,2010
Attachment 1
AGREEMENT
BETWEEN
THE CITY OF SAN LUIS OBISPO
AND
SAN LUIS GARBAGE COMPANY
For Collection and Disposal of Residential Green Waste
Within the City of San Luis Obispo
This Agreement (Agreement) is made and entered into this day of ,
2010, in the State of California by and between the City of San Luis Obispo, A Charter Municipal
Corporation of the State of California, (City) and San Luis Garbage, a California corporation,
(Contractor), for the Collection and processing of residential Green Waste and the Performance of
other services related to meeting the goals and requirements of the California Integrated Waste
Management Act of 1989.
RECITALS
This Agreement is entered into with reference to the following facts and circumstances:
1. The Legislature of the State of California, by enactment of the California Integrated Waste
Management Act of 1989 (AB 939) Division 30 of the California Public Resources Code,
commencing with S 40000, has declared that it is within the public interest to authorize and
require local agencies to make adequate provisions for Green Waste handling within their
jurisdictions. AB 939 requires a fifty percent (50%) reduction in the amount of waste which is
landfilled by the year 2000; and
2. The separate Collection and processing of residential Green Waste to produce usable compost
was selected in the City's Source Reduction and Recycling Element adopted , June 1994
hereinafter referred to as the SRRE, as a means of meeting the 2000 State mandated diversion
goals of AB 939; and
3. The City has entered into an exclusive franchise with San Luis Garbage Company of the
Collection, transportation, processing, diversion and disposal of refuse from residential
properties, Multi-Family Dwelling Units, institutional and commercial and industrial
properties; and
4. The City has determined that an Agreement granted to a private company for the Collection
and processing of residential Green Waste is the most effective and efficient way to collect and
divert residential Green Waste within the City, and
5. The City declares its intention of maintaining reasonable rates and high quality service for the
Collection and processing of residential Green Waste; and
1 June 23,2010
Attachment 1
Green Waste Services Agreement
6. The Contractor is responsible for arranging for Green Waste Collection and processing
services; and
7. The Contractor has submitted a proposal to the City dated November 1, 1995, and the City has
selected the Contractor on the competitive advantages of that proposal over other proposals
received by the City; and,
8. This Franchise Agreement has been developed by and is satisfactory to the parties.
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, it is
hereby agreed by and between the City and Contractor as follows:
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June
2 June 23,2010
Attachment 1
Green Waste Services Agreement
ARTICLE I
DEFINITIONS
1.1 "AB 939 means the California Integrated Waste Management Act of 1989, as it may be
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 Company by virtue of direct or
indirect common ownership interest or common management shall be deemed to be "Affiliated
with" Contractor and included within the term "Affiliates with" Contractor and included within
the "Affiliates" as used herein. An Affiliate shall include a business in which Contractor owns
a direct or indirect ownership interest, a business which has a direct or indirect ownership
interest in Contractor and/or a business which is also owned, controlled or managed by any
business or individual which has a direct or indirect ownership interest exists, the constructive
ownership provisions of Section 318(a) of the Internal Revenue Code of 1986, as in effect on
the date of this Agreement, shall apply; provided, however, that(i) "ten percent(10%)" shall be
substituted for"fifty percent(50%)" in Section 318(a)(2)(C) and in Section 318(a)(3)(C)
thereof; and(ii) Section 318(a)(5)(C) shall be disregarded. For purposes of determining
ownership under this paragraph and constructive or indirect ownership under Section 318(a),
ownership interest of less than ten percent (10%) shall be determined on the basis of the
percentage of voting interest or value which the ownership interest represents, whichever is
greater.
1.3 "Agreement" means this Green Waste Agreement (dated , including
all exhibits and attachments, and any amendments thereto) between City and Contractor for
Collection, processing and marketing of Green Waste and other services related to meeting the
diversion goals and requirements of AB 939.
1.4 'Billings" means any and all statements of charges for services rendered by Contractor
pursuant to this Agreement.
1.5 "California Integrated Waste Management Act of 1989" means Public Resources Code, 8
40,000 et. seq.
1.6 "City" means the City of San Luis Obispo, a Charter Municipal Corporation, and all the
territory lying within the municipal boundaries of the City as presently existing or as such
boundaries may be modified during the term, acting through the City Council or the City
Administrative Officer.
1.7 "Collect" or "Collection" means to take physical possession, transport, and remove Green
Waste within and from the City.
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1.8 "Commercially Generated Green Waste" means Green Waste generated at commercial
and/or industrial property and separated by the Waste Generator for Collection and which are
excluded from the scope of this Agreement as described in Article 4, Scope of Agreement.
1.9 "Compost" means a stabilized humus product which is the result of composting.
1.10 "Composting means a controlled biological decomposition that converts raw organic matter
into a stabilized humus product.
1.11 "Container" means any bin, vessel, can or receptacle used for Collection and storing Green
Waste before removal.
1.12 "Contractor" means San Luis Garbage Company, a corporation organized and operating
under the laws of the State of California, and its officers, directors, employees, agents,
companies and subcontractors where applicable.
1.13 "Environmental Laws" means all federal and state statutes, county, local and City ordinances
and regulations concerning public health, safety and the environment including, by way of
example and not limitation, the comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 USC 89601 et seg.; the Resource Conservation and Recovery Act, 42
USC 86902 et seg.; the Federal Clean Water Act, 33 USC 81251 et seg.,- the Toxic Substances
Control Act, 15 USC 81601 et sea.; the Occupational Safety and Health Act, 29 USC 8651 et
seq.; the California Hazardous Waste Control Act, California Health and Safety Code 825100
et seg.; the California Toxic Substances Account Act, California Health and Safety Code
825300 et sea•-; the Safe Drinking Water and Toxic Enforcement Act, California Health and
Safety Code 825249.5 et sect.; as currently in force or as hereafter amended, and all rules and
regulations promulgated thereunder.
1.14 "Facility" means any plant or site, owned or leased and maintained and/or operated or used by
Contractor for the purposes of performing the duties to fulfill this Agreement.
1.15 "Fiscal Year" means the period commencing on January 1 and concluding December 31 for
Contractor. For City it means the period commencing July 1 of one year and concluding June
30 of the subsequent year.
1.16 "Green Waste" means tree trimmings, grass cuttings, dead plants, leaves, branches, dead trees
and scrap wood(not more than six (6) inches in diameter) and similar materials generated at
the premises.
1.17 "Hazardous Waste" means any discarded material or mixture of materials, which is toxic,
corrosive, flammable, radioactive or which, because of its quantity, concentration, physical,
chemical or infectious characteristics may do harm to either humans, animals or the
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environment, or as defined in Article 2, Chapter 6.5 825117 of the Health and Safety Code and
Public Resources Code 840141.
1.18 "Materials Recovery Facility" means a permitted Facility where Solid Waste, Recyclable
Materials or Green Waste are sorted or separated for the purposes of Recycling, Composting or
reuse.
1.19 "Multi-family Dwelling Unit" means any Premises, other than a Single Family Dwelling
Unit, used for residential purposes, irrespective of whether residence therein is transient,
temporary or permanent.
1.20 "Owner" means the person holding the legal title to the real property constituting the Premises
to which Green Waste collection service is to be provided under this Agreement.
1.21 "Person" means any individual, firm, association, organization, partnership, corporation,
business trust,joint venture, the United States, the State of California, the County of San Luis
Obispo, local agencies, cities and special purpose districts.
1.22 "Premises" means any land or building in the City where Solid Waste is generated or
accumulated.
1.23 "Recyclable Materials" means residential by-products or discards of economic value set
aside, handled, packaged or offered for Collection in a manner different from Solid Waste.
Including, but not limited to, aluminum, newspaper, clear and colored glass, tin and bi-metal,
High density Polyethylene (HDPE), Polyethylene Terephthalate (PET), cardboard, chipboard,
and mixed paper.
1.24 "Recycling" means the process of separating for Collection, Collecting, treating and/or
reconstituting Green Waste which would otherwise be discarded without receiving
compensation or returning them to the economy in the form of raw materials for new, reused, .
or reconstituted products. The Collection, transfer, transportation or disposal of Green Waste
not intended for, or capable of, reuse is not Recycling. Recycling does not include the use of
Green Waste for conversion to energy.
1.25 "Related Party Entity" means any Affiliate which has financial transactions with Company.
1.26 "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 which there is
separate or individual Solid Waste Collection services.
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1.27 "Solid Waste" means all putrescible and non-putrescible refuse, garbage,green waste,
construction and demolition debris,rubbish, and Recyclable Materials, and as otherwise
defined in Public Resources Code 40191.
1.28 "Term" means the term of this Agreement, as provided for in Article 2.
1.29 "Transfer Station" includes those facilities used to receive solid wastes, temporarily store,
separate, convert, or otherwise process the materials in the solid wastes, or to transfer the solid
wastes directly from smaller to larger vehicles for transport and those facilities used for
transformations.
1.30 "Waste Generator" means any Person as defined by the Public Resources Code, whose act or
process produces Solid Waste as defined in the Public Resources Code, or whose act first
causes Solid Waste to become subject to regulation.
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ARTICLE 2
GRANT AND ACCEPTANCE OF AGREEMENT
2.1 Grant and Acceptance of Agreement
Subject of Section 2.5 (Conditions to the Effectiveness of Agreement), City hereby grants to
Contractor an exclusive franchise to collect and process Green Waste accumulating at all
Premises in the City that are offered for Collection to Contractor in accordance with this
Agreement.
Contractor hereby accepts the Agreement on the terms and conditions set forth in this
Agreement.
2.2 Effective Date
The effective date of this Agreement shall be August 6, 2010.
2.3 Term of Agreement
The term of this Agreement shall be fifteen years (15) years commencing at 12:01 a.m.,
August 6, 2010, and expiring at midnight August 6, 2025, subject to extension as provided in
Section 2.4 (Option to Extend).
In the event of a change of law or technology which would render the Collection and
processing services to be implemented under this Agreement obsolete, unnecessary,
impractical, undesirable, or illegal, the City reserves the right to terminate this Agreement upon
the giving of a six (6)month prior written notice of City's election to so terminate this
Agreement. It is understood between Contractor and City that this Agreement is motivated by
the passage of AB 939, and that subsequent legislation could make this Agreement unnecessary
and/or adverse to the best interests of the City. In particular, City and Contractor acknowledge
the possibility of future legislation changing the requirements of AB 939, and/or requiring a
coordination of the collection of Solid Waste and Green Waste.
2.4 Option to Extend
The City shall have the sole option to extend this Agreement up to 24 months in periods of a
least twelve (12) months each. If City elects to exercise this option, it shall give written notice
not later than one hundred eighty (180) days prior to the initial termination date, or, if one
extension has been exercised, one hundred eighty(180) days prior to the extended termination
date.
2.5 Conditions to Effectiveness of Agreement
The obligation of City to permit this Agreement to become effective and to commence
performing its obligations under this Agreement is subject to the satisfaction of each and all of
the conditions set out in this Section 2.5 below, each of which may be waived in whole or in
part by City.
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A. Accuracy of Representations. The representations and warranties made by Contractor
throughout this Agreement are accurate, true and correct on and as of the effective date
of this Agreement.
B. Absence of Litigation. There is no litigation pending in any court challenging the
award of this Agreement to Contractor or the execution of this Agreement or seeking to
restrain or enjoin its performance.
C. Furnishing of Insurance and Bonds. Contractor has furnished evidence of the
insurance and bonds required by Article 10, Indemnification, Insurance and Bond.
D. Effectiveness of City Council Action. The City's Ordinance No. , approving
this Agreement, shall have become effective pursuant to California law on or prior to
the effective date of this Agreement.
2.6 Responsibilities of City
The City does not assume any responsibility for, nor shall it be held liable for damages for the
failure on the part of any Person producing Green Waste material within the City to deliver the
same to Contractor;provided,.however, it is mutually understood and agreed that the City and
its officers will at all times during the period of this Agreement cooperate to enforce the terms
of this exclusive Agreement as it relates to the Collection of Green Waste within the City.
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ARTICLE 3
TERMS OF AGREEMENT
3.1 Contractor Status
Contractor is duly organized, validly existing and in good standing under the laws of the State
of California and has the financial ability to perform its obligations set forth in this Agreement.
Additionally, the Contractor has no suits or threatened suits which would impair the financial
ability of the Contractor to perform its obligations under this Agreement, and that the entering
into this Agreement by Contractor will not in any way constitute a breach of any other
agreements entered into by Contractor with other parties, or constitute a violation of any law.
3.2 Contractor Authorization
Contractor has the authority to enter into and perform its obligations under this Agreement.
The Board of Directors of Contractor(or the shareholders,if necessary)have taken all actions
required by law, its articles of incorporation, its bylaws or otherwise to authorize the execution
of this Agreement. The persons signing this Agreement on behalf of Contractor have the
authority to do so.
3.3 Compliance with Laws and Regulations
Contractor shall comply with all existing and future City, county, state, and federal laws,
including all Environmental Laws, with particular note of Article X of the City Charter and
Chapter 8.04 of the Municipal Code.
3.4 Serve Without Interruption
Contractor shall Collect and process Green Waste throughout the term of this Agreement
without interruption except as described in Section 12.4.
3.5 Permits and Licenses
Contractor shall procure, and keep in full force and affect, all permits and licenses,pay all
charges and fees, and give all notices as necessary.
3.6 Preservation of City Property
Contractor shall pay to the City, on demand, the cost of all repairs to public property made
necessary by any of the operations of Contractor under this Agreement.
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ARTICLE 4
SCOPE OF AGREEMENT
4.1 Scope of Agreement
Subject to Section 4.2 (Limitations to Scope), the Agreement granted to Contractor shall be
exclusive for Green Waste Collection, except where otherwise precluded by law.
4.2 Limitations to Scope
The Agreement for the Collection and processing Green Waste granted to Contractor shall be
exclusive except as to the following categories of Green Waste listed in this Section. The
granting of this Agreement shall not preclude the categories of Green Waste listed below from
being delivered to and Collected and transported by others provided that nothing in this
Agreement is intended to or shall be construed to excuse any person from obtaining any
authorization from City which is otherwise required by law:
A. Green Waste which are separated at any Premises and which are transported by the
owner or occupant of such Premises (or by his/her employee) to a Facility;
B. Green Waste removed from a Premises by a gardening, landscaping, or tree trimming
company as incidental part of a total service offered by that company.
Contractor acknowledges and agrees that City may permit other Persons beside Contractor to
Collect any or all types of the Green Waste listed in this Section 4.2,without seeking or
obtaining approval of Contractor under this Agreement.
This Agreement to Collect, transport and process Green Waste shall be interpreted to be
consistent with state and federal laws, now and during the term of the Agreement, and the
scope of this Agreement shall be limited by current and developing state and federal laws with
regard Green Waste handling and related doctrines. In the event that future interpretations of
current law, enactment or developing legal trends limit the ability of the City to lawfully
provide for the scope of services as specifically set forth herein, Contractor agrees that the
scope of the Agreement will be limited to those services and materials which are lawfully
provided for under this Agreement. The City shall not be responsible for any lost profits and/or
damages claimed by the Contractor as a result of changes in law.
4.3 Administration of Agreement
The City Administrative Officer shall administer this Agreement and the City's Utilities
Director shall supervise Contractor compliance with the Agreement terms and conditions.
4.4 Use of Citv Streets
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Such grant of Agreement shall give Contractor the right and privilege to operate Green Waste
Collection vehicles and equipment on such streets, public ways, rights-of=way, or easements of
the City.
4.5 Annexation
Contractor shall automatically extend all services herein described to any area annexed to the
City, except that the City may permit a firm franchised by the County of San Luis Obispo
before the annexation to continue service the area for a period not less than five (5) years.
4.6 City Right to Request Changes
4.6.1 General
City may request Contractor to perform additional services (including new diversion 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, different kinds of
services and/or new requirements for Waste Generators are included among the kinds of
changes which City may request. Contractor shall present, within 30 days of a request to do so
by City, a proposal to provide additional or expanded diversion services pursuant to the terms
of Section 4.6.2. Contractor shall be entitled to an adjustment in its compensation in
accordance with Section 8.8 (Extraordinary Adjustments), for providing such additional or
modified services.
4.6.2 New Diversion Programs
Contractor shall present, within 30 days of a request to do so by City,a proposal to provide
additional or expanded diversion services. The proposal shall contain a complete description of
the following:
• Collection methodology to be employed (equipment, manpower, etc.)
• Equipment to be utilized(vehicle number, types, capacity, age, etc.).
• Labor requirements (number of employees by classification).
• Type of Containers to be utilized.
• Provision for program publicity/education/marketing.
• A projection of the financial results of the program's operations for the remaining Term
of the Agreement in a balance sheet and operating statement format including
documentation of the key assumptions underlying the projections and the support for
those assumptions.
• Materials processing facility to be utilized.
4.6.3 City's Right to Acquire Services
Contractor acknowledges and agrees that City may permit other Persons besides Contractor to
provide additional Green Waste services not otherwise contemplated under Section 4.6 (City's
Right to Request Changes). If pursuant to Section 4.6.2 (New Diversion Programs), Contractor
and City cannot agree on terms and conditions of such services in ninety (90) days from the
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date when City first requests a proposal from Contractor to perform such services, Contractor
acknowledges and agrees that City may permit Persons other than Contractor to provide such
services.
4.6.4 Implementing new Services
If 1) Contractor is capable of performing or developing the ability to perform a requested
service or modifying an existing service; 2) City has agreed to have Contractor provide such
additional service in accordance with Contractor's proposal; and 3) an adjustment in
Contractor's compensation has been requested but has not been agreed upon or implemented
within 90 days, City may permit a third party to perform the request or modified existing
service, and Contractor shall not be obligated, to perform such additional or modified service
pursuant to the terms of Section 4.6.3.
4.7 Ownership of Green Waste
Once Green Waste is placed in Containers and properly presented for Collection, ownership
and the right to possession shall transfer directly from the Generator to Contractor by operation
of this Agreement. Contractor is hereby granted the right to retain, recycle, process, reuse,
compost and otherwise use such Green Waste or any part thereof, in any lawful fashion or for
any lawful purpose consistent with the hierarchy and goals of AB 939. Subject to the
provisions of this Agreement, Contractor shall have the right to retain any benefit resulting
from its right to retain, recycle, process, compost or reuse the Green Waste which it Collects.
Green Waste or any part thereof, which are delivered to a Facility (Facility, transformation
Facility, transfer station, or Material Recovery Facility) shall become the property of the owner
or operator of the Facility(ies) once deposited there by Contractor.
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ARTICLE 5
DIRECT SERVICES
5.1 General
The work to be done by Contractor pursuant to this Agreement shall include the furnishing of
all labor, supervision, equipment, materials, supplies, and all other items necessary to perform
the services required as presented in the Company's proposal incorporated in this document as
Exhibit A. The enumeration of, and specification of requirements for, particular items of labor
or equipment shall not relieve Contractor of the duty to furnish all others, as may be required,
whether enumerated or not.
The work to be done by Contractor pursuant to this Agreement shall be accomplished in a
thorough and professional manner so that the residents within the City are provided reliable,
courteous and high-quality Green Waste Collection service at all times. The enumeration of,
and specification of requirements for, particular aspects of service quality shall not relieve
Contractor of the duty of accomplishing all other aspects in the manner provided in this
Section, whether such aspects are enumerated elsewhere in the Agreement or not.
5.2 Residential Green Waste Services
Contractor shall Collect and remove all Green Waste placed in or adjacent to
Containers at the designated Collection locations for Single Family Dwelling Units and
Multifamily Dwelling Units.
Green Waste Collection shall be a minimum of once each week on the same day of the week as
Solid Waste Collection service. Contractor will notify Green Waste customers of holiday
Collection schedules. Should the Solid Waste collection day change, Contractor shall re-route
Collections within sixty (60) days of the notification by the change in Solid Waste collection
days to provide same day service.
5.3 Materials To Be Collected
Green waste material to be collected include tree trimmings, grass cuttings, dead plants, leaves,
branches and dead trees (not more than six (6) inches in diameter) and similar materials
generated at the premises.
5.4 Refusal to Provide Collection Services
Contractor may refuse to Collect Green Waste and shall not be obligated to continue to provide
Green Waste Container(s) to any participant in the Green Waste program who, after reasonable
warning, fails to properly sort and set out Green Waste. Contractor shall report monthly to City
any warning notices issued.
5.5 Christmas Tree Collection Program
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Contractor shall operate an annual Christmas Tree Collection and diversion program. The
program shall include curbside and drop-off Collection of Christmas Trees targeting all Single
Family and Multi-family Dwelling Units and shall divert these Christmas Trees from landfill
disposal.
5.6 End Uses for Green Waste
Contractor shall develop and implement plans and programs to divert from disposal materials
collected through curbside Collection of Green Waste and Christmas Tree Collection.
Contractor must provide end uses for Green Waste that maximizes diversion credits for the
City according to regulations established by the California Integrated Waste Management
Board.
5.7 Operations
5.7.1 Schedules
To preserve peace and quiet,no Green Waste shall be Collected from or within two-hundred
(200) feet of residential Premises between 6:30 P.M. and 6:30 A.M. on any day and such Green
Waste shall be Collected, Monday through Friday on the same day as Solid Waste collection.
When the regularly scheduled Collection day falls on a holiday, Collection shall take place on
the following regularly scheduled collection day. In the event the Contractor misses the
collection of set out Green Waste, the Contractor shall collect the missed pickups with one (1)
business day of notification.
5.7.2 Vehicles
A. General. Contractor shall provide a fleet of Collection vehicles sufficient in number
and capacity to perform the work required by this Agreement and proposed in Exhibit
"A" (Contractor's proposal) and in strict accordance with its terms. Contractor shall
have available on Collection days sufficient back-up vehicles in order to respond to
complaints and emergencies. The fleet shall be maintained according to the
requirements of Municipal Code 8.04.030.
B. Specifications. All vehicles used by Contractor in providing Green Waste Collection
services under this Agreement shall comply with all federal, state, and local
requirements for such vehicles 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-tight bodies designed to prevent leakage, spillage or overflow. All such
vehicles shall comply with U.S. Environmental Protection Agency noise emission
regulations and other applicable noise control regulations.
C. Condition
1) Contractor shall maintain all of its properties, facilities, and equipment used in
providing service under this Agreement in a safe, neat, clean and operable condition at
all times.
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2) Contractor shall inspect each vehicle daily to ensure that all equipment is operating
properly. Vehicles which are not operating properly and represent a safety hazard shall
be taken out of service until they are repaired and do operate properly and safely.
Contractor shall perform all scheduled maintenance functions in accordance with the
manufacturer's specifications and schedule. Contractor shall keep accurate records of
all vehicle maintenance, recorded according to date and mileage and shall make such
records available to City upon request.
3) Contractor shall repair, or arrange for the repair of, all of its vehicles and equipment
for which repairs are needed because of accident, breakdown or any other cause so as to
maintain all equipment in a safe and operable condition. Contractor shall maintain
accurate records of repair, which shall include the date/mileage, nature of repair and the
signature of a maintenance supervisor that the repair has been properly performed.
4) Contractor shall arrange all vehicles and other equipment in safe and secure
location(s) in accordance with all applicable zoning regulations..
D. Vehicle Identification. Each truck shall display in a prominent place a sign as required
in Municipal Code section 8.04.090.
E. Operation. Vehicles shall be operated in compliance with the California Vehicle Code,
and all applicable safety and local ordinances. Contractor shall not load vehicles in
excess of the manufacturer's recommendations or limitations imposed by state or local
weight restrictions on vehicles.
5.7.3 Green Waste Containers
Contractor shall supply each Single Family Dwelling Unit with a waste wheeler in size
consistent with the City approved green waste collection program. Contractor shall
supply each multi-family complex with the appropriate type of container to adequately
service the needs of the complex per the solid waste handling location. Containers shall
be identified for Green Waste only. Contractor agrees to provide additional appropriate
Containers, as required.
City and Contractor acknowledge that from time to time, a customer may damage or
destroy a Container. City and Contractor also acknowledge that from time to time
Containers may be stolen from the curb or damaged due to normal use. When notified
of such occurrence, Contractor shall replace the Container, at no charge to the customer.
5.7.4 Litter Abatement
Contractor shall use due care to prevent Green Waste from being spilled or scattered
during the Collection or transportation process. If any Green Waste is spilled during
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Collection, Contractor shall promptly clean up all spilled materials. Each collection
vehicle shall carry a broom and shovel at all times for this purpose.
5.7.5 Personnel
A. General. Contractor shall furnish as presented in Exhibit "A" such qualified
drivers, mechanical, supervisory, clerical, and other personnel as may be
necessary to provide services required by this Agreement in a safe and efficient
manner.
B. Identification. Contractor shall ensure that while on duty each Collection
worker wears a clean uniform which displays the Contractor's company name
and the worker's name or identification number.
C. Fees & Gratuities. Company shall not, nor shall it permit any agent, employee,
or subcontractors employed by it to request, solicit, demand, or accept, either
directly or indirectly any compensation or gratuity for any services performed
under this Agreement except as provided in Article 8 of this Agreement.
D. Training. All drivers shall be trained and qualified in the operation of vehicles
they operate and must possess a valid license, of the appropriate class,issued by
the California Department of Motor Vehicles.
Contractor shall provide adequate operations, health and safety training, and
Hazardous Waste identification and handling training for all of its employees
who use or operate equipment or who are otherwise directly involved in
Collection or other related operations.
E. Customer Courtesy. Contractor shall train its employees in customer courtesy,
shall prohibit the use of loud or profane language, and shall instruct Collection
crews to perform the work quietly. Contractor shall use its best efforts to ensure
that all 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 the manner required by this Agreement, Contractor shall
take all necessary corrective measures. If City has notified Contractor of a
complaint related to a discourteous or improper behavior, Contractor will
reassign the employee to duties not entailing contact with the public while
Contractor is pursuing its investigation and corrective action process.
5.8 Implementation Plan.
The parties recognize that substantial planning will be required in order to assure an orderly
initiation of Green Waste Collection services on August 6, 2010. To that end, City has required
Contractor to submit, as part of its proposal, a detailed implementation plan addressing, among
other things, the steps Contractor will take and the schedule on which it will take them, to
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prepare for such an orderly initiation of service. The implementation plan shall cover
Contractor's schedule for acquiring necessary equipment, personnel, storage and maintenance
facilities, administrative offices, customer relations materials (including Collection schedules,
route maps, billing forms, complaint forms, service request forms, etc.). Contractor agrees to
adhere strictly to the implementation plan. The implementation shall be subject to the City's
review and approval.
Failure to adhere to the implementation schedule will constitute a breach of this Agreement,
and, if incurred, an event of default, under Article 12, Default, Remedies, and Liquidated
Damages.
5.9 Green Waste Processing
5.9.1 Receipt of Green Waste
Commencing August 6, 2010, the Contractor shall have in place or have made arrangements for
a Facility to receive and accept all deliveries of Green Waste generated in the city. Contractor
has designated the Cold Canyon Landfill facility to utilized as of the Effective date.
5.9.2 Status of Green Waste Facility
Any Facility used by contractor must be designed and constructed in accordance with all
applicable state and local laws (e.g., CEQA, California Code of Regulations, etc). The Facility
must have all permits from federal, state, regional, county and city agencies necessary for it to
operate as a Green Waste Facility and must be in full regulatory compliance with all such
permits.
The selected Green Waste Facility must be authorized to accept, under its existing permit, and
have sufficient uncommitted capacity to accept, all Green Waste delivered to it by, or on behalf
of, the City for the term of this Agreement. Contractor shall immediately notify City of any
notice of breach or default received from Green Waste Facility.
5.9.3 Alternative Processing Facility
If Contractor becomes unable to deliver the City's Green Waste to the Green Waste Facility due
to causes within its control or which could have been avoided by the exercise of due care, the
Contractor shall arrange for it to be accepted at another Green Waste Facility, in which case
Contractor shall pay for any increased transportation costs, any differences in the fees charged
at such Green Waste Facility and the fees then in effect under this Agreement. If Contractor's
inability to deliver the City's Green Waste to the Green Waste Facility is not due to causes
within its control or which could have been avoided by the exercise of due care, then
Contractor shall propose alternative Green Waste Facilities including all related costs and City
shall select the alternative to be used.
5.9.4 Disposition of Unauthorized Waste
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Contractor shall ensure that procedures to identify and reject materials delivered to the Green
Waste Facility which are Hazardous Waste, or which otherwise may not be legally accepted at
the Green Waste Facility under their permits, are in place. Contractor may, in the course of
implementing such procedures, refuse to accept Green Waste deposited from the City if they
constitute Hazardous Waste, or otherwise may not be legally accepted at the Green Waste
Facility, and Contractor shall be solely responsible of the materials which are accepted. If
Contractor discovers Hazardous Waste, or other material which may not be legally accepted,
among materials which it has accepted, it shall dispose of such waste at its own expense.
Contractor may pursue all legal rights and remedies it may have against the Waste Generator(s)
of such Solid Waste, if the Waste Generator(s) can be identified.
5.10 Disposal
Contractor shall ensure that the residual Solid Waste from the City's Green Waste delivered to
the Green Waste Facility by the Contractor are disposed of at a permitted disposal site in full
regulatory compliance.
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ARTICLE 6
OTHER SERVICES
6.1 Billing
The City Council shall establish an integrated rate for the Green Waste, Recycling and Solid
Waste services. Contractor shall bill and collect for its services at no more nor less than these
rates. Contractor's billing plan, including billing frequency; and format shall be subject to
approval by City, and City shall have the right to revise the billing format to itemize certain
charges.
The City may also direct Contractor to insert mailers relating to contractor provided services
with the billings and shall be responsible for all labor costs with respect to the mailing inserts.
The mailers must fit in standard envelopes and not increase the required postage. The City will
provide not less than thirty(30) days notice to Contractor prior to the mailing date of any
proposed mailers to permit Contractor to make appropriate arrangements for inclusion of City
materials.
Contractor shall maintain copies of said billings and.receipts, each in chronological order, for a
period of three (3)years after the date of service for inspection by the City. Contractor may, at
its option, maintain those records in computer form, on microfiche, or in any other manner,
provided that the records cannot be altered, and can be preserved and retrieved for inspection
and verification in a timely manner.
The owner of occupied Premises shall be responsible and liable for paying the Green Waste
fees for that property.
6.2 Collection of Bills from Delinquent Customers
Once each year, prior to a date established by the City, Contractor may take actions pursuant to
Chapter 8.04 of the Municipal Code to collect delinquent accounts.
63 Periodic Performance or Billing Audit
The City shall have the right to periodically, not less than annually, request a performance audit
or billing audit be completed by the Contractor, the City or an independent third party. The
City shall be entitled to select the type of consultant that it deems qualified to conduct said
audits. The cost of such audits will be an allowable cost under the rate setting methodology
unless there are findings pursuant to Section 12.5.
6.4 Customer Service
6.4.1 Office
Office hours shall be, at a minimum, from 8:00 A.M. to 5:00 P.M., Monday through Friday,
exclusive of holidays. A responsible and qualified representative of Contractor shall be
available during office hours for communication with the public. Telephone numbers shall
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either be a local or a toll free call to residents and businesses of the City. Contractor's
telephone system shall be adequate to handle the volume of calls typically experienced on the
busiest days. Contractor shall also maintain a local or toll free telephone number for use during
other than normal business hours. Contractor shall have a representative, answering or
message providing/receiving(voice-mail) service available at said after hours telephone
number.
6.4.2 Complaint Documentation
All service complaints related to Green Waste Collection shall be directed to Contractor. Daily
logs of complaints concerning Collection of Green Waste shall be retained for a minimum of
twenty-four(24) months and shall be available to City at all times during this Agreement upon
twenty-four(24) hour notice.
Contractor shall log all complaints received orally or in writing and said log shall include the
date and time the complaint was received, name, address and telephone number of complainant
to the extent that such information is provided by complainant, description of complaint,
employee recording complaint and the action taken by Contractor to respond to and remedy
complaint. All complaints received shall be responded to within twenty four(24) working
hours of receipt.
All customer service records and logs kept by Contractor shall be available at all times during
this Agreement to City upon twenty four(24) hour notice and at no cost to City. City shall, at
any time during regular Contractor business hours, have access to Contractor's customer
service department for purposes of monitoring the quality of customer service or researching
customer complaints assessing liquidated damages or other matters related to Contractor's
performance under this Agreement.
6.43 Resolution of Customer Complaints
Contractor shall notify customers of this complaint procedure at the time customers apply for
or are provided service, and subsequently, annually.
A customer dissatisfied with Contractor's decision regarding a complaint may ask the City to
review the complaint. The City's Utilities Director shall determine if the customer's complaint
is justified, and if so, what remedy, if any shall be provided. The remedy under this Section
shall be limited to a rebate of customer charges related to the period of breach of any of the
Terms of this Agreement. Any resolution of these customer complaints shall not affect the
City's rights to liquidated damages.
6.4.4 Government Liaison
Contractor shall designate in writing a "Government Liaison" who shall be responsible for
working with the City Administrative Officer, Utilities Director and/or one of their designated
representative(s)to resolve customer complaints.
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6.5 Education and Public Awareness
Contractor acknowledges and agrees that education and public awareness are critical, key and
essential elements of any efforts to achieve AB 939 requirements and has submitted a plan to
this effect in Exhibit "A". Accordingly, Contractor agrees to cooperate with City in exploring
opportunities to expand public and customer knowledge concerning needs and methods to
reduce, reuse and recycle Solid Waste and to cooperate fully with City in this regard.
Contractor shall perform all necessary public education activities related to the Recycling
services as presented in Exhibit "A". This shall include,but not be limited to, annual mailings
to all customers explaining the green waste program, mailings prior to the start of services,
flyers handed out with Container delivery and follow-up mailings or handouts related to the
collection of new materials. All public education materials shall be approved in advance by the
City.
At the direction of the City Administrative Officer and/or Utilities Director, Contractor shall
participate in and promote Recycling, reuse and other diversion techniques at community
events and local activities. Such participation would normally include providing, without cost
to the City, educational and publicity information promoting the goals of the City's AB 939
programs.
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ARTICLE 7
PAYMENTS TO CITY
7.1 Franchise Fee
In consideration of the exclusive franchise provided for in this Agreement, Contractor shall pay
the City ten percent(10%) of its gross revenues for Green Waste Collection services;provided,
however, that such franchise fee shall not exceed the costs incur-red by the City to deliver
service to properties. Such franchise fee shall be a "pass-through" expense for purposes of rate
review.
7.2 AB 939 Fee
If requested by City, Contractor shall pay an AB 939 fee, to be specified annually by the City.
All AB 939 fees paid to the City shall be considered a pass through cost for purposes of rate
setting.
7.3 Business License Tax
Contractor shall pay each annual business license tax.
7.4 Other Fees
The City shall reserve the right to set "Other" Fees, as it deems necessary. These expenses will
be determined and a fee designed to reimburse the City. Such fees shall be set annually by City
resolution and may be considered a pass through cost for purposes of rate setting.
7.5 Time and Method of Payment
If Contractor is directed to pay an AB 939, Franchise Fee or "Other" Fee, it shall do so on or
before the fifteenth (15th) day of each month during the Term. Contractor shall remit to City a
sum of money equal to the designated percentage of the gross revenue or a flat monthly fee as
determined by the City. If any fees are not paid on or before the fifteenth (15th) day of any
month, Contractor shall pay to City a late payment penalty in an amount equal to one percent
(I%) of the amount owing for that month. Contractor shall pay an additional late payment
penalty of one percent (1%) owing on any unpaid balance for each following thirty (30) day
period the fee remains unpaid. Late payment penalty amounts shall not be included in any
revenue requirement.
7.6 Adjustment of Fees
The City may adjust the amount of fees annually. Such adjustment shall be reflected in the
rates that the Contractor is allowed to charge and collect from customers.
7.7 Review of Fee Payments
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 Agreement. The cost of such
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reviews will be an allowable cost under the rate setting methodology unless there are findings
pursuant to Section 12.5
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ARTICLE 8
CONTRACTOR'S COMPENSATION AND RATES
8.1 General
Contractor's compensation provided for in this Article shall be the full, entire and complete
compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials
and supplies, taxes,insurance,bonds, overhead,profit and all other things necessary to perform
all the services required by this Agreement in the manner and at the times prescribed.
The Contractor does not look to the City for payment of any sums under this Agreement.
Contractor will perform the responsibilities and duties described in this Agreement in
consideration of the right to charge and collect from customers for services rendered at rates
fixed by the City from time-to-time and the right to sell compost generated from Green Waste.
The City shall have the right to structure those rates as it deems appropriate so long as the
revenues forecasted to be received by Contractor from charging such rates can reasonably be
expected to generate sufficient revenues to provide for Contractor's compensation.
8.2 Initial Rates
Contractor will submit required financial documentation for this service as part of an integrated
solid waste rate application. The rate application will comply with the guidelines set forth in
the City's "Rate Setting Process and Methodology Manual for Integrated Solid Waste
Management Rates". The portion of the rate attributable to this service shall be identified as
part of the Council rate-setting process but will not be separated from the integrated rate.
8.3 Subsequent Rates
Contractor may request rate revisions in future solid waste rate applications. The rate
application must comply with the City's "Rate Setting Process and Methodology Manual for
Solid Waste Management".
8.4 Right to Perform Rate Reviews
City reserves the right to perform, or have a qualified third party perform, a detailed review of
Contractor's expenses and revenues for the purposes of adjusting rates. The results of this
detailed rate review will be used to adjust rates, and the Contractor's calculated revenue
requirements will be used the following year to adjust rates according to Section 8.3
Contractor's Compensation for subsequent Rate Years.
8.5 Extraordinary Adiustments
Contractor or City may request an adjustment to rates at times other than that required in
Section 8.3 for unusual changes in the cost of providing service under this Agreement. Such
changes may include,but are not limited to, changes in laws, ordinances, or regulations, and
significant changes in Contractor's workload due to new residential or commercial
development. However, when an extraordinary adjustment is requested, such adjustment shall
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consider changes in all costs and revenues from Contractor's proposed revenue requirement.
For each such request, Contractor shall prepare a schedule comparing the original proposed
costs and revenues by line item to the then current costs and revenues, including an estimates
of the cost impact of the change, using an operating ratio of 92%, applied to Contractor's costs
as calculated in Contractor's proposed revenue requirement. Such request shall be prepared in
a form acceptable to City with support for assumptions made by Contractor in preparing the
estimate. Contractor and City shall negotiate a mutually acceptable adjustment amount.
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ARTICLE 9
RECORDS,REPORTS AND INFORMATION, STUDIES
AND HEARING REQUIREMENTS
9.1 Records
9.1.1 General
Contractor shall maintain records required to conduct its operations,to support requests it may
make to City, and to respond to requests from City in the conduct of City business.
Additionally, the Contractor shall also keep and maintain records reasonably necessary for
audits, as required by this Agreement, and shall keep and maintain all records reasonably
necessary to develop reports and financial statements required with respect to this Agreement.
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/records shall be protected and backed up.
9.1.2 Financial Records
Financial records shall separate all records related to the services performed under this
Agreement from any and all other types of businesses and operations conducted by the
Contractor.
9.1.3 General Records
City approved records (format) shall be maintained for the City separate from other
jurisdictions relating to:
• Customer services;
• Weight of Green Waste;
• Routes;
• Facilities, inventory of equipment and personnel used;
• Facilities and equipment operations, maintenance and repair;
• Processing of Green Waste and marketing and sale of Compost including name of the
purchaser, the date of sales transaction, processing cost per ton, quantity purchased,
value per ton and net sales records;
• Complaints; and,
• Missed pick ups.
Contractor shall maintain records of all Green Waste Collected in the City for the period of this
Agreement. In the event Contractor discontinues providing Green Waste services to City,
Contractor shall provide all records of all Green Waste Collected in City to City within thirty
(30) days of discontinuing service. Records shall be in chronological and organized form and
readily and easily interpreted.
9.2 Reports
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9.2.1 Report Formats and Schedule
Records shall be maintained in forms and by methods that facilitate flexible use of data
contained in them to structure reports, as needed. Contractor may propose report formats that
are responsive to the objectives and audiences for each report. The format of each report shall
be approved by the City.
Monthly reports shall be submitted within twenty (20) calendar days after the end of the month
being reported. Annual reports shall be submitted before September 30th, for the previous
reporting year.
9.2.2 Monthly Reports
The information listed shall be the minimum reported:
• Green Waste collected, sorted by type of Generator, in tons, by month, and cumulative
for report year.
• Complaint summary, for month and cumulative for report year.
• Narrative summary assessment of problems encountered and actions taken with
recommendations to City for improvement.
• Number of accounts by category for each month of reporting year.
• Participation rates.
• Green Waste Container distribution.
The City may designate any additional information that it wishes provided in the monthly
reports.
9.2.3 Annual Report
The Annual Report is to be essentially in the form and content of the monthly reports. In
addition, Contractor's annual audited financial reports/statements, with the operations related to
the City services segregated, shall be included. The annual report shall also include a complete
inventory of equipment used to provide all services.
Financial statements shall include a supplemental schedule combining Contractor's results of
operations, separating the specific revenues and expenses, including detailed information with
respect to general overhead claimed by the Contractor, in connection with the operations
provided for in this Agreement from others included in such financial statements. The financial
statements, supplemental schedule, management letter and footnotes shall be prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and audited, in
accordance with Generally Accepted Auditing Standards (GAAS)by a certified public
accountant(CPA) licensed (in good standing) to practice public accounting in the State of
California as determined by the State of California Department of Consumer Affairs Board of
Accountancy. The CPA opinion on Contractor's annual financial statements and supplemental
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schedule shall be unqualified, except as to uncertainties for which the ultimate outcome cannot
be determined by the date of the CPA's opinion.
9.3 Right to Inspect Records
City shall have the right to inspect or review the payroll tax reports, specific documents or
records required expressly or by inference pursuant to this Agreement, or any other similar
records or reports of Contractor that City shall deem, in its sole discretion, necessary to
evaluate annual reports, compensation applications provided for in this Agreement and
Contractor's performance provided for in this Agreement. 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
records inspection. The cost of such inspection or review will be an allowable cost under the
rate setting methodology unless there are findings pursuant to Section 12.5.
93.1 Right to Review Basis for Landfill Tipping Fee Increases
The Contractor shall provide to the City a copy of Cold Canyon Landfill's request for an
increase in tipping fees no later than five (5) days following submittal of said request to the
County of San Luis Obispo. Additionally, the Contractor shall notify the City of the action
taken by the Board of Supervisors regarding said request within five(5) days following said
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 allowable cost
under the rate setting methodology unless there are findings pursuant to Section 12.5.
9.4 Waste Generation/Characterization Studies
Contractor acknowledges that the city must perform Solid Waste generation and disposal
characterization studies periodically to comply with AB 939 requirements. Contractor agrees
to participate and cooperate with City and its agents to accomplish studies and data collection
and prepare reports as needed to determine weights and volumes of Solid Waste generated,
diverted, disposed, transformed, or otherwise handled/processed to satisfy AB 939
requirements.
9.5 Performance Hearing
The City maintains the right to hold a public hearing at any time, not more than once each year,
at which the Contractor shall be present and shall participate, to review its services and
performance. The purpose of the hearing is to provide for a discussion and review of
technological, economic, and regulatory changes in order to achieve a continuing, advanced
Solid Waste management system; and to ensure customer service quality and any other areas
that may be addressed regarding services are being provided with adequate quality, efficiency
and economy.
Sixty(60) days after receiving notice from City of a Performance Hearing, Contractor shall, at
a minimum, submit a report to City indicating (1) changes recommended and/or new services
to improve City's ability to meet the goals of AB 939 and to contain costs and minimize
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impacts on rates; and(2) any specific plans for provision of changed or new services by
Contractor.
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ARTICLE 10
INDEMNIFICATION, INSURANCE AND BOND
10.1 Indemnification
Contractor shall indemnify and hold harmless City, its officers, Directors, employees, and
agents from and against any and all loss, liability,penalty, forfeiture, claim, demand, action
proceeding or suit of any and every kind and description (including, but not limited to,injury to
and death of any Person and damage to property, or for contribution or indemnity claimed by
third parties) to the extent arising or resulting from and in any way connected with(1) the
negligence or willful misconduct of Contractor, its officers, employees agents and/or sub
Contractors in performing services under this Agreement; (2) the failure of Contractor, its
officers, employees,agents and/or subcontractors to comply in all respects with the provisions
of this Agreement, applicable laws (including, without limitation, the Environmental Laws) and
regulations, and/or applicable permits and licenses; (3) the acts of Contractor, its officers,
employees, agents and/or subcontractors in performing services under this Agreement for which
strict liability is imposed by law (including, without limitation, the Environmental Laws).
Contractor further agrees to and shall, upon demand of City, at Contractor's sole cost and
expense, defend (with attorneys acceptable to City) the City, its officers, directors, employees,
and agents against any claims, actions, suits or other proceedings, whether judicial, quasi-
judicial or administrative in nature, arising or resulting from any events described in the
immediately preceding paragraph to the extent arising from or related to alleged or actual
violations of Proposition 218 and/or its implementing legislation,.
Contractor's duty to indemnify and defend shall survive the expiration or earlier termination of
this Agreement.
10.2 Landfill.Diversion
The Contractor acknowledges that the City has adopted a SRRE which selects Green Waste
Collection and Composting programs as a means of diverting an estimated 6,796 tons in 1995
and 8,248 tons per year by the year 2000. It is therefore of foremost importance that the Green
Waste and wood debris collected under this Agreement be converted into a functional and
marketable product in order that the materials may be diverted from landfill disposal in
compliance with the City's SRRE, and AB 939. The Contractor shall therefore use
commercially reasonable efforts ensure that the processing method used shall, at all times, meet
the intent of the City's SRRE and AB 939. Should the Contractor find it necessary to utilize
another method of processing in order to meet the intent of the SRRE and AB 939, the City
shall be given an opportunity to make its own determination as to the suitability and cost-
effectiveness of such process and shall approve such process in writing. The City shall have the
right to terminate this Agreement upon the giving of a six (6) month prior written notice to
Contractor should it be determined that the Green Waste program being implemented and/or
proposed under this Agreement is ineffective in meeting the City's diversion goals and
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objectives. Upon termination, the Contractor shall be entitled only to revenues less expenses
incurred to that date. All revenues received thereafter shall be the property of the City unless
otherwise agreed.
10.3 AB 939_Indemnification
Contractor agrees to indemnify and hold harmless City, its officers, Directors, employees, and
agents from and against all fines and/or penalties imposed by the California Integrated Waste
Management Board in the event the source reduction and recycling goals or any other
requirement of AB 939 are not met by City with respect to the waste stream Collected under
this Agreement but only to the extent such failure is due to the failure of Contractor to meet its
obligations under this Agreement or for delays in providing information that prevents City from
submitting reports required by AB 939 in a timely manner.
10.4 Insurance
A. Minimum Limits of Insurance. Contractor shall maintain limits no less than:
1. Comprehensive General Liability: One Million Dollars ($1,000,000) combined
single limit per occurrence for bodily injury, Personal injury and property damage.
2. Automobile Liability: One Million Dollars ($1,000,000) combined single 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 Employers Liability limits of
$1,000,000 per accident.
B. Deductibles and Sel-PInsured Retentions.. Any deductibles or self insured 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, its officials, directors and employees; or Contractor shall procure a bond
guaranteeing payment of losses and related investigations, claim administration and
defense expenses.
C. Other Insurance Provisions. The policies are to contain, or be endorsed to contain,
the following provisions:
1. General Liability and Automobile Liability Coverages
a) The City, its officials, employees, and directors are to be covered as insured as
respects: liability arising out of activities performed by or on behalf of Contractor;
products and completed operations of Contractor; Premises owned, leased or used by
Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The
coverage shall contain no special limitations on the scope of protection afforded to the
City, its officials, employees or volunteers.
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b) Contractor's insurance coverage shall be primary insurance as respects City,
its officials, directors, employees and volunteers. Any insurance or self-insurance
maintained by City, its officials, or employees shall be excess of Contractor's insurance
and shall not contribute with it.
c) Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officials, or employees.
d) Coverage shall state that Contractor's insurance shall apply separately to each
insured against whom claim is made or suit is brought, except with respect to the limits
of the insurer's liability.
2. Workers' Compensation and Employers Liability Coverage - The insurer shall agree
to waive all rights of subrogation against City, its officials, and employees for losses
arising from work performed by Contractor for City.
3. All Coverages - Each insurance policy required by this clause shall be endorsed to
state that coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or limits except after thirty(30) days prior written notice by certified mail,
return receipt requested, has been given to City.
D. Acceptability of Insurers. The insurance policies required by this Section shall be
issued by an insurance contractor or companies admitted to do business in the State of
California subject to the jurisdiction of the California Insurance Commissioner and with
a rating in the most recent edition of Best's Insurance Reports of size category VII or
larger and a rating classification of A or better.
E. Verification of Coverage. Contractor shall furnish City with certificates of insurance
and with original endorsements affecting coverage required by this clause. The
certificates and endorsements for each insurance policy are to be signed by a Person
authorized by that insurer to bind coverage on its behalf. The certificates and
endorsements are to be on forms provided by or acceptable to City and are to be
received and approved by City before work commences. City reserves the right to
require complete, certified copies of all required insurance policies, at anytime.
10.5 Faithful Performance Bond
Simultaneously with the execution of this Agreement, Contractor shall file with City surety
bond, payable to City, securing Contractor's faithful performance of its obligations under this
Agreement. The bond shall be in the amount of 125% of the total annual contract price
guaranteeing the faithful performance of the agreement, including any reasonable attorney's fees
or other collection costs.
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ARTICLE 11
CITY'S RIGHT TO PERFORM SERVICE
11.1 General
In the event that Contractor, for any reason whatsoever, fails, refuses or is unable to Collect,
transport or process any or all green waste materials which it is required by this Agreement to
Collect and process, at the time and in the manner provided in this Agreement, for a period of
more than seven(7) calendar days; and if, as a result thereof, Green Waste should accumulate
in the City to such an extent, in such a manner, or for such a time that the City Administrative
Officer should find that such accumulation endangers or menaces the public health, safety or
welfare, then City shall have the right, but not the obligation, upon twenty-four(24) hour prior
written notice to Contractor during the period of such emergency as determined by the City
Administrative Officer, (1)to perform, or cause to be performed, such services itself with its
own or other personnel without liability to Contractor; and/or(2)to take possession of any or
all of Contractor's land, equipment and other property to Collect,transport or process any
Green Waste generated within the City which Contractor would otherwise be obligated to
Collect, transport, process or market pursuant to this Agreement. In the event the City takes
possession of the Contractor's equipment and other property, the City shall be entitled to have
another contractor operate such equipment and property under City direction. Additionally, in
the event the City takes possession of the Contractor's equipment and other property, the City
does not guarantee repair of existing problems with equipment and facilities.
Notice of Contractor's failure, refusal or neglect to Collect, transport or process Green Waste
may be given orally by telephone to Contractor at its principal office and shall be effective
immediately. Written confirmation of such oral notification shall be sent to Contractor within
twenty-four(24)hours of the oral notification.
Contractor further agrees that in such event:
• It will take direction from City to effect the transfer of possession of property to City
for City's use.
• It will, if City so requests, keep in good repair and condition all of such property,
provide all motor vehicles with fuel, oil and other service, and provide such other
service as may be necessary to maintain said property in operational condition.
• City may immediately engage all or any personnel necessary or useful for the
Collection, transportation and processing Green Waste, including, if City so desires,
employees previously or then employed by Contractor, Contractor further agrees, if
City so requests,to furnish City the services of any or all management or office
personnel employed by Contractor whose services are necessary or useful for Green
Waste Collection, Transportation and processing operations and for the billing and
collection of fees for these services.
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City agrees that it assumes complete responsibility for the proper and normal use of such
equipment and facilities while in its possession.
If the interruption or discontinuance in service is caused by any of the reasons listed in Section
12.4 (Excuse From Performance), City shall pay to Contractor the reasonable rental value of
the equipment and facilities,possession of which is taken by City, for the period of City's
possession, if any, which extends beyond the period of time for which Contractor has rendered
bills in advance of service.
Except as otherwise expressly provided in the previous paragraph, City's exercise of its rights
under this Article 11 (1) does not constitute a taking of private property for which
compensation must be paid; (2) will not create any liability on the part of City to Contractor;
and(3) does not exempt Contractor from the indemnity provisions of Article 10,
Indemnification, Insurance and Bond, which are meant to extend to circumstances arising
under this Section, provided that Contractor is not required to indemnify City against claims
and damages arising from the sole negligence of City officers, employees and agents in the
operation of Collection vehicles during the time City has taken possession of such vehicles.
11.2 Temporary Possession of Contractor's Property
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, Excuse
from Performance), City may take possession of and use all of Contractor's property described
above until other suitable arrangements can be made for the provision of Green Waste Services
which may include the grant of a Contract to another company. The same notice requirements
of Section 11.1 are applicable.
11.3 Billing and Compensation to City During City's Possession
During such time that city is providing Green Waste services, as above provided, Contractor
shall continue to bill and collect payment from all users of the above-mentioned services.
Contractor further agrees that, in such event, it shall reimburse City for any and all costs and
expenses incurred by City in taking over possession of the above-mentioned property for Green
Waste service in such manner and to an extent as would otherwise be required of Contractor
under the Terms of this Agreement. Such reimbursement shall be made from time to time after
submission By City to Contractor of each statement listing such costs and expenses,but in no
event later than five (5) working days from and after each such submission. The City shall
have the right, at its sole discretion, to take over billing and payment collection activities. The
City shall then pay any net revenues to the Contractor, after deducting all expenses, including
City-incurred expenses.
11.4 City's Right to Relinquish Possession
It is further mutually agreed that City may at any time at its discretion relinquish possession of
any or all of the above-mentioned property to Contractor and thereupon demand that Contractor
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resume the Green Waste services as provided in this Agreement, whereupon Contractor shall
be bound to resume the same.
11.5 Duration of City's Possession
City's right pursuant to this Article to retain temporary possession of Contractor's facilities and
equipment, and to render Collection services, shall terminate when City determines that such
services can be resumed by Contractor, or when City no longer reasonably requires such
facilities or equipment. In any case, City has no obligation to maintain possession of
Contractor's property and/or continue its use for any period of time and may at any time, in its
sole discretion, relinquish possession to Contractor.
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ARTICLE 12
DEFAULT,REMEDIES AND LIQUIDATED DAMAGES
12.1 Events of Default
All provisions of this Agreement to be performed by Contractor are considered material. Each
of the following shall constitute an event of default.
A. Fraud or Deceit. If Contractor practices, or attempts to practice, any fraud or deceit
upon city.
B. Insolvency or Bankruptcy. If Contractor becomes insolvent, unable, or unwilling to
pay its debts when due, or upon listing of an order for relief in favor of Contractor in a
bankruptcy proceeding. The Contractor is also in default if there is an assignment of
this contract for the benefit of its creditors.
C. Failure to Maintain Coverage. If Contractor fails to provide or maintain in full force
and effect the Workers' Compensation, liability, indemnification coverage or any
insurance coverage or bond required under this Agreement.
D. Violations of Regulation. If Contractor facilities fall out of full regulatory compliance
or if Contractor violates any orders or filings of any regulatory body having jurisdiction
over Contractor relative to this Agreement, provided that Contractor may contest any
such orders or filings by appropriate proceedings conducted in good faith, in which case
no breach of the Agreement shall be deemed to have occurred.
E. Failure to Perform. If Contractor ceases to provide Green Waste services as required
under this Agreement for a period of two (2) days or more, for any reason within the
control of Contractor.
F. Failure to Pay/Report. If Contractor fails to make any timely payments, including
liquidated damages and penalties, required under this Agreement and/or fails to provide
City with required information, reports, and/or records in a timely manner as provided
for in the Agreement.
G. Acts or Omissions. Any other act or omission by Contractor which violates the terms,
conditions, or requirements of this Agreement, the California Integrated Waste
Management Act of 1989, as it may be amended from time to time, or any order,
directive, rule, or regulation issued there under and which is not corrected or remedied
within the time set in the written notice the violation or, if Contractor cannot reasonably
correct or remedy the breach within the time set forth in such notice, if Contractor
should fail to commence to correct or remedy such violation within the time set forth in
such notice and diligently effect such correction or remedy thereafter.
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H. False or Misleading Statements. Any representation or disclosure made to City by
Contractor in connection with or as an inducement to entering into this Agreement, or
any future amendment to this Agreement, which proves to be false or misleading in any
material respect as of the time such representation or disclosure is made, whether or not
any such representation or disclosure appears as part of this Agreement.
I. Attachment. There is a seizure of attachment of, or levy on, the operating equipment
of Contractor, including without limits its equipment, maintenance or office facilities,
or any part thereof.
J. Suspension or Termination of Service. There is any termination or suspension of the
transaction of business by Contractor, including without limit, due to labor unrest
including strike, work stoppage or slowdown, sickout, picketing, or other concerted job
action lasting more than two (2) days.
Upon default by the Contractor, the City Administrative Officer shall provide written notice to
Contractor of the violation. The City Administrative Officer shall include in the notice, a
demand that the Contractor correct the violation within 10 days following the delivery of said
notice. If the violation is not corrected within the 10 days,the City shall have the right to
terminate the Agreement per the provisions provided in Section 12.2. For purposes of this
Agreement and any notice required thereunder, the term "days" shall mean calendar days.
12.2 Right to Terminate Upon Default
Upon a default by Contractor, 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(3 0) days
notice, but without the need for any hearing, suit or legal action. This right of termination is in
addition to any other rights of City upon a failure of Contractor to perform its obligations under
this Agreement.
City's right to terminate this Agreement and to take possession of Contractor's equipment and
facilities are not exclusive, and City's termination of this Agreement shall not constitute an
election of remedies. Instead, they shall be in addition to any and all other legal and equitable
rights and remedies which City may have.
By virtue of the nature of this Agreement, the urgency of timely, continuous and high-quality
service, the lead time required to effect alternative service, and the rights granted by City to
Contractor, the remedy of damages for a breach hereof by Contractor is inadequate and City
shall be entitled in injunctive relief.
123 Liquidated Damages
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A. General. City finds, and Contractor agrees, that as of the time of the execution of this
Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of
damages which shall be incurred by City as a result of a breach by Contractor of its
obligations under this Agreement.
B. Service Performance Standards; Liquidated Damages for Failure to Meet
Standards. The parties acknowledge that consistent, reliable Green Waste service is of
utmost importance to City and that city has considered and relied on Contractor's
representations as to its quality of service commitment in awarding the Agreement to it.
The parties further recognize that some quantified standards of performance are
necessary and appropriate to ensure consistent and reliable service and performance.
The parties further recognize that if Contractor fails to achieve the performance
standards defined in this Section, comply with complaint resolution criteria, or fails to
submit required documents in a timely manner, City and its residents will suffer
damages and that it is and will be impractical and extremely difficult to ascertain and
determine the exact amount of damages which City will suffer. Therefore, without
prejudice to City's right to treat such non-performance as an event of default under this
Article 12, the parties agree that the following liquidated damage amounts represent a
reasonable estimate of the amount of such damages considering all of the circumstances
existing on the date of this Agreement, including the relationship of the sums to the
range of harm to City that reasonably could be anticipated and the anticipation that
proof of actual damages would be costly or inconvenient. Recognizing the importance
of resolving any failure to meet the service performance standard, the City shall contact
Contractor within two (2) days of any failing reported directly to the City.
Contractor agrees to pay(as liquidated damages and not as a penalty) the amounts set
forth below:
Collection Reliabilitv and Ouality
• For each failure over five (5) annually to commence service to
a new customer account within seven (7) days after order: $150.00
• For each failure over ten (10) annually to Collect Green Waste,
which as been properly set out for Collection, from
an established customer account on the scheduled Collection day: $150.00
• For each failure to Collect Green Waste which have
been properly set out for Collection, from the same customer on
two (2) consecutive scheduled pickup days: $150.00
• For each occurrence over five (5) annually of damage to private
property: $250.00
• For each occurrence of discourteous behavior: $250.00
• For each failure over ten (10) annually to clean up
.P14s=
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Green waste spilled from Bins: $150.00
• For each occurrence over five (5) annually of Collecting
Green Waste during unauthorized hours; $250.00
• For each failure to respond to a customer complaint within
twenty-four(24)working hours: $100.00
Timeliness of Submissions to City
REPORTS Any report shall be considered late until such time as a correct and complete
report is received by City. For each calendar day a report is late, the daily
assessment shall be:
Monthly Reports: For each infraction $100 per day
Annual Reports: For each infraction $500 per day
Liquidated damages will only be assessed after Contractor has been given the opportunity but
failed to rectify the damages, as described in this Agreement (e.g., twenty-four(24) working
hours to respond to a complaint). City may determine the occurrence of events giving rise to
liquidated damages through the observation of its own employees or representative or
investigation of customer complaints.
Prior to assessing liquidated damages, City shall give Contractor notice of its intention to do so.
The notice will include a brief description of the incident(s)/non-performance. Contractor may
review (and make copies at its own expense) all information in the possession of City relating
to incident(s)/non-performance. Contractor may, within ten(10) days after receiving the
notice, request a meeting with City. If a meeting is requested, it shall be held by the City
Administrative Officer or his/her designee.. Contractor may present evidence in writing and
through testimony of its employees and others relevant to the incident(s)/non performance.
The City Administrative Officer or designee will provide Contractor 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 each
calendar day or event, as appropriate, that Contractor is determined to be liable in
accordance with this Agreement.
D. Timing of Payment. Contractor shall pay any liquidated damages assessed by City
within ten (10) days after they are assessed. If they are not paid within the ten(10) day
period, City may proceed against the performance bond required by this Agreement or
order the termination of this Agreement, or both pursuant to the terms of this
Agreement.
12.4 Excuse from Performance P
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The parties shall be excused from performing their respective obligations hereunder in the
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), and
other similar catastrophic events which are beyond the control of and not the fault of the party
claiming excuse from performance hereunder. Labor unrest, including but not limited to strike,
work stoppage or slowdown, sick-out, picketing, or other concerted job action conducted by
Contractor's employees or directed at Contractor or its selected facilities is not an excuse from
performance and Contractor shall be obligated to continue to provide service notwithstanding
the occurrence of any or all such events.
The party claiming excuse from performance shall, within two (2) days after such party has
notice of such cause, give the other party notice of the facts constituting such cause and
asserting its claim to excuse under this Section.
The interruption or discontinuance of Contractor's services caused by one or more of the events
excused shall not constitute a default by Contractor under this Agreement. Notwithstanding the
foregoing, however, if Contractor is excused from performing its 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 excuse from performance was granted. After
such review, if the City determines the excuse from service is no longer valid, the City shall
notify the Contractor in writing to resume service within two (2) days from the receipt of such
notification. If the Contractor fails to resume service within the two(2) days, the City shall
have the right to terminate this Agreement by giving ten (10) days notice, in which case the
provisions relative to taking possession of Contractor's land, equipment and other property and
engaging Contractor's personnel in Article 11, City's Right to Perform Services, and this Article
12 shall apply.
12.5 Financial Material Errors, Omissions or Irregularities
The City may review, test and audit the books and records of the Contractor for the purpose of
determining whether the contractor is complying with the terms of the Agreement. In the event
that material errors or omissions or irregularities are identified, then the cost associated with
the audit, test or review shall be paid by the Contractor to the City. In the case of financial
errors, materiality shall be deemed to be two percent(2%) or greater of the gross revenues of
the Contractor from activities performed under this agreement. Recovery of any overpayment
will be negotiated.on a case by case basis, either immediately or through the next rate setting
evaluation.
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ARTICLE 13
OTHER AGREEMENTS OF THE PARTIES
13.1 Relationship of Parties
The parties intend that Contractor shall perform the services required by this Agreement as an
independent Contractor engaged by City and not as an officer or employee of City nor as a
partner of or joint venture with City. No employee or agent or Contractor shall be or shall be
deemed to be an employee or agent of City. Except as expressly provided herein, Contractor
shall have the exclusive control over the manner and means of conducting the Green Waste
services performed under this Agreement, and all Persons performing such services.
Contractor shall be solely responsible for the acts and omissions of its officers, employees,
subcontractors and agents. Neither Contractor nor its officers, employees, subcontractors and
agents shall obtain any rights to retirement benefits, workers compensation benefits, or any
other benefits which accrue to City employees by virtue of their employment with City.
13.2 Compliance with law
In providing the services required under this Agreement, Contractor shall at all times, at its sole
cost, comply with all applicable laws of the United States, the State of California, City, and
with all applicable regulations promulgated by federal, state, regional or local administrative
and regulatory agencies, now in force and as they may be enacted, issued or amended during
the Term.
13.3 Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws
of the State of California.
13.4 Jurisdiction
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded
in the courts of the State of California, which shall have exclusive jurisdiction over such
lawsuits.
13.5 Assignment
Except as may be provided for in Article 11, (City's Right to Perform Service), neither party
shall assign its rights, nor delegate, subcontract or otherwise transfer its obligations under this
Agreement to any other Person without the prior written consent of the other party. Any such
assignment made without the consent of the other party shall be void and the attempted
assignment shall constitute a material breach of this Agreement. The Contractor shall consent
to any assignment to a joint powers authority, or any similar public entity assignee of the City.
For purposes of this Section when used in reference to Contractor, "assignment" shall include,
but not be limited to (1) a sale, exchange or other transfer of at least fifty-one percent(51%) all
of Contractor's assets dedicated to service under this Agreement to a third party; (2) a sale,
pis-98'
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exchange or other transfer of outstanding common stock of Contractor to a third party provided
said sale, exchange or transfer may result in a change of control of Contractor; (3) any
dissolution, reorganization, consolidation, merger, re-capitalization, stock issuance or re-
issuance, voting trust,pooling agreement, escrow arrangement, liquidation or other transaction
to which results in a change of ownership or control of Contractor; (4) any assignment by
operation of law, including insolvency or bankruptcy, making assignment for the benefit of
creditors, writ of attachment for an execution being levied against this Agreement, appointment
of a receiver taking possession of Contractor's property, or transfer occurring in the event of a
probate proceeding; and(5) any combination of the foregoing (whether or not in related or
contemporaneous transactions) which has the effect of any such transfer or change of
ownership, or change of control of Contractor.
Contractor acknowledges that this Agreement involves rendering a vital service to City's
residents, and that City has selected Contractor to perform the services specified herein based
on (1) Contractor's experience, skill and reputation for conducting its Solid Waste management
operations in a safe, effective and responsible fashion, at all times in keeping with applicable
Environmental Laws, regulations and best waste management practices, and (2) Contractor's
financial resources to maintain the required equipment and to support its indemnity obligations
to City under this Agreement. City has relied on each of these factors, among others, in
choosing Contractor to perform the services to be rendered by Contractor under this
Agreement.
If Contractor requests City's consideration of and consent to an assignment, City may deny or
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 of
service. Accordingly, the following standards have been set to ensure that assignment will
result in continued quality service. In addition, the City reserves the right to solicit competitive
bids for these services if the assignment results in a request by the assignee for rate increases
that are higher than the inflationary index and do not reflect value changes in service standards.
At a minimum, no request by Contractor for consent to an assignment need be considered by
City unless and until Contractor has met the following requirements:
A. Contractor shall undertake to pay City its reasonable expenses for attorney's fees and
investigation costs necessary to investigate the suitability of any proposed assignee, and
to review and finalize any documentation required as a condition for approving any
such assignment;
B. Contractor shall furnish City with audited financial statements of the proposed
assignee's operations for the immediately preceding three (3) operating years;
C. Contractor shall furnish City with satisfactory proof. 1) that the proposed assignee
has at least ten (10)years of Green Waste management experience on a scale equal to or
PHS-17
42 June 23,2010
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Green Waste Services Agreement
exceeding the scale of operations conducted by Contractor under this Agreement; 2)
that in the last five (5) years, the proposed assignee has not suffered any significant
citations or other censure from any federal, state or local agency having jurisdiction
over its Solid Waste management operations due to any significant failure to comply
with state, federal or local Environmental Laws and that the assignee has provided City
with a complete list of such citations and censures; 3) that the proposed assignee has at
all times conducted its operations in an environmentally safe and conscientious fashion;
4)that the proposed assignee conducts its Green Waste management practices in
accordance with sound waste management practices in fall compliance with all federal,
state and local laws regulating the collection, transportation,processing, marketing and
disposal of Solid Waste including Hazardous Wastes; and, 5) of any other information
required by City to ensure the proposed assignee can fulfill the Terms of this
Agreement in a timely safe and effective manner.
Under no circumstances shall the City be obliged to consider any proposed assignment by City
if Contractor is in default at any time during the period of consideration.
13.6 Subcontracting
Except as approved in writing by the City, Contractor shall not enter into an agreement to have
another Person perform Contractor's duties of this Agreement. Contractor shall undertake to
pay City its reasonable expenses for attorney's fees and investigation costs necessary to
investigate the suitability of any proposed subcontractor, and to review and finalize any
documentation required as a condition for approving any such subcontracting agreement.
13.7 Binding on Assigns
The provisions of this Agreement shall inure to the benefit to and be binding on the permitted
assigns of the parties.
13.8 Transition to Next Contractor
If the transition of services to another Contractor occurs through expiration of term, default and
termination, or otherwise, Contractor will cooperate with City and subsequent Contractor(s) to
assist in an orderly transition which will include Contractor providing route lists and billing
information. Contractor will not be obliged to sell collection vehicles or Containers to the next
Contractor. Depending on Contractor's circumstances at the point of transition, Contractor at
its option may enter into negotiations with the next Contractor to sell (in part or all) Collection
vehicles and/or containers.
13.9 Parties in Interest
Nothing in the Agreement, whether express or implied, is intended to confer any rights on any
persons other than the parties to it and their representatives, successors and permitted assigns.
13.10 Waiver
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The waiver by either party of any breach or violation of any provisions of this Agreement shall
not be deemed to be a waiver of any breach or violation of any other provision nor of any
subsequent breach of violation of the same or any other provision. The subsequent acceptance
by either party of any monies which become due hereunder shall not be deemed to be a waiver
of any pre-existing or concurrent breach or violation by the other party of any provision of this
Agreement.
13.11 Contractor's Investigation
Contractor has relied on its own investigations, and not on any representations of the City or its
agents of the conditions and circumstances surrounding the Agreement and the work to be
performed by it.
13.12 Notice
All notices, demands, requests, proposals, approvals, consents and other communications
which this Agreement requires, authorizes or contemplates shall be in writing and shall either
be personally delivered to a representative of the parties at the address below or be deposited in
the United States mail, first class postage prepaid, addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
If to Contractor: Tom Martin
San Luis Garbage Company
2945 McMillan#136
San Luis Obispo, CA 93401
The address to which communications may be delivered may be changed from time to time by
a notice given in accordance with this Section. The notice, if mailed, is deemed served three
(3) days after the mailing.
13.13 Rearesentatives of the Parties
References in this Agreement to the "City" shall mean the City Council and all actions to be
taken by City shall be taken by the City Council except as provided below. The City Council
may delegate, in writing, authority to the City Administrative Officer, Utilities Director, and/or
to the City employees and may permit such employees, in turn,to delegate in writing some or
all of such authority to subordinate employees. Contractor may rely upon actions taken by
such delegates if they are within the scope of the authority properly delegated to them.
Contractor shall,by the effective date, designate in writing a responsible officer who shall
serve as the representative of Contractor in all matters related to the Agreement and shall
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inform City in writing of such designation and of any limitations upon his or her authority to
bind Contractor. City may rely upon action taken by such designated representative as actions
of Contractor unless they are outside the scope of the authority delegated to him/her by
Contractor as communicated to City.
13.14 City Free to Negotiate with Third Parties
City may investigate all options for the Collection and processing of Green Waste after the
expiration of the Term. Without limiting generality of the foregoing, City may solicit
proposals from Contractor and from third parties for the provision of Green Waste services, and
any combination thereof, and may negotiate and execute Agreements for such services which
will take effect upon the expiration or earlier termination under Section 12.1 (Events of
Default) of this Agreement.
13.15 Compliance with City Code
Contractor shall comply with.those provisions of the City code which are applicable, and with
any and all amendments to such applicable provisions during the Term of this Agreement.
13.16 Privacv
Contractor shall strictly observe and protect the rights of privacy of customers. Information
identifying individual customers or the composition or contents of a customer's waste stream
shall not be revealed to any person, governmental unit, private agency, or contractor, unless
upon the authority of a court of law, by statute, or upon valid authorization of the customer.
This provision shall not be construed to preclude Contractor from preparing,participating in, or
assisting in the preparation of waste characterization studies or waste stream analyses which
may be required by AB 939.
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ARTICLE 14
MISCELLANEOUS AGREEMENTS
14.1 Entire Agreement
This Agreement, including the exhibits, represents the full and entire Agreement between the
parties with respect to the matters covered herein.
14.2 Section Headings
The article headings and section headings in this Agreement are for.convenience of reference
only and are not intended to be used in the construction of this Agreement nor to alter or affect
any of its provisions.
14.3 References to laws and Other Agreements
All references in this Agreement to laws shall be understood to include such laws as they may
be subsequently amended or recodified, unless otherwise specifically provided. This
Agreement supersedes any and all Agreements for Green Waste Collection,processing and/or
marketing heretofore entered into by the parties and the City.
14.4 Interpretation
This Agreement, including the exhibits attached hereto, shall be interpreted and construed
reasonably and neither for nor against either party, regardless of the degree to which either
party participated in its drafting.
14.5 Agreement
This Agreement may not be modified or amended in any respect except by a writing signed by
the parties.
14.6 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
remaining provisions of this Agreement which shall be enforced as if such invalid or
unenforceable provision had not been contained herein.
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IN WITNESS WHEREOF, City and Contractor have executed this Agreement as of the day and year
first above written.
The City of San Luis Obispo San Luis Garbage Company
("City") ("Contractor")
By By
City Manager Name: Ronald J Mittelstaedt
Title: Chief Executive Officer
Attest:
City Clerk
App. d'as to Form:
I
I
City Attorney
PH5-40Y
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Attachment 1
AGREEMENT
BETWEEN
THE CITY OF SAN LUIS OBISPO
AND
SAN LUIS GARBAGE COMPANY
For Collection and Disposal of Residential Recyclable Materials
Within the City of San Luis Obispo
This Agreement (Agreement) is made and entered into this day of ,
2010, in the State of California by and between the City of San Luis Obispo, A Charter Municipal
Corporation of the State of California, (City) and San Luis Garbage, a California corporation,
(Contractor), for the Collection, processing and marketing of residential Recyclable Materials and the
Performance of other services related to meeting the goals and requirements of the California
Integrated Waste Management Act of 1989.
RECITALS
This Agreement is entered into with reference to the following facts and circumstances:
1. The Legislature of the State of California, by enactment of the California Integrated Waste
Management Act of 1989 (AB 939) Division 30 of the California Public Resources Code,
commencing with 8 40000, has declared that it is within the public interest to authorize and
require local agencies to make adequate provisions for Recyclable Materials handling within
their jurisdictions. AB 939 also requires a fifty percent (50%) reduction by the year 2000; and
2. The separate Collection, processing and marketing of Recyclable Materials for beneficial reuse
or Recycling was selected in the City's Source Reduction and Recycling Element adopted June
1994,hereinafter referred to as the SRRE, as a means of meeting the 2000 State mandated
diversion goals of AB 939; and
3. The City has entered into an exclusive franchise with San Luis Obispo Garbage Company of
the Collection, transportation, processing, diversion and disposal of refuse from residential
properties, Multi-Family Dwelling Units, institutional and commercial and industrial
properties; and
4. The City has determined that an Agreement granted to a private company for the Collection,
processing and marketing of residential Recyclable Materials is the most effective and efficient
way to collect and divert residential Recyclable Materials within the City; and
5. The City declares its intention of maintaining reasonable rates and high quality service for the
Collection, processing, and marketing of residential Recyclable Materials; and
6. The Contractor is responsible for arranging for residential Recyclable Materials Collection,
processing and marketing services; and
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7. The Contractor has submitted a proposal to the City dated November 1, 1995, and the City has
selected the Contractor on the competitive advantages of that proposal over other proposals
received by the City; and,
8. This Franchise Agreement has been developed by and is satisfactory to the parties.
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, it is
hereby agreed by and between the City and Contractor as follows:
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ARTICLE I
DEFINITIONS
1.1 "AB 939 means the California Integrated Waste Management Act of 1989, as it may be
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 Contractor by virtue of direct or
indirect common ownership interest or common management shall be deemed to be "Affiliated
with" Contractor and included within the term "Affiliates with" Contractor and included within
the "Affiliates" as used herein. An Affiliate shall include a business in which Contractor owns
a direct or indirect ownership interest, a business which has a direct or indirect ownership .
interest in Contractor and/or a business which is also owned, controlled or managed by any
business or individual which has a direct or indirect ownership interest exists, the constructive
ownership provisions of Section 318(a) of the Internal Revenue Code of 1986, as in effect on
the date of this Agreement, shall apply; provided, however, that (i) "ten percent(10%)" shall be
substituted for "fifty percent(50%)" in Section 318(a)(2)(C) and in Section 318(a)(3)(C)
thereof, and(ii) Section 318(a)(5)(C) shall be disregarded. For purposes of determining
ownership under this paragraph and constructive or indirect ownership under Section 318(a),
ownership interest of less than ten percent (10%) shall be determined on the basis of the
percentage of voting interest or value which the ownership interest represents, whichever is
greater.
1.3 "Agreement" means this residential Recycling Agreement (dated - , including all
exhibits and attachments, and any amendments thereto)between City and Contractor for
Collection,processing and marketing of residential Recyclable Materials and other services
related to meeting the diversion goals and requirements of AB 939.
1.4 'Billings" means any and all statements of charges for services rendered by Contractor
pursuant to this Agreement.
1.5 "California Integrated Waste Management Act of 1989" means Public Resources Code, 8
40,000 et. seg.
1.6 "City" means the City of San Luis Obispo, a Charter Municipal Corporation, and all the
territory lying within the municipal boundaries of the City as presently existing or as such
boundaries may be modified during the term, acting through the City Council or the City
Administrative Officer.
1.7 "Collect" or "Collection" means to take physical possession, transport, and remove
Recyclable Materials within and from the City.
/vim
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1.8 "Commercially Generated Recyclable Materials" means Recyclable Materials generated at
commercial and/or industrial property and separated by the Waste Generator for Collection and
which are excluded from the scope of this Agreement as described in Article 4, Scope of
Agreement.
1.9 "Container" means any bin, vessel, can or receptacle used for Collection and storing
Recyclable Materials before removal.
1.10 "Contractor" means San Luis Garbage, a corporation organized and operating under the laws
of the State of California, and its officers, directors, employees, agents, companies and
subcontractors where applicable.
1.11 "Environmental Laws" means all federal and state statutes, county, local and City ordinances
and regulations concerning public health, safety and the environment including, by way of
example and not limitation, the comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 USC 89601 et sea.; the Resource Conservation and Recovery Act, 42
USC 86902 et seg.; the Federal Clean Water Act, 33 USC 81251 et seg.; the Toxic Substances
Control Act, 15 USC 81601 et seg.; the Occupational Safety and Health Act, 29 USC 8651 et
secl.; the California Hazardous Waste Control Act, California Health and Safety Code 825100
et seg.; the California Toxic Substances Account Act, California Health and Safety Code
825300 et seg.; the Safe Drinking Water and Toxic Enforcement Act, California Health and
Safety Code 825249.5 et seg.; as currently in force or as hereafter amended, and all rules and
regulations promulgated there under.
1.12 "Facility" means any plant or site, owned or leased and maintained and/or operated or used by
Contractor for the purposes of performing the duties to fulfill this Agreement.
1.13 "Fiscal Year" means the period commencing January 1 and concluding December 31 for
Contractor. For City it means the period commencing July 1 of one year and concluding June
30 of the subsequent year.
1.14 "Hazardous Waste" means any discarded material or mixture of materials, which is toxic,
corrosive, flammable, radioactive or which, because of its quantity, concentration, physical,
chemical or infectious characteristics may do harm to either humans, animals or the
environment, or as defined in Article 2, Chapter 6.5 825117 of the Health and Safety Code and
Public Resources Code 840141.
1.15 "Materials Recovery Facility" means a permitted Facility where Solid Waste or Recyclable
Materials are sorted or separated for the purposes of Recycling or reuse.
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1.16 "Multifamily Dwelling Unit" means any Premises, other than a Single Family Dwelling Unit,
used for residential purposes, irrespective of whether residence therein is transient, temporary
or permanent.
1.17 "Owner" means the person holding the legal title to the real property constituting the.Premises
to which solid waste collection service is to be provided under this Agreement.
1.18 "Person" means any individual, firm, association, organization,partnership, corporation,
business trust,joint venture, the United States,the State of California, the County of San Luis
Obispo, local agencies, cities and special purpose districts.
1.19 "Premises" means any land or building in the City where Solid Waste is generated or
accumulated.
1.20 "Recyclable Materials" means residential by-products or discards of economic value set
aside, handled, packaged or offered for Collection in a manner different from Solid Waste.
Including, but not limited to, aluminum, newspaper, clear and colored glass, tin and bi-metal,
High density Polyethylene (HDPE);Polyethylene Terephthalate (PET), cardboard, chipboard,
and mixed paper.
1.21 "Recycling" means the process of separating for Collection, Collecting, treating and/or
reconstituting Recyclable Materials which would otherwise be discarded without receiving
compensation or returning them to the economy in the form of raw materials for new, reused,
or reconstituted products. The Collection, transfer, transportation or disposal of Recyclable
Materials not intended for, or capable of,reuse is not Recycling. Recycling does not include
the use of Recyclable Materials for conversion to energy.
1.22 "Related Party Entity" means any Affiliate which has financial transactions with Contractor.
1.23 "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 which there is
separate or individual Solid Waste Collection services.
1.24 "Solid Waste" means all putrescible and non-putrescible refuse,garbage, yard waste,
construction and demolition debris, rubbish, and Recyclable Materials, and as otherwise
defined in Public Resources Code 40191.
1.25 "Term" means the term of this Agreement, as provided for in Article 3.
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1.26 "Transfer Station" includes those facilities used to receive solid wastes,temporarily store,
separate, convert, or otherwise process the materials in the solid wastes, or to transfer the solid
wastes directly from smaller to larger vehicles for transport and those facilities used for
transformations.
1.27 "Waste Generator" means any Person as defined by the Public Resources Code, whose act or
process produces Solid Waste as defined in the Public Resources Code, or whose act first
causes Solid Waste to become subject to regulation.
ARTICLE 2
GRANT AND ACCEPTANCE OF AGREEMENT
2.1 Grant and Acceptance of Agreement
Subject of Section 3.4 (Conditions to the Effectiveness of Agreement), City hereby grants to
Contractor an exclusive franchise to collect, process and market Recyclable Materials
accumulating at Single Family and Multi-family dwelling units in the City that are offered for
Collection to Contractor in accordance with this Agreement.
Contractor hereby accepts the Agreement on the terms and conditions set forth in this
Agreement.
2.2 Effective Date
The effective date of this Agreement shall be August 6, 2010.
2.3 Term of Agreement
The term of this Agreement shall be fifteen(15) years.commencing at 12:01 a.m.., August 6,
2010, and expiring at midnight August 6; 2025, subject to extension as provided in Section 2.4
(Option to Extend).
In the event of a change of law or technology which would render the Collection, processing
and marketing services to be implemented under this Agreement obsolete, unnecessary,
impractical, undesirable, or illegal, the City reserves the right to terminate this Agreement upon
the giving of a six (6) month prior written notice of City's election to so terminate this
Agreement. It is understood between Contractor and City that this Agreement is motivated by
the passage of AB 939, and that subsequent legislation could make this Agreement unnecessary
and/or adverse to the best interests of the City. In particular, City and Contractor acknowledge
the possibility of future legislation changing the requirements of AB 939, and/or requiring a
coordination of the collection of Solid Waste and Recyclable Materials.
2.4 Option to Extend
The City shall have the sole option to extend this Agreement up to 24 months in periods of
least twelve (12) months each. If City elects to exercise this option, it shall give written notice
not later than one hundred eighty (180) days prior to the initial termination date, or, if one
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extension has been exercised, one hundred eighty (180) days prior to the extended termination
date.
2.5 Conditions to Effectiveness of Agreement
The obligation of City to permit this Agreement to become effective and to perform its
undertakings provided for in this Agreement is subject to the satisfaction of each and all of the
conditions set out below, each of which may be waived in whole or in party by City.
A. Accuracy of Representations. The representations and warranties made by Contractor
throughout this Agreement are accurate, true and correct on and as of the effective date
of this Agreement.
B. Absence of Litigation. There is no litigation pending in any court challenging the
award of this Agreement to Contractor or the execution of this Agreement or seeking to
restrain or enjoin its performance.
C. Furnishing of Insurance and Bonds. Contractor has furnished evidence of the
insurance and bonds required by Article 10, Indemnification, insurance and Bond.
D. Effectiveness of City Council Action. The City's Ordinance No. , approving
this Agreement, shall have become effective pursuant to California law on or prior to
the effective date of this Agreement.
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ARTICLE 3
TERMS OF AGREEMENT
3.1 Contractor Status
Contractor is duly organized, validly existing and in good standing under the laws of the State
of California and has the financial ability to perform its obligations set forth in this Agreement.
Additionally, the Contractor has no suits or threatened suits which would impair the financial
ability of the Contractor to perform its obligations under this Agreement, and that the entering
into this Agreement by Contractor will not in any way constitute a breach of any other
agreements entered into by Contractor with other parties, or constitute a violation of any law.
3.2 Contractor Authorization
Contractor has the authority to enter into and perform its obligations under this Agreement.
The Board of Directors of Contractor(or the shareholders, if necessary) have taken all actions
required by law, its articles of incorporation, its bylaws or otherwise to authorize the execution
of this Agreement. The persons signing this Agreement on behalf of Contractor have the
authority to do so.
3.3 Compliance with Laws and Regulations
Contractor shall comply with all existing and future City, county, state, and federal laws,
including all Environmental Laws, with particular note of Article X of the City Charter and
Chapter 8.04 of the Municipal Code.
3.4 Serve Without_Interruption
Contractor shall Collect, process and market residential Recyclable Materials throughout the
term of this Agreement without interruption except as described in Section 12.4.
3.5 Permits and Licenses
Contractor shall procure, and keep in full force and affect, all permits and licenses, pay all
charges and fees, and give all notices as necessary.
3.6 Preservation of City Property
Contractor shall pay to the City, on demand, the cost of all repairs to public property made
necessary by any of the operations of Contractor under this Agreement.
ARTICLE 4
SCOPE OF AGREEMENT
4.1 Scope of Agreement
Subject to Section 4.2 (Limitations to Scope), the Agreement granted to Contractor shall be
exclusive for residential Recyclable Materials, except where otherwise precluded by law.
4.2 Limitations to Scope
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The Agreement for the Collection,processing and marketing of Recyclable Materials granted
to Contractor shall be exclusive except as to the following categories of Recyclable Materials
listed in this Section. The granting of this Agreement shall not preclude the categories of
Recyclable Materials listed below from being delivered to and Collected and transported by
others provided that nothing in this Agreement is intended to or shall be construed to excuse
any person from obtaining any authorization from City which is otherwise required by law:
A. 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 resulting
in a net payment to the Waste Generator for such Recycling or related services.
B. Recyclable Materials donated to a charitable, environmental or other non-profit
organization.
C. Recyclable Materials which are separated at any Premises and which are transported by
the owner or occupant of such Premises (or by his/her-full-time employee)to a Facility-,
D. Containers delivered for Recycling under the California Beverage Container Recycling
Litter Reduction Act, 14500, et seq. California Public Resources Code; and,
E. Recyclable Materials generated at non-residential premises are also excluded from this
Agreement.
Contractor acknowledges and agrees that City may permit other Persons beside Contractor to
Collect any or all types of the Recyclable Materials listed in this Section 4.2, without seeking
or obtaining approval of Contractor under this Agreement.
This Agreement to Collect, transport, process, and market Recyclable Materials shall be
interpreted to be consistent with state and federal laws, now and during the term of the
Agreement, and the scope of this Agreement shall be limited by current and developing state
and federal laws with regard to Recyclable Materials handling, Recyclable Materials flow
control, and related doctrines. In the event that future interpretations of current law, enactment
or developing legal trends limit the ability of the City to lawfully provide for the scope of
services as specifically set forth herein, Contractor agrees that the scope of the Agreement will
be limited to those services and materials which may be lawfully provided for under this
Agreement, and that the City shall not be responsible for any lost profits and/or damages
claimed by the Contractor as a result of changes in law.
4.3 Administration of Agreement
The City Adrninistrative Officer shall administer this Agreement and the City's Utilities
Director shall supervise Contractor compliance with the Agreement terms and conditions.
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4.4 Use of Citv Streets
Such grant of Agreement shall give Contractor the right and privilege to operate Recycling
Collection vehicles and equipment on such streets, public ways, rights-of-way, or easements of
the City.
4.5 Annexation
Contractor shall automatically extend all services herein described to any area annexed to the
City, except that the City may permit a firm franchised by the County of San Luis Obispo
before the annexation to continue service the area for a period not less than five (5) years.
4.6 City Right to Request Changes
4.6.1 General
City may request Contractor to perform additional services (including new diversion 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, different kinds of
services and/or new requirements for Waste Generators are included among the kinds of
changes which City may request. Contractor shall present, within 30 days of a request to do so
by City, a proposal to provide additional or expanded diversion services pursuant to the terns
of Section 4.6.2. Contractor shall be entitled to an adjustment in its compensation in
accordance with Section 8.8 (Extraordinary Adjustments), for providing such additional or
modified services.
4.6.2 New Diversion Programs
Contractor shall present, within 30 days of a request to do so by City, a proposal to provide
additional or expanded diversion services. The proposal shall contain a complete description of
the following:
• Collection methodology to be employed(equipment, manpower, etc.)
• Equipment to be utilized(vehicle number, types, capacity, age, etc.).
• Labor requirements (number of employees by classification).
• Type of Containers to be utilized.
• Provision for program publicity/education/marketing.
• A projection of the financial results of the program's operations for the remaining Term
of the Agreement in a balance sheet and operating statement format including
documentation of the key assumptions underlying the projections and the support for
those assumptions.
• Materials processing facility to be utilized.
4.63 City's Right to Acquire Services
Contractor acknowledges and agrees that City may permit other Persons besides Contractor to
provide additional Recycling services not otherwise contemplated under Section 4.6 (City's
Right to Request Changes). If pursuant to Section 4.6.2 (New Diversion Programs), Contractor
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and City cannot agree on terms and conditions of such services in ninety (90) days from the
date when City first requests a proposal from Contractor to perform such services, Contractor
acknowledges and agrees that City may permit Persons other than Contractor to provide such
services.
4.6.4 Implementing new Services
If 1) Contractor is capable of performing or developing the ability to perform a requested
service or modifying an existing service; 2) City has agreed to have Contractor provide such
additional service in accordance with Contractor's proposal; and 3) an adjustment in
Contractor's compensation has been requested but has not been agreed upon or implemented
within 90 days, City may permit a third party to perform the request or modified existing
service, and Contractor shall not be obligated, to perform such additional or modified service
pursuant to the terms of Section 4.6.3.
4.7 Ownership of Recyclable Materials
Once Recyclable Materials are placed in Containers and properly presented for Collection,
ownership and the right to possession shall transfer directly from the Generator to Contractor
by operation of this Agreement. Contractor is hereby granted the right to retain,recycle,
process, reuse, and otherwise use such Recyclable Materials or any part thereof, in any lawful
fashion or for any lawful purpose consistent with the hierarchy and goals of AB 939. Subject
to the provisions of this Agreement, Contractor shall have the right to retain any benefit
resulting from its right to retain, recycle,process or reuse the Recyclable Materials which it
Collects. Recyclable Materials or any part thereof, which are delivered to a Facility
(processing Facility, transformation Facility, transfer station, or Material Recovery Facility)
shall become the property of the owner or operator of the Facility(ies) once deposited there by
Contractor. The City may obtain ownership or possession of Recyclable Materials placed for
Collection upon written notice of its intent to do so,however, nothing in this Agreement shall
be construed as giving rise to any inference that City has such ownership or possession unless
such written notice has been given to Contractor.
ARTICLE 5
DIRECT SERVICES
5.1 General
The work to be done by Contractor pursuant to this Agreement shall include the furnishing of
all labor, supervision, equipment, materials, supplies, and all other items necessary to perform
the services required as presented in the Contractor's proposal incorporated in this document as
Exhibit A. The enumeration of, and specification of requirements for, particular items of labor
or equipment shall not relieve Contractor of the duty to furnish all others, as may be required,
whether enumerated or not.
The work to be done by Contractor pursuant to this Agreement shall be accomplished in a
thorough and professional manner so that the residents within the City are provided reliable,
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courteous and high-quality Recycling Collection service at all times. The enumeration of, and
specification of requirements for, particular aspects of service quality shall not relieve
Contractor of the duty of accomplishing all other aspects in the manner provided in this
Section, whether such aspects are enumerated elsewhere in the Agreement or not.
5.2 Recycling Services
Contractor shall Collect and remove all Recyclable Materials placed in or adjacent to
Containers at the designated Collection locations for Single Family Dwelling Units and
Multifamily Dwelling Units.
Recyclable Material Collection shall be a minimum of once each week on the same day of the
week as Solid Waste Collection service. Contractor will notify Recycling customers of holiday
Collection schedules. Should the Solid Waste collection day change, Contractor shall re-route
Collections within sixty (60) days of the notification by the change in Solid Waste collection
days to provide same day service.
5.3 Materials To Be Collected
Materials to be collected are to include but not limited to: newspaper, aluminum, tin and bi-
metal cans, clear and colored glass containers, High Density Polyethylene (HDPE),
Polyethylene Terephthalate(PET), polystyrene, corrugated cardboard, and mixed paper
(Including white and colored ledger paper, chipboard,junk mail, magazines and phone books).
5.4 Refusal to Provide Collection.Services
Contractor may refuse to Collect Recyclable Materials and shall not be obligated to continue to
provide Recycling Container(s) to any participant in the Recycling program who, after
reasonable warning, fails to properly sort and set out Recyclable Materials. Contractor shall
report monthly to City any warning notices issued.
5.5 Marketing and Sale of Recyclable Materials
Contractor shall be responsible of the marketing and sale of all Recyclable Materials Collected
pursuant to this Agreement. Revenues from the sales of these materials shall be applied to the
cost of service under the Agreement to reduce Contractor's compensation. Contractor shall sell
all Recyclable Materials Collected pursuant to this Agreement at not less than fair market value
as described in Article 8, Contractor's Compensation and Rates.
5.6 Ouerations
5.6.1 Schedules
To preserve peace and quiet,no Recyclable Materials shall be Collected from or within two-
hundred (200) feet of residential Premises between 6:30 P.M. and 6:30 A.M. on any day and
such Recyclable Materials shall be Collected, Monday through Friday on the same day as Solid
Waste collection. When the regularly scheduled Collection day falls on a holiday, Collection
shall take place on the following regularly scheduled collection day. In the event the
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Contractor misses the collection of set out recyclables, the Contractor shall collect the missed
pickups with one (1) business day of notification.
5.6.2 Vehicles
A. General. Contractor shall provide a fleet of Collection vehicles sufficient in number
and capacity to perform the work required by this Agreement and proposed in Exhibit
"A" and in strict accordance with its terms. Contractor shall have available on
Collection days sufficient back-up vehicles in order to respond to complaints and
emergencies. The fleet shall be maintained according to the requirements of Municipal
Code 8.04.030.
B. Specifications. All vehicles used by Contractor in providing Recyclable Materials
Collection services under this Agreement shall comply with all federal, state, and local
requirements for such vehicles 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-tight bodies designed to prevent leakage, spillage or overflow. All such
vehicles shall comply with U.S. Environmental Protection Agency noise emission
regulations and other applicable noise control regulations.
C. Condition
1) Contractor shall maintain all of its properties, facilities, and equipment used in
providing service under this Agreement in a safe, neat, clean and operable condition at
all times.
2) Contractor shall inspect each vehicle daily to ensure that all equipment is operating
properly. Vehicles which are not operating properly and represent a safety hazard shall
be taken out of service until they are repaired and do operate properly and safely.
Contractor shall perform all scheduled maintenance functions in accordance with the
manufacturer's specifications and schedule. Contractor shall keep accurate records of
all vehicle maintenance, recorded according to date and mileage and shall make such
records available to City upon request.
3) Contractor shall repair, or arrange for the repair of, all of its vehicles and equipment
for which repairsareneeded because of accident, breakdown or any other cause so as to
maintain all equipment in a safe and operable condition. Contractor shall maintain
accurate records of repair, which shall include the date/mileage, nature of repair and the
signature of a maintenance supervisor that the repair has been properly performed.
4) Contractor shall arrange all vehicles and other equipment in safe and secure
location(s) in accordance with all applicable zoning regulations.
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D. Vehicle Identification. Each truck shall display in a prominent place a sign as required
in Municipal Code section 8.04.090.
E. Operation. Vehicles shall be operated in compliance with the California Vehicle Code,
and all applicable safety and local ordinances. Contractor shall not load vehicles in
excess of the manufacturer's recommendations or limitations imposed by state or local
weight restrictions on vehicles.
5.6.3 Recycling Containers
Contractor shall supply each Single Family Dwelling Unit with a container in size
consistent with the City approved curbside recycling collection program. Contractor
shall supply each multi-family complex with the appropriate type of container to
adequately service the needs of the complex per the solid waste handling location.
Containers shall be identified for Recyclable Materials only. Contractor agrees to
provide additional appropriate Containers, as required.
City and Contractor acknowledge that from time to time, a customer may damage or
destroy a Container. City and Contractor also acknowledge that from time to time
Containers may be stolen from the curb or damaged due to normal use. When notified
of such occurrence, Contractor shall replace the Container, at no charge to the customer.
5.6.4 Litter Abatement
Contractor shall use due care to prevent Recyclable Materials from being spilled or
scattered during the Collection or transportation process. If any Recyclable Materials
are spilled during Collection, Contractor shall promptly clean up all spilled materials.
Each collection vehicle shall carry a broom and shovel at all times for this purpose.
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5.6.5 Personnel
A. General. Contractor shall furnish as presented in Exhibit "A" such qualified
drivers, mechanical, supervisory, clerical, and other personnel as may be
necessary to provide services required by this Agreement in a safe and efficient
manner.
B. Identification. Contractor shall ensure that while on duty each Collection
worker wears a clean uniform which displays the Contractor's company name
and the worker's name or identification number.
C. Fees & Gratuities. Contractor shall not,nor shall it permit any agent,
employee, or subcontractors employed by it to request, solicit, demand, or
accept, either directly or indirectly any compensation or gratuity for any services
performed under this Agreement except as provided in Article 8 of this
Agreement.
D. Training. All drivers shall be trained and qualified in the operation of vehicles
they operate and must possess a valid license, of the appropriate class, issued by
the California Department of Motor Vehicles.
Contractor shall provide adequate operations, health and safety training, and
Hazardous Waste identification and handling training for all of its employees
who use or operate equipment or who are otherwise directly involved in
Collection or other related operations.
E. Customer Courtesy. Contractor shall train its employees in customer courtesy,
shall prohibit the use of loud or profane language, and shall instruct Collection
crews to perform the work quietly. Contractor shall use its best efforts to ensure
that all 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 the manner required by this Agreement, Contractor shall
take all necessary corrective measures. If City has notified Contractor of a
complaint related to a discourteous or improper behavior, Contractor will
reassign the employee to duties not entailing contact with the public while
Contractor is pursuing its investigation and corrective action process.
5.7 Material Processing
5.7.1 Receipt of Solid Waste
Commencing August 6, 2010, the Contractor shall have in place or have made arrangements for
a Materials Recovery Facility to receive and accept all deliveries of Recyclable Materials
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generated in the city. Contractor has designated the Tank Farm Road facility to be utilized as
of the Effective date.
5.7.2 Status of Materials Recovery Facility
Any Materials Recovery Facility used by contractor must be designed and constructed in
accordance with all applicable state and local laws (e.g., CEQA, California Code of
Regulations, etc). The Materials Recovery Facility must have all permits from federal, state,
regional, county and city agencies necessary for it to operate as a Material Recovery Facility
and must be in full regulatory compliance with all such permits.
The selected Materials Recovery Facility must be authorized to accept, under its existing
permit, and have sufficient uncommitted capacity to accept, all Recyclable Materials delivered
to it by, or on behalf of, the City for the term of this Agreement. Contractor shall immediately
notify City of any notice of breach or default received from Materials Recovery Facility.
5.73 Alternative Processing Facility
If Contractor becomes unable to deliver the City's Recyclable Materials to the Materials
Recovery Facility due to causes within its control and which could have been avoided by the
exercise of due care, the Contractor shall arrange for it to be accepted at another Materials
Recovery Facility, in which case Contractor shall pay for any increased transportation costs,
any differences in the fees charged at.such Materials Recovery Facility and the fees then in
effect under this Agreement. If Contractor's inability to deliver the City's Recyclable Materials
to the Materials Recovery Facility is not due to causes within its control or which could have
been avoided by the exercise of due care, then Contractor shall propose alternative Material
Recovery Facilities including all related costs and City shall select the alternative to be used.
5.7.4 Disposition of Unauthorized Waste
Contractor shall ensure that procedures to identify and reject materials delivered to the
Materials Recovery Facility which are Hazardous Waste, or which otherwise may not be
legally accepted at the Materials Recovery Facility under their permits, are in place. Contractor
may, in the course of implementing such procedures, refuse to accept Recyclable Materials
deposited from the City if they constitute Hazardous Waste, or otherwise may not be legally
accepted at the Materials Recovery Facility, and Contractor shall be solely responsible of the
materials which are accepted. If Contractor discovers Hazardous Waste, or other material
which may not be legally accepted, among materials which it has accepted, it shall dispose of
such waste at its own expense. Contractor may pursue all legal rights and remedies it may have
against the Waste Generator(s) of such Solid Waste, if the Waste Generator(s) can be
identified.
5.8 Disposal
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Contractor shall ensure that the residual Solid Waste from the City's Recyclable Materials
delivered to the Materials Recovery Facility by the Contractor are disposed of at a permitted
disposal site in full regulatory compliance.
5.9 Implementation Plan
The parties recognize that substantial planning will be required in order to assure an orderly
initiation of Residential Curbside Recycling Collection services on August 6, 2010, To that
end, City has required Contractor to submit, as part of its proposal, a detailed implementation
plan addressing, among other things, the steps Contractor will take and the schedule on which
it will take them, to prepare for such an orderly initiation of service. The implementation plan
shall cover Contractor's schedule for acquiring necessary equipment,personnel, storage and
maintenance facilities, administrative offices, customer relations materials (including
Collection schedules, route maps, billing forms, complaint forms, service request forms, etc.).
Contractor agrees to adhere strictly to the implementation plan. The implementation shall be
subject to the City's review and approval.
Failure to adhere to the implementation schedule will constitute a breach of this Agreement,
and, if incurred, an event of default, under Article 12, Default, Remedies, and Liquidated
Damages.
ARTICLE 6
OTHER SERVICES
6.1 Billing
The City Council shall establish an integrated rate for the Green Waste, Recycling and Solid
Waste services. Contractor shall bill and collect for its services at no more nor less than these
rates. Contractor's billing plan, including billing frequency, and format shall be subject to
approval by City, and City shall have the right to revise the billing format to itemize certain
charges.
The City may also direct Contractor to insert mailers relating to contractor provided services
with the billings and shall be responsible for all labor costs with respect to the mailing inserts.
The mailers must fit in standard envelopes and not increase the required postage. The City will
provide not less than thirty(30) days notice to Contractor prior to the mailing date of any
proposed mailers to permit Contractor to make appropriate arrangements for inclusion of City
materials.
Contractor shall maintain copies of said billings and receipts, each in chronological order, fora
period of three (3)years after the date of service for inspection by the City. Contractor may, at
its option, maintain those records in computer form, on microfiche, or in any other manner,
provided that the records cannot be altered, and can be preserved and retrieved for inspection
and verification in a timely manner.
The owner of occupied Premises shall be responsible and liable for paying the Recycling fees
for that property.
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6.2 Collection of Bills from Delinquent Customers
Once each year, prior to a date established by the City, Contractor may take actions pursuant to
Chapter 8.04 of the Municipal Code to collect delinquent accounts.
6.3 Periodic Performance or Billing Audit
The City shall have the right to periodically, not less than annually, request a performance audit
or billing audit be completed by the Contractor, the City or an independent third party. The
City shall be entitled to select the type of consultant that it deems qualified to conduct said
audits. The cost of such audits will be an allowable cost under the rate setting methodology
unless there are findings pursuant to Section 12.5.
6.4 Customer Service
6.4.1 Off ce
Office hours shall be, at a minimum, from 8:00 A.M. to 5:00 P.M., Monday through Friday,
exclusive of holidays. A responsible and qualified representative of Contractor shall be
available during office hours for communication with the public. Telephone numbers shall
either be a local or a toll free call to residents and businesses of the City. Contractor's
telephone system shall be adequate to handle the volume of calls typically experienced on the
busiest days. Contractor shall also maintain a local or toll free telephone number for use during
other than normal business hours. Contractor shall have a representative, answering or
message providing/receiving(voice-mail) service available at said after hours telephone
number.
6.4.2 Complaint documentation
All service complaints related to Recyclable Materials Collection shall be directed to
Contractor. Daily logs of complaints concerning Collection of Recyclable Materials shall be
retained for a minimum of twenty-four(24) months and shall be available to City at all times
during this Agreement upon twenty-four(24) hour notice.
Contractor shall log all complaints received orally or in writing and said log shall include the
date and time the complaint was received, name, address and telephone number of complainant
to the extent that such information is provided by complainant, description of complaint,
employee recording complaint and the action taken by Contractor to respond to and remedy
complaint. All complaints received shall be responded to within twenty four(24)working
hours of receipt.
All customer service records and logs kept by Contractor shall be available at all times during
this Agreement to City upon twenty four(24)hour notice and at no cost to City. City shall, at
any time during regular Contractor business hours, have access to Contractor's customer
service department for purposes of monitoring the quality of customer service or researching
customer complaints assessing liquidated damages or other matters related to Contractor's
performance under this Agreement.
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6.4.3 Resolution of Customer Complaints
Contractor shall notify customers of this complaint procedure at the time customers apply for
or are provided service, and subsequently, annually.
A customer dissatisfied with Contractor's decision regarding a complaint may ask the City to
review the complaint. The City's Utilities Director shall determine if the customer's complaint
is justified; and if so, what remedy, if any shall be provided. The remedy under this Section
shall be limited to a rebate of customer charges related to the period of breach of any of the
Terms of this Agreement. Any resolution of these customer complaints shall not affect the
City's rights to liquidated damages.
6.4.4 Government Liaison
Contractor shall designate in writing a "Government Liaison" who shall be responsible for
working with the City Administrative Officer, Utilities Director and/or one of their designated
representative(s)to resolve customer complaints.
6.5 Education and Public Awareness
Contractor acknowledges and agrees that education and public awareness are critical, key and
essential elements of any efforts to achieve AB 939 requirements and has submitted a plan to
this effect in Exhibit "A". Accordingly, Contractor agrees to cooperate with City in exploring
opportunities to expand public and customer knowledge concerning needs and methods to
reduce, reuse and recycle Solid Waste and to cooperate fully with City in this regard.
Contractor shall perform all necessary public education activities related to the Recycling
services as presented in Exhibit "A". This shall include, but not be limited to,annual mailings
to all customers explaining the recycling program, mailings prior to the start of services, flyers
handed out with Container delivery and follow-up mailings or handouts related to the
collection of new materials. All Public education materials shall be approved in advance by the
City.
At the direction of the City Administrative Officer and/or Utilities Director, Contractor shall
participate in and promote Recycling and other diversion techniques at community events and
local activities. Such participation would normally include providing, without cost to the City,
educational and publicity information promoting the goals of the City's AB 939 programs.
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ARTICLE 7
PAYMENTS TO CITY
7.1 Franchise Fee
In consideration of the exclusive franchise provided for in this Agreement, Contractor shall pay
the City ten percent (10%) of its gross revenues for residential recycling services; provided,
however, that such franchise fee shall not exceed the costs incurred by the City to deliver
service to properties. Such franchise fee shall be a "pass-through" expense for purposes of rate
review.
7.2 AB 939 Fee
If requested by City, Contractor shall pay an AB 939 fee, to be specified annually by the City.
All AB 939 fees paid to the City shall be considered a pass through cost for purposes of rate
setting.
7.3 Business License.Tax
Contractor shall pay each annual business license tax.
7.4 Other Fees
The City shall reserve the right to set "Other" Fees, as it deems necessary. These expenses will
be determined and a fee designed to reimburse the City. Such fees shall be set annually by City
resolution and may be considered a pass through cost for purposes of rate setting.
7.5 Time and Method of Pavment
If Contractor is directed to pay an AB 939, Franchise Fee or "Other" Fee, it shall do so on or
before the fifteenth (15th) day of each month during the Term. Contractor shall remit to City a
sum of money equal to the designated percentage of the gross revenue, including Recyclable
Materials revenue, or a flat monthly fee as determined by the City. If any fees are not paid on
or before the fifteenth (15th) day of any month, Contractor shall pay to City a late payment
penalty in an amount equal to one percent (I%) of the amount owing for that month.
Contractor shall pay an additional late payment penalty of one percent(1%) owing on any
unpaid balance for each following thirty (30) day period the fee remains unpaid. Late payment
penalty amounts shall not be included in any revenue requirement.
7.6 Adjustment of Fees
The City may adjust the amount of fees annually. Such adjustment shall be reflected in the
rates that the Contractor is allowed to charge and collect from customers.
7.7 Review of Fee Payments
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 Agreement. The cost of such
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reviews will be an allowable cost under the rate setting methodology unless there are findings
pursuant to Section 12:5.
ARTICLE 8
CONTRACTOR'S COMPENSATION AND RATES
8.1 General
Contractor's compensation provided for in this Article shall be the full, entire and complete
compensation due to Contractor pursuant to this Agreement for all labor, equipment, materials
and supplies, taxes, insurance, bonds, overhead,profit and all other things necessary to perform
all the services required by this Agreement in the manner and at the times prescribed.
The Contractor does not look to the City for payment of any sums under this Agreement.
Contractor will perform the responsibilities and duties described in this Agreement in
consideration of the right to charge and collect from customers for services rendered at rates
fixed by the City from time-to-time and the right to sell compost generated from Green Waste.
The City shall have the right to structure those rates as it deems appropriate so long as the
revenues forecasted to be received by Contractor from charging such rates can reasonably be
expected to generate sufficient revenues to provide for Contractor's compensation.
8.2 Initial Rates
Contractor will submit required financial documentation for this service as part of an integrated
solid waste rate application. The rate application will comply with the guidelines set forth in
the City's "Rate Setting Process and Methodology Manual for Integrated Solid Waste
Management Rates". The portion of the rate attributable to this service shall be identified as
part of the Council rate-setting process but will not be separated from the integrated rate.
83 Subsequent Rates
Contractor may request rate revisions in future solid waste rate applications. The rate
application must comply with the City's "Rate Setting Process and Methodology Manual for
Solid Waste Management".
8.4 Right to Perform Rate Reviews
City reserves the right to perform, or have a qualified third party perform, a detailed review of
Contractor's expenses and revenues for the purposes of adjusting rates. The results of this
detailed rate review will be used to adjust rates, and the Contractor's calculated revenue
requirements will be used the following year to adjust rates according to Section 8.3
Contractor's Compensation for subsequent Rate Years.
8.5 Extraordinary Adiustments
Contractor or City may request an adjustment to rates at times other than that required in
Section 8.3 for unusual changes in the cost of providing service under this Agreement. Such
changes may include, but are not limited to, changes in laws, ordinances, or regulations, and
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significant changes in Contractor's workload due to new residential or commercial
development. However, when an extraordinary adjustment is requested, such adjustment shall
consider changes in all costs and revenues from Contractor's proposed revenue requirement.
For each such request, Contractor shall prepare a schedule comparing the original proposed
costs and revenues by line item to the then current costs and revenues, including an estimates
of the cost impact of the change, using an operating ratio of 92%, applied to Contractor's costs
as calculated in Contractor's proposed revenue requirement. Such request shall be prepared in
a form acceptable to City with support for assumptions made by Contractor in preparing the
estimate. Contractor and City shall negotiate a mutually acceptable adjustment amount.
ARTICLE 9
RECORDS,REPORTS AND INFORMATION, STUDIES
AND HEARING REQUIREMENTS
9.1 Records
9.1.1 General
Contractor shall maintain records required to conduct its operations,to support requests it may
make to City, and to respond to requests from City in the conduct of City business.
Additionally, the Contractor shall also keep and maintain records reasonably necessary for
audits, as required by this Agreement, and shall keep and maintain all records reasonably
necessary to develop reports and financial statements required with respect to this Agreement.
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/records shall be protected and backed up.
9.1.2 Financial Records
Financial records shall separate all records related to the services performed under this
Agreement from any and all other types of businesses and operations conducted by the
Contractor.
9.1.3 General Records
City approved records (format) shall be maintained for the City separate from other
jurisdictions relating to:
• Customer services;
• Weight of Recyclable Materials by type of materials.
• Routes;
• Facilities, inventory of equipment and personnel used;
• Facilities and equipment operations, maintenance and repair;
• Processing, marketing and sale of Recyclable Materials including name of the
purchaser, the date of sales transaction,processing cost per ton, quantity purchased,
value per ton and net sales records;
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• Complaints; and;
• Missed pick ups.
Contractor shall maintain records of all Recyclable Materials Collected in the City for the
period of this Agreement. In the event Contractor discontinues providing Recycling services to
City, Contractor shall provideallrecords of all Recyclable Materials Collected in City to City
within thirty (30) days of discontinuing service. Records shall be in chronological and
organized form and readily and easily interpreted.
9.2 Reports
9.2.1 Report Formats and Schedule
Records shall be maintained in forms and by methods that facilitate flexible use of data
contained in them to structure reports, as needed. Contractor may propose report formats that
are responsive to the objectives and audiences for each report. The format of each report shall
be approved by the City.
Monthly reports shall be submitted within twenty(20) calendar days after the end of the month
being reported. Annual reports shall be submitted before September 30th, for the previous
reporting year.
9.2.2 Monthly Reports
The information listed shall be the minimum reported:
• Recyclable Materials collected, sorted by type of Generator, in tons, by month, and
cumulative for report,year.
.
• Complaint summary, for month and cumulative for report year.
• Narrative summary assessment of problems encountered and actions taken with
recommendations to City for improvement.
• Number of accounts by category for each month of reporting year.
• Participation rates.
• Recyclable Materials Container distribution.
• Materials Sales. Sales statement showing: kinds of material, quantity sold (in tons),
value per ton, and net sales.
The City may designate any additional information that it wishes provided in the monthly
reports.
9.2.3 Annual Report
The Annual Report is to be essentially in the form and content of the monthly reports. In
addition, Contractor's annual audited financial reports/statements, with the operations related to
the City services segregated, shall be included. The annual report shall also include a complete
inventory of equipment used to provide all services.
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Financial statements shall include a supplemental schedule combining Contractor's results of
operations, separating the specific revenues and expenses, including detailed information with
respect to general overhead claimed by the Contractor, in connection with the operations
provided for in this Agreement from others included in such financial statements. The financial
statements, supplemental schedule, management letter and footnotes shall be prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and audited, in
accordance with Generally Accepted Auditing Standards (GAAS) by a certified public
accountant (CPA) licensed(in good standing)to practice public accounting in the State of
California as determined by the State of California Department of Consumer Affairs Board of
Accountancy. The CPA opinion on Contractor's annual financial statements and supplemental
schedule shall be unqualified, except as to uncertainties for which the ultimate outcome cannot
be determined by the date of the CPA's opinion.
9.3 Right.to Inspect Records
City shall have the right to inspect or review the payroll tax reports, specific documents or
records required expressly or by inference pursuant to this Agreement, or any other similar
records or reports of Contractor that City shall deem, in its sole discretion, necessary to
evaluate annual reports, compensation applications provided for in this Agreement and
Contractor's performance provided for in this Agreement.
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 records inspection. The cost of such inspection or review will
be an allowable cost under the rate setting methodology unless there are findings pursuant to
Section 12.5..
93.1 Right to Review Basis for Landfill Tipping Fee Increases
The Contractor shall provide to the City a copy of Cold Canyon.Landfill's request for an
increase in ripping fees no later than five (5) days following submittal of said request to the
County of San Luis Obispo. Additionally, the Contractor shall notify the City of the action
taken by the Board of Supervisors regarding said request within five(5) days following said
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 allowable cost
under the rate setting methodology unless there are findings pursuant to Section 12.5.
9.4 Waste Generation/Characterization Studies
Contractor acknowledges that the city must perform Solid Waste generation and disposal
characterization studies periodically to comply with AB 939 requirements. Contractor agrees
to participate and cooperate with City and its agents to accomplish studies and data collection
and prepare reports as needed to determine weights and volumes of Solid Waste generated,
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Contractor acknowledges that the city must perform Solid Waste generation and disposal
characterization studies periodically to comply with AB 939 requirements. Contractor agrees to
participate and cooperate with City and its agents to accomplish studies and data collection and
prepare reports as needed to determine weights and volumes of Solid Waste generated,
diverted, disposed, transformed, or otherwise handled/processed to satisfy AB 939
requirements.
9.5 Performance Hearing
The City maintains the right to hold a public hearing at any time, not more than once each year,
at which the Contractor shall be present and shall participate, to review its services and
performance. The purpose of the hearing is to provide for a discussion and review of
technological, economic, and regulatory changes in order to achieve a continuing, advanced
Solid Waste management system; and to ensure customer service quality and any other areas
that may be addressed regarding services are being provided with adequate quality, efficiency
and economy.
Sixty(60) days after receiving notice from City of a Performance Hearing, Contractor shall, at a
minimum, submit a report to City indicating (1) changes recommended and/or new services to
improve City's ability to meet the goals of AB 939 and to contain costs and minimize impacts
on rates;and (2) any specific plans for provision of changed or new services by Contractor.
ARTICLE 10
INDEMNIFICATION, INSURANCE AND BOND
10.1 Indemnification
Contractor shall indemnify and hold harmless City, its officers, Directors, employees, and
agents from.and against any and all loss, liability, penalty, forfeiture, claim, demand, action
proceeding or suit of any and every kind and description (including, but not limited to, injury to
and death of any Person and damage to property, or for contribution or indemnity claimed by
third parties) to the extent arising or resulting from and in anyway connected with (1) the
negligence or willful misconduct of Contractor, its officers, employees agents and/or sub
Contractors in performing services under this Agreement; (2) the failure of Contractor, its
officers, employees, agents and/or subcontractors to comply in all respects with the provisions
of this Agreement, applicable laws (including,without limitation, the Environmental Laws) and
regulations, and/or applicable permits and licenses; (3)the acts of Contractor, its officers,
employees, agents and/or subcontractors in performing services under this Agreement for which
strict liability is imposed by law (including, without limitation, the Environmental Laws).
Contractor further agrees to and shall, upon demand of City; at Contractor's sole cost and
expense, defend(with attorneys acceptable to City)the City, its officers, directors, employees,
and agents against any claims, actions, suits or other proceedings, whether judicial, quasi-
judicial or administrative in nature, arising or resulting from any events described in the
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immediately preceding paragraph to the extent arising from or related to Contractor's alleged or
actual violations of Proposition 218 and/or its implementing legislation,.
Contractor's duty to indemnify and defend shall survive the expiration or earlier termination of
this Agreement.
10.2 Landfill Diversion
The Contractor acknowledges that the City has adopted a SRRE which selects a single family
curbside Recycling program as a means of diverting an estimated 3,643 tons in 1995 and 3,903
tons per year by the year 2000, and a multi-family curbside Recycling program as a means of
diverting an estimated 308 tons in 1995 and 330 tons per year by the year 2000. It is therefore
of foremost importance that the Recyclable Materials collected under this Agreement be
converted into a functional and marketable product in order that the materials may be diverted
from landfill disposal in compliance with the City's SRRE, and AB 939. The Contractor shall
therefore use commercially reasonable efforts ensure that the processing method used shall, at
all times, meet the intent of the City's SRRE and AB 939. Should the Contractor find it
necessary to utilize another method of processing in order to meet the intent of the SRRE and
AB 939, the City shall be given an opportunity to make its own determination as to the
suitability and cost-effectiveness of such process and shall approve such process in writing.
The City shall have the right to terminate this Agreement upon the giving of a six (6) month
prior written notice to Contractor should it be determined that the Recycling program being
implemented and/or proposed under this Agreement is ineffective in meeting the City's
diversion goals and objectives. Upon termination, the Contractor shall be entitled only to
revenues less expenses incurred to that date. All revenues received thereafter, including from
Recyclable Materials sales, shall be the property of the City unless otherwise agreed.
10.3 AB 939 Indemnification
Contractor agrees to indemnify and hold harmless City, its officers, Directors, employees, and
agents from and against all fines and/or penalties imposed by the California Integrated Waste
Management Board in the event the source reduction and Recycling goals or any other
requirement of AB 939 are not met by City with respect to the waste stream Collected under
this Agreement but only to the extent that such failure is due to the failure of Contractor to meet
its obligations under this Agreement or for delays in providing information that prevents City
from submitting reports required by AB 939 in a timely manner.
10.4 Insurance
A. Minimum Limits of Insurance. Contractor shall maintain limits no less than:
1. Comprehensive General Liability: One Million Dollars ($1,000,000) combined
single limit per occurrence for bodily injury,Personal injury and property damage.
2. Automobile Liability: One Million Dollars ($1,000,000) combined single limit per
accident for bodily injury and property damage.
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3. Workers' Compensation and Employers Liability: Workers' compensation limits as
required by the Labor Code of the State of California and Employers Liability limits of
$1,000,000 per accident..
B. Deductibles and Self-Insured Retentions. Any deductibles or self-insured 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, its officials, directors and employees; or Contractor shall procure a bond
guaranteeing payment of losses and related investigations, claim administration and
defense expenses.
C. Other Insurance Provisions. The policies are to contain, or be endorsed to contain,
the following provisions:
1. General Liability and Automobile Liability Coverages
a) The City, its officials, employees, and directors are to be covered as insured as
respects: liability arising out of activities performed by or on behalf of Contractor;
products and completed operations of Contractor; Premises owned, leased or used by
Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The
coverage shall contain no special limitations on the scope of protection afforded to the
City, its officials, or employees.
b) Contractor's insurance coverage shall be primary insurance as respects City,
its officials, directors, and employees. Any insurance or self-insurance maintained by
City, its officials, employees or volunteers shall be excess of Contractor's insurance and
shall not contribute with it.
c)Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officials, or employees.
d) Coverage shall state that Contractor's insurance shall apply separately to each
insured against whom claim is made or suit is brought, except with respect to the limits
of the insurer's liability..
2. Workers' Compensation and Employers Liability Coverage- The insurer shall agree
to waive all rights of subrogation against City, its officials, employees and volunteers
for losses arising from work performed by Contractor for City.
3. All Coverages- Each insurance policy required by this clause shall be endorsed to
state that coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or limits except after thirty(30) days prior written notice by certified mail,
return receipt requested, has been given to City.
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D. Acceptability of Insurers. The insurance policies required by this Section shall be
issued by an insurance contractor or companies admitted to do business in the State of
California subject to the jurisdiction of the California Insurance Commissioner and with
a rating in the most recent edition of Best's Insurance Reports of size category VII or
larger and a rating classification of A or better.
E. Verification of Coverage. Contractor shall furnish City with certificates of insurance
and with original endorsements affecting coverage required by this clause. The
certificates and endorsements for each insurance policy are to be signed by a Person
authorized by that insurer to bind coverage on its behalf. The certificates and
endorsements are to be on forms provided by or acceptable to City and are to be
received and approved by City before work commences. City reserves the right to
require complete, certified copies of all required insurance policies, at any time.
10.5 Faithful Performance Bond
Simultaneously with the execution of this Agreement, Contractor shall file with City surety
bond,payable to City, securing Contractor's faithful performance of its obligations under this
Agreement. The bond shall be in the amount of 125% of the total annual contract price
guaranteeing the faithful performance of the contract, including any attorney's fees or other
collection costs.
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ARTICLE 11
CITY'S RIGHT TO PERFORM SERVICE
11.1 General
In the event that Contractor, for any reason whatsoever, fails, refuses or is unable to Collect,
transport, process or market any or all recyclable Materials which it is required by this
Agreement to Collect, process and market, at the time and in the manner provided in this
Agreement, for a period of more than seven(7) calendar days, and if, as a result thereof,
Recyclable Materials should accumulate in the City to such an extent, in such a manner, or for
such a time that the City Administrative Officer should find that such accumulation endangers
or menaces the public health, safety or welfare, then City shall have the right, but not the
obligation, upon twenty-four(24) hour prior written notice to Contractor during the period of
such emergency as determined by the City Administrative Officer, (1) to perform, or cause to
be performed, such services itself with its own or other personnel without liability to
Contractor; and/or(2)to take possession of any or all of Contractor's land, equipment and other
property to Collect, transport, process and/or market any Recyclable Materials generated within
the City which Contractor would otherwise be obligated to Collect, transport, process or market
pursuant to this Agreement. In the event the City takes possession of the Contractor's
equipment and other property, the City shall be entitled to have another contractor operate such
equipment and property under City direction. Additionally, in the event the City takes
possession of the Contractor's equipment and other property, the City does not guarantee repair
of existing problems with equipment and facilities.
Notice of Contractor's failure, refusal or neglect to Collect, transport, process or market
Recyclable Materials may be given orally by telephone to Contractor at its principal office and
shall be effective immediately. Written confirmation of such oral notification shall be sent to
Contractor within twenty-four(24) hours of the oral notification.
Contractor further agrees that in such event:
• It will take direction from City to effect the transfer of possession of property to City
for City's use.
• It will, if City so requests, keep in good repair and condition all of such property,
provide all motor vehicles with fuel, oil and other service, and provide such other
service as may be necessary to maintain said property in operational condition.
• City may immediately engage all or any personnel necessary or useful for the
Collection, transportation, processing and/or marketing of Recyclable Materials,
including, if City so desires, employees previously or then employed by Contractor,
Contractor further agrees, if City so requests, to furnish City the services of any or all
management or office personnel employed by Contractor whose services are necessary
or useful for Recyclable Materials Collection, Transportation, processing and marketing
operations and for the billing and collection of fees for these services.
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City agrees that it assumes complete responsibility for the proper and normal use of such
equipment and facilities while in its possession.
If the interruption or discontinuance in service is caused by any of the reasons listed in Section
12.4 (Excuse From Performance), City shall pay to Contractor the reasonable rental value of
the equipment and facilities,possession of which is taken by City, for the period of City's
possession, if any, which extends beyond the period of time for which Contractor has rendered
bills in advance of service.
Except as otherwise expressly provided in the previous paragraph, City's exercise of its rights
under this Article 11 (1) does not constitute a taking of private property for which
compensation must be paid; (2) will not create any liability on the part of City to Contractor;
and(3) does not exempt Contractor from the indemnity provisions of Article 10,
Indemnification, Insurance and Bond, which are meant to extend to circumstances arising
under this Section, provided that Contractor is not required to indemnify City against claims
and damages arising from the sole negligence of City officers, employees and agents in the
operation of Collection vehicles during the time City has taken possession of such vehicles.
11.2 Temporary Possession of Contractor's Property
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, Excuse
from Performance), City may take possession of and use all of Contractor's property described
above until other suitable arrangements can be made for the provision of Recycling Services
which may include the grant of a Contract to another company. The same notice requirements
of Section 11.1 are applicable.
113 Billing and Compensation to City During City's Possession
During such time that city is providing Recycling services, as above provided, Contractor shall
continue to bill and collect payment from all users of the above-mentioned services. Contractor
further agrees that, in such event, it shall reimburse City for any and all costs and expenses
incurred by City in taking over possession of the above-mentioned property for Recycling
service in such manner and to an extent as would otherwise be required of Contractor under the
Terms of this Agreement. Such reimbursement shall be made from time to time after
submission by City to Contractor of each statement listing such costs and expenses,but in no
event later than five (5) working days from and after each such submission. The City shall
have the right, at its sole discretion, to take over billing and payment collection activities. The
City shall then pay any net revenues to the Contractor, after deducting all expenses, including
City-incurred expenses.
11.4 City's Right to Relinquish Possession
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It is further mutually agreed that City may at any time at its discretion relinquish possession of
any or all of the above-mentioned property to Contractor and thereupon demand that Contractor
resume the Recycling services as provided in this Agreement, whereupon Contractor shall be
bound to resume the same.
11.5 Duration of City's Possession
City's right pursuant to this Article to retain temporary possession of Contractor's facilities and
equipment, and to render Collection services, shall terminate when City determines that such
services can be resumed by Contractor, or when City no longer reasonably requires such
facilities or equipment. In any case, City has no obligation to maintain possession of
Contractor's property and/or continue its use for any period of time and may at any time, in its
sole discretion, relinquish possession to Contractor.
ARTICLE 12
DEFAULT, REMEDIES AND LIQUIDATED DAMAGES
12.1 Events of Default
All provisions of this Agreement to be performed by Contractor are considered material. Each
of the following shall constitute an event of default.
A. Fraud or Deceit. If Contractor practices, or attempts to practice, any fraud or deceit upon
city.
B. Insolvency or Bankruptcy. If Contractor becomes insolvent, unable, or unwilling to pay
its debts when due, or upon listing of an order for relief in favor of Contractor in a bankruptcy
proceeding. The Contractor is also in default if there is an assignment for the benefit of its
creditors.
C. Failure to Maintain Coverage. If Contractor fails to provide or maintain in full force and
effect the Workers' Compensation, liability, indemnification coverage or any insurance
coverage or bond required under this Agreement.
D. Violations of Regulation. If Contractor facilities fall out of full regulatory compliance or
if Contractor violates any orders or filings of any regulatory body having jurisdiction over
Contractor relative to this Agreement, provided that Contractor may contest any such orders or
filings by appropriate proceedings conducted in good faith, in which case no breach of the
Agreement shall be deemed to have occurred.
E. Failure to Perform. If Contractor ceases to provide Recycling services as required under
this Agreement for a period of two (2) days or more, for any reason within the control of
Contractor.
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F. Failure to Pay/Report. If Contractor fails to make any timely payments, including
liquidated damages and penalties, required under this Agreement and/or fails to provide City
with required information,reports, and/or records in a timely manner as provided for in the
Agreement.
G. Acts or Omissions. Any other act or omission by Contractor which violates the terms,
conditions, or requirements of this Agreement, the California Integrated Waste Management
Act of 1989, as it may be amended from time to time, or any order, directive, rule, or regulation
issued thereunder and which is not corrected or remedied within the time set in the written
notice the violation or, if Contractor cannot reasonably correct or remedy the breach within the
time set forth in such notice, if Contractor should fail to commence to correct or remedy such
violation within the time set forth in such notice and diligently effect such correction or remedy
thereafter.
H. False or Misleading Statements. Any representation or disclosure made to City by
Contractor in connection with or as an inducement to entering into this Agreement, or any
future amendment to this Agreement, which proves to be false or misleading in any material
respect as of the time such representation or disclosure is made, whether or not any such
representation or disclosure appears as part of this Agreement.
I. Attachment. There is a seizure of attachment of, or levy on, the operating equipment of
Contractor, including without limits its equipment, maintenance or office facilities, or any part
thereof.
J. Suspension or Termination of Service. There is any termination or suspension of the
transaction of business by Contractor, including without limit, due to labor unrest including
strike, work stoppage or slowdown, sickout, picketing, or other concerted job action lasting
more than two (2) days.
Upon default by the Contractor, the City Administrative Officer shall provide written notice to
Contractor of the violation. The City Administrative Officer shall include in the notice, a
demand that the Contractor correct the violation within 10 days following the delivery of said
notice. For purposes of this Agreement and any notice required thereunder, the term "days"
shall mean calendar days.
12.2 Right to Terminate Upon Default
Upon a default by Contractor, 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) days
notice, but without the need for any hearing, suit or legal action. This right of termination is in
addition to any other rights of City upon a failure of Contractor to perform its obligations under
this Agreement.
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City's right to terminate this Agreement and to take possession of Contractor's equipment and
facilities are not exclusive, and City's termination of this Agreement shall not constitute an
election of remedies. Instead, they shall be in addition to any and all other legal and equitable
rights and remedies which City may have.
By virtue of the nature of this Agreement, the urgency of timely, continuous and high-quality
service, the lead time required to effect alternative service, and the rights granted by City to
Contractor, the remedy of damages for a breach hereof by Contractor is inadequate and City
shall be entitled in injunctive relief.
12.3 Liquidated Damages
A. General. City finds, and Contractor agrees, that as of the time of the execution of this
Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages
which shall be incurred by City as a.result of a breach by Contractor of its obligations under
this Agreement.
B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards.
The parties acknowledge that consistent, reliable Recycling service is of utmost importance to
City and that city has considered and relied on Contractor's representations as to its quality of
service commitment in awarding the Agreement to it. The parties further recognize that some
quantified standards of performance are necessary and appropriate to ensure consistent and
reliable service and performance. The parties further recognize that if Contractor fails to
achieve the performance standards, comply with complaint resolution criteria, or fails to submit
required documents in a timely manner, City and its residents will suffer damages and that it is
and will be impractical and extremely difficult to ascertain and determine the exact amount of
damages which City will suffer. Therefore, without prejudice to City's right to treat such non-
performance as an event of default under this Article 12, the parties agree that the following
liquidated damage amounts represent a reasonable estimate of the amount of such damages
considering all of the circumstances existing on the date of this Agreement, including the
relationship of the sums to the range of harm to City that reasonably could be anticipated and
the anticipation that proof of actual damages would be costly or inconvenient. Recognizing the
importance of resolving any failure to meet the service performance standard, the City shall
contact Contractor within two (2) days of any failing reported directly to the City.
Contractor agrees to pay(as liquidated damages and not as a penalty) the amounts set forth
below:
Collection Reliability and Ouality
• For each failure over five (5) annually to commence service to
• a new customer account within seven (7) days after order: $150.00
• For each failure over ten (10) annually to Collect Recyclable
• Materials, which as been properly set out for Collection, from
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• an established customer account on the scheduled Collection day: $150.00
• For each failure to Collect Recyclable Materials which have
• been properly set out for Collection, from the same customer on
• two (2) consecutive scheduled pickup days: $150.00
• For each occurrence over five (5) annually of damage to private
• property: $250.00
• X For each occurrence of discourteous behavior: $250.00
• For each failure over ten (10) annually to clean up Recyclable
• Materials spilled from Bins: $150.00
• For each occurrence over five (5) annually of Collecting
• Recyclable Materials during unauthorized hours: $250.00
• For each failure to respond to a customer complaint within
• twenty-four(24) working hours: $100.00
Timeliness of Submissions to City
REPORTS Any report shall be considered late until such time as a correct and complete
report is received by City. For each calendar day a report is late, the daily
assessment shall be:
Monthly Reports: For each infraction $100 per day
Annual Reports: For each infraction $500 per day
Liquidated damages will only be assessed after Contractor has been given the opportunity but
failed to rectify the damages, as described in this Agreement(e.g., twenty-four(24) working
hours to respond to a complaint). City may determine the occurrence of events giving rise to
liquidated damages through the observation of its own employees or representative or
investigation of customer complaints.
Prior to assessing liquidated damages, City shall give Contractor notice of its intention to do so.
The notice will include a brief description of the incident(s)/non-performance. Contractor may
review (and make copies at its own expense) all information in the possession of City relating
to incident(s)/non-performance. Contractor may, within ten (10) days after receiving the
notice, request a meeting with City. If a meeting is requested, it shall be held by the City
Administrative Officer or his/her designee. Contractor may present evidence in writing and
through testimony of its employees and others relevant to the incident(s)/non performance.
The City Administrative Officer or designee will provide Contractor 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.
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C. Amount. The City Administrative Officer may assess liquidated damages for each calendar
day or event, as appropriate,that Contractor is determined to be liable in accordance with this
Agreement.
D.Timing of Payment. Contractor shall pay any liquidated damages assessed by City within
ten (10) days after they are assessed. If they are not paid within the ten (10) day period, City
may proceed against the performance bond required by this Agreement or order the termination
of this Agreement, or both.
12.4 Excuse from Performance
The parties shall be excused from performing their respective obligations hereunder in the
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), and
other similar catastrophic events which are beyond the control of and not the fault of the party
claiming excuse from performance hereunder. Labor unrest, including but not limited to strike,
work stoppage or slowdown, sick-out, picketing, or other concerted job action conducted by
Contractor's employees or directed at Contractor or its selected facilities is not an excuse from
performance and Contractor shall be obligated to continue to provide service notwithstanding
the occurrence of any or all such events.
The party claiming excuse from performance shall, within two (2) days after such party has
notice of such cause, give the other party notice of the facts constituting such cause and
asserting its claim to excuse under this Section.
The interruption or discontinuance of Contractor's services caused by one or more of the events
excused shall not constitute a default by Contractor under this Agreement. Notwithstanding the
foregoing, however, if Contractor is excused from performing its 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 excuse from performance was granted. After
such review, if the City determines the excuse from service is no longer valid, the City shall
notify the Contractor in writing to resume service within two (2) days from the receipt of such
notification. If the Contractor fails to resume service within the two (2) days, the City shall
have the right to terminate this Agreement by giving ten (10) days notice, in which case the
provisions relative to taking possession of Contractor's land, equipment and other property and
engaging Contractor's personnel in Article 11, City's Right to Perform Services, and this Article
12 shall apply.
12.5 Financial Material Errors,Omissions or Irregularities
The City may review, test and audit the books and records of the Contractor for the purpose of
determining whether the Contractor is complying with the terms of the Agreement. In the
event that material errors or omissions or irregularities are identified, then the cost associated
with the audit, test or review shall be paid by the Contractor to the City. In the case of errors,
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materiality shall be deemed to be two percent(2%) or greater of the gross revenues of the
Contractor from activities performed under this agreement. Recovery of any over payment will
be negotiated on a case by case basis, either immediately or through the next rate setting
evaluation.
ARTICLE 13
OTHER AGREEMENTS OF THE PARTIES
13.1 Relationship of Parties
The parties intend that Contractor shall perform the services required by this Agreement as an
independent Contractor engaged by City and not as an officer or employee of City nor as a
partner of or joint venture with City. No employee or agent or Contractor shall be or shall be
deemed to be an employee or agent of City. Except as expressly provided herein, Contractor
shall have the exclusive control over the manner and means of conducting the Recycling
services performed under this Agreement, and all Persons performing such services.
Contractor shall be solely responsible for the acts and omissions of its officers, employees,
subcontractors and agents. Neither Contractor nor its officers, employees, subcontractors and
agents shall obtain any rights to retirement benefits, workers compensation benefits, or any
other benefits which accrue to City employees by virtue of their employment with City.
13.2 Compliance with law
In providing the services required under this Agreement, Contractor shall at all times, at its sole
cost, comply with all applicable laws of the United States, the State of California, City, and
with all applicable regulations promulgated by federal, state, regional or local administrative
and regulatory agencies, now in force and as they may be enacted, issued or amended during
the Term.
13.3 Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws
of the State of California.
13.4 Jurisdiction
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded
in the courts of the State of California, which shall have exclusive jurisdiction over such
lawsuits.
13.5 Assignment
Except as may be provided for in Article 11, (City's Right to Perform Service), neither party
shall assign its rights, nor delegate, subcontract or otherwise transfer its obligations under this
Agreement to any other Person without the prior written consent of the other party. Any such
assignment made without the consent of the other party shall be void and the attempted
assignment shall constitute a material breach of this Agreement. The Contractor shall consent
to any assignment to a joint powers authority, or any similar public entity assignee of the City.
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For purposes of this Section when used in reference to Contractor, "assignment" shall include,
but not be limited to (1) a sale, exchange or other transfer of at least fifty-one percent (51%) all
of Contractor's assets dedicated to service under this Agreement to a third party; (2) a sale,
exchange or other transfer of outstanding common stock of Contractor to a third party provided
said sale, exchange or transfer may result in a change of control of Contractor; (3) any
dissolution, reorganization, consolidation, merger, re-capitalization, stock issuance or re-
issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction
to which results in a change of ownership or control of Contractor; (4) any assignment by
operation of law, including insolvency or bankruptcy, making assignment for the benefit of
creditors, writ of attachment for an execution being levied against this Agreement, appointment
of a receiver taking possession of Contractor's property, or transfer occurring in the event of a
probate proceeding; and (5) any combination of the foregoing(whether or not in related or
contemporaneous transactions)which has the effect of any such transfer or change of
ownership, or change of control of Contractor.
Contractor acknowledges that this Agreement involves rendering a vital service to City's
residents and businesses, and that City has selected Contractor to perform the services specified
herein based on (1) Contractor's experience, skill and reputation for conducting its Solid Waste
management operations in a safe, effective and responsible fashion, at all times in keeping with
applicable Environmental Laws, regulations and best waste management practices, and(2)
Contractor's financial resources to maintain the required equipment and to support its
indemnity obligations to City under this Agreement. City has relied on each of these factors,
among others, in choosing Contractor to perform the services to be rendered by Contractor
under this Agreement.
If Contractor requests City's consideration of and consent to an assignment, City may deny or
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 of
service. Accordingly, the following standards have been set to ensure that assignment will
result in continued quality service. In addition, the City reserves the right to solicit competitive
bids for these services if the assignment results in a request by the assignee for rate increases .
that are higher than the inflationary index and do not reflect value changes in service standards.
At a minimum, no request by Contractor for consent to an assignment need be considered by
City unless and until Contractor has met the following requirements:
A. Contractor shall undertake to pay City its reasonable expenses for attorney's fees and
investigation costs necessary to investigate the suitability of any proposed assignee, and
to review and finalize any documentation required as a condition for approving any
such assignment;
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B. Contractor shall furnish City with audited financial statements of the proposed
assignee's operations for the immediately preceding three (3) operating years;
C. Contractor shall furnish City with satisfactory proof. 1) that the proposed assignee
has at least ten (10) years of Recyclable Material management experience on a scale
equal to or exceeding the scale of operations conducted by Contractor under this
Agreement; 2)that in the last five (5)years, the proposed assignee has not suffered any
significant citations or other censure from any federal, state or local agency having
jurisdiction over its Solid Waste management operations due to any significant failure
to comply with state, federal or local Environmental Laws and that the assignee has
provided City with a complete list of such citations and censures; 3) that the proposed
assignee has at all times conducted its operations in an environmentally safe and
conscientious fashion; 4)that the proposed assignee conducts its Recyclable Materials
management practices in accordance with sound waste management practices in full
compliance with all federal, state and local laws regulating the Collection,
transportation,processing, marketing and disposal of Solid Waste including Hazardous
Wastes; and, 5) of any other information required by City to ensure the proposed
assignee can fulfill the Terms of this Agreement in a timely safe and effective manner.
Under no circumstances shall the City be obliged to consider any proposed assignment by
Contractor if Contractor is in default at any time during the period of consideration.
13.6 Subcontracting
Except as approved in writing by the City, Contractor shall not enter into an agreement to have
another Person perform Contractor's duties of this Agreement. Contractor shall undertake to
pay City its reasonable expenses for attorney's fees and investigation costs necessary to
investigate the suitability of any proposed subcontractor, and to review and finalize any
documentation required as a condition for approving any such subcontracting agreement.
13.7 Binding on Assigns
The provisions of this Agreement shall inure to the benefit to and be binding on the permitted
assigns of the parties.
13.8 Transition to Next Contractor
If the transition of services to another Contractor occurs through expiration of term, default and
termination, or otherwise, Contractor will cooperate with City and subsequent Contractor(s)to
assist in an orderly transition which will include Contractor providing route lists and billing
information. Contractor will not be obliged to sell collection vehicles or Containers to the next
Contractor. Depending on Contractor's circumstances at the point of transition, Contractor at
its option may enter into negotiations with the next Contractor to sell (in part or all) Collection
vehicles and/or containers.
13.9 Parties in Interest
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Nothing in the Agreement,whether express or implied, is intended to confer any rights on any
persons other than the parties to it and their representatives, successors and permitted assigns.
13.10 Waiver
The waiver by either party of any breach or violation of any provisions of this Agreement shall
not be deemed to be a waiver of any breach or violation of any other provision nor of any
subsequent breach of violation of the same or any other provision. The subsequent acceptance
by either party of any monies which become due hereunder shall not be deemed to be a waiver
of any pre-existing or concurrent breach or violation by the other party of any provision of this
Agreement.
13.11 Contractor's Investigation
Contractor has relied on its own investigations, and not on any representations of the City or its
agents of the conditions and circumstances surrounding the Agreement and the work to be
performed by it.
13.12 Notice
All notices, demands, requests,proposals, approvals, consents and other communications
which this Agreement requires, authorizes or contemplates shall be in writing and shall either
be personally delivered to a representative of the parties at the address below or be deposited in
the United States mail, first class postage prepaid, addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
879 Monro Street
San Luis Obispo, CA 93401
If to Contractor: Tom Martin
San Luis Garbage Company
2945 McMillan#136
San Luis Obispo, CA 93401
The address to which communications may be delivered may be changed from time to time by
a notice given in accordance with this Section. The notice, if mailed, is deemed served three
(3) days after the mailing.
13.13 Representatives of the Parties
References in this Agreement to the "City" shall mean the City Council and all actions to be
taken by City shall be taken by the City Council except as provided below. The City Council
may delegate, in writing, authority to the City Administrative Officer, Utilities Director, and/or
to the City employees and may permit such employees, in turn, to delegate in writing some or
all of such authority to subordinate employees. Contractor may rely upon actions taken by
such delegates if they are within the scope of the authority properly delegated to them.
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Contractor shall,by the effective date, designate in writing a responsible officer who shall
serve as the representative of Contractor in all matters related to the Agreement and shall
inform City in writing of such designation and of any limitations upon his or her authority to
bind Contractor. City may rely upon action taken by such designated representative as actions
of Contractor unless they are outside the scope of the authority delegated to him/her by
Contractor as communicated to City.
13.14 City Free to Negotiate with Third Parties
City may investigate all options for the Collection, processing and marketing of Recyclable
Materials after the expiration of the Term. Without limiting generality of the foregoing, City
may solicit proposals from Contractor and from third parties for the provision of Recycling
services, and any combination thereof, and may negotiate and execute Agreements for such
services which will take effect upon the expiration or earlier termination under Section 12.1
(Events of Default) of this Agreement.
13.15 Compliance with City Code
Contractor shall comply with those provisions of the City code which are applicable, and with
any and all amendments to such applicable provisions during the Term of this Agreement.
13.16 Privacy
Contractor shall strictly observe and protect the rights of privacy of customers. Information
identifying individual customers or the composition or contents of a customer's waste stream
shall not be revealed to any person, governmental unit,private agency, or contractor, unless
upon the authority of a court of law,by statute, or upon valid authorization of the customer.
This provision shall not be construed to preclude Contractor from preparing, participating in, or
assisting in the preparation of waste characterization studies or waste stream analyses which
may be required by AB 939.
ARTICLE 14
MISCELLANEOUS AGREEMENTS
14.1 Entire Agreement.
This Agreement, including the exhibits, represents the full and entire Agreement between the
parties with respect to the matters covered herein.
14.2 Section Headings
The article headings and section headings in this Agreement are for convenience of reference
only and are not intended to be used in the construction of this Agreement nor to alter or affect
any of its provisions.
14.3 References to laws and Other Aereements
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All references in this Agreement to laws shall be understood to include such laws as they may
be subsequently amended or recodified, unless otherwise specifically provided. This
Agreement supersedes any and all Agreements for Recyclable Materials Collection,processing
and/or marketing heretofore entered into by the parties and the City.
14.4 Interpretation
This Agreement, including the exhibits attached hereto, shall be interpreted and construed
reasonably and neither for nor against either party, regardless of the degree to which either
party participated in its drafting.
14.5 Agreement
This Agreement may not be modified or amended in any respect except by a writing signed by
the parties.
14.6 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
remaining provisions of this Agreement which shall be enforced as if such invalid or
unenforceable provision had not been contained herein.
14.7 Exhibit
Exhibit "A" is attached hereto and incorporated herein and made a part hereof by this reference.
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IN WITNESS WHEREOF, City and Contractor have executed this Agreement as of the day and year
first above written.
The City of San Luis Obispo San Luis Garbage Company
("City") ("Contractor")
By By
City Manager Name: Ronald J Mittelstaedt
Title: Chief Executive Officer
Attest:
City Clerk
Approved as to Form:
l
Attorney
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