South Valley Disposal - 1997 Agreement
AGREEMENT
BETWEEN CIlY OF GILROY
AND
SOUlH VALLEY DISPOSAL & RECYCLING. INC.
Table of Contents
Page
1. Definitions......................................... 3
2. Conditions to Effectiveness of Agreement. . . . . . . . . . . . . . . . . . .. 7
3. Contractor Status and Authorization. ...................... 8
4. Scope of Contractor's Services. .......................... 8
(a) In General. .................................... 8
(b) Collection Schedule. .............................. 10
(c) Containers..................................... 10
(d) Service To Elderly and Disabled Residents. . . . . . . . . . . . . . .. 11
(e) Disposal and Recycling Services. . . . . . . . . . . . . . . . . . . . . .. 12
(f) Other Special Services. ............................ 13
(g) Disaster Assistance. .............................. 14
(h) Promotion of Recycling Program and Services. ............ 15
(i) Contractor Representative. . . . . . . . . . . . . . . . . . . . . . . . . .. 16
(j) Customer Service Standards. ........................ 16
(k) Non-Discrimination. .............................. 17
(1) Service Goals. .................................. 17
5. Contractor's Equipment and Personnel. .................... 18
(a) Collection Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 18
(b) Ownership of Equipment. .......................... 19
(c) Contractor's Failure to Perform. ...................... 19
(d) Labor Disputes. ................................. 20
6. Rights and Obligations Affecting Customers. .. . . . . . . . . . . . . . .. 21
(a) Container Requirements. ........................... 21
(b) Storage and Collection Requirements. .................. 21
(c) Ownership of Recyclable Materials. . . . . . . . . . . . . . . . . . . .. 21
7. City's Responsibilities. ................................ 22
(a) Public Awareness Program. ......................... 22
(b) Protection of Contractor's Rights in Recyclable Materials. ..... 22
(c) Assistance with Permits. ........................... 22
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8. Exclusivity......................................... 22
9. Recordkeeping and Reports. ............................ 24
(a) Monthly Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 24
(b) Annual Financial Reports. .......................... 24
(c) Financial Records. ............................... 24
10. Rates and Charges. .................................. 25
(a) In General. .................................... 25
(b) Collection Rates. ................................ 26
(c) Special Service Rates. ............................. 26
(d) Special Requests for Extraordinary Rate Adjustments. ....... 27
(e) Annual Index Rate Adjustments. ..................... 29
(f) Five Year Review and Adjustment. .................... 29
(g) Rate Calculation. ................................ 30
(h) Operating Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 31
11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(a) Customer Billings and Collections. .................... 35
(b) Nonpayment By Customers. ........................ 35
(c) Disputes. ..................................... 35
(d) Franchise and Administrative Fee. .................... 36
(e) Late Payment Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 37
12. Performance Audits and Liquidated Damages,;, ............... 37
(a) Performance Audit. .............................. 37
(b) Liquidated Damages. ............................. 38
13. Relationship of Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 39
(a) Independent Contractor. ........................... 39
(b) Indemnification.................................. 40
14. Performance Bond and Guaranty. ........................ 42
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(b) Guaranty. ..................................... 42
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15. Insurance. ........................................ 43
(a) Insurance Coverages and Amounts. ................... 43
(b) Certificates of Insurance. ........................... 43
16. Assignment........................................ 43
17. Dispute Resolution. .................................. 44
(a) Call for Mediation. ............................... 44
(b) Mediation...................................... 44
18. Term and Termination of Agreement. . . . . . . . . . . . . . . . . . . . . .. 45
(a) Commencement and Term. ......................... 45
(b) Termination Upon Default. ......................... 45
(c) Strike or Labor Dispute. ........................... 46
(d) Termination Upon Insolvency Events. .................. 46
(e) Effect of Termination. ............................. 47
19. Notices. ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
20. Miscellaneous Provisions. .............................. 48
(a) Entire Agreement. ............................... 48
(b) Modifications and Waivers. ......................... 48
(c) Severability. ................................... 48
(d) Interpretation. .................................. 49
(e) Further Documents. .............................. 49
(f) Authority...................................... 49
(g) Multiple Originals and Counterparts. .................. 50
(h) Exhibits. ...................................... 50
EXlllBIT "A"
EXlllBIT "B"
EXlllBIT "C"
EXlllBIT "D"
Exhibit "E"
Exhibit "P"
Exhibit "G"
Exhibit "H"
Exhibit "I"
EXlllBIT "J"
EXlllBIT "K"
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Exhibit "L"
Exhibit "M"
Exhibit "N"
Exhibit "0"
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This Agreement is made and entered into this 2nd.day of September , 1997
("Effective Date") by and between the CIlY OF GILROY ("City"), a municipal
corporation of the State of California, and SOUlH VALLEY DISPOSAL &
RECYCLING, INC. ("Contractor"), a California corporation. City and Contractor
are sometimes collectively referred to herein as the "parties".
This Agreement is made with reference to the following facts:
A. City and Contractor are currently parties to an agreement dated March
18, 1984 by which City granted to Contractor the franchise to collect, transport
and dispose of garbage and refuse produced within the corporate limits of City
for the benefit and in the interest of the health, safety and welfare of its citizens.
That agreement was amended on March 7, 1991 and, as amended, is referred to
herein as the "Prior Agreement". The franchise granted by the Prior Agreement
is for a term of twenty (20) years in addition, and will terminate on December 11,
2004.
B. The parties mutually desire to expand the franchise and obligations of
Contractor, implementing, among other things, an expanded recycling program,
and to extend the term of the Prior Agreement, as more particularly set forth in
this Agreement. The City has prepared a Source Reduction and Recycling
Element as part of its general plan which contains a series of programs designed
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to achieve the diversion goals of the California Integrated Waste Management Act
of 1989 (Public Resources Code Sections 40000 et ~.), and it is the intention of
Contractor and City, through implementation of the programs contained in this
Agreement and other programs which may subsequently be devised by the
parties, to work together to achieve those goals.
C. Pursuant to powers expressly granted to cities and counties in
Article XI, Section 7 of the California Constitution, and also set forth in California
Public Resources Code Section 40059, Franchisor has the authority within its
jurisdiction to regulate the handling of solid waste.
D. City has determined that it is in the best interests of City and its
citizens to contract with Contractor for an integrated waste management program
for residential and commercial premises within the corporate limits of City for the
benefit and in the interest of the health, safety and welfare of its citizens. City
has selected Contractor as its exclusive franchisee to provide to City the services
required for this integrated waste management program subject to the provisions,
terms and conditions set forth in this Agreement, and Contractor desires to
provide to City such services, which it represents to City that it has the necessary
expertise, resources, licenses and permits to provide in accordance with the
provisions, terms and conditions of this Agreement.
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NOW, THEREFORE, in consideration of the factual premises and the
covenants and conditions set forth in this Agreement, City and Contractor hereby
agree as follows:
1. Definitions. For the purposes of this Agreement, certain words
and terms shall be construed as hereinafter set forth, unless it is apparent from
the context that a different meaning is intended.
(a) "Affiliate" means all businesses (including corporations,
limited and general partnerships and sole proprietorships) which are directly or
indirectly related to Contractor by virtue of direct or indirect ownership interest
or common management. Such businesses shall be deemed to be "Affiliated
with" Contractor and included within the term "Affiliates" as used herein. An
Mfiliate shall include a business in which Contractor owns a direct or indirect
ownership interest, a business which has a direct or indirect ownership interest
in Contractor and/or a business which is also owned, controlled or managed by
any business or individual which has a direct or indirect ownership interest in
Contractor.
(b) "Bulky Goods" means discarded furniture, carpets,
mattresses, household appliances including refrigerators, ranges, washers, dryers,
water heaters, dishwashers and other similar items (sometimes referred to as
White Goods"), and electronic equipment such as stereos, televisions, computers,
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VCRs and similar items (sometimes referred to as "Brown Goods"), and tires (but
not other automotive equipment or parts).
(c) "Commercial Customer" means any person or legal entity
which conducts a trade or business in City and receives collection and other
services described in this Agreement.
(d) "Curbside" means on or near a curb forming the side of a
street.
(e) "Hazardous Material" means any material or combination of
materials which, because of its quantity, concentration or physical, chemical or
infectious characteristics may either (i) cause or significantly contribute to an
increase in mortality or an increase in serious irreversible, or incapacitating
reversible illness, or (ii) pose a substantial present or potential hazard to human
health or environment when improperly treated, stored, transported or disposed
of or otherwise managed. Hazardous Material also includes hazardous wastes as
defined under California or Federal law or regulations promulgated pursuant to
any such law, as such law or regulations may from time to time be amended.
The parties understand that the generators of such Hazardous Material are the
customers of Contractor rather than the City or the Contractor.
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(f) "Mixed Paper" means newspaper (including inserts) other
paper products (including magazines, catalogs and junk mail), corrugated
cardboard, brown Kraft bags, paper board, paper egg cartons, office ledger paper,
envelopes and stationery, computer paper, phone books, cereal boxes, shoe boxes
and other similar paper products, and such other items as may be agreed upon
by the parties from time to time.
(g) "Multi-Family Bin Customer" means any person, including
owner or occupant, who resides in City in a multi-family residential complex and
receives bin refuse collection service.
(h) "Multi-Family Can Customer" means any person, including
owner or occupant, who resides in City in a multi-family residential complex and
receives can refuse collection service.
(i) "Recyclable Materials" means "Mixed Paper" and glass, metal
cans (including aluminum and delabeled tin), used motor oil (up to a maximum
of three (3) gallons per Residential Customer set out per week), used automobile
motor oil filters, PETE (polyethylene terephthalate) bottles and containers, HDPE
(high density polyethylene) containers, bi-metal containers, and such other
materials as may from time to time be mutually agreed upon in writing by
Contractor and City.
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(j) "Recycling Containers" means the receptacles provided by
Contractor to Residential Customers and Multi-Family Can Customers for the
disposal of Mixed Paper and other Recyclable Materials in accordance with this
Agreement. "Recycling Containers" also means any other receptacle which is
provided by a customer for collection of Recyclable Materials or Yard Waste and
which is approved for such purpose by Contractor and City and appropriately
labeled as a recycling container.
(k) "Refuse" shall mean all putrescible and nonputrescible solid,
semisolid and/or liquid wastes, including garbage, trash, refuse, paper, rubbish,
ashes, industrial wastes, demolition and construction wastes, discarded home and
industrial appliances, vegetable or animal solid or semisolid wastes, and all
wastes capable of being recycled that are commingled with other waste. Refuse
also means any other item defined as "Refuse" in Section 12.1 of the Code of the
City of Gilroy California, as such code is amended from time to time during the
term of this Agreement ("Code"). The term "Refuse" shall not include Hazardous
Materials, source-separated Recyclable Materials, Yard Waste or stable matter
(manure and other waste material normally accumulated in stables or in livestock
or poultry enclosures).
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(1) "Refuse Containers" means the 32, 64 or 96-gallon refuse
receptacles provided by Contractor to Residential Customers or Multi-Family Can
Customers for the disposal of Refuse in accordance with this Agreement.
(m) "Residential Customer" means any person, including owner
or occupant, who resides in City in a single-family residence.
(n) "Yard Waste" means leaves, grass cuttings, weeds, vines,
shrubbery, brush=and tree trimmings, but not tree limbs over two (2) inches in
diameter. "Yard Waste" does not include palm leaves, succulents, dirt, concrete
or other refuse. Yard Waste also includes all items defined as "Garden Refuse"
in Section 12.24 of the Code.
(0 ) "Yard Waste Containers" means the 96-gallon receptacles
provided by Contractor to Residential Customers for the disposal of Yard Waste
in accordance with this Agreement.
2. Conditions to Effectiveness of Agreement. The obligation of City
to permit this Agreement to become effective and to perform its undertakings
provided for in this Agreement is subject to the satisfaction of each and all of the
conditions set out below, each of which may be waived in whole or in part by
City:
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(a) Accuracy of Representations. Representations and warranties,
made by Contractor throughout this Agreement are accurate, true and correct on
and as of the effective date of this Agreement.
(b) Furnishing of Insurance and Bonds. Contractor has furnished
the insurance and bonds required by this Agreement.
(c) Effectiveness of City Council Action. Gty's action approving
this Agreement shall have become effective pursuant to California law.
3. Contractor Status and Authorization. Contractor is duly organized,
validly existing and in good standing under the laws of the State of California.
It is qualified to transact business in the State of California and has the power to
own its properties and to carry on its business as now owned and operated and
as required by this Agreement. Contractor has the authority to enter into and
perform its obligations under this Agreement. The Board of Directors or partners
of Contractor (or the shareholders, if necessary) have taken all actions required
by law, its articles of incorporation, its bylaws or otherwise to authorize the
execution of this Agreement. The Persons signing this Agreement on behalf of
Contractor have authority to do so.
.
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4. Scope of Contractor's Services.
(a) In General.
(i) During the term of this Agreement, Contractor shall
have the sole and exclusive authority and obligation to collect, remove and
dispose of all Refuse from Residential Customers, Multi-Family Bin Customers,
Multi-Family Can Customers and Commercial Customers in accordance with the
terms and conditions of this Agreement. In order to insure that Contractor is
able to provide service to all residents of the City, City shall notify Contractor in
writing within ten (10) days of every new customer who subscribes for water
utility service from the City.
(ii) In addition, during the term of this Agreement,
Contractor shall have the sole and exclusive authority and obligation to collect,
remove and recycle all Recyclable Materials and Yard Waste from (1) all
Residential Customers, (2) all Multi-Family Can Customers and (3) Commercial
Customers and Multi-Family Bin Customers who have subscribed for recycling
services described in this Agreement in accordance with the terms and conditions
of this Agreement. Notwithstanding the authority granted to Contractor herein,
any Commercial Customer and Multi-Family Bin Customer or Multi-Family Bin
Customer may contract with an independent third party for recycling services,
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provided that the independent third party receives no compensation of any kind
in connection with the provision of such services.
(iii) Contractor's services will not include the collection or
handling of Hazardous Material, but if Contractor picks up identifiable Hazardous
Material, Contractor shall dispose of it properly and in accordance with all
applicable laws and regulations.
(iv) Contractor shall, at its sole cost and expense, except as
otherwise provided herein, furnish all labor, equipment and facilities required to
perform all services required by this Agreement.
(v) Contractor shall maintain appropriate equipment and
weigh all Refuse and Recyclable Materials collection vehicles at the transfer station
and at the landfill disposal site. Information regarding load weights shall be
included in the monthly reports described in Section 9(a) of this Agreement.
(b) Collection Schedule. Unless otherwise authorized by City
in writing, Contractor shall collect Refuse, Mixed Paper, Recyclable Materials and
Yard Waste in accordance with the applicable collection schedules and rules set
forth in Exhibit "A" attached hereto and incorporated herein by this reference.
Contractor's schedules and routes shall be made in consultation the City.
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(c) Containers. Contractor shall purchase, provide and deliver
to customers all Refuse Containers, Recycling Containers, Yard Waste Containers
and other approved receptacles for the integrated waste management program
services described in this Agreement. The types, sizes and colors of the
containers, and the printed labels placed on the containers, shall be subject to the
approval of City. The types, sizes, colors, labels and additional rules regarding
such containers are described in Exhibit "B" attached hereto and incorporated
herein by this reference.
(d) Service To Elderly and Disabled Residents. Residents who,
by reason of age or disability, are unable regularly to place their containers at the
curb shall have the option of placing their containers near their dwelling, visible
from curbside, and Contractor will pick up solid waste at this location and return
the container to same location. Authorization for residents to participate in this
optional program shall come from the Contractor upon request. Contractor will
notify all residents of this option annually, beginning within thirty (30) days of
effectiveness of this Agreement. New customers shall be notified of this option
upon requesting service.
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(e) Disposal and Recycling Services.
(i) Contractor shall select and use landfill sites for the
transportation, sorting and disposal of Refuse, which sites must be reasonably
acceptable to the City. The Pacheco Pass Landfill is deemed acceptable under this
Section by the City for the duration of its useful life, conditioned upon its
compliance with all federal, state and local laws and regulations.
(ii) Contractor shall collect, transport, sort, process, store,
dispose of and recycle or sell Mixed Paper, Recyclable Materials and Yard Waste
collected from customers in compliance with applicable federal, state and local
laws and regulations governing the collection, storage, processing, retransport
and recycling or disposal of such items. Upon request from the City, Contractor
shall identify the entity to which it transfers Recyclable Materials and Yard Waste
for processing. Recyclable Materials and Yard Waste that has been segregated
and collected as such shall not be disposed of at landfill sites without the
approval of the City, which approval shall not be unreasonably withheld. The
parties agree that, without limitation, it would be unreasonable to withhold
agreement if no person or entity is reasonably available which will provide the
service of recycling the materials.
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(ill) The City approvals regarding the manner and means
of disposal and recycling that are required by this Section shall be obtained prior
to the commencement of Contractor's services under this Agreement and prior
to any change in the previously approved manner or means of disposal or
recycling.
(f) Other Special Services.
(i) Contractor shall provide the additional services
described in Exhibit "C" attached hereto and incorporated herein by this
reference, including pick-up of extra bundles, Bulky Goods, Yard Waste overage,
Christmas trees, and used automobile motor oil filters and provide spring cleanup
services, illegal dumping and public places pickup, Amnesty Tags, Extra Can Tags
or coupons and other services. Such services shall be provided at no extra charge
to the customers, except as otherwise provided in Exhibit "C" or in any other
Section of this Agreement.
(ii) Contractor shall provide, at no charge to City,
collection, disposal and recycling services to (1) facilities owned, leased or
operated by City, including the City Hall complex, police and fire stations,
Community Center, Corporation Yard, parks and recreational facilities, including
the golf course, Senior Center, Youth Center and other similar or related facilities,
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(2) civic refuse programs conducted by City, including City sponsored clean-up
events and similar programs, to a maximum of six (6) events with the provision
of two (2) 20-yard bins per event, and (3) construction and demolition projects on
City property and involving City facilities. The free recycling, civic programs and
City projects services shall be on an "as needed" basis and shall be completed at
times and in a manner agreed to by City and Contractor. Contractor shall also
provide free dumping privileges by City for Refuse and debris from City facilities,
programs and projects at the Pacheco Pass Landfill during the useful life of the
landfill, up to a limit of 125% of the amount of Refuse and debris so disposed
during calendar year 1996.
(g) Disaster Assistance. In the event of wartime or natural,
physical or other disasters resulting in the declaration of a state of emergency by
duly authorized authorities which affect the areas in which Contractor's services
are to be performed, Contractor shall make available to City, at no cost to City,
Contractor's equipment and personnel for emergency operations to be conducted
or directed by City's emergency organization. City shall have the right to possess
such equipment and temporarily borrow Contractor's personnel as reasonably
required for City to conduct required operations under the direction and control
of City's chief of disaster operations. Contractor shall also provide to City such
additional equipment and personnel as may be reasonably available to Contractor
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to accomplish effective Refuse and debris removal during any declared state of
emergency .
(h) Promotion of Rec;ycling Program and Services.
(i) Contractor shall reimburse City for, or pay on behalf of
City, up to Ten Thousand Dollars ($10,000) of City's expenditures for public
education as part of the "Can-Do Recycling" and other similar programs.
Contractor shall cooperate with City by causing Contractor's representative or
other appropriate personnel to assist City with the preparation of educational
materials and advertisements promoting the recycling program and services and
to appear at community events for this purpose.
(ii) Contractor shall use reasonable efforts to support and
promote the Can-Do Recycling Program and shall develop and implement a
promotional program to encourage public support and use of recycling and other
special services, as described in Exhibits "C" and "F" hereto. Contractor shall
contact Commercial Customers and Multi-Family Bin Customers at least once each
year during the term of this Agreement to promote and solicit voluntary recycling
services. Contractor shall furnish to City at the end of each year during the term
of this Agreement a report identifying the customers contacted, and the contact
persons, and whether the customers accepted or declined service. City will
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cooperate with Contractor by allowing Contractor's use of the City newsletter and
public access cable television channel for Contractor's promotional program. City
shall have the right to review and consult with respect to all written materials
prepared by Contractor for publication or distribution by Contractor in connection
with Contractor's recycling program and other special services.
(ill) Contractor will use its best efforts to render regular
recycling services in accordance with this Agreement to at least twenty percent
(20%) of all Commercial Customers within five (5) years after the Effective Date.
(i) Contractor Representative. Contractor shall designate a
responsible employee with qualifications reasonably acceptable to City to be the
responsible contractor representative with City in connection with this
Agreement. Contractor's representative shall be available for communications
with City regarding this Agreement during regular business hours. Unless
otherwise stated herein, communications required or permitted to be given or
addressed to City shall be given or addressed to the City Administrator or to
other City officials who may be designated from time to time or for certain
purposes hereunder by the City Administrator.
(j) Customer Service Standards. During the term of this
Agreement, Contractor shall maintain the Customer Service Standards which are
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described in Exhibit "D" attached hereto and incorporated herein by this
reference.
(k) Non-Discrimination. Contractor shall not discriminate
against any person, including Contractor's employees and customers, because of
race, color, creed, national origin, sex, age, condition of physical handicap,
religion, ethnic background or marital status, in violation of any federal, state or
local law .
(1) Service Goals.
(i) Contractor shall cooperate with City in the
establishment, at least annually, or more frequently if requested by City, of
service goals for (1) recycling and special services which will enable Contractor to
increase public support and use of these services and to meet or exceed
Contractor's warranty regarding commercial recycling set forth in Section 4(h)(ill),
(2) quality of customer service which will enhance customer satisfaction and
reduce or limit liquidated damages that may be assessed in accordance with
Section l1(b), and (3) disposal reduction and diversion which will enable City to
achieve and exceed the State mandated disposal reduction goal by the year 2000.
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(ii) If established service goals are not met, at City's
request, Contractor shall prepare and submit to City for its review and approval
a plan of action to meet such goals. If established service goals are not met,
Contractor shall use due diligence and best efforts to increase the amount and
enhance the effectiveness of the services required under this Agreement. If the
parties agree that new and additional kinds of services are required, Contractor
and City shall negotiate the terms and conditions for providing such new
services, including an adjustment to the permitted rates and charges under this
Agreement. If quality of customer service goals established pursuant to
subsection (1)(i)(2) of this Section are not met, City may increase corresponding
liquidated damages up to one hundred percent (100%) for a period of up to one
(1) year.
5. Contractor's Equipment and Personnel.
(a) Collection Equipment.
(i) All items collected under this Agreement shall be
conveyed in well-maintained modern equipment, so constructed and so loaded that
there will not be any leakage or loss of such items from the equipment. All tools,
vehicles and receptacles utilized by Contractor in performing the services under this
Agreement shall be of a type capable of handling such Refuse, Recyclable Materials and
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Yard Waste for which they are used and shall be kept clean and in a good state of
repair.
(ii) Contractor's collection vehicles shall be identified,
painted and subject to inspection and other rules as set forth in Exhibit "E" attached
hereto and incorporated herein by this reference.
(b) Ownership of Equipment. All equipment and personal
property used by Contractor in the performance of this Agreement shall be owned by
Contractor; however, Contractor may lease vehicles if the leases are for not more than
five (5) years and there are no residual costs, but the specific leasing arrangements shall
provide that in the event of default, City, at its option, shall have the right to take
possession of and operate said equipment and property in the event Contractor shall
fail, refuse or neglect for any reason to collect and properly process and dispose of
Refuse, Recyclable Materials and Yard Waste, as required by this Agreement.
Contractor's equipment and personal property shall not be encumbered in a manner
that would interfere with the City's rights under this Section. Any lease entered into
by Contractor pursuant to this Section with an affiliate shall not contains terms and
conditions more favorable to the affiliate than the terms and conditions of leases
generally available from unrelated third parties.
(c) Contractor's Failure to Perform. In the event that Contractor
shall fail, refuse or neglect for any reason to collect and properly process and dispose
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of or recycle items as required by this Agreement for a period in excess of seventy-two
(72) consecutive hours, City may collect and process the same, or cause the same to be
collected, processed and disposed of or recycled, and Contractor shall be liable for the
expense incurred by City. This right of City shall be cumulative and in addition to
any and all other remedies it may have in the event of any such failure, refusal or
neglect of Contractor. City may, during any such period of failure, refusal or neglect
by Contractor, take possession of Contractor's equipment and personal property used
for the collection, processing and disposal or recycling of the Refuse, Recyclable
Materials and Yard Waste and employ such forces as it may deem advisable to continue
the required collection, processing, disposal and recycling services. The cost of all
labor, materials and equipment necessary for City to perform such required services,
under those conditions, shall be paid by Contractor and may be deducted and retained
by City from any monies then due or to become due to Contractor under or by virtue
of this Agreement. City's performance of any such services under those circumstances
shall not be deemed an election of remedies and shall not preclude City from seeking
any other available remedies.
(d) Labor Disputes. Contractor shall promptly report to City any
knowledge of Contractor that an actual or potential labor dispute is delaying or
threatening to delay the performance of Contractor under this Agreement, and
Contractor shall disclose all relevant information with respect thereto.
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6. Rights and Obligations Affecting Customers.
(a) Container Requirements. City shall use best efforts to
require, by ordinance or otherwise, that all customers receiving refuse or recycling
services from Contractor use the receptacles provided by Contractor for the purposes
intended.
(b) Storage and Collection Requirements. City shall use best
efforts to require, by ordinance or otherwise, that all customers receiving services
pursuant to this Agreement store and set out Refuse Containers, Recycling Containers
and Yard Waste Containers and other approved receptacles at the times and in the
manner required as part of the collection program operated by Contractor and
approved by City.
(c) Ownership of Rec;yclable Materials. From the time of
placement of Recyclable Materials at Curbside, or other approved collection locations,
Recyclable Materials shall become the property of Contractor; provided, however, that
the customer who placed those items for collection may retrieve such items as desired
prior to collection.
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7. City's Responsibilities.
(a) Public Awareness Program. City agrees to conduct and
participate in public education programs to encourage recycling, including the "Can-Do
Recycling" program. Additional information concerning this and other public
awareness programs is described in Exhibit "F" attached hereto and incorporated herein
by this reference.
(b) Protection of Contractor's Rights in Rec;yclable Materials.
City agrees reasonably to assist Contractor in protecting Contractor's ownership of the
Recyclable Materials placed at Curbside or other approved collection locations.
(c) Assistance with Permits. City agrees to assist Contractor, to
the extent reasonably possible, in Contractor's obtaining such permits and licenses as
may be required for Contractor's performance of its services under this Agreement.
8. Exclusivity.
(a) City agrees that Contractor shall have the exclusive right,
authority and franchise to provide the services described in this Agreement, subject to
certain exceptions set forth below. Subject to those exceptions, City shall not award
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any contract to, or enter into any contract with, any other person or organization for
the performance of services required to be performed by Contractor.
(b) The right and authority of Contractor hereunder shall be
exclusive, except with respect to the following:
(i) Hauling of Refuse or Yard Waste that is provided
incidental to the provision of other goods or services and without the use of a Refuse
Container, bin or debris box, such as the hauling of Yard Waste by a landscaper, the
hauling of tree trimmings by a tree service, the hauling of construction debris by a
construction contractor and the hauling of used Bulky Goods by the seller of such
goods;
(ii) Collection and disposal of Recyclable Materials from
Commercial Customers if the transaction does not result in a payment or other
consideration to the hauler of such materials by the Commercial Customer who
generated the Recyclable Materials; and
(ill) Collection and disposal of tallow, restaurant grease and
such other commercial bi-products and other non-salable material from commercial
premises upon which the parties may from time to time agree.
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9. Recordkeeping and Reports.
(a) Monthly Reports. During the term of this Agreement,
Contractor shall furnish to City monthly reports, due within fifteen (15) days after the
end of each month, providing the information that is described in Exhibit" G" attached
hereto and incorporated herein by this reference and such other information that is
required by City and the terms of this Agreement to be included in the monthly
reports.
(b) Annual Financial Reports. Contractor shall provide to the
City annually, within one hundred and eighty (180) days after the end of each of
Contractor's fiscal years ending during the term of this Agreement, Contractor's
audited financial statements, including footnotes and accountant's letter. Unaudited
financial statements shall be provided within sixty (60) days after the end of each of
such fiscal years. In connection with any such review by City, Contractor shall
respond to any questions of City concerning Contractor's financial ability to perform
its obligations under this Agreement. Upon request, Contractor will provide all
information reasonably requested with respect to any transactions between the
Contractor and any Affiliate.
(c) Financial Records. Contractor shall maintain financial books
and records, according to generally accepted accounting principles, for each year, and
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for each of the preceding five (5) years, during the term of this Agreement. These
books and records shall reflect all business operations of Contractor under this
Agreement and shall be available to City for review at all reasonable times during
regular business hours. The books and records shall include accurate data regarding
Contractor's revenues from and costs to perform all of its services under this
Agreement and shall reflect accounting for costs attributable to the provision of services
under this Agreement separate from accounting for costs attributable to the provision
of services in any other jurisdiction. Contractor's failure to maintain and make
available for City's review the required books and records may be cause for termination
of this Agreement by City.
10. Rates and Charges.
(a) In General.
(i) The allowable compensation for Contractor's services
relating to the performance of its obligations under this Agreement is subject to
determination by City pursuant to the Code and the procedures set forth herein.
Contractor understands that the rates described in this Agreement constitute the full
and sole compensation for the services of Contractor under this Agreement. No other
or additional charges shall be made or payments shall be sought and/or accepted by
Contractor either from City or from any other person for any of Contractor's services
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in performing its obligations under this Agreement, except for revenues which
Contractor receives from the sale of Recyclable Materials.
(ii) The approved rates will be subject to review and
adjustment by City at the end of the third year of this Agreement and at certain other
times, as provided herein. At the end of the third year, and thereafter, the rates will
be subject to adjustment corresponding to changes in certain price indexes or changes
in costs, as provided herein.
(b) Collection Rates. The maximum permitted rates which may
be charged for Contractor's collection, disposal and related services hereunder during
the first three years of this Agreement are set forth in Exhibit "I" attached hereto and
incorporated herein by this reference.
(c) Special Service Rates. Special rates which may be charged
for Contractor's extra pickup and other special services are set forth in Exhibits "C" and
"I" attached hereto. Unless charges are specifically authorized herein, Contractor's
pickup and other special services will be without charge to customers or City.
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(d) Special Requests for Extraordinary Rate Adjustments.
(i) Contractor shall have the option of filing a special
request, with supporting documentation, for an adjustment to the rates to recover any
significantly increased costs that Contractor can demonstrate have resulted from
extraordinary and unanticipated changes in circumstances occurring during the term
of this Agreement, such as the unavailability of or changes in landfill disposal sites that
have been approved by City, changes in laws or regulations, new or increased taxes
or fees imposed by a governmental agency, or other extraordinary events or
circumstances beyond the reasonable control and anticipation of Contractor. However,
the fact that economic conditions or operating assumptions made by Contractor when
entering into this Agreement do not turn out as anticipated by Contractor is not alone
a valid basis for a request for adjustment by Contractor under this section. Any such
adjustment in the rates shall be subject to the discretion of the City Council of City and
shall be based upon evidence of the increased costs to Contractor of performing its
required services under this Agreement (and shall take into consideration Contractor's
revenues). Any such request by Contractor may not be made more frequently than
once every two (2) years during the term of this Agreement, unless otherwise agreed
by City. Any such special request shall be made by March 1 of a year in which the
request may be made, unless otherwise agreed by City.
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(ii) City shall not be responsible for any damages to
Contractor as a result of City's failure to approve a rate increase to which Contractor
is otherwise entitled pursuant to this Agreement; provided, that any rate increase that
is enacted after the date on which enactment is otherwise required under this
Agreement shall be calculated to permit Contractor to recover the full amount of
revenue that Contractor would have received had the rate increase been enacted in a
timely manner.
(iii) If Contractor requests a rate adjustment due to changes
in circumstances relating to landfill disposal sites, City shall have the option of
providing a substitute landfill disposal site, at City's expense, and adjusting
Contractor's approved rates by an amount fairly equivalent to Contractor's changed
costs, if any, as a result of the use of the substitute landfill disposal site provided by
City. Upon City's request, Contractor shall submit to City evidence of its costs
attributable to the use of the landfill disposal sites for which City may provide a
substitute.
(e) Annual Index Rate Adjustments. Except as provided in
subsection (f), after the third year of this Agreement the rates and charges set forth in
this Agreement shall be subject to adjustments which correspond to increases or
decreases in price indexes in accordance with the terms and conditions set forth in
Exhibit "I" attached hereto and incorporated herein by this reference. Such
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adjustments shall be made as of July 1st each year during the term of this Agreement,
commencing on July 1, 1999.
(f) Five Year Review and Adjustment.
(i) On or before January 15 of the fifth, tenth, and
fifteenth years of this Agreement, either party may initiate a rate review as provided
in this Section by notifying the other party in writing. In the event either party sends
such notice, on the immediately following March 1, Contractor shall submit to City a
rate adjustment application and rate review report (collectively, the "Rate Application"),
showing the Operating Expenses incurred by Contractor in the preceding fiscal year
and all additional Operating Expenses Contractor reasonably anticipates will be
incurred or imposed in the next twelve-month period, together with unaudited
statements reflecting the Contractor's income and Operating Expenses for the
preceding fiscal year and projections of Contractor's anticipated income and Operating
Expenses for the next twelve-month period. The Rate Application shall also include
proposed rate schedules for the next twelve-month period that are calculated in
accordance with this Agreement and the principles in Exhibit "K" to produce
Contractor's Revenue Requirement for such twelve-month period in light of all
Operating Expenses set forth in the Rate Application. In any year in which Contractor
has submitted a Rate Application, City shall use its best efforts to review the Rate
Application and adopt rates for the next succeeding twelve-month period, either as
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proposed by Contractor or as modified by City, by June 1. The duly adopted rates
shall become effective on July 1 of the year, superseding the rate schedules previously
established and becoming the "Base Rates" for that year for purposes of Exhibit "J".
In the event that the rates are not approved on or prior to July 1, City shall make any
increase adopted retroactive to July 1.
(g) Rate Calculation. In any year in which a Rate Application
is submitted pursuant to this Section, the City shall establish rates at a level sufficient
to produce a Revenue Requirement for Contractor that is equal to the product of the
Operating Expenses divided by the Operating Ratio, minus the revenues received by
Contractor from the sale of Recyclable Materials [Le., (Allowable Expenses + Operating
Ratio) - Recycling Revenues], in accordance with the principles and methodology set
forth in the City of Gilroy Refuse Rate Analysis dated July 22, 1994, prepared by Hilton
Farnkopf & Hobson. A brief summary of principles and methodology from that
Analysis is set forth is listed on Exhibit "K" attached hereto and incorporated herein
by this reference. The "Operating Ratio" shall be as set forth in Exhibit "K".
(h) Operating Expenses. For purposes of this Agreement,
"Operating Expenses" shall mean all costs reasonably incurred by Contractor in
connection with or arising from Contractor's provision of services under this
Agreement including, without limitation, the following:
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(i) the costs of complying with all applicable laws,
regulations or orders now existing or hereafter enacted or amended, including but not
limited to California Public Resources Code 994??oo, et seq.;
(ii) labor costs, including but not limited to supervisory
labor, directly or indirectly associated with services provided under this Agreement,
including but not limited to salary and wages, health, pension and retirement benefits,
ESOP expenses (as set forth in Exhibit "K"), payroll taxes and workers' compensation
benefits;
(ill) equipment costs, including but not limited to
depreciation, vehicle registration fees, motor fuel, oil, tires, repairs and maintenance
of equipment, uniforms, tools and parts;
(iv) transfer fees, disposal fees and other fees imposed upon
Contractor in connection with its use of a permitted sanitary landfill or its transfer of
Refuse for the purpose of disposal;
(v) premiums for performance bonds and insurance
policies in the amounts and coverages required by City;
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(vi) administrative costs, including but not limited to
officer salaries, administrative staff, data processing, billing, postage and supplies;
(vii) utilities costs;
(vill) employee training, safety and education costs;
(ix) marketing, promotion and public education costs,
including but not limited to those which from time to time may be required for
compliance with California Public Resources Code 994??oo, et seq., and any and all
additions and amendments thereto;
(x) equipment or facility rental and leasing costs (as set
forth in Exhibit "K"), container costs, improvements and other capital expenditures,
including but not limited to depreciation, repairs, maintenance and replacement of the
same;
(xi) professional fees;
(xii) costs for financial and other reporting, accounting and
regulatory processes associated with or required by this Agreement or under law,
including but not limited to those which from time to time may be required for
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compliance with California Public Resources Code 994??oo et seq., and any and all
additions and amendments thereto;
(xiii) parent and affiliated company overhead expenses
incurred in connection with services provided pursuant to this Agreement;
(xiv) costs associated with designing, developing and
compiling rate applications and participating in the rate setting process;
(xv) business taxes and real and personal property taxes;
(xvi) franchise fees or business license fees associated with
the provision of services under this Agreement;
(xvii) any expenses incurred in the collection, handling,
processing, storing, transporting, marketing, or sale or other disposition of Recyclable
Materials; and
(xviii) any other surcharges, taxes or fees imposed upon
Contractor or levied by federal, State or local governments in connection with
Contractor's provision of services under this Agreement.
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11. The rates set forth in this Agreement take into consideration
Contractor's revenues from the sale of Recyclable Materials, which are projected by
Contractor to be in the amount of Eight Thousand Four Hundred Dollars ($8,400) per
month during the first five (5) years of this Agreement. Upon the review and
adjustment of the rates at the end of the first year and thereafter in accordance with
this Agreement, the parties agree that the projected amount of recycling revenues, as
modified from time to time, shall be offset against Contractor's costs of performing the
required services under this Agreement. The parties agree that the excess revenues,
if any, shall be considered as an incentive to Contractor to increase operating
efficiencies and meet service goals, including disposal reduction and diversion, as
provided in Section 4(1) of this Agreement. The projected amount of revenues from
the sale of Recyclable Materials that is to be offset against Contractor's costs, for
purposes of Contractor's incentive hereunder, shall be subject to modification by City
at the time of any rate review and adjustment, based upon the amount of revenues
actually received by Contractor, the actual costs of Contractor's performance of its
required services, and Contractor's success in achieving operating efficiencies and
meeting service goals.
(a) Customer Billings and Collections. Contractor, at its own
expense, shall perform all customer billing services and all collection of charges billed
in connection with Contractor's services to customers described in this Agreement. A
summary of all billings to customers and collections of charges during each month shall
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be furnished to City at least monthly, not later than the fifteenth (15th) day of the
following month, during the term of this Agreement. The billing summary shall
include all of the information set forth in Exhibit "L" attached hereto and incorporated
herein by this reference.
(b) Nonpayment By Customers. City shall cooperate with
Contractor to establish a lien procedure for the collection of unpaid bills similar to the
procedure provided in Government Code Section 25828. City shall cooperate with
Contractor to implement this procedure on an annual basis, beginning no later than
one year from the effective date of this Agreement.
(c) Disputes. All disputes regarding rates, charges and
adjustments shall be resolved in accordance with the procedures set forth in Section
16 of this Agreement.
(d) Franchise and Administrative Fee. In consideration for the
franchise granted under this Agreement, Contractor shall to submit to City, on the
tenth (10th) day following the last day of each month during the term of this
Agreement, an administrative fee equal to four percent (4%), and a franchise fee equal
to five percent (5%), of the total gross receipts actually collected or received by or on
behalf of Contractor from all customers in connection with the services performed
hereunder, except for those revenues received by Contractor in connection with the
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sale of Recyclable Materials (collectively, the "City Fee"). The City Fee shall be
considered due on the last day of each month and payable on the tenth (10th) day
thereafter. For example, if September bills are mailed on October 1, the City shall be
paid on or before November 10 the appropriate percentage of all amounts collected
during the month of October. Contractor shall send the last page of the monthly cash
receipts journal, the billing register and the accounts receivable aging report to the City
each month to verify collections for each month. Upon reasonable notice, City shall
be given access to Contractor's billing and collection records. The City may increase
the franchise fee to a maximum of seven percent (7%) upon ninety (90) days' written
notice to Contractor; provided, that in the event the City increases the City Fee it shall,
prior to the effective date of the increase, enact an increase in collection rates that shall
permit Contractor to recover the full amount of the increase, including an allowance
for the operating ratio.
(e) Late Payment Charge. Contractor agrees to pay a late
payment service charge of one and one-half percent (11f2 %) per month of the unpaid
amount of any City Fees which have become due hereunder and remain unpaid for
more than ten (10) days.
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12. Performance Audits and Liquidated Damages.l.
(a) Performance Audit. City may conduct performance audits
of Contractor's operations and services under this Agreement in its discretion, but not
more frequently than every five years during the term of this Agreement. The audit
will be conducted by a qualified firm selected by City, and Contractor shall reimburse
City for its costs of this audit in an amount not to exceed $25,000 for the first
performance review, increased by $5,000 per review for each subsequent review. The
audit will address and review appropriate areas of performance including, but not
limited to (1) organizational structure and management systems and procedures, (2)
efficiency of collection and disposal operations, (3) staffing practices, including the
deployment of management and supervisory personnel, (5) financial management
practices, including billing and collection systems, (5) personnel practices and the
resolution of employee grievances, (6) the handling of customer complaints, requests
and inquiries, (7) the acquisition, maintenance and replacement of equipment, (8) the
utilization and management of facilities, and (9) achievement of established service
goals, as described in Section 4(1) of this Agreement. In the event that this audit
reveals areas of performance which the City believes should be changed or improved,
the City may request, and Contractor shall attend, a meeting at which the parties shall
confer with respect to these matters. Contractor shall be required to adopt any changes
requested by the City to rectify a failure to perform according to the terms of this
Agreement or a hazard to public health or safety. Contractor shall be required to
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consider in good faith adoption of any changes that will not materially increase
Contractor's costs of performance under this Agreement.
(b) Liquidated Damages. In addition to any other rights or
remedies of City afforded by any provision of this Agreement or by law, City shall
have the following rights with respect to Contractor's failure to perform Contractor's
required services under this Agreement. City shall give written notice to Contractor
of any such failure to perform required services, and in such notice, City shall provide
to Contractor a fixed period of time of not less than thirty (30) days to comply with its
required services under this Agreement or to correct any failure to perform such
services. If Contractor fails to perform such required services or correct any such
failure, City shall, in addition to any other remedies available to it, have the right to
assess and collect from Contractor the liquidated damages applicable to the type of
service or failure, as set forth in Exhibit "M" attached hereto and incorporated herein
by this reference. The amount of the liquidated damages provided in Exhibit "M" may
be increased annually, commencing on July 1, 1998, based upon the same methods by
which the rates are subject to adjustment in accordance with Exhibit "J" to this
Agreement. City's rights to assess liquidated damages pursuant to this section of the
Agreement shall be in addition to any other rights or remedies of City, including the
rights of City provided in Section 12.14 of the Code. The parties agree that the
liquidated damages are a reasonable estimate of unmeasurable damages that would
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result from Contractor's failure to perform certain required services described in Exhibit
"M".
13. Relationship of Parties.
(a) Independent Contractor. It is expressly understood and
agreed by the parties that at all times in connection with this Agreement Contractor
shall be an independent contractor. All persons employed by Contractor in connection
with this Agreement shall be employees of Contractor and not employees of City in
any respect. Subject to the requirements set forth herein, the means whereby
Contractor's obligations under this Agreement are performed by Contractor shall at all
times be under the control and supervision of Contractor. Neither Contractor nor its
employees or agents shall at any time represent themselves to be employees or agents
of City in any manner or for any purpose.
(b) Indemnification.
(i) To the maximum extent permitted by law, Contractor
hereby agrees to defend and indemnify City, its City Council, commissions, officers,
agents, volunteers and employees against any claim, injury, liability, loss, costs, fines,
penalties and/or expense or damage, however same may be caused, including all costs
and reasonable attorneys' fees in providing a defense to any claim or legal action,
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arising directly or indirectly from any of Contractor's acts, errors or omissions with
respect to or in any way connected with Contractor's operations, services, fees or
charges relating to this Agreement, including without limitation, any failure of
Contractor to comply in all respects with the provisions of this Agreement and all
federal, state and local laws and regulations applicable to Contractor's performance
hereunder and any claim that City's award of an exclusive franchise herein is illegal.
The acceptance by City of any work or services performed by Contractor under this
Agreement shall not operate as a waiver of any such right to indemnification.
(ii) Upon the demand of City, Contractor shall provide a
defense to City and its representatives who are named as defendants in any legal
action or proceeding for which indemnification is required. City shall have the right
to approve counsel selected by Contractor for the defense of any such matter.
Contractor shall not settle any claim or lawsuit without the prior approval of City,
which approval shall not be unreasonably withheld.
(ill) Contractor's obligations under this subsection to
indemnify City shall not extend to any claim, injury, liability, loss, costs, fines,
penalties and/or expense or damage arising solely from the negligence or willful
misconduct of City or its officers, agents, volunteers or employees.
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(c) Hazardous Substances Indemnification. Contractor shall
indemnify, defend with counsel reasonably acceptable to City, protect and hold
harmless City, its elected and appointed boards, commissions, officers, employees, and
agents (collectively, "Indemnitees") from and against all claims, damages (including,
but not limited to, special, consequential, natural resources and punitive damages),
injuries, costs (including without limit any and all response, remediation and removal
costs), losses, demands, debts, liens, liabilities, causes of action, suits, legal or
administrative proceedings, interest, fines, charges, penalties, attorneys' fees for the
adverse party, and expenses (including without limit attorney's and expert witness fees
and costs incurred in connection with defending against any of the foregoing or in
enforcing this Indemnity), of any kind whatsoever paid, incurred or suffered by, or
asserted against, Indemnitees arising from or attributable to the acts or omissions of
Contractor, its officers' directors, employees, companies or agents, whether or not
negligent or otherwise culpable, in connection with or related to the disposal of
Hazardous Materials collected in the City by Contractor after the effective date of this
Agreement. Contractor shall have no obligation to defend or indemnify City pursuant
to this Agreement with respect to claims against City to the extent those claims are
based upon the disposal of Hazardous Materials collected prior to the effective date of
this Agreement.
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14. Performance Bond and Guaranty.
(a) This Agreement shall not become effective until Contractor
shall have secured and delivered to City a good and sufficient surety bond in the
amount of $100,000 to secure the full, true and faithful performance of all of the terms,
obligations, conditions and requirements of this Agreement and the Code which are
to be kept and performed by Contractor. Contractor agrees to secure and present said
bond for approval of City concurrently with the execution of this Agreement. The
bond shall not be subject to cancellation for at least one year and shall be renewed, or
a new bond furnished, subject to approval, not less than fifteen (15) days prior to the
expiration of the then existing bond filed with City. Contractor shall, at all times
during the term of this Agreement, maintain on file with City a surety bond complying
with the requirements of this section.
(b) Guaranty. Contractor shall provide the written guaranty of
Contractor's performance of all of its obligations under this Agreement by its affiliate,
Norcal Waste Systems, Inc. Said guaranty shall be in the form of Exhibit "N" attached
hereto and incorporated herein by this reference.
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15. Insurance.
(a) Insurance Coverages and Amounts. Contractor agrees to
maintain in full force and effect, at Contractor's own cost and expense, at all times
during the term of this Agreement, insurance coverages of the types and in the
amounts set forth in Exhibit "0" attached hereto and incorporated herein by this
reference.
(b) Certificates of Insurance. Contractor shall provide to City
certificates of insurance evidencing the insurance required to be maintained by
Contractor in accordance with this section. Such certificates shall comply with all
requirements therefor set forth in Exhibit "0".
16. Assignment. Contractor shall not in any manner assign its rights
or delegate its duties or obligations under this Agreement, either fully or in part, by
operation of law or otherwise, without the prior written consent of City, which consent
shall not be unreasonably withheld. Any sale of assets or securities, or any merger or
reorganization of Contractor as a result of which there is a change in the majority
ownership of or the right to control Contractor shall be deemed an assignment by
Contractor requiring the prior written consent of City.
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17. Dispute Resolution.
(a) Call for Mediation. If the parties are unable to resolve a dispute
arising under this Agreement in a cooperative manner, either party may call for
mediation, as hereafter described. The party calling for mediation shall serve notice
in writing upon the other party setting forth the question or questions to be mediated.
The costs of the mediation shall be borne equally by the parties.
(b) Mediation. Within ten (10) days after delivery of the notice
called for under subsection (a), the parties shall select a mutually acceptable mediator
from the Judicial Arbitration and Mediation Service ("JAMS") or other mutually
agreeable organization. In the event the parties are unable to agree on a mediator, a
mediator shall be selected for them at random by the San Francisco office of JAMS or
other mutually agreeable organization. Within ten (10) days thereafter, the parties shall
meet with the mediator in a good faith attempt to resolve their dispute. The parties
shall continue to meet with the mediator until their dispute is resolved or the mediator
indicates that he or she does not believe that further efforts are likely to result in a
successful resolution.
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18. Term and Termination of Agreement.
(a) Commencement and Term. This Agreement shall commence
on the Effective Date, but Contractor's services hereunder shall commence on July 9,
1997, or on such other date as the parties may mutually agree. The term of this
Agreement shall be thirteen (13) years in addition to the unexpired portion of the term
of the present franchise agreement between the parties, that is, until July 1, 2017.
(b) Termination Upon Default. In addition to any other rights
of City to terminate this Agreement, including such rights set forth in other provisions
of this Agreement, City shall have the right set forth in this subsection to terminate this
Agreement upon the occurrence of certain events herein described. Upon any material
default of Contractor in the performance of its obligations under this Agreement, City
may give to Contractor a written notice setting forth the nature of the default and
demand that said default be cured within a reasonable time, which as used herein shall
mean such period of time as will be reasonably required under all facts and
circumstances of the particular matter to cure said default; however, in no event shall
such time exceed a period of sixty (60) days, or be less than a period of thirty (30) days,
after the giving of such notice. If Contractor fails, neglects or refuses within the time
stated to cure said default or to comply with the relevant terms of this Agreement, then
City, without further notice or other proceedings, shall have the right to terminate this
Agreement and all of Contractor's rights hereunder.
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(c) Strike or Labor Dispute. The parties hereby agree that if
Contractor's failure to perform hereunder is due to a strike or labor dispute, this
Agreement shall not terminate and shall continue to be effective for the duration of
such strike or labor dispute. Such failure to perform shall not be considered a material
default for purposes of subsection (b), but it may qualify as a failure to perform
pursuant to Section 5(c). In the event of such a strike or labor dispute, Contractor shall
maintain an unobstructed entrance at its place of business which is not regularly used
but which will be primarily reserved for use by City access while City or its designated
representative is collecting Refuse. If the labor dispute or picketing blocks access to
Contractor's place of business, Contractor shall receive no compensation for any time
period in which it failed to collect and remove Refuse in accordance with the provisions
of this Agreement.
(d) Termination Upon Insolvenc;y Events. If Contractor shall at
any time during the term of this Agreement become insolvent, or if bankruptcy
proceedings shall be instituted by or against Contractor, or if Contractor shall be
adjudged bankrupt or insolvent by any court, or if a receiver shall be appointed for any
substantial part of Contractor's assets, or if Contractor shall make an assignment of any
substantial portion of its assets for the benefit of its creditors, then in any such event,
at the option of City, this Agreement shall immediately terminate upon notice by City
to Contractor. Under no circumstances shall this Agreement or franchise hereunder
101697/2-4625135:/31/347671/v6
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become a part of the assets of the estate of Contractor as a bankrupt, insolvent or
assigning entity, as set forth in this section.
(e) Effect of Termination. In the event of the termination of this
Agreement on account of Contractor's default, failure to perform its obligations
hereunder or insolvency, City shall have the right to take possession of Contractor's
equipment, vehicles, tools, computers, software, business records, including billing and
collection records, and other personal property reasonably necessary to continue the
services performed by Contractor under this Agreement; provided, however, that City
shall not be entitled to possession of proprietary information such as route maps, nor
shall Contractor be required to provide customer lists unless and until City has entered
into a refuse collection agreement with another collector. City shall have the right to
retain possession of said equipment until other suitable replacements can be purchased
or otherwise acquired by City for said purpose, and City shall pay Contractor the
reasonable rental value of such equipment and personal property during the time it is
used by City for said purpose. During such time, City shall retain all fees, charges and
revenues applicable to the collection, disposal and recycling services performed by City.
19. Notices. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement shall be in writing and shall be effective
upon personal delivery, to Contractor's designated representative or to the City
Administrator, or two (2) days after deposit in the U.S. Mail, first class, postage
101697/2-4625135:/31/347671/v6
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prepaid and properly addressed to the party to be notified at the address set forth at
the end of this Agreement or at such address as such party may designate by advance
written notice to the other party in accordance with this section.
20. Miscellaneous Provisions.
(a) Entire Agreement. This Agreement constitutes the entire
Agreement between the parties pertaining to its subject matter and supersedes all prior
or contemporaneous written or oral agreements and understandings of the parties,
either express or implied, including, without limitation, the Prior Agreement.
(b) Modifications and Waivers. Any modification or amendment
of this Agreement shall be effective only if evidenced by a written instrument executed
by duly authorized representatives of the parties hereto. Any party may waive specific
rights hereunder, which shall be effective only if evidenced by a written instrument
executed by a duly authorized representative of such party. In no event shall such
waiver of any rights hereunder constitute the waiver of such rights in any future or
other instance unless the waiver so specifies in writing.
(c) Severability. In the event any provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
101697/2-4625135:/31/347671/v6
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Agreement, which shall remain valid and enforceable to the fullest extent provided by
law.
(d) Interpretation. The captions in this Agreement are for
convenience and reference only, and the words contained therein shall in no way be
held to explain, modify, amplify or aid in the interpretation, construction or meaning
of this Agreement. Any pronouns or references used herein shall be deemed to
include the masculine, feminine or neuter genders, as appropriate. Any expression in
the singular or the plural shall, if appropriate in the context, include both the singular
and the plural. The parties agree that this Agreement shall be fairly interpreted in
accordance with its terms without any strict construction in favor of or against either
party, and that ambiguity shall not be interpreted against the drafting party.
(e) Further Documents. Each party agrees to execute and deliver
any and all documents which may be required or expedient to carry out the provisions
and intent of this Agreement.
(f) Authority. Each person executing this Agreement on behalf
of a party hereto represents and warrants that he or she has been duly authorized to
execute and deliver this Agreement on behalf of the party and that this Agreement is
binding upon the party in accordance with its terms.
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(g) Multiple Originals and Counterparts. Each executed copy
of this Agreement, if more than one, shall be deemed an original for all purposes, and
this Agreement may be executed in counterparts or by annexing signature pages hereto
showing assent to the terms of this Agreement.
(h) Exhibits. The following exhibits are attached to this
Agreement, each of which is incorporated herein by reference.
Exhibit A: Collection Schedules and Rules
Exhibit B: Container Specifications and Rules
Exhibit C: Extra Pickup and Other Special Services
Exhibit D: Customer Service Standards
Exhibit E: Collection Vehicle Specifications
Exhibit F: "Can-Do-Recycling" and Other Public Education Programs
Exhibit G: Monthly Reports
Exhibit H: Contractor's Projected Costs of Disposal and Recycling
Exhibit I: Approved Collection and Special Services Rates
Exhibit J: Annual Index Rate Adjustments
Exhibit K: Summary of Rate Principles and Methodologies
Exhibit L: Form of Monthly Billing and Collection Report
Exhibit M: Liquidated Damages for Failure to Perform
Exhibit N: Guaranty of Performance
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Exhibit 0: Required Insurance Coverages
IN WITNESS WHEREOF, the parties hereto sign this Agreement as of the
Effective Date set forth at the beginning hereof.
City of Gilrov
7351 Rosanna Street
Gilroy, CA 95020
Approved as to Form
i\-"---\,i~ \~
c) City Attorney
I
"-
Lr V .' "-'..
\ '-'..,.-..... -
\\ch
101697/2-4625135:/31/347671/v6
-51-
SOUlH V ALLEY DISPOSAL AND
RECYCLING, INC.
~
- ~ / .~t Jl~ml
By: "" J. '" , "h.;,,\^ '/"
By:
Its:
/'
/
/'
Addkss:
Its:
7110 Alexander Street
Gilroy, CA 95020
101697/2-4625135: /31/347671/v6
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EXlllBIT "A"
COLLECTION SCHEDULES AND RULES
A. Service Area & Collection Routes and Schedules. Contractor shall
perform the required collection services in the areas and along the routes mutually
agreed upon by the parties. Contractor shall collect all materials in accordance with
schedules agreed upon and changed from time to time with the approval of City.
When the regular collection day falls on a holiday, collection shall be made on the next
collection day. Alleyway collection service shall continue to be available during the
term of this Agreement to all residences for which such service was available on the
effective date of this Agreement at no extra charge.
B. Collectable Material. Contractor shall have the sole and exclusive authority
and obligation to collect and remove those of the following materials which are
segregated and placed in (or next to, if authorized) appropriate containers at Curbside
on public streets (or other approved location) for collection from customers as specified
by the corresponding schedules, and regardless of weather conditions.
1. Refuse shall be collected from all customers on a weekly basis.
2. Yard Waste shall be collected from all customers on an every other
week basis.
3. Rec;yclable Materials shall be collected from all Residential
Customers and all Multi-Family Can Customers on a weekly basis. Contractor shall
provide commercial recycling to all voluntarily subscribing Commercial Customers, for
whom collection of Recyclable Materials shall be provided on a weekly or as-needed
basis. Recyclable Materials shall be collected from voluntarily subscribing Multi-Family
Bin Customers on a weekly or as-needed basis.
C. Non-Collectable Material: Contractor shall not be required to collect
Hazardous Materials or other materials which are not Refuse, Yard Waste or Recyclable
Materials, nor shall Contractor be required to collect materials which are not placed as
required by applicable collection rules for such items. If Contractor refuses to collect
such misplaced materials, Contractor shall leave a notice explaining why such materials
were not collected. The form and content of such notice shall be subject to approval
by City.
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D. Missed Pick-ups. In case of a missed pick-up called in by a customer or
City, Contractor shall collect the materials from the customer during the next regular
collection day. All calls relating to missed pick-ups shall be logged in by Contractor.
The log shall be sent to City on a monthly basis, but shall be available for inspection
at any time by City.
E. Litter Abatement. Contractor shall use due care to prevent Solid Waste or
fluids from leaking being spilled and/or scattered during the Collection or
transportation process. If any Solid Waste or fluids leak or are spilled during
Collection, Contractor shall promptly clean up all such materials. Each Collection
vehicle shall carry a broom and shovel at all times for this purpose.
101697/2-4625135: /311347671/v6
-2-
EXlllBIT "B"
CONTAINER SPECIFICATIONS AND RULES
A. Container Specifications
1. Rec;ycling Containers. The Recycling Containers to be provided and
used in the residential curbside recycling program shall be one (1) fourteen (14) and
one eighteen (18) gallon bin for each customer, having a design and specifications
acceptable to City and having at least one (1) hole near the bottom of each container.
2. Refuse Containers. The material, shape, color, labels and all other
design specifications of the Refuse Containers, except for size (which is specified in the
Agreement), shall be as agreed upon by the parties and may be subsequently changed
from time to time with the prior written approval of City. The containers shall have
a weight limit of seventy (70) pounds per thirty-two (32) gallon of capacity.
3. Yard Waste Containers. The material, shape, color, labels and all
other design specifications of the Yard Waste Containers, except for size (which is
specified in the Agreement), shall be as agreed upon by the parties and may be
subsequently changed from time to time with the prior approval of City.
B. Container Rules
1. All containers for the integrated waste management program
services described in the Agreement shall be purchased, provided and delivered to
customers by Contractor.
2. Contractor shall provide, at Contractor's sole cost and expense,
such additional recycling containers to those eligible customers in City that demonstrate
the need for such additional containers because of the amount of Recyclable Materials
collected from such customers.
3. Contractor shall replace all containers at its own expense, whether
such replacement is due to loss, theft, damage, destruction, normal use, normal
exposure or manufacturing defects. Contractor shall provide to City documentation of
the cost of such containers.
4. Contractor, working in cooperation with City, agrees to send a
survey questionnaire to all eligible Refuse customers requesting the customers to
subscribe to a thirty-two (32), sixty-four (64) or ninety-six (96) gallon Refuse Container
at least sixty (60) days prior to implementation date. Customers who do not respond
101697/2-4625135:/31/347671/v6
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to the survey will be provided with the default service level of a thirty-two (32) gallon
container.
5. Newspaper and cardboard will be placed in paper bags or flattened
and set next to the Recycling Containers, or bundled in a fashion which allows for easy
collection. Motor oil shall be placed in the Contractor provided one (1) gallon HDPE
plastic container or in any watertight, screw capped one (1) gallon container provided
by the residential customer, and Contractor shall provide the zip-lock plastic bag for
the recycling of used motor oil filters to any residential customer, upon request.
Contractor shall provide these used motor oil containers and oil filter containers at no
cost to the customers.
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-2-
EXlllBIT "C"
EXlRA PICK-UP AND OTHER SPECIAL SERVICES
A. Extra Pick-up
1. Amnesty Tags. Contractor shall provide and be responsible for the
distribution of quarterly" Amnesty Tags" to each eligible customer. The Amnesty Tags
shall allow the customer to discard up to thirty-two (32) gallons of refuse, not
exceeding thirty-five (35) pounds in weight, one time per quarter at no additional
charge. Contractor shall initially supply these "Amnesty Tags" in the public outreach
packet included in the delivery of the Refuse, Yard Waste and Mixed Paper containers.
All future distributions of the "Amnesty Tags" will be the responsibility of Contractor.
2. Extra Pick-Up Tags. Contractor shall offer "Extra Pick-Up Tags" for
a cost of Four Dollars ($4.00) for purchase by individual can customers for extra refuse
above their subscription service. Contractor shall make available these Extra Can Tags
at Contractor's office, City Hall, and participating local merchant locations. Extra Pick-
Up Tags may be attached to refuse placed in a single plastic bag, the weight of which
shall not exceed fifty (50) pounds.
3. Other Overages.
a. Yard Waste Overages. Overages of Yard Waste are allowed
if they are bundled in l' x 2' x 4' dimensions and overages do not exceed ten (10)
bundles or cans per household per two (2) week period.
b. Mixed Paper. Overages of Mixed Paper shall be collected if
they are placed in a paper bag no larger than l' x 2' x 2'. Customers shall be limited
to no more than five (5) such bags per week.
c. Christmas Trees. Contractor agrees to continue to collect
Christmas trees from customers beginning the first service day after Christmas and
continuing until the fifteenth (15th) day of January.
B. Bulky Goods. Contractor shall offer a Bulky Goods pick-up service on an
on-call basis for the collection of items such as White Goods, Brown Goods, furniture,
mattresses and carpets. The charge for the collection of these items shall be Twelve
Dollars ($12.00) per item plus the cost of published disposal rates at the disposal
location used by Contractor and approved by City.
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C. Oil Filter Rec;ycling. Oil Filter Recycling shall be provided by Contractor
at no charge to all residential customers receiving can service. The service will be
provided weekly and Contractor agrees to provide plastic zip-lock bags to such
customers who may wish to recycle their oil filters at no charge. Contractor agrees to
pick up oil filters as long as they are securely sealed in the Contractor-provided bag.
Contractor shall be responsible for the advertising of this program to all eligible
customers.
D. Voluntary Rec;ycling. Contractor shall provide weekly recycling service
to Multi-Family Bin Customers and Commercial Customers who voluntarily subscribe
to such service. Those subscribing Multi-Family Bin Customers shall be charged a fee
of One Dollar and Fifty Cents ($1.50) per residential unit for recycling services. The
material collected will include all those materials listed under Section l(i) of the
Agreement. Multi-Family complexes will also have the option to utilize Contractor's
Commercial Recycling rate of seventy percent (70%) of the Refuse rate as shown in
Exhibit I. Commercial Can Customers shall be eligible for two (2) eighteen (18) gallon
bins upon request at no additional charge for Recyclable Materials.
E. Spring Cleanup. Contractor shall provide an annual Spring Cleanup
Program beginning in April 1998, whereby customers receiving can service may dispose
of up to seven (7) additional thirty-two (32) gallon bags or cans of refuse, not exceeding
thirty-five (35) pounds each, at no additional charge. During the Spring Cleanup
Program, Contractor shall be responsible for the distribution of a Bulky Goods coupon
to all customers receiving can service whereby customers can dispose of two (2) large
items of Bulky Goods free of charge at the transfer location used by Contractor and
approved by City. Contractor shall be responsible for advertising this program to all
eligible customers. City shall be responsible for the cost of disposal of any solid waste
collected during a Spring Cleanup in excess of the greater of 1,000 tons total or 245
pounds per household.
F. Community Cleanup Projects. Contractor shall provide service to City for
the City sponsored community cleanup projects at no charge and upon City's request.
Contractor agrees to provide for the drop off, collection and disposal of debris boxes
from said cleanup projects up to six (6) times per year, with a maximum of two (2) 20-
yard containers to be provided for each event.
G. Complaints of Illegal Dumping. Contractor agrees to service complaints
of illegal dumping of Bulky Goods on public properties at no charge and upon City's
request. Complaints regarding items such as washers, furniture, mattresses, etc., that
have been illegally disposed of on public property will be referred to Contractor by City
for pick-up within forty-eight (48) hours of notification. Contractor shall provide
documentation to City within seven (7) business days that the items under complaint
have been picked up.
101697/2-4625135:/31/347671/v6
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H. Drop-Off Rec;ycling. Contractor shall make available, at Contractor's
expense, drop-off recycling location during the term of the Agreement, except as
otherwise may be directed by written notice from City to Contractor. Contractor shall
make arrangements for drop-off recycling for residents and businesses of City or other
places as and in accordance with rules approved by City. Contractor's recovery
program shall consist of the placement of bins at said location for deposit of Recyclable
Materials. No charges shall be made for drop-off recycling by residents of City, unless
specifically authorized by City and set forth in Exhibit "I" hereto, provided that the
items dropped off are generated within the City and do not exceed two (2) 18-gallon
containers per resident per week. Contractor shall include regular advertisements of
this drop-off recycling location and services in its promotional program described in
Section 4(h) of the Agreement.
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EXlllBIT "D"
CUSTOMERSER~CESTANDARDS
A. General Service Standards. In addition to the customer service standards
set forth elsewhere in the Agreement, including its Exhibits, Contractor shall also
maintain the following standards:
1. Professionalism. Contractor shall perform all services under the
Agreement in an thorough, professional, sanitary, safe and careful manner. Contractor
shall establish and enforce an educational program which will train Contractor's
employees in the identification of Hazardous Waste. Contractor shall also train its
employees in customer courtesy, shall prohibit the use of loud or profane language,
and shall instruct Collection crews to perform the work quietly. Contractor shall use
reasonable efforts to assure that all employees present a neat appearance and conduct
themselves in a courteous manner. Contractor shall provide suitable operation, health
and safety training for all of its employees who use or operate equipment or who are
otherwise directly involved in Collection or other related operations.
2. Compliance with Laws. Contractor shall perform all services under
the Agreement in accordance with all federal, state and local laws, ordinances and
regulations, including without limitation the provisions of applicable sections contained
in Chapter 12 of the Code.
3. Disturbance. No collection made hereunder in residential
neighborhoods shall commence prior to 6:00 a.m. or occur after 7:00 p.m. on any day.
All collection shall be accomplished without unnecessary noise, litter, disturbance, or
commotion.
4. Handling of Containers. Contractor agrees that all containers, after
emptying, shall be returned with the lids closed, and placed, not thrown, to the
premises from which they were removed, within five (5) feet of the place the container
was picked up, but not in any driveway or street.
B. Service Inquiries & Complaints
1. Telephones. Contractor shall provide and maintain, at Contractor's
expense, such telephones and telephone answering services as may be reasonably
necessary so that calls, requests, complaints and service inquiries may be received by
Contractor with respect to Contractor's operations and services between the hours of
8:00 a.m. and 5:00 p.m. on all regular collection days. Contractor shall have staff
available and assigned to answer such calls during these hours. Answering services
101697/2-4625135:/31/347671/v6
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shall be maintained outside of regular business hours and collection days. Contractor
shall also install, utilize and maintain during the term of this Agreement appropriate
telecommunication equipment for communication with deaf customers, such as
"Telecommunication Device for the Deaf" (TDD), and provide training, as reasonably
necessary, for the use of that equipment.
2. Response. Contractor shall respond within the same business day
to all calls and act within one business day, where practicable, upon all reasonable
requests and complaints pertaining to Contractor's operations and services, including
complaints or service inquiries referred to Contractor by City. Contractor shall
maintain a daily log of all complaints, including date, time, name and address of
complainant and a description of actions taken to address and resolve such complaints
and prevent reoccurrence. A copy of the log shall be provided to City upon request
and at least monthly during the term of this Agreement. Contractor shall furnish to
City by the tenth (10th) day of each month during the term of this Agreement a
monthly service report for the preceding month describing Contractor's response to
and resolution of all requests, complaints and service inquiries.
101697/2-4625135:/31/347671/v6
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EXHIBIT "E"
COLLECTION VEHICLE SPECIFICATIONS
A. Collection vehicles used by Contractor to perform the services
contemplated by this Agreement shall be painted uniformly and numbered in
consecutive sequence and shall have Contractor's name, telephone number, place of
business and the number of the vehicle painted in letters of a contrasting color on each
side of each vehicle, and the number painted on the rear. Said rear number shall be
readable for a distance of one hundred (100) feet. No commercial or other advertising
shall be permitted without the approval of City.
B. All collection equipment used by Contractor shall have appropriate safety
markings including, without limitation, highway lighting, flashing and warning lights,
clearance lights, and warning flags. All such safety marking and all other vehicle
aspects shall conform to the requirements of the California Vehicle Code, as amended
from time to time, and shall be subject to approval by City.
C. Collection vehicles shall be repainted at least every sixty months, with
"touch up's" in the interim as required. Each vehicle, when repainted, shall be made
available to City for inspection. All collection vehicles shall not be more than ten (10)
years old unless rehabilitated, overhauled, and repainted to an equivalent condition of
a new vehicle. Rehabilitated vehicles shall be made available to City for inspection.
In no case shall any vehicle be more than fifteen (15) years old.
D. Contractor's compliance with the collection vehicle specifications
hereunder shall be subject to the review and determination of City. All vehicles
operated by Contractor must comply with applicable state laws and regulations.
Contractor shall cooperate with all California Highway Patrol vehicle inspections
initiated with respect to Contractor's vehicles.
101697/2-4625135:/31/347671/v6
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EXHIBIT "F"
"CAN-Do-RECYCLING" AND OlHER PuBuc EDUCATION PROGRAMS -
\"\'S AS
~~5 X AS...
Put e1la5~ food & beverage jars, p(a~tic containers W and~,
and all m'etal food alid beverage container5 all mixed together
in your yellow recycling bin. Place curb5ide for pickup.
-~ ':0- - ~, ".~'~.' - . "; . .' _
. . ~ ,- ~ -.. - .-
.:.-:.~'. -:.:..'~~. ;~'--~ '.
All ~Iati food & I>c.te~ jan;
aM t;o';t.!es 5u.:;h li5 m.!t jui.:;e,
mlly.:ln!Uli5C "na t;pagh~;.i
6Duce jar... ~e ~I !I.... ~
aM place ..eparaky o. ^
;ni:>ln. '"
i" "S'
W 8M G CWIr. op.~ue or
.... _ CO"r"'" COIIt4I~n;
1rn;lwllne 1l1O$1: mIlk /in.:! oranee
Juice J~6. waUl" 1Io;UIS6, !.
dctcreelltand 6hall1pOC , ~
contalrlel'6. ~ I
ClIp6 and di6C.llrd. . ~ .. ~
,.. .. . ~
^" metlIl food .nd I>cverAfc
com.alncl'6 InclwllllG tho6e
"'..... of Aluminum. un. 1I~1
"n.:! I>i'm~' .uch .. lad.., pee
rood, 60up "nd 1:IIns /;8n6.
(~5 ~.) ~ 0 ' ~ .
IU"ORTA~"T: "UN rift.. faN ,....::1. ),____,. conkin.,. aNI ConIeh or .ma.h "...u,; coMaIM"'.
, .
Put newspapers (bundled, tled,or in brown bags) corrugated
c;ardboard (fla~ned and bundled) in separate plies next to your
yellow recycling bin. Place mixed paper separately In your blue recycling bin.
MI><ed paper mU61: I>e kcpt 6epal'llte from newspaper.
P,,1; mlxe<:l paper in p/lpcr I>~s or I>\lru:lle IInd ~ ~ 51:riile.
~ta~rd Pllpllr ,~ .' Gl06~ ~ap<<
. WhIte Pllper'" . Mag_nu . W1u1OS5
. CoI~ r"per . ~ poolc6
:~lo';:Paper.' .' . . ~
Chlpl>c>lIrd I <, Mlseellaneou6 raper
raperl>oarlll : . · Junk Mall
. Ccn:al 5oKe1l . . ~: : . A.lh"6;"" Notes
(1'1lIlIOY/J UMI'6) ~~ . . ~ . rllper ~ CIIrkom>
· Cr"",,"," 5oKe5 ' . ~ Paper
. ~ ~5 'G=ry lla6s
. Wrappl"i! Paper
. -...
. . -~,. .-
- - - -
-, -'. .
--::. .- . - - . - --' -- ' .
NeW6?"pe'6 f'hc)d ~ plAIcca
in pllper Pllell or I>"r~~
and tied with fitrillG
IInd p1".:;c:J I1&lCl; 1:0
)/Our rccycli"!J
I>ins.
P1c"K fl.t1:un and 1>un.:!1e wl1:h
~ nrlne In" Nparatdpl~,
110 '-reer tn"n
:3 ~ toy:!5 ft.
Sorry, We eanno1: 1:akc...
t'ood GO"~.",lft.'U" ,.p.r prG~u". .ft'" p.Gk.fttt, euc;k .. plzz~ ..M41o. JloIlu .0.... Of' ",~r "'Ilk '.rr.of'l'. '''''' ~....II"c~, p.pcr .U.hw.rc _"'
&lun.a.. nApkin., p.p." '-Owel., '..CI..i ~"I.Ie:.. .h,llcprl"~" ur'lron p,p,,.. tDII. mf;Ulllc ..,,. ,llInIC.".nd "p.r pr.ulucc..
Place erass clippings, leaves and small
branches In your yard waste contaIner.
.. '. . .
;... ': ,."-' -. -'. ~. -. . ~ ~
,Pill(;(: ~6C:J motor ",1 nc:>cti
to your rceycline Pin in
onc-oi..r..,., pLt~~
cont4inen; wtth tign.-
flWne 6~ewrDp liD6-
c"n 1M2-~ 01' '-INn
to 5~,gIlll0:.c0m to
rllo1u56t 011 rw.,d1ne contalnel'6.
Y Oi. m"Y fUC6 up -;0 three one-
ea!lon ~lne1'6 for p~cl:up ne>.'1:
to your re...~line PJn$ C)I'l )/O"r
r~\l"',!y ~hc:Jvlc.d ~ dlly
'.. ..:'" . :.. ;....:::.... .,..:..~~.;::.:;~~.::~.~~.~;~;::
PlAco grll66 clippi"!J'" IeQve6 Jlnd 6111.11
I>r.na.". cut iI1ta tnre~-foot Ie"t1tlut Or le61lln _NI61E
your YlIrD Wll!Jte 'on~ln~r. Yard Wa..te mU6t
f11: /n61dt conui~r and lid mU61: ~c CI06td.
Una,"""" ......
'~'.::A..4f.rt, U4aftf. .......J.,..u (J("'~,'" ftlfWll1!l
.*MAet\"~.... .
~~,,;~:,~~~~...,..PO.Y~. ,.,..:on.:.t. o..,~~.
. It: '';.Wrp'. \.tef """".Q rr fI'llnW!. \.I'll'
. N; "'.s" or r......,..."....
~~~.J~-t:~~..'~~;'?,..~~;t.~~.~~.
~III
! ;!!
I' i ::.
I I i ,;
l!~
i~~),P
-1-
Reminder:
Yard wa6U Is c;oIl4Ctlld
every oWer wuk
accordillG to thll
enclo6ed (;IIlendar,
A
~..ww..F"~llIlo1&1
SDIITI4 VAUfY lIISI'DSAl & 1lfCYtU~.
. '"~ .......ftCet ~"'H:
EXI-llBIT ft F ft
ft CAN-Do-RECYcLlNG" AND OrnER PuBuc EDUCATION PROGRAMS ~
,€-S TAN
'< ~~~~~~+!o..
. . .~':..
Ponga 1015 frascos tle comitla '::/ botella6 tle bebitlas. reoipientes
tle plastico ii '::/ ii '::/ totlos 1015 botes tle lata tle comida '::/
bebitlas.juntos en el reclpiente tle reciclaJe amarillo. Pongalof; en
\a acera para 6er recogltlos.
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6O<i6. ~ de peml. &OFA' y
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Po~a toaos 105 perioaicos en butto ':I ammaraaos con coraon
o en bolsa ae papet. El cartOn onaulaao. aplastatlo '::/ en bulto.
pcmBalo en pllae; junta a e;u recipie:nte iimarilIo. Po~o toc:lo au
papel 'iiiiiiiiiIiiIi reaipiente azul. .
E1 peri6ll1~ .:Iel>e lie pont:l'$e en EI pllptl m:"", llel>e de 1TIlI"..aImiie 6epllrUo 4leI pmodiGo- fO<".glI C<
~5de p~pel 0 en l>ulta& pllper! mb...o en bol&lI& de ~pet 0 en !:>Ill"'..o 1I1N1rT'l1do con cord6n.
1I1T1l1M"8.:i05 c;on GOrdOn ':I I' brlIloeo
~ 1I un IIIdo Ile ".pel oroli"",rio ~.. apel
llU ruipic:n~. <'Ie . rapel tunco' . ~& . cllUlo!l05 . dltU""..0ri05
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TO<tI5Io& fr~ c:le coml<la y I>el>Wi '.f
i>oteIlas. como.:le J~C5 y fnI;lG05de
fI'll!':/OI\e~a, y ~I~li de 'paehetti Quite
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ruoi' II d . r6jJ~I'" de ...-Acio.
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...... . '. .:.;-. ~ ~ ~ ~,.."'-:::--::~....-:-
CorteiDfi en medldafi de 3 pIt6 de IarljO 0 me~
El k6".,.diC'06 ole jardin 1Ie~ de C8b4r denU'0 Ilel ._~
redple"t.e Y III 1:lIpaMrlI <'I1ll>e lie !lOUr cerrm. .~ .
-........... .,. il:
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Ruoraatorio
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&e recoJe cada urur
&eftUln& H4un .I
ca!ondario ineluido.
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EXHIBIT "G"
MONTHLY AND QUARTERLY REpORTS
Contractor shall report to City the following information on a monthly basis:
1. Refuse Collected. Contractor shall provide City with
information regarding the quantities of Refuse, Recyclable Materials, and Yard
Waste collected, the type of material collected, from which City the Refuse or
other material was collected, and from which category of customers the Refuse
was collected.
2. Refuse Collection Vehicle Weigh-In. Contractor shall provide
to City detailed information resulting from the weigh-in of collection vehicles
under Section 4(a)(v) of the Agreement. Information to be reported shall be the
number of vehicles weighed and the gross and net weight of each vehicle.
3. Container Expenditures. Contractor shall provide to City the
quantity and types of containers provided to each category of customers,
including additional and replacement containers for refuse customers and any
other information City may reasonably require regarding the provision of and
expenditures for containers.
4. Promotional Materials Distributed. Contractor shall provide to
City the types and amount of promotional materials distributed by Contractor
pursuant to Section 4(h) of the Agreement, and any other information City may
reasonably required regarding the distribution of promotional materials and
contacts made by Contractor to promote the integrated waste management
program.
5. Customer Service Reports. Contractor shall provide to City
information describing Contractor's response to and resolution of all requests,
complaints and service inquiries, pursuant to Section 4(b) of Exhibit "D" to the
Agreement.
6. Other. Contractor must also report to City such other
information as may be required by the terms of the Agreement or as may be
mutually agreed by the parties. Contractor shall retain all records required to
be maintained by this Agreement for a period of not less than five (5) years.
101697/2-4625135:/31/347671/v6
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101697/2-4625135:/311347671/v6
EXHIBIT "H"
THIS EXlllBIT INTENTIONALLY DELETED
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EXHIBIT "I"
ApPROVED COLLECTION RATES & ApPROVED SPECIAL SERVICES RATES
Service
Proposed Rate Note
1. Residential Customers and Multi-Family
Can Customers (including Recycling)
Unlimited
n/a
l-Can
$18.22
2-Can
$28.00
3-Can
$38.00
Each add'l can
over 3
$10.00
Extra Can tag
$4.00
Bulky Item pickup
$12.00
Plus disposal cost
Toter subscription
changes
$10.00
After 90-day phase-in
Low Income Senior
Unlimited n/a
l-Can $15.21
2-Can $24.99
3-Can $34.99
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Hillside
Unlimited
n/a
l-Can
$22.17
2-Can
$31. 95
$41. 95
3-Can
2.
Multi-Family Bin Customer Recycling
Per-Unit Charge $1.50
For recycling service only
(option to choose Commercial Service)
3.
Commercial and Multi-Family Bin Customer
(Refuse)
Business Can n/ a
(unlimited)
l-Can $18.22
2-Can $28.00
3-Can $38.00
Each additional can $10.00
Debris Box,
20 cubic yard $310.68
Plus $6O/ton
over 3 tons
Debris Box,
40 cubic yard $517.72
Plus $60/ton
over 6 tons
101697/2-4625135: /31/347671/v6 - 2-
Debris Box,
Compactor $29.32
(per cubic yard capacity)
Debris Box,
20 yd recyclable $192.43
Debris Box,
40 yd recyclable $340.56
4. Commercial Front Loader Service Rates
a. Refuse Disposal
lx/wk 2x/wk
2 Yard F/L 126.82
3 Yard F/L 183.12
4 Yard F/L 245.90
6 Yard F/L 358.49
Front Loader Special:
238.80
345.81
465.92
682.46
b. Commercial Recycling
lx/wk 2x/wk
2 Yard F/L 88.77
3 Yard F/L 128.18
4 Yard F/L 172.13
6 Yard F/L 250.94
Front Loader Special:
167.16
242.07
326.14
477.72
5. Compactor Service
Front-Loader $29.32/cu.yd.
Debris Box $25.51/cu.yd.
3-yd F /L compactor
3-yd F/L compactor
3-yd F/L compactor
101697/2-4625135:/31/347671/v6
3x/wk
4x/wk
5x/wk
350.78 462.77 574.75
508.50 671.19 833.88
685.94 905.96 1125.98
1006.44 1330.41 1654.38
13.72 (per cubic yd.)
3x/wk
4x/wk 5x/wk
245.55 323.94 402.33
355.95 469.83 583.72
480.16 634.17 788.19
704.51 931.29 1158.29
9.60 (per cubic yd.)
lxwk
2xwk
3xwk
-3-
381.02
762.05
1143.07
6x/wk
686.73
996.57
1346.00
1978.35
6x/wk
480.71
697.60
942.20
1384.85
(on
call)
82.27
117.64
163.74
224.78
(on
call)
57.59
82.35
114.62
157.35
6. Debris Box Rate
Drop Box
20 Yard 310.68
40 Yard 517.72
101697/2-4625135: /31/347671/v6
(Per Yd. )Drop Box - Recyclable
15.53 192.43
12.94 340.56
-4-
(Per Yd)
9.62
8.51
EXlllBIT "J"
ANNUAL INDEX RAlE ADJUSTMENTS
A. The annual index rate adjustments shall be made with reference to
the following terms:
1. The "Base Rates" are the rates that are subject to adjustment
on each Adjustment Date. They are the collection rates and special service rates
described in Exhibit "I" and the liquidated damages set forth in Exhibit "M" of
this Agreement, as subsequently adjusted, that are in effect on March 1
immediately preceding each Adjustment Date. However, the "Base Rates" shall
not include extraordinary, non recurring rates or charges or temporary rate
adjustments.
2.
July 1, 1999.
The "Adjustment Date" is July rt every year, commencing
3. The "Index" means the Consumer Price Index for Urban
Consumers as reported for the Oakland, San Francisco-San Jose Standard
Metropolitan Area Index (Urban Wage Earners. 1982-84 = 100) by the U.S.
Bureau of Labor Statistics
4. The "Percentage Change" means the annual change in the
Index from December to December of the year preceding the Adjustment Date.
The maximum Percentage Change that may be used in connection with these
rate adjustments is 10%. The Percentage Change shall be calculated by the
following formula:
Percentage Change = x(I)-x(I-2)
x(I-2)
Where x(I) = the Index value for December of the year before the
Adjustment Date, and
x(I-2) = The Index value for December of the second year before the
Adjustment Date.
B. The Base Rates shall be adjusted on the Adjustment Dates up or down by
a proportion equal to 40% of the Percentage Change in the Index and a further
proportion equal to 10% of the Percentage Change in the Motor Fuel Component of the
Index during the fourth year of this Agreement. The Base Rates shall be adjusted on
the Adjustment Dates up or down by a proportion equal to 70% of the Percentage
101697/2-4625135:/31/347671/v6
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Change in the Index and a further proportion equal to 10% of the Percentage Change
in the Motor Fuel Component of the Index during all subsequent years of this
Agreement (unless such rates are determined by a rate review pursuant to Section .1.o.J.
C. Annual rate adjustments shall be made only in units of one cent ($0.01).
Fractions less than one cent ($0.01) shall not be considered in making adjustments.
D. If the Index is not published with reference to the months of the year
required for a calculation of rate adjustments hereunder, the Index values for the
month most immediately preceding that December shall be used. If the Index is
discontinued, it shall be replaced by an Index which most closely approximates the
original categories as determined by the United States Department of Labor, Bureau
of Labor Statistics.
E. On or before March rt of each year preceding the Adjustment Date,
commencing March 1, 2000, Contractor shall send to City the information necessary for
the calculation of the Index adjustment in the Base Rates.
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EXlllBIT "K"
SUMMARY OF RATE PRINCIPLES AND METHODOLOGIES
1. Current related party leases are allowed for the remainder of their existing
terms.
2. New related party equipment leases will be allowed for a five year term only,
with no residual cost allowed.
3. No other related party profits are allowed for rate purposes.
4. Depreciation and landfill depletion expenses are to be based on the assets'
original cost, plus any improvements made subsequent to the assets' acquisition.
5. Landfill assets are to be capitalized and depreciated over the remaining life
of the landfill.
6. Allowed ESOP expenses or subsequent employee savings plan are limited to
70% of the annual corporate allocation.
7. Transfer station and landfill costs are to be allocated among the jurisdictions
served by Contractor based on actual tons disposed of by the jurisdictions.
8. Profit on operations and maintenance costs, excluding landfill costs, will be
allowed based on a pre-tax, pre-interest 90% operating ratio.
9. Profit on landfill and disposal costs will be allowed based on a pre-tax,
pre-interest 82% operating ratio.
10. Scales shall be used at both the transfer station and the landfill to weigh
collection and recycling tons.
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EXHIBIT "L"
FORM OF MONTHLY BILLING AND COLLECTION REpORT
BILLING AND COLLECTION REpORT FOR THE MONTH OF , 19_
Total Amounts Billed (See Attached Billing Register):
Charges Late
0 Residential Customers $ $
0 Multi-Family Bin Customers $ $
0 Multi-Family Can Customers $ $
0 Commercial Customers $ $
0 Other Customers (specify: ) $ $
GRAND TOTAL BILLED $
Total Amounts Collected from Previous Monthly Billings:
(See Attached cash receipts journal)
Charges Late
0 Residential Customers $ $
0 Multi-Family Bin Customers $ $
0 Multi-Family Can Customers $ $
0 Commercial Customers $ $
0 Other Customers (specify: ) $ $
SUBTOTAL $
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101697/2-4625135:/31/347671/v6
Total Amount Collected from Rec;ycling:
(See attached recycling report)
o
o
o
Recycling Containers
Recycle Drop-Off Locations
Other Sources (specify:
SUBTOTAL
GRAND TOTAL collected
Fees to be Paid to City:
o
o
City Fee Payments Made to City
Other (specify: )
Amount of Check to City
-2-
)
$
$
$
$
$
Admin 4% Franchise 5%
$
$
$
$
$
EXHIBIT "M"
LIQUIDATED DAMAGES FOR FAILURE TO PERFORM
Description
Collection before 6:00 a.m.
Failure to submit monthly reports:
Tonnage
Recycling
Billing and Collection
Failure to service missed collection within 24 hours
Failure to maintain Contractor's containers and
inventory
Failure to renew Performance Bond or Insurance
and submit Certificate of Insurance prior to
expiration date
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Amount
$50 per verified occurrence
$50 per day for each report
$20 per customer per day
$10 per day late based on agreed
compliance schedule
$100 per day
EXHIBIT "N"
GUARANTY OF PERFORMANCE
For valuable consideration, Norcal Waste Systems, Inc. ("Norcal"), the parent
company of South Valley Disposal & Recycling, Inc. ("Contractor"), hereby
unconditionally guarantees the full and faithful performance and satisfaction by
Contractor of all of Contractor's obligations and liabilities under and arising from the
agreement between City of Gilroy ("City") and Contractor dated September ~, 1997
(" Agreement").
Norcal acknowledges that this Guarantee will directly benefit Norcal and is given
to induce City to enter into the Agreement with Contractor.
If Contractor fails to perform any of the services or obligations required by the
Agreement, or is in any way in default thereunder, or if Contractor fails to pay any
amount which it becomes obligated to pay City relating to its performance or failure
to perform the Agreement, Norcal shall be fully obligated to perform such services an
obligations, cure any such default and make such payments in the same manner and
to the same extent required by the Agreement or any applicable decision or order in
connection therewith. No notice or demand of any such failure or default by
Contractor shall be required to be given to Norcal.
No right or power of City hereunder shall be deemed to have been waived by
any act or conduct of City or by any neglect to exercise that right or power, or by any
delay in so doing, and every right and power shall continue in full force and effect
until specifically waived or released by a writing executed by City. Norcal authorizes
City, without notice or demand to Norcal, to modify, compromise or extend any
obligation or liability of Contractor, or any part thereof, under or arising from the
Agreement.
Any indebtedness of Contractor now or hereafter held by Norcal is hereby
subordinated to any and all indebtedness of Contractor to City under or arising from
the Agreement. Norcal assumes all responsibility for keeping itself informed of
Contractor's performance or non-performance of services and obligations under the
Agreement, of Contractor's assets and financial condition, and of any other factors
bearing on the nature, scope and extent of the risks undertaken by Norcal under this
Guarantee.
Norcal waives any right to require City to proceed against Contractor or pursue
any other remedy in City's power whatsoever. In addition to the obligations and
liabilities guaranteed hereunder, Norcal agrees to pay attorneys' fees, costs and
expenses incurred by City in enforcing this Guarantee. This Guarantee of Norcal shall
be binding on Norcal and its successors and assigns, and this Guarantee shall enure
101697/2-4625135:/31/347671/v6
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to the benefit of City and its successors and assigns. The laws of the State of California
shall govern all matters of construction, validity and performance of this Guarantee,
which may not be waived, altered, modified or amended except in a writing duly
signed by City and Norcal.
If any provision of this Guarantee is held to be invalid or unenforceable, this
Guarantee shall be construed as though it did not contain that provision, and the rights
and liabilities of the parties to this Guarantee shall be construed and enforced
accordingly.
The undersigned are duly elected officers of Norcal and are authorized to
execute this Guarantee on behalf of Norcal in accordance with the attached resolution
duly adopted by its Board of Directors.
Dated:
] O/22/cn
::R~' We.
Its: fT..
fun. lID.. QW ,........__
101697/2-4625135:/31/347671/v6
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EXHIBIT "0"
REQUIRED INSURANCE COVERAGES
Commercial General Liability Insurance. This policy shall insure
Contractor and City against liability for personal injury or death to and of any person
and for property damage arising or resulting from the operations of Contractor in
connection with the performance of the Agreement. Such policy shall include business
automobile liability coverage applicable to vehicles used by Contractor, and
products-completed operations coverage, pertaining to such operations of Contractor.
Minimum limits of coverage shall be in the amount of $5,000,000 each occurrence,
combined single limit and general aggregate coverage (or, if there are separate limits
for property damage liability, minimum policy limits of $500,000 per occurrence for
such property damage liability).
Workers' Compensation and Employer's Liability Insurance. Contractor
shall maintain full Workers' Compensation insurance in accordance with the laws of
the State of California and other applicable laws and regulations.
The insurance companies providing the required insurance, and any
deductibles and/or self-insured retentions which apply to such insurance, shall be
subject to approval by City.
The Commercial General Liability Insurance shall cover City and its public
officials, officers, employees and agents as additional insureds. The required insurance
shall be considered primary insurance as respects any other valid and collectible
insurance City may possess, including any self-insured retention City may have, and
any other insurance City possesses shall be considered excess insurance only.
Contractor shall agree to waive all rights of subrogation against City and its public
officials, officers, employees and agents for any loss arising under the Agreement.
No cancellation or non-renewal of required insurance, and no reduction
of coverage under such insurance, shall be effective until written notice has been given
to City at least 30 days prior to the effective date of such cancellation or reduction.
Certificates evidencing the required insurance, or insurance policies, upon
request, shall be filed with City upon the execution of the Agreement.
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