HomeMy WebLinkAbout07 - Recycling ContractTO: Mayor and City Council
FROM: General Services Director
SUBJECT: Recycling Contract
Recommendation:
City Council Agenda
Item No. t 7
February 26, 1996
Y4�
FEB 2
Approve the attached six year contract with CRT, Inc. for the processing of
solid waste for recyclables.
Background
On March 23, 1990, the City and CRT, Inc. entered into a 10 year contract for
the processing of all City rubbish for recyclables. The actual start date of the
contract was delayed until September 1990 due to delays in the completion of
the Materials Recovery Facility (MRF). The major details of that current
contract are noted by the upper section of Attachment A.
During the past five years, CRT, Inc. has exceeded the mandatory 25%
recycling rate by at least 5% on an annual basis. In addition, CRT, Inc. has
provided various new programs to the City at no additional cost such as a
green waste recycling program and the recycling of Christmas trees and
phone books.
In April 1995, when it became clear that the City would be impacted by a
County landfill disposal fee increase of 52%, CRT, Inc. and staff began
discussions to seek financial solutions.
Subsequently, CRT, Inc. provided four options during May, 1995 that would
have resulted in reduced recycling costs to the City. These options were
considered, but not acted upon due to the impending study of various solid
waste issues and alternatives to offset the landfill fee increases. The Council
did direct staff on September 11, 1995 to proceed with further negotiations
with CRT, Inc.
Staff also addressed various alternatives available to the City such as:
continuing the current recycling contract, renegotiating the current contract,
and soliciting proposals for recycling services near the end of the contract.
There had been interest by one Councilmember at the September 11 meeting
and again on October 9 to explore the rebidding of the recycling contract.
However, with over four and one half years of the contract remaining and the
interest by CRT, Inc. to offer concessions to the City to provide relief from the
landfill fee increases, it is prudent to consider the CRT, Inc. options. The
Assistant City Attorney has indicated by the attached correspondence
(Attachment B) that the existing contract with CRT, Inc. may be terminated
only upon default of CRT, Inc., or by mutual consent of the City and CRT,
Inc.
Preparation of this report was further delayed as staff researched all possible
disposal locations, including the La Paz, Arizona and El Sorbrante, Corona,
California landfills, for lower disposal costs. The effects of a possible sale of
the Orange County landfills to either a private entity or the County
Sanitation District was also considered. Staff plans to provide Council a
landfill disposal alternative during March, 1996.
On a separate note, the recycling surcharge of $1.98 per month cannot be
reset until a decision is made on the CRT, Inc. proposals since the CRT, Inc.
fee is an integral part of the formula used to determine the surcharge. In
addition, any change to the landfill disposal fee will directly affect the
amount of the recycling surcharge.
ThisrniSSinn
Attachment A, which was mentioned earlier, depicts the current CRT, Inc.
contract conditions as well as illustrates the stipulations of the proposed
agreements with CRT, Inc. for FY 95-96 and FY 96-97. Each needs to be
addressed in sequence.
Staff have thoroughly researched a number of options that would offset the
landfill fee increases. This study includes not only the CRT, Inc. contract,
but all other recent and similiar municipal recycling contracts in Orange
County. A comparison of the CRT, Inc. offer with other mixed waste
processing contracts is included in Attachment C. Attachment D notes
estimated City cost avoidance that would result from the approval of the
proposed recycling agreement (Attachment E).
Rate
The current CRT, Inc. rate to recycle a minimum of 25% of the waste stream
is $47.99 per ton. This rate includes a $9.19 increase on July 1, 1995 that
represents a 75% assumption of the landfill fee increase (a minimum of 25%
of the waste stream does not go to a landfill) as per the current contract. The
second increase, also a part of the current contract rate, was a $.65 per ton
increase on August 1, 1995 that was due to a CPI increase.
The proposed agreement (Attachment E) would lower the current rate from
$47.99 per ton to $45.75 per ton effective March 1, 1996.
The actual rate for FY 95-96 would be $43.00 per ton retroactive to July 1,
1995 to assist the City offset the 52% tipping fee increase by the County, and
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would be the lowest recycling fee in the County for mixed waste processing.
The most recent negotiated rates for similiar city contracts (Costa Mesa,
Fullerton, Huntington Beach, and Fountain Valley) for processing of solid
waste for recyclables are listed on Attachment C. It is important to note that
the Fullerton, Huntington Beach, and Fountain Valley recycling contracts
have not only higher current rates, but have no CPI caps. In addition, the
CPI increase for the Fullerton contract is calculated using the full recycling
fee, and not on a smaller base net cost such as incorporated in the current
and proposed CRT, Inc. contracts with our City and the Costa Mesa Sanitary
District. By continuing to use this contract provision, the City will reduce
increases associated with CPI increases when compared with other Orange
County agencies.
The proposed contract also contains a clause that would lower the CRT
service fee should the County landfill fee be decreased or if a lower out of
county disposal fee becomes available. Since there is a possibility of this
occurring should the landfills be sold or transferred to another government
agency, staff recommends that this possibility be addressed in the agreement.
Just as the City is and would be responsible by the current and proposed
contract for only 75% of any landfill fee increase due to a stipulated minimum
recycling rate of 25%, the reduction level of the service fee would be only 75%
of the total decrease. The contract also provides for a similiar calculation if
the City opts for a 50% recycling rate at a future date.
The proposed contract contains a "most favored nation" clause (Section V,
Paragraph H, page 6) that provides valuable future protection to the City.
CRT guarantees that the City recycling service fee will be the most favorable
rate given to any customer using service simihar to that provided the City. If
a more favorable rate is granted any CRT customer subsequent to the
approval of the proposed contract, or if CRT lowers the rate of the Costa Mesa
Sanitary District, then the new rate shall become the new rate for the City.
In summary, the current recycling fee is $47.99 per ton. The proposed
contract fee is $45.75 per ton with a temporary rate of $43.00 per ton for FY
95-96 only. The fee reverts to $45.75 per ton on July 1, 1996.
Term
The term of the contract with CRT, Inc. is proposed to be six years with
automatic annual renewals. This type of contract is used throughout Orange
County and Southern California in the solid waste industry and is commonly
referred to as an "evergreen or rolling" contract. A termination for cause
clause in the proposed contract remains as protection for the City should
recycling mandates not be met or other problems develop.
The length of the contract with renewal rights is of primary concern to CRT,
Inc. Without assurances of a continuing contract, the company may be
restricted from obtaining financing to upgrade their Materials Recovery
Facility (MRF) to ensure continued efficiency and the capability to recycle j
50% of the waste stream to meet the AB 939 mandate of the year 2000.
The City gains in several ways from a longer term contract such as a fee
decrease, CERCLA indemnification, assurances of recycling 50% of the waste
stream (our current contract would expire in September 2000, three months
before the AB 939 50% recycling rate mandate deadline), cost avoidance
worth $189,620 in FY 95-96, and the continuation of a high level of service
with a company that has consistently exceeded contract specifications or
provided amenities at no additional cost.
Recycling Requirements
Since the actual processing for recyclables program started in 1990, CRT, Inc.
has annually exceeded the 25% recycling rate required by contract. For
January 1996, CRT, Inc. recycled 35% of the City solid waste stream
including 470 tons of green waste. Voluntary separation of green waste by
CRT, Inc. has negated the necessity, the costs, and the inconvenience to the
residents for a separate City green waste program.
The proposed contract would offer as a future City option, an increase in the
recycling rate to 50% on July 1, 1999 at an additional cost of $13.95 per ton.
This would permit a postponement of additional recycling expenses over the
next three and a half years and allow an opportunity for the California
Integrated Waste Management Board to possibly lower or rescind the 50%
recycling mandate. Currently, study of the options to a 50% recycling rate
has been solicited by the CIWMB. The attached contract allows for future
changes of the recycling rate by the CIWMB.
CPI
The current contract with CRT, Inc. permits a 3% to 6% CPI annual
adjustment based on the local CPI index. The CPI increase in CY 94 resulted
in a $ .63 per ton increase in the service fee on August 1, 1995.
The proposed contract would lower the CPI cap to 3% with adjustments
effective on July 1 (the same time the landfill fee adjustments are made) vice
the current August 1 date.
The current contract has a provision for an annual minimum CPI increase of
3%. The new contract would link any CPI increases to the actual CPI
change, but would limit any increase to a 3% cap. For example, unlike the
current contract, the new contract would allow a decrease in the rate for any
CPI index below the 3% level.
Another advantage the proposed contract would offer is a smaller CPI
increase due to the lesser base net cost amount that is used in the
A �
calculation. In other words, the CPI is multiplied against the CRT base net
cost of $22.25 instead of the service fee of $45.75. The advantages of this
calculation method were explained in the third paragraph of the "Rate"
section (top of page 3).
Landfill Designation
The proposed contract specifies that Brea or Bowerman landfills may be used
by CRT, Inc. without any rate change. A rate change may be required if
CRT, Inc. were to be required to permanently use other than Brea or
Bowerman landfills. The contract also includes an option for the City to
designate the disposal site should better disposal rates become available
during the term of the contract. Staff will continue to research more
economical disposal options. A time distance study to the new disposal
location would be used as the basis for any fee change.
Indemnification
The proposed contract would include indemnification provided by CRT, Inc.
from any and all claims made or liability that may arise as a result of
CERCLA (Superfund) claims, as well as standard commercial general
liability, automobile liability, and worker's compensation and employee's
claims. This is an important feature that provides valuable current and
future protection to the City. The CRT, Inc. indemnification is separate and
in addition to the recently attained City insurance policy regarding CERCLA
protection under "arranger" liability status.
Amenities
In addition to the service fee reductions, CRT, Inc. also offers the following
amenities:
a) Backup collection and transportation services in the event of City
manpower or equipment stoppages
b) Rolloff containers provided for any City recycling event (to include non-
profit organizations) with fair market value paid for recyclables less
transportation costs of containers
c) Continuation of complimentary Christmas tree, phone book, and green
waste recycling programs
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d) Public education program to include MRF tours, biennial recycling and
hazardous waste brochure, and anti -scavenging program; actual annual
costs not to exceed $5,000
Conclusions
The contract conditions offered by CRT, Inc. will save the City a minimum of
$189,620 during FY 95-96 and a minimum of $90,120 per year thereafter.
Anticipated cost savings of $1,005,700 are expected over the next 10 years as
a result of the approval of the proposed contract (Attachment D). These
savings offset the FY 95-96 landfill fee increase of approximately $200,000
and permit a stabilization of recycling costs over the next ten years.
Other provisions, such as the establishment of anti -scavenging and green
waste programs, effectively address earlier solid waste issues that have
developed in the past year. These issues would be effectively resolved by the
acceptance of the attached contract.
Most importantly, the City would be renewing a contract with very favorable
conditions, built in annual cost avoidance over current costs, substantial
added liability protection, and a guarantee that the service fee for the City
will be the most favorable rate granted by CRT, Inc. (with the exception of
the Costa Mesa Sanitary District rate which is $ .01 per ton lower). Finally,
the agreement would be with a contractor that has exceeded performance
requirements for the past 5 years, while providing valuable assistance on
several occasions when City refuse operations were confronted with
equipment problems.
Summary
Staff recommends approval of the recycling contract for the following major
reasons:
• Provides rate reductions of $189,620 (FY 95-96) and $85,120 (FY 96-97
and thereafter)
• Contract ensures long term refuse processing cost stability
• Improved CPI index provisions
• Optional provisions for 50% recycling rate
• Future landfill or disposal designation option
• CERCLA indemnification
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Contract guarantees most favorable rate in future (except for Costa
Mesa Sanitary District)
• Cost avoidance of contract offsets landfill fee increases
• Continued or expanded recycling programs at no additional cost to City
* City service amenities valued at $5,000/year
• Avoided costs of $1,005,700 over initial ten year term of contract
Very respectfully,
David E. Niederhaus
DEN/pp
Attachments: (A) Recycling Contract Comparison
(B) Assistant City Attorney Memo of December 27, 1995
(C) Comparison of Recycling Contract Options
(D) City Savings With Proposed Contract
(E) Proposed Recycling Agreement
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CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
December 27, 1995
TO: Kevin Murphy, City Manager
Dave Niederhaus, General Services
FROM: Robin Clauson, Assistant City Attorney
RE: CRT Recycling Agreement
You have asked me to review whether the City can
terminate the Recycling Agreement with CRT Transfer, Inc. ("CRT").
The Agreement does not expire until September, 2000. By its terms,
the Agreement may be terminated under two conditions: (1) CRT's
failure to comply with the provisions of the Agreement, or (2) the
mutual consent of the parties. I understand that CRT has so far
complied with all the requirements of the Agreement, therefore,
without the consent of CRT, the City cannot unilaterally terminate
the Agreement without risking litigation from CRT.
de\KMcrta9r.mem
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Attachment B
General Services Department
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RECYCLING AGREEMENT
This AGREEMENT between the CITY OF NEWPORT BEACH (herein-
after referred to as the "CITY") and CR TRANSFER, INC. (hereinafter referred to
as the "CRT"), dated this —day of 1996, for purposes of
identification, is made with reference to the following recitals:
RECITALS
A. The State Legislature has enacted laws that requires CITY to recycle
twenty-five percent (25%) of its solid waste stream by December 31, 1995 and
fifty percent (50%) by December 31, 2000, and the Newport Beach City Council
would like to meet the State mandates.
B. CRT is a California Corporation in the business of accepting solid
waste from public and private haulers at its Stanton Transfer Station, located at
11232 Knott Avenue, Stanton, California, ("CRT processing site") separating
recyclable material from solid waste, delivering the recyclables for sale to users
of recycled material, and disposing of unusable solid waste in a landfill.
C. CITY entered into a Recycling Agreement dated March 23, 1990,
with CRT, which agreement will expire in September 2000. Paragraph XI of the
agreement provides that the agreement may be terminated by the mutual
consent of the Parties.
D. CITY is the only municipality in Orange County that is currently
using City staff to collect, haul, and dispose of solid waste generated by its
residents, the City Council has evaluated alternative programs designed to
satisfy State recycling requirements, and the City Council has determined that
CRT represents the most feasible method of satisfying these requirements.
E. CITY and CRT desire to terminate the Recycling Agreement dated
March 23,1990 and enter into this new AGREEMENT.
F. CITY and CRT will each benefit from a new AGREEMENT in that
CITY will provide CRT with a substantial and dependable solid waste stream
and CRT will separate from that waste stream recyclable material in sufficient
quantity to satisfy CITY's recycling obligations. In addition, CRT will provide
additional protection and benefits to CITY, such as indemnification from a
variety of liabilities, long term processing cost stability, a green waste recycling
program, service of various CITY waste containers, phone book and Christmas
tree recycling, rebates, and additional public education assistance, which were
not included in the agreement dated March 23,1990.
NOW, THEREFORE, the Parties agree as follows:
SECTION I
TERM
A. The term of this AGREEMENT shall be six (6) years effective on
March 1, 1996 through February 28, 2002. The term shall thereafter be
automatically renewed for a new six (6) year term on each March 1st of
successive six (6) year periods beginning on March 1, 2002, unless otherwise
terminated pursuant to this AGREEMENT. The automatic renewal of any six (6)
year term of this AGREEMENT may be terminated by written notice of
cancellation of the renewal. Notice of cancellation of the automatic renewal may
be given by either party at anytime, without cause, and will cause this
AGREEMENT to terminate when the balance of the remaining six (6) year term
expires.
B. This AGREEMENT may also be terminated pursuant to Section XII
of this AGREEMENT or by mutual consent of the Parties.
SECTION II
REPRESENTATIONS AND WARRANTIES
A. CITY warrants and represents that it has the right to, and does,
collect, haul and dispose of solid waste generated by the vast majority of
residential units, and some commercial and industrial properties, within CITY.
CITY further warrants and represents that it will maintain, during the term of
this AGREEMENT and subject to budgetary constraints, manpower and
equipment sufficient to collect and haul solid waste generated within CITY.
B. CRT represents and warrants that it will maintain adequate space,
manpower, and equipment to perform the duties required of it pursuant to this
AGREEMENT. CRT further represents that it will actively seek markets for
recycled materials reclaimed from CITY solid waste stream such that CRT
continues to have a financial interest in performing the duties required by this
AGREEMENT.
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SECTION III
DUTIES OF CRT
CRT shall perform the following basic services:
A. Maintain a solid waste transfer station at the CRT processing site in
the City of Stanton, or an equal facility no further from CITY, with adequate
space to accept all solid waste delivered by CITY, sufficient manpower and
equipment to separate recyclables from the waste stream and store recycled
material prior to shipment, without causing undue delays to CITY. Undue
delays are defined as delays of access to unloading of CITY's solid waste at the
CRT processing facility greater than thirty (30) minutes per load.
B. 1. Sort through the waste stream delivered by CITY and remove
recyclable materials to the extent of twenty-five percent (25%) or more of the
weight of all materials in the waste stream.
2. On July 1, 1999, or such later date as CITY may designate in
writing, continence to sort and remove recyclable materials to the extent of fifty -
percent (50%) or more of the weight of all materials in the waste stream, or such
other percentage as may be required by CITY to comply with State Law. CITY
shall provide CRT with six (6) months prior written notice of its intent to
implement the fifty percent (50%) recycling rate.
C. After separation of recyclable materials, dispose of the remaining
solid waste at a location and/or in a mariner that fully complies with all relevant
local, State, and federal laws, rules and regulations and this AGREEMENT.
D. Provide documentation, satisfactory to CITY and the County of
Orange, and as required by State law, attesting to the tonnage of solid waste
received from CITY and deposited in a landfill. CRT shall also provide a
monthly recycling report which will include, at a minimum, the total solid waste
tonnage, the amount of solid waste recycled by category, and the recycling rate.
E. If requested by CITY due to a mechanical breakdown of CITY
refuse transfer equipment, provide, on a temporary basis, refuse transfer
equipment, and drivers, to transport CITY refuse from Corporation Yard at 592
Superior Avenue, Newport Beach to the CRT processing facility. CITY will
compensate CRT under the provisions of Section V, Paragraph F.
F. In the event of a major CITY manpower or equipment stoppage
related to CITY refuse collection activities, CRT will provide any available CRT
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resources to CITY on a temporary basis at the average Countywide monthly
residential collection rate.
G. CRT shall provide AB 939 education programs by providing up to
five (5) tours of their Materials Recovery Facility each year and preparing with
CITY staff concurrence, a recycling, household hazardous waste, and anti -
scavenging brochure for each residence on a biennial basis. CITY will provide
mailing labels. The brochure will be mailed by CRT within ninety (90) days of
written request by CITY. Costs to CRT shall not exceed five -thousand dollars
($5,000) annually.
H. CRT shall have an agreement in place throughout the term of this
AGREEMENT for composting or processing green waste with a properly
licensed facility and divert CITY green waste to same. This diversion of green
waste will be included in the overall 25% or 50% recycling rate requirement
noted in Section III, Paragraph B.1. and B.2, unless future Federal or State
mandates no longer permit the use of green waste in diversion totals.
I. CRT shall provide complimentary Christmas tree and phone book
recycling on an annual basis.
J. CRT shall provide roll off containers for any CITY sponsored
recycling event, including non-profit organizations, with CRT to pay fair market
value for recyclables collected less transportation costs of the containers
provided to the event.
SECTION IV
DUTIES OF CITY
CITY shall be required to perform the following duties:
A. Deliver at a minimum all solid waste collected by CITY personnel
from residential units to the current CRT processing facility in Stanton or such
other facility as CRT may direct, provided the alternate site is no greater distance
nor driving time from Newport Beach than the current facility, at no cost nor
expense to CITY, except as otherwise noted in Section III, Paragraph E.
B. Solid waste shall be delivered to CRT between the hours of 7:00
a.m. through 6:00 p.m., Monday through Saturday, and shall be off-loaded by
CITY personnel using CITY equipment. The solid waste delivered to CRT shall
be the same material collected by CITY personnel and deposited into CITY
K
vehicles. CITY shall not further compact, or alter the composition of, the waste
collected, except to the extent the material is compacted in the original collection
vehicle.
SECTION V
COMPENSATION
A. CITY shall compensate CRT at the rate of $45.75 per ton of solid
waste delivered by CITY. This service fee ($45.75) includes a base net cost of
$22.25 per ton.
B. The base net cost shall be increased on July 1, 1996, and every
twelve (12) months thereafter, to reflect any increase in the Consumer Price
Index (CPI - all urban consumers for the Los Angeles -Anaheim -Riverside area -
1995 base year) as specified in this subsection. Base net cost increases shall reflect
increases in the CPI. The base net cost of CRT operations as of the effective date
of this AGREEMENT is $22.25 per ton and that sum will be used to calculate the
service fee increase to be effective on, July 1, 1996. The base net cost of CRT shall
increase in subsequent years to reflect prior increases in the CPI (for example,
assuming a CPI increase of three percent (3%) prior to January 1, 1996, the base
net cost used to calculate the July 1, 1997 service fee increase will be $22.92 per
ton). Base net cost increases shall reflect actual changes in CPI provided,
however, in the event the CPI increases more than three percent (3%) during the
preceding twelve (12) months, the increase in the service fee shall be limited to
three percent (3%) multiplied by the then current base net cost.
C. The service fee assumes a current disposal fee of $35.00 per ton. In
the event disposal fees are increased or decreased from the current rate of $35.00
per ton, the service fee shall be increased or decreased by an amount equal to
seventy-five percent (75%) of the difference between the current disposal fee and
the new fee. If CITY opts for an increased recycling rate of fifty percent (50%) as
provided for in Section III, Paragraph B.2. the seventy-five percent (75%)
calculation noted above shall be reduced to fifty percent (50%) of the difference
between the current disposal fee and the new fee.
D. The service fee may be increased by $13.95 per ton of solid waste
received by CRT from CITY upon CITY's request pursuant to Section III,
Paragraph B.2. to increase the recycling rate to fifty percent (50%). The $13.95
service fee increase assumes an increased recycling requirement at fifty percent
(50%) of the solid waste stream. If the California Integrated Waste Management
Board designates a lesser percentage, CRT agrees to negotiate with CITY to
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reduce the $13.95 per ton increase by an amount which will reflect reduced
recycling costs incurred by CRT in recycling.
E. The service fee assumes CRT will, during the term of this
AGREEMENT, be able to dispose of solid waste at Bowerman or Brea Canyon
landfills. If both the Bowerman and Brea Canyon landfills are closed or CITY
designates another facility under the provisions of Section VII below, the service
fee shall be adjusted to reflect any change in disposal and transportation costs
which result from transporting solid waste to a new or different facility location.
If there is a resulting change in disposal costs the fee shall be adjusted as
provided in Section V, Paragraph C. If there is a resulting change in
transportation costs, the adjusted fee will be based upon a precise time/distance
study conducted jointly by CITY and CRT.
F. In the event CRT is required to provide, on a temporary basis,
personnel and refuse equipment to transfer solid waste in the event of a
breakdown of CITY equipment, CRT shall receive an additional five dollars,
ninety cents ($5.90) per ton for all solid waste transported in CRT equipment.
G. Compensation due CRT pursuant to this AGREEMENT shall be
paid within thirty (30) days after receipt of an invoice, accompanied by
supporting documentation as required by State law establishing the total weight
of the solid waste provided by CITY, the amount disposed of by CRT, and the
weight of the recycled or reclaimed materials recovered from the solid waste
delivered to CRT by CITY.
H. CRT guarantees CITY that its service fee will be the most favorable
rate given to any customer using service similar to that provided to CITY. If
CRT negotiates a more favorable service fee with any customer subsequent to the
date of this AGREEMENT, that fee shall become the rate for CITY.
I. CRT shall compensate CITY at the rate of two dollars and seventy-
four cents ($2.74) per ton of all waste delivered to the CRT processing site by
CITY personnel between the dates of July 1, 1995 to February 29, 1996. In
addition, CRT, Inc., shall compensate CITY at the rate of two dollars and twenty- _ (+79
five cents ($2.25) per ton of all waste delivered to the CRT, Inc., processing site by �-�
CITY personnel between the dates of July 1, 1995, and June 30,1996. • __ �'J
SECTION VI -7t)/#Q
OWNERSHIP OF SOLID WASTE 2 2 S Azo N
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CRT shall become the owner of all solid waste when delivered to the CRT
processing site, or such alternate site as may be designated during the term of
this AGREEMENT. CRT shall have the exclusive right to market all recyclable
material reclaimed from solid waste generated by CITY pursuant to this
AGREEMENT and shall be entitled to any and all income derived from the sale
or use of the recycled material. CRT shall make an every reasonable effort to
recover any inadvertently disposed materials which are owned by CITY or
residents and return them upon request.
SECTION VII
LOCATION OF DISPOSAL
A. CRT shall dispose of solid waste only by taking such solid waste to
a landfill, transfer station, recycling facility or materials recovery facility which is
lawfully authorized to accept such solid waste. CRT shall not dispose of solid
waste by depositing it on any land (except a permitted recycling facility) whether
public or private, in any river, stream or other waterway, in any sanitary sewer
or storm drainage system, or any manner prohibited by law. .
B. CRT agrees that CITY has the future right, at any time, to direct
CRT to dispose of CITY solid waste at a permitted disposal facility designated by
CITY. For example, CITY may exercise this right in order to save money on
disposal costs, to avoid disposal sites with potential cleanup problems, or to meet
the requirements for access to a disposal site. CRT agrees to dispose of the solid
waste which CITY delivers to CRT at any disposal facility directed by CITY. This
exercise of "flow control" by CITY shall be made upon at least one hundred -
twenty (120) days prior written notice to CRT.
SECTION VIII
INDEPENDENT CONTRACTOR
CRT, in performing the services required by this AGREEMENT, is acting
in the capacity of an independent contractor. CRT is solely responsible for
determining the type, method and manner of the work or tools and
instrumentalities required to perform the services specified in this
AGREEMENT. CRT is solely responsible for the payment of all salaries, benefits,
unemployment insurance taxes, social security taxes and any other payments
required by law.
II
SECTION IX
INDEMNIFICATION
A. 1. CRT assumes the sole risk for all the work covered by this
AGREEMENT done at the CRT processing site for solid waste. CRT agrees to
indemnify, defend, save and hold harmless CITY, its elected and appointed
boards and commissions, officers, agents, and employees from and against
losses, damages, liability, claims, costs and expenses for damages of any nature,
but not limited to, bodily injury, death, personal injury, property damage,
attorneys' fees and court costs arising from any and all negligent actions of CRT,
its employees, agents or subcontractors in the performance of services under this
AGREEMENT.
2. CRT shall indemnify and hold harmless CITY, its City
Council, boards and conunissions, officers and employees from and against any
and all loss, damages, liability, claims, costs and expenses whatsoever, including
reasonable attorneys' fees, which may accrue to any and all persons, or business
entities furnishing or supplying work, services, materials, equipment or supplies
to contractor in the performance of services under this AGREEMENT.
3. In the event that CRT and CITY are sued by a third party for
damages allegedly caused by negligence or other wrongful conduct of CRT, or
by a dangerous condition of CITY's property created by CRT or existing while
the property was under the control of CRT, CRT shall not be relieved of its
indemnity obligation to CITY by any settlement with any such third party unless
that settlement includes a full release and dismissal of all claims by the third
party against CITY.
B. 1. CRT shall indemnify, defend and hold harmless CITY, as
well as its officers, employees, agents and representatives with respect to any
loss, damage, liability, claim, cost, expense or cause of action arising out of any
act or omission of CRT, its directors, officers, agents, employees, subsidiaries,
affiliates, successors, assigns or insureds in any way related to the services to be
performed by CRT pursuant to this AGREEMENT.
2. In addition, CRT shall indemnify CITY, defend with counsel
approved by CITY, protect and hold harmless CITY, its officers, employees,
agents, assigns, and any successor or successors to CITY's interest from and
against all claims, actual damages including, but not limited to, special and
consequential damages, natural resource damage, punitive damages, injuries,
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costs, response, remediation, and removal costs, losses, demands, debts, liens,
liabilities, causes of action, suits, legal or administrative proceedings, interest,
fines, charges, penalties and expenses attorneys' 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, CITY or its officers, employees, agents or CRT arising from
or attributable to CRT's activities under this AGREEMENT concerning any
hazardous substances or hazardous waste at any place where CRT stores or
disposes of solid or hazardous waste pursuant to this AGREEMENT between
CITY and CRT. The foregoing indemnity is intended to operate as an
AGREEMENT pursuant to CERCLA, 42 USC Section 9607(e) and any
amendments thereto; California Health & Safety Code Section 25364, to insure,
protect, hold harmless and indemnify CITY from liability.
3. CRT shall protect, defend, indernnify, and hold harmless
CITY against all fines or penalties imposed on City by the California Integrated
Waste Management Board with respect to CRT's failure to meet the recycling
requirements of this AGREEMENT.
C. CITY and CRT shall promptly notify the other of any claim or
lawsuit for which the other has obligations pursuant to this Section.
D. If pursuant to Section VII, Paragraph B, CITY directs CRT to
dispose of CITY solid waste at a disposal location outside the County of Orange,
the indemnification provision of Section IX, Paragraph B.2., shall be rescinded at
CRT's option.
SECTION X
INSURANCE
A. Without limiting CRT's indemnification of CITY, CRT shall obtain
and maintain at its own expense during the term of this AGREEMENT, policy or
policies of liability insurance of the type and amounts described below and
satisfactory to CITY. Insurance policies shall be signed by a person authorized
by that insurer to bind coverage on its behalf and must be filed with CITY prior
to exercising any right or performing any work pursuant to this AGREEMENT.
Prior to the commencement of work, CRT shall provide to CITY
certificates of insurance from an insurance company certified to do business in
the State of California, with original endorsements. At the option of CITY, CRT
shall provide copies of all policies providing coverage as required by this
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AGREEMENT. CRT shall provide the following insurance, with Best's rating A -
VII or better carriers, unless otherwise approved by the City Risk Manager:
1. Worker's Compensation and Employers Liability insuring
statutory Worker's Compensation limits as required by the California Labor
Code and one million dollars ($1,000,000) per accident Employers' Liability;
2. Commercial general liability insurance covering third party
liability risks, including without limitation, contractual liability, in a minimum
amount of one million dollars ($1,000,000) combined single limit per occurrence
for bodily injury, personal injury and property damage. If the policy does not
apply separately to this AGREEMENT or contains a general aggregate limit, then
the aggregate limit shall not be less than two million dollars ($2,000,000);
3. Automobile liability and property insurance covering all owned
and rented vehicles of CRT coverage with a minimum amount of two million
dollars ($2,000,000) combined single limit per accident for bodily injury and
property damage, and shall include sudden and accidental coverage.
B. Endorsements to the policies providing the above insurance shall
be obtained by CRT, adding the following three provisions:
1. Additional Insureds:
"CITY and its elected and appointed
boards, officers agents, and employees as additional insureds."
2. Notice:
"The policy shall not terminate, nor shall it be canceled nor the
coverage reduced, until thirty (30) days after written notice is
given to CITY."
3. Other Insurance:
"Any other insurance maintained by CITY shall be excess and
not contributing with the insurance provided by this policy."
C. CRT shall give to CITY prompt and timely notice of any claim
made or suit instituted arising out of CRT's performance of this AGREEMENT.
CRT shall also procure and maintain, at its own cost and expense, any additional
kinds of insurance, which in its own judgment may be necessary for its proper
protection and prosecution of the work.
D. CRT agrees that in the event of loss due to any of the perils for
which it has agreed to provide, comprehensive general and automotive liability
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insurance, that CRT shall look solely to its insurance for recovery. CRT hereby
grants to CITY, on behalf of any insurer providing, comprehensive general and
automotive liability insurance to either CRT or CITY with respect to the services
of CRT, a waiver of any right of subrogation which any such insurer of CRT may
acquire against CITY by virtue of the payment of any loss under insurance.
SECTION XI
PROHIBITION AGAINST TRANSFERS
CRT may not assign any right or obligation of this .AGREEMENT or any
interest in this AGREEMENT by operation without prior written consent of
CITY. Any attempted or purported assignment without consent of CITY shall be
null and void. CRT may not employ any subcontractors unless specifically
authorized by CITY.
The sale, assignment, transfer or other disposition of any of the issued and
outstanding capital stock of CRT, or of the interest of any general partner or
joint -venturer which shall result in changing the control of CRT, shall be
construed as an assignment of this AGREEMENT. Control means fifty percent
(50%) or more of the voting power, or twenty five percent (25%) or more of the
assets of the corporation, partnership or joint -venture.
SECTION XII
DEFAULT/REMEDIES/TERMINATION
A. A party shall be considered in default if and when the party fails or
refuses to perform any of the provisions of this AGREEMENT in the manner
required. The party in default shall have the right to cure the default within
thirty (30) days after written notice from the other party specifying the nature of
the default and its intention to exercise the remedies provided in this
AGREEMENT in the event of a failure to cure. If the default requires more than
thirty (30) days to cure, the breaching party must commence cure within thirty
(30) days after written notice from the non -breaching party and diligently pursue
the cure to completion.
B. In the event a party fails to cure a default as specified in this
Section, the non -breaching party shall have the right to terminate the
AGREEMENT and to exercise any other remedy provided by law.
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C. The Parties agree that remedies at law, including monetary
damages, are not adequate to protect CITY in the event that CRT fails to accept
the waste stream generated by CITY or fails to separate from that waste stream
recyclables equal to twenty-five percent (25%), or more, of the total weight of the
entire waste stream received by CRT. In such event, the CITY's remedies shall
include, but not limited to, the right to a Court Order requiring CRT to
specifically perform in accordance with this AGREEMENT.
SECTION XIII
PERMITS/LICENSES
CRT shall obtain, at its sole cost and expense, all permits and licenses
required by any public agency having jurisdiction over its operations that are
necessary for the performance of services pursuant to this AGREEMENT and,
upon request, shall provide proof to CITY that such licenses and/or permits
have been obtained.
SECTION XIV
MISCELLANEOUS PROVISIONS
A. Notices
Any notice required by this AGREEMENT shall be deemed given
when personally delivered or when deposited in the United States Mail, first
class postage prepaid, and addressed as provided below:
CR Transfer, Inc. " 191- X114
11292 Western Avenue
P.O. Box 125
Stanton, California 90680
General Services Director
City of Newport Beach
3300 Newport Boulevard
P.O. Box 1768
Newport Beach, California 92659-1768
B. Cost of Litigation
,rya -
141d Y%�
If any legal action is necessary to enforce any provision of this
AGREEMENT, or for damages by reason for an alleged breach of any provisions
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of this AGREEMENT, the Parties agree that the court with jurisdiction over the
action may determine and fix reasonable attorneys' fees and expenses to be paid
to the successful party.
C. Arbitration
The parties may mutually agree to submit disputes over the terms
of this Agreement to arbitration.
D. Compliances
CRT represents that it is familiar with and shall comply with all
laws, State or federal and all ordinances, rules and regulations enacted or issued
by CITY which are applicable to the performance of services under this
AGREEMENT.
E. Integrated Contract
This AGREEMENT represents the full and complete understanding
of every kind or nature whatsoever between the Parties and all preliminary
negotiations and agreements of whatsoever kind or nature are merged in this
AGREEMENT. No verbal AGREEMENT or implied covenant shall be held to
vary the provisions hereon. Any modification of this AGREEMENT will be
effective only by written execution signed by both CITY and CRT.
F. Waiver
A waiver by CITY of any breach of any term, covenant or condition
contained herein shall not be deemed to be a waiver of any subsequent breach of
the same or any other term, covenant or condition contained herein whether of
the same or a different character.
G. Authori
Each of the Parties warrants and represents to the other that this
AGREEMENT has been approved by its governing body and that the officers
whose names appear below have been duly authorized to execute this
AGREEMENT and bind the respective Parties.
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SECTION XV
1990 RECYLING AGREEMENT
Upon execution of this AGREEMENT by CITY and CRT, the March 23,
1990 Recyling Agreement is terminated and of no further force or affect.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
AGREEMENT to be executed by its duly authorized representative as of the date
set forth below by such authorized signature.
APPROVED AS TO FORM:
Lai
Cit " Attorney
Attest:
City Clerk
de\winword\recyclin.doc
2-16-96
CITY OF NEWPORT BEACH
A Municipal Corporation
BN7:
Mayor
Date:
CR TRANSFER, INC.
11292 Western Avenue
P.O. Box 125
Stanton, California 90680
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