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HomeMy WebLinkAboutMINUTES - 09101996 - D12 D.12 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA Adopted this Order on September 10, 1996, by the following vote: AYES: NOES: (See below for vote on various actions) ABSENT: ABSTAIN: SUBJECT: Bay View Refuse and Recycling Services, Inc., Kensington area. On August 13, 1996, the Board of Supervisors continued to this date consideration of the recommendations of the Director, Community Development Department, and Director, Growth Management and Economic Development Agency, for approval of a Franchise Agreement with Bay View Refuse and Recycling Services, Inc., in the Kensington area or, alternatively a Memorandum of Understanding with Kensington Police Protection and Community Services District for provision of such services by Bay View Refuse and Recycling Services, Inc. Following comments by Val Alexeeff, Director, Growth Management and Economic Development Agency, the following persons spoke: David Fike, Kensington Community Services District Board member, 28 Windsor, Kensington; Mark Armstrong, Attorney for Bay View Refuse and Recycling Services, Inc., P.O. Box 218, Danville. All persons desiring to speak having been heard, Supervisor Rogers moved that the parties, their accountants and staff meet to discuss proposed suggestions for determining a long-term Consumer Price Index (CPI) formula to help establish a baseline rate for fees, and report to the Board on September 17, 1996. Supervisor Bishop seconded the motion. The vote was as follows: AYES: Supervisors Rogers and Bishop NOES: Supervisors DeSaulnier, Torlakson and Smith Supervisor DeSaulnier moved that the Franchise Agreement between Bay View Refuse and Recycling Services, Inc., and the County become effective in 30 days; and that staff address possible legal issues involved in the County administering the franchise and report to the Board on September 17, 1996. Supervisor Torlakson offered a substitute motion and urged the Board postpone action on Supervisor DeSaulnier's motion for one week. He also suggested that any possible legal issues and reasonable options for an Agreement or Memorandum of Understanding 1\ would be addressed at that meeting, and that staffs recommendations for base rate figures could be discussed then as well. Supervisor Rogers amended the substitute motion and incorporated the suggestions proposed by Supervisor Torlakson. Supervisor Rogers also advised that as part of his motion, the determination of this agreement would not be precedent setting for other similar actions. And that the nature of the agreement for this franchise would be determined at next week's Board meeting. Supervisor Torlakson seconded the motion. The Board took the following actions: 1. CONTINUED to September 17, 1996, consideration of approval of a Franchise Agreement with Bay View Refuse and Recycling Services, Inc., and the County; 2. DIRECTED that the Director, Growth Management and Economic Development Agency confer with the parties and their accountants and report back to the Board; 3. DIRECTED that possible legal issues be determined, with a report to the Board; 4. DIRECTED that this agreement would not be precedent setting for similar such actions; 5. DIRECTED that the type of agreement would be DETERMINED on September 17, 1996. PASSED by the Board of Supervisors on September 10, 1996, by the following vote: AYES: Supervisors Rogers, DeSaulnier and Torlakson NOES: Supervisors Bishop and Smith ABSENT/ABSTAIN: None I hereby certify that is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. Attested: n mhp r in i QA 6 _ PHIL BATCHELOR,Clerk of the Board of Supervisors d ounty Adm' istrator B BARBARA .G T. Deputy Clerk c.c. Community Development Director GMEDA County Counsel with attachments TO: BOARD OF SUPERVISORS Contra FROM: HARVEY BRAGDON Costa DIRECTOR OF COMMUNITY DEVELOPMENT ; w Wurty DATE: SEPTEMBER 10, 1996 SUBJECT: Consider approval of a Franchise Agreement with Bay View Refuse and Recycling Services, Inc. and the County for the provision of solid waste and recycling services in the Kensington area or, alternatively a Memorandum of Understanding with Kensington Police Protection and Community Services District for provision of such services by Bay View Refuse and Recycling Services, Inc. SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: Approve the Franchise Agreement between Bay View Refuse and Recycling Inc. and the County for the collection of solid waste in the Kensington area, or State intent to approve the MOU subject to KCSD approving a new Franchise Agreement which is satisfactory to the County or Continue to October 1 for status report and possible decision FINANCIAL IMPACT The agreements all include a provision for franchise fees that will help to pay for solid waste administration and recycling programs that the County will be providing in the unincorporated area. CONTINUED ON ATTACHMENT: X YES SIGNATURE: _RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEN N OF1 B ARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED_ OTHER VOTE OF SUPERVISORS UNANIMOUS (ABSENT I HEREBY CERTIFY THAT THIS IS A TRUE AND AYES: NOES: CORRECT COPY OF AN ACTION TAKEN AND ABSENT: ABST ENTERED ON THE MINUTES OF THE BOARD UPERVISORS ON THE DATE SHOWN. Contact: Ma ming (510) 335-1230 cc: mmunity Development Department(CDD) ATTESTED PHIL BAtG4ELOR,CLERK OF THE BOARD OF SDiZgRVISORS AND COUNTY ADMINIS TOR BY: , DEPUTY HEB\MF\rw RMF1:kns83096.bo t ' Board Order Hearing on approval of a Franchise Agreement Bay View Refuse & Recycling Services, Inc. and the County September 10, 1996 - Page 2 - BACKGROUND REASONS FOR RECOMMENDATIONS The Kensington Community Services District (KCSD) has had a Franchise Agreement with Bay View Refuse Inc. (Bay View) for the collection and disposal of solid waste since July of 1981. In 1991, the Board approved Ordinance 91-31, "Solid waste Collection, Disposal and Recycling Agreements". The Ordinance requires solid waste haulers in the unincorporated area to obtain either a Franchise Agreement from the Board of Supervisors, or a Memorandum of Understanding (MOU) with a public agency. On August 6, 1991 the Board stated their intent to provide for solid waste services in several unincorporated areas, including Kensington, through either a direct Franchise Agreement with the solid waste contractors or an MOU with the local agency. A five year notice was provided to all existing solid waste contractors and local agencies regarding the county intent. The transitional permit issued to Bay View pursuant to Ordinance No. 91-31 has been extended to September 30, 1996. In April, Bay View requested that the County grant it a Franchise Agreement for the unincorporated Kensington area. Since that time staff has been working with both Bay View and the KCSD to reach an agreement on the preferred method of providing for solid waste service in the Kensington area. The Board has indicated a preference to let Bay View and KCSD work out their differences and come to an agreement, but directed staff to develop a Franchise Agreement between Bay View and the County in case an agreement was not reached between Bay View and the KCSD. Staff and Bay View have developed a Franchise Agreement with the participation of the KCSD General Manager. This Agreement has been ready for approval since August 6, at which time it appeared that KCSD and Bay View Refuse might come to an agreement. The Board therefore continued the hearing for a week, to August 13 to allow KCSD and Bay View to continue negotiations. On August 13, at KCSD's request, the Board again continued the hearing to September 10 to allow further discussions between KCSD and Bay View. At the date of this writing, no agreement has been reached between KCSD and Bay View. There appears to be a recognition that the services provided by the company are quite acceptable but the parties are unable to reach agreement on the appropriate rate structure. Bay View is still requesting a Franchise Agreement with the County. FRANCHISE AGREEMENT with BAY VIEW As noted above, a County/Bay View Franchise Agreement has been ready for approval since August 6, 1996. This proposed County Franchise Agreement is based on the Franchise Agreements used by the County in other unincorporated areas for the provision of solid waste services. This agreement provides for a Local Advisory Committee which would consist of five Kensington residents who would be responsible for determining how best to meet source reduction and diversion goals in the Kensington area, reviewing rate change proposals and solid waste services, and then providing such information to the County for incorporation into local programs. The most significant difference between the proposed Franchise Agreement and earlier Franchise Agreements approved by the County, is that a portion of the Franchise Fee can be allocated to the Local Advisory Committee to provide funding for their activities in providing assistance to the County in it's function of developing and implementing waste reduction programs. The KCSD has shown an interest in, and has been active in providing, initial waste reduction programs. If Bay View and KCSD are unable to reconcile their differences, staff recommends approval of this Franchise Agreement between Bay View and the County. Board Order Hearing on approval of a Franchise Agreement Bay View Refuse & Recycling Services, Inc. and the County September 10, 1996 - Page 3 - BACKGROUND REASONS FOR RECOMMENDATIONS (Cont'd) MOU with DISTRICT (incorporating a new District/Bay View Franchise) County staff has had several meetings with Jim Bray, General Manager of the KCSD and Ray McDevitt of HANSON, BRIDGETT, MARCUS, VLAHOS and RUDY, attorney for KCSD, to try to develop a MOU that is acceptable to both parties. Staff has modified and remodified the MOU to address as many of KCSD's concerns as possible. KCSD staff has also agreed to a number of changes from staffs original positions. The MOU that is in the Board packet has been developed cooperatively between County staff and the KCSD staff but as of the date of this writing (August 28, 1996) has not been reviewed or approved by the KCSD Board. The MOU is dependent on and assumes the adoption of a new Franchise Agreement between the KCSD and Bay View, which incorporates modifications requested by County staff. Staff has not received any response from KCSD to their suggested modifications. Bay View has agreed to staffs suggested modifications. The purpose of the MOU and new Franchise Agreement is to assure that the County has the ability to meet state AB939 requirements, and to comply with County ordinance requirements in a way that is mutually agreeable to all parties, including Bay View. The draft MOU in the Board's packet provides the County with the ability to meet AB 939 requirements, and complies with County requirements. However, we emphasize that as of the date of this writing there appears to be no agreement between KCSD and Bay View on the terms of a franchise agreement. In addition, the MOU includes provisions that both the County and KCSD staff have agreed upon only after significant compromise, and may contain provisions objectionable to Bay View. The following are some of the aspects of the MOU that staff considers merits special Board consideration. 1) The MOU contains no acknowledgment by KCSD of the County's superior authority under the State Constitution's police power grant to the counties and cities. District staff has made clear its desire to preserve its right to challenge any County/Bay View franchise. (See the stricken text in section 2.12, and the bold text in section 5.11.) As the Board is aware, the County Counsel has consistently been of the opinion that the County has the authority under state law and the County ordinance, to franchise directly with Bay View. 2) Section 3.1 provides for termination of the MOU by either upon 30 days notice. Staff and County Counsel support a provision allowing either party to terminate the MOU, as in the event either or both find that a cooperative arrangement is not feasible. In section 3.4, it is provided that the County will succeed to the KCSD's rights in the KCSD/Bay View franchise if the MOU is terminated. It is uncertain whether KCSD will agree to this provision. HEBWIFVw RMF1:kns83096.bo C0,13iWcr wjfh D , /Z SO"StY Ow��� Q � 0 o August 29, 1996 Jeff Smith, M.D., Chairman Board of Supervisors RECEIVED Contra Costa County --- 651 Pine St. Martinez, CA 94553 SEP -51,996 3 CLERK SOARO OF SUpr ;` Dear Dr. Smith, CONTRA COStq CC On September 10th the Contra Costa Board of Supervisors will be discussing the negotiations between Bay View Refuse Company and the Kensington Police and Community Service District (KCSD) and determining whether the County will move to abrogate the existing franchise agreement. The Kensington Property Owners Association (KPOA) is disappointed that the Board of Supervisors has continued to be involved with this issue. The KCSD has demonstrated good faith negotiations with the hauler by opting to extend the franchise term, allowing a 12%rate of return and retaining an independent firm to provide a rate review. The requests of the Kensington District Board to review the company's financial information is a valid attempt to'evaluate the rates being charged to customers. This type of evaluation and rate setting is done inmost Bay Area counties and cities. The current franchise agreement with the District provides access,to that information as well. We believe the KCSD has met the requirements that the County wanted and therefore believe that the County should step away from the matter and allow KCSD and Bay View Refuse to complete negotiations. We strongly believe that Kensington should have complete local control over our refuse service. SincAMeader Don President, KPOA cc: All Contra Costa Board of Supervisors . Phil Batchelor,County Administrator KCSD Board of Directors Janet Gotch; CIWMB Bay View.Refuse DKM:GF'ConCos.BOS SIP Item D. 12 LAW OFFICES OF GAGEN, MCCOY, MCMAHON & ARMSTRONG WILLIAM E. GAGEN, JR. A PROFESSIONAL CORPORATION DANVILLE OFFICE GREGORY L. MCCOY 279 FRONT STREET PATRICK J. MCMAHON P. O. BOX 218 MARK L. ARMSTRONG DANVILLE, CALIFORNIA 94 5 2 6-02 1 8 LINN K. COOMBS TELEPHONE: (510) 837-0585 STEPHEN W. THOMAS FAX: (510) 838-5985 CHARLES A. KOSS MICHAEL J. MARKOWITZ NAPA OFFICE MICHAEL W. CARTER RICHARD C. RAIN ES September 5, 1996 1001 SECOND STREET, SUITE 3(5 VICTOR J. CONTI NAPA, CALIFORNIA 94559-3017 BARBARA DUVgL JEWELL TELEPHONE: (707) 224-8396 ROBERT M. FANUCCI FAX: (707) 224-5817 ALLAN C. MOORE PATRICIA E. CURTlN PLEASE REPLY TO: STEPHEN T. BUEHL Danville ALEXANDER L. SCHMID DANIEL A. MULLER Chair Jeff Smith Contra Costa County Board of Supervisors 651 Pine Street, Room 106 Martinez, CA 94553 Re: Franchise Agreement Between Bay View Refuse and Recycling Services, Inc. and Contra Costa County for Kensington Franchise Area September 10, 1996 Board Hearing Dear Chair Smith: I explained to Supervisor DeSaulnier and you at the Ad Hoc Solid Waste Committee meeting that, in the opinion of Lewis Figone and me, it seemed very unlikely that further efforts will be successful by September 10th or anytime soon thereafter to complete a franchise agreement between Kensington Police Protection and Community Services District and Bay View. Completion of such a franchise agreement is necessary as part of the memorandum of understanding recommended by County staff and County Counsel. To date, District officials have been unwilling to accept the basic principles and approach to such a franchise agreement as outlined in our letter to the District in the beginning of July. We have explained to District officials that since such acceptance has not been forthcoming, then in our judgement completion of the franchise agreement and its fine points by September 10th does not seem possible. Also, we have not reached agreement on what should be the base rate for the new franchise agreement . Mr. Figone and his certified public accountant, Ed Butler, have no trust or confidence in the analysis undertaken by the District 's financial advisor, Mr. Arnstein (who is not a CPA) . Please see the enclosed review prepared by Mr. Butler of that analysis by Mr. Arnstein. Incredibly, the Districts financial advisor presently takes the position that the current rate is too high, oblivious to the fact that the current Kensington rate is the lowest in the County for backyard service -- and Kensington is a hard to serve area with virtually no commercial base ! Chair Jeff Smith September 5, 1996 Page 2 At the District Board meeting on July 9th, it seemed that District officials were willing to accept the basic approach and principles set forth in my letter to the District dated July 5, 1996 when these discussions first began. That has since turned out not to be the case. In my letter and in our statements to the District Board that evening, Bay View made it very clear that unless the District was willing to accept our basic approach and principles, Mr. Figone was not prepared to enter a new franchise agreement with the District and would instead ask the County Board of Supervisors to approve a franchise agreement with the rate structure remaining the same until at least September, 1997 . In my letter I stated: . . . . the basic premise of Mr. Figone ' s proposal is to avoid potential disputes in the future by agreeing in advance, and as part of a long term, new franchise agreement with the District, to certain standards, base assumptions and requirements instead of allowing for future broad District discretion and flexibility in the agreement . This is in contrast to the model County franchise agreement . in which there is substantial discretion given to the Community Development Director and the Board of Supervisors on most matters. For Mr. Figone to accept a continued franchise agreement with the District, its Board of Directors will need to accept this basic concept and as provided for in the points below. Otherwise, Mr. Figone will ask the Board of Supervisors to approve a County franchise agreement with a local advisory or recommending committee at its meeting on August 6, 1996 . The basic principles of the agreement included: 1) establishment of a new base rate at an agreed profit margin, subject to subsequent adjustments only for CPI, requested service changes, or landfill. rate changes; 2) limiting the franchise company to providing Kensington service only, structured so as to limit future financial review to that corporation' s books and records only; and 3) accepting a base salary for the corporation's president of $80, 000 a year with no benefits . This approach has been proposed by Mr. Figone to avoid the kind of confrontation Bay View has been involved in with District officials over the last year on issues relating to rates, salary, scope of financial review and other matters. Some District officials say Mr. Figone is being stubborn and unreasonable in sticking to this approach during negotiations following the July 9th District Board of Directors meeting. To the contrary, he has tried to be up front, giving his bottom line from the start . He did not want to unfairly surprise District officials or delay these discussions . Chair Jeff Smith September 5, 1996 Page 3 If this confrontation continues or is renewed in the future it will be detrimental to Bay View' s customers. Mr. Figone does not want to have a franchise agreement with the District that invites this kind of confrontation instead of avoiding it . Frankly, it appears Kensington ratepayers will do well under the County Franchise Agreement . The earliest rate review under the County Franchise Agreement would be in June of next year after County officials have become familiar with Bay View' s business and operations and the new green waste diversion and recycling services that are being provided. Mr. Figone will absorb for now the additional costs and losses associated with the new programs, the increased franchise fee, the new household hazardous waste fee and other expenses until these incurred costs can be taken into consideration as part of next summer' s rate review. Until then, Bay View will about break even at best. Under the County Franchise Agreement, the County has substantial authority to set reasonable rates and review financial records of Bay View and affiliated companies . If County officials deem necessary, they may request audited financial statements from Bay View or have an audit performed by a CPA of their choice. Mr. Figone has trust and confidence in the professional ability of County officials to understand the needs and costs of his business operation and prevailing market conditions, services and rates . He trusts their ability to consider and understand what rate is appropriate to allow a reasonable profit and still provide in a reasonable manner the quality of service the Kensington community has come to expect over the years and meet the County' s diversion goals in this hard to serve area with virtually no commercial base. Mr. Figone 's experience to date with County staff is that they take their diversion, rate review and financial oversight responsibilities seriously. They also listen to and give careful consideration to his insights and perspective based on his decades of experience in the business and serving Kensington. Sadly, given the change in direction of the District Board after all Bay View' s years of service, Mr. Figone presently lacks that trust and confidence in District officials . Some District officials and their supporters have concluded that the same excellent service can be provided by Mr. Figone, or if necessary, someone else at a lower rate. That Bay View' s current rate is the lowest in the County for the service provided is irrelevant to them. It seems to Mr. Figone and me that at least some District officials and their supporters have personally concluded that ratepayers in Kensington and throughout the County pay too much for garbage and recycling service. They seem convinced "competitive bidding" is the way to get the same or better service in Kensington and elsewhere at a better rate. Maybe Chair Jeff Smith September 5, 1996 Page 4 sometimes that is the case. It is not the case for the Kensington service area. Customers who have become accustomed to their uniquely tailored service at a reasonable rate would be sorely disappointed if another company replaced Bay View after all these years . Lewis Figone has no interest in putting his company and his customers through the confrontations and expense involved in allowing such political sentiments and personal opinions to control Bay View' s franchise agreement and rate and service review processes over the next several years through a District franchise agreement that is broadly stated and affords District officials substantial discretion. Some District officials take offense that Mr. Figone will accept a franchise agreement that gives County officials such discretion, but he is not willing to give that same discretion to District officials . Given the official actions of the District over the last year, I do not blame him. He is being prudent. In real terms, he is acting in the best interests of his customers . With this small service area, two thousand homes and little commercial base, neither Bay View nor his customers can afford another year with the District like this last one. Mary Fleming, Lillian Fujii, Lewis Figone and I met with the District 's general manager, Jim Bray and their attorney, Ray McDevitt on Monday, August 19th, to try one more time to see if the gap between the parties could be bridged. There was no break through. I imagine District officials will blame Mr. Figone and/or me. Who is to blame turns on one ' s perspective. The bottom line is we have not reached voluntary agreement . We will try one more time this afternoon. Even if there is some progress in this meeting, it is very unlikely that an executed District Franchise Agreement will be in place before September 10th. Mr. Figone has already delayed sending out his billing for September, October and November. He very much wants to conclude this. County process now. Therefore, Bay View respectfully requests that on September 10th the Board of Supervisors approve the County Franchise Agreement, the terms and form of which are acceptable to County staff, County Counsel and Bay View. In truth, whether Bay View' s franchise is with the County or the District does not matter to the vast majority of Bay View' s customers . In Bay View' s survey to its customers, Mr. Figone explained that the County may take over the franchise from the District. The survey results were overwhelmingly in support of Bay View in every respect, from quality and scope of service to rates. No objections were expressed about County regulation replacing District regulation. Chair Jeff Smith September 5, 1996 Page 5 With all due respect to those District officials and their supporters who think District control of solid waste service is of paramount importance to the Kensington community, they are wrong. In truth, the one thing that would upset Kensington ratepayers the .most is if the continued actions of District officials cause Mr. Figone, involuntarily through their ,legal or regulatory action or voluntarily through his aggravation and frustration over their actions, to stop providing solid waste service to Kensington after 52 years of high quality service at consistently the best rate in the County, in a difficult service area with virtually no commercial base. If the Board of Supervisors approves a County Franchise Agreement with Bay View on September 10th that does not mean Mr. Figone will thereafter ignore District officials. If his trust and confidence in District officials is renewed and Bay View and the District can reach agreement on a new District Franchise Agreement and a new rate, he would be happy to go that way in the future. However, it would be unfair and costly to Mr. Figone and a continued burden on County officials to wait any longer for that to happen. Moreover, if the Board of Supervisors continues its decision yet again, in my opinion that will only encourages further posturing and political maneuvering. At the last hearing before the Board of Supervisors, the District ' s general manager, Jim Bray, pleaded for the Supervisors to give Bay View and the District until September 10th to execute a District Franchise Agreement. Supervisor DeSaulnier asked him what happens if their is no District Franchise Agreement by that time. Mr. Bray replied that it would then be appropriate for the County to approve its own franchise agreement with Bay View. We agree. Mr. Figone has been very patient to date. We respectfully request the Board to approve the County Franchise Agreement, which is recommended as to .content and form by County staff and County Counsel . XVVey yoursL. Armstrong MLA:kh Enclosure cc w/enc . : Lewis Figone Jim Bray Ray McDevitt Mary Fleming Lillian Fujii Val Alexeeff F AC LMLA\2 8117\SM1TH2.LTR EDWIN A. BUTLER Certified Public Accountant 3629-D Clayton Road P.O.Box 1130 Concord,California 94521 Concord,CA 94522 Phone:(510)685-1400 FAX:(510)685-1495 E-mail Address:cpa4valu@ix.netcom.com August 30, 1996 Mr. Mark L. Armstrong Attorney at Law Gagen, McCoy, McMahon and Armstrong 279 Front Street Danville, California 94526-0218 Subject: Arnstein Consulting - Recommendation Letter dated August 8. 1997 Dear Mr. Armstrong: I have reviewed the subject letter per your request and have prepared comments and my observations relative to Arnstein Consulting's analysis. Overview The existing franchise agreement with the Kensington Police Protection and Community Service District (District) provides for the audit of Bay View Refuse Service, Inc. (BVRS) by an independent Certified Public Accountant. The "analysis" performed by Arnstein Consulting (AC) cannot be characterized as an audit nor can I verify that James J. Arnstein is a Certified Public Accountant. In fact, BVRS has been under no obligation to open it's records to Arnstein Consulting. However, in the spirit of cooperation and with a desire to move toward concluding negotiations for the new rate base, BVRS has acquiesced to this "analysis". Throughout AC's analysis he uses the collective "we". Does this mean AC and the District? If' so, is AC being directed by the District? Therefore, does AC lack independence in his analysis? if so, this further supports the reason why the franchise agreement called for an audit by an independent Certified Public Accountant. Consequently, much that follows will demonstrate AC's apparent lack of experience with the refuse collection industry, highlight fundamental errors in methodology and point out certain fallacies in operating theories. Arnstein Consulting (AC) has recommended an increase representing only 25.30% of the proposed rate increase under consideration, while establishing no foundation for the percentage. The AC recommendation raises the existing 30 gallon 1 can rate of $16.25 per month to $17.17. On a percentage basis, the increase represents 5.66% rather than the 22.46% requested. However, $17.17 is not comparable to the $16.25 rate because of a 5.0%franchise fee and $4,000. ($8,000. through December 31, 1997) annual hazardous waste fee which will reduce the AC recommendation. Below, I have scheduled the calculation to obtain comparable rates. AC recommendation $ 17.17 Less - 5.0% franchise fee ( .86) Less - Hazardous waste fee .32 ($8,000/2084)/12 Comparable recommended rate $ 15.99 As one can see, the comparable AC recommended rate of$15.99 is 26 cents less than the existing rate under which Bay View Refuse Service, Inc. (BURS) is presently operating. All should be reminded that the compiled financial statements for the 4 months ended April 30, 1996 exhibited an operating loss of$589. Based upon AC's EXHIBIT1, if an across-the-board rate were to be used it should be 32.0% ($42,895. divided by $134,066.). Reference the last two sentences under Note 1. AC's recommendation is in light of BVRS providing 4 unlimited frontyard green waste pick-ups, as well as, a fifth frontyard general waste pick-up, having a requirement for .the purchase of new equipment and incurring overall increased cost from inflation. Note 1. Income - Regular. AC applied an "across-the-board" adjustment factor of 25.30% to the proposed $3.65 or 22.46% rate increase. AC is recommending only 25.30 % of the proposed rate increase. As seen above this equates to a .26 cent decline in comparable monthly rates or actually a 1.6% effective decrease. Additionally, there is a methodology error in AC's presentation. AC mentions that revenues will increase $42,895. over existing revenues under the 25.30% "across-the- board" recommendation. However, using the recommended .92 cent increase and following through for each type of service accordingly, the recommendation produces only $33,832. in additional revenue. This represent a $9,063. error in methodology. See SCHEDULE A attached. Note 2. Communications. AC's adjustment of$270.00 annually is immaterial and not worthy of comment. Note 3. Depreciation. A fundamental principle of accounting is the matching of revenue with the expenses necessary to the production of that revenue over a specific accounting period, generally one year. Capital assets having a life of more than one year are generally capitalized with their cost being allocated (depreciated) to future accounting periods over its useful life. As such, depreciation is a perfectly legitimate recoverable cost. The $53,053. represents expected depreciation expense for the year 1997 and includes the expected purchase of new equipment under the new rate base. Without further equipment purchases, 1998 estimated depreciation is expected to run $43,104. The 1998 purchase will be addressed in 1998. AC cannot arbitrarily disregard the expenses associated with the projected purchase of new equipment. AC uses depreciation of $32,675. which is between $10,339. and $20,378. too low. Using only the additional $10,339. of depreciation would allow for 49.8 cents more in monthly rate. Note 4. Equipment rental. AC calculation of$66.00 per day as an equipment rental fee includes only depreciation. The more appropriate rental rate obtained from both Hertz and Concord Disposal Service is $37.00 per hour which includes not only depreciation but also the cost of insurance, tires, repairs and maintenance. AC questions the possibility of Saturday additional pick-ups. After over 50 years in the business, Mr. Figone's strong conviction is that the most efficient method is the one presently being used. Mr. Figone is prepared to discuss the merits of the existing operational methods with District officials. AC's recommended adjustment.of $6,210. in this area has no substantial foundation other than an unwillingness to pay the going market rental rate. Replacement of the $6,210. of cost here would equate to 29.9 cents more in monthly rate. Note 5. Additional clean-up costs. Under the proposed new rate structure BVRS is offering 4 unlimited frontyard green waste pick=ups, as well as, a fifth frontyard general waste pick-up. Knowing this would create additional expenses for BVRS, Mr. Figone, President of BVRS, recently performed a study to analyze the costs associated with the general clean-up (all waste, including green waste) for the period August 5-9, 1996. A substantial majority of the collected debris was green waste. The previous general clean-up was done 3 months earlier. The total costs resulting from the most recent clean-up was $13,145. for the 3 months period. When reduced this represents a per unit monthly cost of $2.11. A $2.11 per unit monthly cost converts to an annual cost of$52,782. This is substantially higher than the monthly per unit cost used in the rate proposal of 90.0 cents which converts to an annual cost of$22,464. Thus, BVRS disagrees with AC's adjustment of $9,464. in this area and in particular the use of a $66.00 daily rental fee. Replacement of the $9,464. of costs here would equate to 45.5 cents more in monthly rate. Note 6. Debris-box operational costs. AC uses the $66.00 daily rental fee as a basis to reduce cost in this area by $12,591. As previously stated, BVRS disagrees with this narrow depreciation based theory. Replacement of the $12,591. of costs here would equate to 60.6 cents more in monthly rate Note 7. Franchise fee. Effect of 5.0% franchise fee recognized. Note 8. Fuel. AC's adjustment of $1,475. annually is insignificant, without justification and not worthy of comment. Note 9. Insurance. Insurance will be obtained as a separate company. The minimum annual rate is estimated correctly at $25,128. This will not change because the franchise agreement is premised on service being provided by an independent corporation in response to the District criticisms about comingling of funds and resources. Restoring the AC adjustment of$13,128. of insurance costs would equate to 63.2 cents more in monthly rate. Note 10. Legal fees. Legal and accompanying fees.are expected to decline, yet the costs of lengthy rate review and related negotiations must be recoverable to BVRS as an unfortunate but necessary business expense. There are no facts or professional opinions presented that such fees have been unreasonable. Such rate review and related costs are typically recoverable by franchise agreements. For example, the standard County franchise agreement identifies such costs as a reasonable pass-through. Note 11. Repairs and maintenance. No effect. No.comment. Note 12. Tires. No effect. No comment. Note 13. Telephone. Accepted. Note 14. Net income before tax. The targeted 12.0% as net income from operations is recognized and accepted by the District and their consultant as reasonable. In summary, response has been made to each of the areas adjusted by Arnstein Consulting. Also, indication has been made as to the effect on the AC recommended monthly rate. Where their is a non-comment does not necessarily imply agreement with treatment by AC. Below I have schedule the add-backs as noted above. Arnstein Consulting recommendation $ 17.17 Depreciation .50 Equipment rental .30 Additional clean-up .46 Debris box operations .61 Insurance .63 TOTAL-after add-backs $ 19.67 Mr. Figone is requesting $19.90, 23 cents over the rate after add-backs, in order to partially recover losses BVRS has experienced since its initial rate application was submitted this time last year. In addition to the above items, Mr. Figone has informed me that he has never charged BVRS for the rental of Bay Cities Refuse Service, Inc. trucks used in the transportation of recycled materials. This has been merely an oversight at an annual cost of$2,720. As seen above, Arnstein Consulting not only has. made fundamental methodology errors but appears unsupported in many of the areas of adjustment. The recommendation of a single 30 gallon can rate of $17.17 per month is grossly understated and would inflict extreme financial burden on BVRS. Per your instructions, I have faxed a copy of this letter to Mr. James M. Bray at District. Sincerely, Edwin A. Butler, MBA, CPA, CVA EAB:tb cc: Lewis Figone (BVRS) OCF)0 O) M (NO MSO ro y 4 �6 4 P` N O) N om, L M r M u> .- M e- M O C U BM 00 v> tt 00 00 E O Q O �-va v> v> CM V d 0 v> a> M ai aroi 'a y ro LOOM (�O d0 O OHO m N —Ln M O M 00 0 0 y M LO It 00 (G r 0 Lr !a N It LO v> v> r, > 0 Ln M e- r Q) M va yr r M T- 0 M CD OMC) M .- V LO. (O r R LQ . LC N p O C d E y N 00 O (0 V a) O O O)(D O (O O C O r N U y v>v>v> v> v> > N Q V t !6 L C C C d G4 Q ro . LO LO O LO p O Q y O(O M In t} () W CO(0 r- co m v W -+ 0 y v>a>v> v> Ij> D CL D 0 LV U O y n 00 O (O n s O N M �Nch M � d Q v>•v>v> v> v> c >M d(D L p O NLOO CO0 n C G N M M co tL yr yr yr a> 0 d () C 47 � ro L O LLQ 0 LO LO L(j d C�r C) O �J M d' 't "t p !6 d oa nWJ yr yr va v> yO r N `. L N 00 C > N V C LO OQM 7 d 0,0 O d O d y ro ULr) C7 C d 3 0 C O C d ` Q N a� 0 03.3 03 03 y c c y c c E o C raro ro CD Oro E E O v to v 0 a) A r7, n ((++ T r n r I.` `�1'i .U �!? F ll F.L U F A X" 1,10. 09:3c SEP 09, 1996 ID: Q11A TEL NO 510-635+-59eS 4131@P PAGE: 2/5 �c .,u�* / l2 J. September 9, 1996 Chair Jeff Smith Contra Costa County Board of Supervisors ,. 651 Pine Street, Room 106 Martinez, CA 94553 Re: Franchise Agreement Between Bay view Refuge and Recycling Services, Inc. and Contra Costa County for Kensington Franchise Area September lo, 1996 Board Hearing Dear Chair Smith: I reviewed over the weekend a copy of the letter dated September 6, 1996 from KPPCSD Vice President John Ream to you. I did meet with District President, David Fike, Jim Bray and Mr. Arnstein, the District's financial consultant, late Thursday afternoon. They threatened to walk out of the meeting if Mark Armstrong attended so I asked him not to attend. They did not inform me that the District Board of Directors had set a special meeting for that evening to review our discussions and make some decisions. I wish they did. Perhaps they would not be confused about Say view's position. Contrary to Mr. Ream's letter, there is no agreement on rates. I said I would consider the rates we discussed if the District Board was prepared to approve an entire package, including a District f Tj �� T��' nr C rTl T T � n n r. . L1J Er:vI :F 1 FA7, IiG. 10 3rr,; 7�0, F, 3 09%32 SEP 09, 1996 ID: GMR TEL N0: 510-838-5965 #1310c PAGE: aiS Chair Jeff Smith September 9, 1996 Page Z Franchise AgrOGMent essentially as proposed, before Tuesday. The District Board has declined to accept the basic approach and principles of our proposed franchise agreement, let alone its fine points. furthermore, with the rates as proposed by the District, including the District's proposed mini-can rate, Bay View is at substantial risk that it will not make a reasonable profit in serving the Kensington area. ` After reading the District's letter, I qet the sense that District officials are putting an incorrect light on the substance of their meeting with to in order to convince the Board of Supervisors to continue its decision on the County Franchise Agreement yet again. I renew Bark Armstrong's request in his earlier letter to the Board of Supervisors on behalf of Bay View that tomorrow the Board approve the County Franchise Agreement, which has been recommended as to form and content by County staff and County Counsel. I have delayed sending out Hay View's September bills to our Kensington Customers for two weeks. The September bill covers the next four months. In our 52 year history of service to this area, this is the first time bilis have not been timely mailed. I don't like doing business this way. Jim Bray told Supervisor DeSaulnier at the last hearing that it would be appropriate for the Board of Supervisors to approve the ti SERI T r,t+. 11Y�_ ; :1 �Cn, 7r;i_l7c'' 0933 SEP 03, 19% ID GMP TEL NO: 510-838-5995 #13102 PAGE: 4/5 Chair Jeff Smith September 9, 1996 Page 3 County Franchise Agreement on September 10th if the District and Bay View had not completed a District Franchise Agreement by that time. After that last Board of Supervisors hearing, I continued to meet with District officials in good faith. However, in the back of my mind I recognized that District officials might use these continued discussions, or any progress toward a voluntary resolution of the differences between the District and Bay View, as a justification for a further continuance, in continuing to meet with District officials, I relied on Jim bray's statement to Supervisor DeSaulnier and indications from at least three supervisors that the Board would make a final decision on the County Franchise Agreement on September 10th. I believe it is unfair for District officials to use against me my good faith efforts to work with therm and to ask the Board of Supervisors to drag out making a decision on the County Franchise Agreement yet again. Their mischaracteriaation of our discussions is particularly unfair. If the Board of Supervisors approves the County Franchise Agreement, I will continue thereafter to work with District officials in good faith so long as they do the same. Their attorney has threatened to file a lawsuit against the County and Bay View if the Board of Supervisors approves the County Franchise Agreement. Under the County Franchise Agreement, the County is i I r- f+nn r �—���i .� G � (� F'j' �'t'•}, v L 09134 MP 09, 19% ID. GMMA TEL NO- 510-E3B-5985 #13102 PAGE+ 5/5 Chair Jeff Smith September 9, 1996 Fage 4 indemnified against any liability in the event of such a lawsuit and is not responsible for litigation costs. In truth, such a lawsuit would be directed at my company. I would consider such a lawsuit to be an action in bad faith by District's officials. Thank you for your consideration of my request. I know and commit that my customers will be very satisfied with the quality of service, recycling and diversion programs and the rates for service with County regulation of my business. I provided high quality service at reasonable rates in the Kensington area well before the District began regulating my business. I will continue to do so if it doesn't regulate my business. whatever disputes I have in Kensington are with District officials, not with my customers. our survey results bear that out. Please approve the County Franchise Agreement tomorrow. Sincerely, M21 Lewis Pigon President cc: Supervisor Rogers Supervisor De5aulnier Supervisor Bishop Supervisor Torlakson Jim Bray Mark Armstrong Fs\CLMLh\28117\JEFFSMIT.LTR tib FRANCHISE AGREEMENT WITH BAY VIEW REFUSE AND RECYCLING SERVICES, INC. CONTRA COSTA COUNTY TABLE OF CONTENTS 1. EFFECTIVE DATE, PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 a. Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 1 b. Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 C. Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 d. Commercial Solid Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 e. Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 f. County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 • , g. Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 h. Designated Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. Franchise Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 j. Hazardous Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 k. Industrial Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. Infectious Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 M. Recycle or Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 n. Residential Solid Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 o. Septage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 P. Solid Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 q. Waste Stream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4. INTENT- TO REGULATE ALL RECYCLING AND RESIDENTIAL AND SOLID WASTE COLLECTION, REMOVAL ANWOR DISPOSAL . . . . . . . . . . . . . . . . . 3 5. EXCLUSIVE PRIVILEGE AND DUTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6. EXCEPTIONS TO EXCLUSIVE PRIVILEGE . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 7. CONTRACTOR'S DUTY TO MAINTAIN RECORDS; COUNTY'S RIGHT TO EXAMINE RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 8. RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 9. RATE APPLICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 10. OPERATION BY CONTRACTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 11. LIMITATION ON TIME AND MANNER OF COLLECTION . . . . . . . . . . . . . . . . 7 i 12. CUSTOMER SATISFACTION, AB 939 AND EFFICIENCIES IN OPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 13. CUSTOMER SERVICE STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 14. LOCAL ADVISORY COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 A. 1. Utilize County Rate Setting Methodology . . . . . . . . . . . . . . . . . . . 10 2. Utilize Diversion Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3. Method of Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4. Household Hazardous Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 } B. AB 939 Implementation and Tracking . . . . . . . . . . . . . . . . . . . . . . . . . .. . 11- 1. 11. Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2. Program Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 15. CUSTOMER COMPLAINTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 16. BILLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 17. RECYCLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 18. FREE SERVICE FOR COUNTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 19. FRANCHISE AREA-WIDE COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 20. PARTICIPATION IN COMMUNITY CLEAN-UP PROJECTS . . . . . . . . . . . . . . 15 21. DISPOSAL AND WASTE STREAM CONTROL . . . . . . . . . . . . . . . . . . . . . . . 15 22. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR . . . . . . . . . . . . . . . . . 15 23. ADMINISTRATIVE SERVICES AND FRANCHISE FEES . . . . . . . . . . . . . . . . 15 24. HAZARDOUS WASTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 25. PRELIMINARY DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 26. FAITHFUL PERFORMANCE BOND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 27. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 28. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 a. Complete Indemnification of County . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 b. Defense of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 18 29. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 ii 30. ASSIGNABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 31. INVOLUNTARY ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 32. NOTICE PROVISIONS . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . 20 33. ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES . . . . . 20 34. AFFILIATED ENTITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 t 35. BREACH AND TERMINATION . . . . . . . . . . . . . . . . . . . 21 . . . . . . . . . . . . . . . . 36. EMERGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 37. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS . . . . . . . . . . . . 23 38. AMENDMENT OR MODIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 39. POLICE POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 40. CONTEST OF AGREEMENT'S TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 41. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 42. WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 43. SURVIVAL OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 44. NEW AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 45. ENTIRE AGREEMENT24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii FRANCHISE AGREEMENT WITH BAY VIEW REFUSE AND RECYCLING SERVICES, INC. 1. EFFECTIVE DATE, PARTIES. This Agreement is binding between the County and the below named Contractor and is effective on September 11,1996. 2. DEFINITIONS. As used herein, the following terms shall have the meanings set forth below: a. Agreement. Agreement means this Agreement by and between the County and Contractor for the collection, removal and disposal of solid waste and the recycling of material. b. Act. Act means the California Integrated Waste Management Act of 1989 (Public Res. Code, § 40000 et seq.) and all rules and regulations adopted under any of those sections, as such sections, rules and regulations may be amended from time to time in the future. C. Board. Board means the Board of Supervisors for the County of Contra Costa. d. Commerciale Solid Waste. Commercial Solid Waste means Solid Waste routinely originating from stores, business offices and other commercial and light industrial sources excluding residences and any wastes from heavy industry (i.e., industry that manufactures or processes petroleum, lumber, steel, chemicals, explosives, fertilizers, gas, rubber, cement, sugar and other such products [see section 84-60.402 of the Contra Costa County Ordinance Code.]). e. Contractor. Contractor means Bay View Refuse and Recycling Services, Inc., a California Corporation. It is the entity which has been granted an exclusive franchise pursuant to the terms and conditions set forth herein. Lewis Figone is president and owns 100% of the stock in Bay View Refuse and Recycling Services, Inc. Lewis Figone is also president and owns 100% of the stock in Bay View Refuse Service, Inc., the corporation that is providing waste collection and recycling services to the Kensington franchise area up to the effective date of this Agreement, based on a contract with the Kensington Police Protection and Community Services District. f. County. County means the County of Contra Costa. g. Customers. Customers means those who receive service from the Contractor for the collection of materials for recycling and/or for the collection, removal, or disposal of Solid Waste, pursuant to this Agreement and applicable ordinances of County, including mandatory subscription 1 ordinances. h. Designated Waste. Designated Waste as used herein has the meaning set forth in section 2522 of Title 23 of the California Code of Regulations, as amended from time to time. L Franchise Area. Franchise Area means the geographic area generally known as the unincorporated community of Kensington in West Contra Costa County described in Exhibit A to this Agreement with Bay View Refuse and Recycling Services, Inc. The Community Development Department may maintain six hundred (600)-scale maps reflecting the Franchise Area. Exhibit A and/or the six hundred (600)-scale maps may be amended,from time to time to reflect changes of boundaries of the Franchise Area in such: . a manner as to identify each alteration to the Franchise Area and the effective date thereof. j. Hazardous Waste. Hazardous 'Wastes include any waste material or mixture of wastes which is toxic, corrosive, flammable, an irritant, or a strong sensitizer, which generates pressure through decomposition, heat or other means, if such a waste or mixture of wastes may cause substantial personal injury, serious illness or harm to humans, domestic animals, or wildlife, during or as a proximate result of any disposal of such wastes as defined in Article 2, Chapter 6.5, Section 25117 of the Health and Safety Code and 14 Cal.Code Regs., § 17225.32. The terms"toxic," "corrosive," "flammable," irritant," and "strong sensitizer' shall be given the same meaning as in the California Hazardous Substances Act (Chapter 4 commencing with Section 108100 of Part 3 of Division 104 of the Health and Safety Code). k. Industrial Waste. Industrial Waste includes all types of Solid Waste which result from industrial processes and manufacturing operations and/or which originates from such facilities. I. Infectious Waste. Infectious Wastes include: (1) Equipment, instruments, utensils and other fomites of a disposable nature from the rooms of patients who are suspected to have or have been diagnosed as having a communicable disease and must, therefore, be isolated as required by public health agencies; (2) laboratory wastes, including pathological specimens (i.e., all tissues, specimens of blood elements, excreta and secretions obtained from patients or laboratory animals) and disposable fomites (any substances that may harbor or transmit pathogenic organisms) attendant thereto; (3) surgical operating room pathologic specimens - including 2 recognizable anatomical parts, human tissue, anatomical human remains and disposable materials from hospital, clinics, outpatient areas and emergency rooms, as is also defined in Section 314(d) of the California Administrative Code, Title 17 (14 Cal.Code Regs., § 17225.36). M. Recycle or Recycling. Recycle or Recycling means the process of collecting, sorting, cleaning, treating and reconstituting materials and recovering them so that they may be used in the form of raw material for new, reused, or reconstituted products. n. Residential Solid Waste. Residential Solid Waste means Solid Waste routinely originating from single family or multiple family dwellings. Residential Solid Waste includes household hazardous waste, but does not include septage. o. Septage. Septage means non-sewered liquid or semi-liquid waste which may be trucked to treatment facilities for disposal, to include, but not be limited to, waste from residential septic tanks, commercial grease clean-outs, and industrial waste holding facilities. p. Solid Waste. Solid Waste has the meaning set forth in Section 40191 of the California Public Resources Code as of the date of execution of this Agreement. Solid Waste includes, but is not limited to, all putrescible and nonputrescible solid, semisolid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semisolid wastes and other discarded solid and semisolid wastes. "Solid Waste" does not include infectious, designated, and hazardous waste, except household hazardous waste. q. Waste Stream. Waste Stream means the Solid Waste to be collected under this Agreement from the time of its collection by the Contractor to its disposal at a landfill or, at County's discretion, delivery to a transfer facility or other facility by Contractor. 3. TERM. Subject to section 33 (Annexation and Change of Franchise Area Boundaries) and section 35 (Breach and Termination) , the term of this Agreement and the exclusive franchise granted hereunder shall be 20 years, commencing on the effective date first mentioned in section 1 of this Agreement. 4. INTENT TO REGULATE ALL RECYCLING AND RESIDENTIAL AND SOLID WASTE COLLECTION, REMOVAL AND/OR DISPOSAL. The parties hereto agree 3 that County currently has jurisdiction to regulate the collection, removal and disposal of all Solid Waste, and the recycling of all material in the Franchise Area. The intent of this Agreement is to regulate Solid Waste handling service and recycling of material in the Franchise Area. Consistent with State law and County ordinance, this Agreement is intended to and shall supersede the "Contract With Relation To Collection And Disposal Of Garbage Between Bay View Refuse Service, Inc. and the Kensington Community Service District", as amended. 5. EXCLUSIVE PRMLEGE AND DUTY. To the extent allowed by law, County hereby grants to Contractor the exclusive privilege and duty within the Franchise Area to collect, and remove for disposal and recycling, all residential and commercial Solid Waste, including recyclable materials, and to charge and receive charges therefor,. pursuant to and subject to the terms of this Agreement. Contractor promises and., agrees to perform the responsibilities and duties set forth herein. The Franchise Area may be expanded or reduced in size by mutual agreement of the parties, or as provided in section 33 (Annexation and Change of Franchise Area Boundaries) of this Agreement. 6. EXCEPTIONS TO EXCLUSIVE PRIVILEGE. The exclusive privilege granted by this Agreement shall not apply if: a. A person or entity generates Solid Waste, including recyclable materials, and personally collects, removes and disposes or recycles such in a clean and sanitary manner in conformance with all applicable laws and regulations, including mandatory subscription ordinances. This exception shall not apply to a person who incurs a net cost of collection to a third person in the above described activities-, or b. A person or entity contracts with a third person for the removal and disposal or recycling of inorganic refuse or garden waste (a "Non-Franchised Contractor") and such removal and disposal or recycling is solely incidental to work such as remodeling or gardening occasionally performed by or for the customer. This exception shall not apply if the Non-Franchised Contractor incurs a net cost of collection to any third person in connection with its collection and/or disposal of said Solid Waste. 7. CONTRACTOR'S DUTY TO MAINTAIN RECORDS; COUNTY'S RIGHT TO EXAMINE RECORDS. Contractor shall maintain a proper set of books and records in accordance with generally accepted accounting principles, accurately reflecting the business done by it under this Agreement. Contractor shall further maintain and make available to County, upon its request, records as to number of Customers, total and by type, route maps, service records and other materials and operating statistics in such manner and with such detail as 4 County may require. County shall treat the information required by this paragraph that affects the competitive position of the company as confidential information to the extent permitted by law. County may at any time during the term of this Agreement, have the books and records of the Contractor examined by a County Agent or Agents (as defined hereinbelow) appointed for that purpose by the County. County shall give thirty (30) days written notice to the Contractor of such examination date. County expenses incurred under this section shall be paid by Contractor subject to their recovery through the rates allowed by the County hereunder. s The information required by this section shall pertain to Contractor's operations, covered and regulated by this Agreement, and nothing contained herein shall require the Contractor to provide the County with information pertaining to the Contractor's operations which are not regulated by the County, except in conformance with this section. County's Agents may examine Contractor's books, records and financial statements pertaining to operations not regulated by the County as may be reasonably required for the sole purpose of gathering information necessary to allow the Agents to ascertain whether income, expenses, assets and liabilities are reasonably and consistently allocated among operations regulated by County and those not regulated by the County. Contractor shall obtain County's written approval of its method of segregating its financial records between County-regulated and non- County regulated operations. County shall not unreasonably withhold such approval. To the extent allowed by law, information gained from examination of records pertaining to operations not regulated by the County shall be treated by County and its Agents as confidential information. For the review of books and other financial records necessary to verify the Contractor's income, expenses, assets and liabilities, "County Agent" shall mean County employees or any independent Certified Public Accountant or public accountancy firm. For all other information or records, including the results of financial verification, "County Agent" shall mean any consultant designated by the County or County employees. Nothing in this section will prevent County from allowing public access to County records as provided for under the California Government Code, and in the event any dispute arises as to the public access to information provided by Contractor under the terms of this Agreement, the County shall in its discretion provide public access to said information according to law or tender the defense of any claims made against the County concerning said information to Contractor. Prior to releasing any information pursuant to this paragraph, County shall make a good faith effort to notify Contractor of the intended release. 5 8. RATES. Rates shall be fixed by the County from time to time. In determining the rates, the County shall consider fairness to both Contractor and the Customers. Reasonable costs incurred by Contractor pursuant to this Agreement shall be designated as "pass-through" or"subject to reasonable profit" as determined by the County during the rate review process. Rates fixed by County shall be maximum rates which Contractor may charge the Customers. The maximum rates fixed by the County at this time shall be the current rates set forth in Exhibit B to this Agreement. Future modifications in said maximum rates pursuant to section 9 (Rate Applications) hereinbelow shall not require; an amendment to this Agreement to be allowed. Following consultation with the Contractor and examination of industry norms and trends, the County, in its sole discretion, shall determine the method of determining Contractor profitability. Contractor is advised that the County may try to establish a common rate setting methodology for unincorporated areas, with input from Contractor and other solid waste collectors in the unincorporated areas. All costs associated with County review and processing of rate applications shall be paid by Contractor and shall be allowed as a pass-through cost in the rate application process. Following a survey, Contractor shall offer a mini-can program at reduced rates and variable can rates if requested by the Community Development Director. Rates shall be reallocated so that the overall receipts of the Contractor remain essentially the same when the program is in operation. Any such program implementation in 1997 will be part of the June rate review provided for in section 9. 9. RATE APPLICATIONS. Rate applications shall be prepared in accordance with such forms and in such detail as required by the County. The application shall include one reproducible hard copy, 1:i hard copies bound in an appropriate manner and one copy on disk formatted pursuant to County specifications. All rate applications shall include information from the previous rate change to the present, or such other period of time as is selected by the County. At least every three years, any rate application shall be accompanied by an audited financial statement covering the entire period since the last audited rate application together with supporting documentation as required to segregate its County regulated activities from other business activities. The Community Development Director may, in writing, allow the rate application to be submitted without an audited financial statement provided the Community Development Director is satisfied that the level of verifiable detail allows for adequate assessment of the Contractor's income, expenses, assets and liabilities. Rate changes may be initiated by County at any time or by Contractor under the conditions allowed in this section. In either case, Contractor shall prepare a rate 6 application in accordance with the requirements of this section. If the rate change is initiated by County, the Contractor shall submit its rate application to County within 60 days of County's notice to Contractor. If the rate change is initiated by Contractor, it shall be submitted no more than once a year under normal operating conditions (but see also section 12.c below regarding implementation of new programs). The date of Contractor initiated applications shall reasonably relate to the fiscal year of Contractor and be standard, year by year. Unless otherwise agreed by the parties, rate applications will be submitted in June of any year and any new rate shall be applied to the September 1st billing (the bill for September through December service). Such a mutual agreement on alternative rate application submittal dates does not require an� . amendment to this Agreement. In the event that the rate change that would be requested by Contractor is no more than the change in the Consumer Price Index for All Urban Consumers for the San Francisco Bay Area for that fiscal year of Contractor, Contractor may increase its rate up to such amount and not request a rate change from the County. Contractor may defer a rate application pursuant to this paragraph for a maximum of two consecutive years. In the event that Contractor must make significant changes in its operations or experiences significant changes in costs or revenue not under its control, Contractor may submit a rate application at any such time thereafter. Contractor shall provide documentation for the need for such rate application relative to those changes. The application will thereafter be considered by the Board. 10. OPERATION BY CONTRACTOR. Contractor shall furnish all necessary equipment(excluding containers for weekly Solid Waste service) for services provided pursuant to this Agreement in the Franchise Area and shall maintain such equipment in a sanitary condition at all times. Contractor shall furnish all necessary labor in connection with the operation of a Solid Waste collection system in the Franchise Area. The Contractor, in performance of this Agreement, shall use trucks with covered, water-tight truck bodies constructed of sufficient strength to withstand a fire within the truck body and not endanger adjacent property. Trucks, drop boxes, bins, or similar types of equipment owned and operated by the Contractor shall be kept clean and in good repair. Contractor shall have its name and telephone number on the side of each truck and on each drop box, bin or similar type equipment provided by Contractor. 11. LIMITATION ON TIME AND MANNER OF COLLECTION. Contractor shall systematically collect Solid Waste, and to the extent permitted by this Agreement, materials for recycling from its Customers. Frequency, place of pickup (backyard service for weekly Solid Waste and curbside service for recycling, green waste and periodic clean-ups unless otherwise approved by the County) or any other manner of collection shall be subject to the review and approval of the Director of Community Development. Upon commencement of service and upon changes in collection day schedules, Contractor shall provide each customer with notice of the scheduled collection day. Contractor shall not collect Solid Waste from an inhabited dwelling or dwelling unit between the hours of 6:00 p.m. and 5:30 a.m. from May through October and 6:00 a.m. from November through April (unless otherwise directed by the Community Development Director). 12. CUSTOMER SATISFACTION, AB 939 AND EFFICIENCIES IN OPERATION. a. From time to time, at its discretion, County may examine Contractor's. operation in order to evaluate whether the Contractor is operating at a satisfactory level of efficiency and customer satisfaction. Contractor agrees to cooperate in any such examination and shall permit County representatives to inspect, at Contractor's principal place of business, such information pertaining to Contractor's obligations hereunder as County may require, including, but not limited to, such things as customer inquiry records, collection routes and equipment records. Access to Contractor's records shall be subject to section 7 (Contractor's Duty to Maintain Records; County's Right to Examine Records). b. Notwithstanding any contrary provision in this Agreement, the County shall have the right to direct Contractor to compile information, develop plans for and/or conduct programs on alternative methods of Solid Waste and recyclable material collection and management, or to take any other action requested by the County for the purpose of meeting the source reduction, recycling and composting requirements of the Act, and any other applicable federal, state or local laws regarding Solid Waste collection, recycling and disposal, including, without limitation, the County's Materials Diversion Ordinance. Contractor agrees to indemnify and hold the County harmless from and against any and all liability to the State of California for the County's noncompliance with the requirements of the California Integrated Waste Management Act due in whole or material part to the material failure of Contractor to properly carry out the reasonable directives of.the County to Contractor regarding collection and disposition of Solid Waste and recyclable material; provided, however, that Contractor shall not be obligated to carry out any such directive (and shall not indemnify nor hold the County harmless from any resulting liability) if the County fails to agree to allow Contractor its reasonable costs (including a reasonable profit) associated with carrying out such directives. 8 C. County may require Contractor to develop plans for and conduct programs on alternative methods of Solid Waste collection, including pilot programs of limited scope, or may require additional programs, for the purpose of improving service, increasing customer satisfaction, and meeting diversion requirements. County may also require Contractor to implement efficiencies in its operation upon written notice from County. The notice shall allow Contractor a reasonable period of time to implement the specified service (or efficiency). Should County require commencement of such a program as outlined in this paragraph, Contractor agrees not only to do those things specified herein, but also to act at the direction of the County on other matters that may be necessary for the success and efficiency of the project,. ` such as public information and notification. In the event that County elects to direct Contractor to discontinue any service theretofore performed by' Contractor at the direction of County hereunder, County shall allow Contractor to recover its reasonable capital equipment costs and other reasonable costs arising upon termination of the service. Rate adjustments applicable solely to programs instituted pursuant to this subsection initially shall be established at the time the County authorizes implementation of the program or efficiency. 13. CUSTOMER SERVICE STANDARDS. Contractor shall provide prompt, efficient, continuous and professional service to its Customers. Contractor shall have a phone system with sufficient capacity to promptly respond to telephone calls for at least 8 hours a day during weekdays, excluding those holidays observed by Contractor, plus a 24-hour answering service. All vehicles shall be radio equipped. Telephone numbers for customer service shall be located in the local telephone directory. All telephone lines for customer service shall be toll free to Customers. Not less than once every three years and not less than six months prior to an application for contract renewal, assignment or extension of term, Contractor shall conduct a representative survey or surveys of Customers within the Franchise Area to determine satisfaction with service, including, without limitation, response to customer complaints. The survey methodology, format and content shall be subject to the prior review and approval of the Director of Community Development. A copy of the survey results shall be sent to the County within sixty(60) days of completion of the survey. Nothing in this paragraph shall limit the right of the County to conduct additional surveys. The Contractor shall cooperate with the County in such cases. Upon initiation of service, and at least once a year, Contractor shall send or deliver to Customers information concerning the conditions of service, including, but not limited to, rates, fees, charges, service options, payment options, discounts (if any), days of collections, the amount and manner of refuse to be collected, service level and inquiry/complaint procedures, including the name, address and local telephone number of Contractor and the name, address and telephone number of the County Community Development Department. The form and content shall be subject to the 9 review and approval of the Director of Community Development. 14. LOCAL ADVISORY COMMITTEE. The Board of Supervisors shall establish the Kensington Solid Waste and Recycling Committee ("Committee") and appoint five Kensington residents to the Committee. At least two members shall be appointed from the Kensington Police Protection and Community Services District(if requested by the District). The Committee at its election may: 1) review local service interests and needs, recycling and diversion programs, household hazardous materials programs, and the performance of the Contractor in the Kensington Franchise Area and under this Franchise Agreement; 2) participate in rate review; and 3) advise and provide recommendations to the Community Development Department Director and the Board of Supervisors on any such matters. The Committee at its election_ may hold regularly scheduled meetings or special meetings as may be appropriate.., . In all cases, the Committee shall provide public notice of its meetings and agendas as a County standing committee and otherwise comply with County committee procedures. The Committee shall hold such meetings at a time and place in Kensington convenient to the public. The Committee should encourage and solicit public input. The Board of Supervisors, in it's discretion, may apportion up to 2% of the franchise fee (section 23) to the Committee based on the Committee's acceptance of responsibility for making recommendations;to the Community Development Director or the Board of Supervisors, implementing the SRRE and other matters, as directed by the County from time to time. If accepted by the Committee, such responsibility may include but is not limited to: A. 1) UTILIZE COUNTY RATE SETTING METHODOLOGY - The County shall set the initial rate for solid waste and recycling pickup. Future rate modifications may be reviewed by the Committee using the methodology established by the County. Recommendations shall then be referred to the County for discussion. 2) UTILIZE DIVERSION CRITERIA - The Committee shall be responsible for developing in coordination with and subject to approval of the County conservation staff, programs as indicated in the County SRRE to assure that the State mandated diversion of 50% is accomplished by the year 2000. Due to the difficulty in determining the exact amount of waste generated by the subject area in 1990 and the current difficulties in tracking all waste coming from the area due to self hauling and special non-franchised loads, the Committee shall assist in implementing such source reduction and recycling programs as directed by the County, in a timely manner, on a schedule that, at least, reflects that of the majority of the County population including the Cities and Regional Agencies within the County. 10 3) METHOD OF RECYCLING (CURBSIDE/TRANSFER STATION/ETC) - The Committee may determine, with the Contractor, the most cost effective method of accomplishing the required recycling. Possible methods to consider are: a) picking up at curbside different materials on different days, b) allow for mixed curbside pickup to be sorted at a transfer station or central sorting area or, c) designated containers for each material to be picked up at curbside d) local neighborhood drop off sites for some materials 4) HOUSEHOLD HAZARDOUS WASTE - METHOD OF DEALING WITH HHW REQUIREMENTS.- In order to meet State requirements each city and county is required to provide Household Hazardous Waste disposal for their residents. The County mobile HHW program is currently providing for a mobile drop-off service that is financed in various ways throughout the county. The Local Advisory Committee shall determine the method of payment for the Kensington area. B. AB 939 IMPLEMENTATION AND TRACKING 1) DATA COLLECTION a) REPORTS FROM CONTRACTOR TO LOCAL ENTITY AND COUNTY REGARDING SOLID WASTE DISPOSED AND MATERIALS RECYCLED - The Committee may be responsible for obtaining reports from the Contractor that provide a breakdown by material/tonnage and sales price of ' all materials recycled and of the amount of solid waste and green waste disposed and at what location for the Kensington Community. Such report information would then be forwarded to the County in the required format for compilation into the Countywide recording system, initially in the format shown in Exhibit C. b) COUNTYWIDE COLLECTION OF DATA AND REPORTING TO STATE - The County shall be responsible for the collection and consolidation of all disposal and recycling information for the unincorporated County and for collection and reporting to each County jurisdiction of disposal information, and for the AB 939 reporting to the State. 2) PROGRAM DEVELOPMENT 11 a) COUNTY RESPONSIBILITY-The County will be responsible for setting up programs in all parts of the County to meet the requirements of the State approved SRRE. As part of that responsibility the County will provide Source Reduction and Recycling programs to individual communities. An example is compost workshops. The County will also provide coordination to provide for variable can rates, mini-can rates, source reduction programs (ie: Shop Smart), Commercial recycling programs, collection programs for reusable items, develop full scale recycling programs for both single family and multifamily residential and commercial developments. b) LOCAL RESPONSIBILITY - The Committee may provide: local publicity and generate local interest in solid waste and recycling programs, provide locations for activities such as compost workshops, determine any special needs that the community may have in regards to solid waste pickup services, either garbage or recycling, work with county staff to develop "reduce, reuse and recycle" programs that will be effective in the Kensington community. The Committee, using the methodology approved by the County, may review any rate change requests and transmit their recommendation on the request to the County. They will determine the preferred method of paying for Household Hazardous Waste services and maintain records of amounts of solid waste, recyclables and green waste collected. ' 15. CUSTOMER COMPLAINTS. Contractor shall develop and implement policy and procedure for responding to and recording Customer complaints, including dispute resolution. The policy and procedure ;shall be subject to the approval of the Director of Community Development. 16. BILLING. The form and content of customer bills shall be subject to the review and approval of the Director of Community Development. Bills for services will be sent three times per year for every four months (September, January, May), unless otherwise determined by the County. The County may establish billing period options for Customers upon a finding that such options are cost-effective and meet a community need. Full payment for drop boxes may be required by Contractor prior to delivery of the drop box to the Customer. The County shall have the right to direct the Contractor to change or alter its billing system in which event the marginal additional expenses incurred by the Contractor in the implementation of the change, with regard to the accounting, printing, mailing, 12 loss of use of funds, or otherwise, shall be recoverable by the Contractor through the rates allowed by the County provided such expenses are reasonable. Contractor shall inform Customers of all rate changes at least 30 days prior to their effective date. A copy or facsimile of such notice shall be provided to County at the time of Customer notification. 17. RECYCLING. County grants to Contractor the right and obligation to operate recycling programs, including curbside pick up of recyclable materials, as determined and designated by County, subject to County's right to terminate this grant to Contractor pursuant to the provisions of this section. Contractor shall request that recyclable materials be placed at the curb by 5:00 a.m. of the day for which service has been designated for that particular dwelling. Contractor is not responsible to pick up recyclables not placed on the curb in a timely manner. Contractor has already instituted and implemented a recycling program including regular curbside pick up in five-gallon buckets at all single family residences of at least aluminum, tin, newsprint, glass bottles, non-colored HDPE and PET, as more fully set forth in Exhibit B. The current program will be supplemented by cardboard, mixed paper and other collections with the implementation of this Agreement, so that items listed in County Ordinance Section 418-10.604, as it may be amended from time to time, are collected. Separate green waste pick ups will be added effective January 1997. The County has the right at any time to modify said program or require new programs as provided at section 12.b hereinabove. At the written request of Contractor, the Community Development Department Director may delete a material from recycling if the Director determines that there is no market to accept the material (see Article 418-10.8 for applicable exemptions and findings). Contractor shall maintain and provide to the County records relating to its recycling programs as directed by the Director of Community Development. Contractor shall provide to each household promotional information pertaining to the curbside recycling program. Contractor shall allow County staff to review such material prior to delivery and shall make any changes reasonably requested by staff. Contractor shall distribute written promotional material two times per year as necessary to maintain participation in the program and more frequently, if required by the Community Development Director. Unless otherwise required by the Community Development Director, Contractor shall provide the County with periodic reports on the recycling program which shall include: a. Participation level (i.e., the number of residences .participating in the recycling program) based on one sample week during each calendar quarter. b. Quantity of materials collected, in tons, by type of material (e.g., newspaper, glass, plastic and metal), by calendar quarter. . 13 C. Revenues received by Contractor for each type of material and total revenues received, by calendar quarter. Unless otherwise directed by the Community Development Director, reports shall be provided quarterly and annually. The quarterly reports shall be due by the 15th of the month following the close of the quarter and shall cover the preceding three months. For example, the first quarterly report shall be due April 15, 1997 and shall cover January, February and March, 1997. The first annual report shall be due by March 15 of 1997, and shall cover the preceding calendar year. Contractors provision of recycling service shall be reviewed in approximately one year and thereafter within three (3) years of the effective date of this Agreement and, at County's discretion, every five years thereafter. If County determines that continuation of such service by Contractor is not consistent with the County's ratepayers best interest, but not as a result of Contractor's failure to satisfactorily provide recycling services, Contractor shall be allowed to recoup its unamortized capital expenditures as follows. Contractor shall make a good faith effort to sell all disposable assets acquired in furtherance of the program for their fair market value. If income derived from the sale is insufficient to cover the unamortized costs of such assets, Contractor may transfer those losses together with net operations profits or losses to its general account and submit a rate application to cover such losses. If County determines that Contractor has failed to satisfactorily provide and perform recycling services, County may terminate this grant to Contractor of the right and obligation to provide and operate recycling programs, at no cost or further obligation on the part of the County or County's ratepayers. 18. FREE SERVICE FOR COUNTY. Contractor shall provide Solid Waste collection and disposal services at those County buildings within the Franchise Area (the library) designated by the Director of Community Development from time to time, at no charge to the County. 19. FRANCHISE AREA-WIDE COLLECTION. Unless otherwise determined by the Community Development Director, in addition to its regular collections, commencing in-January, 1997, as set forth in Exhibit B, Contractor shall provide three scheduled green waste curbside pick ups (no yardage limit; no plastic bags) and one on call curbside general pick up (two yards, bundled, tied or placed in boxes or trash containers). Said collections shall be made each year throughout the term of this Agreement in accordance with practices and procedures established by Contractor and subject to the approval of the Community Development Director. If the Community Development Director determines that one more green waste pick up is desirable, then Contractor shall provide it at no additional cost until the next regular rate review. Green waste shall be delivered to a composting or chipping facility by the Contractor, subject to review and direction by the Community Development Director. 14 , The increased cost of green waste pick ups and any changes in the recycling program may be considered as part of the next rate review. Customers shall be timely notified on the dates of the scheduled green waste pick ups. The recycling and other services provided by Contractor are set forth in Exhibit B. The scope of solid waste collection, green waste and recycling services provided may be changed from Exhibit B at the direction or with the approval of the Community Development Director and without amending this Agreement. 20. PARTICIPATION IN COMMUNITY CLEAN-UP PROJECTS. Contractor shall provide, upon direction of the Community Development Director, Solid Waste drop s boxes or equivalent containers for community or other clean-up projects within the . Franchise Area. The Contractor's obligation shall be limited to the equivalent of uR to three (3) 20-cubic yards drop boxes per year on request in the Franchise Area. 21. DISPOSAL AND WASTE STREAM CONTROL. Contractor shall be solely responsible for the disposal of the Solid Waste collected pursuant to this Agreement. County has complete authority and control over the Franchise Area waste stream. County may, at its sole discretion upon providing 60 days notice to Contractor, direct the Solid Waste collected under this Agreement to be delivered to any site or facility of its choosing. This shall include the right of the County to direct the Solid Waste to be delivered to any County designated transfer station, disposal site, transformation facility and/or resource recovery facility. It is understood that County may contract with any party, public or private, to commit the waste stream from the Franchise Area, and that Contractor's contracts may not bind County, nor need County consider such other contracts for any purpose. Notwithstanding the above, Contractor may propose, and County may but need not consider, waste management and/or disposition alternatives which are cost effective. In determining or comparing costs, County shall consider all relevant factors, including but not limited to, transportation costs, closure and postclosure requirements, costs and liabilities, disposal fees, fees levied by governmental entities, including benefits to Contractor's customers from paying such fees, costs of compliance with ordinances and other local requirements, and long-term costs, including degree of control over future costs. 22. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR. Contractor shall assist County in its enforcement of its mandatory subscription ordinance by providing County with the addresses of properties not subscribing to collection service within the Franchise Area and by providing collection service to such properties upon written request by the County. 23. ADMINISTRATIVE SERVICES AND FRANCHISE FEES. Contractor shall pay to the County for (a) the services provided by the County in administering this Agreement, (b)for services and programs pertaining to Solid Waste provided by the County, and (c) additionally as directed by the County, a percentage of its gross 15 annual revenues generated from the performance of such waste collection services under this Agreement. Unless otherwise subsequently determined by the County, the total amount for such administration services and franchise fees shall be 5% of the commercial and residential bills for each calendar year, commencing in September, 1996. Such percentage, time and frequency of payment may be adjusted by County from time to time. Said sums shall be payable from the Contractor to the County on a four month basis (January, May and September for the respective four preceding months' billings). Such administrative and program services and any franchise fees shall be considered a reasonable cost and subject to "pass-through" as described in section 8 on Rates. i 24. HAZARDOUS WASTE. The parties hereto recognize that federal, state and local, agencies with responsibility for defining hazardous waste and for,regulating the.;, . collection, handling or disposing of such substances are continually providing new definitions, tests and regulations concerning these substances. Under this Agreement, it is Contractor's responsibility to keep current with the regulations on such substances and to identify such substances and to comply with all federal, state and local regulations concerning such substances. Contractor agrees to provide to County upon its request, Contractor's program for identifying hazardous waste and complying with all federal, state and local statutes and regulations dealing with hazardous waste. Contractor shall make every reasonable effort to prohibit the collection and the disposal of hazardous waste in any manner inconsistent with applicable law. 25. PRELIMINARY DISPUTE RESOLUTION. If Contractor has a question as to the interpretation of this Agreement, it shall submit a written request to the Director of Community Development for a determination of the issue. The Contractor shall provide and submit such information as the Director of Community Development may request or require to make the requested determination. The written determination of the Director of Community Development on such interpretation, as with any other determination by the Director, may be appealed to the Board of Supervisors pursuant to Ordinance Code Chapter 14-4. 26. FAITHFUL PERFORMANCE BOND. Contractor shall submit to County simultaneously with the execution of this Agreement a corporate surety bond in the amount of$10,000, provided however, that the Board may increase this amount not more often than every three years to reflect changes in the Consumer Price Index for All Urban Consumers for the San Francisco Bay Area. The bond shall be executed by a surety company licensed to do business in the State of California and acceptable to County. The bond shall be approved by the County and shall be payable to County. The condition of the bond shall be that Contractor will faithfully perform the duties imposed by ordinance, this Agreement and the rules and regulations of County. Any action by County to proceed against the Bond shall not limit or affect the right of County to use other remedies available to County under the agreement or in courts of law or equity, not withstanding the foregoing. In lieu 16 of the corporate surety bond, Contractor may provide to County a letter of credit, cash bond or other security acceptable to the County Administrator's Office and in a form satisfactory to the County. -27. INSURANCE. Contractor shall procure and maintain in full force and effect at all times during the entire term of this Agreement the following coverage.- a. overage:a. Public liability and property damage insurance including completed operations, products, contractual, broad form property damage, personal injury and owned and non-owned automobile liability with such coverages and limits as may be reasonably requested by County from time to time, but in no event with limits not less than the sum of $3 million combined single . limit for each occurrence arising from the services as stated in the' Agreement herein. County shall be named as an additional insured under such liability insurance policy or policies, if commercially available. b. Contractor shall carry workers' compensation insurance for all its employees. Evidence of liability and workers' compensation insurance shall be provided by Contractor by filing with County a certificate of insurance indicating that County is endorsed as an additional named insured under the liability policy. All policies shall include a provision that written notice of cancellation or any material change in coverage shall be delivered to County thirty (30) days in advance of the effective date thereof. No cancellation, alteration or change of beneficiary shall be made without written notice to County. County reserves the right to examine all policies from time to time to ensure appropriate conformity to prevailing practices and standards of the insurance industry. Such insurance shall be obtained from a company or companies licensed to do business in the State of California and acceptable to County. Failure of Contractor to maintain insurance in the manner and amount stated herein and as directed by County Administrator, subject to the approval of the Board, will constitute a material breach of this Agreement. 28. INDEMNIFICATION. a. Complete Indemnification of County. All work and performance covered by this Agreement shall be at the risk of Contractor. Contractor agrees to save, indemnify and keep harmless the County, its officers, employees, agents and assigns against any and all liability, claims, judgments, or demands, including demands arising from injuries or deaths of persons and damage to property, including environmental damage, arising 17 directly or indirectly out of the obligations herein undertaken or out of the operations conducted by Contractor, save and except claims or litigation arising through the sole negligence! or willful misconduct of County, and will make good to and reimburse County for any expenditures, including reasonable attorney's fees, that County may make by reason of such matters and, if requested by County shall defend any such suit at the sole cost and expense of Contractor. The above promise by Contractor to indemnify, hold harmless and defend the County expressly includes, but is not limited to, all claims, damages (including but not limited to special and consequential damages), natural resources damages, punitive damages, injuries, costs, response,- remediation esponse,remediation and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal administrative proceedings, interest, fines, charges, penalties and expenses (including but not limited to attorney's and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity) of any kind whatsoever paid, incurred or suffered by, or asserted against, County, its officers, employees or agents arising from or attributed to any repair, cleanup or detoxication, or preparation and implementation of any removal, remedial, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substances or hazardous waste at any place where municipal solid waste is or has been transported, transferred, processed, stored, disposed of or otherwise come to be located by Contractor under Agreement, or the activities of Contractor pursuant to this Agreement resulting in a release of hazardous substances or waste into the environment. The foregoing! is intended to operate in part as an agreement, pursuant to section 107 (e) of the Comprehensive Environmental Response, Compensation and Liability Act, "CERCLA," 42 U.S.C. section 9607(e), and California Health and Safety Code section 25364, to defend, protect, hold harmless and indemnify County. The intent of the section is to provided County with the highest level of protection possible under existing and future laws. b. Defense of Agreement. Should any party successfully challenge the validity of this Agreement, the procedure by which this Agreement was entered into or the validity of any County ordinance which authorizes the County to enter into this Agreement, then in such case the Contractor shall have no cause of action for damages or any other relief against County as a result of such successful challenge. Contractor has the right to defend this Agreement and County. County has no duty to Contractor to defend the validity of this Agreement or any provision hereof. 29. ATTORNEY'S FEES. In the event of litigation between the parties arising 18 hereunder, each party shall be responsible for and pay its own litigation expenses, including attorney's fees. 30. ASSIGNABILITY. Contractor shall not sell, assign, subcontract or transfer this Agreement or any part hereof, or any obligation hereunder, without the written consent of County. The term assignment shall include any dissolution, merger, consolidation or other reorganization of Contractor, which results in change of control of Contractor, or the sale or other transfer by probate proceeding or otherwise of a controlling percentage of Contractor's capital stock to a person not a shareholder on the date of the execution of this Agreement. The term "assignment" does not include internal business reorganizations or formations of new companies by Contractor,- , formation of trusts by Contractor or transfers of any interest of Contractor as a result of death, disability or estate planning by one or more of the principals of Contractor, so long as essential management decisions are retained by Lewis Figone, his spouse, his children, and/or their spouses. It is understood and agreed by the parties that corporations that are 100% owned by Lewis Figone, his spouse, his children, and/or their spouses may presently and in the future perform obligations and responsibilities of the Contractor in the Franchise Area. Performances of obligations and responsibilities of the Contractor by such companies shall not be deemed an assignment under this section. Consent to assignment may not be unreasonably withheld. However, it is understood that County's grant of this franchise to Contractor is partly persuaded by the Contractor's financial strength and background in the field of waste management. Therefore, assuming Contractor maintains its ability to faithfully carry out its duties hereunder, it is in the County's ratepayers best interest for Contractor to continue under this Agreement. Following a public hearing, County may assign or transfer any or all of its rights under this Agreement without the consent of Contractor to any legally authorized public entity. In the event Contractor herein attempts to assign or subcontract this Agreement or any part hereof or any obligations hereunder in a manner inconsistent with the foregoing, County shall have the right to elect to terminate this Agreement forthwith, without suit or other proceeding. 31. INVOLUNTARY ASSIGNMENT. No interest of Contractor in this Agreement shall be assignable by operation of law. Each or any of the following acts shall be considered an involuntary assignment providing County with the right to elect to terminate the Agreement forthwith, without suit or other proceedings: (1) If Contractor is or becomes insolvent, or makes an assignment for the benefit of creditors; (2) If writ of attachment or execution is levied on this Agreement or other property of Contractor such that would affect Contractor's ability to perform 19 its duties and obligations under this Agreement. (3) If in any proceeding to which Contractor is a party, a receiver is appointed with authority to take possession of Contractor's property such that would affect Contractor's ability to perform its duties and obligations under this Agreement. (4) Except as otherwise provided in section 30 (Assignability), in the event of a probate proceeding where the rights of Contractor under the Agreement would pass to another individual or other individuals. 32. NOTICE PROVISIONS. Any notice required or permitted under this Agreement shall be in writing and shall be deemed to have been given if delivered personally, or ten (10) days after posted by certified mail, return receipt requested, addressed as appropriate either to Contractor.- Bay View Refuse and Recycling Services, Inc. Attn: Lewis Figone P.O. Box 277 EI Cerrito, CA 94530 Or to County: Contra Costa Community Development Department 651 Pine Street, 4th Floor, North Wing Martinez, CA 94553-0095 Attention: Solid Waste Program Manager 33. ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES. Contractor shall give notice to County by January 30 of the next calendar year of any geographic area in the Franchise Area or immediately contiguous to the Franchise Area, in which Contractor has commenced service within the preceding year, notwithstanding whether Contractor deems that area to be regulated or unregulated. Contractor realizes that the public agency boundaries may be altered by virtue of actions taken by the Contra Costa County Local Agency Formation Commission (LAFCO). Contractor agrees that should a municipal corporation lawfully annex territory which is within the Franchise Area, County may make such alterations to the Franchise Area as the annexation necessitates. Should the Franchise Area boundaries be amended, Contractor agrees that it will abide by any change resulting from the Franchise Area change. Contractor agrees that the Board of Supervisors may make such alterations to the Franchise Area as are necessitated by such Local Agency Formation Commission actions and shall have no right or claim to damages or other relief against the County for such alterations to the Franchise Area. However, nothing herein is intended to abrogate Contractor's rights under Public Resources Code Section 49520 or any successor or similar 20 statute. 34. AFFILIATED ENTITIES. Contractor shall provide information necessary to + reasonably satisfy County that the charges made by any Affiliated Entity are reasonable in accordance with the provisions of section 8 (Contractor's Duty to Maintain Records; County's Right to Examine Records). Information gained from examination of books and records pertaining to operations not regulated by the County shall be treated by the County and its Agents as confidential information. "Affiliated Entity" shall be defined, for purposes of this section, as any entity which provides products or services to Contractor and in which either Contractor or the affiliated entity owns a ten percent (10%) or greater interest in the other, or where one person or entity owns ten percent (10%) or greater interest in both. For purposes of this section, the term "Contractor" shall include Contractor, and if Contractor is an individual or a group of individuals (partnership), all immediate family members, or if a corporation, major shareholders, and if any major shareholder is an individual, said individual's immediate family members. For the purpose of this paragraph, "immediate family" includes spouses and relatives of the first degree of sanguinity, and their spouses. 35. BREACH AND TERMINATION. The Director of Community Development shall have authority, subject to review by the Board of Supervisors upon appeal, to determine whether a breach of any provision of this Agreement by Contractor has occurred. Any waiver of a breach shall not be deemed to be a waiver of any subsequent breach or to be construed as approval of a course of conduct. In the event that the Director determines that a breach has occurred, County shall give Contractor written notice of the breach setting forth the breach or default. Contractor shall have a reasonable period to cure the noticed breach, said period not to exceed 60 days. In the event the breach or default is cured to the satisfaction of the Director of Community Development within the period of time allotted, the breach shall not be deemed a material breach. In the event that the Director of Community Development determines that Contractor has failed to satisfactorily cure the breach or default within the period of time allotted, the Director of Community Development may determine such breach or default to be material. Multiple or repeated breaches, or a pattern of breaches and subsequent attempts to cure said breaches by Contractor shall provide an adequate basis for the Director of Community Development, in his discretion, to declare any subsequent breach to be material, notwithstanding whether that breach is ultimately cured by Contractor. If such a determination of material breach is made, the Director of Community Development's determination shall be automatically appealed to the Board of Supervisors for final action. A material breach shall be cause for termination of this Agreement by the Board of Supervisors. 21 In the event of a termination pursuant to this section, County shall have the right to temporarily assume the obligations of Contractor and shall have the right to forthwith take possession of all trucks and other equipment of Contractor and exercise Contractor's right to enter and use any disposal facilities for the purpose of performing the services agreed to be performed by Contractor herein until such time as County can make other arrangements for the performance of said services. However, such temporary assumption of Contractor's obligations under the Agreement shall not be continued by County for a period exceeding twelve (12) months from the date such operations are undertaken by County. During any period in which County has temporarily assumed the obligations of Contractor under this Agreement, County shall be entitled to the gross revenue attributable to operations during such period and shall pay therefrom only those.j costs and expenses applicable or allocable to said period, including the reasonable rental value of the trucks and equipment to be paid to Contractor. County shall be entitled to the excess, if any, of revenue over applicable or allowable costs and expenses during such period. The loss, if any, during such period shall be a charge against Contractor, and shall be paid to County by Contractor on demand. Final adjustment and allocation of gross revenue, costs, and expenses to the period during which County temporarily assumed the obligations of Contractor shall be determined by an audit by a Certified Public Accountant and prepared in report form with his unqualified opinion attached thereto. Nothing in this Agreement shall prevent County during any period in which County temporarily assumes the obligations of Contractor under this Agreement, from employing persons who were employed by the Contractor for the collection of Solid Waste under this Agreement. Upon the occurrence of a material breach and the declaration of such and termination of this Agreement by the Board of Supervisors, this Agreement and the franchise granted thereunder shall be of no further force and effect, excepting these provisions concerning County's right to temporarily assume Contractor's obligations and to use Contractors facilities, and section 28 (Indemnification). County then shall be free to enter into whatever other arrangements are deemed justified and necessary for the collection, removal and disposal of Solid Waste within the Franchise Area. 36. EMERGENCY. Notwithstanding Contractor's exclusive franchise rights set forth in section 5 (Exclusive Privilege and Duty), in the event of an emergency due to natural disaster or labor strike which interrupts the collection of Solid Waste by Contractor, the Board of Supervisors shall have the right to declare a temporary suspension of this Agreement for the reasonable duration of the emergency and until such time as County determines that Contractor is able to reassume all obligations under this Agreement. Should Contractor fail to demonstrate to the satisfaction of the Board of Supervisors that required services can be resumed by Contractor prior to the expiration of a six (15) month period, this Agreement may be terminated at the direction of the Board. 22 `37. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS. Contractor shall be responsible for and shall comply with all applicable laws, rules, and regulations that are now in effect or may be promulgated or amended from time to time by the Government of the United States, the State of California, the County and any other agency now authorized or which may be authorized in the future to regulate the services to be performed herein regarding the collection, removal and disposal of Solid Waste and recycling of material. This includes County Ordinance Code Chapter 418-6 (on mandatory subscription to Solid Waste collection service), and the County's Materials Diversion Ordinance. 38. AMENDMENT OR MODIFICATION. This Agreement may be amended or modified upon written agreement of the parties hereto. The parties agree to meet and confer in good faith if amendments or modifications are proposed. 39. POLICE POWERS. Nothing in this Agreement is intended to or may limit County authority pursuant to its police power. 40. CONTEST OF AGREEMENTS TERMS. In the event either party to this Agreement attempts to challenge the validity of any portion of this Agreement, such action in attempting to challenge the Agreement shall constitute a material breach of this Agreement and the non-breaching party shall have the right to elect to terminate this Agreement forthwith without suit of other proceeding. This section shall not be construed to prevent either party from seeking redress from the courts for the purpose of legal review of administrative proceedings regarding rate setting or County actions taken pursuant to this Agreement, or for the purpose of interpreting or enforcing the provisions contained in this Agreement. 41. SEVERABILITY. In the event legal action is brought by a person or entity, other than the parties to this Agreement, to challenge, invalidate, contest or set aside any of the provisions of this Agreement, each and every term and condition, and each and every section and paragraph is severable from the remaining terms, conditions, sections, and paragraphs. The invalidation of any term, condition, section or paragraph as a result of a legal action, brought by a person or entity not a party to this Agreement shall not affect the validity or enforceability of the remaining provisions. However, if material provisions hereof are affected, the parties agree to negotiate in good faith to reach agreement on revisions which preserve the substance hereof to the greatest extent allowed by law. 42. WAIVER. The waiver by either party of any breach or violation of any provisions of this Agreement shall not be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision. The acceptance of any monies which become due hereunder shall not be deemed to be a waiver of any pre-existing or concurrent breach or violation 23 by the other party of any provision of this Agreement. 43. SURVIVAL OF OBLIGATIONS. Obligations of this Agreement which embody continuing obligations, including but not limited to section 28 (Indemnification) shall survive the termination or expiration of this Agreement. 44. NEW AGREEMENT. Contractor acknowledges that County has provided notice to Contractor pursuant to Public Resource Code section 49520. Pursuant to said notice and Chapter 418-7 of the County Ordinance Code, effective no later than the effective date of this Agreement, Contractor's Franchise Agreement with the Kensington Community Service District is terminated and of no force or effect. Pursuant to section 3 (Term), this Agreement will be effective through it's term. 45. ENTIRE AGREEMENT. This Agreement represents the full and entire agreement between the parties hereto with respect to the matters covered herein. COUNTY OF CONTRA COSTA CHAIR, BOARD OF SUPERVISORS Date ATTEST, Phil Batchelor, Recommended for Approval Clerk of the Board Form Approved and County Administrator By: DEPUTY CONTRACTOR BAY VIEW REFUSE AND RECYCLING SERVICES, INC. a California Corporation By: LEWIS FIGONE Date PRESIDENT Taxpayer I.D. No. Form Approved W AAFRANCHISAGR 24 O obit A b Ems`• d Daps ._.... _,y in ton b J#<1 DR &hot AV . ,� �• �, ��E ' �, � it AR . IL � _ `EAU f yj res` i P LID 4c 44p ,` a / orf a� c N1 BLVD. Ay .. �E�R �►vE.� /Q. �e� x . ti c OLIAMET AV DR s 5 wx ell e\ A99 ee, v \�; RZy�, n ic� W Q .o r Af- L 5 .00ll 9t,� IL 10 Q ern•'. Highgits kd. �, ��'0 �� •/� Highland Blvd. Jessen Dr. �+ �,f, +►j'j 01 Kenilworth Ct. �Q 1-4 c-1 Kenilworth Dr. Kensington Rd. y � Kenyon Av. , Kerr Av. ROAD Kingston Rd. Lake Dr. � Lawson Rd. ' H Las Alias Drr 4,V0 f• Lenox Rd. Lexington Rd. 6KGnsingtor 0 SO. Kt4f y Y tic.• ,�5�' .}i v rIn C► � 4CZ ., � zoo �► � �,� 04 ��� NORWOOD r { \% \ PL. o N C"� cif �y 1 Qr Q• O _ 0 Z CG AV -< WILLAMETTE Xt AvE. DR. E� AV .SUNSET Vp ! , ,c ;'r y` Eta i arWESIN .� Lo Vr'�AMET tE D � DR .,,--:-1 d �NS��'• '�' fit^ O � �F 4` Q c, � Fy 4tom A-0k f -SA Pi TA 19 td C4VENI,at ok 4 cc ILL E A .i lot Ods'- w �f Dom•- •� 4�'1. \ `'i .4 s\ o � ry, � its r►F S"t � . 1 . . -WAY � '4AV 4- 'u, Lo , .rj jP •- `' � _ . . _ SUN.-:,:.% ,� ,, \c^ \ ilk (01 99 ell 0 IN. 194 ��► ! " of r. y� �'S' '. 4 cme al. , No co 9 s �E• pCOY < rlooC, CIL cot E y� •ar G y DA ALLE 1 � P R AMON 1 RD 1 v LA u .� U) op :.�.._.,.• � f RR's f E Cep pock ao�►o `s1'0 Sing o' ©w KE IV Cr f VA ,, jD OR 8 �,- Sic.`' ,�► +gyp y 4' �. WORVWOOO Ctil,4 PL y� . F ♦ �► s Qcwar f5- 4 � Jr ��, AV ,►,� cv P •ro$" K"� p L��it+tty `rs r s�n9t° KE N fC8L VD „ - • SorRj-., `�' Q Ory Cr AN MAV �• y © �4N � s,� y Est IL s �,y� � ���,qy.� 'Qct, ,►� '�o. r Ike 0 lb C• ,Q` Exhibit B MONTHLY MAXIMUM RESIDENTIAL AND COMMERCIAL RATES IN KENSINGTON • Residential Rates: 30 gallon cans Monthly Fee 1 can once a week $16.25 2 cans once a week $27.50 3 cans once a week $39.00 4 cans once a week $50.00 -i 5 cans once a week $61.30 s f. 40 gallon cans Monthly Fee 1 can once a week $36.60 45 gallon cans Monthly Fee 1 can once a week $39.75 • Commercial Rates: 30 gallon can once a week $16.25 Material other than can use (bulk rate) Dry $16.50/cubic yard Wet $17.00/cubic yard • These rates represent the current rates in Kensington. Rates subject to adjustment when rnini- can and higher multiple can rates are implemented by the County with the intent that total revenue collected remain approximately the same. KENSINGTON SERVICE INFORMATION • Yearly 4 month billing cycles: bills sent our in January, May and September for next 4 months service beginning with billing month. • Designated month to file standard applications for rate changes: June. Earliest rate review request by Bay View would be June, 1997. Any such approved rate request may take effect in September. Rate reallocation among customers may occur earlier with new mini-can rate and higher multiple can rates. • Containers: residential and commercial customers provide their own cans for the weekly solid waste collection service. 3 five-gallon buckets provided by Bay View for weekly recycling service (customers charged at cost for any replacement buckets). If recycling increases, Bay View will provide additional buckets. Recyclable materials are as follows: (a) aluminum cans, (b) glass containers, (c) newsprint, (d) PET bottles, (e) clear HDPE bottles, (f) colored HDPE bottles, (g) steel and tin-plated cans, (h) cardboard, (1) polystyrene, (j) plastic film, (k) yardwaste, and (1) mixed paper (includes magazines). • Special job pick ups (e.g., old refrigerators) may be scheduled for a separate charge. • At County direction, Bay View will provide notice of scheduled pick ups by Bay View;of reusable materials (e.g., old clothes, toys) in coordination with organizations like Good VJill Industries. ' • Pick up locations: backyard weekly service for cans; frontyard weekly recycling service. • Green waste pick ups effective January 1, 1997: frontyard scheduled green waste pick ups; 3 pick ups annually on customer's regular garbage day; each pick up (no yardage limit) bundled, tied or placed in boxes or trash containers (no plastic bags). • General pick up effective January 1, 1997: 1 frontyard on call pick up annually on customer's regular garbage day; 1 1/2 yards bundled, tied or bagged of general waste (no waste); up to eight such on call pick ups per day in the Franchise Area scheduled on first call basis uniiss otherwise directed by the Community Development Department. • In 1996 there will be one general pick up in November. A:E)OMTT.B t MEMORANDUM OF UNDERSTANDING WITH KENSINGTON POLICE PROTECTION AND COMMUNITY SERVICES DISTRICT CONTRA COSTA COUNTY August 30, 1996 t MEMORANDUM OF UNDERSTANDING BETWEEN THE KENSINGTON POLICE PROTECTION AND COMMUNITY SERVICES DISTRICT AND THE COUNTY OF CONTRA COSTA FOR MEETING THE REQUIREMENTS OF THE CALIFORNIA INTEGRATED WASTE MANAGEMENT ACT OF 1989 This Memorandum of Understanding ("MOU") is made and entered into between the Kensington Police Protection and Community Services District, a public agency formed pursuant to California Government Code Sections 61000, et M. (Hereinafter "District") and the County of Contra Costa, a political subdivision of the State of California, (hereinafter "County") and shall be effective on provided it is executed by both parties on or before RECITALS This MOU is entered into in consideration of the following matters: A. The County Board of Supervisors and the District Board of Directors represent, within their respective boundaries, the residents in the unincorporated area of the County. B. District is a community services district providing solid waste management, resource recovery and disposal services to the public, as well as businesses, within the unincorporated area of Contra Costa County known as Kensington. C. The California Legislature has enacted the California Integrated Solid Waste Management Act of 1989, Chapter 1095, Statutes of 1989 (hereinafter "the ACT'). Amendments to the ACT have been adopted and others may be adopted in the future. The ACT is codified in the California Public Resources Code, Sections 40000, et M. D. The ACT requires that the County prepare and adopt a Source Reduction and Recycling Element (hereinafter "SRRE") and a Household Hazardous Waste Element (hereinafter "HHWE") for the unincorporated areas of the County. The ACT further mandates the diversion of twenty-five percent (25%) of identified solid waste from land disposal by January 1, 1995 and the diversion of fifty percent (50%) of said solid waste by January 1, 2000. The County is also designated within the ACT as the responsible agency for meeting these waste reduction goals for the unincorporated areas of the County. E. The County and the District have statutory powers to contract and enter August 30, 1996 -1 - into agreements. F. The County has adopted Ordinance 91-31 (Solid Waste Collection, Disposal and Recycling Agreements) providing for the franchising of solid waste activities within the unincorporated areas of Contra Costa County unless memoranda of understanding (MOUs) are entered into by the current franchisors and the County. Further, the County has prepared the SRRE and HHWE for the unincorporated areas of the County. G. The District is authorized and empowered by State of California Community Services District Law, Sections 61000, et M. of the California Government Code, to collect and dispose of waste and garbage. The District currently is a party to a franchise agreement pursuant to which solid waste collection and disposal is currently provided by Bay View Refuse and Recycling Inc. H. The District and County wish to enter into a MOU for the purpose of meeting the mandates of the ACT with regard to the unincorporated territory of the County within the jurisdictional boundaries of the District, and further coordinate with each other to facilitate the County's achievement of the countywide goalspursuant to the ACT. NOW, THEREFORE, the County and the District enter into this MOU to define their respective roles and responsibilities regarding the provision of solid waste collection service within the boundaries of the District. ARTICLE 1: PURPOSE OF THE MOU 1.1 General. The purpose and intent of this MOU is to provide a representative, economical and effective means by which the unincorporated areas of the County may achieve the waste reduction goals set forth in the ACT and to meet the requirements of County Ordinance Code Chapter 418-7. ARTICLE 2: FRANCHISE, ACT AND OTHER SOLID WASTE REQUIREMENTS 2.1 SRRE and HHWE The ACT mandates that the County prepare and adopt a SRRE and a HHWE for the unincorporated portion of the County, which elements are included as parts of the Countywide Integrated Waste Management Plan for Contra Costa County. The County, prior to the effective date of this MOU, has prepared the SRRE and HHWE for the unincorporated areas of the County, which have been approved by the California Integrated Waste Management Board. The County intends to continue to implement the programs in the HHWE and SRRE, as amended from time to time, as required by State law in the unincorporated area of the County, including the Kensington area. August 30, 1996 -2- 2.2 FRANCHISE. The District will concurrently enter into a franchise agreement with Bay View Refuse and Recycling Inc. for the provision of solid waste services in Kensington. Attached as Exhibit A to this MOU is the franchise agreement executed by the District and Bay View Refuse and Recycling Services, Inc. ("Bay View"), dated , 1996. County.acknowledges that the attached franchise agreement adequately provides for County's ability to implement programs as required by the Act, and to meet the goals and other mandates of the Act and/or any other law regarding solid waste management and/or recycling as may be adopted from time to time. 2.3 COUNTY PROGRAMS. Pursuant to the SRRE, the County is responsible for setting up programs in all parts of the County. Initially, as part of that responsibility the County will provide Source Reduction and Recycling programs to individual communities, ( such as compost workshops) as well as the coordination for countywide programs (such as variable can rates, mini-can rates, source reduction programs [i.e.: Shop Smart], commercial recycling programs, collection programs for reusable items, develop full scale recycling programs for both single family and multifamily residential and commercial developments). The County shall work with the District in establishing such programs in the Kensington area. The District and County shall cooperate in the implementation of such programs, as appropriate. Prior to making any changes to these programs which the County is aware may significantly affect the District's jurisdictional area, the County shall notify the District of the proposed change and provide an opportunity to comment on'said proposal. To the extent practically possible, the County shall integrate the District's comments into any significant program change prior to its implementation. 2.4 COORDINATING COMMITTEE. The District shall form a coordinating committee which consists of five members: one member of the District Board of Directors or the member's alternate, one District staff person, one representative of Bay View, one member of the County Board of Supervisors or the member's alternate, and one County staff person. The purposes of the coordinating committee are to facilitate communications between the County, the District and Bay View and to assist in developing source reduction and recycling programs in a cost effective manner. 2.5 DATA COLLECTION. Pursuant to the Act, the County is responsible for: reporting disposal, recycling and program information to the State on a regular basis; tracking all waste originating within the County and waste deposited in County landfills;reporting the amounts to all.Cities and Counties and to the State for purpose of determining overall compliance with the waste diversion goal of 50% by 2000; and for reporting to the state the amounts of various materials recycled and waste reduction 0 August 30, 1996 -3. i programs instituted in the unincorporated County. The District agrees to implement such uniform monitoring, reporting and data collection methodologies as established by the County from time to time in response to State requirements. The District shall provide information to the County in the computerized or noncomputerized form (including format) as requested by County, in a timely manner. Initially, the District General Manager shall provide complete recycling reports on at least a quarterly basis. The first quarterly report shall be submitted by November 15, 1996 for the prior July/August/ September quarter, followed by quarterly reports on the following schedule - February 15 for October/November/December; May 15 for January/February/March; and August 15 for April/May/June. The first Annual Report is due February 15,1997 for 1996 and then each year thereafter on the same schedule. The District shall be responsible for obtaining reports from Bay View that provide a breakdown by material/tonnage, and sales price and buyer of all materials recycled, and of the amount of solid waste and green waste disposed and at what location for the Kensington community. The scheduling of reports may be modified by the County. The reports shall initially be provided in the format shown in Exhibit B. The District shall provide to the County the following information in a timely manner: a) eopy of rate applieation from the eontreetor [Note: original subsections a) and c) were eliminated because the Bay View is to provide copies to the County.] a) copy of District notification to contractor of rate decrease e) eopy of written notiee of GPI rate ehange b) draft customer survey for review and approval c) copy of survey results d) copy of draft annual customer information for review and approval e) final copy of annual customer information f) draft recycling promotional information for review and approval g) final copy of recycling promotional information The County shall have thirty days to review b), d) and f), and propose reasonable modifications to the drafts. 2.6 PUBLIC INFORMATION. The District shall provide a means for the County to disseminate information to individual customers relating to the SRRE and/or HHWE. If dissemination of information will be through customer billings, the District shall inform the County of applicable deadlines for including information with customer billings. Customers shall be kept informed regarding program implementation and goals, and their progress toward meeting those goals. In addition, the District will arrange for distribution to individual customers of other materials provided by the County related to environmental programs at no cost to the County other than direct costs such as incremental postage. Promotional material generated by the District or August 30, 1996 -4- Bay View relating to recycling, reuse etc. shall be submitted to County for review and approval prior to distribution to assure compatibility with County source reduction and recycling efforts which review shall be completed in 30 days. District shall provide County with copies of all solid waste or recycling surveys and public information provided to Kensington residents by Bay View or by the District. 2.7 DISTRICT PROGRAMS. The District will implement "reduce, reuse and recycle" programs described in the County SRRE, as amended from time to time, in a manner sufficient to achieve a reduction in the amount of solid waste originating in the District area, which is landfilled, comparable to the amount of reduction that is required in similar residential areas in the unincorporated area of the County, to meet the requirements of the Act. The District, shall design and modify programs and/or rate structures as needed to meet the overall SRRE goals. Specifically, the District will implement each of the selected programs contained in the source reduction component, the recycling component, and the composting component of the SRRE, as amended from time to time, which are identified as programs to be implemented by franchisor agencies and/or haulers. The District will provide local publicity and generate local interest in solid waste and recycling programs, provide locations for activities such as compost workshops, determine any special needs that the community may have in regards to solid waste pickup services, including recycling and green waste and work with County staff to develop "reduce, reuse and recycle" programs that will be effective in the Kensington community. The District shall notify the County of the implementation or reduction or elimination of any "reduce, reuse, recycle" programs required for the implementation of the SRRE. If the County considers the District's implementation of one or more such programs to be inadequate (as measured against the description of the program and it's anticipated impact on waste diversion in the SRRE) it may bring the matter to the attention of the Coordinating Committee. If, thereafter, the County, continues to consider the District's implementation to be inadequate it may notify the District in writing, specifying the deficiency and proposing specific changes. If the District does not implement the changes in a reasonable time, the County may independently arrange for the implementation of such program changes and may require the District to pay the costs thereof. 2.8 HOUSEHOLD HAZARDOUS WASTE PROGRAM. The District will pay its pro rata share of costs incurred by the County in implementing the HHWE. The District's share of such costs for FY 1996-97 is approximately $4,000, which sum shall be paid in full within thirty (30) days after receipt of an invoice by the District. (Such services are currently provided by County.) The County shall provide District with amount of its share for FY 1997-98 and a statement of how its share was calculated no August 30, 1996 -5- later than April 15, 1997. 2.9 FRANCHISE FEES. The District shall include in the rates, a Franchise Fee in an amount determined by the County, to pay for County expenses and costs incurred in implementing the SRRE, as amended from time to time, and other solid waste management costs incurred in connection with solid waste management, including, but not limited to, costs associated with this MOU. Unless otherwise directed by County, the Franchise Fee to be paid to County shall be 3% of Bay View's gross receipts. County shall not increase the Franchise Fee above 3% unless the County's costs of administering solid waste programs, including costs of implementing the SRRE, exceed the then applicable franchise fee. Any increase shall be proportional to District's share of the costs. If County's costs of administering solid waste programs, including costs of implementing the SRRE decreases, the District may request a decrease in the franchise fee. The District shall have no duty to defend the County in any suit challenging the County's franchise fee. 2.10 INITIAL PROGRAM IMPLEMENTATION REUSE PROGRAM: The District and County shall work together with Bay View to design a pilot reusables pick-up program. The program may include pickup of reusables by either a non-profit or a for profit organization. (e.g. Goodwill or Urban Ore). METHOD OF RECYCLING: The District shall consult with Bay View and the County to determine the most cost effective method of accomplishing the required recycling. Possible methods include: a) picking up at curbside, different materials on different days, b) allow for mixed curbside pickup to be sorted at a transfer station or central sorting area, c) designated containers for each material to be picked up at curbside, d) local neighborhood drop off sites for some materials. SOURCE REDUCTION AND RECYCLING ELEMENT (SRRE): The District shall work with Bay View to provide for the following SRRE requirements: a) After a survey to determine the level of interest, set mini-can and variable can rates, and establish a variable can rate structure and provide for mini-can service by 6/1/97 or as soon thereafter as possible. b) Collection of cardboard, mixed paper and other items required by Chapter 418-10 shall begin as soon as possible. c) Collection of green waste beginning in 1997. A minimum of three August 30, 1996 -6- green waste pickups will be provided annually. 2.11 FREE SERVICE FOR COUNTY. District shall provide Solid Waste collection and disposal services at those County buildings within the Franchise Area (currently, the Library) designated by the Director of Community Development from time to time, at no charge to the County 2.12 COUNTY AUTHORITY, DISCRETION. The ACT, other California statutes, and the California Constitution, authorize and/or require the County to undertake a number of activities involving solid waste handling and disposal. The ACT specifically empowers the County to undertake certain planning functions including the development of SRRE's, HHWE's and the Countywide Integrated Waste Management Plan. The District franchise with Bay View provides for District/County control over the location at which solid waste is disposed. The District agrees to direct Bay View to transport (or not transport) solid waste to specified landfills or solid waste handling facilities as directed by County in the following circumstances. (1) The County determines that the landfill currently being used is unpermitted, is in violation of its permits, or is otherwise out of compliance with federal or state environmental laws, regulations or standards such that the disposal of solid waste from Kensington creates a potential liability for the County, and so advises the District, and other agencies in the County using such landfill, in writing; (2) The County requires the ability to commit the solid waste from several jurisdictions, including Kensington, to a particular landfill in order to secure volume reductions on tipping fees charged at such landfill, and the tipping fees for the aggregated wastestream are lower then those then paid by the District at the landfill it is using; (3) The County determines that the solid waste diversion goal required by the Act will not be met in the unincorporated area of the County, has made a diligent effort to implement the SRRE programs which are the responsibility of the County , and has determined that it is necessary for an overall Countywide effort which includes the use by it's franchisees and franchisor agencies in the unincorporated areas, of materials recovery facilities to secure the additional recycling needed to comply with the Act. If the County determines that it is necessary for proper implementation of SRRE programs, the County may direct the District to direct specified recyclable materials collected within the District's boundaries to be delivered to a particular purchaser of August 30, 1996 -7- such material. The County will not exercise its discretion, as described in this paragraph, unless it has or will also direct all similarly situated recyclable materials collected in other County franchised areas. ARTICLE 3: TERMINATION 3.1 TERM. The term of this MOU is for 20 years, subject to termination as provided herein. 3.2 TERMINATION FOLLOWING NOTICE. District or County may terminate this MOU following the provision of 30 days' written notice to the other party. 3.3 INCORPORATION, ANNEXATION. Upon the annexation to a municipal corporation or the incorporation of any of the territory covered by this MOU, as to said territory, this MOU shall be terminate as provided by law, upon the effective date of the municipal corporation's determination to franchise or otherwise regulate solid waste and recycling in said territory. 3.4 EFFECT OF TERMINATION. Upon termination of this MOU other than termination upon the annexation or incorporation of territory covered by this MOU, County shall succeed to all of the District's rights and obligations in the franchise granted by District to Bay View, as well as have all of the County's rights as set forth in this MOU. Upon termination of this MOU, District Franchise fees for that year shall be apportioned between District and County effective the date of termination. 3.5 TERMINATION OF FRANCHISE AGREEMENT. This MOU shall automatically terminate one year after the termination of the Franchise Agreement unless the District enters a new Franchise Agreement that provides for the effective implementation of the SRRE and HHWE and complies with Ordinance Code Chapter 418-7, as amended from time to time, no less effectively than as provided in Exhibit A. ARTICLE 4: INSURANCE INDEMNITY, FINES AND ALLOCATION OF LIABILITY 4.1 INSURANCE AND INDEMNITY. Neither the County nor the District, as a condition of the execution of this MOU, shall be required to provide direct insurance coverage or protection to the other. Except as provided in section 4.2 (Act August 30, 1996 -8- Requirements), neither County or District is required or to contractually indemnify the other against damages to any person or property not a party to this MOU. 4.2 ACT REQUIREMENTS. District shall indemnify the County for any fines imposed on the County by the state for failure to properly implement the County's SRRE, where the failure is partly or wholly attributable to action or inaction by the District. The District's share of any fines shall be proportionate to the District's share of responsibility for the failure. The District's share will be calculated as the ratio which the numbers of tons of solid waste disposed of on land that originate in the District in excess of the number of tons which could be so disposed without violating the Act bears to the number of tons of solid waste disposed of on land which originate in the unincorporated area of the County in excess of the number of tons which could be so disposed without violating the Act. ARTICLE 5: GENERAL PROVISIONS 5.1 SEVERABILITY. The invalidation of any term, condition, or provision of this MOU as a result of a legal action brought by a person or entity not a party to this MOU shall not affect the validity or enforceability of the remaining provisions. However, if one or more material provisions is affected, the parties agree to negotiate in good faith to reach agreement on revisions which preserve the substance hereof. 5.2 MODIFICATION. This MOU constitutes the entire agreement between the parties with regard to the items discussed herein. A party may modify this MOU only by subsequent mutual written agreement executed by both the County and the District. 5.3 ASSIGNMENT AND DELEGATION. Except as provided herein, neither County nor District shall assign any rights nor delegate any obligations as provided under this MOU without written notice to and consent of the other party to this MOU. 5.4 CALIFORNIA LAW. This MOU, its interpretation and all work performed thereunder, shall be governed by the laws of the State of California. 5.5 NOTICES. All notices and communications deemed by either party to be necessary or desirable to be given to the other party shall be in writing and may be given by personal delivery to a representative of the parties or by mailing the same postage prepaid, addressed as follows: If to the District: Kensington Community Services District 217 Arlington Avenue Kensington, California 94707-1498 August 30, 1996 -9- Attention: General Manager If to the County: Contra Costa County Community Development Department County Administrative Building 651 Pine Street 4th Floor, North Wing Martinez, California 94553-0095 Attention: Solid Waste Program Manager If to Bay View: Bay View Refuse and Recycling Inc. Attn: Lewis Figone, President P.O. Box 277 EI Cerrito, CA 94530 The address to which mailings may be made may be changed from time to time by notice mailed as described above. Any notice given by mail shall be deemed given on the day after that on which it is deposited in the United States Mail as provided above. 5.7 WAIVER. The waiver by either party of any breach or violation of any of the provisions of this Agreement shall not be deemed to be a waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision. 5.8 ATTORNEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall be responsible for and shall pay its own litigation expenses, including attorney's fees. 5.9 BAY VIEW REFUSE. This MOU grants rights to and imposes obligations upon Bay View. By its execution of this MOU, Bay View acknowledges and agrees to comply with and be bound by each and every term, condition or provision of this MOU applicable to Bay View. 5.10 Except as set forth in section 5.9, this MOU is not intended to and does not benefit any third party. No third party shall have the right to bring suit to enforce any of the provisions hereof. 5.11. PRESERVATION OF POSITIONS. This MOU is not an admission, acceptance or ratification by the District of the legality of the portions of Ordinance No. 91-31, which purport to give the County authority to take control over existing solid waste franchises without the consent of the district and its franchisee, nor is this MOU a concession by the County that Ordinance No. 91-31 August 30, 1996 -10- is not valid, effective and enforceable in all its particulars. Kensington Police Protection and County of Contra Costa Community Services District By: By President, Board of Directors Chair, Board of Supervisors Date: Date: Attest: Secretary Attest: Phil Batchelor, Clerk of the Board of Supervisors and County Administrator By: Date: Date: The following signature(s) attest to Bay View's agreement to the terms, conditions and provisions of this MOU. BAY VIEW REFUSE AND RECYCLING SERVICES, INC. By: Lewis Figone, President n1.�__828 nc_ '�f:lci'T�zD:"Jvf 21&*n9828.962 M F 1:kns830.96 August 30, 1996 -11 -