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HomeMy WebLinkAboutUkiah Waste Solutions, Inc. 2011-12-12WASTE COLLECTION AGREEMENT TABLE OF CONTENTS H Page Waste Collection Agreement I 1. Franchise Grant I 2. Definitions 2 3. Term 5 4. Franchise Fee; Other Fees 6 5. Services 6 5.1 Solid Waste 6 5.2 Recyclables 7 5.3 Green Waste 7 5.4 Food Waste 7 5.5 Contaminated Materials 7 5.6 Changes; Missed Pick -Ups 7 5.7 Containers — Single Family Residential 8 5.8 Containers — Multi -Family Residential, Commercial and Institutional 8 5.9 Replacement or Addition of Containers 8 5.10 Personnel and Equipment 8 5.11 Disposal and Processing Facilities 8 5.12 Local Office 10 5.13 Pick -Ups at City Facilities 10 5.14 Outreach and Public Education 10 5.15 Fall Leaf Collection I 1 H Ii i Z sluauipuauiv OZ saolIoN OZ aolotaluoD luopuodopul OZ uor1t,alsluluipv OZ aanit?m 61 luauiaissv L I jjnejaa uodn saipauim d 91 aouvansul puU ssaluTt'H pioH 91 saaodmd put, sp iooag Si lauuosaad put, wauidinbg of algvoilddV suoisinoad 91 8 I Z uoi;isodoad L'9 ti sullim 9'9 tI suiajl ,�avulpaot,ajxg uo past'g uolltogipow 9'9 tI MWAa-d at'a,k anl3 t'9 £I sisoD g.Snoagl,-ssud ui soSurgD uo posug uolpoglpoW £'9 1 l sisoD gSnojq L-ssLd uiuwD put? uoilonpa-1 SuiloXoa-1 `xapul Ian3 `xapul ooiad aauinsuoj uo pasug uoileoglpoW Z'9 I I sow-djo juauigsllqu;sg i I sa1mZl sluauiaambmd uoisaaniQ 6I'9 II sosuaoi7 put; sjluuad 81'S i I saoinaaS iL'uol;IPPV LT'S 133rn dfl-uvalD SuladS 9I'S L I I f 17. Successors and Assigns 18. Integration; Severability Exhibit A — Waste Management Strategic Plan Exhibit B —Recyclable Materials Agreement Exhibit C — Curbside Rate Calculation Exhibit D — Agreement for Receipt of Wood and Green Waste Exhibit E — Initial Service Rates iii 21 21 23 24 25 26 27 /;Ziz( WASTE COLLECTION AGREEMENT -t�- This Waste Collection Agreement (the "Agreement") is made as of December 1 2011 by and between the City of Ukiah, a municipal corporation (hereinafter "City"), and Ukiah Waste Solutions, Inc., a California corporation (hereinafter "Company"), with reference to the following: WHEREAS, Company currently collects and disposes of Solid Waste generated in City pursuant to that certain Contract for Collection, Transportation and Disposal of Garbage, Refuse, and Rubbish, and Recycling of Recyclables from within the City of Ukiah dated March 23, 1992, as amended May 9, 1997, August 21, 1998, November 7, 2001 and April 16, 2008 (the "Prior Agreement"); and WHEREAS, Company has proposed a capital -intensive, long-term Strategic Waste Management Plan (the "Strategic Plan"), including, but not limited to, Contractor financed capital projects, for City and the other customers served by Company and its affiliates that is designed to increase diversion, mandated by law, of Solid Waste from landfills, reduce greenhouse gasses, convert waste into energy, and create new jobs, a true and correct copy of which is attached hereto as Exhibit A; and WHEREAS, undertaking the Strategic Plan will require a long-term commitment of Company's staff, time and capital; and WHEREAS, the parties wish to continue to assure the health, safety and public welfare of City's residents and businesses by providing efficient services for recycling and the collection and disposal of all Solid Waste generated in the City resulting in increased diversion pursuant to the terms of a new, long-term agreement that replaces the Prior Agreement; NOW, THEREFORE, in and for the mutual covenants herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. F-r-anehise C=oaf4 1.1 City hereby grants to Company, and Company hereby accepts from City, the exclusive franchise right and privilege, subject only to Section 1.3 below, to Collect, remove, transport, Recycle, Process, compost and Dispose of all Solid Waste generated in City in accordance with the provisions of City's laws and regulations pertaining to the accumulation, collection and removal thereof and any other applicable law, including applicable State and Federal statutes or administrative rules. 1.2 All Solid Waste Collected by Company pursuant to this Agreement shall become the property of Company upon its possession thereof, provided that nothing in this section shall be deemed a waiver by City of its rights and duties under this Agreement. 1.3 The franchise granted to Companly hereunder shall in all respects be exclusive, , 1 1 W except as otherwise provided by applicable law and as follows: (a) Recyclables generated at any Residential, Commercial or Institutional Property that are Source Separated may be (i) transported personally by the Generating person for sale or donation to a Processing facility that has been duly approved and authorized as such by a governmental or other appropriate authority, including beverage containers Recycled at authorized facilities under the California Beverage Container Recycling Litter Reduction Act, (ii) may be sold or donated by the Generating person to any Charitable Entity, or (iii) sold by the Generating person to any licensed Recycler (provided the Generating person is not charged any amount by such Recycler, directly or indirectly); (b) Solid Waste Generated at any Residential, Commercial or Institutional Property may be personally transported by the person Generating same to any licensed landfill, transfer station or materials recovery facility; (c) Green Waste removed from a Residential, Commercial or Institutional Property by a gardening, landscaping or tree trimming contractor as an incidental part of a comprehensive service offered by such contractor, rather than as a hauling service, may be disposed of by such contractor at any licensed transfer station or materials recovery facility, provided that such contractor does not store the box, bin or container used for such purpose at the location where the service is provided or remove such box, bin or container from such contractor's truck; (d) Construction Debris and Demolition Debris removed from a Residential, Commercial or Institutional Property by a licensed construction or demolition contractor using its own employees and equipment as an incidental part of a comprehensive service offered by such contractor, rather than as a hauling service, may be disposed of by such contractor at any licensed transfer station or materials recovery facility, provided that such contractor does not store the box, bin or container used for such purpose at the location where the service is provided or remove such box, bin or container from such contractor's truck; and (e) Hazardous Waste and Household Hazardous Waste may be disposed of in any lawful manner. 1.4 To the extent permitted by applicable law, City agrees to take such steps as may be reasonably necessary to protect (a) Company's ownership of Solid Waste, including Recyclables and Green Waste, placed at the curbside or designated collection location for Collection by Company under the terms of this Agreement, and (b) Company's exclusive rights to collect all Solid Waste, including Recyclables and Green Waste, in accordance with the terms hereof. City's obligation under this Section 1.4 is subject to Company's agreement, upon request of City, to reimburse City's reasonable expenses, including attorneys' fees and litigation expenses, incurred in taking steps as agreed upon herein; provided, however, that nothing herein shall prevent Company from taking any lawful action to protect its rights hereunder. 1.5 Except as expressly provided herein, this Agreement shall supersede the Prior Agreement as of the Effective Date set forth in Section 3 below, when the Prior Agreement shall cease to have any effect (except for periods prior to such Effective Date). 2. Definitions. 2 2.1 "Authorized Facility" means a Disposal or Processing facility that has received and is maintaining in good standing all regulatory or other approvals required by law to perform the task for which Company is using the facility and which has been approved by the City pursuant to Section 5.11 below. 2.2 "Billing Fees" means the billing fees payable to City pursuant to Section 6.6 below, including any fees or charges adopted to replace or supplement such billing fees. 2.3 "CCC" means Cold Creek Compost, Inc. 2.4 "Change in Law" means the enactment, adoption, promulgation, issuance, modification, or written adoption or change in administrative or judicial interpretation on or after the Effective Date of, any law, regulation, rule, order, judgment, decree, permit, approval or other requirement of any governmental agency (including City) having jurisdiction over this Agreement or Company's performance hereunder. 2.5 "Charitable Entity" means any not-for-profit organization or entity maintained for community service, education or the public good, including service clubs, scouting organizations, religious and educational organizations and recognized charities. 2.6 "Collect" or "Collection" means the collection, transportation and removal of Solid Waste within and from City. 2.7 "Commercial Property" means property upon which business activity is conducted, including but not limited to retail sales, services, wholesale operations, manufacturing and industrial operations, but excluding businesses conducted upon Residential Property that are permitted under applicable zoning regulations and are not the primary use of the property. 2.8 "Construction Debris" means used or discarded construction materials generated during the construction or renovation of a building, structure or other man-made improvement on a Residential, Commercial or Institutional Property. 2.9 "Containers" means any and all types of Solid Waste receptacles supplied by Company, including but not limited to rectangular bins, cylindrical containers, and any and all other kinds of receptacles or bags, irrespective of size or shape. 2.10 "Customer" means the owner or occupant of Residential, Commercial or Institutional Property. 2.11 "Demolition Debris" means used construction materials generated during the razing or renovation of a building, structure or other man-made improvement on a Residential, Commercial or Institutional Property. 2.12 "Disposal" means the permanent placing of Solid Waste in a facility legally permitted to receive it. 2.13 "Disposal Costs" means Company's costs to deposit Solid Waste collected under this Agreement at the Transfer Station (as defined in Section 5.11 below) or any other Authorized Facility. 2.14 "Food Waste" means food that is discarded (as from a Commercial or Residential Property kitchen). 2.15 "Franchise Fees" means the franchise fees payable to City pursuant to Section 4 below, including any fees or charges adopted to replace or supplement such franchise fees. 2.16 "Generate" means to create or render. A Customer is not considered to be the Generator of Solid Waste if the material has merely been transported or moved to the Customer's site. 2.17 "Green Waste" means tree trimmings, grass cuttings, plants, leaves, branches and trees (not more than six (6) inches in diameter or more than four (4) feet in length) and similar materials generated at a Residential, Commercial or Institutional Property. 2.18 "Hazardous Waste" means all substances defined as Hazardous Waste, acutely Hazardous Waste or extremely Hazardous Waste by the State of California, or identified as Hazardous Waste by the U.S. Environmental Protection Agency, under applicable laws or regulations. 2.19 "Household Hazardous Waste" means Hazardous Waste that is generated at Residential Properties. 2.20 "Institutional Property" means the premises or site of any governmental entity, including city, county, state and/or federal buildings, public schools, colleges, and public recreational sites. 2.21 "Multi -Family Residential Property" means any building or structure, connected structure or series of structures used for residential purposes, and consisting of three (3) or more distinct dwelling units, irrespective of whether the dwelling units are rental units or are owner -occupied. 2.22 "Pass -Through Costs" means Disposal Costs, Processing Costs and Regulatory Costs. 2.23 "Processing" means the act of salvaging, reprocessing, marketing and selling or reusing Recyclables (including Food Waste and Green Waste) for the purpose of Recycling, 4 whether directly or through one or more third parties, and shall include other means of diverting Solid Waste from landfills pursuant to the Strategic Plan. 2.24 "Processing Costs" means the costs of Processing. 2.25 "Recyclables" means Solid Waste which may be reused or processed into a form suitable for reuse through reprocessing or remanufacture consistent with the requirements of the California Integrated Waste Management Act of 1989, as amended ("AB 939"), including, without limitation, paper, newsprint, printed matter, pasteboard, paper containers, cardboard, glass, aluminum, PET, HDPE, and other plastics, beverage containers, compostable materials (including Green Waste and Food Waste), and wood, brick and stone in reusable size and condition. Recyclables shall include those items of Construction Debris and Demolition Debris which are described in this Sections 2.8 and 2.11. Company shall report changes in Recyclables collected at the curbside to the City Manager who must approve those changes. 2.26 "Recycle" means the process of reusing or processing Solid Waste into a form suitable for reuse consistent with the requirements of AB 939. 2.27 "Regulatory Costs" means all regulatory and governmental fees and charges incurred by Company in connection with providing services under this Agreement, including, without limitation, Franchise Fees, Billing Fees, commercial oversight fees and landfill closure costs payable to City. 2.28 'Residential Property" means Single Family Residential Property and Multi - Family Residential Property. 2.29 "Single Family Residential Property" means any building or structure, connected structure or series of structures used for residential purposes, and consisting of less than three (3) distinct dwelling units, irrespective of whether the dwelling units are rental units or are owner -occupied. 2.30 "Solid Waste" means all putrescible and nonputrescible residential refuse, commercial solid waste, institutional solid waste, garbage, Green Waste, Food Waste and rubbish as defined in Public Resources Code Section 40191, including, without limitation, for the purposes of this Agreement Construction Debris, Demolition Debris, Recyclables, but excluding Hazardous Waste and Household Hazardous Waste. 2.31 "Source Separated" means Recyclables that are separated at the Residential, Commercial or Institutional Property where they are generated from Solid Waste and other Recyclables that are Collected separately, and which are saleable or acceptable for Processing without further sorting, including, but not limited to, Recyclables consisting of glass, paper, plastic, cardboard, tin cans and aluminum cans which are separated from all other Recyclables and Solid Waste, Green Waste which is separated from all other Recyclables and Solid Waste, and Food Waste which is separated from all other Recyclables and Solid Waste. 3. Term. Subject to earlier termination in accordance with the terms of this Agreement, the term of this Agreement shall commence on January 1, 2012 (the "Effective Date") and continue for a period of fifteen (15) years through December 31, 2026, provided that Company shall have one (1) option to extend this Agreement and the franchise granted hereunder on the terms and conditions herein for a period of five (5) years commencing January 1, 2027 and ending December 31, 2031. Notice of Company's exercise of such option must be given at least six (6) months prior to December 31, 2026. The option to extend hereunder may not be exercised unless Company is in material compliance with the terms of this Agreement at the time of exercise and on December 31, 2026. It is the parties' intention that, subject to prior termination hereunder or thereunder, the term of this Agreement be coextensive with the term of the Transfer Station Agreement between City and Solid Wastes Systems, Inc. ("SWS") of even date herewith (the "Transfer Station Agreement"). 4. Franchise Fee; Other Fees. Company shall be liable to City for a franchise fee equal to fifteen percent (15%) of the gross revenues collected by Company from Customers within the City limits during the term of this Agreement or such other percentage of such gross revenues as the City Council may establish from time to time. Within thirty (30) days after the end of each calendar month, Company shall send City a statement detailing gross revenue received by Company from Commercial and Institutional Customers, and from the Multi -Family Residential Customers that Company bills, for the prior calendar month, and City shall send Company a statement showing how City calculated the amounts withheld in accordance with this Section 4 and Section 6.6 below from its payment to Company for the prior calendar month. As soon as City's billing system permits it to generate the following statement, City will provide Company within thirty (30) days after the end of each calendar month with a statement detailing the amounts billed by City to the Residential Customers billed by City, the amounts collected by City from such Customers, the amounts paid to Company and all amounts withheld from such payments in accordance with this Section 4 and Section 6.6 below for the prior calendar month. In addition, each party shall maintain copies of all its billing and collection records for three (3) years following the date of billing for inspection and verification by the other party. Company shall also owe City a Billing Fee pursuant to Section 6.6 below, a commercial oversight fee of $10,000 per calendar year and a landfill closure cost of $60,000 per calendar year. The Franchise Fee, the Billing Fee, the oversight fee and the landfill closure fee shall all be paid by means of City's withholding such amounts from the payments City makes to Company in respect of the revenues City bills to Residential Customers in accordance with Section 6.6 below. The annual oversight and landfill closure fees will each be withheld at the rate of one -twelfth per month. Services. 5.1 Solid Waste. Company shall Collect and Dispose of all Solid Waste (other than Source Separated Recyclables, which are subject to Section 5.2 below, and Source Separated Green Waste and Food Waste, which are subject to Section 5.3 below) generated at every Single Family Residential Property within City once each week on a regularly scheduled day, and at 6 i every Multi -Family Residential, Commercial and Institutional Property within City upon a schedule established between Company and each Generating person (or the owner, landlord or property manager, in the case of Multi -Family Residential Properties), but at least once each week on a regularly scheduled day, in accordance with this Agreement. Solid Waste shall not be put out for Collection with Hazardous Waste or Household Hazardous Waste in the same Container. Company will not collect Solid Waste, including Recyclables, on New Year's Day, Memorial Day, July 4t', Labor Day, Thanksgiving Day or Christmas Day, and will make appropriate adjustments to its collection schedule in order to avoid an excessive accumulation of Solid Waste on such days. 5.2 Recyclables. On the same day as specified by Company under Section 5. 1, Company shall collect all Source Separated Recyclables (other than Green Waste and Food Waste) Generated at every Residential Property within City once each week on a regularly scheduled day in accordance with this Agreement. Company shall collect all Source Separated Recyclables (other than Green Waste and Food Waste) Generated at every Commercial and Institutional Property within City upon a schedule established between Company and each Generating person (or the owner, landlord or property manager, in the case of Multi -Family Residential Properties), but not less frequently than weekly. 5.3 Green Waste. On the same day as specified by Company under Section 5. 1, Company shall collect all Source Separated Green Waste Generated at every Residential Property within City once each week on a regularly scheduled day in accordance with this Agreement. Company shall collect all Source Separated Green Waste Generated at each electing Commercial and Institutional Property within City upon a schedule and at rates established between Company and each Generating person, but not less frequently than weekly. 5.4 Food Waste. Subject to Company's obtaining all necessary permits, and Company and City agreeing upon the specific terms of the program, including applicable Rates and methods of collection, Company shall commence a pilot Food Waste Collection program for Commercial and Institutional Properties as soon as possible but by no later than June 1, 2013. No later than six months after commencement of such pilot program, Company and City will develop the specific terms, including applicable Rates and methods of collection, for an ongoing Food Waste Collection programs for all Residential, Commercial and Institutional Properties, subject to Company's obtaining all necessary permits. In developing such a program Company , shall provide City with a list of any proven options, including, but not limited to, open air composting, in vessel composting and anaerobic digestion, information about potential Processing Facilities, and a comparative analysis of the methods of collection, feasibility, cost, impact on rates, and environmental benefits of each alternative. City may request additional information before approving a program. 5.5 Contaminated Materials. Company may refuse to collect Solid Waste, Recyclables, Green Waste or Food Waste Generated by, and shall not be obligated to continue to provide any Solid Waste, Recyclables, Green Waste or Food Waste Container to, any person who after reasonable warning, fails to sort Solid Waste, Recyclables, Green Waste or Food Waste properly, or fails or refuses to allow Company to Collect, on an exclusive basis, said 0 1 1 person's Solid Waste, Recyclables, Green Waste or Food Waste. Company shall make available to City any warning notices issued by Company for this purpose, and City shall investigate same to determine whether the person receiving the notice has violated the applicable ordinance. Company may alternatively assess a contamination charge in accordance with Exhibit E in such instances. 5.6 Changes; Missed Pick -Ups. Company shall not alter or adjust Collection services without providing prior notice to all service addresses, and any schedule modifications shall not result in reduced service frequency to any Customer. Company shall collect and remove Solid Waste and Recyclables from any premises "missed" or "skipped" during the regularly scheduled time, within one (1) working day after demand for collection is made by the Customer or City. 5.7 Containers -Single Family Residential. Company shall collect Solid Waste, Recyclables, Green Waste and Food Waste from Single Family Residential Properties in City in the following types of Containers: Solid Waste — 10, 20, 32, 64 or 96 gallons, Recyclables —32 (Billy Goat Run), 64 or 96 gallons, Green Waste — 32 (Billy Goat Run), 64 or 96 gallons, Food Waste — sizes proposed by Company and approved by the City Manager. Company has provided and distributed one set of Solid Waste, Recyclables and Green Waste Containers, at no cost in addition to the monthly rates, to each Single Family Residential Property in City, and will provide such a set to each new Single Family Residential Property in City after the Effective Date, and will provide a Food Waste Container of the approved size to each Single Family Residential Property upon commencement of the relevant Food Waste Collection program. Nothing in this section shall be deemed to preclude the use of bins or other Containers of a size and shape, which are compatible with approved rates, acceptable to and supplied by Company and, in the event City and Company shall institute new programs hereunder which require bins or other Containers of a particular size and shape, Customers on single unit Residential Properties shall use bins or other Containers supplied by Company meeting such requirements. 5.8 Containers- Multi -Family Residential, Commercial and Institutional. Company shall collect Solid Waste, Recyclables, Green Waste and Food Waste from Multi -Family Residential Properties, Commercial Properties and Institutional Properties in City in a size and shape suitable for each such location from the following capacities: 10, 20, 32, 64 or 96 gallon carts, two -yard, three -yard, four -yard and six-yard bins, and 15 -yard, 20 -yard and 30 -yard boxes. 5.9 Replacement or Addition of Containers. Company shall replace, at no charge to a Single Family Residential Generator but not more than once a calendar year, a Solid Waste, Recyclables, Green Waste or Food Waste Container that is stolen from the curb. If from time to time a Single Family Residential Generator may wish to have additional Containers, Company shall make additional Containers available for free and adjust the Generator's service rate. A replacement Container will be provided free to any Single Family Residential Generator returning the original Container for a Container of a different size, but not more than twice a calendar year. Company will maintain and repair Containers at its cost, and shall repair or replace damaged Containers, at Company's option, upon request of a Customer or City. The ownership of all Containers purchased by Company under this Agreement shall be and remain with Company. 5. 10 Personnel and Equipment. Company shall furnish sufficient personnel, labor and equipment required for the Collection, removal, handling, Processing and Disposal of all Solid Waste Generated within the corporate limits of the City in compliance with this Agreement and the City's applicable law or City policy. 5.11 Disposal and Processing Facilities. (a) Solid Waste. Company shall transport all Solid Waste collected by it in City to the transfer station operated by SWS and located at 3151 Taylor Drive, Ukiah, California (the "Transfer Station"). All of such Solid Waste that is not Recycled shall be hauled to a licensed disposal facility in accordance with the terms of the Transfer Station Agreement. The gate fee paid by Company to SWS for Solid Waste delivered to the Transfer Station shall be as determined under the Transfer Station Agreement. (b) Recyclables. Company shall transport all Source Separated Recyclables (other than Green Waste and Food Waste) Collected by it curbside from Residential Customers in City to the materials recovery and green waste facility operated by Pacific Recycling Solutions, Inc. ("PRS") and located at 4260 North State Street, Ukiah, California (the "PRS Facility") for Processing. Company shall transport all other Recyclables collected in City to the Transfer Station. Any residue from such Recyclables that cannot be Recycled shall be Disposed of in accordance with the Transfer Station Agreement if delivered to the Transfer Station, or at any Authorized Facility selected by PRS, if delivered to the PRS Facility. PRS shall pay Company the amounts determined under that certain Recyclable Materials Agreement between PRS and Company of even date with this Agreement attached hereto as Exhibit B for Recyclables delivered to PRS by Company (the "Recycling Agreement"). The amount, if any, paid by Company to SWS for Recyclables delivered to the Transfer Station shall be as determined under the Transfer Station Agreement. (c) Green and Food Waste. Company shall transport all Source Separated Green Waste and Food Waste collected by it in City to any or all of the following facilities: the Transfer Station, the PRS Facility or the Scotia biomass conversion facility (the "Scotia Facility") for Processing; provided, however, that, notwithstanding any other provision in this Agreement, Company shall arrange for delivery of an average of 400 tons per calendar month, subject to seasonal adjustments affecting the amount of Green Waste available, of Green Waste (including Green Waste generated in City), un -ground but presorted, to the CCC facility so long as (1) CCC is licensed to accept Green Waste from City, (2) CCC is in full compliance with its license, (3) CCC is the only licensed composting facility in Mendocino County that is licensed to accept and is capable of accepting the full range of inputs accepted by CCC as of April 1, 2008, (4) CCC charges not more than $32.00 per ton for the first 200 tons of such Green Waste in the aggregate delivered per calendar month ,(which may represent more than the actual Green Waste collected curbside in City by Company), and correspondingly CCC will accept, at no charge for any tons in excess of 200 delivered in such month (which represents Green Waste from sources other than City), and (5) CCC continues to accept sheet rock from Company, SWS and PRS at no charge; and, provided, further, that Company's obligation shall be deemed satisfied by Green Waste arranged to be delivered by SWS to the CCC facility pursuant to Section 4.5 of the Transfer Station Agreement. Any residue from the Green Waste generated in City that cannot be Processed shall be disposed of in accordance with the Transfer Station Agreement if delivered to the Transfer Station, or at any Authorized Facility selected by PRS, if delivered to the PRS Facility. The amount paid by Company to SWS for Green Waste delivered to the Transfer Station shall be as determined under the Transfer Station Agreement, and the amount paid by Company to PRS for Green Waste delivered to the PRS Facility shall be as determined under that certain Agreement for the Receipt of Green and Wood Waste between PRS, Company and SWS of even date with this Agreement and attached hereto as Exhibit C. (d) Alternate, Successor and Other Authorized Facilities. Company shall provide City with written notice as soon as Company knows that it will use a Processing Facility instead of or in addition to the PRS Facility, the Scotia Facility or CCC. The notice shall provide the name and location of the proposed Facility, the anticipated gate fee and other charges for Processing at that Facility, and a copy of the proposed contract between Company and such Facility. Company shall also provide City with any additional information about such Processing Facility reasonably requested by City. Company's use of the proposed Processing Facility shall be subject to approval by the City Council, which shall not be unreasonably withheld. In acting on a request for approval, the City shall consider, among other things, whether the use of that Facility is reasonably consistent with the Strategic Plan, as attached, or revised with approval of the City Council, available at a reasonable cost to the ratepayers considering the environmental benefits and the available alternatives, and otherwise qualifies as an Authorized Facility. The City Council may consider any other factor reasonably related to a legitimate City interest in its management of waste collection and disposal, including, but not limited to, alternative technologies and facilities, the impact on rates, past performance and regulatory compliance history of the Processing Facilities under consideration, factors affecting the facilities' future performance, and the public interest. In the event that the Transfer Station, the PRS Facility, the CCC facility, the Scotia Facility or any other Authorized Facility described above cannot accept Solid Waste, Recyclables, Green Waste, or Food Waste Generated in City on a temporary basis due to no fault of Company, or due to events beyond the control of Company, such as acts of God, public emergency, strike or lockout by employees of another entity unrelated to Company, Company shall locate and use an alternate licensed facility for the duration of such circumstance; provided, however, that City approval in accordance with this Section 5.11(d) shall be required if the Authorized Facility cannot accept Solid Waste for a period of time exceeding three (3) months. 5.12 Local Office. Company shall maintain an office in or in close proximity to the City, as approved by the City Manager, where service may be applied for and complaints made. The address and telephone number of such office shall regularly be included in Customer billings and service information distributed to the public. Company's office shall have a responsible individual available daily between the hours of seven -thirty o'clock a.m. and four o'clock p.m., excepting Saturday, Sunday and holidays. Calls for missed collections shall be received 24 hours per day, by answering machine after four o'clock p.m. and on Saturdays, Sundays and holidays. 10 5.13 Pick -Ups at City Facilities. Company shall provide Containers and remove, without charge, all Solid Waste, Source Separated Recyclables and Source Separated Green and Food Waste Generated at all City facilities, including from City street cans, (of the nature and in the amounts currently collected) at least once per week, but Company may charge all other public agencies for services rendered at the same rates and on the same basis as Commercial Customers are charged for similar services. Company shall also remove, without charge, all grit and screenings from City's wastewater plant as scheduled by Company and City 5.14 Outreach and Public Education. Company shall execute a public awareness campaign for recycling by Residential and Commercial Customers, which campaign will include an up to date Web Site that includes educational information, a business waste reduction program, a school Recycling program and a flyer in Company's billing statements (or posted on Company's website) not less than every six months. City shall provide Company with free space at all City -sponsored events to promote the campaign. Additional activities shall be available at additional cost by mutual agreement of the parties. Company shall also provide each new Customer with a packet of information regarding the curbside Recycling and Green Waste programs, and, if in effect, a Food Waste program, as well as information cards to be used in the event that a Customer places materials out for Recyclables, Green Waste or Food Waste collection that are not acceptable as set forth in this Agreement. Such card shall be left with the Customer's container or bin and shall inform the Customer why the materials were not picked UP. 5.15 Fall Leaf Collection. Company shall provide all Customers with reasonable leaf collection without charge during the week after Thanksgiving each year in Containers and/or bags approved or provided by Company. City shall prepare and pay for an insert in all Customer billing advertising this service. 5.16 Sig Clean -0 Week. Company shall provide all Customers with reasonable Green Waste collection without charge during the third week of April each year, including the collection of tree branches not to exceed six (6) inches in diameter or four (4) feet in length. 5.17 Additional Services. Company shall provide additional services upon request of City, or upon the proposal of Company as approved by City pursuant to Section 5.19 below, subject, if the costs incurred by Company to provide such services increase, to the establishment by mutual written agreement of a reasonable service Rate therefor. 5.18 Permits and Licenses. Company shall obtain and maintain throughout the term of this Agreement all permits, licenses and approvals necessary or required for Company to perform the work and services described herein. City shall reasonably cooperate with Company in connection with obtaining or renewing such permits, licenses and approvals. 5.19 Diversion Requirements. In an effort to assure City's continuing compliance with the current and any future diversion requirements set forth in the California Integrated Waste Management Act of 1989, as amended ("AB 939"), Company shall propose and City may 11 require Company to adopt and implement various recycling, Solid Waste reduction, public education and reporting programs for City and its residents, subject to City taking all actions necessary to implement such programs and approving reasonable service rate increases needed, if any, in connection therewith. 6. Rates. 6.1 Establishment of Rates. The service rates specified in Exhibit E to this Agreement (the "Rates") shall take effect on the Effective Date, subject to approval by the City Council and compliance with the notice and hearing requirements in Article XIII.D of the California Constitution and Government Code Sections 53750 et seq. (collectively, "Proposition 218"). Such Rates shall be adjusted pursuant to Sections 6.2, 6.3, 6.4 and 6.5 below, subject to compliance with the notice and public hearing requirements of Proposition 218 as provided in such Sections. The parties' agreement to subject the Rates and certain adjustments thereto to the notice and public hearing requirements of Proposition 218 is precautionary only and shall not be deemed an admission that Proposition 218 applies to the Rates or such adjustments. Company shall not charge any amount in excess of the approved Rates for services required by or permitted under this Agreement. 6.2 Modification Based on Consumer Price Index Fuel Index Recycling Reduction and Certain Pass -Through Costs. (a) Adjustment Calculation. Each Rate shall be adjusted January 1st every year, beginning January 1, 2013 ("Rate Adjustment Date") to reflect changes in the CPI, the Fuel Index, the amount paid to Company by PRS for Recyclables and certain Pass -Through Costs by a percentage determined in accordance with the Curbside Rate Calculation attached hereto as Exhibit C (the "Calculation"). (b) Definitions. For purposes of Rate adjustments pursuant to this Section 6.2 and the Calculation, the following terms shall have the following meanings. (i) "Base Fuel Costs" means Company's actual costs for diesel and other fuels used in performing services under this Agreement for the year ended December 31, 2010 or $200,641.15. (ii) "Base Revenue" means Company's total revenue received from Customers during the Comparison Year. (iii) "Base Year" means the year ended June 30th one year prior to June 30th of the Comparison Year. (iv) "Comparison Year" means the year ended June 30th immediately prior to the relevant Rate Adjustment Date. (v) "Commercial Oversight Fees" means the total amount of commercial oversight fees, including any fees or charges adopted to replace or supplement such fees, paid by Company to City in accordance with Section 4 and 6.6 during the Comparison Year. (vi) "CPI" means the Consumer Price Index, All Urban Consumers, U.S. City Average, All Items (1982-1984=100), published by the United States Department of Labor, Bureau of Labor Statistics. (vii) "Disposal Fees — Garbage" means the actual Disposal Costs paid by 12 Company to SWS for Solid Waste delivered by Company to the Transfer Station during the Comparison Year. (viii) "Disposal Fees — Green Waste" means the actual Processing Costs paid by Company to CCC, PRS or any other Authorized Facility for Green Waste delivered by Company to the CCC facility, the PRS Facility or such Authorized Facility, respectively, during the Comparison Year. (ix) "Fuel Costs" means Company's actual costs for diesel and other fuels used in performing services under this Agreement during the Comparison Year. (x) "Fuel Index" means the California No.2 Diesel Retail Sales by all Sellers (Dollars Per Gallon) published by the U. S. Energy Information Administration. (xi) "Landfill Closure Costs" means the total amount of landfill closure fees, including any fees or charges adopted to replace or supplement such fees, paid by Company to City in accordance with Section 4 and 6.6 during the Comparison Year. (xii) "Recycle Credit" means the product of (A) the average monthly weighted average price (AMWAP) per ton PRS is required to pay to Company under the Recycling Agreement for Source Separated Recyclables collected by Company curbside from Residential Customers during the Comparison Year, but not less than $5.00, times (B) the total tons of such Recyclables so delivered by Company to PRS and accepted by PRS during the Comparison Year; provided, however, that if the amount of Recyclables rejected by PRS under Section 2 of the Recycling Agreement averages over any consecutive six month period more than 5% of the total Recyclables delivered to PRS ("the Acceptable Rejection Rate"), the credit shall include AMWAP, but not less than $5.00, times the tons of Recyclables rejected by PRS for that same six month period in excess of the Acceptable Rejection Rate. (xiii) "Total Costs" means all of Company's costs to provide Collection services under this Agreement, including, without limitation, labor costs, vehicle and vehicle - related costs, maintenance, insurance, and transportation costs, Fuel Costs and Pass -Through Costs. (c) Rules. For purposes of Rate adjustments pursuant to this Section 6.2 and the Calculation, the following rules shall apply. (i) "CPI Change" shall be calculated as one hundred percent (100%) of the percentage increase or decrease, if any, in the CPI during the Comparison Year, using the CPI published for June of such Year as compared with the CPI published for June of the Base Year. (ii) "Fuel Index Change" shall be calculated as one hundred percent (100%) of the percentage increase or decrease, if any, in the Fuel Index from June of the Base Year through June of the Comparison Year; provided, however, that, notwithstanding Section 6.2(b)(iii) above, "Base Year" for purposes of the Fuel Index Change shall mean the year ended June 30, 2010; and, provided, further, that the Fuel Index Change adjustment (i.e., Fuel Index Change multiplied by Base Fuel Cost) for any Rate Adjustment Date shall be calculated after removal of such adjustment for the prior Rate Adjustment Date. (iii) Each adjustment element in the first part of the Calculation will be grossed up for the corresponding increase or decrease in Franchise Fees and Billing Fees (where applicable) resulting from such adjustment, other than the CPI adjustment. (iv) Rate adjustments for changes in Commercial Oversight Fees or 13 Landfill Closure Costs that take effect on a date other than January 1St, as well as changes in other Pass -Through Costs, will be determined under Section 6.3 below and not under this Section 6.2. (d) Procedure. The procedure for Rate adjustments under this Section 6.2 shall be as follows: (i) Not later than August 15th of each year, Company shall file with the City Manager a written notice of intention to adjust each of the then current Rates effective as of January 1 st of the next year in accordance with Section 6.2(a) through (c) above. (ii) Within sixty (60) days of the filing of the notice of intention, the City Manager shall review the notice and either confirm that the proposed Rates are within the limit of Section 6.2(a) though (c) above or establish by mutual agreement with Company any necessary changes to the proposed Rates to make such confirmation. (iii) Not later than October 20th, the City Manager shall inform the City Council in writing of his or her determination regarding the proposed new Rates and the City Council shall be entitled to review and confirm that the proposed Rates are within the limit of Section 6.2 above or establish by mutual agreement with Company any necessary changes to the proposed Rates to make such confirmation, not later than November 20th. Any new Rates shall become effective on the following January 1St, provided that the Company and the City shall give the respective Customers that each bills written notice of the new Rates not later than December 1 st. (iv) In the event that the CPI or the Fuel Index described in Section 6.2(b) above shall be discontinued or materially modified during the term of this Agreement, the parties shall together select a replacement index and/or otherwise change Section 6.2(b) above so as to replicate, as nearly as possible, the mutual intention of the parties to rely on the results of the relevant index described in Section 6.2(b) as in effect on the date hereof. 6.3 Modification Based on Changes in Pass -Through Costs. In addition to adjustments under Section 6.2 above, each Rate shall be adjusted to reflect changes in Pass - Through Costs that are not the subject of Rate adjustments pursuant to Section 6.2 above, as follows. Using the section of the Calculation entitled "Revenue Base," each Rate shall be increased by an amount equal to the increase in applicable Pass -Through Costs, and decreased by an amount equal to the decrease in applicable Pass -Through Costs, in each case so as to cause all the Rates to compensate for such change in Pass -Through Costs as of the date such change becomes effective and either payable by or a benefit to Company, and taking into account the increase or decrease in Franchise Fees and/or Billing Fees payable in respect of such change. 6.4 Five Year Review. Once every five (5) years (beginning no later than April 2, 2016 for purposes of adjusting the Rates effective January 1, 2017), City shall conduct a review for the purpose of determining whether or not the automatic adjustments provided in Sections 6.2 and 6.5 have adequately adjusted the rates to cover the actual increase or decrease in the Company's reasonable operating costs or have exceeded those costs and whether the Rates remain fair to the ratepayer and the Company. Depending on the results of that review the City may increase or decrease the rates. City shall complete each such review and adjustment, if any, at least three months (3) prior to the beginning of such year (by September 30, 2016 in the case 14 of the first such review), and Company shall cooperate with such review. In conducting each such review, City shall consider the following information: financial records of Company (including operating expenses and revenues and Disposal, Processing, Regulatory and other costs of Company, and Company revenues), the factors described in Section 6.5 below, and rates charged for comparable services in similar communities. Increases or decreases in the Rates pursuant to this Section 6.4 shall be subject to the notice and public hearing requirements of Proposition 218. The City may conduct such investigation as it deems necessary to perform this review and Company shall cooperate with such investigation, which may include the City's inspection and copying of Company records and Review and/or Audit of Company's financial records by a City retained CPA, the costs of which shall be reimbursed to City from Base Revenue but treated as a pass-through cost for rate setting purposes. 6.5 Modification Based on Extraordinary Items. In addition to adjustments under Sections 6.2, 6.3 and 6.4 above, Company may request an increase in the Rates if Company's costs increase or its revenues decrease solely as the result of extraordinary circumstances beyond its control that could not have been reasonably anticipated by Company (such as a Change in Law) and if the increase in costs or decrease in revenues unavoidably adversely affects Company's opportunity to operate at a reasonable profit. Company shall have the burden of producing evidence satisfactory to City demonstrating its need for a rate increase prior to the regular Five Year Review pursuant to Section 6.4 above, including, but not limited to, reviewed or audited financial statements of Company, if requested by City. The City Council shall consider the request in good faith. Any such increase shall only be approved through the notice and hearing requirements in Proposition 218. 6.6 Billing. Company shall bill directly for all Solid Waste, Recyclables and Green and Food Waste Collection services provided herein to all Commercial and Institutional Customers, and to those Multi -Family Residential Customers assigned by City to Company for billing. Company and City shall regularly exchange billing lists to avoid double billing and to insure that Company is following the City's direction regarding its direct billing of Multi -Family Residential Customers. City shall bill all Residential Customers (except those currently billed by Company as approved by City) for all Solid Waste, Recyclables and Green and Food Waste Collection services hereunder. Each Commercial or Institutional Customer will be billed for one (1) month of service in advance upon commencement of service, and thereafter for one (1) month of service in arrears. Interest of one percent (19/6) per month or the highest rate permitted under applicable law, whichever is less, shall be applied to any past due amounts from all Customers until paid in full. Amounts shall be past due if not paid within thirty (30) days of billing. Company shall have the right to refuse service to any Customer that is more than sixty (60) day's delinquent on his, her or its account; provided, however, that if the City is forced to take enforcement action against a Customer who has been refused service, Company shall pay the City's costs to take such enforcement action as is necessary to protect public health and safety. Company shall pay City three percent (3%) of the amount billed by City to Residential Customers as a billing fee. City shall pay to Company all amounts billed to Residential Customers, less Billing Fees, Franchise Fees, commercial oversight fees and landfill closure costs (in accordance with Section 4 above), and a delinquency allowance equal to one-half 15 r � � percent (0.5%) of such billings, monthly within thirty (30) days of the end of the calendar month for which the Residential Customers are billed. When permitted by the City's accounting software, the City will reconcile the amount held by City as a delinquency allowance at the end of each calendar quarter and shall pay Company, within thirty (30) days after the end of such quarter, the portion of such amount that exceeds the actual delinquent billings for such quarter. 6.7 Proposition 218. Notwithstanding any other provision in this Agreement, in the event that the Rates or any modifications thereof are invalidated by a final non -appealable judgment in a court action challenging them as in violation of Proposition 218, and Company's operating costs exceed its revenue for a continuous period of six months since the date of the last Rate adjustment, Company shall have the right, exercisable by written notice to City within ninety (90) days after the entry of such judgment, to terminate this Agreement effective One Hundred Twenty (120) days after City's receipt of such notice. 7. Provisions Applicable to Equipment and Personnel. 7.1 Company shall use in connection with transportation of Solid Waste modern motor dump trucks with water tight bodies, sufficient in number and capacity to efficiently perform the work required by this Agreement and to comply with all applicable legal requirements. Company shall keep the outside of the truck bodies free from dirt and filth, and shall clean the inside of the trucks in a sanitary manner on a regular basis. Suitable measures shall be taken to prevent refuse from falling into public streets or places. Company shall keep all trucks freshly painted in a uniform manner, and the firm name or logo, telephone number, and truck number of each truck shall appear in a conspicuous manner. Company shall keep all trucks in good maintenance and repair, regularly inspect same, keep accurate records of all vehicle maintenance, and replace as needed. 7.2 Company shall not litter premises in the process of making collections nor allow refuse to blow or fall from any vehicle used for collections. Company shall clean up any and all spills, including oil and debris on the streets, resulting from its operations. Should Company fail to promptly clean up such spills resulting from its operations after notice from City, Company shall be liable to City for all reasonable costs incurred by City in doing so. 7.3 Company shall provide suitable operational, and safety training for all of its employees who utilize or operate vehicles or equipment for Collection of Solid Waste or who are otherwise directly involved in such Collection. Company shall use its best efforts to assure that all employees present a neat appearance, conduct themselves in a courteous manner, and perform the work as quietly as possible. Company shall also designate one or more qualified employees as supervisors of field operations, who will devote a substantial portion of their time in field checking Collection operations, including responding to complaints. 7.4 City officials shall at all times have access on 24 hours' prior written notice to inspect Company's work during operations and Company's facilities for purposes of ascertaining full knowledge respecting the conduct of Company's operations. 16 8. Records and Reports. 8.1 Company shall keep and maintain accurate books and records in accordance with the most recently adopted Accounting Standards Codification of generally accepted accounting principles by the Financial Accounting Standards Board clearly showing its revenues and expenses in connection with the operations provided for in this Agreement. Company shall maintain records accounting by category for the tonnage of Solid Waste, Green Waste, Food Waste and Source Separated Recyclables Collected pursuant to this Agreement on a monthly, quarterly and annual basis. 8.2 Every three (3) months after the Effective Date through the date which applies for purposes of measuring compliance with the diversion requirements of AB 939, Company shall supply City with a written report setting forth Company's best estimate of the diversion rate as of the end of the most recent month. Company shall also supply City with such related information as City may reasonably request and as Company possesses or is required by this Agreement to possess concerning such estimate. 8.3 Every three (3) months after the Effective Date, Company shall provide City with a written financial report on the amounts billed by Company to each Multi -Family Residential, Commercial and Institutional Customer and the amounts paid by such Customer. 8.4 Not later than March 31 each year, or when otherwise requested by City, Company shall provide City with a complete customer list for all Customers with the service type, billing rate, and name and address of each Customer. 9. Hold Harmless and Insurance. 9.1 Company shall indemnify and hold harmless City, its City Council, boards, commissions, officers, agents, representatives and employees from any and all actions, claims or damages brought for or on account of injuries to or death of any person or damage to property of all kinds resulting from or arising out of the operations of Company, its officers, agents, employees or servants pursuant to this Agreement. The duty of Company to indemnify and hold harmless shall include the duty to defend as set forth in California Civil Code Section 2778. 9.2 Company shall have in effect during the term of this Agreement, workers' compensation and employer liability insurance providing full statutory coverage. 9.3 Company shall take out and maintain during the term of this Agreement liability insurance for the following types and minimum amounts: (a) General liability, including comprehensive form, premises operations, products/completed operations, hazard, contractual insurance, broad form property damage, independent contractors and personal liability, with limits for bodily and property damage combined of $500,000 each occurrence and $500,000 aggregate. 17 (b) Automobile liability, including comprehensive form, owned, hired and non - owned, with a limit of $1,000,000 for bodily injury and property damage combined. (c) Excess liability, umbrella form with the same scope of coverage and exclusions as the underlying policies, with a limit for bodily injury and property damage combined of $5,000,000 each occurrence and $5,000,000 aggregate. (d) Pollution and remediation liability with limits in an amount of not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) annual aggregate insuring against loss, the cost of remediation and legal defense as a result of pollution conditions arising out of the collision, upset or overturn of Company vehicles in conjunction with this Agreement. Insurance certificates and policy endorsements evidencing the required coverage shall be filed with City and shall be subject to approval by the City Attorney. City, its City Council, boards, commissions, officers, agents and employees shall be named as additional insureds on any such policies of insurance which shall also contain a provision that the insurance afforded thereby shall be primary. No such policy shall be cancelled or modified except upon thirty (30) days' prior written notice to City. Insurance is to be placed with admitted California insurers with an A.M. Best's rating of no less than A- for financial strength, AA for long-term credit rating and AMB -1 for short-term credit rating. 9.4 Company shall post a $300,000 performance bond or financial instrument reasonably acceptable to the City Manager as security for Company's faithful performance of each and every term, covenant and condition of this Agreement to be performed by Company, provided that the cost of such bond or other instrument shall be included in Company's Collection Costs for rate making purposes. 10. Remedies upon Default. 10.1 Company shall be deemed in default in the event Company defaults in the performance of any of the duties to be performed by it under the terms of this Agreement and fails to cure the default as further provided in this Section 10.1. City shall give Company written notice, either by mail or by personal service, setting forth the default. Company shall correct such default within thirty (30) days after receipt of such notice (within seven (7) days if City determines that the public health or safety is at risk) unless the default cannot, by its nature, be cured within said period, in which case the cure period shall be extended for such additional time as is reasonably necessary to effect a cure, provided that Company shall commence efforts to effect a cure as soon as practicable and shall diligently pursue the cure to completion. 10.2 In the event Company's default described in Section 10.1 is of a material provision of this Agreement and is not cured as set forth in Section 10.1 or if Company has committed Multiple Breaches (defined to mean three or more defaults of material provisions of this Agreement within an eighteen (18) month period, whether cured or not) ("Material Default") City shall have the following remedies: 18 10.2.1 Liquidated Damages. The parties acknowledge that City will incur damages as a result of a Material Default, and that such Material Default may not warrant termination of this Agreement. The parties agree that as of the time of the execution of this Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages which shall be incurred by City as a result of a Material Default. The factors relating to the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) substantial damage results to members of the public who are denied services or denied quality or reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the benefits of the Agreement to individual members of the general public for whose benefit this Agreement exists, in subjective ways and in varying degrees of intensity which are incapable of measurement in precise monetary terms; (iii) that exclusive services might be available at substantially lower costs than alternative services and the monetary loss resulting from denial of services or denial of quality or reliable services is impossible to calculate in precise monetary terms; and (iv) the termination of this Agreement for such breaches, and other remedies are, at best, a means of future correction and not remedies which make the public whole for past breaches. Liquidated damages shall be the City's exclusive damages remedy for any individual Material Default which does not result in termination of this Agreement by City. The amount of liquidated damages is $1,000 for each day the Material Default continues after Company fails to cure until it is either cured or the City terminates this Agreement_ 10.2.2 Franchise Termination. Without further notice and without suit or other proceedings, City may cancel and annul the rights and privileges of this Agreement upon a Material Default. In the event of termination of this Agreement for Material Default, City shall have the right forthwith to grant a franchise to another scavenger service or to take possession of trucks and other equipment of Company used to perform work under this Agreement. City shall have the right to retain possession of the trucks and equipment until other suitable trucks and equipment can be purchased or otherwise acquired by City for the purpose and City shall pay Company the reasonable rental value of such trucks and equipment, and keep them in good maintenance and repair, during the time the same are used by City. City shall also have access to Company's records for the purpose of billing service accounts during the period City is providing the services described in this Agreement, and shall retain all fees collected for such services. 10.2.3 Other Remedies. Upon termination of this Agreement based on a Material Default, City shall have all other remedies in law or equity for such Material Default. 10.3 If a dispute arises between City and Company regarding fees or any other term or provision of this Agreement, the parties agree to meet and confer in good faith to resolve the dispute. Either party may request to meet and confer by written notice to the other party. Alternatively, the parties may agree to participate in non-binding mediation. If the dispute is not resolved within thirty (30) days after the written request to meet and confer has been given or after the parties have agreed to non-binding mediation, the matter, other than an action seeking specific performance or other equitable relief, damages of Twenty Five Thousand Dollars ($25,000) or less, or indemnification or insurance coverage pursuant to Section 9, shall be submitted to non-binding arbitration in accordance with Title 9 of the California Code of Civil 19 4 Procedure, commencing with Section 1280, before a single neutral arbitrator ("Arbitrator") in Mendocino County. The Arbitrator shall be an attorney with at least ten (10) years' experience or a retired judge (or a person having comparable qualifications) and shall be mutually agreed upon by the parties. If the parties are unable to agree on an Arbitrator, the Arbitrator shall be appointed by the superior court in accordance with Cal. Code Civ. Proc. § 1281.6. The fees and expenses of the Arbitrator shall be borne equally by the parties. In the event such non-binding arbitration does not resolve the matter and in any other dispute that results in any court action, the parties waive any right to a jury trial and agree that any such action shall be fled in the federal or state courts in or for Mendocino County, each party hereby consents to the jurisdiction of and venue in such courts, the matter shall be governed by the internal laws of the State of California (irrespective of choice of law principles), and the prevailing party shall be entitled to recover its reasonable attorneys' fees, costs and disbursements incurred in such action from the non -prevailing party. 10.4 If Company shall at any time during the term of this Agreement or any extension thereof, become insolvent, or if proceedings in bankruptcy shall be instituted by or against Company, or if Company shall be adjudged bankrupt or insolvent by any Court, or if a receiver or trustee in bankruptcy or a receiver of any property by Company shall be appointed in any suit or proceeding brought by or against Company, or if Company shall make an assignment for the benefit of creditors, then and in each and every such case, and provided that such proceedings, adjudication, appointment or assignment, as the case may be, continue in effect for ninety (90) days without being vacated, removed or withdrawn, this Agreement shall immediately cease and come to an end, and the rights and privileges granted shall immediately be cancelled and annulled without notice or action required on behalf of City. 10.5 Notwithstanding any other provision herein, no default, delay or failure to perform on the part of either party shall be considered a breach hereunder if such default, delay or failure to perform is due to causes beyond such party's control, including, but not limited to, riots, civil disturbances, actions or inactions of governmental authorities, epidemic, war, embargoes, severe weather, fire, earthquake, acts of God, defaults by the other party or defaults by carriers. In the event of any such default, delay or failure to perform, any dates or times by which the affected party otherwise is scheduled to perform shall be extended for a period of time equal in duration to the additional time required because of the excused default, delay or failure to perform. 11. Assignment. Company shall not directly or indirectly, voluntarily or involuntarily assign, mortgage, pledge or encumber any interest in all or a part of this Agreement without the prior written consent of City. The City Council shall have the right to determine in its sole discretion whether to approve, conditionally approve or deny any request by Company for approval under this Section. Any action requiring City Council approval under this Section that occurs without such approval shall give City the right to terminate this Agreement without prior notice to Company or its successors or assigns. For purposes of this Section, any transaction involving the transfer, sale or exchange of stock which results in a change in majority control of Company 20 from its owners as of the date hereof (excluding transfers between such owners and transfers by any such owners to revocable living trusts for the benefit of their families) shall be an assignment subject to City review and approval. 12. Waiver. The waiver by either party of any breach or violation of any term or condition of this Agreement or of any provision of law by the other party must be in writing signed by the party to be charged, and shall not be deemed to be a waiver of the term, condition or provision of law, or of any subsequent breach or violation of the same or any other term, condition or provision of law. The acceptance by City of any franchise fee or other fee or other monies which may become due hereunder to City shall not be deemed to be a waiver of any preceding breach or violation by Company. 13. Administration. The administration and enforcement of this Agreement shall be the responsibility of the City Manager or a designated representative of that office. This section is not intended to indicate or suggest the City Manager has the authority to grant, amend, or revoke the franchise referenced herein. Nothing contained in this Agreement shall prohibit the City Manager from seeking approval from the City Council for any decision the City Manager is authorized to make under the terms of this Agreement. 14. Independent Contractor. Company, its employees and agents, are independent contractors and not employees or agents of City. 15. Notices. Whenever a notice or document is required or permitted to be served or given hereunder, it shall be deemed given or served when received if delivered by fax or email (with acknowledgment of receipt), certified U.S. Mail, overnight courier (such as UPS or Federal Express), or 48 hours after deposit in the U.S. Mail with first class postage affixed. Any such document or notice shall be addressed as follows: City: City Manager Ukiah Civic Center 300 Seminary Avenue Ukiah, California 95482 FAX: Email: Company: Ukiah Waste Solutions, Inc. Attn: David M. Carroll, President P. O. Box 60 Ukiah, California 95482 FAX: Email: or to such other person or address as may be specified from time to time in writing by either party in accordance with this Section. 21 16. Amendments. This Agreement may be amended from time to time only by written agreement between the parties signed by an authorized representative of each party. Either party may at any time request that the service or other provisions in this Agreement be modified by delivering written notice of its requested modifications to the other party. Within thirty (30) days after receipt of any such request, the parties shall meet and negotiate in good faith on adopting such requested modifications, including, without limitation, any change to the Rates necessitated by such modifications, provided that nothing herein shall obligate either party to agree on any such requested modifications. 17. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the permitted successors and assigns of the parties. 18. Integration; Severability. This Agreement, including the Exhibits hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements between the parties, whether written or oral, relating to such subject matter, including the Prior Agreement. If a court finds any provision of this Agreement invalid or unenforceable as applied to any circumstance, the remainder of this Agreement and the application of such provision to other persons or circumstances shall remain in effect. The parties further agree to replace such void or unenforceable provision with a valid and enforceable provision which will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. Ukiah Waste Solutions, Inc. President City of Ukiah By: ty Manager ATTEST: -�c- Oty Clerk 22 APPROVED AS TO FORM: c CitykAltol<ey 23 EXHIBIT A WASTE MANAGEMENT STRATEGIC PLAN 24 The Next Generation of Waste Management in Mendocino and Lake Counties �AjE�ti3 Strategic Waste Management Plan b�0 V^ f K h J 5482 C4LIF09' � U, Plan Overview The Plan is described in the following sections: Section 1. Executive summary and plan overview Section 2. Proposed new programs and activities Section 3. Benefits of plan implementation Objectives of the Plan Our objectives in developing this Plan include: Minimizing landfilling of collected municipal solid waste (MSW) Maximizing energy and resource recovery Reducing greenhouse gas production Creatingjobs Being practical and affordable Allowing phased implementation as projects and programs become viable 9/28/2011 Introduction & Purpose of the Plan This plan presents our concepts for next generation solid waste management programs that are locally appropriate These new programs supplement, not replace, our existing recycling programs o C&S will investigate each program fully and report back Programs requiring a rate increase would require approval of the jurisdiction(s) Some may turn out to be feasible, others not Section 1. Executive Summary and Plan Overview This Plan outlines a long-term, comprehensive, solid waste management strategy It addresses all aspects of the municipal solid waste stream It offers innovative systems and processes to recover and manage those materials and identifies the benefits from doing so It also identifies and provides new solid waste management services for the communities served by C&S Elements of the Plan The plan includes the following new programs: 1 . Food waste collection and conversion 2. New Resource Recovery Facility to process MSW from Ukiah Valley and Lake County/Clearlake 3. Localized landfill disposal 4. Waste to energy These programs supplement, not replace our existing diversion programs Some may be feasible, others not They could be implemented on a phased basis, and not necessarily in this order 6 1 Benefits of the Plan i, The new programs have the potential to: Divert MSW - over 90% of the area's MSW (40,000 tons) could be diverted from landfill each year Produce Green Energy- 2,500 Kilowatts of clean, renewable energy -enough to power over 3,600 homes Provide jobs - over 80 temporary and 25 on-going new "green"jobs Eliminate Greenhouse Gas - Remove approximately 65,000 tons per year of greenhouse gases, equivalent to taking 13,000 cars off the road or planting 14,000 acres of pine forest annually a Program #1 -Food Waste Collection and Conversion _ Food waste is the largest component of ,-" our waste stream (1 S to 22%) - . Approximately 75% of food waste is from " commercial sources (restaurants, " commercial kitchens) " Initial activities include: Food Waste Conversion System Feasibility Study @ • In -vessel aerobic composting pilot program,`w / and • Anaerobic digestion/fuel cell project = Demonstration food waste collection program \ 4 Implement full-scale collection and diversion programs based on results ,.•� a, IVA 9 Food Waste Option B: Anaerobic Digestion and Fuel Cell Power Food Waste, fats, oils, grease and other organic materials can produce Biogas Fuel Fuel cells provide 50% more power from the same amount of fuel in a conventional power plant No pollution emissions Project could be stand-alone or consolidated with wastewater treatment bio -solids digestion Significant grant funding available to offset costs 9/28/2011 Section 2. Proposed New Programs I . Food waste collection and conversion 2. New Resource Recovery Facility to process MSW from Ukiah Valley and Lake County/Clearlake 3. Localizing landfill disposal 4. MSW energy conversion Food Waste Option A: In -Vessel Aerobic Composting Leading edge technology Fully contained system that minimizes odor, air, and water quality issues , Produces a high quality compost Possible to start small and increase capacity in a modular fashion Feed stocks include food waste, green waste and other locally available organic materials _ !� • Program #2- Resource Recovery Facility (RRF) Program . Construct and operate Resource Recovery Facility i, Consolidate Ukiah Valley and Lake County/Clearlake waste i, Locate at C&S's transfer station in Lakeport Recovered recyclable materials shipped to Pacific Recycling Solution's facility in Ukiah for processing and shipment to markets F Post-RRF residue would be landfilled Eastlake Ukiah (if reopened)I �� ,z 2 Implementing the RRF could reduce landfilling by an additional 20 to 30% Program #3- Localization of Landfilling -Ukiah Landfill Investigate reopening Ukiah landfill Different use options would be considered Inerts only Control inbound volumes to significantly extend landfill life Post-RRF residues All Ukiah area waste Lake County MSW to preserve Eastlake capacity Program #4- Waste to Energy (WTE) MSW remaining after food waste and RRF programs are in place still has significant energy value C&S will investigate feasibility of converting this remaining MSW into energy Recycling, composting, and digestion/fuel cell programs would remain in place Will consider the following state of the art technologies: Anaerobic Digestion Pyrolysis Gasification Siting in Lake County or Ukiah would be considered Project could supply green power to Ukiah or others k Implement WTE when/if feasible 17 9/28/2011 Program #3- Localization of Landfilling -Eastlake Landfill Continue using for all Lake County MSW Add Ukiah MSW on a multi-year contract Provides significant funding for Lake County at no additional cost to Ukiah customers Provides long term disposal for Ukiah, with flexibility to incorporate future opportunities Program #3- Localization of Landfilling -Ukiah Landfill Non-processible wastes from the Ukiah Transfer Station saves hauling to a distant site Some post-RRF residue could also be delivered Advantages: Postpone closure 20+ years to avoid short-term financial challenge. Reduces cost of transportation Lowers greenhouse gas emissions Provides local jobs By phasing in Waste to Energy, C&S could reduce landfilling well beyond existing programs 3 Why Consider Waste to Energy? Y Vendors eager to supply demonstration plants to prove their technology They will provide financing and operations t Subsidies and grants available to offset capital costs All diversion programs (recycling, composting, etc) will remain in place 75 to 99% additional reduction of landfill disposal o Source of reliable, base load renewable energy near population centers and industrial loads Reduced greenhouse gas and other emissions r Very low emissions if properly designed and operated �It 19 Annual Diversion From Plan Elements TPY -tons per year Green Energy Production The food waste digestion/fuel cell project could produce approximately 300 kilowatts Enough to power over 400 homes F The waste to energy project could provide approximately 2,200 kilowatts Enough to power about 3,200 homes Section 3. Benefits of the Plan Implementation of these four (4) programs would: Provide greater MSW Diversion from landfill Localize all activities -no more reliance on distant landfills owned by others Allow C&S and its local government partners to determine the timing and location of all activities Extend landfill life Create new local jobs Provide clean, renewable energy Recover additional recyclable materials Reduce greenhouse gas emissions Enhance AB 939 and AB 32 Compliance w/ The Plan Creates New Jobs I -1 A. Food_.Waste-Compost 5 '1 Current Amount Landfilled '44,400 TPY 1. Food Waste 2,700TPY 6% 2. Resource Recovery 13,300 TPY: 30%. Facility 50 20 3. Localizing Landfilling Not Applicable Not Applicable 4. Waste to Energy :25.600 TPY' Total amount Diverted 41,600 TPY 94% Total amount Landfilled ':.2,800TPY :: :6% TPY -tons per year Green Energy Production The food waste digestion/fuel cell project could produce approximately 300 kilowatts Enough to power over 400 homes F The waste to energy project could provide approximately 2,200 kilowatts Enough to power about 3,200 homes Section 3. Benefits of the Plan Implementation of these four (4) programs would: Provide greater MSW Diversion from landfill Localize all activities -no more reliance on distant landfills owned by others Allow C&S and its local government partners to determine the timing and location of all activities Extend landfill life Create new local jobs Provide clean, renewable energy Recover additional recyclable materials Reduce greenhouse gas emissions Enhance AB 939 and AB 32 Compliance w/ The Plan Creates New Jobs I -1 A. Food_.Waste-Compost 5 '1 1B. Food Waste-AD/FC 2. Resource Recovery Facility is 6 3. Landfill Localization.: 4. Waste to Energy 50 20 Tota(-: 86 29's 9/28/2011 22 The Plan Reduces Greenhouse Gas (GHG) and Helps Meet AB32 Requirements �� e 'i I Food Waste Compost 8,000 1,600 ' 1700 18. Food Waste WD/FC) 8,600 1,700 1:800 2. Resource Recovery 20,200 4,000 4,300 Facility 3. Landfill Localization 400 100 100 4. Waste to Energy 36.200 7.200 7,700 :Total 64,800 to '12,900 to 13.,800to 65,400tons/yr 13,000cars . 13,900acres/yr. 4 EXHIBIT B RECYCLABLE MATERIALS AGREEMENT EXHIBIT B RECYCLABLE MATERIALS AGREEMENT THIS RECYCLABLE MATERIALS AGREEMENT (the "Agreement") is entered into as of DeC, (jL 2011 by and between Pacific Recycling Solutions, Inc. ("Buyer") and Ukiah Waste Solutions, Inc. ("Seller"). Seller and Buyer shall collectively be referred to herein as the "Parties." WHEREAS, Seller is in the business of collecting and transporting solid waste and recyclable materials; and WHEREAS, Buyer wishes to purchase and Seller wishes to sell recyclable materials collected by Seller. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, Seller and Buyer hereby agree as follows: 1. Recyclable Materials. During the term of this Agreement, Buyer agrees to purchase and Seller agrees to sell all of the type(s) of recyclable materials identified in Exhibit A attached hereto and incorporated herein collected by Seller curbside from single-family residences within the California City of Ukiah ("Recyclable Materials"). The Recyclable Materials shall meet the standards and specifications set forth in Exhibit A or such other standards and specifications as shall be agreed upon in writing by Seller and Buyer. 2. Delivery. Delivery of the Recyclable Materials shall be made from Seller to Buyer's facility located at 4260 North State Street, Ukiah, California and/or 3501 Taylor Drive, Ukiah, California, commonly known as the Materials Recycling Facility (the "MRF"), in accordance with a schedule as agreed upon in advance by Buyer and Seller. 3. Pricing; Payment. Buyer shall pay Seller the price per ton, as calculated each year, determined in Exhibit B attached hereto and incorporated herein, but not less than $5.00, for each ton of Recyclable Materials that is received by Buyer in accordance with Section 2. The Recyclable Materials shall be weighed at Seller's or Buyer's facility, as agreed by the parties, and proof of weight shall be provided to Seller. Seller shall, on a monthly basis, transmit an invoice to Buyer showing the types and number of tons of Recyclable Materials received by Buyer hereunder during the preceding month and the total amount due therefor. Buyer shall remit to Seller the full amount due no later than the fifteenth (15th) day of the month following the month in which Recyclable Materials were received by Buyer. Within thirty (30) days after the end of each year of the term of this Agreement, the Parties shall conduct a true - up of the amounts paid and the amounts owed hereunder, with UWS returning any overpayment to PRS and PRS paying any underpayment to UWS. Each late payment shall be subject to a late fee of one and one-half percent (1-1/2%) and shall bear interest at the higher of 10% per annum or the highest rate permitted by applicable law until paid in full. 4. Term; Default; Termination. 4.1 Subject to Section 9 below, the term of this Agreement shall be for a period commencing on January 1, 2012 (the "Effective Date") and ending upon the expiration or termination of Seller's Waste Collection Agreement with the City of Ukiah of even date herewith, including extensions, subject to earlier termination on the terms herein. 4.2 If at any time either Party determines or becomes aware that the other Party is in default under or has breached any of the terms of this Agreement, the non -defaulting Party shall provide Page 1 W written notice to the other Party as to the nature of such default. If the defaulting Party fails to make any payment due hereunder within five (5) days, and/or falls to cure any default in the performance of any other obligation under this Agreement within thirty (30) days, after receipt of such written notice, the non defaulting Party shall have the right to terminate this Agreement upon giving written notice; provided, however, that, other than for failure to make any payment hereunder, in the event the defaulting party shows cause why it should be entitled to reasonable additional time to cure a default, the non -defaulting Party shall allow such reasonable additional time to cure. 5. Representations and Warranties. In performing this Agreement, each of the Parties shall fully comply with all applicable federal, state and local laws, ordinances, decisions, orders, rules or regulations. Each of the Parties shall, and shall cause any carrier with which it contracts to, handle and transport the Recyclable Materials in a safe and workmanlike manner and all of the Parties' driver personnel and any carrier with which the Parties contract are, and shall at all times relevant to the performance of this Agreement remain, properly licensed and otherwise fully qualified to perform the services required hereunder. By the commencement date of this Agreement and throughout the term of this Agreement and any extension thereof, each Party shall be duly licensed, permitted and authorized pursuant to all applicable federal, state and local laws to handle and transport the Recyclable Materials and each Party's facility or facilities will have been issued all licenses, permits and authorizations required by all applicable federal, state and local laws to handle Recyclable Materials. 6. Indemnification. Each Party hereto (the "Indemnitor") hereby agrees to indemnify, hold harmless and defend the other Party, and its owners, officers, directors, employees and agents (collectively, the "Indemnitees"), from and against any and all liabilities, penalties, fines, forfeitures, demands, claims, causes of action, suits, judgments and costs and expenses incidental thereto, including reasonable attorneys' fees (collectively, "Damages"), which any or all of the Indemnitees may hereafter suffer, incur, be responsible for or pay out as a result of personal injuries, property damage, or contamination of or adverse effects on the environment, to the extent directly or indirectly caused by, or arising from or in connection with the breach of any representations and warranties set forth in this Agreement of, the Indemnitor, or any negligent or intentional actions or omissions or willful misconduct of the Indemnitor, its employees, officers, owners, directors or agents in the performance of this Agreement or the transportation, handling or disposition of the Recyclable Materials by the Indemnitor, its employees or subcontractors. Such indemnity shall be limited to exclude Damages to the extent they arise as a result of any negligent or intentional actions or omissions or willful misconduct of the Indemnitees or their employees, officers, owners, directors or agents. If any claims indemnified against under this paragraph have the potential for coverage under any insurance, then the indemnities set forth in this Agreement shall apply only to the extent the amount of any indemnified claim exceeds all amounts collected under any insurance covering such claim. Before pursuing recovery under this indemnity, the Indemnitees shall exhaust all recovery available for such claim from insurance. 7. Insurance. Each of the Parties shall obtain and maintain during the term of this Agreement commercial general liability insurance which conforms to the industry standard for the services being performed by each hereunder and workers' compensation insurance that complies with applicable state statutory requirements. 8. Assignment. This Agreement shall be binding upon the successors and assigns of the Parties hereto; provided, that no assignment of this Agreement shall be binding upon the other Party without the other Party's consent, which consent shall not be unreasonably withheld or delayed; and provided further, that no assignment shall be valid and binding which endeavors to relieve the assigning Party of any obligations to make payments hereunder which accrued prior to the date of assignment or in which the assignee does not affirmatively agree, in writing, to assume all obligations of the assignor under this Agreement. No assignment can be made without the prior written approval of the City of Ukiah, Page 2 exercising its rights in accordance with Section 11 of the Waste Collection Agreement between UWS and the City of Ukiah. 9. Force Majeure. Except for the obligation to pay for Recyclable Materials received by Buyer, the performance of this Agreement may be suspended to the extent that and for so long as either Party's obligations hereunder are delayed or hindered by a cause or causes beyond the reasonable control of such Party. Such causes shall include, but not be limited to, acts of God, landslides, lightning, forest fires, storms, floods, freezing, earthquakes, civil disturbances, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, public riots, breakage, explosions, or other similar causes. 10. General Provisions. (a) No waiver by either Party of any one or more defaults or breaches by the other in the performance of this Agreement shall operate or be construed as a waiver of any future defaults or breaches, whether of a like or different character. If any provision of this Agreement is declared invalid or unenforceable, then such portion shall be deemed to be severable from this Agreement and shall not affect the remainder hereof. (b) This Agreement and all Exhibits hereto represent the entire understanding between the Parties and no representations, statements or agreements, unless agreed to by the parties in writing, shall modify, change, amend or otherwise affect the obligations undertaken in this Agreement. This Agreement supersedes, as of the Effective Date, the prior Recyclable Materials Agreement between the Parties and Solid Wastes Systems, Inc. dated November 1, 2007, and may only be amended by a written agreement executed by Seller and Buyer. (c) All notices under this Agreement shall be in writing and shall be effective if delivered personally or sent by certified mail, postage prepaid, or by overnight carrier or confirmed facsimile to the addresses set forth on the signature page hereto or to such other address as either Party shall specify by written notice so given. Any notice sent by mail shall be deemed given and received three (3) business days after the date deposited in the mail. Any notice given by personal delivery or sent by overnight carrier or confirmed facsimile shall be deemed given upon receipt. (d) The validity, interpretation and performance of this Agreement shall be governed and construed in accordance with the internal laws of the state of California, irrespective of choice of law principles, and applicable federal laws and regulations. (e) The City of Ukiah shall be considered a third party beneficiary of this Agreement with all of the rights of a party to enforce the provisions of this Agreement. EXECUTED and effective as of the Effective Date. Pacific Recycling Solutions, Inc. mariff/Al ' 1 Page 3 Ukiah Waste Solutions, Inc. i I • MO.MIJ, Its:re51��n l Address for receipt of notices: -Fox (0 Page 4 Its: -PrGSl G1er) Address for receipt of notices: EXHIBIT A TYPES, STANDARDS & SPECIFICATIONS OF RECYCLABLE MATERIALS Material Specifications During the course of operations, any changes to the material specifications for any inbound commodity will be agreed to by both Parties prior to introduction of the new commodity. Residential Materials Materials collected through curbside recycling include: glass bottles and jars, tin and aluminum cans, aluminum foil, plastic food and beverage containers (#147) and milk and juice cartons, newspaper, OCC, magazines, junk mail, chipboard, white and office paper, and telephone books. Inbound materials may not contain more than 5% reject material. Commercial Materials Clean Corrugated Containers Consists of baled or loose corrugated containers having liners of either test liner, jute or kraft. Prohibitive materials..............................................1% Total Outthrows may not exceed................................5% Mixed Office Paper Consists of office fiber waste including envelopes, files, file folders, white ledger, color ledger, CPO, copy paper (coated or uncoated), brochures, forms and associated staples, clips, bindings and bands. • Prohibitives include glass, food, shredded paper, restroom waste and hospital waste. Total outthrows may not exceed 5% Page 5 EXHIBIT B Pricing Schedule (a) Annual Calculation of Tonnage Payment. The price per ton of Recyclables delivered by Seller to Buyer during any calendar year shall be calculated in accordance with Table 1 below. Table 1 Tier CMV* Tier 1 $167.69 and below Tier 2 Above $167.69 to $200 Tier 3 Above $200 to $280 Tier 4 Above $280 Tier CMV Cap Base Fee and % of Tier Differences $ 167.69 $5.00 $ 200 Plus of CMV above $167.69 up to $200 5.00% $ 280 Plus of CMV above $200 up to $280 10.00% Plus of CMV above $280 15.00% *CMV means weighted average "Composite Market Value" computed according to (b) below. By way of example, using the tiers forth in Table 1, Buyer shall pay for each ton of Recyclables delivered as follows: If the CMV is $167.69 or below, Buyer shall pay $5.00 per ton delivered; If the CMV is above $167.69 but not above $200, Buyer shall pay $5.00 plus 5% of the excess of the CMV over $167.69 per ton delivered; If the CMV is above $200 but not above $280, Buyer shall pay $5.00 plus $1.62 ($200 minus $167.69 times .05) plus 10% of the excess of the CMV over $200 per ton delivered; and If the CMV is greater than $280, Buyer shall pay $5.00 plus $1.62 ($200 minus $167.69 times .05) plus $8.00 ($280 minus $200 times .1), plus 15% of the excess of the CMV over $280 per ton delivered. 1.1 (b) Annual Commodity Material Value (CMV). The CMV for each calendar year during the term of the Agreement (commencing with 2012) shall equal the CMV calculated by the following per ton weighted profile, with each category of Commodity being multiplied by the monthly annual average actual market price, using June to June values preceding that year, for such Commodity, including any California Redemption Value, for such year, FOB at the PRS Facility. The Composition percentages and/or the commodity categories in the first two columns below shall be reviewed every five (5) years after the Effective Date (beginning January 1, 2017) and may be revised by the mutual agreement of the parties to reflect actual curbside collections. Page 6 1.2 Page 7 Per Ton Weighted Profile Composite Market Value Grid Scrap Weighted Composition Commodity Value/Ton CRV/Ton Value/Ton 16.75% OCC #11 $140.50 $23.53 23.07% ONP #7 $155.00 $35.76 21.01% Mixed Paper $155.00 $32.57 0.53% HDPE Color $477.50 $120.00 $3.17 0.51% HDPE Natural $587.50 $120.00 $3.61 1.94% PET $626.50 $1,160.00 $34.66 1.25% #3 - #7 MRP $11.50 $0.14 1.82% Tin $150.00 $2.73 24.41% Glass 3 Mix ($40.00) $72.00 $7.81 0.71% Alum Cans $1,479.50 $2,700.00 $29.67 8.00% Residuals ($74.50) ($5.96) Total Composite Market Value Per Ton $167.69 1.2 Page 7 EXHIBIT C CURBSIDE RATE CALCULATION 26 , 1. I , r Ukiah Waste Solutions Curbside Rate Components Annual Adjustment Calculations Effective Date January, 2012 TOTAL COSTS Less: Fuel Cost Less Disposal Fees - Garbage Less Disposal Fees - Green Waste Less City Landfill Closure Costs Less City Commercial Oversight fee Collection Costs before Recycle Credit Recycle Credit Collection COSTS Subject to CPI adj. Revenue base 2010 Revenue Fuel Cost Disposal Fees - Greenwaste Landfill closure cost Commercial Oversight fee Other Regulatory & Governmental Costs Disposal Fees - Garbage CPI adjustment Total before franchise and billing fees Franchise Fee Billing Fee Adjusted revenue Increase / Decrease Index Allowed 5200,641.15 Fuel $ 71,869.66 $693,250.45 SWS TS Gate $ 39,099.33 $72,000.00 Negotiated $ - $60,000.00 Set by City $ - $9,999.96 Set by City $ - $1,783,488.91 $0.00 $0.00 -$16,056.55 $0.00 $11,512.12 $1,767,432.36 CPI $ 62,920.59 $ 173,889.58 TOTAL Residential Commercial Roll Off Total Revenue 29.44% 67.79% 2.77% 100.00% $806,433.60 $1,856,695.20 $75,811.40 $2,738,940.20 $21,160.78 $48,719.59 $1,989.29 $71,869.66 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $11,512.12 $26,504.97 $1,082.23 $39,099.32 $18,525.88 $42,653.12 $1,741.59 $62,920.59 $857,632.38 $1,974,572.88 $80,624.51 $2,912,829.77 $5,976.75 $13,274.92 $542.03 $19,793.70 $1,195.35 $0.00 $0.00 $1,195.35 $864,804.48 $1,987,847.80 $81,166.54 $2,933,818.82 Revenue Increase $58,370.88 $131,152.60 $5,355.14 $194,878.62 Rate increase as a percent 1 7.12% Page 1 of 4 Ukiah Waste Solutions Curbside Rate Components Annual Adjustment Calculations Effective Date January, 2012 Fuel - June to June (Fuel Index) June 2010 June 2011 Index Increase (Decrease) $3.102 $4.213 $1.111 Fuel % Change 35.82% CPI - June to June (Index) June 2010 June 2011 Index Increase (Decrease) 217.965 225.722 7.757 CPI % Change 3.56% Transfer Station Fee (Disposal Fees - Garbage) Jan to Jan January 2011 January 2012 Increase (Decrease) $74.50 $78.70 4.200 Transfer Station Fee % Change 5.64% Green Waste Disposal Fee (Disposal - Green Waste) Jan to Jan January 2011 January 2012 Increase (Decrease) $30.00 $30.00 $ - Disposal Fee - Green Waste % Change 0.00% Landfill Closure Costs Jan to Jan January 2011 January 2012 Increase (Decrease) $60,000.00 $60,000.00 $ - Landfill Closure Costs % Change 0.00% Commercial Oversight Fee Jan to Jan January 2011 January 2012 Increase (Decrease) $10,000.00 $10,000.00 $ - Commercial Oversight Fee % Change 0.00% Recycle Credit June to June Tons Value/Ton Credit June 2011 3,211.31 $5.00 $ 16,056.55 Recycle Credit $ 16,056.55 City Franchise Fee 15% 1 City Billing Fee - Residential Customers 3% Page 2 of 4 Calculation to adjust fuel costs Fuel Exhibit #1 Page 3 of 4 Fuel Revenue Adjustment Worksheet, based on Fuel Index change, June to June Base Year Fuel Index and Cost 3.102 $200,641.15 2010 Actual Index Change - New vs. Base Year 1 Estimated Fuel index adjustment at June 2011 4.213 35.82% $71,869.66 Plus: Base Year Cost X Index Change Revenue adjustment for January 2012 rate revision >1 $71,869.66 $0.00 Less: Prior Fuel Cost applied to rate $272,510.81 Fuel Cost Allowed Year 1 Annual adjustment based on Fuel Index change, year to year (using example fuel index changes) 2 Estimated Fuel index adjustment at June 2012 4.630 49.26% $98,835.83 Plus: Base Year Cost X Index Change Revenue adjustment for January 2013 rate revision >1 $26,966.17 $71,869.66 Less: Prior Fuel Cost applied to rate $299,476.98 Fuel Cost Allowed Year 2 3 Estimated Fuel index adjustment at June 2013 3.940 27.01% $54,193.17 Plus: Base Year Cost X Index Change Revenue adjustment for January 2014 rate revision ($44,642.66) $98,835.83 Less: Prior Fuel Cost applied to rate $254,834.32 Fuel Cost Allowed Year 3 4 Estimated Fuel index adjustment at June 2014 4.330 39.59% $79,433.83 Plus: Base Year Cost X Index Change Revenue adjustment for January 2015 rate revision > $25,240.66 $54,193.17 Less: Prior Fuel Cost applied to rate $280,074.98 Fuel Cost Allowed Year 4 5 Estimated Fuel index adjustment at June 2015 S.410 74.40% $149,277.02 Plus: Base Year Cost X Index Change Revenue adjustment for January 2016 rate revision > $69,843.19 $79,433.83 Less: Prior Fuel Cost applied to rate $349,918.17 May be RESET during rate review process 6 Estimated Fuel index adjustment at June 20 4.870 57.00% $114,365.46 Plus: Base Year Cost X Index Change Revenue adjustment for January 2017 rate revision ($34,911.56) $149,277.02 Less: Prior Fuel Cost applied to rate $315,006.61 Fuel Cost Allowed Year 6 Page 3 of 4 Ukiah Waste Solutions Curbside Agreement Adjustment Adjustment Cost/Rev Period Method Index Used Cost Arnu 1,2 Fuel Annual 100% of index change eia Ca #2 Diesel Retail all sellers Base Rate as Adjusted Disposal - Solid Waste Time to Time Per TS (SWS) Agreement N/A Pass Through 1,2 Operations (all other costs) Annual 100% of index change CPI - US Cities CPI -U Base Rate as Adjusted 3 Recycle Reduction Annual Per Recycle Agreement Rec Market Value Grid - $5 base Operating Cost Reduction 1,2 Green Waste Disposal $30 / Ton Annual Up to CPI (Contractor Choice) CPI - US Cities CPI -U Base Rate as Adjusted 1,2,8 Food Waste Disposal (Comm) Up to $40 / ton Annual Up to CPI (Contractor Choice) CPI - US Cities CPI -U Base Rate as Adjusted 4 City Franchise Fee 15% Time to Time City Action N/A Pass Through 4 City Bill Fee 3% Time to Time City Action N/A Pass Through 4 City Oversight Fee $10,000.00 Time to Time City Action N/A Pass Through 4 City Landfill Closure Fee $60,000.00 Time to Time City Action N/A Pass Through 6,9 ITOTAL NET COST Notes 1 Agreement should state mutually agreed upon Index if Index becomes unavailable 2 June to June change 3 Recycle Agreement with PRS renewable every 5 years with Base Market Value per mixed ton to provide for Rev sharing with City (reduction of operating costs). 4 Agreement should state initial rate, subject to change by City action 5 Exhibit of calculation to be made part of agreement 6 UWS requests new rate by Aug 15, City approves by Oct 15, Pub Notice given by Nov 1, Adjusted Rate goes into effect following January 1. 7 Agreement must provide for City Flow Control with language that directs flow to contractor facilities when available. 8 FOOD WASTE - UWS will implement a pilot and or full commercial food waste program in place by June 2013 provided proper permits can be obtained Details still to be worked out. 9 Rate change is calced as follows: % annual adjustment X actual prior year (July to June) actual component cost = new funds needed / collection revenue _ % adjustment per rate. New cost adj dollars (fuel, disposal, city fees etc..) need to be adjusted for city fees - CPI adj does not. RE -OPENER - the contract should have a mutual re -opener for other new items Page 4 of 4 EXHIBIT D AGREEMENT FOR RECEIPT OF WOOD AND GREEN WASTE 27 EXHIBIT D AGREEMENT FOR RECEIPT OF WOOD AND GREEN WASTE THIS AGIZ4EMENT FOR RECEIPT OF WOOD AND GREEN WASTE (the "Agreement") is entered into as of �, 2011 ("Effective Date") by and between Pacific Recycling Solutions, Inc., a California corpor ion ("PRS"), Ukiah Waste Solutions, Inc., a California corporation ("UWS"), and Solid Waste Systems, Inc., a California corporation ("SWS"), with reference to the following: A. PRS owns and operates a green waste and wood waste processing facility located at 4260 North State Street, Ukiah, California (the "Facility"). B. The Facility is fully permitted to accept and process Green Waste and Wood Waste, as defined below ("Materials"). C. SWS is party with the City of Ukiah to that certain Amended and Restated Transfer Station Agreement of even date herewith for the operation of the Ukiah Valley Transfer Station for the receipt, collection, transportation and disposal of municipal, commercial and industrial solid waste (the "TS Agreement"), and UWS is party with the City of Ukiah to that certain Waste Collection Agreement of even date herewith for the collection and disposal of solid waste (the "Collection Agreement"). SWS and UWS desire to enter into an agreement with PRS which will provide for disposal of approximately 10,000 tons, but without limit subject to the Facility's permitted capacity, annually of Materials at the Facility. In consideration of the aforementioned recitals and upon the terms and conditions herein set forth, the parties hereto agree as follows: Definitions: The following terms shall have the respective meanings set forth below: "Green Waste" shall mean green trimmings, grass, weeds, leaves, prunings, branches, dead plants, brush, tree trimmings, dead trees, small wood pieces and other types of organic yard waste, provided that dead trees and branches may not exceed six (6) inches in diameter and four (4) feet in length. "Wood Waste" shall mean clean pieces of unpainted and untreated wood. "Process" shall mean handle, grind or chip and recycle Materials. 2. Agreement to Accept Materials: PRS agrees to accept and Process all Materials collected at SWS's transfer station or collected by UWS, as provided for under the TS Agreement and the Collection Agreement, and delivered by SWS or UWS to the Facility, on the terms herein. 3. Processing Rate: As consideration for the receipt and proper Processing by PRS of the Materials delivered by SWS and UWS, SWS and UWS shall each pay PRS a fee of Thirty Dollars ($30.00) per ton for Materials received by PRS at the Facility from SWS and UWS, respectively, as adjusted pursuant to Paragraph 4 herein (the "Processing Rate"). Fees shall be paid by SWS and UWS within thirty (30) days of receipt from PRS of a written invoice detailing the amount of Materials received by PRS for each month. Adjustment of Processing Rate: a. Adjustment based on CPI: PRS shall have the right, commencing on July 1, 2012 and annually thereafter, to increase the Processing Rate by a percentage equal to the percentage increase, if any, in the Consumer Price Index, All Urban Consumers, U.S. City Average, All Items (1982-1984=100), published by the United States Department of Labor, Bureau of Labor Statistics ("Index"), for the preceding year, using the Index published for the month nearest the beginning and the month nearest the end of such year. Notwithstanding any other provision herein, to the extent any government having jurisdiction over the Facility should impose any fee or tax ("Government Tax") on the Facility associated with the Processing of Materials, the Processing Rate shall be increased by the amount of such Government Tax, either at the per ton rate of such Tax or if such Tax is not assessed on a per ton basis, in the proportion that the total tonnage of Materials PRS reasonably projects to accept from SWS an UWS during the period for which the Government Tax will pertain compared with other users of the Facility. On each adjustment of the Processing Rate, PRS shall deliver to SWS and UWS written notice stating the adjusted Processing Rate. If PRS forgoes the application of a CPI adjustment in any year, that adjustment will be treated as a zero increase (decrease) in subsequent years, and shall not be retroactively recouped. b. Five year review: Every five years the parties and the City of Ukiah ("City") shall review the gate fee to determine whether changes in the market for green and wood waste warrant an adjustment in the gate fee to account for changes in the cost of processing and the income produced from processed green and wood waste. If processing costs have become substantially more or less and/or the income produced from processed material has substantially increased or decreased over the five year period, the rates shall be adjusted to account for these changes. 5. Term of Agreement: This Agreement shall expire as to each of SWS and UWS on the expiration of the TS Agreement or the Collection Agreement, respectively, including extensions, subject to earlier termination, as follows. PRS, on the one hand, and either of SWS or UWS, on the other, shall be entitled to terminate this Agreement in the event of the other party's material breach hereof unless such breach is cured within thirty (30) days after written notice thereof. This Agreement shall terminate automatically as to any party in the event of such party's insolvency, bankruptcy, assignment for the benefit of creditors or other debt reorganization unless, in the case of bankruptcy, the petition is removed or withdrawn within thirty (30) days. 6. Type of Waste: PRS shall only accept, and SWS and UWS shall only be entitled to provide, Materials not containing any prohibited substances or hazardous waste. PRS shall be entitled to inspect the Materials and reject and/or return to SWS or UWS any Materials that are not in conformance with the standards set forth herein. Notice of rejection of non -conforming Materials shall be given in writing prior to the close of business on the day PRS receives such non -conforming Materials at the Facility. Failure to provide written notice in accordance with the terms of the preceding sentence shall forfeit PRS's right to reject such non -conforming Materials. SWS or UWS shall bear all costs associated with inspecting, testing and rejecting any non -conforming Materials. Each party agrees to comply with all laws applicable to such party in the performance of its duties hereunder. 7. Amount of Waste to be Delivered: SWS and UWS shall deliver an aggregate minimum of 30 tons per day and an aggregate maximum of 75 tons per day of Materials to the Facility. 8. Time of Delivery: SWS and UWS shall be entitled to deliver Materials to the Facility six (6) days a week, Monday thru Saturday during normal operating hours. 9. Attorney's Fees: If any litigation is commenced between PRS and SWS or PRS and UWS to collect any sums due under this Agreement, or concerning any provisions of this Agreement, the prevailing party in such litigation shall be entitled, in addition to such other relief deemed appropriate by the court, to reasonable attorney's fees and expenses incurred in connection with such litigation. 10. Binding Effect: This Agreement shall be binding upon and inure to the benefit of the successors and assigns of SWS, UWS and PRS. 11. Confidentiality: Neither party shall disclose the Processing Rate to any person except with the express written permission of the other, which permission shall not be unreasonably withheld. Without limiting the generality of the foregoing, PRS shall agree to allow SWS or UWS to disclose the Processing Rate as may be reasonably requested or required by the City of Ukiah under the TS Agreement or the Collection Agreement. 12. Counterparts: This Agreement may be executed in counterparts, and shall be effective when fully executed by all of the parties. The parties agree to accept signatures transmitted by facsimile. 13. Third Party Beneficiaries: The City of Ukiah shall be deemed a third party beneficiary of this Agreement with all of the rights of a party to enforce the terms of this Agreement. 14. Assignment: No assignment of this Agreement can be made without the prior written approval of the City of Ukiah, exercising its rights under Section 11 of each of the Waste Collection and Transfer Station Agreements with UWS and SWS, respectively. IN WITNESS WHEREOF, this Agreement is entered into as of the date first set forth above. PACIFIC RECYCLING SOLUTIONS, INC. BYQm4ff SOLID WASTES SYSTEMS, INC. B��1=i�► UKIAH WASTE SOLUTIONS, INC. EXHIBIT E INITIAL SERVICE RATES The current rate chart is attached. Commercial Green Waste collection is charged at the same rates as Commercial Solid Waste. The chart will need to be expanded to clarify that for Single Family Residences, the Solid Waste rate includes Recyclables and Green Waste, and that for Multi -Family Residences and Commercial Solid Waste, Recyclables and Green Waste collection are all billed at the cart rates listed. Rates to collect and dispose of sludge will be competitive with current rates Insert replacement/additional cart/container fees. Insert all Special Charges. 28 Ukiah Waste Solutions, Inc. NEW 2012 GARBAGE COLLECTION RATE ADJUSTMENTS SUMMARY OF RATE ADJUSTMENT FOR STANDARD SERVICES YEAR 2012 Effective Percentage Total Monthly Rate Per Service Level $ Current Adjusted 2012 Adjustment Adjustment Gallon / Yard Curbside Service $ 0.728 10 gallon can rate $ 6.80 $ 7.28 7.06% No Service $ 4.41 $ 4.72 7.03% $ 0.31 $ 0.472 10 gallon can rate $ 4.41 $ 4.72 7.03% $ 0.31 $ 0.472 20 gallon can rate $ 9.26 $ 9.92 7.13% $ 0.66 $ 0.496 32 gallon can rate $ 16.64 $ 17.82 7.09% $ 1.18 $ 0.557 68 gallon can rate $ 39.30 $ 42.10 7.12% $ 2.80 $ 0.619 95 gallon can rate $ 55.39 $ 59.33 7.11% $ 3.94 $ 0.625 Other combinations - rate per gallon $ - 0.64 $ 0.69 7.14% $ 0.05 $ 0.690 Overstuffed can charge/Extra Stop $ 5.91 $ 6.33 7.12% $ 0.42 n/a 1 yard bin rate $ 110.07 $ 117.91 7.12% $ 7.84 $ 117.91 1.5 yard bin rate $ 130.08 $ 139.34 7.12% $ 9.26 $ 92.89 2 yard bin rate $ 173.44 $ 185.79 7.12% $ 12.35 $ 92.90 3 yard bin $ 260.16 $ 278.68 7.12% $ 18.52 $ 92.89 4 yard bin $ 346.88 $ 371.58 7.12% $ 24.70 $ 92.90 6 yard bin $ 520.32 $ 557.37 7.12% $ 37.05 $ 92.90 No Service $ 6.80 $ 7.28 7.06% $ 0.48 $ 0.728 10 gallon can rate $ 6.80 $ 7.28 7.06% $ 0.48 $ 0.728 20 gallon can rate $ 11.62 $ 12.45 7.14% $ 0.83 $ 0.623 32 gallon can rate $ 20.38 $ 21.83 7.11% $ 1.45 $ 0.682 68 gallon can rate $ 47.87 $ 51.28 7.12% $ 3.41 $ 0.754 95 gallon can rate $ 69.16 $ 74.08 7.11% $ 4.92 $ 0.780 Other combinations - rate per gallon $ 0.73 $ 0.78 7.14% $ 0.05 $ 0.780 Overstuffed can charge/Extra Stop $ 6.80 $ 7.28 7.06% $ 0.48 n/a Pack out service is limited to the elderly and disabled who apply directly through Ukiah Waste Solutions at 707-234-6400 Remote Area Service Add to the Packout Service rate. $ 6.80 $ 7.28 7.06% $ 0.48 N/A In areas with limited access, an additional fee is charged to fund the costs of special equipment and special handling necessary to provide garbage pickup services. This fee is in addition to the "Packout Service" fee listed in this schedule. Y. -r" r ,V. Ukiah Waste Solutions, Inc. 2012 Rate Schedule Residential Carts No Service 1-10 11-20 21-32 33-68 69-95 Gallons 2012 Rates Pee lx/WK ix/WK lx/WK lx/WK 1x/WK Roadside 4.72 4.72 9.92 17.82 42.10 59.33 Pack Out* 7.28 7.28 12.45 21.83 51.28 74.08 Remote** 14.56 14.56 19.73 29.11 58.56 81.36 " Pack Out service is limited to the elderly and disabled who apply directly through Ukiah Waste Solutions @ 707-234.6400 ** The additional charges of Remote service may be required for certain areas with difficult access. 2012 Rates 1-10 11-20 21-32 33-68 69-95 Gallon 1 Can - 1x/WK 4.91 10.28 18.50 43.72 61.62 1 Can - 2x/WK 41.12 97.33 136.96 1 Can - 3x/WK 68.70 149.24 208.48 2 Cans - lx/WK 41.12 97.33 136.96 Yards 2012 Rates Number of pick-ups per week ix/WK 2x/WK 3x/WK 4x/WK Sx/WK 6x/WK Extra Pick-up 1.0 117.91 n/a n/a n/a n/a n/a 27.23 1.5 139.34 278.68 418.02 557.36 696.70 836.04 32.18 2.0 185.79 371.58 557.37 743.16 928.95 1,114.74 42.91 3.0 278.68 557.36 836.04 1,114.72 1,393.40 1,672.08 64.36 4.0 371.58 743.16 1,114.74 1,486.32 1,857.90 2,229.48 85.82 6.0 557.37 1,114.74 1,672.11 2,229.48 2,786.85 3,344.22 128.72 Extra p/u calculated at 1/wk divided by 4.33 Clean -Up Bins and Boxes New Rate 2012 includes tip fee 3.0 Yd 3 day rental 96.41 15.0 Yd 7 day rental 218.46 Plus $78.70 per ton tip fee 20.0 Yd 7 day rental 218.46 Plus $78.70 per ton tip fee 30.0 Yd 7 day rental 218.46 Plus $78.70 per ton tip fee Compactors 218.46 Plus $78.70 per ton tip fee Misc Charges New Rate 2012 Plus tip fee Bulky Items (appliances, Lg Tires, Furniture etc..) 24.25 Tires - each - (Automotive or motorcycle) 5.11 Damage Cart Replacement 66.00 Additional Green Waste or R/C Cart 6.50 Extra Residential Pick-up 6.33 Extra Commercial Pick-up 11.82 Compactor Cleaning 284.46 Container Cleaning 102.41 Locking bin, one-time setup fee 32.43 Plus Materials Replacement Key 11.38 Contamination Fee 32.48 Returned Check Fee 35.00 Roll Off or Bin Extra Day Charge 11.82 Exchange Cart Siz 1 24.36 Rate to collect and dispose of sludge will be equal to or less than the current rate. Customers billed by Ukiah Waste Solutions are billed as commercial customers. Customers billed by the City of Ukiah are billed as residential customers.