HomeMy Public PortalAbout18-021 - Approving the Franchise Agreement for Waste Management Services Between the City of Carson and Waste Resource Technologies, Inc, A Delaware CorporationRESOLUTION NO. 18-021
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARSON
APPROVING THE FRANCHISE AGREEMENT FOR WASTE
MANAGEMENT SERVICES BETWEEN THE CITY OF CARSON AND
WASTE RESOURCE TECHNOLOGIES, INC, A DELAWARE
CORPORATION
WHEREAS, the City of Carson has the authority to award a nonexclusive, partially
exclusive or wholly exclusive franchise, contract, license, or permit for solid waste collection
services pursuant to Public Resources Code section 40059. The Act at section 49501 defines
"exclusive solid waste handling services" to include circumstances when one or more solid waste
enterprises has the exclusive right to provide solid waste handling services of any class or type
within all or any part of the territory of the City local agency; and
WHEREAS, the City decided to consolidate all solid waste management services
(commercial and residential) under one exclusive and comprehensive franchise agreement for a
period of 15 years, with a City option to provide one additional twenty-four month extension;
and
WHEREAS, on July 20, 2017, the City released a Request for Proposal for Integrated
Solid Waste Management Services (RFP P17-19), seeking qualified companies to provide solid
waste collection, transportation, recycling and disposal services, as well as the potential
development of solid waste facilities within the City; and
WHEREAS, the City received proposals from the following solid waste haulers: EDCO
Disposal (EDCO), Waste Management Services, Inc. (WMI), Commercial Waste Services
(CWS), Southland Environmental Services (SES), Athens Services (AS), Universal Waste
Systems (UWS) and Waste Resources Inc. ("WRI" or Waste Resources Technologies a
Delaware Corporation) by the October 5, 2017 RFP submission deadline. An Ad-hoc Solid
Waste Committee (Committee) narrowed the contract prospects to two final candidates, EDCO
and WRI for the Council consideration and appointment; and
WHEREAS, On December 5, 2018 the City Council chose to direct City staff to
negotiate RFP P17 -19's "Exclusive Franchise Agreement for Provision of Solid Waste Handling
Services" (the "Agreement") with WRI for the provision of refuse and recycling services to
commercial and residential customers. The parties have negotiated the Agreement in the form
attached hereto at Exhibit 1. Staff is recommending City Council approval of the Agreement.
The Agreement provides for an exclusive franchise Arrangement with WRI for residential and
commercial/industrial solid waste management services for 15 years, with a one-time option to
extend for an additional twenty-four months; and
WHEREAS, after review and consideration, the City Council determines that the public
interest is served by approving the Exclusive Franchise Agreement.
RESOLUTION NO. 18-021
Page 1 of 3
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carson
as follows:
Section 1. The foregoing recitals are true and correct and are incorporated by reference.
Section 2. The City Council hereby approves the Exclusive Franchise Agreement, City of
Carson — Waste Management Resources Inc., a Delaware Company, attached as Exhibit 1,
(Fifteen year term, with a one-time twenty-four month extension) and authorizes (i) the City
Manager and City Attorney to finalize the Agreement in form and make any non -substantive
revisions to prepare the Agreement for execution, and (ii) the Mayor or City Manager to execute
the same on behalf of the City subject to approval as to final form by the City Attorney. The
Maximum Rate Schedule attendant to the Agreement shall be approved by separate action of the
Council in accordance with Proposition 218; this Resolution approves the balance of the
Agreement's terms subject to approval as to final form by the City Attorney.
Section 3. The Agreement shall be effective when fully executed by both parties, with solid
waste services commencing July 1, 2018.
Section 4. The City Council finds that the Agreement serves a public purpose and is in the
best interest and welfare of the City of Carson and its residents.
Section 5. This Resolution shall be effective upon adoption.
PASSED, APPROVED, and ADOPTED this 20`h day of February, 2018.
APPROVED AS TO FORM:
Sun K. oltani, City Attorney
CITY OF CARSON:
ATTEST:
VOD — 0
Donesia Gause-Aldana, MMC, /"�
CityClerk
V
RESOLUTION NO. 18-021
Page 2 of 3
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF CARSON )
I, Donesia Gause-Aldana, City Clerk of the City of Carson, California, hereby attest to and
certify that the foregoing resolution, being Resolution No. 18-021, adopted by the City of Carson
City Council at its meeting held on February 20, 2018, by the following vote:
AYES: COUNCIL MEMBERS: ROBLES, HILTON
NOES: COUNCIL MEMBERS: HICKS
ABSTAIN: COUNCIL MEMBERS: DAVIS-HOLMES
ABSENT: COUNCIL MEMBERS: SANTARINA
Donesia Gause-Aldana, MMC, City ,Klerk
Or—
RESOLUTION
NO. 18-021
Page 3 of 3
EXCLUSIVE FRANCHISE AGREEMENT
FOR PROVISION OF SOLID WASTE HANDLING SERVICES
THIS EXCLUSIVE FRANCHISE AGREEMENT FOR PROVISION OF SOLID
WASTE HANDLING SERVICES is made and entered into this day
of 2018 by and between Waste Resource Technologies, Inc., a
Delaware corporation ("Franchisee") and THE CITY OF CARSON, a municipal corporation of
the State of California ("City"). City and Franchisee are occasionally herein referred to each as a
"Party" and collectively as the "Parties".
RECITALS
A. The Legislature of the State of California, by enactment of the California
Integrated Waste Management Act of 1989 ("AB 939") declares that a City may determine all
aspects of solid waste handling which are of local concern, including, but not limited to,
frequency of Collection, means of Collection and transportation, level of services, charges and
fees and the nature, location and extent of providing solid waste handling services;
B. The passage of AB 32, the California Global Warming Solutions Act of 2006,
("AB 32") required by law a sharp reduction of greenhouse gas (GHG) emissions. AB 32
requires California to reduce its GHG emissions to 1990 levels by 2020 — a reduction of
approximately 15% below emissions expected under a "business as usual" scenario. Local
governments will play a vital role in the implementation of AB 32 by identifying opportunities
and best practices to increase waste reduction and recycling, thereby reducing carbon emissions.
Franchisee's hauling operations shall aim to reduce GHG emissions by maximizing diversion to
reduce gas -producing landfill deposits and utilizing latest fuel and vehicular technologies to
reduce carbon emissions produced by waste hauling vehicles in performing waste Collection and
diversion activities for the City and by recovering and recycling commodities in the waste
stream;
C. In 2011, the State of California enacted Assembly Bill 341 ("AB 341"), which
provides further procedures for complying with the statute under AB 32 which requires a
reduction in greenhouse gas (GHG) emissions. The purpose of AB 341 is to achieve the
reduction in GHG by increasing the amount of commercial waste recycled in California,
specifically, by requiring businesses and public entities that generate 4 cubic yards or more of
solid waste per week, and multifamily residences with 5 or more units, to recycle. Such
commercial recycling shall be required by this Agreement;
D. AB 939, AB 32, AB 341, AB 1826 and related laws pertaining to the
environmental impacts of solid waste, as may be enacted or amended in the future, are
collectively referred to herein as the "Refuse Impact Reduction Laws". Pursuant to California
Public Resources Code Section 40059(a)(1), the City Council of the City of Carson has
determined that the public health, safety, and welfare require that an exclusive franchise be
awarded to a qualified solid waste enterprise for solid waste handling in residential, commercial,
and industrial areas in the City;
Exhibit 1
Page 1 of 79
1333632.1
E. The successful implementation of solid waste handling in residential, commercial,
and industrial areas in the City will entail the expenditure of large sums of capital by the
Franchisee, for which the Franchisee is, subject to the terms of Proposition 218, entitled to be
compensated. City intends that this Agreement will contribute to safeguarding public health by
providing the most cost-effective, efficient, reliable, and environmentally appropriate solid waste
services to its citizens.
F. In 2017 the City issued a Request for Proposals ("RFP") for the Collection
services franchised hereunder, with Franchisee being the successful proposer at the conclusion of
the RFP process. In addition to the services franchised under this Agreement, Franchisee's
competitive proposal offered:
(i) To lease areas of the City's Corporate Yard located at 2400 E. Dominguez
St., Carson, CA 90745 for Franchise's storage of certain equipment
utilized by Franchisee in the course of providing the Collection services
franchised hereunder. Such lease arrangement shall be memorialized in a
lease agreement to be separately entered by the Franchisee and City at a
time commensurate with the Effective Date of this Agreement (the "City
Yard Lease").
(ii) To take reasonable efforts to facilitate the opening of the headquarters of
third -party Dongfeng Progen Electric Vehicles LLC within the boundaries
of the City of Carson.
(iii) Franchisee shall pay the City a fee of $1.00/ton for all Solid Waste and
Recyclables generated in the City and delivered to Waste Resources
Recovery, Inc. ("WRR"), located at 357 West Compton Boulevard,
Gardena, CA 90248.
G. The inducements proposed by Franchisee described in the preceding recital were
material inducements to the City's award of this Agreement to Franchisee.
NOW THEREFORE, in consideration of the promises and covenants contained herein,
the above recitals, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE I
ARTICLE I DEFINITIONS; DELEGATION OF
AUTHORITY.
1.1. General. Whenever any term used in this Agreement has been defined by the
provisions of Chapter 2 of Article V the Carson Municipal Code (hereinafter "Chapter 2") or by
Division 30, Part 1 of the California Public Resources Code, the definitions in the Municipal
Code or the Public Resources Code shall apply unless the term is otherwise defined in this
Agreement, in which case this Agreement shall control.
1333632.1
Exhibit 1
Page 2 of 79
1.2. Definitions. Except as provided in Section 1.1, words beginning with lower case
letters are being used with their common ordinary meanings, not as defined terms. Otherwise, the
following capitalized words and terms shall have the following respective meanings:
1.2.1 AB 939. "AB 939" means the California Integrated Waste Management
Act of 1989, Public Resources Code Section 40000 et seq. and regulations promulgated
thereunder, as amended from time, to time.
1.2.2 AB 341. "AB 341" means Assembly Bill 341 from the 2011-1012
Regular Session of the California Legislature (Chapter 476, Statutes of 2011).
Act of 2006. 1.2.3 AB 32. "AB 32" means Assembly Bill 32, the Global Warming Solutions
1.2.4 AB 1826. "AB 1826" means Assembly Bill 1826 from the 2013-2014
Regular Session of the California Legislature (Chapter 727, Statutes of 2014).
1.2.5 Affiliate. "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 ownership interest or common management shall be
deemed to be "Affiliated with" Franchisee and included within the term "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 in Franchisee. For purposes of determining
whether an 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 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. Being an Affiliate does not exempt a business from the application of assignment
requirements under Article X hereof.
1.2.6 Agreement or Haul Agreement. "Agreement" or "Haul Agreement"
means this Agreement for Provision of Solid Waste Handling Services.
1.2.7 Annual Diversion Report. "Annual Diversion Report" means the annual
report submitted by the Franchisee to the City describing the previous year's Diversion activities,
Diversion percentages and associated calculations and the description of the Diversion activity
planned for the upcoming year, if applicable. The Annual Diversion Report shall be prepared in
a manner that directly corresponds to the reporting requirements of the California Department of
Resources Recycling and Recovery (CalRecycle), the California Integrated Waste Management
Act, and Refuse Impact Reduction Laws, all as may be amended.
Exhibit 1
1333632.1 Page 3 of 79
1.2.8 Bin and Franchisee Provided Bin. 'Bin" and "Franchisee Provided Bin"
means any Solid Waste container of a capacity exceeding 96 gallons and generally unmovable by
just one individual (i.e., a "dumpster") and provided to customers by Franchisee.
1.2.9 Bulky Waste. "Bulky Waste" means an item too large to fit in a Cart,
including but not limited to White Goods, furniture (including chairs, sofas, mattresses, and
rugs), residential waste (including green waste larger than three (3) inches in diameter or three
(3) feet in length, such as tree stumps, trunks or branches), and tires. Bulky Waste does not
include car bodies, C&D Materials or items requiring more than two persons to remove. In the
event a question arises as to whether a specific item or category of items meets the definition of
Bulky Waste, City shall determine whether said definition shall apply, and the City's
determination shall be final and binding on the Parties. Notwithstanding the above, Bulky Waste
will never include materials that Franchisee is not legally permitted to handle.
1.2. 10 CalRecycle. "CalRecycle" means the California Department of Resources
Recycling and Recovery.
1.2.11 Cart and Franchisee Provided Cart. "Cart" and "Franchisee Provided
Cart" means any molded container provided by Franchisee of a size not to exceed 96 gallons
with two or more wheels for easy carting by an individual.
1.2.12 City. "City" means the City of Carson, a municipal corporation organized
under the laws of the State of California, and all of the territory lying within the municipal
boundaries of the City as presently existing and, subject to the provisions of Section 3.1.3, all
geographic areas which may be added or annexed thereto during the term of this Agreement.
1.2.13 City Facility. "City Facility" means any building, park, central avenue or
other site owned, leased or used by the City. City Facilities also include all public bus stops
located within City limits. A list of City Facilities, and their typical Solid Waste service needs, is
attached hereto as Exhibit C. Sites may be added or removed from the scope of "City Facilities"
by mutual written acknowledgement signed by Franchisee and City Manager.
1.2.14 City Manager. "City Manager" means the Manager of the City or his or
her designee(s).
1.2.15 Collection. "Collection" means the process whereby Solid Waste is
removed and transported from within the City.
1.2.16 Commercial and Industrial Unit. "Commercial and Industrial Unit" shall
mean the Premises of a business that is neither a City Facility nor a Single -Family Residential
Unit, and specifically includes all Multi -Family Complexes.
1.2.17 Complaint. "Complaint" means any complaint received by the City or
Franchisee via mail, email, in writing, verbally, by telephone or in person.
1.2.18 Construction and Demolition Debris or C&D Material. "Construction and
Demolition Material" or "C&D Material" means any combination of inert building materials and
Solid Waste resulting from construction, remodeling, tenant improvements, repair, cleanup, or
Exhibit 1
1333632.1 Page 4 of 79
demolition operations as defined in California Code of Regulations, Title 22 Section 66261.3 et
seq. This term includes, but is not limited to, asphalt, concrete, cement, brick, lumber, gypsum
wallboard, cardboard, and other associated packaging, roofing material, ceramic tile, carpeting;
plastic pipe and steel. The material may be commingled with rock, soil, tree stumps; and other
vegetative matter resulting from land clearing and landscaping for construction or land
development projects.
1.2.19 County. "County" means the County of Los Angeles.
1.2.20 CPI. "CPP' means the Consumer Price Index for All Urban Consumers
(CPI -U), Los Angeles, CA, all items index.
1.2.21 Customer. "Customer" shall mean any person or entity receiving Solid
Waste Handling Services from Franchisee within the City.
1.2.22 Day. 'Day" means calendar day, unless otherwise stated in this
Agreement.
1.2.23 Designated Disposal Site. "Designated Disposal Site" shall have the
meaning ascribed in Section 4.1.4 of this Agreement.
1.2.24 Disposal Fee. 'Disposal Fee" means those costs imposed at a Disposal
Site for the handling or dumping of Solid Waste collected by Franchisee.
1.2.25 Disposal Site. 'Disposal Site" means a final end-point or permanent site
for the final disposition of Solid Waste, such as a landfill, incineration facility, pyrolysis,
distillation, gasification, biological conversion or final processing facility for Recyclables.
1.2.26 Divert or Diversion. 'Divert" or 'Diversion" means to divert from
disposal facilities such as a Disposal Site, through source reduction, Recycling and composting,
as provided in Section 41780 of the Act as such act may be hereafter amended or superseded
provided that Divert or Diversion shall include delivery to transformation facilities if the overall
Diversion achieved by the City is at a level where delivery to such facilities shall be considered
Diversion pursuant to the Act.
1.2.27 Effective Date. "Effective Date" means the date this Agreement has been
fully executed by both parties and approved by the City Council.
1.2.28 Electronic Waste. "Electronic Waste" means "Covered Electronic Waste"
as defined in Section 42463 of the Public Resources Code and other discarded electronic
equipment commonly known as "brown goods" or "non -covered electronic waste" such as, but
not limited to, CD players and recorders, DVD players and recorders, stereos, computers,
printers, keyboards, and peripherals. Revenues from the recycling of Electronic Waste shall be
accounted for separately from revenues from other Recyclable Materials.
1.2.29 EV Company. "EV Company" means that electric vehicle sales operation
of Dongfeng Progen Electric Vehicles, LLC.
Exhibit 1
1333632.1 Page 5 of 79
1.2.30 Food Waste. "Food Waste" means solid waste comprised of animal, fruit
or vegetable matter that attends the preparation, consumption, decay, dealing in or storage of
meats, fish, fowls, fruits or vegetables, and compostable paper used with food service.
1.2.31 Franchisee. "Franchisee" means Waste Resource Technologies, a
Delaware corporation.
1.2.32 Franchise Documents. "Franchise Documents" means Chapter 2 of
Article V the Carson Municipal Code governing Solid Waste services in the City, as such
Chapter may be amended from time to time and/or any successor City ordinances governing
refuse and waste hauling services in the City. The Franchise Documents specifically
include, without limitation, Carson Municipal Code Section 5229.2 ("Seamless Service
Requirements") as may be amended from time to time, each and all of the provisions of
which are hereby incorporated into this Agreement by this reference as if set forth in full.
1.2.33 Franchise Fee. "Franchise Fee" means that consideration paid by
Franchisee to the City as consideration for the grant of exclusive franchise effected by the
Agreement and as described in Section 3.3.1 hereof.
1.2.34 Franchisee Provided Container or Container. "Franchisee Provided
Container" or "Container" refers to either a Bin or a Cart provided by Franchisee to customers
receiving Franchisee's automated Collection service. Carts and Bins (but not Roll -Offs) shall be
constructed of a minimum of twenty percent (20%) post -consumer recycled content once
Franchisee has exhausted its existing inventory of Carts and Bins (i.e., Franchisee's existing
inventory may not meet the 20% requirement but all Carts and Bins acquired by Franchisee
following this Agreement shall meet such requirement). Franchisee shall not be required to
replace its existing Carts and Bins to meet the requirements of this Section unless or until they
are in need of replacement as reasonably determined by Franchisee or as otherwise provided in
this Agreement. Carts and Bins not meeting the 20% requirement and replaced under a
manufacturer's warranty shall be exempt from the 20% requirement.
1.2.35 Green Waste. "Green Waste" means any and all forms of biodegradable
plant material which can be placed in a covered Container, such as wastes generated from the
maintenance or alteration of public, commercial or residential landscapes including, but not
limited to, yard clippings, leaves, tree trimmings, prunings, brush, and weeds. Tree stumps and
limbs greater than three (3) inches in diameter are excluded unless they are reduced to a chipped
form; otherwise, such large portions of Green Waste shall be considered Bulky Waste.
1.2.36 Gross Receipts. "Gross Receipts" means any and all revenue collected
from billings by Franchisee, and compensation in any form, of Franchisee or subsidiaries, parent
companies or other Affiliates of Franchisee, derived from Solid Waste Handling attributable to
Solid Waste generated in City. Franchisee's Net Recycling Revenues are included in Gross
Receipts for purposes of calculating Franchise Fees. The Franchise Fees owed to City pursuant
to Section 3.3.1 are to be deducted from Gross Receipts for purposes of calculating Franchise
Fees.
Exhibit 1
Page 6 of 79
1333632.1
1.2.37 Hazardous Waste. "Hazardous Waste" means any hazardous or toxic
substance, material or waste which is or becomes regulated by any local governmental authority,
the State of California or the United States Government. The term "Hazardous Material"
includes, without limitation, any material or substance which is: (i) petroleum or oil or gas or any
direct or derivate product or byproduct thereof, (ii) defined as a "hazardous waste," "extremely
hazardous waste" or "restricted hazardous waste" under Sections 25115, 25117 or 25122.7, or
listed pursuant to Section 25140, of the California Health and Safety Code, Division 20, Chapter
6.5 (Hazardous Waste Control Law); (iii) defined as a "hazardous substance" under Section
25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter -Presley -
Tanner Hazardous Substance Account Act); (iv) defined as a "hazardous material," "hazardous
substance," or "hazardous waste" under Sections 255010)and (k) and 25501.1 of the California
Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and Inventory); (v) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances); (vi) "used oil" as defined under Section 25250.1 of the California Health
and Safety Code; (vii) asbestos; (viii) listed under Chapter 11 of Division 4.5 of Title 22 of the
California Code of Regulations, or defined as hazardous or extremely hazardous pursuant to
Chapter 10 of Division 4.5 of Title 22 of the California Code of Regulations; (ix) defined as
waste or a hazardous substance pursuant to the Porter -Cologne Act, Section 13050 of the
California Water Code; (x) designated as a "toxic pollutant" pursuant to the Federal Water
Pollution Control Act, 33 U.S.C. Section 1317; (xi) defined as a "hazardous waste" pursuant to
the Federal Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. (42
U.S.C. § 6903); (xii) defined as a "hazardous substance" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq. (42
U.S.C. § 9601); (xiii) defined as "Hazardous Material" pursuant to the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101, et seq.; or (xiv) defined as such or regulated by any
"Superfund" or "Superlien" law, or any other federal, state or local law, statute, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing liability or standards of
conduct concerning Hazardous Materials and/or oil wells and/or underground storage tanks
and/or pipelines, as now, or at any time hereafter, in effect.
1.2.38 Household Hazardous Waste or HHW. "Household Hazardous Waste" or
"HHW" shall mean that waste resulting from products purchased by the general public for
household use which, because of their quantity, concentration, or physical, chemical, or
infectious characteristics, may pose a substantial known or potential hazard to human health or
the environment when improperly treated, disposed, or otherwise managed.
1.2.39 Infectious Waste. "Infectious Waste" means waste capable of producing
an infection or pertaining to or characterized by the presence of pathogens including, but not
limited to, certain wastes generated by medical practitioners, hospitals, nursing homes, medical
testing labs, mortuaries, taxidermists, veterinarians, veterinary hospitals and medical testing labs.
1.2.40 Materials Recovery Facility/Transfer Station or MRF/TS. "Material
Recovery Facility/Transfer Station" or "MRF/TS" shall mean a fully permitted facility where
Solid Waste, Recyclable Materials, and other materials are processed, sorted or separated for the
purposes of recovering reusable or Recyclable Materials, processing or composting, which
facility may or may not include a transfer station that receives Solid Waste from collection
Exhibit 1
1333632.1 Page 7 of 79
vehicles and transfers the material to larger vehicles for transport to landfills and other
destinations.
1.2.41 Maximum Rate Schedule. "Maximum Rate Schedule" means that
schedule of rates charged to Residential Units and Commercial and Industrial Units located in
the City for Solid Waste Handling by Franchisee. The Maximum Rate Schedule, which is
effective as of the Services Start Date, is attached to this Agreement at Exhibit A.
1.2.42 Multi -Family Complex. "Multi -Family Complex" means a Premises
comprised of five (5) or more Residential Units, including, but not limited to, condominium
projects, townhouse projects, apartment houses, or mobile home parks, irrespective of whether
residence therein is transient, temporary or permanent. Occupants of Multi -Family Complexes
dispose of Solid Waste in one or more communal Bins at centralized locations. Any ambiguity
as to whether a Customer's Premises qualifies as a Multi -Family Complex shall be resolved by
the City Manager, whose decision shall be final.
1.2.43 Net Recycling Revenues. "Net Recycling Revenues" means the gross
recycling revenues received by Franchisee from the sale of all Recyclable Materials handled by
Franchisee as a whole (including the recycling of Electronic Waste, HHW, U -Waste and White
Goods) that are generated in the City, less all processing costs incurred by Franchisee for such
Recyclable Materials.
1.2.44 Oil Waste. "Oil Waste" means used motor oil and used oil filters.
1.2.45 On -Call Service. "On -Call Service" means any Collection provided by
Franchisee by appointment or that is not regularly scheduled. On -Call Service is initiated by a
Customer by calling, emailing, or requesting the service in person at Franchisee's office.
1.2.46 Organics Waste. "Organics Waste" means Food Waste, Green Waste,
landscape and pruning waste, nonhazardous wood waste, and food -soiled paper that is mixed in
with Food Waste.
1.2.47 Owner. "Owner" means the person, organization or corporation holding
the legal title to the real property constituting the Premises to which Solid Waste Handling
services are provided or required to be provided. For the purposes of sending notices, billings or
other communications required by this Agreement, Franchisee may regard the Owner as the
person, organization, corporation or other entity shown in the records of the Assessor of the
County or as may be indicated by documents recorded in the Office of the Recorder of the
County.
1.2.48 Premises. 'Premises" means any parcel of land, building(s) and/or
structure(s), or portion thereof, in the City where Solid Waste and/or Recyclable Materials are
produced, generated or accumulated and which is billed as one Customer.
1.2.49 Proposition 218. "Proposition 218" means Articles XIIIC and XIIID of
the California Constitution and any implementing legislation promulgated thereunder, as may be
amended from time to time.
Exhibit 1
1333632.1 Page 8 of 79
1.2.50 Reasonable Business Efforts. "Reasonable Business Efforts" means those
efforts a reasonably prudent business person would expend under the same or similar
circumstances in the exercise of such Person's business judgment, intending in good faith to take
steps calculated to satisfy the obligation which such Person has undertaken to satisfy.
1.2.51 Recyclable Materials and Recyclables. "Recyclable Materials" or
"Recyclables" interchangeably mean any product salvaged or collected for the purpose of
reprocessing or remanufacturing including, but not limited to, Electronic Waste, glass, newsprint,
aluminum, cardboard, paper, Green Waste, C&D Material, wood, plastics or metal. Recyclable
Materials discarded or self -hauled by the Owner (including where the owner pays a fee or other
consideration to have Recyclable Materials collected by another party) are Solid Waste.
"Recyclable Materials" or "Recyclables" also include materials that are source -separated from
other Solid Waste for the purpose of Recycling, such as, but not limited to, paper, newsprint,
printed matter, pasteboard, paper containers, cardboard, glass, aluminum, polyethylene
terephthalate and other plastics, beverage containers, compostable materials and such other
materials designated by the City Manager or CalRecycle as recyclable.
1.2.52 Recycling. "Recycling" means the processing of Recyclable Materials for
the purpose of returning them to the economy in the form of raw materials for new, reused, or
reconstituted products. The Collection, transportation or Disposal of Solid Waste not intended
for, or capable of, reuse is not Recycling. Recycling does not include the use of Solid Waste for
conversion to energy.
1.2.53 Remodel or Remodeling. The term "Remodel" or "Remodeling" shall
refer to any construction or demolition project (other than mere repair work) requiring the
issuance of a building permit or such construction and demolition project that generates for
disposal bulky structural items, appliances (household or commercial) such as showers, tubs,
toilets, ovens, stoves, cabinetry and built-in units, roofing materials, etc., and other C&D
Material.
1.2.54 Residential Unit. "Residential Unit" means one or more rooms designed
for occupancy by one family for living and sleeping purposes and containing kitchen facilities or
an area designed for the preparation of food for use solely by one family.
1.2.55 Roll -Off. The term "Roll -Off' means a metal container with a capacity of
ten (10) or more cubic yards that is normally loaded onto a motor vehicle and transported to an
appropriate facility.
1.2.56 Services Start Date. "Services Start Date" shall mean July 1, 2018.
1.2.57 Solid Waste or Refuse. "Solid Waste" or "Refuse" means all solid wastes
generated by residential, commercial, and industrial sources, and all solid waste generated at
construction and demolition sites, which are collected and transported under the authorization of
the City or are self -hauled by residents or contractors. Solid Waste does not include Hazardous
Waste, Infectious Waste or any waste which is not permitted to be disposed of at a Class III
landfill and which falls within the definition of "Nonhazardous Solid Waste" set forth in Title 23,
Chapter 15, Section 2523(a) of the California Code of Regulations as amended or designated
Exhibit 1
Page 9 of 79
1333632.1
Class II wastes. Materials shall be deemed "Solid Waste" consistent with the meaning of
California Public Resources Code Section 40191, and for purposes of this Agreement shall be
regulated as such, whether or not they may be potentially recyclable, if (i) the material is mixed
or commingled with other types of Solid Waste, or (ii) the payment of a fee, charge, or other
consideration, in any form or amount, is directly or indirectly solicited or received from the
generator by any person or combination of persons in exchange for Collection, removal,
transportation, storage, processing, conversion, consulting, container rental or disposal services
("fee for service" recycling), whether or not arranged by or through a subcontractor, broker,
agent or affiliate of the service provider.
1.2.58 Solid Waste Enterprise. "Solid Waste Enterprise" means "solid waste
enterprise" as defined in Public Resources Code Section 40193 (i.e., any individual, partnerships,
joint venture, unincorporated private organization, or private corporation, which is regularly
engaged in the business of providing solid waste handling services).
1.2.59 Solid Waste Handling. "Solid Waste Handling" or "Handling" (or other
form thereof) means: (i) "Solid Waste Handling" or "Handling" as defined in Public Resources
Code Section 40195 (i.e., the Collection, transportation, storage, transfer, or processing of solid
wastes) and Solid Waste disposal by a Solid Waste Enterprise defined in Section 40193 of the
Public Resources Code, such as residential or commercial refuse Collection in packer -type
vehicles by haulers whose core business is refuse Collection or the small-scale Collection and
disposal of residential or commercial solid waste in any type of truck, trailer or vehicle; and
(ii) the development and operation of Solid Waste facilities, such as materials recovery facilities,
transfer stations, conversion/transformation facilities, storage sites for equipment related to Solid
Waste Handling (including without limitation the City Yard), or other such facilities.
1.2.60 Single -Family Residential Unit. "Single -Family Residential Unit" means
Premises used or designated for residential use and consisting of no more than four (4)
Residential Units, such that each Residential Unit receives its own set of Carts and individual
curbside Collection services. Any ambiguity as to whether a Customer's Premises qualifies as a
Single -Family Residential Unit shall be resolved by the City Manager, whose decision shall be
final.
1.2.61 Source Reduction. "Source Reduction" means the process of reducing the
amount of waste produced by the person or organization generating such waste. Source
Reduction occurs through the use of alternative goods and products and/or the reuse of goods
and products.
1.2.62 Source Separated. "Source Separated" describes the segregation, by the
generator, of materials designated for separate Collection for some form of materials recovery,
Recycling or special handling.
1.2.63 Term. "Term" shall have the meaning ascribed in Section 2.3 of this
Agreement, including any extensions.
1.2.64 Universal Waste or U -Waste. "Universal Waste" or "U -Waste" means all
waste defined by Title 22, Subsections 66273.1 through 66273.9 of the California Code of
1333632.1
Exhibit 1
Page 10 of 79
Regulations. These include, but are not limited to, batteries, fluorescent light bulbs, mercury
switches, and Electronic Waste.
1.2.65 Waste Diversion or Diversion. "Waste Diversion" or "Diversion" means
to divert from Disposal Sites or Transformation facilities (as "Transformation" is described in
Section 40201 of the Act, as may be amended) through Source Reduction, Recycling and
composting, as provided in Section 41780 of the Act. "Divert" or "Diversion" shall include
conversion and transformation that reduces the amount of waste delivered to Disposal Sites .
1.2.66 White Goods. "White Goods" means inoperative and discarded
refrigerators, microwave ovens, ranges, water heaters, freezers, and other similar household
appliances. White Goods are a subset of Bulky Wastes.
1.3. Delegation of Authority. The administration of this Agreement by the City shall
be under the supervision and direction of the City Manager and the actions specified in this
Agreement shall be taken by the City Manager or his/her designee.
ARTICLE II
GENERAL REPRESENTATIONS & TERM
2.1. Documents; Compliance with Ordinances. All of the provisions of the
Franchise Documents are incorporated and made a part of this Agreement as though set forth in
full. Nothing shall prevent the City from amending the Franchise Documents or from adopting
such other and further legislation as the City deems necessary or appropriate. The City shall give
Franchisee thirty (30) days' notice prior to considering any amendment to the Franchise
Documents if such amendment would affect costs or revenue under this Agreement, and during
that period the Parties shall meet and confer in good faith to determine whether the planned
amendment will materially increase Franchisee's costs and whether a Proposition 218 hearing
process is warranted for purposes of allowing Franchisee to adjust service rates pursuant to
Section 7.2 hereof. Otherwise, Franchisee shall abide by all provisions of the Franchise
Documents, and if there is a conflict between the Franchise Documents and the terms of this
Agreement that cannot be harmonized through reasonable principles of interpretation, the terms
of this Agreement shall prevail, unless otherwise mutually agreed in writing by the Parties.
2.2. Effective Date; Commencement of Services. This Agreement shall become
effective at the Effective Date. However, the provision of Solid Waste Collection, imposition of
customer rates, payment of Franchise Fees, and actual Collection services by Franchisee, shall
commence on the Services Start Date. Franchisee understands and agrees that the interim time
between the Effective Date and the Services Start Date is intended to provide Franchisee with
ample and sufficient time to, among other things, order equipment, prepare necessary routing
schedules and route maps, obtain any permits and licenses, establish/build facilities, obtain
required service agreements, begin the public awareness campaign as part of Franchisee's
transition program as specified in this Agreement, and undertake a Proposition 218 hearing
process for purposes of adopting the initial Maximum Rates at Exhibit A.
2.3. Term and Extended Term. Unless earlier terminated in accordance with Article
IX of this Agreement, this Agreement shall continue in full force and effect from and after the
Exhibit 1
Page 11 of 79
1333632.1
Services Start Date for a period of fifteen (15) years. City reserves the right, in its sole and
unfettered discretion, to extend the term of this Agreement, under the then -existing terms and
conditions, for a maximum of one 24 -month period. This means that service would commence
July 1, 2018 and end on June 30, 2033 (if no extension is granted), or end June 30, 2035 (if the
extension is granted). City shall give notice of intention to extend the term of this Agreement in
writing no later than six (6) calendar months prior to expiration of the term of the Agreement.
2.4. Representations and Warranties of Franchisee.
2.4.1 Corporate Status. Franchisee is doing business as a corporation, duly
organized, validly existing and in good standing under the laws of the State of California.
Franchisee 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.
2.4.2 Corporate 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 authority to do so. Entering into this Agreement does
not violate any provision of any other Agreement to which Franchisee is bound.
2.4.3 Accuracy of Representations. The representations and warranties made by
Franchisee in this Section 2.4 are true and correct on and as of the Effective Date of this
Agreement.
2.5. Ownership of Solid Waste. City and Franchisee acknowledge that Franchisee,
and not City, is responsible for Collection of Solid Waste and Recyclables, and that City has not,
and by this Agreement does not, instruct Franchisee on its Collection methods, nor supervise the
Collection process; nor do the Parties intend to place title to the Solid Waste and Recyclables
collected by Franchisee in City. Rather, the Parties intend that whatever title, if any, in and to
the Solid Waste and Recyclables that are collected by Franchisee that otherwise might exist in or
with City in the absence of this Agreement is hereby transferred to Franchisee; and further that if
Franchisee gains title to such Solid Waste and Recyclables it is by operation of law and
agreement with its Customers and is not the result of this Agreement. At no time does City
obtain any right of ownership or possession of any Solid Waste or Recyclable Materials placed
for Collection, and nothing in this Agreement shall be construed as giving rise to any inference
that City has any such rights. City and Franchisee agree that, for the purposes of the California
Commercial Code and all other laws imposing liability for defective products, it is Franchisee,
and not City, which is to be considered the merchant of the goods Recycled pursuant to this
Agreement. Subject to the provisions of this Agreement, and unless City exercises its rights to
direct the location for disposal and processing of Solid Waste and Recyclables, Franchisee shall
have the right to retain, Recycle, process, convert, transform, dispose, and otherwise use Solid
Waste collected pursuant to the terms of this Agreement in any lawful fashion or for any lawful
purpose; and, further, shall have the right to retain any benefit resulting from its right to retain,
Recycle, process, convert, transform, dispose, and otherwise use the Solid Waste and
Recyclables which it collects.
Exhibit 1
1333632.1 Page 12 of 79
ARTICLE III
GRANT OF FRANCHISE; SCOPE OF FRANCHISE;
EXCLUSIONS
3.1. Grant of Franchise.
3.1.1 General Grant. The City grants to Franchisee, and Franchisee shall have
during the Term, the exclusive franchise, right, license and privilege (except as provided in
Section 3.2 below) to engage in the business of collecting, transporting, transferring, processing,
Recycling, treating, diverting, converting, and disposing of all Solid Waste and Recyclable
Materials generated by Single -Family Residential Units and Commercial and Industrial Units
within the City of Carson. Franchisee's exclusive franchise shall include the exclusive right to
rent Containers for the Collection of Solid Waste and Recyclables to its Customers. It is
expressly understood that the Solid Waste Enterprise and Collection is conducted by Franchisee
and not City, and while City grants the right to conduct the business within the terms of this
Agreement, the Franchisee must determine what personnel to employ, terms and conditions of
employment, what equipment to utilize and all methods, costs, obligations and mechanisms to
undertake the terms of the franchise.
3.1.2 Duty. To the extent that the franchise granted hereby is exclusive, it shall
be so only if Franchisee is and shall be at all times ready, willing and able to perform its
obligations under this Agreement, including but not limited to, Collecting, transporting and
disposing of all Solid Waste and Recyclables generated within the City in accordance with the
provisions of this Agreement and all applicable law, rules and regulations.
3.1.3 Annexations. This Agreement shall extend to any territory annexed to the
City during the Term that is not covered by an existing Solid Waste permit, license, agreement or
franchise granted by another public entity, except to the extent that Collection by Franchisee
within that annexed territory would violate the provisions of Public Resources Code Section
49520. In such event, this Agreement shall become effective as to such area at the earliest
possible date permitted by law, and City agrees that it shall cooperate with Franchisee to fulfill
any requirement necessary for Franchisee to serve the annexed area consistent with this Section
3.1.3.
3.1.4 Enforcement of Exclusivity. City shall be responsible for enforcing the
exclusivity of this Agreement. City shall use Reasonable Business Efforts to enforce the
exclusivity of this Agreement and Franchisee shall reasonably assist City in those efforts. In
addition, City shall adopt such ordinances or other regulations as is necessary or desirable to
protect the exclusive rights granted by this Agreement.
3.2. Scope of Franchise; Mandatory Service And Exclusions. The franchise
granted to Franchisee shall be exclusive within City limits, such that Franchisee shall be the sole
provider of general Solid Waste and Recyclable Materials hauling services to City residents and
businesses. To this end, at all times during the Term the City shall require the Owner of each
Single -Family Residential Unit and Commercial and Industrial Unit where Solid Waste is
produced to subscribe to the Collection service provided for in this Agreement and in the
Exhibit 1
Page 13 of 79
1333632.1
Franchise Documents. The hauling services franchise herein granted shall be subject to the
following exclusions.
3.2.1 Intergovernmental Immunity. All (i) universities, (ii) school districts, (iii)
other state agencies, (iv) any other governmental entity that is not subject to the City's police
powers, and (v) the exclusivity provisions of any ordinance to be adopted by the City.
3.2.2 Self -Hauling. Self -hauling by City residents, Owners, or occupants of
Premises. To qualify as a "self -hauler" for purposes of this exemption, an Owner or occupant
must remove and personally transport Solid Waste and/or Recyclables from his/her own
Premises using his/her own equipment for the purpose of lawfully delivering same to a Disposal
Site or MRF/TS authorized to receive and handle Solid Waste or Recyclables. The use of a
subcontractor is not "self -haul" within the meaning of this exception. Self -hauling of Solid
Waste or Recyclables does not exempt the property owner from subscribing to franchise
Collection service. For purposes of the Diversion reporting requirements set forth in AB 939,
City shall use Reasonable Business Efforts (such as City permitting or inspection procedures) to
collect data from any self -hauler regarding the amount and location of their disposal of Solid
Waste and Recyclables excluded under this sub -section. This information shall be reported to
Franchisee on a quarterly basis.
3.2.3 Gardner/Landscaper Green Waste. Green Waste and other compostables
removed from a Premises by an Owner or resident of Premises or by a gardening, landscaping or
tree trimming contractor as an incidental part of a total service offered by that contractor rather
than as a hauling service. To qualify for this exemption, a gardener or landscaper must not be a
hauling service or Solid Waste Enterprise, must not separately or additionally charge for the
incidental service of removing, transporting or disposing (except for tipping fee) of the Green
Waste, and must utilize only his or her own employees and equipment to collect, transport and
dispose of said Green Waste. For purposes of the Diversion reporting requirements set forth in
AB 939, City shall use Reasonable Business Efforts (such as City permitting or inspection
procedures) to collect data from any Owner, resident of Premises, or gardening, landscaping or
tree trimming contractor regarding the amount and location of their disposal of Solid Waste and
Recyclables excluded under this sub -section. This information shall be reported to Franchisee on
a quarterly basis.
3.2.4 C&D Material. The Collection, transportation and disposal by a
construction contractor of C&D Material from jobs which are generated as an incidental part of
providing such Remodeling services, provided that the construction contractor is not a hauling
service or Solid Waste Enterprise, does not separately or additionally charge for the incidental
service of removing, transporting or disposing (except for tipping fee) of the C&D Material, and
utilizes only his/her own employees and equipment to collect, transport and dispose of the C&D
Material. For purposes of the Diversion reporting requirements set forth in AB 939, City shall
use Reasonable Business Efforts (such as City permitting or inspection procedures) to collect
data from any construction contractor regarding the amount and location of its disposal of Solid
Waste and Recyclables excluded under this sub -section. This information shall be reported to
Franchisee on a quarterly basis.
Exhibit 1
1333632.1 Page 14 of 79
3.2.5 Automotive Dismantling. The Collection, transportation and disposal of
vehicles or machine parts and waste generated by an automotive/vehicle dismantler or Owner of
a vehicular salvage or disposal yard. For purposes of the Diversion reporting requirements set
forth in AB 939, City shall use Reasonable Business Efforts (such as City permitting or
inspection procedures) to collect data from any automotive/vehicle dismantler or Owner of a
vehicular salvage or disposal yard regarding the amount and location of their disposal of Solid
Waste and Recyclables excluded under this sub -section. This information shall be reported to
Franchisee on a quarterly basis.
3.2.6 Asphalt/Concrete/Dirt Materials. The Collection, processing and/or
transport of asphalt, concrete and dirt, and the Parties hereto acknowledged that other entities in
the City are, and shall continue to be permitted to collect, process and transport asphalt, concrete
and dirt materials. For purposes of the Diversion reporting requirements set forth in AB 939,
City shall use Reasonable Business Efforts (such as City permitting or inspection procedures) to
collect and report to Franchisee on a quarterly basis data from any entity in the City regarding
the amount and location of their disposal of Solid Waste and recyclables excluded under this
sub -section. This information shall be reported to Franchisee on a quarterly basis.
3.2.7 Hazardous Waste. The Collection, processing and/or transport of
Hazardous Waste and non-spadeable wastewater or sewage sludge by third -party entities duly
licensed to handle such Hazardous Waste and/or non-spadeable wastewater or sewage sludge
materials.
3.2.8 Recyclable Materials. Recyclable Materials not "discarded" (but rather
sold or donated) directly by an Owner of Premises which are disposed of at legally -mandated
public redemption centers that comply with all reporting and other requirements imposed by any
political entity having jurisdiction over those redemption centers. A mere discount or reduction
in price of third -party charges for the handling of Recyclables is not a sale or donation within the
meaning of this Agreement and is thus precluded by Franchisee's exclusive franchise.
3.2.9 Emergency Collections by City. The casual or emergency Collection,
removal, disposal or Diversion of Solid Waste or Recyclables by the City through City officers
or employees in the normal course of their employment.
3.2. 10 Legally -Required Exemptions. Other Collection, removal or disposal
activities required to be exempt from mandatory franchise services pursuant to law, or entities
exempt from such franchise pursuant to State or Federal law, including but not limited to Non -
City governmental entities located within City boundaries.
3.2.11 Unoccupied Units. Premises which have been unoccupied by any human
habitation and upon which no refuse has been produced or accumulated for three (3) consecutive
months may be exempted from this Agreement by the City until such Premises become
occupied. The granting of an exemption shall be conditioned upon completion of an application
for exemption by Franchisee and its approval. Exemptions shall expire on December 31 of each
calendar year. An exemption may be renewed, provided that during three (3) consecutive months
prior to the application for renewal, the Premises have been unoccupied by any human habitation
and no refuse has been produced or accumulated. Notwithstanding anything in this Section
1333632.1
Exhibit 1
Page 15 of 79
3.2.11 to the contrary, all exemptions in existence on the Service Start Date shall remain valid.
For purposes of this Section, a unit shall be deemed "unoccupied" if the structure is both
unoccupied and unused (such as, without limitation, foreclosed or abandoned structures).
Structures that are presently unoccupied by virtue of their continuing use as a vacation home or a
seasonal business shall not be considered as "unoccupied". Residential rental units, such as those
rented as vacation rentals or seasonal rentals (e.g., Residential Units under an AirBnB account or
similar such program) shall not be exempted from service unless Franchisee obtains a written
acknowledgement from the Premises Owner that such premises will be unoccupied for a period
of at least three (3) upcoming consecutive months, in which case the Owner shall arrange for
immediate reinstatement of Solid Waste and Recycling services upon re -occupation of the
Premises.
3.2.12 City Hauls. The Collection, removal, disposal or Diversion of Solid
Waste or Recyclables by the City through City officers or employees in the normal course of
their City employment. For purposes of Diversion reporting requirements set forth in AB 939,
City shall report to Franchisee on a quarterly basis, the amount and location of its disposal of
Solid Waste and recyclables excluded under this sub -section.
3.2.13 Oil Waste. The Collection, processing and/or transport of Oil Waste by
third -party entities duly licensed to handle such waste, such as licensed automotive shops and
mechanic businesses.
3.2.14 Tires. The Collection, processing and/or transport of tires by third -party
entities duly licensed to handle such waste.
3.2.15 Infectious Waste. Franchisee's franchise does not preclude the Collection,
processing and/or transport of Infectious Waste by third -party entities duly licensed to handle
such Infectious Waste.
3.2.16 HHW, White Goods and U -Waste. The Collection, processing and/or
transport of HHW, White Goods and U -Waste by third -party entities duly licensed to handle
such Waste.
3.3. Compensation To City for Grant of Franchise
3.3.1 Franchise Fee. In consideration for the grant of the franchise provided
herein, Franchisee agrees to pay the City a franchise fee equaling:
(a) 12.5% of the Gross Receipts derived by Franchisee from the
services provided in City to all Cart Customers; and
(b) 15% of the Gross Receipts derived by Franchisee from the
Collection services provided in City to all Roll -Off and Bin Customers.
Concurrent with each Franchise Fee payment, Franchisee shall provide an accounting worksheet
showing the (i) the number of accounts billed at each billing rate to arrive at Gross Receipts; (ii)
amount, if any, of delinquent customer accounts, (iii) an accounting worksheet showing the
discrepancy, if any, between Gross Receipts as calculated for purposes of the Franchise Fee
Exhibit 1
1333632.1 Page 16 of 79
versus the Franchisee's gross receipts actually collected, and (iv) an accounting of Net Recycling
Revenues, including collection and sale records for City -generated Recyclables. City shall pre -
approve the format of required accounting worksheet. The City has found that the Franchise Fee
stated herein bears a reasonable relationship to the value of the exclusive franchise rights herein
granted, and is comparable or equivalent to franchise fees found in the Los Angeles County
region.
3.3.2 Administrative Costs to be Paid by Franchisee. Franchisee shall pay
certain administrative costs associated with the administration and preparation of this
Agreement, which have been estimated by the City for reasonable nexus to the actual costs of
such administrative functions incurred by City. The administrative costs to be paid by
Franchisee are as follows:
1333632.1
(a) Administrative Costs. Franchisee shall pay to City a one-time
administrative fee, to be paid no later than the Services Start Date, for the City 's
legal fees (attorneys' fees and costs) and staff/administrative costs incurred in the
negotiation, research and drafting of this Agreement. This fee shall be One
Hundred Fifty -Thousand Dollars Even ($150,000.00).
(b) Annual Public Education Fee. Commencing from the Services
Start Date, Franchisee shall pay to City annual a fee for (i) preparation and
distribution of public education materials and community newsletters by the City,
(ii) production and broadcast of public service announcements promoting
resources conservation by City, and (iii) internal City staff training and education
on Solid Waste and Recyclables issues and enforcement. In the first year of the
Term,this fee shall be One Hundred Thousand Dollars ($100,000.00). In each
year that Franchisee receives a COLA Adjustment to its Maximum Rate Schedule
pursuant to Section 7.2.2, this fee shall also be adjusted in an amount equal to the
annual percent change in the CPI, as is more fully described in Section 3.3.2(f).
(c) Annual Infrastructure Impact Fee. Commencing from the Services
Start Date, Franchisee shall pay to the City an annual "Roadway Maintenance
Fee" as compensation to the City for additional damage and accelerated
deterioration caused to the City's roadways as a result of the Franchisee's
operations within the City. In the first year of the Term, this fee shall be Two -
Hundred Fifty -Thousand Dollars ($250,000.00). In each year that Franchisee
receives a COLA Adjustment to its Maximum Rate Schedule pursuant to Section
7.2.2, this fee shall also be adjusted in an amount equal to the annual percent
change in the CPI, as is more fully described in Section 3.3.2(f).
(d) Annual Inspection Fees. Commencing from the Services Start
Date, Franchisee shall pay to the City an annual "Inspection Fee" for the cost of
monitoring and enforcing anti-dumping and anti -scavenging regulations. In the
first year of the Term, this fee shall be Three Hundred and Sixty -Three
Thousand, Five Hundred Dollars ($363,500.00). In each year that Franchisee
receives a COLA Adjustment to its Maximum Rate Schedule pursuant to Section
Exhibit 1
Page 17 of 79
7.2.2, this fee shall also be adjusted in an amount equal to the annual percent
change in the CPI, as is more fully described in Section 3.3.2(f).
(e) Annual Mobile Phone Application Fee. Commencing from the
Services Start Date, Franchisee shall support the continuing use and development
of the City's service request system (currently, IWORQ application for public
works trash -related needs (i.e., illegal dumping, Bulky Waste, street sweeping,
etc.). The application will be maintained and developed to, at a minimum, will
include an application allowing users to receive reminders of their respective
Collection times, service changes, holidays, events and Carson Clean
Environment Week services and to track reporting of illegal bins/boxes and
abandoned items on the internet and on their mobile phones. In the first year of
the Term, this fee shall be Seventy -Five Hundred Dollars ($7,500.00). In each
year that Franchisee receives a COLA Adjustment to its Maximum Rate Schedule
pursuant to Section 7.2.2, this fee shall also be adjusted in an amount equal to the
annual percent change in the CPI, as is more fully described in Section 3.3.2(f).
(f) Administrative Cost CPI Adjustment. In any year that the
administrative costs and fees set forth in Sections 3.3.2(b) -(e) are to be adjusted ,
the adjustment shall be made each July 1st and shall be equal to the percentage
change in CPI -U for the year that ended the immediately preceding March 31 for
Los Angeles -Riverside -Orange counties, base year 1967. The COLA Adjustment
calculation is [current rate X (1 + the percentage change in CPI -U) = new rate].
3.3.3 Tonnage Processing Fee. Franchisee shall pay the City a fee of
$1.00/ton for all Solid Waste and Recyclables generated in the City and delivered to Waste
Resources Recovery, Inc. ("WRR"), located at 357 West Compton Boulevard, Gardena, CA
90248. This includes all Solid Waste and Recyclables delivered to WRR by Franchisee, self -
haulers and any other person or entity disposing of waste generated from within the jurisdictional
limits of the City of Carson (with the exception of tonnage generated by gratis services such as
those for City Facilities, City clean-ups, abandoned item Collections, illegal dumping
Collections, Bulky Waste collection events and Bulky Waste sweeps). This per -ton processing
fee will be paid in the same manner as Franchise Fees per Section 3.3.4(b) below. All financial
and tonnage records relating to the tonnage processing fee set forth in this Section shall be
maintained by Franchisee and made available to City in accordance with the terms of Article
1333632.1
3.3.4 Payment Protocols.
(a) Administrative Fees: On and after the Services Start Date, the
administrative fees set forth in Section 3.3.2(b) through Section 3.3.2(e) shall be
paid quarterly, with equal installments due within thirty (30) days from the end of
each calendar quarter.
(b) Franchise Fees: Franchise Fees paid to the City pursuant to this
Section 3.3 shall be made to City within thirty (30) days of the conclusion of each
calendar quarter during the term of this Agreement, including any extension, as
set forth in Section 2.3, above. Upon the expiration of any such thirty (30) day
Exhibit 1
Page 18 of 79
period, a delinquent assessment of five percent (5%) per month shall be levied
against any unpaid balance. All remittances by Franchisee shall be accompanied
by a report setting forth the basis and calculations used for computing the amount
due. Each payment of the Franchisee Fee shall be accompanied by a statement
separately setting forth the Gross Revenues, including the Net Recycling
Revenues collected by Franchisee, and the computation of the total Franchise Fee
due. Each statement shall include the following certification executed by an
officer of the Franchisee: "I hereby certify that the foregoing statement of
Franchise Fee payments as based on Gross Receipts, including Net Recycling
Revenues collected by Franchisee, is made by me, that I am authorized to make
such statement, and that, to the best of my knowledge and belief, it is true, correct
and complete."
(c) No Waiver: No acceptance by City of any payment shall be
construed as an accord that the amount is the correct amount, nor shall such
acceptance of payment be construed as a release of any claim City may have
against Franchisee for any additional sums payable under the provisions of this
Agreement. All amounts paid shall be subject to independent audit and
recompilation by City.
(d) Pro -rating: Payments over partial years or partial quarters shall be
pro -rated by quarter, month or day, as applicable.
ARTICLE IV
SERVICES OF FRANCHISEE
4.1. General Standards.
4. 1.1 Initial Transition Program. No later than March 2, 2018, Franchisee shall
provide a written "transition program plan" to the City in a form reasonably acceptable to
City ("Transition Plan"). A transition period is necessary to implement all components of
this Agreement and to ensure Customer needs are met throughout the process. The
transition period will begin on the Effective Date and service will begin at the Service Start
Date. Major Transition Plan elements may include, without limitation, the following
elements at the City's option:
i. Truck Procurement;
ii. Equipment/Bin Procurement;
iii. Customer Database:
• Development and Management;
• Customer Database Development;
• Billing Procedures;
• Account Transfers (permitted hauler to franchise hauler);
iv. Routing / Mapping:
• Type of Services Needed by Each Customer;
• Customer mapping;
• Level of Service;
Exhibit 1
1333632.1 Page 19 of 79
• Routing:
o Route Balancing
o Route Optimization
V. Incremental Personnel Hiring and Training;
vi. Driver Hiring and Training;
vii. Customer Service Procedures and Tracking;
viii. Communication Plan:
;ublic
Notice to Customers;
ix. Education and Outreach;
X. Facility Certification;
xi. Schedule for the above:
• Transition Plan End Date;
• Identity of Franchisee Primary Contact with City During
Transition Period.
The terms and timeframes set forth in the Transition Plan, once accepted by the City, shall
become a term and condition of this Agreement and incorporated herein by this reference.
(a) The Transition Plan may be updated by concurrence of the parties
as needed to accommodate Franchisee's operations and actual implementation of
the transition.
(b) The Franchisee shall (i) be solely responsible for implementation
of the Transition Plan and the handling of Customer complaints received during
the transition period, and (ii) have sufficient Solid Waste Handling resources (i.e.,
vehicles, personnel and Containers) prior to the Service Start Date to make the
Solid Waste Handling transition as efficient, clean and accordant as possible in
the exercise of Franchisee's Reasonable Business Efforts. In the event Franchisee
is unable or unwilling to secure the resources needed to resolve Customer
disputes, Container shortages, incidents of unauthorized container use, missed
Collections, or other such problems arising during the transition period,
Franchisee shall at its sole cost have on stand-by another Solid Waste Hauling
service or contractor duly permitted, licensed and able to resolve such disputes or
service shortfalls.
(c) Under no circumstances shall City be responsible for the resolution
of Customer disputes relating to the Transition Plan, transition period, or
resources allocated thereto, except to the extent such disputes are directly
attributable to City's active negligence or gross misconduct. However, for any
transition period shortfalls in Solid Waste Handling services that are directly
attributable to the cooperation or management of any former City -franchised
waste hauler, the City and Franchisee shall meet and confer to negotiate in good
faith a cooperative plan for securing the cooperation of the former franchised
hauler(s). Nothing herein waives or limits the City's rights and remedies to abate
nuisance conditions or service shortfalls during the transition period, including
without limitation those rights under Sections 4.2, 9.1, 9.8 and 9.13.
Exhibit 1
Page 20 of 79
1333632.1
4.1.2 Furnishing of Services. The work to be performed pursuant to this
Agreement shall include the furnishing of all labor, materials and equipment necessary for, and
the Collection of all Solid Waste and Recyclables from Single -Family Residential Units and
Commercial and Industrial Units within the City according to the terms of this Agreement, and
the disposal, Recycling and/or Diversion of such materials. Franchisee shall own or lease and
maintain at its expense all equipment necessary to perform its duties as provided for under the
Agreement, including sufficient radio equipment for office to field equipment communication.
All work shall be accomplished in a courteous, thorough and workmanlike manner and adhere to
the highest standards consistent with the best practice in the industry. As of the Services Start
Date, Franchisee shall not be required to collect materials unless they have been properly placed
in Franchisee -Provided Containers unless otherwise specifically stated herein (including but not
limited to mandated services for Bulky Waste, holiday trees, and HHW/E-Waste/U-Waste stated
herein). Notwithstanding the foregoing, the Parties hereto acknowledge that a need may arise for
Franchisee to collect materials that are either placed in alternative, non -Franchisee -Provided
Containers or that are placed directly for Collection without containment; to this end, the Parties
may meet and confer in good faith in order to reach an accord as to how such needs may be met.
Any program specifically requiring Franchisee to collect materials from alternative containers or
to collect uncontained materials shall be memorialized in writing executed by each Party.
4.1.3 Oversight of City Manager.
(a) Performance of each of the provisions of this Agreement shall be
under the direction of the City Manager or designee and the work hereunder shall
be done in a thorough and workmanlike manner under the direction, and to the
satisfactions, of the City Manager or designee. To this end, the City Manager
shall have the power to establish rules and regulations relating to the
accumulation, Collection, Recycling, disposal, and management of Solid Waste
not inconsistent herewith and/or as necessary to ensure compliance with laws,
ordinances and regulations, and which the City Manager finds are reasonably
necessary for enforcement hereof or of applicable laws, ordinances and
regulations, or for preservation of the public peace, health, and safety.
(b) The Parties may negotiate a means of recompensing Franchisee for
material increases in Franchisee's costs as a result of either (i) new or changed
rules and regulations by the City Manager, or (ii) other services required by the
City that are in excess of those contemplated by this Agreement. If any such
changes cause an increase or decrease in the cost of, or the time required for
performance of the Agreement, an equitable adjustment shall be made in the
Agreement price or schedule, or both, subject to the requirements of Section 7.2.3
hereof (Proposition 218).
4.1.4 Designated Disposal Site. Franchisee shall dispose of all collected
Refuse at the Designated Disposal Sites listed on Exhibit G. Franchisee may request that City
designate additional or alternate Designated Disposal Sites for Franchisee's use. Any changes to
the Designated Disposal Site or the addition of alternate Designated Disposal Sites shall be
subject to prior written consent of the City Manager, which shall not be unreasonably withheld.
Notwithstanding the above, Franchisee may transport any and all collected Refuse to a
Exhibit 1
1333632.1 Page 21 of 79
transformation site for processing and Diversion before final deposit at a Designated Disposal
Site, subject to any limits on credits for Diversion under the Refuse Impact Reduction Laws. All
costs associated with its disposal of collected Refuse at a Designated Disposal Site are to be
borne by Franchisee.
4.1.5 Hazardous Materials.
(a) The scope of this Agreement and franchise excludes the handling
of Hazardous Materials, and no right to provide Hazardous Materials handling
services is conferred on Franchisee as a result of this Agreement. Franchisee shall
use commercially reasonable efforts to ensure that only persons duly -licensed to
handle Hazardous Materials shall be engaged when such services become
necessary.
(b) Franchisee shall implement a system of Hazardous Waste and
Prohibited Material (as defined by CCR Title 22, Chapter 11, Sections 66261.1
through 66261.126) screening, identification, and prevention protocol reasonably
designed to screen -out Hazardous Waste and prohibited materials that Franchisee
is not permitted to handle pursuant to applicable law prior to Franchisee accepting
such materials. If Franchisee inadvertently collects Hazardous Waste or other
materials that Franchisee is not qualified or permitted to handle (under any
applicable permit conditions or applicable laws), the Franchisee shall arrange, at
no cost and without liability to City, for the proper disposal of the such materials
in accordance with applicable laws and regulations; provided however, that
Franchisee shall be entitled to return any such Hazardous Waste, if the customer
can be identified, or at its own expense pursue all legal rights and remedies it may
have against the customer(s) who generated such materials. The City shall be
indemnified by Franchisee from liability for any disposal of Hazardous Waste or
other materials that Franchisee is not qualified or permitted to handle pursuant to
Section 11.2 hereof.
4.2. Standards of Performance.
4.2.1 Availability of Franchisee. Franchisee has established, and shall continue
to maintain a local office for the purpose of receiving customer payments and handling customer
inquiries, orders and complaints. The "local" office must remain in a location within three (3)
miles of the City boundary and have the same telephone area code as that existing in the City.
The local office shall be open to the public between the hours of 9:00 a.m. to 5:00 p.m., five (5)
days per week, Monday through Friday, except Holidays ("Regular Business Hours"). A
representative of Franchisee shall be available during Regular Business Hours for
communication with the public at such local office. Additionally, the Franchisee shall continue
to employ the services of a telephone representative, answering exchange or message system for
calls during non -business hours and provide a telephone system and staff sufficient and adequate
to handle calls during peak periods.
4.2.2 Franchisee Liaison to City. Franchisee shall be reasonably available to the
City. The Franchisee shall provide the City Manager and the Police and Fire Departments with
1333632.1
Exhibit 1
Page 22 of 79
an emergency telephone number for effectively reaching Franchisee in the case of off -hour
emergencies. Franchisee shall also provide the City Manager with the cellular phone number of
a Franchisee representative(s) with day-to-day managerial responsibility over Franchisee
services provided within the City. One or more of the Franchisee's representatives described in
this Section shall visit City offices at such reasonable times as the City Manager shall designate
for the purpose of discussing any matters relating to this Agreement or the Franchisee's
performance thereof. Any representative appointed by Franchisee shall occupy a position of
sufficient managerial authority and knowledge of day-to-day Franchisee operations as to be able
to meaningfully discuss performance issues with the City Manager.
4.2.3 Citizen Complaints. The Franchisee shall commence response to all
complaints within eight (8) business hours, shall return all Customer phone calls received within
eight (8) business hours, and shall exercise Reasonable Business Efforts to resolve all
complaints. The City may, but is not obligated to, respond to complaints that have not been
addressed within two (2) business days and may charge the Franchisee for the actual costs
incurred therefor.
4.2.4 Record of Complaints. Franchisee shall maintain a record of all
complaints received by mail, by telephone or in person for a period of three (3) years.
Franchisee's records shall include the date of the Customer complaint, the address and name of
the Customer, a description of the complaint or request, and a description of the action taken by
Franchisee to resolve the complaint. Copies of all complaints and the records described in this
Section 4.2.4 shall be submitted to the City Manager on a quarterly basis, before the 15th of the
following month.
4.2.5 Disputes. Disputes between the Franchisee and its Customers regarding
the services provided in accordance with this Agreement may be resolved by the City; provided,
however, the City shall not be obligated to resolve any such disputes. The City Council by
resolution or ordinance may prescribe the procedures for processing customer complaints. The
City's decision shall be final and binding unless challenged in a court of competent jurisdiction.
4.2.6 Tags & Record of Non -Collected Material. The Franchisee shall notify
Customers in the event any item left for disposal is not picked up. Said notification shall be in
the form of a written tag placed upon the Customer's container or entry door if identifiable,
stating Franchisee's telephone, address and the reason for non -Collection. Reasons for non -
Collection may include, but are not limited to the following: Containers inaccessible to
Franchisee (after Franchisee has made a reasonable effort to secure access); improper Container
or use of a non -Franchisee Provided Container; Container overfilled; overweight Container; or a
Container that includes Hazardous Waste. Franchisee shall implement a system of progressive
warnings and penalties for repeat Customer violations, which system and any changes thereto
shall be noticed to all Customers in Franchisee bills and on Franchisee's website. Franchisee
shall maintain a record of all items not collected. Should Franchisee fail to collect and dispose of
materials set out or placed for Collection at times required, after notification by City and a
reasonable time thereafter, City may collect and dispose of uncollected materials and Franchisee
shall be liable to the City for the expenses incurred, plus overhead charges equal to ten (10%) of
the City's expenses in Collection. Nothing herein shall waive or limit the City's rights to inspect,
Exhibit 1
1333632.1 Page 23 of 79
tag or initiate code enforcement procedures in response to repeated or significant violations of
Container use, Solid Waste dumping or unlawful scavenging.
4.2.7 Property Damage Caused by Franchisee. The Franchisee shall be
responsible for the cost of repairing any property damaged by the negligent or intentional
conduct of its employees or agents. The City may, but is not obligated to, respond to complaints
that have not been addressed in accordance with Section 4.2.3 hereof and may charge the
Franchisee for the actual costs incurred by the City therefor.
4.2.8 Quality of Service Survey. The City may, at its own expense, conduct
periodic quality of service surveys of Franchisee's Customers. Prior to finalizing the survey
form, the City shall review the survey with the Franchisee. Results of the quality of service
survey shall be reviewed with the Franchisee and used to discuss improvements in service
delivery.
4.2.9 Annual Route Audit. At least once annually, Franchisee shall conduct an
audit of its Collection routes. The annual route audit shall include the identity of the truck
servicing each route, the number of accounts serviced per route (residential, commercial,
industrial and municipal), the frequency of pick-ups, the size of each Container for each account
on the route, the frequency of service for each account on the route, as well as the weight of the
truck and refuse delivered to the applicable Disposal Site. Results of the annual route audit shall
be available for review by the City.
4.2.10 "On -Call" Equipment and Personnel. During Regular Business Hours, the
Franchisee shall have "on-call" at least one (1) truck to handle duly -appointed or noticed pick-
ups or missed Collections. After Regular Business Hours, the Franchisee shall have "on-call" the
necessary manpower and equipment (including without limitation an emergency service vehicle
to attend to complaints or emergency calls) to respond to Customer emergencies that are an
immediate threat to life or property. Franchisee's on-call equipment and personnel shall also be
available to assist the City with debris Collection and removal within a reasonable time resulting
from emergencies and natural disasters, excepting that nothing in this Section shall require
Franchisee to collect, haul or dispose of waste that Franchisee is not permitted to handle.
4.3. Hours & Dates of Collection. Franchisee shall conduct its operations so as to
offer the least possible obstruction and inconvenience to public traffic or disruption to the peace
or quiet of the area within which Collections are effected. In accordance therewith, Collection
services by Franchisee shall operate in the City between the hours of 7:00 a.m. and 6:30 p.m.,
Monday through Friday. Franchisee's trucks shall not leave Franchisee's yard or operate in City
streets before 6:30 a.m. Franchisee may not change its established Collection schedules without
obtaining prior written consent of the City Manager. Further, Franchisee shall observe the
following holidays annually (whereby there will be no Collection services and Collection shall
occur one day late following the holiday):
New Year's Day (January 1st)
Memorial Day (4th Monday in May)
Exhibit 1
Page 24 of 79
1333632.1
Independence Day (July 4th)
Labor Day (1st Monday in September)
Thanksgiving Day (4th Thursday in November)
Christmas Day (December 25th)
Franchisee shall also observe any additional holidays coinciding with the holiday
schedule observed by the County to the extent such County -observed holiday results in the
closure of the Designated Disposal Site. In any week in which one of these holidays falls on a
Collection day, Collection will be delayed to the next business day. Any changes to the holiday
collection schedule may only be made as approved by the City Manager in advance in writing.
4.4. Sinstle-Family Residential Customers: Source -Separated Three -Stream
Collection For Refuse, Recyclable Materials and Green Waste All Three
Containers For Each Stream To Be Collected Weekly.
4.4.1 Single -Family Residential Unit Refuse Collection. Franchisee shall
collect and remove Refuse from all Single -Family Residential Units once per week from
Franchisee Provided Carts. Franchisee shall provide each Customer with at least one 96 gallon
Cart specially for the purpose of Refuse as the default service level for Refuse Collection.
(a) Collection Location; Roll -Out Service. Franchisee shall collect
Refuse from Single -Family Carts curbside unless the Customer has requested Cart
"roll-out" service (described below) and has agreed to pay the applicable
premium service rate (as reflected in the Exhibit A Maximum Rate Schedule).
Roll-out services shall be provided free of charge to disabled Customers who have
applied for and received certification by the City. In the case of roll-out service,
Franchisee shall collect Carts from and return Carts to the alternative service
location (such as the side yard or back yard) specified by the Customer and
agreed -to by Franchisee. Also, where paved alleys exist in the rear of a Single -
Family Residential Unit, Collections may be made by Franchisee from alleys
(provided, however, that this requirement does not apply to a blind alley). Absent
a roll-out service arrangement, Franchisee shall not be under any obligation to
enter private courts or places, blind alleys, or other private property, to make
Collections from Single -Family Residential Units.
(b) Rates on Per -Cart Basis; Smaller Cart Option. The basic, default
rate for Refuse service (i.e., one Refuse Cart) is set forth in the Maximum Rate
Schedule (Exhibit A). Single -Family Residential Units that regularly require
more than 95/96 -gallons of Refuse Cart capacity may request additional Refuse
Carts for an additional charge per Cart in accordance with the Maximum Rate
Schedule. Single -Family Residential Units shall be permitted the option of
electing a smaller Refuse Cart (either 64/65- gallons or 32/35 -gallons). However
the smaller Cart option shall be serviced at the same rates as the default 95/96 -
gallon Carts.
Exhibit 1
Page 25 of 79
1333632.1
(c) Refuse Overages. Single -Family Residential Units are entitled to
two annual overage pickups per year of material not -to -exceed three (3) 30 -gallon
bags of Refuse (cumulatively over the year) that did not otherwise fit in the
Refuse Cart(s) at no additional cost. In addition to the overage allowance
provided in the preceding sentence, Refuse overage pickups may also be provided
at no additional charge during the two Carson Clean Environment Weeks as
described below. Any additional Refuse overage pickups may be charged per
pickup in accordance with the Maximum Rate Schedule (Exhibit A). This
overage service is exclusive of Bulky Waste services. Single -Family Residential
Units will not need to call ahead to schedule this service; Franchisee will track
each account's use of this service and additional Refuse overage pickups will be
documented and charged in accordance with the Maximum Rate Schedule.
4.4.2 Single -Family Residential Unit Recyclable Materials Collection.
Franchisee shall collect and remove source -separated Recyclable Materials from all Single -
Family Residential Units once per week from Franchisee -Provided Carts. Franchisee shall
provide each Single -Family Residential Unit with a 95/96- gallon Cart dedicated to Recyclable
Materials as the default service at no additional cost.
(a) Manner of Collection. Collection of Recyclable Materials shall be
made from the same location and in the same manner as Refuse from the Single -
Family Residential Units, and shall occur on the same day each week as Refuse
Collection.
(b) Smaller Cart Option. Single -Family Residential Units shall be
permitted the option of electing smaller Recycling Carts, either 64/65 -gallon or
32/35 -gallon.
(c) Recycling Overages. Single -Family Residential Units are entitled
to two annual overage pickups per year of material not -to -exceed three 30 -gallon
bags of Recyclables (cumulatively over the year) that did not otherwise fit in the
provided Recyclable Cart(s) at no additional cost. In addition to the overage
allowance provided in the preceding sentence, Recycling overage pickups may
also be provided at no additional charge during the two Carson Clean
Environment Weeks as described below. Any additional Recycling overage
pickups may be charged per pickup in accordance with the Maximum Rate
Schedule (Exhibit A). This overage service is exclusive of Bulky Waste services.
Single -Family Residential Units will not need to call ahead to schedule this
[ service; Franchisee will track each account's use of this service and additional
1 Recycling overage pickups will be documented and charged in accordance with
the Maximum Rate Schedule.
4.4.3 Single -Family Residential Unit Green Waste Collection. Franchisee shall
collect and remove source -separated Green Waste from all Single -Family Residential Units once
per week from Franchisee Provided Carts. Franchisee shall provide each Single -Family
Residential Unit with at least one 95/96 -gallon Cart dedicated to Green Waste as the default
service, at no charge.
1333632.1
Exhibit 1
Page 26 of 79
(a) Manner of Collection. Collection of Green Waste shall be made
from the same location and in the same manner as Refuse from the Single -Family
Residential Units, and shall occur on the same day each week as Refuse
Collection.
(b) Rates on Per -Cart Basis; Smaller Cart Option. Single -Family
Residential Units shall be permitted the option of electing smaller Green Waste
Carts, either 64/65 -gallon or 32/35 -gallon.
(c) Green Waste Overages. Single -Family Residential Units are
entitled to two annual overage pickups per year of material not -to -exceed three
30 -gallon bags of Green Waste (cumulatively over the year) that did not otherwise
fit in the provided Green Waste Cart(s) at no additional cost. In addition to the
overage allowance provided in the preceding sentence, Green Waste overage
pickups may also be provided at no additional charge during the two Carson
Clean Environment Weeks as described below. Any additional Green Waste
overage pickups may be charged per pickup in accordance with the Maximum
Rate Schedule (Exhibit A). This overage service is exclusive of Bulky Waste
services. Single -Family Residential Units will not need to call ahead to schedule
this service; Franchisee will track each account's use of this service and additional
Refuse overage pickups will be documented and charged in accordance with the
Maximum Rate Schedule.
4.4.4 Smart Gardening Program. Franchisee will use the County's Smart
Gardening Program to provide workshops designed to educate residents on proper Green Waste
composting techniques, xeriscaping, and grasscycling. If the County program cannot be used
due to low numbers of pre -registered residents, Franchisee will provide experienced staff to
teach these classes. A guide to composting will be prepared and a page on Franchisee website
will be added to promote the program. For those residents who attend a workshop, Franchisee
will provide a Twenty Dollar ($20.00) rebate to those who purchase a backyard composting
and/or vermicomposting bin within one month of attending the workshop. Residents will need to
supply a proof of purchase and residency in order to receive the rebate.
4.4.5 Containers & Changes to Collection Schedules. All Carts and Containers
shall be the property of Franchisee, and shall be placed by Franchisee, following Collection
therefrom, in an upright position where found; provided, Franchisee shall not place any Cart or
other Container in a manner interfering with a public street or public right-of-way.
1333632.1
(a) Notice of Residential Collection Schedule. Franchisee shall post
and maintain up-to-date written route schedules and maps of the routes on a
publicly -accessible and easy -to -find website maintained by Franchisee for
purposes of its hauling services and/or other waste management operations in the
City.
(b) Changes in Residential Collection Schedule. City may require
changes in the route schedule for among other things, to improve service or
resolve complaints. Prior to the change of a route schedule, Franchisee shall
Exhibit 1
Page 27 of 79
provide written notice of the change to affected customers thirty (30) days in
advance and shall post the changes on a publicly accessible website maintained by
the Franchisee for purposes of its hauling services and/or other waste
management operations in the City.
4.5. Commercial and Industrial Customers: Shared Container or Individual
Containers; RecyclingCommercial and Industrial Unit Refuse Collection.
Franchisee shall collect Refuse from Commercial and Industrial Units not less than once per
week and more frequently if required to handle the Refuse generated at the Premises where the
Containers are located. The Franchisee shall provide each Customer with all necessary and
required Bins at the rates set forth in the Maximum Rate Schedule (Exhibit A). At a minimum,
Franchisee shall offer the following Refuse Collection service methodologies to Commercial and
Industrial Customers:
1333632.1
(a) Centralized Service on Premises. Commercial and Industrial Units
may share Bins with neighboring Commercial and Industrial Units provided that
all sharing units are on the same Premises and so long as the sharing of Bins does
not result in the overfilling of, or overflow from, the Bins. In such case,
Franchisee shall provide the Premises with a choice of Bin capacities including
one (1), two (2), three (3), four (4) and six (6) cubic yards, provided that capacity
shall be sufficient to provide that no Refuse need be placed outside the Bin(s).
(b) Commercial and Industrial Units with Individual Bins.
Commercial and Industrial Units may elect to have its own Bin that is not shared
with another Commercial and Industrial Units on the same Premises, so long as
such Unit's Bins can be properly stored out of public view in a location that
reasonably maximizes discreet Bin storage and reasonable ease of Collection by
Franchisee (either by direct automated collection or roll-out/scout services).
(c) Commercial and Industrial Unit Cart Service. Franchisee shall
offer Cart Collection to Commercial and Industrial Units that do not have space
for a Bin or larger Container at the service rate for such Cart identified in the
Maximum Rate Schedule. Collection frequency for Commercial and Industrial
Carts may occur either on the same regular times and routes as for Commercial
and Industrial Collections in the area, or on the same regular schedule/route as for
Single -Family Residential Unit Cart Collections in the area.
To the extent their unit is able to accommodate curbside pickup
and Cart storage, Multi -Family Complexes may elect to obtain Cart service at the
same rates as Single -Family Cart Customers. Collection frequency for Multi -
Family Carts may occur either on the same regular times and routes as for
Commercial and Industrial Collections in the area, or on the same regular
schedule/route as for other Single -Family Residential Unit Cart Collections in the
area. This program is intended to benefit Multi -Family Complexes with hauling
and collection needs analogous to Single -Family needs (i.e., condominiums,
townhouses and mobilehome units). Franchisee shall notify any Owner of
mobilehome park Premises and the City in writing of individual mobilehome
Exhibit 1
Page 28 of 79
units receiving Cart service to facilitate the City's mobilehome park rent control
program.
(d) Temporary Bin and Roll -Off Box Service and Processing.
Franchisee shall be the exclusive provider of temporary Bin service and
permanent and temporary Roll -Off box service, at the rates identified the
Maximum Rate Schedule (Exhibit A). Roll -off box sizes include ten (10), twenty
(20), thirty (30) and forty (40) cubic yard capacities.
4.5.2 Commercial and Industrial Recyclables Collection (Not Including
Organics Waste). Franchisee shall cooperate and assist the City in meeting the requirements of
State -mandated Recycling for businesses including, but not limited to, identifying Commercial
and Industrial Units that are required to receive Recycling services under the Refuse Impact
Reduction Laws. Franchisee shall undertake Recycling Collection services for Commercial and
Industrial Units in compliance with current Refuse Impact Reduction Laws, as may be amended
from time to time.
1333632.1
(a) Commercial and Industrial. Commercial and Industrial Units shall
subscribe to source -separated Recyclable Materials Collection service and shall
pay Franchisee for such service based on the number of Franchisee Provided Bins
dedicated to Recyclables Collection, in accordance with the Maximum Rate
Schedule (Exhibit A). Franchisee shall offer a range of service options for
Recycling Bins and Recycling service choices that is similar or equivalent to the
service options offered for Commercial and Industrial Refuse Collection per
Section 4.5.1, subject to the condition that the level of service for Recycling
Collection shall be of sufficient capacity and frequency that it does not result in
the overfilling of, or overflow from, the Recycling Bin(s). Franchisee shall
collect source -separated Recyclable Materials collected from Commercial and
Industrial Units not less than once per week. Recyclable Bins for Commercial
and Industrial Units shall be serviced on the same day as Commercial and
Industrial Refuse Collection.
(b) Multi -Family Complexes. Multi -Family Complexes receiving
Refuse Collection service (including individual Cart service per Section 4.5.1(c))
shall be provided one (1) Container designated for Recyclables Collection for
every Refuse Container serving the Premises, subject to the condition that the
level of service for Recycling Collection shall be of sufficient capacity and
frequency that it does not result in the overfilling of, or overflow from, the
Recycling Container(s). Recyclable Containers for Multi -Family Complexes
shall be serviced at least once per week and on the same day as the Premises'
Refuse Container(s) at a rate identified in the Maximum Rate Schedule (Exhibit
A).
(c) Level of Service Audit; Monitoring Reports.
(1) Level of Service Audit. Franchisee shall conduct a waste
audit of all Commercial and Industrial Units to determine their Recyclable
Exhibit 1
Page 29 of 79
Collection needs within the first year following the Service Start Date.
The process used to conduct this audit shall be shared with the City to
ensure permit compliance and acceptance. Those Customers that
demonstrate a significant Recyclable content shall have their level of
services for Recyclables Collection adjusted (i.e., by changes in Container
size, number or Collection frequency) such that the level of services
provided meets actual Recycling demand. Commercial and Industrial
Units that demonstrate lower Recyclables Collection needs may have their
level of services downsized accordingly. Such audits and service
adjustments shall be repeated by Franchisee at least every four (4) years or
as required by law.
(2) Monitoring Reports. Franchisee shall provide the City with
quarterly reports upon Franchisee's status of compliance with all Refuse
Impact Reduction Laws applicable to Commercial and Industrial Units,
and will assist the City with all related filing and reporting requirements of
CalRecycle. As part of such reporting, Franchisee will maintain a
database for the City detailing all Commercial and Industrial Units that are
subject to mandatory Recycling under the Refuse Impact Reduction Laws
in order to track Franchisee's progress and compliance with the
implementation of State -mandated Commercial Recycling programs.
4.5.3 Commercial and Industrial Organics Programs. Franchisee shall provide
all Commercial and Industrial Units mandated by the State to participate in an Organic Waste
Diversion program under the Refuse Impact Reduction Laws with a compliant program.
Collection of Organic Waste shall be provided at rates equal to the Refuse rates for the same size
Container and frequency of service as outlined in the Maximum Rate Schedule (Exhibit A).
Notwithstanding any other provision in this Section 4.5.3, as of the Services Start Date, those
Commercial and Industrial Units that are not required to participate in Food Waste Recycling
under the Refuse Impact Reduction Laws shall only be required to subscribe to a Container that
is dedicated to Green Waste; in such case the term "Organic Waste" as used in this Section 4.5.3
may be read as limited to "Green Waste".
(a) Commercial and Industrial Organic Waste Generators. Those
Commercial and Industrial Units that are required to engage in Mandatory
Commercial Organics Recycling under the Refuse Impact Reduction Laws shall
subscribe to source -separated Organic Waste Collection or processing service.
These Commercial and Industrial Units shall utilize their own Container dedicated
to Organic Waste (i.e., a Container not shared with other Commercial and
Industrial Units unless such Units sharing the Container are also required to
engage in Organic Waste Recycling under the Refuse Impact Reduction Laws).
Franchisee shall offer a range of service options for Organics Containers and
Organics Collection services that is similar or equivalent to the service options
offered for Commercial and Industrial Refuse Collection per Section 4.5.1,
subject to the condition that the level of service for Organic Waste shall be of
sufficient capacity and frequency that it does not result in the overfilling of, or
overflow from, the Organics Container(s). Franchisee shall collect source -
Exhibit 1
Page 30 of 79
1333632.1
separated Organic Wastes from Commercial and Industrial customers not less
than once per week. Commercial and Industrial Organics Containers shall be
serviced on the same day as Commercial and Industrial Refuse and Recycling
Collection.
(b) Food Rescue. To the extent possible, Franchisee will notify
generators of edible food waste of local food rescue opportunities that provide
outlets for unwanted, yet usable food items. The use of this option will be tracked
through Franchisee's level of service audit program.
(c) Multi -Family Organics. Multi -Family Complexes that are required
to engage in Mandatory Commercial Organics Recycling under the Refuse Impact
Reduction Laws shall subscribe to source -separated Organic Waste Collection
service, and will be offered a range of service options designated for Organic
Waste Collection, subject to the condition that the level of service for Organic
Waste Collection shall be of sufficient capacity and frequency that it does not
result in the overfilling of, or overflow from, the Organic Waste Container(s).
Multi -Family Complex Recycling Containers shall be serviced at least once per
week and on the same day as the Premises' Refuse Container(s) at a rate
identified in the Maximum Rate Schedule (Exhibit A). Organic Waste for Multi -
Family Complexes does not include Food Waste, unless otherwise provided by
the Refuse Impact Reduction Laws, as may be amended.
(d) Level of Service Audit, Monitoring Reports.
(1) Level of Service Audit. Franchisee shall conduct a waste
audit of all Commercial and Industrial Units to determine their Organic
Waste Collection needs within the first year following the Services Start
Date. The process used to conduct this audit shall be shared with the City
to ensure permit compliance and acceptance. Those accounts that
demonstrate a significant generation of Organic Waste shall have their
level of services for Organic Waste Collection adjusted (i.e., by changes in
Container size, number or Collection frequency) such that the level of
services provided meets actual Organic Waste demand. Commercial and
Industrial Units that demonstrate lower Organic Waste Collection needs
may have their level of services downsized accordingly. Such audits and
service adjustments shall be repeated by Franchisee at least every four (4)
years or as required by law.
(2) Monitoring Reports. Franchisee shall provide the City with
quarterly reports upon Franchisee's status of compliance with all Refuse
Impact Reduction Laws applicable to Commercial and Industrial Units,
and will assist the City with all related filing and reporting requirements of
CalRecycle. As part of such reporting, Franchisee will maintain a
database for the City detailing all Commercial and Industrial Units that are
subject to mandatory Organic Waste Recycling under the Refuse Impact
Reduction Laws in order to track Franchisee's progress and compliance
Exhibit 1
Page 31 of 79
1333632.1
with the implementation of State -mandated Organic Waste Recycling
programs.
Schedules. 4.5.4 Commercial Container Storage Roll -Out Services & Collection
1333632.1
(a) Appropriate Collection/Storage Locations. Unless expressly
instructed by the City in writing, Franchisee shall provide Franchisee Provided
Containers only to those Commercial or Industrial Units that provide an
appropriate location for such Container(s) in accordance with the City of Carson
Municipal Code, but in no event shall such Containers be maintained in the street
or plain public view. Storage of Commercial or Industrial Containers must utilize
any Container shelters located on the Premises.
(b) Multi -Family, Commercial and Industrial Roll-out Services.
Commercial and Industrial Units may put Containers out for access, or subscribe
to roll-out service. Franchisee shall provide retrieval or "roll-out" services as
requested by Commercial and Industrial Units at the rates identified in the
Maximum Rate Schedule (Exhibit A). Roll-out services shall include, but not be
limited to moving manually or by a specialized "scout" truck the Containers from
their storage location for Collection and returning the Containers to their storage
location.
(c) Collection Schedules; Changes. Collection schedules for
Commercial and Industrial Units shall be subject to the same terms as for Single -
Family Residential Units as described in Section 4.4.4 above.
4.6. Specialized Collection Services and Events.
4.6.1 Bulky Waste and E -Waste Collection
(a) Single -Family Bulky Waste/E-Waste Pickup. Franchisee shall
provide Bulky Waste/E-Waste pickup service to all Single -Family Residential
Units on the regularly -scheduled Collection day or by appointment with
Franchisee. Each Single -Family Residential Unit is entitled to four (4) Bulky
Waste/E-Waste pickups per calendar year at no charge, once per quarter. In
addition, the Bulky Waste/E-Waste pickups may be provided at no additional
charge during the two (2) Carson Clean Environment Weeks as described below
(making for a total cumulative of six (6) Bulky Waste/E-Waste pickups possible
to Residential Units). Each Bulky Waste/E-Waste pickup includes Collection of
up to five (5) items. Franchisee may offer a Customer the alternative option of a
three cubic yard temporary Bin for Bulky Waste/E-Waste Collection if requested,
which will be subject to an additional charge for such Bin (as such charge is
stated in the Maximum Rate Schedule (Exhibit A)). Single -Family Residential
Units that exceed the number of free Bulky Waste/E-Waste pickups per annual
quarter may receive additional curbside Bulky Waste/E-Waste Collection at the
rate set forth in Exhibit A. Customers shall provide Franchise with notice of
Exhibit 1
Page 32 of 79
Bulky Waste/E-Waste pickup service requests prior to 12 noon on the business
day before pickup (up to one week prior), and Customers shall have ability to
request the service by phone, online, or through the City website. Bulky Waste/E-
Waste must be placed within three (3) feet of the curb, swale, paved surface of the
public roadway, closest accessible roadway, or other such location agreed to by
the Franchisee and Customer, that will provide safe and efficient accessibility to
the Franchisee's Collection crew and vehicle.
(b) Multi -Family Bulky Waste/E-Waste Pickup. Customers in Multi -
Family Complexes shall be entitled to a number of annual Bulky Waste/E-Waste
pickups at no additional charge equal to the number of Residential Units in the
Multi -Family Complex. Excessive Bulky Waste/E-Waste deposited in Multi -
Family Complexes may be subject to an additional charge to the Owner in
accordance with the Maximum Rate Schedule (Exhibit A).
(c) CommercialAndustrial Bulky Waste/E-Waste. Excluding Multi -
Family Complexes, Commercial and Industrial Units may receive Bulky Waste/E-
Waste Collection for a fee set in the Maximum Rate Schedule (Exhibit A). This
Bulky Waste/E-Waste pickup service shall be made curbside on the regularly
scheduled Collection day, or by appointment with the Franchisee, in which case
the Customer shall notify Franchisee of the Bulky Waste/E-Waste pickup service
request by noon the day prior to the next scheduled collection day by phone,
online, or through the City website.
(d) Bulky Waste/E-Waste Collection Restrictions. The following
applies to items Collected under this Section:
(1) No single item that cannot be handled by two workers will
be accepted.
(2) The following items will not be picked up: Hazardous
Substances and Hazardous Waste, waste oil, antifreeze, HHW, Infectious
Waste, and U -Waste (other than E -Waste).
(3) Vehicles used for Collection of Bulky Waste shall not use
compactor mechanisms or mechanical handling equipment that may
damage reusable goods or release Freon or other gases from pressurized
appliances.
(4) Bulky Waste Containing Freon. In the event Franchisee
Collects Bulky Waste that contains Freon, Franchisee shall handle such
Bulky Waste in a manner such that the Bulky Waste is not subject to
regulation as Hazardous Waste under applicable state and federal laws or
regulations.
4.6.2 Holiday Tree Collection and Recycling. Franchisee will Collect and
Divert holiday trees placed curbside (or within the Container area in the case of Multi -Family
Exhibit 1
1333632.1 Page 33 of 79
Complexes) from all Residential Unit Customers (both Single -Family and Multi -Family
Complexes) on all regular collection days following Christmas through the second week in
January. Franchisee will Divert all holiday trees from landfilling, with the exception of trees that
cannot be Diverted due to flocking, tinsel or ornaments.
4.6.3 Locking Commercial Containers. Franchisee shall provide locking
Containers (Bins or Roll -Offs) charged in accordance with the Maximum Rate Schedule
(Exhibit A) as an option for Industrial and Commercial Premises.
4.6.4 Oil Waste Collection Center Inspections. Franchisee will conduct annual
inspections of all Used Oil Certified Collection Centers (as certified by CalRecycle) located in
the City by June of each year following the Effective Date at no cost to the City. Upon mutual
written agreement between the City and Franchisee, Franchisee may work with an outside
vendor to collect used motor oil and filters curbside in order to provide additional recycling
opportunities for residents. Any costs to Franchisee that are associated with this additional
service is subject to review during the annual rate adjustment process.
4.6.5 Residential Sharps Collection Program. Franchisee shall provide
Residential Unit Customers (both Single -Family and Multi -Family Complex) with pre -paid
postage mail -back sharps containers at no additional charge. Sharps shall be handled as follows:
(a) Residential Unit Customers may call or email Franchisee to
request a free sharps kit (i.e., a container designed for sharps disposal, a pre -paid
postage label and a form). The kit will be delivered the following week.
Residential Unit Customers then collect household -generated sharps in the
container in accordance with directions therefor. Residential Unit Customers mail
the container back for safe disposal by Franchisee or Franchisee's contractor
using the pre -paid postage label provided and sign the form included in side
pocket of the kit.
(b) Residential Unit Customers will receive one free sharps mail -back
kit per quarter, with further kits available at the rates reflected in the Maximum
Rate Schedule (Exhibit A). Limit one kit at a time.
(c) Franchisee will receive a certificate from its contractor after the
container has been properly emptied that documents that the sharps were safely
and completely processed. That information will be added to the customer's
account data for future review and reference and may be subject to City review in
accordance with other audit procedures herein.
4.6.6 Carson Clean Environment Weeks. Franchisee will provide special
Collection services during two one-week cleanup campaigns known as the "Carson Clean
Environment Weeks."
1333632.1
(a) Time. The Carson Clean Environment Weeks shall occur as one
week in the Spring and one week in the Fall of each year. The City and
Franchisee shall mutually agree in writing upon the exact dates of each Carson
Exhibit 1
Page 34 of 79
1333632.1
Clean Environment Week at least 60 days prior to such Week to allow for
adequate public notice and advertising.
(b) Services. Free services provided during each Carson Clean
Environment Week shall include the following:
Spring Clean Week
Fall Clean Week
1. Curbside pickup of extra
1. Curbside pickup of extra
Refuse bags of up -to three 30-
Refuse bags of up -to three 30 -
gallon bags per Single -Family
gallon bags per Single -Family
Residential Unit.
Residential Unit.
%.uiunuc picxup or extra
Recycling bags of up -to three
30 -gallon bags per Single -
Family Residential Unit.
3. Curbside pickup of extra
Green Waste bags of up -to
three 30 -gallon bags per
Single -Family Residential
Unit.
3. Curbside pickup of up -to
four Bulky Waste items per
Single -Family Residential
Unit.
4. At least one paper
"shredding event" to be
centrally located in the City
(i.e., at City Hall) to provide
paper shredding for up -to three
(3) bankers' boxes of paper
submitted per Residential or
Commercial Unit customer,
until the capacity for shredded
material is full.
5. HHW, E -Waste and U -
Waste "drop-off event" during
which each Single -Family
Unit, Multi -Family Unit, and
Commercial and Industrial
Units may deliver up -to 100
1. Curbside pickup of extra
Recycling bags of up -to three
30 -gallon bags per Single -
Family Residential Unit.
3. Curbside pickup of extra
Green Waste bags of up -to
three 30 -gallon bags per
Single -Family Residential
Unit.
3. Curbside pickup of up -to
four Bulky Waste items per
Single -Family Residential
Unit.
4. At least one paper
"shredding event" to be
centrally located in the City
(i.e., at City Hall) to provide
paper shredding for up -to three
(3) bankers' boxes of paper
submitted per Residential or
Commercial Unit customer,
until the capacity for shredded
material is full.
5. HHW, E -Waste and U -
Waste "drop-off event" during
which each Single -Family
Unit, Multi -Family Unit, and
Commercial and Industrial
Units may deliver up -to 100
Exhibit 1
Page 35 of 79
Sarins Clean Week
Fall Clean Week
pounds of HHW, E -Waste or
U -waste to a central location.
pounds of HHW, E -Waste or
U -waste to a central location.
(c) Curbside Pickup Process. Carson Clean Environment Week
pickups for Single Family Residential Units will be made curbside on the
regularly -scheduled pickup day for that week, or by appointment with the
Franchisee. In the case of by -appointment pickups, at least eight (8) business
hours prior to Collection, residents shall inform Franchisee of the types and
numbers of extra Refuse, Recyclables, Organic Waste, Bulky Waste, E -Waste or
other items to be serviced during a Carson Clean Environment Week.
(d) Event Coordination. The exact dates and locations for paper
shredding events and HHW/E-Waste/U-Waste events held during a Carson
Clean Environment Week will be coordinated with City of Carson Staff in
writing with ample time provided to notice and advertise the events prior to the
start of Carson Clean Environment Week. These events may be undertaken
directly by Franchisee, if Franchisee is duly -licensed to provide such services, or
through a City -approved subcontractor.
(e) Large Venues and Public Events Recycling Program. In support
of the City's compliance with AB 2176, Franchisee will provide reports for the
venues and events previously identified in the AB939 Annual Report process and
will work with those locations to provide detailed information that will
demonstrate compliance with the law. In some instances, these venues/events
may use other service providers, hence third party information may be used for
reporting purposes.
4.7. Free Service to City Facilities. The Franchisee shall collect not less than once
per week, at no cost to the City, all Solid Waste, Recyclables, Organic Waste and C&D Materials
from all City Facilities that are existing on or after the Services Start Date. Where locking lids
are available for a Container type serving a City Facility, the City may request use of locking lids
at no charge.
Franchisee shall provide the City with a Cart or small Bin for E -Waste at City Facilities
where such items are generated. Franchisee shall Collect E -Waste from City Facilities on-call
(but in no event more often than once per month) at no charge. These services may be provided
by Franchisee directly, or through a City -approved subcontractor.
Additionally, self -hauls of Solid Waste and Recyclables Collected by City employees and
delivered by City employees during the ordinary course of their job duties to WRR or other
processing facility owned and operated by Franchisee shall be deposited by the City employees
at no cost (i.e., no tipping fees) charged by the Franchisee facility.
Exhibit 1
1333632.1 Page 36 of 79
City Facilities that are under construction are not eligible for free service. However, if
the City is constructing a new City Facility that is intended to be certified by the Leadership in
Energy and Environmental Design ("LEED") program, then Franchisee shall provide at no
charge any Solid Waste Handling services that exceed the standards for non-LEED buildings,
along with all required reporting to obtain LEED certification.
4.8. Free Service to City Events. Franchisee shall provide Solid Waste, Food Waste
and Recycling Collection and disposal/processing service for all City -sponsored events at no
additional charge. Customers will be provided Solid Waste, Recycling and Food Waste capacity
at the appropriate service levels for each venue or event, as determined by City. When requested
by event organizers, Solid Waste, Food Waste and Recycling Collection service, special event
boxes and liners will be provided for each venue or event. For City Events that may generate a
significant amount of Food Waste, WRC will provide Containers for Food Waste with
appropriate signage for the disposal of Food Waste. Containers available for these events shall
consist of standard cardboard temporary use Containers with liners generally used for short-term
events as standard in the Solid Waste Handling industry. Collection frequency will be provided
as needed by the event. The list of some City -sponsored events for which services will be
provided is attached hereto at Exhibit D.
4.9. Battery Collection. Franchisee shall provide battery collection containers at
various locations throughout the City. These containers can be mailed directly to a third -party
duly licensed to handle and Recycle such Universal Waste from its collection point, with
Franchisee receiving documentation upon battery disposal/Recycling. Totals collected will be
included in Franchisee's regular records subject to audit. This program is only for small
household batteries (alkaline, button, or NiCad), not automotive or marine batteries. The
location of collection containers for U -Waste is listed at Exhibit F hereto.
4.10. Illegal Dumping.
4.10.1 Baclky Waste "Clean -Sweep" Program. Franchisee shall provide "clean -
sweeps" whereby a truck shall Collect Bulky Waste abandoned on any City right-of-way, alley
or street, park or easement. The City will be split into four areas and each week, one area of the
City will be scouted for any abandoned Bulky Waste items and any abandoned Bulky Waste will
be collected. This service shall be provided at no charge to City or Customers.
4.10.2 Private Property Illegal Dumping and Scavenging. Franchisee shall direct
its drivers to note in writing any unauthorized dumping, Recyclables scavenging, unauthorized
Container use, or nuisance Refuse accumulation observed at any private property Premises, and
report the same to the City within two (2) business days of such observation. Owner(s) of the
Premises may request removal of illegally abandoned items from their Premises at the applicable
rate under the Maximum Rate Schedule, or may utilize one of their free Bulky Waste or free
Refuse/Recyclable overage Collection privileges. Franchisee shall exercise Reasonable Business
Efforts to cooperate with the City's Code Enforcement Division in the course of any abatement,
prosecution or administrative code enforcement process, including the provisions of bills,
records, reports, observations, and Franchisee employee testimony.
1333632.1
Exhibit 1
Page 37 of 79
4.10.3 Extra Collections in Code Enforcement Matters. In addition to the above
programs, the City has the right, but not the obligation, to direct Franchisee to Collect illegally
abandoned Bulky Waste/E-Waste from any Premises (public or private) at a rate chargeable to
the City on the basis of time and materials at rates proposed by Franchisee and approved by the
City Manager. The Franchisee shall create a specific work order in response to each call for
abandoned item Collection with a monthly "Summary of Unlawfully Discarded Solid Waste
Work Order Completed." The summary shall include, but not be limited to, the date, time, hours
spent, and type of unlawfully discarded Solid Waste Collected and disposed of. Franchisee
agrees to reasonably cooperate with City in any code enforcement process to facilitate City's
recovery of such amounts paid for the Premises clean-up under this Section. Franchisee agrees
that if requested to provide such services in connection with abatement activities for which
reimbursement is sought from the property owner by City through abatement liens or otherwise,
Franchisee will provide billing information sufficient for City to include it in its liens, and
Franchisee will be paid at such time as the abatement lien is paid, or reimbursement is otherwise
obtained by City from the property owner.
ARTICLE V
WASTE DIVERSION.
5.1. State Mandate. Franchisee hereby agrees to meet or exceed the Diversion
mandates set forth in the Refuse Impact Reduction Laws, as may be amended. The Refuse
Impact Reduction Laws currently set the directive of Diverting fifty percent (50%) of the City's
Solid Waste, with a goal to Divert 75% by the year 2020. If the City fails to implement its
required plans to achieve the aforementioned directive under the Refuse Impact Reduction Laws,
CalRecycle may impose administrative civil penalties of up to TEN THOUSAND DOLLARS
($10,000.00) per day until the City implements its plans. Furthermore, City anticipates that the
State Legislature will adopt new legislation that will increase the minimum Diversion
requirement. Upon the effective date of any new legislation that affects the Diversion
requirements currently imposed by the current Refuse Impact Reduction Laws, Franchisee
agrees, subject to the provisions of Section 7.2, to implement a revised or new Diversion
program meeting such amended legislative requirements. Failure to implement an amended
Diversion program based upon new State legislation mandating Waste Diversion levels shall
constitute a default of this Agreement.
5.1.1 Diversion Processing; Facilities. To facilitate Franchisee's Diversion
obligations hereunder, the Parties agree that Solid Waste, Recyclables, and Organic Waste shall
be delivered to one or more of the recovery facilities (Transfer Stations and/or Materials
Recovery Facilities) identified in Franchisee's proposal (Exhibit E hereto) for Diversion
recovery prior to final disposal at a Disposal Site. Franchisee shall direct all source -separable or
separated Organic Wastes to an Organics processing facility, as approved by the City Manager,
capable of meeting the requirements AB 1826 and any other applicable Refuse Impact Reduction
Law. The list of facilities in Exhibit E to be utilized prior to final disposition at a Disposal Site
may be amended at any time with the written concurrence of the City Manager, excepting that
any use, operation or acquisition of a recovery facility by Franchisee within the City of Carson
jurisdictional boundaries shall require prior approval by the City Council. However, Franchisee
agrees to use Reasonable Business Efforts to maximize the amount of Solid Waste, Recyclables
and Organic Wastes processed at Waste Resources Recovery, Inc. ("WRR"), located at 357 West
Exhibit 1
1333632.1 Page 38 of 79
Compton Boulevard, Gardena, CA 90248, and WRR will reserve tipping capacity for such
Carson -generated materials at WRR. .
5.2. Joint Responsibilities: Development of Diversion Program. The City and
Franchisee shall meet and confer in good faith to jointly develop Solid Waste Diversion
strategies and develop a program adequate to meet the requirements established by the State. In
the event of any change to State or regional laws, regulations or mandates setting new Diversion
requirements applicable to the City, the Parties shall promptly meet and confer to negotiate in
good faith the implementation of such amendments to law through the City's Solid Waste
Diversion program. City and Franchisee shall reasonably cooperate in good faith with all effort
by each other to meet statutory Diversion requirements and otherwise to ensure compliance with
the Act including, without limitation, requests to CalRecycle pursuant to Public Resources Code
§§ 41785 and/or 41820. If the City and Franchisee cannot agree on a program within thirty (30)
days after initially commencing any meet and confer process, City shall be entitled to specify the
program to be implemented, subject to the provisions of Section 7.2. Programs negotiated,
prepared and implemented by Franchisee shall include the a Waste Diversion Plan for City of
Carson and proposed "Zero Waste Plan" for the City.
5.3. Franchisee Waste Diversion Responsibilities.
5.3.1 Cooperation and Education. The Franchisee shall cooperate with the Solid
Waste Diversion activities of the City and shall coordinate Diversion activities and programs to
the extent possible. The Franchisee shall cooperate with the City's efforts to develop and
implement public education and information programs designed to promote Source Reduction,
Recycling and composting in general as well as specific Waste Diversion strategies. Franchisee
shall have a public education program in place by which it will distribute free educational
information about Solid Waste management and Recycling to customers in their regular bills.
(a) Waste Diversion Education. Both City and Franchisee shall
immediately undertake public outreach as approved by the City in writing to
encourage customers to divert many types of wastes within Franchisee Provided
Containers; education programs shall encourage a public perception of recycling
that understands the re -use value of such material in the production of clean -
burning fuels and alternative energy. Said education shall be, but not limited to,
informational tags, education fliers, supportive "ataboy" and South Bay Business
Environmental Coalition rewards programs for compliant customers, community
broadcasts, community newsletters, billing inserts, etc., sent to every Single -
Family Unit, and every Multi -Family Unit, Commercial and Industrial Unit
subject to the mandates of AB 1826.
5.3.2 Implementation of Strategies and Penalties. The Franchisee shall
implement the Diversion strategies jointly developed and agreed to by the Parties. If
Franchisee's failure to perform its obligations under this Section 5.3 results in the imposition of
penalties against the City pursuant to the provisions of any Refuse Impact Reduction Laws,
Franchisee shall protect, defend with counsel approved by City, indemnify, and reimburse the
City (including its officers, directors, employees and agents) for such fine or penalty within thirty
Exhibit 1
Page 39 of 79
1333632.1
(30) days of its imposition, subject to any limitations on such indemnification contained in
Public Resources Code § 40059.1.
5.3.3 Waste Diversion Reporting Requirements. The Franchisee shall comply
with the Waste Diversion reporting requirements established by the City. Franchisee shall
provide City with regular written reports in a form acceptable to the City and adequate to meet
City's reporting requirements to the CalRecycle on compliance with all Refuse Impact Reduction
Laws, including a breakdown of the type and quantity of waste (by weight and volume) hauled
by Franchisee, generator type and program area, the type and quantity of Recyclable Materials,
HHW/U-Waste/E-Waste (as may be inadvertently received by Franchisee), Organic Waste and
Bulky Waste, and including a discussion of the quarterly Waste Diversion percentages achieved
during the year. Franchisee shall report such information on a quarterly basis. Quarterly records
will allow for reporting of seasonal variation in waste quantities and will assists in program
operation, improvement and expansion.
5.3.4 Meet and Confer Process. If Franchisee fails to Divert the required
amount of the City's Solid Waste, as described in this Agreement, Franchisee and City shall meet
and confer in good faith to develop a revised or new Diversion program. If the City and
Franchisee fail to agree on a revised or new Diversion program within ninety (90) days of
commencing the meet and confer process (which date may be extended by mutual written
agreement), notwithstanding anything to the contrary contained herein, City may elect, in its sole
discretion, to terminate this Agreement on thirty (30) days written notice. Franchisee agrees to
continue performance under this Agreement until City hires a new contractor.
5.4. Recycling Program.
5.4.1 Ownership of Solid Waste and Recyclable Materials. Except as otherwise
provided by law, once Solid Waste, Refuse, Recyclable Materials and/or Organic Waste have
been actually discarded by an Owner or Solid Waste generator in a Container, ownership
transfers to Franchisee. Franchisee is thereby granted the right to retain, recycle, compost,
dispose of and otherwise use such waste, or any part thereof, in any lawful fashion or for any
lawful purpose desired by Franchisee. Subject to the Recycling Fee and provisions of this
Agreement, and excepting any material which is not a Solid Waste and which was inadvertently
or improperly discarded, Franchisee shall have the right to retain any benefit or profit resulting
from its right to retain, recycle, compost, convert, dispose of or use the refuse which it collects,
including, without limitation, the market value of all greenhouse gas (GHG) emissions,
reduction, carbon, or renewable energy credits, offsets or similar benefits arising from the Solid
Waste Handling activities undertaken by Franchisee pursuant to this Agreement. City shall have
the right to report any such benefits as part of City's Climate Action Plan or similar plan, and
Franchisee shall provide information requested by City for such reporting. Solid Waste and any
other material which is disposed of at a Disposal Site or sites (whether landfill, transformation
facility, transfer station or material recovery facility) shall, as between the City and Franchisee,
remain the responsibility of the Franchisee, and Franchisee shall retain ownership of the same.
5.4.2 Franchisee As Sole Authorized Recycling Agent. City hereby designates
Franchisee as the sole authorized Recycling agent for the purposes of conducting Recycling
activities within the City for those Recyclables actually discarded by the generator. This
Exhibit 1
1333632.1 Page 40 of 79
designation is made pursuant to the terms of Public Resources Code § 40105. Notwithstanding
the foregoing, Franchisee at all times shall be and remain independent from the City.
ARTICLE VI
VEHICLES, EQUIPMENT AND PERSONNEL
6.1. Vehicles.
6.1.1 General. Franchisee shall utilize a fleet of Collection vehicles sufficient in
number and capacity to perform efficiently the work required by this Agreement in strict
accordance with its terms. As of the Service Start Date, Franchisee's Collection vehicles will be
new CNG -fueled collection vehicles. Franchisee agrees to maintain each piece of equipment
used by it in good order and repair, and not more than three (3) years of age as of the Services
Start Date. All vehicles shall be uniformly painted and fully equipped for efficient automated
Collection. All vehicles shall be registered with the California Department of Motor Vehicles
and shall meet or exceed all applicable State and local requirements, including State CARB
standards. Each Collection vehicle shall also carry a fire extinguisher, first aid kit and a broom
and shovel to be used for the immediate removal of any spilled material. All spilled material
shall be immediately removed by Franchisee. Franchisee shall be responsible for the cost of
repairing all damage to driveway approaches caused by Franchisee's vehicles.
1333632.1
(a) Franchisee has ordered two (2) electric truck chassis from the EV
Company as part of the fleet it will use to perform the work required by this
Agreement. Franchisee's goal is to have an all -electric fleet of Collection
vehicles by July 1, 2023. Franchisee shall use Reasonable Business Efforts to
meet this goal. However, as of the Service Start Date the EV Company does not
currently offer a right-hand drive truck chassis, which is required for the side -
loading vehicles in the Collection fleet, and the availability of a suitable all -
electric truck chassis from another manufacture is neither known nor predictable
at this time. If Franchisee is unable to reach the goal of an all -electric fleet of
Collection vehicles through Reasonable Business Efforts, Franchisee shall utilize
vehicles that contain the next gen CNG engine that is near -zero for emissions, or
any other commercially available truck chassis with equal or lower emissions
performance, such as a hybrid truck chassis. Notwithstanding the above, the City
may require Franchisee to improve or upgrade Collection vehicles to incorporate
the latest technology available to control environmental impacts of the work
required by this Agreement; provided, however, that Franchisee shall not be
required to perform any substantial upgrade relative to the original cost of the
subject vehicle unless a reasonable period of time and fee structure is available
under the Agreement to recover such investment.
(b) As of the Services Start Date, all Franchisee Collection vehicles
will have GPS systems installed. All Collection vehicles will be fitted with up-to-
date technology enabling drivers to access real-time routing and dispatch by
wireless communication to Franchisee offices. Such modules and technology will
be will be continuously updated so that routes and stops are sequenced to
minimize vehicular miles traveled.
Exhibit 1
Page 41 of 79
6.1.2 Truck Bodies. All truck bodies used by Franchisee shall be constructed of
metal, shall be watertight and leak -proof and shall be so constructed as to prevent odors or the
falling, leaking or spilling of Solid Waste, Recyclables, or other materials. Franchisee shall
maintain all trucks and equipment used within City in good mechanical condition and the same
shall be clean and uniformly painted and numbered. All trucks and equipment shall have painted
thereon, or affixed thereto, in letters and numbers at least six (6) inches in height, the name and
telephone number of Franchisee, which name and telephone shall be clearly visible at all times.
Each vehicle utilized by Franchisee shall be identified by numerals at least six (6) inches in
height in a location or locations on such vehicles to be specified by City. A list showing each
vehicle so identified shall be made available to City and maintained in the current status by
Franchisee and, upon notice given by City, Franchisee shall make the equipment available for
inspection. If City finds that any truck or equipment being used by Franchisee is not in
satisfactory condition then the truck or equipment requiring correction of defects shall not be
used by Franchisee in the performance of the Agreement until corrected to the reasonable
satisfaction of City. In addition, if Franchisee's trucks are inspected by any other public
agencies, copies of any inspection report shall be made available to the City upon request.
6.1.3 Backup Alarm. Each vehicle used for collecting, hauling or disposing of
Solid Waste and/or Recyclables shall be equipped with an audible warning device that is
activated when the vehicle is backing up.
6.1.4 Gross Vehicle -Weight Limit. No vehicle used for collecting, hauling or
disposing of Solid Waste and/or Recyclables shall be loaded in excess of the manufacturer's
gross vehicle weight rating or in excess of the maximum weight specified by the California
Vehicle Code, whichever is less. Evidence of the manufacturer's name and gross vehicle weight
rating shall be maintained in, or upon, every vehicle.
6.1.5 Preventive Maintenance and Repair Program. Within thirty (30) days of
the Effective Date of this Agreement, Franchisee shall have implemented a complete and
comprehensive preventive maintenance and repair program, or if such repair program has
already been implemented, Franchisee shall continue its performance thereof. Franchisee shall
provide a copy of its preventative maintenance program to City for its review and approval, or if
such a program has already been approved by the City, Franchisee shall notify the City of any
updates to the program for City approval. Franchisee shall perform all scheduled maintenance
functions in accordance with the manufacturer's specifications and schedule and shall inspect
each vehicle daily to ensure that all equipment is in good working order. Franchisee shall keep
accurate records of all vehicle maintenance and repairs, recorded according to date and mileage,
nature of maintenance or repair and the signature of a maintenance supervisor or mechanic that
the maintenance or repair has been properly performed. Franchisee shall make such maintenance
records available to City on request.
6.1.6 Vehicle Cleaning. Vehicles in use shall be washed completely at least
once a week and steam -cleaned on a regular basis so as to present a clean appearance and
minimize odors, but in no event less than once a month.
6.1.7 Vehicle Storage. No vehicle used by Franchisee in performance of this
Agreement shall be stored on any public street or other public property in the City, except as may
1333632.1
Exhibit 1
Page 42 of 79
be permitted under the City Yard Lease. All Franchisee's vehicles if kept within the boundaries
of the City shall at all times when not in use be kept on property of the proper zone either within
a building or fenced yard, or at 2400 E. Dominguez Street, Carson, California (comprised of
APN No. 7316-026-900).
6.2. Container Condition. Franchisee, at its sole cost and expense, shall maintain all
Franchisee Provided Containers in good condition and repair as needed and shall clean and/or
paint all Franchisee Provided Bins and Roll -offs annually. More frequent cleaning and painting
shall be conducted by Franchisee if needed or as otherwise specified, and can be charged to the
Customer per the rates set forth in Exhibit A. Franchisee shall, at no charge, replace any
Franchisee Provided Containers that become unusable by reason of normal conditions of wear
and tear. If damages occur to a Franchisee Provided Container necessitating repair or
replacement, and if said damages were incurred as a direct result of Customer negligence, the
Customer may be liable for such costs and/or replacement of the Container. During all times that
a Franchisee Provided Container is in the custody and control of Franchisee, Franchisee shall not
store such Container in or on public streets or rights-of-way.
6.2.1 Franchisee Provided Containers that have graffiti on them must be
(i) removed and replaced, or (ii) cleaned of all graffiti, or (iii) repainted to a like -new appearance
within two (2) business days of Franchisee reasonably becoming aware of such graffiti.
6.2.2 Any addresses, name, company or other identifiers on Franchisee
Provided Containers shall be neatly stenciled on, or adhered to, the Containers.
6.2.3 If new laws or regulations relating to composting are enacted such that
additional receptacles are required to be provided to Customers for purposes of complying with
the composting program, Franchisee will supply appropriate Franchisee Provided Carts or Bins
at no additional cost to meet new State mandates.
6.2.4 Upon request by a Cart Customer, Franchisee shall provide steam cleaning
services of Franchisee Provided Carts once per year at no cost to the City or Customer.
Franchisee shall provide additional steam cleaning services for Carts at such charge as adopted in
Franchisee's Maximum Rate Schedule (Exhibit A).
6.2.5 All Containers dedicated to the Collection of Organic Waste that includes
commingled Food Waste shall be exchanged for a fresh Containers after each Collection.
6.2.6 All Containers dedicated to a single Collection stream shall clearly
indicate the appropriate materials to be disposed in such Container. If such instructions are
placed on the Container by paint or decal, such paint or decal shall be maintained by Franchisee
in an attractive, and well -adhered condition.
6.3. Inspection.
6.3.1 City Inspections. Franchisee shall give the City at least fifteen (15) days
prior written notice of any vehicle inspection to be performed by the California Highway Patrol
("CHP") and the City may elect to observe the CHP inspection. Without limiting the City's right
Exhibit 1
Page 43 of 79
1333632.1
to observe the CHP inspections, City reserves the right to cause any vehicle used in performance
of this Agreement to be inspected and tested at any commercially reasonable time and in such
manner as may be appropriate to determine that the vehicle is being maintained in compliance
with the provisions of the City of Carson Municipal Code and the State Vehicle Code, including
but not limited to California Vehicle Code §§ 27000(b), 23114, 23115, 42030, 42032, and all
Vehicle Code Sections regarding smog equipment requirements. City may direct the removal of
any vehicle from service if that vehicle is found to be in nonconformance with applicable codes.
No vehicle directed to be removed from service shall be returned to service until it conforms
with applicable codes and such conformance has been acknowledged by City. The City may
elect in its sole discretion to hire an independent contractor to perform a comprehensive
inspection of Franchisee's vehicles. If the City hires an independent contractor to perform the
inspection on behalf of the City the Franchisee shall pay for the cost of such inspection. City
shall act prudently in requesting any such inspection.
6.3.2 Brake Inspections. The brake system of each vehicle used in performance
of this Agreement shall be inspected bi-annually by the CHP and shall comply with State law.
Notice of certification shall be filed with the City within thirty (30) days after each such
certification. Failure to submit the required certification shall be grounds for terminating this
Agreement.
6.3.3 Correction of Defects. Following any inspection, the City Manager shall
have the right to reasonably require Franchisee to take out of service any vehicles and equipment
not in good working order and cause Franchisee to recondition or replace any vehicle or
equipment found to be unsafe, unsanitary or unsightly within thirty (30) days of notification of
defect in such vehicle or equipment. The City Manager's determination may be appealed to the
City Council.
6.4. Personnel.
6.4.1 General. Franchisee shall furnish such qualified drivers, mechanical,
supervisory, clerical and other personnel as may be necessary to provide the services required by
this Agreement in a courteous, safe and efficient manner. Franchisee shall keep itself fully
informed of existing and future State and Federal laws, rules and regulations rules and orders in
any manner affecting those engaged and employed in or on the work contemplated herein or in
any way affecting the conduct of that work and of all orders or decrees of bodies of officials
having jurisdiction or authority over the same, and shall, at all times, observe and comply with
and cause any and all persons employed by Franchisee or under Franchisee cause to observe and
comply with all such laws, ordinances, rules, regulations, orders and decrees. Franchisee and
any subcontractors and/or employees under Franchisee shall comply with and be governed by the
law of the State of California having to do with working hours as set forth in the Labor Code of
the State of California, as the same may be amended from time to time.
6.4.2 Driver Qualifications. All drivers shall be trained and qualified in the
operation of Collection vehicles and must have in effect a valid license, of the appropriate class,
issued by the California Department of Motor Vehicles.
1333632.1
Exhibit 1
Page 44 of 79
6.4.3 Uniforms and Identification Badges. Franchisee shall require its drivers
and all other Collection personnel to wear a suitable and appropriate uniform as a means of
identifying the employee. All other employees of Franchisee who come into contact with the
public shall carry suitable identification badges or cards upon their person.
6.4.4 Employee Appearance and Conduct. All employees, while engaged in the
Collection of Solid Waste and/or Recyclables within the City or otherwise engaged in services
described in this Agreement, shall be attired in uniform. At least one member of every
Collection truck crew shall be able to read and speak English. Franchisee shall use its best
efforts to assure that all employees present a neat appearance and conduct themselves in a
courteous manner. Franchisee shall regularly train its employees in customer courtesy, shall
prohibit the use of loud or profane language, and shall instruct Collection crews to perform the
work as quietly as possible. If any employee is found not to be courteous or not to be performing
services in the manner required by this Agreement, Franchisee shall take all appropriate
corrective measures.
6.4.5 Safety Traininc. Franchisee shall provide suitable operational and safety
training for all its employees who use or operate vehicles or equipment for Collection of Solid
Waste or who are otherwise directly involved in such Collection. Franchisee shall train its
employees involved in Solid Waste and/or Recycling Collection to identify, and not to collect,
Hazardous Wastes. Franchisee and its employees shall comply with the terms of all contracts
between the Los Angeles County Department of Public Works and any Disposal Site that is used
by Franchisee.
6.4.6 Safety. All work performed pursuant to this Agreement shall be
performed in a manner that provides safety to the public and meets or exceeds safety standards
outlined by the California Construction Safety Orders under the State of California Code of
Regulations ("CAL -OSHA"). City reserves the right to issue restraint or cease and desist orders
to Franchisee when unsafe or harmful acts are observed or reported to City. Franchisee shall
instruct its employees to report immediately any hazardous conditions or Hazardous Wastes they
observe within the City during the course of their work to the City.
6.4.7 No Gratuities. Franchisee shall not permit its employees or subcontractors
to demand or solicit, directly or indirectly, any additional compensation or gratuity from
members of the public for the work performed by those employees or subcontractors pursuant to
this Agreement.
6.4.8 Notice of Labor Disputes. Franchisee shall advise City in writing at the
time any negotiations are undertaken between Franchisee and its employees relating to the wages
and benefits and Franchisee shall report the status of said negotiations from time to time
including any pending strike, lock out, walkout, boycott or other labor dispute.
ARTICLE VII
FRANCHISEE'S COMPENSATION
7.1. Maximum Rate Schedule. In the attached Exhibit A, which is incorporated
herein by this reference ("Maximum Rate Schedule"), the City has established the maximum
Exhibit 1
Page 45 of 79
1333632.1
service rates which may be charged by Franchisee to its Customers in the City. The Maximum
Rate Schedule will go into effect on Services Start Date, and shall be the Maximum Rate
Schedule in effect as of the Services Start Date. Franchisee may establish such rates and charges
Franchisee believes are appropriate in the marketplace, provided such rates and charges do not
exceed the maximum rates set forth in the Maximum Rate Schedule. Franchisee shall not
receive any other fees or compensation for the services to be performed pursuant to this
Agreement in excess of those provided in the Maximum Rate Schedule unless until such
additional fees or compensation have been duly noticed and subjected to a public hearing process
in accordance with Proposition 218.
7.2. Adiustments to Maximum Rate Schedule.
7.2.1 General. Franchisee acknowledges that under current law, increases in the
Maximum Rate Schedule are subject to the substantive and procedural requirements of
Proposition 218. During the Term, the City and Franchisee may mutually agree to adjustments
or increases to the Maximum Rate Schedule, subject to the provisions and requirements of
Proposition 218. Any increases in the Maximum Rate Schedule are strictly subject to the assent
of the City and compliance with Proposition 218 as provided in Section 7.3.
7.2.2 COLA Adjustments; Government Code §53756. Subject to the
requirements of Proposition 218 and this Agreement, the Maximum Rate Schedule may be
adjusted to account for annual inflationary increases to all regular, weekly service rates for both
Single -Family Residential Units and Commercial and Industrial Units in an amount equal to the
annual percent change in the CPI. This adjustment (the "COLA Adjustment") shall be made
each July 1st and shall be equal to the percentage change in CPI -U for the year that ended the
immediately preceding March 31 for Los Angeles -Riverside -Orange counties, base year
1967. The COLA Adjustment calculation is [current rate X (1 + the percentage change in CPI -
U) = new rate]. Notwithstanding the above, the COLA Adjustment to the Maximum Rate
Schedule shall be subject to the following requirements:
(a) The COLA Adjustment may take effect only after it has been
adopted and passed pursuant to a Proposition 218 hearing and/or protest process.
The COLA Adjustment shall be enacted consistent with Government Code
§ 53756, such that no prior approval of a COLA Adjustment may exceed a period
of five (5) years.
(b) Commencing from the date of adoption for any COLA
Adjustment, such adjustments shall continue automatically on a year-to-year basis
for a period not to exceed five (5) years after the date such adjustments were
adopted in accordance with Proposition 218.
(c) At the end of the five-year period, there shall be no further CPI
escalations or other automatic adjustments to the Maximum Rate Schedule unless
or until further automatic adjustments are adopted through a subsequent
Proposition 218 process as required by Government Code § 53756.
Exhibit 1
Page 46 of 79
1333632.1
(d) Notwithstanding any other provision hereof, there shall be no
COLA Adjustment for period of three (3) years following the Services Start Date.
Upon the expiration of such three-year period, the COLA Adjustment shall be
applied for a period of two (2) years thereafter (or up -to July 1, 2023). After July
1, 2023, any further automatic rate adjustments must be processed in accordance
with the terms of this Agreement and Government Code § 53756.
7.2.3 Increases for Cost Pass-Throughs. Subject to adoption in accordance with
Proposition 218 and this Agreement, the Maximum Rate Schedule (Exhibit A) shall be adjusted
to account for Franchisee's increased costs during the Term such that cost increases shall be
"passed -through" to Franchisee's customers in the form of service rate adjustments ("Pass -
Through Adjustments"). Such costs that shall be passed -through include, without limitation:
(a) The cost of paying the Franchise Fee;
(b) Cost increases (i.e., on any direct or indirect cost, whether fixed or
variable) associated with an increase in the level of Franchisee's Solid Waste or
Recyclables handling services, including new programs or services, increases in
tipping fees, which may be required of, or agreed to by, Franchisee, or;
(c) Increased actual costs due to changes in law or legal requirements
imposed upon Franchisee.
These Pass -Through Adjustments may be adopted through a Proposition 218 process any time
after the Services Start Date. Pass -Through Adjustments, however, may not be increased
automatically each year, but shall remain at status quo unless and until another Proposition 218
process is undertaken to increase Pass-Throughs again as needed to cover actual cost increases to
be incurred by Franchisee. (See, Government Code § 53756, which only extends automatic
increases for inflationary adjustments.) Franchisee agrees to notify City in writing of any
expected cost increases that could result in a Pass -Through Adjustment, and Franchisee shall use
Reasonable Commercial Efforts to utilize any alternate action (including, as appropriate, a
change to using a Disposal Site with lower Disposal Fees) to the extent reasonably feasible to
avoid passing -on cost increases to Franchisee's customers.
7.2.4 Purpose of Adjustments. The rates and rate adjustment provisions
contemplated by this Agreement are calculated (1) to provide Franchisee with the means to fund
Diversion efforts, (2) to pay certain other costs and expenses, including fuel costs, that are of a
contingent and uncertain nature, along with a commercially reasonable profit and (3) assume, to
a limited degree, a certain amount of revenue from the recovery of Recyclable Materials. The
parties recognize further that recycling markets, along with fuel costs, will likely fluctuate
throughout the Term. Accordingly, the parties understand and agree that while Franchisee will
remain obligated to maximize Waste Diversion and identify and pursue opportunities to market
the Recyclable Materials it recovers, Franchisee cannot influence or dictate fuel prices or the
availability or adequacy of markets for Recyclable Materials, including beverage containers, and
that a future fuel cost increase, or decline in revenue from the sale of Recyclable Materials may,
depending upon the scale of that increase or decline, justify a cost pass-through in accordance
with this Paragraph 7.2.3.
Exhibit 1
Page 47 of 79
1333632.1
7.3. Proposition 218 Process for Adiustments to Maximum Rate Schedule
7.3.1 Compliance with Proposition 218 Required; Timeframes. Further
adjustments and/or increases to the Maximum Rate Schedule in addition to those identified in
Section 7.2, above, are strictly subject to the assent of the City and compliance with Proposition
218. The City intends to comply with all applicable laws, including without limitation
Proposition 218, concerning the setting of adjustments to the Maximum Rate Schedule under this
Agreement. Franchisee shall pay up to and not exceeding Fifteen Thousand Dollars
($15,000.00) for the administration of Proposition 218 compliance, including the costs of public
noticing.
(a) Preliminary Meeting Re Proposed Rate Adjustments. At a
minimum, the City and Franchisee will meet at least once per year in March to
discuss potential rate adjustments (increases or decreases) and the justifications
therefor. Such meetings will be conducted between Franchisee and the City
Manager or his/her designee. Franchisee represents that as of the Services Start
Date the Customer rates and/or the Maximum Rates shall be competitive with the
rates charged for similar services to Residential and Commercial and Industrial
customers in the local area.
(b) Timing/Notice to City of Rate Adjustment Requests. For any rate
adjustment subject to a Proposition 218 majority hearing process, Franchisee
hereby acknowledges that it typically takes 75-90 days to process an adjustment
through Proposition 218. Therefore, Franchisee shall provide the City written
notice of a requested rate adjustment, with the specific proposed new rates, at
least 120 days the date such adjusted rates are contemplated to take effect.
7.3.2 Indemnification. Franchisee shall indemnify, defend and hold harmless
the City, their officers, employees, agents and volunteers, (collectively, indemnitees) from and
against all claims, damages, injuries, losses, costs, including demands, debts, liens, liabilities,
causes of action, suits, legal or administrative proceedings, interest fines, charges, penalties and
expenses (including attorneys' and expert witness fees, expenditures for investigation, and
administration) and costs or losses of any kind whatsoever paid, imposed upon, endured or
suffered by or assessed against Franchisee or any of the indemnitees resulting in any form from
the City's establishing maximum rates for service under this Agreement or in connection with the
application of California Constitution Article XIIIC and Article XIIID to the imposition,
payment or Collection of rates and fees for services provided by Franchisee under this
Agreement. Notwithstanding the foregoing, this indemnity shall not extend to any portion of the
rates that is not associated with Franchisee's costs in providing service, such as governmental
fees, franchise fees or charges, nor shall it apply to any loss arising directly from the negligence
of City, its officers and employees. Nothing herein is intended to imply that California
Constitution Articles XIIIC or XIIID, apply to the setting of rates for the services provided under
this Agreement; rather this Section is provided merely to allocate risk of loss as between the
Parties.
7.3.3 Notice of Increases to Ratepayers. Franchisee shall give prompt written
notice of any duly -adopted rate increases to all customers, which notice shall inform customers
Exhibit 1
Page 48 of 79
1333632.1
of the exact date on which the increase becomes effective. These notices shall be provided on
the Franchisee's publicly -accessible website and shall also be included in those billing invoices
mailed out at a time in conformance with Government Code § 53756.
7.3.4 Rate Increase Not Automatic. While City reserves all powers afforded to
cities generally under the provisions of applicable law, this Agreement, including the rate
adjustment elements hereof, has been agreed to by the parties following arms -length negotiations
and upon advice of counsel, for the dual purposes of safeguarding public health and facilitating
the performance of obligations undertaken by Franchisee on City's behalf and for its benefit.
Accordingly, while this Agreement does not require City's approval of a Maximum Rate
Schedule adjustment in every case, it does contemplate that City will exercise its powers
reasonably and in good faith, and shall favorably consider and shall accord proper weight to a
Maximum Rate Schedule proposal if accompanied by substantial supporting evidence. In no
case will City's failure to approve any specific Maximum Rate Schedule adjustment be a default
hereunder, and City bears no liability to Franchisee for any damages suffered by Franchisee as a
result of the failure to pass new Maximum Rate Schedules or adjustments thereto. Accordingly,
the City Council is completely free within its police powers to exercise its discretion in
considering such matters, and the City has not contracted away any of the its police powers or
duties to protect the public health, safety or general welfare of its citizens pursuant to State and
Federal law.
7.3.5 Rate Studies. The City shall at its option, have the right but not the
obligation, to conduct, or retain a consultant to conduct, a Proposition 218 rate study once every
three (3) years to review the Maximum Rate Schedule's substantive compliance with the
requirements of Proposition 218. Franchisee shall reimburse City up to, but not exceeding, Fifty
Thousand Dollars ($50,000.00) for the cost actually incurred and paid for the rate study.
7.4. Billing. All Commercial and Industrial Unit accounts shall be directly billed by
Franchisee monthly. Billing and Collection for service may be done on a monthly basis in
advance of service, providing the due date of said bill is not more than sixty-five (65) days prior
to the end of the billing cycle where service is being provided. Franchisee shall refund any
portion of charge for service which is not provided within ten (10) days of cancellation of
service.
7.4.1 Default service levels for Single -Family Residential accounts shall be
billed via enrollment on annual property tax rolls. In accordance with County property tax
protocols, all account bills to be enrolled onto property taxes are due to the County by August 1
each year. Such enrollment also requires City Council action.
7.4.2 Enrollment upon the tax rolls only applies to "default" or basic level
Collection services to Single -Family accounts. Additional Carts, Bins, temporary Containers,
and special, non -regular services that vary from month-to-month may be directly billed to
Single -Family accounts by Franchisee on a monthly basis.
7.4.3 Franchisee shall provide monthly statements to residential and commercial
customers upon request by the customers. Franchisee is responsible for bad debt.
Exhibit 1
Page 49 of 79
1333632.1
7.5. Delinquent Accounts.
7.5.1 Residential Units. Franchisee shall provide at least three (3) monthly,
written notices of delinquency/past-due account status to the occupants and/or owner of any
Residential Unit with a delinquent account for items that are directly billed to the Residence (as
opposed to bills enrolled on property tax rolls). Franchisee shall otherwise make diligent efforts
to resolve said account delinquencies, including but not limited to the reasonable use of a
collection agency. Further, Franchisee shall be entitled to collect all applicable fees and late
charges set forth in the Maximum Rate Schedule (Exhibit A). After three (3) months of
delinquency on any account, Franchisee will take prompt action in the exercise of all Reasonable
Business Efforts to collect on the account in a manner that does not unreasonably prolong the
Collection process. Franchisee shall also be entitled to utilize any remedies or lien procedures
available to it for the Collection of delinquent accounts as provided in the City of Carson
Municipal Code, as such may be amended from time to time.
7.5.2 Industrial and Commercial Unit Accounts. City may permit Franchisee to
discontinue service to Commercial and Industrial Units whose accounts are more than ninety
(90) days past due. Franchisee shall be entitled to collect late charges at the rate of 1.5% per
month and, in addition, to charge a reasonable rate for the redelivery of Franchisee Provided
Containers. Franchisee shall also be entitled to utilize any remedies or lien procedures available
to it for the collection of delinquent accounts as provided in the City of Carson Municipal Code,
as such may be amended from time to time.
7.5.3 No Waiver of City Remedies to Address Public Nuisance. Should
Franchisee terminate service to any Customer in the City, nothing herein waives or supersedes
the City's rights to initiate code enforcement action(s) in response to the build-up, long-term
stagnation, or misplacement of Solid Waste as a result of said termination of Franchisee's
service. In addition, the City and Franchisee shall, at the option of either party, meet and confer
in good faith to resolve any matters of public nuisance or Solid Waste build-up that resulted from
a termination of service by Franchisee.
7.6. City's Payment To Franchisee For Residential Solid Waste Collection. To be
completed via staff and WRI invoicing process.
ARTICLE VIII
ACCOUNTING AND RECORDS.
8.1. Recordkeeaing. Franchisee shall maintain records required to conduct its
operations, to support requests it may make to City, and to respond to requests from City in the
conduct of City business. Adequate record security shall be maintained to preserve records from
events that can be reasonably anticipated such as a fire, theft and earthquake. Electronically
maintained data/records shall be protected and backed up. All records shall be maintained for
five (5) years, and shall continue to be available for five (5) years after the expiration of this
Agreement. After minimum holding periods are met, Franchisee will notify City 90 days before
destroying records.
Exhibit 1
Page 50 of 79
1333632.1
(a) Related Operations and Account Histories. Franchisee agrees that
the records of any and all companies conducting operations addressed in the
Agreement shall be provided or made available to City and its official
representatives during normal business hours. Account histories shall be
accessible to the City by computer for a minimum of five (5) years. City may
review or utilize any of the records described in this Section for any purpose
whatsoever.
(b) Contract -Related Records. Franchisee understands and agrees that
it shall keep full and complete books, records and accounts of all financial
transactions with respect to this Agreement. All such books, records and accounts
shall be maintained for a minimum of five (5) years from and after the end of the
fiscal year in which any such books, records and accounts are created. Records
subject to this Section shall include paper, electronic, magnetic or other media
including, but not limited to, records of recovered materials, marketing records,
cash register records of purchases of source separated Recyclables, and video tape
recordings of Franchisee operations, vehicular registration and maintenance
records, complaint logs, the log of uncollected materials, personnel files, customer
correspondence and other correspondence, etc.
(c) Financial Records. Financial records shall be maintained and
expense and revenue information for City shall be segregated from other areas
served by Franchisee. Where the allocation of expenses or revenues to various
categories of customers is required to develop equitable rates that reflect the cost
of service, Franchisee shall segregate such expenses and revenues. Franchisee
shall maintain at least the following records:
(1) Audited financial statements for Franchisee or, if a
guarantee was provided, for the parent company guarantor as a whole;
(2) Financial statements (compiled, reviewed or audited) of
revenue and expense for this Agreement segregated from the other
operations of Franchisee (including without limitation those operations of
Franchisee in City and surrounding jurisdictions which are not covered by
this Agreement), including a description of segregation methodology; and
(3) Complete descriptions of related party transactions
(corporate and/or regional management fees, inter -company profits from
r transfer, processing or Disposal operations).
1333632.1
(d) Solid Waste Records. Records shall be maintained by Franchisee
for City relating to:
(1) Customer services and billing;
(2) Route audits and maps;
Exhibit 1
Page 51 of 79
(3) Tons Collected, processed, diverted and disposed by waste
stream (Refuse, Recycling, Organic Waste), by customer type (Cart, Bin,
Roll -Off, etc.) and Facilities (Transfer Station, MRF, Transformation
Facility, landfill or others) where such material was taken;
(4) Bulky Waste and C&D Materials (with separate line items
to be included for temporary and regular Bin and Roll -Off services),
Collection and Diversion results including tons disposed;
(5) Annual cleanup event results, including tons disposed and
Diverted;
(6) Facilities, equipment and personnel used;
(7) Facilities and equipment operations, inventories,
maintenance and repair;
(8) Number of Refuse, Recycling and Organic Waste
Franchisee provided containers in service;
(9) Complaints; and,
(10) Missed pickups.
(11) Records for all other programs including, but not limited to,
public education, Bulky Waste programs, City Facilities and Events,
illegal dumping and scavenging programs, and customer outreach
activities, amongst any other program identified herein. These records
shall be tailored to specific needs of the program at issue. In general, the
records shall include: (i) Plans, tasks, and milestones;
and (ii) Accomplishments in terms such as dates, activities conducted,
quantities of products used, produced or distributed, and numbers of
participants and responses.
Franchisee shall maintain copies of billings, service and Collection records and receipts relating
to Franchisee's services under this Agreement, each in chronological order, for a period of five
(5) years after the date of service for inspection by City upon request. Franchisee may, at its
option, maintain those records in computer form, on microfiche, or in any other manner,
provided that the records can be preserved and retrieved for inspection and verification in a
timely manner, are sufficient to verify accuracy of Franchise Fees owed to the City, and may be
produced in a form and manner sufficient to establish the existence of customer obligations in a
court of competent jurisdiction.
8.2. Right to Annually Conduct Audit. The City may annually, at City's option,
request the Franchisee's audited financial reports/statements (or parent company, if parent
company submits Corporate Guaranty of Performance), and Franchisee's internally prepared
supplemental statement of income and expenses related specifically to City of Carson operations,
for up to the most recently completed last two fiscal years not previously reviewed by the City in
Exhibit 1
Page 52 of 79
1333632.1
connection with a proposed rate adjustment, rate audit, billing audit, Franchise Fee audit, or
verification of other information required under this Agreement. The financial statements 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.
8.2.1 City Audit of Records. City shall have the right to conduct a contract
compliance audit at any time, and City anticipates that such audit shall be performed not less
than once every two years for purposes of reviewing and ensuring Franchisee's compliance with
all terms of this Agreement. In addition to any records to be retained and available for inspection
under this Article 8, the audit may request review or copying of financial statements maintained
by Franchisee, which may include, without limitation, comparative balance sheets, comparative
operating statements, statements of changes in investments in property and equipment,
statements of source and application of funds, and a statement of any changes in Franchisee's
equity, in which shall be set forth the names of principal officers and stockholders of the
corporation, income statements for local hauling operations, profit/loss statements for local
hauling operations, any other documents that may reasonably be requested by City or its auditor.
(a) Cost of Audit. The cost for preparation of the financial statements,
and the reimbursement of the City's contract compliance audit costs shall be
borne by Franchisee as a direct cost of service. In addition, Franchisee shall
provide to City the supplemental schedule on a compiled basis showing
Franchisee's results of operations, including the specific revenues and expenses in
connection with the operations provided for in this Agreement, separated from
others included in such financial statements.
(b) Working Papers. At City's request, Franchisee shall provide City
with copies of working papers or other documentation deemed relevant to the
audit by City or relating to information shown in the disclosure letter. The
disclosure letter shall be provided to City.
(c) Payments and Refunds. Should the performance of an audit by the
City disclose that the Franchise Fees payable by the Franchisee was underpaid or
that customers were overcharged for the period under review, Franchisee shall
pay to City any underpayments of the Franchise Fee and/or refund to Franchisee's
customers any overcharges. Should the performance of an audit by the City
disclose that Franchise Fees were overpaid, City shall promptly refund to
Franchisee the amount of the overpayment.
8.3. CERCLA Defense Records. City views the ability to defend against the
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and
related litigation as a matter of great importance. For this reason, the City regards the ability to
prove where Solid Waste Collected in the City was taken for disposal, as well as where it was
not taken, to be matters of concern. Franchisee shall maintain data retention and preservation
systems which can establish where Solid Waste Collected in the City was landfilled (and
Exhibit 1
Page 53 of 79
1333632.1
therefore establish where it was not landfilled) and provide a copy or summary of the reports
required in Section 8.3 for five (5) years after the term during which Collection services are to be
provided pursuant to this Agreement, or to provide copies of such records to City. Franchisee
agrees to notify City's Risk Manager and City Attorney before destroying such records and to
offer records to the City. This provision shall survive the expiration of the period during which
Collection services are to be provided under this Agreement.
ARTICLE IX
ENFORCEMENT OF AGREEMENT.
9.1. City Right to Terminate. The City shall have the right to terminate Franchisee's
franchise and this Agreement upon Franchisee's material breach of this Agreement. The City's
right to terminate shall be in addition to any other remedy provided in this Agreement or
provided by law and shall include, but not be limited to, any of the events of default set forth in
this Article 1X. In addition, specific events of default by Franchisee include, without limitation,
the following:
(a) If Franchisee practices, or attempts to practice, any fraud or deceit
upon the City.
(b) Should the Franchisee or any of its officers, directors, shareholders
(who have been active in the business of Franchisee), or employees be found
guilty of felonious conduct, illegal transport or disposal of Hazardous Waste, or
bribery of public officials, the City reserves the unilateral right to terminate this
Agreement should they not be removed from their position upon conviction, or to
impose such other sanctions (which may include financial sanctions, temporary
suspensions or any other condition deemed appropriate short of termination) as it
shall deem proper under the circumstances. The term "felonious conduct" shall
mean a felony that in the City's determination has the potential of endangering the
public or affecting Franchisee's ability to perform this Agreement (e.g., identity
theft). The term "found guilty" shall be deemed to include any judicial
determination of guilt including, but not limited to, pleas of "guilty", "nolo
contendere", "no contest" or "guilty to a lesser charge" entered as part of a plea
bargain. This Section is not intended, and shall not be interpreted, to require that
Franchisee terminate any current employee who may, as of the Effective Date,
have a criminal record.
(c) If Franchisee fails to provide or maintain in full force and effect
the workers' compensation or any other insurance coverage or performance bond
required by this Agreement.
(d) If Franchisee willfully violates any orders or rulings of any
regulatory body having jurisdiction over Franchisee, provided that Franchisee
may reasonably contest any such orders or rulings by appropriate proceeding
conducted in good faith, in which case no breach of this Agreement shall be
deemed to have occurred.
Exhibit 1
Page 54 of 79
1333632.1
1333632.1
(e) If Franchisee fails to make any payments or to pay any penalties
required to be made or paid by Franchisee pursuant to this Agreement. This
includes the failure to pay the administrative fee set forth in Section 3.3.3 hereof.
(f) If Franchisee for any reason ceases to provide Solid Waste and/or
Recycling management services required under this Agreement over all or a
substantial portion of its franchise area for a period of thirty (30) days.
(g) If Franchisee violates the terms, conditions or requirements of the
City of Carson Municipal Code or Refuse Impact Reduction Laws or successor
legislation, as they may be amended from time to time or violates any order,
directive, rule or regulation issued pursuant to the foregoing legislation, where the
violation is not remedied within the time set in the written notice of the violation.
(h) If Franchisee refuses to provide City with required information,
financial statements, report or test results in a timely manner as required by this
Agreement.
(i) If Franchisee becomes insolvent, unable or unwilling to pay its
debts, or upon the appointment of a receiver to take possession of all or
substantially all of the assets of Franchisee, or upon a general assignment by
Franchisee for the benefit of creditors, or upon any action taken by or suffered by
Franchisee under any insolvency or bankruptcy act.
0) If Franchisee fails to meet the Diversion requirements of this
Agreement or Refuse Impact Reduction Laws.
(k) If Franchisee should persistently and repeatedly refuse or should
fail to supply enough properly skilled workers or proper materials or equipment
for the Collection and disposal of Solid Waste from City in a good and
workmanlike manner, or fail to make prompt payment for materials, equipment or
labor, or fail to make any payment to City when due, or persistently disregard
laws, ordinances, or the instructions of City or its duly authorized representatives,
or otherwise to be in substantial violation of any provision of the Agreement.
(1) If Franchisee should persistently and repeatedly fail to perform its
services hereunder in a professional and workmanlike manner as required by the
performance standards set forth herein, or if Franchisee's conduct of its services
under this Agreement should result in a recurrent or persistent condition of public
nuisance or threat to public health and safety.
(m) If Franchisee fails to make reasonable efforts to process, market
and sell Recyclables.
(n) If Franchisee should commit an uncured default of the City Yard
Lease. In the event that the City, following a hearing on a Default, determines to
terminate this Agreement as a remedy for such default, such determination shall
Exhibit I
Page 55 of 79
concurrently cause termination of the City Yard Lease, and vice versa, except as
the City shall otherwise direct by resolution.
9.2. Rights of Nondefaulting Party after Default. The Parties acknowledge that
both Parties shall have hereunder all legal and equitable remedies as provided by law following
the occurrence of a default or to enforce any covenant or agreement herein. Before this
Agreement may be terminated or action may be taken to obtain judicial relief the Party seeking
relief for a default ("Non -defaulting Party") shall comply with the notice and cure provisions
below.
9.3. Notice of Default and Opportunity to Cure. A Non -defaulting Party in its
discretion may elect to declare a default under this Agreement in accordance with the procedures
hereinafter set forth for any failure or breach of the other Party ("Defaulting Party") in its
performance of a material duty or obligation of said Defaulting Party under the terms of this
Agreement. However, the Non -defaulting Party must provide written notice to the Defaulting
Party setting forth the nature of the breach or failure and the actions, if any, required by
Defaulting Party to cure such breach or failure ("Default Notice"). The Defaulting Party shall be
deemed in "default" under this Agreement, where: (i) said breach or failure can be cured, but the
Defaulting Party has failed to fully cure within thirty (30) days after the date of the Default
Notice (subject to the provisions below), or (ii)a monetary default remains uncured for ten (10)
days (or such lesser time as may be specifically provided in this Agreement).
9.4. Non -Monetary Defaults; Longer Cure Period. The Defaulting Party on a non -
monetary default shall not be deemed in breach of this Agreement, and such default shall be
waived, if such non -monetary default cannot reasonably be cured within the above -prescribed
thirty -day period, and as long as the Defaulting Party does each of the following:
(a) Notifies the Non -defaulting Party in writing with a reasonable
explanation as to the reasons the asserted default is not curable within the thirty
(30) day period;
(b) Notifies the Non -defaulting Party of the Defaulting Party's
proposed cause of action to cure the default;
(c) Promptly commences to cure the default within the thirty (30) day
period;
(d) Makes periodic reports to the Non -defaulting Party as to the
progress of the program of cure; and
(e) Diligently prosecutes such cure to completion.
9.5. Termination Upon Default. Upon receiving a Default Notice, should the
Defaulting Party fail to timely cure any default, or fail to diligently pursue such cure as
prescribed above, the Non -defaulting Party may, in its discretion, provide the Defaulting Party
with a written notice of intent to terminate this Agreement and other Agreements ("Termination
Notice"). The Termination Notice shall state that the Non -defaulting Party will elect to terminate
Exhibit 1
Page 56 of 79
1333632.1
this Agreement and will describe the evidence upon which the decision to terminate is based.
Once the Termination Notice has been issued, the Non -defaulting Party's election to terminate
this Agreement will only be waived if (i) the Defaulting Party fully and completely cures all
defaults prior to the date of termination.
9.6. Franchisee Hearing Opportunity Prior to Termination. If Franchisee is the
Defaulting Party, then the City's Termination Notice to Franchisee shall additionally specify that
Franchisee has the right to a hearing prior to the City's termination of the Agreement
("Termination Hearing"). The Termination Hearing shall be scheduled as an open public hearing
item at a regularly -scheduled City Council meeting within thirty (30) days of the Termination
Notice, subject to any legal requirements including but not limited to the Ralph M. Brown Act,
Government Code Sections 54950-54963. At said Termination Hearing, Franchisee shall have
the right to present evidence to demonstrate that it is not in default and to rebut any evidence
presented in favor of termination. Based upon substantial evidence presented at the Termination
Hearing, the Council may, by adopted resolution, act as follow:
(a) Decide to terminate this Agreement; or
(b) Determine that Franchisee is innocent of a default and,
accordingly, dismiss the Termination Notice and any charges of default; or
(c) Impose conditions on a finding of default and a time for cure, such
that Franchisee's fulfillment of said conditions will waive or cure any default.
Findings of a default or a conditional default must be based upon substantial evidence
supporting the following two findings: (i) that a default in fact occurred and has continued to
exist without timely cure, and (ii) that such default has, or will, cause a material breach of this
Agreement and/or a substantial negative impact upon public health, safety and welfare, the
environment, the City or the financial terms established in this Agreement.
9.7. Interest on Monetary Default. In the event Franchisee fails to perform any
monetary obligation under this Agreement, Franchisee shall pay interest thereon at the rate of ten
percent (10.0%) per annum from and after the due date of said monetary obligation until
payment is actually received by City.
9.8. City's Right to Perform Service.
9.8.1 City Rights. In addition to any and all other legal or equitable remedies, in
the event that Franchisee, for any reason whatsoever, fails, refuses or is unable to collect,
transport or process any or all Solid Waste or Recyclables which it is required by this
Agreement to collect and transport, at the time and in the manner provided in this Agreement, for
a period of more than five (5) 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 in his or
her sole discretion should find that such accumulation endangers or menaces the public health,
safety or welfare, then the City Manager shall have the right, but not the obligation, without
payment to Franchisee, to (i) cause to be performed, such services itself with its own personnel
or employ Franchisee's personnel, without liability to Franchisee; and/or (ii) to take possession
Exhibit 1
Page 57 of 79
1333632.1
of any or all of Franchisee's equipment and other property used or useful in the Collection and
transportation of Solid Waste and to use such property at the expense of Franchisee to collect and
transport any Solid Waste which Franchisee would otherwise be obligated to collect and
transport pursuant to this Agreement.
such event:
9.8.2 Franchisee and City Responsibilities. Franchisee further agrees that in
(a) It will fully cooperate with City to effect the transfer of possession
or property to the City for City's use;
(b) It will, if City Manager so requests, and to the extent feasible, 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; and
(c) The City agrees to assume complete responsibility for the proper
and normal use of such equipment and facilities while in its possession.
9.8.3 Franchise Waivers. Franchisee agrees that the City's exercise of its rights
under this Article IX:
(a) Does not constitute a taking of private property for which
compensation must be paid, but is rather an exercise of the City's police power;
(b) Will not create any liability on the part of City to Franchisee,
including but not limited to, any right to compensation for use of Franchisee's
equipment;
(c) Does not exempt Franchisee from the indemnity provisions of
Article XI, which are meant to extend to circumstances arising under this Section
9.8, provided that Franchisee is not required to indemnify City against claims and
damages arising from the negligence of City, its officers, employees, agents, or
volunteers acting under this Section 9.8; and
(d) Does not terminate this Agreement, unless termination occurs
under other provisions of this Agreement.
9.9. Duration of City's Possession. City has no obligation to maintain possession of
Franchisee's property and/or continue its use in Collecting and transporting Solid Waste or
Recyclables for any period of time and may, at any time, in its sole discretion, relinquish
possession to the Franchisee. Should the City desire to retain possession of Franchisee's
property, the City's right to retain temporary possession, and to provide Solid Waste Collection
services, shall continue until Franchisee can demonstrate to the City Manager's reasonable
satisfaction that it is ready, willing and able to resume such services.
9.10. Forfeiture of Performance Bond. In the event Franchisee shall for any reason
become unable to, or fail in any way to, perform as required by this Agreement, City may declare
Exhibit 1
Page 58 of 79
1333632.1
that portion of the performance bond or other security established pursuant to Section 11.3 which
is necessary to recompense and make whole the City, forfeited to the City. Upon partial
forfeiture of the performance bond or other security, Franchisee shall promptly take all steps
necessary to restore the performance bond or other security to its face amount.
9.11. City's Right to Lease Franchisee's Equipment Following Termination. If
City terminates this Agreement for cause, the City shall have the right to lease Franchisee's
equipment from Franchisee at its fair market value for a period not to exceed six (6) months in
order to allow City to perform the services required under this Agreement.
9.12. Cooperation Following Termination. At the end of the Term or in the event
this Agreement is terminated for cause prior to the end of the Term, Franchisee shall cooperate
fully with City and any subsequent contractor to assure a smooth transition of Solid Waste
management services. Franchisee's cooperation shall include, but not be limited to, providing
operating records needed to service all properties covered by this Agreement.
9.13. Remedies for Nuisance Violations.
9.13.1 Liquidated Damages. The provision of poor public service or the
production of any nuisance condition will subject Franchisee to administrative procedures,
potential liquidated damages and, ultimately, termination, for severe and repeated violations.
9.13.2 Complaints. Public complaints (whether received by the City regarding
Franchisee' performance or received directly by Franchisee) will be handled as prescribed in
Sections 4.2.3 and 4.2.4 hereof.
9.13.3 Nuisance Conditions. Repeated, substantiated complaints of, or continued
conditions of, poor service quality and/or nuisance conditions may be handled in the manner
prescribed below. For purposes of this Section, the term "nuisance conditions" shall include, but
is not limited to, the following:
(a) Failure to duly collect Solid Waste and/or Recyclables that have
been properly set -out for Collection through the willful or negligent conduct of
Franchisee employees;
(b) Uncured damage to the property of third parties or customers
through the willful or negligent conduct of Franchisee employees;
(c) Legitimate complaints of rude or unprofessional behavior or
conduct by Franchisee's employees in the course of their duties;
(d) Failure to perform service surveys and route audits as required by
Sections 4.2.8 and 4.2.9, respectively, hereof,
(e) Unreasonable spillage of Solid Waste or other collected materials
from Franchisee's vehicles;
Exhibit 1
Page 59 of 79
1333632.1
(f) Failure to immediately or promptly collect Solid Waste that spilled
or fell from Franchisee's vehicles onto public streets or third -party property;
(g) Poor maintenance of Franchisee's vehicles, containers and
equipment in violation of Sections 6.1 through 6.3 hereof,
(h) Violations of personnel standards and qualifications in
contravention of Section 6.4 hereof;
(i) Any other failure to meet performance standards in such a manner
as to give rise to a condition of public nuisance or threat to public health and
safety.
9.13.4 Notice of Violation. Initially, when the City Manager or a designated
enforcement officer observes a violation, a verbal warning shall be given to the Franchisee. If
the violation is thereafter repeated and, in the opinion of the City Manager or designated
enforcement officer, Franchisee has not taken timely, effective action to correct the violation and
prevent its repetition, then the City Manager or designated enforcement officer may issue a
written notice of violation (the "Notice of Violation") describing the violation, the period in
which Franchisee is required to cure the violation (if such violation is curable) and a warning that
continued violations can be subject to liquidated damages.
9.13.5 Franchisee's Right To Contest. Within five (5) business days after
receiving the Notice of Violation, Franchisee may submit a written response (the "Response") to
the Notice of Violation to the City Manager. The City Manager shall review Franchisee's
Response and may further investigate the claimed violation. The City Manager shall make a
final determination regarding the Notice of Violation and the City Manager shall deliver to
Franchisee a written conclusion concerning the Notice of Violation. Additionally, at the election
of either Party, the Parties may meet to develop a written corrective action plan ("Correction
Plan") to prevent further occurrence of the problematic conditions established in the Notice of
Violation. The Correction Plan shall be finally prepared by the City (or, at the election of the
City, by Franchisee) within ten (10) business days after the meeting between the City Manager
(or designee) and Franchisee. The Correction Plan may include additional procedures, as
deemed necessary by the City Manager, to assure that in the future Franchisee will be able to
perform its services in compliance with this Agreement.
9.13.6 Liquidated Damages. There shall be no basis for the imposition of
Liquidated Damages for any Notice of Violation issued within ninety (90) days of the Service
Start Date. If a second Notice of Violation is issued for any violation after an initial verbal
warning and thereafter the issuance of a written Notice of Violation that is not withdrawn
pursuant to Subsections 9.13.4 or 9.13.5 above, then liquidated damages may thereafter be
assessed against Franchisee (as liquidated damages and not a penalty) by the City Manager in the
amount of $450 for every day the condition persists. Further, if the violation for which
liquidated damages were assessed recurs on three (3) or more days within a 60 -day period
following any assessment of liquidated damages, then starting on the fourth (4th) day that such
violation either persists or recurs the amount of liquidated damages shall increase to $700 per
day.
Exhibit 1
Page 60 of 79
1333632.1
9.13.7 Basis for Liquidated Damages. The Parties further recognize that if
Franchisee recurrently fails to prevent and remediate nuisance conditions, the 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 and its citizens will suffer.
Therefore, the Parties agree that the liquidated damages established herein represent a reasonable
estimate of the amount of such damages for such specific violations, 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 impractical. In placing their initials at the places provided,
each Party specifically confirms the accuracy of the statements made above and the fact that each
Party has had ample opportunity to consult with legal counsel and obtain an explanation of these
liquidated damage provisions prior to entering this Agreement.
Franchisee's Initials City Initials
9.13.8 Further Remedies For Severe Or Persistent Violations. The above
provisions for a Correction Plan procedure and liquidated damages are intended to give the
Parties a remedy under this Agreement short of termination or default; however, should
Franchisee's violations be severe and repetitive or otherwise not reasonably subject to correction
through liquidated damages, the Planning Director may, in his sole discretion, institute the
procedures set forth in this Article hereof.
9.14. No Waiver Of City's Police Powers Or Legal Rights. Nothing in this
Agreement is intended to limit the power and ability of the City or any law enforcement agency
to initiate administrative and/or judicial proceedings for the abatement of nuisance conditions or
violations of any applicable law. Nothing herein shall waive or limit any other legal rights or
recourses the City may have in response to Franchisee's repeated, material violations of
Performance Standards or failure to mitigate nuisance conditions.
9.15. Early Termination of Agreement for Non -Delivery of EV Assembly Plant.
Franchisee has entered negotiations to collaborate with Dongfeng Progen, a current supplier of
Franchisee's waste hauling fleet, to open the EV Company within the City of Carson.
Franchisee expects Dongfeng Progen to open the EV Company by February 1, 2018. Given that
Franchisee's relationship with Dongfeng was a substantial inducement to the City's award of this
Agreement to Franchisee, the City has a vested interest in the successful opening and operation
of the EV Company within its city limits at the operational levels represented. It is therefore
agreed that should the EV Company fail to open, fully commence operations by February 1,
2018, and continue sales tax -generating operations within the City for at least two years, then
within two (2) years thereafter the City may elect to:
9.15.1 Terminate this Agreement, such termination to be without prejudice to the
City, at the City's discretion, and upon no less than 90 days written notice to Franchisee; and/or
9.15.2 Undertake a new request for proposal process to obtain new proposals for
the franchised Collecting, transporting, transferring, processing, recycling, treating, diverting,
converting, and Collecting for disposal all Solid Waste and Recyclable Materials generated by
Residential, Commercial and Industrial establishments within the City of Carson; and/or
Exhibit 1
Page 61 of 79
1333632.1
9.15.3 Undertake negotiations or an immediate award of contract with another
Solid Waste Enterprise that submitted a qualified proposal to the City in 2017 for the Collecting,
transporting, transferring, processing, Recycling, treating, Diverting, converting, and Collecting
for disposal all Solid Waste and Recyclable Materials generated by Residential, Commercial and
Industrial establishments within the City of Carson.
ARTICLE X
TRANSFERS OF INTEREST.
10.1. Restrictions on Transfers. The City, in entering into this Agreement, has placed
a special value, faith and confidence in the experience, background, and expertise of the
Franchisee in the field of waste disposal. Such faith and confidence being a substantial
consideration in the granting of this Agreement warrants the transfer restrictions provided in this
Article X.
10.2. Definition of Transfer. As used in this Section, the term "Transfer" shall include
any hypothecation, mortgage, pledge, or encumbrance of this Agreement by Franchisee, subject
to the exceptions set forth in Section 10.4 below. A Transfer shall also include the transfer to
any person or group of persons acting in concert of more than forty-nine percent (49%) of the
present equity ownership and/or more than forty-nine percent (49%) of the voting control of
Franchisee (jointly and severally referred to herein as the "Trigger Percentages"), taking all
transfers into account on a cumulative basis, except transfers of such ownership or control
interest to an affiliate owned or controlled by the present beneficial owners of Franchisee or
members of their immediate family, or between members of the same immediate family, or
transfers to a trust, testamentary or otherwise, in which the beneficiaries are limited to members
of the transferor's immediate family. A transfer of interests (on a cumulative basis) in the equity
ownership and/or voting control of Franchisee in amounts less than Trigger Percentages shall not
constitute a Transfer subject to the restrictions set forth herein. In the event Franchisee or its
successor is a corporation or trust, such Transfer shall refer to the transfer of the issued and
outstanding capital stock of Franchisee, or of beneficial interests of such trust; in the event that
Franchisee or any general partner comprising Franchisee is a limited or general partnership or a
limited liability company, such Transfer shall refer to the transfer of more than the Trigger
Percentages in the limited or general partnership or limited liability company interest; in the
event that Franchisee or any general partner is a joint venture, such Transfer shall refer to the
transfer of more than the Trigger Percentages of such joint venture partner, taking all transfers
into account on a cumulative basis.
10.3. Transfers Require City Approval. Franchisee shall not Transfer this
Agreement or any of Franchisee's rights hereunder, directly or indirectly, voluntarily or by
operation of law, except as provided below, without the prior written approval of City, and if so
purported to be transferred, the same shall be null and void. Franchisee will submit its request
for City consent to the City together with documents, including but not limited to: (i) the
transferee's audited financial statements for at least the immediately preceding three (3) operating
years; (ii) proof that the proposed transferee has municipal solid waste management experience
on a scale equal to or exceeding the scale of operations conducted by Franchisee; (iii) proof that
in the last five (5) years, the proposed transferee has not suffered any citations or other censure
from any federal, state, or local agency having jurisdiction over its waste management operations
Exhibit 1
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due to any significant failure to comply with federal, state, or local waste management law and
that the transferee has provided the City with a complete list of such citations and censures; (iv)
proof that the proposed transferee has at all times conducted its operations in an environmentally
safe and conscientious fashion; (v) proof that the proposed transferee conducts its municipal
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 waste,
including hazardous waste; (v) proof that the transferee's officers or directors have no criminal
convictions for fraud, deceit, false claims or racketeering with respect to the transferee's course
of business; (vi) a "transition plan" describing how Franchisee proposes to efficiently transition
the rights and obligations hereunder to the transferee or assignee without material disruptions to
service, and (vii) any other information required by the City to ensure the proposed transferee
can fulfill the terms of this Agreement, including the payment of indemnities and damages and
provision of bonds and/or performance standards, in a timely, safe, and effective manner.
10.4. Exceptions. The requirement to obtain City approval for a Transfer shall not
apply to any of the following:
(a) Any mortgage, deed of trust, sale/lease-back, or other form of
conveyance for financing and any resulting foreclosure therefrom.
(b) A sale or transfer resulting from or in connection with a
reorganization as contemplated by the provisions of the Internal Revenue Code of
1986, as amended or otherwise, in which the ownership interests of a corporation
are assigned directly or by operation of law to a person or persons, firm or
corporation which acquires the control of the voting capital stock of such
corporation or all or substantially all of the assets of such corporation.
(c) A sale or transfer to an affiliate of Franchisee owned or controlled
by the present beneficial owners of Franchisee or members of their immediate
family, or between members of the same immediate family, or transfers to a trust,
testamentary or otherwise, in which the beneficiaries are limited to members of
the transferor's immediate family.
(d) A sale of Franchisee's securities in a public offering, so long as the
public offering does not result in the transfer to any person or group of persons
acting in concert of more than forty-nine percent (49%) of the present equity
ownership and/or more than forty-nine percent (49%) of the voting control of
Franchisee. In addition, such public offering shall not result in a material change
in Franchisee management, employees, budget, or level of services allocated to
the City of Carson without the City's prior written consent.
10.5. Assumption of Obligations. No attempted Transfer of any of Franchisee's
obligations hereunder shall be effective unless and until the successor party executes and delivers
to City an assumption agreement in a form approved by the City assuming such obligations.
Following any such assignment or Transfer of any of the rights and interests of Franchisee under
this Agreement, the exercise, use and enjoyment shall continue to be subject to the terms of this
Agreement to the same extent as if the assignee or transferee were Franchisee.
Exhibit 1
Page 63 of 79
1333632.1
10.6. Release of Franchisee. City's consent to a Transfer shall not be deemed to
release Franchisee of liability for performance under this Agreement unless such release is
specific and in writing executed by City, which release shall not be unreasonably withheld.
Upon the written consent of City to the complete assignment of this Agreement and the express
written assumption of the assigned obligations of Franchisee under this Agreement by the
assignee, Franchisee shall be relieved of its legal duty from the assigned obligations under this
Agreement, except to the extent Franchisee is in default under the terms of this Agreement prior
to said Transfer. Franchisee shall cooperate with the City and transferee or assignee to assist in
an orderly transition of obligations and rights, including without limitation Franchisee timely
providing route lists, billing information, etc., to the transferee or assignee.
10.7. Franchisee to Pay Transfer Costs. Franchisee will pay City its reasonable
expenses for attorneys' fees and investigation costs necessary to investigate the suitability of any
proposed transferee or assignee, and to review and finalize any documentation required as a
condition for approving any such Transfer. In the event of a Transfer, Franchisee shall pay City
a "transfer fee" in within thirty (30) days of the date the Transfer is effective. The amount of the
transfer fee paid to City shall depend on the date the number of years remaining in the Term of
this Agreement, as of the date of the Transfer:
# Years Remaining in
Amount of Transfer
Fee
Term
Less than 1 year
$120,000
1 to 2 years
$160,000
2 to 3 years
$200,000
3 to 4 years
$240,000
4 to 5 years
$280,000
5 to 6 years
$320,000
6 to 7 years
$360,000
8 years or more
$400,000
10.8. Subcontracting. This Agreement, or any portion thereof, shall not be
subcontracted except with the prior written consent of the City, which consent shall not be
unreasonably withheld. No such consent shall be construed as making the City a Party to such
subcontract, or subject the City to liability of any kind to any subcontractor. Franchisee shall
submit all subcontracts for review and approval by the City and any permitted subcontract shall
terminate on or before the termination of this Agreement. All subcontractors shall be licensed as
required under State, Federal and local laws and regulations to perform their subcontracted work
and obtain and maintain a City business license if required. Franchisee shall remain otherwise
Exhibit 1
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1333632.1
liable for the full and complete performance of its obligations hereunder. City acknowledges and
approves of Franchisee's use of a subcontractor to haul transfer rigs to the landfill, subject to
City's approval of such subcontractors, which will not be unreasonably withheld.
_ 10.9. Heirs and Successors. The terms, covenants and conditions of this Agreement
shall apply to and shall bind the heirs, successors, executors, administrators and assigns of the
Franchisee and City.
ARTICLE XI
INSURANCE, INDEMNITY AND PERFORMANCE BOND.
11.1. Insurance. Franchisee shall procure and maintain, at its sole cost and expense, in
a form and content satisfactory to City, during the entire term of this Agreement including any
extension thereof, the policies of insurance contained in Exhibit B hereto.
11.2. Indemnification. Without regard to the limits of any insurance coverage,
Franchisee agrees to indemnify, defend with counsel appointed by the City, protect and hold
harmless the City, its representatives, officers, agents and employees against any and all fines,
response costs, assessments, actions, suits, injunctive relief, claims, damages to persons or
property, losses, costs penalties, obligations, errors, omissions or liabilities, ("claims or
liabilities") that may be asserted or claimed by any person, firm or entity arising out of or in
connection with (i) violations of the commerce clause of the U.S. Constitution, AB 939, the
Comprehensive Environmental Response, Compensation and Liability Act, Title 42 U.S.C.
§9601 et seq. ("CERCLA"), HSAA, RCRA, any other Hazardous Waste laws, or other federal,
state or local environmental statutes, ordinances and regulations which arise from this
Agreement; (ii) the negligent performance of the work or services of Franchisee, its agents,
employees, subcontractors, or invitees, provided for in this Agreement; (iii) the negligent acts or
omissions of Franchisee hereunder, or arising from Franchisee's negligent performance of or
failure to perform any term, provision, covenant or condition of this Agreement, whether or not
there is concurrent passive or active negligence, on the part of the City, its representatives,
officers, agents or employees but excluding such claims or liabilities arising from the sole
negligence or willful misconduct of the City, its representatives, officers, agents or employees,
who are directly responsible to the City, and in connection therewith:
(a) Franchisee will defend any action or actions filed in connection
with any of said claim or liabilities and will pay all costs and expenses, including
legal costs and attorneys' fees incurred in connection therewith;
(b) Franchisee will promptly pay any judgment rendered against the
City, its officers, agents or employees for any such claims or liabilities arising out
of or in connection with the negligent performance of or failure to perform such
work or services of Franchisee hereunder; and Franchisee agrees to save and hold
the City, its officers, agents and employees harmless therefrom;
(c) In the event the City, its officers, agents or employees is made a
party to any action or proceeding filed or prosecuted against Franchisee for such
damages or other claims arising out of or in connection with the negligent
Exhibit 1
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1333632.1
performance of or failure to perform the work or services of Franchisee
hereunder, Franchisee agrees to pay to the City, its officers, agents or employees,
any and all costs and expenses incurred by the City, its officers, agents or
employees in such action or proceeding, including but not limited to, legal costs
and attorneys' fees.
Franchisee's obligations hereunder shall survive the termination or expiration of this
Agreement.
11.3. Faithful Performance Security. Concurrently with execution of this Agreement,
Franchisee shall deliver to City a bond or a letter of credit in the amount of Ten Million Dollars
($10,000,000.00) which shall secure the faithful performance of this Agreement, including,
without limitation, payment of any penalty and the funding of any work to cure a breach of this
Agreement, unless such requirement is waived by the City Manager. If Franchisee elects to
submit a bond, the performance bond shall be executed by a surety company licensed to do
business in the State of California, having an A: VII or better rating, and approved by the City;
and included on the list of surety companies approved by the Treasurer of the United States. The
bond shall contain the original notarized signature of an authorized officer of the surety and
affixed thereto shall be a certified and current copy of his or her power of attorney. The bond
shall be unconditional and remain in force during the entire Term. If Franchisee elects to submit
a letter of credit, the instrument shall be an irrevocable standby letter of credit in a form
approved by the City Attorney and issued by a bank which is reasonably satisfactory to City.
The bank must be chartered in the United States, have a rating of B or above or a number rating
of 40 or above in the Bank Watch Thomas Ratings, or such equivalent rating service as may be
mutually agreed upon between the City and Franchisee, maintain an office in the State of
California, maintain an agent for service of process in the State of California, and otherwise do
business in the State of California. In the event Franchisee shall for any reason become unable
to, or fail in any way to perform as required by this Agreement, City may declare a portion or all
of the performance bond or letter of credit forfeited to the City. Upon partial or full forfeiture of
the performance bond or letter of credit, Franchisee shall restore the performance bond or letter
of credit to its face amount within thirty (30) days of the City's declaration. Failure to restore the
performance bond or letter of credit to its full amount within thirty (30) days shall be a material
breach of this Agreement.
11.4. AB 939 Guarantee and Indemnification. Without in any way limiting the
indemnification provisions in Section 11.2 above, Franchisee guarantees compliance with the
requirements AB 939 as amended from time to time. Franchisee shall carry out its obligations
under this Agreement so that the City will meet or exceed the diversion requirements set forth in
AB 939, and all amendments thereto more fully set forth below. City and Franchisee shall
reasonably assist each other to meet the City's AB 939 diversion requirements. In carrying out
the provisions of this Section, Franchisee agrees to perform the following obligations at its cost
and expense:
(a) Defend, with counsel approved by City, indemnify and hold
harmless the City against all fines and/or penalties imposed by the CalRecycle, if
Franchisee fails or refuses to provide information relating to its operations which
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1333632.1
is required under this Agreement and such failure or refusal prevents or delays
City from submitting reports required by AB 939 in a timely manner;
(b) Assist City in preparing for, and participating in, the CalRecycle's
biannual review of the City's source reduction and recycling element pursuant to
Public Resources Code Section 41825;
(c) Assist City in responding to inquiries from the CalRecycle in
applying for an extension under Public Resources Code Section 41820, if so
directed by City; in conducting any hearing conducted by the CalRecycle relating
to AB 939; or in any other investigative or enforcement manner undertaken by
any agency;
(d) Defend, with counsel acceptable to City, and indemnify and hold
harmless the City against any fines or penalties levied against it for violation of
AB 939's diversion requirements, provided that Franchisee's obligation to
indemnify City shall be subject to the limitations set forth in Public Resources
Code Section 40059.1(c) as may be amended from time to time;
(e) In cooperating with the City, should it seek to become its own
enforcement agency, to the extent it may be permitted under state law.
11.5. AB 939 Education. Franchisee and City shall jointly develop and implement a
public awareness and education program that is consistent with the City's Source Reduction and
Recycling goals as stated in Article V.
ARTICLE XII
GENERAL PROVISIONS.
12.1. Force Maieure. The time period(s) specified for performance of the provisions
of this Agreement shall be extended because of any delays due to unforeseeable causes beyond
the control and without the fault or negligence of the Franchisee, including, but not restricted to,
acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods,
epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts
of any governmental agency, including the City if the Franchisee shall within ten (10) days of the
commencement of such delay notify the City Manager in writing of the causes of the delay; no
extension of time for performance shall be granted, however, by reason of the unavailability of
any Disposal Site or by reason of strikes, lockouts, or other labor disturbances, or breakage or
accidents to vehicles, equipment, machinery or plants. The City Manager shall ascertain the
facts and the extent of delay, and extend the time for performing the services for the period of the
enforced delay when and if in the judgment of the City Manager such delay is justified. In no
event shall Franchisee be entitled to recover damages against the City for any delay in the
performance of this Agreement, however caused, Franchisee's sole remedy being extension of
the Agreement pursuant to this Section 12.1.
12.2. Notices. All notices, demands, requests, approvals, disapprovals, proposals,
consents, or other communications whatsoever which this Agreement contemplates or
Exhibit 1
Page 67 of 79
1333632.1
authorizes, or requires or permits either Party to give to the other, shall be in writing and shall be
personally delivered, sent by telecopier or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed to the respective Party as follows:
If to Franchisee: Waste Resource Technologies
Attn: Tommy Gendal
P.O. Box 2410
Gardena, CA 90247
With copy to: TUCKER ELLIS, LLP
Attn: Bart L. Kessel
515 South Flower Street
42nd Floor
Los Angeles, CA 90017
If to City: City Manager
CITY OF CARSON
701 East Carson Street
Carson, CA 90745
With copy to: ALESHIRE & WYNDER, LLP
18881 Von Karman Avenue, Suite 1700
Irvine, CA 92612
Attention: Sunny Soltani, City Attorney
or to such other address as either Party may from time to time designate by notice to the other
given in accordance with this Section 12.2. Notice shall be deemed effective on the date
personally served or by facsimile or, if mailed, three (3) days from the date such notice is
deposited in the United States mail.
12.3. Non-discrimination. Franchisee covenants that, by and for itself, its heirs,
executors, assigns and all persons claiming under or through them, that there shall be no
discrimination against or segregation of, any person or group of persons on account of race,
color, creed, religion, sex, marital status, national origin, sexual orientation, or ancestry in the
performance of this Agreement. Franchisee shall take affirmative action to ensure that applicants
are employed and that employees are treated during employment without regard to their race,
color, creed, religion, sex, marital status, sexual orientation, national origin or ancestry.
12.4. Compliance with Immigration Laws. Franchisee agrees that, in the
performance of this Agreement, it will comply with all applicable immigration laws and
regulations.
12.5. No Liability of City Officials. No officer, employee or agent of the City shall be
personally liable to the Franchisee, or any successor in interest, in the event -of any default or
breach by the City or for any amount that may become due to the Franchisee or to its successor,
or for breach of any obligation of the terms of this Agreement.
12.6. Laws and Regulations. Franchisee shall observe all the terms of any City
ordinance or resolution now in effect, or as the same maybe subsequently adopted or amended by
the City, governing or affecting the Collection, removal and disposal of Municipal Solid Waste
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Page 68 of 79
1333632.1
in the City of Carson specifically including, without limitation, Carson Municipal Code Section
5229.2 ("Seamless Service Requirements"), as may be amended from time to time, each and all
of the provisions of which are hereby incorporated into this Agreement by this reference as if set
forth in full. Franchisee further agrees to comply with all applicable county, state or federal laws
or regulations as they exist now or may subsequently be adopted or amended, governing the
Collection, removal and disposal of Municipal Solid Waste or related environmental laws.
Franchisee further agrees to comply with all applicable state and federal laws governing
employment, wages, working conditions, use of materials, equipment, supplies and the like.
12.7. Proprietary Information: Public Records. The City acknowledges that a
number of the records and reports of the Franchisee are proprietary and confidential. Franchisee
is obligated to permit City inspection of certain of its records, as provided herein, on demand and
to provide copies to City where requested. City will endeavor to maintain the confidentiality of
all proprietary information provided by Franchisee and shall not voluntarily disclose such
proprietary information. Notwithstanding the foregoing, any documents provided by Franchisee
to City that are public records may be disclosed pursuant to a proper public records request. City
shall notify Franchisee of any such request affecting Franchisee's records or reports at least five
(5) business days prior to their release, to enable Franchisee to seek a protective order or
otherwise prevent disclosure; provided, however, that City's failure to provide such notice shall
not be a breach of this Agreement.
12.8. Waiver of Future Claims. No delay or omission in the exercise of any right or
remedy by a Non -Defaulting Party on any default shall impair such right or remedy or be
construed as a waiver. A Party's consent to or approval of any act by the other party requiring the
party's consent or approval shall not be deemed to waive or render unnecessary the other party's
consent to or approval of any subsequent act. Any waiver by either Party of any default must be
in writing and shall not be a waiver of any other default concerning the same or any other
provision of this Agreement.
12.9. Conflict of Interest. No officer or employee of the City shall have any financial
interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in
any decision relating to the Agreement which affects his financial interest or the financial interest
of any corporation, partnership or association in which he is, directly or indirectly, interested, in
violation of any State statute or regulation. The Franchisee warrants that it has not paid or given
and will not pay or give any officer, employee or agent of the City any money or other
consideration for obtaining this Agreement.
12.10. Interpretation. The terms of this Agreement shall be construed in accordance
with the meaning of the language used and shall not be construed for or against either Party by
reason of the authorship of this Agreement or any other rule of construction which might
otherwise apply.
12.11. Integration: Amendment. It is understood that there are no oral agreements
between the Parties hereto affecting this Agreement and this Agreement supersedes and cancels
any and all previous negotiations, arrangements, agreements and understandings, if any, between
the Parties, and none shall be used to interpret this Agreement. This Agreement may only be
amended at any time by the mutual consent of the Parties by an instrument in writing. This
Exhibit 1
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1333632.1
Agreement is intended, in part, to carry out City's obligation to comply with the provisions of
AB 939 and regulations promulgated thereunder, as amended from time to time. In the event that
AB 939 or other state or federal laws or regulations enacted after this Agreement prevent or
preclude compliance with one or more provisions of this Agreement, such provisions of this
Agreement shall be modified or suspended as may be necessary to comply with such state or
federal laws or regulations. No other amendment of this Agreement shall be valid unless in
writing duly executed by the Parties.
12.12. Severability. In the event that part of this Agreement shall be declared invalid or
unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity
or unenforceability shall not affect any of the remaining portions of this Agreement which are
hereby declared as severable and shall be interpreted to carry out the intent of the Parties
hereunder unless the invalid provision is so material that its invalidity deprives either Party of the
basic benefit of their bargain or renders this Agreement meaningless.
12.13. Attorneys' Fees. If either Party to this Agreement is required to initiate or
defend or is made a party to any action or proceeding in any way connected with this Agreement,
the prevailing party in such action or proceeding, in addition to any other relief which may be
granted, whether legal or equitable, shall be entitled to reasonable attorneys, fees and expert
witness fees.
12.14. No Joint Venture. Neither the City nor any of its employees shall have any
control over the manner, mode or means by which Franchisee, its agents or employees, perform
the services required herein, except as otherwise set forth. Franchisee shall perform all services
required herein independent from the City and shall remain at all times as to City a wholly
independent entity with only such obligations as are consistent with that role. Franchisee shall
not at any time or in any manner represent that it or any of its agents or employees are agents or
employees of City. City shall not in any way or for any purpose become or be deemed to be a
partner of Franchisee in its business or otherwise or a joint venturer or a member of any joint
enterprise with Franchisee.
12.15. Rights and Remedies are Cumulative. Except with respect to rights and
remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the
parties are cumulative, and the exercise by either Party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other Party.
12.16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
12.17. No Third Party Beneficiary Rights; Exceptions. This Agreement is not
intended to and shall not be construed to give any third party any interest or rights (including,
without limitation, any third party beneficiary rights) with respect to or in connection with any
agreement or provision contained herein or contemplated hereby, except as otherwise expressly
provided for in this Agreement. Notwithstanding the foregoing, the following beneficial rights
as set forth in Carson Municipal Code Section 5229.2(g), as may be amended from time to time,
are specifically afforded Qualified Displaced Workers:
Exhibit 1
Page 70 of 79
1333632.1
"It is understood between the parties that Qualified Displaced Workers,
as that term is defined in Carson Municipal Code § 5229.2 are third -
party beneficiaries to this contract and Contractor agrees that, as such,
Qualified Displaced Workers shall have the right to enforce the
provisions of this agreement relating to employee retention and initial
wages and benefits. This right shall be independent of the City's right to
enforce any and all portions of the contract and shall be in addition to
any rights that such workers may have under any other federal, state or
local statute or at equity. In the event that a Qualified Displaced Worker
prevails in an action to enforce this contract, that Qualified Displaced
Worker shall be entitled to his or her costs, including a reasonable
attorney's fee, in addition to any other remedies that the worker may be
due at law or in equity."
12.18. Jurisdiction and Venue. The parties hereto agree that the State of California is
the proper jurisdiction for litigation of any matters relating to this Agreement. The Parties
further agree that Los Angeles County, California is the proper place for venue as to any such
litigation arising out of the Agreement and Franchisee agrees to submit to the personal
jurisdiction of such court in the event of such litigation.
12.19. Lestai Action. In addition to any other rights or remedies, either Party may take
legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for
any default, to compel specific performance of this Agreement, to obtain declaratory or
injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.
IN WITNESS WHEREOF, the Parties hereto do hereby set their hands and seals as of
the day and the year first written above.
CITY OF CARSON
By:
Mayor
ATTEST:
Donesia Gause,
CMC, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
Sunny Soltani, City Attorney
1333632.1
FRANCHISEE
President
By: , Vice President
Exhibit 1
Page 71 of 79
EXHIBIT A
MAXIMUM RATE SCHEDULE
Exhibit 1
Page 72 of 79
1333632.1
EXHIBIT B
INSURANCE PROVISIONS
Franchisee shall carry the following types and levels of insurance:
1. Comprehensive General Liability Insurance. Throughout the Term of this
Agreement, Franchisee shall keep or cause to be kept in full force and effect, for the mutual
benefit of City and Franchisee, comprehensive broad form general public liability insurance
against claims and liability for personal injury, death or property damage arising from
Franchisee's operations hereunder, said liability insurance shall be a minimum of Five Million
Dollars ($5,000,000). Such insurance shall be carried only in responsible insurance companies
licensed to do business in the State of California. Franchisee shall pay all premiums therefor,
without contribution by the City. All such policies shall contain language that: (i) the insurer
waives the right of subrogation against City and against City's elected officials, officers,
employees, agents, and representatives; (ii) the policies are primary and non-contributing with
any insurance that may be carried by City; and (iii) they cannot be canceled or materially
changed except upon forty-five (45) days' prior written notice by the insurer to City. In the event
of any such cancellation or material change in such policy of insurance, then this Agreement
shall terminate and be of no further force and effect. Franchisee agrees to furnish City copies of
all such policies promptly upon receipt of them, or certificate evidencing the insurance.
Franchisee further agrees that all such policies shall name City, its elected officials, officers,
agents and employees as additional insureds. Franchisee may effect for its own account
insurance not required under this Agreement.
2. Workers' Compensation Insurance. Franchisee shall, at Franchisee's sole
cost and expense, maintain a policy of workers' compensation insurance in such amount as will
fully comply with the laws of the State of California and which shall indemnify, insure and
provide legal defense for both the Franchisee and the City against any loss, claim or damage
arising from any injuries or occupational diseases occurring to any worker employed by or any
persons retained by the Franchisee in the course of carrying out the work or services
contemplated in this Agreement. Franchisee shall furnish to City a copy of its workers'
compensation policy or certificate evidencing such policy.
3. Automotive Insurance. A policy of comprehensive automobile liability
insurance written on a per occurrence basis in an amount not less than either (i) bodily injury
liability limits of $1,000,000.00 per person and $2,000,000.00 per occurrence and property
damage liability limits of $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate or
(ii) combined single limit liability of $2,000,000.00. Said policy shall include coverage for
owned, non --owned, leased and hired cars.
4. Umbrella Insurance. Umbrella coverage to bring total aggregate insurance
coverage for all underlying insurance coverage to TWENTY MILLION DOLLARS
($20,000,000.00).
5. No Limitation. Franchisee agrees that the provisions of this Exhibit shall
not be construed as limiting in any way the extent to which the Franchisee may be held
Exhibit 1
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1333632.1
responsible for the payment of damages to any persons or property resulting from the
Franchisee's activities or the activities of any person or persons for which the Franchisee is
otherwise responsible.
6. Rating. The insurance policies required by this Agreement shall be
satisfactory only if issued by companies qualified to do business in California rated All or better
in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal
Register, and only if they are of a financial category Class IV or better, unless such requirements
are waived by the Risk Manager of the City.
7. Primary Insurance. The insurance policies shall be considered primary
insurance as respects any other valid and collectible insurance the City may possess including
any self-insured retention the City may have, and any other insurance the City does possess shall
be considered excess insurance and shall not contribute with it. The insurance policies shall act
for each insured, as though a separate policy had been written for each. This, however, will not
act to increase the limit of liability of the insuring company.
8. Changes in Market. In the event the Risk Manager determines that (i) the
market conditions creates an increased or decreased risk of loss to City, (ii) greater insurance
coverage is required due to the passage of time or (iii) changes in the insurance industry require
different coverages be obtained, Franchisee agrees that the minimum limits of any insurance
policy required to be obtained by Franchisee may be hanged accordingly upon receipt of written
notice from the Risk Manager.
Exhibit 1
Page 74 of 79
1333632.1
EXHIBIT "C"
CITY FACILITIES
Exhibit 1
Page 75 of 79
1333632.1
EXHIBIT D
CITY EVENTS
Exhibit 1
Page 76 of 79
1333632.1
EXHIBIT E
LIST OF PERMITTED RECOVERY FACILITIES
Exhibit 1
Page 77 of 79
1333632.1
EXHIBIT F
LIST OF U -WASTE DISPOSAL CONTAINERS
City Hall (Front Desk)
701 E. Carson Street, Carson, CA 90745
Juanita Millender McDonald Community Center (Front Desk)
' 801 E. Carson Street, Carson, CA 907476
Corporate Yard - Public Works Department (Front Desk)
2390 E. Dominguez Street, Long Beach, CA 90810
Exhibit 1
Page 78 of 79
1333632.1
EXHIBIT G
LIST OF DESIGNATED DISPOSAL SITES
Chiquita Canyon Landfill
29201 Henry Mayo Dr.
Castaic, California 91384
Exhibit 1
Page 79 of 79
1333632.1