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HomeMy WebLinkAboutMINUTES - 02051991 - H.4 ItA Irl Contra ra N . TO: BOARD OF SUPERVISORS Costa FROM: Sara Hoffman CT I.JIJ Solid Waste Manager s � DATE: February 5, 1991 SUBJECT: Solid Waste Collection and Recycling Franchise Agreement for West Pittsburg with Pleasant Hill Bayshore Disposal, Inc. SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. APPROVE the Franchise Agreement (attached) with Pleasant Hill Bayshore Disposal Inc. , effective March 5, 19991 provided that the Contractor has properly executed the Franchise Agreement, filed its Performance Bond with the County and submitted evidence of insurance to the satisfaction of the County. 2 . SET residential rates at $16.75 per month for 3 can collection service(1 can waste, 2 cans clippings) and curbside recycling. 3 . DIRECT Staff to draft a procedure and criteria for eligibility for a discount rate of $12 .00 per month for senior citizens with verifiable financial need and report to the Board with a recommendation within 60 days. 4. DIRECT Staff to review the contractor's commercial rates and report to the Board with a recommendations within 9.0 days. 5. ESTABLISH that the contractor is not required, at. this ,time, to make a payment to the County as provided in Section 22 of the Franchise Agreement in dons ideration 'of the contractor's provision of curbside recycling at no cost to residential customers. 6. DESIGNATE the West Pittsburg MAC as the Local Advisory Board f r .nthe Franchise Agreement with Pleasant Hill Bayshore Dispos&'YZZTrWest P# svxrg. BACKGROUND/REASONS FOR RECOMMENDATIONS The Board of Supervisors directed staff to develop .franchise agreements for the unincorporated areas of Contra Costa County. The West Pittsburg franchise is the first of those agreements. The agreement was developed in consultation with the current. collectors, Pittsburg Disposal and Pleasant-Hill Bayshore, as well as the West Pittsburg MAC (Municipal Advisory Council) . The Environmental Affairs Committee of the Board of Supervisors reviewed the draft franchise agreement on January 28, 1991, including comments of the West Pittsburg MAC and Pittsburg Disposal. The EA Committee's position on each issue is noted in BOLD where there was a resulting change in the franchise agreement text. The Committee recommends its approval by the Board. The West Pittsburg MAC reviewed the draft agreement on October 15, 1990 and, following revision, on December 18, 1990. At this time, the MAC has not submitted written comments on the draft agreement; however, noted below are staff's understanding of the concerns expressed by the MAC. 13 . Customer Satisfaction - The MAC felt that solid waste collection should not necessarily be curbside due to the propensity for cans to be knocked over by the wind. Section 13 gives the County the right to require alternate methods of solid waste collection to increase customer satisfaction. 14 . Customer Service Standards - The MAC expressed concern that it may not always be appropriate for the contractor to conduct a survey of its customers to determine satisfaction with service. Consequently, staff included language that stated that nothing would preclude the County from conducting surveys as well. This section also includes yearly notification of the conditions of service including telephone numbers for complaint calls (a concern of the EA Committee) . 15. Local Advisory Board - The MAC expressed a need for citizens to have a local, easily accessible forum to review rate applications. Language was added to allow the Board of Supervisors'to designate a local advisory board on matters relating to the franchise agreement. The EA Committee recommends that the .West Pittsburg MAC be designated as the Local Advisory Board. 16. Customer Complaints - The MAC wanted explicit procedures for handling customer complaints. A paragraph was added that provided for development and implementation of policy and procedure on customer complaints. 17. Billing - The MAC expressed concern that some customers may want to pay their bills monthly, others .over a longer period. Language was added so that the Board of Supervisors may establish billing period options for customers upon a finding that such options are cost effective and meet a community need. 18. Recycling - The MAC felt that revenue from recycling activities should be dedicated to community projects. Such revenue is used to offset the cost of the recycling service. The EA Committee recommends including tin in the list of curbside pick-up recyclables. 21. Miscellaneous Obligations of Contractor - The MAC was concerned that street sweeping be a part of the services provided by the contractor. Staff surveyed all the cities in Contra Costa County and found that only two, Antioch and Pittsburg, provide for street sweeping as part of the garbage bill. Currently, West Pittsburg's street sweeping program is being handled by the Delta/Diablo Sanitary District. 22. Payment to County - The MAC felt that any fees paid by the contractor to the County should be set aside for use in West Pittsburg. The section provides that the payments shall be for funding solid waste programs, county administration of the agreements, programs that benefit the . unincorporated areas of the County and other purposes deemed appropriate by the Board. In addition, the MAC felt. that there should be no franchise fee on recycling. No .such franchise fee is provided for in this agreement. Representatives of Pleasant Hill Bayshore worked closely with staff in developing the agreement. Numerous changes were made in response to their concerns. However, there were some areas on which staff and the contractor "agreed to disagree". These issues are noted below. 3 . Term - Pleas ant :Hill Bayshore wants a term longer than the 10 year term specified in the agreement through renewal or extension options. Since this agreement is not subject to public bidding, staff believes that the ten year term is appropriate, or at a minimum, an extension at the County's option. The EA Committee recommends a IS year term. S. County's Right to Examine Records - Pleasant Hill Bayshore wants modification of the agreement to only allow a certified public accountant to review the contractor's records. Staff believes that such limitation would preclude firms that specialize in rate regulations and which are not accountancy firms. In addition, having only certified public accountants could unnecessarily increase costs to the ratepayers. The EA Committee split on its recommendation on this issue, with one member recommending CPA review only and the other recommending development of a list of acceptable consultants with selection rights to the County. 10. Rate Applications - Pleasant Hill Bayshore believes that audited financial statements should not be required for rate applications, because they believe it will be unduly expensive for the ratepayers. Staff believes that the. cost of audited statements will not be excessive and that they are necessary for the protection of public interest in assessing the financial operations of the Contractor. Furthermore, contractor may take advantage of economics of scale where it serves other jurisdictions that review audited financial statements. Audited financials are required by San Ramon, Walnut Creek, Pleasant Hill, Brentwood,. Pittsburg and Central Sanitary. District (Orinda/Moraga and areas served by Valley Waste Management) , according to their franchise agreements. Central Sanitary District (for Pleasant Hill Bayshore) and Crockett Valona Sanitary District require audited financials if required by others. Hercules requires audits depending on the rate increase while Clayton specifies "in such form and providing such information as the city may require. " If the Board would like to provide leeway to allow for less rigorous financial analysis when it will not impair County's ability to verify financial information, then staff recommends the following language: "The County Administrator may, in writing, allow the rate application to be submitted without . an audited financial statement provided the County Administrator is satisfied that the alternate submitted financial documentation will provide an appropriate level of verifiable detail in assessing the Contractor's income, expenses, assets and liabilities. " The EA Committee recommends including the above language. Pleasant Hill Bayshore would also like Consumer Price Index adjustments to the rates based on the "Other Goods and Services" component of the CPI not the "All Urban Consumers" component, as currently referenced. From 1985- 89, "Other Goods" tracked a higher rate of increase than "All Consumers". However, "Other Goods" is based. on the cost of goods irrelevant to the operation of a solid waste collection company; e.g. the cost, of tobacco, personal care, educational expenses and legal aid financial services. 18. Recycling - The agreement provides for review of. franchise to the contractor for recycling services every three years. Pleasant Hill Bayshore would like a 3 year initial review with rights to recycling for the remaining term of the agreement (7 years) . Staff believes that the County needs to reserve maximum flexibility in its recycling program, to insure its ability to meet AB 939 goals and to respond to the changing dynamics. of the recycling market. Under the agreement, the contractors are kept financially whole in cases of non-renewal through provisions that Allow for. recouping of unamortized capital costs. 34. Breach and Termination. - The County has the right to temporarily take possession of the contractor's trucks to perform collection, in cases of termination of the contract. Pleasant Hill Bayshore would like to require .prior..notice and argues that this would allow for judicial review prior to County possession. To the contrary, nothing in the section precludes the County from giving prior notice and, of course, nothing prohibits the contractor from seeking a temporary restraining order. However, staff believes that the County should not restrict itself from being able to act quickly,. as circumstances warrant. At the -EA Committee's direction, staff has included language regarding prior notice. Other recommendations .of the EA Committee include: Miscellaneous Obligations - The Committee recommends language to delineate the Contractor's responsibility in assisting the County in enforcing the mandatory subscription ordinance. CONTINUED ON ATTACHMENT: YES SIGNA E: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF -BOARD7"ITTEE APPROVE OTHER SIGNATURES) ACTION OF BOARD ON S APPROVED AS RECOMMENDED _ OTHER J _ This is the time set for hearing on solid waste collections franchises for Pleasant Hill Bayshore Disposal and West Pittsburg Disposal for the West Pittsburg area, and Discovery Bay Disposal for the Discovery Bay area. Sara Hoffman advised that there were several issues in the proposed agreements where the haulers and staff .disagreed. She noted that staff had met with the West Pittsburg Municipal Advisory Council three times and that their comments are contained in the staff report with' the exception of 'last night's comments, which she delineated as follows: No ,charge to the customer for curbside recycling, term of the agreement, and rates. Ms. Hoffman noted that staff had also met with both Pleasant Hill Bayshore and West Pittsburg Disposal in developing the agreements and that there are areas where staff and the haulers agreed to disagree, such as the issue of term; the County' s right to examine records, with the haulers wanting a modification to allow. only certified public accountants; rate applications; CPI rate. adjustments, with the County suggesting using the "All Urban Consumers" index, and the Pleasant Hill Bayshore suggesting using the "All Other Goods and Services" index; review of the recycling portion ,of the agreement; and breach and termination. r Ms. Hoffman noted that on the issue of .affiliated entities (In Section 33-. of the agreement, the County reserves the right to examine the records of affiliated entities if the contractor owns 10 per cent or greater interest) West Pittsburg Disposal believes the cutoff mark should be .51 per cent rather than 10 per cent. Chairman Powers opened the public hearing. Scott Gordon, attorney representing Pleasant Hill Bayshore Disposal, appeared and advised that the proposed agreement was largely workable, but a few areas of disagreement remain, including the right of the County to examine records, noting that his client proposed that the right be reposed in a CPA or public accountancy firm so as to provide a reliable, trustworthy source for the data and preserve confi- dentiality. He noted that on the recycling question, his client proposed a three year review and if the performance has been satisfactory that they be provided with the right for the balance of the contract term because of the extensive monetary commitment and the commitment of staff and resources. He noted. on the question of term, they would have preferred a twenty year term, maybe based on a ten year term going in, with a ten year option, but could agree to a fifteen year plus five year option. Mike McCabe, attorney representing West Pittsburg Disposal and Discovery Bay Disposal, complimented staff. on the work they had done and noted there were only a very few remaining issues to be negotiated. ' He noted that Mr. Gordon' s comments on the term and on the examination of the books by Certified Public Accountants only reflects those of his client. Mr. McCabe commented that on the need for confidentiality with respect to examination of records of affiliated entities, and recommended inclusion of a qualifying phrase to provide that examination of books and records of affiliated entitles be conducted only to the extent necessary to establish the reasonableness of the charges. At the request of the Chair, Sara Hoffman responded that an alteration had been made to provide that contractors shall provide information necessary to. satisfy the County that the charges made by any affiliated -entity are reasonable in accordance with the provisions of Section 8, which is the County' s right to examine records and which contains the confidentiality provisions. Chairman Powers commented that there are two issues, one is confidentiality, the other is only examine the records to the extent necessary to determine the -reasonableness of the charges. Sara Hoffman advised that this is also covered in Section 8 of the agreement. • Chairman Powers requested that it also be covered in Section 33 . Sara Hoffman agreed to have it reiterated in Section 33. Board members discussed the various approaches to renewing the agreements. Supervisor Torlakson moved to approve the recommendation of the Environmental Affairs Committee to substitute fifteen-year terms for the ten-years set forth in Section 3. Supervisor McPeak advised that she did not support the fifteen-year franchise nor a rolling franchise that would always have a ten-year period, but felt that a ten-year term is quite sufficient and suggested that upon request from the hauler and approval of the County, and based on capitalization, an extension of five years. Chairman Powers suggested a compromise of ten years plus the renewable every five years. Supervisor McPeak clarified that her recommendation is a ten-year franchise and at any time in that ten years, that at the request of the franchisee, because of capitalization considerations, they could come to the Board for up to a five-year extension on whatever is the remaining period of time on the franchise. Chairman Powers invited further discussion. Sara Hoffman commented that anything that gives the Board the greatest amount of flexibility for future decision making would be strongly supported by staff and therefore perhaps the ten-year franchise with five-year option might give the greatest amount of flexibility. Supervisor McPeak so moved. There was no .second. The Board further discussed the matter. Supervisor McPeak moved the ten-year franchise with the option of a five-year extension; that would be requested by -the hauler, granted at the discretion of the Board of Supervisors, based upon capital investment demonstrated by the hauler. Supervisor Schroder seconded the motion. Supervisor Torlakson suggested giving .staff direction to come back with the language for an option agreement. Sara Hoffman suggested that the Board go on to another issue while staff works on the language and perhaps come back with appropriate language later in the hearing. Chairman Powers suggesting voting on the motion and directing staff to bring the language back for review at a later time. The motion passed unanimously. Chairman Powers advised that the next two issues, the question of whether CPA' s would be looking at the books to verify, and the rate setting issue would be discussed separately. He noted that the first issue is whether a CPA, or a CPA firm, or a firm that has CPA' s, would be looking at the books so that .the accounting standards can be kept common. Supervisor Schroder moved approval of separating the issues, and having CPA' s reviewing or verifying the books of the franchisees. Supervisor Torlakson commented that the Committee had a split recommendation on that. He noted that one of the concerns is that staff would like to use CPA' s, but they may also want to use other kinds. of analysis that other kinds of professionals could provide. He suggested a compromise by developing lists of providers or contractors and this would be determined to be an acceptable list to choose from, and it may not be just all firms with CPA' s but it might also include firms that have CPA' s and other types of analysts. Sara Hoffman commented that, prior to the separation of the issues, staff had concern that firms that have rate expertise not be precluded from assisting the County in. developing rates. Supervisor Torlakson seconded the motion on the separation of issues and the use of CPA's for reviewing records. The vote was unanimous. Supervisor Torlakson moved that with respect to the rate setting firms, that staff and the haulers mutually agree on a list of firms and staff make the selection from among those firms. The motion was seconded by Supervisor .Schroder and passed unanimously. Chairman Powers announced that the next issue was the level of audited statements, whether its audited or some .lesser level of standard. Supervisor Schroder moved that it be at some level of verifications that is satisfactory, and that could be short of an audited financial _ statement'. The motion was seconded by Supervisor Torlakson and passed unanimously Chairman Powers noted that the . next issue is the question of CPI increases and the type of CPI increase, which would be on the yearly basis between the three year rate setting period. Sara Hoffman recommended using the All Consumers Index. Supervisor Torlakson moved to approval of using the All Consumers Index. The motion. was seconded by Supervisor Powers and passed unanimously. Chairman Powers indicated that the next item was the recycling question, whether it was every three years, or three years and then to the end of the contract, which would be ten years. He noted that staff recommends three years and one of the haulers recommends three and then to the end of the ten-year period. Supervisor McPeak. discussed the options of three years or three years and then to the end of the contract. She noted that there is a tremendous investment in a recycling program, and that the Marketing Committee in the Plastics Task Force wants to add recycling of colored HDPE, and therefore she thought it reasonable to go three years and then have the option to renew to the end of the contract, and have the ability to add colored HDPE upon the direction of the Board of Supervisors, and that as noted by Sara Hoffman, the Board could require expansion of the recycling program upon 60 days written notice, and Supervisor McPeak thereupon moved the three-year initial period and then .the option to renew to the end of the contract on recycling. Supervisor Torlakson spoke in opposition suggesting that it could benefit the County to have the option of the extra incentive for the providers, for the franchisees to be innovative and at the cutting edge, and that the EA Committee felt pretty strongly about keeping it to the staff recommendation of three years. .The motion passed by the following vote: AYES: Supervisors Schroder, McPeak and Powers NOES: Supervisors Torlakson and Fanden Chairman Powers noted that the next issues is the percentage of interest in affiliated companies, 51 percent versus 10 percent. Supervisor Fanden moved the recommendation' of staff, which is 10 per cent. Supervisor Torlakson seconded the motion and the vote was as follows: AYES: Supervisors Fanden, McPeak, Torlakson and Powers NOES: Supervisor Schroder. Sara Hoffman advised that after consulting with County Counsel, language had been developed- for the extension of terms of the franchise agreements as follows: "However, prior to the expiration of this agreement, the contractor may request, and the Board of Supervisors may grant a five-year extension if the contractor demonstrates such extension is needed for capital investment purposes, and the Board is satisfied by the service and performance of the contractor to date." Board members indicated their agreement with the language proposed. Supervisor Torlakson moved approval of the franchise agreements for the West Pittsburg area with West Pittsburg Disposal, and Pleasant Hill Bayshore Disposal with all the previous motions incorporated in it, including the language for the five-year extension. The motion was seconded by Supervisor McPeak, and it passed unanimously. The Board APPROVED Recommendations 1, as amended above; 2; 3; 4; 5 and 6, and AUTHORIZED the Chairman of the Board of Supervisors to execute the Franchise Agreement as modified ty the Board this date. VOTE OF BUPERVIBORS I HEREBY CERTIFY THAT THIS TS A UNANIMOUS (ABSENT TRUE AND CORRECT COPY OF AN AXES: NOES: ACTION TAKEN AND ENTERED ON THE ]ABSENT: ABSTAIN: MINUTES OF TEE BOARD OF sIIPERVISORS ON THE DATE BROWN. CC: Community Development County Counsel Pleasant Hill Bayshore Disposal, 'Inc ATTESTED VEIL SATCHEL , CLERK OF THE BOARD OF BUPERVISORS AND COUNTY ADMINISTRATOR BY , DEPUTY h15Jwpphbd.bo9 i i r AGREEMENT BETWEEN CONTRA COSTA COUNTY AND PLEASANT HILL BAYSHORE DISPOSAL INC. FOR SOLID WASTE COLLECTION AND RECYCLING IN WEST PITTSBURG TABLE OF CONTENTS Section Title Paste 1. Effective Date, Parties. . . . . . . . . . . . . . . . . . . . . . . 1 2. Definitions. . . . . . . . . . . . . . . . . 1 3 . Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 . Intent to Regulate All Recycling and Residen- tial and Commercial Solid Waste Collection, Removal and/or Disposal. . . . . . . . . . . . . . . . . . . 3 5. Exclusive Privilege and Duty. . . . . . . . . . . . . . . . . . 3 6. Exceptions to Exclusive Privilege. . . . . . . . . . . . . 3 7 . Salvage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 8. Contractor's Duty to Maintain Records; County's Right to Examine Records. . . . . . . . . . . . . . . . . . . . . . 4 9 . Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 10. Rate Applications. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 5 11. Operation by Contractor. . . . . . . . . . . . . . . . . . . . . . . 7 12 . Limitation on Time and Manner of Collection. . . 7 13 . Customer Satisfaction and Efficiencies inOperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 14 . Customer Service Standards, . . . . . . . . . 8 15. Local Advisory Board. . . . . . . . . . . . . . . . . . . . . . . . 8 16. Customer Complaints. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 17 . Billing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 18 . Recycling. . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . 9 19 . Participation in Community Clean-up Projects. . 10 20. Disposal and Waste Stream Control. . . . . . . . . . . . . 10 21. Miscellaneous Obligations of Contractor. . . . . . . 10 22 . Payment to County. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (January 31, 1991) Section Title Pace 23 ., Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 24. Faithful Performance Bond. . . ... . . . . . . . . . . . . . . . . it 25. Insurance. ... . . . . . . . . . . . ... . ... . . . . . . . . . . . . . . . . . . 12 26. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 27. Attorney's Fees. . . . . . . . . . . . . . . . . . 13 28. Assignability. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 13 29. Involuntary Assignment. . . . . . . . . . 13 30. Notice Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 . 31. Hazardous Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 14 32 . Annexation and Change of Franchise Area Boundaries. . . . . . . ... . . . . . . . . . 14 33 . Affiliated Entities. . . . . . . . . . . . . . . . . . . . . . . . . . . 15 34 . Breach and Termination. . . . . . . . . . . . . . ... . . . . . . . 15 35. Emergency. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 36. Compliance With Federal, State and Local Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 17 37 . Amendment or Modification. . . . . . . . . . . . . . . 17 38 . Police Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 39. Contest of Agreement's Terms by the Parties. . . 17 40. Severability. . . . . . . . . . . . . . . . . 17 (January 31, 1991) 1. EFFECTIVE DATE, PARTIES. This Agreement, effective on March 5, 1991, is by and between County and the below named Contractor. 2. DEFINITIONS. As used herein, the following terms shall have the meanings set forth below: (a) "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) "Commercial solid waste" means solid waste routinely originating from stores, business offices, commercial warehouses, hospitals, educational, health care, military and Correctional institutions, non-profit research organizations, and non-exempt government offices. Commercial solid waste refers to SIC Codes 401 through 4939, 4961, and 4971 ' (transportation, communications and utilities) , 501 through 5999 (wholesale and retail trade) , 601 through 679 (finance, insurance and real estate) , 701 through 8748 (public and private service industries such as hospitals and hotels) , and 911 through 9721 (public administration) . Commercial solid waste does not include construction or demolition waste, industrial waste or septage. (c) "Contractor" means Pleasant Hill Bayshore Disposal Inc. , and is the entity which has been granted an exclusive franchise pursuant to the terms and conditions set forth herein. (d) "County" means the County of Contra Costa (e) "Customers" means those who have contracted with 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 ordinances. (f) "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. (g) "Franchise Area" means the geographic area generally described in Exhibit A to this Agreement, which exhibit is attached hereto and incorporated herein by reference, and more particularly as set forth in the six hundred (600) scale maps maintained and available for inspection at the Community Development Department. Said six hundred (600) scale maps shall 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. (h) "Hazardous Waste" means a waste, or combination of wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may either: (1) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or (2) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. The term "hazardous waste" is intended to include all waste which are defined as being a hazardous waste pursuant to any federal, state or county laws, statutes, ordinances or other regulation currently in effect oras may be enacted or amended in the future. (i) "Industrial Waste" means solid waste originating from mechanized manufacturing facilities, factories, refineries, and publicly operated treatment works. (j) "Infectious Waste" as used herein has the meaning set forth in Health and Safety Code section 25117 .5, as amended from time to time. (k) "Recycle" or "recycling" means the process of collecting, sorting, cleaning, treating, and reconstituting materials that would otherwise become solid waste, and recovering them so that they may be used in the form of raw material for new, reused, or reconstituted products. (1) "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. (m) ."Salvage" means the removal of material from the waste stream following collection and refurbishing such material so that it may be reused. . (n) "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 cleanouts, and industrial waste holding facilities. (o) "Solid Waste" means 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. (January 31,1991) —2— t (p) "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 delivery to a transfer facility or other facility by Contractor. 3. TERM. Subject to section 34, the term of this Agreement and the exclusive franchise granted hereunder shall be . for a period of fifteen (15) years from the effective date of this agreement. 4. INTENT TO REGULATE ALL RECYCLING AND RESIDENTIAL AND COMMERCIAL SOLID WASTE COLLECTION, REMOVAL AND/OR DISPOSAL. The parties hereto agree 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 residential and commercial solid waste handling service and recycling of material as specified herein. However, this Agreement does not regulate the collection, removal and disposal of industrial waste, or infectious waste, hazardous waste or septage, irrespective of origin. Whether a particular solid waste collection activity is covered or regulated by this Agreement is within the sole determination of County in accordance with provisions of section 23 (Dispute Resolution) of this Agreement. S. EXCLUSIVE PRIVILEGE AND DUTY. County hereby grants to Contractor the exclusive privilege and duty to collect, remove and dispose of all commercial and residential solid waste within the Franchise Area pursuant to and subject to the terms of this Agreement. The Franchise Area may be expanded or reduced in size by mutual agreement of the parties, or as provided in section 32 (Annexation and Change .of 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 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; or (b) A person or entity contracts for the removal and disposal or recycling of inorganic refuse or garden waste and such removal and disposal or recycling is solely incidental to work such as remodeling or gardening occasionally performed by or for the customer. (c) The Board designates a franchise area(s) which another company may also serve, as approved by the Board of Supervisors. (January 31,1991) —3— Nothing in this section shall be construed to eliminate or qualify the exclusive privilege of Contractor to provide drop boxes and/or bulk-collection containers for collection of solid waste within the Franchise Area. 7. SALVAGE. County shall be entitled to the right of salvage from the solid waste collected pursuant to this Agreement, but at its sole discretion may delegate this right to, or waive the same in favor of, Contractor. By entering this agreement, County has temporarily waived its right of salvage and has delegated such to Contractor. Delegation of salvage rights to Contractor shall be reviewed every three years, as part of the - rate review process, to reassess whether such delegation is in the best interest of the ratepayers. S. 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, records as to number of Customers, total and by . type, route maps, service records and other materials and operating statistics in such manner and in such detail as 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 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 and allowed as a "pass through" cost in the rates. 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 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 County. Contractor shall obtain County's written approval of its method of segregating its financial records between County regulated and non-county regulated operations. Oanuary 31,1991) —4— As used in this section, "County Agent" shall mean: 1) an independent Certified Public Accountant or public accountancy firm; 2) a consulting firm or consultant with expertise in rate regulation; 3) County employees; and 4) for non-financial records only, any other consultant designated by the County. Information gained from such. examination of records pertaining to operations not regulated by the County shall be treated by County and its agents as confidential information. 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. 9. RATES. Contractor shall perform the responsibilities and duties herein agreed in accordance with and in consideration of the reasonable rates which may be fixed by the County from time to time. In determining the rates, the, County shall consider fairness to both Contractor and the Customers. The County may set discount rates for residential customers 62 years or older with verifiable financial needs, such as receipt of supplemental security income (SSI) . or General Assistance. 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. The rate review process shall provide for accrued interest and carryingcharges in connection with sums required to be advanced by Contractor to County. Costs associated with provision of services required under Section 19 , Participation in Community Clean-Up Projects and Section 21, Miscellaneous Obligations of Contractor, shall be included as 'general operating expenses of Contractor in the rate application process. 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. 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. Uaouary31, 1991) -5- 10. 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, 15-hard copies bound in an appropriate manner and one copy on disk formatted pursuant to County. specifications. Contractor shall submit its first rate application. as directed by the County. All rate. applications shall include information from the previous rate change to the present. Every three years, a 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 County Administrator ,may, in writing, allow the rate application to be submitted without. an audited financial statement provided the County Administrator is satisfied that the alternate submitted financial documentation will provide an appropriate level of verifiable detail in assessing 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 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 6.O' 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. The date of Contractor initiated applications shall be standard, year by year; such date to be determined upon mutual agreement. of the parties and reasonably relate to the fiscal year of Contractor., 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 2 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. Contractor shall provide documentation for the need for such rate application relative to those changes. The application will thereafter be considered by the Board. Qanuary 31,1991} —(— County will act with reasonable diligence in reviewing rate applications. 11. OPERATION BY CONTRACTOR. Contractor shall furnish all necessary equipment (excluding containers for single-family residential wastes) 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 service in the Franchise area. The Contractor, in performance hereof, shall use covered water-tight bodied motor trucks with truck bodies constructed of sufficient strength to withstand a fire within, without endangering adjacent property. Trucks, drop boxes, bins, or similar types of equipment shall be kept neat, clean and in good repair. Contractor shall have its name, permit number, and telephone number on the side of each truck and on each drop box, bin or similar type- equipment provided by Contractor. 12. 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. Collection shall be curbside, backyard, or any other manner 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 7: 00 p.m. and 4 : 00 a.m. , except that if a dwelling unit is part of a collection route that predominately serves commercial accounts, collection may begin as early as 3 : 00 a.m. 13. CUSTOMER SATISFACTION AND EFFICIENCIES IN OPERATION. County may from time to time, at its discretion, examine Contractor's operation in order to evaluate whether or not 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 8 (Contractor's Duty to Maintain Records; County's Right to Examine Records. ) In addition, County may require Contractor to develop plans for and conduct programs on alternative methods of solid waste collection, including pilot programs of limited scope, for the purpose of improving efficiencies and increasing customer satisfaction. County may also require Contractor to implement QanuM 31,1"1 —7—. efficiencies in its operation upon written notice from County. The notice shall allow Contractor a reasonable period of time to implement the specified efficiency (service) . 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. Rate adjustments applicable solely to programs instituted pursuant to this section initially shall be established at the time the County authorizes implementation of the program or efficiency. 14. 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. 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 survey or surveys . of all customers 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 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 review and approval of the Director of Community Development. .15. LOCAL ADVISORY BOARD. The Board of Supervisors may designate an existing committee to represent the franchise area, or form an advisory body to advise the Board on the performance of the contractor in the community, focal service interests and needs, and rate applications. In all cases, the Committee shall (January 31, 1991) �8� hold its meetings at a time and -place convenient to the public. The Committee shall keep a record of all public comments and submit such .comments when reporting to the Board. 16. 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. 17. BILLING. The form and content of customer bills shall be subject to the review and approval of the Director of Community Development. Bills for service may be monthly, bimonthly or quarterly as determined ,by County. Contractor may bill its customer in advance or in arrears. The Board may also establish billing period options for customers upon a finding that such options are cost-effective and meet a community need. Charges on a bill shall not be deemed delinquent and a customer shall not be subject to a late fee or termination of service, so long as a customer pays such charges within 30 days after the end of the period covered by the charges. Full payment for drop boxes may be required by Contractor prior to delivery of the drop box to the customer. 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. 18. , RECYCLING. County may grant to Contractor or any other party or parties, the right and obligation to operate recycling . programs, including curbside pickup of recyclable materials. If within 45 days of the effective date of this contract, Contractor has instituted and is implementing a recycling program including regular curbside pickup" at all single family residences of at least aluminum, tin, newsprint, glass bottles, cardboard, non-colored HDPE and PET to the satisfaction of County, County grants to Contractor, the exclusive right and obligation to operate a residential customer curbside pickup recycling program. For purposes of this section, cardboard recycling my be provided by means of drop boxes placed at locations acceptable to the Director of Community Development. County may require Contractor . to expand or alter the recycling program by providing 60 days/ notice in writing. Contractor shall maintain and provide to the County records relating to its recycling programs as directed by the Director of Community Development. Oanuary31, 1991) —9— It is 'understood that the County controls the disposition of all recycling materials. Upon providing 60 days notice in writing, .County may also require Contractor to segregate, treat and/or deliver the recyclable materials to locations or sites designated by County, provided County shall take into account. the , terms and conditions of any contracts. existing at the time of the effective date of this Agreement. Contractor's provision of recycling service shall be reviewed every three years, .as part of the rate review process, to reassess whether continuation of such service by Contractor is in the best interest of the ratepayers. If County determines that continuation of such service by Contractor is not in the best interest of ' the ratepayers and such decision is not based solely or partly upon 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. 19. PARTICIPATION IN COMMUNITY CLEAN-IIP PROJECTS. Contractor shall provide, upon direction of the Community Development Director, solid waste drop 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 ten (10) 20 cubic yard drop boxes. -per year. 20. DISPOSAL AND WASTE STREAM CONTROL. Contractor shall be solely responsible for the disposal of the solid waste collected pursuant to this Agreement. However, it is understood that County controls the 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(s) , transformation facilities and/or resource recovery facilities. 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. 21. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR. (a) Contractor shall provide two additional all-purpose pickups per year not to exceed one cubic yard per pickup per (January 31,1991) _10— • ' i residential unit in the residential areas of the Franchise Area. The dates for said additional pickups may be set by the Contractor, however, it is the intent of this Agreement that they shall be held once in April and once in November. Contractor will provide notice to the Customers of said pickup dates. (b) .Upon direction from County, Contractor shall provide for at least once yearly collection of household hazardous waste, the timing and manner of which shall be subject to the prior review and approval of the Community Development Department. (c) 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. 22. PAYMENT TO COUNTY. Contractor shall make payments to County for funding solid waste programs, County administration of this agreement, programs that benefit the unincorporated communities of the County and for other purposes as deemed appropriate by the Board. Payment amounts and frequency shall be set by the Board. 23. 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 fora 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 may be appealed to the Board of Supervisors pursuant to Ordinance Code Chapter 14-4 . ' 24. 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 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. Notwithstanding the foregoing, in lieu 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 in a form satisfactory to the County. Uanuary31, 1991) —11— 25. . INSURANCE. Contractor shall procure and maintain in full force and effect at all times during the entire term of this agreement the following insurance coverages: (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 for no less than the sum of $1 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. (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 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 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. 26. INDEMNIFICATION. 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, arising 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. (January 31,1991) -12 Should any party successfully challenge the validity of this Agreement or 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. 27. ATTORNEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall pay its own litigation expenses, including attorney's fees. 28. 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. In the event Contractor herein attempts to assign or subcontract this Agreement or any part hereof or any obligation hereunder, County shall have the right to elect to terminate this Agreement forthwith, without suit or other proceeding. Consent to assignment may not be unreasonably withheld. Following a properly noticed 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. 29 . 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 proceeding: (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 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 (January 31, 1991) —13— 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 28 (Assignability) , in the event of� a probate proceeding where the rights of Contractor under the Agreement would pass to another individual or other individuals. 30. 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 at: 441 N. Buchanan Circle, Pacheco, CA 94553 or to County at 651 Pine Street, 4th Floor North Wing, Martinez, CA 94553, Attention: Director of Community. Development. 31. HAZARDOUS WASTE. The parties hereto recognize that federal, state and local agencies with responsibility for defining hazardous waste and for regulating the collection, hauling 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 and tests 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. 32 . ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES. Contractor shall give notice to County by January 30th 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 . (January 31,1991) —14- Y 4 f 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 shall abrogate Contractor's rights under Public Resources Code section 49520 or any successor or similar statute. 33. AFFILIATED ENTITIES. Contractor shall provide information necessary to satisfy County that the charges made by any affiliated entity are reasonable, in accordance with the provisions of Section 8 (County's Right to Examine Records) . "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. County shall have the right to inspect the financial records of any affiliated entity. 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 members, or if a corporation, major shareholders and any major shareholder is an individual, said individuals' immediate family members. For the purpose of this section, "immediate family" includes spouses and relatives of the first degree of sanguinity, and their spouses. 34. 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 sixty (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 ulti- mately cured by Contractor. If such a determination of material breach is made, the Uaouary 31,1991) r 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. In the event of a termination pursuant to this section and following at least 24 hours written notice to, Contractor, 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 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 allocable 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 annexed 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 franchisegranted 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 Contractor's facilities upon early termination as provided herein. 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. (January 31,1991) _16— 35. EMERGENCY. Notwithstanding Contractor's exclusive franchise rights set forth in section 5, 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 (6) month period, this Agreement may be terminated at the direction of .the Board of Supervisors. 36. COMPLIANCE WITH FEDERAL, STATE . AND LOCAL LAWS. Contractor 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 of Contra Costa 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. This includes County Ordinance 85-12 (on mandatory subscription to solid waste collection service) . 37. 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. 38. POLICE POWERS. Nothing in this agreement is intended to or may limit County authority pursuant to its police power. 39. CONTEST OF- AGREEMENT'S TERMS BY THE PARTIES. 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 nonbreaching party shall have the right to elect to terminate forthwith without suit or other proceeding. This paragraph 39 shall not be construed to prevent either party from seeking redress to the courts for the purposes of legal review of administrative proceedings in regard to rate setting or County actions taken pursuant to this Agreement, or for the purpose of interpreting or enforcing the provisions contained in this Agreement. 40. 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 (January 31,1991) —17— action, brought by a person or entity not a party to this Agreement, shall not affect the validity or enforceability of the remaining provisions. Each of said provisions shall remain in full force and effect. LTF/jh:df fnn\phbaYa&•nm Uanuary 31,1941? i^ !O ; >f \ OP:RY+DOO - r OR VoMAP SURF DR \ �Or ') H rStgAEDR ,AXD v,Ew OR '.,. l- x DR: =IPOg1 V E o` 1b r0 M. r aEAM VIE S y� UKE R on- gPE F���S � tp � .r•. �s?,y` 040 '�, cX OR IM,Np vim yq t c A Oq L� ,_.�_�------•--- •+ /)gyp^..,, (�� fD '�'j' �.�a: n e�EgtAPDMDi. s = JYDr _-•—'.""'_}�j-._`-'--"' YD (fl E/r �= ry[PSDFC eY.3 of tD 9� .. p MA�f Q7 '.- c�c*NS { .Y V2h^ ,.�4�, It •. �t —,''.�.4"Aw�E• `w-/•1 O ((1 A .�.'tr (X tAv.E t4 CG 13 MARM/ AY - w-�"-++•, n� RDS i r� rM e LY4 AXOP O P� 1P a R (� tp R :.., ..-rte ✓r `F --f•-C,P AD IOLAh O - OWAr D p __..D �. .lA pEMJ.tire•^,M.w+ - i. -- �,I`�li .. `,rlM1 _J ` , � N )S + ,- 'r Xltl .N r,...,.�P r e'pirY rY• �moi,. .. ~ b TO: BOARD OF SUPERVISORS T� Contra ' Costa FROM: Sara Hoffman Solid Waste Manager ,' �� COLOY DATE: February 5, : 1991 SUBJECT: Solid Waste Collection' and Recycling Franchise Agreement with Pittsburg Disposal for West Pittsburg SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) i BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. APPROVE the Franchise Agreement (attached) with Pittsburg Disposal for West Pittsburg, _ effective March 5, 1991 provided that the Contractor has properly executed the Franchise Agreement, filed it Performance Bond with the County and submitted evidence of insurance to the satisfaction of the County. 2. . SET residential rates at $16.75 per month for 3 can collection service and curbside recycling. 3 . DIRECT Staff to .draft a procedure and criteria for eligibility for a discount rate of $12 .00 per month for senior citizens with verifiable financial need and report to the Board with a recommendation within 60 days. 4. DIRECT Staff to review the contractor's .commercial rates and report to the Board with a recommendation within 90 days. 5. ESTABLISH that the contractor is not required, at this time, to . make a payment to the County as provided in Section 22 of the Franchise Agreement in consideration of the contractor's provision of curbside recycling at no -cost to residential customers. 6. DESIGNATE the West Pittsburg MAC as the Local Advisory Board for . the Franchise Agreement with Pittsburg Disposal in West P.it-tsb�arg. BACKGROUND/REASONS EOR RECOMMENDATIONS The Board of Supervisors directed staff to develop franchise agreements for the unincorporated areas of Contra Costa County. The West Pittsburg franchise is the first of those agreements. The agreement was developed in consultation with the current collectors, Pittsburg Disposal and Pleasant Hill Bayshore, as well as the West Pittsburg MAC (Municipal Advisory Council) . The Environmental Affairs Committee of the Board of Supervisors reviewed the draft franchise agreement on January 28, 1991, including comments of the West Pittsburg MAC and Pittsburg Disposal.. The EA Committee's position on each issues is noted in BOLD where there was a resulting change in the franchise agreement text. The Committee recommends its approval by the Board. The West Pittsburg MAC reviewed the draft agreement on October 15, 1990 and, following revision, on December 18, . 1990. At this time, the MAC has not submitted written comments on the draft agreement; however, noted below are staff's. understanding of the concerns expressed by the MAC. 13 . Customer Satisfaction - The MAC felt that solid waste 'collection should not necessarily be curbside due to the propensity for cans to be knocked over by the wind. Section 13 gives the County the right to require alternate methods . of solid waste .collection to. increase customer satisfaction. 14. Customer Service Standards - The MAC expressed concern that it may not always be appropriate for the contractor to conduct a survey of its customers to determine satisfaction with service. Consequently, staff included language that stated that nothing would preclude the County from conducting surveys as well. The section also includes yearly notification of the conditions of service including telephone numbers for complaint calls (a concern of the EA Committee) . ,4 15. Local Advisory Board - The MAC expressed a need for citizens to have a local, easily accessible forum to review rate applications. Language was added to allow.the Board of Supervisors to designate a local advisory board on matters relating to the franchise agreement. The EA Committee recommends that the West Pittsburg MAC be designated as the Local Advisory Board. 16. Customer Complaints The MAC wanted explicit procedures for handling customer complaints. A paragraph was added that provided for development and implementation of policy and procedure on customer complaints. 17. Billing - The MAC expressed concern that some customers may want to pay their bills monthly, others over a longer period. Language .was added so that the Board of Supervisors may establish billing period options for customers upon a finding that such options are cost effective and meet a community need. 18. Recycling - The MAC felt that revenue from recycling activities should be dedicated to community projects. Such revenue is used to offset the cost of the recycling service. The EA Committee recommends including tin in the list of curbside pick-up recyclables.. 21. Miscellaneous Obligations of Contractor - The MAC was concerned that street sweeping be a part of the services provided by the contractor. Staff surveyed all the cities in ' Contra Costa County and found that only two, . . ..Antioch and Pittsburg, , provide for street sweeping as part of the garbage . bill. Currently, West Pittsburg's street sweeping program is being handled by the Delta/Diablo Sanitary ,District. 22 . Payment to County - The MAC felt that any fees paid by the contractor to the County should be set aside for use in West Pittsburg. The section provides that the payments shall be for funding solid waste programs, county administration . of the agreements, . programs that benefit the unincorporated areas of the. County and other purposes deemed appropriate by the Board. In addition, the MAC felt . that there should be no franchise fee on recycling. No such franchise fee is provided for in this agreement. Representatives of Pittsburg Disposal worked closely with staff in developing the agreement. Numerous changes were made in response to their concerns. However, there were some areas on which staff and the contractor "agreed to disagree". These issues are noted below. . 3. Term - Pittsburg Disposal wants a term longer than the 10 year term specified in the agreement. . Since this agreement is not subject to public bidding, staff believes that the ten year term is appropriate, or at a minimum, an extension at the County's option. The EA Committee recommends a 15 year term. 8. County's Right' to Examine Records - Pittsburg Disposal wants modification of the agreement to only allow a certified public accountant to review the contractor's records. Staff believes that such limitation would preclude firms that specialize in rate regulations and which are not accountancy firms. In addition, having only certified public accountants could unnecessarily. increase costs to the ratepayers. The EA Committee split on its recommendation on this issue, with one member recommending CPA review only and the other recommending development of a list, of acceptable consultants with selection rights to the County. 10. Rate Applications - Pittsburg Disposal believes that audited financial statements should not be required for rate applications, because they believe it will be unduly expensive for the ratepayers. Staff believes that the cost of audited statements will not be excessive and that they are necessary for the protection of public interest in assessing the financial operations ,of the Contractor. Furthermore, contractor may take advantage of economics of scale where it serves other jurisdictions that review audited financial statements. Audited financials are required by San Ramon, Walnut Creek, Pleasant Hill, Brentwood, . Pittsburg and Central Sanitary District (Orinda/Moraga and areas served by Valley Waste Management) , . according to their franchise agreements. Central Sanitary District (for Pleasant Hill Bayshore) and Crockett Valona Sanitary District require audited financials if required by others. Hercules requires audits depending on the rate increase while Clayton specifies "in such form and providing such information as the city may require. " If the Board would. . like to provide leeway to allow for less rigorous financial analysis when it will not impair County's ability to verify financial information, then staff recommends the following language: "The County Administrator may, in writing, allow the rate application to be submitted without an audited financial statement provided the County Administrator is satisfied that the alternate submitted financial documentation will provide an appropriate level of verifiable detail in assessing the Contractor's income, expenses, assets and liabilities. " The EA Committee recommends including the above language. 33 . Affiliated Entities - The agreement provides that an affiliated entity is one which owns 10% or grater interest in the other. Pittsburg Disposal believes that 51% should be the definitive mark. The affiliated entities status is important because the County is able to review the records of affiliated entities with whom the franchisee does business, to insure that charges are fair. The EA Committee recommends that this section be cross- referenced with Section 8, which sets forth the conditions of confidentiality. . Other recommendations of the EA Committee include: 21. Miscellaneous Obligations - The Committee recommends language to delineate the Contractor's responsibility in assisting .the County in enforcing the mandatory subscription ordinance. CONTINUED ON ATTACHMENT: YES SIGNAT • RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDAT BOARD ITTEE APPROVE OTHER. SIGNATURE(S) : ACTION OF BOARD ON S' APPROVED AS RECOMMENDED �_ OTHER This is the time set for hearing on solid waste collections franchises for Pleasant Hill Bayshore Disposal and West Pittsburg Disposal for the West Pittsburg area, and Discovery Bay Disposal for the Discovery Bay area. Sara Hoffman reviewed the staff report and advised. that Pittsburg Disposal was incorrectly referred to in the background material, that they would like to be referred to as West Pittsburg Disposal, in terms of these franchises, and she asked the Board to note that correction. The Board agreed. Sara Hoffman advised that there were several issues in the proposed agreements where the haulers and staff disagreed. She noted that staff had met with the West Pittsburg Municipal Advisory Council three times and that their comments are contained in the staff report with the exception of last night' s comments, which she delineated as follows: No charge to the customer for curbside recycling, term of the agreement, and rates. Ms. Hoffman noted that staff. had also met with both Pleasant Hill Bayshore and West Pittsburg Disposal in developing the agreements and that there are areas where staff and the haulers agreed to disagree, such as the issue of term; the County' s right to examine records, with the haulers wanting a modification to allow only certified public accountants; rate applications; CPI rate -adjustments, with the County suggesting using the "All Urban Consumers" index, and the Pleasant Hill Bayshore suggesting using the "All .Other Goods and Services" index; review of the recycling portion of the agreement; and breach and termination. Ms. Hoffman noted that on the issue of affiliated entities (In Section 33 of the agreement, the County reserves the right to examine the records of affiliated entities if the contractor owns 10 per cent or greater interest) West .Pittsburg Disposal believes the cutoff mark should be 51 percent rather than 10 per cent. Chairman Powers opened the public hearing. Scott Gordon, attorney representing Pleasant Hill' Bayshore Disposal, appeared and advised that the proposed agreement was largely workable, but a few areas of disagreement remain, including the right of the County to examine records, noting that his client proposed that the right be reposed in a CPA or public accountancy firm so 'as to provide a reliable, trustworthy source for the data and preserve confi- dentiality. He noted that on the recycling question, his client proposed a three year review and 'if the performance has been satisfactory that they be provided with the right for the balance of the contract term because of the extensive monetary commitment and the commitment of staff and resources. He noted on the question of term, they would. have preferred 'a twenty year term, maybe based on a ten year term going in, with a ten year option, but could agree to a fifteen year plus five year option. Mike McCabe, attorney representing West Pittsburg Disposal and Discovery Bay Disposal, complimented staff on the work they had done and noted there were only a very few remaining issues to be . negotiated. He noted that Mr. Gordon's comments on the term and on the examination of the books by Certified Public Accountants only reflects those of. his client. Mr. McCabe commented that on the need for confidentiality with respect to examination of records of affiliated entities, and recommended inclusion of a 'qualifying phrase to provide that examination of books and records of affiliated entitles be conducted only to the extent necessary to establish the reasonableness of the charges. At the request of the Chair, Sara Hoffman responded that an alteration had been made to provide that contractors shall provide information necessary to satisfy the County that the charges made by any affiliated entity are reasonable in accordance with. the provisions of Section 8, which is the County' s right to examine records and which contains, the confidentiality provisions. Chairman Powers commented that there are. -two issues, one is . confidentiality, the other is only examine the records to the extent necessary to determine the reasonableness of the charges. Sara Hoffman advised that this is also covered in Section 8 of the agreement. Chairman Powers requested that it also be covered in. Section 33 . Sara Hoffman agreed .to have it reiterated in Section 33 . Board members discussed the various approaches to renewing the agreements. Supervisor Torlakson moved to approve the recommendation of the Environmental Affairs Committee to substitute fifteen-year terms for. the ten-years set forth 'in Section 3 . Supervisor McPeak ..advised that' she did not support the fifteen-year franchise nor a rolling franchise that would always have a ten-year period, but felt that a ten-year term is quite sufficient and suggested that upon request from the .hauler and approval of the County, and based on capitalization, an extension of five years. Chairman Powers .suggested a compromise of ten years plus the renewable every five years. Supery-sor McPeak clarified that her recommendation -is a ten-year franchise and at any time in that ten years, that at the request of the franchisee, . because of capitalization considerations, they could come to the Board for up to a five-year extension on whatever is the remaining period of time on the franchise. Chairman Powers invited further discussion. Sara Hoffman commented that anything that gives the Board the greatest amount of flexibility for future decision making would be strongly supported by staff and therefore perhaps the ten-year franchise with five-year option might give the greatest amount of flexibility: Supervisor. McPeak so moved. There was no second. The Board further discussed the matter. Supervisor McPeak moved the ten-year franchise with the option of a five-year extension, that would be requested by the hauler, granted at the discretion . of the Board of Supervisors, based upon capital investment demonstrated by the hauler. Supervisor Schroder seconded the .motion. Supervisor Torlakson suggested giving staff direction to come back with the language for an option agreement. Sara Hoffman suggested that the Board go on to another issue while staff works on the language and .perhaps come back with appropriate language later in the hearing. Chairman Powers suggesting voting on the motion and. directing staff to . bring the language back .for review at a later time. The motion. passed unanimously: Chairman Powers advised. that the next two issues, 'the question of whether CPA' s would be looking at the . books to verify, and the rate setting issue would be discussed separately. . He noted that .the first issue is whether a CPA, or a CPA firm, or .a firm that .has CPA's, would be looking at the .books so that the accounting standards can be kept common. Supervisor Schroder moved approval of separating the issues, and having CPA' s reviewing or. verifying the books of the franchisees. Supervisor Torlakson commented that the Committee had a split recommendation on that. He noted that one of the concerns 'is that staff would like to use CPA' s, but they may also want to use other kinds of analysis .that other kinds of professionals could provide. He suggested a compromise by developing lists of providers or contractors and this would be determined to be an acceptable list to choose from, and' it may not be just all firms with CPA' s but it might also include firms that have CPA' s and .other types of analysts. Sara Hoffman commented that, prior to the separation of the issues, staff had concern that firms that have rate expertise not be precluded from assisting the County in developing rates. Supervisor Torlakson seconded the motion on the separation of issues and .the use of CPA' s for reviewing records. The vote was unanimous. Supervisor Torlakson moved that with respect to the rate setting firms, that .staff and the haulers mutually agree on a list of firms and staff make the selection from among those firms. The motion was seconded. by Supervisor Schroder and passed unanimously. Chairman Powers announced that the next issue was the level of audited statements, whether its audited or some lesser level of standard. Supervisor Schroder moved that it be at some level of verifications that is satisfactory, and that could be short of an audited financial statement. The motion was seconded by Supervisor Torlakson and passed unanimously Chairman Powers noted that the next issue is the question of CPI increases and the type of CPI increase, which would. be on the yearly basis between the three year rate setting period. Sara Hoffman.. recommended using the All Consumers Index. Supervisor Torlakson moved to approval of using the All Consumers Index. The motion was seconded by Supervisor Powers and passed unanimously.. Chairman Powers indicated that the next item was the recycling question, whether it was every three years., or three years and then to the end of the contract, which. would be ten years. He noted that staff recommends three years and one of the haulers recommends three and then to the end of the ten-year period. •, ,- ,Supervisor McPeak discussed the options of three years or three years and then to the end of the contract. She noted that there is a tremendous investment in a recycling program, and that the Marketing Committee in the Plastics Task Force wants to add recycling of colored HDPE, and therefore she thought it reasonable to go three years and then have the option to. renew to the end of the contract, and have the ability to add colored HDPE upon the direction of the Board of Supervisors, and that as noted by Sara Hoffman, the Board could require expansion of the recycling program upon 60 days written notice, and Supervisor McPeak thereupon moved the three-year initial period and then the option to renew to the end of the contract on recycling. The motion was seconded by Supervisor Schroder. Supervisor Torlakson spoke in opposition suggesting that it could benefit the County to have the option of the extra incentive for the providers, for the franchisees to be innovative and at the cutting edge, and that the EA Committee felt pretty strongly about keeping it to the staff recommendation of three years. The motion passed by the following vote: AYES: Supervisors Schroder, McPeak and Powers NOES: Supervisors Torlakson and. Fanden Chairman Powers noted that the next issues is the percentage of interest in affiliated companies, 51 percent versus 10 percent. Supervisor Fanden moved the recommendation of staff, which is 10 per cent. Supervisor Torlakson seconded the motion and the vote was as follows: AYES: Supervisors Fanden, McPeak, Torlakson and. Powers NOES: Supervisor Schroder. . Sara Hoffman advised that after consulting with County Counsel, language had been developed for the extension of terms of the franchise agreements as follows: "However, prior to the expiration of this agreement, the contractor may request, and the Board of Supervisors may grant a five-year extension if the contractor demonstrates such extension is needed for capital investment purposes, and the Board is satisfied by the service and performance of the contractor to date." Board members indicated their agreement with the language proposed. Supervisor Torlakson moved approval of' the franchise agreements for the West Pittsburg area with West Pittsburg Disposal, and Pleasant Hill Bayshore Disposal with all the previous motions incorporated in it, including the language for the five-year extension. The motion was seconded by Supervisor McPeak, and it passed unanimously. The Board APPROVED Recommendations 1, as amended above; 2; . 3 ; . 4; 5 and 6, and ,AUTHORIZED the Chairman of the Board of Supervisors to execute the Franchise Agreement as modified by the Board this date. VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ASSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: . MINUTES OF THE BOARD OF 8UPERVISORS ON THE DATE SHOWN. cc: Community Development Pittsburg Disposal ATTESTED 5' / ' y/ County Counsel PHIL BATCNZLORj, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY DEPUTYhl5/wppdisp.boe , AGREEMENT BETWEEN CONTRA COSTA COUNTY AND PITTSBURG DISPOSAL SERVICE FOR SOLID WASTE COLLECTION AND RECYCLING IN WEST PITTSBURG i TABLE OF CONTENTS Section Title Page 1. Effective Date, Parties. . . . . . . . . . . . . . . . . . . . . 1 2. Definitions. . . . . . . . . . . . . . . . . . . 1 3. Term.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . 3 4 . Intent to Regulate All Recycling and Residen- tial and Commercial Solid Waste Collection, Removal and/or Disposal. . . . . . . . . . . . . . . . . . . . . . . 3 5. Exclusive Privilege and Duty.. . . . . . . . . . . . . . . 3 6. Exceptions, to Exclusive Privilege. . . . . . . . . . . . . 3 . 7. Salvage. . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 8. Contractor's Duty to Maintain Records; County's Right to Examine Records. . . . . . . . . . . . . . . . . . . . . . 4 9. Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 10. Rate Applications. . . . . . . . . . . . . . . . . . ... . . . . . . . . . 5 11. Operation by Contractor. . . . . . . . . . . . . . . . . . . . . . . 7 12 . Limitation on Time and Manner of Collection. . . 7 13 . Customer Satisfaction and Efficiencies in Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 14 . Customer Service Standards. . . . . . . . . . ... . . . . . . . . 8 15. Local Advisory Board. . . . . . . . . . . . . . . . . . . . . . 8 16. Customer Complaints. . . . . . . . . . . . . . . . . . . . . . . . . . 9 ' 17 . Billing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 18. Recycling. . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . 9 19 . Participation in Community Clean-up Projects. . 10 20. Disposal and Waste Stream Control. . . . . . . . . . . . . 10 21. Miscellaneous Obligations of Contractor. . . . . . . 10 22 . Payment to County. . . . 11 (January 30, 1991) Section Title Pacte 23 . Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . it 24 . Faithful Performance Bond. . . . . . . . . . . . . . . . . . . . . 11 25. Insurance. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 26. Indemnification. . . 12 27.. Attorney's Fees. . . . . . . . . . . . . . . . . . . 13 28. Assignability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 29 . Involuntary Assignment. . . . . . . . . . . . . . . . . . . . . . 13 30. Notice Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 . 31. Hazardous Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 32 . Annexation and Change of Franchise Area Boundaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 33 . Affiliated Entities. . . . . . . . . . . . . . . . . . . . . . . . . . . 15 34 . Breach and Termination. . . . . . . . . . . . . . . . . . . . . . . . 15 35. Emergency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 36 . Compliance With Federal, State and .Local Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 37 . Amendment or Modification. . . . . . . . . . . . . . . . . . . . 17 38 . Police Powers. . 17 39 . Contest of Agreement's Terms by the Parties. . . 17 40. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 17 (January 30, 1991) ` 1. EFFECTIVE DATE, PARTIES. This Agreement, effective on March 5, 1991, is by and between County and the below named Contractor. 2. DEFINITIONS. As used herein, the following terms shall have the meanings set forth below: (a) "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) "Commercial solid waste" means solid waste routinely originating from stores, business offices, commercial warehouses, hospitals, educational, health care, military and correctional institutions, non-profit research organizations, and non-exempt government offices. Commercial solid waste refers to SIC Codes 401 through 4939, 4961, and 4971 (transportation, _ communications and utilities) , 501 through 5999 (wholesale and retail trade) , 601 through 679 (finance, insurance and real estate) , 701 through 8748 (public and. private service industries such as hospitals and hotels) , and 911 through 9721 (public administration) . Commercial solid waste does not include construction or demolition waste, industrial waste or septage. (c) "Contractor" means Pittsburg Disposal Service, and is the entity which has been granted an exclusive franchise . pursuant to the terms and conditions set forth herein. (d)' "County" means the County of Contra Costa (e) "Customers" means those who have contracted with 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 ordinances. (f) "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. (g) "Franchise Area" means the geographic area generally described in Exhibit A to this Agreement, which exhibit is attached hereto and incorporated herein by reference, and more- particularly as set forth in the six hundred (600) scale maps maintained and available for inspection at the Community Development Department. Said six hundred (600) scale maps shall 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. (h) "Hazardous Waste" •means a waste, or combination of wastes, which because of its quantity, concentration, •or physical, chemical, or infectious characteristics may either: (1) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or . incapacitating reversible, illness; or (2) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. The term "hazardous waste" is intended to include all waste which are defined as being a hazardous waste pursuant to any federal, state or county laws, - statutes, ordinances or other regulation currently in effect or as may be enacted or amended in the future. (i) "Industrial Waste" means solid waste originating from mechanized .manufacturing facilities, factories, refineries, and publicly operated treatment works. (j) "Infectious Waste" as used herein has the meaning set forth in Health and Safety Code section 25117 .5, as amended from time to time. (k) "Recycle" or "recycling" means the process of collecting, sorting, cleaning, treating, and reconstituting materials that would otherwise become solid waste, and recovering them so that they may be used in the form of raw material for new, reused, or reconstituted products. (1) "Residentialsolid 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. . (m) "Salvage" means the removal of material from the waste stream following collection and refurbishing such material so that it may be reused. (n) "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 cleanouts, and industrial waste holding facilities. (o) "Solid .Waste" means 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. Uaauary 31, 1991) —2— (p) "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 delivery to a transfer facility or other facility by Contractor. 3. TERM. Subject to paragraph 32, the term of this Agreement and the exclusive franchise granted hereunder shall be for a period of fifteen (15) years from the effective date of this agreement. 4. INTENT TO REGULATE ALL RECYCLING AND RESIDENTIAL AND COMMERCIAL SOLID WASTE COLLECTION, REMOVAL AND/OR DISPOSAL. The parties hereto agree 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 residential and commercial solid waste handling service and recycling of material as specified herein. However, this Agreement does not regulate . the collection, removal and disposal of industrial waste, or infectious waste, hazardous waste or septage, irrespective of origin. Whether a particular solid waste collection activity is covered or regulated by this Agreement is within the sole determination of County in accordance with provisions of Section 21 (Dispute Resolution) of this Agreement. 5. EXCLUSIVE PRIVILEGE AND DUTY. County hereby grants to Contractor the exclusive privilege and duty to collect, remove and dispose of all commercial and residential solid waste within the Franchise Area pursuant to and subject to the terms of this Agreement. The Franchise Area may be expanded or reduced in size by mutual agreement of the parties, or as provided in Section 30 (Annexation and Change of 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 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; or (b) A person or entity contracts for the removal and disposal or recycling of inorganic refuse or garden waste and such removal and disposal or recycling is solely incidental to work such as. remodeling or gardening occasionally performed by or for the customer. (c) The Board designates a franchise area(s) which another company may also serve, as approved by the board. (January 31, 1991) —3- Nothing in this paragraph shall be construed to eliminate or qualify the exclusive privilege of Contractor to provide drop boxes and/or bulk-collection containers for collection of solid waste within the Franchise Area. 7. SALVAGE. County shall be entitled to the right of salvage from the solid waste collected pursuant to this Agreement, but at its sole discretion may. delegate this right to, or waive the same in favor of, Contractor. By entering this agreement, County has temporarily waived its right of salvage and has delegated such to Contractor. Delegation of salvage rights . to Contractor shall be reviewed every three years, as part of the rate review process, to reassess whether such delegation is in the best interest of the ratepayers. S. 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, 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 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 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 and allowed as a "pass through" cost in the rates. 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 .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 County. Contractor shall obtain County's written approval of its method of segregating its financial records between County regulated and non-county regulated operations. (January 31,1991) -4— As used in this section, "County Agent" shall mean: 1) an independent Certified Public Accountant or .public accountancy firm; 2) a consulting firm or consultant with expertise in rate regulation; 3) County employees; and 4) for non-financial records only, any other consultant designated by the County. Information gained from such examination of records pertaining to operations not regulated by the County shall be treated by County and its agents as confidential information. 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. 9. RATES. Contractor shall perform the responsibilities and duties herein agreed in accordance with and in consideration of the reasonable rates which may be fixed by the County from time to time. In determining the rates, the County shall consider fairness to both Contractor and the Customers. The County may set discount rates for residential customers 62 years or older with verifiable financial needs, such as receipt of supplemental security income (SSI). or General Assistance. 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. The rate review process shall provide for accrued interest and carrying charges in connection with sums required to be advanced by Contractor to County. Costs associated with provision of services required under Section 19, Participation in Community Clean-Up Projects, and Section 21, Miscellaneous Obligations of Contractor, shall be included as general operating expenses of Contractor in the rate application process. 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. 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. 10. RATE APPLICATIONS. Rate applications shall be prepared in accordance with such forms and in such detail as required by (January 31,1991) —5— the County. The application shall include one reproducible hard copy, 15 hard copies bound in an appropriate manner and one copy on disk formatted pursuant to 'County specifications. Contractor shall submit its first rate application as directed. by the County. All rate applications shall include information from the previous rate change to the present. Every three years, aerate 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 County Administrator may, in writing, allow the rate application to be submitted without an audited financial statement provided the County Administrator is. satisfied that the alternate submitted. financial documentation will provide an appropriate level of verifiable detail in assessing 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 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. The date of Contractor initiated applications shall be standard; year by year; such date to be determined upon mutual agreement of the parties and reasonably relate. to the fiscal year of Contractor. 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. 2 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. . Contractor shall provide documentation for the need for such rate application relative to those changes. The application. will thereafter be considered by the Board. (Tanuary 31,1991) (— County will act with reasonable diligence in reviewing rate applications. 11. OPERATION BY CONTRACTOR. Contractor shall furnish all necessary equipment (excluding containers for single-family residential wastes) 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 service in the Franchise area. The Contractor, in performance hereof, shall use covered water-tight bodied motor trucks with truck bodies constructed of sufficient strength to withstand a fire. within, without endangering adjacent property. Trucks, drop boxes, bins, or similar types of equipment shall be kept neat, clean and in good repair. Contractor shall have its name, permit number, and telephone number on the side of each truck and on each drop box, bin or similar type equipment provided by Contractor. 12. 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. Collection shall be curbside, backyard, or any other manner 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 7: 00 p.m. and 4: 00 a.m. , except that if a awelling unit is part of a collection r.: route that predomi _zely serves commercial accounts, collection may begin as early as 3 :00 a.m. 13. CUSTOMER. SATISFACTION AND EFFICIENCIES IN OPERATION. County may from time to time, at its discretion, examine Contractor's operation in order to evaluate whether or not 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 8 (Contractor's Duty to Maintain Records; County's Right to Examine Records. ) In addition, County may require Contractor to develop plans for and conduct programs on alternative methods of solid waste collection, including pilot programs of limited scope, for the purpose of improving efficiencies and increasing customer satisfaction. County may also require Contractor to implement (January 31, 1991) —7— efficiencies in its operation upon written notice from County. The notice shall allow Contractor a reasonable period of time to implement the specified efficiency (service) . 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. Rate adjustments applicable solely to programs instituted pursuant to this section initially shall be established at the time the County authorizes implementation of .the program or efficiency. 14. 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. 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 survey or surveys . of all customers 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 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 review and approval of the Director of Community Development. . 15. LOCAL ADVISORY BOARD. The Board of Supervisors may designate an existing committee to represent the franchise area, or form an advisory body to advise the Board on the performance of the contractor in the community, local service interests and needs, and rate applications. In all cases, the Committee shall (January 31, 1991) f _8 hold its meetings at a time and place convenient to the public. The Committee shall keep a record of all public comments and submit such comments when reporting to the Board. 16. 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. 17. BILLING. The form and content of customer bills shall be subject to the review and approval of the Director of Community Development. Bills for service may be monthly, bimonthly or quarterly as determined by County. Contractor may bill its customer in advance or in arrears. The Board may also establish billing period options for customers upon a finding that such options. are cost-effective and meet a community need. Charges on a bill shall not be deemed delinquent and a customer shall not be subject to a late fee or termination of service, so long as a customer pays such charges within 30 days after the end of the period covered by the charges. Full payment for drop boxes may be required by Contractor prior to delivery of the drop box to the customer. 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. 18. RECYCLING. ' County may grant to Contractor or any other party or parties, the right and obligation to operate recycling programs, including curbside pickup of recyclable materials. If within 45 days of the effective date of this contract, Contractor has instituted and is implementing a recycling program including regular curbside pickup at all single family residences of at least aluminum, tin, newsprint, glass bottles, cardboard, non-colored HDPE and PET to the satisfaction of County, County grants to Contractor, the exclusive right and obligation to operate a residential customer curbside pickup recycling program. For purposes of this paragraph, cardboard recycling my be provided by means of drop boxes placed at locations acceptable to the Director of Community Development. County may require Contractor to. expand the recycling program by providing 60 days' . notice in writing. Contractor shall maintain and provide to the County records relating to its recycling programs as directed by the Director of Community Development. Usnuary31,1991) —9— It is understood that the County controls the disposition of all recycling materials. Upon providing 60 days notice in writing, County may also require Contractor to segregate, treat and/or deliver the recyclable materials to locations or sites designated by. County, provided County shall take into account the terms and conditions of any contracts existing at the time .of the effective date of this Agreement. Contractor's provision of recycling service shall be reviewed every three years, as part of the rate review process, to reassess whether continuation of such service by Contractor is in the best interest of the ratepayers. If County determines that continuation of such service by Contractor is not in the best interest of the ratepayers and such. decision is not based solely or partly upon 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.. 19. PARTICIPATION IN COMMUNITY CLEAN-IIP PROJECTS. Contractor shall provide, .upon direction of the Community Development Director, solid waste. drop 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 ten (10) 20 cubic yard drop boxes per year. 20. DISPOSAL AND WASTE STREAM CONTROL. Contractor shall be solely responsible for the disposal of •the solid waste collected pursuant to this Agreement. However, itis understood that County controls the 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(s) , transformation facilities and/or resource recovery facilities. 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. 21. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR. (a) Contractor shall provide two additional all-purpose pickups per year not to exceed one cubic yard per pickup per (January 31,1991) _10— residential unit in the residential areas of the Franchise Area. The dates for said additional pickups may be set by the Contractor, however, it is the intent of this Agreement that they shall be held once in April and once in November. Contractor will provide notice to the Customers of said pickup dates. (b) Upon direction from County, Contractor shall provide for at least once yearly collection of household ha.zardous waste, the timing and manner of which shall be subject to the prior review and approval of the Community Development Department. (c) 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. 22. PAYMENT TO COUNTY. Contractor shall make payments to County for funding solid waste programs, County administration of this agreement, programs that benefit the unincorporated communities of the. County and for other purposes as deemed appropriate by the Board. Payment amounts and frequency shall be set by the Board. 23. 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 may be appealed to the Board of Supervisors pursuant to Ordinance Code Chapter 14-4. 24, 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 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. Notwithstanding the foregoing, in lieu 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 in a form satisfactory to the County. Uaauary31, 1991) —11— 25. INSURANCE. Contractor shall procure and maintain in full force and effect at all times during the entire term of this agreement the following insurance coverages: (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 for no less than the sum of $1 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. (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 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 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. 26. INDEMNIFICATION. 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, arising 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. Should any party successfully challenge the validity of this (January 31,1991) -12 Agreement or 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. 27. ATTORNEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall pay its own litigation expenses, including attorney's fees. 28. 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 formation 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 Silvio Garaventa, Sr. , his spouse, his children, their spouses and relatives of the first degree of sanguinity. In the event Contractor herein attempts to assign or subcontract this Agreement or any part hereof or any obligation hereunder, County shall have the right to elect to terminate this Agreement forthwith, without suit or other proceeding. Consent to assignment may not be unreasonably withheld. Following a properly noticed 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. 29. 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 proceeding: (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 (January 31,1991) —13— Contractor's ability to perform 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 26, in the event of a probate proceeding where the rights of Contractor under the Agreement would pass to another individual or other individuals. 30. 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 at: Silvio Garaventa, Sr. , 4080. Mallard Dr. , Concord, CA 94524 or to County at 651 Pine. Street, 4th Floor North Wing, Martinez, -CA 94553, Attention: Director of Community Development. 31. HAZARDOUS WASTE. The parties hereto recognize that federal, state and local agencies with responsibility for defining hazardous waste and for regulating the collection, hauling 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 and tests 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. 32. ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES. Contractor shall give notice to County by January 30th 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 Uanaary 31,1"1) -19 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 shall abrogate Contractor's rights under Public Resources Code section 49520 or any successor or similar statute. 33. AFFILIATED ENTITIES. Contractor shall provide information necessary to satisfy County that the charges made by any affiliated entity are reasonable, in accordance with' the provisions of Section. 8 (County's Right to Examine Records) . "Affiliated entity" shall be defined, for purposes of this paragraph, 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 (l0%) or greater interest in both. County shall have the right to inspect the financial records of any affiliated entity. For purposes of this paragraph, the term "Contractor" shall include ` Contractor, and if Contractor .is an individual, or a group of individuals (partnership) all immediate members, or if a corporation, major shareholders. and any major shareholder is an individual, said individuals' immediate family members. For the purpose of this paragraph, "immediate family" includes spouses and relatives of the first degree of sanguinity, and their spouses. 34. 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 sixty (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 attempt s .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 ulti- mately cured by Contractor. (January 31, 1991) —15- 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. 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 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 allocable 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 annexed 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 Contractor's facilities upon early termination as provided herein. 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. Uaauary 31,1991) —16- 35. EMERGENCY. Notwithstanding Contractor's exclusive franchise rights set forth in paragraph 5, 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 (6) month period, this Agreement may be terminated at the direction of the Board of Supervisors: 36. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS. Contractor 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 of Contra Costa 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. This includes County Ordinance 85-12 (on mandatory subscription to solid waste collection service) . 37. 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. 38. POLICE POWERS. Nothing in this agreement is intended to or may limit County authority pursuant to its police power. 39. CONTEST OF. AGREEMENT'S TERMS BY THE PARTIES. 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 nonbreaching party shall have the right to elect to terminate forthwith without suit or other proceeding. This paragraph 39 shall not be construed to prevent either party from seeking redress to the courts for the purposes of legal review of administrative proceedings in regard to rate setting or County actions taken pursuant to this Agreement, or for the purpose of interpreting or enforcing the provisions contained in this Agreement. 40. 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 Uanuary 31, 1991) —17— r action, brought by. a person or entity not a party to this Agreement, shall not affect the validity or enforceability of the remaining provisions. Each of said provisions shall remain in full force and effect. LTF/jh:df fm:\pinagro.agm UaauM 31, 1991) 1g v,c, o,s -' iQ +� \\\ '\ i ~• ,7 J tel`* WNAN cm s AF SHOALOA C✓ [n.' �, �l O - c} ( co d -ANDYEW op IN MA AS COW MI vPOPTr_VIEWOR\ cj i f,ocE.N nt / .7'� �• �. � a"CT Oj/f9''�fi`��' UdE N l , vIFw DA . _ 3�$ » UT HAA s - n „� a I•'o �, EFTA -f, NO7 s- o sit F CANAL BREA R/? f'1 CN DR o., N"m BAY W h ',i `g4fNp 'LR WRMAROFOI• iRP/FRBIDf•S ••+I.S2f EL ►�+yy i, J~ LBERTSyt AY .- . IrEN MARIN i CD ,X.— O � a «Vit' � .......v � ','jam* os• •' `I •�• ' - BA ET AM J»Ar to E / 'A E91 ct 03 tqR ti /y Contra TO: BOARD OF SUPERVISORS \.Jth7l� FROM: Sara Hoffman _ ��� Couly Solid Waste Manager DATE: February 5, 1991 SUBJECT: Solid Waste Collection and Recycling Franchise Agreement with Discovery Bay Disposal for Discovery Bay gPECIFIC REQUEST(S) OR RECOMMENDATIONS (S) S BACKGROUND AND JUSTIFICATION RECOMMENDATIONS 1. APPROVE the Franchise Agreement (attached) with Discovery Bay Disposal for Discovery Bay, effective March 5, 1991 provided that the Contractor has properly executed the Franchise Agreement, filed its Performance Bond with the County and submitted evidence of insurance to the satisfaction of the County. 2. SET residential rates at $17.00 per month for one can service and curbside recycling with an additional $4.50 per month for additional cans. -Set the toter service, including curbside recycling, at $17.00 per month with a $3 . 00 per month container rental fee. 3'. DIRECT Staff to review the contractor's commercial rates and report to the Board with a recommendation within 90 days. . 4 . ESTABLISH that the contractor is not required, at this time, to make a payment to the County as provided in Section 22 of the Franchise Agreement in consideration of the contractor's provision of curbside recycling at no cost to residential customers. PACKGROUND/REASONS FOR RECOMMENDATIONS The Board of Supervisors directed staff to develop franchise agreements for the unincorporated areas of Contra Costa County. The Discovery Bay franchise is the second of those agreements. The agreement was developed in consultation with the current collector, Discovery Bay Disposal, and the Discovery Bay Property Owners Association (DBPOA) . The Environmental Affairs Committee of the Board .of Supervisors reviewed the draft franchise agreement on January 28, 1991 and recommends its approval by the Board. The EA Committee's position on each issue is noted in BOLD where there was a resulting change in the franchise agreement text. . ' The DBPOA reviewed the draft agreement on September 12 and September 26, 1990. Subsequently revisions to the draft agreement were reviewed in a meeting with the DBPOA chairman and a board member on January '10, 1991. . Noted below are staff's understanding of the concerns expressed by the DBPOA in their letter of October 11, 1990 and in discussion: 6. . Exceptions to Exclusive Privilege: The DBPOA noted that considerable construction work is being conducted in the Discovery Bay area and felt .that the construction contractors should not be prohibited from disposing of waste from their construction sites as they please. Section 6 allows the solid waste contractor exclusive privilege to provide drop boxes and/or bulk collection containers for the collection of solid waste within the franchise area. However, construction .contractors would be the generator of the solid waste and, with their trucks, could dispose of it in accordance with the exceptions allowed in Section 6. 10. Rate Applications - DBPOA wants review of rates every 24 months. The section currently provides that rate applications shall be submitted to the County not less frequently than once every three years. However, the County has the. right to initiate a rate application at any time. 15. Local Advisory Board . DBPOA originally suggested that Sanitation District No. 19 handle the franchise in order to increase local control. Subsequently, staff added Section 15, Local Advisory Board, which we believe has handled their concerns. 22.. payment to County - DBPOA wanted any fees or charges, other than those necessary to pay, for the actual costs of garbage collection and recycling, to be returned to the community for services, preferably increased manning of the Sheriff's Marine Patrol. The section now provides that payment shall be for funding solid waste programs, county administration of the agreement, programs that benefit the unincorporated areas of the County and other purposes deemed appropriate by the Board. 32. Annexation and Change of Franchise Area Boundaries - DBPOA wanted provision for transfer of the franchise in case Discovery Bay becomes an incorporated city. Such language has been added to the section. It should be noted that, under current law, a newly incorporated city would have transfer rights. whether or not such language. were part of the franchise agreement. Discovery Bay Disposal is owned and operated by the same principals as Pittsburg Disposal. Consequently, their comments on the agreement are the same as those for Pittsburg Disposal. For the record, these comments are noted below: 3 . Term - Pittsburg Disposal wants a term longer than the 10 year term specified in the agreement through renewal or extension options. Since these agreements are not subject to public bidding, staff believes that the ten year term is appropriate, or at a minimum, an extension at the County's option. The EA Committee recommends a 15 year term. 8. County's Right to Examine Records - Pittsburg Disposal wants modification of the agreement to only allow a certified public accountant to review the contractor's records. Staff believes that such limitation would preclude firms that specialize in rate regulations and which are not accountancy firms. In addition, having only certified public accountants could unnecessarily increase costs to the ratepayers. The EA Committee split on its recommendation on this issue, with one member recommending CPA review only and the other recommending development of a list of acceptable consultants with selection rights to the County. 10. Rate Applications - Pittsburg Disposal believes that audited financial statements should not be required for rate applications, because they believe it will be unduly expensive for the ratepayers. Staff believes that the cost of audited statements will not be excessive and that they are necessary for the protection of public interest in assessing the financial operations of the Contractors. Furthermore, contractors may take advantage of economics of scale where they serve other jurisdictions that review audited financial statements. Audited financials are required by San Ramon, Walnut Creek, Pleasant Hill, Brentwood, Pittsburg and Central Sanitary District (Orinda/Moraga and areas served by Valley Waste Management) , according to their franchise agreements. Central Sanitary District (for Pleasant Hill Bayshore) and Crockett Valona Sanitary District require audited financials if required by others. Hercules requires audits depending on the rate increase while Clayton specifies "in such form and providing such information as the city may require. " If the Committee and Board would like to provide leeway to allow for less rigorous financial analysis when it will not impair County's ability to verify financial information, then staff recommends the following language: "The County Administrator may, in writing, allow the rate application to be submitted without an audited financial statement provided the County Administrator is satisfied that the alternate submitted financial documentation will provide an appropriate level of verifiable detail in assessing the Contractor's income, expenses, assets and liabilities. " The EA Committee recommends including the above language. 33 . Affiliated Entities - The agreement provides that an affiliated entity is one which owns 10% or greater interest in the other. Pittsburg Disposal believes that 51% should be the definitive mark. The affiliated entities status is important because the County is able to review the records of affiliated entities with whom the franchisee does business, to insure that charges are fair. The EA Committee recommends that this section be cross- referenced with Section 8, which sets forth the conditions of confidentiality. Other recommendations of the EA' Committee include: 18. Recycling - The Committee recommends including tin in the list of curbside pick-up recyclables. 21. Miscellaneous Obligations - The Committee recommends language to delineate the Contractor's responsibility in assisting the County in enforcing the mandatory subscription ordinance. CONTINUED ON ATTACHMENT: YES SIGNAT E: RECOMMENDATION,OF .COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD CO TTEE APPROVE OTHER SIGNATURE M : ACTION OF BOARD ON / 9cAPPROVED AS RECOMMENDED x OTHER4 This is the time set for hearing on solid waste collections franchises for Pleasant Hill Bayshore Disposal and West Pittsburg Disposal for the West Pittsburg area; and Discovery Bay Disposal for the Discovery Bay area. Sara Hoffman advised that there were several issues in the proposed agreements where the haulers .and staff disagreed. She noted that staff had met with the West Pittsburg Municipal Advisory Council three times and that their comments are contained in the staff report with the exception of last night' s comments, which she delineated as follows: No charge to the customer for curbside recycling, term of the agreement, and rates.. Ms. Hoffman noted that staff had also met with both Pleasant Hill Bayshore and West Pittsburg Disposal in developing the agreements and that there are areas where staff and the haulers agreed to disagree, such as the issue of term; the County' s right to examine records, with the haulers wanting a modification to allow only certified public accountants; rate applications; CPI rate adjustments, with the County . suggesting using the "All Urban Consumers" index, and the Pleasant Hill Bayshore suggesting using the "All Other Goods and Services" index; review of the recycling portion of the agreement; and breach and termination. Ms. Hoffman noted that on the issue of affiliated entities (In Section 33 of the agreement, the County reserves the right to examine the records of affiliated entities if the contractor owns 10 per cent or greater interest) West Pittsburg Disposal believes the cutoff mark should be 51 percent rather than 10 per cent. Supervisor Schroder requested that the senior citizen discount be available to eligible residents of Discovery Bay as well as to the residents. of West Pittsburg. Supervisor Torlakson agreed. Sara Hoffman advised that that issue can easily be added if that is the Board' s desire. Board .members agreed that it should be added. Chairman Powers opened the public hearing. Scott Gordon, attorney representing Pleasant Hill Bayshore- Disposal, appeared and advised that the proposed agreement was largely workable, but a few areas of disagreement remain, including the right of the County to examine records, noting that his client proposed that the right be reposed in a CPA or public accountancy firm so as to provide a reliable, trustworthy source for the data and preserve confi- dentiality. He noted that on 'the recycling question, his client proposed a three year review and if the performance .has been satisfactory that they be provided with the right for the balance of the contract term because of the extensive monetary commitment and the commitment of staff and resources. He noted on the question of term, . they would have preferred a twenty year term, maybe based on a ten . year term going in, with .a ten year option, but could agree to a fifteen year plus five year option. Mike McCabe, attorney representing West Pittsburg Disposal and Discovery Bay Disposal, - complimented staff on the work they had done and noted there were only a very few remaining issues to be negotiated. He noted that Mr. Gordon's comments on the term and on the examination of the books by Certified. Public Accountants only reflects those of his client. Mr. McCabe commented that on the need forconfidentiality with respect to examination of records of affiliated entities, and recommended inclusion of a qualifying phrase to provide that examination of books and records of affiliated entitles be conducted only to the extent .necessary, to establish the reasonableness of the charges. At the request of the Chair, Sara Hoffman responded that an alteration had been made to provide that contractors shall provide information necessary to satisfy the County that the charges made by any affiliated entity are reasonable in accordance with the provisions of Section 8, which is the County' s right to examine. records and which contains the confidentiality provisions. Chairman Powers commented that there are two issues, one is confidentiality, the other is only examine the records to the extent necessary to determine the reasonableness of the charges. Sara Hoffman advised that this is also covered in. Section 8 of the agreement. Chairman Powers requested that it also be covered in- Section 33 . Sara Hoffman agreed. to have it reiterated in Section 33 . Board members discussed the various approaches to renewing the agreements. Supervisor Torlakson moved to approve the recommendation of the Environmental Affairs Committee to substitute fifteen-year terms for the ten-years set forth in Section 3. Supervisor McPeak advised that 'she did not. support the fifteen-year franchise nor a rolling franchise that would always have a ten-year period, but felt that a ten-year term is quite sufficient and suggested that upon request from the hauler and approval of the County, and based on capitalization, an extension of five years. Chairman Powers suggested a. compromise of ten years plus the renewable every five years. Supervisor McPeak clarified that her recommendation is a ten-year franchise and at any in that •ten years, that at the request of .the franchisee, because of capitalization considerations, they could come to the .Board for up to a five-year extension on whatever is the remaining period of . time on the franchise. Chairman Powers invited further discussion. Sara Hoffman commented that anything that gives the Board the greatest amount of flexibility for future decision making would be strongly supported by .staff and therefore perhaps the ten-year franchise with five-year option might give the greatest amount of flexibility. Supervisor McPeak so moved. There was no second. The Board further discussed the matter. Supervisor McPeak moved the ten-year franchise with the option of a five-year extension, that would be requested by the hauler, granted at the discretion of the Board of Supervisors, based upon capital investment demonstrated by the hauler. Supervisor Schroder seconded the motion. - Supervisor Torlakson suggested giving staff direction to come back with the language for an option agreement. Sara Hoffman suggested that the Board go on to another issue while staff works on the language and perhaps come back with appropriate language later in the hearing. Chairman Powers suggesting voting on the motion and directing staff to bring the language .back for review at a later time. The motion passed unanimously. Chairman Powers advised that the next two issues, the question of whether CPA' s would be looking at the books to verify, and the rate setting issue would be discussed separately. He noted that the .first issue is whether a CPA, or a CPA firm, or a firm that has •CPA' s; would be looking at the books so that the accounting standards can be kept common. Supervisor Schroder moved approval of separating the issues, and having CPA' s reviewing or verifying the books of the franchisees. Supervisor Torlakson commented that the Committee had a split recommendation on that. He noted that one of the concerns .is that staff would like to use CPA' s, but they may also want to use other kinds of analysis that other kinds of professionals could provide. He suggested a compromise by.developing lists of providers or contractors and this would be determined to be an acceptable list to choose from, and it may not be just all firms with CPA's but it might also include firms that have CPA's and other types of analysts. Sara Hoffman commented that, prior to the separation of the issues; staff had concern that firms that have rate expertise not be precluded from assisting the County in developing rates. Supervisor Torlakson seconded the• motion on the separation of issues and the use of CPA's for reviewing records. The vote was unanimous. Supervisor Torlakson moved that with respect to the rate setting firms, that staff and the haulers mutually agree on a list of firms and staff make the selection from among those firms. The motion was seconded by Supervisor Schroder and passed unanimously. Chairman Powers announced that the next issue was the level of audited statements, whether its audited or some lesser level of standard. Supervisor Schroder moved that it be at some level of verifications that. is satisfactory, and that could be short of an audited financial statement. The motion was seconded by Supervisor Torlakson and passed unanimously Chairman Powers noted that the next issue is the question of CPI increases and the type of CPI increase, which would be on the yearly basis between the three year rate setting period. Sara Hoffman recommended using the All Consumers Index. Supervisor Torlakson moved to approval of using the All Consumers Index. '.The motion. was seconded by Supervisor Powers and passed unanimously. Chairman Powers indicated that the next item was the recycling question, whether it was every three years, or three years and then to the end of the contract, which would be ten years. He noted that staff recommends three years and one of the haulers recommends three and then to the end of the ten-year period. Supervisor McPeak discussed the options of three. years or three years and then to the end of the contract.. She noted that there is a tremendous investment in a recycling program, and that the Marketing Committee in the Plastics Task Force wants to add recycling of colored HDPE, and therefore she thought it reasonable to go three years and then have the option to renew to the end of the contract, and have the ability to add colored HDPE upon the direction of the Board of Supervisors., and that as noted by Sara Hoffman, the Board could require expansion of the recycling program upon .60 days written notice, and Supervisor McPeak thereupon moved the three-year initial period and then the option to renew to the end .of the contract on recycling. The motion was seconded by Supervisor Schroder. Supervisor Torlakson spoke in opposition suggesting that it could benefit the County to have the option of the extra incentive for the providers, for the franchisees to be innovative and at the cutting edge, and that the EA Committee felt pretty strongly about keeping it to the staff recommendation of three years. The motion passed by the following vote: AYES: . Supervisors Schroder. McPeak and Powers NOES: Supervisors Torlakson and Fanden Chairman Powers noted that the next issues is the percentage of interest in affiliated companies, 51 percent versus 10 percent. Supervisor Fanden moved the recommendation of staff, which is 10 per cent. Supervisor Torlakson seconded the motion and the vote was as follows: AYES: Supervisors Fanden, McPeak, Torlakson and Powers NOES: Supervisor Schroder. Sara Hoffman advised that after consulting with County Counsel, language had been developed for the extension of terms of the franchise agreements as follows: "However, prior to the expiration of this agreement, the contractor may request, and the Board of Supervisors may grant a five-year extension if the contractor demonstrates such extension is needed for capital investment purposes, and the Board is satisfied by the service and performance of the contractor to date. " Board members indicated their agreement with the language proposed. Supervisor Torlakson moved approval of the the franchise agreement for the Discovery Bay area with Discovery Bay Disposal, to include all the previous motions and language for the five-year extension, and provision for senior citizen discount. .The motion was seconded by Supervisor McPeak and passed unanimously. The Board APPROVED Recommendations 1, as amended above; 2; 3; and 4 , and AUTHORIZED the Chairman of the Board of Supervisors to execute the Franchise Agreement as modified by the Board this date. VOTE OF SUPERVISORS _4zf�- I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. cc: Community Development County Counsel ATTESTED Discovery: Bay .Disposal PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY , DEPUTY h15/dbdisp.bos AGREEMENT BETWEEN CONTRA COSTA COUNTY AND DISCOVERY BAY DISPOSAL SERVICE FOR SOLID WASTE COLLECTION AND RECYCLING IN DISCOVERY BAY TABLE OF CONTENTS Section Title Page 1. Effective Date, Parties. . . . . . . . . . . . . . . . . . . . . . . 1 2 . Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3 . Term. . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4. Intent to Regulate All Recycling and Residen- tial and Commercial Solid Waste Collection, Removal and/or Disposal. . . . . . . . . . . . . . . . . . . . . . . 3 5. Exclusive Privilege and Duty. . : . . . . 000 . . . . . . 3 6. Exceptions to Exclusive Privilege. . . . . . . . . : . . . 3 7. Salvage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 8 . Contractor's Duty to Maintain Records; County's Right to Examine Records. . . . . . . . . . . . . . . . . . . . . . 4 9. Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 10. Rate Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 .11. Operation by Contractor. . . . . . . . . . . . . . . ... . . . . . . 7 12. Limitation on Time and Manner of Collection. . . 7 13 . Customer Satisfaction and Efficiencies inOperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 14 . Customer Service Standards. . . . . . . . . . . . . . . . . . . . 8 15. ?vocal Advisory Board. . . . . . . . . . . . . . . . . . . . . . . . . . 8 16. Customer Complaints. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 17. Billing. . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 18 . Recycling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 19. Participation in Community Clean-up Projects. . 10 20. Disposal and Waste Stream Control. . . . . . . . . . . . . 10 21. Miscellaneous Obligations of Contractor. . . . . . . 10 22 . Payment to County. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (January 30, 1991) Section Title Paae 23. Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 24. Faithful Performance Bond. . . . . . . . . . . . . . . . . . . . . 11 25. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . 12 26. Indemnification. . . . . . . . . . . 12 27. Attorney'.s Fees. . 13 28. Assignability. . . . . . . 13 29 . Involuntary Assignment. . . . . . . . . . . . . . . . . . . . . . . . 13 30. Notice Provisions. . . 14 . 31. Hazardous Waste. . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . 14 32 . Annexation and Change of Franchise Area Boundaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 33 . Affiliated Entities. . . . . . . . . . . . . . . . . ... . . . . . . 15 34 . Breach and Termination. . . . . . . . . . . . . . . . . . . . . . . . . 15 35. Emergency. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 36. Compliance With Federal, State and Local Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 37. Amendment or Modification. . . . . . . . . . . 17 38. Police Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 39. Contest of Agreement's Terms by the Parties. . . 17 40. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 (lanumy 30, 1991) 1. EFFECTIVE DATE, PARTIES. This Agreement, effective on March 5, 1991, is by and between County and the below named Contractor. 2. DEFINITIONS. As used herein, the following terms shall have the meanings set forth below: (a) "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) "Commercial solid waste" means solid waste routinely originating from stores, business offices, commercial warehouses, hospitals, educational, health care, military and correctional institutions, non-profit research organizations, and non-exempt government offices. Commercial solid waste refers to SIC Codes 401 through 4939, . 4961, and 4971 (transportation, communications and utilities) , 501 through 5999 (wholesale and retail trade) , 601 through 679 (finance, insurance and real estate) , 701 through 8748 (public and private service industries such as hospitals and hotels) , and 911 through 9721 (public administration) . Commercial solid waste does not include construction or demolition waste, industrial waste or septage. (c) "Contractor" means Discovery Bay Disposal Service, and is the entity which has been granted an exclusive franchise pursuant to the terms and conditions set forth herein. . . (d) "County" means the County of Contra Costa (e) "Customers" means those who have contracted with 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 ordinances. (f) :'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. (g) "Franchise Area" means the geographic area generally described in Exhibit A to this Agreement, which exhibit is attached hereto and incorporated herein by reference, and more particularly as set forth in the six hundred (600) scale maps maintained and available for inspection at the Community Development Department. Said six hundred (600) scale maps shall 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. (h) "Hazardous Waste" means a waste, or combination of wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may either: (1) cause.., or significantly contribute. to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or (2) pose a substantial present or potential, hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. The term "hazardous waste" is intended to include all waste which are defined as being a hazardous waste pursuant to any federal, state. or county laws, statutes, ordinances or other regulation currently in effect or as may be enacted or amended in the future. (i) "Industrial Waste" means solid waste originating from mechanized manufacturing facilities, factories, refineries, and publicly. operated treatment .works. (j) "Infectious Waste" . as used herein has the meaning set forth in Health and Safety Code section 25117.5, ' as amended' from time to time. (k) "Recycle" or "recycling" means. the process of collecting, sorting, cleaning, treating, and reconstituting materials that would otherwise become solid waste, and recovering them so that. they may be used in the form of raw material for new, reused, or reconstituted products. (1) "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. (m) .. "Salvage" means the removal of. material from the waste stream following collection and refurbishing such material so that it may be reused. , (n) "Septage" means non-sewered liquid or semi-liquid waste which may trucked to treatment. facilities for disposal, to include, but not be limited to, waste from residential septic tanks, commercial grease cleanouts, and industrial waste holding facilities. (o) "Solid Waste" means 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. (iaouary 31, 1991) —2— (p) "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 delivery to a transfer facility or other facility by Contractor. 3. TERM. Subject to paragraph 32, the term of this Agreement and the exclusive franchise granted hereunder shall be for a period of fifteen (15) years from the effective date of this agreement. 4. INTENT TO REGULATE ALL RECYCLING AND RESIDENTIAL AND COMMERCIAL SOLID WASTE COLLECTION, REMOVAL AND/OR DISPOSAL. The . parties hereto agree 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 residential and commercial solid waste handling service and recycling of material as specified herein. However, this Agreement does not regulate the collection, removal and disposal of industrial waste, or infectious waste, hazardous waste or septage, irrespective of origin. Whether a particular solid waste collection activity is covered or regulated by this Agreement is within the sole determination of County in accordance with provisions of Section 21 (Dispute Resolution) of this Agreement. S. EXCLUSIVE PRIVILEGE AND DUTY. County hereby grants to Contractor the exclusive privilege and duty to collect, remove and dispose of all commercial and residential solid waste within the Franchise Area pursuant to and subject to the terms of this Agreement. The Franchise Area may be expanded or reduced in size by mutual agreement of the parties, or as. provided in Section 30 (Annexation and Change of 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 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; or (b) 'A person or entity contracts for the removal and disposal or recycling of inorganic refuse or .garden. waste and such removal and disposal or recycling is solely incidental to work such as remodeling or gardening occasionally performed by or for the customer. (c) The Board designates a franchise area(a) which another company may also serve, as approved by the Board. Uanuary 31,1991) . -3— Nothing in this paragraph shall be construed to eliminate or qualify the exclusive privilege of Contractor to provide drop boxes and/or bulk-collection containers for collection of solid waste within the Franchise Area. 7. SALVAGE. County shall be entitled to the right of salvage from the solid waste collected pursuant to this Agreement, but at its sole discretion may delegate this right to, or waive the same in favor of, Contractor. By entering this agreement, County has temporarily waived its right of salvage and has delegated such to Contractor. Delegation of salvage rights to Contractor shall be reviewed every three years, as part of the rate review process, to reassess whether such delegation is in the best interest of the ratepayers. 8. " 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, 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 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 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 and allowed as a "pass through" cost in the rates. 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 for the sole purpose of gathering information necessary to allow the agents to ascertain whether income, expenses, assets. arid liabilities are reasonably and consistently allocated among operations regulated by County and those not regulated by County. Contractor shall obtain County's written approval of its method of .segregating its financial records between County regulated and non-county regulated operations. Oanuary 31, 1991) —4— As used in this section, "County Agent" shall mean: 1) an independent Certified Public Accountant or public accountancy firm; 2) a consulting firm or consultant with expertise in rate regulation; 3) County employees; and 4) for non-financial records only, any other consultant designated by the County. Information gained from such examination of records pertaining to operations not regulated by the County shall be treated by County and its agents as confidential information. 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. 9. RATES. Contractor shall perform the responsibilities and duties herein agreed in accordance with and in consideration of the -reasonable rates which may be fixed by the County from time to time. In determining the rates, the County shall consider fairness to both Contractor and the Customers. The County may set discount rates for residential customers 62 years or older with verifiable financial needs, such as receipt of supplemental security income (SSI) or General Assistance. 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.. The rate review- process shall provide for accrued interest and carrying charges in connection with sums required to be advanced by Contractor to County. Costs associated with provision of services required under Section 19; Participation in Community Clean-up Projects, and Section 21, Miscellaneous Obligations of Contractor, shall be included as general operating expenses of Contractor in the rate application process. 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. 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. 10. RATE APPLICATIONS. Rate applications shall be prepared in accordance with such forms and in such detail as required by Uaauary 31,1"1) —5— the County. The application shall include one reproducible hard copy, 15 hard copies bound in an appropriate manner and one copy on disk formatted pursuant to County specifications. Contractor shall submit .its first rate application as directed by the County. All rate applications shall include information from the previous rate change to the present. Every three years, a 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 County .Administrator may, in writing, allow. the rate. application.. to be submitted without an audited financial statement provided the County Administrator is satisfied that the alternative submitted financial documentation will provide an appropriate level of verifiable detail in assessing 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 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. The date of Contractor initiated applications shall be standard, year by year; such date to be determined upon .mutual agreement of the parties and reasonably relate to the fiscal year of Contractor. 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 2 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. Contractor shall provide documentation for the need for such rate application relative to those changes. The application will thereafter be considered by the Board. Oanuary 31,1991) —6- County will act with reasonable diligence in reviewing rate applications. 11. OPERATION BY CONTRACTOR. Contractor shall furnish all necessary equipment (excluding containers for single-family residential wastes) 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 service in the Franchise area. The Contractor, in performance hereof, shall use covered water-tight bodied motor trucks with truck bodies constructed of sufficient strength to withstand a fire within, without endangering adjacent property. Trucks, drop boxes, bins, or similar types of equipment shall be kept neat, clean and in good repair. Contractor shall have its name, permit number, and telephone number on the side of each truck and on each drop box, bin or similar type equipment provided by Contractor. 12. 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. Collection shall be curbside, backyard, or any other manner 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 7: 00 p.m. and 4 : 00 a.m. , except that if a dwelling unit is part of a collection route that predominately serves commercial accounts, collection may begin as early as 3 : 00 a.m. 13. CUSTOMER SATISFACTION AND EFFICIENCIES IN OPERATION. County may from time to time, at its discretion, examine Contractor's operation in order to evaluate whether or not 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 8 (Contractor's Duty to Maintain Records; County's Right to Examine Records. ) In addition, County may require Contractor to develop plans for and conduct programs on alternative methods of solid waste collection, including pilot programs of limited scope, for the purpose of improving efficiencies and increasing customer satisfaction. County may also require Contractor to implement Uanuary31,1991) —7— efficiencies in its operation upon written notice from County. The notice shall allow Contractor a reasonable period of time to implement the specified efficiency (service) . 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. Rate adjustments applicable solely to programs instituted pursuant to this section initially shall be established at the time the County authorizes implementation of the program or efficiency. 14. 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. 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 survey or surveys of all customers 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 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 review and approval of the Director of Community Development. 15. LOCAL ADVISORY BOARD. The Board of Supervisors may designate an existing committee to represent the franchise area, or form an advisory body to advise the Board on the performance of the contractor in the community, local service interests and needs, and rate . applications. In all cases, the Committee shall (January 31,1991) �a hold its meetings at a time and place convenient to the public. The Committee shall keep a record of all public comments and submit such comments when reporting to the Board. 16. 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. 17. BILLING. The form and content of customer bills shall be subject to the review and approval of the Director of Community Development. Bills for service may be monthly, bimonthly or quarterly as determined by County. Contractor may bill its customer in advance or in arrears. The Board may also establish billing period options for customers upon a finding that such options are cost-effective and meet a community need. Charges on a bill shall not be deemed delinquent and a customer shall not be subject to a late fee or termination of service, so long as a customer pays such charges within 30 days after the end of the period covered by the charges. Full payment for drop boxes may be required by Contractor prior to delivery of the drop box to the customer. 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. 18. RECYCLING. County may grant to Contractor or any other party or parties, the right and obligation to operate recycling programs, including curbside pickup of recyclable materials. If within 45 days of the effective date of this contract, Contractor has instituted and is implementing a recycling program including regular curbside pickup at all single family residences of at least aluminum, tin, newsprint, glass bottles, cardboard, non-colored HDPE and PET to the satisfaction of County, County grants to Contractor, the exclusive right and obligation to operate a residential customer curbside pickup recycling program. For purposes of this paragraph, cardboard recycling .my be provided by means of drop boxes placed at locations acceptable to the Director of Community Development. County may require Contractor to expand the recycling program' by providing 60 days, notice in writing. Contractor shall maintain and provide to the County records relating to its recycling programs as directed by the Director of Community Development. Uanuary31,1991) —9— It is understood that the County controls the disposition of all recycling materials. Upon providing 60 days notice in writing, County may also require Contractor to segregate, treat and/or deliver the recyclable materials to locations or sites designated by County, provided County shall take into account the terms and conditions of any contracts existing at the time of the effective date of this Agreement. Contractor's provision of recycling service shall be reviewed every three years, as part of the rate review process, to reassess whether continuation of such service by Contractor is in the best interest of the ratepayers. If County determines that continuation of such service by Contractor is not in the best interest of the ratepayers and such decision is not based solely or partly upon 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. 19. PARTICIPATION IN COMMUNITY CLEAN-IIP PROJECTS. Contractor shall provide, upon direction of the Community Development Director, solid waste drop 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 ten (10) 20 cubic yard drop boxes per year. 20. DISPOSAL AND WASTE STREAM CONTROL. Contractor shall be solely responsible for the disposal of the solid waste collected pursuant to this Agreement. ' However, it is understood that County controls the 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(s) , transformation facilities and/or resource recovery facilities. 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. 21. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR. (a) Contractor shall provide two additional all-purpose pickups per year not to exceed one cubic yard per pickup per Uanuary 31,1991) _10— residential unit in the residential areas of the Franchise Area. The dates for said additional pickups may be set .by the Contractor, however, it is the intent of this Agreement that they shall be held once in April and once in November. Contractor will provide notice to the Customers of said pickup dates. (b) Upon direction from County, Contractor shall provide for at least once yearly collection of household hazardous waste, the timing and manner of which shall be subject to the prior review and approval of the Community Development Department. (c) 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. 22. PAYMENT TO COUNTY. Contractor shall .make payments to County for funding solid waste programs, County administration of this agreement, programs that benefit the unincorporated communities of the County and for other purposes as deemed appropriate by the Board: Payment amounts and frequency shall be set by the Board. 23. 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 may be appealed to -the Board of Supervisors pursuant to Ordinance Code Chapter 14-4. 24. 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 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. Notwithstanding the foregoing, in lieu 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 in a form satisfactory to the County. (January 31,1991) —11— F 25. . . INSURANCE. Contractor shall procure and maintain in full force and effect at all times during the. entire .term of this agreement the following insurance coverages: (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 for no less than the sum Of $1 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. (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 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 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. 26. ' .INDEMNIFICATION.' All work and performancecovered 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, arising 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.. Should any party successfully challenge the validity of this (January 31,1991) -12- Agreement or 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. 27. ATTORNEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall pay its own litigation expenses, including attorney's fees. 28. 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 formation 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 Silvio Garaventa, Sr. , his spouse, his children, their spouses, and relatives of the first degree of sanguinity. In the event Contractor herein attempts to assign or subcontract this Agreement or any part hereof or any obligation hereunder, County shall have the right to elect to terminate this Agreement forthwith, without suit or other proceeding. Consent to assignment may not be unreasonably withheld. Following a properly noticed 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. 29. 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 proceeding: (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 Uanuary 31,1991) —13— Contractor's ability to perform 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 26, in the event of a probate proceeding where the rights of Contractor under the Agreement would pass to another individual or other individuals. 30. 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 at.: Silvio Garavanta, Sr. , 4080 Mallard Dr. , Concord, CA 94524 or to County at 651 Pine Street, 4th Floor North Wing, Martinez, CA 94553, Attention: Director of Community Development. 31. HAZARDOUS WASTE. The parties hereto recognize that federal, state and local agencies with responsibility for defining hazardous waste and for regulating the collection, hauling 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 - -nulations and tests 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. 32.. ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES. Contractor shall give notice to County by January 30th 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 be formed or . lawfully annex territory which is within the Franchise Area, County may make (;anuary 31,1991) —14- such alterations to the Franchise Area as the incorporation or 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 shall abrogate Contractor's rights under Public Resources Code section 49520 or any successor or similar statute. 33. AFFILIATED ENTITIES. Contractor shall provide information necessary to satisfy County that the charges made by any affiliated entity are reasonable in accordance with the provision of Section 8 (County's Right to Examine Records) . "Affiliated entity" shall be defined, for purposes of this paragraph, 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. County shall have the right to inspect the financial records of any affiliated entity. For purposes of this paragraph, the term "Contractor" shall include Contractor, and if Contractor is an individual, or a group of individuals (partnership) all immediate members, or if a corporation, major shareholders and any major shareholder is an individual, said individuals' immediate family members. For the purpose of this paragraph, "immediate family" includes spouses and relatives of the first degree of sanguinity, and their spouses. 34. 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 sixty (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 ulti- mately cured by Contractor. Unnuary31, 1991) —15— 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. In the event of a termination pursuant to this Section, . County shall have the right to temporarily assume theobligations 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 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 allocable 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 annexed 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 Contractor's facilities upon early termination as provided herein. 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. 35. EMERGENCY. Notwithstanding Contractor's exclusive (January 31,1991) —16— franchise rights set forth in paragraph 5, 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 (6) month period, this Agreement may be terminated at the direction of the Board of Supervisors. 36. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS. Contractor 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 of Contra Costa 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. This includes County Ordinance 85-12 (on mandatory subscription to solid waste collection service) . 37. 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. 38. POLICE POWERS. Nothing in this agreement is intended to or may limit County .authority pursuant to its police power. 39. CONTEST OF AGREEMENT'S TERMS, BY THE PARTIES. 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 nonbreaching party shall have the right to elect to terminate forthwith without suit or other proceeding. This paragraph 39 shall not be construed to prevent either party from seeking redress to the courts for the purposes of legal review of administrative proceedings in regard to rate setting or County actions taken pursuant to this Agreement, or for the purpose of interpreting or enforcing the provisions contained in this Agreement. 40. 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 Uanuary 31, 1991) —17— t Agreement, shall not affect the validity or enforceability of the remaining provisions. Each of said provisions shall remain in full force and effect. LTF/jh:df fm\discbay.agm (January 31,1991) X18 F.�B� A OXY BAY ''r'�,,,,,,,,,,,�,•�"'' �y � j,•,cp05A1'���C D�COVON BAY A ,A OF .� Slough , 8ou;eVard CO P ` ,�,, Je �, t.✓ blow It oQ �S q lint ►� C1 at ij Ic tho 00 0 S� A y N. 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