HomeMy WebLinkAbout1308ORDINANCE NO. 1308 (1996 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO GRANTING FIVE YEAR FRANCHISES TO
SAN LUIS GARBAGE COMPANY FOR GREEN WASTE AND RESIDENTIAL
CURBSIDE RECYCLING SERVICES
WHEREAS, the City of San Luis Obispo has adopted a Source Reduction and Recycling
Element (SRRE) to meet the state law AB 939 requirements; and
WHEREAS, the SRRE states that.the City will provide residential curbside recycling
and green waste collection services; and
WHEREAS, the City solicited competitive proposals for residential curbside recycling
and green waste collection services; and
WHEREAS, the Council selected San Luis Garbage Company's proposal to provide
residential curbside recycling and green waste collection services;
BE IT ORDAINED by the City Council of the City of San Luis Obispo as follows:
SECTION 1. Exclusive franchises shall be granted to San Luis Garbage Company for
services to collect and process 1) residential and commercial green waste and 2) residential
recyclables subject to the terms and conditions presented in Exhibit 1, Green Waste Services
Agreement and Exhibit 2, Residential Recycling Services Agreement.
SECTION 2. A synopsis of this ordinance; approved by the City Attorney, together
with the names of the Council Member voting for and against, shall be published at least five
days prior to its final passage, in the Telegram- Tribune, a newspaper published and circulated
in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its
final passage.
INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis
Obispo at a meeting held on the 20th day of August on
motion of Council Member Smith , seconded by
Vice Mayor Williams , and on the following roll call vote:
AYES: Council Members Smith, Williams, Roalman, Romero and Mayor Settle
NOES: None
ABSENT: None
ATTEST:
C' y Clerk Knfii L. dawf
APPROVED AS TO FORM:
. I_I�ir�i,
Mayor Allen Settle
Ordinance No. 1308 (1996 Series)
FINALLY PASSED this 3rd day of September, 11996, on motion of Council
Member Smith, seconded by Vice Mayor Williams, and on the following roll call vote:
AYES: Council Members Smith, Williams, Roalman, Romero and Mayor Settle
NOES: None
ABSENT: None
Mayor Allen K. Settle
ATTEST:
y Clerk Bo'17K-?�F
GY CLE \
A
Exhibit 2
ESIDENTIAL RECYCLING
SERVICES
AGREEMENT
City of San Luis Obispo
and
San Luis Garbage Company
August 1996
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 3
ARTICLE 2. GRANT AND ACCEPTANCE OF AGREEMENT . .
. 7
2.1
Grant and Acceptance of Agreement . . . . . . . . . . . . . . .
. . . . . 7
2.2
Effective Date . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 7
2.3
Term of Agreement . . . . . . . . . . . . . . . . . . . . . .
. . . . 7
2.4
Option to Extend . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 7
2.5
Conditions to Effectiveness of Agreement . . . . . . . . . . . . .
. . . . . 8
ARTICLE
3. TERM OF AGREEMENT . . . . . . . . . . . . . . . .
. . . 9
3.1
Contractor Status . . . . . . . . . . . . . . . . . . . . . . .
. . . 9
3.2
Contractor Authorization . . . . . . . . . . . . . . . . . . . .
9
3.3
Compliance with Laws and Regulations . . . . . . . . . . . . .
. 9
3.4
Serve Without Interruption . . . . . . . . . . . . . . . . . . .
. 9
3.5
Permits and Licenses . . . . . . . . . . . . . . . . . . . . .
. . 9
3.6
Preservation of City Property . . . . . . . . . . . . . . . . . .
. . . . . 9
ARTICLE 4. SCOPE OF AGREEMENT . . . . . . . . . . . . . . . .
. . 10
4.1
Scope of Agreement . . . . . . . . . . . . . . . . . . . . . .
. . . . . 10
4.2
Limitations to Scope . . . . . . . . . . . . . . . . . . . . . .
. 10
4.3
Administration of Agreement . . . . . . . . . . . . . . . . . .
11
4.4
Use of City Streets . . . . . . . . . . . . . . . . . . . . .
11
4.5
Annexation . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 11
4.6
City Right to Request Changes . . . . . . . . . . . . .
11
4.7
Ownership of Recyclable Materials . . . . . . . . . . . . . . .
. . . . . 12
ARTICLE 5. DIRECT SERVICES . . . . . . . . . . . . . . . . .
. . . 13
5.1
General . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 13
5.2
Recycling Services . . . . . . . . . . . . . . . . . . .
13
5.3
Materials to be Collected . . . . . . . . . . . . . . . . .
13
5.4
Refusal to Provide Collection Services . . . . . . . . . . .
13
5.5
Marketing and Sale of Recyclable Materials . . . . . . . . . . .
. . . . 14
5.6
Operations . . . . . . . . . . . . . . . . . . . . . . .
.
• . 14
5.7
Materials Processing . . . . . . . . . . . . . . . . . . . . . .
. . 16
. . . . .
5.8
Disposal . . . . . . . . . . . . . . . . . . . . . . .
17
5.9
Implementation Plan . . . . . . . . . . . . . . . . . . . . . .
. . . . . 18
n
ARTICLE 6. OTHER SERVICES . . . . . . . . . . . . . . . . . . .
. . . . . 19
6.1
Billing . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 19
6.2
Collection of Bills from Delinquent Customers . . . . . . ... . .
. . . . . 19
6.3
Periodic Performance or Billing Audit . . . . . . . . . . . . . .
. . . . . 19
6.4
Customer Service . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 20
6.5
Education and Public Awareness . . . . . . . . . . . . . . . .
. . . . . 21
ARTICLE 7. PAYMENTS TO CITY . . . . . . . . . . . . . . . . . .
. . . . . 22
7.1
Franchise Fee . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 22
7.2
AB 939 Fee . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 22
7.3
Business License Tax . . . . . . . . . . . . . . . . . . . . .
. . . . . 22
7.4
Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 22
7.5
Time and Method of Payment . . . . . . . . . . . . . . . . . .
. . . . . 22
7.6
Adjustment of Fees . . . . . . . . . . . . . . . . . . . . . .
. . . . . 22
7.7
Review of Fee Payments . . . . . . . . . . . . . . . . . . . .
. . . . . 22
ARTICLE 8. CONTRACTOR'S COMPENSATION AND RATES . . . .
. . . . . 24
8.1
General . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . .24
8.2
Contractor's Initial Compensation . . . . . . . . . . . . . . . .
. . . . . 24
8.3
Contractor's Compensation for Subsequent Rate Years . . . . . . .
. . . . . 24
8.4
Initial Rates . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 24
8.5
Subsequent Rates . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 25
8.6
Right to Perform Rate Reviews . . . . . . . . . . . . . . . . .
. . . . . 25
8.7
Extraordinary Adjustments . . . . . . . . . . . . . . . . . . .
. . . . . 25
ARTICLE 9. RECORDS, REPORTS AND INFORMATION, STUDIES AND
HEARING REQUIREMENTS . . . . . . . . . . . . . . . .
. . . . . . . . . 26
9.1 Records . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 26
9.2 Reports . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 27
9.3 Right to Inspect Records . . . . . . . . . . . . . . . .
. . . . . . . . . 28
9.4 Waste Generation /Characterization Studies . . . . . . . .
. . . . . . . . . 28
9.5 Performance Hearing . . . . . . . . . . . . . . . . .
. . . . . . . . . 28
ARTICLE 10. INDEMNIFICATION, INSURANCE AND BOND
10.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.2 Landfill Diversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.3 AB 939 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 Faithful Performance Bond . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 11. CITY'S RIGHT TO PERFORM SERVICE . . . . . . . . . . . . . 33
11.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
11.2 Temporary Possession of Contractor's Property . . . . . . . . . . . . . . . 34
11.3 Billing and Compensation to City During City's
Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.4 City's Right to Relinquish Possession . . . . . . . . . . . . . . . . . . . 35
M
11.5 Duration of City's Possession . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 12. DEFAULT, REMEDIES AND LIQUIDATED DAMAGES . . . . . . 36
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.2 Right to Terminate Upon Default . . . . . . . . . . . . . . . . . . . . 37
12.3 Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.4 Excuse from Performance . . . . . . . . . . . . . . . . . . . . . . . . 39
12.5 Financial Material Errors, Omissions or Irregularities . . . . . . . . . . . . 40
ARTICLE 13. OTHER AGREEMENTS OF THE PARTIES . . . . . .
. . . . . . 41
13.1
Relationship of Parties . . . . . . . . . . . . . . . . . . . .
. . . . . . 41
13.2
Compliance with Law . . . . . . . . . . . . . . . . . . . .
. . . . 41
13.3
Governing Law . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 41
13.4
Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 41
13.5
Assignment . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . .41
13.6
Subcontracting . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 43
13.7
Binding on Assigns . . . . . . . . . . . . . . . . . . . . .
. . . . . . 43
13.8
Transition to Next Contractor . . . . . . . . . . . . . . . . .
. . . . . . 43
13.9
Parties in Interest . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 43
13.10
Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 44
13.11
Contractor's Investigation . . . . . . . . . . . . . . . . . .
. . . . . . 44
13.12
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 44
13.13
Representatives of the Parties . . . . . . . . . . . . . . . . .
. . . . . 44
13.14
City Free to Negotiate with Third Parties . . . . . . . . . . . .
. . . . . 45
13.15
Compliance with City Code . . . . . . . . . . . . . . . . . .
. . 45
13.16
Privacy . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 45
ARTICLE 14. MISCELLANEOUS AGREEMENTS . . . . . . . .
. . . . . . . . 46
14.1
Entire Agreement . . . . . . . . . . . . . . . . . . . .
. . . . . 46
14.2
Section Headings . . . . . . . . . . . . . . . . . . . .
. . . . . 46
14.3
References to Laws and Other Agreements . . . . . . . . .
. . . . . . . . 46
14.4
Interpretation . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 46
14.5
Agreement . . . . . . . . . . . . . . . . . . . . . . .
. . . 46
14.6
Severability . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .46
14.7
Exhibit . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 46
n
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
1996, 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:
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 § 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 twenty -five percent (25 %) reduction in the amount of
waste which is landfilled by 1995, and 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 1995 and 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
July 31, 1996
Residential Recycling Services Agreement
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
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:
July 31, 1996
Residential Recyclin g 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 "AtTliate" 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, §
40,000 et. sea.
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.
July 31, 1996
Residential Recycling Services Agreement
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 §9601 et sea.; the Resource Conservation and Recovery Act, 42
USC §6902 et sea.; the Federal Clean Water Act, 33 USC §1251 et sea.; the Toxic Substances
Control Act, 15 USC §1601 et sea.; the Occupational Safety and Health Act, 29 USC §651 et
sec..; the California Hazardous Waste Control Act, California Health and Safety Code §25100 et
sec .; the California Toxic Substances Account Act, California Health and Safety Code §25300
et sea.; the Safe Drinking Water and Toxic Enforcement Act, California Health and Safety Code
§25249.5 et sea.; as currently in force or as hereafter amended, and all rules and regulations
promulgated thereunder.
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 §25117 of the Health and Safety Code and
Public Resources Code §40141.
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.
July 31, 1996
Residential Recycling Services Agreement
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.
July 31, 1996
Residential Recyclin Services Agreement
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.
July 31, 1996
Residential Recycling_ Services Agreement
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
2.3 Term of Agreement
The term of this Agreement shall be five (5) years commencing at 12:01 a.m.,
. and expiring at midnight 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 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.
July 31, 1996
Residential Recycling Services Agreement
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.
July 31, 1996
Residential Recycling Services Agreement
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.
July 31, 1996
Residential Recycling Services Agreement
ARTICLE 4
SCOPE OF AGREEMENT
4.1 Scone 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 Scone
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,
July 31, 1996 10
Residential Recycling Services Agreement
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 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 City 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 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:
O Collection methodology to be employed (equipment, manpower, etc.)
O Equipment to be utilized (vehicle number, types, capacity, age, etc.).
O Labor requirements (number of employees by classification).
O Type of Containers to be utilized.
o Provision for program publicity /education/marketing.
July 31, 1996
Residential Recycling Services Agreement
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,
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
13 July 31, 1996
Residential Recycling Services Agreement
O 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.
O 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 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
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.
July 31, 1996 12
Residential Recycling Services Agreement
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 Recvclable 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 Operations
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 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
July 31, 1996 14
Residential Recycling Services Agreement
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 , the Contractor shall have in place or have made
arrangements for a Materials Recovery Facility to receive and accept all deliveries of Recyclable
Materials generated in the city. Contractor has designated the Tank Farm Road facility to be
utilized as of the Effective date.
July 31, 1996 16
Residential Recycling Services Agreement
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.
5.6.3 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.
15 July 31, 1996
Residential Recycling Services Agreement
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.
5.7.3 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
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.
17 July 31, 1996
Residential Recycling Services Agreement
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 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.
July 31, 1996 18
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Residential Recycling Services Agreement
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 Recycling 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.
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.
19 1 July 31, 1996
Residential Recycling Services Agreement
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 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.
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.
July 31, 1996 20
Residential Recycling Services Agreement
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.
21 July 31, 1996
Residential Recycling Services Agreement
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 six percent (6 %) of its gross revenues for residential recycling services. 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, 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 (1 %) 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
July 31, 1996 22
Residential Reqcling Services Agreement
reviews will be an allowable cost under the rate setting methodology unless there are findings
pursuant to Section 12.5.
23 July 31, 1996
Residential Recycling Services Agreement
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 Contractor's Initial Compensation
Contractor's compensation for performance of all its responsibilities and duties for curbside
recycling required by this Agreement for the first and second years of this Agreement shall not
exceed the compensation identified in the Request for Proposal ($46,695 - Year l; $51,022 -
Year 2).
8.3 Contractor's Compensation for Subsequent Rate Years
Contractor's compensation for performance of all its responsibilities and duties in subsequent
years of this Agreement will be set using the guidelines and approach outlined in the City's "Rate
Setting Process and Methodology Manual for Integrated Solid Waste Management Rates ".
Profit to the Contractor is allowed in the rate base, and is based on a targeted operating ratio of
92 percent on allowable costs, with a range of between 90 and 94 percent. In the base year, if
rates would remain unchanged at an operating ratio within the range of 90 to 94 percent, and the
company actually realized an operating ratio within this range, then that same operating ratio
resulting in no rate change will be used, and no rate change will occur. Otherwise, a 92 percent
operating ratio will be used for the base year calculation.
8.4 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
July 31, 1996 24
Residential Recycling Services Agreement
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.
8.5 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 ".
8.6 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.
8.7 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 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.
25 July 31, 1996
Residential Recycling Services Agreement
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;
• 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 provide all records 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.
July 31, 1996 26
Residential Recycling Services Agreement
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:
o Recyclable Materials collected, sorted by type of Generator, in tons, by month, and
cumulative for report year.
o Complaint summary, for month and cumulative for report year.
o Narrative summary assessment of problems encountered and actions taken with
recommendations to City for improvement.
o Number of accounts by category for each month of reporting year.
o Participation rates.
o Recyclable Materials Container distribution.
o 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.
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
27 July 31, 1996
Residential Recycling Services Agreement
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.
9.3.1 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.
July 31, 1996 28
Residential Recycling Services Agreement
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.
29 July 31, 1996
Residential Recycling Services Agreement
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 and such failure is due in substantial part 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 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 nd 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, directors, and volunteers 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.
31 July 31, 1996
Residential Recycling Services Agreement
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)
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.
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 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
July 31, 1996 30
Residential Recycling Services Agreement
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, 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, employees or volunteers.
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 (3 0) 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 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.
July 31, 1996 32
Residential Recycling Services Agreement
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:
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, 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
33 July 31, 1996
Residential Recycling Services Agreement
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.
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. l are applicable.
11.3 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.
July 31, 1996 34
Residential Recycling Services Agreement
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
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.
35 July 31, 1996
Residential Recycling Services Agreement
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.
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
July 31, 1996 36
Residential Recycling Services Agreement
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.
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.
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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
0 For each failure over five (5) annually to commence service to
a new customer account within seven (7) days after order:
$150.00
0 For each failure over ten (10) annually to Collect Recyclable
Materials, which as been properly set out for Collection, from
an established customer account on the scheduled Collection day:
$150.00
0 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
0 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 Recyclable
Materials spilled from Bins:
$150.00
0 For each occurrence over five (5) annually of Collecting
July 31, 1996 38
Residential Recycling Services Agreement
Recyclable Materials during unauthorized hours: $250.00
O 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.
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
39 July 31, 1996
Residential Recycling Services Agreement
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, 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.
July 31, 1996 40
Residential Recycling Services Agreement
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.
41 July 31, 1996
Residential Recycling Services Agreement
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;
B. Contractor shall furnish City with audited financial statements of the proposed
assignee's operations for the immediately preceding three (3) operating years;
July 31, 1996 42
Residential Recycling Services Agreement
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
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.
43 July 31, 1996
Residential Recycling Services Agreement
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
955 Morro Street
San Luis Obispo, CA 93401
If to Contractor: Tom Martin
San Luis Garbage Company
970 Monterey Street
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.
July 31, 1996 44
Residential Recycling Services Agreement
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.
1344 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.
45 July 31, 1996
Residential Recycling Services Agreement
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 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.
July 31, 1996 46
I
Residential Recycling Services Agreement
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
( "City ")
en K. Settle,-.Mayor
Attest:
Cit lerk Bo ie L Gawf
Approved as to Form:
San Luis Garbage Company
("Contractor")
B /4
Name: v Tom Mart
Title: Controller
47 July 31, 1996
:.� -
Exhibit I
REEN WASTE SERVICES
AGREEMENT
CLJ
City of Son Luis Obispo
and
Son Luis Garbage Company
August 1996
A
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 3
ARTICLE 2. GRANT AND ACCEPTANCE OF AGREEMENT . . . . .
. . . . . 7
2.1
Grant and Acceptance of Agreement . . . . . . . . . . . . . . .
. . . . . 7
2.2
Effective Date . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 7
2.3
Term of Agreement . . . . . . . . . . . . . . . . . . . . . .
. . . . . 7
2.4
Option to Extend . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 7
2.5
Conditions to Effectiveness of Agreement . . . . . . . . . . . . .
. . . . . 7
2.6
Responsibilities of City . . . . . . . . . . . . . . . . . . . . .
. . . . . 8
ARTICLE 3. TERM OF AGREEMENT . . . . . . . . . . . . . . . .
. . . . . 9
3.1
Contractor Status . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 9
3.2
Contractor Authorization . . . . . . . . . . . . . . . . . . . .
. . . . . 9
3.3
Compliance with Laws and Regulations . . . . . . . . . . . .
. . . . . 9
3.4
Serve Without Interruption . . . . . . . . . . . . . . . . . . .
. . . . . 9
3.5
Permits and Licenses . . . . . . . . . . . . . . . . . . . . .
. . . . . 9
3.6
Preservation of City Property . . . . . . . . . . . . . . . . . .
. . . . . 9
ARTICLE 4. SCOPE OF AGREEMENT . . . . . . . . . . . . . . . .
. . . . . 10
4.1
Scope of Agreement . . . . . . . . . . . . . . . . . . . . .
. . . . . 10
4.2
Limitations to Scope . . . . . . . . . . . . . . . . . . . . . .
. . . . . 10
4.3
Administration of Agreement . . . . . . . . . . . . . . . . . .
. . . . . 10
4.4
Use of City Streets . . . . . . . . . . . . . . . . . . . . . .
. . . . . 11
4.5
Annexation . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 11
4.6
City Right to Request Changes . . . . . . . . . . . . . . . .
. . . . . 11
4.7
Ownership of Green Waste . . . . . . . . . . . . . . . . . . .
. . . . . 12
ARTICLES. DIRECT SERVICES . . . . . . . . . . . . . . . . . .
. . . . . 13
5.1
General . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 13
5.2
Residential Green Waste Services . . . . . . . . . . . . . . . .
. . . . . 13
5.3
Materials to be Collected . . . . . . . . . . . . . . . . . . . .
. . . . . 13
5.4
Refusal to Provide Collection Services . . . . . . . . . ... . . .
. . . . . 13
5.5
Christmas Tree Collection Program . . . . . . . . . . . . . . .
... . . . 14
5.6
End Uses for Green Waste . . . . . . . . . . . . . . . . . . .
. . . . . 14
5.7
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 14
5.8
Implementation Plan . . . . . . . . . . . . . . . . . . . . . .
. . . . . 16
5.9
Green Waste Processing . . . . . . . . . . . . . . . . . . . .
. . . . . 17
5.10
Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 18
U
ARTICLE 6. OTHER SERVICES . . . . . . . . . . . . . . . . . . . . .
. . . 19
6.1
Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 19
6.2
Collection of Bills from Delinquent Customers . . . . . . . . ... . .
. . . 19
6.3
Periodic Performance or Billing Audit . . . . . . . . . . . . . . . . .
. . 19
6.4
Customer Service . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 19
6.5
Education and Public Awareness . . . . . . . . . . . . . . . . . . .
. . 21
ARTICLE 7. PAYMENTS TO CITY . . . . . . . . . . . . . . . . . . . . .
. . 22
7.1
Franchise Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
7.2
AB 939 Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
7.3
Business License Tax . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
7.4
Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
7.5
Time and Method of Payment . . . . . . . . . . . . . . . . . . . . .
. . 22
7.6
Adjustment of Fees . . . . . . . . . . . . . . . . . . . . . . . . .
. . 22
7.7
Review of Fee Payments . . . . . . . . . . . . . . . . . . . . . . .
. . 22
ARTICLE
8. CONTRACTOR'S COMPENSATION AND RATES . .
. . 24
8.1
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
8.2
Contractor's Initial Compensation . . . . . . . . . . . . . . . . . .
24
8.3
Contractor's Compensation for Subsequent Rate Years . . . . . . . . .
. 24
8.4
Initial Rates . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
8.5
Subsequent Rates . . . . . . . . . . . . . . . . . . . . . . . .
25
8.6
Right to Perform Rate Reviews . . . . . . . . . . . . . . . . .
25
8.7
Extraordinary Adjustments . . . . . . . . . . . . . . . . . . . . . .
. . 25
ARTICLE 9. RECORDS, REPORTS AND INFORMATION, STUDIES AND
HEARING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . .
26
9.1
Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 26
9.2
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
9.3
Right to Inspect Records . . . . . . . . . . . . . . . . . . .
28
9.4
Waste Generation /Characterization Studies . . . . . . . . . . .
28
9.5
Performance Hearing . . . . . . . . . . . . . . . . . . . . . . . .
. . 28
ARTICLE 10. INDEMNIFICATION, INSURANCE AND BOND
10.1
Indemnification . . . . . . . . . . . . . . . . . . . . . . .
29
10.2
Landfill Diversion . . . . . . . . . . . . . . . . . . . . . .
29
10.3
AB 939 Indemnification . . . . . . . . . . . . . . . . . . . . .
. . 30
10.4
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . .
30
10.5
Faithful Performance Bond . . . . . . . . . . . . . . . . . . . . . .
. . 31
ARTICLE 11. CITY'S RIGHT TO PERFORM SERVICE . . . . . . . . . .
. 32
11.1
General . . . . . . . . . . . . . . . . . . . . . . . .
32
11.2
Temporary Possession of Contractor's Property . . . . . . . . . . . . .
. . 33
11.3
Billing and Compensation to City During City's
Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 33
U
11.4 City's Right to Relinquish Possession . . . . . . . . . . . . . . . . . . . 33
11.5 Duration of City's Possession . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 12. DEFAULT, REMEDIES AND LIQUIDATED DAMAGES . . . . . . 35
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.2 Right to Terminate Upon Default . . . . . . . . . . . . . . . . . . . . . 36
12.3 Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.4 Excuse from Performance . . . . . . . . . . . . . . . . . . . . . . . 38
12.5 Financial Material Errors, Omissions or Irregularities . . . . . . . . . . . . 39
ARTICLE 13. OTHER AGREEMENTS OF THE PARTIES . . . . . .
. . . . . . 40
13.1
Relationship of Parties . . . . . . . . . . . . . . . . . . . .
. . . . . . 40
13.2
Compliance with Law . . . . . . . . . . . . . . . . . . . .
. . . . . . 40
13.3
Governing Law . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 40
13.4
Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 40
13.5
Assignment . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . .40
13.6
Subcontracting . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 42
13.7
Binding on Assigns . . . . . . . . . . . . . . . . . . . . .
. . . . . . 42
13.8
Transition to Next Contractor . . . . . . . . . . . . . . . . .
. . . . . . 42
13.9
Parties in Interest . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 42
13.10
Waiver . . . . . . . . . . . . . . . . . .
. 43
13.11
Contractor's Investigation . . . . . . . . . . . . . . . . . .
. . . . . . 43
13.12
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 43
13.13
Representatives of the Parties . . . . . . . . . . . . . . . . .
. . . . . . 43
13.14
City Free to Negotiate with Third Parties . . . . . . . . . . . .
. . . . . . 44
13.15
Compliance with City Code . . . . . . . . . . . . . . . . . .
. . . . . . 44
13.16
Privacy . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 44
ARTICLE 14. MISCELLANEOUS AGREEMENTS . . . . . . . .
. . . . . . . . 45
14.1
Entire Agreement . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 45
14.2
Section Headings . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 45
14.3
References to Laws and Other Agreements . . . . . . . . .
. . . . . . . . 45
14.4
Interpretation . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 45
14.5
Agreement . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 45
14.6
Severability . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .45
14.7
Exhibit . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . .45
ifi
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
1996, 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 § 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 1995 and 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
August 7, 1996
Green Waste Services Agreement
5. The City declares its intention of maintaining reasonable rates and high quality service for the
Collection and processing of residential Green Waste; and
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,
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:
August 7, 1996
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, §
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 Green
Waste within and from the City.
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Green Waste Services Agreement
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 §9601 et sea.; the Resource Conservation and Recovery Act, 42
USC §6902 et sea.; the Federal Clean Water Act, 33 USC § 1251 et seg.; the Toxic Substances
Control Act, 15 USC § 1601 et sea.; the Occupational Safety and Health Act, 29 USC §651 et
sew.._; the California Hazardous Waste Control Act, California Health and Safety Code §25100 et
sec .; the California Toxic Substances Account Act, California Health and Safety Code §25300
et sea.; the Safe Drinking Water and Toxic Enforcement Act, California Health and Safety Code
§25249.5 et seg.; 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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Green Waste Services Agreement
environment, or as defined in Article 2, Chapter 6.5 §25117 of the Health and Safety Code and
Public Resources Code §40141.
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.
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.
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Green Waste Services Agreement
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.
August 7, 1996 12
Green Waste Services Agreement
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.
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Green Waste Services Agreement
5.5 Christmas Tree Collection Program
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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Green Waste Services Agreement
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 July 1, 1996. 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,
August 7, 1996 16
Green Waste Services Agreement
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
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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Green Waste Services Agreement
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 July 1, 1996, 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
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
17 August 7, 1996
Green Waste Services Agreement
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.
August 7, 1996 18
Green Waste Services Agreement
ARTICLE 6
OTHER SERVICES
6.1 Billin
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.
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 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
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Green Waste Services Agreement
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 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.
6.4.3 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.
August 7, 1996 20
Green Waste Services Agreement
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.
21 August 7, 1996
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Green Waste Services Agreement
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 six percent (6 %) of its gross revenues for Green Waste Collection services. 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
(1%) 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
August 7, 1996 22
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Green Waste Services Agreement
0
reviews will be an allowable cost under the rate setting methodology unless there are findings
pursuant to Section 12.5
23 August 7, 1996
Green Waste Services Agreement
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 . Contractor's Initial Compensation
Contractor's compensation for performance of all its responsibilities and duties for curbside
recycling required by this Agreement for the first and second years of this Agreement shall not
exceed the compensation identified in the Request for Proposal ($217,608 - Year 1; $219,412 -
Year 2).
8.3 Contractor's Compensation for Subsequent Rate Years
Contractor's compensation for performance of all its responsibilities and duties in subsequent
years of this Agreement will be set using the guidelines and approach outlined in the City's "Rate
Setting Process and Methodology Manual for Integrated Solid Waste Management Rates ".
Profit to the Contractor is allowed in the rate base, and is based on a targeted operating ratio of
92 percent on allowable costs, with a range of between 90 and 94 percent. In the base year, if
rates would remain unchanged at an operating ratio within the range of 90 to 94 percent, and the
company actually realized an operating ratio within this range, then that same operating ratio
resulting in no rate change will be used, and no rate change will occur. Otherwise, a 92 percent
operating ratio will be used for the base year calculation.
8.4 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
August 7, 1996 24
Green Waste Services Agreement
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.
8.5 Subseauent 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 ".
8.6 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.
8.7 Extraordinary Adjustments
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 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.
25 August 7, 1 996
Green Waste Services Agreement
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.
August 7, 1996 26
Green Waste Services Agreement
$-
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:
O 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 (GARS) 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.
27 August 7, 1996
Green Waste Services Agreement
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.
9.3.1 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 impacts on
rates; and (2) any specific plans for provision of changed or new services by Contractor.
August 7, 1996 28
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Green Waste Services Agreement
!I
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)
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.
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 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 objectives. Upon termination, the Contractor shall be entitled only to
29 August 7, 1996
Green Waste Services Agreement
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 and such failure is due in substantial part 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 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, directors, and volunteers 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.
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, employees or volunteers shall be excess of Contractor's
insurance and shall not contribute with it.
August 7, 1996 30
Green Waste Services Agreement
c) Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officials, employees or volunteers.
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.
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.
31 August 7, 1996
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Green Waste Services Agreement
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:
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 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.
August 7, 1996 32
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Green Waste Services Agreement
W
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 Citv'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
33 August 7, 1996
Green Waste Services Agreement
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.
August 7, 1996 34
Green Waste Services Agreement
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.
August 7, 1996 6
Green Waste Services Agreement
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 July 1, 1996.
2.3 Term of Agreement
The term of this Agreement shall be five (5) years commencing at 12:01 a.m.,
and expiring at midnight , 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
August 7, 1996
Green Waste Services Agreement
the conditions set out in this Section 2.5 below, each of which may be waived in whole or in part
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.
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.
August 7, 1996 8
Green Waste Services Agreement
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.
9 August 7, 1996
Green Waste Services Agreement
ARTICLE 4
SCOPE OF AGREEMENT
4.1 Scone 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 Scone
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.
August 7, 1996 10
Green Waste Services Agreement
4.4 Use of City Streets
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.
O 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 date
when City first requests a proposal from Contractor to perform such services, Contractor
1 l August 7, 1996
A
Green Waste Services Agreement
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 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
35 August 7, 1996
Green Waste Services Agreement
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. 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 (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.
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.
August 7, 1996 36
Green Waste Services Agreement
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 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 Reliability and Oualitv
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 Green 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 Green 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
• For each occurrence of discourteous behavior: $250.00
• For each failure over ten (10) annually to clean up
Green waste spilled from Bins: $150.00
37 August 7, 1996
Green Waste Services Agreement
o For each occurrence over five (5) annually of Collecting
Green Waste during unauthorized hours: $250.00
O 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:
Annual Reports:
For each infraction
For each infraction
$100 per day
$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
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
August 7, 1996 38
Green Waste Services Agreement
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 IrreL7ularities
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.
39 August 7, 1996
Green Waste Services Agreement
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.
August 7, 1996 40
Green Waste Services Agreement
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 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;
41 August 7, 1996
Green Waste Services Agreement
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
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 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 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.
August 7, 1996 42
Green Waste Services Agreement
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
955 Morro Street
San Luis Obispo, CA 93401
If to Contractor: Tom Martin
San Luis Garbage Company
970 Monterey Street
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.
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
43 August 7, 1996
Green Waste Services Agreement
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 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.
August 7, 1996 44
Green Waste Services Agreement
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 A reements
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 Severabilitv
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.
45 August 7, 1996
Green Waste Services Agreement
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
(11Cityll)
By
Allen K. Settle,. -Mayor
Attest:
POP
clerk rBerawf
Approved as to Form:
I m �
August 7, 1996 46
San Luis Garbage Company
( "Contractor ")
B
Name: Tom Martin
Title: Controller