HomeMy WebLinkAboutO-1711 amending franchise agreements with San Luis Garbage Company to implement SB 1383O 1711
ORDINANCE NO. 1711 (2022 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING ITS FRANCHISE AGREEMENTS
WITH SAN LUIS GARBAGE COMPANY TO IMPLEMENT SB 1383
REQUIREMENTS
WHEREAS, as on March 15, 2022 the City Council of the City of San Luis Obispo
(“City”) passed Resolution No. 11312 (2022 Series), a Resolution of Intention declaring
its intention to amend the franchise agreements with San Luis Garbage Company; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public
hearing on April 19, 2022 for the purpose of considering a doption of the amended
franchise agreements; and
WHEREAS, notices of said public hearing were made at the time and in the
manner as required by law; and
WHEREAS, the City Council of the City of San Luis Obispo adopted Ordinance
No.1551 (2010 Series) granting a franchise to San Luis Garbage Company (“San Luis
Garbage”) for a term of 15 years for the collection and disposal of solid waste and
recycling, and Ordinance No. 1624 (2015) series for a term of 20 years fo r the collection
and deposition of food and green waste within the City (collectively referred to as the
“Franchise Agreements”); and
WHEREAS, public health and safety demand the orderly and periodic collection
and safe disposal and/or processing of solid waste, recyclables, food, and green waste;
and
WHEREAS, it has been determined that an exclusive franchise granted to a private
company is the most effective and efficient way to collect and remove solid waste,
recyclables, and green waste within the City; and
WHEREAS, San Luis Garbage has provided a high level of service and reasonable
rates for waste, recyclables, and green waste collection in the City for the terms of the
Franchise Agreements; and
WHEREAS, Senate Bill 1383 Lara, Chapter 395, Statutes of 2016 (“SB 1383”)
establishes methane emissions reduction targets in a statewide effort to reduce emissions
of short-lived climate pollutants by reducing disposal of organic waste in landfills and is
California’s most comprehensive change to solid waste regulations in over thirty years;
and
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Ordinance No. 1711 (2022 Series) Page 2
O 1711
WHEREAS, SB 1383 and its implementing regulations require all jurisdictions to
implement organic waste diversion programs to meet the goals of SB 1383 and allows a
jurisdiction to designate a public or private entity to fulfill, in whole or in part, its
responsibilities under SB 1383 through contracts with its waste haulers , such as the
Franchise Agreements; and
WHEREAS, the Franchise Agreements allow the flexibility to add or change solid
waste and recycling programs to comply with new laws and regulations.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The City Council of the City of San Luis Obispo hereby grants to San
Luis Garbage the exclusive right, privilege, and franchise for continued services to collect,
process, and dispose of solid waste, recyclable, and green waste subject to the terms
and conditions presented in Exhibit A - Solid Waste Agreement, Exhibit B – Recycling
Agreement, and Exhibit C - Organic Materials Agreement.
SECTION 2. Ordinance No. 1551 (2010 Series) and Ordinance No. 1624 (2015
Series) are hereby repealed and superseded upon the effective date of this ordinance.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Ordinance No. 1711 (2022 Series) Page 3
O 1711
SECTION 4. A summary of this ordinance, together with the names of Council
members voting for and against, shall be published at least five (5) days prior to its final
passage, in The New Times, 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 on the 19th day of April 2022, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 3rd day of May 2022, on the following vote:
AYES: Council Member Marx, Pease, Shoresman, Vice Mayor
Christianson, and Mayor Stewart
NOES: None
ABSENT: None
___________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124E
5/9/2022 | 6:01 PM PDT
DocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
1
AMENDED AND RESTATED
FRANCHISE AGREEMENT BETWEEN
THE CITY OF SAN LUIS OBISPO ·
AND
SAN LUIS GARBAGE COMPANY
For Collection, Transportation, and Disposal of Solid
Waste Within the City of San Luis Obispo
This Agreement between the City of San Luis Obispo and San Luis Garbage Company for Collection of Solid
Waste (“Agreement”), is made and entered into as of June 3, 2022 (the “Effective Date”) in the State of California
by and between the City of San Luis Obispo, a political subdivision of the State of California (hereafter “City”)
and San Luis Garbage Company, a California corporation (hereafter “Franchisee”), each of which may be referred
to individually as a “Party” or together as the “Parties.
RECITALS
This Agreement is made and entered into on the basis of the following facts, understandings, and intentions of
the Parties:
WHEREAS: The Parties entered into a Franchise Agreement for Solid Waste Collection on August 20, 2010;
and,
WHEREAS: Section 5.8 of the Franchi se Agreement for Solid Waste Collection provides City with the right to
direct Franchisee to modify the scope of one or more types of service described in the Agreement, or to
otherwise modify its performance under the Agreement, subject to providing addit ional compensation; and,
WHEREAS: The State of California has found and declared that the amount of refuse generated in California,
coupled with diminishing Disposal capacity and potential adverse environmental impacts from landfill Disposal and
the need to conserve natural resources, have created an urgent need for State and local agencies to enact and
implement an aggressive integrated waste management program. The State has, through enactment of AB 939 and
subsequent related legislation including, but not limited to: the Jobs and Recycling Act of 2011 (AB 341), the Event
and Venue Recycling Act of 2004 (AB 2176), SB 1016 (Chapter 343, Statutes of 2008 [Wiggins, SB 1016]), the
Mandatory Commercial Organics Recycling Act of 2014 (AB 1826), and the Short-Lived Climate Pollutants Bill of
2016 (SB 1383), directed the responsible State agency, and all local agencies, to promote Diversion and to maximize
the use of feasible waste reduction, re-use, Recycling, and Composting options in order to reduce the amount of
refuse that must be Disposed; and
WHEREAS: SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid Waste
facilities, and other entities to support achievement of State -wide Organic Waste Disposal reduction targets; and
WHEREAS: SB 1383 requires the City to implement Collection programs for Organic Waste, Recyclable
Materials, and Solid Waste, meet Processing Facility requirements, conduct contamination monitoring, provide
education, maintain records, submit reports, mo nitor compliance, conduct enforcement, and fulfill other
requirements; and, the City has chosen to delegate some of its responsibilities to the Franchisee, acting as the
City’s designee, through this Agreement; and
WHEREAS: Both Parties have, in good faith, negotiated changes to the Franchise Agreement for Solid Waste
Collection necessary to support the City’s and Franchisee’s compliance with SB 1383, as set forth herein; and
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
2
WHEREAS, this Agreement is intended to restate and supersede all prior Franchise Agreements for Solid Waste
Collection between City and Franchisee; and
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions herein contained,
CITY and FRANCHISEE do hereby agree as follows:
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
3
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 341” means the California Jobs and Recycling Act of 2011 (Chapter 476, Statues of 2011 [Chesbro,
AB 341]), also commonly referred to as “AB 341”, as amended, supplemented, superseded, and replaced
from time to time.
1.2 "AB 939" means the California Integrated Waste Management Act of 1989, (Division 30 of the California
Public Resources Code), also commonly referred to as "AB 939," as amended, supplemented, superseded,
and replaced from time to time.
1.3 “AB 1826” means the Organic Waste Recycling Act of 2014 (Chapter 727, Statutes of 2014 modifying
Division 30 of the California Public Resources Code), also commonly referred to as "AB 1826," as
amended, supplemented, superseded, and replaced from time to time.
1.4 "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 an d /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 3l 8(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 3l 8(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 3l 8(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.
1.5 "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.
1.6 “Applicable Law” means all Federal, State, County, and local laws, regulations, rules, orders, judgments,
degrees, permits, approvals, or other requirement of any governmental agency having jurisdiction over the
Collection, Transportation, and Processing of Recyclable Materials, Organic Materials, and Solid Waste that
are in force on the Effective Date and as may be enacted, issued or amended during the Term of this
Agreement. Applicable Law includes, but is in no way limited to, AB 939, AB 341, AB 1826, and SB 1383.
1.7 "Arranger" means any person that arranges for the collection, diversion, transfer, burning, disposal or
processing of any solid waste.
1.8 “Bin” means a Container with capacity of approximately one (1) to eight (8) cubic yards, with a hinged lid,
and with wheels (where appropriate), that is serviced by a front end-loading and/or rear-end loading
Collection vehicle, including Bins with Compactors attached to increase the capacity of the Bin.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
4
1.9 "Bulky Item(s)” or “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.
1.10 “Business Days” mean days during which the City offices are open to do business with the public.
1.11 “California Code of Regulations” or “CCR” means the State of California Code of Regulations. CCR
references in this Agreement are preceded with a number that refers to the relevant Title of the CCR (e.g.,
“14 CCR” refers to Title 14 of CCR).
1.12 “CalRecycle” means California's Department of Resources Recycling and Recovery.
1.13 “Cart” means a plastic Container with a hinged lid and wheels that is serviced by an automated or semi -
automated Collection vehicle. A Cart has capacity of 20, 35, 64 or 96 gallons (or similar volumes).
1.14 "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C Section 9601, et seq.
1.15 "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. The City may designate responsibilities to one or more third parties, in
writing, between the City Manager and the designee.
1.16 "Collect" or "Collection" (or any variation thereof) means to take physical possession, Transport, and
remove Discarded Materials and other material at the place of generation in the City.
1.17 “Commencement Date” means the date specified in Article 3 when Collection, Transportation, Processing,
and Disposal services required by this Agreement shall be provided.
1.18 "Commercial” shall mean of, from, or pertaining to non-Residential Premises where business activity is
conducted, including, but not limited to, retail sales, services, wholesale operations, manufacturing, and
industrial operations, but excluding businesses conducted upon Residential property which are permitted
under applicable zoning regulations and are not the primary use of the property.
1.19 “Compactor” means a mechanical apparatus that compresses materials together with the Container that
holds the compressed materials or the Container that holds the compressed materials if it is detached from
the mechanical compaction apparatus. Compactors include two (2) to eight (8) cubic yard Bin Compactors
serviced by front-end loader Collection vehicles and ten (10) to fifty (50) cubic yard Drop Box Compactors
serviced by Roll-Off Collection vehicles.
1.20 “Complaint” shall mean each written or orally communicated statement made by any Person, whether to
City or Franchisee, alleging: (1) non-performance, or deficiencies in Franchisee’s performance of its duties
under this Agreement; (2) a violation by Franchisee of this Agreement; (3) an SB 1383 Non-Compliance
Complaint as required under 14 CCR Section 18995.3.
1.21 “Compost” (or any variation thereof) includes a controlled biological decomposition of Organic Materials
yielding a safe and nuisance free Compost product.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
5
1.22 “Compostable Plastic” means plastic materials that meet the ASTM D6400 standard for Compostability.
1.23 "Construction and Demolition Debris" or “C&D” means used or discarded construction materials removed
from a Premises during the construction, repair, demolition, or renovation of a structure.
1.24 "Container" means Bin, Carts, Compactors, and franchise Roll-Offs.
1.25 “County” means the County of San Luis Obispo, a political subdivision of the State of California.
1.26 “Customer” means the Person whom Franchisee submits its billing invoice to and collects payment from
for Collection services provided to a Premises. The Customer may be either the Occupant or Owner of the
Premises.
1.27 "Demolition Debris" means used construction materials removed from a premises during the razing or
renovation of a structure.
1.28 "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.
1.29 “Designated Disposal Facility” or “Designated Disposal Site” means the landfill or transfer station,
selected by City where Solid Waste Collected under this Agreement is sent for final Disposal. The
Designated Disposal Facility is subject to the City's right of direction. The Designated Disposal Facility is
the Cold Canyon Landfill as the primary, owned and operated by Waste Connections and located at 2268
Carpenter Canyon Rd, San Luis Obispo, CA 93401, and Chicago Grade Landfill, or the Santa Maria
Landfill, as alternatives.
1.30 “Designated Waste” means non-Hazardous Waste which may pose special Disposal problems because of
its potential to contaminate the environment, and which may be Disposed of only in Class II Disposal sites
or Class III Disposal sites pursuant to a variance issued by the California Department of Health Services.
Designated Waste consists of those substances classified as Designated Waste by the State, in California
Code of Regulations Title 23, Section 2522 as may be amended from time to time.
1.31 “Discarded Materials” means Recyclable Materials, Organic Materials, and Solid Waste placed by a
Generator in a receptacle and/or at a location for the purposes of Collection, excluding Excluded Waste.
1.32 “Disposal Facility” means a landfill, or other Facility for ultimate Disposal of Solid Waste.
1.33 "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.
1.34 "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.
1.35 "Dispose” or “Disposal" means the ultimate disposition of Solid Waste or Processing Residue at a Disposal
Facility.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
6
1.36 “Divert” or “Diversion” (or any variation thereof) means to prevent Discarded Materials from Disposal at
landfill or transformation facilities, (including facilities using incineration, pyrolysis, distillation,
gasification, or biological conversion methods) through source reduction, reuse, Recycling, Composting,
anaerobic digestion, or other method of Processing, subsequent to the provisions of AB 939. Diversion is a
broad concept that is to be inclusive of material handling and Processing changes that may occur over the
Term including, but not limited to, changes in standard industry practice or implementation of innovative
(but not necessarily fully proven) techniques or technology that reduce Disposal risk, decrease costs and/or
are for other reasons deemed desirable by the City.
1.37 “Dwelling Unit” means any individual living unit in a; Single-Family Dwelling Unit or Multi-Family
Dwelling Unit or building, a mobile home, or a motor home located on a permanent site intended for, or
capable of being utilized for, Residential living other than a Hotel or Motel.
1.38 “Edible Food” means food intended for human consumption. For the purposes of this Agreement, Edible
Food is not Solid Waste if it is recovered and not discarded. Nothing in this Agreement requires or
authorizes the recovery of Edible Food that does not meet the food safety requirements of the California
Retail Food Code. If the definition in 14 CCR Section 18982(a)(18) for Edible Food differs from this
definition, the definition in 14 CCR Section 18982(a)(18) shall apply to this Agreement.
1.39 “Effective Date” means the date on which the latter of the two Parties signs this Agreement, as specified in
Section 3.1 of this Agreement.
1.40 “Excluded Waste” means Hazardous Substance, Hazardous Waste, Infectious Waste, Designated Waste,
volatile, corrosive, biomedical, infectious, biohazardous, and toxic substances or material, waste that
Franchisee reasonably believes would, as a result of or upon Disposal, be a violation of local, State or
Federal law, regulation or ordinance, including land use restrictions or conditions, waste that cannot be
Disposed of in Class III landfills, waste that in Franchisee’s reasonable opinion would present a significant
risk to human health or the environment, cause a nuisance or otherwise create or expose Franchisee or City
to potential liability; but not including de minimis volumes or concentrations of waste of a type and amount
normally found in Residential Solid Waste after implementation of programs for the safe Collection,
Recycling, treatment, and Disposal of batteries and paint in compliance with Sections 41500 and 41802 of
the California Public Resources Code.
1.41 "Facility" means any plant or site utilized by Franchisee (or its Subcontractor) for the purposes of
performing the duties under this Agreement, including, but not limited to, Transfer, Processing, or Disposal
of Discarded Materials Collected in the City.
1.42 “Federal” means belonging to or pertaining to the Federal government of the United States.
1.43 “Food Recovery” means actions to Collect and distribute food for human consumption which otherwise
would be Disposed, or as otherwise defined in 14 CCR Section 18982(a)(24).
1.44 “Food Scraps" means those Discarded Materials that will decompose and/or putrefy including: (i) all
kitchen and table Food Waste; (ii) animal or vegetable waste that is generated during or results from the
storage, preparation, cooking or handling of food stuffs; (iii) fruit waste, grain waste, dairy waste, meat, and
fish waste; and, (iv) vegetable trimmings, houseplant trimmings and other Compostable Organic Waste
common to the occupancy of Residential dwellings. Food Scraps are a subset of Food Waste.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
7
1.45 “Food-Soiled Paper” means Compostable paper material that has come in contact with Food Scraps or
liquid, such as, but not limited to, Compostable paper plates, napkins, and pizza boxes. Food -Soiled Paper is
a subset of Food Waste.
1.46 “Food Waste” means Source Separated Food Scraps and Food-Soiled Paper. Food Waste is a subset of
Organic Materials.
1.47 "Franchise" means the special right granted by the City of San Luis Obispo to operate a Discarded
Materials Collection company providing such services within the City.
1.48 “Franchise Fee” means the fee paid by Franchisee to the City as described in Article 8.
1.49 "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.
1.50 "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.
1.51 “Generator” or “Waste Generator” means any Person whose act or process produces Solid Waste as
defined in the Public Resources Code, or whose act first causes Solid Waste to become subject to regulation.
1.52 "Green Waste" means those Discarded Materials that will decompose and/or putrefy, including, but not
limited to, green trimmings, tree trimmings, grass cuttings, dead plants, weeds, prunings, brush, leaves,
branches, brush, dead trees, small pieces of untreated and unpainted wood and other types of Organic Waste
resulting from normal yard and landscaping maintenance that may be specified in City Legislation for
Collection and Processing as Organic Materials under this Agreement. Green Waste does not include items
herein defined as Excluded Waste. Green Waste is a subset of Organic Materials. If Green Waste is more
than six (6) inches in diameter, it shall be Collected in the Bulky Waste Collection program.
1.53 "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.
1.54 “Hazardous Substance” means any of the following: (a) any substances defined, regulated or listed
(directly or by reference) as "Hazardous Substances", "hazardous materials", "Hazardous Wastes", "toxic
waste", "pollutant", or "toxic substances", or similarly identified as hazardous to human health or the
environment, in or pursuant to: (i) the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) of 1980, 42 USC §9601 et seq. (CERCLA); (ii) the Hazardous Materi als Transportation Act,
49 USC §1802, et seq.; (iii) the Resource Conservation and Recovery Act, 42 USC §6901 et seq.; (iv) the
Clean Water Act, 33 USC §1251 et seq.; (v) California Health and Safety Code §§25115-25117, 25249.8,
25281, and 25316; (vi) the Clean Air Act, 42 USC §7901 et seq.; and, (vii) California Water Code §13050;
(b) any amendments, rules or regulations promulgated thereunder to such enumerated statutes or acts
currently existing or hereafter enacted; and, (c) any other hazardous or toxic substance, material, chemical,
waste or pollutant identified as hazardous or toxic or regulated under any other Applicable Law currently
existing or hereinafter enacted, including, without limitation, friable asbestos, polychlorinated biphenyl’s
(PCBs), petroleum, natural gas, and synthetic fuel products, and by-products.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
8
1.55 "Hazardous Waste" means any discarded material or mixture of materials, which is toxic, corrosive,
flammable, radioactive or which, because of its quantity, concentration, physical, chemical or infectious
characteristics may do harm to either humans, animals or the environment, or as defined in Article 2,
Chapter 6.5 25117 of the Health and Safety Code and Public Resources Code 40141.
1.56 “Holidays” are defined as New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day.
1.57 "Household Hazardous Waste" means hazardous waste generated at residential premises.
1.58 "Interruption of Service" means (a) any period during which Franchisee's operations are diminished or
discontinued by circumstances beyond its control, or (b) any period during which operations are diminished
or discontinued as a result of any breach of the Agreement by Franchisee or (c) any period after the City has
terminated the franchise and until the City can reasonably acquire other suitable service and/or enter into a
new franchise agreement.
1.59 “Liquidated Damages” means the amounts due by Franchisee for failure to meet specific quantifiable
standards of performance as described in Article 12.
1.60 ''Materials Recovery Facility" means a permitted Facility where Discarded Materials are sorted or
separated for the purposes of Recycling, Processing, or Reuse.
1.61 "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.
1.62 "Multi-Family Dwelling Unit" or “Multi-Family” means, notwithstanding any contrary definition in the
City Municipal Code, any Premises, other than a Single Family Dwelling Unit, used for residential purposes,
irrespective of whether residence therein is transient, temporary or permanent, including such Premises when
combined in the same building with Commercial establishments, that receive centralized, shared, Collection
service for all units on the Premises which are billed to one (1) Customer at one (1) address. Customers
residing in Townhouses, mobile homes, condominiums, or other structures with five (5) or more Dwelling
Units who receive centralized, shared, Collection service for all units on the Premises which are billed to one
(1) Customer at one (1) address shall be considered Multi-Family.
1.63 “Occupant” means the Person who occupies a Premises.
1.64 "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 P remises, 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 satisfact ion
of the City Manager.
1.65 “Organic Materials” means Green Waste and Food Waste, individually or collectively. No Discarded
Material shall be considered to be Organic Materials, however, unless it is separated from Recyclable
Material and Solid Waste. Organic Materials are a subset of Organic Waste.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
9
1.66 “Organic Waste” means wastes containing material originated from living organisms and their metabolic
waste products including, but not limited to, food, Yard Trimmings, lumber, wood, paper products, printing
and writing paper, manure, biosolids, digestate, and sludges, or as otherwise defined in 14 CCR Section
18982(a)(46). Biosolids and digestate are as defined in 14 CCR Section 18982(a)(4) and 14 CCR Section
18982(a)(16.5), respectively.
1.67 "Owner" means the Person or Persons holding legal title to real property and/or any improvements thereon
and shall include the Person(s) listed on the latest equalized assessment roll of the County Assessor.
1.68 “Party” or “Parties” refers to the City and Franchisee, individually or together.
1.69 "Person" means any individual, firm, association, organization, partnership, corporation, consortium,
business trust, joint venture, Commercial entity, governmental entity, public entity, the United States, the
State of California, the County, local agencies, special purpose districts, or any other legal Person.
1.70 “Premises” means any land or building where Discarded Materials are generated or accumulated.
1.71 “Process” or “Processing” means to prepare, treat, or convert through some special method.
1.72 “Processing Facility” means any plant or site used for the purpose of sorting, cleansing, treating or
reconstituting Recyclable Materials, or Reusable Materials for the purpose of making such material available
for Recycling or reuse or the Facility for the Processing and/or Composting of Organic Materials.
1.73 “Prohibited Container Contaminants” means the following: (i) Discarded Materials placed in the
Recyclable Materials Container that are not identified as acceptable Recyclable Materials for the City’s
Collection program; (ii) Discarded Materials placed in the Organic Materials Container that are not
identified as acceptable Organic Materials for the City’s Collection program; (iii) Discarded Materials
placed in the Solid Waste Container that are acceptable Recyclable Materials and/or Organic Materials to be
placed in the City’s Recyclable Materials or Organic Materials Containers or otherwise managed under the
City’s Collection program; and, (iv) Excluded Waste placed in any Container.
1.74 "Recyclable Materials" means Recyclable Materials as defined under the Franchise agreement between the
Parties for Recyclable Materials Collection, as it may be amended from time to time.
1.75 “Recycle” or “Recycling” means the Process of sorting, cleansing, treating, and reconstituting at a
Recyclable Materials Processing Facility, materials that would otherwise be Disposed of at a landfill for the
purpose of returning such materials to the economy in the form of raw materials for new, reused, or
reconstituted products. Recycling includes Processes deemed to constitute a reduction of landfill Disposal
pursuant to 14 CCR, Division 7, Chapter 12, Article 2. Recycling does not include gasification or
transformation as defined in Public Resources Code Section 40201.
1.76 "Related Party Entity" means any affiliated entity which has financial transactions with the Franchisee.
1.77 “Residential” shall mean of, from, or pertaining to a Single-Family Premises or Multi-Family Premises
including Single-Family homes, apartments, condominiums, Townhouse complexes, mobile home parks,
and cooperative apartments.
1.78 "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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
10
1.79 “Residue” means those materials which, after Processing, are Disposed rather than Recycled due to either
the lack of markets for materials or the inability of the Processing Facility to capture and recover the
materials.
1.80 “Reusable Materials” means items that are capable of being used again after minimal Processing. Reusable
Materials may be Collected Source Separated or recovered through a Processing Facility.
1.81 “Roll-Off” means an open-top or lidded Container with a capacity of seven (7) to forty (40) cubic yards that
is serviced by a franchise roll-off Collection vehicle.
1.82 "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.
1.83 “SB 1383” means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which added
Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added Chapter 13.1
(commencing with Section 42652) to Part 3 of Division 30 of the Public Resources Code, establishing
methane emissions reduction targets in a statewide effort to reduce emissions of short -lived climate
pollutants as amended, supplemented, superseded, and replaced from time to time. For the purposes of this
Agreement, SB 1383 specifically refers to the Short-Lived Climate Pollutants (SLCP): Organic Waste
Reductions regulations developed by CalRecycle and adopted on November 3, 2020 that created Chapter 12
of 14 CCR, Division 7 and amended portions of regulations of 14 CCR and 27 CCR.
1.84 “SB 1383 Renewable Natural Gas” or “SB 1383 RNG” means SB 1383 qualified gas derived from
Organic Waste that has been Diverted from a landfill and Processed at an in-vessel digestion Facility that is
permitted or otherwise authorized by 14 CCR to recover Organic Waste, or as otherwise defined in 14 CCR
Section 18982(a)(62).
1.85 “Self-Haul” or “Self-Hauler” means a Person who hauls Discarded Materials, recovered material, or any
other material, to another Person, or as otherwise defined in 14 CCR Section 18982(a)(66). Self-Hauler also
includes a Person who back-hauls waste, as defined in 14 CCR Section 18982(a)(66)(A).
1.86 “Service Level” refers to the size of a Customer’s Container and the frequency of Collection service.
1.87 "Single Family Dwelling Unit" or “Single-Family” or “SFD” means, notwithstanding any contrary
definition in City Code, any detached or attached house or residence designed or used for occupancy by one
(1) family, provided that Collection service feasibly can be provided to such Premises as an independent
unit, and the Owner or Occupant of such independent unit is billed directly for the Collection service.
Single-Family includes Townhouses that maintain individual collection service regardless of whether each
unit is separately billed for their specific Service Level. Single-Family also includes duplex, tri-plex, or four-
plex Residential structures regardless of whether each unit maintains individual collection service or is
separately billed for their specific Service Level.
1.88 "Solid Waste" means Solid Waste as defined in California Public Resources Code, Division 30, Part 1,
Chapter 2, §40191 and regulations promulgated thereunder. Excluded from the definition of Solid Waste are
Excluded Waste, C&D, Source Separated Recyclable Materials, Source Separated Organic Materials, and
radioactive waste. Notwithstanding any provision to the contrary, Solid Waste may include de minimis
volumes or concentrations of waste of a type and amount normally found in Residential Solid Waste after
implementation of programs for the safe Collection, Recycling, treatment, and Disposal of Household
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
11
Hazardous Waste in compliance with Section 41500 and 41802 of the California Public Resources Code as
may be amended from time to time. Solid Waste includes salvageable materials only when such materials
are included for Collection in a Solid Waste Container not Source Separated from Solid Waste at the site of
generation.
1.89 “Source Separated” means the segregation, by the Generator, of materials designated for separate
Collection for some form of Recycling, Composting, recovery, or reuse.
1.90 “State” means the State of California.
1.91 “Subcontractor” means a Party who has entered into a contract, express or implied, with the Franchisee for
the performance of an act that is necessary for the Franchisee’s fulfillment of its obligations for providing
service under this Agreement. Vendors providing materials and supplies to Franchisee shall not be
considered Subcontractors.
1.92 "Term" means the term of the Agreement, as provided for in Article 3.
1.93 “Ton” or “Tonnage” means a unit of measure for weight equivalent to two thousand (2,000) standard
pounds.
1.94 “Townhouse” means an attached or semi-attached Dwelling Unit within a group of attached or semi-
attached Dwelling Units. A Townhouse shall be considered a Single-Family Dwelling Unit if each unit
maintains individual Collection service subscription. A Townhouse shall be considered a Multi-Family
Dwelling Unit if the Premise receives centralized, shared, Collection service for all units on the Premise.
These shall be the designations regardless of whether the Premises are billed individually or through a
central account (e.g., homeowner association, property manager).
1.95 “Transfer” means the act of transferring the Discarded Materials Collected by Franchisee in its route
vehicles into larger vehicles for Transport to other facilities for the purpose of Processing or Disposing of
such Discarded Materials.
1.96 “Transport” or “Transportation” means the act of transferring the materials Collected by Contractor in its
route vehicles into larger vehicles for Transport to other facilities for the purpose of Recycling or Disposing
of such materials.
1.97 "Waste Generator" or “Generator” means any Person whose act or process produces Solid Waste as
defined in the Public Resources Code, or whose act first causes Solid Waste to become subject to regulation.
1.98 “Working Days” means days on which the Franchisee is required to provide regularly scheduled Collection
services under this Agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
12
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 SB 1383, Article X of the City Charter and
Chapters 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
13
ARTICLE 3.
TERM OF AGREEMENT
3.1 Effective Date
The effective date of this Agreement shall be June 3, 2022 ("Effective Date").
3.2 Term
The term of this Agreement shall commenc e at 12:01 a.m. on the Effective Date, June 3,
2022, and expire at midnight, August 20, 2025, subject to extension as provided in paragraph
3.3 (Option to Extend).
The City Council may elect to renew this franchise at any time during the three-year period
prior to the end of the franchise.
3.3 Option to Extend
The City, by written authorization of the City Manager, 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 exe rcised, 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 of this Agreement.
(2) Furnishing of Insurance and Bonds. Franchisee has furnished evidence of the
insurance and bonds required by Article 10, Indemnification, insurance and Bond.
(3) Effectiveness of City Council Action. The City's Ordinance No. 1711, approving this
Agreement, shall have become effective pursuant to California law on or prior to the
effective date of this Agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
14
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 Commercial properties
placed in the Designated Collection Location for regular or scheduled Collection in accordance
with the City’s Municipal Code and this Agreement, except where otherwise precluded by
Applicable Law. Franchisee accepts the grant of the Franchise under the terms and conditions as
set forth in this Agreement. Franchisee agrees to perform and be bound by each of the conditions
proposed in the grant and by procedural ordinance and the requirements of Acceptance on file
with the City Clerk’s office (Article X of the City Charter, Section 1006, Duties of Grantee).
4.2 Limitations to Scope
This Agreement for the Collection, Processing, Diversion, and Disposal of Solid Waste from
Residential and Commercial properties shall be exclusive except as to the following categories of
Discarded Materials, which the Franchisee may, but shall not be obligated to Collect, Transfer,
Process, Divert or Dispose of. Discarded Materials which are not required to be Collected
include:
A. Construction and Demolition Debris which is not offered by Persons performing the
work and which may be legally Collected and Disposed of by some alternate means;
B. Solid Waste Self-Hauled by Generators to Disposal Facilities.;
C. To the extent allowable by Applicable Law, all Recyclable Materials whether
1. Source Separated by the Generator for the purpose of placing for scheduled
Collection with the Recycling Collection franchisee; or
2. Source Separated from Solid Waste by the Generator and which the 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 Generator; or,
3. Source Separated at any Premises and transported by the Owner or Occupant of
such Premises (or by their full-time employees) to a Processing Facility.
D. All Organic Materials whether
1. Source Separated by the Generator for the purpose of placing for scheduled
Collection with the Organic Materials Collection franchisee; or
2. Source Separated from other Discarded Materials by the Generator and which
the 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
Generator; or
3. Source Separated at any Premises and transported by the Owner or Occupant of
such Premises (or by their full-time employees) to a Processing Facility; or,
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.
5. Franchisee shall cooperate with and shall not impede, interfere, or attempt to
impede or interfere with the implementation, expansion, or operation of Food
Recovery efforts in the City.
E. Animal waste and remains from slaughterhouse or butcher shops.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
15
F. By-products of sewage treatment, including sludge, sludge ash, grit and screening.
G. Excluded Waste, 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 Discarded Materials listed in paragraph 4.2 without
seeking or obtaining approval of Franchisee under this Agreement.
This grant to Franchisee of an exclusive Franchise, right and privilege to Collect, Transfer,
Process, Divert, and Dispose of Solid Waste shall be interpreted to be consistent with State
and Federal laws, now and during the Term of this Franchise Agreement· 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 Applicable Law, enactment or developing
legal trends limit the ability of the City to lawfully provide for the scope of Fra nchise
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 respons ible 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 provide d.
4.3 Administration of Franchise
The City Manager 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 City 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 Agre ement 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
16
4.8 Use of City Streets
Such grant of franchise shall give Franchisee the right and privilege to operate solid waste
collection vehicles and equipment on such streets, public ways, rights-of-way, or easements of the
City.
4.9 Annexation
The Franchisee shall automatically extend all services herein described to any area annexed to
the City, except that the City may permit a firm franchised by the County of San Luis
· Obispo before the annexation to continue serving the area for a period not to exceed five (5) years.
4.10 Ownership of Solid Waste
Once solid waste is placed in containers and properly presented for collection, ownership and the
right to possession shall transfer directly from the waste generator to Franchisee by operation of
this Agreement. Franchisee is hereby granted the right to retain, process, divert, dispose of, and
otherwise use such solid was te, 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. Arty 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
17
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 Three- Container Collection System
Franchisee shall provide Solid Waste Collection as part of the City’s three -Container
Collection program for the separate Collection of Source Separated Recyclable Materials,
Source Separated Organic Materials, and Solid Waste, in accordance with the appli cable
Franchise Agreement(s) for each Discarded Material type. Franchisee shall ensure that the
Solid Waste services provided under this Agreement are at all times performed in accordance
with Applicable Law, and operationally align with the Collection of Organic Materials and
Recyclable Materials in order to operate a successful three -Container Collection system.
Franchisee shall provide Containers to Customers for Collection of Solid Waste and shall
provide Solid Waste Collection service in accordance with this Section. Franchisee shall
Transport the Solid Waste to a Designated Disposal Facility. Franchisee may allow carpets
and textiles to be placed in the Solid Waste Containers. Prohibited Container Contaminants
shall not be Collected in So lid Waste Containers. The Containers shall comply with the
requirements of Section 6.1.3.
5.3 Collection Service
5.3.1 Single-Family Residential Solid Waste Collection Service
For Single-Family Customers, Franchisee shall Collect Solid Waste placed in Franchisee-
provided Containers at the curbside at a minimum of once a week, Monday through Friday,
except as specified below. The Franchisee-provided Solid Waste Containers shall comply
with the requirements of Section 6.1.3 of this Agreement. Franchisee s hall Transport all Solid
Waste Collected to a Designated Disposal Facility. The Franchisee will notify Solid Waste
Customers of Holiday Collection schedules.
Single-Family Customers with a disability shall have the option of placing their Containers
near their dwelling, visible and within reasonable distance from the curb, and without
obstacles (i.e. uneven surfaces, steep inclines/declines, behind gates) that cause a safety
concern. The Franchisee will Collect their Containers at this lo cation and return Container to
same location. Franchisee will notify residents annually, beginning within thirty (30) days of
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
18
execution of this Agreement, of this Collection option. To be eligible for this Collection
option, residents must present proof of their disability to the Franchisee. SL Garbage agreed
upon change – duplicated.
5.3.2 Multi-Family Solid Waste Collection Service
Franchisee shall Collect Solid Waste from all Multi -Family Dwelling Units within the City,
using Franchisee- provided Contain ers, not less than once per week. The Solid Waste
Containers shall comply with the requirements of Section 6.1.3 of this Agreement. Franchisee
shall Transport all Solid Waste Collected to a Designated Disposal Facility.
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.
5.3.3 Commercial 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. The Solid Waste Containers shall comply with the requirements
of Section 6.1.3 of this Agreement. Franchisee shall Transport all Solid Waste Collected to a
Designated Disposal Facility
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 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 Collect Solid Waste from City
Containers and Collection locations, 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:
A. Collection of Solid Waste from all sidewalk litter containers;
B. Collection of Solid Waste from City -sponsored special events as specified by the City;
C. Collection of Solid Waste from containers in City parks as mutually agreed upon by the
Franchisee and the City;
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
19
D. Review of plans for land use or property developments with regard to Solid Waste
service issues; and
E. 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 Bulky Waste Collection arrangements with Generators within seven (7)
days after 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 Bulky Waste item is not
to exceed 200 pounds.
Franchisee shall Collect Green Waste separately from other Bulky Items placed for Collection and
shall handle such acceptable material as Organic Waste in accordance with SB 1383 regulations
and the Franchise Agreement between the City and Franchisee for Organic Materials Collection,
as amended.
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 1st of each year.
Franchisee shall Collect Green Waste separately from other materials and shall Process such material
as Organic Waste in accordance with SB 1383 regulations and the Franchise Agreement between the
City and Franchisee for Organic Materials Collection, as amended.
Franchisee shall record by class and weight (in Tons) the Solid Waste, Bulky Items, 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, Composting, reuse, or
other means of Diversion.
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
5.9. Franchisee shall be entitled to an adjustment in its compensation in accordance with Section
9.4, for providing such additional or modified services.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
20
5.9 New Programs
Franchisee shall present, within thirty (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:
A. Collection methodology to be employed (equipment, workforce , etc.)
B. Equipment to be utilized (vehicle number, types, capacity, age, etc.).
C. Labor requirements (number of employees by classification).
D. Type of Containers to be utilized.
E. Provision for program publicity/education/marketing.
F. 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.
G. Facility to be utilized.
5.10 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.
5.11 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.
5.12 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.
5.13 Processing of Solid Waste
The City reserves the right, prior to Disposal, to direct portions of the waste stream Collected under
this Agreement, to a designated Processing Facility for separation and Processing of any Recyclable
Materials, Reusable Materials, or Organic Waste contained therein. City shall provide Franchisee with
reasonable prior written notice concerning any change of service location.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
21
5.14 Designated Disposal Facility
A. General. Franchisee shall Transport all Solid Waste Collected within the City and not separated for
Recycling to a Designated Disposal Facility for Disposal in accordance with Applicable Law and
this Agreement.
B. Compliance with Regulatory Requirements and Applicable Law. The Franchisee is required to
notify the City if one of Designated Disposal Facilities has their permit to accept Solid Waste
revoked by the regulatory agency. Upon request, Franchisee shall provide copies of Facility
permits, approvals, and/or notices of violations (obtained from the Designated Disposal Facility
operator if necessary) to the City.
C. Capacity. Franchisee has secured sufficient Disposal Facility 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.
D. Alternative Facility(ies). 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 a
Designated Disposal Facility, 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 a Designated Disposal Facility. Franchisee shall in good faith expeditiously
identify and evaluate alternative Disposal Facilities. An alternative Disposal Facility(ies) 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 Facility.
In addition, the City reserves the right to direct the Solid 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 Facilities. Absent a Section 12.5 event, Franchisee
shall be responsible for any increased costs, including Transportation, with respect to the alternate
Disposal Facility.
5.15 Hazardous Waste Handling and Disposal
If the Franchisee determine 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
22
If the Hazardous waste or medical waste or other unauthorized waste is collected before its
presence is detected by Franchisee, and if the waste generator cannot be identified or fails to remove
the solid waste after being requested to do so, the Franchisee shall arrange for its legal disposal.
The Franchisee shall make a good faith effort to recover the cost of disposal of such waste from
the waste generator, and the costs of this effort, as well as the cost of disposal shall be
chargeable to the waste generator. Provided the failure to detect the hazardous waste, medical
wastes or other unauthorized wastes prior to collection and/or their delivery to the designated
disposal site is not due to the negligence of the Franchisee or its employees or due to failure of
the Franchisee to have an adequate in place inspection program, the Franchisee shall be entitled
to include the costs incurred under this paragraph as an operating expense for purposes of rate
setting.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
23
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 Manager or the City Manager's designee. In
the event the Franchisee misses the Collection of set out of Solid Waste Materials, the
Franchisee shall collect the missed pickups with one (1) Business Day of notification.
6.1.2 Vehicles
A. General. Franchisee shall keep a fleet of collec tion 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
24
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
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.
F. Renewable Natural Gas (RNG) Vehicles Under this Agreement Franchisee shall
make a best effort for all Collection Vehicles to be powered by SB 1383 RNG
generated by a local facility or powered by SB 1383 RNG that is purchased through a
wheeling agreement with a party(ies), provided that the wheeling agreement is for
purchase of gas derived from Organic Waste that has been Diverted from a Landfill
and Processed at an in-vessel digestion Facility that is permitted or otherwise
authorized by Title 14 of CCR to recover Organic Waste and meets the requirements
of 14 CCR Section 18993.1(h). Upon the City’s request, Franchisee shall obtain and
provide the City with a written certification by an authorized representative of the
publicly-owned treatment works or the wheeling agreement under which Franchisee
purchased SB 1383 RNG certifying that the in-vessel digestion Facility produces the
SB 1383 RNG consistent with the requirements of 14 CCR Section 18993.1(h).
Franchisee shall maintain records of the amount of SB 1383 RNG purchased and shall
report this information in accordance with Section 7. Franchisee shall agree to the City
the right to report this SB 1383 RNG usage toward the City’s fulfilment of its annual
recovered Organic Waste product procurement target in accordance with 14 CCR
Section 18993.1.
6.1.3 Containers
A. General.
1) Franchisee shall supply all Customers with Solid Waste Containers for
Collection of Solid Waste, in accordance with this Section. Franchisee shall use
the Franchisee-provided Collection Containers that are currently located at
Customers’ Premises, if applicable. If Customer is currently utilizing Collection
Containers that were not provided by the Franchisee, Franchisee shall provide
Containers from current inventory.
2) Franchisee shall provide Customers (including Single-Family, Multi-Family,
Commercial, and City facility Customers) with new Collection Containers as
requested by the Customer to meet its desired Service Level within five (5)
Working Days of Franchisee’s first receipt of the Customer request.
3) On and after the Effective Date, any new Containers provided by the Franchisee
shall comply with the Container standards set forth in this Section. All Containers
shall display the Franchisee’s name, logo, telephone number, website, capacity
(yards or gallons), and some identifying inventory or serial number.
4) If an existing Container breaks or is otherwise rendered non-functional on or
after Effective Date the Franchisee shall replace the non-functional Container
with a Container that complies with the color requirements of this Section.
Notwithstanding this Section, the Franchisee is not required to replace functional
Containers, including Containers purchased prior to January 1, 2022, that do not
comply with the color requirements of this Section prior to the end of the useful
life of those Containers, or prior to January 1, 2036, whichever comes first.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
25
B. Container Types and Sizes.
1) Single-Family Solid Waste Containers. Franchisee shall supply each Single-
Family Dwelling Unit with a Solid Waste Container in a size consistent with the
City-approved Solid Waste Collection program.
2) Multi-Family Solid Waste Containers. Franchisee shall supply each Multi-
Family complex with the appropriate number and type of Container to
adequately service the needs of the complex. Franchisee agrees to provide
additional appropriate Containers, as required.
3) Commercial Solid Waste Containers. Franchisee shall furnish to all Commercial
Customers appropriate Containers to Collect Solid Waste at Commercial
Premises. Containers with a capacity of one (1) 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.
4) Other Solid Waste Containers. 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.
C. Container Colors. Solid Waste Cart lids shall be black/grey. Solid Waste Bin,
Compactor, and franchise Roll -Off lids or bodies shall be black/grey. No later than
December 31, 2035, Contractor shall provide all Customers with Collection Containers
that comply with the Container color requirements specified in this Section or as otherwise
specified in 14 CCR Section 18982; 14 CCR, Division 7 , Chapter 12, Article 3; or other
Applicable Law.
D. Container Labels.
1) Labels on Existing Containers or Lids. Franchisee shall ensure a label on the
body or lid of each Container has been provided to a Customer that includes
language or graphic images, or both, that indicate the primary materials accepted
and the primary materials prohibited in that Container. Labels shall clearly
indicate items that are Prohibited Container Contaminants for each Container.
2) Imprinted or In-Mold Labels for New Containers or New Lids. On or before
Effective Date, Franchisee shall imprint new Container bodies or lids with text
or graphic images that indicate the primary materials accepted and the primary
materials prohibited in that Container. Labels shall clearly indicate items that are
Prohibited Container Contaminants for each Container. Prior to ordering any
Containers or lids with in-mold labels, Franchisee shall submit a sample of its
proposed label, proposed location(s) for placement of labels on each type of
Container, and its labeling plan to the City for approval.
E. 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 s urfaces 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
26
F. 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 or City pursuant to the guidelines established by the Franchisee and
approved by the City. Each Customer shall be responsible for excess damage to any
such Containers not caused by Franchisee.
6.1.4 Litter Abatement
Franchisee shall use due care to prevent Solid Waste from being spilled or scattered
during the Collection or transportation process. If any Solid Waste is spilled during
Collection, Franchisee shall promptly clean up all spilled materials. Each collection
vehicle shall carry a broom and shovel at all times for this purpose.
6.1.5 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 Fra nchisee to
increase the number and type of personnel utilized, at no additional cost to the
City.
B. Identification. Franchisee shall ensure that while on duty each collection worker
wears a clean uniform with conspicuous insignia displaying Franchisees
company name and the worker's name or identification number.
C. Fees & Gratuities. Franchisee shall not, nor shall it permit any agent, employee, or
subcontractors employed by it to request, solicit, demand, or accept, either directly or
indirectly, any compensation or gratuity for any services performed under this
Agreement, except as provided in Article 8 of this Agreement.
D. Training. All drivers shall be trained and qualified in the operation of vehicles they
operate and must possess a valid license of the appropriate class, issued by the
California Department of Motor Vehicles.
Franchisee shall provide adequate operations, health and safety training, and
Hazardous Waste identification and handling training for all of its employees who
use or operate equipment or who are otherwise directly involved in collection or
other related operations.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
27
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.
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
A. 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:
1. Changes recommended and/or new services to improve City’s ability to meet the goals of
AB 939, SB 1383, and other Applicable Law, and to contain costs and minimize impacts
on rates; and
2. Any specific plans for provision of changed or new services by Franchisee.
B. 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
28
C. 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 SB 1383 and AB 939’s goals,
regulatory constraints, and Franchisee performance. City and Franchisee may each select additional
topics for discussion at any performance review hearing.
D. 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:
1. Collection methodology to be employed (equipment, workforce, etc.)
2. Equipment to be utilized (vehicle number, types, capacity, age, etc.).
3. Labor requirements (number of employees by classification).
4. Type of Containers to be utilized.
5. Provision for program publicity/education/marketing.
6. 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.
7. Facility to be utilized.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
29
ARTICLE 7.
OTHER SERVICES: BILLING, REPORTING, RECORD-KEEPING
AND PUBLIC EDUCATION
7.1 Billing
By resolution of the City Council, the City shall establish rates for the services provided by the
Franchisee. Franchisee shall bill and collect these rates. Franchisee billing format and billing
frequency shall be subject to approval of the City and City shall have the right to revise the
billing format to itemize certain charges.
The City may also direct Franchisee to insert mailers relating to Franchisee provided service with
the billings at no additional cost to the City. The mailers must fit in standard envelopes and not
increase the required postage. The City will provide not less than thirty (30) days notice to
Franchisee prior to the mailing date of any proposed mailing to permit Franchisee to make
appropriate arrangements for inclusion of City materials.
Franchisee shall maintain copies of said billings and receipts, each in chronological order, for a
period of three (3) years after the date of service for inspection by the City, or for such longer
term as the City directs. Franchisee may, at its option, maintain those records in computer form, on
microfiche, or in any other manner, provided that the records cannot be altered, and can be
preserved and retrieved for inspection and verification in a timely manner. Franchisee shall, in
addition, provide an adequate backup system for billing records, regardless of the form in which
the records are maintained. Any such backup system shall be subject to approval by the City.
7.2 Owner Responsible for Payment
The owner of occupied developed property shall be responsible and liable for paying the solid
waste collection and disposal fees for that property.
7.3 Collection of Bills from 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
A. 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.
B. The following records shall be maintained for the City in form and detail satisfactory to the City,
relating to:
1. Customer services and billing;
2. Weight of Solid Waste, especially as related to reducing and Diverting Solid Waste.
Information is to be separated by kind of account (Single-Family, Multi-Family, and
Commercial);
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
30
3. Special annual clean-up event results;
4. Routes;
5. Facilities, equipment, and personnel used;
6. Facilities and equipment operations, maintenance, and repair;
7. Processing and Disposal of Solid Waste;
8. Complaints; and
9. Missed pick-ups.
C. 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
Cit y, 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.
D. Records for other programs shall be tailored to specific needs. In general, they shall include:
1. Plans, tasks·, and milestones; and,
2. Accomplishments in terms such as dates, activities conducted, quantities of products used,
produced or distributed, and numbers of participants and responses.
E. Unless otherwise required in this Agreement, Franchisee shall retain all records and data required to
be maintained by this Agreement for the Term of this Agreement plus five (5) years after its
expiration or earlier termination. Franchisee’s records shall be stored in one central location,
physical or electronic, that can be readily accessed by Franchisee. Upon request, any such records
shall be retrieved in a timely manner, not to exceed ten (10) Working Days of a request by the City
and made available to the City; including any record or documentation that the City, requires to
fulfill obligations under Applicable Law including, but not limited to, AB 939, AB 341, AB 1826,
AB 876, AB 901, SB 1383, and other current or future Federal, State, or local regulations, as
amended.”
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
A. 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:
1. Determine and set rates, and evaluate the financial efficacy of operations; and
2. Evaluate past and expected progress towards achieving goals and objectives; and
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
31
3. Determine needs for adjustment to programs; and
4. Evaluate Customer service and Complaints.
B. 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 information needed for the City’s compliance with Applicable Law,
including, but not limited to AB 939, AB 1826, AB 341, and SB 1383 report information.
C. 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
D. Monthly reports shall be submitted within ten (20) calendar days after the end of the report month.
Quarterly reports shall be submitted within fifteen (20) calendar days after the end of the quarter.
Quarters end on November 30, February 28, May 31, and August 31. Franchisee shall provide
first monthly report with Customer and Service Level information to the City, with a copy to the
City within thirty (30) days of the approved Agreement. All reports shall be submitte d to
City electronically via e -mail to the Utilities Director using software acceptable to the City and
provide a copy of reports to the City. The City reserves the right to require the Franchisee to
maintain records and submit the reports required herein through use of a web -based software
platform provided or designated by the City and/or Microsoft Excel spreadsheet, at the
Franchisee’s expense.
E. Franchisee shall maintain records and reports in accordance with Section 7 and shall allow the City
to audit and inspect records as described in Section 7.
F. At the City’s option, the City may require that Franchisee provide the City with the aggregate
tonnage data related to AB 901 reporting that the City needs for its SB 1383 reporting to the extent
available to Franchisee, within five (5) Business Days of City’s request.
7.7 Monthly Reports
The information listed shall be the minimum reported for each service:
A. Tonnage. Solid Waste, Collected, Transferred, Diverted, and Disposed of, by sector (Commercial, ,
Residential) of Waste Generator Collected by Franchisee, in Tons, by month. Tonnage shall be
reported separately by Facility and Facility type. Franchisee shall also provide documentation of all
Discarded Materials exported out of State, as provided in 14 CCR Sections 18800 through 18813.
B. Customer Subscription.
1. Number of Containers at each Service Level by Customer Type and program, including:
i. A summary of the total gallons of Cart service, cubic yards of Bin service, and
pulls; and cubic yards or Tons of Drop Box and Compactor service by
Customer Type.
ii. Calculation of the average volume of service received per: Single-Family
Dwelling Unit (separately identifying Dwelling Units in a duplex, triplex, or
fourplex); Multi-Family Dwelling Unit; and Commercial Customer.
2. A summary of Customer subscription data, including the number of accounts; the number of
Customers subscribing to each Cart and Bin Service Level listed separately for Single-
Family, Multi-Family, and Commercial and separately for each type of Discarded Material;
and the number of Bulky Items Collections performed.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
32
C. Complaint summary, for month and cumulative for report year, as above. Summarized by nature of
Complaints.
D. Narrative summary of problems encountered and actions taken with recommendations for the City,
as appropriate.
E. Education Program Report. The monthly status of activities identified in the annual public
education plan described in Section 7.16 of this Agreement
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 Report and Financial Audit
A. 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 re conciled to the audited financial statements.
B. Annual Report.
1. Collection and Subscription Report
i. A summary of all data provided in the Tonnage report section, including quarterly
and annual totals and averages.
ii. The type(s) of Collection service(s) provided, a list of all hauler routes serviced, and
a record of the addresses served on each hauler route.
iii. A summary of Customer subscription data, including the number of accounts; the
total number of Generators enrolled with Franchisee for service, listed separately by
Service Level and Container type separately by Single -Family, Multi-Family, and
Commercial Customers, and separately for each type of Discarded Material; and the
number of Bulky Items Collections perfor med.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
33
iv. A detailed list of Single -Family, Multi -Family, and Commercial Customer
information, including Solid Waste Container Waste, Recyclable Materials, and
Organic Materials Service Levels, Customer type, and Customer service addresses
reflecting Customer Service Levels as of December 1 (for the year in which the
report is submitted).
2. Public Education and Outreach Report
i. A copy of all education and outreach materials provided to Generators, or otherwise
used for education and outreach efforts in accordance with this Agreement, including,
but not limited to: flyers, brochures, newsletters, invoice messaging/billing inserts, and
website and social media postings.
ii. A record of the date and to whom the information was disseminated or direct contact
made, in the form of a list that includes: the Generator’s name or account name, the type
of education or outreach received; the distribution date, and the method of distribution.
iii. For any mass distribution through mailings or bill inserts, the Franchisee shall maintai n a
record of the date, a copy of the information distributed, and the type and number of
accounts that received the information.
iv. A copy of electronic media, including the dates posted of: social media posts, e -mail
communications, or other electronic mess ages.
v. A summary of the status of the annual education plan of the reporting year, including
activities conducted and the quantitative and/or qualitative results of those activities.
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 Franc hisee. 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
34
7.14 Customer Information
Franchisee shall prepare and keep current a flier acceptable to the City which summarizes solid
waste regulations, all services provided by Franchisee, solid waste collection and disposal rates,
telephone numbers, special collection events, collection schedules, complaint procedures, and
other pertinent information. Franchisee shall have copies of this flier available at all times in
Franchisee's office; shall distribute copies to all new customers; shall annually mail copies to all
of its current customers; and shall mail updated copies to all customers as notification of
changes in service or rates, prior to such changes.
7.15 Regulatory Reporting
Franchisee shall promptly provide the City copies of each adverse report from, and each regulatory
action from local, state or federal regulatory agencies. In addition, Franchisee shall send copies to
City of any reports that Franchisee submits to regulatory agencies with respect to performance of
this Agreement.
Franchisee shall provide City promptly with copies of any notices and correspondence from other
facilities, including disposal sites, utilized by Franchisee in performance of this Agreement,
concerning any breach of agreement with such facility or violation of regulations, including
delivery of unauthorized wastes. Franchisee shall direct such facilities to at all times
simultaneously send copies of such notices and correspondence to City.
Franchisee shall promptly provide City with copies of any reports and correspondence concerning
the status of permits with respect to Franchisee and such disposal sites and facilities referenced
above.
7.16 Public Education
A. Program Objectives. The City or its designee shall be responsible for designing, implementing,
and conducting a public education and outreach program. The City’s public education and outreach
strategy shall focus on improving Generator understanding of the benefits of and opportunities for
source reduction, Reuse, and landfill Disposal reduction and supporting compliance with
Applicable Laws and regulations, including, but not limited to SB 1383. The cumulative intended
effect of these efforts is to reduce the amount of each Generator’s Discarded Materials and,
ultimately, Disposal of Discarded Materials, and Franchisee agrees to support and not undermine or
interfere with such efforts.
B. Franchisee Cooperation and Support for City Educational Efforts. Franchisee acknowledges
and agrees that education and public awareness are critical, key and essential elements of any
efforts to achieve compliance with AB 939, SB 1383, and other Applicable Law. 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 acknowledges that they are part of a multi -
party effort to operate and educate the public about the regional integrated waste management
system. Franchisee shall cooperate and coordinate with the City on public education activities to
minimize duplicative, inconsistent, or inappropriately timed education campaigns. The Franchisee
shall cooperate with and shall not impede, interfere, or attempt to impede or interfere with the
implementation, expansion, or operation of public education and outreach programs or campaigns
conducted by the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
35
C. Supplemental Education. Franchisee shall obtain approval from the City on all Franchisee-
provided public education materials outside of the City’s education plan, including, but not limited
to: print, radio, television, or internet media before publication, distribution, and/or release. The
City shall have the right to request that Franchisee include identification and contact information
for the City on public education materials and approval of such requests shall not be unreasonably
withheld.
D. Billing Inserts. 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 any and all 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. Franchisee shall be responsible for printing single-sheet, double sided bill
inserts at least annually. Franchisee shall provide electronic bill inserts (or separate email
attachments) to Customers who are billed electronically, and paper bill inserts to Customers who
receive paper bills. Upon City request for such inserts, Franchisee shall comply with such request
during its next billing cycle for the targeted Customer group. Franchisee shall perform this service
with no additional requirement for compensation.
E. Annual Notice of Requirements. If not already provided through another Discarded Materials
Franchise agreement between the Parties, Franchisee shall, not less than once per year, prepare and
distribute to each Generator in the City a mailer that includes information specified in 14 CCR
Section 18985.1(a). Such mailer shall be distributed by Franchisee to all Residential and
Commercial mailing addresses including individual Multi-Family Dwelling Units and tenants of
multi-tenant Commercial locations. Franchisee shall also make this notice available in an electronic
format through the Franchisee’s website.
F. Other Outreach. At the direction of the City, Franchisee shall participate in and promote AB 939
activities, SB 1383 programs, 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 Collection and Diversion
programs.
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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
36
ARTICLE 8.
PAYMENTS TO CITY
8.1 Franchise Fee Payments
In consideration of the exclusive franchise provided for in Article 4 of this Agreement, Franchisee
shall pay the City ten percent (10%) of Franchisee’s gross revenues for collection and disposal of
solid waste within the City; provided, however, that such franchise fee shall not exceed the costs
incurred by the City to deliver service to properties. Such franchise fee shall be a “pass-through”
expense for purposes of rate review and setting. Each monthly remittance of fees to City shall be
accompanied by a statement detailing gross revenues for the period covered from all operations
conducted or permitted pursuant to this Agreement.
8.2 Schedule of Payment
Franchise fees described in Section 8.1 are due on the 15th day of each month for receipts from the
previous month. The remittance will be accompanied by a report setting forth the basis, and
calculations used for computing the amount due.
8.3 AB 939/SB 1383 Fee
Contractor shall pay an AB 939 /SB 1383 fee to the City each month. The City shall retain the
sole right to set priorities for the use of its AB 939/SB 1383 fee. In addition, if the City’s
designee implements an AB 939, SB 1383, or Solid Waste Management fee, Contractor shall pay
that fee directly to the desig nee. Said fees shall be an allowable cost in Contractor’s rate
application. All AB 939 /SB 1383 fees and Solid Waste Management fees paid to the City or its
designee shall be considered a pass through cost for purposes of rate setting , and, as such,
chang es to these fees shall be adjusted accordingly , subject to all applicable laws and regulations.
The City or its designee shall have the right to establish and adjust the AB 939, SB 1383, or Solid
Waste Management fee at any time, provided that any changes are considered a “pass-through”
cost for the purposes of rate setting, at the time of the change in the AB 939, SB 1383, or Solid
Waste Management fee .
8.4 Other Fees
The City shall reserve the right to set such other fees, as the City deems necessary. These fees will be
treated as a “pass-through” expense. The amount, time and method of payment shall be similar to
section 8.2.
8.5 Time and Method of Payment
If Franchisee is directed to pay an AB 939/SB 1383 Fee, 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
(1%) owing on any unpaid balance for each following thirty (30) day period the fee remains unpaid.
Late payment penalty amounts shall not be included in any revenue requirement.
8.6 Review of Fee Payments
The City, or its agent, reserves the right to annu ally 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
37
8.7 Business License Tax
Franchisee shall pay each year the annual business license tax.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
38
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, 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 1st
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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
39
9.5 Allowable Profit
When performing the procedure described in the “City of San Luis Obispo Rate Setting
Process and Methodology Manual/or Integrated Solid Waste Management Rates,” dated
June 1994, the allowable profit on expenses shall be calculated using targeted operating
ratio of ninety-three percent (93%), with a range of ninety -one percent (91%) to ninety -
five percent (95%), applied to Franchisee ’s reasonable and necessary allowable costs, as
these costs are defined in the rate setting manual, incurred in the performance of its
obligations under this Agreement.
9.6 Publication of Rates
Franchisee shall provide written notice to subscribers of all rate changes, prior to
implementation. If appropriate, this notice should include reasons and background for the rate
change.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
40
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 an· claims asserted or liability
established for damages or injuries to any person or property, including, but not limited to, damages
arising from or related to alleged or actual violations of Proposition 218 and/or its implementing
legislation, injury to the Franchisee's employees, agents or officers to the extent arising from or
connected with or are caused or claimed to be caused by the acts or omission of the Franchisee, and
its agents, officers, directors or employees, in performing the services herein, and all expenses of
investigating and defending against same; provided, however, that the Franchisee's duty to
indemnify and hold harmless shall not include any claims or liability arising from the established
sole negligence or willful misconduct of the City, its agents, officers or employees.
10.1.2 CERCLA.
Franchisee agrees to defend and indemnify the City, Council members, officers, employees and
agents for all actions of the Franchisee associated with the Franchisee's role as the arranger of
solid waste service, or as a "potentially responsible party" within the meaning of CERCLA in
performing solid waste service under any Federal, State or local laws, rules or regulations. The
Franchisee shall further defend and indemnify City from any and all legal actions against City on
the basis of the assertion that the City is an arranger of solid waste services as a result of this
Agreement.
10.1.3 Integrated Waste Management Act.
Franchisee agrees to defend and indemnify the City, Council members, officers, employees and
agents for any fines or penalties imposed by the California Integrated Waste Management Board
or its agents in the event and to the extent that Franchisee's delays in providing information or
reports required pursuant to this Agreement prevent the City from submitting reports or attaining
goals in a timely manner as required by the Integrated Waste Management Act.
10.2 Insurance
Franchisee shall procure and maintain for the duration of the franchise insurance against claims for
injuries to persons or damages to property which may arise from or in connection with the
performance of the services hereunder by the Franchisee, its agents, representatives, employees or
subcontractors.
A. Minimum Scope of Insurance. Coverage shall be at least as broad as:
(1) Insurance Services Office Commercial General Liability coverage (occurrence
form CG 0001).
(2) Insurance Services Office form number CA 0001 (Ed. 1/87)
covering Automobile Liability, code I (any auto).
(3) Workers' Compensation insurance as required by the State of California and
Employer's Liability insurance.
(4) Pollution Legal Liability
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
41
B. Minimum Limits of Insurance. Franchisee shall maintain limits no less than:
(1) Commercial or Comprehensive General Liability: Five Million Dollars
($5,000,000) combined single limit per occurrence for bodily injury, personal
injury, and property damage. If Commercial General Liability or other form
with a general aggregate limit is used, either the general aggregate limit shall
apply separately to this Agreement or the general aggregate limit shall be
twice the required occurrence limit.
(2) Automobile Liability: Five Million Dollars ($5,000,000) combined single
limit per accident for bodily injury and property damage.
(3) Workers' Compensation and Employers Liability: Workers' compensation
limits as required by the Labor Code of the State of California and employers
liability with limits of $1,000,000 per accident for bodily injury or disease.
(4) Pollution Liabilities: One million Dollars ($1,000,000) each loss/Two Million
Dollars ($2,000,000) annual aggregate all losses.
C. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions
must be declared to and approved by the City. At the option of the City, either: the insurer
shall reduce or eliminate such deductibles or self-insured retentions as respects the City,
Council members, its officers, officials, employees, and agents; or the Franchisee shall
procure a bond guaranteeing payment of losses and related investigations, claim
administration and defense expenses. Any insurance policies providing for self insured
retentions shall further provide that legal costs and costs of investigation, including
consultant fees, with respect to any claim or suit, shall apply to the self insured retention
amount.
D. Other Insurance Provisions. The general liability and automobile liability policies are to
contain, or be endorsed to contain, the following provisions:
(1) The City, Council members, its officers, officials, employees, and agents are
to be covered as insurers as respects: liability arising out of activities
performed by or on behalf of the Franchisee; products and completed
operations of the Franchisee; premises owned, occupied or used by the
Franchisee; or automobiles owned, leased, hired or borrowed by the
Franchisee. The coverage shall contain no special limitations on the scope of
protection afforded to the City, its officers, officials, employees, or agents.
(2) For any claims related to this project, the Franchisee's insurance coverage
shall be primary insurance as respects the City, Council members, its
officers, officials, employees, and agents. Any insurance or self-insurance
maintained by the City, its officers, officials, employees, agents or volunteers
shall be excess of the Franchisee's insurance and shall not contribute with it.
(3) Any failure to comply with reporting or other provisions of the policies
including breaches of warranties shall not affect coverage provided to the
City, Council members, its officers, officials, employees, or agents.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
42
(4) The Franchisee's insurance shall apply separately to each insured against
whom claim is made or suit is brought except with respect to the limits of
the insurer's liability.
(5) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced
in coverage or in limits except after thirty (30) days' prior written notice by
certified mail, return receipt required, has been given to the City.
(6) The Automobile Liability Policy shall be endorsed to delete the Pollution
exclusion and add the Motor Carrier Act endorsement (MCS-90),
TL.1005, TL 1007 and/or other endorsements required by federal or state
authorities.
(7) Pollution, if on a Claims Made form:
a. The "Retro Date" must be shown and must be before the date of the contract
or the beginning contract work.
b. Insurance must be maintained, and evidence of insurance must be provided
for at least five (5) years after completion of the contract of work.
c. If coverage is canceled or non-renewed, and not replaced with another claims
made policy form with a "Retro Date" prior to the contract effective date, the
Franchisee must purchase "extended reporting" coverage for minimum of
two years after completion of contract.
E. Acceptability of Insurers. Insurance is to be placed with insurers with a current
A.M. Best's rating of no less than A:VII. 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
43
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 Manager shoul d 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 Manager, (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 ot her 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:
• It will take direction from City to effect the transfer of possession of
property to City for City's use.
• It will, if City so requests, keep in good repair and condition all of such
property, provide all motor vehicles with fuel, oil and other service, and
provide such other service as may be necessary to maintain said
property in operational condition.
• City may immediately engage all or any personnel necessary or useful
for the Collection, transportation and processing 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 arid 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
44
Except as otherwise expressly provided in the previous paragraph, City's exercise of its rights under
this Article 11 (1) does not constitute a taking of private property for which compensation must be
paid; (2) will not create any liability on the part of City to Franchisee; and (3) does not exempt
Franchisee from the indemnity provisions of Article 10, Indemnification, Insurance and Bond, which
are meant to extend to circumstances arising under this Section, provided that Franchisee is not
required to indemnify City against claims and damages arising from the sole negligence of City
officers, employees and agents in the operation of Collection vehicles during the time City has
taken possession of such vehicles.
11.2 Temporary Possession of Franchisee’s Property
If the City suffers an interruption or discontinuance of service as described in Section 11.1
(including interruptions and discontinuance due to events described in Section 12.4, Excuse from
Performance), City may take possession of and use all of Franchisee’s property described above
until other suitable arrangements can be made for the provision of Solid Waste Services which may
include the grant of a Contract to another company. The same notice requirements of Section 11.1
are applicable.
11.3 Billing and Compensation to City During City's Possession
During such time that city is providing Solid Waste services, as above provided, Franchisee shall
continue to bill and collect payment from all users of the above-mentioned services.
Franchisee further agrees that, in such event, it shall reimburse City for any and all costs and expenses
incurred by City in taking over possession of the above-mentioned property for Solid Waste service in
such manner and to an extent as would otherwise be required of Franchisee under the Terms of this
Agreement. Such reimbursement shall be made from time to time after submission By City to
Franchisee of each statement listing such costs and expenses, but in no event later than five (5) working
days from and after each such submission. The City shall have the right, at its sole discretion, to take
over billing and payment collection activities. The City shall then pay any net revenues to the
Franchisee, after deducting all expenses, including City-incurred expenses.
11.4 City's Right to Relinquish Possession
It is further mutually agreed that City may at any time at its discretion relinquish possession of any or
all of the above-mentioned property to Franchisee and thereupon demand that Franchisee resume the
Solid Waste services as provided in this Agreement, whereupon Franchisee shall be bound to resume
the same.
11.5 Duration of City’s Possession
City's right pursuan t 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
45
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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
46
I. Attachment. There is a seizure of attachment of, or levy on, the operating equipment
of Franchisee, including without limits its equipment, maintenance or office facilities,
or any part thereof.
J. Suspension or Termination of Service. There is any termination or suspension of the
transaction of business by Franchisee, including without limit, due to labor unrest
including strike, work stoppage or slowdown, sickout, picketing, or other concerted
job action lasting more than two (2) days.
Upon default by the Franchisee, the City Manager shall provide written notice to
Franchise of the violation. The City Manager 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 (30) days
notice, but without the need for any hearing, suit or legal action. This right of termination is in
addition to any other rights of City upon a failure of Franchisee to perform its obligations
under this Agreement.
12.3 Possession of Property and Billing Records and Systems Upon Termination
In the event of termination for default, the City shall have the right, subject to the obligations
contained in Article 12 hereof, to take possession of any and all of Franchisee's land,
equipment, and other property used or useful in the collection, diversion and/or disposal of
solid waste and to conduct all activities concerning billing and collection of fees for these
services and to use such property. The City shall have the right to retain the possession of such
property until other suitable arrangements can be made for the provision of solid waste
collection services, which may include the award of an agreement or franchise to another waste
hauling company. If the City retains possession thereof after the period of time for which
Franchisee has already been paid by means of bills issued in advance of providing service for
the class of service involved, Franchisee shall be entitled to the reasonable rental value of such
property (which shall be offset against any damages due the City for the Franchisees default).
Franchisee shall provide the City immediate access to all of its business records and billing
system related to its billing of accounts for services and shall take direction from the City
regarding the billing of customers during the period between the City's termination of the
Agreement for default until other suitable arrangements can be made for the billing of solid
waste collection services. The provisions of this Section 12.3 shall survive the termination of this
Agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
47
12.4 City's Remedies Cumulative; Specific Performance
The City's right to terminate the Agreement under Section 12.1 and to take possession of the
Franchisee's properties under Section 12.3 are not exclusive, and the City's termination of the
Agreement shall not constitute an election of remedies. Instead, they shall be in addition to
any and all other legal and equitable rights and remedies which the City may have.
By virtue of the nature of this Agreement, the urgency of timely, continuous and high quality
service, the lead time required to effect alternative service, and the rights granted by the City
to Franchisee, the remedy of damages for a breach hereof by Franchisee is inadequate and the
City shall be entitled to injunctive relief and/or specific performance if it so desires.
12.5 Excuse from Performance
The parties shall be excused from performing their respective obligations hereunder in the
event they are prevented from so performing by reason of floods, earthquakes, other "acts of
God", war, civil insurrection, riots, acts of any government (including judicial action), and
other similar catastrophic events which are beyond the control of and not the fault of the party
claiming excuse from performance hereunder. Labor unrest, including but not limited to
strike, work stoppage or slowdown, sick -out, picketing, or other concerted job action
conducted by Franchisee's employees or directed at Franchisee or its selected facilities is not an
excuse from performance and Franchisee shall be obligated to continue to provide service
notwithstanding the occurrence of any or all such events.
The party claiming excuse from performance shall, within two (2) days after such party has
notice of such cause, give the other party notice of the facts constituting such cause and
asserting its claim to excuse under this Section.
The interruption or discontinuance of Franchisee's services caused by one or more of the
events excused shall not constitute a default by Franchisee under this Agreement.
Notwithstanding the foregoing, however, if Franchisee is excused from performing its
obligations hereunder for any of the causes listed in this Section for a period of seven (7) days
or more, City shall have the right to review the circumstances under which the excuse from
performance was granted. After such review, if the City determines the excuse from service is
no longer valid, the City shall notify the Franchisee in writing to resume service within two (2)
days from the receipt of such notification. If the Franchisee fails to resume service within the two
(2) days, the City shall have the right to terminate this Agreement by giving ten (10) days
notice, in which case the provisions relative to taking possession of Franchisee's land, equipment
and other property and engaging Franchisee's personnel in Article 11, City's Right to Perform
Services, and this Article 12 shall apply.
12.6 Liquidated Damages
A. General. 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:
1. Substantial damage results to members of the public who are denied services or denied
quality or reliable service;
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
48
2. Such breaches cause inconvenience, anxiety, frustration, and deprivation of the benefits of
the Agreement to individual members of the general public to whom the City provides
services pursuant to this Agreement, in subjective ways and in varying degrees of intensity
which are incapable of measurement in precise monetary terms;
3. 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
4. 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 City whole for past breaches. However,
substantial breaches may result in the termination of this Agreement as described in Section
12.1.
B. Service Performance Standards and Liquidated Damages for Failure to Meet Standards. 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 fail to submit required documents in a
timely manner, City and its residents will suffer damages and that it is and will be impractical and
extremely difficult to ascertain and determine the exact amount of damages which City will suffer.
Therefore, without prejudice to City's right to treat such non-performance as an event of default
under this Article 12, the Parties agree that the following Liquidated Damages amounts represent a
reasonable estimate of the ,amount of such damages considering all of the circumstances existing
on the date of this Agreement, including the relationship of the sums to the range of harm to City
that reasonably could be anticipated and the anticipation that proof of actual damages would be
costly or inconvenient.
The City may monitor the Franchisee’s performance under the Agreement in each of the
performance areas listed below. In the event that the City determines that Franchisee has failed to
meet the performance standard established for any of the areas identified below, the City may
assess Liquidated Damages pursuant to this Section of the Agreement. Franchisee agrees to pay (as
Liquidated Damages and not as a penalty) the amounts set forth below:
Event of Non-Performance Liquidated Damage
Collection Reliability and Quality
1 Failure to Implement three-
Container System. For each
occurrence of failing to provide
Customers with Solid Waste
Containers as part of the three-
Container system required by
and compliant with the
Municipal Code (excluding
Generators and Customers that
demonstrate compliance with
Recycling and Organic Waste
Self-Hauling requirements
pursuant to the Municipal Code
and 14 CCR Division 7, Article
12, Article 7.)
$150/ Generator or
Customer / occurrence /
Day until compliance
achieved
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
49
Event of Non-Performance Liquidated Damage
2 For each failure over five (5)
annually to commence service to
a new Customer account within
seven (7) days after order:
$150.00
3 For each failure over ten (10)
annually to Collect Solid Waste,
which has been properly set out
for Collection, from an
established Customer account on
the scheduled Collection day
$150.00
4 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
5 For each occurrence over five
(5) annually of damage to
private property:
$250.00
6 For each occurrence of
discourteous behavior:
$250.00
7 For each failure over ten (10)
annually to clean up Solid Waste
spilled by Contractor from
Containers:
$150.00
8 For each occurrence over five
(5) annually of Collecting Solid
Waste during unauthorized
hours:
$250.00
9 For each failure to respond to a
Customer Complaint within
twenty-four (24) working hours:
$100.00
10 For each failure to prepare for or
properly conduct twice annual
clean-ups including advertising
and press releases
$250.00
11 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
12 For each occurrence of
excessive noise above the
limits specified in this
Agreement
$250.00
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
50
Event of Non-Performance Liquidated Damage
13 Failure to Comply with
Container Labeling and
Colors. For each occurrence of
Franchisee’s failure to comply
with Container labeling and
color requirements pursuant to
Section 6.1.3 of this Agreement.
$150/
Container/occurrence
14 Use of Unauthorized Facilities.
For each individual occurrence
of delivering Discarded
Materials to a Facility other than
a Designated Disposal
Facility(ies).
$150 / Ton / occurrence
Customer Responsiveness
15 For each failure to respond to a
Customer Complaint within
sixteen (16) working hours
$100.00
16 For each failure to process
Customer Complaints to City
$500.00
17 For each failure to carry out
responsibilities for establishing
service
$500.00
Reports and Timeliness of Submissions to the City
18 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:
a. Monthly Reports: For
each infraction
$100 per day
b. Quarterly Reports For
each infraction
$250 per day
c. Annual Reports: For
each infraction
$500 per day
19 Failure to Allow Access to
Records. For each failure to
provide access to records in
compliance with and in the
timeframe specified in this
Agreement.
$120/day
Other
20 Failure to Perform Public
Education and Outreach. For
each failure to perform any
individual education and
outreach activity as required and
in the timeframe specified by
this Agreement.
$180 / occurrence
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
51
Event of Non-Performance Liquidated Damage
21 Improper Fee Issuance. For
each fee that is issued to a
Generator without prior
authorization from City under
this Agreement.
$100/Customer/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 Manager or their
designee. Franchisee may present evidence in writing and through testimony of its employees and
others relevant to the incident(s)/non performance. The City Manager or designee will provide
Franchisee with a written explanation of their determination on each incident(s)/non-performance prior
to authorizing the assessment of Liquidated Damages. The decision of the City Manager or designee
shall be final.
12.7 Notice, Hearing and Appeal
Should the Franchisee contend that the City is in breach of the Agreement, Franchisee shall file
a written request with the Utilities Director for a consultation regarding the allegations. Such
consultation shall be held within thirty calendar days of the receipt of Franchisee's request.
Franchisee shall present its position and all relevant facts to the Utilities Director.
Franchisee shall be notified of the Utilities Director judgment within ten calendar days of the
consultation.
If the Franchisee is not in agreement with the ruling issued by the Utilities Director, it shall
have the right to appeal the decision to the City Manager. 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 Manager 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 Manager. Franchisee shall be notified in writing within
fourteen calendar days of the City Manager's ruling. The decision of the City Manager can be
appealed to City Council per Municipal Code Section 1.20.020.
12.8 Financial Material Errors, Omissions or Irregularities
The City may review, test and audit the books and records of the Franchisee for the purpose of
determining whether the Franchisee is complying with the terms of the Agreement. In the
event that material errors or omissions or irregularities are identified, then the cost associated
with the audit; test or review shall be paid by the Franchisee to the City. In the case of
financial errors, materiality shall be deemed to be two percent (2%) or greater of the gross
revenues of the Franchisee from activities performed under this agreement. Recovery of any
overpayment will be negotiated on a case by case basis, either immediately or through the
next rate setting evaluation.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
52
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 least 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
53
If Franchisee requests City’s consideration of and consent to an assignment, City may deny or
approve such request in its complete discretion. The City is concerned about the possibility that
assignment could result in significant rate increases, as well as a change in the quality of service.
Accordingly, the following standards have been set to ensure that assignment will result in
continued quality service. In addition, the City reserves the right to solicit competitive bids for
these services if the assignment results in a request by the assignee for rate increases that are
higher than the inflationary index and do not reflect value changes in service standards. At a
minimum, no request by Franchisee for consent to an assignment need be considered by City
unless and until Franchisee has met the following requirements:
A. Franchisee shall undertake to pay City its reasonable expenses for attorney's fees and
investigate the suitability of any proposed assignee, and to review and finalize any
documentation required as a condition for approving any such assignment;
B. Franchisee shall furnish City with audited financial statements of the proposed
assignee's operations for the immediately preceding three (3) operating years;
C. Franchisee shall furnish City with satisfactory proof:
1. that the proposed assignee has at least ten (10) years of solid waste
management experience on a scale equal to or exceeding the scale of
operations conducted by Franchisee under this Agreement;
2. that in the last five (5) years, the proposed assignee or affiliates has not suffered
any significant citations or other censure from any federal, state or local agency
having jurisdictions over its waste management operations due to any significant
failure to comply with state, federal or local environmental laws and that the
assignee has provided City with a 9omplete 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
51
ARTICLE 14.
OTHER AGREEMENTS OF THE PARTIES
14.1 Relationship of Parties
The parties intend that Franchisee shall perfo rm the services required by this Agreement as an
independent contractor 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
52
14.8 Parties in Interest
Nothing in this Agreement, whether express or implied, is intended to confer any rights on any
persons other than the parties to it and their representatives, successors and permitted assigns.
14.9 Waiver
The waiver by either party of any breach or violation of any provision(s) of this Agreement shall not
be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent
breach or violation of the same or any other provision. The subsequent acceptance by either party of
any monies which become due hereunder shall not be deemed to -be a waiver of any pre-existing or
concurrent breach or violation by the other party of any provision of this Agreement.
14.10 Condemnation
The City fully reserves whatever rights it may have to acquire Franchisee's property utilized in
the performance of this Agreement, by negotiated purchase or failing that.1 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
53
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 i n writing and shall either be personally
delivered to a representative of the parties at the address below, or by email as
specified below, or be deposited in the United States mail, first class postage prepaid,
addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
ut_services@slocity.org and cityclerk@slocity.org
If to Franchisee: District Manager
San Luis Garbage Company
4388 Old Santa Fe Road
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 Manager, the Director of Util ities and/or to other City
officials and may permit such officials, in tum, 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 their 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 them 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
54
14.20 References to Laws
All references in this Agreement to laws shall be understood to include such laws as they may be
subsequently amended or recodified, unless otherwise specifically provided.
14.21 Interpretation
This Agreement shall be interpreted and construed reasonably and neither for nor against either
party, regardless of the degree to which either party participated in its drafting.
14.22 Amendment
This Agreement may not be modified or amended in any respect except by another Agreement in
writing signed by the parties.
14.23 Severability
If any non-material provision of this Agreement is for any reason deemed to be invalid and
unenforceable, the invalidity or unenforceability of such provision shall not affect any of the
remaining provisions of this Agreement which shall be enforced as if such invalid or unenforceable
provision had not been contained herein.
14.24 Counterparts
This Agreement may be executed in counterparts each of which hall 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Franchise Agreement – Solid Waste
55
IN WITNESS WHEREOF, City and Franchisee have executed this Agreement as of the day and
year first above written.
THE CITY OF SAN LUIS OBISPO SAN LUIS GARBAGE COMPANY
“City” “Franchisee”
By: ___________________________ By: ______________________________
Derek Johnson, Susan VanDelinder:
City Manager Division Vice President:
ATTEST:
______________________________
Teresa Purrington, City Clerk
APPROVED TO FORM:
________________________________
J. Christine Dietrick, City Attorney
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
1
AMENDED AND RESTATED AGREEMENT BETWEEN
THE CITY OF SAN LUIS OBISPO
AND
SAN LUIS GARBAGE COMPANY
For Collection and Disposal of Recyclable Materials Within the
City of San Luis Obispo
This Agreement between the City of San Luis Obispo and San Luis Garbage Company for Collection and
Processing of Recyclable Materials (“Agreement”), is made and entered into as of June 3, 2022 (“Effective
Date”) in the State of California by and between the City of San Luis Obispo, a political subdivision of the
State of California (hereafter “City”) and San Luis Garbage Company, a California corporation (hereafter
“Franchisee”), each of which may be referred to individually as a “Party” or together as the “Parties.”
RECITALS
This Agreement is made and entered into on the basis of the following facts, understandings, and intentions
of the parties:
1. WHEREAS: The Parties entered into a Franchise Agreement for Recyclable Materials Collection on
August 20, 2010 (“Agreement”) and,
2. WHEREAS: Section 4.6 of the Agreement provides City with the right to direct Franchisee to modify
the scope of one or more types of service described in the Agreement, or to otherwise modify its
performance under the Agreement, subject to providing additional compensation; and,
3. WHEREAS: The State of California has found and declared that the amount of refuse generated in
California, coupled with diminishing Disposal capacity and potential adverse environmental impacts
from landfill Disposal and the need to conserve natural resources, have created an urgent need for State
and local agencies to enact and implement an aggressive integrated waste management program. The
State has, through enactment of AB 939 and subsequent related legislation including, but not limited to:
the Jobs and Recycling Act of 2011 (AB 341), the Event and Venue Recycling Act of 2004 (AB 2176),
SB 1016 (Chapter 343, Statutes of 2008 [Wiggins, SB 1016]), the Mandatory Commercial Organics
Recycling Act of 2014 (AB 1826), and the Short-Lived Climate Pollutants Bill of 2016 (SB 1383),
directed the responsible State agency, and all local agencies, to promote Diversion and to maximize the
use of feasible waste reduction, re-use, Recycling, and Composting options in order to reduce the
amount of refuse that must be Disposed; and
4. WHEREAS: SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid
Waste facilities, and other entities to support achievement of State-wide Organic Waste Disposal
reduction targets; and,
5. WHEREAS: SB 1383 requires the City to implement Collection programs for Organic Waste and
Recyclable Materials, meet Processing Facility requirements, conduct contamination monitoring,
provide education, maintain records, submit reports, monitor compliance, conduct enforcement, and
fulfill other requirements; and, the City has chosen to delegate some of its responsibilities to the
Franchisee, through this Agreement; and,
6. WHEREAS: Both Parties have, in good faith, negotiated changes to the Agreement necessary to
support the City’s compliance with SB 1383, as set forth herein.
7. WHEREAS, this Agreement is intended to restate and supersede all prior Franchise Agreements for
Recyclables Collection between City and Franchisee; and
8. NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions herein
contained, CITY and FRANCHISEE do hereby agree as follows:
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
2
ARTICLE 1.
DEFINITIONS
1.1 “AB 341” means the California Jobs and Recycling Act of 2011 (Chapter 476, Statues of 2011 [Chesbro,
AB 341]), also commonly referred to as “AB 341”, as amended, supplemented, superseded, and replaced
from time to time.
1.2 "AB 939” means the California Integrated Waste Management Act of 1989, (Division 30 of the
California Public Resources Code), as amended, supplemented, superseded, and replaced from time to
time.
1.3 “AB 1826” means the Organic Waste Recycling Act of 2014 (Chapter 727, Statutes of 2014 modifying
Division 30 of the California Public Resources Code), as amended, supplemented, superseded, and
replaced from time to time.
1.4 "Affiliate" means all businesses (including corporations, limited and general partnerships and sole
proprietorships) which are directly or indirectly related to Franchisee by virtue of direct or indirect
common ownership interest or common management shall be deemed to be "Affiliated with" Franchisee
and included within the term "Affiliates with" Franchisee and included within the "Affiliates" 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 exists, the constructive ownership provisions of Section 318(a) of the Internal
Revenue Code of 1986, as in effect on the date of this Agreement, shall apply; provided, however, that
(i) "ten percent (10%)" shall be substituted for "fifty percent (50%)" in Section 318(a)(2)(C) and in
Section 318(a)(3)(C) thereof; and (ii) Section 318(a)(5)(C) shall be disregarded. For purposes of
determining ownership under this paragraph and constructive or indirect ownership under Section
318(a), ownership interest of less than ten percent (10%) shall be determined on the basis of the
percentage of voting interest or value which the ownership interest represents, whichever is greater.
1.5 "Agreement" means this residential Recycling Agreement (dated August 20, 2010, including all
exhibits and attachments, and any amendments thereto) between City and Franchisee for Collection,
Processing and marketing of residential Recyclable Materials and other services.
1.6 “Applicable Law” means all Federal, State, County, and local laws, regulations, rules, orders,
judgments, degrees, permits, approvals, or other requirement of any governmental agency having
jurisdiction over the Collection, Transportation, and Processing of Recyclable Materials, Organic
Materials, and Solid Waste that are in force on the Effective Date and as may be enacted, issued or
amended during the Term of this Agreement. Applicable Law includes, but is in no way limited to,
AB 939, AB 341, AB 1826, and SB 1383.
1.7 “Approved Recyclable Materials Processing Facility” means the Materials Recovery Facility at Cold
Canyon Landfill, owned and operated by Waste Connections and located at 2268 Carpenter Canyon
Rd, San Luis Obispo, CA 93401, which has been selected by the Franchisee and approved by the City.
1.8 "Billings" means any and all statements of charges for services rendered by Franchisee
pursuant to this Agreement.
1.9 “Bin” means a Container with capacity of approximately one (1) to eight (8) cubic yards, with
a hinged lid, and with wheels (where appropriate), that is serviced by a front end-loading
and/or rear-end loading Collection vehicle, including Bins with Compactors attached to
increase the capacity of the Bin.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
3
1.10 "Bulky Item(s)” or “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.
1.11 “Business Days” mean days during which the City offices are open to do business with the public.
1.12 “California Code of Regulations” or “CCR” means the State of California Code of Regulations. CCR
references in this Agreement are preceded with a number that refers to the relevant Title of the CCR
(e.g., “14 CCR” refers to Title 14 of CCR).
1.13 “CalRecycle” means California's Department of Resources Recycling and Recovery.
1.14 “Cardboard” means corrugated fiberboard consisting of a fluted corrugated sheet and one (1) or two (2)
flat linerboards, as is often used in the manufacture of shipping containers and corrugated boxes.
Cardboard is a subset of Recyclable Materials.
1.15 “Cart” means a plastic Container with a hinged lid and wheels that is serviced by an automated or semi -
automated Collection vehicle. A Cart has capacity of 20, 35, 64 or 96 gallons (or similar volumes).
1.16 "City" means the City of San Luis Obispo, a Charter Municipal Corporation, and all the territory lying
within the municipal boundaries of the City as presently existing or as such boundaries may be modified
during the term, acting through the City Council or the City Manager. The City may designate
responsibilities to one or more third parties, in writing, between the City Manager and the designee.
1.17 "Collect" or "Collection" (or any variation thereof) means to take physical possession, Transport, and
remove Discarded Materials and other material at the place of generation in the City.
1.18 “Commercial” shall mean of, from, or pertaining to non-Residential Premises where business activity
is conducted, including, but not limited to, retail sales, services, wholesale operations, manufacturing,
and industrial operations, but excluding businesses conducted upon Residential property which are
permitted under applicable zoning regulations and are not the primary use of the property.
1.19 "Commercially Generated Recyclable Materials" means Recyclable Materials generated at commercial
and/or industrial property and separated by the Waste Generator for Collection and which are excluded
from the scope of this Agreement as described in Article 4, Scope of Agreement.
1.20 “Compactor” means a mechanical apparatus that compresses materials together with the Container that
holds the compressed materials or the Container that holds the compressed materials if it is detached
from the mechanical compaction apparatus. Compactors include two (2) to eight (8) cubic yard Bin
Compactors serviced by front-end loader Collection vehicles and ten (10) to fifty (50) cubic yard Drop
Box Compactors serviced by Roll-Off Collection vehicles.
1.21 “Complaint” shall mean each written or orally communicated statement made by any Person, whether
to City or Franchisee, alleging: (1) non-performance, or deficiencies in Franchisee’s performance of its
duties under this Agreement; (2) a violation by Franchisee of this Agreement; or, (3) an SB 1383 Non-
Compliance Complaint as required under 14 CCR Section 18995.3.
1.22 “Compost” (or any variation thereof) includes a controlled biological decomposition of Organic
Materials yielding a safe and nuisance free Compost product.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
4
1.23 “Compostable Plastic(s)” means plastic materials that meet the ASTM D6400 standard for
Compostability.
1.24 "Construction and Demolition Debris" or “C&D” means used or discarded construction
materials removed from a Premises during the construction, repair, demolition, or renovat ion
of a structure.
1.25 "Container" means Bins, Carts, Compactors, and franchise Roll-Offs.
1.26 “County” means the County of San Luis Obispo, a political subdivision of the State of California.
1.27 “Customer” means the Person whom Franchisee submits its billing invoice to and collects payment
from for Collection services provided to a Premises. The Customer may be either the Occupant or
Owner of the Premises.
1.28 “Customer Notice” means the Franchisee’s notice to Customer(s) as described in Section 5.4.
1.29 "Designated Collection Location" means the place where the Franchisee or an authorized Recycling
agent or a Solid Waste Collector has contracted with either the City or a private entity to Collect Solid
Waste.
1.30 “Designated Disposal Facility” means the landfill or Transfer Station, selected by City where
Processing Residue under this Agreement is sent for final Disposal. The Designated Disposal Facility is
subject to the City's right of direction. The Designated Disposal Facility is the Cold Canyon Landfill
owned and operated by Waste Connections and located at 2268 Carpenter Canyon Rd, San Luis
Obispo, CA 93401.
1.31 “Designated Waste” means non-Hazardous Waste which may pose special Disposal problems because
of its potential to contaminate the environment, and which may be Disposed of only in Class II Disposal
sites or Class III Disposal sites pursuant to a variance issued by the California Department of Health
Services. Designated Waste consists of those substances classified as Designated Waste by the State, i n
California Code of Regulations Title 23, Section 2522 as may be amended from time to time.
1.32 “Discarded Materials” means Recyclable Materials, Organic Materials, and Solid Waste placed by a
Generator in a receptacle and/or at a location for the purposes of Collection, excluding Excluded Waste.
1.33 “Disposal Facility” means a landfill, or other Facility for ultimate Disposal of Solid Waste.
1.34 “Dispose” or “Disposal” (or any variation thereof) means the final disposition of Solid Waste or
Processing Residue at a Disposal Facility.
1.35 “Divert” or “Diversion” (or any variation thereof) means to prevent Discarded Materials from Disposal
at landfill or transformation facilities, (including facilities using incineration, pyrolysis, distillation,
gasification, or biological conversion methods) through source reduction, reuse, Recycling,
Composting, anaerobic digestion, or other method of Processing, subsequent to the provisions of AB
939. Diversion is a broad concept that is to be inclusive of material handling and Processing changes
that may occur over the Term including, but not limited to, changes in standard industry practice or
implementation of innovative (but not necessarily fully proven) techniques or technology that reduce
Disposal risk, decrease costs and/or are for other reasons deemed desirable by the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
5
1.36 “Dwelling Unit” means any individual living unit in a; Single-Family Dwelling Unit or Multi-Family
Dwelling Unit or building, a mobile home, or a motor home located on a permanent site intended fo r, or
capable of being utilized for, Residential living other than a Hotel or Motel.
1.37 “Effective Date” means the date on which the latter of the two Parties signs this Agreement, as
specified in Section 2.2 of this Agreement.
1.38 "Environmental Laws" means all federal and state statutes, county, local and City ordinances and
regulations concerning public health, safety and the environment including, by way of example and not
limitation, the comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
USC 9601 et seq.; the Resource Conservation and Recovery Act, 42 USC 6902 et seq.; the Federal
Clean Water Act, 33 USC 1251 et seq.; the Toxic Substances Control Act, 15 USC 1601 et seq.; the
Occupational Safety and Health Act, 29 USC 651 et seq.; the California Hazardous Waste Control Act,
California Health and Safety Code 25100 et seq.; the California Toxic Substances Account Act,
California Health and Safety Code 25300 et seq.; the Safe Drinking Water and Toxic Enforcement Act,
California Health and Safety Code 25249.5 et seq.; as currently in force or as hereafter amended, and
all rules and regulations promulgated there under.
1.39 “Excluded Waste” means Hazardous Substance, Hazardous Waste, Infectious Waste, Designated
Waste, volatile, corrosive, biomedical, infectious, biohazardous, and toxic substances or material, waste
that Franchisee reasonably believes would, as a result of or upon Disposal, be a violation of local, State
or Federal law, regulation or ordinance, including land use restrictions or conditions, waste that cannot
be Disposed of in Class III landfills, waste that in Franchisee’s reasonable opinion would present a
significant risk to human health or the environment, cause a nuisance or otherwise create or expose
Franchisee or City to potential liability; but not including de minimis volumes or concentrations of
waste of a type and amount normally found in Residential Solid Waste after implementation of
programs for the safe Collection, Recycling, treatment, and Disposal of batteries and paint in
compliance with Sections 41500 and 41802 of the California Public Resources Code.
1.40 "Facility" means any plant or site utilized by Franchisee (or its Subcontractor) for the purposes of
performing the duties to fulfill this Agreement, including Transfer, Processing, or Disposal of
Discarded Materials Collected in the City.
1.41 “Federal” means belonging to or pertaining to the Federal government of the United States.
1.42 "Fiscal Year" means the period commencing January 1 and concluding December 31 for Franchisee.
For City it means the period commencing July 1 of one year and concluding June 30 of the
subsequent year.
1.43 “Food Scraps" means those Discarded Materials that will decompose and/or putrefy including: (i) all
kitchen and table Food Waste; (ii) animal or vegetable waste that is generated during or results from
the storage, preparation, cooking or handling of food stuffs; (iii) fruit waste, grain waste, dairy waste,
meat, and fish waste; and, (iv) vegetable trimmings, houseplant trimmings and other Compostable
Organic Waste common to the occupancy of Residential dwellings. Food Scraps are a subset of Food
Waste.
1.44 “Food-Soiled Paper” means Compostable paper material that has come in contact with Food Scraps or
liquid, such as, but not limited to, Compostable paper plates, napkins, and pizza boxes. Food -Soiled
Paper is a subset of Food Waste.
1.45 "Food Waste" means Source Separated Food Scraps and Food-Soiled Paper. Food Waste is a subset
of Organic Materials.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
6
1.46 “Franchise Fee” means the fee paid by Franchisee to the City as described in Article 7.
1.47 "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, related-parties, Affiliates, and Subcontractors where applicable.
1.48 “Generator” or “Waste Generator” means any Person whose act or process produces Solid Waste as
defined in the Public Resources Code, or whose act first causes Solid Waste to become subject to
regulation.
1.49 "Green Waste" means those Discarded Materials that will decompose and/or putrefy, including, but
not limited to, green trimmings, tree trimmings, grass cuttings, weeds, dead plants, pruning’s, leaves,
branches, brush, dead trees, small pieces of untreated and unpainted wood, and other types of Organic
Waste resulting from normal yard and landscaping maintenance that may be specified in City
Legislation for Collection and Processing as Organic Materials under this Agreement. Green Waste
does not include items herein defined as Excluded Waste. Green Waste is a subset of Organic
Materials. Green Waste placed in Organic Materials for Collection may not exceed six (6) inches in
diameter.
1.50 "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.
1.51 “Hazardous Substance” means any of the following: (a) any substances defined, regulated or listed
(directly or by reference) as "Hazardous Substances", "hazardous materials", "Hazardous Wastes",
"toxic waste", "pollutant", or "toxic substances", or similarly identified as hazardous to human health
or the environment, in or pursuant to: (i) the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA) of 1980, 42 USC §9601 et seq. (CERCLA); (ii) the Hazardous Materials
Transportation Act, 49 USC §1802, et seq.; (iii) the Resource Conservation and Recovery Act, 42
USC §6901 et seq.; (iv) the Clean Water Act, 33 USC §1251 et seq.; (v) California Health and Safety
Code §§25115-25117, 25249.8, 25281, and 25316; (vi) the Clean Air Act, 42 USC §7901 et seq.; and,
(vii) California Water Code §13050; (b) any amendments, rules or regulations promulgated
thereunder to such enumerated statutes or acts currently existing or hereafter enacted; and, (c) any
other hazardous or toxic substance, material, chemical, waste or pollutant identified as hazardous or
toxic or regulated under any other Applicable Law currently existing or hereinafter enacted,
including, without limitation, friable asbestos, polychlorinated biphenyl’s (PCBs), petroleum, natural
gas, and synthetic fuel products, and by-products.
1.52 "Hazardous Waste" means any discarded material or mixture of materials, which is toxic, corrosive,
flammable, radioactive or which, because of its quantity, concentration, physical, chemical or
infectious characteristics may do harm to either humans, animals or the environment, or as defined in
Article 2, Chapter 6.5 25117 of the Health and Safety Code and Public Resources Code 40141.
1.53 “Holidays” are defined as New Year’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
1.54 “Liquidated Damages” means the amounts due by Franchisee for failure to meet specific quantifiable
standards of performance as described in Article 12.
1.55 "Materials Recovery Facility" means a permitted Facility where Discarded Materials are sorted or
separated for the purposes of Recycling, Composting, Processing, or reuse.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
7
1.56 "Multifamily Dwelling Unit" or “Multi-Family” means, notwithstanding any contrary definition in the
City Municipal Code, any Premises, other than a Single Family Dwelling Unit, used for residential
purposes, irrespective of whether residence therein is transient, temporary or permanent, including such
Premises when combined in the same building with Commercial establishments, that receive centralized,
shared, Collection service for all units on the Premises which are billed to one (1) Customer at one (1)
address. Customers residing in Townhouses, mobile homes, condominiums, or other structures with five
(5) or more Dwelling Units who receive centralized, shared, Collection service for all units on the
Premises which are billed to one (1) Customer at one (1) address shall be considered Multi-Family.
1.57 “Occupant” means the Person who occupies a Premises.
1.58 “Organic Materials” means Green Waste and Food Waste, individually or collectively. No Discarded
Material shall be considered to be Organic Materials, however, unless it is separated from Recyclable
Materials and Solid Waste. Organic Materials are a subset of Organic Waste.
1.59 “Organic Waste” means wastes containing material originated from living organisms and their metabolic
waste products including, but not limited to, food, Yard Trimmings, lumber, wood, paper products,
printing and writing paper, manure, biosolids, digestate, and sludges, or as otherwise defined in 14 CCR
Section 18982(a)(46). Biosolids and digestate are as defined in 14 CCR Section 18982(a)(4) and 14 CCR
Section 18982(a)(16.5), respectively.
1.60 "Owner" means the person holding the legal title to the real property constituting the Premises to which
solid waste collection service is to be provided under this Agreement.
1.61 “Party” or “Parties” refers to the City and Franchisee, individually or together.
1.62 "Person" means any individual, firm, association, organization, partnership, corporation, business
trust, joint venture, the United States, the State of California, the County of San Luis Obispo, local
agencies, cities and special purpose districts.
1.63 "Premises" means any land or building in the City where Solid Waste is generated or accumulated.
1.64 “Process” or “Processing” means to prepare, treat, or convert through some special method.
1.65 “Processing Facility” means any plant or site used for the purpose of sorting, cleansing, treating or
reconstituting Recyclable Materials, or Reusable Materials for the purpose of making such material
available for Recycling or reuse or the Facility for the Processing and/or Composting of Organic Materials.
1.66 “Prohibited Container Contaminants” means the following: (i) Discarded Materials placed in the
Recyclable Materials Container that are not identified as acceptable Recyclable Materials for the City’s
Collection program; (ii) Discarded Materials placed in the Organic Materials Container that are not
identified as acceptable Organic Materials for the City’s Collection program; (iii) Discarded Materials
placed in the Solid Waste Container that are acceptable Recyclable Materials and/or Organic Materials
to be placed in the City’s Recyclable Materials or Organic Materials Containers or otherwise managed
under the City’s Collection program; and, (iv) Excluded Waste placed in any Container.
1.67 "Recyclable Materials" means residential by-products or discards of economic value set aside, handled,
packaged or offered for Collection in a manner different from Solid Waste. Including, but not limited
to, aluminum, newspaper, clear and colored glass, tin and bi-metal, High density Polyethylene (HDPE),
Polyethylene Terephthalate (PET), cardboard, chipboard, and mixed paper.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
8
1.68 "Recycling" means the Process of sorting, cleansing, treating, and reconstituting at a Recyclable
Materials Processing Facility, materials that would otherwise be Disposed of at a landfill for the
purpose of returning them to the economy in the form of raw materials for new, reused, or reconstituted
products. Recycling includes Processes deemed to constitute a reduction of landfill Disposal pursuant
to 14 CCR, Division 7, Chapter 12, Article 2. The Collection, Transfer, Transportation or Disposal of
Recyclable Materials not intended for, or capable of, reuse is not Recycling. Recycling does not
include the use of Recyclable Materials for conversion to energy, gasification, or transformation as
defined in Public Resources Code Section 40201.
1.69 "Related Party Entity" means any Affiliate which has financial transactions with Franchisee.
1.70 “Residential” shall mean of, from, or pertaining to a Single-Family Premises or Multi-Family Premises
including Single-Family homes, apartments, condominiums, Townhouse complexes, mobile home parks,
and cooperative apartments.
1.71 “Residue” means those materials which, after Processing, are Disposed rather than Recycled due to
either the lack of markets for materials or the inability of the Processing Facility to capture and recover
the materials.
1.72 “Reusable Materials” means items that are capable of being used again after minimal Processing.
Reusable Materials may be Collected Source Separated or recovered through a Processing Facility.
1.73 “Roll-Off” means an open-top or lidded Container with a capacity of seven (7) to forty (40) cubic yards
that is serviced by a franchise Roll-Off Collection vehicle.
1.74 “Source reduction and recycling element (SRRE)” means plans prepared by all jurisdictions in
accordance with Public Resources Code Section 41000 et seq. The SRRE sets forth a jurisdiction’s
basic strategy for management of MSW and divertable materials generated within its borders, with
emphasis on implementation of source reduction, recycling, and composting programs source reduction,
recycling, and composting programs.
1.75 “SB 1383” means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which
added Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added
Chapter 13.1 (commencing with Section 42652) to Part 3 of Division 30 of the Public Resources Code,
establishing methane emissions reduction targets in a statewide effort to reduce emissions of short -lived
climate pollutants as amended, supplemented, superseded, and replaced from time to time.For the
purposes of this Agreement, SB 1383 specifically refers to the Short-Lived Climate Pollutants (SLCP):
Organic Waste Reductions regulations developed by CalRecycle and adopted on November 3, 2020 that
created Chapter 12 of 14 CCR, Division 7 and amended portions of regulations of 14 CCR and 27 CCR.
1.76 “SB 1383 Qualified Renewable Natural Gas” or “SB 1383 RNG” means SB 1383 qualified gas derived
from Organic Waste that has been Diverted from a landfill and Processed at an in-vessel digestion
Facility that is permitted or otherwise authorized by 14 CCR to recover Organic Waste, or as otherwise
defined in 14 CCR Section 18982(a)(62).
1.77 “Self-Haul” or “Self-Hauler” means a Person who hauls Discarded Materials, recovered material, or any
other material, to another Person, or as otherwise defined in 14 CCR Section 18982(a)(66). Self-Hauler
also includes a Person who back-hauls waste, as defined in 14 CCR Section 18982(a)(66)(A).
1.78 “Service Level” refers to the size of a Customer’s Container and the frequency of Collection service.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
9
1.79 "Single Family Dwelling Unit" or “Single-Family” or “SFD” means, notwithstanding any contrary
definition in the City Municipal Code, any detached or attached house or residence designed or used
for occupancy by one (1) family, provided that Collection service feasibly can be provided to such
Premises as an independent unit, and the Owner or Occupant of such independent unit is billed directly
for the Collection service. Single-Family includes Townhouses that maintain individual collection
service regardless of whether each unit is separately billed for their specific Service Level. Single-
Family also includes duplex, tri-plex, or four-plex Residential structures regardless of whether each
unit maintains individual collection service or is separately billed for their specific Service Level.
1.80 "Solid Waste" means Solid Waste as defined in California Public Resources Code, Division 30, Part 1,
Chapter 2, §40191 and regulations promulgated thereunder. Excluded from the definition of Solid
Waste are Excluded Waste, C&D, Source Separated Recyclable Materials, Source Separated Organic
Materials, and radioactive waste. Notwithstanding any provision to the contrary, Solid Waste may
include de minimis volumes or concentrations of waste of a type and amount normally found in
Residential Solid Waste after implementation of programs for the safe Collection, Recycling,
treatment, and Disposal of Household Hazardous Waste in compliance with Section 41500 and 41802
of the California Public Resources Code as may be amended from time to time. Solid Waste includes
salvageable materials only when such materials are included for Collection in a Solid Waste Container
not Source Separated from Solid Waste at the site of generation.
1.81 “Source Separated” means the segregation, by the Generator, of materials designated for
separate Collection for some form of Recycling, Composting, recovery, or reuse.
1.82 “State” means the State of California.
1.83 “Subcontractor” means a party who has entered into a contract, express or implied, with the
Franchisee for the performance of an act that is necessary for the Franchisee’s fulfillment of its
obligations for providing service under this Agreement. Vendors providing materials and
supplies to Franchisee shall not be considered Subcontractors.
1.84 "Term" means the term of this Agreement, including extension periods if granted, as provided
for in Article 3.
1.85 “Ton” or “Tonnage” means a unit of measure for weight equivalent to two thousand (2,000)
standard pounds.
1.86 “Townhouse” means an attached or semi-attached Dwelling Unit within a group of attached or
semi-attached Dwelling Units. A Townhouse shall be considered a Single-Family Dwelling
Unit if each unit maintains individual Collection service subscription. A Townhouse shall be
considered a Multi-Family Dwelling Unit if the Premise receives centralized, shared,
Collection service for all units on the Premise. These shall be the designations regardless of
whether the Premises are billed individually or through a central account (e.g., homeowner
association, property manager).
1.87 “Transfer” means the act of transferring the materials Collected by Franchisee in its route
vehicles into larger vehicles for Transport to other facilities for the purpose of Recycling or
Disposing of such materials.
1.88 "Transfer Station" includes those facilities used to receive solid wastes, temporarily store, separate,
convert, or otherwise process the materials in the solid wastes, or to transfer the solid wastes directly
from smaller to larger vehicles for transport and those facilities used for transformations.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
10
1.89 "Waste Generator" means any Person as defined by the Public Resources Code, whose act or process
produces Solid Waste as defined in the Public Resources Code, or whose act first causes Solid Waste to
become subject to regulation.
1.90 “Transport” or “Transportation” means the act of conveying Collected materials from one location to
another.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
11
ARTICLE 2.
GRANT AND ACCEPTANCE OF AGREEMENT
2.1 Grant and Acceptance of Agreement
Subject to Section 3.4 (Conditions to the Effectiveness of Agreement), City hereby grants to Franchisee
an exclusive franchise to Collect, Process and market Recyclable Materials accumulating at Single
Family, Multi-Family, and Commercial Premises in the City that are offered for Collection to
Franchisee in accordance with this Agreement. Franchisee hereby accepts the Agreement on the terms
and conditions set forth in this Agreement.
2.2 Effective Date
The effective date of this Agreement shall be June 3, 2022.
2.3 Term of Agreement
The term of this Agreement shall commence at 12:01 a.m. on the Effective Date, and expire at
midnight August 20, 2025, subject to extension as provided in Section 2.4 (Option to Extend).
In the event of a change of law or technology which would render the Collection, processing and
marketing services to be implemented under this Agreement obsolete, unnecessary, impractical,
undesirable, or illegal, the City reserves the right to terminate this Agreement upon the giving of a six
(6) month prior written notice of City's election to so terminate this Agreement. It is understood
between Franchisee and City that this Agreement is motivated by the passage of AB 939 and SB 1383,
and that subsequent legislation could make this Agreement unnecessary and/or adverse to the best
interests of the City. In particular, City and Franchisee acknowledge the possibility of future
legislation changing the requirements of AB 939 and SB 1383, and/or requiring a coordination of the
collection of Solid Waste and Recyclable Materials by and through entities other than the Franchisee.
2.4 Option to Extend
The City, by written authorization of the City Manager, shall have the sole option to extend this
Agreement up to 24 months in periods of a least twelve (12) months each. If City elects to exercise
this option, it shall give written notice not later than one hundred eighty (180) calendar days prior to
the initial termination date, or, if one extension has been exercised, one hundred eighty (180) calendar
days prior to the extended termination date.
2.5 Conditions to Effectiveness of Agreement
The obligation of City to permit this Agreement to become effective and to perform its undertakings
provided for in this Agreement is subject to the satisfaction of each and all of the conditions set out
below, each of which may be waived in whole or in party by City.
A. Accuracy of Representations. The representations and warranties made by Franchisee
throughout this Agreement are accurate, true and correct on and as of the effective date
of this Agreement.
B. Absence of Litigation. There is no litigation pending in any court challenging the
award of this Agreement to Franchisee or the execution of this Agreement or seeking to
restrain or enjoin its performance.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
12
C. Furnishing of Insurance and Bonds. Franchisee has furnished evidence of the
insurance and bonds required by Article 10, Indemnification, insurance and
Bond.
D. Effectiveness of City Council Action. The City's Ordinance No. 1711, approving this
Agreement, shall have become effective pursuant to California law on or prior to the
effective date of this Agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
13
ARTICLE 3.
TERMS OF AGREEMENT
3.1 Franchisee Status
Franchisee is duly organized, validly existing and in good standing under the laws of the State of
California and has the financial ability to perform its obligations set forth in this Agreement.
Additionally, the Franchisee has no suits or threatened suits which would impair the financial ability of
the Franchisee to perform its obligations under this Agreement, and that the entering into this
Agreement by Franchisee will not in any way constitute a breach of any other agreements entered into
by Franchisee with other parties or constitute a violation of any law.
3.2 Franchisee Authorization
Franchisee has the authority to enter into and perform its obligations under this Agreement. The Board
of Directors of Franchisee (or the shareholders, if necessary) have taken all actions required by law, its
articles of incorporation, its bylaws or otherwise to authorize the execution of this Agreement. The
persons signing this Agreement on behalf of Franchisee have the authority to do so.
3.3 Compliance with Laws and Regulations
Franchisee shall comply with all existing and future City, county, state, and federal laws, including all
Environmental Laws, with particular note of SB 1383, Article X of the City Charter and Chapters
8.04 of the Municipal Code.
3.4 Serve Without Interruption
Franchisee shall Collect, Process, and market Commercial and Residential Recyclable Materials
throughout the Term of this Agreement without interruption except as described in Section 12.4.
3.5 Permits and Licenses
Franchisee shall procure, and keep in full force and affect, all permits and licenses, pay all charges and
fees, and give all notices as necessary.
3.6 Preservation of City Property
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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
14
ARTICLE 4:
SCOPE OF AGREEMENT
4.1 Scope of Agreement
Subject to Section 4.2 (Limitations to Scope), the Agreement granted to Franchisee shall be exclusive for
Recyclable Materials, except where otherwise precluded by Applicable Law.
4.2 Limitations to Scope
The Agreement for the Collection, Transportation, Processing, and marketing of Recyclable Materials
granted to Franchisee shall be exclusive except as to the following categories of Recyclable Materials
listed in this Section. The granting of this Agreement shall not preclude the categories of Recyclable
Materials listed below from being delivered to and Collected and Transported by others provided that
nothing in this Agreement is intended to or shall be construed to excuse any Person from obtaining any
authorization from City which is otherwise required by law:
A. Source Separated Recyclable Materials separated from other Discarded Materials by the Waste
Generator and for which Waste Generator sells or is otherwise compensated by a collector in a
manner resulting in a net payment to the Waste Generator for such Recycling or related services.
B. Source Separated Recyclable Materials donated to a charitable, environmental, or other non-
profit organization.
C. Source Separated Recyclable Materials which are separated at any Premises and which are Self-
Hauled by the Owner or Occupant of such Premises (or by their employee) to a Facility.
D. Containers delivered for Recycling under the California Beverage Container Recycling Litter
Reduction Act, 14500, et seq. California Public Resources Code; and,
Franchisee acknowledges and agrees that City may permit other Persons beside Franchisee to Collect any
or all types of the Recyclable Materials listed in this Section 4.2, without seeking or obtaining approval of
Franchisee under this Agreement.
This Agreement to Collect, Transport, Process, and market Recyclable Materials shall be interpreted to
be consistent with Applicable Law, now and during the Term of the Agreement, and the scope of this
Agreement shall be limited by current and developing Applicable Law with regard to Recyclable
Materials handling, Recyclable Materials flow control, and related doctrines. In the event that future
interpretations of current law, enactment or developing legal trends limit the ability of the City to
lawfully provide for the scope of services as specifically set forth herein, Franchisee agrees that the
scope of the Agreement will be limited to those services and materials which may be lawfully provided
for under this Agreement, and that the City shall not be responsible for any lost profits and/or damages
claimed by the Franchisee as a result of changes in law.
4.3 Administration of Agreement
The City Manager shall administer this Agreement and the City's Utilities Director shall supervise
Franchisee compliance with the Agreement terms and conditions.
4.4 Use of City Streets
Such grant of Agreement shall give Franchisee the right and privilege to operate Recycling Collection
vehicles and equipment on such streets, public ways, rights-of-way, or easements of the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
15
4.5 Annexation
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 service the area for a period not less than five (5) years.
4.6 City Right to Request Changes
4.6.1 General
City may request 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 thirty (30) calendar days of a request to do so by City, a proposal to provide additional or
expanded Diversion services pursuant to the terms of Section 4.6.2. Franchisee shall be entitled to an
adjustment in its compensation in accordance with Section 8.8 (Extraordinary Adjustments), for
providing such additional or modified services.
4.6.2 New Diversion Programs
Franchisee shall present, within thirty (30) calendar days of a request to do so by City, a proposal. to
provide additional or expanded Diversion services. The proposal shall contain a complete description of
the following:
• Collection methodology to be employed (equipment, workforce, etc.)
• Equipment to be utilized (vehicle number, types, capacity, age, etc.).
• Labor requirements (number of employees by classification).
• Type of Containers to be utilized.
• Provision for program publicity/education/marketing. A projection of the financial results of the
program's operations for the remaining Term of the Agreement in a balance sheet and operating
statement format including documentation of the key assumptions underlying the projections
and the support for those assumptions.
• Processing Facility to be utilized.
4.6.3 City's Right to Acquire Services
Franchisee acknowledges and agrees that City may permit other Persons besides Franchisee to provide
additional Recyclable Materials Collection, Recycling, or Processing services not otherwise
contemplated under Section 4.6 (City's Right to Request Changes). If pursuant to Section 4.6.2 (New
Diversion Programs), Franchisee and City cannot agree on terms and conditions of such services in
ninety (90) calendar 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.
4.6.4 Implementing new Services
If I) Franchisee is capable of performing or developing the ability to perform a requested service or
modifying an existing service; 2) City has agreed to have Franchisee provide such additional service in
accordance with Franchisee's proposal; and 3) an adjustment in Franchisee's compensation has been
requested but has not been agreed upon or implemented within 90 calendar days, City may permit a
third party to perform the request or modified existing service, and Franchisee shall not be obligated, to
perform such additional or modified service pursuant to the terms of Section 4.6.3.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
16
4.7 Ownership of Recyclable Materials
Once Recyclable Materials are placed in Containers and properly presented for Collection, ownership
and the right to possession shall transfer directly from the Generator to Franchisee by operation of this
Agreement. Franchisee is hereby granted the right to retain, Recycle, Process, reuse, and otherwise use
such Recyclable Materials or any part thereof, in any lawful fashion or for any lawful purpose consistent
with the hierarchy and goals of AB 939, AB 341, SB 1383, and other Applicable Law. Sub ject to the
provisions of this Agreement, Franchisee shall have the right to retain any benefit resulting from its
right to retain, Recycle, Process or reuse the Recyclable Materials which it Collects. Recyclable
Materials or any part thereof, which are delivered to a Facility (Processing Facility, transformation
Facility, Transfer Station, or Material Recovery Facility) shall become the property of the owner or
operator of the Facility(ies) once deposited there by Franchisee. The City may obtain ownership or
possession of Recyclable Materials placed for Collection upon written notice of its intent to do so,
however, nothing in this Agreement shall be construed as giving rise to any inference that City has such
ownership or possession unless such written notice has been given ·to Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
17
ARTICLE 5.
DIRECT SERVICES
5.1 General
The work to be done by Franchisee pursuant to this Agreement shall include the furnishing of all labor,
supervision, equipment, materials, supplies, and all other items necessary to perform the services
required. The enumeration of, and specification of requirements for, particular items of labor or
equipment shall not relieve Franchisee of the duty to furnish all others, as may be required, whether
enumerated or not.
The work to be done by Franchisee pursuant to this Agreement shall be accomplished in a thorough and
professional manner so that the residents within the City are provided reliable, courteous and high-
quality Recycling Collection service at all times. The enumeration of, and specification of requirements
for, particular aspects of service quality shall not relieve Franchisee of the duty of accomplishing all
other aspects in the manner provided in this Section, whether such aspects are enumerated elsewhere in
the Agreement or not.
5.2 Recyclable Materials Collection Services
A. Three-Container Collection System. Franchisee shall provide Recyclable Materials Collection
service as part of a three-Container Collection program for the separate Collection of Source
Separated Recyclable Materials, Source Separated Organic Materials, and Solid Waste, in
accordance with the applicable Franchise Agreement(s) between the Franchisee and City for each
Discarded Material Type. Franchisee shall ensure that the Recyclable Materials services provided
under this Agreement are at all times performed in accordance with Applicable Law, including SB
1383, and operationally align with the Collection of Solid Waste and Organic Materials in order to
operate a successful three-Container Collection system.
Single-Family Customers with a disability shall have the option of placing their Containers near
their dwelling, visible and within reasonable distance from the curb, and without obstacles (i.e.
uneven surfaces, steep inclines/declines, behind gates) that do not cause a safety concern. The
Franchisee will Collect their Containers at this location and return Container to same location.
Franchisee will notify residents annually, beginning within thirty (30) calendar days of
execution of this Agreement, of this Collection option. To be eligible for this Collection option,
residents must present proof of their disability to the Franchisee.
B. Collection. Franchisee shall Collect and remove all Recyclable Materials placed in or adjacent to
Franchisee-provided Containers at the Designated Collection Locations for Single Family, Multi-
Family, and Commercial Customers; and Transport the Recyclable Materials to the Approved
Recyclable Materials Processing Facility.
C. Schedule. Franchisee shall provide Recycling Materials Collection for all Customers not less than
once each week and on the same day of the week as Solid Waste Collection service for
Residential customers.
Franchisee will notify Recyclable Materials Customers of Holiday Collection schedules. Should the
Solid Waste Collection Day change, Franchisee shall re-route Collections within sixty (60) calendar
days of the notification by the change in Solid Waste Collection days to provide same day service.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
18
5.3 Materials To Be Collected
Franchisee shall Collect all types of Source Separated Recyclable Materials, as defined in Section 1, that
are properly set out for Collection. Recyclable Materials to be Collected are to include, but are not
limited to: newspaper, aluminum, tin and bi- metal cans, clear and colored glass containers, High
Density Polyethylene (HDPE), Polyethylene Terephthalate (PET), polystyrene, corrugated Cardboard,
and mixed paper (Including white and colored ledger paper, chipboard, junk mail, magazines and phone
books). Containers shall comply with the requirements of Section 5.6.3. Materials prohibited for
Collection in the Recyclable Materials Containers include: Solid Waste, Organic Materials, and
Excluded Waste.
5.4 Refusal to Provide Collection Services
Franchisee may refuse to Collect Recyclable Materials and shall not be obligated to continue to provide
Recycling Container(s) to any participant in the Recycling program who, after reasonable warning, fails to
properly sort and set out Recyclable Materials. Upon observation of Prohibited Container Contaminants,
Franchisee shall leave a Customer Notice describing the contamination issue and educating the Customer
on proper Source Separation as described in this Section. Franchisee shall report monthly to City any
warning notices issued, in accordance with Exhibit A.
5.4.1 Customer Notices.
A. General. In the event Franchisee does not Collect any item or Container of Discarded Materials
due to a Customer’s non- compliance with rules and regulations for proper set-out or the presence
of Prohibited Container Contaminants, Franchisee shall attach a Customer Notice, subject to
City’s approval, securely to the item or Container specifying the reasons for courtesy Collection
or non-Collection. The Customer Notice shall contain Franchisee’s name, telephone number, and
information described below.
The Customer Notice shall, at a minimum:
1. Inform the Customer of the reason for the courtesy Collection or non-Collection; and
2. Include the date and time the issue was observed.
3. In addition, upon the identification of Prohibited Container Contaminants in a
Customer’s Container, the Franchisee shall provide the Customer with the following
information in the Customer Notice, or through another form of communication such as
mail, e-mail, text message, or over the phone: Information on the Customer’s
requirement to properly separate materials into the appropriate Containers, and the
accepted and prohibited materials for Collection in each Container;
4. Inform the Customer of the courtesy collection or non-collection of the contaminated
materials on this occasion with information that the Franchisee may assess contamination
Processing fees and/or may not Collect the Container in the future; and,
5. Be supported by photographic evidence of the violation(s).
B. Upon identification of Prohibited Container Contaminants. Franchisee shall Collect the
contaminated Recyclable Materials Containers and either Transport the material to the appropriate
Approved Facility for Processing; or, Franchisee may Collect the contaminated materials with the
Solid Waste and Transport the contaminated materials to the Approved Disposal Facility. A
courtesy Collection of contaminated Recyclable Materials where the materials are sent to the
Approved Disposal Facility may be made with a Solid Waste Collection vehicle, provided that the
contaminants may safely and lawfully be Collected as Solid Waste.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
19
C. Communications with Customer. Whenever a Container at the Premises of a Customer is not
Collected, Franchisee shall contact the Customer on the scheduled Collection day by telephone,
email, text message, or other verbal or electronic message to explain why the Container was not
Collected. Whenever a Container is not Collected because of Prohibited Container Contaminants,
a Customer service representative shall contact the Customer to discuss and encourage the
Customer to adopt proper Discarded Materials preparation and separation procedures.
D. Franchisee Return for Collection. Upon request from Customer, Franchisee shall Collect
Containers that received Customer Notices specifying non-Collection within one (1) Working Day
of Customer’s request. Franchisee shall bill Customer for the extra Collection service event
(“extra pick-up”) at the applicable City-approved Rates only if Franchisee notifies Customer of
the premium Rate for this service at the time the request is made by Customer.
E. Assessment of Contamination Processing Fees. If the Franchisee observes twenty percent
(20%) or more Prohibited Container Contaminants and has issued a Customer Notice specifying a
courtesy Collection, the Franchisee may impose a contamination rate approved by the City for that
Customer’s Service Level, if and only if Franchisee has informed the Customer of the potential
for a Processing fee pursuant to this Section. The intent of contamination fees is to provide a
behavioral tool to educate and prevent Customers from placing Source Separated Discarded
Material into the improper designated Container(s). To ensure that assessment of fees are to be
used for the intended purposes and not as a form of revenue generation, after the first issuance of a
Customer Notice for the observance of Prohibited Container Contaminants in one (1) calendar
year, Franchisee may issue a fee of ten (10) dollars. After the second observance of Prohibited
Container Contaminants in the same calendar year, Franchisee may issue a fee of twenty (20)
dollars. After the third observance of Prohibited Container Contaminants in the same calendar
year, Franchisee may issue a fee of thirty (30) dollars. In the fourth and any subsequent
observances of Prohibited Container Contaminants in the same calendar year, Franchisee may
increase the contamination Processing fee by ten (10) dollar increments and may Collect the
contaminated materials with the Solid Waste and Transport the contaminated materials to the
Approved Disposal Facility, provided that the contaminants may safely and lawfully be Collected
as Solid Waste.
F. Suspension of Contamination Processing Fee Program. Franchisee agrees that contamination
fees shall not exceed one percent (1%) of Franchisee’s Gross Receipts in any calendar quarter. In
the event that contamination fees exceed one percent (1%) of Franchisee’s Gross Receipts in any
calendar quarter, the assessment of contamination fees shall be suspended immediately and
indefinitely pending a program assessment by the City and Franchisee. Upon program suspension
or at the request of the City at any time during the Term of the Agreement, City and Franchisee
shall meet and confer regarding the application and effectiveness of contamination fees in
accomplishing the behavior change. If the program is suspended due to excessive revenue
generation, the City may require Franchisee to either: i) modify the program parameters; ii)
modify the amount of the contamination fee; or, iii) return to the City any funds generated by the
contamination fee which exceed one percent (1%) of Franchisee’s Gross Receipts for a given
period of time.
G. City Actions Upon Identification of Prohibited Container Contaminants. The City or its
designee shall perform SB 1383 activities required for the identification of Prohibited Container
Contaminants which includes but is not limited to, record keeping, provision of educational
notices and reporting.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
20
5.5 Marketing and Sale of Recyclable Materials
Franchisee shall be responsible of the marketing and sale of all Recyclable Materials Collected pursuant to
this Agreement. Revenues from the sales of these materials shall be applied to the cost of service under the
Agreement to reduce Franchisee's compensation. Franchisee shall sell all Recyclable Materials Collected
pursuant to this Agreement at not less than fair market value as described in Article 8, Franchisee's
Compensation and Rates.
5.6 Operations
5.6.1 Schedules
To preserve peace and quiet, no Recyclable Materials shall be Collected from or within two- hundred (200)
feet of residential Premises between 6:30 P.M. and 6:30 A.M. on any day and such Recyclable Materials
shall be Collected, Monday through Friday on the same day as Solid Waste collection. When the regularly
scheduled Collection day falls on a holiday, Collection shall take place on the following regularly
scheduled collection day. In the event the Franchisee misses the collection of set out recyclables, the
Franchisee shall collect the missed pickups with one (1) business day of notification.
5.6.2 Vehicles
A. General. Franchisee shall provide a fleet of Collection vehicles sufficient in number and capacity
to perform the work required by this Agreement and proposed in Exhibit "A" and in strict
accordance with its terms. Franchisee shall have available on Collection days sufficient back-up
vehicles in order to respond to complaints and emergencies. The fleet shall be maintained
according to the requirements of Municipal Code 8.04.030.Renewable Natural Gas (RNG)
Vehicles Under this Agreement, the Franchisee shall make a best effort for all Collection
vehicles to be powered by SB 1383 compliant RNG generated by a local facility or powered by
SB 1383 compliant RNG that is purchased through a wheeling agreement with a party(ies),
provided that the wheeling agreement is for purchase of gas derived from Organic Waste that has
been diverted from a Landfill and Processed at an in-vessel digestion Facility that is permitted or
otherwise authorized by Title 14 of CCR to recover Organic Waste and meets the requirements
of 14 CCR Section 18993.1(h). Upon City’s request, Franchisee shall obtain and provide the City
with a written certification by an authorized representative of the publicly owned treatment
works, or the wheeling agreement under which Franchisee purchased SB 1383 RNG certifying
that the in-vessel digestion Facility produces the SB 1383 compliant RNG consistent with the
requirements of 14 CCR Section 18993.1(h). Franchisee shall maintain records of the amount of
SB 1383 compliant RNG purchased and shall report this information in accordance with Exhibit
B. Franchisee shall agree to the City the right to report this SB 1383 compliant RNG usage
toward the City’s fulfilment of its annual recovered Organic Waste product procurement target in
accordance with 14 CCR Section 18993.1.
B. Specifications. All vehicles used by Franchisee in providing Recyclable Materials Collection
services under this Agreement shall comply with all federal, state, and local requirements for
such vehicles as they now exist or may be amended in the future, and be registered with the
California Department of Motor Vehicles. All such vehicles shall have water-tight bodies
designed to prevent leakage, spillage or overflow. All such vehicles shall comply with U.S.
Environmental Protection Agency noise emission regulations and other applicable noise control
regulations.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
21
C. Condition. 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.
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.
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.
Franchisee shall arrange all vehicles and other equipment in safe and secure location(s) in
accordance with all applicable zoning regulations.
D. Vehicle Identification. Each truck shall display in a prominent place a sign as required in
Municipal Code section 8.04.090.
E. Operation. Vehicles shall be operated in compliance with the California Vehicle Code, and all
applicable safety and local ordinances. Franchisee shall not load vehicles in excess of the
manufacturer's recommendations or limitations imposed by state or local weight restrictions on
vehicles.
5.6.3 Recyclable Materials Containers
A. General
1. Franchisee shall supply all Customers with Recyclable Materials Containers for
Collection of Recyclable Materials, in accordance with this Section. Franchisee shall use
the Franchisee-provided Collection Containers that are currently located at Customers’
Premises, if applicable. If Customer is currently utilizing Collection Containers that were
not provided by the Franchisee, Franchisee shall provide Containers from current
inventory.
2. Franchisee shall provide Customers (including Single-Family, Multi-Family,
Commercial, and City facility Customers) with new Collection Containers as requested
by the Customer to meet a change in Service Level or to accommodate new Customers
within five (5) Business Days of Franchisee’s first receipt of the Customer request.
3. On and after the Effective Date, any new Containers provided by the Franchisee shall
comply with the Container standards set forth in this Section. All Containers shall
display the Franchisee’s name, logo, telephone number, website, capacity (yards or
gallons), and some identifying inventory or serial number.
4. If an existing Container breaks or is otherwise rendered non-functional on or after the
Effective Date, the Franchisee shall replace the non-functional Container with a
Container that complies with the requirements of this Section. Notwithstanding this
Section, the Franchisee is not required to replace functional Containers, including
Containers purchased prior to January 1, 2022, that do not comply with the color
requirements of this Section prior to the end of the useful life of those Containers, or
prior to January 1, 2036, whichever comes first.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
22
B. Container Types and Sizes
1. Single-Family Containers. Franchisee shall supply each Single-Family Dwelling Unit
with a Recyclable Materials Container in size consistent with the City approved
Recyclable Materials Collection program.
2. Multi-Family Containers. Franchisee shall supply each Multi-Family complex with
Recyclable Materials Container(s) to adequately service the needs of the Multi-Family
Premises. Franchisee agrees to provide additional appropriate Containers, as required.
3. Commercial Containers. Franchisee shall supply each Commercial Customer with the
Recyclable Materials Container(s) to adequately service the needs of the Premises.
Notwithstanding this Section, Franchisee shall not be required to provide Recyclable
Materials Container(s) to a Commercial Customer that is exempted from Recyclable
Materials services by the City or has demonstrated to the City that it is Diverting
Recyclable Materials through subscription with another City-approved contractor, or
other City -approved method, for the duration of the approved exemption.
C. Container Labels. Containers shall be identified for Recyclable Materials only and clearly
labeled in accordance with this Section.
1. Labels on Existing Containers or Lids. Per the existing Agreement, Franchisee shall
ensure a label on the body or lid of each Container has been provided to a Customer that
includes language or graphic images, or both, that indicate the primary materials
accepted and the primary materials prohibited in that Container. Labels shall clearly
indicate items that are Prohibited Container Contaminants for each Container.
2. Imprinted or In-Mold Labels for New Containers or New Lids. On or before the
Effective Date, Franchisee shall imprint new Container bodies or lids with text or graphic
images that indicate the primary materials accepted and the primary materials prohibited
in that Container. Labels shall clearly indicate items that are Prohibited Container
Contaminants for each Container. Prior to ordering any Containers or lids with in-mold
labels, Franchisee shall submit a sample of its proposed label, proposed location(s) for
placement of labels on each type of Container, and its labeling plan to the City for
approval.
D. Container Colors. Recyclable Materials Cart lids shall be blue. Recyclable Materials Bin,
Compactor, and franchise Roll-Off lids or bodies shall be blue. No later than December 31, 2035,
Franchisee shall provide all Customers with Collection Containers that comply with the
Container color requirements specified in this Section or as otherwise specified in 14 CCR
Section 18982; 14 CCR, Division 7, Chapter 12, Article 3; or other Applicable Law.
E. Additional Containers. 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 City or Customer,
with Containers that comply with this Section.
F. Upon expiration or early termination default of Agreement, City may purchase all Containers put
into service at Customer Premises during the Term of the Agreement and shall become property
of the City at a value negotiated with the City factoring the depreciation and scrap value. All
Containers and Compactors purchased and put into service at Customer Premises during the
Term of the Agreement that have not been fully depreciated shall be available to the City, at the
City’s option, at a cost reflecting the net book value, plus scrap.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
23
5.6.4 Litter Abatement
Franchisee shall use due care to prevent Recyclable Materials from being spilled or scattered during the
Collection or transportation process. If any Recyclable Materials are spilled during Collection, Franchisee
shall promptly clean up all spilled materials. Each collection vehicle shall carry a broom and shovel at all
times for this purpose.
5.6.5 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.
B. Identification. Franchisee shall ensure that while on duty each Collection worker
wears a clean uniform which displays the 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 mariner. 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.
5.7 Recyclable Materials Processing
5.7.1 Receipt of Recyclable Materials
Franchisee shall Transport all Recyclable Materials to the Approved Recyclable Materials Processing
Facility and shall Transfer, Process, and Dispose of Discarded Materials in accordance with this Section
5.7. The Approved Facilities shall comply with the following requirements.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
24
5.7.2 Status of Approved Recyclable Materials Processing Facility
Any Processing Facility used by Franchisee must be designed and constructed in accordance with all
Applicable Law (CEQA, California Code of Regulations, etc). The Processing Facility must have all
permits from Federal, State, regional, County, and City agencies necessary for it to operate as a Mat erial
Recovery Facility and must be in full regulatory compliance with all such permits. The Approved
Recyclable Materials Processing Facility must be authorized to accept, under its existing permit, and have
sufficient uncommitted capacity to accept, all Recyclable Materials delivered to it by, or on behalf of, the
City for the Term of this Agreement. Franchisee shall immediately notify City of any notice of breach or
default received from Approved Recyclable Materials Processing. Franchisee shall, directly or through
similar obligations in its subcontract(s) with facility operators, keep active all existing permits and
approvals necessary for use of the Approved Processing Facility in compliance with regulatory
requirements and Applicable Law. Upon request, Franchisee shall provide copies of Facility permits and/or
notices of violations (obtained from its Processing Facility Subcontractor if necessary) to City.
5.7.3 Alternative Processing Facility
If Franchisee becomes unable to deliver the City’s Recyclable Materials to the Approved Processing
Facility due to causes within its control and which could have been avoided by the exercise of due care, the
Franchisee shall arrange for it to be accepted at another Processing Facility, in which case Franchisee shall
pay for any increased Transportation costs, any differences in the fees charged at such Processing Facility,
and the fees then in effect under this Agreement.
If Franchisee’s inability to deliver the City’s Recyclable Materials to the Approved Recyclable Materials
Processing Facility is not due to causes within its control or which could have been avoided by the exercise
of due care, then Franchisee shall propose alternative Processing Facilities including all related costs to the
City and City shall select the alternative to be used. Within forty-eight (48) hours of an emergency or
sudden and unforeseen closure at the Approved Recyclable Materials Processing Facility, the Franchisee
shall provide a written description of the reasons the use of the Approved Facility is not feasible, and the
period of time Franchisee proposes to use an alternative Processing Facility. Such a change in Processing
Facility shall be temporarily permitted until such time as the City is able to consider and respond to the use
of the proposed alternative Processing Facility. If the use of the proposed Alternative Processing Facility is
anticipated to or actually does exceed thirty (30) calendar days in a consecutive twelve (12) month period,
the use of such Processing Facility shall be subject to approval by the City. The City may, in its sole
discretion, approve, conditionally approve, temporarily approve, or disapprove of the use of the proposed
Alternative Processing Facility. If the City disapproves the use of the proposed Alternative Processing
Facility, the Parties shall meet and confer to determine an acceptable Processing Facility.
5.7.4 Disposition of Unauthorized Waste
Franchisee shall ensure that procedures to identify and reject materials delivered to the Approved
Recyclable Materials Processing Facility which are Hazardous Waste, Excluded Waste, or which otherwise
may not be legally accepted at the Approved Recyclable Materials Processing under their permits, are in
place. Franchisee may, in the course of implementing such procedures, refuse to accept Recyclable
Materials deposited from a Generator if they constitute Hazardous Waste, or otherwise may not be legally
accepted at the Approved Recyclable Materials Processing Facility, and Franchisee shall be solely
responsible of the materials which are accepted. If Franchisee discovers Hazardous Waste, or other material
which may not be legally accepted, among materials which it has accepted, it shall dispose of such waste at
its own expense. Franchisee may pursue all legal rights and remedies it may have against the Waste
Generator(s) of such Solid Waste, if the Waste Generator(s) can be identified.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
25
5.7.5 Subcontracting
Franchisee shall not engage any Subcontractors for Collection, Transportation, or Processing of Recyclable
Materials without the prior written consent of City. Franchisee must obtain written agreements with
Processing Subcontractors to guarantee capacity to Process Discarded Materials. If the Franchisee plans to
engage other affiliated or related party entities in the provision of services, Franchisee shall provide City
with thirty (30) calendar days written notification of its plans and provide an explanation of any potential
impacts related to the scope, quality, timeliness, or cost of providing services under this Agreement. All
insurance documents must be reviewed and approved by the City’s Risk Manager prior to City acceptance.
Franchisee shall require that all Subcontractors file insurance certificates with the City, name City as an
additional insured, and comply with all material Terms of this Agreement.”
5.8 Disposal
Franchisee shall ensure that the Residue from a Generator’s Recyclable Materials, delivered to the
Approved Recyclable Materials Processing Facility by the Franchisee, are disposed of at the Approved
Disposal Facility in full regulatory compliance.
5.9 Implementation Plan
The parties recognize that substantial planning will be required in order to assure an orderly initiation of
Residential Curbside Recycling Collection services on August 6, 2010, To that end, City has required
Franchisee to submit, as part of its proposal, a detailed implementation plan addressing, among other
things, the steps Franchisee will take and the schedule on which it will take them, to prepare for such an
orderly initiation of service. The implementation plan shall cover Franchisee's schedule for acquiring
necessary equipment, personnel, storage and maintenance facilities, administrative offices, customer
relations materials (including Collection schedules, route maps, billing forms, complaint forms, service
request forms, etc.). Franchisee agrees to adhere strictly to the implementation plan. The implementation
shall be subject to the City's review and approval.
Failure to adhere to the implementation schedule will constitute a breach of this Agreement, and, if
incurred, an event of default, under Article 12, Default, Remedies, and Liquidated Damages.
5.10 Generator Waivers
A. General. The City or its designee may grant waivers described in this Section to Commercial or
Multi-Family Generators that impact the scope of Franchisee’s provision of service for those
Customers; provided, the Generator shall continue to subscribe with Franchisee for franchised
Collection services to the extent such services are not waived by the City. Waivers issued shall
be subject to compliance with SB 1383 requirements, pursuant to 14 CCR Section 18984.11, or
other requirements specified by the City.
B. Generator Waivers.
a. De Minimis Waivers. The City or its designee may waive a Multi-Family’s, Commercial
Business’, or its Property Owner’s obligation to comply with some or all of the Source
Separated Recyclable Materials Collection requirements set forth in this Agreement, SB
1383 Regulations, and the City’s Municipal Code, all as may be amended from time to
time, if the Multi-Family, Commercial Business, or its Property Owner provides
documentation, or the City has evidence demonstrating one of the following de minimis
conditions:
i. The Multi-Family’s or Commercial Business’ total Solid Waste Collection service
is two (2) cubic yards or more per week, and Organic Waste subject to Collection
comprises less than twenty (20) gallons per week, per applicable Container, of the
Multi-Family’s or Commercial Business’ total waste; or,
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
26
ii. The Multi-Family’s or Commercial Business’ total Solid Waste Collection service
is less than two (2) cubic yards per week, and Organic Waste subject to Collection
comprises less than ten (10) gallons per week, per applicable Container, of the
Multi-Family’s or Commercial Business’ total waste.
b. Space Constraint. The City or its designee may waive a Multi-Family’s, Commercial
Business’, or its Property Owner’s obligation to comply with some or all of the Source
Separated Recyclable Materials Collection service requirements set forth in this
Agreement, SB 1383 Regulations, and the City’s Municipal Code, in the event that the
Generator qualifies for a space constraint waiver under the City’s Municipal Code.
c. Waiver Requests. Generators may submit requests for de minimis waivers and physical space
waivers to the City or its designee. If a Generator submits a request for a waiver to the Franchisee,
the Franchisee shall refer the Generator to the City or its designee. Upon request of the City, the
Franchisee shall support the City in the waiver review process by providing requested Customer
information. If the City or its designee grants a waiver to a Generator, the City shall notify the
Franchisee and Franchisee shall update the Customer’s information and Service Level in
accordance with Exhibit B.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
27
ARTICLE 6:
OTHER SERVICES
6.1 Billing
The City Council shall establish an integrated rate for Organics, Recycling and Solid Waste services.
Franchisee shall bill and collect for its services at no more nor less than these rates. Franchisee's billing
plan, including billing frequency, and format shall be subject to approval by City, and City shall have the
right to revise the billing format to itemize certain charges.
The City may also direct Franchisee to insert mailers relating to contractor provided services with the
billings and shall be responsible for all labor costs with respect to the mailing inserts. The mailers must fit
in standard envelopes and not increase the required postage. The City will provide not less than thirty (30)
calendar days notice to Franchisee prior to the mailing date of any proposed mailers 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. 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. The owner of
occupied Premises shall be responsible and liable for paying the Recycling fees for the property.
6.2 Collection of Bills from Delinquent Customers
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 accounts.
6.3 Performance or Billing Audit
The City shall have the right to periodically, not less than annually, request a performance audit or billing
audit be completed by the 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 12.5.
6.4 Customer Service
6.4.1 Office
Office hours shall be, at a minimum, from 8:00 AM. to 5:00 P.M., Monday through Friday, exclusive of
holidays. A responsible and qualified representative of Franchisee shall be available during office hours for
communication with the public. Telephone numbers shall either be a local or a toll free call to residents and
businesses of the City. Franchisee's telephone system shall be adequate to handle the volume of calls
typically experienced on the busiest days. Franchisee shall also maintain a local or toll free telephone
number for use during other than normal business hours. Franchisee shall have a representative, answering
or message providing/receiving (voice-mail) service available at said after hours telephone number.
6.4.2 Complaint documentation
All service complaints related to Recyclable Materials Collection shall be directed to Franchisee. Daily logs
of complaints concerning Collection of Recyclable Materials shall be retained for a minimum of twenty-
four (24) months and shall be available to City at all times during this Agreement upon twenty-four (24)
hour notice.
Franchisee shall log all complaints received orally or in writing and said log shall include the date and time
the complaint was received, name, address and telephone number of complainant to the extent that such
information is provided by complainant, description of complaint, employee recording complaint and the
action taken by Franchisee to respond to and remedy complaint. All complaints received shall be responded
to within twenty four (24) working hours of receipt. ·
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
28
All customer service records and logs kept by Franchisee shall be available at all times during this
Agreement to City upon twenty four (24) hour notice and at no cost to City. City shall, at any time during
regular Franchisee business hours, have access to Franchisee's customer service department for purposes of
monitoring the quality of customer service or researching customer complaints assessing liquidated
damages or other matters related to Franchisee's performance under this Agreement.
6.4.3 Resolution of Customer Complaints
Franchisee shall notify customers of this complaint procedure at the time customers apply for or are
provided service, and subsequently, annually.
A customer dissatisfied with Franchisee's decision regarding a complaint may ask the City to review the
complaint. The City's Utilities Director shall determine if the customer's complaint is justified, and if so,
what remedy, if any shall be provided. The remedy under this Section shall be limit ed to a rebate of
customer charges related to the period of breach of any of the Terms of this Agreement. Any resolution of
these customer complaints shall not affect the City's rights to liquidated damages.
6.4.4 Government Liaison
Franchisee shall designate in writing a "Government Liaison" who shall be responsible for working with
the City Manager, Utilities Director and/or one of their designated representative(s) to resolve customer
complaints.
6.5 Education and Public Awareness
A. Program Objectives.
Franchisee acknowledges that the City, or its designee, will be responsible for designing,
implementing, and conducting a public education and outreach program. The City’s, or its
designee’s, public education and outreach strategies may focus on topics such as: improving
Generator understanding of the benefits of and opportunities for source reduction, Reuse, and
Landfill Disposal reduction and supporting compliance with Applicable Laws and regulations,
including, but not limited to SB 1383 and SB 1383 regulations. The cumulative intended effect of
these efforts is to reduce each Generator’s Solid Waste and, ultimately, Disposal of Solid Waste,
and Franchisee agrees to support and not undermine or interfere with such efforts.
B. Franchisee Cooperation and Support.
Franchisee acknowledges and agrees that education and public awareness are critical, key and
essential elements of any efforts to achieve compliance with AB 939, AB 341, AB 1826, and SB
1383 requirements”. Accordingly, Franchisee agrees to cooperate with City in exploring
opportunities to expand public and Customer knowledge concerning needs and methods to reduce,
reuse and Recycle Discarded Materials and to cooperate fully with City in this regard. Franchisee
shall cooperate and coordinate with the City or its designee on public education activities to
minimize duplicative, inconsistent, or inappropriately timed education campaigns. The Franchisee
shall cooperate with and shall not impede, interfere, or attempt to impede or interfere with the
implementation, expansion, or operation of public education and outreach programs or campaigns
conducted by the City or its designee.
C. Franchisee Education Activities
1. Supplemental Education Materials. Franchisee shall perform all necessary public
education activities related to the Recyclable Materials services as directed by the City.
This shall include, but not be limited to, annual mailings to all Customers explaining the
Recycling program, mailings prior to the start of services, flyers handed out with Container
delivery and follow-up mailings or handouts related to the Collection of new materials, and
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
29
other materials required by this Section. All public education materials shall be approved in
advance by the City. Franchisee shall obtain approval from the City on all Franchisee-
provided public education materials outside of the City’s education plan, including, but not
limited to: print, radio, television, or internet media before publication, distribution, and/or
release. City shall have the right to request that Franchisee include City identification and
contact information on public education materials and approval of such requests shall not
be unreasonably withheld.
2. Bill Inserts. Franchisee shall maintain its own program of providing information relevant
to billing and Organic Materials services, issues and needs with its bills. Franchisee shall
also include in Customer bills additional information, including information on any and all
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. Franchisee shall be
responsible for printing single-sheet, double sided bill inserts at least annually. Franchisee
shall provide electronic bill inserts (or separate email attachments) to Customers who are
billed electronically, and paper bill inserts to Customers who receive paper bills. Upon City
request for such inserts, Franchisee shall comply with such request during its next billing
cycle for the targeted Customer group. Franchisee shall perform this service with no
additional requirement for compensation.
3. Annual Notice of Requirements. If not already provided through another Discarded
Materials Franchise agreement between the Parties, Franchisee shall, not less than once per
year, prepare and distribute to each Generator in the City a mailer that includes information
specified in 14 CCR Section 18985.1(a). Such mailer shall be distributed by Franchisee to
all Residential and Commercial mailing addresses including individual Multi-Family
Dwelling Units and tenants of multi-tenant Commercial locations. Franchisee shall also
make this notice available in an electronic format through the Franchisee’s website.
4. Other Outreach. At the direction of the City, Franchisee shall participate in and promote
AB 939, AB 341, AB 1826, SB 1383 or other Applicable Law 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 Discarded Materials program.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
30
ARTICLE 7
PAYMENTS TO CITY
7.1 Franchise Fee
In consideration of the exclusive franchise provided for in this Agreement, Franchisee shall pay the City ten
percent (10%) of its Gross Revenues for Recyclable Materials services; provided, however, that such
Franchise Fee shall not exceed the reasonable costs of the City to deliver service to properties. Such
Franchise Fee shall be a “pass-through” expense for purposes of rate review.
7.2 AB 939/SB 1383 Fee
Franchisee shall pay an AB 939/SB 1383 fee to the City each month. The City shall retain the sole right to
set priorities for the use of its AB 939/SB 1383 fee. In addition, if the City’s designee implements an AB
939, SB 1383, or Solid Waste Management fee, Franchisee shall pay that fee directly to the designee. Said
fees shall be an allowable cost in Franchisee’s rate application. All AB 939/SB 1383 fees and Solid Waste
Management fees paid to the City or its designee shall be considered a “pass through” expense for purposes
of rate setting, and, as such changes to these fees shall be adjusted accordingly subject to all applicable laws
and regulations. The City or its designee shall have the right to establish and adjust the AB 939, SB 1383,
or Solid Waste Management fee at any time, provided that any changes are considered a pass-through cost
for the purposes of rate setting, at the time of the change in the AB 939, SB 1383, or Solid Waste
Management fee.
7.3 Business License Tax
Franchisee shall pay each annual business license tax.
7.4 Other Fees
The City shall reserve the right to set "Other" Fees, as it deems necessary. These expenses will be
determined and a fee designed to reimburse the City. Such fees shall be set annually by City resolution
and may be considered a “pass-through” cost for purposes of rate setting.
7.5 Time and Method of Payment
If Franchisee is directed to pay an AB 939/SB 1383 Fee, 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, including Recyclable
Materials revenue, or a flat monthly fee as determined by the City. If any fees are not paid on or before
the fifteenth (15th) day of any month, 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 (1%) owing on any unpaid balance for each following thirty (30) day
period the fee remains unpaid. Late payment penalty amounts shall not be included in any revenue
requirement.
7.6 Adjustment of Fees
The City may adjust the amount of fees annually. Such adjustment shall be reflected in the rates that
the Franchisee is allowed to charge and collect from customers.
7.7 Review of Fee Payments
The City, or its agent, reserves the right to annually perform an independent review of fee payments, to
verify that fees are being paid in accordance with Agreement. The cost of such reviews will be an
allowable cost under the rate setting methodology unless there are findings pursuant to Section 12.5.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
31
ARTICLE 8:
CONTRACTOR'S COMPENSATION AND RATES
8.1 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, profit and all other things necessary to perform all the services required by
this Agreement in the manner and at the times prescribed.
The Franchisee does not look to the City for payment of any sums under this Agreement. Franchisee will
perform the responsibilities and duties described in this Agreement in consideration of the right to charge
and collect from customers for services rendered at rates fixed by the City from time-to-time and the right
to sell compost generated from Green Waste. The City shall have the right to structure those rates as it
deems appropriate so long as the revenues forecasted to be received by 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”.
8.2 Initial Rates
Franchisee will submit required financial documentation for this service as part of an integrated solid
waste rate application. The rate application will comply with the guidelines set forth in the City's "Rate
Setting Process and Methodology Manual for Integrated Solid Waste Management Rates". The portion
of the rate attributable to this service shall be identified as part of the Council rate-setting process but will
not be separated from the integrated rate.
8.3 Subsequent Rates
Franchisee may request rate revisions in future solid waste rate applications. The rate application must
comply with the "City of San Luis Obispo Rate Setting Process and Methodology Manual for
Integrated Solid Waste Management Rates".
8.4 Right to Perform Rate Reviews
City reserves the right to perform, or have a qualified third party perform, a detailed review of Franchisee's
expenses and revenues for the purposes of adjusting rates. The results of this detailed rate review will be
used to adjust rates, and the Franchisee's calculated revenue requirements will be used the following year to
adjust rates according to Section 8.3 Franchisee's Compensation for subsequent Rate Years.
8.5 Extraordinary Adjustments
Franchisee or City may request an adjustment to rates at times other than that required in Section 8.3 for
unusual changes in the cost of providing service under this Agreement. Such changes may include, but
are not limited to, changes in laws, ordinances, or regulations, and significant changes in Franchisee's
workload due to new residential or commercial development. However, when an extraordinary
adjustment is requested, such adjustment shall consider changes in all costs and revenues from
Franchisee's proposed revenue requirement.
For each such request, Franchisee shall prepare a schedule comparing the original proposed costs and
revenues by line item to the then current costs and revenues, including an estimates of the cost impact of
the change, using an operating ratio of 93%, applied to Franchisee's costs as calculated in Franchisee's
proposed revenue requirement. Such request shall be prepared in a form acceptable to City with support
for assumptions made by Franchisee in preparing the estimate. Franchisee and City shall negotiate a
mutually acceptable adjustment amount.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
32
ARTICLE 9.
RECORDS, REPORTS AND INFORMATION, STUDIES AND HEARING REQUIREMENTS
9.1 Records
9.1.1 General
A. 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.
B. The following records shall be maintained for the City in form and detail satisfactory to
the City, relating to:
1. Customer services and billing;
2. Weight of Recyclable Materials. Information is to be separated by kind of
account (Single-Family, Multi-Family, and Commercial);
3. Special annual clean-up event results;
4. Routes;
5. Facilities, equipment, and personnel used;
6. Facilities and equipment operations, maintenance, and repair;
7. Processing of Recyclable Materials;
8. Complaints; and
9. Missed pick-ups.
C. Franchisee shall maintain records of Transfer, Diversion, and Disposal of all Recyclable
Materials 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
Recyclable Materials services to City, Franchisee shall provide all records of Diversion
and Disposal of all Recyclable Materials Collected within the City to City within thirty
(30) calendar days of discontinuing service. Records shall be in chronological order and
organized in a form readily and easily interpreted.
D. Records for other programs shall be tailored to specific needs. In general, they shall
include:
1. Plans, tasks·, and milestones; and,
2. Accomplishments in terms such as dates, activities conducted, quantities
of products used, produced or distributed, and numbers of participants and
responses.
E. Unless otherwise required in this Agreement, Franchisee shall retain all records and data
required to be maintained by this Agreement for the Term of this Agreement plus five (5)
years after its expiration or earlier termination. Franchisee’s records shall be stored in one
central location, physical or electronic, that can be readily accessed by Franchisee. Upon
request, any such records shall be retrieved in a timely manner, not to exceed ten (10)
Working Days of a request by the City and made available to the City; including any
record or documentation that the City, requires to fulfill obligations under Applicable Law
including, but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 901, SB 1383, and
other current or future Federal, State, or local regulations, as amended.
9.1.2 Financial Records
Financial records shall separate all records related to the services performed under this Agreement
from any and all other types of businesses and operations conducted by the Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
33
9.2 Reports
9.2.1 Report Formats and Schedule
A. 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:
1. Determine and set rates, and evaluate the financial efficacy of operations; and
2. Evaluate past and expected progress towards achieving goals and objectives; and
3. Determine needs for adjustment to programs; and
4. Evaluate Customer service and Complaints.
B. 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 information needed for the City’s compliance with
Applicable Law, including, but not limited to AB 939, AB 1826, AB 341, and SB 1383
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.
C. Franchisee shall submit all reports to the City, electronically to the Utilities Director via e-
mail using software acceptable to the City. The City reserves the right to require the
Franchisee to maintain records and submit the reports required herein through use of the
City-selected web-based software platform and/or Microsoft Excel spreadsheet, at the
Franchisee’s expense.
D. Monthly reports shall be submitted within twenty (20) calendar days after the end of the
report month.
9.2.2 Monthly Reports
The information listed shall be the minimum reported for each service:
A. Discarded Materials, Collected, Transferred, Diverted and Disposed of, by sector
(Commercial, industrial, Residential) of Waste Generator-Collected by Franchisee, in
Tons, by month.
B. Complaint summary, for month and cumulative for report year, as above, summarized by
nature of Complaints.
C. Narrative summary of problems encountered and actions taken with recommendations for
the City, as appropriate.
D. All requirements specified in Exhibit A.
9.2.3 Annual Report
The Annual Report is to be essentially in the form and content of the monthly reports. Annual reports shall
include at a minimum, all data and information described in Exhibit A, unless otherwise specified under
this Agreement. In addition, Franchisee’s annual audited financial reports/statements, with the operations
related to the City services segregated, shall be included. The annual report shall also include a complete
inventory of equipment used to provide all services.
Financial statements shall include a supplemental schedule combining Franchisee’s results of operations,
separating the specific revenues and expenses, including detailed information with respect to general
overhead claimed by the Franchisee, in connection with the operations provided for in this Agreement from
others included in such financial statements. The financial statements, supplemental schedule, management
letter and footnotes shall be prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and audited, in accordance with Generally Accepted Auditing Standards (GAAS) by a certified
public accountant (CPA) licensed (in good standing) to practice public accounting in the State of California
as determined by the State of California Department of Consumer Affairs Board of Accountancy. The CPA
opinion on Franchisee’s annual financial statements and supplemental schedule shall be unqualified, except
as to uncertainties for which the ultimate outcome cannot be determined by the date of the CPA’s opinion.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
34
9.2.4 Additional Reports
A. General. City reserves the right to require Franchisee to provide additional reports or
documents as City reasonably determines to be required for the administration of this
Agreement or compliance with Applicable Law.
B. AB 901 Reporting. At the City’s option, the City may require that Franchisee provide the
City with the aggregate tonnage data related to AB 901 reporting that the City needs for its
SB 1383 reporting, to the extent available to Franchisee within five (5) Business Days of
City’s request.
9.3 Right to Inspect Records
City shall have the right to inspect or review the payroll tax reports, specific documents or records required
expressly or by inference pursuant to this Agreement, or any other similar records or reports of Franchisee
that City shall deem, in its sole discretion, necessary to evaluate annual reports, compensation applications
provided for in this Agreement and Franchisee's performance provided for in this Agreement.
The City retains the right to have an independent third party or agent of the City's choosing, such as a
CPA, participate in the records inspection. The cost of such inspection or review will be an allowable cost
under the rate setting methodology unless there are findings pursuant to Section 12.5.
Right to Review Basis for Landfill Tipping Fee Increases
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) Business 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) Business Days following said action, including letter to
the Board of Supervisors and related executed resolution. The City retains the right to have an independent
third party or agent of the City's choosing, such as a CPA, participate in the review. The cost of such
inspection or review will be an allowable cost under the rate setting methodology unless there are findings
pursuant to Section 12.5.
9.4 Waste Generation/Characterization Studies
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 City and its agents to accomplish studies and data collection and prepare reports as needed to
determine weights and volumes of Solid Waste generated, diverted, disposed, transformed, or otherwise
handled/processed to satisfy AB 939 requirements.
9.5 Performance Hearing
The City maintains the right to hold a public hearing at any time, not more than once each year, at which
the Franchisee shall be present and shall participate, to review its services and performance. The purpose
of the hearing is to provide for a discussion and review of technological, economic, and regulatory changes
in order to achieve a continuing, advanced Solid Waste management system; and to ensure customer
service quality and any other areas that may be addressed regarding services are being provided with
adequate quality, efficiency and economy.
Sixty (60) calendar days after receiving notice from City of a Performance Hearing, Franchisee shall, at a
minimum, submit a report to City indicating (1) changes recommended and/or new services to improve
City's ability to meet the goals of AB 939 and to contain costs and minimize impacts on rates; and (2) any
specific plans for provision of changed or new services by Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
35
ARTICLE 10.
INDEMNIFICATION, INSURANCE AND BOND
10.1 Indemnification
Franchisee shall indemnify and hold harmless City, its officers, Directors, employees, and agents from
and against any and all loss, liability, penalty, forfeiture, claim, demand, action proceeding or suit of
any and every kind and description (including, but not limited to, injury to and death of any Person and
damage to property, or for contribution or indemnity claimed by third parties) to the extent arising or
resulting from and in any way connected with (1) the negligence or willful misconduct of Franchisee, its
officers, employees agents and/or sub Franchisees in performing services under this Agreement; (2) the
failure of Franchisee, its officers, employees, agents and/or subcontractors to comply in all respects with
the provisions of this Agreement, applicable laws (including, without limitation, the Environmental
Laws) and regulations, and/or applicable permits and licenses; (3) the acts of Franchisee, its officers,
employees, agents and/or subcontractors in performing services under this Agreement for which strict
liability is imposed by law (including, without limitation, the Environmental Laws).
Franchisee further agrees to and shall, upon demand of City, at Franchisee's sole cost and expense,
defend (with attorneys acceptable to City) the City, its officers, directors, employees, and agents against
any claims, actions, suits or other proceedings, whether judicial, quasi- judicial or administrative in
nature, arising or resulting from any events described in the immediately preceding paragraph to the
extent arising from or related to Franchisee's alleged or actual violations of Proposition 218 and/or its
implementing legislation,.
Franchisee's duty to indemnify and defend shall survive the expiration or earlier termination of this
Agreement.
10.2 Landfill Diversion
The Franchisee acknowledges that the City has adopted a SRRE which selects a single family curbside
Recycling program as a means of diverting an estimated 3,643 tons in 1995 and 3,903 tons per year by
the year 2000, and a multi-family curbside Recycling program as a means of diverting an estimated 308
tons in 1995 and 330 tons per year by the year 2000. It is therefore of foremost importance that the
Recyclable Materials collected under this Agreement be converted into a functional and marketable
product in order that the materials may be diverted from landfill disposal in compliance with the City's
SRRE, and AB 939. The Franchisee shall therefore use commercially reasonable efforts ensure that the
processing method used shall, at all times, meet the intent of the City's SRRE and AB 939. Should the
Franchisee find it necessary to utilize another method of processing in order to meet the intent of the
SRRE and AB 939, the City shall be given an opportunity to make its own determination as to the
suitability and cost-effectiveness of such process and shall approve such process in writing.
The City shall have the right to terminate this Agreement upon the giving of a six (6) month prior written
notice to Franchisee should it be determined that the Recycling program being implemented and/or
proposed under this Agreement is ineffective in meeting the City's diversion goals and objectives.
Upon termination, the Franchisee shall be entitled only to revenues less expenses incurred to that
date. All revenues received thereafter, including from Recyclable Materials sales, shall be the
property of the City unless otherwise agreed.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
36
10.3 AB 939 Indemnification
Franchisee agrees to indemnify and hold harmless City, its officers, Directors, employees, and agents from
and against all fines and/or penalties imposed by the California Integrated Waste Management Board in
the event the source reduction and Recycling goals or any other requirement of AB 939 are not met by
City with respect to the waste stream Collected under this Agreement but only to the extent that such
failure is due to the failure of Franchisee to meet its obligations under this Agreement or for delays in
providing information that prevents City from submitting reports required by AB 939 in a timely manner.
10.4 Insurance
A. Minimum Limits of Insurance. Franchisee shall maintain limits no less than:
1. Comprehensive General Liability: One Million Dollars ($1,000,000) combined single limit per
occurrence for bodily injury, Personal injury and property damage.
2. Automobile Liability: One Million Dollars ($1,000,000) combined single limit per accident for
bodily injury and property damage.
3. Workers' Compensation and Employers Liability: Workers' compensation limits as required by
the Labor Code of the State of California and Employers Liability limits of $1,000,000 per
accident.
B. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be
declared to and approved by the City. At the option of the City, either: the insurer shall reduce or
eliminate such deductibles or self-insured retentions as respects the City, its officials, directors and
employees; or Franchisee shall procure a bond guaranteeing payment of losses and related
investigations, claim administration and defense expenses.
C. Other Insurance Provisions. The policies are to contain, or be endorsed to contain, the following
provisions:
1. General Liability and Automobile Liability Coverages
a. The City, its officials, employees, and directors are to be covered as insured as
respects: liability arising out of activities performed by or on behalf of Franchisee;
products and completed operations of Franchisee; Premises owned, leased or used by
Franchisee; or automobiles owned, leased, hired or borrowed by Franchisee. The
coverage shall contain no special limitations on the scope of protection afforded to the
City, its officials, or employees.
b) Franchisee's insurance coverage shall be primary insurance as respects City, its
officials, directors, and employees. Any insurance or self-insurance maintained by
City, its officials, employees or volunteers shall be excess of Franchisee’s insurance
and shall not contribute with it.
c) Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officials, or employees.
d) Coverage shall state that 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.
2. Workers' Compensation and Employers Liability Coverage - The insurer shall agree to waive
all rights of subrogation against City, its officials, employees and volunteers for losses arising
from work performed by Franchisee for City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
37
3. All Coverages - Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, canceled by either party, reduced in coverage or
limits except after thirty (30) calendar days prior written notice by certified mail, return receipt
requested, has been given to City.
D. Acceptability of Insurers. The insurance policies required by this Section shall be issued by an
insurance contractor or companies admitted to do business in the State of California subject to the
jurisdiction of the California Insurance Commissioner and with a rating in the most recent edition of
Best's Insurance Reports of size category VII or larger and a rating classification of A or better.
E. Verification of Coverage. Franchisee shall furnish City with certificates of insurance and with
original endorsements affecting coverage required by this clause. The certificates and endorsements
for each insurance policy are to be signed by a Person authorized by that insurer to bind coverage on
its behalf. The certificates and endorsements are to be on forms provided by or acceptable to City
and are to be received and approved by City before work commences. City reserves the right to
require complete, certified copies of all required insurance policies, at any time.
10.5 Faithful Performance Bond
Simultaneously with the execution of this Agreement, Franchisee shall file with City surety bond, payable
to City, securing Franchisee's faithful performance of its obligations under this Agreement. The bond shall
be in the amount of 125% of the total annual contract price guaranteeing the faithful performance of the
contract, including any attorney's fees or other collection costs.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
38
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,
process or market any or all recyclable Materials which it is required by this Agreement to Collect,
process and market, at the time and in the manner provided in this Agreement, for a period of more than
seven (7) calendar days, and if, as a result thereof, Recyclable Materials should accumulate in the City to
such an extent, in such a manner, or for such a time that the City Manager 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 Manager, (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, process
and/or market any Recyclable Materials 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 contractor 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, process or market Recyclable
Materials 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:
• It will take direction from City to effect the transfer of possession of property to City for City's
use.
• It will, if City so requests, keep in good repair and condition all of such property,
provide all motor vehicles with fuel, oil and other service, and provide such other
service 'as may be necessary to maintain said property in operational condition.
City may immediately engage all or any personnel necessary or useful for the Collection,
transportation, processing and/or marketing of Recyclable Materials, including, if City so desires,
employees previously or then employed by 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 Recyclable Materials Collection,
Transportation, processing and marketing operations and for the billing and collection of fees for
these services.
City agrees that it assumes complete responsibility for the proper and normal use of such equipment and
facilities while in its possession. If the interruption or discontinuance in service is caused by any of the
reasons listed in Section 12.4 (Excuse From Performance), City shall pay to Franchisee the reasonable
rental value of the equipment and facilities, possession of which is taken by City, for the peri od of City's
possession, if any, which extends beyond the period of time for which Franchisee has rendered bills in
advance of service.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
39
Except as otherwise expressly provided in the previous paragraph, City's exercise of its rights under this
Article 11 (1) does not constitute a taking of private property for which compensation must be paid; (2)
will not create any liability on the part of City to Franchisee; and (3) does not exempt Franchisee from the
indemnity provisions of Article 10, Indemnification, Insurance and Bond, which are meant to extend to
circumstances arising under this Section, provided that Franchisee is not required to indemnify City
against claims and damages arising from the sole negligence of City officers, employees and agents in the
operation of Collection vehicles during the time City has taken possession of such vehicles.
11.2 Temporary Possession of Franchisee's Property
If the City suffers an interruption or discontinuance of service as described in Section 11.1 (including
interruptions and discontinuance due to events described in Section 12.4, Excuse from Performance), City
may take possession of and use all of Franchisee's property described above until other suitable
arrangements can be made for the provision of Recycling Services which may include the grant of a
Contract to another company. The same notice requirements of Section 11.1 are applicable.
11.3 Billing and Compensation to City During City's Possession
During such time that city is providing Recycling 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 Recycling 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
Recycling 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
40
ARTICLE 12.
DEFAULT, REMEDIES AND LIQUIDATED DAMAGES
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 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 Recycling services as required under this
Agreement for a period of two (2) Working 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
41
J. Suspension or Termination of Service. There is any termination or suspension of the transaction
of business by Franchisee, including without limit, due to labor unrest including strike, work
stoppage or slowdown, sickout, picketing, or other concerted job action lasting more than two (2)
Working Days.
Upon default by the Franchisee, the City Manager shall provide written notice to Franchisee of the
violation. The City Manager shall include in the notice, a demand that the Franchisee correct the violation
within 10 days following the delivery of said notice. For purposes of this Agreement and any notice
required thereunder, the term "days" shall mean calendar days.
12.2 Right to Terminate Upon Default
Upon a default by Franchisee, City shall have the right to terminate this Agreement upon a ten
(10) calendar days notice if the public health or safety is threatened, or otherwise a thirty (30) calendar
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. ·
City's right to terminate this Agreement and to take possession of Franchisee's equipment and facilities are
not exclusive, and City's termination of this Agreement shall not constitute an election of remedi es.
Instead, they shall be in addition to any and all other legal and equitable rights and remedies which City
may have.
By virtue of the nature of this Agreement, the urgency of timely, continuous and high-quality service, the
lead time required to effect alternative service, and the rights granted by City to Franchisee, the remedy of
damages for a breach hereof by Franchisee is inadequate and City shall be entitled in injunctive relief.
12.3 Liquidated Damages
A. General. 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: (i) substantial damage results to members of the public who are denied services or denied
quality or reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and
deprivation of the benefits of the Agreement to individual members of the general public provided
services pursuant to this Agreement, in subjective ways and in varying degrees of intensity which
are incapable of measurement in precise monetary terms; (iii) that exclusive 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, (iv) 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 City whole for past
breaches.
B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The
Parties acknowledge that consistent, reliable Recyclable Materials 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 Agreement to it. The parties further recognize that
some quantified standards of performance are necessary and appropriate to ensure consistent and
reliable service and performance. The parties further recognize that if Franchisee fails to achieve
the performance standards, comply with Complaint resolution criteria, or fails to submit required
documents in a timely manner, City and its residents will suffer damages and that it is and will be
impractical and extremely difficult to ascertain and determine the exact amount of damages which
City will suffer.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
42
Therefore, without prejudice to City’s right to treat such nonperformance as an event of default
under this Article 12, the parties agree that the following Liquidated Damage amounts represent a
reasonable estimate of the amount of such damages considering all of the circumstances existing
on the date of this Agreement, including the relationship of the sums to the range of harm to City
that reasonably could be anticipated and the anticipation that proof of actual damages would be
costly or inconvenient. Recognizing the importance of resolving any failure to meet the service
performance standard, the City shall contact Contractor within two (2) business days of any failing
reported directly to the City.
The City may monitor the Franchisee’s performance under the Agreement in each of the
performance areas listed below. In the event that the City determines that Franchisee has failed to
meet the performance standard established for any of the areas identified below, the City may
assess Liquidated Damages pursuant to this Section of the Agreement.
Franchisee agrees to pay (as Liquidated Damages and not as a penalty) the amounts set forth
below:
Event of Non-Performance Liquidated Damage
Collection Reliability and Quality
1 Failure to Implement three-Container System. For each
occurrence of failing to provide Customers with
Recyclable Materials Containers as part of the three-
Container system required by and compliant with the
Municipal Code upon request of the City or its designee
(excluding Generators and Customers that demonstrate
compliance with Recycling and Organic Waste Self-
Hauling requirements pursuant to the Municipal Code and
14 CCR Division 7, Article 12, Article 7): and/or pursuant
to Section 5.10 of this agreement) unless customer refuses
to accept the Recyclables Materials Container from
Franchisee, and Franchisee has provided this information
to the City or its designee for further review within two (2)
business days of customer refusal.
$150 / Generator or Customer /
occurrence / Day until compliance
achieved
2 For each failure over five (5) annually to commence
service to a new Customer account within seven (7)
calendar days after order:
$150.00
3 For each failure over ten (10) annually to Collect
Recyclable Materials, which has been properly set out for
Collection, from an established Customer account on the
scheduled Collection day:
$150.00
4 For each failure to Collect Recyclable Materials which
have been properly set out and accessible for Collection,
from the same Customer on two (2) consecutive scheduled
pickup days:
$150.00
5 For each occurrence over five (5) annually of damage to
private property:
$250.00
6 For each occurrence of discourteous behavior:
$250.00
7 For each failure over ten (10) annually to clean up
Recyclable Materials spilled by Franchisee from
Containers:
$150.00
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
43
Event of Non-Performance Liquidated Damage
8 For each occurrence over five (5) annually of Collecting
Recyclable Materials during unauthorized hours:
$250.00
9 For each failure to respond to a Customer Complaint
within twenty-four (24) working hours:
$100.00
10 Failure to Comply with Container Labeling and Colors.
For each occurrence of Franchisee’s failure to comply with
Container labeling and color requirements pursuant to
Section 5.6 of this Agreement:
$150 / Container / occurrence
11 Use of Unauthorized Facilities. For each individual
occurrence of delivering Discarded Materials to a Facility
other than an Approved Facility(ies) for each Discarded
Material type under this Agreement:
$150 / Ton / occurrence
Reports and Timeliness of Submissions to the City
12 Reports. Any report shall be considered late until such
time as a correct and complete report is received by City.
For each calendar day a report is late, the daily assessment
shall be:
Monthly Reports: For each infraction $100 per day
Annual Reports: For each infraction $500 per day
13 Failure to Allow Access to Records. For each failure to
provide access to records in compliance with and in the
timeframe specified in this Agreement:
$120 / day
Other
14 Failure to Perform Public Education and Outreach. For
each failure to perform any individual education and
outreach activity as required and in the timeframe
specified by this Agreement:
$180 / occurrence
15 Failure to Issue Contamination Notices. For each failure of
Franchisee Collection personnel to issue contamination
notices and maintain documentation of issuance as
required by Section 5.4 of this Agreement:
$100 / Franchisee Route / day
16 Improper Fee Issuance. For each fee that is issued to a
Generator without prior authorization from City under this
agreement:
$100 /Customer/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) Business Days after receiving the notice, request a
meeting with City. If a meeting is requested, it shall be held by the City Manager or their designee.
Franchisee may present evidence in writing and through testimony of its employees and others relevant
to the incident(s)/non performance. The City Manager or designee will provide Franchisee with a
written explanation of their determination on each incident(s)/non-performance prior to authorizing the
assessment of Liquidated Damages. The decision of the City Manager or designee shall be final .
C. Amount. The City Manager may assess liquidated damages for each calendar day or event, as
appropriate, that Contractor is determined to be liable in accordance with this Agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
44
D. Timing of Payment. Contractor shall pay any liquidated damages assessed by City within ten (10) days
after they are assessed. If they are not paid within the ten (I 0) day period, City may proceed against the
performance bond required by this Agreement or order the termination of this Agreement, or both.
12.4 Excuse from Performance
The parties shall be excused from performing their respective obligations hereunder in the event they are
prevented from so performing by reason of floods, earthquakes, other "acts of God", war, civil
insurrection, riots, acts of any government (including judicial action), and other similar catastrophic
events which are beyond the control of and not the fault of the party claiming excuse from performance
hereunder. Labor unrest, including but not limited to strike, work stoppage or slowdown, sick-out,
picketing, or other concerted job action conducted by 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) Business 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) Business 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) Business Days from the receipt of such notification. If the Franchisee fails
to resume service within the two (2) Business Days, the City shall have the right to terminate this
Agreement by giving ten (10) Business 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.
12.5 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 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 over payment will be negotiated on a case-by-case basis, either immediately or through the next rate
setting evaluation.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
45
ARTICLE 13.
OTHER AGREEMENTS OF THE PARTIES
13.1 Relationship of Parties
The parties intend that Franchisee shall perform the services required by this Agreement as an independent
contractor engaged by City and not as an officer or employee of City nor as a partner of or joint venture
with City. No employee or agent or Franchisee shall be or shall be deemed to be an employee or agent of
City. Except as expressly provided herein, Franchisee shall have the exclusive control over the manner and
means of conducting the Recycling services performed under this Agreement, and all Persons performing
such services. Franchisee shall be solely responsible for the acts and omissions of its officers, 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 City.
13.2 Compliance with law
In providing the services required under this Agreement, Franchisee shall at all times, at its sole cost,
comply with all applicable laws of the United States, the State of California, City, and with all applicable
regulations promulgated by federal, state, regional or local administrative and regulatory agencies, now i n
force and as they may be enacted, issued or amended during the Term.
13.3 Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the
State of California.
13.4 Jurisdiction
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded in the
courts of the State of California, which shall have exclusive jurisdiction over such lawsuits.
13.5 Assignment
Except as may be provided for in Article 11, (City's Right to Perform Service), neither party shall assign
its rights, nor delegate, subcontract or otherwise transfer its obligations under this Agreement to any other
Person without the prior written consent of the other party. Any such assignment made without t he consent
of the other party shall be void and the attempted assignment shall constitute a material breach of this
Agreement. The Franchisee shall consent to any assignment to a joint powers authority, or any similar
public entity assignee of the City.
For purposes of this Section when used in reference to Franchisee, "assignment" shall include, but not be
limited to (1) a sale, exchange or other transfer of at least fifty-one percent (51%) all of Franchisee's assets
dedicated to service under this Agreement to a third party; (2) a sale, exchange or other transfer of
outstanding common stock of Franchisee to a third party provided said sale, exchange or transfer may
result in a change of control of Franchisee;. (3) any dissolution, reorganization, consolidation, merger, re-
capitalization, stock issuance or re- issuance, voting trust, pooling agreement, escrow arrangement,
liquidation or other transaction to which results in a change of ownership or control of Franchisee; (4)
any assignment by operation of law, including insolvency or bankruptcy, making assignment for the
benefit of creditors, writ of attachment for an execution being levied against this Agreement, appointment
of a receiver taking possession of Franchisee's property, or transfer occurring in the event of a probate
proceeding; and (5) any combination of the foregoing (whether or not in related or contemporaneous
transactions) which has the effect of any such transfer or change of ownership, or change of control of
Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
46
Franchisee acknowledges that this Agreement involves rendering a vital service to City's 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 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
investigation costs necessary to investigate the suitability of any proposed assignee; and to
review and finalize any documentation required as a condition for approving any such
assignment;
B. 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 Recyclable Material 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 has not suffered any significant citations or
other censure from any federal, state or local agency having jurisdiction over its Solid
Waste management operations due to any significant failure to comply with state, federal
or local Environmental Laws and that the assignee has provided City with a complete list
of such citations and censures; 3) that the proposed assignee has at all times conducted its
operations in an environmentally safe and conscientious fashion; 4) that the proposed
assignee conducts its Recyclable Materials management practices in accordance with
sound waste management practices in full compliance with all federal, state and local laws
regulating the Collection, transportation, processing, marketing and disposal of Solid
Waste including Hazardous Wastes; and 5) of any other information required by City to
ensure the proposed assignee can fulfill the Terms of this Agreement in a timely safe and
effective manner.
Under no circumstances shall the City be obliged to consider any proposed assignment by Franchisee if
Franchisee is in default at any time during the period of consideration.
13.6 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
47
13.7 Binding on Assigns
The provisions of this Agreement shall inure to the benefit to and be binding on the permitted assigns of
the parties.
13.8 Transition to Next Franchisee
If the transition of services to another Franchisee occurs through expiration of term, default and
termination, or otherwise, Franchisee will cooperate with 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 or Containers to the next Franchisee. Depending on
Franchisee's circumstances at the point of transition, Franchisee at its option may enter into negotiations
with the next Franchisee to sell (in part or all) Collection vehicles and/or containers.
13.9 Parties in Interest
Nothing in the Agreement, whether express or implied, is intended to confer any rights on any persons
other than the parties to it and their representatives, successors and permitted assigns.
13.10 Waiver
The waiver by either party of any breach or violation of any provisions of this Agreement shall not be
deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach of
violation of the same or any other provision. The subsequent acceptance by either party of any monies
which become due hereunder shall not be deemed to be a waiver of any pre-existing or concurrent breach
or violation by the other party of any provision of this Agreement.
13.11 Franchisee's Investigation
Franchisee has relied on its own investigations, and not on any representations of the City or its agents of
the conditions and circumstances surrounding the Agreement and the work to be performed by it.
13.12 Notice
All notices, demands, requests, proposals, approvals, consents and other communications which this
Agreement requires, authorizes or contemplates shall be in writing and shall either be personally delivered
to a representative of the parties at the address below, or by email as specified below, or be deposited in
the United States mail, first class postage prepaid, addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
ut_services@slocity.org and cityclerk@slocity.org
If to Franchisee: District Manager
San Luis Garbage Company
4388 Old Santa Fe Road
San Luis Obispo, CA 93401
The address to which communications may be delivered may be changed from time to time by a notice
given in accordance with this Section. The notice, if mailed, is deemed served three (3) days after the
mailing.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
48
13.13 Representatives of the Parties
References in this Agreement to the “City” shall mean the City Council and all actions to be taken by City
shall be taken by the City Council except as provided below. The City Council may delegate, in writing,
authority to the City Manager, Utilities Director, and/or to the City employees and may permit such
employees, in turn, to delegate in writing some or all of such authority to subordinate employees.
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 City in writing of
such designation and of any limitations upon their authority to bind Franchisee. 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 them by Franchisee as communicated to City.
13.14 City Free to Negotiate with Third Parties
City may investigate all options for the Collection, processing and marketing of Recyclable Materials after
the expiration of the Term. Without limiting generality of the foregoing, City may solicit proposals from
Franchisee and from third parties for the provision of Recycling services, and any combination thereof,
and may negotiate and execute Agreements for such services which will take effect upon the expiration or
earlier termination under Section 12.1 (Events of Default) of this Agreement.
13.15 Compliance with City Code
Franchisee shall comply with those provisions of the City code which are applicable, and with any and all
amendments to such applicable provisions during the Term of this Agreement.
13.16 Privacy
Franchisee shall strictly observe and protect the rights of privacy of customers. Information identifying
individual customers, or the composition or contents of a customer's waste stream shall not be revealed to
any person, governmental unit, private agency, or contractor, unless upon the authority of a court of law,
by statute, or upon valid authorization of the customer. This provision shall not be construed to preclude
Franchisee from preparing, participating in, or assisting in the preparation of waste characterization studies
or waste stream analyses which may be required by AB 939.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
49
ARTICLE 14.
MISCELLANEOUS AGREEMENTS
14.1 Entire Agreement
This Agreement, including the exhibits, represents the full and entire Agreement between the parties with
respect to the matters covered herein.
14.2 Section Headings
The article headings and section headings in this Agreement are for convenience of reference only and are
not intended to be used in the construction of this Agreement nor to alter or affect any of its provisi ons.
14.3 References to laws and Other Agreements
All references in this Agreement to laws shall be understood to include such laws as they may be
subsequently amended or recodified, unless otherwise specifically provided. This Agreement supersedes
any and all Agreements for Recyclable Materials Collection, processing and/or marketing heretofore
entered into by the parties and the City.
14.4 Interpretation
This Agreement, including the exhibits attached hereto, shall be interpreted and construed reasonably and
neither for nor against either party, regardless of the degree to which either party participated in its
drafting.
14.5 Agreement
This Agreement may not be modified or amended in any respect except by a writing signed by the parties.
14.5 Severability
If any non-material provision of this Agreement is for any reason deemed to be invalid and unenforceable,
the invalidity or unenforceability of such provision shall not affect any of the remaining provisions of this
Agreement which shall be enforced as if such invalid or unenforceable provision had not been contained
herein.
14.6 Exhibit
Exhibit A – Recordkeeping and Reporting is attached to this Amendment and is hereby incorporated into
the Agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
50
EXHIBIT A
Record Keeping and Reporting
A.1 General
Franchisee shall maintain such accounting, statistical, and other records related to its performance
under this Agreement as shall be necessary to develop the reports required by this Agreement or
City Municipal Code. Franchisee agrees to conduct data collection, information and record
keeping, and reporting activities needed to comply with Applicable Laws and regulations and to
meet the reporting and Discarded Materials Collection, Processing, and disposal program
management needs of the City. At the written direction or approval of City, the records and reports
to be maintained and provided by Franchisee in accordance with this Exhibit and other Articles of
the Agreement may be adjusted in number, format, and frequency, if required to comply with State
or Federal regulatory or reporting requirements.
Information from Franchisee’s records and reports can be used to, among other things:
1. Determine and set Rates and evaluate the financial efficacy of operations;
Evaluate past and expected progress toward achieving the Franchisee’s Landfill
Disposal reduction or Diversion goals and objectives;
2. Provide concise and comprehensive program information and metrics for use in
fulfilling reporting requirements under Applicable Law;
3. Determine needs for adjustment to programs; Evaluate Customer service and
Complaints; and,
4. Determine Customer compliance with AB 341, AB 1826, and SB 1383 statutes
and corresponding regulations; and, any subsequent State-mandated landfill
Disposal reduction, Recycling, recovery, or Diversion statutes, regulations, or
other requirements.
A.2 Record Keeping
A. General. Franchisee shall maintain Customer contact data, Customer service, accounting,
statistical, operational, and other records related to its performance as shall be necessary to provide
reporting required by this Agreement and Applicable Law and to demonstrate compliance with this
Agreement and Applicable Law (such as, but not limited to, AB 939, AB 341, AB 1826, AB 876,
AB 901, and SB 1383 statutes and corresponding regulations).
Franchisee shall maintain adequate records, and corresponding documentation, of information
required by this Exhibit, such that the Franchisee is able to produce accurate monthly and annual
reports, and is able to provide records to verify such reports. Franchisee will make these records
available and provide to the City any record or documentation necessary for the City to fulfill
obligations under Applicable Law including, but not limited to, AB 939, AB 341, AB 1826, AB
876, AB 901, and SB 1383 statutes and corresponding regulations; and, other current or future
Federal, State, or local statutes and regulations, as amended. Upon request by the City, Franchisee
shall provide access to Franchisee’s requested records in a timely manner, not to exceed ten (10)
Business Days from the time of City’s request to Franchisee.
B. Record Retention and Security. Records shall be maintained in forms and by methods that
facilitate flexible use of data contained in them to structure reports, as needed, pursuant to this
Exhibit. Franchisee’s records shall be stored in one central location, physical or electronic, that can
be readily accessed by Franchisee. City reserves the right to require the Franchisee to maintain the
records required herein through the use of a City-selected web-based software platform, at
Franchisee’s expense. Unless otherwise required in this Exhibit, Franchisee shall retain all records
and data required to be maintained by this Agreement for the Term of this Agreement plus five (5)
years after its expiration or earlier termination.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
51
C. Records and data shall be in chronological and organized form and readily and easily interpreted.
Franchisee shall maintain adequate record security to preserve records from events that can be
reasonably anticipated such as a fire, theft, and an earthquake. Electronically maintained data and
records shall be protected and backed-up. To the extent that Franchisee utilizes its computer
systems to comply with record keeping and reporting requirements under this Agreement,
Franchisee shall, on a monthly basis, save all system-generated reports supporting those record
keeping and reporting requirements in a static format in order to provide an audit trail for all data
required.
D. Compilation of Information for State Law Purposes. Franchisee shall maintain accurate records
for its operation, including, but not limited to, Discarded Materials quantities Collected and
quantities Transported to or Transferred to each Approved Facility, listed separately by material
type, Customer type, and Facility. Records shall be maintained in such form by methods that
facilitate the use of data for the production of reports as needed. Franchisee will make these
records available and provide to the City, any record or documentation necessary for the City to
fulfill obligations under Applicable Law including, but not limited to, AB 939, AB 341, AB 1826,
AB 876, AB 901, AB 1595, and SB 1383 statutes and corresponding regulations; and, other
current or future local, Federal or State statutes and regulations, as amended.
A.3 Reporting
A.3.1 General
A. General Purpose. Reports are intended to compile recorded data into useful forms of information
that can be used by the City. All reports shall be adequate to meet City’s current and future
reporting requirements to CalRecycle, including AB 939, AB 341, AB 1826, and SB 1383 statutes
and corresponding regulations, or any other State or Federal agency statutes and regulations
throughout the Term of this Agreement.
B. Failure to Report. Failure of Franchisee to comply with the reporting requirements as set forth in
this Section may result in an assessment of Liquidated Damages in accordance with the Liquidated
Damages provision in Section 12.3 of this Agreement. Franchisee’s repeated failure to submit
reports, and/or failure to submit reports on time, may be deemed an event of default and may result
in the termination of the Agreement at the discretion of the City Manager, in accordance with
Article 12 of this Agreement.
D. Report Format. Franchisee shall submit all reports to the City electronically via e-mail using
software acceptable to the City. The City reserves the right to require the Franchisee to maintain
records and submit the reports required herein through use of the City-selected web-based software
platform and/or Microsoft Excel spreadsheet, at the Franchisee’s expense.
E. Submittal Process. All reports shall be submitted to the City, Utilities Director per Section 9.2 of
the Recycling Services Agreement Reports shall be submitted electronically via email or uploaded
to a document sharing platform agreed upon by the Parties. City reserves the right to require the
Franchisee to maintain records and submit the reports required herein through use of a City-
selected web-based software platform, at the Franchisee’s expense.
Monthly reports shall be submitted within twenty (20) calendar days after the end of the reporting
month; and annual reports shall be submitted before September 30th, for the previous reporting
year.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
52
A.3.2 Monthly Reports
Monthly reports shall be submitted by Franchisee to City and shall include the following information
pertaining to the most recently-completed calendar month. In addition, each monthly report shall include a
year-to-date summary page that includes the data submitted from the monthly report(s) submitted in the
calendar year prior to the submittal of the current monthly report. Franchisee shall report the information
included in the following subsections.
A. Tonnage Report
1. Franchisee shall report the total quantities in Tons of Discarded Materials Collected,
Transferred, Processed, and Disposed by the Franchisee, all of which shall be based on
actual certified scale weights for each load, if available, or similarly accurate methodology
pursuant to weighing protocol. Tonnage shall be reported separately by:
a. Material type, which shall include, at a minimum, separate reporting of Source
Separated Recyclable Materials and any other type of Discarded Material separately
Collected by Franchisee;
b. Customer/sector type (Single-Family, Multi-family, Commercial Roll-off, C&D); and,
c. Approved Facility and Facility type.
2. Report Residue level and Tonnage for all Discarded Materials Processed, listed separately
by material type Collected and Approved Facility(ies) used.
3. Source Separated Recyclable Materials Tonnage Marketed, by commodity, and including
average commodity value for each, and Processing Residue Tonnage Disposed, listed
separately by material type Collected and Approved Facility(ies) used.
4. Documentation of all Discarded Materials exported out of State, as provided in 14 CCR
Sections 18800 through 18813.
B. Collection and Subscription Report
1. Number of Containers at each Service Level by Customer Type and program, including:
a. A summary of the total gallons of Cart service, cubic yards of Bin service, and pulls;
and cubic yards or Tons of Drop Box and Compactor service by Customer Type.
b. Calculation of the average volume of service received per: Single-Family Dwelling Unit
(separately identifying Dwelling Units in a duplex, triplex, or fourplex); Multi-Family
Dwelling Unit; and, Commercial Customer.
2. A summary of Customer subscription data, including the number of accounts; the number
of Customers subscribing to each Cart, Bin, and Roll-Off Service Level listed separately
for Single-Family, Multi-Family, and Commercial and separately for each type of
Discarded Material; and the number and type of waivers (i.e., de minimis or physical
space constraint) active for Customers for each type of Discarded material.
C. Contamination Monitoring Report
The Franchisee shall submit the following information regarding Franchisee conducted
contamination monitoring and issuance of Prohibited Container Contaminant notices conducted
pursuant to Section 5.4 of this Agreement:
1. Description of the Franchisee’s Process for determining the level of contamination;
2. Summary report of Customer Notices issued, which for each notice shall include the date
of issuance, Customer name, and service address.
3. A record of each inspection and contamination incident, which shall include, at a
minimum:
a. Name of the Customer
b. Address of the Customer
c. The date the contaminated Container was observed
d. The staff who conducted the inspection
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
53
e. The total number of violations found and a description of what action was taken for ach
f. Copies of all notices issued to Generators with Prohibited Container Contaminants
g. Any photographic documentation or supporting evidence.
4. Any other information reasonably requested by the City or specified in contamination
monitoring provisions of this Agreement.
D. Customer Service Report
1. Franchisee shall maintain a record of all SB 1383 non-compliance Complaints as defined
in 14 CCR Section 18995.3 and responses and submit the following information:
a. Total number of SB 1383 non-compliance Complaints received and total number of SB
1383 non-compliance Complaints investigated
b. Copies of documentation recorded for each SB 1383 non-compliance Complaint
received, which shall at a minimum include the following information:
i. The SB 1383 non-compliance Complaint as received;
ii. The name and contact information of the complainant, if the SB 1383 non-
compliance Complaint is not submitted anonymously;
iii. The identity of the alleged violator, if known;
iv. A description of the alleged violation; including location(s) and all other
relevant facts known to the complainant;
v. Any relevant photographic or documentary evidence submitted to support the
allegations in the SB 1383 non-compliance Complaint; and,
vi. The identity of any witnesses, if known.
c. Copies of all SB 1383 non-compliance Complaint reports submitted by Franchisee to
the City.
d. Copies of all investigation reports submitted to the City which shall include at
minimum:
i. The SB 1383 non-compliance Complaint as received;
ii. The date the Franchisee investigated the SB 1383 non-compliance Complaint;
iii. Documentation of the findings of the investigation;
iv. Any photographic or other evidence collected during the investigation; and,
v. Franchisee’s recommendation to the City on whether or not the entity
investigated is in violation of SB 1383 Regulations based on the Franchisee’s
investigation.
E. Education Program Report
The monthly status of activities identified in the annual public education plan described in Section
6.5 of this Agreement.
A.3.3 Annual Reports
In addition to the monthly reporting requirements in this Exhibit and Section 9.2, the Franchisee shall
provide an Annual Report, covering the most recently-completed calendar year, in accordance with the
format and submittal requirements of this Exhibit. The Annual Report shall include the information in the
following subsections.
A. Collection and Subscription Report
1. A summary of all data provided in the Tonnage report section, including quarterly and
annual totals and averages.
2. The type(s) of Collection service(s) provided, a list of all hauler routes serviced, and a
record of the addresses served on each hauler route.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
54
3. A summary of Customer subscription data, including the number of accounts; the total
number of Generators enrolled with Franchisee for service, listed separately by Service
Level and Container type (Cart, Bin, and Roll-Off service), separately by Single-Family,
Multi-Family, and Commercial Customers, and separately for each type of Discarded
Material.
4. A detailed list of Single-Family, Multi-Family, and Commercial Customer information,
including Solid Waste Container Waste, Recyclable Materials, and Organic Materials
Service Levels, Customer type, and Customer service addresses reflecting Customer
Service Levels as of December 1 (for the year in which the report is submitted)
B. Processing Facility Report
1. Temporary Equipment or Operations Failure: If the Franchisee is granted a Processing
facility temporary equipment or operational failure waiver, in accordance with Section 5.7
of the Agreement, the Franchisee shall include the following documents and information:
a. The number of days the Processing Facility temporary equipment waiver or
operation failure waiver was in effect;
b. Copies of any notifications sent to the City pursuant to Section 5.7 of the
Agreement, and copies of City notices to Franchisee pursuant to Section 5.7 of the
Agreement;
c. Documentation setting forth the date of issuance of the waiver, the timeframe for
the waiver; and,
d. A record of the Tons of Recyclable Materials redirected to an Alternative Facility
or Disposed at an Approved Disposal Facility as a result of the waiver, recorded
by Collection vehicle or Transfer vehicle number/load, date, and weight.
C. Compliance Monitoring and Enforcement Report
1. A summary of the total number of SB 1383 Regulatory non-compliance Complaints that
were received and investigated, and forwarded to the City or their designee.
2. The total number of Customer Notices, categorized by type of Generator.
3. The number of violations that were resolved, categorized by type of Generator.
4. Copies of all Customer Notices issued and educational materials issued to non-compliant
Generators.
D. Public Education and Outreach Report
1. A copy of all education and outreach materials provided to Generators, or otherwise used
for education and outreach efforts in accordance with this Agreement, including, but not
limited to: flyers, brochures, newsletters, invoice messaging/billing inserts, and website
and social media postings.
2. A record of the date and to whom the information was disseminated or direct contact
made, in the form of a list that includes: the Generator’s name or account name, the type
of education or outreach received; the distribution date, and the method of distribution.
3. For any mass distribution through mailings or bill inserts, the Franchisee shall maintain a
record of the date, a copy of the information distributed, and the type and number of
accounts that received the information.
4. A copy of electronic media, including the dates posted of: social media posts, e-mail
communications, or other electronic messages.
5. A summary of the status of the annual education plan of the reporting year, including
activities conducted and the quantitative and/or qualitative results of those activities.
6. The annual public education plan required by Section 6.5 of the Agreement for the
upcoming then-current calendar year. For example, Franchisee submittal of a 2022 annual
report in February 2023 shall include Franchisee submittal of the annual public education
plan for calendar year 2023.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
55
A.3.4 Additional Reports
A. Upon Request Reporting. City reserves the right to request additional reports or documents in the
case of unforeseen legislative or regulatory changes, requests from CalRecycle, or additional
requirements imposed upon the City. The Franchisee shall provide the requested reports,
documents, or information within ten (10) Business Days upon receipt of the request or within a
timeframe determined by the City Manager, which shall not to exceed ten (10) days.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Recycling Services Agreement
56
IN WITNESS WHEREOF, City and Franchisee have executed this Agreement as of the day and year first
above written.
THE CITY OF SAN LUIS OBISPO SAN LUIS GARBAGE COMPANY
“City” “Franchisee”
By: ___________________________ By: ______________________________
Derek Johnson, Susan VanDelinder:
City Manager Division Vice President:
ATTEST:
______________________________
Teresa Purrington, City Clerk
APPROVED TO FORM:
________________________________
J. Christine Dietrick, City Attorney
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
1
AMENDED AND RESTATED AGREEMENT BETWEEN
THE CITY OF SAN LUIS OBISPO
AND
SAN LUIS GARBAGE COMPANY
For Collection and Disposal of Organic Materials
Within the City of San Luis Obispo
This Agreement between the City of San Luis Obispo and San Luis Garbage Company for Collection and
processing of Organic Materials (“Agreement”), is made and entered into as of June 3, 2022 (the “Effective
Date”) in the State of California by and between the City of San Luis Obispo, a political subdivision of the
State of California (hereafter “City”) and San Luis Garbage Company, a California corporation (hereafter
“Franchisee”), each of which may be referred to individually as a “Party” or together as the “Parties.
RECITALS
This Agreement is made and entered into on the basis of the following facts, understandings, and intentions of
the Parties:
1. WHEREAS: The Parties entered into a Franchise Agreement for Green Waste and Food Waste
Collection on November 1, 2015 (“Agreement”); and,
2. WHEREAS: Section 4.6 of the Agreement provides City with the right to direct Franchisee to modify
the scope of one or more types of service described in the Agreement, or to otherwise modify its
performance under the Agreement, subject to providing additional compensation; and,
3. WHEREAS: The State of California has found and declared that the amount of refuse generated in
California, coupled with diminishing Disposal capacity and potential adverse environmental impacts from
landfill Disposal and the need to conserve natural resources, have created an urgent need for State and
local agencies to enact and implement an aggressive integrated waste management program. The State
has, through enactment of AB 939 and subsequent related legislation including, but not limited to: the
Jobs and Recycling Act of 2011 (AB 341), the Event and Venue Recycling Act of 2004 (AB 2176), SB
1016 (Chapter 343, Statutes of 2008 [Wiggins, SB 1016]), the Mandatory Commercial Organics
Recycling Act of 2014 (AB 1826), and the Short-Lived Climate Pollutants Bill of 2016 (SB 1383),
directed the responsible State agency, and all local agencies, to promote Diversion and to maximize the
use of feasible waste reduction, re-use, Recycling, and Composting options in order to reduce the amount
of refuse that must be Disposed; and
4. WHEREAS: SB 1383 establishes regulatory requirements for jurisdictions, Generators, haulers, Solid
Waste facilities, and other entities to support achievement of State-wide Organic Waste Disposal
reduction targets; and,
5. WHEREAS: SB 1383 requires the City to implement Collection programs for Organic Waste and
Recyclable Materials, meet Processing Facility requirements, conduct contamination monitoring, provide
education, maintain records, submit reports, monitor compliance, conduct enforcement, and fulfill other
requirements; and, the City has chosen to delegate some of its responsibilities to the Franchisee, acting as
the City’s designee, through this Agreement; and
6. WHEREAS: Both Parties have, in good faith, negotiated changes to the Agreement necessary to support
the City’s compliance with SB 1383, and other Applicable Law, as set forth herein.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
2
7. WHEREAS, this Agreement is intended to restate and supersede all prior Franchise Agreements for Food
and Green Waste Collection between City and Franchisee; and
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions herein
contained, City and Franchisee do hereby agree as follows:
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
3
ARTICLE 1.
DEFINITIONS
1.1 “AB 341” means the California Jobs and Recycling Act of 2011 (Chapter 476, Statues of 2011
[Chesbro, AB 341]), also commonly referred to as “AB 341”, as amended, supplemented, superseded,
and replaced from time to time.
1.2 "AB 939” means the California Integrated Waste Management Act of 1989, (Division 30 of the
California Public Resources Code), also commonly referred to as "AB 939," as amended,
supplemented, superseded, and replaced from time to time.
1.3 “AB 1826” means the Organic Waste Recycling Act of 2014 (Chapter 727, Statutes of 2014
modifying Division 30 of the California Public Resources Code), also commonly referred to as "AB
1826," as amended, supplemented, superseded, and replaced from time to time.
1.4 "Affiliate" means all businesses (including corporations, limited and general partnerships and sole
proprietorships) which are directly or indirectly related to Company by virtue of direct or indirect
common ownership interest or common management shall be deemed to be "Affiliated with"
Franchisee and included within the term "Affiliates with" Franchisee and included within the
"Affiliates" 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 Contractor
and/ or a business which is also owned, controlled or managed by any business or individual which
has a direct or indirect ownership interest exists, the constructive ownership provisions of Section
318(a) of the Internal Revenue Code of 1986, as in effect on the date of this Agreement, shall apply;
provided, however, that (i) "ten percent (10%)" shall be substituted for "fifty percent (50%)" in
Section 318(a)(2)(C) and in Section 318(a)(J)(C) thereof; and (ii) Section 3l8(a)(S)(C) shall be
disregarded. For purposes of determining ownership under this paragraph and constructive or indirect
ownership under Section J l 8(a), ownership interest of less than ten percent (10%) shall be
determined on the basis of the percentage of voting interest or value which the ownership interest
represents, whichever is greater.
1.5 "Agreement" means the Food and Green Waste (or “Organics”) Agreement (dated June 3, 2022)
including all exhibits and attachments, and any amendments thereto) between City and Franchisee for
Collection, processing and marketing of Food and Green Waste and other services related to meeting
the diversion goals and requirements of AB 939 and SB 1383.
1.6 “Applicable Law” means all Federal, State, County, and local laws, regulations, rules, orders,
judgments, degrees, permits, approvals, or other requirement of any governmental agency having
jurisdiction over the Collection, Transportation, and Processing of Recyclable Materials, Organic
Materials, and Solid Waste that are in force on the Effective Date and as may be enacted, issued or
amended during the Term of this Agreement. Applicable Law includes, but is in no way limited to,
AB 939, AB 341, AB 1826, and SB 1383.
1.7 “Approved Organic Materials Processing Facility” means the Hitachi Zosen lnova (HZI)
Kompogas Facility located at 4300 Old Santa Fe Rd, San Luis Obispo, CA 93401, and Engel & Gray
Inc. Regional Compost Facility, located at 745 West Betteravia Road, Santa Maria, California, which
have been selected by the Franchisee and approved by the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
4
1.8 “Approved Disposal Facility” means the Cold Canyon Landfill as the primary, owned and operated
by Waste Connections and located at 2268 Carpenter Canyon Rd, San Luis Obispo, CA 93401, and
Chicago Grade Landfill located at 2290 Homestead Rd, Templeton, CA 93465, or the Santa Maria
Landfill located at 2065 E Main St, Santa Maria, CA 93454, as alternatives which have been selected
by the Franchisee and approved by the City. Franchisee shall notify City before using an alternative
facility.
1.9 "Billings" means any and all statements or charges for services rendered by Franchisee pursuant to
this Agreement.
1.10 “Bin” means a Container with capacity of approximately one (1) to eight (8) cubic yards, with a
hinged lid, and with wheels (where appropriate), that is serviced by a front end-loading and/or rear-
end loading Collection vehicle, including Bins with Compactors attached to increase the capacity of
the Bin.
1.11 "Bulky Item(s)” or “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.
1.12 “Bulky Item Collection Program” means the Contractor’s Collection service for bulky items,
including bulky Green Waste, in accordance with the Franchise Agreement for Solid Waste
Collection entered into on June 3, 2022 between the City and Franchisee.
1.13 “Business Days” mean days during which the City offices are open to do business with the public.
1.14 “California Code of Regulations (CCR)” means the State of California Code of Regulations. CCR
references in this Agreement are preceded with a number that refers to the relevant Title of the CCR
(e.g., “14 CCR” refers to Title 14 of CCR).
1.15 "California Integrated Waste Management Act of 1989" means Public Resources Code§§ 40000
et. seq.
1.16 “CalRecycle” means California's Department of Resources Recycling and Recovery.
1.17 “Cart” means a plastic Container with a hinged lid and wheels that is serviced by an automated or
semi-automated Collection vehicle. A Cart has capacity of 20, 35, 64 or 96 gallons (or similar
volumes).
1.18 "City" means the City of San Luis Obispo, a municipal corporation and charter city, 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, acting through the City Council or the City
Manager. The City may designate responsibilities to one or more third parties, in writing, between the
City Manager and the designee.
1.19 "Collect" or "Collection" (or any variation thereof) means the act of taking physical possession of
Recyclable Materials, Organic Materials, Solid Waste, Bulky Items, and other material at the place of
generation in the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
5
1.20 “Commercial” shall mean of, from, or pertaining to non-Residential Premises where business activity
is conducted, including, but not limited to, retail sales, services, wholesale operations, manufacturing,
and industrial operations, but excluding businesses conducted upon Residential property which are
permitted under applicable zoning regulations and are not the primary use of the property.
1.21 "Commercially Generated Food and Green Waste" means Food and Green Waste generated at
commercial and/or industrial property and separated by the Waste Generator for Collection and which
are excluded from the scope of this Agreement as described in Article 4, Scope of Agreement.
1.22 “Compactor” means a mechanical apparatus that compresses materials together with the Container
that holds the compressed materials or the Container that holds the compressed materials if it is
detached from the mechanical compaction apparatus. Compactors include two (2) to eight (8) cubic
yard Bin Compactors serviced by front-end loader Collection vehicles and ten (10) to fifty (50) cubic
yard Drop Box Compactors serviced by Roll-Off Collection vehicles.
1.23 “Complaint” shall mean each written or orally communicated statement made by any Person,
whether to City or Franchisee, alleging: (1) non-performance, or deficiencies in Franchisee’s
performance of its duties under this Agreement; (2) a violation by Franchisee of this Agreement; or,
(3) an SB 1383 Non-Compliance Complaint as required under 14 CCR Section 18995.3.
1.24 "Compost" (or any variation thereof) includes a controlled biological decomposition of Organic
Materials yielding a safe and nuisance free Compost product.
1.25 “Compostable Plastic” means plastic materials that meet the ASTM D6400 standard for Compostability.
1.26 "Construction and Demolition Debris" or “C&D” means used or discarded construction materials
removed from a Premises during the construction, repair, demolition, or renovation of a structure.
1.27 "Container" means Bins, Carts, Compactors and franchise Roll-Offs.
1.28 “County” means the County of San Luis Obispo, a political subdivision of the State of California.
1.29 “Customer” means the Person whom Franchisee submits its billing invoice to and collects payment
from for Collection services provided to a Premises. The Customer may be either the Occupant or
Owner of the Premises.
1.30 “Customer Notice” means the Franchisee’s notice to Customer(s) as described in Section 5.4.
1.31 "Designated Collection Location" means the place where the Franchisee or an authorized Recycling agent
or a Solid Waste Collector has contracted with either the City or a private entity to Collect Solid Waste.
1.32 “Designated Waste” means non-Hazardous Waste which may pose special Disposal problems because
of its potential to contaminate the environment, and which may be Disposed of only in Class II Disposal
sites or Class III Disposal sites pursuant to a variance issued by the California Department of Health
Services. Designated Waste consists of those substances classified as Designated Waste by the State, in
California Code of Regulations Title 23, Section 2522 as may be amended from time to time.
1.33 “Discarded Materials” means Recyclable Materials, Organic Materials, and Solid Waste placed by a
Generator in a receptacle and/or at a location for the purposes of Collection, excluding Excluded
Waste.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
6
1.34 “Disposal Facility” means a landfill, or other Facility for ultimate Disposal of Solid Waste.
1.35 “Dispose” or “Disposal” (or any variation thereof) means the final disposition of Solid Waste or
Processing Residue at a Disposal Facility.
1.36 “Divert” or “Diversion” (or any variation thereof) means to prevent Discarded Materials from
Disposal at landfill or transformation facilities, (including facilities using incineration, pyrolysis,
distillation, gasification, or biological conversion methods) through source reduction, reuse,
Recycling, Composting, anaerobic digestion, or other method of Processing, subsequent to the
provisions of AB 939. Diversion is a broad concept that is to be inclusive of material handling and
Processing changes that may occur over the Term including, but not limited to, changes in standard
industry practice or implementation of innovative (but not necessarily fully proven) techniques or
technology that reduce Disposal risk, decrease costs and/or are for other reasons deemed desirable by
the City.
1.37 “Dwelling Unit” means any individual living unit in a; Single-Family Dwelling Unit or Multi-Family
Dwelling Unit or building, a mobile home, or a motor home located on a permanent site intended for,
or capable of being utilized for, Residential living other than a hotel or motel.
1.38 “Edible Food” means food intended for human consumption. For the purposes of this Agreement,
Edible Food is not Solid Waste if it is recovered and not discarded. Nothing in this Agreement
requires or authorizes the recovery of Edible Food that does not meet the food safety requirements of
the California Retail Food Code. If the definition in 14 CCR Section 18982(a)(18) for Edible Food
differs from this definition, the definition in 14 CCR Section 18982(a)(18) shall apply to this
Agreement.
1.39 “Effective Date” means the date on which the latter of the two Parties signs this Agreement, as
specified in Section 2.2 of this Agreement.
1.40 "Environmental Laws" means all federal and state statutes, county, local and City ordinances and
regulations concerning public health, safety and the environment including, by way of example and
not limitation, the comprehensive Environmental Response, Compensation and Liability Act of 1980,
42 USC 9601 et seq.; the Resource Conservation and Recovery Act, 42 USC 6902 et seq.; the Federal
Clean Water Act, 33 USC 1251; the Toxic Substances Control Act, 15 USC 1601 et seq.; the
Occupational Safety and Health Act, 29 USC 651 et seq.: the California Hazardous Waste Control
Act, California Health and Safety Code 25100 et seq.; the California Toxic Substances Account Act,
California Health and Safety Code 25300 et seq.; the Safe Drinking Water and Toxic Enforcement
Act, California Health and Safety Code 25249.5 et seq.; as currently in force or as hereafter amended,
and all rules and regulations promulgated thereunder.
1.41 “Excluded Waste” means Hazardous Substance, Hazardous Waste, Infectious Waste, Designated
Waste, volatile, corrosive, biomedical, infectious, biohazardous, and toxic substances or material,
waste that Franchisee reasonably believes would, as a result of or upon Disposal, be a violation of
local, State or Federal law, regulation or ordinance, including land use restrictions or conditions,
waste that cannot be Disposed of in Class III landfills, waste that in Franchisee’s reasonable opinion
would present a significant risk to human health or the environment, cause a nuisance or otherwise
create or expose Franchisee or City to potential liability; but not including de minimis volumes or
concentrations of waste of a type and amount normally found in Residential Solid Waste after
implementation of programs for the safe Collection, Recycling, treatment, and Disposal of batteries
and paint in compliance with Sections 41500 and 41802 of the California Public Resources Code.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
7
1.42 "Facility" means any plant or site utilized by Franchisee (or a Subcontractor of Franchisee) for the
purposes of performing the duties to fulfill this Agreement, including, without limitation, Transfer,
Processing, or Disposal of Discarded Materials Collected in the City.
1.43 "Facility Operation Date" means December 18, 2018, the date on which, following its start-up, testing
and commissioning, the Facility began processing commercial quantities of Food and Green Waste.
1.44 “Federal” means belonging to or pertaining to the Federal government of the United States.
1.45 "Fiscal Year" means the period commencing on January 1 and concluding December 31 for
Franchisee. For City it means the period commencing July 1 of one year and concluding June 30 of
the subsequent year.
1.46 “Food Recovery” means actions to Collect and distribute food for human consumption which
otherwise would be Disposed, or as otherwise defined in 14 CCR Section 18982(a)(24).
1.47 “Food Scraps" means those Discarded Materials that will decompose and/or putrefy including: (i) all
kitchen and table Food Waste; (ii) animal or vegetable waste that is generated during or results from the
storage, preparation, cooking or handling of food stuffs; (iii) fruit waste, grain waste, dairy waste, meat,
and fish waste; and, (iv) vegetable trimmings, houseplant trimmings and other Compostable Organic
Waste common to the occupancy of Residential dwellings. Food Scraps are a subset of Food Waste.
1.48 “Food-Soiled Paper” means Compostable paper material that has come in contact with Food Scraps
or liquid, such as, but not limited to, Compostable paper plates, napkins, and pizza boxes. Food -
Soiled Paper is a subset of Food Waste.
1.49 "Food Waste" means Source Separated Food Scraps and Food-Soiled Paper. Food Waste is a subset
of Organic Materials.
1.50 “Franchise Fee” means the fee paid by Franchisee to the City as described in Article 7.
1.51 "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, related-
parties, Affiliates, and Subcontractors where applicable.
1.52 “Generator” or “Waste Generator” means any Person whose act or process produces Solid Waste
as defined in the Public Resources Code, or whose act first causes Solid Waste to become subject to
regulation. “Green Waste" means those Discarded Materials that will decompose and/or putrefy,
including, but not limited to, green trimmings, tree trimmings, grass cuttings, weeds, dead plants,
prunings, leaves, branches, brush, dead trees, small pieces of untreated and unpainted wood, and
other types of Organic Waste resulting from normal yard and landscaping maintenance that may be
specified in City Legislation for Collection and Processing as Organic Materials under this
Agreement. Green Waste does not include items herein defined as Excluded Waste. Green Waste is a
subset of Organic Materials. Green Waste placed in Organic Materials for Collection may not exceed
six (6) inches in diameter.
1.53 "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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
8
1.54 “Hazardous Substance” means any of the following: (a) any substances defined, regulated or listed
(directly or by reference) as "Hazardous Substances", "hazardous materials", "Hazardous Wastes",
"toxic waste", "pollutant", or "toxic substances", or similarly identified as hazardous to human health
or the environment, in or pursuant to: (i) the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA) of 1980, 42 USC §9601 et seq. (CERCLA); (ii) the Hazardous Materials
Transportation Act, 49 USC §1802, et seq.; (iii) the Resource Conservation and Recovery Act, 42 USC
§6901 et seq.; (iv) the Clean Water Act, 33 USC §1251 et seq.; (v) California Health and Safety Code
§§25115-25117, 25249.8, 25281, and 25316; (vi) the Clean Air Act, 42 USC §7901 et seq.; and, (vii)
California Water Code §13050; (b) any amendments, rules or regulations promulgated thereunder to
such enumerated statutes or acts currently existing or hereafter enacted; and, (c) any other hazardous
or toxic substance, material, chemical, waste or pollutant identified as hazardous or toxic or regulated
under any other Applicable Law currently existing or hereinafter enacted, including, without
limitation, friable asbestos, polychlorinated biphenyl’s (PCBs), petroleum, natural gas, and synthetic
fuel products, and by-products.
1.55 "Hazardous Waste" means any discarded material or mixture of materials, which is toxic, corrosive,
flammable, radioactive or which, because of its quantity, concentration, physical, chemical or
infectious characteristics may do harm to either humans, animals or the environment, or as defined in
Article 2, Chapter 6.5 625117 of the Health and Safety Code and Public Resources Code S40141.
1.56 “Holidays” are defined as New Year’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
1.57 “Liquidated Damages” means the amounts due by Franchisee for failure to meet specific
quantifiable standards of performance as described in Article 12.
1.58 "Materials Recovery Facility" means a permitted Facility where Discarded Materials are sorted or
separated for the purposes of Recycling, Composting, Processing, or reuse.
1.59 "Multi-family Dwelling Unit" or “Multi-Family” or “MFD” means, notwithstanding any contrary
definition in the City Municipal Code, any Premises, other than a Single Family Dwelling Unit, used for
Residential purposes, irrespective of whether residence therein is transient, temporary, or permanent,
including such Premises when combined in the same building with Commercial establishments, that
receive centralized, shared, Collection service for all units on the Premises which are billed to one (1)
Customer at one (1) address. Customers residing in Townhouses, mobile homes, condominiums, or other
structures with five (5) or more Dwelling Units who receive centralized, shared, Collection service for
all units on the Premises which are billed to one (1) Customer at one (1) address shall be considered
Multi-Family.
1.60 “Occupant” means the Person who occupies a Premises.
1.61 “Organic Materials” means Green Waste and Food Waste, individually or collectively. No
Discarded Material shall be considered to be Organic Materials, however, unless it is separated from
Recyclable Materials and Solid Waste. Organic Materials are a subset of Organic Waste.
1.62 “Organic Waste” means wastes containing material originated from living organisms and their
metabolic waste products including, but not limited to, food, Yard Trimmings, lumber, wood, paper
products, printing and writing paper, manure, biosolids, digestate, and sludges, or as otherwise
defined in 14 CCR Section 18982(a)(46). Biosolids and digestate are as defined in 14 CCR Section
18982(a)(4) and 14 CCR Section 18982(a)(16.5), respectively.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
9
1.63 "Owner" means the Person holding the legal title to the real property and/or any improvements
thereon and shall include the Person(s) listed on the latest equalized assessment roll of the County
Assessor.
1.64 “Party” or “Parties” refers to the City and Contractor, individually or together.
1.65 "Person" means any individual, firm, association, organization, partnership, consortium, corporation,
business trust, joint venture, Commercial entity, governmental entity, public entity, the United States,
the State of California, the County of San Luis Obispo, local agencies, cities, special purpose districts,
or any other legal Person.
1.66 "Premises" means any land or building in the City where Discarded Materials are generated or
accumulated.
1.67 “Process” or “Processing” means to prepare, treat, or convert through some special method.
1.68 “Prohibited Container Contaminants” means the following for the purposes of this Agreement: (i)
Discarded Materials placed in the Recyclable Materials Container that are not identified as acceptable
Recyclable Materials for the City’s Collection program; (ii) Discarded Materials placed in the
Organic Materials Container that are not identified as acceptable Organic Materials for the City’s
Collection program; (iii) Discarded Materials placed in the Solid Waste Container that are acceptable
Recyclable Materials and/or Organic Materials to be placed in the City’s Recyclable Materials or
Organic Materials Containers or otherwise managed under the City’s Collection program; and, (iv)
Excluded Waste placed in any Container.
1.69 "Recyclable Materials" or “Recyclables” means Recyclable Materials as defined under the
Franchise Agreement between the Parties for Recyclable Materials Collection, as it may be amended
from time to time.
1.70 “Recycle” or "Recycling" means the Process of sorting, cleansing, treating, and reconstituting at a
Recyclable Materials Processing Facility, materials that would otherwise be Disposed of at a landfill
for the purpose of returning such materials to the economy in the form of raw materials for new,
reused, or reconstituted products. Recycling includes Processes deemed to constitute a reduction of
landfill Disposal pursuant to 14 CCR, Division 7, Chapter 12, Article 2. Recycling does not include
gasification or transformation as defined in Public Resources Code Section 40201.
1.71 "Related Party Entity" means any Affiliate which has financial transactions with Franchisee.
1.72 “Residential” shall mean of, from, or pertaining to a Single-Family Premises or Multi-Family
Premises including Single-Family homes, apartments, condominiums, Townhouse complexes, mobile
home parks, and cooperative apartments.
1.73 “Residue” means those materials which, after Processing, are Disposed rather than Recycled due to
either the lack of markets for materials or the inability of the Processing Facility to capture and
recover the materials.
1.74 “Roll-Off” means an open-top or lidded Container with a capacity of seven (7) to forty (40) cubic
yards that is serviced by a franchise roll-off Collection vehicle.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
10
1.75 “SB 1383” means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which
added Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added
Chapter 13.1 (commencing with Section 42652) to Part 3 of Division 30 of the Public Resources
Code, establishing methane emissions reduction targets in a statewide effort to reduce emissions of
short-lived climate pollutants as amended, supplemented, superseded, and replaced from time to time.
For the purposes of this Agreement, SB 1383 specifically refers to the Short-Lived Climate Pollutants
(SLCP): Organic Waste Reductions regulations developed by CalRecycle and adopted on November
3, 2020 that created Chapter 12 of 14 CCR, Division 7 and amended portions of regulations of 14
CCR and 27 CCR.
1.76 “SB 1383 Renewable Natural Gas” or “SB 1383 RNG” means SB 1383 qualified gas derived from
Organic Waste that has been Diverted from a landfill and Processed at an in-vessel digestion Facility
that is permitted or otherwise authorized by 14 CCR to recover Organic Waste, or as otherwise
defined in 14 CCR Section 18982(a)(62).
1.77 “Self-Haul” or “Self-Hauler” means a Person who hauls Discarded Materials, recovered material, or
any other material, to another Person, or as otherwise defined in 14 CCR Section 18982(a)(66). Self-
Hauler also includes a Person who back-hauls waste, as defined in 14 CCR Section 18982(a)(66)(A).
1.78 “Service Level” refers to the size of a Customer’s Container and the frequency of Collection service.
1.79 "Single Family Dwelling Unit" or “Single-Family” or “SFD” means, notwithstanding any contrary
definition in the Municipal Code, any detached or attached house or residence designed or used for
occupancy by one (1) family, provided that Collection service feasibly can be provided to such
Premises as an independent unit, and the Owner or Occupant of such independent unit is billed directly
for the Collection service. Single-Family includes Townhouses that maintain individual collection
service regardless of whether each unit is separately billed for their specific Service Level. Single-
Family also includes duplex, tri-plex, or four-plex Residential structures regardless of whether each
unit maintains individual collection service or is separately billed for their specific Service Level.
1.80 "Solid Waste" means Solid Waste as defined in California Public Resources Code, Division 30, Part
1, Chapter 2, §40191 and regulations promulgated thereunder. Excluded from the definition of Solid
Waste are Excluded Waste, C&D, Source Separated Recyclable Materials, Source Separated Organic
Materials, and radioactive waste. Notwithstanding any provision to the contrary, Solid Waste may
include de minimis volumes or concentrations of waste of a type and amount normally found in
Residential Solid Waste after implementation of programs for the safe Collection, Recycling,
treatment, and Disposal of Household Hazardous Waste in compliance with Section 41500 and 41802
of the California Public Resources Code as may be amended from time to time. Solid Waste includes
salvageable materials only when such materials are included for Collection in a Solid Waste
Container not Source Separated from Solid Waste at the site of generation.
1.81 “Source Separated” means the segregation, by the Generator, of materials designated for separate
Collection for some form of Recycling, Composting, recovery, or reuse.
1.82 “State” means the State of California.
1.83 “Subcontractor” means a Party who has entered into a contract, express or implied, with the
Franchisee for the performance of an act that is necessary for the Franchisee’s fulfillment of its
obligations for providing service under this Agreement. Vendors providing materials and supplies to
Franchisee shall not be considered Subcontractors.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
11
1.84 "Term" means the Term of this Agreement, including extension periods if granted, as provided for in
Article 2.
1.85 “Ton” or “Tonnage” means a unit of measure for weight equivalent to two thousand (2,000) standard
pounds.
1.86 “Townhouse” means an attached or semi-attached Dwelling Unit within a group of attached or semi-
attached Dwelling Units. A Townhouse shall be considered a Single-Family Dwelling Unit if each
unit maintains individual Collection service subscription. A Townhouse shall be considered a Multi-
Family Dwelling Unit if the Premise receives centralized, shared, Collection service for all units on
the Premise. These shall be the designations regardless of whether the Premises are billed individually
or through a central account (e.g., homeowner association, property manager).
1.87 “Transfer” means the act of transferring the materials Collected by Franchisee in its route vehicles
into larger vehicles for Transport to other facilities for the purpose of Processing, Recycling, or
Disposing of such materials.
1.88 "Transfer Station” includes those facilities used to receive Solid Wastes, temporarily store, separate,
convert, or otherwise Process the materials in the Solid Wastes, or to Transfer the Solid Wastes
directly from smaller to larger vehicles for Transport and those facilities used for transformations.
1.89 "Waste Generator" or “Generator” means any Person as defined by the Public Resources Code,
whose act or Process produces Solid Waste as defined in the Public Resources Code, or whose act
first causes Solid Waste to become subject to regulation.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
12
ARTICLE 2.
GRANT AND ACCEPTANCE OF AGREEMENT
2.1 Grant and Acceptance of Agreement
Subject to Section 2.5 (Conditions to the Effectiveness of Agreement), City hereby grants to
Franchisee an exclusive franchise to collect and process Organic Materials accumulating at all
Premises in the City that are offered for Collection to Franchisee in accordance with this Agreement.
Franchisee hereby accepts the Agreement on the terms and conditions set forth in this Agreement.
2.2 Effective Date
The effective date of this Agreement shall be June 3, 2022.
2.3 Term of Agreement
The term of this Agreement shall commence at 12:01 a.m., June 3, 2022 on the Effective Date and
expire at midnight on December 18, 2038, the twentieth (20th) annual anniversary of the Facility
Operation Date, subject to extension as provided in Section 2.4 (Option to Extend).
2.3.1 Term Contingency
In the event of a change of law or technology which would render the collection and processing
services to be implemented under this Agreement obsolete, unnecessary, impractical, undesirable, or
illegal, the City reserves the right to terminate this Agreement upon the giving of a six (6) month prior
written notice of City's election to so terminate this Agreement. It is understood between Franchisee
and City that this Agreement is motivated by the passage of AB 939 and SB 1383, and that
subsequent legislation could make this Agreement unnecessary and/or adverse to the best interests of
the City. In particular, City and Franchisee acknowledge the possibility of future legislation changing
the requirements of AB 939 and SB 1383, and/or requiring a coordination of the collection of Solid
Waste, Food and Green Waste.
2.4 Option to Extend
The City, by written authorization of the City Manager, shall have the sole option to extend this
Agreement up to 36 months in periods of least twelve (12) months each. If City elects to exercise this
option, it shall give written notice not later than one hundred eighty (180) days prior to the initial
termination date, or, if one extension has been exercised, one hundred eighty (180) days prior to the
extended termination date.
2.5 Conditions to Effectiveness of Agreement
The obligation of City to permit this Agreement to become effective and to commence performing its
obligations under this Agreement is subject to the satisfaction of each and all of the conditions set out
in this Section 2.5 below, each of which may he waived in whole or in part by City.
A. Accuracy of Representations. The representations and warranties made by Franchisee
throughout this Agreement are accurate, true and correct on and as of the effective date of this
Agreement.
B. Absence of Litigation. There is no litigation pending in any court challenging the award of this
Agreement to Franchisee or the execution of this Agreement or seeking to restrain or enjoin its
performance.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
13
C. Furnishing of Insurance and Bonds. Franchisee has furnished evidence of the insurance and
bonds required by Article 10, Indemnification, Insurance and Bond.
D. Effectiveness of City Council Action. The City's Ordinance No. 1711 approving this
Agreement, shall have become effective pursuant to California law on or prior to the effective
date of this Agreement.
2.6 Responsibilities of City
The City does not assume any responsibility for, nor shall it be held liable for damages for the failure
on the part of any Person producing Food or Green Waste material within the City to deliver the same
to Franchisee; provided, however, it is mutually understood and agreed that the City and its officers
will at all times during the period of this Agreement cooperate to enforce the terms of this exclusive
Agreement as it relates to the Collection of Food and Green Waste within the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
14
ARTICLE 3.
TERMS OF AGREEMENT
3.1 Franchisee Status
Franchisee is duly organized, validly existing and in good standing under the laws of the State of
California and has the financial ability to perform its obligations set forth in this Agreement.
Additionally, the Franchisee has no suits or threatened suits which would impair the financial ability
of the Franchisee to perform its obligations under this Agreement, and that the entering into this
Agreement by Franchisee will not in any way constitute a breach of any other agreements entered into
by Franchisee with other parties or constitute a violation of any law.
3.2 Franchisee Authorization
Franchisee has the authority to enter into and perform its obligations under this Agreement. The
Board of Directors of Franchisee (or the shareholders, if necessary) have taken all actions required by
law, its articles of incorporation, its bylaws or otherwise to authorize the execution of this Agreement.
The persons signing this Agreement on behalf of Franchisee have the authority to do so.
3.3 Compliance with Laws and Regulations
Franchisee shall comply with all existing and future Applicable Law, with particular note of SB 1383,
Article X of the City Charter and Chapters 8.04 of the Municipal Code.
3.4 Serve Without Interruption
Franchisee shall Collect and Process Organic Materials throughout the Term of this Agreement
without interruption, except as described in Section 12.4.
3.5 Permits and Licenses
Franchisee shall procure, and keep in full force and affect, all permits and licenses, pay all charges
and fees, and give all notices as necessary.
3.6 Preservation of City Property
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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
15
ARTICLE 4.
SCOPE OF AGREEMENT
4.1 Scope of Agreement
Subject to Section 4.2 (Limitations to Scope), the Agreement granted to Franchisee shall be exclusive
for Organic Materials Collection, except where otherwise precluded by Appliable Law.
4.2 Limitations to Scope
The Agreement for the Collection and Processing Organic Materials granted to Franchisee shall be
exclusive except as to the following categories of Organic Materials listed in this Section. The
granting of this Agreement shall not preclude the categories of Organic Materials listed below from
being delivered to and Collected and Transported by others provided that nothing in this Agreement is
intended to or shall be construed to excuse any Person from obtaining any authorization from City
which is otherwise required by law:
A. Organic Materials which are separated at any Premises and which are Transported by the
Owner or Occupant of such Premises (or by their employee) to a Facility;
B. Green Waste removed from Premises by a gardening, landscaping, or tree trimming
company as incidental part of a total service offered by that company.
C. Franchisee shall cooperate with and shall not impede, interfere, or attempt to impede or
interfere with the implementation, expansion, or operation of Food Recovery efforts in
the City.
Franchisee acknowledges and agrees that City may permit other Persons beside Franchisee to Collect
any or all types of the Organic Materials listed in this Section 4.2, without seeking or obtaining
approval of Franchisee under this Agreement.
Agreement to Collect, Transport, and Process Organic Materials shall be interpreted to be consistent
with State and Federal laws, now and during the Term of the Agreement, and the scope of this
Agreement shall be limited by current and developing Applicable Law with regard to Organic Waste
handling and related doctrines. In the event that future interpretations of current law, enactment or
developing legal trends limit the ability of the City to lawfully provide for the scope of services as
specifically set forth herein, Franchisee agrees that the scope of the Agreement will be limited to
those services and materials which are lawfully provided for under this Agreement. The City shall not
be responsible for any lost profits and/or damages claimed by the Franchisee as a result of changes in
law.
4.3 Administration of Agreement
The City Manager shall administer this Agreement and the City's Utilities Director shall
supervise Franchisee's compliance with the Agreement terms and conditions.
4.4 Use of City Streets
This Agreement shall give Franchisee the right and privilege to operate Organic Materials Collection
vehicles and equipment on such streets, public ways, rights-of-way, or easements of the City as
reasonably appropriate for Franchisee to provide the services herein.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
16
4.5 Annexation
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 service the area for a period not less than five (5) years.
4.6 City Right to Request Changes
4.6.1 General
City may request 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 thirty (30) days of a request to do so by City, a proposal to provide
additional or expanded Diversion services pursuant to the terms of Section 4.6.2. Franchisee shall be
entitled to an adjustment in its compensation in accordance with Section 8.5 (Extraordinary
Adjustments), for providing such additional or modified services.
4.6.2 New Diversion Programs
Franchisee shall present, within thirty (30) days of a request to do so by City, a proposal to provide
additional or expanded Diversion services. The proposal shall contain a complete description of the
following:
• Collection methodology to be employed (equipment, workforce, etc.)
• Equipment to be utilized (vehicle number, types, capacity, age, etc.).
• Labor requirements (number of employees by classification).
• Type of Containers to be utilized.
• Provision for program publicity/education/marketing.
• A projection of the financial results of the program's operations for the remaining Term of the
Agreement in a balance sheet and operating statement format including documentation of the
key assumptions underlying the projections and the support for those assumptions.
• Processing Facility to be utilized.
4.6.3 City's Right to Acquire Services
Franchisee acknowledges and agrees that City may permit other Persons besides Franchisee to
provide additional Organic Materials services not otherwise contemplated under Section 4.6 (City's
Right to Request Changes). If pursuant to Section 4.6.2 (New Diversion 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.
4.6.4 Implementing New Services
If l) Franchisee is capable of performing or developing the ability to perform a requested service or
modifying an existing service; 2) City has agreed to have Franchisee provide such additional service
in accordance with Franchisee's proposal; and 3) an adjustment in Franchisee’s compensation has
been requested but has not been agreed upon or implemented within ninety (90) days, City may
permit a third party to perform the request or modified existing service, and Franchisee shall not be
obligated, to perform such additional or modified service pursuant to the terms of Section 4.6.3.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
Organic Materials Services Agreement
17
4.7 Ownership of Organic Materials
Once Organic Materials are placed in Containers and properly presented for Collection, ownership
and the right to possession shall transfer directly from the Generator to Franchisee by operation of
this Agreement. Franchisee is hereby granted the right to retain, Recycle, Process, reuse, Compost
and otherwise use such Organic Materials or any part thereof, in any lawful fashion or for any lawful
purpose consistent with the hierarchy and goals of AB 939 and AB 1826, and constitutes a reduction
in landfill Disposal in accordance with SB 1383. Subject to the provisions of this Agreement,
Franchisee shall have the right to retain any benefit resulting from its right to retain, Recycle, Process,
Compost or reuse the Organic Materials which it Collects. Organic Materials or any part thereof,
which are delivered to a Facility shall become the property of the Owner or operator of the
Facility(ies) once deposited there by Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
18
ARTICLE 5.
DIRECT SERVICES
5.1 General
The work to be done by Franchisee pursuant to this Agreement shall include the furnishing of all
labor, supervision, equipment, materials, supplies, and all other items necessary to perform the
services required to collect Organic Materials. The enumeration of, and specification of requirements
for, particular items of labor or equipment shall not relieve Franchisee of the duty to furnish all
others, as may be required, whether enumerated or not.
The work to be done by Franchisee pursuant to this Agreement shall be accomplished in a thorough
and professional manner so that the customers within the City are provided reliable, courteous and
high-quality Organic Materials Collection service at all times. The enumeration of, and specification
of requirements for, particular aspects of service quality shall not relieve Franchisee of the duty of
accomplishing all other aspects in the manner provided in this Section, whether such aspects are
enumerated elsewhere in the Agreement or not.
5.2 Organic Materials Collection Services
A. Three-Container Collection System. Franchisee shall provide Organic Materials
Collection service, as part of the City’s three-Container Collection program for the
separate Collection of Source Separated Recyclable Materials, Source Separated Organic
Materials, and Solid Waste, in accordance with the applicable Franchise Agreement(s)
between the Franchisee and City for each Discarded Material type. Franchisee shall
ensure that the Organic Materials services provided under this Agreement are at all times
performed in accordance with Applicable Law, including SB 1383, and operationally
align with the Collection of Solid Waste and Recyclable Materials in order to operate a
successful three-Container Collection system.
Single-Family Customers with a disability shall have the option of placing their
Containers near their dwelling, visible and within reasonable distance from the curb, and
without obstacles (i.e. uneven surfaces, steep inclines/declines, behind gates) that cause a
safety concern. 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 disability to the
Franchisee.
B. Collection Service. Franchisee shall provide Organic Materials Containers and
Collection service to all Single-Family, Multi-Family, and Commercial Generators in
accordance with Article 5 of this Agreement. Franchisee’s Organic Materials Collection
program shall allow Generators to intentionally commingle Food Waste and Green Waste
in the Organic Materials Containers. Franchisee shall Collect and remove all Organic
Materials placed in Containers at the Designated Collection Locations for Commercial,
Single-Family, and Multi-Family Customers, and Transport the Organic Materials to (i)
the Approved Organic Materials Processing Facility for Processing in accordance with
this Agreement. Prohibited Container Contaminants shall not be Collected in Organic
Materials Containers. The Containers shall comply with the requirements of Section
5.7.3.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
19
C. Schedule. Contractor shall provide Organic Materials Collection for all Customers not
less than once each week on the same day of the week as Solid Waste Collection service.
Franchisee will notify Customers of Holiday Collection schedules. Should the Collection
day change, Franchisee shall re-route Collections within sixty (60) days of the
notification by the change in Solid Waste Collection days to provide same day service.
5.3 Materials To Be Collected
Organic Materials to be accepted for Collection include: Food Waste, Food Scraps; Food-Soiled
Paper; and Green Waste. The Parties agree that accepted types of Organic Materials may be added to
or removed from this list from time to time at the sole discretion of the City. Franchisee shall not add
or remove materials to or from this list without written approval from the City or signed amendment
to the Agreement, and such approval shall not be unreasonably withheld.
Carpets, non-Compostable paper, textiles, and Prohibited Container Contaminants shall not be
Collected in the Organic Materials Containers. The Containers shall comply with the requirements of
Section 5.7.3. Materials prohibited for Collection in the Organic Materials Containers include: Source
Separated Recyclable Materials, Solid Waste, Excluded Waste, and other Prohibited Container
Contaminants.
5.4 Refusal to Provide Collection Services
5.4.1 Customer Notices.
A. General. In the event Franchisee does not Collect any item or Container of Discarded
Materials due to a Customer’s non- compliance with rules and regulations for proper set-out
or the presence of Prohibited Container Contaminants, Franchisee shall attach a Customer
Notice, subject to City’s approval, securely to the item or Container specifying the reasons
for non-Collection. The Customer Notice shall contain Franchisee’s name, telephone number,
and information described below.
The Customer Notice shall, at a minimum:
• Inform the Customer of the reason for the courtesy Collection or non-Collection; and
• Include the date and time the issue was observed.
• In addition, upon the identification of Prohibited Container Contaminants in a
Customer’s Container, the Franchisee shall provide the Customer with the following
information in the Customer Notice, or through another form of communication such
as mail, e-mail, text message, or over the phone: Information on the Customer’s
requirement to properly separate materials into the appropriate Containers, and the
accepted and prohibited materials for Collection in each Container;
• Inform the Customer of the courtesy collection or non-collection of the contaminated
materials on this occasion with information that the Franchisee may assess
contamination Processing fees and/or may not Collect the Container in the future; and,
• Be supported by photographic evidence of the violation(s).
B. Upon identification of Prohibited Container Contaminants. Franchisee shall Collect the
contaminated Organic Materials Containers and either Transport the material to the
appropriate Approved Facility for Processing; or, Franchisee may Collect the contaminated
materials with the Solid Waste and Transport the contaminated materials to the Approved
Disposal Facility. A Collection of contaminated Recyclable Materials or Organic Materials
where the materials are sent to the Approved Disposal Facility may be made with a Solid
Waste Collection vehicle, provided that the contaminants may safely and lawfully be
Collected as Solid Waste.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
20
C. Communications with Customer. Whenever a Container at the Premises of a Customer is
not Collected, Franchisee shall contact the Customer on the scheduled Collection day by
telephone, email, text message, or other verbal or electronic message to explain why the
Container was not Collected. Whenever a Container is not Collected because of Prohibited
Container Contaminants, a Customer service representative shall contact the Customer to
discuss, and encourage the Customer to adopt proper Discarded Materials preparation and
separation procedures.
D. Franchisee Return for Collection. Upon request from Customer, Franchisee shall Collect
Containers that received Customer Notices specifying non-Collection within one (1) Working
Day of Customer’s request. Franchisee shall bill Customer for the extra Collection service
event (“extra pick-up”) at the applicable City-approved Rates only if Franchisee notifies
Customer of the premium Rate for this service at the time the request is made by Customer.
E. Assessment of Contamination Processing Fees. If the Franchisee observes twenty percent
(20%) or more Prohibited Container Contaminants and has issued a Customer Notice
specifying a courtesy Collection, the Franchisee may impose a contamination rate approved
by the City for that Customer’s Service Level, if and only if Franchisee has informed the
Customer of the potential for a Processing fee pursuant to this Section. The intent of
contamination fees is to provide a behavioral tool to educate and prevent Customers from
placing Source Separated Discarded Material into the improper designated Container(s). To
ensure that assessment of fees are to be used for the intended purposes and not as a form of
revenue generation, after the first issuance of a Customer Notice for the observance of
Prohibited Container Contaminants in one (1) calendar year, Franchisee may issue a fee of
ten (10) dollars. After the second observance of Prohibited Container Contaminants in the
same calendar year, Franchisee may issue a fee of twenty (20) dollars. After the third
observance of Prohibited Container Contaminants in the same calendar year, Franchisee may
issue a fee of thirty (30) dollars. In the fourth and any subsequent observances of Prohibited
Container Contaminants in the same calendar year, Franchisee may increase the
contamination Processing fee by ten (10) dollar increments and may Collect the contaminated
materials with the Solid Waste and Transport the contaminated materials to the Approved
Disposal Facility, provided that the contaminants may safely and lawfully be Collected as
Solid Waste.
F. Suspension of Contamination Processing Fee Program . Franchisee agrees that
contamination fees shall not exceed one percent (1%) of Franchisee’s Gross Receipts in any
calendar quarter. In the event that contamination fees exceed one percent (1%) of
Franchisee’s Gross Receipts in any calendar quarter, the assessment of contamination fees
shall be suspended immediately and indefinitely pending a program assessment by the City
and Franchisee. Upon program suspension or at the request of the City at any time during the
Term of the Agreement, City and Franchisee shall meet and confer regarding the application
and effectiveness of contamination fees in accomplishing the behavior change. If the program
is suspended due to excessive revenue generation, the City may require Franchisee to either:
i) modify the program parameters; ii) modify the amount of the contamination fee; or, iii)
return to the City any funds generated by the contamination fee which exceed one percent
(1%) of Franchisee’s Gross Receipts for a given period of time.
G. City Actions upon Identification of Prohibited Container Contaminants. The City or its
designee shall perform SB 1383 activities required for the identification of Prohibited
Container Contaminants which includes but is not limited to, record keeping, provision of
educational notices and reporting.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
21
5.5 Additional Green Waste Collection Programs
A. Christmas Tree Program. Franchisee shall operate an annual Christmas Tree Collection
and Diversion program. The program shall include curbside and drop-off Collection of
Christmas Trees targeting all Single-Family and Multi-Family Dwelling Units and shall
Divert these Christmas Trees from landfill Disposal and Process the materials as Organic
Waste in accordance with this Agreement.
B. On-Call/Green Waste Pick-Up. Franchisee shall make available additional Green Waste
collection services upon customer request and Transport the Material to the Approved
Organic Materials Processing Facility.
5.6 End Uses for Organic Materials
General. Franchisee shall develop and implement plans and programs to Divert from Disposal the
Organic Waste Collected through Curbside Collection of Organic Materials and the additional Organic
Materials Collection programs specified in Section 5.5. Franchisee must provide end uses for Organic
Materials that maximize Diversion credits for the City according to regulations established by
CalRecycle, and that constitute a reduction in landfill Disposal in accordance with SB 1383.
Power. To the extent that electricity produced from the Organic Materials Processing Facility qualifies
for City's procurement credit under SB 1383, City shall be allocated its proportional share of such
qualified electricity usage based on the inbound Tonnage delivered by City divided by the total
inbound tonnage of the facility for that same time period.
5.7 Operations
5.7.1 Schedule
To preserve peace and quiet, no Organic Materials shall be Collected from or within two- hundred
(200) feet of Residential Premises between 6:30 P.M. and 6:30 A.M. on any day and such Organic
Materials shall be Collected, Monday through Friday on the same day as Solid Waste Collection.
When the regularly scheduled Collection day falls on a Holiday, Collection shall take place on the
following regularly scheduled Collection day. In the event the Franchisee misses the Collection of set
out Organic Materials, the Franchisee shall collect the missed pickups with one (1) Business Day of
notification.
5.7.2 Vehicles
A. General. Franchisee shall provide a fleet of Collection vehicles sufficient in number and
capacity to perform the work required by this Agreement and in strict accordance with its
terms. Franchisee shall have available on Collection days sufficient back-up vehicles in order
to respond to complaints and emergencies. The fleet shall be maintained according to the
requirements of Municipal Code 8.04.030.
B. Specifications. All vehicles used by Franchisee in providing Organic Materials Collection
services under this Agreement shall comply with all Federal, State, and local requirements for
such vehicles as they now exist or may be amended in the future and be registered with the
California Department of Motor Vehicles. All such vehicles shall have water-tight bodies
designed to prevent leakage, spillage or overflow. All such vehicles shall comply with U.S.
Environmental Protection Agency noise emission regulations and other applicable noise
control regulations.
C. Condition 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
22
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.
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.
Franchisee shall arrange all vehicles and other equipment in safe and secure location(s) in
accordance with all applicable zoning regulations.
D. Vehicle Identification. Each truck shall display in a prominent place a sign as required in
Municipal Code section 8.04.090.
E. Operation. Vehicles shall be operated in compliance with the California Vehicle Code, and
all applicable safety and local ordinances. Franchisee shall not load vehicles in excess of the
manufacturer's recommendations or limitations imposed by state or local weight restrictions
on vehicles.
F. Renewable Natural Gas (RNG) Vehicles. Under this Agreement, the Franchisee shall make
a best effort for all Collection vehicles to be powered by SB 1383 RNG generated by a local
facility or powered by SB 1383 RNG that is purchased through a wheeling agreement with a
party(ies), provided that the wheeling agreement is for purchase of gas derived from Organic
Waste that has been Diverted from a Landfill and Processed at an in-vessel digestion Facility
that is permitted or otherwise authorized by Title 14 of CCR to recover Organic Waste and
meets the requirements of 14 CCR Section 18993.1(h). Upon City’s request, Franchisee shall
obtain and provide the City with a written certification by an authorized representative of the
publicly owned treatment works or the wheeling agreement under which Franchisee
purchased SB 1383 RNG certifying that the in-vessel digestion Facility produces the SB 1383
RNG consistent with the requirements of 14 CCR Section 18993.1(h). Franchisee shall
maintain records of the amount of SB 1383 RNG purchased and shall report this information
in accordance with Exhibit A. Franchisee shall agree to the City the right to report this SB
1383 RNG usage toward the City’s fulfilment of its annual recovered Organic Waste product
procurement target in accordance with 14 CCR Section 18993.1.
5.7.3 Organic Materials Containers
A. General.
1. Franchisee shall supply all Customers with Organic Materials Containers for
Collection of Organic Materials, in accordance with this Section. Franchisee shall use
the Franchisee-provided Collection Containers that are currently located at
Customers’ Premises, if applicable. If Customer is currently utilizing Collection
Containers that were not provided by the Franchisee, Franchisee shall provide
Containers from current inventory.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
23
2. Franchisee shall provide Customers (including Single-Family, Multi-Family,
Commercial, and City facility Customers) with new Collection Containers as
requested by the Customer to meet its desired Service Level within five (5) Working
Days of Franchisee’s first receipt of the Customer request.
3. On and after the Effective Date, any new Containers provided by the Franchisee shall
comply with the Container standards set forth in this Section. All Containers shall
display the Franchisee’s name, logo, telephone number, , capacity (yards or gallons),
and some identifying inventory or serial number for carts only.
4. If an existing Container breaks or is otherwise rendered non-functional on or after the
Effective Date, the Franchisee shall replace the non-functional Container with a
Container that complies with the requirements of this Section. Notwithstanding this
Section, the Franchisee is not required to replace functional Containers, including
Containers purchased prior to January 1, 2022, that do not comply with the color
requirements of this Section prior to the end of the useful life of those Containers, or
prior to January 1, 2036, whichever comes first.
B. Container Types and Sizes
1. Single-Family Containers. Franchisee shall supply each Single Family Dwelling Unit
with an Organic Materials Container consistent in size with the City-approved Organic
Materials Collection program.
2. Multi-Family Containers. Franchisee shall supply each Multi-Family Customer with
Organic Materials Container(s) to adequately service the needs of the Multi-Family
Premises.
3. Commercial Containers. Franchisee shall supply each Commercial Customer with
Organic Materials Container(s) to adequately service the needs of the Premises.
Notwithstanding this Section, Franchisee shall not be required to provide Organic
Materials Container(s) to a Commercial Customer that is exempted from Organic
Materials services by the City or has demonstrated to the City that it is Diverting
Organic Materials through subscription with another City-approved Franchisee, or
other City -approved method, for the duration of the approved exemption.
4. Kitchen Pails. In addition, upon request, Franchisee will supply each Single Family
and Multi-Family customer a kitchen pail to Collect Organic Materials inside a
Dwelling Unit prior to placement in Multi-Family and Single-Family Customers’
Organic Materials Container, as approved by the City. Franchisee will be responsible
for distribution of kitchen pails to Single-Family and Multi-Family Customers upon
request, from Franchisee’s office beginning the Effective Date. City may restock
Franchisee inventories at local offices for distribution to new residents or residents
who need a replacement.
C. Container Labels.
Containers shall be identified for Organic Materials only and shall be clearly labeled in
accordance with this Section.
1. Labels on Existing Containers or Lids. Franchisee shall ensure a label on the body or
lid of each Container has been provided to a Customer that includes language or
graphic images, or both, that indicate the primary materials accepted and the primary
materials prohibited in that Container. Labels shall clearly indicate items that are
Prohibited Container Contaminants for each Container.
2. Imprinted or In-Mold Labels for New Containers or New Lids. On or before the
Effective Date, Franchisee shall imprint new Container bodies or lids with text or
graphic images that indicate the primary materials accepted and the primary materials
prohibited in that Container. Labels shall clearly indicate items that are Prohibited
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
24
Container Contaminants for each Container. Prior to ordering any Containers or lids
with in-mold labels, Franchisee shall submit a sample of its proposed label, proposed
location(s) for placement of labels on each type of Container, and its labeling plan to
the City for approval.
D. Container Colors. Organic Materials Cart lids shall be green. Organic Materials Bin,
Compactor, and franchisee provided Roll-Off lids or bodies shall be green. No later than
December 31, 2035, Franchisee shall provide all Customers with Collection Containers that
comply with the Container color requirements specified in this Section or as otherwise
specified in 14 CCR Section 18982; 14 CCR, Division 7, Chapter 12, Article 3; or other
Applicable Law.
E. Additional Containers. 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 City or Customer,
pursuant to the guidelines established by the Franchisee and approved by the City. Each
Customer shall be responsible for excess damage to any such Containers not caused by
Franchisee.
F. Upon expiration or early termination default of Agreement, City may purchase all Containers
put into service at Customer Premises during the Term of the Agreement and shall become
property of the City at a value negotiated with the City factoring the depreciation and scrap
value. All Containers and Compactors purchased and put into service at Customer Premises
during the Term of the Agreement that have not been fully depreciated shall be available to
the City, at the City’s option, at a cost reflecting the net book value, plus scrap.
5.7.4 Litter Abatement
Franchisee shall use due care to prevent Organic Materials from being spilled or scattered during the
Collection or Transportation process. If any Organic Materials are spilled during Collection,
Franchisee shall promptly clean up all spilled materials. Each Collection vehicle shall carry a broom
and shovel at all times for this purpose.
5.7.5 Personnel
A. General. Franchisee shall furnish qualified drivers, mechanical, supervisory, clerical, and
other personnel as may be necessary to provide services required by this Agreement in a safe
and efficient manner.
B. Identification. Franchisee shall ensure that while on duty each Collection worker wears a
clean uniform which displays the Franchisee's company name and the worker's name or
identification number.
C. Fees & Gratuities. Company shall not, nor shall it permit any agent, employee, or
subcontractors employed by it to request, solicit, demand, or accept, either directly or
indirectly any compensation or gratuity for any services performed under this Agreement
except as provided in Article 8 of this Agreement.
D. Training. All drivers shall be trained and qualified in the operation of vehicles they operate
and must possess a valid license, of the appropriate class, issued by the California
Department of Motor Vehicles.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
25
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.
5.8 Organic Materials Processing
5.8.1 Receipt of Organic Materials
Franchisee shall Transport all Organic Materials Collected to the Approved Organic Materials
Processing Facility. Franchisee’s Approved Organic Materials Processing Facility shall be a Facility
that Processes Single-Family, Multi-Family, and Commercial Source Separated Organic Materials to
recover Organic Waste.
5.8.2 Status of Approved Organic Materials Processing Facility
The Approved Organic Materials Processing Facilities used by Franchisee must be designed and
constructed in accordance with all Applicable Laws (e.g., CEQA, California Code of Regulations,
etc.). The Facility must have all permits from Federal, State, regional, County and City agencies
necessary for it to operate as a Food and/ or Green Waste Facility and must be in full regulatory
compliance with all such permits. Franchisee shall, keep active all existing permits and approvals
necessary for use of the Approved Organic Materials Processing Facilities in full regulatory
compliance. Upon request, Franchisee shall provide copies of Facility permits and/or notices of
violations (obtained from its Processing Facility Subcontractor, if necessary) to the City Manager.
The Approved Organic Materials Processing Facilities must be authorized to accept, under its existing
permit, and have sufficient uncommitted capacity to accept, all Organic Materials delivered to it by,
or on behalf of, the City for the Term of this Agreement. Franchisee shall immediately notify City of
any notice of breach or default received from Approved Organic Materials Processing Facilities.
5.8.3 Alternative Processing Facility
If Franchisee becomes unable to deliver the City's Organic Materials to an Approved Organic
Materials Processing Facility due to causes within its control or which could have been avoided by
the exercise of due care, the Franchisee shall arrange for it to be accepted at another Processing
Facility, provided that the Franchisee provides written notice to the City, in which case Franchisee
shall pay for any increased Transportation costs, any differences in the fees charged at such
alternative Processing Facility and the fees then in effect under this Agreement. If Franchisee's
inability to deliver the City's Organic Materials to the Approved Organic Materials Processing
Facility is not due to causes within its control or which could have been avoided by the exercise of
due care, then Franchisee shall propose alternative Processing Facilities including all related costs and
City shall select the alternative to be used. In the event of an emergency or sudden unforeseen closure
of the Approved Organic Materials Processing Facility, Contract shall, within forty-eight (48) hours
of the emergency or sudden and unforeseen closure, provide a written description of the reasons the
use of the Approved Facility is not feasible, and the period of time Franchisee proposes to use the
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
26
alternative Processing Facility. Such a change in Processing Facility shall be temporarily permitted
until such time as the City is able to consider and respond to the use of the proposed alternative
Processing Facility. If the use of the proposed Alternative Processing Facility is anticipated to or
actually does exceed thirty (30) days in a consecutive twelve (12) month period, the use of such
Processing Facility shall be subject to approval by the City. The City may in its sole discretion,
approve, conditionally approve, temporarily approve, or disapprove of the use of the proposed
Alternative Processing Facility. If the City disapproves the use of the proposed alternative Processing
Facility, the Parties shall meet and confer to determine an acceptable Processing Facility.
5.8.4 Disposition of Unauthorized Waste
Franchisee shall ensure that procedures to identify and reject materials delivered to the Approved
Organic Materials Processing Facility which are Excluded Waste, Hazardous Waste, or which
otherwise may not be legally accepted at the Approved Organic Materials Processing Facility under
their permits, are in place. Franchisee may, in the course of implementing such procedures, refuse to
accept Organic Materials deposited from a Generator if they constitute Hazardous Waste, or
otherwise may not be legally accepted at the Approved Organic Material Processing Facility, and
Franchisee shall be solely responsible of the materials which are accepted. If Franchisee discovers
Hazardous Waste, or other material which may not be legally accepted, among materials which it has
accepted, it shall Dispose of such waste at its own expense. Franchisee may pursue all legal rights and
remedies it may have against the Generator(s) of such Solid Waste if the Generator(s) can be
identified.
5.8.5 Subcontracting
Franchisee shall not engage any Subcontractors for Collection, Transportation, or Processing of
Organic Materials without the prior written consent of City. Franchisee must obtain written
agreements with Processing Subcontractors to Facilities’ capacity to Process Discarded Materials. If
the Franchisee plans to engage other affiliated or Related Party Entities in the provision of services,
Franchisee shall provide City with thirty (30) days written notification of its plans and provide an
explanation of any potential impacts related to the scope, quality, timeliness, or cost of providing
services under this Agreement. All insurance documents must be reviewed and approved by the City
Manager prior to City acceptance. Franchisee shall require that all Subcontractors file insurance
certificates with the City, name City as an additional insured, and comply with all material terms of
this Agreement.
5.9 Disposal
Franchisee shall ensure that the Residue from the Organic Materials Collected in the City and
delivered to the Approved Organic Materials Processing Facility by the Franchisee are Disposed of at
the Approved Disposal Facility.
5.10 Generator Waivers
A. General. The City or its designee may grant waivers described in this Section to Commercial
or Multi-Family Generators that impact the scope of Franchisee’s provision of service for
those Customers; provided, the Generator shall continue to subscribe with Franchisee for
franchised Collection services to the extent such services are not waived by the City. Waivers
issued shall be subject to compliance with SB 1383 requirements, pursuant to 14 CCR
Section 18984.11, or other requirements specified by the City.
B. Generator Waivers.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
27
a. De Minimis Waivers. The City or its designee may waive a Multi-Family’s, Commercial
Business’, or its Property Owner’s obligation to comply with some or all of the Source
Separated Organic Materials requirements set forth in this Agreement, SB 1383 Regulations,
and the City’s Municipal Code, all as may be amended from time to time, if the Multi-
Family, Commercial Business, or its Property Owner provides documentation, or the City
has evidence demonstrating one of the following de minimis conditions:
i. The Multi-Family’s or Commercial Business’ total Solid Waste Collection service is two
(2) cubic yards or more per week, and Organic Materials subject to Collection comprises
less than twenty (20) gallons per week, per applicable Container, of the Multi-Family’s or
Commercial Business’ total waste; or,
ii. The Multi-Family’s or Commercial Business’ total Solid Waste Collection service is less
than two (2) cubic yards per week, and Organic Materials subject to Collection comprises
less than ten (10) gallons per week, per applicable Container, of the Multi-Family’s or
Commercial Business’ total waste.
b. Space Constraint. The City or its designee may waive a Multi-Family’s, Commercial
Business’, or its Property Owner’s obligation to comply with some or all of the Source
Separated Organic Materials Collection service requirements set forth in this Agreement, SB
1383 Regulations, and the City’s Municipal Code, in the event that the Generator qualifies
for a space constraint waiver under the City’s Municipal Code.
C. Waiver Requests. Generators may submit requests for de minimis waivers and physical
space waivers to the City or its designee. If a Generator submits a request for a waiver to the
Franchisee, the Franchisee shall refer the Generator to the City or its designee. Upon request
of the City, the Franchisee shall support the City in the waiver review process by providing
requested Customer information. If the City or its designee grants a waiver to a Generator, the
City shall notify the Franchisee and Franchisee shall update the Customer’s information and
Service Level in accordance with Exhibit A.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
28
ARTICLE 6.
OTHER SERVICES
6.1 Billing
The City Council shall establish an integrated rate for the Organics Materials, Recycling and Solid
Waste services. Franchisee shall bill and collect for its services at no more nor less than these rates.
Franchisee's billing plan, including billing frequency, and format shall be subject to approval by City,
and City shall have the right to revise the billing format to itemize certain charges.
The City may also direct Franchisee to insert mailers relating to Franchisee provided services with the
billings and shall be responsible for all labor costs with respect to the mailing insert s. 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 mailers 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. 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.
The owner of occupied Premises shall be responsible and liable for paying the Food and Green Waste
fees for that property.
6.2 Collection of Bills from Delinquent Customers
Once each year, prior to a date established by the City, Franchisee may take actions pursuant to
Chapter 8.04 of the Municipal Code to collect delinquent accounts.
6.3 Periodic Performance or Billing Audit
The City shall have the right to periodically, not less than annually, request a performance audit
or billing audit be completed by the 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. The cost of such audits will be
an allowable cost under the rate setting methodology unless there are findings pursuant to Section 12.5.
6.4 Customer Service
6.4.1 Office
Office hours shall be, at a minimum, from 8:00 A.M. to 5:00 P.M., Monday through Friday, exclusive
of holidays. A responsible and qualified representative of Franchisee shall be available during office
hours for communication with the public. Telephone numbers shall either be a local or a toll free call
to residents and businesses of the City. Franchisee's telephone system shall be adequate to handle the
volume of calls typically experienced on the busiest days. Franchisee shall also maintain a local or
toll free telephone number for use during other than normal business hours. Franchisee shall have a
representative, answering or message providing/receiving (voice-mail) service available at said after
hours telephone number.
6.4.2 Complaint Documentation
All service complaints related to Food and Green Waste Collection shall be directed to Franchisee.
Daily logs of complaints concerning Collection of Food and Green Waste shall be retained for a
minimum of twenty-four (24) months and shall be available to City at all times during this Agreement
upon twenty-four (24) hour notice.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
29
Franchisee shall log all complaints received orally or in writing and said log shall include the date and
time the complaint was received, name, address and telephone number of complainant to the extent
that such information is provided by complainant, description of complaint, employee recording
complaint and the action taken by Franchisee to respond to and remedy complaint. All complaints
received shall be responded to within twenty four (24) working hours of receipt.
All customer service records and logs kept by Franchisee shall be available at all times during this
Agreement to City upon twenty four (24) hour notice and at no cost to City. City shall, at any time
during regular Franchisee business hours, have access to Franchisee's customer service department
for purposes of monitoring the quality of customer service or researching customer complaints
assessing liquidated damages or other matters related to Franchisee's performance under this
Agreement.
6.4.3 Resolution of Customer Complaints
Franchisee shall notify customers of this complaint procedure at the time customers apply for or are
provided service, and subsequently, annually.
A customer dissatisfied with Franchisee's decision regarding a complaint may ask the City to review
the complaint. The City's Utilities Director shall determine if the customer's complaint is justified,
and if so, what remedy, if any shall be provided. The remedy under this Section shall be limited to a
rebate of customer charges related to the period of breach of any of the Terms of this Agreement. Any
resolution of these customer complaints shall not affect the City's rights to liquidated damages.
6.4.4 Government Liaison
Franchisee shall designate in writing a "Government Liaison" who shall be responsible for working
with the City Manager, Utilities Director and/or one of their designated representative(s) to resolve
customer complaints.
6.5 Education and Public Awareness
A. Program Objectives.
The City, or its designee, shall be responsible for designing, implementing, and conducting a public
education and outreach program. The City’s, or its designee’s, public education and outreach strategy
may focus on topics such as: improving Generator understanding of the benefits of and opportunities
for source reduction, Reuse, and Landfill Disposal reduction and supporting compliance with
Applicable Laws and regulations, including, but not limited to SB 1383 and SB 1383 regulations. The
cumulative intended effect of these efforts is to reduce the amount of each Generator’s Discarded
Materials and, ultimately, Disposal of Discarded Materials, and Franchisee agrees to support and not
undermine or interfere with such efforts.
B. Franchisee Cooperation and Support.
Franchisee acknowledges and agrees that education and public awareness are critical, key, and
essential elements of any efforts to achieve AB 939, SB 1383, and other Applicable Laws.
Accordingly, Franchisee agrees to cooperate and coordinate with the City or its designee to exploit
opportunities to expand public and Customer knowledge concerning needs and methods to reduce,
reuse, and Recycle Discarded Materials and to cooperate fully with City in this regard. Franchisee
acknowledges that they are part of a multi-party effort to operate and educate the public about the
regional integrated waste management system. Franchisee shall cooperate and coordinate with the
City or its designee on public education activities to minimize duplicative, inconsistent, or
inappropriately timed education campaigns. The Franchisee shall cooperate with and shall not
impede, interfere, or attempt to impede or interfere with the implementation, expansion, or operation
of public education and outreach programs or campaigns conducted by the City.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
30
C. Franchisee Education Activities
1. Supplemental Education Materials. Franchisee shall perform all necessary public
education activities related to the Organic Materials services as directed by the City.
This shall include, but not be limited to, annual mailings to all Customers explaining
the Organics Materials program, mailings prior to the start of services, flyers handed
out with Container delivery and follow-up mailings or handouts related to the
Collection of new materials. All public education materials shall be approved in
advance by the City. Franchisee shall obtain approval from the City on all Franchisee-
provided public education materials outside of the City’s education plan, including,
but not limited to: print, radio, television, or internet media before publication,
distribution, and/or release. The City shall have the right to request that Franchisee
include City identification and contact information on public education materials and
approval of such requests shall not be unreasonably withheld.
2. Bill Inserts. Franchisee shall maintain its own program of providing information
relevant to billing and Organic Materials services, issues and needs with its bills.
Franchisee shall also include in Customer bills additional information, including
information on any and all 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. Franchisee shall be responsible for printing single-
sheet, double sided bill inserts at least annually. Franchisee shall provide electronic
bill inserts (or separate email attachments) to Customers who are billed electronically,
and paper bill inserts to Customers who receive paper bills. Upon City request for
such inserts, Franchisee shall comply with such request during its next billing cycle
for the targeted Customer group. Franchisee shall perform this service with no
additional requirement for compensation.
3. Annual Notice of Requirements. If not already provided through another Discarded
Materials franchise agreement between the Parties, Franchisee shall, not less than
once per year, prepare and distribute to each Generator in the City a mailer that
includes information specified in 14 CCR Section 18985.1(a). Such mailer shall be
distributed by Franchisee to all Residential and Commercial mailing addresses
including individual Multi-Family Dwelling Units and tenants of multi-tenant
Commercial locations. Franchisee shall also make this notice available in an
electronic format through the Franchisee’s website.
4. Other Outreach. At the direction of the City, Franchisee shall participate in and
promote AB 939, AB 341, AB 1826, SB 1383 or other Applicable Law 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 Discarded Materials program.
6.6 Procurement of Recovered Organic Waste Products
A. Compost Give-Away Events and City Use. Franchisee shall make available for distribution an
annual total of at least one hundred cubic yards of Compost, or other mutually agreed upon amount, at
two (2) public events held within the City or for other City use. The location, date, and time of such
events shall be determined by the City, with adequate notice to the Franchisee, and may be held in
conjunction with other City-approved events. Franchisee shall deliver the Compost to the agreed-
upon event location at no cost to City. Franchisee shall provide at least one (1) attendant for at least
six (6) hours per event.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
31
B. In the event a public compost give-away event is held at the Designated Processing Facility, and
to the extent that such distribution qualifies for City's procurement credit under SB 1383, the City
shall be allocated its proportional share of such qualified procurement based on the inbound Tonnage
of Organic Materials collected by Franchisee from City divided by the total inbound Tonnage of the
Approved Organic Materials Processing Facility to which Franchisee delivered such City Tonnage
during the applicable measurement period.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
32
ARTICLE 7.
PAYMENTS TO CITY
7.1 Franchise Fee
In consideration of the exclusive franchise provided for in this Agreement, Franchisee shall pay the
City ten percent (10%) of its gross revenues for Organic Materials Collection services; provided,
however, that such Franchise Fee shall not exceed the costs of the City to deliver service to
properties. Such Franchise Fee shall be a “pass-through” expense for purposes of Rate review.
7.2 AB 939/SB 1383 Fee
Franchisee shall pay an AB 939/SB 1383 fee to the City each month. The City shall retain the sole
right to set priorities for the use of its AB 939/SB 1383 fee. In addition, if the City’s des ignee
implements an AB 939, SB 1383, or Solid Waste Management fee, Franchisee shall pay that fee
directly to the designee. Said fees shall be an allowable cost in Franchisee’s rate application. All AB
939/SB 1383 fees and Solid Waste Management fees paid to the City or its designee shall be
considered a pass through cost for purposes of rate setting, and, as such changes these fees shall be
adjusted accordingly subject to all applicable laws and regulations. The City or its designee shall have
the right to establish and adjust the AB 939, SB 1383, or Solid Waste Management fee at any time,
provided that any changes are considered a “pass-through” cost for the purposes of rate setting, at the
time of the change in the AB 939, SB 1383, or Solid Waste Management fee.
7.3 Business License Tax
Franchisee shall pay each annual business license tax.
7.4 Other Fees
The City shall reserve the right to set "Other" Fees, as it deems necessary. These expenses will
be determined and a fee designed to reimburse the City. Such fees shall be set annually by City
resolution and may be considered a “pass through” cost for purposes of rate setting.
7.5 Time and Method of Payment
If Franchisee is directed to pay an AB 939/SB 1383 Fee, 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 (1%) owing on any unpaid
balance for each following thirty (30) day period the fee remains unpaid. Late payment penalty
amounts shall not be included in any revenue requirement.
7.6 Adjustment of Fees
The City may adjust the amount of fees annually. Such adjustment shall be reflected in the rates that
the Franchisee is allowed to charge and collect from customers.
7.7 Review of Fee Payments
The City, or its agent, reserves the right to annually perform an independent review of fee payments,
to verify that fees are being paid in accordance with Agreement. The cost of such reviews will be an
allowable cost under the rate setting methodology.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
33
ARTICLE 8.
FRANCHISEE'S COMPENSATION AND RATES
8.1 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, profit and all other things necessary to perform all the
services required by this Agreement in the manner and at the times prescribed.
The Franchisee does not look to the City for payment of any sums under this Agreement.
Franchisee will perform the responsibilities and duties described in this Agreement in
consideration of the right to charge and collect from customers for services rendered at rates
fixed by the City from time-to-time and the right to sell compost and other beneficial
byproducts generated from the Food and Green Waste. The City shall have the right to
structure those rates as it deems appropriate so long as the revenues forecasted to b e 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”.
8.2 Initial Rates
Franchisee will submit required financial documentation for this service as part of an integrated solid
waste rate application. The rate application will comply with the guidelines set forth in the City's
"Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates". The
portion of the rate attributable to this service shall be identified as part of the Council rate-setting
process but will not be separated from the integrated rate.
8.3 Subsequent Rates
Franchisee may request rate revisions in future solid waste rate applications. The rate application
must comply with the City's "Rate Setting Process and Methodology Manual for Solid Waste
Management Rates".
8.4 Right to Perform Rate Reviews
City reserves the right to perform, or have a qualified third party perform, a detailed review of
Franchisee's expenses and revenues for the purposes of adjusting rates. The results of this detailed
rate review will be used to adjust rates, and the Franchisee's calculated revenue requirements will be
used the following year to adjust rates according to Section 8.3 Franchisee's Compensation for
subsequent Rate Years.
8.5 Extraordinary Adjustments
Franchisee or City may request an adjustment to rates at times other than that required in Section 8.3
for unusual changes in the cost of providing service under this Agreement. Such changes may
include, but are not limited to, changes in laws, ordinances, or regulations, and significant changes in
Franchisee's workload due to new residential or commercial development. However, when an
extraordinary adjustment is requested, such adjustment shall consider changes in all costs and
revenues from Franchisee's proposed revenue requirement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
34
For each such request, Franchisee shall prepare a schedule comparing the original proposed costs and
revenues by line item to the then current costs and revenues, including an estimates of the cost impact
of the change, using an operating ratio of 93%, applied to Franchisee's costs as calculated in
Franchisee's proposed revenue requirement. Such request shall be prepared in a form acceptable to
City with support for assumptions made by Franchisee in preparing the estimate, Franchisee and City
shall negotiate a mutually acceptable adjustment amount.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
35
ARTICLE 9.
RECORDKEEPING AND REPORTING
9.1 Records
9.1.1 General
A. 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.
B. The following records shall be maintained for the City in form and detail satisfactory to the
City, relating to:
1. Customer services and billing;
2. Weight of Organic Materials. Information is to be separated by kind of account
(Single-Family, Multi-Family, and Commercial);
3. Additional Green Waste Collection Service Requests:
4. Routes;
5. Facilities, equipment, and personnel used;
6. Facilities and equipment operations, maintenance, and repair;
7. Processing of Organic Materials;
8. Complaints; and
9. Missed pick-ups.
C. Franchisee shall maintain records of Transfer, Diversion, and Disposal of all Organic
Materials 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 Organic
Materials services to City, Franchisee shall provide all records of Diversion and Disposal of all
Organic Materials 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.
D. Records for other programs shall be tailored to specific needs. In general, they shall include:
1. Plans, tasks·, and milestones; and,
2. Accomplishments in terms such as dates, activities conducted, quantities of
products used, produced or distributed, and numbers of participants and
responses.
E. Unless otherwise required in this Agreement, Franchisee shall retain all records and data
required to be maintained by this Agreement for the Term of this Agreement plus five (5)
years after its expiration or earlier termination. Franchisee’s records shall be stored in one
central location, physical or electronic, that can be readily accessed by Franchisee. Upon
request, any such records shall be retrieved in a timely manner, not to exceed ten (10) Working
Days of a request by the City and made available to the City; including any record or
documentation that the City, requires to fulfill obligations under Applicable Law including,
but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 901, SB 1383, and other current or
future Federal, State, or local regulations, as amended.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
36
9.1.2 Financial Records
Financial records shall separate all records related to the services performed under this Agreement
from any and all other types of businesses and operations conducted by the Franchisee.
9.2 Reports
A. 9.2.1 Report Formats and Schedule
Records shall be maintained in forms and by methods that facilitate flexible use of data
contained in them to structure reports, as needed. Reports are intended to compile recorded
data into useful forms of information that can be used to, among other things:
1. Determine and set rates, and evaluate the financial efficacy of operations; and
2. Evaluate past and expected progress towards achieving goals and objectives; and
3. Determine needs for adjustment to programs; and
4. Evaluate Customer service and Complaints.
B. 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 information needed for the City’s compliance with Applicable Law,
including, but not limited to AB 939, AB 1826, AB 341, and SB 1383 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.
C. Franchisee shall submit all reports to the City, electronically to the Utilities Director, via e-
mail, using software acceptable to the City. The City reserves the right to require the
Franchisee to maintain records and submit the reports required herein through use of the City-
selected web-based software platform and/or Microsoft Excel spreadsheet, at the Franchisee’s
expense.
Monthly reports shall be submitted within 20 ten calendar days after the end of the report month.
9.2.2 Monthly Reports
The information listed shall be the minimum reported for each service:
A. Discarded Materials, Collected, Transferred, Diverted and Disposed of, by sector
(Commercial, industrial, Residential) of Waste Generator-Collected by Franchisee, in Tons,
by month.
B. Complaint summary, for month and cumulative for report year, as above, summarized by
nature of Complaints.
C. Narrative summary of problems encountered and actions taken with recommendations for the
City, as appropriate.
D. All requirements specified in “Exhibit A.”
9.2.3 Annual Report
The Annual Report is to be essentially in the form and content of the monthly reports. Annual reports
shall include at a minimum, all data and information described in Exhibit A, unless otherwise
specified under this Agreement. In addition, Franchisee's annual audited financial reports/statements,
with the operations related to the City services segregated, shall be included. The annual report shall
also include a complete inventory of equipment used to provide all services.
Financial statements shall include a supplemental schedule combining Franchisee's results of
operations, separating the specific revenues and expenses, including detailed information with respect
to general overhead claimed by the Franchisee, in connection with the operations provided for in this
Agreement from others included in such financial statements. The financial statements, supplemental
schedule, management letter and footnotes shall be prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and audited, in accordance with Generally Accepted Auditing
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
37
Standards (GAAS) by a certified public accountant (CPA) licensed (in good standing) to practice
public accounting in the State of California as determined by the State of California Department of
Consumer Affairs Board of Accountancy. The CPA opinion on Franchisee's annual financial
statements and supplemental schedule shall be unqualified, except as to uncertainties for which the
ultimate outcome cannot be determined by the date of the CPA's opinion.
9.2.4 Additional Reports.
At the City’s option, the City may require that Franchisee provide the City with the aggregate tonnage
data related to AB 901 reporting that the City needs for its SB 1383 reporting, to the extent available
to Franchisee within five (5) Business Days of City request.
9.3 Right to Inspect Records
City shall have the right to inspect or review the payroll tax reports, specific documents or records
required expressly or by inference pursuant to this Agreement, or any other similar records or reports
of Franchisee that City shall deem, in its sole discretion, necessary to evaluate annual reports,
compensation applications provided for in this Agreement and Franchisee's performance provided for
in this Agreement. The City retains the right to have an independent third party or agent of the City's
choosing, such as a CPA, participate in the records inspection. The cost of such inspection or review
will be an allowable cost under the rate setting methodology.
9.3.1 Right to Review Basis for Landfill Tipping Fee Increases
The Franchisee shall provide to the City a copy of Cold Canyon Landfill's and/or the designated Food
and Green Waste processing facility'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 and/or the designated
processing facility.
Additionally, the Franchisee shall notify the City of the action taken by the Board of Supervisors and
/or the designated processing facility regarding said request within five (5) days following said action,
including letter to the Board of Supervisors and related executed resolution and/or appropriate
documentation from the designated processing facility. 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 arc findings pursuant to Section 12.5.
9.4 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 City and its designated agents to accomplish 1) studies and data
collection and prepare reports as needed to determine weights and volumes of Solid Waste generated,
Diverted, Disposed, transformed, or otherwise handled/processed to satisfy AB 939 requirements; and
2) other efforts the City may be required to conduct for compliance with Applicable Law, such as SB
1383.
9.5 Performance Hearing
The City maintains the right to hold a public hearing at any time, not more than once each year, al
which the Franchisee shall be present and shall participate, to review its services and performance.
The purpose of the hearing is to provide for a discussion and review of technological, economic, and
regulatory changes in order to achieve a continuing, advanced Solid Waste management system; and
to ensure customer service quality and any other areas that may be addressed regarding services are
being provided with adequate quality, efficiency and economy.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
38
Sixty (60) days after receiving notice from City of a Performance Hearing, Franchisee shall, at a
minimum, submit a report to City indicating (1) changes recommended and/or new services to
improve City's ability to meet the goals of AB 939 and Ab 1826 to contain costs and minimize
impacts on rates; and (2) any specific plans for provision of changed or new services by Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
39
ARTICLE 10.
INDEMNIFICATION, INSURANCE AND BOND
10.1 Indemnification
Franchisee shall indemnify and hold harmless City, its officers, Directors, employees, and agents
from and against any and all loss, liability, penalty, forfeiture, claim, demand, action proceeding or
suit of any and every kind and description (including, but not limited to, injury to and death of any
Person and damage to property, or for contribution or indemnity claimed by third parties) to the
extent arising or resulting from and in any way connected with (1) the negligence or willful
misconduct of Franchisee, its officers, employees agents and/or sub Contractors in performing
services under this Agreement; (2) the failure of Franchisee, its officers, employees, agents and/or
subcontractors to comply in all respects with the provisions of this Agreement, applicable laws
(including, without limitation, the Environmental Laws) and regulations, and/or applicable permits
and licenses; (3) the acts of Franchisee, its officers, employees, agents and/or subcontractors in
performing services under this Agreement for which strict liability is imposed by law (including,
without limitation, the Environmental Laws). Franchisee further agrees to and shall, upon demand of
City, at Franchisee's sole cost and expense, defend (with attorneys acceptable to City) the City, its
officers, directors, employees, and agents against any claims, actions, suits or other proceedings,
whether judicial, quasi-judicial or administrative in nature, arising or resulting from any events
described in the immediately preceding paragraph to the extent arising from or related to alleged or
actual violations of Proposition 218 and/or its implementing legislation.
Franchisee's duty to indemnify and defend shall survive the expiration or earlier termination of this
Agreement.
10.2 Landfill Diversion
The Franchisee acknowledges that the City has adopted a SRRE which selects Food and Green Waste
Collection and Composting programs as a means of diverting an estimated 6,796 tons in 1995 and
8,248 tons per year by the year 2000. It is therefore of foremost importance that the Food and Green
Waste and wood debris collected under this Agreement be converted into a functional and marketable
product in order that the materials may be diverted from landfill disposal in compliance with the
City's SRRE, and AB 939. The Franchisee shall therefore use commercially reasonable efforts ensure
that the processing method used shall, at all times, meet the intent of the Cit y's SRRE and AB 939.
Should the Franchisee find it necessary to utilize another method of processing in order to meet the
intent of the SRRE and AB 939, the City shall be given an opportunity to make its own determination
as to the suitability and cost- effectiveness of such process and shall approve such process in writing.
The City shall have the right to terminate this Agreement upon the giving of a six (6) month prior
written notice to Franchisee should it be determined that the Food and Green Waste program being
implemented and/or proposed under this Agreement is ineffective in meeting the City's diversion
goals and objectives. Upon termination, the Franchisee shall be entitled only to revenues less
expenses incurred to that date. All revenues received thereafter shall be the property of the City unless
otherwise agreed.
10.3 AB 939/SB1383 Indemnification
Franchisee agrees to indemnify and hold harmless City, its officers, Directors, employees, and agents
from and against all fines and/or penalties imposed by the California Integrated Waste Management
Board in the event the source reduction and recycling goals or any other requirements of AB 939 or
SB 1383 are not met by City with respect to the waste stream Collected under this Agreement but
only to the extent such failure is due to the failure of Franchisee to meet its obligations under this
Agreement or for delays in providing information that prevents City from submitting reports required
by AB 939 or SB 1383 in a timely manner.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
40
10.4 Insurance
A. Minimum Limits of Insurance. Franchisee shall maintain limits no less than:
1. Comprehensive General Liability: One Million Dollars ($1,000,000) combined
single limit per occurrence for bodily injury, Personal injury and property
damage.
2. Automobile Liability: One Million Dollars ($1,000,000) combined single limit
per accident for bodily injury and property damage.
3. Workers' Compensation and Employers Liability: Workers' compensation limits
as required by the Labor Code of the State of California and Employers Liability
limits of
4. $1,000,000 per accident.
B. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must
be declared to and approved by the City. At the option of the City, either: the insurer shall
reduce or eliminate such deductibles or self-insured retentions as respects the City, its
officials, directors and employees; or Franchisee shall procure a bond guaranteeing payment
of losses and related investigations, claim administration and defense expenses.
C. Other Insurance Provisions. The policies are to contain, or be endorsed to contain, the
following provisions:
1. General Liability and Automobile Liability Coverages
a) The City, its officials, employees, and directors are to be covered as insured as
respects: liability arising out of activities performed by or on behalf of
Franchisee; products and completed operations of Franchisee; Premises owned,
leased or used by Franchisee; or automobiles owned, leased, hired or borrowed
by Franchisee. The coverage shall contain no special limitations on the scope of
protection afforded to the City, its officials, employees or volunteers.
b) Franchisee's insurance coverage shall be primary insurance as respects City, its
officials, directors, employees and volunteers. Any insurance or self-insurance
maintained by City, its officials, or employees shall be excess of Franchisee's
insurance and shall not contribute with it.
c) Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officials, or employees. Coverage shall state that
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.
2. Workers' Compensation and Employers Liability Coverage - The insurer shall
agree to waive all rights of subrogation against City, its officials, and employees
for losses arising from work performed by Franchisee for City.
3. All Coverages - Each insurance policy required by this clause shall be endorsed
to state that coverage shall not be suspended, voided, canceled by either party,
reduced in coverage or limits except after thirty (30) days prior written notice by
certified mail, return receipt requested, has been given to City.
D. Acceptability of Insurers. The insurance policies required by this Section shall be issued by
an insurance Franchisee or companies admitted to do business in the State of California
subject to the jurisdiction of the California Insurance Commissioner and with a rating in the
most recent edition of Best's Insurance Reports of size category VII or larger and a rating
classification of A or better.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
41
E. Verification of Coverage. Franchisee shall furnish City with certificates of insurance and
with original endorsements affecting coverage required by this clause. The certificates and
endorsements for each insurance policy are to be signed by a Person authorized by that
insurer to bind coverage on its behalf. The certificates and endorsements are to be on forms
provided by or acceptable to City and are to be received and approved by City before work
commences. City reserves the right to require complete, certified copies of all required
insurance policies, at any time.
10.5 Faithful Performance Bond
Simultaneously with the execution of this Agreement, Franchisee shall file with City surety bond,
payable to City, securing Franchisee's faithful performance of its obligations under this Agreement.
The bond shall be in the amount of 125% of the total annual contract price guaranteeing the faithful
performance of the agreement, including any reasonable attorney's fees or other collection costs.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
42
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 Food and Green Waste materials which it is required by this Agreement to
Collect and process, at the time and in the manner provided in this Agreement, for a period of more
than seven (7) calendar days, and if, as a result thereof, Food and Green Waste should accumulate in
the City to such an extent, in such a manner, or for such a time that the City Manager 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 Manager, (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 Food and/or Green 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 Food and Green
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:
• It will take direction from City to affect the transfer of possession of property to City for
City's use.
• It will, if City so requests, keep in good repair and condition all of such property, provide all
motor vehicles with fuel, oil and other service, and provide such other service as may be
necessary to maintain said property in operational condition.
• City may immediately engage all or any personnel necessary or useful for the Collection,
transpot1ation and processing Green 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 arc necessary or useful for Green 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 (I) does not constitute a taking of private property for which compensation must
be paid; (2) will not create any liability on the part of City to Franchisee; and (3) does not exempt
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
43
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 or 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 Food and Green Waste Services which may include
the grant of a Contract to another company. The same notice requirements of Section 11.1 are
applicable.
11.3 Billing and Compensation to City During City's Possession
During such time that city is providing Green Waste services, as above provided, 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 Food and Green
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
Food and Green 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
44
ARTICLE 12.
DEFAULT, REMEDIES AND LIQUIDATED DAMAGES
12.1 Events of Default
All provisions of this Agreement to be performed by Franchisee arc 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 Food and Green 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 there under 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
45
I. Attachment. There is a seizure of attachment at: or levy on, the operating equipment of
Franchisee, including without limits its equipment, maintenance or office facilities, or
any part thereof.
J. Suspension or Termination of Service. There is any termination or suspension of the
transaction of business by Franchisee, including without limit, due to labor unrest
including strike, work stoppage or slowdown, sickout, picketing, or other concerted job
action lasting more than two (2) days.
Upon default by the Franchisee, the City Manager shall provide written notice to
Franchisee of the violation. The City Manager 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 IO 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 (IO)
days notice if the public health or safety is threatened, or otherwise a thirty (30) days notice, but
without the need for any hearing, suit or legal action. This right of termination is in addition to any
other rights of City upon a failure of Franchisee to perform its obligations under this Agreement.
City's right to terminate this Agreement and to take possession of Franchisee's equipment and
facilities are not exclusive, and City's termination of this Agreement shall not constitute an election of
remedies. Instead, they shall be in addition to any and all other legal and equitable rights and
remedies which City may have.
By virtue of the nature of this Agreement, the urgency of timely, continuous and high-quality service,
the lead time required to effect alternative service, and the rights granted by City to Franchisee, the
remedy of damages for a breach hereof by Franchisee is inadequate and City shall be entitled in
injunctive relief.
12.3 Liquidated Damages
A. General. 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: (i) substantial damage results to members of the public who are
denied services or denied quality or reliable service; (ii) such breaches cause inconvenience,
anxiety, frustration, and deprivation of the benefits of the Agreement to individual members of
the general public for provided services pursuant to this Agreement , in subjective ways and in
varying degrees of intensity which are incapable of measurement in precise monetary terms; (iii)
that exclusive 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, (iv) 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 City whole for past breaches.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
46
B. Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The
parties acknowledge that consistent, reliable Organic Materials 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 Agreement to it. The Parties further recognize that
if Franchisee fails to achieve the performance standards defined in this Section, comply with
Complaint resolution criteria, or fails to submit required documents in a timely manner, City and
its residents will suffer damages and that it is and will be impractical and extremely difficult to
ascertain and determine the exact amount of damages which City will suffer. Therefore, without
prejudice to City's right to treat such non-performance as an event of default under this Article 12,
the parties agree that the following Liquidated Damage amounts represent a reasonable estimate
of the amount of such damages considering all of the circumstances existing on the date of this
Agreement, including the relationship of the sums to the range of harm to City that reasonably
could be anticipated and the anticipation that proof of actual damages would be costly or
inconvenient. Recognizing the importance of resolving any failure to meet the service
performance standard, the City shall contact Contractor within two (2) business days of any
failing reported directly to the City.
The City may monitor the Franchisee’s performance under the Agreement in each of the
performance areas listed below. In the event that the City determines that Franchisee has failed to
meet the performance standard established for any of the areas identified below, the City may
assess Liquidated Damages pursuant to this Section of the Agreement. Franchisee agrees to pay
(as Liquidated Damages and not as a penalty) the amounts set forth below:
Event of Non-Performance Liquidated Damage
Collection Reliability and Quality
1 Failure to Implement three-Container System. For each
occurrence of failing to provide Customers with Organic
Materials Containers as part of the three-Container system
required by and compliant with the City’s Municipal Code
upon request of the City or its designee (excluding Generators
and Customers that demonstrate compliance with Recycling
and Organic Waste Self-Hauling requirements pursuant to the
Municipal Code and 14 CCR Division 7, Article 12, Article 7
and/or pursuant to Section 5.10 of this agreement) unless
customer refuses to accept the Organic Materials Container
from Franchisee, and Franchisee has provided this information
to the City or its designee for further review within two (2)
business days of customer refusal.
$150 / Generator or Customer /
occurrence / Day until compliance
achieved
2 For each failure over five (5) annually to commence service to
a new Customer account within seven (7) days after order:
$150.00
3 For each failure over ten (IO) annually to Collect Food and/or
Green Waste, which has been properly set out for Collection,
from an established Customer account on the scheduled
Collection day
$150.00
4 For each failure to Collect Food and/or Green Waste which
have been properly set out and accessible for Collection, from
the same Customer on two (2) consecutive scheduled pickup
days:
$150.00
5 For each occurrence over five (5) annually of damage to
private property:
$250.00
6 For each occurrence of discourteous behavior: $250.00
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
47
Event of Non-Performance Liquidated Damage
7 For each failure over ten (10) annually to clean up Food
and/or Green Waste spilled by Franchisee from Containers
$150.00
8 For each occurrence over five (5) annually of Collecting Food
and/ or Green Waste during unauthorized hours:
$250.00
9 For each failure to respond to a Customer Complaint within
twenty-four (24) working hours:
$100.00
10 Failure to Comply with Container Labeling and Colors.
For each occurrence of Franchisee’s failure to comply with
Container labeling and color requirements pursuant to Section
5.7 of this Agreement.
$150 / Container / occurrence
11 Use of Unauthorized Facilities. For each individual
occurrence of delivering Discarded Materials to a Facility
other than an Approved Facility(ies) for each Discarded
Material type under this Agreement.
$150 / Ton / occurrence
Reports and Timeliness of Submissions to the City
13 REPORTS. Any report shall be considered late until such time
as a correct and complete report is received by City. For each
calendar day a report is late, the daily assessment shall be:
Monthly Reports: For each infraction $100 per day
Annual Reports: For each infraction $500 per day
14 Failure to Allow Access to Records. For each failure to
provide access to records in compliance with and in the
timeframe specified in this Agreement.
$120 / day
Other
15 Failure to Perform Public Education and Outreach. For
each failure to perform any individual education and outreach
activity as required and in the timeframe specified by this
Agreement.
$180 / occurrence
16 Failure to Issue Contamination Notices. For each failure
of Franchisee Collection personnel to issue contamination
warning notices and maintain documentation of issuance as
required by Section 5.4 of this Agreement.
$100 / Franchisee Route / day
17 Improper Fee Issuance. For each fee that is issued to a
Generator without prior authorization from City under this
agreement.
$100 /Customer/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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
48
If a meeting is requested, it shall be held by the City Manager or their designee. Franchisee may
present evidence in writing and through testimony of its employees and others relevant to the
incident(s)/non performance. The City Manager or designee will provide Franchisee with a written
explanation of their determination on each incident(s)/non-performance prior to authorizing the
assessment of Liquidated Damages. The decision of the City Manager or designee shall be final.
Franchisee
12.4 Excuse from Performance
The parties shall be excused from performing their respective obligations hereunder in the event they
are prevented from so performing by reason of floods, earthquakes, other "acts of God", war, civil
insurrection, riots, acts of any government (including judicial action), and other similar catastrophic
events which are beyond the control of and not the fault of the party claiming excuse from
performance hereunder. Labor unrest, including but not limited to strike, work stoppage or slowdown,
sick-out, picketing, or other concerted job action conducted by 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 term inate 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.
12.5 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, and 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.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
49
ARTICLE 13.
OTHER AGREEMENTS OF THE PARTIES
13.1 Relationship of Parties
The parties intend that Franchisee shall perform the services required by this Agreement as an
independent contractor engaged by City and not as an officer or employee of City nor as a partner of
or joint venture with City. No employee or agent or Franchisee shall be or shall be deemed to be an
employee or agent of City. Except as expressly provided herein, Franchisee shall have the exclusive
control over the manner and means of conducting the Green Waste services performed under this
Agreement, and all Persons performing such services.
Franchisee shall be solely responsible for the acts and omissions of its officers, employees,
subcontractors and agents. Neither Contractor nor its officers, employees, subcontractors and agents
shall obtain any rights to retirement benefits, workers compensation benefits, or any other benefits
which accrue to City employees by virtue of their employment with City.
13.2 Compliance with law
In providing the services required under this Agreement, Franchisee shall at all times, at its sole cost,
comply with all applicable laws of the United States, the State of California, City, and with all
applicable regulations promulgated by federal, state, regional or local administrative and regulatory
agencies, now in force and as they may be enacted, issued or amended during the Term.
13.3 Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the
State of California.
13.4 Jurisdiction
Any lawsuits between the parties arising out of this Agreement shall be brought and concluded in the
courts of the State of California, County of San Luis Obispo, which shall have exclusive jurisdiction
over such lawsuits.
13.5 Assignment
Except as may be provided for in Article 11, (City's Right to Perform Service), neither party shall
assign its rights, nor delegate, subcontract or otherwise transfer its obligations under this Agreement
to any other Person without the prior written consent of the other party. Any such assignment made
without the consent of the other party shall be void and the attempted assignment shall constitute a
material breach of this Agreement. The Franchisee shall consent to any assignment to a joint powers
authority, or any similar public entity assignee of the City.
For purposes of this Section when used in reference to Franchisee, "assignment" shall include, but not
be limited to (1) a sale, exchange or other transfer of at least fifty-one percent (51%) all of Franchisee's
assets dedicated to service under this Agreement to a third party; (2) a sale, exchange or other transfer
of outstanding common stock of Franchisee to a third party provided said sale, exchange or transfer
may result in a change of control of Franchisee; (3) any dissolution, reorganization, consolidation,
merger, re-capitalization, stock issuance or re- issuance, voting trust, pooling agreement, escrow
arrangement, liquidation or other transaction to which results in a change of ownership or control of
Franchisee; (4) any assignment by operation of law, including insolvency or bankruptcy, making
assignment for the benefit of creditors, writ of attachment for an execution being levied against this
Agreement, appointment of a receiver taking possession of Franchisee's property, or transfer occurring
in the event of a probate proceeding; and (5) any combination of the foregoing (whether or not in
related or contemporaneous transactions) which has the effect of any such transfer or change of
ownership, or change of control of Franchisee.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
50
Franchisee acknowledges that this Agreement involves rendering a vital service to City's residents,
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 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
investigation costs necessary to investigate the suitability of any proposed assignee, and to
review and finalize any documentation required as a condition for approving any such
assignment;
B. 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 Green 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 has not suffered any significant citations or other censure from
any federal, state or local agency having jurisdiction over its Solid Waste management
operations due to any significant failure to comply with state, federal or local Environmental
Laws and that the assignee has provided City with a complete list of such citations and
censures; 3) that the proposed assignee has at all times conducted its operations in an
environmentally safe and conscientious fashion;4) that the proposed assignee conducts its
Green Waste management practices in accordance with sound waste management practices in
full compliance with all federal, state and local laws regulating the collection, transportation,
processing, marketing and disposal of Solid Waste including Hazardous Wastes; and, 5) of
any other information required by City to ensure the proposed assignee can fulfill the Terms
of this Agreement in a timely safe and effective manner.
Under no circumstances shall the City be obliged to consider any proposed assignment by
City if Franchisee is in default at any time during the period of consideration.
13.6 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 lo review and finalize any documentation required as a
condition for approving any such subcontracting agreement.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
51
13.7 Binding on Assigns
The provisions of this Agreement shall inure to the benefit to and be binding on the permitted assigns
of the parties.
13.8 Transition to Next Franchisee
If the transition of services to another Franchisee occurs through expiration of term, default and
termination, or otherwise, Franchisee will cooperate with 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 or Containers to the next Franchisee.
Depending on Franchisee’s circumstances at the point of transition, Franchisee at its option may enter
into negotiations with the next Franchisee to sell (in part or all) Collection vehicles and/or containers.
13.9 Parties in Interest
Nothing in the Agreement, whether express or implied, is intended to confer any rights on any
persons other than the parties to it and their representatives, successors and permitted assigns.
13.10 Waiver
The waiver by either party of any breach or violation of any provisions of this Agreement shall not be
deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach
of violation of the same or any other provision. The subsequent acceptance by either party of any
monies which become due hereunder shall not be deemed to be a waiver of any pre-existing or
concurrent breach or violation by the other party of any provision of this Agreement.
13.11 Franchisee's Investigation
Franchisee has relied on its own investigations, and not on any representations of the City or its
agents of the conditions and circumstances surrounding the Agreement and the work to be performed
by it.
13.12 Notice
All notices, demands, requests, proposals, approvals, consents and other communications which this
Agreement requires, authorizes or contemplates shall be in writing and shall either be personally
delivered to a representative of the parties at the address below, or by email as specified below, or be
deposited in the United States mail, first class postage prepaid, addressed as follows:
If to City: Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
ut_services@slocity.org and cityclerk@slocity.org
If to Franchisee: District Manager
San Luis Garbage Company
4388 Old Santa Fe Springs Road
San Luis Obispo, CA 93401
The address to which communications may be delivered may be changed from time to time by a
notice given in accordance with this Section. The notice, if mailed, is deemed served three
(3) days after the mailing.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
52
13.13 Representatives of the Parties
References in this Agreement to the "City" shall mean the City Council and all actions to be taken by
City shall be taken by the City Council except as provided below. The City Council may delegate, in
writing, authority to the City Manager, Utilities Director, and/or to the City employees and may
permit such employees, in turn, to delegate in writing some or all of such authority to subordinate
employees. 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 City in
writing of such designation and of any limitations upon their authority to bind Franchisee. 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 them by Franchisee as communicated to City.
13.14 City Free to Negotiate with Third Parties
City may investigate all options for the Collection and processing of Food and Green Waste after the
expiration of the Term. Without limiting generality of the foregoing, City may solicit proposals from
Franchisee and from third parties for the provision of Food and Green Waste services, and any
combination thereof, and may negotiate and execute Agreements for such services which will take
effect upon the expiration or earlier termination under Section 12.1 (Events of Default) of this
Agreement.
13.15 Compliance with City Code
Franchisee shall comply with those provisions of the City code which arc applicable, and with any
and all amendments to such applicable provisions during the Term of this Agreement.
13.16 Privacy
Franchisee shall strictly observe and protect the rights of privacy of customers. Information
identifying individual customers or the composition or contents of a customer's waste stream shall not
be revealed to any person, governmental unit, private agency, or contractor, unless upon the authority
of a court of law, by statute, or upon valid authorization of the customer. This provision shall not be
construed to preclude Franchisee from preparing, participating in, or assisting in the preparation of
waste characterization studies or waste stream analyses which may be required by AB 939.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
53
ARTICLE 14.
MISCELLANEOUS AGREEMENTS
14.1 Entire Agreement
This Agreement, including the exhibits, represents the full and entire Agreement between the parties
with respect to the matters covered herein.
14.2 Section Headings
The article headings and section headings in this Agreement are for convenience of reference only
and arc not intended to be used in the construction of this Agreement nor to alter or affect any of its
provisions.
14.3 References to laws and Other Agreements
All references in this Agreement to laws shall be understood to include such laws as they may be
subsequently amended or recodified, unless otherwise specifically provided. This Agreement
supersedes any and all Agreements for Food and Green Waste Collection, processing and/or
marketing heretofore entered into by the parties and the City.
14.4 Interpretation
This Agreement, including the exhibits attached hereto, shall be interpreted and construed reasonably
and neither for nor against either party, regardless of the degree to which either party participated in
its drafting.
14.5 Agreement
This Agreement may not be modified or amended in any respect except by a writing signed by the
parties.
14.6 Severability
If any non-material provision of this Agreement is for any reason deemed to be invalid and
unenforceable, the invalidity or unenforceability of such provision shall not affect any of the
remaining provisions of this Agreement which shall be enforced as if such invalid or unenforceable
provision had not been contained herein.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
54
EXHIBIT A
RECORD KEEPING AND REPORTING
A.1 General
Franchisee shall maintain such accounting, statistical, and other records related to its performance under
this Agreement as shall be necessary to develop the reports required by this Agreement or City Municipal
Code. Franchisee agrees to conduct data collection, information and record keeping, and reporting
activities needed to comply with Applicable Laws and regulations and to meet the reporting and
Discarded Materials Collection, Processing, and Disposal program management needs of the City. At the
written direction or approval of City, the records and reports to be maintained and provided by Franchisee
in accordance with this Exhibit and other Articles of the Agreement may be adjusted in number, format,
and frequency, if required to comply with State or Federal regulatory or reporting requirements.
Information from Franchisee’s records and reports can be used to, among other things:
Determine and set Rates and evaluate the financial efficacy of operations;
Evaluate past and expected progress toward achieving the Franchisee’s Landfill Disposal reduction or
Diversion goals and objectives;
Provide concise and comprehensive program information and metrics for use in fulfilling reporting
requirements under Applicable Law;
Determine needs for adjustment to programs;
Evaluate Customer service and Complaints; and,
Determine Customer compliance with AB 341, AB 1826, and SB 1383 statutes and corresponding
regulations; and, any subsequent State-mandated landfill Disposal reduction, Recycling, recovery, or
Diversion statutes, regulations, or other requirements.
A.2 Record Keeping
A. General. Franchisee shall maintain Customer contact data, Customer service, accounting,
statistical, operational, and other records related to its performance as shall be necessary to
provide reporting required by this Agreement and Applicable Law and to demonstrate
compliance with this Agreement and Applicable Law (such as, but not limited to, AB 939,
AB 341, AB 1826, AB 876, AB 901, and SB 1383 statutes and corresponding regulations).
Franchisee shall maintain adequate records, and corresponding documentation, of information
required by this Exhibit, such that the Franchisee is able to produce accurate monthly and
annual reports and is able to provide records to verify such reports. Franchisee will make
these records available and provide to the City any record or documentation necessary for the
City to fulfill obligations under Applicable Law including, but not limited to, AB 939, AB
341, AB 1826, AB 876, AB 901, and SB 1383 statutes and corresponding regulations; and,
other current or future Federal, State, or local statutes and regulations, as amended. Upon
request by the City, Franchisee shall provide access to Franchisee’s requested records in a
timely manner, not to exceed ten (10) Business Days from the time of City’s request to
Franchisee.
B. Record Retention and Security. Records shall be maintained in forms and by methods that
facilitate flexible use of data contained in them to structure reports, as needed, pursuant to
this Exhibit. Franchisee’s records shall be stored in one central location, physical or
electronic, that can be readily accessed by Franchisee. City reserves the right to require the
Franchisee to maintain the records required herein through the use of a City-selected web-
based software platform, at Franchisee’s expense. Unless otherwise required in this Exhibit,
Franchisee shall retain all records and data required to be maintained by this Agreement for
the Term of this Agreement plus five (5) years after its expiration or earlier termination.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
55
Records and data shall be in chronological and organized form and readily and easily
interpreted. Franchisee shall maintain adequate record security to preserve records from
events that can be reasonably anticipated such as a fire, theft, and an earthquake.
Electronically-maintained data and records shall be protected and backed-up. To the extent
that Franchisee utilizes its computer systems to comply with record keeping and reporting
requirements under this Agreement, Franchisee shall, on a monthly basis, save all system-
generated reports supporting those record keeping and reporting requirements in a static
format in order to provide an audit trail for all data required.
C. Compilation of Information for State Law Purposes. Franchisee shall maintain accurate
records for its operation, including, but not limited to, Discarded Materials quantities
Collected and quantities Transported to or Transferred to each Approved Facility, listed
separately by material type, Customer type, and Facility. Records shall be maintained in such
form by methods that facilitate the use of data for the production of reports as needed.
Franchisee will make these records available and provide to the City, any record or
documentation necessary for the City to fulfill obligations under Applicable Law including,
but not limited to, AB 939, AB 341, AB 1826, AB 876, AB 901, AB 1595, and SB 1383
statutes and corresponding regulations; and, other current or future local, Federal or State
statutes and regulations, as amended.
A.3 Reporting
A.3.1 General
A. General Purpose. Reports are intended to compile recorded data into useful forms of
information that can be used by the City. All reports shall be adequate to meet City’s current
and future reporting requirements to CalRecycle, including AB 939, AB 341, AB 1826, and
SB 1383 statutes and corresponding regulations, or any other State or Federal agency statutes
and regulations throughout the Term of this Agreement.
B. Failure to Report. Failure of Franchisee to comply with the reporting requirements as set
forth in this Section may result in an assessment of Liquidated Damages in accordance with
the Liquidated Damages provision in Section 12.3 of this Agreement. Franchisee’s repeated
failure to submit reports, and/or failure to submit reports on time, may be deemed an event of
default and may result in the termination of the Agreement at the discretion of the City
Manager, in accordance with Article 12 of this Agreement.
C. Report Format. Franchisee shall submit all reports to the City electronically via e-mail using
software acceptable to the City. The City reserves the right to require the Franchisee to
maintain records and submit the reports required herein through use of the City-selected web-
based software platform and/or Microsoft Excel spreadsheet, at the Franchisee’s expense.
D. Submittal Process. Reports shall be submitted to the Utilities Director per Section 9.2 of the
Organic Materials Services Agreement. Reports shall be submitted electronically via email or
uploaded to a document sharing platform agreed upon by the Parties. City reserves the right
to require the Franchisee to maintain records and submit the reports required herein through
use of a City-selected web-based software platform, at the Franchisee’s expense.
Monthly reports shall be submitted within twenty (20) calendar days after the end of the
reporting month; and annual reports shall be submitted before June 30th, for the previous
reporting year.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
56
A.3.2 Monthly Reports
Monthly reports shall be submitted by Franchisee to City and shall include the following information
pertaining to the most recently completed calendar month. In addition, each monthly report shall
include a year-to-date summary page that includes the data submitted from the monthly report(s)
submitted in the calendar year prior to the submittal of the current monthly report. Franchisee shall
report the information included in the following subsections.
A. Tonnage Report
1. Franchisee shall report the total quantities in Tons of Discarded Materials Collected,
Transferred, Processed, and Disposed by the Franchisee, all of which shall be based
on actual certified scale weights for each load, if available, or similarly accurate
methodology pursuant to weighing protocol. Tonnage shall be reported separately by:
a. Material type, which shall include, at a minimum, separate reporting of Source
Separated Organic Materials and any other type of Discarded Material separately
Collected by Franchisee;
b. Customer/sector type (Single-Family, Multi-family, Commercial, Roll-off, C&D); and,
c. Approved Facility and Facility type.
2. Report Residue level and Tonnage for all Discarded Materials Processed, listed
separately by material type Collected and Approved Facility(ies) used.
3. Source Separated Recyclable Materials Tonnage Marketed, by commodity, and
including average commodity value for each, and Processing Residue Tonnage
Disposed, listed separately by material type Collected and Approved Facility(ies)
used.
4. Documentation of all Discarded Materials exported out of State, as provided in 14
CCR Sections 18800 through 18813.
B. Collection and Subscription Report
1. Number of Containers at each Service Level by Customer Type and program,
including:
a. A summary of the total gallons of Cart service, cubic yards of Bin service, and pulls;
and cubic yards or Tons of Drop Box and Compactor service by Customer Type.
b. Calculation of the average volume of service received per: Single-Family Dwelling
Unit (separately identifying Dwelling Units in a duplex, triplex, or fourplex); Multi-
Family Dwelling Unit; and Commercial Customer.
2. A summary of Customer subscription data, including the number of accounts; the
number of Customers subscribing to each Cart, Bin, and Roll-Off Service Level listed
separately for Single-Family, Multi-Family, and Commercial and separately for each
type of Discarded Material; the number and type of waivers (i.e., de minimis or
physical space constraint) active for Customers for each type of Discarded material;
and the number of Bulky Items Collections performed.
C. Contamination Monitoring Report
The Franchisee shall submit the following information regarding Franchisee conducted
contamination monitoring and issuance of Prohibited Container Contaminant Notices
conducted pursuant to Section 5.4 of this Agreement:
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
57
1. Description of the Franchisee’s Process for determining the level of contamination;
2. Summary report of Customer Notices issued, which for each notice shall include the
date of issuance, Customer name, and service address.
3. A record of each inspection and contamination incident, which shall include, at a
minimum:
a. Name of the Customer
b. Address of the Customer
c. The date the contaminated Container was observed
d. The staff who conducted the inspection
e. The total number of violations found and a description of what action was taken for
each
f. Copies of all notices issued to Generators with Prohibited Container Contaminants
g. Any photographic documentation or supporting evidence.
Any other information reasonably requested by the City or specified in contamination
monitoring provisions of this Agreement.
D. Customer Service Report
1. Franchisee shall maintain a record of all SB 1383 non-compliance Complaints as
defined in 14 CCR Section 18995.3 and responses and submit the following
information:
a. Total number of SB 1383 non-compliance Complaints received and total number of
SB 1383 non-compliance Complaints investigated
b. Copies of documentation recorded for each SB 1383 non-compliance Complaint
received, which shall at a minimum include the following information:
i. The SB 1383 non-compliance Complaint as received;
ii. The name and contact information of the complainant, if the SB 1383 non-
compliance Complaint is not submitted anonymously;
iii. The identity of the alleged violator, if known;
iv. A description of the alleged violation; including location(s) and all other relevant
facts known to the complainant;
v. Any relevant photographic or documentary evidence submitted to support the
allegations in the SB 1383 non-compliance Complaint; and,
vi. The identity of any witnesses, if known.
c. Copies of all SB 1383 non-compliance Complaint reports submitted by Franchisee
to the City.
d. Copies of all investigation reports submitted to the City which shall include at a
minimum:
i. The SB 1383 non-compliance Complaint as received;
ii. The date the Franchisee investigated the SB 1383 non-compliance Complaint;
iii. Documentation of the findings of the investigation;
iv. Any photographic or other evidence collected during the investigation; and,
v. Franchisee’s recommendation to the City on whether or not the entity
investigated is in violation of SB 1383 Regulations based on the Franchisee’s
investigation.
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
58
H. Compliance Monitoring and Enforcement Report
1. A summary of the total number of SB 1383 Regulatory non-compliance Complaints
that were received and forwarded to the City or their designee.
2. The total number of contamination notices issued, categorized by type of Generator.
3. Copies of all Prohibited Container Contaminant Courtesy Pick-Up and Non-
Collection Notices issued and educational materials issued to non-compliant
Generators.
I. Public Education and Outreach Report
1. A copy of all education and outreach materials provided to Generators, or otherwise
used for education and outreach efforts in accordance with this Agreement, including,
but not limited to: flyers, brochures, newsletters, invoice messaging/billing inserts,
and website and social media postings.
2. A record of the date and to whom the information was disseminated or direct contact
made, in the form of a list that includes: the Generator’s name or account name, the
type of education or outreach received; the distribution date, and the method of
distribution.
3. For any mass distribution through mailings or bill inserts, the Franchisee shall
maintain a record of the date, a copy of the information distributed, and the type and
number of accounts that received the information.
4. A copy of electronic media, including the dates posted of: social media posts, e-mail
communications, or other electronic messages.
5. A summary of the status of the annual education plan of the reporting year, including
activities conducted and the quantitative and/or qualitative results of those activities.
6. The annual public education plan required by Section 6.5 of the Agreement for the
upcoming then-current calendar year. For example, Franchisee submittal of a 2022
annual report in February 2023 shall include Franchisee submittal of the annual
public education plan for calendar year 2023.
A.3.4 Additional Reports
A. Upon Request Reporting. City reserves the right to request additional reports or documents in
the case of unforeseen legislative or regulatory changes, requests from CalRecycle, or additional
requirements imposed upon the City. The Franchisee shall provide the requested reports, documents,
or information within ten (10) Business Days upon receipt of the request or within a timeframe
determined by the City Manager, which shall not to exceed ten (10) days.
B. Facility Capacity Planning Information. To the extent such information is available to
Franchisee, City may require Franchisee to provide City with information of available Organic Waste
Processing capacity for any Approved Processing Facilities, where available capacity may include
identification of monthly Tons of additional Organic Waste such Approved Facilities have the ability
to receive within permitted limits. Franchisee shall respond to City within sixty (60) days of City’s
request for information regarding available new or expanded capacity, to the extent such information
is available to Franchisee and, at City’s option, may be required to submit reports on a more regular
basis (such as monthly, quarterly, or annually). If Franchisee uses a Subcontractor to perform some or
all of the Facility-related services required by this Agreement, Franchisee shall use commercially
reasonable efforts to secure any City-requested Facility capacity planning information from its
Subcontractor(s). The annual Facility capacity planning report shall comply with the following:
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406
59
1. Include reports of current throughput and permitted capacity and available capacity
for Organic Materials Processing for any Facility in the City that Processes Organic
Materials. Existing capacity may include identification of monthly Tons of additional
Source Separated Recyclable Materials, Source Separated Organic Materials, and/or
Solid Waste capacity such Facility has the ability to receive within permitted limits.
2. Include description of potential new or expanded Processing capacity at those
Facilities, operations, and activities for Processing of Organic Materials, including
information about throughput and permitted capacity necessary for planning purposes.
3. Be submitted using a form or format approved by the City Manager.
IN WITNESS WHEREOF, City and Franchisee have executed this Agreement as of the day and year first above
written.
THE CITY OF SAN LUIS OBISPO SAN LUIS GARBAGE COMPANY
“City” “Franchisee”
By: ___________________________ By: ______________________________
Derek Johnson, Susan VanDelinder:
City Manager Division Vice President:
ATTEST:
______________________________
Teresa Purrington, City Clerk
APPROVED TO FORM:
________________________________
J. Christine Dietrick, City Attorney
DocuSign Envelope ID: A18343F3-A87D-44D6-BC5C-6437F580124EDocuSign Envelope ID: CC9CB107-A79F-4CD2-ABCB-EEB44B3FD406