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ORDINANCE NO. 1319 (1997 SERIES)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO
GRANTING A FIFTEEN YEAR FRANCHISE TO SAN LUIS GARBAGE
COMPANY FOR COLLECTING, PROCESSING AND DISPOSING OF SOLID
WASTE WITHIN THE CITY OF SAN LUIS OBISPO
WHEREAS, public health and safety demand the orderly and periodic collection and
disposal of solid waste from properties with the City of San Luis Obispo (City); and
. WHEREAS, the City has determined that an exclusive franchise granted to a private
company is the most effective and efficient way to collect and remove solid waste within the City;
and
WHEREAS, the current franchisee, San Luis Garbage Company, has provided solid waste
collection and disposal service within the City for more than 45 years without interruption; and
WHEREAS, continuing the franchise held by San Luis Garbage Company would ensure the
continuation of effective and efficient solid waste collection, processing and disposal service;
BE IT ORDAINED by the City Council of the City of San Luis Obispo as follows:
SECTION 1. An exclusive franchise shall be granted San Luis Garbage Company for
services to collect, process and dispose of solid waste subject to the terms and conditions presented
in Exhibit 1, Solid Waste Franchise Agreement.
SECTION 2. Ordinance No. 1177 (1990 Series) shall be repealed upon the effective date of
this ordinance.
SECTION 3. 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 4th day of D7arch on motion of
Council Member Romero seconded by Council member Williams and on
the following roll call vote:
AYES: Council Members Romero, Williams, Smith and Mayor Settle
NOES: Vice Pryor Roalman
ABSENT: None
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ATTEST:
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APPROVED AS TO FORM:
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Mayor Allen Settle
Ordinance No. 1319 (1997 Series)
FINALLY PASSED this 25th day of March, 1997, on motion of Council
Member Romero, seconded by Council Member Williams, and on the following roll call
vote:
AYES: Council Members Romero, Williams, Smith and Mayor Settle
NOES: Vice Mayor Roalman
ABSENT: None
Mayor Allen K. Settle
ATTEST:
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Clerk Bo L. awfG
Franchise Agreement - Solid Waste
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS .................................................................................. ............................... 5
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE FRANCHISEE .................. 9
2.1 Corporate Status .............................................................................................. ............................... 9
2.2 Corporate Authorization ................................................................................. ............................... 9
2.3 Compliance with Laws and Regulations .......................................................... ............................... 9
2.4 Financial Representation ................................................................................. ............................... 9
2.5 Absence of Litigation ...................................................................................... ............................... 9
ARTICLE 3. TERM OF AGREEMENT ........................................................... ............................... 10
3.1 Effective Date .............................................................................:.................. ............................... 10
3.2 Term of Agreement ....................................................................................... ............................... 10
3.3 Option to Extend ........................................................................................... ............................... 10
3.4 Conditions to Effectiveness of Amendment ................................................. ............................... 10
ARTICLE 4. SCOPE OF AGREEMENT------------ ------------------------- - - - - -- ------- - - - - -- ------------------- - - - - -- t t
4.1
Grant and Acceptance of Exclusive Franchise for Solid Waste Collection and Disposal ............
11
4.2
Limitations to Scope ..................................................................................... ...............................
11
4.3
Administration of Franchise ......................................................................... ...............................
12
4.4
Serve Without Interruption ........................................................................... ...............................
12
4.5
Permits and licenses ...................................................................................... ...............................
12
4.6
Preservation of City Property ........................................................................ ...............................
12
4.7
Franchise as Arranger ....................................................................................... .............................12
5.7
4.8
Use of City Streets ............................................................................................ .............................12
5.8
4.9
Annexations ....................................................................................................... .............................12
5.9
4.10 Ownership of Solid Waste ................................................................................. .............................13
ARTICLE 5. DIRECT SERVICES ..................................................................... ...............................
14
5.1
General .......................................................................................................... ...............................
14
5.2
Single Family Residential Solid Waste Collection Service ........................... ...............................
14
5.3
Other Solid Waste Solid Waste Collections Service .................................... ...............................
14
5.4
Public Facilities Collection ........................................................................... ...............................
15
5.5
Missed Pick- up ............................................................................................. ...............................
15
5.6
Bulky Waste Collection ................................................................................. ...............................
15
5.7
Semi Annual Clean-up Weeks ...................:................................................... ...............................
15
5.8
City's Right to Request Changes ....................................................................... .............................16
5.9
Report Accumulation of Solid Waste; Unauthorized Dumping ....................... .............................16
5.10
City directed Removal of Solid Waste .............................................................. .............................16
5.11
Processing of Solid Waste ................................................................................ .............................17
5.12
Designated Disposal Facility ..........................................................:................. .............................17
5.13
Hazardous Waste Handling and Disposal ......................................................... .............................17
ARTICLE 6. COLLECTION SERVICE STANDARDS .................................... ............................... 19
6.1 Operations ...................................................................................................... ............................... 19
6.2 Service Complaints ........................................................................................ ............................... 21
6.3 Periodic Performance Audit .............................................................................. .............................22
6.4 Performance Hearing ........................................................................................ .............................22
1 February 20, 1997
a
F
City of San Luis Obispo
Solid Waste
Franchise
An agreement with
San Luis Garbage Company
Franchise solia Waste
ARTICLE 7. OTHER SERVICES: BILLING, REPORTING, RECORD-KEEPING AND
PUBLIC EDUCATION -----------------------------------------23
7.1
Billing --------------------..-.-----------------------73
7.2
Responsible ----------------.---------------23
7.3
Collection of Bills from Delinquent Cootomeru-------------------------.
23
7/4
Records ......................................................................... .................................................................
23
7.5
Waste S1udieu---------------------------..
24
7.6
Report Formats and Schedule ........................................................................................................
24
7.7
Monthly Reports ------------------------------------..----...
25
7.0
Quarterly Report ---------..-------------------------------.25
7.9
Annual Financial Audit --------------------------------------25
7.lUy�uintcoaoueof
Accounting Records .............................................................................................
26
7.11
Right to Audit Records ---------------------------------_____26
7.12
Inspection bv City ..........................................................................................................................
26
7]]
Office .............................................................................................................................................
26
7.l4
Customer Information ....................................................................................................................
2G
7.15
Regulatory Reporting --------------------------------------...
27
7.16
Public Education ---------------.-------------------------..27
7.l7
Records Retention ..........................................................................................................................
27
ARTICLE 8. PAYMENTS ][O CITY ....................................................................................................
28
d.]
Franchise Fee Payment ----------------------------.----.-----2Q
8-2
Schedule of Payment -------------------.-------------------..28
8.3
ABQ3Q Fee Amount .....................................................................................................................
28
0/4
Other Fees -----------.------------------------------.--..28
8.5
Time and Method of Payments ----------------------------------28
8.6
Review of Fee -------------------------------------.2@
8.7
Business License Tax .....................................................................................................................
28
ARTICLE 9. SERV ICE RATES AND REVIEW ...............................................................................
29
4.1
General ..........................................................................................................................................
29
9.2
Service Rates .................................................................................................................................
2A
9.3
Rate Review ..................................................................................................................................
2g
9.4
Special Interim Rate Review ........................................................................................................
2Q
9.5
Allowable Profi1.............................................................................................................................
?Q
9.6
Publication of Rates .......................................................................................................................
30
ARTICLE 10. INDEMNITY, INSURANCE AND BOND ..................................................................
3l
//\/
Indemnification ------..----------------------------_-----..3l
lU2Insurance
.......................................................................................................................................
3l
lO.3
Performance Bond ........................................................................................................................
33
ARTICLE DD. CITY'S RIGHT TO PERFORM SERVICE--------------------..
34
lLlGeneral
...........................................................................................................................................
34
11.2
_________.____________..___35
11.3
Billing City's Possession .........................................................
]5
11/4
------------------------------.]5
}}.5
Duration of City's Possession ........................................................................................................
]5
ARTICLE 12. DEFAULT AND REMEDIES ......................................................................................
36
l2.}
Events of Default ..........................................................................................................................
36
l22
Right ---------'------------..]7
12.3
Possession of Property, Billing Records and Systems Upon Termination ...................................
37
12.4
City's Remedies Cumulative; Specific Performance
2 March 24,1997
Franchise Agreement - Solid Waste
TABLE OF CONTENTS
ARTICLE1. DEFINITIONS .................................................................................. ............................... 5
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE FRANCHISEE .................. 9
2.1
Corporate Status .............................................................................................. ...............................
9
2.2
Corporate Authorization ................................................................................. ...............................
9
2.3
Compliance with Laws and Regulations .......................................................... ...............................
9
2.4
Financial Representation ................................................................................. ...............................
9
2.5
Absence of Litigation ...................................................................................... ...............................
9
ARTICLE
3. TERM OF AGREEMENT ........................................................... ...............................
10
3.1
Effective Date ................................................................................................ ...............................
10
3.2
Term of Agreement ....................................................................................... ...............................
10
3.3
Option to Extend ........................................................................................... ...............................
10
3.4
Conditions to Effectiveness of Amendment ................................................. ...............................
10
ARTICLE 4. SCOPE OF AGREEMENT ........................................................... ...............................
11
4.1
Grant and Acceptance of Exclusive Franchise for Solid Waste Collection and Disposal ............
11
4.2
Limitations to Scope ..................................................................................... ...............................
11
4.3
Administration of Franchise ......................................................................... ...............................
12
4.4
Serve Without Interruption ........................................................................... ...............................
12
4.5
Permits and licenses ...................................................................................... ...............................
12
4.6
Preservation of City Property ........................................................................ ...............................
12
4.7
Franchise as Arranger ....................................................................................... .............................12
4.8
Use of City Streets ............................................................................................ .............................12
4.9
Annexations ....................................................................................................... .............................12
4.10
Ownership of Solid Waste ................................................................................. .............................13
ARTICLE 5. DIRECT SERVICES ...........................:......................................... ...............................
14
5.1
General .......................................................................................................... ...............................
14
5.2
Single Family Residential Solid Waste Collection Service ........................... ...............................
14
5.3
Other Solid Waste Solid Waste Collections Service .................................... ...............................
14
5.4
Public Facilities Collection ........................................................................... ...............................
15
5.5
Missed Pick-up .............................................................................................................................
15
5.6
Bulky Waste Collection ................................................................................. ...............................
15
5.7
Semi Annual Clean-up Weeks ....................................................................... ...............................
15
5.8
City's Right to Request Changes ....................................................................... .............................16
5.9
Report Accumulation of Solid Waste; Unauthorized Dumping ....................... .............................16
5.10
City directed Removal of Solid Waste .............................................................. .............................16
5.11
Processing of Solid Waste ................................................................................ .............................17
5.12
Designated Disposal Facility ............................................................................ .............................17
5.13
Hazardous Waste Handling and Disposal ......................................................... .............................17
ARTICLE
6. COLLECTION SERVICE STANDARDS .................................... ...............................
19
6.1
Operations ...................................................................................................... ...............................
19
6.2
Service Complaints ........................................................................................ ...............................
21
6.3
Periodic Performance Audit .............................................................................. .............................22
6.4
Performance Hearing ........................................................................................ .............................22
1 March 24,1997
franchise Agreement - Solid Waste
12.5 Excuse from Performance ................................................................................. .............................37
12.6 Liquidated Damages ......................................................................................... .............................38
12.7 Notice, Hearing and Appeal .............................................................................. .............................40
12.8 Financial Material Errors, Omissions or Irregularities ..................................... .............................41
ARTICLE 13. ASSIGNMENT
13.1 Assignment ........................................................................................................ .............................42
ARTICLE 14. OTHER AGREEMENTS OF THE PARTIES ............................... .............................44
14.1
Relationship of Parties .................................................................................. .............................44
14.2
Governing Law ............................................................................................... .............................44
14.3
Jurisdiction .................................................................................................... .............................44
14.4
Subcontracting ............................................................................................... .............................44
14.5
Interests of Franchisee ................................................................................... .............................44
14.6
Binding on Successors ............................:..................................................... .............................44
14.7
Transition to Next Franchisee ....................................................................... .............................44
14.8
Parties in Interest ........................................................................................... .............................45
14.9
Waiver ........................................................................................................... .............................45
14.10
Condemnation ................................................................................................ .............................45
14.11
City Free to Negotiate with Third Parties ..................................................... .............................45
14.12
Immigration Act of 1986 ............................................................................... .............................45
14.13
Non- Discrimination ....................................................................................... .............................45
14.14
Public and Employee Safety .......................................................................... .............................45
14.15
Recycled Products ......................................................................................... .............................45
14.16
Notice ..............................:............................................................................. .............................45
14.17
Representatives of the Parties ........................................................................ .............................46
14.18
Entire Agreement ....................................................................................... ...............................
46
14.19
Section Headings ........................................................................................... .............................46
14.20
References to Laws .................................................................................... ...............................
46
14.21
Interpretation .............................................................................................. ...............................
46
14.22
Amendment ................................................................................................... .............................46
14.23
Severability ................................................................................................... .............................47
14.24
Counterparts .................................................................................................. .............................47
14.25
Use of "Will" .............................................................................................. ...............................
47
14.26
Surviving Provisions ..................................................................................... .............................47
14.27 Investigations ................................................................................................... .............................47
APPENDICES
Appendix I- Landfill Disposal Capacity Agreement
Appendix II- Container Replacement Guidelines
Appendix III -City Solid Waste Collection Services
March 24, 1997
Franchise Agreement - Solid Waste
FRANCHISE AGREEMENT
BETWEEN
THE CITY OF SAN LUIS OBISPO
AND
SAN LUIS GARBAGE COMPANY
For Collection, Diversion, and Disposal of Solid Waste
Within the City of San Luis Obispo
This Agreement is made and entered into as of the 23rd day of April, 1997 in the State of California by
and between the City of San Luis Obispo, a Charter Municipal Corporation of the State of California,
(hereinafter the "City ") and San Luis Garbage Company, Inc., a California corporation (hereafter
referred to as the "Franchisee ").
RECITALS
This Agreement is entered into with reference to the following facts and circumstances:
1. The Legislature of the State of California, by enactment of California Integrated Waste Management
Act of 1989, Division 30 of the California Public Resources Code, commencing with Section 40000
(CIWMA), declares that it'is within the public interest to authorize and require local agencies to
make adequate provisions for solid waste handling within their jurisdictions. The law, AB 939
requires a 50 percent reduction in the amount of waste which is landfilled by 2000; and
2. The City has authority to grant a franchise for collection, diversion, and disposal of solid waste
within the City of San Luis Obispo pursuant to City Charter Article X and Chapter 8.04 of the San
Luis Obispo Municipal Code; and
3. The City Council has determined that solid waste, including discards from residential and non-
residential properties, must be regulated to protect public health, safety and welfare; to conserve
landfill disposal capacity; and to develop and maintain effective resource management programs;
and
4. The City Council has determined that all occupied developed properties in the City must participate
in the City's solid waste collection and disposal service; and
5. The City Council has determined that an exclusive franchise granted to a private company is the
most effective and efficient way to collect and remove solid waste within the City; and
6. The City Council has determined that the Franchisee can provide needed solid waste services; and
7. Franchisee is responsible for arranging for solid waste collection and disposal service, and an
appropriate landfill destination for collected solid waste; and
8. Upon passage by the City Council, Ordinance 1319, pursuant to the authority granted by City
Charter Article X and Chapter 8.04 of the San Luis Obispo Municipal Code; and
9. This Agreement has been developed by and is satisfactory to the parties.
NOW, THEREFORE, for and in consideration of the mutual promises herein contained, it is
hereby agreed by and between the City and Franchisee as follows:
4 April 2,1997
Franchise Agreement - Solid Waste
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, unless a different meaning is clearly required, the following terms shall
have the following meanings:
1.1 "AB 939" means the California Integrated Waste Management Act of 1989, as it may be
amended from time to time.
1.2 "Affiliate" means all businesses (including corporations, limited and general partnerships,
and sole proprietorships) which are directly or indirectly related to Franchisee by virtue of a
common ownership interest or common management shall be deemed to be "Affiliated with"
Franchisee and included within the term "Affiliate" as used herein. An Affiliate shall include
a business in which Franchisee owns a direct or indirect ownership interest, a business which
has a direct or indirect ownership interest in Franchisee and /or a business which is also
owned, controlled or managed by any business or individual which has a direct or indirect
ownership interest in Franchisee. For purposes of determining whether an indirect ownership
exists, the constructive ownership provisions of Section 318(a) of the Internal Revenue Code
of 1986, as in effect the date of this Agreement, Shall apply; provided, however, that (i) "ten
percent (10 %)" shall be substituted for "fifty percent (50 %)" in Section 318(a)(2)(C) and in
Section 318(a)(3)(C) thereof; and (ii) Section 318(a)(5)(C) shall be disregarded. For
purposes of determining ownership under this paragraph and constructive or indirect
ownership under Section 318(a), ownership interest of less than ten percent (10 %) shall be
disregarded and percentage interests shall be determined on the basis of the percentage of
voting interest or value which the ownership interest represents, whichever is greater.
1.3 "Agreement" means this agreement the between the City and Franchisee for arranging for
the collection, diversion, and disposal of solid waste, and collection and any future
amendments hereto.
1.4 "Arranger" means any person that arranges for the collection, diversion, transfer, burning,
disposal or processing of any solid waste.
1.5 "Bulky Waste" means discarded, large household appliances, furniture, tires, carpets,
mattresses, and similar large items which require special handling due to their size, but can
be collected without the assistance of special loading equipment (such as forklifts or cranes)
and without violating vehicle load limits. It does not include abandoned automobiles.
1.6 "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.0 Section 9601, et seq.
1.7 "City" means the City of San Luis Obispo, a Charter municipal corporation, and all the
territory lying within the municipal boundaries of the City as presently existing or as such
boundaries may be modified during the term of this Agreement.
1.8 "Collect" or "Collection" means to take physical possession of, transport, and remove Solid
Waste within and from the City.
1.9 "Commercial and Industrial Property" means property upon which business activity is
conducted, including, but not limited to, retail sales, services, wholesale operations,
manufacturing and industrial operations, but excluding businesses conducted upon residential
properties which are permitted under applicable zoning regulations and are not the primary
use of the property.
1.10 "Construction Debris" means used or discarded construction materials removed from a
March 24, 1997
Franchise Agreement - Solid Waste
premises during the construction, repair or renovation of a structure.
1.11 "Container" means any bin, vessel, can or receptacle used for collecting and storing solid
waste before removal.
1.12 "Demolition Debris" means used construction materials removed from a premises during
the razing or renovation of a structure.
1.13 "Designated Collection Location" means the place where an authorized recycling agent or
a solid waste collector has contracted with either the City or a private entity to collect solid
waste.
1.14 "Disposal Site(s)" means any properly licensed and permitted solid waste facility or
facilities arranged by Franchisee after consultation with City for the ultimate disposal of solid
waste collected by Franchisee.
1.15 "Designated Processing Facility" means any properly licensed and permitted plant or site
used for the purpose of sorting, cleansing, treating, reconstituting, processing and marketing
recyclable materials, which has been arranged by Franchisee after consultation with City.
1.16 "Disposal' means the ultimate disposition of solid waste collected by Franchisee at a landfill
in full regulatory compliance or other fully permitted disposal site.
1.17 "Facility" means any plant or site, owned or leased and maintained and /or operated or used
by Franchisee for purposes of performing under this Agreement.
1.18 "Franchise" means the special right granted by the City of San Luis Obispo to operate a
solid waste collection company providing such services within the City.
1.19 "Franchisee" means San Luis Garbage Company, a corporation organized and operating
under the laws of the State of California, and its officers, directors, employees, agents,
companies.
1.20 "Full Regulatory Compliance" means compliance with all applicable permits for a facility
and with other applicable regulations such that the Franchisee will at all times maintain the
ability to fully comply with its obligations under this Agreement.
1.21 "Green Waste" means tree trimmings, grass cuttings, dead plants, leaves, branches and dead
trees ( no more than six (6) inches in diameter) and similar materials generated at the
premises.
1.22 "Gross Revenues" means the sum of the cash receipts derived by Franchisee from customer
billings for solid waste collection services and orange bag sales provided in the City.
1.23 "Hazardous Waste" is as defined in Article 2, Chapter 6.5, Section 25117 of the Health and
Safety Code and Public Resource Code Section 40141. For the purposes of this Agreement,
however, hazardous waste shall not include Household Hazardous Waste which may be
contained in solid waste.
1.24 "Household Hazardous Waste" means hazardous waste generated at residential premises.
1.25 "Interruption of Service" means (a) any period during which Franchisee's operations are
diminished or discontinued by circumstances beyond its control, or (b) any period during
which operations are diminished or discontinued as a result of any breach of the Agreement
March 24,1997
Franchise Agreement - Solid Waste
by Franchisee or (c) any period after the City has terminated the franchise and until the City
can reasonably acquire other suitable service and/or enter into a new franchise agreement.
1.26 "Materials Recovery Facility" means a permitted Facility where solid wastes are sorted or
separated for the purposes of recycling or reuse.
1.27 "Medical Waste" means biohazardous waste, sharp wastes, waste which is generated or
produced as a result of the diagnosis, treatment or immunization of human beings or animals,
in research pertaining thereto, or in the production or testing of biological products, pursuant
to California Health and Safety Code, Section 25023.2.
1.28 "Multi- Family Dwelling Unit" means any premises, other than a single family dwelling
unit, used for residential purposes, irrespective of whether residence therein is transient,
temporary or permanent.
1.29 "Occupied" means when a person or persons has taken or is /are holding possession of a
premises for temporary or permanent use. For the purpose of determining whether a
premises was occupied during periods when solid waste collection service was available to
such premises, the premises shall be presumed to have been so occupied unless evidence is
presented that no gas, electric, telephone or water utility services were consumed on such
premises during such periods or such other evidence is presented to the satisfaction of the
City Administrative Officer.
1.30 "Owner" means the person or persons record title to the property constituting the premises
to which solid waste collection service is to be provided under this Agreement or the person
holding legal .title to a facility used by Franchisee under this Agreement.
1.31 "Person" means any individual, firm, association, organization, partnership, corporation,
business trust, joint venture, the United States, the State of California, the County of San Luis
Obispo, local agencies and special purpose districts.
1.32 "Premises" means any land, or building where solid waste is generated or accumulated.
1.33 "Recyclable Materials" means residential and non - residential by- products or discards of
economic value which include, but are not limited to, aluminum, glass, paper, plastic, metal,
and green or woody debris.
1.34 "Related Party Entity" means any affiliated entity which has financial transactions with the
Franchisee.
1.35 "Residential Property" means property used for residential purposes, irrespective of
whether such dwelling units are rental units or are owner- occupied, and includes both single
family and multi - family dwelling units.
1.36 "Rubbish" means all waste wood, wood products, printed materials, paper, paste board,
rages, straw, used and discarded clothing, packaging materials, ashes, floor sweepings, glass
and other materials not included in the definition of Garbage, Hazardous Substance, or
Recyclable Materials.
1.37 "Single Family Dwelling Unit" means each premises used for or designated as a single
family residential dwelling, including each unit of a duplex or triplex in all cases in which
there is separate or individual solid waste collection service.
1.38 "Solid Waste" means all putrescible and non - putrescible residential refuse, commercial
7 March 24, 1997
Franchise Agreement - Solid Waste
solid waste, institutional solid waste, garbage, recyclable material, yard waste, and rubbish,
and as otherwise defined in Public Resources Code §40191. Solid waste which is not
required to be collected includes:
(a) Demolition and construction debris which are not offered by persons performing the
work and which may be legally collected and disposed of by some alternate means;
(b) Recyclable materials separated from solid waste by the waste generator and for which
waste generator sells or is otherwise compensated by a collector in a manner resulting
in a net payment to the Waste generator;
(c) Recyclable materials separated from solid waste by the waste generator and which the
waste generator donates to a charitable organization such as the Boy Scouts;
(d) Materials removed by householders or occupants and transported by them to disposal
facilities or recycling centers;
(e) Residential recyclable materials source separated by the waste generator for the
purposes of scheduled collection with the recyclable materials collection Franchisee.
1.39 "Term" means the term of the Agreement, as provided for in Article 3.
1.40 "Waste Generator" means any person as defined by the Public Resources Code, whose act
or process produced solid waste as defined in the Public Resources Code, or whose act first
causes solid waste to become subject to regulation.
March 24, 1997
Franchise Agreement - Solid Waste
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE FRANCHISEE
2.1 Corporate Status
Franchisee is a corporation duly organized, validly existing and in good standing under the
laws of the State of California. It is qualified to transact business in the State of California
and has the corporate power to own its properties and to carry on its business as now owned
and operated and as required by this Agreement.
2.2 Corporate Authorization
Franchisee has the authority to enter into and perform its obligations under this Agreement.
The Board of Directors of Franchisee (or shareholders if necessary) have taken all actions
required by law, its articles of incorporation, its bylaws or otherwise to authorize the
execution of this Agreement. The persons signing this Agreement on behalf of Franchisee
have authority to do so.
2.3 Compliance with Laws and Regulations
Franchisee shall comply with all existing and future City, County, other local agencies, State,
and Federal laws and regulations with particular note of Article X of the City Charter and
Chapter 8.04 of the City Municipal Code.
2.4 Financial Representation
Franchisee represents that it has the financial ability to full perform its obligations as set forth
in this Agreement.
2.5 Absence of Litigation
Franchisee represents that there are no suits or threatened suits which would impair the
financial or legal ability of Franchisee to perform its obligations under this Agreement and
that the entering into this Agreement by Franchisee will not in any was constitute a breach of
any other agreement entered into by Franchisee with other parties, or constitute a violation of
any law.
March 24,1997
Franchise Agreement - Solid Waste
ARTICLE 3. TERM OF AGREEMENT
3.1 . Effective Date
The effective date of this Agreement shall be April 23, 1997 ( "Effective Date ").
3.2 Term
The term of this Agreement shall be fifteen years, commencing at 12:01 a.m., April 23, 1997,
and expiring at midnight, April 23, 2012, subject to extension as provided in paragraph 3.3
(Option to Extend).
The City Council may elect to renew this franchise at any time during the three year period
prior to the end of the franchise.
3.3 Option to Extend .
The City shall have the sole option to extend this Agreement up to 36 months in periods of at
least twelve (12) months each. If City elects to exercise this option, it shall give written
notice not later than ninety (90) days prior to the initial termination date, or, if one extension
has been exercised, ninety (90) days prior to the extended termination date.
3.4 Conditions to Effectiveness of Amendment
The obligation of City to permit this Agreement to become effective and to perform its
undertakings provided for in this Agreement is subject to the satisfaction of each and all of
the conditions set out below, each of which may be waived in whole or in part by the City, in
its sole direction.
(1) Accuracy of Representations. The representations and warranties made by
Franchisee in Article 2 of this Agreement are true and correct on and as of the
effective date.
(2) Effectiveness of City Council Action. The City's Ordinance No. 1319, approving
this Agreement, shall have become effective pursuant to California law on or prior to
the effective date.
10 April 2,1997
Franchise Agreement - Solid Waste
ARTICLE 4. SCOPE OF AGREEMENT
4.1 Grant and Acceptance of Exclusive Franchise for Solid Waste Collection and Disposal
Subject to paragraphs 3.4 (Conditions to Effectiveness of Agreement) and 4.2 (Limitations to
Scope), this Agreement grants the Franchisee the exclusive right to arrange for the collection,
processing, diversion and disposal of Solid Waste from residential and non - residential
properties placed in the designated collection location for regular or scheduled collection in
accordance with the City's Municipal Code and Ordinances, except where otherwise
precluded by law. Franchisee accepts the grant of the Franchise under the terms and
conditions as set forth in this Agreement. Franchisee agrees to perform and be bound by
each of the conditions proposed in the grant and by procedural ordinance and the
requirements of Acceptance on file with the City Clerk's office (Article X of the City Charter,
Section 1006, Duties of Grantee).
4.2 Limitations to Scone
This Agreement for the collection, processing, diversion and disposal of Solid Waste from
residential and non - residential properties shall be exclusive except as to the following
categories of solid waste, which the Franchisee may, but shall not be obligated to collect,
transfer, process, divert or dispose of:
A. To the extent allowable by law, all residential recyclable materials whether
1. source separated by the waste generator for the purpose of placing for
scheduled collection with the recycling collection franchisee, or
2. separated from solid waste by the waste generator and which the waste
generator either donates to a charitable organization, or sells or is otherwise
compensated by a collector in a manner resulting in a net payment to the waste
generator; or
3. separated at any premises and transported by the owner or occupant of such
premises (or by his or her full -time employees) to a processing facility.
B. All green waste material whether
1. source separated by the waste generator for the purpose of placing for
scheduled collection with the green waste collection franchisee, or
2. separated from solid waste by the waste generator and which the waste
generator either donates to a charitable organization, or sells or is otherwise
compensated by a collector in a manner resulting in a net payment to the waste
generator; or
3. separated at any premises and transported by the owner or occupant of such
premises (or by his or her full -time employees) to a processing facility.
4. Green waste removed from a premises by a gardening, landscaping, or tree
trimming company as an incidental part of a total service offered by that
company rather than as a hauling service;
C. Animal waste and remains from slaughterhouse or butcher shops;
D. By- products of sewage treatment, including sludge, sludge ash, grit and screening;
E. Hazardous waste, liquid waste and medical waste.
Franchisee acknowledges and agrees that City may permit other persons besides Franchisee
to collect any or all types of the solid waste listed in paragraph 4.2 without seeking or
obtaining approval of Franchisee under this Agreement.
This grant to Franchisee of an exclusive Franchise, right and privilege to collect, transfer,
11 March 24,1997
Franchise Agreement - Solid Waste
process, divert and dispose of Solid Waste shall be interpreted to be consistent with state and
federal laws, now and during the term of this Franchise, and the scope of this exclusive
franchise shall be limited by current and developing state and federal laws with regard to
solid waste handling, exclusive franchise, solid waste flow control, and related doctrines.
In the event that future interpretations of current law, enactment or developing legal trends
limit the ability of the City to lawfully provide for the scope of Franchise services as
specifically set forth herein, Franchisee agrees that the scope of the Franchise will be limited
to those services which may be lawfully provided for under this Agreement. Further, the
Franchisee agrees that the City shall not be responsible for any lost profits or damages
claimed by the Franchisee to arise out of further limitations of the scope of the Agreement set
forth herein. It shall be the responsibility of Franchisee to minimize the financial impact to
other services being provided.
4.3 Administration of Franchise
The City Administrative Officer shall administer the City's solid waste franchise and the
City's Utility Director shall supervise Franchisee's compliance with the Agreement's terms
and conditions.
4.4 Serve Without Interruption
Franchisee shall continue to collect and dispose of solid waste throughout the term of its
franchise without interruption.
4.5 Permits and Licenses
Franchisee shall procure all permits and licenses, pay all charges and fees, and give all
notices as necessary.
4.6 Preservation of Qjy Property
Franchisee shall pay to the City, on demand, the cost of all repairs to public property made
necessary by any of the operations of Franchisee under this Agreement.
4.7 Franchisee as Arranger
The City and Franchisee mutually agree that the City's granting of this franchise shall not be
construed as the City "arranging for" the collection and disposal of solid waste or recyclables
within the meaning of CERCLA. The parties further mutually agree that the granting of the
Franchise by City shall be construed as an action whereby the Franchisee is granted, and
accepts the rights, responsibilities, benefits and liabilities of collection and disposal of solid
waste. Commencing on the effective date of this Agreement and, to the extent that
Franchisee's performance under this Agreement requires the collection and disposal of solid
waste, and may be construed as "arranging for" collection and disposal of solid waste within
the meaning of CERCLA, such actions shall be the sole responsibility of Franchisee and
Franchisee expressly agrees to be solely responsible for all such actions.
4.8 Use of City Streets
Such grant of franchise shall give Franchisee the right and privilege to operate solid waste
collection vehicles and equipment on such streets, public ways, rights -of -way, or easements
of the City.
4.9 Annexation
The Franchisee shall automatically extend all services herein described to any area annexed
to the City, except that the City may permit a firm franchised by the County of San Luis
Obispo before the annexation to continue serving the area for a period not to exceed five (5)
years.
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Franchise Agreement - Solid Waste
4.10 Ownership of Solid Waste
Once solid waste is placed in containers and properly presented for collection, ownership and
the right to possession shall transfer directly from the waste generator to Franchisee by
operation of this Agreement. Franchisee is hereby granted the right to retain, process, divert,
dispose of, and otherwise use such solid waste, or any part thereof, in any lawful fashion or
for any lawful purposed desired by franchisee.
Subject to this Agreement, Franchisee shall have the right to retain any benefit resulting from
its right to retain, process, divert, dispose of, or use the solid waste which it collects. Any
cost savings resulting from decreased disposal shall off -set Franchisee's operating expenses
in accordance with the "City of San Luis Obispo Rate Setting Process and
Methodology Manual for Integrated Solid Waste Management Rates ".
Solid waste, or any part thereof, which is disposed of at a disposal site or facility (whether
landfill, transformation facility, transfer station, or materials recovery facility) shall become
the property of the Owner or operator of the disposal site(s) or facility once deposited there
by Franchisee.
The City may obtain ownership or possession of solid waste placed for collection upon
written notice of its intent to do so. However, nothing in this Agreement shall be construed
as giving rise to any inference that the City has such ownership or possession unless such
written notice has been given to Franchisee.
13 March 24,1997
Franchise Agreement - Solid Waste
ARTICLE 5. DIRECT SERVICES
5.1 General
The work to be done by the Franchisee pursuant to this Agreement shall include the
furnishing of all labor, supervision, equipment, materials, supplies, and all other items and
tasks necessary to perform the services required.
It is mandatory that the work to be done by Franchisee pursuant to this Agreement shall be
accomplished in a thorough and professional manner so that all occupied developed
properties within the City are provided reliable, courteous, prompt and high - quality services
for collection of solid waste. All collection activities shall be conducted in such a manner
that public and private property will not be damaged. Franchisee shall replace containers and
covers in designated collection locations and shall not place them in the street or on adjoining
property.
The City reserves the right to revise its laws and regulations pertaining to solid waste
collection and disposal in order to protect public health, safety and welfare. The Franchise
Agreement is subject to any such future revisions of the City's laws and regulations, and
Franchisee agrees to comply with any such changes in said laws and regulations as if
incorporated into the Agreement.
5.2 Single Family Residential Solid Waste Collection Service
For residential customers, Franchisee shall collect solid waste at the curbside at a minimum
of once a week, Monday through Friday, except as specified below. The Franchisee will
notify solid waste customers of holiday collection schedules.
Handicapped residents shall have the option of placing their containers near their dwelling,
visible from the curb, and the Franchisee will collect their containers at this location and
return container to same location. Franchisee will notify residents annually, beginning within
thirty (30) days of execution of this Agreement, of this collection option. To be eligible for
this collection option, residents must present proof of their physical incapacity to the
Franchisee.
5.3 Other Solid Waste Collection Service
5.3.1 Multi- family Solid Waste Collection Service
Franchisee shall collect Solid Waste from all Multi- Family dwelling units within the City,
using containers of a size and shape acceptable to Franchisee, not less than once per week.
The Franchisee and each customer shall agree on the designated collection location. Special
consideration shall be given when determining the designated collection location for multi-
family accounts to ensure that the flow of traffic is not impeded and that it does not result in
aesthetic degradation of an area. The designated collection location, if disputed by customer
or Franchisee, shall be determined by the City.
5.3.2 Commercial, Industrial and Institutional Solid Waste Collection Services
Franchisee shall collect Solid Waste from all commercial, industrial and institutional
properties within the City, using containers of a size and shape acceptable to Franchisee, not
less than once per week. To the extent allowable by law, Franchisee shall collect from all
occupied commercial, industrial and institutional properties in the City recyclable materials,
arranged for Collection by the Franchisee with the Waste Generator, that have been placed in
recycling containers provided by the Franchisee and placed in the designated collection
location for regular collection by Franchisee. To the extent allowable by law, nothing in this
Agreement shall preclude any organization from collecting recyclable materials from
commercial and /or industrial customers within the City.
14 March 24,1997
Franchise Agreement - Solid Waste
The Franchisee and each customer shall agree on the designated collection location. Special
consideration shall be given when determining the designated collection location for
commercial and /or industrial accounts to ensure that the flow of traffic is not impeded and
that it does not result in aesthetic degradation of an area. The designated collection location,
if disputed by customer or Franchisee, shall be determined by the City.
Additionally, if in the City's opinion, the location of an existing collection location for
particular multi - family dwelling unit or commercial, industrial or institutional property is
inappropriate, the City may direct the customer or Franchisee to relocate the collection
location. If a customer refuses to comply with said directive, Franchisee shall decline to
collect solid waste from said mis- located containers.
5.4 Public Facilities Collection
When requested by the City, the Franchisee shall collect and dispose of all Solid Waste
generated at premises owned and/or operated by the City. Franchisee shall make collections
from City solid waste containers, not less than once per week, Monday through Friday or on
Saturdays following non - working holidays. Collections shall be scheduled at a time
mutually agreed upon by Franchisee and the Waste Generator.
Franchisee shall provide, at City's direction, additional solid waste collection and disposal
and consulting services including:
(1) Collection of solid waste from all sidewalk litter containers;
(2) Collection of solid waste from City- sponsored special events as specified by the City;
(3) Collection of solid waste from containers in City parks as mutually agreed upon by
the Franchisee and the City;
(4) Review of plans for land use or property developments with regard to solid waste
service issues; and
(5) Residual solid waste remaining from temporary household hazardous waste collection
events.
5.5 Missed Pickups
Upon notification, Franchisee, shall collect any missed pickup which had been properly and
timely placed for collection within 24 hours of said notice.
5.6 Bulky Waste Collection
Franchisee shall make special collection arrangements with Waste Generators within seven
(7) days after waste generators' written or verbal request for the collection of bulky waste for
a fee established by the City and updated by resolution when the City adjusts rates. Any
single item is not to exceed 200 pounds.
5.7 Semi - Annual Clean -up Weeks
At least twice per year throughout the term of this Agreement, Franchisee shall provide, in
addition to regularly scheduled service, two clean -up events pursuant to guidelines
established by the Franchisee and approved by the City, for solid waste placed at the curb by
single family dwelling units and at pre arranged locations for multi - family residential
properties in addition to each customer's normal collection service. The dates for each event
shall be proposed by Franchisee and approved by the City prior to September Is` of each year.
Franchisee shall record by class and weight (in tons) the solid waste, white goods, etc.,
collected during the clean-up events. Franchisee shall record the kinds and weights (in tons)
of solid waste diverted during these clean -ups from the landfill through recycling, reuse,
transformation or other means of diversion.
15 March 24,1997
Franchise Agreement - Solid Waste
5.8 City Right to Request Changes
5.8.1 General
City may request Franchisee to perform additional services (including new diversion
programs, billing services, etc.) or modify the manner in which it performs existing services.
Pilot programs and innovative services which may entail new Collection methods, different
kinds of services and /or new requirements for Waste Generators are included among the
kinds of changes which City may request. Franchisee shall present, within 30 days of a
request to do so by City, a proposal to provide additional or expanded diversion services
pursuant to the terms of Section 5.8.2. Franchisee shall be entitled to an adjustment in its
compensation in accordance with Section 9.4, for providing such additional or modified
services.
5.8.2 New Programs
Franchisee shall present, within 30 days of a request to do so by City, a proposal to provide
additional or expanded services. The proposal shall contain a complete description of the
following:
o Collection methodology to be employed (equipment, manpower, etc.)
O Equipment to be utilized (vehicle number, types, capacity, age, etc.).
o Labor requirements (number of employees by classification).
o Type of Containers to be utilized.
o Provision for program publicity /education/marketing.
o A projection of the financial results of the program's operations for the remaining Term 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.
5.8.3 City's Right to Acquire Services
Franchisee acknowledges and agrees that City may permit other Persons besides Franchisee
to provide additional services not otherwise contemplated under Section 5.8 (City's Right to
Request Changes). If pursuant to Section 5.8.2 (New Programs), Franchisee and City cannot
agree on terms and conditions of such services in ninety (90) days from the date when City
first requests a proposal from franchisee to perform such services, Franchisee acknowledges
and agrees that City may permit Persons other than Franchisee to provide such services.
5.9 Report of Accumulation of Solid Waste; Unauthorized Dumping
Franchisee shall direct its drivers to note the addresses of any premises at which they observe
that solid waste is accumulating and is not being delivered for collection; and the address, or
other location description, at which solid waste has been dumped in an unauthorized manner.
Franchisee shall report the address or description to the City within twenty -four (24) hours
of such observation.
5.10 City Directed Removal of Solid Waste
Franchisee shall arrange for the removal of all accumulated solid waste and recyclables on
any developed or vacant property in the City as directed by the City Utilities Director. The
Franchisee shall make a good faith effort to recover the cost of disposal from the waste
generator, and the costs of this effort, as well as the cost of disposal shall be chargeable to the
waste generator. The Franchisee shall be entitled to include the costs incurred and not
collected under this Section as an operating expense for purposes of rate setting.
5.11 Processing of Solid Waste
The City reserves the right, prior to disposal, to direct portions of the waste stream collected
under this franchise, to a designated processing facility for separation and recycling of any
recyclable materials contained therein. City shall provide Franchisee with reasonable prior
16 March 24,1997
Franchise Agreement - Solid Waste
written notice concerning any change of service location.
5.12 Designated Disposal Facility
Franchisee shall arrange with the operator of a disposal site situated outside the city limits for
disposal of solid waste collected within the City. All solid waste collected within the City
and not separated for recycling shall be delivered to the designated disposal site and disposed
of according to the regulations of the designated disposal site.
Franchisee shall secure within 90 days of the effective date of this Agreement, sufficient
disposal site capacity commitment including landfill disposal site capacity commitment, to
adequately serve the reasonably anticipated solid waste disposal needs of the City and its
customers during the term of this Agreement, including any extensions provided for herein.
City reserves the right to review said disposal capacity commitments. Prior to entering into
any capacity commitment, Franchisee shall give prior written notice to the City concerning
negotiations. The disposal site capacity commitment contract for the designated disposal
facility shall be incorporated into this Agreement as Appendix I.
If Franchisee receives notice from the landfill operator or otherwise expects, during the term
of this Agreement, to be prevented from delivering solid waste to the designated disposal
site, Franchisee shall immediately notify in writing the City's Utilities Director, stating the
reason(s) Franchisee is prevented, or expects to be prevented, from disposing of solid waste
in the designated disposal facility. Franchisee shall in good faith expeditiously identify and
evaluate alternative disposal sites. An alternative designated disposal site or sites shall be .
arranged for and secured by Franchisee, after consultation with the City's Utilities Director.
Franchisee shall provide City with adequate written notice prior to contracting for any
alternate disposal site. City reserves the right to direct the waste stream to other disposal site
selected by Franchisee.
City in addition, reserves the right to direct the waste stream to any disposal facility or site.
Absent such direction by the City, nothing contained herein shall be construed to mean that
the City has arranged for site selection or waste disposal.
Section 12.5, "Excuse From Performance ", does not relieve Franchisee from the good faith
obligation to find and secure alternate disposal sites. Absent a Section 12.5 event, Franchisee
shall be responsible for any increased costs, including transportation, with respect to the
alternate disposal site.
5.13 Hazardous Waste Handling and Disposal
If the Franchisee determines that solid waste placed in any container for collection is a
Hazardous Waste or Medical Waste, or other solid waste that may not be legally disposed of
at the designated disposal site or presents a hazard to the Franchisee's employees, the
Franchisee shall have the right to refuse to accept such solid waste. The Franchisee will
contact the waste generator and request that the waste generator arrange for proper disposal.
If the Waste Generator cannot be reached immediately, the Franchisee shall, prior to leaving
the premises, leave a tag at least two inches by six inches indicating the reason for refusing to
collect the solid waste, in which case, a copy of the tag, along with the address of the
premises (and the name of the waste generator, if known) shall be delivered to the City on the
following business day.
If the Hazardous waste or medical waste or other unauthorized waste is collected before its
presence is detected by Franchisee, and if the waste generator cannot be identified or fails to
remove the solid waste after being requested to do so, the Franchisee shall arrange for its
legal disposal. The Franchisee shall make a good faith effort to recover the cost of disposal
17 March 24,1997
Franchise Agreement - Solid Waste
of such waste from the waste generator, and the costs of this effort, as well as the cost of
disposal shall be chargeable to the waste generator. Provided the failure to detect the
hazardous waste, medical wastes or other unauthorized wastes prior to collection and /or their
delivery to the designated disposal site is not due to the negligence of the Franchisee or its
employees or due to failure of the Franchisee to have an adequate in place inspection
program, the Franchisee shall be entitled to include the costs incurred under this paragraph as
an operating expense for purposes of rate setting.
18 March 24,1997
Franchise Agreement - Solid Waste
ARTICLE 6. COLLECTION SERVICE STANDARDS
6.1 Operations
6.1.1 Schedules
To preserve peace and quiet, solid waste shall not be collected within two - hundred (200) feet
of residential premises between 6:30 p.m. and 6:30 a.m. on any day, Monday through Friday.
When the regularly scheduled collection day falls on a holiday, collection shall take place on
the following regularly scheduled collection day. Franchisee will promptly resolve any
complaints of noise to the satisfaction of the City Administrative Officer or the City
Administrative Officer's designee.
6.1.2 Vehicles
A. General. Franchisee shall keep a fleet of collection trucks sufficient in number and
capacity to efficiently perform the work required in the Agreement in strict
accordance with the terms of this Agreement. Franchisee shall provide a detailed
description concerning the number and type of vehicles necessary for performance.
Franchisee shall have available on collection days sufficient back -up vehicles for each
type of collection vehicle (i.e., rear loader, front loader, and roll -off) used to respond
to complaints and emergencies. The fleet shall be maintained according to the
requirements of Municipal Code § 8.04.030.
B. Specifications. All vehicles used by Franchisee in providing solid waste collection
services shall comply with all federal, state, and local requirements for such vehicles
as they now exist or may be amended in the future, and be registered with the
California Department of Motor Vehicles. All such vehicles shall have water -tight
bodies designed to prevent leakage, spillage, or overflow. All such vehicles shall
comply with U.S. Environmental Protection Agency noise emission regulations and
other applicable noise control regulations.
C. Condition.
1) Franchisee shall maintain all of its properties, facilities, and equipment used in
providing service under this Agreement in a safe, neat, clean and operable
condition at all times.
2) Franchisee shall inspect each vehicle daily to ensure that all equipment is
operating properly. Vehicles which are not operating properly and represent a
safety hazard shall be taken out of service until they are repaired and do
operate properly and safely. Franchisee shall perform all scheduled
maintenance functions in accordance with the manufacturer's specifications
and schedule. Franchisee shall keep accurate records of all vehicle
maintenance, recorded according to date and mileage, and shall make such
records available to City upon request.
3) Franchisee shall repair, or arrange for the repair of, all of its vehicles and
equipment for which repairs are needed because of accident, breakdown or
any other cause so as to maintain all equipment in a safe and operable
condition. Franchisee shall maintain accurate records of repair, which shall
include the date /mileage, nature of repair and the signature of a maintenance
supervisor that the repair has been properly performed.
D. Vehicle Identification. Each truck shall display in a prominent place a sign as
required in Municipal Code §8.04.090.
E. Operation. Vehicles shall be operated in compliance with the California Vehicle
19 March 24,1997
Franchise Agreement - Solid Waste
Code, and all applicable safety and local ordinances. Franchisee shall not load
vehicles in excess of the manufacturer's recommendations or limitations imposed by
state or local vehicle weight restrictions.
6.1.3 Containers
A. Residential Solid Waste Containers. When requested, Franchisee shall supply each
Single Family Dwelling Unit with a waste wheeler in size consistent with the City
approved Solid Waste collection program. Franchisee shall supply each multi - family
complex with the appropriate type of container to adequately service the needs of the
complex per the solid waste handling location. Franchisee agrees to provide
additional appropriate Containers, as required.
City and Franchisee acknowledge that from time to time, a customer may damage or
destroy a Container. City and Franchisee also acknowledge that from time to time
Containers may be stolen from the curb or damaged due to normal use. When
notified of such occurrence, Franchisee shall replace the Container, at no charge to the
customer pursuant to the guidelines established by the Franchisee and approved by
the City. The container replacement guidelines are presented in Appendix lI of this
Agreement.
B. Non - Residential and Multi- Family Dwelling Unit Solid Waste Containers.
Franchisee shall furnish to all customers appropriate containers to collect solid waste
at multi - family dwelling units, commercial and industrial properties, and other
premises upon customer request. Containers with a capacity of one cubic yard or
more shall be available in standard sizes. The kind, size and number of containers
furnished to particular customers shall be as determined mutually by the customer and
Franchisee. Containers which are front loading bins shall have lids. All containers
with a capacity of one cubic yard or more shall meet applicable regulations for Solid
Waste bin safety and shall be maintained in good repair with neatly and uniformly
painted surfaces and shall prominently display the name and telephone number of
Franchisee. Additionally, one cubic yard or more bins in public right -a -ways shall
have reflectorized markings. Bins shall be clearly marked and identified as belonging
to Franchisee. Franchisee shall not be obligated to provide customers with compactor
units, but will be obligated to charge the rates set by the City for the collection of
compacted solid waste.
Each customer shall be responsible for excess damage to any such containers not
caused by Franchisee.
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Franchise Agreement - Solid Waste
6.1.4 Personnel
A. General. Franchisee shall furnish such qualified drivers, mechanical, supervisory,
clerical, and other personnel as may be necessary to provide services required by this
Agreement in a safe and efficient manner.
If Franchisee needs to provide additional personnel, Franchisee shall be responsible
for all costs related to provision of such additional personnel. Franchisee may only
reduce the number and type of personnel required with prior approval of City. If
quality of service declines following such reduction in type and number of personnel,
the City at its discretion, may require the Franchisee to increase the number and type
of personnel utilized, at no additional cost to the City.
B. Identification. Franchisee shall ensure that while on duty each collection worker
wears a clean uniform with conspicuous insignia displaying Franchisee's company
name and the worker's name or identification number.
C. Fees & Gratuities. Franchisee shall not, nor shall it permit any agent, employee, or
subcontractors employed by it to request, solicit, demand, or accept, either directly or
indirectly, any compensation or gratuity for any services performed under this
Agreement, except as provided in Article 8 of this Agreement.
D. Training. All drivers shall be trained and qualified in the operation of vehicles they
operate and must possess a valid license of the appropriate class, issued by the
California Department of Motor Vehicles.
Franchisee shall provide adequate operations, health and safety training, and
Hazardous Waste identification and handling training for all of its employees who use
or operate equipment or who are otherwise directly involved in collection or other
related operations.
E. Customer Courtesy. Franchisee shall train its employees in customer courtesy; shall
prohibit the use of loud or profane language; and shall instruct collection crews to
perform the work quietly. Franchisee shall use its best efforts to ensure that all
employees present a neat appearance and conduct themselves in a courteous manner.
If any employee is found to be discourteous or not to be performing services in the
manner required by this Agreement, Franchisee shall take all necessary corrective
measures. If City has notified Franchisee of a complaint related to a discourteous or
improper behavior, Franchisee will reassign the employee to duties not entailing
contact with the public while Franchisee is pursuing its investigation and corrective
action process.
6.2 Service Complaints
Franchisee shall maintain and provide copies of all written service complaints and summaries
of all oral service complaints and the Franchisee's response to those complaints for the term
of one year and shall allow City officials to inspect these records during the required office
staffing hours after the City has requested such inspection with reasonable notice.
If a disagreement arises between Franchisee and a customer, the customer may request an
administrative hearing. The City's Utilities Director shall conduct an investigation, and give
notice of that decision. The customer may elect to appeal this decision to the City Integrated
Waste Management Appeals Committee made up of representatives from the Utilities
Department, the Finance Department and the Administrative Office.
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Franchise Agreement - Solid Waste
6.3 Periodic Performance Audit
The City shall have the right to periodically, not less than annually, request a performance
audit or billing audit be completed by the Franchisee, the City or an independent third party.
The City shall be entitled to select the type of consultant that it deems qualified to conduct
said audits. The cost of such audits will be an allowable cost under the rate setting
methodology unless there are findings pursuant to Section 12.8.
6.4 Performance Hearing
The City maintains the right to hold a public hearing at any time, not more than once each
year, at which the Franchisee shall be present and shall participate, to review Franchisees.
services and performance. The purpose of the hearing shall be, in part, to provide for a
discussion and review of technological, economic and regulatory changes and quality of
service provided to date. The goal of the performance hearing is to strive for an ever-
advancing solid waste management system, and to ensure services are provided with
adequate quality, efficiency and economy.
Sixty (60) days after receiving notice from City of a performance review hearing, Franchisee
shall, at a minimum, submit a report to City indicating the following:
❑ Changes recommended and /or new services to improve City's ability to meet the
goals of AB 939 and to contain costs and minimize impacts on rates; and
❑ Any specific plans for provision of changed or new services by Franchisee.
The reports required by this Agreement regarding customer complaints shall be used as one
basis for review. Franchisee may submit other relevant performance information and reports
for consideration. City may request Franchisee submit specific information for the hearing.
In addition, any customer may submit comments or complaints during or before the hearing,
either orally or in writing, and these shall be considered.
Topics for discussion and review at the performance review hearing shall include, but shall
not be limited to, quality and adequacy of services provided, feasibility of providing new
services, application of new technologies, customer complaints, amendments to this
Agreement, developments in the'law, new initiatives for meeting or exceeding AB 939's
goals, regulatory constraints and Franchisee performance. City and Franchisee may each
select additional topics for discussion at any performance review hearing.
Not later than sixty (60) days after the conclusion of each performance review hearing, City
may issue a report. As a result of the review, City may request Franchisee to provide
expanded or new services. Franchisee shall present, within 30 days of a request to do so by
City, a proposal to provide additional or expanded diversion services. The proposal shall
contain a complete description of the following:
o Collection methodology to be employed (equipment, manpower, etc.)
o Equipment to be utilized (vehicle number, types, capacity, age, etc.).
o Labor requirements (number of employees by classification).
o Type of Containers to be utilized.
o Provision for program publicity /education/marketing.
o A projection of the financial results of the program's operations for the remaining Term 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.
22 March 24,1997
Franchise Agreement - Solid Waste
ARTICLE 7. OTHER SERVICES: BILLING, REPORTING, RECORD- KEEPING AND
PUBLIC EDUCATION
7.1 Billin
By resolution of the City Council, the City shall establish rates for the services provided by
the Franchisee. Franchisee shall bill and collect these rates. Franchisee billing format and
billing frequency shall be subject to approval of the City and City shall have the right to
revise the billing format to itemize certain charges.
The City may also direct Franchisee to insert mailers relating to Franchisee provided service
with the billings at no additional cost to the City. The mailers must fit in standard envelopes
and not increase the required postage. The City will provide not less than thirty (30) days
notice to Franchisee prior to the mailing date of any proposed mailing to permit Franchisee to
make appropriate arrangements for inclusion of City materials.
Franchisee shall maintain copies of said billings and receipts, each in chronological order, for
a period of three (3) years after the date of service for inspection by the City, or for such
longer term as the City directs. Franchisee may, at its option, maintain those records in
computer form, on microfiche, or in any other manner, provided that the records cannot be
altered, and can be preserved and retrieved for inspection and verification in a timely manner.
Franchisee shall, in addition, provide an adequate backup system for billing records,
regardless of the form in which the records are maintained. Any such backup system shall be
subject to approval by the City.
7.2 Owner Responsible for Payment
The owner of occupied developed property shall be responsible and liable for paying the
solid waste collection and disposal fees for that property.
7.3 Collection of Bills from Delinquent Solid Waste Customers.
Bills shall be considered delinquent if not paid within 30 days of the date due. Once each
year, prior to a date established by the City, Franchisee may take actions pursuant to Chapter
8.04 of the Municipal Code to collect delinquent solid waste collection and disposal
accounts.
7.4 Records
Franchisee shall maintain records required to conduct its operations, to support requests it
may make to City, and to respond to requests of the City. Adequate record security shall be
maintained to preserve records from events that can be reasonably anticipated such as a fire,
theft and earthquake. Electronically maintained data and records shall be protected and an
adequate backup system shall be provided for such data and records. The protection and
backup systems shall be subject to approval by the City.
The following records shall be maintained for the City in form and detail satisfactory to the
City, relating to:
❑ Customer services and billing;
❑ Weight of solid waste, especially as related to reducing and diverting solid waste.
Information is to be separated by kind of account (including multi - family dwelling
units with residential);
❑ Special annual clean-up event results;
❑ Routes;
❑ Facilities, equipment and personnel used;
❑ Facilities and equipment operations, maintenance and repair;
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Franchise Agreement - Solid Waste
❑ Processing and disposal of solid waste;
❑ Complaints; and
❑ Missed pick -ups.
Franchisee shall maintain records of transfer, diversion and disposal of all solid waste
collected in the city for the period of this Agreement and all extensions to this Agreement or
successor Agreements. In the event Franchisee discontinues providing solid waste services
to City, Franchisee shall provide all records of diversion and disposal of all solid waste
collected within the City to City within thirty (30) days of discontinuing service. Records
shall be in chronological order, and organized in a form readily and easily interpreted.
Records for other programs shall be tailored to specific needs. In general, they shall include:
❑ Plans, tasks, and milestones; and,
❑ Accomplishments in terms such as dates, activities conducted, quantities of products
used, produced or distributed, and numbers of participants and responses.
7.5 Waste Generation /Characterization Studies
Franchisee acknowledges that the City must perform solid waste generation and disposal
characterization studies periodically to comply with AB 939 requirements. Franchisee agrees
to participate and cooperate with the City and its agents, at no cost to the City, to accomplish
studies and data collection, and prepare reports, as needed, to determine weights and volumes
of solid waste and characterize solid waste generated, diverted, disposed, transformed, or
otherwise handled or processed to satisfy AB 939 requirements.
7.6 Report Formats and Schedule
Records shall be maintained in forms and by methods that facilitate flexible use of data
contained in them to structure reports, as needed. Reports are intended to compile recorded
data into useful forms of information that can be used to, among other things:
❑ Determine and set rates, and evaluate the financial efficacy of operations; and
❑ Evaluate past and expected progress towards achieving goals and objectives; and
❑ Determine needs for adjustment to programs; and
❑ Evaluate customer service and complaints.
The City may at no cost to itself request that Franchisee provide such additional information
in the reports set forth below as the City deems necessary or appropriate to meet its needs,
including provision of AB 939 report information.
Franchisee may propose report formats that are responsive to the objectives and audiences for
each report. The format of each report shall be subject to approval by the City.
Monthly reports shall be submitted within ten (10) calendar days after the end of the report
month. Quarterly reports shall -be submitted within fifteen (15) calendar days after the end of
the quarter. Quarters end on November 30, February 28, May 31, and August 31.
All reports shall be submitted to:
24 March 24,1997
Franchise Agreement - Solid Waste
Utilities Director
City of San Luis Obispo
955 Morro Street
San Luis Obispo, CA 93401
7.7 Monthly Reports
The information listed shall be the minimum reported for each service:
❑ Solid Waste, collected, transferred, diverted and disposed of, by sector (commercial,
industrial, residential) of waste generator -- collected by Franchisee, in tons, by month.
❑ Complaint summary, for month and cumulative for report year, as above.
Summarized by nature of complaints.
❑ Narrative summary of problems encountered and actions taken with recommendations
for the City, as appropriate.
7.8 Quarterly Report
Quarterly reports shall be quarterly summaries of the monthly information in addition to the
following:
❑ Status report on applications for renewals of existing permits or any new permits
which may be required to continue operations at the designated disposal site within
existing permitted areas.
❑ Solid Waste, collected, diverted and disposed of, in tons, during the semi - annual
residential clean-up weeks, if applicable.
❑ For each new program, provide activity related and narrative reports on goals and
milestone and accomplishments. Describe problems encountered, actions taken.and
any recommendations to facilitate progress.
❑ Provide a summary assessment of the overall solid waste program from Franchisee's
perspective relative to financial and physical status of program. The physical status is
to relate to how well the program is operating for efficiency, economy and
effectiveness relative to meeting all the goals and objectives of this Agreement.
Provide recommendations and plans to improve. Highlight significant
accomplishments, problems and proposed solutions.
7.9 Annual Financial Audit
Franchisee shall submit to the City annual audited financial statements prepared at
Franchisee's expense by an independent Certified Public Accountant not later than 180 days
following the expiration of the Franchisee's fiscal year. Pursuant to the "Rate Setting
Process and Methodology Manual for Integrated Solid Waste Management Rates ",
dated June 1994, at the time a rate application request is submitted to City, the financial
forms contained in the rate application must be reconciled to the audited financial statements
to provide assurance that all of the company's activities are accounted for.
The annual report shall separate out information with respect to revenues and expenses in
relation to performance of this Agreement, including detailed information concerning
overhead claimed by Franchisee. Operations by Franchisee concerning activities not related
to performance of this Agreement shall be maintained in a separate portion of the annual
financial statement.
City shall have the right to inspect or review the payroll tax reports, specific documents or
records required expressly or by inference pursuant to this Agreement, or any other similar
records or reports of Franchisee that City shall deem, in its sole discretion, necessary to
evaluate annual reports, compensation applications provided for in this Agreement and
Franchisee's performance provided for in this Agreement. The City retains the right to have
an independent third party or agent of the City's choosing, such as a CPA, participate in the
25 March 24,1997
Franchise Agreement - Solid Waste S
records inspection. The cost of such inspection or review will be an allowable cost under the
rate setting methodology unless there are findings pursuant to Section 12.8.
The Franchisee shall provide to the City a copy of Cold Canyon Landfill's request for an
increase in tipping fees no later than five (5) days following submittal of said request to the
County of San Luis Obispo. Additionally, the Franchisee shall notify the City of the action
taken by the Board of Supervisors regarding said request within five (5) days following said
action, including letter to the Board of Supervisors and related executed resolution. The City
retains the right to have an independent third party or agent of the City's choosing, such as a
CPA, participate in the review. The cost of such inspection or review will be an allowable
cost under the rate setting methodology unless there are findings pursuant to Section 12.8.
7.10 Maintenance of Accounting Records
Franchisee shall maintain accounting records in accordance with generally accepted
standards and principles of accounting. In its accounting records, Franchisee shall discreetly
maintain and clearly identify all items of revenue and expense pertaining to the City's
franchised operations. Cost and revenue information for the City shall be segregated from
other geographical areas served by Franchisee. Cost and revenue information for the City, in
addition, shall be segregated from other business activities of the Franchisee. Separate
detailed records shall be maintained by Franchisee with respect to all transactions with
affiliated entities that affect the cost and revenue of Franchisee in providing the franchise
collection services.
7.11 Right to Audit Records
In addition to other reporting requirements in this Agreement, the City may review, test and
audit the books and records of the Franchisee or may engage a Certified Public Accountant
for this purpose. The cost of such inspection or review will be an allowable cost under the
rate setting methodology unless there are findings pursuant to Section 12.8.
7.12 Inspection by City
The designated representatives of the City shall have the right to observe and review
Franchisee operations and enter Franchisee's premises for the purpose of such observation
and review at all reasonable hours with reasonable notice.
7.13 Office
Franchisee shall maintain an office with telephone within the City limits where customers
may apply for service, pay bills, and register complaints. At a minimum, Franchisee shall
staff this office from 8:00 a.m. to 5:00 p.m., Monday through Friday, except legal holidays
observed by the City. A representative of Franchisee shall be available during office hours to
communicate with the public in person and directly by telephone.
7.14. Customer Information
Franchisee shall prepare and keep current a flier acceptable to the City which summarizes
solid waste regulations, all services provided by Franchisee, solid waste collection and
disposal rates, telephone numbers, special collection events, collection schedules, complaint
procedures, and other pertinent information. Franchisee shall have copies of this flier
available at all times in Franchisee's office; shall distribute copies to all new customers; shall
annually mail copies to all of its current customers; and shall mail updated copies to all
customers as notification of changes in service or rates, prior to such changes.
7.15 Regulatory Reporting
Franchisee shall promptly provide the City copies of each adverse report from, and each
regulatory action from local, state or federal regulatory agencies. In addition, Franchisee
shall send copies to City of any reports that Franchisee submits to regulatory agencies with
26 March 24,1997
Franchise Agreement - Solid Waste
respect to performance of this Agreement.
Franchisee shall provide City promptly with copies of any notices and correspondence from
other facilities, including disposal sites, utilized by Franchisee in performance of this
Agreement, concerning any breach of agreement with such facility or violation of
regulations, including delivery of unauthorized wastes. Franchisee shall direct such facilities
to at all times simultaneously send copies of such notices and correspondence to City.
Franchisee shall promptly provide City with copies of any reports and correspondence
concerning the status of permits with respect to Franchisee and such disposal sites and
facilities referenced above.
7.16 Public Education
Franchisee acknowledges and agrees that education and public awareness are critical, key and
essential elements of any efforts to achieve AB 939 requirements. Accordingly, Franchisee
agrees to take direction from City to exploit opportunities to expand public and customer
knowledge concerning needs and methods to reduce, reuse and recycle solid waste and to
cooperate fully with City in this regard.
Franchisee shall maintain its own program of providing information relevant to billing and
solid waste services, issues and needs with its bills. Franchisee shall also include in customer
bills additional information, including information on recycling programs, as directed by the
City. Franchisee shall bear all labor costs with respect to inserting public education materials
with the billings. City shall bear any additional postage expense resulting from the City's
inserts and shall bear other expenses related to the inserts to the extent said expenses are
clearly in excess of the Franchisee's normal billing costs. All public education materials shall
be approved in advance by the City.
At the direction of the City, Franchisee shall participate in and promote AB 939 activities and
other solid waste management techniques at community events and local activities. Such
participation would normally include providing, without cost, educational and publicity
information promoting the goals of the City's solid waste program.
7.17 Records Retention
Franchisee shall maintain the above records, reports and data set forth in this Article for such
time as City may direct. Franchisee agrees to make all such records, reports and data
available for inspection by City or City's authorized representatives, upon reasonable notice
by City.
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Franchise Agreement - Solid Waste
ARTICLE 8. PAYMENTS TO CITY
8.1 Franchise Fee Payments
In consideration of the exclusive franchise provided for in Article 4 of this Agreement,
Franchisee shall pay the City six percent (6 %) of Franchisee's gross revenues for collection
and disposal of solid waste within the City. Such franchise fee shall be a "pass- through"
expense for purposes of rate review and setting. Each monthly remittance of fees to City
shall be accompanied by a statement detailing gross revenues for the period covered from all
operations conducted or permitted pursuant to this Agreement.
8.2 Schedule of Payment
Franchise fees described in Section 8.1 are due on-the 15th day of each month for receipts
from the previous month. The remittance will be accompanied by a report setting forth the
basis, and calculations used for computing the amount due.
8.3 AB 939 Fee Amount
In consideration of the exclusive franchise provided for in Article 4 of the Agreement,
Franchisee shall pay when directed by the City, a percentage of Franchisee's gross revenue
for an AB 939 fee(i.e. the cost that the City incurs in managing and addressing AB 939 issues
regarding diversion, recyclable materials, source reduction, etc.), on a monthly installment
basis, based on cash receipts from customers provided residential and non - residential services
during the prior month. All AB 939 fees paid to the City shall be considered a pass through
cost for purposes of rate setting under Article 9. The monthly AB 939 fee is due on the 15th
day of each month for receipts from the previous month.
8.4 Other Fees
The City shall reserve the right to set such other fees, as the City deems necessary. These
fees will be treated as a pass - through expense. The amount, time and method of payment
shall be similar to section 8.2.
8.5 Time and Method of Pam
If Franchisee is directed to pay an AB 939, Franchise Fee or "Other" Fee, it shall do so on or
before the fifteenth (15th) day of each month during the Term. Franchisee shall remit to City
a sum of money equal to the designated percentage of the gross revenue or a flat monthly fee
as determined by the City. If any fees are not paid on or before the fifteenth (15th) day of
any month, Franchisee shall pay to City a late payment penalty in an amount equal to one
percent (1%) of the amount owing for that month. Franchisee shall pay an additional late
payment penalty of one percent (I%) owing on any unpaid balance for each following thirty
(30) day period the fee remains unpaid. Late payment penalty amounts shall not be included
in any revenue requirement.
8.6 Review of Fee Pam
The City, or its agent, reserves the right to annually perform an independent review of fee
payments to verify that fees are being paid in accordance with this Agreement. The cost of
such inspection or review will be an allowable cost under the rate setting methodology unless
there are findings pursuant to Section 12.8.
8.7 Business License Tax
Franchisee shall pay each year the annual business license tax.
28 . March 24,1997
Franchise Agreement - Solid Waste
ARTICLE 9. SERVICE RATES AND REVIEW
9.1 General
Franchisee's compensation provided for in this Article shall be the full, entire and complete
compensation due to Franchisee pursuant to this Agreement for all labor, equipment,
materials and supplies, taxes, insurance, bonds, overhead, transfer and transport, processing,
division, disposal, profit and all other things necessary to perform all the services required by
this Agreement in the manner and at the times prescribed, Franchisee will not be entitled to
any further rate adjustments as a result of customer delinquencies and other bad debt issues.
Franchisee does not look to the City for payment of any sums, except for solid waste
collection services provided to the City and presented in Appendix III, under this Agreement
in consideration of the right to charge and collect from customers for services rendered at
rates fixed by the City from time -to -time. The City shall have the right to structure those
rates as it deems appropriate so long as the revenues forecasted to be received by Franchisee
from charging such rates can reasonably be expected to generate sufficient revenues to
provide for Franchisee's compensation as calculated in accordance with the "City of San
Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid
Waste Management Rates"
9.2 Service Rates
Service rates are those established by Resolution adopted by City Council. Franchisee shall
provide the services required by this Agreement and charge no more than the rates authorized
by City Resolution.
9.3 Rate, Review
Franchisee shall submit to the City an application for rate review annually, in accordance
with the procedures described in the "City of San Luis Obispo Rate Setting Process and
Methodology Manual for Integrated Solid Waste Management Rates," dated June 1994,
except as that may be modified by the City from time to time. In addition to the procedures
contained in the above referenced manual, Franchisee shall submit any and all data requested
by and in the format prescribed by the City. In the event Franchisee shall fail to meet the
schedule set forth in the above referenced manual, a revision of rates for the following year
shall not be authorized until the 1 st day of the first calendar month following a 120 day
period from the date that the complete application is submitted and such revision shall
contain no consideration for Franchisee's failure to submit the application in accordance with
the schedule set forth in the above - referenced manual.
9.4 Special Interim Rate Review
The City or franchisee may request an extraordinary or consequential adjustment outside of
the base year and interim year adjustment schedules, as set forth in the "City of San Luis
Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste
Management Rates," dated June 1994. To be extraordinary and consequential, cost changes
must be significant enough to require a greater than five percent (5 %) decrease or increase in
monthly rates for basic residential service.
9.5 Allowable Profit
When performing the procedures described in the "City of San Luis Obispo Rate Setting
Process and Methodology Manual for Integrated Solid Waste Management Rates," dated
June 1994, the allowable profit on expenses shall be calculated using targeted operating ratio
of ninety -two percent (92 %), with a range of ninety percent (90 %) to ninety -four percent
(94 %), applied to Franchisee's reasonable and necessary allowable costs, as these costs are
29 March 24,1997
Franchise Agreement - Solid Waste
defined in the rate setting manual, incurred in the performance of its obligations under this
Agreement.
9.6 Publication of Rates
Franchisee shall provide written notice to subscribers of all rate changes, prior to
implementation. If appropriate, this notice should include reasons and background for the
rate change.
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Franchise Agreement - Solid Waste
ARTICLE 10. INDEMNITY, INSURANCE, AND PERFORMANCE BOND
10.1 Indemnification
10.1.1 General. Franchisee agrees to defend, indemnify, protect and hold the City and its
Council members, agents, officers and employees harmless from and against any and all
claims asserted or liability established for damages or injuries to any person or property,
including, but not limited to, injury to the Franchisee's employees, agents or officers which
arise from or are connected with or are caused or claimed to be caused by the acts or
omission of the Franchisee, and its agents, officers, directors or employees, in performing the
services herein, and all expenses of investigating and defending against same; provided,
however, that the Franchisee's duty to indemnify and hold harmless shall not include any
claims or liability arising from the established sole negligence or willful misconduct of the
City, its agents, officers or employees.
10.1.2 CERCLA. Franchisee agrees to defend and indemnify the City, Council members,
officers, employees and agents for all actions of the Franchisee associated with the
Franchisee's role as the arranger of solid waste service, or as a "potentially responsible party"
within the meaning of CERCLA in performing solid waste service under any Federal, State
or local laws, rules or regulations. The Franchisee shall further defend and indemnify City
from any and all legal actions against City on the basis of the assertion that the City is an
arranger of solid waste services as a result of this Agreement.
10.1.3 Integrated Waste Management Act. Franchisee agrees to defend and indemnify the
City, Council members, officers, employees and agents for any fines or penalties imposed by
the California Integrated Waste Management Board or its agents in the event that
Franchisee's delays in providing information or reports required pursuant to this Agreement
prevent the City from submitting reports or attaining goals in a timely manner as required by
the Integrated Waste Management Act.
10.2 Insurance
Franchisee shall procure and maintain for the duration of the franchise insurance against
claims for injuries to persons or damages to property which may arise from or in connection
with the performance of the services hereunder by the Franchisee, its agents, representatives,
employees or subcontractors.
A. Minimum Scope of Insurance. Coverage shall be at least as broad as:
(1) Insurance Services Office Commercial General Liability coverage (occurrence
form CG 0001).
(2) Insurance Services Office form number CA 0001 (Ed. 1/87) covering
Automobile Liability, code 1 (any auto).
(3) Workers' Compensation insurance as required by the State of California and
Employer's Liability insurance.
(4) Pollution Legal Liability
B. Minimum Limits of Insurance. Franchisee shall maintain limits no less than:
(1) Commercial or Comprehensive General Liability: Five Million Dollars
($5,000,000) combined single limit per occurrence for bodily injury, personal
injury, and property damage. If Commercial General Liability or other form
with a general aggregate limit is used, either the general aggregate limit shall
apply separately to this Agreement or the general aggregate limit shall be
twice the required occurrence limit.
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Franchise Agreement - Solid Waste
(2) Automobile Liability: Five Million Dollars ($5,000,000) combined single
limit per accident for bodily injury and property damage.
(3) Workers' Compensation and Employers Liability: Workers' compensation
limits as required by the Labor Code of the State of California and employers
liability with limits of $1,000,000 per accident for bodily injury or disease.
(4) Pollution Liabilities: One million Dollars ($1,000,000) each loss /Two
Million Dollars ($2,000,000) annual aggregate all losses.
C. Deductibles and Self- Insured Retentions. Any deductibles or self - insured
retentions must be declared to and approved by the City. At the option of the City,
either: the insurer shall reduce or eliminate such deductibles or self - insured retentions
as respects the City, Council members, its officers, officials, employees, agents and
volunteers; or the Franchisee shall procure a bond guaranteeing payment of losses and
related investigations, claim administration and defense expenses. Any insurance
policies providing for self insured retentions shall further provide that legal costs and
costs of investigation, including consultant fees, with respect to any claim or suit,
shall apply to the self insured retention amount. .
D. Other Insurance Provisions. The general liability and automobile liability policies
are to contain, or be endorsed to contain, the following provisions:
(1) The City, Council members, its officers, officials, employees, agents and
volunteers are to be covered as insurers as respects: liability arising out of
activities performed by or on behalf of the Franchisee; products and
completed operations of the Franchisee; premises owned, occupied or used by
the Franchisee; or automobiles owned, leased, hired or borrowed by the
Franchisee. The coverage shall contain no special limitations on the scope of
protection afforded to the City, its officers, officials, employees, agents or
volunteers.
(2) For any claims related to this project, the Franchisee's insurance coverage
shall be primary insurance as respects the City, Council members, its officers,
officials, employees, agents and volunteers. Any insurance or self - insurance
maintained by the City, its officers, officials, employees, agents or volunteers
shall be excess of the Franchisee's insurance and shall not contribute with it.
(3) Any failure to comply with reporting or other provisions of the policies
including breaches of warranties shall not affect coverage provided to the
City, Council members, its officers, officials, employees, agents or volunteers.
(4) The Franchisee's insurance shall apply separately to each insured against
whom claim is made or suit is brought except with respect to the limits of the
insurer's liability.
(5) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in
coverage or in limits except after thirty (30) days' prior written notice by
certified mail, return receipt required, has been given to the City.
(6) The Automobile Liability Policy shall be endorsed to delete the Pollution
exclusion and add the Motor Carrier Act endorsement (MCS -90), TL 1005,
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Franchise Agreement - Solid Waste
TL 1007 and /or other endorsements required by federal or state authorities.
(7) Pollution, if on a Claims Made form:
a. The "Retro Date" must be shown, and must be before the date of the
contract or the beginning contract work.
b. Insurance must be maintained and evidence of insurance must be
provided for at least five (5) years after completion of the contract of
work.
c. If coverage is canceled or non - renewed, and not replaced with
another claims made policy form with a "Retro Date" prior to the
contract effective date, the Franchisee must purchase "extended
reporting" coverage for minimum of two years after completion of
contract.
E. Acceptability of Insurers. Insurance is to be placed with insurers with a current
A.M. Best's rating of no less than ANII. Insurers selected by Franchisee shall be
admitted to issue insurance in the State of California.
F. Verification of Coverage. Franchisee shall furnish the City with Certificates of
insurance and with original endorsements effecting coverage required herein. The
certificates and endorsements for each insurance policy are to be signed by a person
authorized by that insurer to bind coverage on its behalf. The certificates and
endorsements are to be on forms provided by or acceptable to the City and are to be
received and approved by the City before performance under this Agreement
commences. The City reserves the right to require complete certified copies of all
required policies at any time, and Franchisee shall provide said copies upon request.
G. Subcontractors. Franchisee shall include all subcontractors as insurers under its
policies or shall furnish separate certificates and endorsements for each subcontractor.
All coverages for subcontractors shall be subject to all of the requirements stated
herein.
H. Occurrence Based Coverage. All policies secured by Franchisee shall be
occurrence and not claims based unless City so Consents in writing.
10.3 Performance Bond
Simultaneously with the execution of this Agreement, Franchisee shall file with the City a
bond, payable to City, securing Franchisee's faithful performance of its obligations under this
Agreement. The principal sum of the bond shall be One Half Million Dollars ($500,000).
The bond shall be executed as surety by a corporation authorized to issue surety bonds in the
State of California, with a financial condition and record of service satisfactory to City. The
bond shall be in a form approved by the City. If such bond at any time ceases to be effective
for any reason, this shall be deemed a breach of this Agreement by Franchisee and the City
shall be entitled to proceed as hereinafter provided.
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Franchise Agreement - Solid Waste
ARTICLE 11. CITY'S RIGHT TO PERFORM SERVICE
11.1 General
In the event that Franchisee, for any reason whatsoever, fails, refuses or is unable to Collect,
transport or process any or all Solid waste materials which it is required by this Agreement to
Collect and process, at the time and in the manner provided in this Agreement, for a period of
more than seven (7) calendar days, and if, as a result thereof, Solid Waste should accumulate
in the City to such an extent, in such a manner, or for such a time that the City Administrative
Officer should find that such accumulation endangers or menaces the public health, safety or
welfare, then City shall have the right, but not the obligation, upon twenty -four (24) hour
prior written notice to Franchisee during the period of such emergency as determined by the
City Administrative Officer, (1) to perform, or cause to be performed, such services itself
with its own or other personnel without liability to Franchisee, and/or (2) to take possession
of any or all of Franchisee's land, equipment and other property to Collect, transport or
process any Solid Waste generated within the City which Franchisee would otherwise be
obligated to Collect, transport, process or market pursuant to this Agreement. In the event
the City takes possession of the Franchisee's equipment and other property, the City shall be
entitled to have another Franchisee operate such equipment and property under City
direction. Additionally, in the event the City takes possession of the Franchisee's equipment
and other property, the City does not guarantee repair of existing problems with equipment
and facilities.
Notice of Franchisee's failure, refusal or neglect to Collect, transport or process Solid Waste
may be given orally by telephone to Franchisee at its principal office and shall be effective
immediately. Written confirmation of such oral notification shall be sent to Franchisee
within twenty -four (24) hours of the oral notification.
Franchisee further agrees that in such event:
o It will take direction from City to effect the transfer of possession of property to City for
City's use.
o It will, if City so requests, keep in good repair and condition all of such property, provide
all motor vehicles with fuel, oil and other service, and provide such other service as may be
necessary to maintain said property in operational condition.
o City may immediately engage all or any personnel necessary or useful for the Collection,
transportation and processing Solid Waste, including, if City so desires, employees
previously or then employed by Franchisee, Franchisee further agrees, if City so requests, to
furnish City the services of any or all management or office personnel employed by
Franchisee whose services are necessary or useful for Solid Waste Collection, Transportation
and processing operations and for the billing and collection of fees for these services.
City agrees that it assumes complete responsibility for the proper and normal use of such
equipment and facilities while in its possession.
If the interruption or discontinuance in service is caused by any of the reasons listed in
Section 12.4 (Excuse From Performance), City shall pay to Franchisee the reasonable rental
value of the equipment and facilities, possession of which is taken by City, for the period of
City's possession, if any, which extends beyond the period of time for which Franchisee has
rendered bills in advance of service.
Except as otherwise expressly provided in the previous paragraph, City's exercise of its rights
under this Article 11 (1) does not constitute a taking of private property for which
compensation must be paid; (2) will not create any liability on the part of City to Franchisee;
34 March 24, 1997
Franchise Agreement - Solid Waste
and (3) does not exempt Franchisee from the indemnity provisions of Article 10,
Indemnification, Insurance and Bond, which are meant to extend to circumstances arising
under this Section, provided that Franchisee is not required to indemnify City against claims
and damages arising from the sole negligence of City officers, employees and agents in the
operation of Collection vehicles during the time City has taken possession of such vehicles.
11.2 Temporary Possession of Franchisee's Property
If the City suffers an interruption or discontinuance of service as described in Section 11.1
(including interruptions and discontinuance due to events described in Section 12.4, Excuse
from Performance), City may take possession of and use all of Franchisee's property
described above until other suitable arrangements can be made for the provision of Solid
Waste Services which may include the grant of a Contract to another company. The same
notice requirements of Section 11.1 are applicable.
11.3 Billing and Compensation to Ci1y During City's Possession
During such time that city is providing Solid Waste services, as above provided, Franchisee
shall continue to bill and collect payment from all users of the above - mentioned services.
Franchisee further agrees that, in such event, it shall reimburse City for any and all costs and
expenses incurred by City in taking over possession of the above - mentioned property for
Solid Waste service in such manner and to an extent as would otherwise be required of
Franchisee under the Terms of this Agreement. Such reimbursement shall be made from
time to time after submission By City to Franchisee of each statement listing such costs and
expenses, but in no event later than five (5) working days from and after each such
submission. The City shall have the right, at its sole discretion, to take over billing and
payment collection activities. The City shall then pay any net revenues to the Franchisee,
after deducting all expenses, including City - incurred expenses.
11.4 City's Right to Relinquish Possession
It is further mutually agreed that City may at any time at its discretion relinquish possession
of any or all of the above - mentioned property to Franchisee and thereupon demand that
Franchisee resume the Solid Waste services as provided in this Agreement, whereupon
Franchisee shall be bound to resume the same.
11.5 Duration of City's Possession
City's right pursuant to this Article to retain temporary possession of Franchisee's facilities
and equipment, and to render Collection services, shall terminate when City determines that
such services can be resumed by Franchisee, or when City no longer reasonably requires such
facilities or equipment. In any case, City has no obligation to maintain possession of
Franchisee's property and /or continue its use for any period of time and may at any time, in
its sole discretion, relinquish possession to Franchisee.
35 March 24, 1997
Franchise Agreement - Solid Waste
ARTICLE 12. DEFAULT AND REMEDIES
12.1 Events of Default
All provisions of this Agreement to be performed by Franchisee are considered material.
Each of the following shall constitute an event of default.
A. Fraud or Deceit. If Franchisee practices, or attempts to practice, any fraud or deceit upon
city.
B. Insolvency or Bankruptcy. If Franchisee becomes insolvent, unable, or unwilling to pay
its debts when due, or upon listing of an order for relief in favor of Franchisee in a
bankruptcy proceeding. The Franchisee is also in default if there is an assignment of this
contract for the benefit of its creditors.
C. Failure to Maintain Coverage. If Franchisee fails to provide or maintain in full force
and effect the Workers' Compensation, liability, indemnification coverage or any insurance
coverage or bond required under this Agreement.
D. Violations of Regulation. If Franchisee facilities fall out of full regulatory compliance or
if Franchisee violates any orders or filings of any regulatory body having jurisdiction over
Franchisee relative to this Agreement, provided that Franchisee may contest any such orders
or filings by appropriate proceedings conducted in good faith, in which case no breach of the
Agreement shall be deemed to have occurred.
E. Failure to Perform. If Franchisee ceases to provide Solid Waste services as required
under this Agreement for a period of two (2) days or more, for any reason within the control
of Franchisee.
F. Failure to Pay/Report. If Franchisee fails to make any timely payments, including
liquidated damages and penalties, required under this Agreement and /or fails to provide City
with required information, reports, and /or records in a timely manner as provided for in the
Agreement.
G. Acts or Omissions. Any other act or omission by Franchisee which violates the terms,
conditions, or requirements of this Agreement, the California Integrated Waste Management
Act of 1989, as it may be amended from time to time, or any order, directive, rule, or
regulation issued thereunder and which is not corrected or remedied within the time set in the
written notice the violation or, if Franchisee cannot reasonably correct or remedy the breach
within the time set forth in such notice, if Franchisee should fail to commence to correct or
remedy such violation within the time set forth in such notice and diligently effect such
correction or remedy thereafter.
H. False or Misleading Statements. Any representation or disclosure made to City by
Franchisee in connection with or as an inducement to entering into this Agreement, or any
future amendment to this Agreement, which proves to be false or misleading in any material
respect as of the time such representation or disclosure is made, whether or not any such
representation or disclosure appears as part of this Agreement.
I. Attachment. There is a seizure of attachment of, or levy on, the operating equipment of
Franchisee, including without limits its equipment, maintenance or office facilities, or any
part thereof.
J. Suspension or Termination of Service. There is any termination or suspension of the
transaction of business by Franchisee, including without limit, due to labor unrest including
36 March 24,1997
Franchise Agreement - Solid Waste
strike, work stoppage or slowdown, sickout, picketing, or other concerted job action lasting
more than two (2) days.
Upon default by the Franchisee, the City Administrative Officer shall provide written notice
to Franchise of the violation. The City Administrative Officer shall include in the notice, a
demand that the Franchisee correct the violation within 10 days following the delivery of said
notice. If the violation is not corrected within the 10 days, the City shall have the right to
terminate the Agreement per the provisions provided in Section 12.2. For purposes of this
Agreement and any notice required thereunder, the term "days" shall mean calendar days.
12.2 Right to Terminate Upon Default
Upon a default by Franchisee, City shall have the right to terminate this Agreement upon a
ten (10) days notice if the public health or safety is threatened, or otherwise a thirty (3 0) days
notice, but without the need for any hearing, suit or legal action. This right of termination is
in addition to any other rights of City upon a failure of Franchisee to perform its obligations
under this Agreement.
12.3 Possession of Property and Billing Records and Systems Upon Termination
In the event of termination for default, the City shall have the right, subject to the obligations
contained in Article 12 hereof, to take possession of any and all of Franchisee's land,
equipment, and other property used or useful in the collection, diversion and /or disposal of
solid waste and to conduct all activities concerning billing and collection of fees for these
services and to use such property. The City shall have the right to retain the possession of
such property until other suitable arrangements can be made for the provision of solid waste
collection services, which may include the award of an agreement or franchise to another
waste hauling company. If the City retains possession thereof after the period of time for
which Franchisee has already been paid by means of bills issued in advance of providing
service for the class of service involved, Franchisee shall be entitled to the reasonable rental
value of such property (which shall be offset against any damages due the City for the
Franchisee's default).
Franchisee shall provide the City immediate access to all of its business records and billing
system related to its billing of accounts for services and shall take direction from the City
regarding the billing of customers during the period between the City's termination of the
Agreement for default until other suitable arrangements can be made for the billing of solid
waste collection services. The provisions of this Section 12.3 shall survive the termination of
this Agreement.
12.4 City's Remedies Cumulative; Specific Performance
The City's right to terminate the Agreement under Section 12.1 and to take possession of the
Franchisee's properties under Section 12.3 are not exclusive, and the City's termination of the
Agreement shall not constitute an election of remedies. Instead, they shall be in addition to
any and all other legal and equitable rights and remedies which the City may have.
By virtue of the nature of this Agreement, the urgency of timely, continuous and high quality
service, the lead time required to effect alternative service, and the rights granted by the City
to Franchisee, the remedy of damages for a breach hereof by Franchisee is inadequate and the
City shall be entitled to injunctive relief and /or specific performance if it so desires.
12.5 Excuse from Performance
The parties shall be excused from performing their respective obligations hereunder in the
event they are prevented from so performing by reason of floods, earthquakes, other "acts of
God ", war, civil insurrection, riots, acts of any government (including judicial action), and
other similar catastrophic events which are beyond the control of and not the fault of the
37 March 24, 1997
Franchise Agreement - Solid Waste
party claiming excuse from performance hereunder. Labor unrest, including but not limited
to strike, work stoppage'or slowdown, sick -out, picketing, or other concerted job action
conducted by Franchisee's employees or directed at Franchisee or its selected facilities is not
an excuse from performance and Franchisee shall be obligated to continue to provide service
notwithstanding the occurrence of any or all such events.
The party claiming excuse from performance shall, within two (2) days after such party has
notice of such cause, give the other party notice of the facts constituting such cause and
asserting its claim to excuse under this Section.
The interruption or discontinuance of Franchisee's services caused by one or more of the
events excused shall not constitute a default by Franchisee under this Agreement.
Notwithstanding the foregoing, however, if Franchisee is excused from performing its
obligations hereunder for any of the causes listed in this Section for a period of seven (7)
days or more, City shall have the right to review the circumstances under which the excuse
from performance was granted. After such review, if the City determines the excuse from
service is no longer valid, the City shall notify the Franchisee in writing to resume service
within two (2) days from the receipt of such notification. If the Franchisee fails to resume
service within the two (2) days, the City shall have the right to terminate this Agreement by
giving ten (10) days notice, in which case the provisions relative to taking possession of
Franchisee's land, equipment and other property and engaging Franchisee's personnel in
Article 11, City's Right to Perform Services, and this Article 12 shall apply.
12.6 Liquidated Damages
City finds, and Franchisee agrees, that as of the time of the execution of this Agreement, it is
impractical, if not impossible to reasonably ascertain the extent of damages which shall be
incurred by City as a result of a breach by Franchisee of its obligations under this Agreement.
The factors relating to the impracticability of ascertaining damages include, but are not
limited to, the fact that:
❑ substantial damage results to members of the public who are denied services or
denied quality or reliable service;
❑ such breaches cause inconvenience, anxiety, frustration, and deprivation of the
benefits of the Agreement to individual members of the general public for whose
benefit this Agreement exists, in subjective ways and in varying degrees of intensity
which are incapable of measurement in precise monetary terms;
❑ that services might be available at substantially lower costs than alternative services
and the monetary loss resulting from denial of services or denial of quality or reliable
services is impossible to calculate in precise monetary terms; and
❑ the termination of this Agreement for such breaches, and other remedies are, at best, a
means of future correction and not remedies which make the public whole for past
breaches. However, substantial breaches may result in the termination of this
Agreement as described in Section 12.1.
The parties further acknowledge that consistent, reliable solid waste collection service is of
utmost importance to City and that City has considered and relied on Franchisee's
representations as to its quality of service commitment in awarding the Franchise to it. The
parties further recognize that if Franchisee fails to achieve the performance standards, 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,
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Franchise Agreement - Solid Waste
including the relationship of the sums to the range of harm to City that reasonably could be
anticipated and the anticipation that proof of actual damages would be costly or inconvenient.
Franchisee agrees to pay (as liquidated damages and not as a penalty) the amounts set forth
below:
Collection Reliability and Quality
o For each failure over five (5) annually to commence service to
a new customer account within seven (7) days after order:
$150.00
o For each failure over ten (10) annually to Collect Solid Waste,
which as been properly set out for Collection, from
an established customer account on the scheduled Collection day:
$150.00
o For each failure to Collect Solid Waste which have
been properly set out for Collection, from the same customer on
two (2) consecutive scheduled pickup days:
$150.00
O For each occurrence over five (5) annually of damage to private
property:
$250.00
• For each occurrence of discourteous behavior:
$250.00
• For each failure over ten (10) annually to clean up Solid Waste spilled from Bins:
$150.00
• For each occurrence over five (5) annually of Collecting
Solid Waste during unauthorized hours:
$250.00
o For each failure to respond to a customer complaint within
twenty -four (24) working hours:
$100.00
o For each failure to prepare for or properly conduct twice annual clean-ups including
advertising and press releases;
$250.00
• For each failure to perform and submit billing reviews:
$250.00
• For each occurrence over ten (10) annually of failure to properly return containers
to avoid pedestrian or vehicular traffic impediments or to place cans upright with
lid secured:
$150.00
O For each occurrence of excessive noise above the limits specified in this
Agreement:
$250.00
Customer Responsiveness
o For each failure to respond to a customer complaint within sixteen (16)
working hours: $100.00
• For each failure to process customer complaints to City: $500.00
• For each failure to carry out responsibilities for establishing service: $500.00
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Franchise Agreement - Solid Waste
Timeliness of Submissions to City
REPORTS Any report shall be considered late until such time as a correct and complete
report is received by City. For each calendar day a report is late, the daily
assessment shall be:
Monthly Reports: For each infraction $100 per day
Quarterly Reports For each infraction $250 per day
Annual Reports: For each infraction $500 per day
Liquidated damages will only be assessed after Franchisee has been given the opportunity but
failed to rectify the damages, as described in this Agreement (e.g., twenty -four (24) working,
hours to respond to a complaint). City may determine the occurrence of events giving rise to
liquidated damages through the observation of its own employees or representative or
investigation of customer complaints.
Prior to assessing liquidated damages, City shall give Franchisee notice of its intention to do
so. The notice will include a brief description of the incident(s) /non - performance.
Franchisee may review (and make copies at its own expense) all information in the
possession of City relating to incident(s) /non - performance. Franchisee may, within ten (10)
days after receiving the notice, request a meeting with City. If a meeting is requested, it shall
be held by the City Administrative Officer or his/her designee. Franchisee may present
evidence in writing and through testimony of its employees and others relevant to the
incident(s) /non performance. The City Administrative Officer or designee will provide
Franchisee with a written explanation of his or her determination on each incident(s)/non-
performance prior to authorizing the assessment of liquidated damages. The decision of the
City Administrative Officer or designee shall be final.
C. Amount. The City Administrative Officer may assess liquidated damages for each
calendar day or event, as appropriate, that Franchisee is determined to be liable in accordance
with this Agreement.
D. Timing of Payment. Franchisee shall pay any liquidated damages assessed by City
within ten (10) days after they are assessed. If they are not paid within the ten (10) day
period, City may proceed against the performance bond required by this Agreement or order
the termination of this Agreement, or both pursuant to the terms of this Agreement.
12.7 Notice, Hearin and nd Appeal
Should the Franchisee contend that the City is in breach of the Agreement, Franchisee shall
file a written request with the Utilities Director for a consultation regarding the allegations.
Such consultation shall be held within thirty calendar days of the receipt of Franchisee's
request. Franchisee shall present its position and all relevant facts to the Utilities Director.
Franchisee shall be notified of the Utilities Director judgment within ten calendar days of the
consultation.
If the Franchisee is not in agreement with the ruling issued by the Utilities Director, it shall
have the right to appeal the decision to the City Administrative Officer. This appeal shall be
made in writing to the City no later than fourteen days after the notification is mailed by
Utilities Director of the judgment. The City Administrative Officer shall notify Franchisee of
the time and date of the review of allegation within thirty calendar days of the request.
Franchisee shall present its position and all relevant facts to the City Administrative Officer.
Franchisee shall be notified in writing within fourteen calendar days of the City
Administrative Officer's ruling. The decision of the City Administrative Officer can be
appealed to City Council per Municipal Code Section 1.20.020.
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Franchise Agreement - Solid Waste
12.8 Financial Material Errors, Omissions or Irregularities
The City may review, test and audit the books and records of the Franchisee for the purpose
of determining whether the Franchisee is complying with the terms of the Agreement. In the
event that material errors or omissions or irregularities are identified, then the cost associated
with the audit, test or review shall be paid by the Franchisee to the City. In the case of
financial errors, materiality shall be deemed to be two percent (2 %) or greater of the gross
revenues of the Franchisee from activities performed under this agreement. Recovery of any
overpayment will be negotiated on a case by case basis, either immediately or through the
next rate setting evaluation.
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Franchise Agreement - Solid Waste
ARTICLE 13. ASSIGNMENT
13.1 Assignment
Except as provided in Article 11, "City's Right to Perform Service ", neither party shall assign
its rights nor delegate or otherwise transfer its obligations under this Agreement to any other
person without the prior written consent of the other party. Any such assignment made
without the consent of the other party shall be void and the attempted assignment shall
constitute a material breach of this Agreement. The City may, however, assign its rights and
delegate its obligations under this Agreement to a joint powers authority without the prior
written consent of Franchisee.
For purposes of this section, "assignment" shall include, but not be limited to
(1) a sale, exchange or other transfer to a third party of at lease fifty -one percent of
Franchisee's assets dedicated to service under this Agreement;
(2) a sale, exchange or other transfer to a third party, including other shareholders, of
outstanding common stock of Franchisee which may result in a change of control of
Franchisee;
(3) any dissolution, reorganization, consolidation, merger, recapitalization, stock issuance
or re- issuance, voting trust, pooling agreement, escrow arrangement, liquidation or
other transaction which Franchisee or any of its shareholders is a party which results
in a change of ownership or control of Franchisee; and
(4) any assignment by operation; of law, including insolvency or bankruptcy, assignment
for the benefit of creditors, writ of attachment for an execution being levied against
this Agreement, appointment of a receiver taking possession of Franchisee's property,
or transfer occurring in the probate proceeding; and
(5) any combination of the foregoing (whether or not in related or contemporaneous
transactions, which has the effect of any such transfer or change of ownership, or
change of control of Franchisee.
Franchisee acknowledges that this Agreement involves rendering a vital service to City
residents and businesses, and that City has selected Franchisee to perform the services
specified herein based on:
1. Franchisee's experience, skill and reputation for conducting its solid waste
management operations in a safe, effective and responsible fashion, at all times in keeping
with applicable environmental laws, regulations and best waste management practices, and
2. Franchisee's financial resources to maintain the required equipment and to support its
indemnity obligations to City under this Agreement. City has relied on each of these factors,
among others, in choosing Franchisee to perform the services to be rendered by Franchisee
under this Agreement.
If Franchisee requests City's consideration of and consent to an assignment, City may deny or
approve such request in its complete discretion. The City is concerned about the possibility
that assignment could result in significant rate increases, as well as a change in the quality of
service. Accordingly, the following standards have been set to ensure that assignment will
result in continued quality service. In addition, the City reserves the right to solicit
competitive bids for these services if the assignment results in a request by the assignee for
rate increases that are higher than the inflationary index and do not reflect value changes in
42 March 24,1997
Franchise Agreement - Solid Waste
service standards. At a minimum, no request by Franchisee for consent to an assignment
need be considered by City unless and until Franchisee has met the following requirements:
A. Franchisee shall undertake to pay City its reasonable expenses for attorney's fees
and investigate the suitability of any proposed assignee, and to review and finalize
any documentation required as a condition for approving any such assignment;
B. Franchisee shall furnish City with audited financial statements of the proposed
assignee's operations for the immediately preceding three (3) operating years;
C. Franchisee shall furnish City with satisfactory proof:
1. that the proposed assignee has at least ten (10) years of solid waste
management experience on a scale equal to or exceeding the scale of
operations conducted by Franchisee under this Agreement;
2. that in the last five (5) years, the proposed assignee or affiliates has not
suffered any significant citations or other censure from any federal, state or
local agency having jurisdictions over its waste management operations due to
any significant failure to comply with state, federal or local environmental
laws and that the assignee has provided City with a complete list of such
citations and censures;
3. that the proposed assignee has at all times conducted its operations in an
environmentally safe and conscientious fashion;
4. that the proposed assignee conducts its solid waste management practices in
accordance with sound waste management practices in full compliance with
all federal, state and local laws regulating the collection and disposal of solid
waste, including hazardous wastes; and,
5. of any other information required by City to ensure the proposed assignee can
fulfill the terms of this Agreement in a timely, safe and effective manner.
Under no circumstances shall the City be obliged to consider any proposed
assignment by Franchisee, if Franchisee is in default at any time during the period of
consideration.
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Franchise Agreement - Solid Waste
ARTICLE 14. OTHER AGREEMENTS OF THE PARTIES
14.1 Relationship of Parties
The parties intend that Franchisee shall perform the services required by this Agreement as an
independent Franchisee engaged by the City and not as an officer or employee of the City nor as a
partner of a joint venture with the City. No employee or agent of Franchise shall be nor shall be
deemed to be an employee or agent of the City. Except as expressly provided herein, Franchisee
shall have the exclusive control over the manner and means of conducting the solid waste collection
and disposal services performed under this Agreement, and over all persons performing such
services. Franchisee shall be solely responsible for the acts and omissions of its officers, directors,
employees, subcontractors, and agents. Neither Franchisee nor its officers, employees,
subcontractors and agents shall obtain any rights to retirement benefits, workers compensation
benefits, or any other benefits which accrue to City employees by virtue of their employment with
the City.
14.2 Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of
the State of California.
14.3 Jurisdiction
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded in the
courts of the State of California, which shall have exclusive jurisdiction over such lawsuits.
With respect to venue, the parties agree that this Agreement is made in and will be performed in San
Luis Obispo County.
14.4 Subcontracting
Except as approved in writing by the City, Franchisee shall not enter into an agreement to have
another Person perform Franchisee's duties of this Agreement. Franchisee shall undertake to pay
City its reasonable expenses for attorney's fees and investigation costs necessary to investigate the
suitability of any proposed subcontractor, and to review and finalize any documentation required as a
condition for approving any such subcontracting agreement.
14.5 Interests of Franchisee
Franchisee covenants that it presently has no interest, and shall not acquire any interest direct or
indirect or otherwise, which would conflict in any manner or degree with the performance of the
work hereunder. The Franchisee further covenants that, in the performance of this work, no
subcontractor of any person having such an interest shall be employed. The Franchisee certifies that
no one who has or will have any financial interest in performing this work is an officer or employee
of the City.
14.6 Binding on Successors
The provisions of this Agreement shall insure to the benefit of and be binding on the successors and
permitted assigns of the parties.
14.7 Transition of Next Franchise
At the point of transition to a new franchise, Franchisee will cooperate with the City and subsequent
franchisee(s) to assist in an orderly transition which will include Franchisee providing route lists and
billing information. Franchisee will not be obliged to sell collection vehicles, bins, and containers to
the next franchise. The Franchisee, at its option, may enter into negotiations with the next franchisee
to sell (in part or all) collection vehicles, bins and containers.
14.8 Parties in Interest
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Nothing in this Agreement, whether express or implied, is intended to confer any rights on any
persons other than the parties to it and their representatives, successors and permitted assigns.
14.9 Waiver
The waiver by either party of any breach or violation of any provision(s) of this Agreement shall not
be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent
breach or violation of the same or any other provision. The subsequent acceptance by either party of
any monies which become due hereunder shall not be deemed to be a waiver of any pre- existing or
concurrent breach or violation by the other party of any provision of this Agreement.
14.10 Condemnation
The City fully reserves whatever rights it may have to acquire Franchisee's property utilized in the
performance of this Agreement, by negotiated purchase or failing that, through the exercise of the
right of eminent domain.
14.11 City Free to Negotiate with Third Parties
The City may investigate, during the term and thereafter, all options for the collection, diversion, and
disposal of solid waste after the expiration of the term. Without limiting the foregoing, the City may
solicit proposals from Franchisee and from third parties for the provision of collection services,
disposal services, recycling services, Solid waste collection and composting, and any combination
thereof, and may negotiate and execute agreements for such services which will take effect upon the
expiration or earlier termination under Section 11.1 of this Agreement.
14.12 Immigration Act of 1986
The Franchisee warrants on behalf of itself and all subcontractors engaged for the performance of
this work that only persons authorized to work in the United States pursuant to the Immigration
Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of
this work.
14.13 Non - Discrimination
In the performance of this work, the Franchisee agrees that it will not engage in, nor permit such
subcontractors as it may employ, to engage in discrimination in employment of persons because of
age, race, color, sex, national origin or ancestry, sexual orientation, physical disability, mental
condition or religion of such persons.
14.14 Public and Employee Safety
Whenever the Franchisee's operations create a condition hazardous to the public or City employees,
it shall, at its expense and without cost to the City, furnish, erect and maintain such fences,
temporary railings, barricades, lights, signs and other devices, and take such other protective
measures as are necessary to prevent accidents or damage or injury to the public and employees.
14.15 Recycled Products
The City encourages the Franchisee's use of recycled products.
14.16 Notice
All notices, demands, requests, proposals, approvals, consent, and other communications which this
Agreement requires, authorizes or contemplates, except as provided in Section 12. 1, shall be in
writing and shall either be personally delivered to a representative of the parties at the address below
or be deposited in the United States mail, first class postage prepaid, addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
955 Morro Street
45 March 24,1997
Franchise Agreement - Solid Waste
San Luis Obispo, CA 93401
If to Franchisee: 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.
Notice shall be deemed given on the day it is personally delivered or, if mailed, three days from the
date it is deposited in the mail.
14.17 Representatives of the Parties
References in this Agreement to the "City" shall mean the City Council and all actions to be taken by
the City shall be taken by the City Council except as provided below. The City Council may
delegate, in writing, authority to the City Administrative Officer, the Director of Utilities and /or to
other City officials and may permit such officials, in turn, to delegate in writing some or all of such
authority to subordinate officers. Franchisee may rely upon actions taken by such delegates if they
are within the scope of the authority properly delegated to them.
Franchisee shall, by the effective date, designate in writing a responsible officer who shall serve as
the representative of Franchisee in all matters related to the Agreement and shall inform the City in
writing of such designation and of any limitations upon his or her authority to bind Franchisee. The
City may rely upon action taken by such designated representative as actions of Franchisee unless
they are outside the scope of the authority delegated to him /her by Franchisee as communicated to
the City.
14.18 Entire Agreement
This Agreement represents the full and entire Agreement between the parties with respect to the
matters covered herein.
14.19 Section Headings
The article headings and section headings in this Agreement are for convenience and reference only
and are not intended to be used in the construction of this Agreement nor to alter or affect any of its
provisions.
14.20 References to Laws
All references in this Agreement to laws shall be understood to include such laws as they may be
subsequently amended or recodified, unless otherwise specifically provided.
14.21 Interpretation
This Agreement shall be interpreted and construed reasonably and neither for. nor against either
party, regardless of the degree to which either party participated in its drafting.
14.22 Amendment
This Agreement may not be modified or amended in any respect except by another Agreement in
writing signed by the parties.
14.23 Severabilily
If any non - material provision of this Agreement is for any reason deemed to be invalid and
unenforceable, the invalidity or unenforceability of such provision shall not affect any of the
46 March 24,1997
Franchise Agreement - Solid Waste
remaining provisions of this Agreement which shall be enforced as if such invalid or unenforceable
provision had not been contained herein.
14.24 Counterparts
This Agreement may be executed in counterparts each of which shall be considered an original.
14.25 Use of "Will"
The use of the word "will" shall be construed as interchangeable with the word "shall."
14.26 Surviving Provisions
Paragraphs 7.11, 7.16, 8.5, 10.2, and other provisions of this Agreement so providing, shall survive
termination of this Agreement.
14.27 Investigation
Franchisee has relied on its own investigations in deciding to enter into this Agreement and has not
relied upon any representations of the City, its Council members, officers, directors, employees or
agents.
47 March 24,1997
I Franchise Agreement - Solid Waste
By: SAN LUIS GARBAGE CO. By: CIT'
- /?J/j
axles Cattaneo
ATTEST:
Clerk
48 March 24,1997
APPENDICES
APPENDIX I
OUTPUT AGREEMENT WITH HAULER
Between
COLD CANYON LAND FILL, INC.,
a California Corporation
( "Operator ")
and
SAN LUIS GARBAGE.COMPANY
a California Corporation
( "Hauler ")
F- INET.C'.CULDCAOIIHAULER. SLG
OUTPUT AGREEMENT WITH HAULER
This Output Agreement With Hauler ( "Agreement ") is made and entered into this 16th
day of May, 1995, to be effective as of January 1, 1995, by and between COLD CANYON
LAND FILL, INC., a California corporation ( "Operator "), and SAN LUIS GARBAGE
COMPANY, a California corporation ( "Hauler "), with reference to the following facts:
RECITALS
A. Operator operates a sanitary landfill disposal site for the receipt of solid waste on
certain real property commonly known as the Cold Canyon Landfill, located on Highway 227
in the County of San Luis Obispo, California (the "Landfill ");
B. Hauler has an agreement with the City of San.Luis Obispo (the "City ") and an
agreement with the County of San Luis Obispo (the "County "), for the collection, hauling and
disposition of solid waste (these agreements are collectively referred to as the "Franchise
Agreements ");
C. Operator and Hauler have previously entered into an oral agreement pursuant to
which Operator accepts and receives from Hauler, and Hauler delivers to the Landfill, all of the
solid waste collected by Hauler pursuant to the Franchise Agreements, at the tipping fee and
other applicable rates as from time to time in effect at the Landfill; and
D. Operator and Hauler now desire to formalize and memorialize their existing oral
agreement with respect to the foregoing, and to modify their oral agreement on the terms and
conditions herein contained.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein. Operator and Hauler agree as follows:
AGREEMENT
1. Purpose of Agreement. Hauler requires -a fully authorized and licensed disposal
site that will assure the prompt and regular ability of Hauler to deliver all solid waste which
Hauler collects pursuant to the Franchise Agreements and not otherwise separated for recycling,
and Operator agrees to provide the Landfill for such purpose, all on the terms and conditions
set forth in this Agreement.
2. Quantity. Operator shall receive and accept from Hauler. and Hauler shall deliver
to and deposit in the Landfill, all of the solid waste collected by Hauler and not otherwise
separated for recycling.
F9N Er.000LDCA01 \HA ULER. SLG
3. Term. The term of this Agreement commenced on January 1, 1995, and shall
continue for the duration of Hauler's Franchise Agreements, and any extensions, renewals,
modifications, or similar arrangements between Hauler and the City or County with respect to
the collection, hauling and disposition of solid waste.
4. Payment. As consideration for Operator's acceptance at the Landfill of all of.
Hauler's solid waste hereunder, Hauler shall pay to Operator compensation in a sum equal to:
ten dollars ($10.00) per year as an Availability Fee to fairly and reasonably compensate Operator
for reserving capacity at the Landfill to accommodate and receive all of Hauler's anticipated
solid waste collections; and (b) the applicable tipping fees and other Landfill charges at the rates
which are from time to time in effect at the Landfill. The foregoing compensation shall be
payable (i) annually with respect to the Availability Fee and (ii) monthly with respect to the
tipping fees and other associated Landfill charges. Operator will periodically bill Hauler for the
foregoing fees and charges. Hauler. shall pay the bills within thirty (30) days following
submission of the bill.
4.1 Late Charges. Hauler acknowledges that late payment by Hauler to
Operator will cause Operator to incur costs not contemplated by this Agreement, the exact
amount of such costs being extremely difficult and impracticable to fix. Such costs include,
without limitation, processing and accounting charges, and late,charges that may be imposed on
Operator by the terms of its agreements with third parties. .Therefore, if any payment due
hereunder is not received by Operator when due, then Hauler shall pay to Operator an additional
sum of five percent (5 %) of the overdue amount as a late charge. The parties agree that this
late charge represents a fair and reasonable estimate of the cost that Operator will incur by
reason of a late payment by Hauler: Acceptance of any late charge shall not constitute a waiver
of Hauler's default with respect to the overdue amount, or prevent Operator from exercising any
of its other available rights and remedies.
5. Specifications and Restrictions.
5.1 Solid Waste. The solid waste which Operator agrees to accept and deposit
in the Landfill pursuant to this Agreement means and includes all solid waste, including garbage,
rubbish, and refuse, as more particularly set forth and /or referenced in the Franchise Agreements
and any applicable laws, regulations or statutes. Notwithstanding anything to the contrary
contained in this Agreement or in the Franchise Agreements, Operator shall have no obligation
to accept any solid waste other than.that which Operator is permitted to accept under
Operator's Solid Waste -Facilities Permit or under any applicable federal, state or local laws,
regulations, ordinances and orders.
5.2 Compliance with Laws. Hauler shall comply, at its sole cost and expense,
with all federal, state and local laws, codes, regulations, ordinances and orders relating to the
collection, storage, accumulation, and transportation, of any solid waste, as these laws may
apply to the solid wastes which are hauled to the Landfill.
F:\NF'nC COLDCAO I %HAULER.SLG 2
5.3 Indemnity. Hauler shall be solely responsible for and shall indemnify.
protect, defend and hold harmless Operator and its agents, employees, representatives, directors
and officers (collectively referred to as the "Indemnitees" from and against any and all claims,
costs, penalties, fines, losses, liabilities, attorneys' fees, damages, injuries, causes of action,
judgments, and expenses which arise, directly or indirectly, in connection with or related to
Hauler's collection, handling, transportation and disposal of solid wastes, hazardous or toxic
materials by Hauler or its agents, employees, contractors, or licensees. The Indemnitees will
not be liable to Hauler for any damage to Hauler or Hauler's property from any cause. Hauler
waives all claims against Operator for damage to person or property arising for any reason
except the willful acts . or omissions of Operator or . its authorized representatives. The
indemnification by Hauler. under this paragraph shall survive the termination of this Agreement.
6. Noncompetition. Hauler agrees that during..the period of this Agreement it shall
deliver all solid waste collected by Hauler to Cold Canyon Landfill. This section shall not
prohibit Hauler from delivering the following materials to other destinations: (1) wastes which
cannot be deposited in the Landfill under the terms of Operator's Solid Waste Facilities Permit;
and (2) recyclables collected by Hauler.
7. Access to Records. Upon request, Operator and its representatives shall have
access during regular business hours to records of Hauler related to - Hauler's collection,
transport, handling and disposition of Hauler's solid waste, and to any records of Hauler
pertaining to this Agreement or to the performance of this Agreement.
8. Estimate of Output. It is agreed that the estimate of Hauler's collected solid waste
output to be delivered to Operator's Landfill is approximately three thousand ten (3,010) tons
per month. This estimate is based upon Hauler's historic collection experiences.
9. Remedies. Operator and Hauler agree that the services to be rendered by
Operator pursuant to this Agreement, and the rights and privileges granted to Hauler pursuant
to this Agreement, are of a special, unique, and extraordinary character, which gives them a
peculiar value, the loss of which cannot be reasonably or adequately compensated in damages
in any action at law, and that a breach by Hauler of any of the terms of this Agreement will
cause Operator great and irreparable injury and damage. Hauler hereby expressly agrees that
Operator shall be entitled to the remedies of injunction, specific performance and other equitable
relief to prevent a breach of this Agreement by Hauler. This Section shall not be construed as
a waiver of any other rights or remedies which Operator may have for damages or otherwise.
10. Severability. If any provision of this Agreement is held to be unenforceable for
any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the parties
to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid
and enforceable to the extent possible.
11. Succession. This Agreement shall inure to the benefit of and be binding upon the
Hauler and its successors and assigns and any such successor or assignee shall be deemed
F:' NErC ZOLDCAO V H.AULER.SLG 3
substituted for the Hauler under the terms of this Agreement for all purposes. As used herein,
successor" and "assignee" shall include any person, firm, corporation or other business entity
which at any time, whether by purchase. merger or otherwise, directly or indirectly acquires the
stock of Hauler or to which Hauler assigns this Agreement, or its Franchise Agreements, by
operation of law or otherwise. Notwithstanding the foregoing, this Agreement shall not be
assignable by Hauler without Operator's prior written consent, which may be given or withheld
in the'sole and absolute discretion of Operator.
12. Notices. Any notice or other communication provided for in this Agreement shall
be in writing and sent:
if to Operator at:
Cold Canyon Land Fill, Inc.
2268 Carpenter Canyon Road
San Luis Obispo, CA 9' )401
Attention: Chas Cattaneo, President
and if to Hauler at:
San Luis Garbage Company
970 Monterey Street
San Luis Obispo, California 93401
Attention: Al Rizzoli, Vice President
or at such other address as the Operator or Hauler may designate, from time to time, in writing.
Each such notice or other communication shall be effective (i) if given by telecommunication,
when transmitted to the applicable number so specified in (or pursuant to) this Section and a
verification of receipt is received, (ii) if given by mail, three (3) days after such communication
is deposited in the mails, sent certified mail with first class postage prepaid, addressed as
aforesaid or (iii) if given by any other means, when actually delivered at such address.
13. Entire Agreement. This Agreement contains the entire agreement of the parties
relating to the subject matter hereof ' and supersedes any prior agreements, undertakings,
commitments and practices relating thereto.
14. Amendments. No amendment or modification of the terms of this Agreement
shall be valid unless made in writing and duly executed by both parties.
15. Waiver. No failure on the part of any party to exercise or delay in exercising any
right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or
partial exercise preclude any further or other exercise of such right or any other right.
F:I Er,C'•COLDCAO I %HAULER. SLG 4
16. Governing Law. This Agreement, and the legal relations between the parties,
shall be governed by and construed in accordance with the laws of the State of California, and
any court action arising out of this Agreement shall be brought in any court of competent
jurisdiction within the State of California, County of San Luis Obispo.
17. Attorneys' Fees. In the event of any controversy, claim or dispute relating to this
Agreement, the prevailing party will be entitled to recover all costs of suit, including reasonable
attorneys' fees and court costs. , In addition to the foregoing award of attorneys' fees, the
prevailing party shall be entitled, to its attorneys' fees incurred in any post judgment proceedings
to enforce any judgment in connection with. this Agreement; this provision is separate and
several and shall survive the merger of this provision into any judgment.
18. No Partnership. Nothing contained in this Agreement:. shall be .deemed or
construed for any purpose as -creating between the parties any relationship with one another as
a partner, principal or agents.
19. - Counterparts. This Agreement and any amendment:hereto may be executed in
one or more counterparts. All' of such counterparts shall constitute one. and the same agreement
and shall become effective -when, a copy signed by each party has been .delivered to the other
party..
20. Headings. Section and other headings contained in this Agreement are for
convenience of reference only and shall not affect in any way. the meaning or interpretation of
this Agreement.
21. Representation By Counsel: Interpretation. Operator and Hauler each
acknowledge that each party to this Agreement has been represented by counsel of its choice in
connection with this Agreement and the matters contemplated by this Agreement. Accordingly,
any rule of law, including but not limited to Section 1654 of the California Civil Code, or any
legal decision that would require interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
"Operator"
COLD CANYON LAND FILL, INC.,
a California corporation
"Hauler"
SAN LUIS GARBAGE COMPANY,
a. California corporation
By: By: —��•
Charles Cattaneo, President Al Rizzoli, Vice - President
F: tSMC.COLDCA0I% HAULER. SLG 5
APPENDIX II
San Luis Garbage Co.
970 Monterey Street • San Luis Obispo, California 93401 • Telephone (805) 543 -0875
SAN LUIS GARBAGE CO., INC.
WAS.TE'W.HEELER REPLACEMEHT_POLICY
effective 1 -1 -97
All waste wheelers have a serial number imprini-a B/L #V"01
Our office staff will give the serial number J`9 'MG
and ask that they look around the 4 houses on Gf*pVt4/- brl&
to see if it just got set back at the wrong a &Lr"6 .
If the customer can't locate it, then San Luib 644 -'A, e, &J �1
deliver another waste wheeler at no charge. J