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HomeMy WebLinkAbout02-09-1983 CITY COUNCIL AGENDACITY OF SARATOGA � s A, DA. BILL NO. 3 q,7 DATE: February 9, 1983 DEPARTMMIT: Administrative Services Initial: Dept. Hd. C. Atty. C. Mgr. SUBJECT': Green Valley Disposal Franchise Agreement and Proposed Rates, Guadalupe Landfill Agreement Issue Summary The current franchise agreement with Green Valley Disposal Company for garbage services expires on March 31, 1983. You have before you for approval a new . 20 -year franchise agreement and a selection of three rate options for residential service. You also are asked to approve rates for commercial- gervice and drop off boxes. For the first time you have the opportunity to enter into an agreement with Guadalupe Disposal Company which assures the City of Saratoga 20 years of dump space at the Guadalupe landfill site. Recommendation 1) Review the franchise agreement with Green Valley Disposal Comapany, and adopt. 2) Select a rate option for residential service. 3) Adopt Resolution No. approving rates for residential and commercial service and drop off boxes. 4) Review landfill agreement with Guadalupe Disposal Company and adopt. Fiscal-Impacts The City of Saratoga receives franchise fees equal to 10% of gross revenues collected by Green Valley. The 1982 -83 budget projects franchise fees of approximately $108,000 from Green Valley. E:zh.ibi is /Attachments Background memo and.attachments Resolution No. b -7 Approving Rates for Residential,--Commercial and Drop Off Box Service Franchise Agreement Landfill Agreement Council Action 2/16: Fanelli /Mallory moved to adopt franchise agreement as amended by City Attorney. Passed 3 -1 (Callon opposed, Moyles absent). Mallory /Clevenger moved to adopt landfill agreement. Passed 3 -1 (Callon opposed, Moyles absent). Clevenger /Fanelli moved to accept rate schedule including one -can or unlimited option on the flatland with a variable rate for hard -to -serve areas. Passed 3 -1 (Mallory opposed, Moyles absent). IA I E ogu'ff O2 O&ULCUOO& 13777 FRUITVALE AVENUE • SARATOGA, CALIFORNIA 95070 (408) 887 -3438 . TO: Mayor and Council FROM: Assistant City Manager DATE: February 4, 1983 SUBJECT: Review of New Green Valley Disposal Company Franchise and'Proposed Rates, and Review of Guadalupe Landfill Agreement Following a year of efforts by the cities of Saratoga, Los Gatos, Campbell and Monte Sereno, and representatives of Green Valley Disposal Company,-you have before you three major items for dis- cussion and review: 1) A proposed new franchise agreement with Green Valley Disposal Company 2) Rate alternatives as a result.of the new franchise provisions for residential, commercial and drop boxes 3) A proposed landfill agreement with Guadalupe Disposal Company. The proposed franchise agreement was-received on January 28, 1983, from Mr. Frank Gillio, City Attorney for Monte Sereno. (The four cities had agreed previously to have the actual franchise document prepared by the City Attorney from one of the four cities and the costs would be shared). The document has also been sent to Paul Smith for his review. We also expect to receive comments from the attorney representing Green Valley. The proposed landfill agreement was received on February 2, 1983, and is being distributed to you in this packet. Paul Smith was sent a copy on February 3, 1983, to review. The landfill agreement is also being reviewed by legal counsel for Guadalupe Disposal Company. BUDGET REVIEW PROCESS Discussions between the four cities and Green Valley representatives on the issues to be included in the franchise agreement were con- cluded in October, 1982. Green Valley then submitted proposed . Green Valley Disposal February 4, 1983 Page two budgets for 1982 -83, 83 -84, and 84 -85, in November, 1982. During the months of November, December and January, an extensive review of the budget materials submitted was completed by representatives of the four cities. The proposed budget was reviewed.line item by line item requiring Green Valley representatives to explain and /or justify expenditure levels being proposed. Tentative agreement was reached by the negotiating committee to propose an expenditure level of $6,213,181 for the 1982 -83 Green Valley budget. The final 1981 -82 audit of expenditures for Green Valley shows a total of $4,830,243. The proposed budget for 1982 -83 is approximately 30% higher. The areas of the 1982 -83 budget which contribute most heavily to the 30% increase in costs are l) disposal costs (fees paid to Guadalupe Disposal) 2) equipment variable costs and 3) personnel costs. RATE REVIEW PROCESS Following tentative agreement on the.proposed 1982 -83 Green Valley budget, representatives of Green Valley submitted a set of proposed rates for each jurisdiction for residential, commercial and drop boxes. Discussion of the assumptions used by Green Valley to develop the rates raised the issue of subsidy of the residential rates by the commercial rates. A pattern has developed over the years under the current Green Valley franchise which has resulted in the residential rates being partially subsidized by the commercial rates. In fact, cities with substantial commercial customers (Campbell and Los Gatos) have been subsidizing residential rates in Saratoga and Monte Sereno also. The four cities reached agreement to continue the subsidy in order to avoid substantial residential rate increases; however, a method was developed to share the revenues on the basis of total customers. What this process means for Saratoga in the 1982 -83 Green Valley budget is that our own commercial revenues will subsidize residential rates by approximately $72,547 and Campbell's commercial revenues will subsidize our residential rates by approximately $62,251. There is no assurance that the City of Campbell will want to continue' to contribute a portion of their commercial revenues on an indefinite basis. If this revenue were withdrawn, the impact on City of Saratoga residential customers would be approximately $ .60 per month. f Green Valley Disposal February 4,'1983' Page three The alternative rates being presented with this packet were developed by City of Saratoga staff.after receiving data and information from Green Valley representatives. Following several reiterations of rates by Green Valley which the cities found unacceptable, Green Valley representatives suggested each City develop its own rates. The rate alternatives in your packet are a result of that process. The City of Saratoga "share" of the 1982 -83 Green Valley budget is approximately $917,593. The cost of the semi annual "free ", - ,pickup is approximately $27,390 and is included in the $917,593. Recognizing the revenues contributed by commercial rates totalling $134,798 the full budget required from Saratoga is approximately $1,052,391. PROPOSED RATES Commercial The rates proposed by Green Valley shown on schedule 1 are being recom- mended by each of the four cities. The average increase proposed is 13 %. Attached inyouur agenda material is a comparison of commercial rates from other jurisdictions. Drop Boxes The rates proposed by Green Valley shown on schedule 2 are not 'being recommended by the four cities. Green Valley increased the rates in October, 1982, and the negotiating committee did not feel an addi- tional increase was needed in the 1982 -83 fiscal year. A comparison•of rates for drop boxes from other companies is also attached. Residential Schedule 3 proposed three different options for residential rates. OPTION A - Revenue base needed $917,593 - Includes semi annual pickup - Establishes variable rate per can for both "flatlands' and "hard to serve" areas OPTION B - Revenue base needed $890,203 - Does not include semi annual pickup - Establishes unlimited pickup rates based upon location of cans in "flatland" areas - Establishes variable rate per can for "hard to serve" areas 'Green Valley Disposal February 4, 1983. Page four OPTION C - Revenue base needed $890,203 - Does not include semi annual pickup - Establishes a one can rate, and an unlimited rate for "flatland" areas - Establishes variable rate per can for "hard to serve" areas A comparison of residential rates from other jurisdictions is attached for your review. Residential Rate Recommendation Following a review of the various alternatives available, staff finds Option C provides rates at a reasonable level, while allowing single can users to avoid paying higher costs for those desiring unlimited service. Under Option C, there are approximately 1,650 customers, out of a total 8,350 "flatland" customers, who would qualify for the single can rate. The single can users comprise 20% of all users. "Hard to serve" areas were established with a variable rate per can as Green Valley indicated they were not prepared to offer unlimited service in the hard to serve areas because of the difficulties and expense involved. There are approximately 440 customers in the areas designated as "hard to serve. "' A map is attached to schedule 3. As a result of the new service provisions set out in the new franchise agreement, it is difficult to compare current rates with the proposed rates. The current rates are shown at the bottom of schedule 3. Each individual customer may experience varying levels of rate increases depending upon which option is.chosen and where the service is pro- vided (curbside, 5 -30 feet, 30 -130 feet, or over 130 feet from the curbside). CONCLUSION A public hearing has been scheduled for Wednesday, February 16, 1983, for final review of the franchise, proposed rates, and the landfill agreement. The other three cities will be hearing these same issues on the following dates: Los Gatos - work session February 14 public hearing February 22 Campbell - work session February 10 public hearing February 15 Monte Sereno - public hearing February 15 If all goes well, the new franchise agreement, landfill agreement and new rates are to be effective March 1, 1983. A �1_ - P tricia M. Mullens COMPARISON OF COMMERCIAL SERVICES (One Pick Up Per Week) 'r Los Altos Garbage Specialty Foothill South Valley Disposal /""� r Garbage Disposal Proposed for P'tla Vly Cup'tno Cup'tno Morgan Yards SARATOGA Los Altos Menlo Pk city county Sunnyvale Mtn. View Gilroy Hill rural 1 1/3 32.00 1 1/2 44.25 44.20 31.60 28.95 -2 45.25' 43.09 23.27 31.90 40.50 54.00 3 63.75 74.20 76.75 52.55: 48.25 56.83 31.47 46.05 58.65' 83.70 6. 127.55 133.85 109.70 91.00 83.45 91.73 55.92 90.20 113.45 162.70 COMPARISON OF DROP OFF BOX RATES lIncludes Los Altos, Los Altos Hills, Cupertino, San Jose, Mountain View, Woodside 2Sunnyvale 3Mountain View (One Pick Up Per Week) r Proposed for South Valle y Dis p osal Box Sizes /'SARATOGA \ Los Altos Specialty2 Foothi113 Morgan (Yards) City Mtn. Areas Garbage Co. Garbage Disposal Gilroy Hill rural . 16 103.50 18 100.00 150.00 20 302.96 88.65 104.00 141.35 30 145.00 195.00 162.25 478.18 76.11 113.65 135.00 177.85 40 165.00 no service 200.80 98.23 138.65 166.00 214.35 lIncludes Los Altos, Los Altos Hills, Cupertino, San Jose, Mountain View, Woodside 2Sunnyvale 3Mountain View PAUL B. SMITH ERIC L. FARASYN LEONARD J. SIEGAL HAROLD S. TOPPEL STEVEN G. BAIRD JACK L. BRIDGE GREGORY A. MANCHUK To: From: Dated: ATKINSON • FARASYN ATTORNEYS AT LAw 660 WEST DANA STREET P, O. BOX 279 MOUNTAIN VIEW CALIP08NIA 94042 (41S) 967 -6941 M E M O R A M D U M Saratoga City Council Saratoga City Attorney February 10, 1983 Re: Proposed Agreements with Green Valley Disposal Company and Guadalupe Disposal Com an Inc. J. M. ATKINSON, (1892 -1982) L. M. FARASYN, (1915 -1979) The City has negotiated an exclusive franchise agreement with Green Valley-Disposal Company for the collection and d' Of solid waste matter produced, kept or accumulated in the City of Saratoga. disposal with Guadalupe Disposal Company, Inc•r whit grants a landfill agreement the right to dispose, at a set lo to solid waste he City accumulated and collected in the City. The terms of each oftthes agreements is 20 years. e These agreements were drafted by Frank Gillio as the designated attorney for the four cities seeking to establish coordinated agreements with the same collection and disposal companies. Copies of the Green Valley agreement dated January 1983, and the Guadalupe Disposal Company 1, 1983, were forwarded to me for reiew and comment. February it was requested that the Green Valley agreement be reviewed light of the following n Particular, g concerns: wed in 1• The City wishes to have a liberal ability to terminate or renew the franchise after each 5 -year Section 2 of the agreement; Period designated in Section therefore, what grounds would be Y to relieve the City from its obligations under this agreement at the end of each 5 -year period if the City elected t terminate the franchise? 0 2• What authority does the City have to compel Green Valley to continue its performance under this agreement in the event the City should deny a subsequent rate adjustment requested by Green Valley? q ted this agreement tobthedfirst concern on the opportunity to terminate Council audits is limited to (a) breaches of the lagreement by the coer the co ce mpany, Memorandum of Saratoga City Council February 10, 1983 Page Two or, possibly, (b) failure of the company to implement specific recommendations made in the performance audits. The City may not terminate this agreement if it subsequently determines that it wishes to put the franchise out for bid, accept an unsolicited bid, or establish a municipal department for the collection of solid waste matter. As to (a) above, Section 2(b) of the Green Valley agreement provides that a performance audit is to be prepared every 5 years during the term of the agreement. The performance audit is to be performed by a firm selected by the City aria is to address all appropriate areas of the agreement. Moreover, the performance audit is to provide specific recommendations for improvements in each area of the agreement. It is the intent of this agreement that the performance audit provide a historical review of the performance, and nonperformance, of the company for the preceding 5.years, and not just a report of its performance at the time the report is prepared. I am concerned that Sections 2(b) and 2(c) do not adequately express that intent and would recommend that those sections be reworded so as to make that intent clear. _ As to (b) above, Section 2(b) (i) of the agreement permits the City Council to terminate the agreement on 30 days written notice if the City Council has (1) reviewed a performance audit, (2) considered any evidence presented by the company in connection therewith, and (3) "determines" (namely makes findings) that the company has not fully performed all of its obligations under the agreement. It is the intent of this agreement that if a performance audit reflects chronic problems or complaints regarding the company, then the City may terminate the agreement, even if the recurring problems are routinely corrected. It is also the intent of this agreement that the City may terminate this agreement if any of the specific recommendations made in a performance audit are'not implemented by the company. Once again, I am concerned that the existing language of Sections 2(b)(i) and 2(c) do not adequately express that intent and I would recommend that they be reworded to clarify that intent. An additional concern regarding the performance audits deals with sources of information which may be used in their preparation. Existing Section 2(c) implies that the qualified firm selected by the City to perform the performance audit will be entitled to consider, for the purposes of comparison in making recommendations for improvements, the financial, organizational, and operational procedures of businesses similar to Green Valley. I would recommend that this section be revised so that that implication is expressly stated. If not expressly stated, the performance audit is based solely on information provided by the franchise holder which might prevent the Council from making making the findings necessary to terminate the agreement under Memorandum to Saratoga City Council February 10, 1983 Page Three Section 2 (b) (i) . As to the City's second concern regarding adjustments in rates, Section 6(c) of the agreement permits, but does not mandate, periodic reviews for rate adjustments. (It should be noted that the references in this section and Section 6(g)(i) are to rate "increases" rather than rate "adjustments," which may be increases or decreases.) Section 6(d) of the agreement specifies particular information which the company must submit to the City,.in a manner and form prescribed by the City, each time the company shall submit a request for review of rates. 4 �- According to Section 6(e) the rate adjustment request is received by a joint rate review committee which is specifically directed to consider, among other things, the acceptability of expenditures, rate comparability, and "other information as the committee determines to be appropriate." This is an important provision from the City's standpoint, in that it permits the City, through the rate review committee, to assemble and consider financial, organizational and operational information regarding this type of business from sources other than the franchise holder. Section -6(g) then provides that the City Council makes the final determination on any rate adjustment request after the City Council has received the rate review committee's recommenda- tion. The City may wish to revise Section 6 to permit the City Council to review all information and data presented to and collected by the rate review committee, as well as authorize the City Council to make independent requests for the type of information available to the rate review committee pursuant to Section 6(e)(i). That revision is desirable because it would allow the City Council to obtain the maximum amount of input on which to base any findings it must make pursuant to Section 6(g)(i). If the City Council has an opportunity, to assemble sufficient information to make findings justifying a denial of a rate adjustment request by the company, then the company would be required to continue to provide the franchise services enumerated in Section 4 at the then authorized rate until such time as the City Council might make findings that justify a rate adjustment. In addition to the two enumerated concerns discussed above, I make the following comments regarding the two draft agreements: 1. Section 17 of the Green Valley agreement states that the City retains ownership of the waste prior to its disposal by the•company in the City designated landfill site. Section 4(a) places the burden on the City to designate a disposal site for the waste collected, and obligates the company to continue collections even if a disposal site is unavailable. Furthermore, Section 7 of the landfill- agreement limits the landfill operator's liability for nonperformance occasioned by certain specified conditions. Memorandum to Saratoga City Council February 10, 1983 Page Four Therefore, if the Guadalupe landfill site were to be summarily closed pursuant to one of the Section 7 conditions, the City would be responsible for immediately finding a replacement---site or be subject to damages suffered by the collection company occasioned by its obligation to continue collections, but its inability to dispose of the collected materials. It is uncertain under Section 7 of the landfill agreement as to whether the City could recover damages from the landfill operator in the event of such a closure. 2. Section 15(b) of the Green Valley agreement requires a surety bond. The current Saratoga City Code Section 7-7,-sets the amount of such bond at $5,000. It is recommended that the City amend Section 7 -7 to require a minimum bond of $25,000 and state that amount in the agreement. 3. Section 15(c) of the Green Valley agreement requires the franchise holder to carry public liability insurance. It is recommended that this insurance coverage be set in the amount of $1,000,000 and that the City be named as an additional insured. Ver ul ours AUL SMITH SARATOGA CITY ATTORNEY PBS:ns FRANCHISE AGREEMENT THIS AGREEMENT entered into by and between the CITY OF SARATOGA, a Municipal Corporation (herein called "CITY "), and GREEN VALLEY DIS- POSAL COMPANY, INC., a California Corporation (herein called "COMPANY "), R E C I T A L S: 1. CITY regulates the collection and disposal of garbage, refuse and waste matter (herein referred to as "solid waste ") to protect the physical health and safety of its inhabitants. 2. CITY is acting under clearly articulated and affirmatively expressed policies of the State of California empowering cities to regulate the collection and disposal of solid waste under powers ex- pressly granted -to cities in Article XI, Section 7 of the California Constitution, and also as set forth in the following state statutes: Section 4250 of the Health and Safety Code of California and Sections 66755 to 66757, inclusive, of the Government Code of California. 3. CITY has examined and found the performance and services provided by COMPANY to inhabitants of CITY under the Agreement during the preceeding. -go )10 years to have been satisfactory. 4. The City Council of CITY hereby determines that the public interest and convenience, and the physical health and safety of its inhabitants require the entering into of the within Franchise Agree- ment. 5. CITY and COMPANY desire to enter into a new Franchise Agree- ment providing continuation by COMPANY of the collection and disposal of solid waste matter accumulated in CITY. A G R E E M E N T In consideration of the mutual covenants, terms and.conditions herein contained, the parties agree as follows: 1. Franchise Grant. �N_ CITY grants to COMPANY, and COMPANY hereby accepts from CITY the exclusive right, franchise and privilege to collect and dispose of all solid waste matter produced, kept or accumulated in the City of Saratoga, together with the right and privilege to use and operate upon the CITY maintained streets and other rights -of -way to the extent necessary to perform COMPANY's obligations under this Franchise Agree- ment. The right and privilege herein granted shall be subject to com- pliance with the provisions of CITY's ordinances pertaining to the accumulation, collection and removal of solid waste matter as they presently exist or as they may be amended during the term hereof, or any extension thereof, and any applicable State and Federal statutory or administrative laws and rules. For the purposes of this Agreement "solid waste matter" is defined to mean all putrescible and nonputres- cible solid, semi -solid and liquid wastes. 2. Franchise Term and Renewal. (A) The term of the Franchise shall be for a period of twenty (20) years, commencing at 12:01 a.m. on the 1st day of March, 1983, and ending at 11 :59 p.m. on the 28th day of February, 2003, excepting as herein otherwise specified. -2- (B) During the fifth, tenth and fifteenth years, respectively, of the term of this Agreement an audit of the performance of COMPANY (herein called the "Performance Audit ") shall be conducted as set forth in Subsection (C) of Section 2. (i) If after the City Council of CITY has reviewed a particular Performance Audit and has considered any evidence presented by COMPANY in connection therewith, the Council determines to its s-atis - --- faction that all.covenants, provisions, terms and conditions of this Agreement on the part of COMPANY to be performed, kept and observed, have not been fully and faithfully performed, kept and observed, then this Agreement may be termi- nated by CITY at its option and without preju- dice to any other remedy to which it may be entitled to either at law, in equity, or under this Agreement by giving written notice of ter- mination, either by mail or personal service, to COMPANY not less than thirty (30) days prior to the date upon which the termination is to become effective. This right of termination shall be in addition to the right of CITY to terminate this Agreement under the provisions of Section 11 hereof. (ii) In connection with the review of a particular Performance Audit, CITY reserves the right to propose any amendment or amendments of this Agreement which the City Council of CITY deter- mines to be necessary by reason of the findings or'results of the Performance Audit to carry out the intent of the terms and conditions of this Agreement. (C) The performance audit shall: (i) be performed by a qualified firm to be selected by CITY, (ii) be totally paid for by COMPANY as part of its operating costs, and (iii) address all appropriate areas including, but not limited to the following areas, and shall provide specific recommendations for improve- ment in each area, namely: (a) Overall organizational structure and management systems and procedures. -3- (b) Efficiency of collection operations, including an analysis of routes, schedules and the impact of franchise requirements. (c) Staffing practices, including the deploy - ment of management and supervisory personnel. (d) Financial management practices, including the COMPANY's billing and collection system and its policies with regard to uncollected _ accounts. (e) Personnel management practices, including compensation policies and the resoluti -on of employee grievances. (f) Procedures for receiving and resolving customer complaints and concerns, including damage to customer -owned containers and disappearance of container covers. (g) Procedures for the acquisition, maintenance and replacement of equipment; types of equipment; rationale for recent capital investments; and financing options. (h) Utilization and management of facilities. 3. Franchise Fee. On or before the 20th day of each month during the term of this Agreement, COMPANY shall remit to -CITY a sum of money equal to ten percent (10 %) of the gross revenues collected by the COMPANY within the CITY limits during the preceding calendar month as and for a fran- chise fee. Provided, however, if the franchise fee is not paid on or before the 20th day of any month, a late payment fee in an amount equal to one percent (1 %) of the amount owing per month will be charged for each thirty (30) day period the franchise fee remains unpaid. Each monthly remittance to CITY shall be accompanied by a state- ment detailing gross receipts from operations conducted or permitted within CITY pursuant to this Agreement for the period covered. In addition, COMPANY shall maintain copies of all billings and collection records in chronological order for three (3) years following the date of billing for inspection and verification by CITY. -4- 4. Franchise Services. (A) COMPANY shall furnish the personnel, labor and equip- ment required for the collection, removal, handling and disposal of all solid waste matter generated within the corporate limits of the City of Saratoga in accordance with the terms set forth in this Agreement. COMPANY shall haul all solid waste matter collected for disposal to a site outside of the City limits of CITY and the-location of which site shall be designated by CITY. Unavailability of proper disposal facilities shall not remove COMPANY from responsibility under this Agreement. (B) COMPANY shall also furnish the personnel, labor and equipment required for the collection, removal, hauling and disposal of any solid waste matter generated on parcels of property owned, leased or otherwise occupied by CITY and without charge to CITY. Provided, however, the cost of such collection from public properties, a list of which and their respective locations and the schedule of when pickups are required shall be provided by CITY, shall be calculated with the rate base for CITY. (C) Collection of -solid waste matter shall be at the curbside of the customer's property unless arrangements are made with COMPANY by the customer for a sideyard pickup and payment of the additional rate for sideyard pickups. (D) COMPANY shall provide curbside recycling of suitable items of solid waste matter upon request of CITY. Pro- vided, however, CITY retains the right to perform such recycling itself or to contract with another business entity to provide recycling services for its inhabitants. (E) COMPANY may provide additional services upon request Of CITY subject to the establishment of a rate therefor. Provided, however, if COMPANY elects not to provide a -5- proposed new service and so notifies CITY in writing, CITY retains the right/to perform the proposed new service itself or to contract with another business entity to provide it. (F) Twice each year on dates to be fixed by CITY, and without extra compensation therefor,.COMPANY shall provide city -wide curbside pickup of garden trimmings and o,her refuse or waste matter, or items discarded by residents of CITY, unless unlimited service is offered. CITY shall give COMPANY four (4) months advance notice of dates selected for city -wide pickups. (G) COMPANY shall provide regular, scheduled collection service on a city -wide basis in all residential areas at least once per week, or.oftener, as arranged for by the customer and within all non - residential areas in accordance with the frequency of pickup specified for the particular service in the Schedule of Rates. (H) COMPANY shall not alter or adjust collection schedules or routes without providing prior notice to all service addresses, and any schedule modification shall not result in reduced service frequency to any customer. COMPANY shall-collect and remove from any and all premises, within twenty -four (24) hours after demand, notice or request, any and all solid waste matter which COMPANY shall have failed to collect and remove as required at the regular scheduled time. , (I) Collections in residential areas shall begin after six o'clock a.m. and conclude by ten o'clock p.m., Monday through Friday, except when earlier collections are necessary on a workday preceding or following a recognized holiday. The following holidays are exempt: Christmas and New Year's Day. Necessary weekend collections shall be performed between eight o'clock a.m. and six o'clock p:m.. -L. v Collections in non - residential areas shall begin after three o'clock a.m. and conclude by ten o'clock p.m. on Monday through Saturday. The times for collections in non- residential areas adjacent to residential areas shall be fixed by mutual agreement of CITY and COMPANY after consid- eration, among others, of (i) traffic conditions, (ii) accessibility to and from the collection areas, and (iii) any other circumstances which may require an early -pickup. (J) COMPANY shall comply with each of the following requirements: (i.) All collection vehicles and equipment shall be modern and so constructed and maintained to prevent leakage, spillage and overflow. COMPANY shall maintain all vehicles, detach- able containers and debris boxes in a clear and sanitary condition, and shall perform such maint ,enance necessary to assure each vehicle and piece of equipment capable of performing all functions for which it was designed. COMPANY shall maintain an equipment replace- ment schedule to be provided to CITY upon its request. (a) All trucks and equipment shall be clearly - identified with the COMPANY name, a current local business telephone number, and a vehicle identification number in letters not less than two and one -half (2 -1/2) inches in height. COMPANY shall not use. a firm name containing the words "City" or other words implying municipal owner- ship. (b) CITY may refuse to permit the operation within the city limits of any vehicle not adequately serviced, cleaned or in need of repair. Removal of vehicles for servicing and repair shall not relieve the COMPANY from maintaining all collection schedules. (ii) COMPANY shall not litter premises in the process of making collections nor allow refuse to blow or fall from any vehicle used for collections. COMPANY shall replace lids or•covers on containers immediately after emptying the same and shall repair or replace at its expense any containers damaged as a result of its handling thereof, normal wear and tear excepted. COMPANY shall clean up all spills including oil and debris on the streets resulting from its operation.. -7- COMPANY shall establish and maintain an office where service may be applied for and complaints made. Such office shall have a responsible individual available daily between the hours of eight o'clock a.m. and five o'clock p.m., excepting Saturday, Sunday, and such holidays as are recognized by COMPANY and approved by CITY. Calls for missed collections shall be received twenty -four (24) hours per day. (iv) COMPANY shall prepare and mail to all existing and new customers a public information brochure not later than July 1, 1983, including a description of all services provided, amounts of solid waste matter which will be collected, complaint procedures, rates, regulations and days of collection. COMPANY also shall provide written notice to new subscribers of existing rates and written notice of rate changes to all subscribers. COMPANY shall post at the dump site dumping fees charged to other depositors. Costs fore mailings shall be considered as part of COMPANY's annual budget reviewed by CITY. (v) COMPANY shall keep records of wastes collected and maintain these separately from other COMPANY opera- tions. Route status sheets for each collection route shall be maintained by COMPANY indicating the address of each service, type and frequency of service and such other pertinent information as may be required by the CITY. CITY shall be provided waste collection records and route status sheets upon re- quest. COMPANY shall provide a quarterly summary of collection operations within the CITY, including number of vehicles and amounts collected. As used in this Agreement, "wastes" mean natural soil, earth, sand, clay, gravel, loam, manure, stone, brocks, brick -bats, plaster, Portland cement, crockery, queensware, glass, ashes, cinders, shells, metals and all other non- combustible material. (vi) COMPANY shall extend routes and'services promptly upon annexation of new areas to'the CITY or upon other increase in service demand. Service shall be provided upon all dedicated public streets and private roads when possible. (vii) The standard size container for residential and non- residential service shall not exceed 32 gallons and that weight will not exceed 70 lbs.. Individ- ual users shall have the option of using an un- limited number of plastic bags approved by CITY and COMPANY instead of the containers with un- limited pickup. COMPANY shall replace all garbage am and rubbish containers used by its customers in an upright position, recovered, in approximately the same location where the containers were immediately before COMPANY emptied them. COMPANY shall return all commercial bins to the location where the containers were immediately before COMPANY emptied them, within any .enclosures provided and shall close any doors or gates provided for screening the bins. COMPANY shall instruct its employees to comply with the foregoing re- quirements, and shall exercise sufficient super- vision of its employees to assure that these instructions are followed. (viii) COMPANY shall respond on an on -call basis for the pick up of large items and shall charge therefor the appropriate charge appearing in the approved Schedule of Rates. (K) In addition to the foregoing requirements, the City Manager of CITY shall have the power to establish rules and regulations respecting the accumulation, collection, transportation and /or disposal of solid waste matter not inconsistent with the provisions of this Agreement or with the provisions of any applicable ordinances or laws, providing such rules and regulations are found to be necessary or convenient by the City Manager for the enforcement of the provisions of this Agreement, the provisions of any and all applicable sanitary laws and ordinances, and the preservation of the public peace, health and safety; and the COMPANY shall comply with any and all such rules and regulations of the City Manager. 5. Franchise Representative and Inspections. (A) COMPANY shall assign a qualified person to be in charge of its operations in the CITY, and shall inform CITY of such person's identity and experience. It shall be such person's responsibility to assure that all collection operations are effectively performed and all complaints courteously handled and satisfactorily resolved. CRE (B) To ensure that the laws governing the performance of this Agreement are complied with, a representative of CITY may inspect, review and observe the operations of COMPANY during the term of this Agreement. CITY may make inspections of the equipment and facilities at any reasonable hour and upon reasonable notice. At CITY's request, COMPANY shall make designated personnel available to accompany CITY inspectors. 6. Franchise Collection Rates. (A) COMPANY shall not charge any amount in excess of the approved schedule of service rates for any services required or permitted to be performed by the terms of this Agreement, including, but not limited to residential, non - residential, drop -off boxes (inclusive of rental fees) and special pickup services. The approved service rates are those set forth in Exhibit "A" entitled "Schedule of Rates ", attached hereto and incorporated herein by reference, or as such Schedule of Rates may hereafter be amended by resolution of the City Council. (B) CITY allows COMPANY to bill to and collect from persons receiving services the appropriate sums of money due for all such services, utilizing current rates approved by the City Council. Billing and collection shall be conducted either monthly or quarterly for each account, but in no case less frequently than once per calendar quarter. COMPANY may impose a financial charge within the legal limits on any accounts thirty (30) days past due. Neither CITY nor any of its officers or em- ployees shall be liable for or in any way be responsible for the payment of any service rates or charges due COMPANY for performing services under this Agreement within CITY's corporate limits. -10- (C) The approved Schedule of Rates may be reviewed annually through 1984 and once every three (3) years thereafter during the term of this Agreement, or any extension thereof. Any change of rates shall become effective on Parch 1st, or on July lst by mutual agreement.of the parties, of the year in which the review is completed. Provided, however, COMPANY may request or CITY may initiate a review for a special- � interim rate adjustment at any time.during the three (3) year period if it becomes apparent to either party that the authorized rates are inappropriate due to then current economic conditions, or any significant error in estimates provided by COMPANY is discovered subsequent to CITY's approval of a rate adjustment. (D) COMPANY shall submit its request for a review of service rates no later than five (5) months prior to the proposed effective date of any rate adjustments. Each of the following items shall be provided by COMPANY as part of its request for a rate review at no expense to CITY and in the manner and form pre- scribed by CITY. (i) An audit for the fiscal year immediately pre- ceeding the year in which the rate review is requested, and prepared by a certified public accountant who has annexed his opinion thereto. (ii) Financial reports and operating data to review for the two (2) fiscal years immediately pre - ceeding the fiscal year for which an audit is required. (iii) Actual revenues for the current fiscal year and projected revenues for the ensuing three (3) years. (iv) Organization chart reflecting current staffing, job description and salary schedules. -11- (v) Number of customers and bad debts in each service use category in the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell. (vi) Schedule of rates charged at the Guadalupe Landfill. (vii) A survey of tipping charges of-certain other landfill facilities to be agreed upon by CITY and COMPANY in an Agreement to be entered into between CITY and the Guadalupe Rubbish Disposal Company, Inc. at the same time the within Agree- ment is approved by the parties. (viii) Any related party transactions between Guadalupe Rubbish Disposal Company, Inc. and Green Valley, Disposal Company, Inc.. Any "related party.trans- actions" shall be provided in accordance with generally accepted accounting principles. (ix) A survey of collection rates of certain other disposal companies to be agreed upon by CITY and COMPANY. (x) COMPANY's investment schedule. (xi) COMPANY 's equipment replacement schedule. (xii) Data concerning the degree to which commercial collection provides a subsidy to residential collection in the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell. (xiii) Detail concerning the-current service rates, actual costs for services, and actual revenues for the prior three years, together with the projected revenues, expenditures and proposed .rates for the ensuing three years in each of the following categories: (a) Residential Service. 1. Provide for level terrain areas the following alternates: (i) Alternate I: The cost per, can for curbside collection (within 5 feet of edge of pavement). (ii) Alternate II: The cost per can for front yard pickup (within 30 feet of edge of pavement). -12- (iii) An additional fee: The cost per can in increments of 100 feet be- yond that provided in Alternate II. (iv) Unlimited curbside collection option: The cost per customer for city -wide unlimited collection in level terrain zones. (b) Hard to Serve Areas. 1. Provide maps and /or lists delineating hard to serve areas, together with rate -proposals to be considered for such areas. A map of any hard to serve area for which rate pro - posals are approved shall be attached to any schedule of service rates thereafter approved. 2. A "hard to serve area" is defined as an area of one or more residences or non - residential establishments which, by virtue of the nature of its access road or the low density of individual residences, requires signifi- cant additional time or effort, or use of special equipment to pick up solid waste matter. (c) Non - Residential Areas. 1. Costs of service in such areas shall be re- flected by the size of bin and frequency of collection. 2. Costs of drop -off boxes shall be reflected by the size of the box, and will include rental fees as well as the cost per dump. (E) Each review of the Schedule of Rates shall be considered and studied by a Rate Review Committee (herein called the "Committee ") to be composed of one (1) administrative staff representative from each of the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell, and which shall there- after make a recommendation to CITY. The Committee is to be composed of representatives from these cities because each of them contracts with COMPANY for the same type of service and each city has similar solid waste matter collection prob- lems. The Committee shall do the following in reviewing a service rate request: -13- (i) Take into consideration the acceptability of expenditures, performance incentives and sanc- tions, rate comparability, and other information as the Committee determines to be appropriate. (ii) When determining the profit level, use the operating ratio method with a five (5) percent after -tax return (excluding tax credits and operating losses) as a guideline. (iii) When calculating the revenue side.of the operating ratio, exclude: (a) Prior years' earnings from short -term investments generated from prior profits or retained earnings in each fiscal year; (b) Tax credits; and (c) Prior year net operating losses. (F) In addition to reviewing the Schedule of Rates periodi- cally as provided in Subparagraph E, the Committee also shall meet annually with representatives of COMPANY to discuss issues or problems which are-of concern to CITY or COMPANY arising out of the terms and conditions of this Agreement. The annual financial report required to be provided under Paragraph 7 of this Agreement shall be reviewed and discussed at the annual meeting provided for herein. (G) Upon receipt of the Committee's recommendation, the City Council of CITY shall determine whether to approve any change in the previously approved Schedule of Rates. (i) In reaching its decision, the City Council shall determine what are the proper expenses to be used in the calculation of a rate base for a rate increase after COMPANY has been given an opportunity to provide documentation to CITY's administrative staff and the City Council. (ii) CITY reserves the right to request: that rates be calculated on an unlimited collection basis. (iii) Rates charged by the COMPANY to any unincorporated areas contiguous to CITY shall be consistent with rates charged to customers in CITY. Approval of any rate adjustment by CITY shall be contingent upon the approval by the appropriate governmental entity on behalf of the unincorporated areas -14- within three (3) months following the approval by CITY. If approval is not given within the three (3) month period specified, COMPANY shall not charge service rates in excess of the rates then currently being charged in the unincorporated areas referred to above. COMPANY agrees and covenants that in no event shall the service rates charged in CITY subsidize the rates charged by COMPANY within any mountain areas serviced by COMPANY which are unincorporated. (H) In the event CITY requests COMPANY to provide any addi- tional new services, COMPANY shall furnish CITY with docu- mentation concerning the costs of the new service, and the City Council shall establish a rate for the new service. 7. Franchise Annual Report. COMPANY shall furnish at its sole expense an annual financial report to CITY not later than ninety (90) days following the close of COMPANY's fiscal year. (A) If the report includes an audit prepared by a certified public accountant and who has-annexed his opinion thereto, the cost of the audit may be included as an operating cost of COMPANY. (B) CITY may specify the form and detail of the annual report and audit, and may inspect the financial records of COMPANY at all reasonable times for any purpose rele- vant to the performance or enforcement of the franchise provisions, including, but not limited to, evaluation of the annual financial reports and any rate review applica- tions. (C) CITY may request additional records as it deems necessary to evaluate the performance of COMPANY. 8. Franchise Providing Development Plans. COMPANY shall provide CITY with the specific criteria by which development plans for residential and non = residential units may be -15- reviewed by CITY concerning the location of refuse containers and appropriate screening thereof. 9. Franchise Service Termination. COMPANY may terminate service to residential customers who are one hundred twenty (120) days in arrears in payment of rate charges and non - residential customers who are sixty (60) days is arr_e-ars in payment of rate charges, respectively, provided COMPANY: (A) Shall give a customer whose service may be cut off at least thirty (30) days written notice prior to the proposed service termination date. (B) Shall notify CITY in advance of each proposed service termination by property location. (C) Shall monitor each property location at which service has been terminated,and notify CITY of any problems observed, including accumulation of garbage on the premises. (D) Shall promptly restore service when the rate charges owing have been paid. Provided, however, CITY reserves the right and discretion unilaterally to withdraw COMPANY's privilege of terminating service for non - payment of rate charges by giving COMPANY at least thirty (30) days written notice prior to the suspension of this privilege and holding one (1) meeting with COMPANY concerning withdrawal of the privilege. No amendment of this Agreement shall be required. If this privilege is withdrawn, COMPANY shall be entitled to do each of the following: -16- (i) Include bad debt as part of its rate base, but. limited to one (1).percent of its annual gross revenues; provided, however, if COMPANY demon- strates. a good faith effort in its attempts to collect bad debts to the satisfact.ion of CITY, then CITY may allow inclusion of bad debt as part of the rate base in a specified amount beyond one (1) percent of annual gross revenue; and (ii) Require a deposit for new customers and for re- starts of service. N' 10. Franchise Labor Disputes. (A) In the event the collection or disposal services of COMPANY required to be provided under this Agreement are interrupted by a labor dispute and scheduled collection or disposal services are discontinued for more than forty - eight (48)_ hours, CITY shall have, as one of its options, the right forthwith to take temporary possession of all facilities and equipment of COMPANY for the purpose of continuing the service which COMPANY has agreed to pro- vide to preserve and protect the public health and safety. (i) CITY shall have the right to retain possession of said facilities and equipment and to render the required service until COMPANY can demonstrate to the satisfaction of the City Council that required services can be resumed by COMPANY; provided,.however that such temporary assumption of COMPANY's obliga- tions under this.Agreement shall not be continued by CITY for more than one hundred twenty (120) days from the date such operations were undertaken. Should COMPANY fail to demonstrate to the satisfac- tion of the City Council that required services can be resumed by COMPANY prior to the expiration 'of the aforementioned one hundred twenty (120) days, the Agreement shall be terminated in the manner herein- after provided, and the rights and privileges granted in this Agreement shall be cancelled and annulled. (ii) During any period in which CITY has temporarily assumed the obligations of COMPANY under this Agreement, CITY shall be entitled to be reim- bursed for all costs incurred by CITY from COMPANY within thirty (30) days after CITY has billed COMPANY therefor. QiW10 (iii) Employees of COMPANY may be employed by CITY during any period in which CITY temporarily assumes the obligations of COMPANY under this Agreement. Provided, however, the number of employees shall remain the same and the rate of compensation to be paid such employees shall be the rate or rates in effect.at the time COMPANY's service was interrupted by the labor dispute. 11. Franchise Termination. �. (A) All terms and conditions of this Agreement are considered material and in the event COMPANY defaults in the performance of any of the covenants or agree- ments to be performed by it under the terms of this Agreement, CITY shall give COMPANY one hundred eighty (180) days written notice, either by mail or by personal service, setting forth the default. If COMPANY fails, neglects or refuses for the period of one hundred eighty (180) days to correct or perform the default, or if COMPANY fails to resume service within one hun- dred twenty (120) days after CITY commences operation of the services required to be performed by COMPANY on account of a labor dispute, as the case may be, then CITY, without further notice and without suit or other proceedings, may cancel and annul the rights and privi- leges granted in this Agreement. (B) In the event of termination of this Agreement for default by COMPANY as above specified, CITY shall have the right forthwith to take possession of trucks and other equipment of COMPANY, used to perform work under this Agreement. CITY shall have the right to retain possession of said trucks and equipment until other suitable trucks -and equipment can be purchased or other- wise acquired by CITY for said purpose and CITY shall pay COMPANY the reasonable rental value of such trucks and equipment during the time the same are used by CITY for ,n -.Lo- said purpose. CITY shall also have access to COMPANY's records for the purpose of billing service accounts during the period CITY is providing the service described in this Agreement, and shall retain all fees collected for such services. (C) In the event of any litigation arising out of a breach of this Agreement, the prevailing party in such litigation shall be entitled to receive from the other party reasonable attorney's fees in addition to costs and necessary disbursements. 12. Franchise Insolvency or Bankruptcy. If the COMPANY shall at any time during the term of this Agreement or any extension thereof, become insolvent, or if proceedings in bank- ruptcy shall be instituted by or against COMPANY, or if COMPANY shall be adjudged bankrupt or insolvent by any Court, or if a receiver or trustee in bankruptcy or a receiver of any property of COMPANY shall be appointed in any suit or proceeding brought by or against the COMPANY, or if COMPANY shall make an assignment for the benefit of creditors, then and in each and every such case,- this Agreement shall.immediately cease and come to an end, and the rights and privileges granted in this Agreement shall immediately be cancelled and annulled without notice or action required on behalf of CITY. 13. Franchise Disaster Assistance. (A) In the event of wartime, natural, physical or other disaster in or proximate to the CITY limits resulting in the declaration of a State of Emergency by the duly authorized authority or City Council, COMPANY shall make available to CITY at no cost to -19- CITY, all trucks, equipment and personnel normally performing services under this Agreement, for emer- gency operations conducted or directed by the CITY emergency organization. (B) CITY shall have the right to take possession of all such equipment provided by COMPANY, and to tem- porarily employ all COMPANY personnel so provided as emergency operation forces of CITY, under the_,dire�tion and control of the CITY disaster operation chief. (C) COMPANY shall make available, in addition to the equipment and personnel above, equipment and personnel from those COMPANY operations and resources not serving CITY, to the extent necessary to conduct effective refuse, waste and debris removal during any declared State of Emergency_to the specifications of the Disaster Operations Chief. (D) CITY shall not be required to compensate COMPANY in any manner or form for COMPANY provision of vehicles, personnel or equipment normally performing services under this Agreement within the CITY limits, when made available during a declared State of Emergency. When additional vehicles, personnel or equipment are provided during an emergency, CITY shall compensate COMPANY for actual expenses incurred by COMPANY in providing addi- tional vehicles, upon submission by COMPANY to CITY of detailed records of costs and expenses actually borne by COMPANY, and upon approval by the Federal government of CITY's reimbursement of expenses incurred by COMPANY during a disaster. 14. Franchise Indemnification. COMPANY shall protect and save harmless CITY, its officers, agents and employees, for and from any and all loss, liability, claims, demands, actions or suits, or any and every kind and description, arising or -20- resulting from or in any way connected with any operations of COMPANY or its subcontractors in exercising any license or privilege granted to him by this Agreement or by any ordinance of CITY, or arising or resulting from the failure of COMPANY or its subcontractors to comply in all resp2cts with the provisions and requirements of this Agreement, or of all applicable ordinances of CITY and of all other app,;.icable laws. COMPANY shall, upon demand of CITY, at COMPANY's sole cost and expense, defend, and provide attorneys to defend CITY, its officers, agents and employees against any and all claims, actions or suits brought against CITY, its officers, agents and employees, arising or resulting from or in any way connected with the above - mentioned opera- tions of COMPANY or its subcontractors or its subcontractor's failure to comply with this Agreement and with the ordinances and laws herein - above mentioned. 15. Franchise Insurance and Bond. (A) This Agreement and the privileges herein granted to COMPANY is and are conditioned upon the faithful perform- ance by COMPANY and by each and every one of his subcon- tractors, if any, of each and all of the covenants and provisions herein agreed to be performed by COMPANY or required to be performed by its subcontractors; and pay- ment of all license fees and other moneys herein agreed to be paid by COMPANY. (B) Upon execution of this Agreement, COMPANY shall furnish to CITY and shall file with the City Clerk of CITY a corporate surety bond, approved by the City Manager and approved as to form by the City Attorney, executed by COMPANY as principal and by a corporate surety as surety, in the sum of $ conditioned upon the faithful . performance by COMPANY and its subcontractors, if any, of this Agreement. (C) COMPANY and its subcontractors, if any, shall, at their sole cost and expense, obtain and maintain in full force and effect throughout the entire term of this Agree- ment, or any extension thereof, public liability insurance, approved by the City Manager and Certificates of such insurance, approved by the City Manager and approveo as to form by the City Attorney, shall be filed with the City Clerk of CITY. COMPANY shall immediately notify CITY of any cancellation, withdrawal and /or change of any such insurance. 16. Franchise Assignment. COMPANY shall not assign this Agreement, or any interest therein,. or any privilege or right granted therein, without the written consent of the City Council being first obtained, and then only to a person or persons approved by said Council subject to such terms and conditions - as said Council may require. CITY may review the competency and finan- cial integrity of the proposed assignee. The authorization will not be unreasonably withheld by CITY. A consent to one assignment shall not be deemed to be a consent to any subsequent assignment. Any assign- ment without such consent and approval shall be void and shall at the option of CITY, terminate this Agreement and the rights and privileges granted herein. This Agreement shall not, nor shall any interest therein, be assignable, as to the interests of COMPANY, by operation of law without the written consent of said Council expressed by ordi- nance or resolution. COMPANY shall not subcontract all or any portion of the work or business of this Agreement without the written consent of CITY. -22- 17. Franchise Waste. Notwithstanding any other provision of this Agreement, CITY shall retain ownership of waste prior to its disposal by COMPANY in the designated landfill. 18. Franchise Waiver. The waiver by CITY of any breach or violation of any term, cove- nant or condition of this Agreement or of any provision —, ordInance or law shall not be deemed to be a waiver of such term, covenant, condition, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, ordinance or law. The subsequent acceptance by CITY of any franchise or other fee or of any other moneys which may become due hereunder to CITY shall not be deemed to be awaiver of any preceding breach or violation by COMPANY of any term, covenant or condition of this Agreement or of any applicable law or ordinance. 19. Franchise Administration. The administration and enforcement of this Agreement shall be the responsibility of the City Manager or designated representatives . of that office. 20. Franchise Independent Contractor Status. .COMPANY, its employees and agents, are independent contractors and not employees, agents or sub - agents of CITY. 21. Franchise Notice. Any notice required to be given to COMPANY shall be deemed to be duly and properly given if mailed to COMPANY, postage prepaid, addressed to: GREEN VALLEY DISPOSAL COMPANY, INC. 573 University Avenue Los Gatos, CA 95030 -23- Any notice required to be given to CITY shall be deemed to be duly and properly given if mailed to CITY, postage prepaid, addressed to: or personally delivered to CITY at such address, or at such other address as CITY may designate, in writing, to COMPANY. 22. Franchise Successors and Assigns. COMPANY and CITY, and each of them, each binds itself, its respec- tive successors and assigns, to the other party to this Agreement, and to the respective successors and assigns of such other party in respect to all covenants of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in the City of Saratoga, County of Santa Clara, State of California, as follows: By COMPANY this day of By CITY this day of ATTEST: 1983. 1983. CITY OF SARATOGA, a Municipal Corporation By Mayor City Clerk (CITY) -24- GREEN VALLEY DISPOSAL COMPANY, INC., a California Corporation By (COMPANY) LANDFILL AGREEMENT THIS LANDFILL AGREEMENT entered into by and between the CITY OF SARATOGA a Municipal Corporation (herein called "CITY "), and GUADALUPE RUBBISH DISPOSAL COMPANY, INC., a California Corporation (herein called "COMPANY ") — .` R E C I T A L S: 1. CITY is required to make adequate provision for the final disposition of garbage, refuse and waste matter (herein referred to as "solid waste ") collected within its corporate limits to protect the physical health and safety of its inhabitants. 2. CITY is acting under clearly articulated and affirmatively expressed policies of the State of California empowering cities to regulate the final disposition of solid waste under powers expressly granted to cities in Article XI, Section 7 of the California Constitu- tion, and also as set forth in the following state statutes: Section 4250 of the Health and Safety Code of California and Sections 66730, 66732(a), and 66755 to 66757, inclusive, of the Government Code of California. 3. COMPANY owns and operates a disposal site described in tDom'' Exhibit "A ", tached hereto and incorporated herein by reference, and which is used for the landfill disposal of solid wastes (herein called the "Disposal Site "). 4. CITY and COMPANY desire to enter into a Landfill Agreement providing for the final deposition of solid waste matter accumulated and collected in CITY at COMPANY's Disposal Site. It is understood between the parties that this Landfill Agreement is being entered into by COMPANY concurrently with the Cities of Los Gatos, Monte Sereno, Saratoga and Campbell. 5. The purposes to be accomplished by the parties thereto - entering into this Landfill Agreement are: A. To ensure residents of the Cities of Los Gatos, Monte Sereno, Saratoga and Campbell a site for the final disposition of solid waste matter accumulated and collected in each of the named cities. B. To enable COMPANY to more accurately predict disposal demand and to capitalize its disposal site facilities. C. To encourage the recovery of resources and energy from solid wastes at the Disposal Site, including, among others, the reduction, separation, recovery, conversion and recycling of solid wastes and the environmentally safe disposal of non - reusable residues in order to further extend the availability and disposal capacity of the Disposal Site for future use by residents of each of the above -named cities. 6. The City Council of CITY hereby determines that the public interest and convenience, and the physical health and safety of its inhabitants require the entering into of the within Landfill Agreement. -2- A G R E E M E N T In consideration of the mutual covenants, terms and conditions herein contained, the parties agree as follows: 1. Deposition Grant. COMPANY grants to CITY the irrevocable right and privilege of delivering, or causing to be delivered, to the Disposal Site1�for final deposition therein all solid waste matter accumulated and collected within CITY during the term of this Agreement, or any extension thereof, and COMPANY covenants and agrees to accept all solid waste matter so delivered. The right and - privilege herein granted shall be subject to compliance by CITY of the provisions of the within Agreement. For the purposes of this Agreement "solid waste matter" is defined to mean all putrescible and nonputrescible solid, semi- solid and liquid wastes. 2. Term. The term of the right and privilege herein granted shall be for a period of twenty (20) years, commencing at 12:01 a.m, on the lst day of March, 1983, and ending at 11:59 p.m. on the 28th day of February, 2003, excepting as herein otherwise specified. 3. Resource Recovery. A. With the exception of methane gas recovery from the Disposal Site Area One as it exists at the time of execution of this Agreement, or minor material salvage therefrom, COMPANY shall not undertake any major resource recovery -3- operation without first notifying CITY in writing at least ninety (90) days prior to the date upon which the resource recovery operation is proposed -to begin, and giving CITY an opportunity to comment and participate therein upon terms and conditions satisfactory to both parties. B. COMPANY shall pay five (5) percent of after -tax net pro- ceeds and based upon the average actual tax rate, drive -d from any major resource recovery operation which it under- takes to GREEN VALLEY DISPOSAL COMPANY, INC., a California Corporation (herein called "GREEN VALLEY ") and which is the grantee of an exclusive franchise to collect and dispose of all solid waste matter produced in CITY, as and for a sub- sidy to GREEN VALLEY's customers in each of the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell. The total amount of the five (5) percent payment described above shall be paid to each of the named cities in propor- tion to the volume of solid waste matter collected from each of the cities. For example, in a year where eighteen (18) percent of the total guantity of material is deposited by the above -named cities, then the five (5) percent payment would be computed on the eighteen (18) percent of the resource recovery. (i) CITY shall include its share of any five (5) percent payment received in calculating the gross receipts of GREEN VALLEY under the franchise described above from CITY. (ii) A certified public accountant employed by COMPANY and at COMPANY's sole expense shall prepare and submit to CITY an annual finan- cial review of any major resource recovery -4- operation which it undertakes, including, .but not limited to, the relationship of the amount of any five (5) percent payment made and the volume of refuse collected from each of the cities,named above. (iii) In the event any.of the cities named above provides financial, operational. or any other tangible form of support on a voluntary basis in connection with any major resource recovery operation conducted by COMPANY, the parties agree that a new profit- sharing arrangement in any such operation shall be negotiated and memorialized by an appropriate addendum to this Agreement executed by the parties hereto. (iv) It is further agreed by the parties that CITY may, but is not obligated to, support any major resource recovery operation con- ducted by COMPANY. 4. Tipping Fee. A. COMPANY shall be entitled to charge a "tipping fee" to GREEN VALLEY upon delivery of solid waste matter accumulated and collected within CITY to the'Disposal Site. Provided, however, any tipping fee so charged shall not exceed an amount per ton equal to fifteen (15) percent above the average tipping fee charged at a group of disposal sites the number of which and method of selection shall be as hereinafter set forth. B. COMPANY and each of the following cities: Los Gatos, Monte Sereno, Saratoga and Campbell, shall provide each -5- other with a list of comparable public and privately- owned landfill disposal sites in the counties of Santa Clara, San Mateo and Alameda, to be considered for inclusion in the group of disposal sites to be surveyed. (i) The tipping fees charged by each disposal site finally selected for the survey group shall include: L �_ (a) Any surcharge, assessment or fee imposed by the disposal site which is computed by the volume (yards or tons) of solid waste matter deposited which is imposed on solid waste collection companies or haulers over and above the unit of refuse by volume (yards or tons) charged to the local solid waste collection companies or haulers. (b) Any surcharge, assessment, inspection fee or tax which is computed by the volume (yards or tons) of solid waste matter deposited which is imposed by a governmental agency and uniformly applicable to the disposal site used in the survey. (c) All other surcharges, taxes, permit fees and licenses shall be included as part of the basic tipping fees of the disposal sites used in the survey group. (ii) In selecting each disposal.site for the survey group, each of the following shall be taken into account: (a) Location of disposal site. (b) Tipping charges for compacted solid waste matter by the ton. If a particular disposal site uses compacted yardage in lieu of tonnage, the unit of yardage shall be con- _ verted to tonnage by multiplying one (1) compacted yard by four (4). N (c) Estimated capacity and time life of the disposal site. (d) Resource recovery program at the dis- posal site. (e) Ownership of the disposal site. (f) Average volume of solid waste matter received daily. (g) Any plans for expansion of the land- 1 fill and /or use of transfer stations. (h) Any other data -which would aid the parties in the selection of comparable disposal sites. C. COMPANY and the cities named above shall agree upon a selection of a minimum of six (6) and a maximum of ten (10) disposal sites. Provided, however, the highest and the lowest shall be eliminated prior to calculating the average. (i) If for any reason the survey group of disposal sites selected shall be reduced to four (4), COMPANY and the cities named above shall estab- lish a new list in the same manner as the original list was agreed upon. (ii) If for any reason a new survey group of dis- posal sites cannot be selected, then in lieu of using the results reached from the survey group, COMPANY shall charge GREEN VALLEY a tipping fee-the amount of which.shall be ten (10) percent less than the average tipping fee charged by COMPANY to solid waste collec- tion companies other than GREEN VALLEY which use the Disposal Site. -7- D. Neither CITY nor any of its officers or employees shall be liable for or in any way be responsible for the payment of any tipping fees due COMPANY from GREEN VALLEY. 5. Annual Report. COMPANY shall furnish at its sole expense an annual report to CITY not later than ninety (90) days following the close of COMPANY's fiscal year concerning the current capacity and operational status, respec- tively, of the Disposal Site, and, if requested by CITY, a summary of tipping fees charged and received from Green Valley Disposal Company, Inc. for any year wherein there will be a sharing of proceeds from any major resource operation. 6. Public Health. In order to protect the public health and the environment, COMPANY shall operate and maintain the Disposal Site so as to: A. Control vectors, odor, fire, litter and moisture infil- tration at the solid waste disposal site. B. Not require any collection vehicle to travel on the active face of a disposal site. 7. Catastrophes; Termination. A. Neither CITY nor COMPANY shall be deemed to be in de- fault in the performance of the terms of this Agreement if either party is prevented from performing the terms of this Agreement by causes beyond its control, including, without being limited to, acts of God or the public enemy; failure due to delay of performance by suppliers or con- tractors, interference, rulings or decisions by municipal, zz state, federal or other governmental agencies, boards or commissions; and the laws and /or regulations of such municipal, state, federal or other governmental bodies; any catastrophe resulting from flood, fire, explosion .or other cause beyond the control of the defaulting party. If any of the stated contingencies occur, the party delayed by force majeure shall immediately give the other party written notice of the cause of delay. The party delayed by force majeure shall use reasonable diligence to correct the cause of delay, if correctable, and if the condition that caused the delay is corrected, the party delayed shall notify the other party immediately and shall resume performing the terms of this Agreement. B. If any of the contingencies stated in subsection A occur and thereby make resumption of performance of the terms of this Agreement impossible, then either party may terminate this Agreement by giving the other party not less than ninety (90) days written notice, either by mail or by personal service prior to the date upon , which the termination is to be effective. 8. Assignment. COMPANY shall not assign this Agreement, or any interest.therein, without the written consent of the City Council being first obtained. -9- The authorization will not be unreasonably withheld by CITY. A consent to one assignment shall not be deemed to be a consent to any subse- quent assignment. In the event of a sale of the Disposal Site, CITY shall not have the right to approve or disapprove the buyer. however, the new owner shall be subject to the terms of this Agreement. l 9. Administration. The administration and enforcement of this Agreement shall be the responsibility of the City Manager or designated representatives of that office. 10. Independent Contractor Status. COMPANY, its employees and agents, are independent contractors and not employees, agents or sub - agents of CITY. 11. Notice. Any notice required to be given to COMPANY shall be deemed to be duly and properly given if mailed to COMPANY, postage prepaid, addressed to: GUADALUPE RUBBISH DISPOSAL COMPANY, INC. P. O. Box 712 15929 Guadalupe Mines Road San Jose, CA or personally delivered to COMPANY at such address, or at such other address as COMPANY designates, in writing, to CITY. Any notice required to be given to CITY shall be deemed to be duly and properly given if mailed to CITY, postage prepaid, addressed to: or personally delivered to CITY at such address, or at such other address as CITY may designate, in writing, to COMPANY. -10- •r I 12. Condemnation. A. It is the intent of the parties hereto that this Agreement constitutes the deed and grant of a property interest in the Disposal Site to CITY for the length of the term of this Agreement, or any extension thereof. B. In the event of the partial or total taking of-thee- Disposal Site by a governmental entity entitled to do so under eminent domain, whether by the filing and prosecution of a' proceeding under the power of eminent domain, or under threat of filing or prosecuting such an action, CITY shall be entitled to receive the amount of the value of the taking of or damage to-CITY's property interest in the Disposal Site. 13. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and- supercedes any previous agreements or understandings. 14. Successors and Assigns. COMPANY and CITY, and each of them, each binds itself, its respective successors and assigns, to the other party to this Agreement, and to the respective successors and .assigns of such other party in respect to all covenants of this Agreement. -11- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in the City of _Saratoga County of Santa Clara, State of California, as follows: By COMPANY this day of , 1983. By CITY this day of , 1983. ATTEST: City Cler CITY OF Saratoga , a Municipal Corporation By Mayor (CITY) GUADAL[JPE RUBBISH DISPOSAL COMPANY, INC., a California Corporation By . -12- (COMPANY)