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HomeMy WebLinkAbout03 - Non -Exclusive Commercial Solid Waste FranchisesQ SEW Pp�T CITY OF O � z NEWPORT BEACH <,FORN'P City Council Staff Report October 11, 2022 Agenda Item No. 3 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: David A. Webb, Public Works Director - 949-644-3311, dawebb@newportbeachca.gov PREPARED BY: Micah Martin, Deputy Public Works Director, mmartin@newportbeachca.gov PHONE: 949-644-3055 TITLE: Ordinance No. 2022-21: Non -Exclusive Commercial Solid Waste Franchises ABSTRACT: On September 27, 2022, the City Council held a public hearing to consider granting non-exclusive commercial solid waste franchise agreements to Al Rivera Gardening & Landscape, American Dream Construction Clean Up, Corp., and Key Disposal & Recycling Inc. with an effective date of November 11, 2022 and an expiration date of October 7, 2027. Following the public hearing, the City Council introduced Ordinance No. 2022-21. For the City Council's consideration is the adoption of Ordinance No. 2022- 21, granting franchise agreements to these three entities. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Conduct second reading and adopt Ordinance No. 2022-21, An Ordinance of the City Council of the City of Newport Beach, California, Granting Non -Exclusive Franchise Agreements for Commercial Solid Waste and Divertible Materials Handling Services Within the City of Newport Beach to the three so named companies. DISCUSSION: The City of Newport Beach (City) utilizes a non-exclusive franchise system to manage commercial solid waste collection within the City. This system allows the City to meet the solid waste collections needs of the business community in a comprehensive manner while still complying with State of California (State) law. Over the past several years, the State has been making significant changes to its laws regarding the disposal of solid waste, as well as the amount that is required to be diverted away from landfills and recycled or reused (Assembly Bill 939 and 341, Senate Bill 1383). 3-1 Ordinance No. 2022-21: Non -Exclusive Commercial Solid Waste Franchises October 11, 2022 Page 2 Newport Beach Municipal Code (NBMC) Section 12.63.030 provides that no person shall provide commercial solid waste handling services or conduct a solid waste enterprise in the City without having first been awarded a franchise and entered into a franchise agreement with the City. At the August 23, 2022 meeting, the City Council passed a Resolution of Intention, Resolution No. 2022-55 (Attachment A), to conduct a public hearing at the September 27, 2022 meeting to consider granting franchises to the three entities listed therein. At the September 27, 2022 meeting, the City Council held a public hearing, conducted the first reading of Ordinance 2022-21 (Attachment B) to consider granting franchises to the three entities listed therein, and passed it to second reading. NBMC Section 12.63.080 allows the City Council to approve or conditionally approve an application for a franchise if, based on the application, information, materials and testimony submitted, the City Council finds that: • The application complies with NBMC Chapter 12; • The applicant or any person responsible for the management of the entity submitting the application has not within the past three years: (1) had a franchise for commercial solid waste handling services terminated by the City; and/or (2) operated a solid waste enterprise within the City without a franchise; • Awarding the franchise is in accord with the objectives of NBMC Chapter 12; • Granting of such franchise will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the city or be materially detrimental to the public welfare or injurious to property or public improvements; and • The applicant has sufficient experience, equipment or recycling plan to safely comply with the requirements of the franchise agreement. Staff has received and reviewed the franchise applications from the three entities listed in Resolution 2022-55; Al Rivera Gardening & Landscape, American Dream Construction Clean Up, Corp., and Key Disposal & Recycling Inc. Based on staff's review, the submitted applications meet all criteria required under NBMC 12.63.080. The new Non -Exclusive Commercial Solid Waste Franchises will take effect 30 days after adoption of the ordinance with an effective date of November 11, 2022, contingent on the execution of the individual franchise agreements, and approval of each firm's required insurance and bonds. 3-2 Ordinance No. 2022-21: Non -Exclusive Commercial Solid Waste Franchises October 11, 2022 Page 3 FISCAL IMPACT: Companies (franchisees) that are approved and granted a 2020 Non -Exclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services within the City are required to pay a franchise fee to the City which is equal to a total of 16 percent of the gross receipts for all commercial franchise services provided by Franchisee in the City. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Resolution No. 2022-55 Attachment B —Ordinance No. 2022-21 3-3 ATTACHMENT A RESOLUTION NO. 2022-55 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, DECLARING ITS INTENTION TO CONDUCT A PUBLIC HEARING TO CONSIDER GRANTING NON-EXCLUSIVE COMMERCIAL SOLID WASTE AND DIVERTIBLE MATERIALS HANDLING FRANCHISES WHEREAS, the City Council of the City of Newport Beach ("City") finds and determines that the collection of municipal solid waste and divertible materials, including recyclable materials, food scraps, green waste, wood waste, construction and demolition debris, and all other materials that can be diverted from landfill disposal (collectively "Commercial Solid Waste") generated within the City is a vital public service; WHEREAS, the City Council further finds and determines that the collection, transportation, storage, and disposal of municipal solid waste and the collection, transportation, processing, and diversion of processable municipal solid waste and divertible materials ("Commercial Franchise Services") is a matter of great public concern because improper control of such matters subjects the City to potential liability, damages and penalties, and may create a public nuisance, air pollution, fire hazard, infestation and other problems affecting the public health, safety and welfare; WHEREAS, the non-exclusive franchises for the use of public streets to provide Commercial Franchise Services promotes the public health, safety and welfare by providing permanence and stability among those businesses wishing to provide such service and accountability to the City for compliance with current and future state mandates; WHEREAS, on October 22, 2019, the City Council approved a new model franchise agreement in compliance with state law ("2020 Franchise"), that expires in the year 2027; WHEREAS, the City has since received applications from new applicants that wish to perform work under the 2020 Franchise; 3-4 Resolution No. 2022-55 Page 2of5 WHEREAS, pursuant to Article XIII (Franchises) of the City Charter, Chapter 12.63 (Solid Waste Management) of the Newport Beach Municipal Code ("NBMC"), and California Public Resources Code Sections 40059, 49300, and 49500 through 49523, or any successor statutes, the City is authorized to enter into non-exclusive franchise agreements for Commercial Franchise Services with private solid waste haulers; WHEREAS, pursuant to City Charter Section 1301 (Resolution of Intention. Notice and Public Hearing), the City Council, prior to granting any franchise, shall pass a resolution declaring its intention to grant same, stating the name of the proposed grantee(s), the character of the franchise, and the terms and conditions upon which it is proposed to be granted; and WHEREAS, such resolution shall fix and set forth the day, hour and place when and where any persons having any interest therein or any objection to the granting thereof may appear before the City Council and be heard thereon. NOW, THEREFORE, be it resolved by the City Council of the City of Newport Beach: Section 1: The City Council does hereby declare its intention to grant non- exclusive franchises, subject to the following general terms and conditions ("Non - Exclusive Franchise"): a. Effective date. November 10, 2022; b. Franchise fees. Sixteen percent (16%) of gross monthly receipts. Five and one-half percent (5.5%), shall be earmarked for the purposes of indemnifying and holding the City harmless from environmental liability associated with the franchisee's operations in the City. This portion of the franchise fee shall be paid into the City's Environmental Liability Fund. One-half percent (0.5%) shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling Element; C. Term. November 10, 2022 to October 7, 2027; d. Rates. The City shall not set franchisees' bin rates; e. Indemnification. Franchisees shall indemnify and hold City harmless from penalties and damages for failure to meet state recycling requirements with respect to the portion of the Commercial Solid Waste stream collected by franchisees; 3-5 Resolution No. 2022-55 Page 3of5 f. Diversion requirements. Franchisees shall divert the minimum amounts required by state law, of all processable municipal solid waste, recyclable materials, food scraps, green waste, and construction and demolition debris collected by franchisees; g. Disposal requirements. Franchisees shall dispose of Commercial Solid Waste, not otherwise diverted, in Orange County landfills pursuant to the City's waste disposal agreement with the County of Orange. City maintains the right to designate disposal facilities to be used by franchisees; h. Billing. Franchisees shall be responsible for all billing and collection for its accounts; i. Termination. Franchise shall not be revoked unless franchisee has defaulted in the performance of any obligation of the 2020 Franchise, and the Franchise may be terminated pursuant to Newport Beach Municipal Code Section 12.63.140 (Solid Waste Management - Termination); j. Application requirements. Prior to obtaining the 2020 Franchise, franchisees shall designate the specific Commercial Franchise Services for which it desires to apply and shall demonstrate competence in and compliance with the City's insurance, equipment, and diversion requirements with respect to those Commercial Franchise Services; k. Public education. Franchisees shall meet City's requirements to implement recycling, diversion, and source reduction public education activities; I. Recycling/diversion programs. Franchisees shall implement and provide recycling and diversion programs for all customers subject to California State Assembly Bills 939, 341, and 1826, Senate Bill 1383, and the California Green Building Standards Code, codified in the California Code of Regulations Title 24, Part 11, ("CALGreen"); M. Hauler representative. Franchisees shall designate a representative to assist in implementing State -imposed recycling and diversion programs; and n. Compliance. Franchisees shall comply with all state, federal laws and regulations, terms and conditions of the franchise agreement, the City Charter and the Newport Beach Municipal Code. 3-6 Resolution No. 2022-55 Page 4 of 5 Section 2: The City intends to grant the 2020 Franchise to the following entities (collectively, "Proposed Grantees"), which do not currently hold a franchise with the City: a. Al Rivera Gardening & Landscape; b. American Dream Construction Cleanup, Corp; and c. Key Disposal, Inc. Section 3: The City Council shall conduct a public hearing on September 27, 2022 at 5:00 p.m., or as soon thereafter as is practical, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California, to consider granting the Proposed Grantees the 2020 Franchise. Persons who have an interest in or objection to the granting of the 2020 Franchise to the Proposed Grantees may appear before the City Council and be heard at that date and time. Section 4: The City Council finds the adoption of this resolution is categorically exempt from the California Environmental Quality Act ("CEQA") pursuant to Sections 15301 and 15308 of the California Code of Regulations set forth in Title 14, Division 6, Chapter 3 which exempts "existing operations and facilities" and "actions by regulatory agencies for protection of the environment." Application of Sections 15301 and 15308 is appropriate because the resolution does not change nor expand existing solid waste operations and facilities within the City. This resolution is also consistent with the goals of California State Assembly Bills 939, 341, and 1826, Senate Bill 1383 and The California Solid Waste Management Act, CALGreen, as well as the objectives of the City's Source Reduction and Recycling Element. Section 5: The recitals provided above are true and correct and are incorporated into the operative portion of this resolution. 3-7 Resolution No. 2022-55 Page 5of5 Section 6: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid or unconstitutional. Section 7: Pursuant to City Charter Section 1301, this resolution shall be published in the City's official newspaper within fifteen (15) days of its adoption and at least ten (10) days prior to September 27, 2022. ADOPTED this 23rd day of August, 2022. ATTEST: I I/Zf13— _ . _ ./EW Leilani I. Brown City Clerk mayul ocx APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE ar�--- Aaron C. Harp City Attorney 3-8 STATE OF CALIFORNIA } COUNTY OF ORANGE ss. CITY OF NEWPORT BEACH i I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; the foregoing resolution, being Resolution No. 2022-55 was duly introduced before and adopted by the City Council of said City at a regular meeting of said Council held on the 23rd day of August, 2022; and the same was so passed and adopted by the following vote, to wit: AYES: Mayor Kevin Muldoon, Mayor Pro Tern Noah Blom, Council Member Brad Avery, Council Member Joy Brenner, Council Member Diane Dixon, Council Member Duffy Duffield NAYS: None ABSENT: Council Member Will O'Neill IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 241h day of August, 2022, MW� Leilani I. Brown City Clerk Newport Beach, California 3-9 ATTACHMENT B ORDINANCE NO. 2022-21 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, GRANTING NON-EXCLUSIVE FRANCHISE AGREEMENTS FOR COMMERCIAL SOLID WASTE AND ❑IVERTIBLE MATERIALS HANDLING SERVICES WITHIN THE CITY OF NEWPORT BEACH WHEREAS, the City Council of the City of Newport Beach ("City Council") finds and determines that the collection of municipal solid waste and divertible materials, including recyclable materials, food scraps, green waste, wood waste, construction and demolition debris and all other materials that can be diverted from landfill disposal (collectively, "Commercial Solid Waste") generated within the City of Newport Beach ("City") is a vital public service; WHEREAS, the City Council further finds and determines the collection, transportation, storage, and disposal of municipal solid waste and the collection, transportation, processing and diversion of processable municipal solid waste and divertible materials ("Commercial Franchise Services") is a matter of great public concern because improper control of such matters subjects the City to potential liability, damages and penalties and may create a public nuisance, air pollution, fire hazard, infestation and other problems affecting the public health, safety and welfare; WHEREAS, the non-exclusive franchises for use of public streets to provide Commercial Franchise Services promotes the public health, safety and welfare by providing permanence and stability among those businesses wishing to provide such service and accountability to the City for compliance with current and future state mandates; WHEREAS, in 2017, the City Council adopted a model non-exclusive commercial solid waste franchise agreement for private solid waste haulers and, thereafter, entered into franchise agreements with a number of commercial solid waste franchise haulers ("2017 Franchise"), effective through November 8, 2024; WHEREAS, although the 2017 Franchise did not expire until November 8, 2024, on October 22, 2019, the City Council approved a new model franchise agreement in compliance with Assembly Bill 1826 and Assembly Bill 341 ("2020 Franchise"), that expires in the year 2027; WHEREAS, the City has since received applications from new applicants that wish to perform work under the 2020 Franchise; 3-10 Ordinance No. 2022- Page 2 of 6 WHEREAS, pursuant to Article XII1 of the City Charter, Chapter 12.63 (Solid Waste Management) of the Newport Beach Municipal Code ("NBMC"), and California Public Resources Code Sections 40059, 49300, and 49500 through 49523, or any successor statutes, the City is authorized to enter into nonexclusive franchise agreements for Commercial Franchise Services with private solid waste haulers, - WHEREAS, pursuant to City Charter Section 1301 (Resolution of Intention. Notice and Public Hearing), on August 23, 2022, the City Council adopted Resolution No. 2022-55, providing notice of a public hearing to be held on September 27, 2022 to grant the 2020 Franchise to the franchise haulers identified in the resolution; WHEREAS, a public hearing was held on September 27, 2022, in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the public hearing was given in accordance with California Government Code Section 54950 et seq. ("Ralph M. Brown Act") and Section 1301 of the City Charter. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing; WHEREAS, pursuant to Section 12.63.080 (Required Findings) of the NBMC, the City Council finds, on the basis of the application, information, materials, and testimony submitted, that: ■ The applications submitted by Franchisees (defined herein) complies with Chapter 12.63 (Solid Waste Management) of the NBMC; ■ The Franchisees have not within the past three years: (1) had a franchise terminated by the City; and/or (2) operated a solid waste enterprise within the City without a franchise; • Awarding the 2020 Franchise is in accordance with the objectives of Chapter 12.63 (Solid Waste Management) of the NBMC; ■ Granting the 2020 Franchise to Franchisees will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or working in the City or be materially detrimental to the public welfare or injurious to property or public improvements; and 3-11 Ordinance No. 2022- Page 3 of 6 ■ Franchisees have demonstrated sufficient experience, equipment and a recycling plan and diversion program to safely comply with the requirements of the 2020 Franchise; and WHEREAS, having considered all oral and documentary evidence presented at the public hearing, the City Council determines that the granting of the 2020 Franchise to Franchisees is in the public interest. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: There is hereby granted to each entity listed below (collectively, "Franchisees"), which do not currently hold a franchise with the City, the 2020 Franchise attached hereto as Attachment 1: a. Al Rivera Gardening & Landscape; b. American Dream Construction Cleanup, Corp; and C. Key Disposal, Inc. Section 2: Franchisees' right to use City's public streets, ways, alleys and places for the purposes set forth in this ordinance, is not exclusive and the City reserves the right to grant a similar use of public streets, ways, alleys and places to any person at any time from the effective date of this ordinance until the expiration of the 2020 Franchise on October 7, 2027. Section 3: Franchisees shall comply with and shall be bound by all terms, provisions and conditions contained in the City Charter and the NBMC including, but not limited to, Chapters 6.04 (Garbage, Refuse and Cuttings), 6.06 (State Mandated Municipal Solid Waste Diversion Programs), and 12.63 (Solid Waste Management), Resolution No. 2022-55, this ordinance, and the 2020 Franchise attached hereto as Uri M.11110n, am 3-12 Ordinance No. 2022- Page 4 of 6 Section 4: The 2020 Franchise granted under this ordinance shall take effect on November 10, 2022, and shall expire October 7, 2027, unless terminated earlier pursuant to the terms of the agreement. Notwithstanding the effective date above, the 2020 Franchise granted by this ordinance shall not become effective unless and until the Franchisee files written acceptance of the 2020 Franchise with the City Clerk and delivers to the City all bonds and insurance policies required to be furnished in accordance with the requirements of Chapter 12.63 of the NBMC and the 2020 Franchise. The written acceptance shall be in form and substance as prescribed by the City Attorney and shall operate as an acceptance of each and every term, condition and limitation contained in this ordinance, the 2020 Franchise, Article XIII (Franchises) of the City Charter, Resolution No. 2022-55, and Chapter 12.63 (Solid Waste Management) of the NBMC. A Franchisee shall file written acceptance of the 2020 Franchise no later than ten (10) days after the adoption of this ordinance. Section 5: During the term of the 2020 Franchise, Franchisee shall pay to City franchise fees for the privilege of providing Commercial Solid Waste and ❑ivertible Materials Handling Services in the City of Newport Beach and use of public streets, ways, alleys and places for such purposes. Franchise fee payments shall be paid quarterly and shall be computed and paid on the basis of paid receipts received by the Franchisee for all Commercial Solid Waste and Divertible Materials Handling Services provided by the Franchisee within the City. Franchise fees shall total sixteen percent (16%) of Franchisee's grass receipts as follows: (a) Franchisee shall pay to the City ten and one-half percent (10.5%) of the Franchisee's gross receipts, of which one-half of one percent (0.5%) shall be attributable for the preparation, adoption, and implementation of an integrated waste management plan consistent with of the City's Source Reduction and Recycling Element; and (b) Franchisee shall pay to the City Environmental Liability Fund five and one-half percent (5.5%) of Franchisee's gross receipts for the City to, among other things, take reasonable actions to obtain protection and indemnification from environmental liability associated with the franchisee's operations in the City as set forth in the 2020 Franchise. Section 6: The City Council authorizes the Mayor and City Clerk to execute the attached 2020 Franchise in substantially the same form as the attached, 3-13 Ordinance No. 2022- Page 5 of 6 Section 7: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 8: if any section, subsection, sentence, clause or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid or unconstitutional. Section 9: The City Council of the City of Newport Beach finds that this ordinance is not a project subject to the California Environmental Quality Act ("CEQX) in accordance with Sections 15060(c)(2), 15060(c)(3), 15061(b)(3) and 15308 of the California Code of Regulations Title 14, Division 6, Chapter 3. The City Council further finds that this ordinance is categorically exempt under Sections 15301 and 15308, which exempts "existing operations and facilities" and "actions by regulatory agencies for protection of the environment." Application of Sections 15301 and 15308 is appropriate because neither this ordinance nor the 2020 Franchise changes or expands existing solid waste operations and facilities within the City. This ordinance is also consistent with the goals of California State Assembly Bills 939, 341, and 1826, The California Solid Waste Management Act, CALGreen, as well as the objectives of the City's Source Reduction and Recycling Element, Section 10: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty (30) calendar days after its adoption. 3-14 Ordinance No. 2022- Page6of6 This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the 27th day of September 2022, and adopted on the 11th day of October 2022, by the following vote, to -wit: AYES: NAYS: ABSENT: KEVIN MULDOON, MAYOR ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORMA: CITY ATTORNEY'S OFFICE /'" C. --• AARON C. HARP, TY ATTORNEY Attachment: Agreement Template for 2020 Non -Exclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services 3-15 NON-EXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND FOR COMMERCIAL SOLID WASTE AND DIVERTIBLE MATERIALS HANDLING SERVICES This Non-exclusive Franchise Agreement for Commercial Solid Waste and ❑ivertible Materials Handling Services ("Agreement") is entered into this day of , 2022 ("Effective Date) by and between the City of Newport Beach, a California municipal corporation and charter city organized and existing under the laws of the State of Califomia ("City"), and , a [insert name and type of business entity e.g. corporation, LLC, partnership] ("Franchisee") (City and Franchisee may collectively be referred to as "Parties"), whose address is and is made with reference to the following: RECITALS This Agreement is entered into on the basis of the following facts: A. Assembly Bill ("AB") 939 (the California Integrated Solid Waste Management Act of 1989, hereinafter the "Act` Public Resources Code Sections 40000 et seq.) requires the City to divert from landfill disposal a minimum of fifty percent (50%) of all municipal solid waste generated within the City. B. In 2011, the Act was amended by AB 341 to establish a statewide goal of diverting from landfills seventy-five percent (75%) of all municipal solid waste by 2020 and required the City, on or before July 1, 2012, to provide a commercial recycling program. C. AB 341 also requires all businesses generating more than four (4) cubic yards per week of commercial municipal solid waste and all multifamily dwellings of five (5) units or more to arrange for recycling services by July 1, 2012. D. In 2014, the Act was further amended by AB 1826 to require the City, on or before January 1, 2016, to provide a diversion program for collection and diversion of food scraps and green waste- E. AB 1826 also requires commercial generators of certain quantities of food scraps and green waste to participate in a diversion program beginning ❑n a date between April 1, 2016 and January 1, 2019, depending on the quantity of waste generated. Some smaller commercial generators are required by CalRecycle to participate on or after January 1, 2020. F. The City has received written notification from CalRecycle of its intention to enforce the deadlines for implementation of AB 341 and AB 1826 programs within the City as required by the Act; therefore, it is important that Franchisee implement and maintain successful AB 341 an AB 1826 diversion programs for all commercial customers as required by the Act, to the satisfaction of both the City and CalRecycle. 3-16 G. Pursuant to Article XIII of the City Charter, Code Chapter 12-63, and Public Resources Code Sections 40059, 49300, and 49500 through 49523, or any successor statutes, the City is authorized to enter into non-exclusive franchise agreements for commercial solid waste and divertible materials handling services. H. On October 10, 2017, the City Council of the City of Newport Beach ("City Council") adopted Ordinance No. 2017-16, An Ordinance of the City Council of the City of Newport Beach, California, Granting Non -Exclusive Solid Waste Franchises to Provide Commercial Solid Waste Handling Services Within the City of Newport Beach. L As part of its adoption of Ordinance No. 2017-16, the City entered into a number of nonexclusive franchise agreements allowing solid waste haulers to operate in the City. J. On October 22, 2019, the City Council approved revisions to the nonexclusive franchise agreement with solid waste haulers to improve procedures for compliance with Assembly Bills 341 and 1826. The revised nonexclusive franchise agreement also extended the term for an additional two (2) years. K. Pursuant to Code Chapter 12.63, Franchisee has filed a franchise application with the City to operate under the new Nonexclusive Franchise Agreement for Commercial Solid Waste and Divertible Materials Handling Services. L. The Parties now wish to terminate the franchise agreement adopted pursuant to Ordinance No. 2017-16 and enter into a new Nonexclusive Franchise Agreement for Commercial Solid Waste and ❑ivertible Materials Handling Services. ALTERNATIVE, IF THEY DO NOT HAVE A CURRENT FRANCHISE AGREEMENT, THEN L. WOULD READ, "The Parties now wish to enter into a Nonexclusive Franchise Agreement for Commercial Solid Waste and Divertibie Materials Handling Services." M. City has reviewed Franchisee's application and Franchisee has represented it is capable of providing collection services for commercial recyclable materials, food scraps, green waste, municipal solid waste, and/or construction and demolition debris in the City. N. Pursuant to this Agreement, City desires to authorize Franchisee to provide those non-exclusive commercial services for collection, transportation, delivery, and disposal of Municipal Solid Waste and/or collection, transportation, processing and diversion of recyclable materials, food scraps, green waste, wood waste, and construction and demolition debris as requested in Franchisee's application and for which Franchisee has demonstrated capability. O. The City Council has determined that this grant of a non-exclusive franchise is in the public interest. Non-exclusive Franchise Agreement Page 2 3-17 NOW, THEREFORE, the City and Franchisee d❑ hereby agree as follows: SECTION 1. GRANT OF FRANCHISE A. By Ordinance No. 2020-20, City has granted to Franchisee a non-exclusive Franchise authorizing Franchisee to provide Commercial Franchise Services within all or any part of the City and to use the public streets and public right-of-ways for such purpose. Franchisee acknowledges that the Franchise is not exclusive and that the Franchise is subject to all provisions of applicable law, including, but not limited to, Article XIII of the City Charter, Ordinance No. 2020-20, Code Chapter 12.63, and the terms and conditions of this Agreement. B. Upon the Effective Date of this Agreement, the parties agree that any prior authorization relating to the provision of Commercial Franchise Services within all or any part of the City arising under and pursuant to any prior franchise issued to Franchisee shall be deemed to be abandoned and of no further force or effect except the Franchisee's obligation(s) to comply with the Diversion requirements set forth in Sections 12 through 15, the Continuing Obligations set forth in Section 23(J), or any other obligations specified in the franchise agreement granted pursuant to Ordinance No. 2017-16. SECTION 2. TERM OF FRANCHISE This Agreement shall commence on the Effective Date, and shall terminate on the Termination Date, unless terminated earlier as set forth herein. SECTION 3. DEFINITIONS "AB 341 Generator" means all Municipal Solid Waste generators required by AB 341 (Public Resources Code Section 41780.01) to divert Recyclable Materials generated on -site from Disposal including (A) all businesses located and operating within the City, and the responsible party, property owners, owners, operators, property managers, tenants and lessees of same, that generate four (4) or more cubic yards of Municipal Solid Waste per week; including but not limited to, retail stores, restaurants, offices, supermarkets, convenience stores, malls, strip malls, service businesses, hospitals, assisted living facilities, and federal, state and local government facilities; (B) Multifamily Dwellings consisting of five (5) or more units regardless of the amount of Municipal Solid Waste generated; (C) the City, its facilities, its non-residential properties, and (D) special events that take place in the City that generate four (4) or more cubic yards of municipal solid waste per event whether or not sponsored by the City. "AB 1826 Generator" means all food -generating businesses within the City, and the responsible parties, property owners, owners, operators, property managers, tenants and lessees of same, that generate four (4) or more cubic yards of Municipal Solid Waste per week and are required by AB 1826, as codified in Public Resources Code Section 42649.82, to divert all Food Scraps generated on -site from Disposal; including but not limited to, all restaurants, cafeterias, hospitals, and supermarkets; (B) all non -food - generating businesses and the responsible parties, property owners, owners, operators, property managers, tenants and lessees of same, that generate four (4) or more cubic Non-exclusive Franchise Agreement Page 3 3-18 yards of Municipal Solid Waste per week and that generate Green Waste and/or Wood Waste (C) all Multifamily Dwellings consisting of five (5) or more units regardless of the amount of Municipal Solid Waste generated; (D) federal, state and local government facilities, schools, the City, its facilities, and its non-residential properties, and (E) special events that take place within the City that generate four (4) or more cubic yards of municipal solid waste per event, whether or not sponsored by the City. As of the effective date of this Agreement, the threshold amount of Municipal Solid Waste provided for in Public Resources Code Section 42649.81 is four (4) or more cubic yards of Municipal Solid Waste per week on or after January 1, 2020. If CalRecycle changes the quantities of Municipal Solid Waste necessary to be considered an AB 1826 Generator, the definition of an AB 1826 Generator shall be automatically amended to reflect these new quantities. "Act" means the California Integrated Waste Management Act of 1989 (Public Resources Code Sections 40000, et seq.) as amended and as implemented by regulations of CalRecycle (or its successor agency) and the Air Resources Board (or its successor agency). "Alternative Daily Cover" or "ADC' means cover material other than earthen material placed on the surface of the active face of a Municipal Solid Waste Landfill at the end of each operating day to control vectors, flies, fires, odors, blowing litter and scavenging. Prior to 2014. Green Waste was included in the list of CalRecycle-approved ADC materials and use of Green Waste for this purpose was counted as "Diversion" for purposes of the Act. AB 1594, passed and signed into law in 2014, phases out the use of Green Waste as ADC effective January 1, 2020. As of January 11 2020, no Green Waste Collected within the City will not be used as ADC and Green Waste must be diverted for processing such as mulching, Composting, as feedstock for Anaerobic Digestion or other CalRecycle-approved means that counts as Diversion. "Anaerobic Digestate" or "Digestate" means the material left at the conclusion of a biological process that decomposes organic matter in an enclosed environment with little or no oxygen, resulting in a biogas and a liquid/solid stream called Digestate (CCR Section 17896.2(a)(6)). Any Digestate created from Green Waste, Food Scraps or other organic materials Collected within the City must be further processed at a permitted Composting Facility or utilized in another manner that is fully permitted and approved by all federal, state and local regulatory agencies, including but not limited to CalRecycle, and that is considered as "Diversion" by CalRecycle for purposes of the Act. "Anaerobic Digestion" means a biological process that decomposes organic matter in an environment with little or no oxygen, resulting in a biogas and a liquid/solid stream called Anaerobic Digestate. Such activity takes place at an "Anaerobic Digestion Facility." "Bin(s)" means open top rectangular containers with wheels, with attached plastic or metal lids, used for storage of Municipal Solid Waste, Recyclable Materials, Green Waste, Food Scraps, Construction and Demolition Debris or other materials that are Collected by Franchisees or other Persons authorized to Collect and transport such materials within City. Non-exclusive Franchise Agreement Page 4 3-19 "Bioengineered Feedstock" means a mixture of materials utilized in Wastewater Treatment Plants (VWVTP's) or publically-awned treatment works (POTVV's) to produce biogas. (This process is also referred to as `vet anaerobic digestion.) Bioengineered Feedstock may include primary and secondary sludge, greases from the VWVTP grease trap, and organic materials such as Food Scraps from businesses and households or other organic materials from industries that have been pre-treated and liquefied to the required consistency. "Bioengineered Feedstock Facility" means a Processing Facility that accepts Food Scraps and other Bioengineered Feedstock, chops, macerates or otherwise size -reduces the incoming materials, mixes the material with liquid and produces a slurry which is then transported or otherwise delivered to a Wastewater Treatment Plant or similar facility that uses Bioengineered Feedstock to produce methane, "CalRecycle" means the California Department of Resources Recycling and Recovery, the successor agency to the former California Integrated Waste Management Board. "Can" means a receptacle for Municipal Solid Waste, Recyclable Materials, Green Waste, Food Scraps or wood provided by the Customer and Collected using manual (instead of automated) means of Collection. "Cart" means a plastic wheeled Container with a hinged lid used to store Municipal Solid Waste, Recyclable Materials, Green Waste or Food Scraps that is Collected by an automated or semi -automated vehicle. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 DSC §9601 of seq.). "City Council" means the City Council of the City of Newport Beach. "City Manager," `Finance Director," and "Public Works Director" mean the City Manager, Finance Director and Public Works Director of the City or their designee. Clean Materials Recovery Facility ("Clean MRF") means a materials recovery facility ("MRF"), or that portion of a MRF, that processes Recyclable Materials that have been separated from Municipal Solid Waste such as Single Material Recyclables and Single Stream Recyclable Materials, containing no more than the maximum Residue or contamination allowed by CalRecycle (10% Residue). "Code" means the Newport Beach Municipal Code. "Collect" or "Collection" means taking physical possession of Commercial Solid Waste, or other materials, from Customers and transporting such materials by means of a motor vehicle, or other means, to a MRF, Compost Facility, other Organics Processing Facility, Construction and Demolition Debris Processing Facility, transfer station or Landfill. Non-exclusive Franchise Agreement Page 5 3-20 "Commercial Franchise Services" means the services provided by Franchisees pursuant to the terms and conditions of the Franchise and includes the Collection, transportation, storage, and Disposal of Municipal Solid Waste and the Collection, transportation, Processing and Diversion of Processible Municipal Solid Waste, Recyclable Materials, Green Waste, Wood Waste, Food Scraps and/or Construction and Demolition Debris by private solid waste enterprises, and includes, without limitation, the placement of Commercial Solid Waste and ❑ivertible Materials Containers on public property. "Commercial Premises" means all occupied real property in the City used for commercial purposes including, without limitation, wholesale or retail establishments, restaurants, other food establishments, bars, stores, shops, offices, mechanized manufacturing facilities, repair, research and development or professional services, sports or recreational facilities, industrial facilities, federal, state and local government facilities, schools, Multi -Family Dwellings that receive centralized Collection service and construction and demolition sites. "Compactor" means an enclosed rectangular or square metal container containing a ramrod to condense and compress the contents, and is typically used to store Municipal Solid Waste, Green Waste, Recyclable Materials, Food Scraps or Construction and Demolition Debris. Compactors may be small (3 or 4 cubic yards) for use on smaller Commercial Premises or large (10, 20, 30 or cubic yards) for use at large Commercial Premises such as supermarkets, hotels, and large retail stores or at construction sites. A special Roll Off vehicle equipped with hooks and a winch to pull the Compactor on to the railed bed of the vehicle is used to Collect Compactors and transport them to a Landfill or to a Processing Facility. "Compost" means the product resulting from the controlled biological decomposition of organic wastes which are separated from the Municipal Solid Waste stream at the point of generation and includes Food Scraps, Green Waste, and wood that are not hazardous wastes. "Compost Facility" means a facility that processes one (1) or more of the following: Food Scraps, Green Waste, wood and food -soiled fiber such as paper napkins and paper towels, by means of outdoor windrow composting, aerated static pile composting, covered composting, vermiculture or other outdoor composting methods or covered composting with use of either finished compost or fiber, synthetic or other type(s) of cover(s) applied to the compost piles. "Composting" means the controlled microbial degradation of organic materials yielding a safe and nuisance -free finished product called Compost, a soil amendment suitable for incorporating into topsoil and for growing plants. "Construction and Demolition Debris" means all inert material of every nature, description or kind, which has resulted from the building or demolition of a structure, pavements, sidewalks, curbs, gutters and other concrete structures, including all lumber scraps, shingles, plaster, sheetrock, packaging, rubble, brick, stone, concrete, asphalt, Non-exclusive Franchise Agreement Page 6 3-21 dirt, rock and other building material. A facility that accepts Construction and Demolition Debris for separation and further processing to prepare materials for sale or reuse (such as removing nails and screws from wood, or grinding of concrete and asphalt) and then markets the materials for reuse is a "Construction and Demolition Debris Processing Facility. "Container(s)" means any object designed and used to hold or store Municipal Solid Waste, Recyclable Materials, Food Scraps, Green Waste, or Construction and Demolition Debris to be Coliected by Franchisees. Containers include Carts, Bins, open top Roll Off Boxes, and Compactors. "Contamination" means materials that are not specified for Collection in particular Containers or for processing at either a Clean MRF or a Dirty MRF, which would either interfere with such processing and/or reduce the quality and value of the Recovered Materials. For example, for purposes of Collection, metals and plastics would constitute "Contamination" if placed in a Food Scrap Container and tree trimmings would constitute "Contamination" if placed in a Recyclable Materials Container. "Customer" means the owner, occupant, manager or user of premises at which Municipal Solid Waste, Recyclable Materials, Green Waste, Wood Waste, Food Scraps or Construction and Demolition Debris are generated who requests and receives Commercial or Multifamily Collection services for Municipal Solid Waste and/or Divertible Materials from one or more Franchisees. in the event a business, non-residential property, Multifamily dwelling or Commercial Premises shares Containers and/or Collection services, "Customer" refers only to the entity that arranges and pays for such services. Dirty Materials Recovery Facility ("Dirty MRF") means a facility, or that certain portion of a facility, that processes Processable Municipal Solid Waste to separate Recyclable Materials, Green Waste, Wood Waste, Construction and Demolition Debris and other Divertible materials for sale to end users. Franchisees shall not utilize any Dirty MRF that has not been approved by City and that does not meet the standards and requirements of Public Resources Code Section 42649 and all subsequent amendments, rules, and regulations promulgated in furtherance thereof requiring a Dirty MRF to be a source -separated comparable MRF. "Disposal" means the final disposition of solid waste of Municipal Solid Waste at a permitted landfill or transformation at a permitted facility, as transformation is defined and limited by the Act other permitted solid waste disposal facility. "Diversion" or "Divert" means any combination of Recycling, sorting, Composting and other processing activities conducted at a Clean MRF, a Dirty MRF, a Compost Facility, an Anaerobic Digestion Facility, a Bioengineered Feedstock Facility, and/or a Construction and Demolition Debris Processing Facility in order to use or market the materials for re -use, remanufacture, reconstitution or otherwise return the materials to the economic marketplace and to prevent the materials from being Disposed in a Landfill. Non-exclusive Franchise Agreement Page 7 3-22 "Diversion Plan" or "the Plan" means a plan prepared for a Customer by Franchisee pursuant to Exhibit E, Section A 2 of this Franchise Agreement that describes in detail the Diversion Program(s) recommended by Franchisee to be implemented at Customer's premises. A Diversion Plan contains estimated quantities of Divertible Materials generated at the Customer's premises, recommended types and sizes of outside Containers for storage of Divertible Materials, recommended frequency of Collection; modifications to sizes, types and Collection frequency for Containers for Municipal Solid Waste to adjust for the separate storage and Collection of Divertible Materials, and plans for the flow of materials through Customer's premises, including the location and sizing of interior Containers required for separation and interim storage of Divertible Materials. ❑iversion Plans also contain projected costs and any projected cost savings to the Customer for implementing the Diversion Plan. "Diversion Program(s)," "Recycling Programs)" and "Diversion Services" mean Recyclable Materials Collection, Green Waste Collection, Wood Waste Collection, Food Scraps Collection, Processable Municipal Solid Waste Collection, Construction and Demolition Debris Collection and subsequent processing of the Collected materials at a Clean MRF, a Dirty MRF, a Compost Facility, an Anaerobic Digestion Facility, a facility creating Engineered Feedstock for digestion at a wastewater treatment plant, a Construction and Demolition Debris Processing Facility and all other programs operated by Franchisees, the City, Residents, Customers or other Persons that have the effect of Diverting Municipal Solid Waste from Landfill Disposal. Diversion Programs includes, but is not limited to, all of the programs included in the City's SRRE and all of the programs included in this Agreement. "Divertible Materials" or "Divertible" means Recyclable Materials, Food Scraps, Green Waste, Wood Waste, Construction and Demolition Debris, electronic waste, universal waste and all other materials that can be diverted from Landfill Disposal. Divertible Materials includes, but is not limited to, all materials required to be diverted from Landfill Disposal by City, CaIRecycle or any state or federal agency." "Edible Food For Human Consumption" or "Edible Food" means food that has been prepared but not served, and includes, but is not limited to: any appetizer, soup, salad, entree, dessert, raw fruit and vegetable, that may or may not have been sliced, grated, cooked, baked or otherwise prepared for consumption but not served; any packaged sandwich, salad, fruit and fruit salad and any other non -served food that meets state and local requirements as being edible for human consumption. "Effective Date" means the date upon which this Agreement is effective as set forth in the first paragraph of this Agreement. "Environmental Laws" means any and all present and future federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any other requirements of Governmental Authorities relating to the environment or any "Hazardous Substance" or "Hazardous Substance Activity" as defined herein, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 of seq.) as amended from time to time and Non-exclusive Franchise Agreement Page 8 3-23 the applicable provisions of the California Health and Safety Code and California Water Code. "Food Scraps" means material resulting from the production, processing, preparation or cooking of food for human consumption that is separated from Municipal Solid Waste. Food scraps include surplus or unsold edible food, raw food left over after food preparation, leftover cooked food, as well as spoiled food such as vegetables and culls, and plate scrapings. Food scraps includes food -soiled paper that is mixed in with the food scraps. "Food Scraps are Collected and transported to Food Scrap Processing Facilities which include Compost Facilities, Anaerobic Digestion Facilities, and Wastewater Treatment Plants utilizing Engineered Feedstock. "Food Soiled Paper means paper towels, tissue products, paper napkins, paper plates and cups, coffee filters, tea bags, waxed paper, butcher paper, paper take-out boxes and containers, greasy pizza boxes, paper bags, cardboard and wax -coated cardboard produce boxes that are Contaminated with Food Scraps. Food Soiled Paper does not include polystyrene, aluminum foil, foil -lined wrap or diapers. "Franchise" or "Franchise Agreement" means this Agreement between the City and a Franchisee, granted pursuant to Agreement Section 1(A), providing Franchisee the right, for a specified period of time and pursuant to Article XIII of the City Charter, the Code, and the terms and conditions of this Agreement, to provide for the Collection and Diversion of Commercial Solid Waste Handling Services to Commercial Premises and Multifamily Dwellings within all or any part of the City of Newport Beach and to use the public streets and public right-of-ways for such purpose. Throughout this Agreement, the terms "Agreement," "Franchise" or "Franchise Services" may be used interchangeably unless otherwise specified or the context requires otherwise. "Franchisee" means the individual or business entity identified as "Franchisee" on the signature page of this Agreement. "Franchise Fee" means the fee or assessment imposed by the City on a Franchisee, which among other things, is intended to offset the City's expenses related to the administration of the Franchise Agreement, the Integrated Waste Management Program, the maintenance and implementation of the City's Source Reduction and Recycling Element, compliance with the California Integrated Waste Management Act, to compensate the City for damages to its streets, sidewalks, curbs and gutters and other infrastructure resulting from the Franchisee's exercise of its rights under the franchise, City's reporting requirements and other related expenses. "Generator" means a resident, an owner or responsible party for a Multifamily Dwelling, Commercial Premises, or business that Generates Municipal Solid Waste, Recyclable Materials, Green Waste, Food Scraps and/or Construction and Demolition Debris as a result of its business, commercial facility or property activity. Generator may also include tenants, property managers for facilities with leased space, employees and contractors of Generator. Non-exclusive Franchise Agreement Page 9 3-24 "Generate" means to bring into existence or create, or to use, maintain, or possess an item, material or product, the result of which such creation, bringing into existence, use, maintenance or possession is that the item, material or product first becomes, or is converted transformed, evolved or deemed as Municipal Solid Waste, Recyclable Materials, Food Scraps, Green Waste or Construction and Demolition Debris. "Green Waste" means any debris that is composed of organic material or plantlike matter, which is a result of seasonal variations, landscape or gardening activities. Green Waste includes, without limitation, grass clippings, leaves, shrubs, trees, branches, stumps, flowers, plant stalks and non -hazardous wood. Green Waste does not include Food Scraps. "Gross Receipts" means all money, whether paid by cash, check, debit or credit, or other consideration collected from Customers by Franchisee that relates in any way to Commercial Franchise Services provided by Franchisee to Customers, whether or not such services occur wholly or partially within the City, including, but not limited to, Collection, processing, removal, marketing and Diversion of Recyclable Materials, Green Waste, Food Scraps, Processable Municipal Solid Waste and Construction and Demolition Debris and Disposal of Non-Processable Municipal Solid Waste, Industrial Waste, trash, litter, as well as fuel surcharges. Gross receipts shall also include all money received by any Person other than the Franchisee, where the money was paid to the Person to avoid the Franchisee's obligations under this chapter and/or the Franchise. Gross Receipts shall not include (or if included there shall be deducted, but only to the extent they have been included) the following: (1) if any sales taxes are levied on the Franchisee's Commercial Franchise Services in the City, the amount of State sales taxes collected in connection with Franchisee's provision of such services in the City and remitted to the State pursuant to State law; (2) the amount of documented bad debt write- offs due to uncollectible accounts for Franchisee's Commercial Franchise Services in the City, not to exceed three percent (3%) of Gross Receipts; and (3) revenues collected for Franchisee's Commercial Franchise Services provided to the City through a written contract. "Hazardous Waste" or "Hazardous Substance" means any (a) chemical, compound, material, mixture or substance that is now or hereinafter defined or listed in, or otherwise classified pursuant to any Environmental Law as a "hazardous substance," "hazardous material," "hazardous waste," "extremely hazardous waste," "infectious waste," "toxic waste," "toxic pollutant," or any other formulation intended to define, list or classify substances by reason of deleterious properties or effect and (b) petroleum, petroleum by-products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources. "Industrial Waste" means solid waste originating from mechanized manufacturing facilities, factories, refineries, construction and demolition projects, publicly operated treatment works, or solid waste placed in Commercial Solid Waste containers excluding hazardous waste. Non-exclusive Franchise Agreement Page 10 3-25 "Landfill" means a fully permitted disposal site that accepts Municipal Solid Waste that is in compliance with all Federal, State and local laws, regulations and permits conditions at the time Municipal Solid Waste is delivered and unloaded at the disposal site. "Multifamily Dwelling" mean housing projects containing or consisting of five (5) or more units, whether apartment houses, condominiums, townhomes, or mixed use projects, mixed use condominiums and rental housing, which use centralized Commercial Solid Waste Containers (including Bins, Carts and/or Compactors) for storage of Municipal Solid Waste, Recyclable Materials, Green Waste and/or Food Scraps. Multifamily Dwelling does not include single-family residences, duplexes, tri-plexes or four-plexes that receive individual Collection services for Municipal Solid Waste, Recyclable Materials, Green Waste and/or Food Scraps stored in wheeled carts. For purposes of the implementation of the Diversion programs, reporting requirements, and the percentage Diversion requirements, "Commercial Tons" shall include only Tons Collected from Multifamily Dwellings in Carts, Bins, Compactors or Roll Off Boxes and shall not include any Tons Collected from Containers Collected from Commercial Premises, Tons Collected from Containers Collected from Commercial Premises shall be reported separately. "Municipal Solid Waste" means all Processable Municipal Solid Waste and all Non- Processable Municipal Solid Waste, putrescible and nonputrescible solid and semisolid wastes, Generated in or upon, related to the occupancy of, remaining in or emanating from residential, commercial, and/or industrial premises, including, but not limited to, garbage, trash, refuse, rubbish, ashes, Industrial Waste, discarded home and industrial appliances, manure, vegetable or animal solid or semisolid wastes, and other solid and semisolid wastes. Municipal Solid Waste excludes Recyclable Materials, Green Waste, Food Scraps, Construction and Demolition Debris, liquid wastes, abandoned vehicles and hazardous, biohazardous and biomedical wastes. "Non-Processable Municipal Solid Waste" means putrescible and non-putrescible solid and semi -solid wastes Generated in or upon, related to the occupancy of, remaining or emanating from residential, Commercial, and/or industrial premises, that has been segregated or separated from Recyclable Materials, Food Scraps, Green Waste, wood and/or Construction and Demolition Debris such that the remaining constituents in the Non-Processable Municipal Solid Waste (such as broken glass, diapers, ashes, Industrial Waste, discarded Bulky Goods that cannot be re -used or dismantled for Recycling, manure, vegetable or animal solid or semi -solid wastes that remain after segregation of Food Scraps and Green Waste) cannot be diverted by reasonable economic or technologically available means. Non-Processable Municipal Solid Waste does not include Recyclable Materials, Green Waste, Food Scraps, wood, Construction and Demolition Debris, Bulky Goods or other materials that have been segregated for Diversion; liquid wastes; low level radioactive waste regulated under California Health and Safety Code Sections 20015, et seq.; abandoned vehicles and auto parts; hazardous, biohazardous and biomedical wastes. "Person" means an individual, firm, association, organization, partnership, corporation, business trust, joint venture, Limited Liability Company, the United States, Non-exclusive Franchise Agreement Page 11 3-26 the State of California, the County, municipality, special purpose district or any other business entity whatsoever. "Processable Municipal Solid Waste" means putrescible and non-putrescible solid and semi -solid wastes Generated in or upon, related to the occupancy of, remaining or emanating from residential, commercial, and/or industrial premises that can be sorted at a Dirty MRF to separate any Divertible Materials contained therein for Recycling. Processable Municipal Solid Waste may also contain non-divertible constituents including but not limited to, broken glass, diapers, ashes, Industrial Waste, discarded Bulky Goods that cannot be re -used or dismantled for Recycling, manure, vegetable or animal solid or semi -solid wastes that remain after segregation of Food Scraps and Green Waste, which cannot be separated or sorted out of the Processable Municipal Solid Waste by reasonable economic or technologically available means. "Processing Facility/Facilities" means a facility or facilities where the following activities are conducted: sorting, cleaning, treating, Composting and reconstituting Collected materials and returning these materials to the economic mainstream in the form of raw materials for new, reused or reconstituted products which meet the quality standards of the market place (activities are herein collectively defined as "Processing"). Processing Facilities include Materials Recovery Facilities (both Clean and Dirty MRF's as defined herein), Composting Facilities, Anaerobic Digestion Facilities, Wastewater Treatment Plants, Construction and Demolition Debris sorting facilities, and concrete and asphalt grinding facilities. Processing Facilities do not include waste -to -energy, thermal destruction or any type of Transformation facilities. "Recycle/Recycling" means the process of collecting, sorting, cleansing, treating, and reconstituting materials that would otherwise become Non-Processable Municipal Solid Waste, and returning them to the economic mainstream in the form of raw materials for new, reused, or reconstituted products which meet the quality standards used in the marketplace. Recycling does not include Transformation. "Recycling Facility" means a Recycling Materials Recovery Facility (either a Clean or Dirty MRF), a Construction and ❑emolition Debris sorting facility or a re -use facility that is fully permitted and operating in compliance with federal, state and local laws and regulations and includes Recycling Facilities that receive, process, and market Recyclable Materials that have been source separated by the Generator or segregated from Processable Municipal Solid Waste, such as Single -Material Recyclables and Single Stream Recyclable Materials. The Recycling Facility may be located at a landfill. "Recyclable Materials" means items in the solid waste stream which can be reused or processed into a form suitable for reuse consistent with the requirements of State law (i.e., AB 939). Recyclable materials include, but are not limited to, aluminum and tin cans, glass bottles, plastic bottles, plastic containers, newspaper, paper, printed materials, paper containers, cardboard and textiles. "Recycling Requirements" means the obligations imposed by or upon the City pursuant to State, Federal and local law, ordinance, resolution, policy, plan or program relative to Diverting all, or a portion, of the Municipal Solid Waste generated within the Non-exclusive Franchise Agreement Page 12 3-27 City including, without limitation, State mandates to Divert fifty percent (50%) of the Municipal Solid Waste Generated within the City, achievement of the per capita Diversion requirements in the Act, and the provision of City -approved Diversion services to all Customers. Recycling Requirements includes future changes to the Act that may require the City to Divert higher percentages of Municipal Solid Waste Generated within the City and/or to provide additional and/or enhanced or expanded Diversion Programs. "Residue" means the Non-Processable Municipal Solid Waste destined for Disposal in a Landfill, which remains after processing at a Processing Facility has taken place. Residue does not include Anaerobic ❑igestate. The percent of Residue is calculated by dividing the weight of the Residue by the weight of the total materials delivered for processing at the facility. State law and regulations govem the allowable amount of Residue that can be Generated by a Processing Facility. Franchisees shall not utilize Processing Facilities that exceed State -required maximum Residue Generation rates for any materials Collected within the City. "Responsible Party" means the individual or entity responsible for the Generator's management of solid waste and/or Recycling at the Generator's commercial premises, business, or non-residential property. "Roll Off Boxes" means large open top rectangular metal Containers used to store and transport Municipal Solid Waste, Recyclable Materials, Green Waste, Construction and Demolition Debris or other materials. "Single Material Recyclables" means those Recyclable Materials which satisfy each of the following requirements: (1) have been segregated from Processable Municipal Solid Waste for separate handling and Diversion by or for the Generator thereof; (2) have been further segregated or sorted so that various types of Recyclable Materials, such as glass, metals, paper, cardboard, plastics are not commingled; and (3) after such segregation, contain no more than five percent (5%) by weight (measured by each load being transported, Collected and/or Disposed) of any Residue or Contamination material which cannot be Recycled, Composted or similarly utilized, and which instead must be Disposed in a Landfill. "Single Stream Recyclable Materials" or "Single Stream Recyclables" means those Recyclable Materials collected as separated from Processable Municipal Solid Waste by the Generator or Customer and consisting of a mixture of metals, glass, plastics #1-7, and all paper from Residential Premises, Commercial Premises, Multifamily Dwellings and industrial premises. Single Stream Recyclable Materials are distinguished from Single -Material Recyclables, which consist of only a single type of material such as cardboard, separated from other Recyclable Materials. "Split Bins" means Bins that have a divider down the middle, dividing the Bin into two (2) separate compartments. Such Bins have separate locking lids for each side of the Bin that allows the Bin to be emptied one (1) side at a time. The lid on the side of the Bin that is for storage of Recyclable Materials is designed such that it allows for the placement of Recyclable Materials in the Bin without unlocking or opening the lid, and yet Non-exclusive Franchise Agreement Page 13 3-28 does not allow Recyclable Materials to spill out when the lid is closed and locked for the emptying of the MSW stored on the opposite side of the Bin. "SRRE" means the Source Reduction and Recycling Element of the Integrated Waste Management document for the City prepared and updated pursuant to the California Public Resources Code. "Term" means the finite amount of time that commences on the Effective Date and terminates on the Termination Date. "Termination Date means October 7, 2027. "Staten means the State of California. "Transformation" means incineration, pyrolysis, distillation, or biological conversion (other than Composting) to turn Municipal Solid Waste and/or organic materials into a fuel used to produce energy (example: waste -to -energy). Transformation does not include Composting, gasification, Biomass Conversion, or wet or dry Anaerobic Digestion. "Transformation Facility" means a facility using a Transformation process to turn Municipal Solid Waste and/or organic materials into a fuel used to produce energy. A Franchisee may only utilize Transformation for the quantity of Municipal Solid Waste allowed by CalRecycle to be counted as Diversion pursuant to the Act, as this may be changed in the future by legislation or regulations. The Act currently provides that a jurisdiction can only use Transformation to divert up to ten percent (10%) of the Municipal Solid Waste generated in the jurisdiction. Therefore, materials collected by a Franchisee and processed at a Transformation Facility shall be limited to ten percent (10%) of the Non-Processable Municipal Solid Waste Collected by the Franchisee within City. "Ton" means a short ton of two -thousand (2,000) pounds avoirdupois. "Wood Waste" means all non -hazardous wood material that is not painted with lead -based or other paints containing materials identified as hazardous waste, or treated with creosote or other hazardous materials. Wood Waste includes, but is not limited to, tree branches and other wood trimmings, dimensional lumber and other pieces of wood generated during the manufacture or processing of wood products. For wood generated from construction and/or demolition activities, see the definition of "Construction and Demolition Debris. SECTION 4. FRANCHISE FEES A. During the Term of this Franchise, Franchisee shall pay to City Franchise Fees for the privilege of providing Commercial Franchise Services in the City and for the use of public streets, right-of-ways and places for such purposes. The Franchise Fees that Franchisee shall pay to the City shall total sixteen percent (16%) of the gross receipts which are reasonably related to the value of Agreement for all Commercial Franchise Services provided by Franchisee in the City as follows: Non-exclusive Franchise Agreement Page 14 3-29 1. Ten and one-half percent (10.5%) of the Gross Receipts for all Commercial Franchise Services provided by the Franchisee in the City ("Commercial Franchise Service Fee"), of which one half percent (.5%) shall be attributable to the maintenance and implementation of the City's SRRE, and shall be separately accounted for, and used only for the costs stated in Public Resources Code Section 41901 or any successor provision. 2. Five and one-half percent (5.5%) of the Gross Receipts for all Commercial Franchise Services provided by Franchisee in the City shall be paid into an Environmental Liability Fund, which shall be a separate fund established and maintained by City ("Environmental Liability Fund Fee"). Hereinafter, Environmental Liability Fund Fee and Commercial Franchise Fee shall be collectively referred to as "Fees." B. City and Franchisee acknowledge the potential environmental liability that may result from Commercial Franchise Services under Federal and State environmental protection laws and the Public Resources Code. City intends to take reasonable actions to obtain protection and indemnification against future environmental liability for Commercial Solid Waste and ❑ivertible Materials generated within the City and the activities of Franchisee under this Agreement for handling such Commercial Solid Waste and Divertible Materials. To provide protection and indemnification to City for Franchisee's Commercial Franchise Services in the City, Franchisee agrees to collect from its customers an Environmental Liability Fund Fee for payment into the Environmental Liability Fund. The Environmental Liability Fund may be used by the City for any expense associated with this Franchise, including, but not limited to, the purchase of environmental liability insurance and paying all costs, expenses, and penalties that arise from or in any way relate to liability incurred by the City as a result of any act, negligence, or omission by the City, Franchisee, Franchisee Customer, or any of their respective officers, directors, shareholder members, volunteers, partners, employees, agents, subcontractors, suppliers, representatives or affiliates. The Environmental Liability Fund may also be used by the City to pay for any Disposal, Diversion, or Recycling activity required of the City, Franchisee, or any Generator under State, Federal or local law. The Fund shall not be commingled with or included in the City's General Fund. 1. The Fees shall be paid concurrently 2. Compliance with this Section shall not limit Franchisee's indemnification as set forth in Agreement Section 10; however, the indemnification provisions of Agreement Section 10 shall be secondary to the Environmental Liability Fund established by this Section or any insurance purchased by the Environmental Liability Fund. C. The Fees shall be paid on a calendar quarterly basis on forms prescribed by the Finance Director. D. All payments shall be made in lawful money of the United States of America and shall be paid to City in person or by United States' mail, or overnight mail service, at the Cashier's Office located at 100 Civic Center Drive, P.O. Box 1768, Newport Beach, Non-exclusive Franchise Agreement Page 15 3-30 California, 92658, or to such other address as City may from time to time designate in writing to Franchisee. if requested by City, Franchisee shall make payments electronically (at www.newportt>eachca.gov) or by wire transfer (at Franchisee's Cost). Franchisee assumes all risk of loss and responsibility for late charges and delinquency rates if payments are not timely received by City regardless of the method of transmittal. E. Franchisee hereby acknowledges that the late payment of Fees or other sums due hereunder will cause City to incur costs not contemplated by this Agreement, the exact amount of which is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges. Accordingly, any payment of any sum to be paid by Franchisee not paid within five (5) calendar days of its due date shall be subject to a ten percent (10%) late charge plus interest on the amount due at the rate of ten percent (10%) per annum from the date due and payable by the terms of this Agreement until the same shall be paid. City and Franchisee agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to City for its loss suffered by such late payment by Franchisee. F. With the exception of October 30, 2020, Fees shall be due and payable on April 30, July 30, October 30 and January 30 of each calendar year of the Term. Any dates failing on a weekend or holiday may be paid the first business day following the weekend or holiday. Fees must be received by City, not merely postmarked, by or before the aforementioned dates. G. In the event Franchisee believes that it has paid Fees in excess of the Fees due to City, Franchisee may submit a request for refund to the Finance Director on a form provided by the Finance Director. If proof of overpayment is satisfactory to the Finance Director, the Finance Director shall refund to Franchisee any overpayment. Franchisee shall not apply any overpayment as a credit against any other amounts payable to City unless specifically authorized by the Finance Director in writing. H. Each Franchise Fee and Environmental Liability Fund Fee payment shall be accompanied by a written statement described in Code Section 12.63.090, or any successor section, on a form provided by the Finance Director. No statement filed under this Section shall be conclusive as to the matters set forth in such statement, nor shall the filing of such statement preclude the City from collecting by appropriate action the sum that is actually due and payable. I. Franchisee may separately list the actual Franchise Fee rate and Environmental Liability Fund Fee rate as established by this Section, and any other fees required by this Agreement, on its invoices to its customers. In no case may the Franchise Fee rate or Environmental Liability Fund Fee rate listed by the Franchisee on the invoice exceed the actual Franchise Fee or Environmental Liability Fund Fee rates imposed by the City. SECTION 5. PERFORMANCE BONDIDEPOSIT A. Prior to the placement of any Container for Commercial Franchise Services on public or private property, Franchisee shall, to ensure compliance with the duties and Non-exclusive Franchise Agreement Page 16 3-31 obligations imposed by the provisions of the Code, State regulation, regulations adopted by the City Manager and this Agreement, either: (1) provide City with a cash deposit ("Deposit"); or (2) obtain, provide and maintain, at its own expense, a faithful performance bond ("Bond"). The amount of the Deposit and Bond shall be determined in the Public Works Director's sole and absolute discretion. B. If Franchisee decides to provide a Bond, the Bond shall be issued by an insurance organization or surety: (1) currently authorized by the Insurance Commissioner to transact business of insurance in the State of California; (2) listed as an acceptable surety in the latest revision of the Federal Register Circular 570; and (3) assigned a Policyholders' Rating A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide: Property -Casualty. The Bond shall be in the form attached hereto as Exhibit "A," which is incorporated herein by this reference. SECTION f. DIVERSION AND DISPOSAL OF MUNICIPAL SOLID WASTE, RECYCLABLE MATERIALS, FOOD SCRAP AND GREEN WASTE A. Franchisee shall comply with all Diversion requirements imposed by law, ordinance, or regulation on City, Franchisee, and/or any Commercial Premises or Multifamily Dwelling. On a monthly basis, Franchisee shall Divert a minimum of fifty-five percent (55%) of all Processable Municipal Solid Waste, Recyclable Materials, Food Scraps and Green Waste Collected in the City by Franchisee. This Diversion requirement is separate from and in addition to any Diversion requirements set forth in Agreement Sections 7, 12, 13, 14 and 15. In the event new or additional Diversion requirements are imposed by law, ordinance or regulation on City, Franchisee, and/or any Commercial Premises or Multifamily Dwelling, the City shall have the right to require Franchisee to Divert additional Municipal Solid Waste, Recyclable Materials, Food Scraps, and/or Green Waste by providing Franchisee with thirty (30) calendar days written notice of the new Diversion requirements. Upon request of the Public Works Director, Franchisee shall provide all documents and information requested by the Public Works Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to Recycling and Diversion of Municipal Solid Waste, Recyclable Materials, Food Scraps and/or Green Waste. B. Franchisee shall Dispose of all Nan-Processable Municipal Solid Waste colleted in the City, over which Franchisee has control, in accordance with the Franchise Hauler Acknowledgment, attached hereto as Exhibit "B" and incorporated herein by reference. Franchisee hereby accepts and agrees to abide by all terms of the Franchise Hauler Acknowledgment. If, during the Term of this Agreement, the City's Waste Disposal Agreement with Orange County expires, lapses, or is terminated, the Franchise Hauler Acknowledgement shall be null and void and Franchisee shall Dispose of Municipal Solid Waste Collected in the City only by taking it to a fully permitted Orange County certified/licensed landfill or to a fully permitted licensed transfer station, which is lawfully authorized to accept that specific type of solid waste material and has been approved by the City. Non-exclusive Franchise Agreement Page 17 3-32 C. Franchisee shall not Dispose of Municipal Solid Waste, Recyclable Materials, Food Scraps, or Green Waste by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system. Nothing in this Agreement shall be deemed or construed as authorizing Franchisee to operate a Landfill, Recycling Facility, or other solid waste disposal facility in the City. D. If Franchisee violates the terms in Agreement Section 6(A) and/or Section 6(13) above, Franchisee agrees that the City has the future right to direct that all Municipal Solid Waste be delivered to a fully permitted Disposal facility designated by City and that Recyclable Materials, Food Scraps, Green Waste and/or Wood Waste be delivered to a fully permitted Processing Facility designated by City. This exercise of "flow control" by the City shall be made upon at least thirty (30) calendar days prior written notice to Franchisee, and written notice shall include the violation(s) prompting the City's action regarding "flow control." Failure to comply with the Recycling, Diversion, and/or Disposal requirements set forth in this Section shall be a material breach of this Agreement. E. Franchisee shall include as a condition to its contractual agreement with its Customers a provision prohibiting disposal of Hazardous Waste in any Container. F. Franchisee shall implement a load check program that includes, at a minimum, a visual check of all Containers to be emptied to protect against inclusion of Hazardous Waste and shall prepare a written record of all Hazardous Waste discovered during the process. The records shall comply with all State and Federal Hazardous Waste Regulations and shall be maintained for the length of the Term of the Franchise and for a minimum period of three (3) years, or for any longer period required by law, after the Extended Termination Date. The records shall be made available to the City in Franchisee's monthly reports submitted pursuant to Agreement Section 16. G. This Agreement does not purport to grant Franchisee or City ownership over materials that Franchisee's Customers discard for pickup by Franchisee or that Franchisee handles under this Agreement. The right to possession or ownership of those materials shall be determined in accordance with law and any agreement between Franchisee and its Customers, and not as a result of this Agreement. Parties acknowledge that City has no ownership rights in Divertible Materials or revenue from sale thereof, except as provided in this Agreement. H. City makes no representations or warranties with respect to characterization of Municipal Solid Waste, Recyclable Materials, Food Scraps, or Green Waste within City. City expressly disclaims any representations and warranties, either express or implied, as to the merchantability or fitness of Municipal Solid Waste, Recyclable Materials, Food Scraps, or Green Waste for any particular purpose. SECTION 7. DIVERSION OF CONSTRUCTION AND DEMOLITION DEBRIS A. On a monthly basis, Franchisee shall Divert a minimum of sixty-five percent (65%) of all Construction and Demolition Debris collected in the City by Franchisee. This Diversion requirement shall be in addition to and separate from any Diversion Non-exclusive Franchise Agreement Page 18 3-33 requirements set forth in Agreement Section 6. Franchisee shall also comply with all requirements of Section 15. If new or additional Diversion requirements are imposed by law, ordinance or regulation on City, Franchisee, and/or any Commercial Premises or Multifamily Dwelling, the City shall have the right to require Franchisee to ❑ivert additional Construction and Demolition Debris by providing Franchisee with ten (1 D) calendar days written notice of the new Diversion requirements. Upon request of the Public Worsts Director, Franchisee shall provide all documents and information requested by the Public Works Director to prove that Franchisee has complied with this subsection, any applicable law, ❑rdinance, regulation, or condition related to Recycling and Divers ion of Construction and Demolition Debris. B. Franchisee shall Dispose of, or oversee Disposal of, any Construction and Demolition Debris collected in the City by Franchisee, and not diverted pursuant to Agreement Section 7(A), in accordance with the Franchise Hauler Acknowledgment, attached hereto as Exhibit "B." Franchisee hereby accepts and agrees to abide by all terms of the Franchise Hauler Acknowledgment. If, during the Term of this Agreement, the City's Waste Disposal Agreement with Orange County expires, lapses or is terminated, the Franchise Hauler Acknowledgement shall be null and void and Franchisee shall Dispose of non -Diverted Construction and Demolition Debris collected by Franchisee in the City only by taking such debris to an Orange County certified/licensed landfill, State certified/licensed transfer station, State certified/licensed recycling facility or State certified/licensed materials recovery facility which is lawfully authorized to accept that specific type of solid waste material. Franchisee shall not dispose of Construction and Demolition Debris by depositing it on any land except a permitted facility, whether public or private, or in any river, stream or other waterway, or in any sanitary sewer or storm drainage system. C. If Franchisee violates the terms in Agreement Section 7(A) and/or Section 7(B) above, Franchisee agrees that the City has the future right to direct that Construction and Demolition Debris be delivered to a permitted processing and/or disposal facility designated by City. This exercise of "flow control" by the City shall be made upon at least thirty (30) calendar days prior written notice to Franchisee, and written notice shall include the violation(s) prompting the City's action regarding "flow control." Failure to comply with the Recycling, Diversion, and/or Disposal requirements set forth in this Section shall be a material breach of this Agreement. D. Franchisee shall include as a condition to its contractual agreement with its Customers a provision prohibiting disposal of Hazardous Waste in any Container. E. Franchisee shall implement, or require a third party to implement, a load check program that includes, at a minimum, a visual check of all Containers to be emptied to protect against inclusion of Hazardous Waste and shall prepare a written record of all Hazardous Waste discovered during the process. The records shall comply with all local, State and Federal Hazardous Waste regulations, and shall be maintained for the length of the Term of the Franchise and for a minimum period of three (3) years, or for any longer period required by law, after the Extended Termination Date. The records shall be made available to the City upon request. Non-exclusive Franchise Agreement Page 19 3-34 F. This Agreement does not purport to grant Franchisee or City ownership over materials that Franchisee's Customers discard for pickup by Franchisee or that Franchisee handles under this Agreement. The right to possession or ownership of those materials shall be determined in accordance with law and any agreement between Franchisee and its customers, and not as a result of this Agreement. Parties acknowledge that City has no ownership rights in Recyclable Materials or revenue from sale thereof, except as provided in this Agreement. G. City makes no representations or warranties with respect to characterization of Construction and Demolition Debris within City. City expressly disclaims any representations and warranties, either express or implied, as to the merchantability or fitness of Construction and Demolition Debris for any particular purpose. SECTION 8. FRANCHISEE'S APPLICATION; RECORDS; AUDITS A. Application. Franchisee has submitted an application to City in substantially the same form as the template attached hereto as Exhibit "C" and incorporated herein by reference as a condition of entering into this Agreement. Franchisee hereby represents and warrants that all information contained in the application submitted to City, and any information submitted by Franchisee to City supplementary thereto, is true and correct and does not contain any untrue statement of a material fact nor omit a material fact that makes a statement contained therein misleading. B. Records. Franchisee shall maintain all records relating to Franchisee's Commercial Franchise Services provided hereunder including, but not limited to, Customer lists, billing records, accounts payable records, maps, service requests, cash receipts records, AB 939/341/1826 compliance records, tonnage reports, weight tickets and invoices from all Landfills, Processing Facilities, and Recycling Facilities utilized for Commercial Solid Waste collected within City, and all other documents and materials which reasonably relate to Franchisee's compliance with and performance of the provisions of this Agreement ("Records"), for the full Term of this Agreement and an additional period thereafter of not less than three (3) years, or any longer period required by law. Such Records shall be made available to City at Franchisee's regular place of business, but in no event outside the County of Orange. All Records shall be clearly identifiable, and Franchisee shall maintain record security sufficient to preserve records from destruction or damage from foreseeable events. Data maintained in an electronic medium shall be protected, and backed up, with a copy stored at a separate site from the original data. C. CERCLA Defense Records. City's ability to defend against CERCLA and related litigation is a matter of great importance. Franchisee shall maintain and preserve records establishing where Solid Waste Collected in the City was landfilled for the full Term of this Agreement and an additional period thereafter of not less than five (5) years, or any longer period required by law. At any time, including after the expiration of the Term, Franchisee shall provide copies of such records to City within three (3) business days of City's request. Non-exclusive Franchise Agreement Page 20 3-35 D. Inspection; Audit_ On an annual or as -needed basis, City shall have the right, upon five (5) business days advance notice, to inspect Franchisee's Records and/or conduct, or to contract with an independent auditing firm to perform, an audit, at City's expense, of Franchisee's Records ("City Audit") to ensure compliance with the provisions of this Agreement. The City Audit shall include, without limitation, review and/or copying of Franchisee's cash receipts, books of account, Municipal Solid Waste and ❑ivertible Materials tonnage reports, Collection, Disposal and Diversion records, and other related records, as well as those of each of its parent, subsidiary and/or affiliated companies, as appropriate. As part of the City Audit, Franchisee's Customer accounts and related records may be subject to review. While Franchisee will not be required to submit for copying detailed account records, such as Customer names, Franchisee shall make such records and information available for review in connection with the City Audit. The purpose of the City Audit shall be for: (a) verification of the Fees paid by Franchisee under this Agreement, and the accuracy thereof; (b) verification of the amounts of Municipal Solid Waste and Divertible Materials reported as Collected, processed, Diverted and Disposed by Franchisee pursuant to this Agreement; (c) verification of Recycling/Diversion program implementation efforts and actions taken by Franchisee pursuant to this Agreement; and (d) verification of such other information as is reasonably deemed appropriate by the Public Works Director to evaluate Franchisee's performance hereunder. E. Reimbursement. Franchisee shall reimburse City for all of City's costs in performance of an audit if, as a result of the audit, it is determined: 1. There was any intentional misrepresentation by Franchisee with respect to the amount of Fees due to the City; 2. There is a One Thousand and 0 0/ 100 ❑oilars ($1,000.00) or greater discrepancy in the amount of Fees due to the City. I There was any intentional misrepresentation by Franchisee with respect to Franchisee's Commercial Franchise Services and/or Franchisee's handling and transportation of Municipal Solid Waste and/or ❑ivertible Materials or with regard to any information provided about Diversion; or 4. There is a discrepancy (whether intentional or not) in the number of Tons of Municipal Solid Waste, Recyclable Materials, Green Waste, Foods Scraps and/or Construction and Demolition Debris Collected, Recycled, processed andlor Disposed that equals or exceeds two percent (2%). Such reimbursement shall be paid by Franchisee within ten (10) calendar days of the date City notifies Franchisee in writing that Franchisee is liable to reimburse the City in conformance with this subsection and the amount of City's audit costs. Non-exclusive Franchise Agreement Page 21 3-36 SECTION 9. INSURANCE REQUIREMENTS Without limiting Franchisee's indemnification of City, and prior to commencement of the Effective Date of this Agreement, Franchisee shall obtain, provide copies to City and maintain at its own expense during the Term of this Agreement policies of insurance of the type and amounts described in the Insurance Requirements attached hereto as Exhibit "D" and incorporated herein by reference. SECTION 10. RESPONSIBILITY FOR DAMAGES AND INJURYIINDEMNIFICATION A. Franchisee Responsibility. Franchisee shall be solely responsible for any damages caused as a result of Franchisee's acts, negligence, or omissions including, but not limited to, injuries to or death of any person or damage to public and/or private property and damages to public improvements arising from or as a result of Franchisee's Commercial Franchise Services. B. General Indemnification. Franchisee shall indemnify, hold harmless, and defend City, and each of its past, present and future elected officials, officers, employees, agents, consultants, volunteers, affiliates, assignees, representatives, attorneys, subsidiaries, and affiliated entities and their respective successors, heirs and assigns (collectively, "Indemnified Parties") from and against any costs, expenses, damages, and losses, including actual attorneys' fees ("Losses") of any kind or character to any person or property arising directly or indirectly from or caused by any of the following: (i) any act, negligence, or omission of Franchisee or its respective officers, directors, shareholder members, partners, employees, agents, Franchisee's subcontractors, suppliers, representatives and affiliates ("Franchisee Representatives"); (ii) Franchisee's or Franchisee Representative's activities; (iii) any accident or casualty within or arising out of the performance of Franchisee's Commercial Franchise Services under this Franchise; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of Commercial Recyclable Materials, Food Scraps, Green Waste, Wood Waste, Construction and Demolition Debris and/or Municipal Solid Waste services performed pursuant to the Franchise; (v) the negligence or willful misconduct of Franchisee or any of Franchisee Representatives in the performance of Franchisee's Commercial Franchise Services under the Franchise, and (vi) any breach of the Franchise. Franchisee shall not be required to indemnify, hold harmless and defend the Indemnified Parties from the sole negligence, active negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Franchisee. C. Hazardous Substances Indemnification. Franchisee shall indemnify the Indemnified Parties from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, costs, response, remediation, and removal costs, losses, demands, debts, liens, Non-exclusive Franchise Agreement Page 22 3-37 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, the Indemnified Parties or Franchisee arising directly or indirectly from or caused by any of the following- (i) the violation of any environmental laws or the failure to clean up and mitigate the consequences of the spill or release of any Hazardous Substance; and (ii) Franchisee's activities under this Agreement con ceming any Hazardous Substance at any place where Franchisee stores or disposes of solid or Hazardous Waste pursuant to this Agreement, or preceding Agreements between City and Franchisee. The foregoing indemnity is intended to operate as an agreement pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9667(e)) and any amendments thereto, and California Health and Safety Code Section 25364, or any successor statute, to insure, protect, hold harmless, and indemnify City from liability. D. AB 939 Indemnification. Franchisee agrees to meet all requirements of City's SRRE as to the portion of the Commercial Solid Waste stream Collected and/or handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold the Indemnified Parties harmless against all fines or penalties imposed by CalRecycle, or other entity, arising from the failure of Franchisee to meet Act ❑iversion requirements with respect to the portion of the Commercial Solid Waste stream collected by Franchisee. E. AB 341 Indemnification. Franchisee agrees to meet all requirements of AB 341, specifically Public Resources Code Section 42649, or any successor statute, as to the portion of the Municipal Solid Waste and Recyclable Materials stream Collected and/or handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold the Indemnified Parties harmless against all fines or penalties imposed by CalRecycle, or other entity, arising from the failure of Franchisee to meet AB 341 diversion and recycling requirements with respect to the Municipal Solid Waste and Divertible Materials Collected and/or handled by Franchisee. F. AB 1826 Indemnification. Franchisee agrees to meet all requirements of AB 1826, specifically Public Resources Code Section 42649.82, or any successor statute, as to the portion of the Food Scraps, Green Waste and Wood Waste streams Collected and/or handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold the Indemnified Parties harmless against all fines or penalties imposed by CalRecycle, or other entity, arising from the failure of Franchisee to meet AB 1826 recycling requirements with respect to the Food Scraps and Green Waste collected and/or handled by Franchisee. G. Notice. City agrees to give notice to Franchisee when the City receives a claim for damages or other liability for which Franchisee has provided indemnification under this Section. Non-exclusive Franchise Agreement Page 23 3-38 SECTION 11. COMMERCIAL SOLID WASTE AND DIVERTIBLE MATERIALS COLLECTION SERVICES A. Authorized Collection Services. Franchisee may only provide those Commercial Franchise Services designated in Franchisee's application, or any amended application, and for which Franchisee has demonstrated compliance with Code Section 12.63.050, or any successor section. B. Frequency of Collection. Franchisee shall collect all Municipal Solid Waste and Divertible Materials from Commercial Premises and Multifamily Dwellings on a schedule to be agreed upon between Franchisee and its Customers, subject to the restrictions set forth in Agreement Section 11(C), provided, however, that such schedule complies with Code Subsections 6.04.110 and 6.04.120 and does not permit the accumulation of Commercial Solid Waste or Divertible Materials in quantities that are unreasonable or detrimental to the public health or safety. Requests for Collection from Customer Premises with overflowing Containers, or from Customer Premises where there have been missed pickups, shall be serviced within twenty-four (24) hours of any such request by the Customer or City. Should City receive a Customer complaint related to or arising from Franchisee's failure to collect Commercial Solid Waste and Divertible Materials as provided herein, Franchisee's Collection schedule shall be submitted to the City for review. C. Hours and Days of Collections. 1. Franchisee shall not collect Commercial Solid Waste or Divertible Materials in any area of the City after 6.30 p.m. and prior to 5:00 a.m. 2. Franchisee shall not Collect Commercial Solid Waste or Divertible Materials from any Commercial Premises or Multifamily Dwelling located within five hundred (500) feet of an occupied residential premise, motel or hotel, nor shall any of Franchisee's Collection vehicles be operated in any residential areas of the City except between the hours of 7:00 a.m. and 6:30 p.m., Monday through Friday, nor on any Saturday or Sunday, except between the hours of 8.00 a.m. and 6.00 p.m. 3. Franchisee shall neither operate its Collection vehicles nor Collect Commercial Solid Waste or Divertible Materials from any Commercial Premises, governmental facility, or Multifamily Dwelling located within five hundred (500) feet of a school, or other educational facility between the hours of 7:30 a.m. and 9:00 a.m. or 1:00 p.m. and 3:00 p.m., Monday through Friday. The limitations in Agreement Section 11(C)(3) notwithstanding, Franchisee's operation of Collection vehicles on any non-- residential arterial roadway within the City are subject to Section 6.04.130(A) but shall not be prohibited or limited under this Agreement. 4. Commercial Solid Waste and Divertible Materials collection on Sundays shall be limited to Food Scraps and Municipal Solid Waste from Commercial Premises, which require Collection every day due to public health and safety concems. Non-exclusive Franchise Agreement Page 24 3-39 5. At Franchisee's request, the City shall provide maps illustrating the geographic limitations placed on Franchisee's Collection services pursuant to Agreement Section 11(C)(3) ("Maps"). City expressly disclaims any liability related to or arising from the accuracy of any Maps provided by City. City may update the Maps as needed, and Franchisee's failure to request or secure the Maps, or any updated Maps, shall not relieve Franchisee of any obligations under this Agreement. D. Containers. Franchisee shall provide the appropriate sized Containers to each Customer for storage of the Commercial Solid Waste and Divertible Materials Collected by Franchisee. Containers provided by Franchisee must be identified with Franchisee's name and be in the color identified by Franchisee in Franchisee's application. SECTION 12. AB 341 RECYCLING PROGRAM FOR COMMERCIAL PREMISES AND MULTIFAMILY DWELLINGS A. Diversion Program. The Act requires all AB 341 Generators to arrange for Recyclable Materials Collection services by July 1, 2612. The Act requires all cities to provide a commercial Recyclable Materials Collection Program for AB 341 Generators on or before July 1, 2012. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11(A), for all AB 341 Generators that contract with or pay Franchisee to haul Municipal Solid Waste and/or ❑ivertible Materials, Franchisee shall implement a Recyclable Materials Collection Program using one or more of the following: 1. Provide Single Stream Recyclable Materials and (if applicable) Single Material Collection service on a weekly or more frequent basis. 2. Provide Collection of Recyclable Materials commingled with Municipal Solid Waste and process the Collected material at a City -approved Dirty MRF that yields Diversion results comparable to source separation. No Dirty MRF may be used for separation of AB 341 materials unless the Dirty MRF has been approved by City as meeting the standards and requirements of Public Resources Code Section 42649 and all rules, amendments and regulations promulgated in furtherance thereof. 3. If Franchisee observes that the AB 341 Generator has one (1) or more internal Programs that Divert Recyclable Materials, is self -hauling or backhauling Recyclable Materials, donating or selling Recyclable Materials to a third party, or is using a third party or other Franchisee to Collect Recyclable Materials, Franchisee shall report this to City and City, in its sole discretion, shall make a final determination as to the adequacy of the internal and/or third party Recyclable Materials Diversion Program(s). If the City finds the internal and/or third party Program(s) inadequate, Franchisee shall proceed to implement a Recyclable Materials Diversion Program to Divert all the remaining AB Non-exclusive Franchise Agreement Page 25 3-40 341 Recyclable Materials generated by the AB 341 Generator as described in Exhibit E, which is incorporated herein by reference. B. Act Compliance. The Parties agree that provision of an AB 341 Diversion Program, as set forth in this Section 12 and in Exhibit "E," is of paramount importance for the City to comply with the Act. The Parties further agree that providing high quality Diversion Services, public education and technical assistance to AB 341 Generators to obtain their full participation in AB 341 Diversion Program is essential for Franchisee to implement an effective Diversion Program for each and every AB 341 Generator it serves. The Parties acknowledge that achievement of this requirement is integral to the City's compliance with the Act and that failure to implement said AB 341 Diversion Programs may cause City to be non -compliant with the Act and be grounds for termination of this Ag reement. C. Program Implementation. Within ninety (90) calendar days of either: (1) the Effective Date of this Agreement; or (2) the date an AB 341 Generator initiates service with Franchisee to collect or transport Municipal Solid Waste and/or Divertible Materials, whichever is later, Franchisee shall implement a Recyclable Materials Diversion Program for said AB 341 Generator. For purposes of this Section 12, "implement" as provided herein shall mean Franchisee's completion of all of the steps and requirements in Exhibit E. SECTION 13. AB 1826 FOOD SCRAP DIVERSION PROGRAM FOR COMMERCIAL PREMISES A. Food Scrap Diversion Program. The Act requires AB 1826 Generators to implement Diversion Programs as follows. On or after January 1, 2017, all owners and responsible parties of Commercial Premises generating four (4) or more cubic yards of Food Scraps and/or Green Waste per week must arrange for Diversion Programs for those materials. On or after January 1, 2019, all owners and responsible parties of Commercial Premises generating four (4) or more cubic yards of Commercial Solid Waste per week must arrange for Diversion Programs for Food Scraps and Green Waste. The Act requires cities to provide a commercial Food Scrap Diversion Program for AB 1826 Food Scrap Generators on or before January 1, 2016. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11(A), for all AB 1826 Food Scrap Generators that contract with or pay Franchisee to haul Municipal Solid Waste and/or Divertible Materials Franchisee shall implement a Food Scrap Diversion Program. The City will maintain a listing of all AB 1826 Food Scrap Generators. City expressly disclaims any liability related to or arising from the accuracy of any lists provided by City. Franchisee's failure to request or secure the list on an annual basis shall not relieve Franchisee of any obligations under this Section. Franchisee shall implement a Food Scrap Diversion Program using one or more of the following; Provide source separated Food Scrap Collection service on a weekly or more frequent basis. 2. If Franchisee observes that the AB 1826 Food Scrap Generator has one (1) or more internal Food Scrap Diversion Programs, is self -hauling Non-exclusive Franchise Agreement Page 26 3-41 or backhauling Food Scraps, is donating or selling Food Scraps, is donating edible food for human consumption, and/or is using a third party or other Franchisee to Collect Food Scraps, Franchisee shall report this to City and City, in its sole discretion, shall make a final determination as to the adequacy of the intemaI and/or third party Food Scrap Diversion Programs). If the City finds the internal and/or third party program(s) are inadequate, Franchisee shall proceed to implement a Diversion Program to Divert all the remaining AB 1826 Food Scraps generated by the AB 1826 Generator. B. Act Compliance. The parties agree that provision of a Food Scrap Diversion Program as described in this Section 13 and in Exhibit "E" is of paramount importance for the City to comply with the Act. The parties further agree that providing high quality Diversion Services, public education, and technical assistance to AB 1826 Food Scrap Generators to obtain their full participation in AB 1826 Diversion Programs is essential for Franchisee to implement an effective Food Scrap Diversion Program for each and every AB 1826 Food Scrap Generator it serves. The parties acknowledge that achievement of this requirement is integral to the City's compliance with the Act and that failure to implement said Diversion Program may cause City to be non -compliant with the Act and be grounds for termination of this Agreement. C. Program Implementation. Within ninety (90) calendar days of either: (1) the Effective Date of this Agreement; or (2) the date an AB 1826 Food Scrap Generator initiates service with Franchisee to Collect and/or transport Municipal Solid Waste and/or ❑ivertible Materials , whichever is later, Franchisee shall implement a Food Scrap Diversion Program for said AB 1826 Food Scrap Generator. For purposes of this Section, Franchisee shall be found to have "implemented" a Food Scrap Diversion Program for an AB 1826 Food Scrap Generator only if Franchisee completes all of the steps and requirements in Exhibit E. SECTION 14. AB 1826 COMMERCIAL AND MULTIFAMILY GREEN WASTE AND WOOD WASTE COLLECTION PROGRAM. A. Act Requirements. The Act requires all AB 1826 Generators of Green Waste and/or Wood Waste to implement Diversion Programs as follows. All Commercial Premises and all Multifamily Dwellings generating four (4) or more cubic yards of Food Scraps and/or Green Waste and Wood Waste must arrange for Diversion Programs for Green Waste and Wood Waste on or before January 1, 2617. On or after January 1, 2019, all owners and responsible parties of Commercial Premises and Multifamily Dwellings generating four (4) or more cubic yards of Commercial Solid Waste per week are required to arrange for Diversion Programs for Green Waste and Wood Waste. The Act requires cities to provide Commercial and Multifamily Green Waste and Wood Waste Diversion Programs for AB 1826 Green Waste and Wood Waste Generators on or before January 1, 2016. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11(A), for all AB 1826 Green Waste and Wood Waste Generators that contract with or pay Franchisee to haul Municipal Solid Waste and/or Dlvertible Materials, Franchisee shall implement a Green Waste and Wood Waste Diversion Program. (For wood generated by construction and demolition projects, Non-exclusive Franchise Agreement Page 27 3-42 the requirements of Sections 7 and 15 shall apply.) The City will maintain a listing of all AB 1826 Green Waste and Wood Waste Generators. City expressly disclaims any liability related to or arising from the accuracy of any lists provided by City. Franchisee's failure to request or secure the list on an annual basis shall not relieve Franchisee of any obligations under this Section. Franchisee shall implement a Green Waste and Wood Waste Diversion Program using one or more of the following: Provide source separated Green Waste and Wood Waste Collection service on a weekly or more frequent basis. 1. Provide Collection of Green Waste and Wood Waste co -mingled with Municipal Solid Waste and process the Collected material at a City - approved Dirty MRF that yields Diversion results comparable to source separation. No Dirty MRF may be used for separation of AB 1826 Green Waste or Wood Waste materials unless the Dirty MRF has been approved by City as meeting the standards and requirements of Public Resources Code Section 42649 and all rules, amendments and regulations promulgated in furtherance thereof. 2. If Franchisee observes that the AB 1826 Green Waste and Wood Waste Generator has one (1) or more internal Green Waste and/or Wood Waste Diversion Program(s), is self -hauling or backhauling Green Waste and/or Wood Waste, is donating or selling Green Waste and/or Wood Waste, or is using a third party or other Franchisee to Collect Green Waste and/or Wood Waste, Franchisee shall report this to City and City, in its sole discretion, shall make a final determination as to the adequacy of the internal and/or third party Green Waste and/or Wood Waste Diversion Program(s). If the City finds the internal and/or third party program(s) are inadequate, Franchisee shall proceed to implement a Diversion Program to Divert all the remaining Green Waste and Wood Waste generated by the Customer. 3. If the AB 1826 Green Waste and Wood Waste Generator is using a landscaping company to haul away Green Waste and Wood Waste, Franchisee shall report this to the City and City, in its sole discretion, shall make a final determination as to the adequacy of the landscaper program to Divert all the Green Waste and Wood Waste. if the City finds the landscaper program to be inadequate and/or lacking the proper documentation of the end use for the Collected Green Waste and Wood Waste, Franchisee shall proceed to implement a Diversion Program to Divert all the Green Waste and Wood Waste generated by the AB 1826 Generator. All Green Waste and Wood Waste Collected by Franchisee shall be delivered to a permitted Green Waste and/or Wood Waste Processing Facility for Diversion. No Green Waste or Wood Waste Collected in City may be used as Alternative Daily Cover at a Non-exclusive Franchise Agreement Page 28 3-43 landfill as an end use. This prohibition includes Green Waste and Wood Waste processed at a permitted Processing Facility as well as the residue from such Facility. B. Act Compliance. The parties agree that provision of a Green Waste and Wood Waste Diversion Program as described in this Section 14 and in Exhibit "En is of paramount importance for the City to comply with the Act. The parties further agree that providing high quality Diversion Services, public education, and technical assistance to AB 1826 Green Waste and Wood Waste Generators to obtain their full participation in AB 1826 Diversion Programs is essential for Franchisee to implement an effective Green Waste and Wood Waste Diversion Program for each and every AB 1826 Green Waste and Wood Waste Generator it serves. The parties acknowledge that achievement of this requirement is integral to the City's compliance with the Act and that failure to implement said Diversion Programs may cause City to be non-compiiant with the Act and be grounds for termination of this Agreement. C. Program Implementation. Within ninety (90) calendar days of either: (1) the Effective Date of this Agreement; or (2) the date an AB 1826 Green Waste and Wood Waste Generator initiates service with Franchisee to Collect and/or transport Municipal Solid Waste and/or Divertible Materials, whichever is later, Franchisee shall implement a Green Waste and Wood Waste Diversion Program for said AB 1826 Green Waste and Wood Waste Generator. For purposes of this Section, Franchisee shall be found to have "implemented" a Green Waste and Wood Waste Diversion Program for an AB 1826 Green Waste and Wood Waste Generator only if Franchisee completes all of the steps and requirements in Exhibit E. SECTION 15. CONSTRUCTION AND DEMOLITION DEBRIS RECYCLING PROGRAM A. Act Requirements. The California Green Building Standards Code codified in the California Code of Regulations Title 24, Part 11, ("CalGreen") and adopted by reference in Code Section 15.11.010, requires mandatory diversion of Construction and Demolition Debris. Contractor shall comply with all requirements of CalGreen, as it may be amended from time to time. In the event CalGreen and the City's Construction and Demolition Debris diversion requirements differ, Franchisee shall comply with the highest Construction and Demolition Debris Diversion percentage. Further, City reserves the right to amend and/or expand its own Construction and Demolition Debris Recycling ordinance at any time during the Term. Contractor shall provide all services necessary to (a) inform Customers of, (b) support Customer compliance with, and (c) support City's enforcement of, the Construction and Demolition Debris Recycling requirements pursuant to CalGreen and the Code. B. Construction and Demolition Debris Diversion Program. Franchisee acknowledges these requirements and agrees that, subject to the restrictions contained in Agreement Section 11(A), for all Customers that contract with or pay Franchisee to haul Construction and Demolition Debris, Franchisee shall implement a Diversion Program as described and set forth in Exhibit "F" which is incorporated herein by reference. Non-exclusive Franchise Agreement Page 29 3-44 SECTION 16. REPORTING REQUIREMENTS. A. Monthly Reports. Franchisee shall submit monthly reports to the Public Works Director identifying, at a minimum, the following information: 1. The address of each facility serviced and the precise services provided to each address including, but not limited to, Commercial Franchise Services broken down by type (i.e., Recyclable Materials, Food Scraps, Green Waste, Wood Waste, Construction and Demolition Debris, and/or Municipal Solid Waste) presented in an Excel format acceptable to the City; 2. The frequency of Commercial Franchise Services provided to each address; 3. The number of containers by type and size at each address and the frequency of collection; 4. The actual tonnage, by material category, collected per month in tons.; 5. The location of the Landfill and/or Processing Facility to which the Municipal Solid Waste, Recyclable Materials, Green Waste, Wood Waste and/or Food Scraps were taken during the previous month and the Diversion rate achieved if the facility accepts mixed waste materials/Processable Municipal Solid Waste; 6. AB 341 and AB 1826 compliance information by Generators, including the total number of AB 341 and AB 1826 accounts serviced by the Franchisee, the total number of accounts that have a Recycling Program, Food Scrap Diversion Program, and/or Green Waste/Wood Waste Diversion Program provided by the Franchisee, the number of Customers with Franchisee -documented internal Diversion programs that comply with AB 1826 and AB 341, the number of Customers that comply with AB 341 or AB 1826 via a Clean or Dirty MRF, the number of Customers that do not have an AB 341 or AB 1826-compliant Diversion program, and a description of outreach efforts for non -compliant Generators; 7. The "Exhibit E Tracking Document" described in subparts D, E and F of Exhibit E. 8. Such other tonnage or other information as requested by the Public Works Director including weight tickets and Diversion records. B. Form of Report. Monthly reports shall be included in the City provided electronic template. No other templates or formats will be accepted. Use of any alternate format or template shall result in the monthly report being considered incomplete and inaccurate and the Franchisee shall be subiect to assessment of liquidated damages pursuant to Section 24(B) of the Franchise. Non-exclusive Franchise Agreement Page 30 3-45 C. Report Due Date. Each monthly report shall be submitted on or before the 25th day of the month following the end of the month. D. Submission. Franchisee shall submit each monthly report to: Public Works Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92658 E. No Waiver. Franchisee shall file the monthly report required under Agreement Section 16(A) regardless of whether Franchisee has provided Commercial Franchise Services in the City during the reported month. F. Compliance. Franchisee shall comply with all Recycling and Diversion requirements imposed by law, ordinance, or regulation on the City. At the end of each calendar month, reports will be evaluated for compliance with City Recycling and Diversion requirements. Failure to comply with City Recycling and Diversion requirements shall be a material breach of this Agreement. E-yx09C6l►itm:1_11111:1:�:1��:7•y�►��_��1�1� Franchisee shall designate, at a minimum, one (1) individual employed by Franchisee to assist City in implementing the Agreement's Recycling and Diversion programs, as applicable, and to manage all reporting requirements set forth herein ("Hauler Representative"). Franchisee shall provide City with the Hauler Representative's contact information, and the Hauler Representative shall be the primary contact for the City. The Hauler Representative shall respond to any City questions or concerns relating to or arising from Franchisee's performance under this Agreement within five (5) business days of City submitting such question or concern. SECTION 18. VEHICLES AND EQUIPMENT A. Containers. Any and all Containers provided to Customers for storage, Collection or transportation of Municipal Solid Waste, Recyclable Materials, Food Scraps, and/or Green Waste shall meet the requirements designated by the Public Works Director as well as State of California minimum standards for solid waste handling established under Public Resources Code Section 43020 and applicable health requirements, or any successor statutes or requirements. B. Identification. All Containers and vehicles used by Franchisee in the performance of Commercial Franchise Services shall be marked with Franchisee's name in letters which are not less than four inches (4n) high and which are easily read by the general public. Non-exclusive Franchise Agreement Page 31 3-46 C. Equipment. 1. Maintenance, Records. Franchisee shall, at all times, provide such number of vehicles and such equipment as will be adequate for the Commercial Franchise Services, which it is authorized to provide under this Agreement. All vehicles utilized by Franchisee in the performance of this Agreement shall be registered with the California Department of Motor Vehicles. All vehicles must pass annual "BIT' and brake inspections and Franchisee shall provide evidence of such to the Public Works Department upon request_ Upon request by the City, Franchisee shall provide records from the most recent California Highway Patrol biennial inspection of the terminal(s) responsible for the maintenance and repair of equipment used in the City. All vehicles shall be properly maintained, kept clean and in good condition and repair, shall not leak any fluids, and shall be uniformly painted. All Commercial Solid Waste and Divertible Materials Containers used in the performance of this Agreement shall be kept clean and in good repair, shall not leak any fluids, and shall be uniformly painted in the color identified by Franchisee in Franchisee's application. All equipment required by City in the performance of this Agreement, including vehicle mirrors and the collision avoidance system, may be subject to inspection by the City upon twenty-four (24) hours' notice by the Public Works Director. All drivers employed by Franchisee and operating equipment in the City shall be properly licensed for the class of vehicle they drive, enrolled in the Department of Motor Vehicles Employee Pull Notice (EPN) program, and abide by all State and federal regulations for driver hours and alcohol and controlled substances testing. 2. Solid Waste and Divertible Materials Retention. Each vehicle shall be so constructed and used in a manner so that no rubbish, garbage, debris, oil, grease or other material will blow, fall, or leak out of the vehicle. All Municipal Solid Waste and Divertible Materials shall be transported by means of vehicles that are covered in such a manner as to securely contain all Solid Waste and Divertible Materials and to prevent such Municipal Solid Waste and Divertible Materials from projecting, blowing, falling or leaking out of the vehicles. Any Municipal Solid Waste or Divertible Materials dropped or spilled in Collection, transfer or transportation shall be immediately cleaned up by Franchisee. A broom and a shovel shall be carried at all times on each vehicle for this purpose. In addition, each Collection vehicle shall be equipped with trash bags, masking tape and notice of non -Collection tags for the purpose of separating Hazardous Waste for return to the Generator. A communications device such as a two-way radio or a cellular telephone shall also be maintained on each vehicle at all times. 3. Vehicle Mirrors. All equipment used by Franchisee for Commercial Franchise Services in the City with a gross vehicle weight rating of twenty-six thousand (26,000) pounds or more shall be equipped with a convex mirror on the front of each vehicle, adjusted so as to enable the operator to see all points on an imaginary horizontal line which: (a) Is three feet (3') above the road; (b) Is one foot (1) directly forward from the midpoint of the front of the vehicles; and Non-exclusive Franchise Agreement Page 32 3-47 (c) Extends the full width of the front of the vehicle. 4. Collision Avoidance System. All vehicles operated by Franchisee in the City shall include the best available collision avoidance system that is capable of detecting adjacent pedestrians and bicyclists. City reserves the right to inspect Franchisee's vehicles, at any time, to confirm that the installation and capability of Franchisee's collision avoidance system is consistent with Section 18(C)(4). On or before January 1 of each year, Franchisee shall submit to City a certification signed under penalty of perjury containing the following: List of any collection vehicle (including front loader, rear loader, side loader, and roll off vehicles and all "spares") of such vehicles that franchisee operate in the City. Collision Avoidance System installed on each vehicle including name of system, manufacturer, date installed, name of Person who installed the system, name of Person(s) who tested the system to ensure proper installation and operation of system. 5. Storage. Franchisee shall not store any vehicle or equipment on any public street, public right-of-way or other public property in the City without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the Public Works Development. 6. Compliance. Should the Public Works Director at any time give written notification to Franchisee that any vehicle does not comply with the standards hereunder, the vehicle shall be promptly removed from service by Franchisee and not used again until inspected and authorized in writing by the Public Works Director. i. City Standards. Placement of Containers and equipment shall be in accordance with the standards set by the City. 8. Equipment Standards. All equipment provided by Franchisee shall be in accordance with standards set by the Public Works Department. SECTION 19. ABANDONED CONTAINERS A. If Franchisee abandons any Commercial Solid Waste or ❑ivertible Materials Container within the City, the City may remove the Container and/or dispose of the contents of the Container and recover its cost from Franchisee. B. For the purposes of this Section, "abandons" includes - Non -exclusive Franchise Agreement Page 33 3-48 1. Franchisee's failure to remove the Container within the time period specified by the City Council upon termination of the Franchise pursuant to Section 12.63.140 of the Code, or any successor statute; 2. Franchisee's failure to remove the Container within ten (10) calendar days after the expiration or termination of the Franchise granted to Franchisee, except in the case where Franchisee has been granted an extension of the Term of said Franchise or Franchisee has been granted a subsequent franchise authorizing Franchisee to Collect and transport the type or types of Commercial Solid Waste for which the Container was used pursuant to this Agreement; or 3. Franchisee's failure to collect the Container and dispose of the contents of the Container within two (2) calendar days after the Public Works Director issues written notice to Franchisee to dispose of the contents. 4. Franchisee's failure to replace a Container that fails to comply with the City's aesthetic standards, as set forth in this Agreement, within five (6) calendar days of receiving written notice from the Public Works Director of non-compliance. SECTION 20. COMPLIANCE WITH LAW A. Franchisee shall perform all Commercial Franchise Services in accordance with applicable federal, state, and local law, including, but not limited to, Code Chapter 12.63, Article XIII of the City Charter, Ordinance No. 2020-20 and the terms and conditions of this Agreement. B. During the Term of this Agreement, Franchisee and City agree that the City's ordinances may be amended as provided herein, as provided in Chapter 12.63 or as necessary to permit the City to comply with changes to federal, state, and local legislative regulatory requirements, which may affect or alter City's obligations or requirements for Commercial Solid Waste management. Franchisee agrees to comply with any such amendment of the City's ordinances without the need to amend this Agreement. SECTION 21. PERMITS AND LICENSES A. Applicable Permits and Licenses. Franchisee shall obtain and maintain, at Franchisee's sole cost and expense, all permits and licenses applicable to Franchisee's operations under the Franchise, which are required of Franchisee by any governmental agency. Payment of the Franchise Fee and Environmental Liability Fund Fee shall be in addition to any permit or license fees or business tax prescribed by the City for the same period. B. Orange County Landfill Account. Franchisee shall obtain and maintain for the Term of this Agreement an account with the Orange County landfills. If Franchisee disposes of any Municipal Solid Waste collected from the City at an Orange County landfill, the Franchisee shall utilize its landfill account only (no "cash" disposal). Non-exclusive Franchise Agreement Page 34 3-49 SECTION 22. PUBLIC EDUCATION ACTIVITIES A. Informational Materials. Each year during the Term of this Agreement, Franchisee shall transmit informational materials to all Customers and to such prospective Customers as it may select, informing them of the Commercial Franchise Services that are required of them under State law as well as Hazardous Waste Disposal requirements. B. Customer Compliance Notification. Each year during the Term of this Agreement, Franchisee shall notify all AB 1825 and AB 341 accounts for which it provides Commercial Franchise Services of the Customer's compliance obligations. C. Submission to City of Informational Materials. Franchisee's informational materials shall be provided to the Public Works Director upon request if, in City's sole and absolute discretion, such informational materials are necessary for City to comply with State reporting requirements. SECTION 23. SUSPENSION; TERMINATION; APPEAL A. Cit 's Right to Suspend or Terminate. The Franchise granted to Franchisee may be suspended or terminated by the City Council pursuant to Code Section 12.63.140, or any successor statute. B. Notice of Default. Should the Public Works Director determine Franchisee has defaulted in the performance of any obligation hereunder, the Public Works Director may provide written notice to Franchisee of such default ("Default Notice"). The Public Works Director may, in the Default Notice, set a reasonable time within which Franchisee may cure such default. Unless a longer or shorter time is otherwise specified by the Public Works Director, a reasonable time for correction shall be thirty (30) calendar days from the date the Default Notice is issued. C. Public Works Director Review. Within ten (10) business days of the Public Works Director's issuance of the Default Notice, at the request of Franchisee, the Public Works Director will hold a meeting with Franchisee to discuss the failure(s) described in the Default Notice. Such request shall immediately suspend any deadlines set forth in Agreement Section 23(B) or the Default Notice. During Franchisee's meeting with the Public Works Director, Franchisee shall have an opportunity to present evidence explaining or justifying the failures described in the Default Notice. After the meeting, the Public Works Director will make a determination, in his or her sole discretion, as to whether to uphold the Default Notice, or any portion thereof, and shall issue such determination within five (5) business days of the meeting. Franchisee will have thirty (30) calendar days from the date the Public Works Director's determination is issued to cure the upheld Default Notice or portion thereof. D. Appeal to City Manager. Within five (5) business days of the Public Works Director issuing hisfher determination, Franchisee may appeal the Public Works Director's determination, in writing, to the City Manager. City's receipt of such appeal request shall immediately suspend any deadlines set forth in Agreement Section 23(C). Non-exclusive Franchise Agreement Page 35 3-50 The City Manager will hold a meeting with Franchisee no more than ten (10) business days after receiving Franchisee's written appeal request. After the meeting, the City Manager will make a determination, in his or her sole discretion, as to whether to uphold the Default Notice, or any portion thereof, and shall issue such determination within five (5) business days of the meeting. The decision of the City Manager shall be final. Franchisee will have thirty (30) calendar days from the date the City Manager's determination is issued to cure the upheld Default Notice or any portion thereof. F. Failure to Timely Cure. If Franchisee fails to timely cure a Default Notice, or any portion thereof, then the applicable liquidated damages set forth in Agreement Section 24 shall be final and conclusive and the amount(s) shall be immediately due and payable. Franchisee's failure to timely cure three (3) Default Notices shall be a material breach of this Agreement. G. Audit Findings. Notwithstanding anything to the contrary, if Franchisee disagrees with City's audit findings, then Franchisee may, within ten (10) business days after service of the audit finding, appeal to the City Manager specifying the basis for its disagreement with City's audit findings. If Franchisee fails to timely request such an appeal, then the discrepancy determinations shall be final and conclusive and the violation shall be deemed established. H. Termination Without Right to Cure. City shall have the right of suspension or termination as a result of Franchisee's failure to timely cure any deficiency or default as set forth above, which right is in addition to City's right to terminate this Agreement without affording Franchisee an opportunity to cure in circumstances where Franchisee is determined to have materially breached this Agreement. Notwithstanding anything to the contrary, in the event of any material breach hereof, City shall have the right to terminate this Agreement without affording Franchisee the right to cure including, without limitation, any action, inaction or circumstance defined herein as a material breach and/or under any of the following circumstances which are hereby defined as material breaches: If Franchisee conducts, or attempts to conduct, fraud upon City. 2. If Franchisee becomes insolvent, unable, or unwilling to pay its debts. 3. If Franchisee fails to materially comply with any insurance or indemnification requirement set forth in this Agreement; provided, however, that Franchisee shall have a reasonable opportunity to cure any default relating to the Franchisee's failure to provide the City with proof of insurance, so long as such insurance is in effect at all times. 4. If City is required to pay any fine or penalty, which Franchisee is required by the terms hereof to pay, yet which Franchisee fails, refuses, neglects or is unable to timely pay. Non-exclusive Franchise Agreement Page 36 3-51 5. If Franchisee fails to submit Records thirty (39) calendar days or more following a written request by City, or its designated representative for Records disclosure, 6. Franchisee fails to meet the Diversion requirements of this Agreement or pursuant to applicable laws. I. Removal of Commercial Solid Waste and Divertible Materials Containers Customer Notification. In the event this Franchise is terminated or expires without a grant of a subsequent franchise allowing Franchisee to continue performing Commercial Franchise Services in City, then within ten (19) calendar days of such termination or expiration Franchisee shall- 1 . Remove all of Franchisee's Municipal Solid Waste and ❑ivertible Materials Containers from all Franchisee's Collection service locations and properly dispose of all Municipal Solid Waste in such containers and deliver all ❑ivertible Materials to Processing Facilities for Diversion within the time period specified by the City Council; and 2. Submit to the Public Works Director a list of the names and addresses of Generators in the City far which Franchisee provided Commercial Franchise Services as of the date of termination or expiration (i.e., Franchisee's City of Newport Beach customer list); or 3. Send written notification to each Solid Waste Generator, AB 341 Generator and AB 1826 Generator on Franchisee's customer list that Franchisee is no longer authorized to provide Commercial Franchise Services in the City. Such notification shall be in the form provided by the Public Works Director and shall be personally delivered or shall be sent by first class mail, postage prepaid, to the customers' billing addresses. Franchisee shall submit to the Public Works Director an affidavit, signed under penalty of perjury, stating that the required notification has been provided by Franchisee to all of Franchisee's City Customers. J. Continuing Obligations. Upon Agreement termination, suspension or expiration: 1. Franchisee shall have no right or authority to engage in Commercial Franchise Services in the City, subject to the provisions of Sections 49520-49524 of the Public Resources Code, or any successor statutes. 2. Franchisee shall remain liable to City for any and all Franchise Feesand Environmental Liability Fund Fees that would otherwise be payable by Franchisee, for any and all liquidated damages, late charges and/or interest assessed. 3. Franchisee shall have a continuing obligation to submit to City all reports and records required by this Agreement. Franchisee's obligation shall survive this Agreement shall continue for such period of time as required by this Agreement or applicable law. Non-exclusive Franchise Agreement Page 37 3-52 4. Franchisee shall allow the Commercial Solid Waste Generators, AB 341 Generators and AB 1826 Generators served by Franchisee to arrange for Commercial Franchise Services with another Franchise Holder or Person authorized to perform such services, without penalty or liability for breach of contract on the part of the generators, for such period of time as Franchisee is not authorized to perform such services because of termination or suspension. 5. Franchisee shall have a continuing obligation to provide the indemnifications required in this Agreement. Such indemnifications include, but are not limited to, the Hazardous Materials indemnification and AB 939, AB 341, and AB 1826 indemnifications as set forth in Agreement Section 10. SECTION 24. CITY'S REMEDIES A. The City incurred considerable time and expense procuring this Agreement to secure an improved level and quality of Recycling and compliance with State Diversion mandates. B. Liquidated Damages. The Parties agree the following liquidated damages schedule represents a reasonable estimate of the amount of damages, considering all the circumstances existing on the date of this Agreement, including the relationship of the sums to the range of harm to City that reasonably could be expected in anticipation that proof of actual damages would be costly or inconvenient: Applicable Failure(s)* Damages Section(s) 6(A), 7(A) Comply with City -mandated Diversion Two hundred fifty requirements within thirty (30) calendar dollars ($250) per days of notification by City business day until compliant 6(B), 7(B) Deliver Commercial Solid Waste as Two hundred fifty designated dollars ($250) per truck delivery 8(B) Provide requested records Two hundred fifty dollars ($250) per business day until completed 11(A) Provide only those Commercial Two hundred fifty Franchise Services for which Franchisee dollars ($250) has applied 11(c) Collect at unauthorized locations and/or Two hundred fifty during unauthorized hours five (5) or dollars ($250) more times in a twelve (12) month period Non-exclusive Franchise Agreement Page 38 3-53 11(D) Label Containers; paint vehicles and/or Fifty dollars ($50) Containers corporate color per business day until corrected 12(A), 12(C), Implement AB 341 Diversion Program One thousand Exhibit E, Parts A, including Tasks 1-16 in Exhibit E, Part A dollars ($1,000) per B and C within the timeframe in Franchise occurrence Section 12C. Comply with the requirements of Exhibit E, Parts B and C within ninety (90) days of the events described in Part B, or within ninety (90) days of a previously operating AB 341 Program malfunctioning as required by J Part C. 13(A), 13(C), Implement AB 1826 Food Scrap One thousand Exhibit E, Parts A, Diversion Program including Tasks 1-16 dollars ($1,000) B and C in Exhibit E, Part A, within the timeframe in Franchise Section 13C. Comply with the requirements of Exhibit E, Parts B and C within ninety (90) days of the events described in Part B or within ninety (90) days of a previously operating Food Scrap Diversion Program malfunctioning as required by Part C. 14(A), 14(C), Implement AB 1826 Green Waste and Five hundred dollars Exhibit E, Parts A, Wood Waste Diversion Program ($500) Band C including Tasks 1-16 in Exhibit E, Part A, within the timeframe in Franchise Section 14C. Comply with the requirements of Exhibit E, Parts B and C within ninety (90) days of the events described in Part B or within ninety (90) days of a previously operating Green Waste and Wood Waste Diversion Program malfunctioning as required by Part C. 15(B) Implement Construction and Demolition One thousand Diversion Program dollars ($1,000) 16(A), 16(B), 16(E) Submit complete and accurate monthly One hundred dollars reports ($100) per business day until corrected or completed Non-exclusive Franchise Agreement Page 39 3-54 16(C) Submit timely monthly reports One hundred dollars ($100) — if not submitted when due 17 Designate qualified Hauler Representative; Failure of Hauler Representative to timely respond to City 18(C) Secure or maintain vehicles or vehicle equipment 19 Remove, replace, or collect abandoned Container(s) Five hundred dollars ($500) — if not submitted wfin thirty (30) calendar days after due date Fifty dollars ($50) per business day until completed One hundred dollars ($100) per business day until completed Fifty dollars ($50) per business day until completed *Unless otherwise designated, reference to "failure(s)" refers to each occurrence of specified breach (such as for each Customer or each Customer record entry or complaint) and not for aggregate occurrences of those breaches (such as for all Customers on a given route or day). C. City's Remedies Cumulative. The rights and remedies of City set forth herein shall be in addition to any and all other rights and privileges City may have, and shall not be deemed to limit any such other rights or privileges of City under this Agreement or by virtue of any law. By placing its initials below, each party specifically confirms: (1) the accuracy of the statements made in Agreement Section 24; and (2) it has had ample opportunity to consult with legal counsel and obtain an explanation of liquidated damage provisions prior to signing this Agreement. FRANCHISEE CITY Initial Here: Initial Here: SECTION 25. CONFIDENTIAL INFORMATION. A. Confidential Information. In the performance of this Agreement or in contemplation thereof, the parties and their respective employees and agents may have access to private or confidential information owned or controlled by the other party and such information may contain proprietary details and disclosures. All information and Non-exclusive Franchise Agreement Page 40 3-55 data identified in writing as proprietary or confidential by either party ("Confidential Information") and so acquired by the other party or its employees or agents under this Agreement or in contemplation thereof shall be and shall remain the disclosing party's exclusive property. The recipient of Confidential Information shall use all reasonable efforts (which in any event shall not be less than the efforts the recipient takes to ensure the confidentiality of its own proprietary and other confidential information) to keep, and have its employees and agents keep, any and all Confidential Information confidential, and shall not copy, or publish or disclose it to others, nor authorize its employees, agents or anyone else to copy or disclose it to others, without the disclosing party's written approval; nor shall the recipient make use of the Confidential Information except for the purposes of executing its obligations hereunder, and (except as provided for herein) shall return the Confidential Information and data to the first party at its request. The City's duty to maintain confidentiality as described hereunder shall be subject to the laws of the State of California. B. Excluded Information. The foregoing conditions will not apply to information or data which is, or which becomes generally known to the public by publication or by any means other than a breach of duty on the part of the recipient hereunder, is information previously known to the recipient, is information independently developed by or for the recipient or is information generally released by the owning party without restriction. C. Public Records Request. Should City receive a public records request, or otherwise be directed by any governmental authority to disclose any or all Confidential Information in City's possession, custody or control, City shall promptly provide notice to Franchisee of such request to allow Franchisee an opportunity to prevent disclosure. ❑. Right to Injunctive Relief. Because of the unique nature of the Confidential Information, the parties agree that each party may suffer irreparable harm in the event that the other party fails to comply with any of its obligations under this Section, and that monetary damages may be inadequate to compensate either party for such breach. Accordingly, the parties agree that either party will, in addition to any other remedies available to it at law or in equity, be entitled to seek injunctive relief to enforce the terms of this Section. SECTION 26. ASSIGNMENT Franchisee shall not assign, sell, subcontract, transfer or otherwise delegate its authority to perform any portion of the Commercial Franchise Services or obligations under the Franchise without prior express consent of the City Council. This prohibition includes any transfer of ownership or control of Franchisee, or the conveyance of a majority of Franchisee's stock to a new controlling interest. City's consent shall not be unreasonably withheld. SECTION 27. MISCELLANEOUS PROVISIONS A. Notices. Except as otherwise provided in this Agreement, all notices required by this Agreement shall be given by personal service or by deposit in the United States mail, postage pre -paid and return receipt requested, addressed to the parties as follows: Non-exclusive Franchise Agreement Page 41 3-56 To: Public Works Director City of Newport Beach P.O. Box 1768 100 Civic Center Dr. Newport Beach, CA 92666 To Franchisee: Notice shall be deemed effective on the date personally served or, if mailed, three (3) calendar days after the date deposited in the mail. B. Integrated Agreement. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the City and Franchisee, and all preliminary negotiations and other agreements of any kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. C. Amendments. This Agreement supersedes all prior agreements and understandings between the parties and may not be modified or terminated orally, and no modification, termination or attempted waiver of any of the provisions hereof shall be binding unless in writing and signed by both parties. D. Recitals. The Parties acknowledge that the Recitals are true and correct and are hereby incorporated by reference into this Agreement. E. Applicable Law. The laws of the City, State of California, and applicable Federal law, shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. F. Authori . The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing. G. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. H. Waiver. A waiver by either party 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 difFerence character. I. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction that might otherwise apply. Non-exclusive Franchise Agreement Page 42 3-57 J. Equal Opportunity Employment. Franchisee represents that it is an equal opportunity employer and it shall not discriminate against any authorized subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age or any other impermissible basis under law. K. Compliance with Laws. Franchisee shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. Franchisee agrees to obtain a business license from the City in accordance with the Code. The parties hereto agree that the Franchise and this Agreement are the only authorizations to conduct Commercial Franchise Services in the City and that the issuance of a business license does not grant the Franchisee a right to conduct Commercial Franchise Services or other business in the City. L. Conflicts of Interest. Franchisee and its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "California Political Reform Act"), which (i) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (ii) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the California Political Reform Act, Franchisee shall conform to all requirements of the California Political Reform Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Franchisee shall indemnify and hold harmless City for any and all claims for damages resulting from Franchisee's violation of this subsection. M. Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. N. No Attorneys' Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees. 0. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. [SIGNATURES ON FOLLOWING PAGE] Non-exclusive Franchise Agreement Page 43 3-58 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: in Aaron C. Harp City Attorney ATTEST: ❑ ate: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: By: VVII O'Neill Mayor FRANCHISEE: D ate: wo Date: By: (END OF SIGNATURES) Attachments: Exhibit A — Faithful Performance Bond Exhibit B — Franchise Hauler Acknowledgement Exhibit C — Franchisee Application Template Exhibit D — Insurance Requirements Exhibit E — Required Tasks for Implementation of Diversion Programs Exhibit F -- Construction and Demolition Debris Diversion Program Non-exclusive Franchise Agreement Page 44 3-59 EXHIBIT A CITY OF NEWPORT BEACH BOND NO. FAITHFUL PERFORMANCE BOND The premium charges on this Bond is $ WHEREAS, the City of Newport Beach, State of California, has awarded to hereinafter designated as the "Principal," a Non-exclusive Franchise for Commercial Solid Waste and Divertible Materials Handling Services ("Franchise Agreement") in the City of Newport Beach, in strict conformity with the Franchise Agreement on file with the office of the City Cleric of the City of Newport Beach, which is incorporated herein by this reference. WHEREAS, Principal has executed or is about to execute the Franchise Agreement and the terms thereof require the furnishing of a Bond for the faithful performance of the Franchise Agreement. NOW, THEREFORE, we, the Principal, and , duly authorized to transact business under the laws of the State of California as Surety (hereinafter "Surety"), are held and firmly bound unto the City of Newport Beach, in the sum of Seven Thousand Five Hundred Dollars and 001100 ($7,500.00) lawful money of the United States of America, to be paid to the City of Newport Beach, its successors, and assigns; for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors, or assigns, jointly and severally, firmly by these present. THE CONDITION OF THIS OBLIGATION IS SUCH, that if the Principal, or the Principal's heirs, executors, administrators, successors, or assigns, fail to abide by, and well and truly keep and perform any or all the services, covenants, conditions, and agreements in the Franchise Agreement documents and any alteration thereof made as therein provided on its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to its true intent and meaning, or fails to indemnify, defend, and save harmless the City of Newport Beach, its officers, employees and agents, as therein stipulated, then, Surety will faithfully perform the same, in an amount not exceeding the sum specified in this Bond; otherwise this obligation shall become null and void. As a part of the obligation secured hereby, and in addition to the face amount specified in this Performance Bond, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by City, only in the event City is required to bring an action in law or equity against Surety to enforce the obligations of this Bond. Surety, for value received, stipulates and agrees that no change, extension of time, alterations or additions to the terms of the Franchise Agreement or to the services to be performed thereunder shall in any way affect its obligations on this Bond, and it does Faithful Performance Bond Page A-1 3-60 hereby waive notice of any such change, extension of time, alterations or additions of the Agreement or to the services or to the specifications. This Faithful Performance Bond shall be extended and maintained by the Principal in full force and effect for seven (7) years following the date Principal is granted the Franchise Agreement by City. In the event that the Principal executed this bond as an individual, it is agreed that the death of any such Principal shall not exonerate the Surety from its obligations under this Bond. IN WITNESS WHEREOF, this instrument has been duly executed by the Principal and Surety above named, on the day of . 20 Name of Contractor (Principal) Name of Surety Address of Surety Telephone APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: in Aaron C. Harp City Attorney Authorized Signature/Title Authorized Agent Signature Print Name and Title NOTARY ACKNOWLEDGMENTS OF CONTRACTOR AND SURETY MUST BE ATTACHED Faithful Performance Bond Page A-2 3-61 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of Califomia County of } ss. On 20 before me, Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of } ss. On 20 before me, Notary Public, personally appeared proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) Faithful Performance Bond Page A-3 3-62 EXHIBIT B FRANCHISE HAULER ACKNOWLEDGEMENT THIS FRANCHISE HAULER ACKNOWLEDGMENT is entered into as of this _ day of , 2022 (the "Acknowledgment"), by and between the City of Newport Beach, a charter city and municipal corporation (the "City"), and (the "Franchise Hauler"). WITNESSETH WHEREAS, the City and the Franchise Hauler have heretofore entered into an agreement entitled NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND FOR COMMERCIAL SOLID WASTE AND DIVERTIBLE MATERIALS HANDLING SERVICES (the "Franchise"); and WHEREAS, the Franchise provides for the collection and disposal of certain municipal commercial solid waste as described therein ("Franchise Waste") generated within the City; and WHEREAS, the County of Orange (the "County") owns, manages and operates a sanitary landfill disposal system for municipal solid waste generated within the County; and WHEREAS, the City and the County have heretofore entered into a Waste Disposal Agreement as of 2009, and subsequent Amendment to the Waste Disposal Agreement dated April 28, 2016 (collectively, the "Disposal Agreement"), determining that the execution of such Disposal Agreement will serve the public health, safety and welfare of the residents of the City and County, by maintaining public ownership and stewardship over the Orange County Landfill Disposal System (the "Disposal System"); and WHEREAS, under the Disposal Agreement, the County has agreed to provide long-term disposal of all municipal solid waste generated within the City and the City has agreed to exercise all legal, and contractual power which it possesses from time to time to deliver or cause the delivery of such waste to the Disposal System; and WHEREAS, the provisions of the Waste Disposal Agreement which guarantee capacity for the long term disposal of waste at specified rates generated in the City provide significant benefits to the Franchise Hauler; and WHEREAS, notwithstanding any Franchise provisions to the contrary, the Franchise Hauler explicitly acknowledges the aforementioned benefits to the City, the County and the Franchise Hauler in providing for the disposal of all Franchise Waste to the Disposal System; and WHEREAS, the City and the Franchise Hauler desire to enter into this Acknowledgment to assure that the City and the Franchise Hauler will be entitled to the benefits of the Waste Disposal Agreement and to assure conformity with the waste Franchise Hauler Acknowledgement Page B-1 3-63