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HomeMy WebLinkAbout04 - Non-exclusive Solid Waste Collection FranchiseCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 4 September 28, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: General Services Department Mark Harmon, Director, 949 - 644 -3055 mharmon(a)citv.newport- beach.ca.us SUBJECT: Award of Non - Exclusive Solid Waste Collection Franchise to United Pacific Waste, a California Corporation ISSUE: Consideration of the award of a Non - exclusive Solid Waste Franchise to United Pacific Waste of Pico Rivera, California. RECOMMENDATION: Adopt the attached Resolution of Intention (Resolution No. 2010 -_) to conduct a public hearing on October 25, 2010 to consider the award of a Non - exclusive Solid Waste Franchise to United Pacific Waste, a California corporation. Introduce the attached Ordinance No. 2010 -_ granting a Non - exclusive Solid Waste Franchise to United Pacific Waste, a California corporation for a first reading. It is recommended that Council adopt the Ordinance granting the Franchise at the conclusion of the October 25, 2010 public hearing. DISCUSSION: Background: In the City of Newport Beach, solid waste is collected, recycled, and disposed of by either City crews or commercial solid waste haulers. City crews collect approximately 75% of all residential solid waste while private haulers collect the remainder of the residential waste stream and all commercial solid waste, including construction and demolition (C &D) waste. Award of Non - Exclusive Solid Waste Collection Franchise to United Pacific Waste, a California Corporation September 28, 2010 Page 2 The City's integrated solid waste management program is structured to ensure the health and safety of all residents and business owners. In addition, AB939 requires cities in California to divert 50% of municipal solid waste from the landfill each year. Since this mandate was initiated in 2000, the City has met the waste reduction requirements of AB939. Currently, the City has a 60% State approved diversion level. If the City fails to achieve the 50% diversion rate, a fine of up to $10,000 can be imposed by the California Integrated Waste Management Board. The City utilizes a non - exclusive franchise system to manage commercial solid waste collection. This system helps the City in its efforts to meet AB939 requirements and also establishes a competitive commercial solid waste collection system for businesses in the City. Additionally, the franchise system stipulates a franchise fee in the amount of 16% of gross monthly paid receipts be paid to the City. These funds are used to fund environmental insurance premiums, maintenance of city infrastructure, and administrative costs tied to managing the franchise system. Article XIII of the City Charter (Granting of Franchises) and Chapter 12.63 of the Municipal Code (Solid Waste Management) establish requirements and procedures to grant a franchise to provide solid waste handling services within the City. There are currently 29 solid waste franchisees operating under separate agreements to collect and transport solid waste generated within the City limits. There is no limit on the number of franchises that Council may approve. This policy permits competitive, service- oriented refuse operations. Staff recently received a franchise application from United Pacific Waste, Inc. The application submitted by United Pacific Waste meets the minimum City qualifications per Section 12.63.050 (Application for a Franchise) of the Municipal Code. United Pacific Waste began business in 2002 and is located in Pico Rivera, CA. They currently operate over 50 collection vehicles, and are enrolled in the Department of Motor Vehicles' Employer Pull Notice program. They currently hold municipal solid waste franchises in the City of EI Monte and the unincorporated Rowland Heights area of Los Angeles County, and non - exclusive franchises in many other cities, including Pasadena and Irvine. Pending completion of the Public Hearing and Council approval on October 26, 2010, the franchise with United Pacific Waste will take effect November 25, 2010. The franchise will expire on March 1, 2017 at the end of the City's ten -year franchise term that began in 2007. Award of Non - Exclusive Solid Waste Collection Franchise to United Pacific Waste, a California Corporation September 28, 2010 Page 3 Environmental Review: The City Council of the City of Newport Beach finds that this Ordinance is categorically exempt under the California Code of Regulations Section 15301 and 15308 defined as "existing operations and facilities" and as "actions by regulatory agencies for protection of the environment' respectively. Use of the above exemption classifications are appropriate because this Ordinance does not change nor expand existing solid waste operations and facilities within the City. The Ordinance is also consistent with the goals of California State Assembly Bill 939, The California Solid Waste Management Act as well as the objectives of the City's Source Reduction and Recycling Element (SRRE). Public Notice: The Resolution of Intention will be published in the City's official newspaper within 15 days after its adoption and at least 10 days prior to the Public Hearing to award the Franchise. Funding Availability: Award of the Non - exclusive Franchise would have no financial effect to the City, as any franchise fees paid by this company would be offset by the loss of fees paid by another hauler. Prepared by: oy__� Mike Pisani Deputy General Services Director Attachments: General Services Director (1) Resolution No. 2010 - Resolution of Intent to Conduct a Public Hearing to Consider the Granting of a Non - Exclusive Solid Waste Franchise to United Pacific Waste, a California Corporation Award of Non - Exclusive Solid Waste Collection Franchise to United Pacific Waste, a California Corporation September 28, 2010 Page 4 (2) Ordinance No. 2010 - _Ordinance Granting a Non - Exclusive Solid Waste Franchise to United Pacific Waste, a California Corporation (3) Commercial Solid Waste Collection Nonexclusive Franchise Agreement Between the City of Newport Beach and United Pacific Waste, a California Corporation RESOLUTION NO. 2010- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DECLARING ITS INTENTION TO CONDUCT A PUBLIC HEARING TO CONSIDER THE GRANTING OF A NON - EXCLUSIVE SOLID WASTE FRANCHISE TO UNITED PACIFIC WASTE, A CALIFORNIA CORPORATION WHEREAS, the City Council finds and determines that the collection of solid waste generated within the City is a vital public service and that the storage, accumulation, collection and disposal of solid waste and recyclables is a matter of great public concern because improper control of such matters would subject 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; and, WHEREAS, non - exclusive franchises for the use of public streets to provide commercial solid waste hauling services will promote the public health, safety and welfare by promoting permanence and stability among those businesses wishing to provide such service and accountability to the City for compliance with current and future state mandates; and, WHEREAS, pursuant to Article XIII of the City Charter and pursuant to Sections 49500 through 49523 of the Public Resources Code, the City is authorized to enter into non - exclusive franchise agreements for commercial solid waste collection services with private solid waste haulers; and, WHEREAS, United Pacific Waste, a California corporation, has submitted an application requesting a Non - exclusive Solid Waste Franchise that satisfies the City's application requirements. 1 NOW, THEREFORE, be it resolved by the City Council of the City of Newport Beach that: 1. A public hearing shall be conducted on October 26, 2010 at 7:00 p.m., or as soon thereafter as practical in the City Council Chambers, 3300 Newport Boulevard, Newport Beach, California, to consider the granting of a franchise to the applicant listed under Item 2 below pursuant to the following terms and conditions: a. Franchise effective date: November 25, 2010. b. Franchise fee: 16% of gross monthly receipts. C. A portion of the Franchise fee, 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. d. Term of Franchise: November 25, 2010 to March 1, 2017 with renewal rights upon mutual agreement of the franchisee and City. e. The City shall not set the Franchisee's bin rates. f. Franchisee shall indemnify and hold City harmless from penalties and damages for failure to meet current and future state recycling requirements with respect to the portion of the commercial solid waste stream collected by Franchisee. g. Designated disposal facility: City maintains the right to designate disposal facilities to be used by Franchisee. h. Franchisee shall be responsible for all billing and collection for its accounts. i. Franchise shall not be revoked unless there is default under the agreement, ordinance or applicable law. j. Prior to obtaining a Solid Waste Franchise, the applicants shall satisfy the City's minimum qualifications regarding liability insurance, equipment, knowledge of solid waste regulations, load check programs, etc. 2 k. Franchisee shall meet City's requirements to implement recycling and source reduction public education activities. I. City has authority to annually audit Franchisee's financial records relating to the payment of fees required under the franchise. M. Franchisee shall comply with all State, Federal laws and regulations, terms and conditions of the franchise agreement, City Charter and Municipal Code. 2. The City proposes to offer a non - exclusive solid waste collection franchise to the following applicant listed below that are presently licensed and permitted to conduct business in the City. Persons who have an interest in or objection to the proposed franchise may appear before the City Council and be heard on the date and time listed above. a. United Pacific Waste, a California Corporation 3. This Resolution of Intention shall be published in the City's official newspaper within 15 days of its adoption and at least 10 days prior to October 26, 2010. ATTEST: CITY CLERK ADOPTED this 281h day of September, 2010. t' MAYOR ORDINANCE NO. 2010- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH GRANTING A NON - EXCLUSIVE SOLID WASTE FRANCHISE TO UNITED PACIFIC WASTE, A CALIFORNIA CORPORATION TO PROVIDE SOLID WASTE COLLECTION SERVICES UPON THE CITY STREETS AND WITHIN THE CITY OF NEWPORT BEACH The City Council of the City of Newport Beach does ordain as follows: SECTION 1: Findings A. Article XII I of the City Charter and Sections 49500 through 49523 of the Public Resources Code authorize the City to enter into non - exclusive franchise agreements for commercial solid waste handling services with private solid waste enterprises. B. The City Charter and Chapter 12.63 establish requirements and procedures to grant a franchise to provide solid waste handling services within the City of Newport Beach. C. In compliance with the City Charter a duly noticed public hearing was held on October 26, 2010, to consider the granting of a franchise to United Pacific Waste, Inc. D. Having considered all oral and documentary evidence presented at the public hearing, the City Council has determined that the granting of a non - exclusive franchise is in the public interest. SECTION 2: Definitions All words, terms, phrases in this Ordinance shall have the meanings set forth in Section 12.63.020 of Chapter 12.63 of the Newport Beach Municipal Code. SECTION 3: Franchise Agreements A. Grant of Franchises There is hereby granted to the enterprise listed below (hereinafter, "Franchisee ") a non - exclusive franchise to operate, maintain, and provide solid waste 1 handling services along, across and over the public streets, alleys, public ways and public places dedicated for public use in the City: (a) United Pacific Waste, a California corporation B. Non - exclusive Grant The right to use City streets, alleys, public ways and places for the purposes set forth in this Ordinance, shall not be exclusive and the City reserves the right to grant a similar use of streets, alleys, public ways and places to any person at any time during the term of this franchise. C. Term of Franchises The term of the franchise per Section 2 of the Franchise Agreement ( "Agreement ") attached hereto as Exhibit A, Commercial Solid Waste Collection , Franchise Agreement between the City of Newport Beach and United Pacific Waste, Inc. is hereby adopted, approved and incorporated into this Ordinance by reference, shall commence at 12:01 a.m., on November 25, 2010 and expire on March 1, 2017. The franchise shall take effect on the date specified above provided that.the grantee has filed written notice of acceptance in accordance with the requirement of Section 4 of this Ordinance. D. Franchise Fees (1) During the term of the Agreement, Franchisee shall pay to City franchise fees for the privilege of providing commercial solid waste handling services in the City of Newport Beach and use of public streets, right of ways, and places for such purposes. Fees shall be in the following amounts: Franchisee shall pay to the City 10.5% (ten and one -half percent) of the Franchisee's gross receipts. 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 solid waste handling services provided by the Franchisee within the City. One -half of one percent (0.5 %) of the franchise fee shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling 2 Element (SRRE), and shall be separately accounted for, and used only for the costs stated in Public Revenue Code Section 41901 or any successor provisions. (2) Franchisee shall pay to the City Environmental Liability Fund, on a quarterly basis, 5.5% of gross receipts for all commercial solid waste handling services provided by the Franchisee in the City. Payment shall be made concurrently with the payment of the franchise fee and the filing of reports specified in Section 4 and Section 6 of the Agreements. E. Inclusion of Franchise Documents Franchisee shall comply with and shall be bound by all of the terms, provisions and conditions contained in the City Charter, this Ordinance, Chapter 12.63 of the Newport Beach Municipal Code and the Franchise Agreement. SECTION 4: Effective Date This Ordinance shall become effective 30 days from and after the date of its adoption; provided, however, franchises granted by this Ordinance shall not become effective unless and until the grantee files written acceptance of the 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 Newport Beach Municipal Code and the Franchise Agreement. 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 Franchise Agreement, Article XIII of the City Charter, and Chapter 12.63 of the Newport Beach Municipal Code. The grantee shall file written acceptance of the franchise no later than ten (10) days after the adoption of this Ordinance. SECTION 5: CEQA Exemption The City Council of the City of Newport Beach finds that this Ordinance is categorically exempt under the California Code of Regulations Section 15301 and 15308 defined as "existing operations and facilities" and as "actions by regulatory agencies for protection of the environment" Use of the above exemption 3 classifications are appropriate because this Ordinance does not change nor expand existing solid waste operations and facilities within the City. The Ordinance is also consistent with the goals of California State Assembly Bill 939, The California Solid Waste Management Act as well as the objectives of the City's Source Reduction and Recycling Element (SRRE). SECTION 6: Severability 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, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared unconstitutional. SECTION 7: Adoption of Ordinance The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within fifteen (15) days after its adoption. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach, held on the 28th day of September 2010, and adopted on the 26th day of October 2010 by the following vote to wit: 0 AYES, COUNCIL MEMBERS NOES, COUNCIL MEMBERS ABSTAINED, COUNCIL MEMBERS ABSENT, COUNCIL MEMBERS MAYOR ATTEST: CITY CLERK Approved to as Form: Office of the City Attorney: 5"'L-C-71L'k, Leonie Mulvihill Assistant City Attorney fd- COMMERCIAL SOLID WASTE COLLECTION NONEXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND UNITED PACIFIC WASTE, A CALIFORNIA CORPORATION This Nonexclusive Franchise Agreement for Commercial Solid Waste Handling Services ( "Agreement ") is entered into this 25th day of NOVEMBER, 2010 ( "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 California ( "City "), and UNITED PACIFIC WASTE, a California corporation ( "Franchisee "), whose address is 4320 San Gabriel River Parkway, Pico Rivera, California 90660 and is made with reference to the following: RECITALS This Agreement is entered into on the basis of the following facts: A. Franchisee has provided or is capable of providing commercial solid waste collection services in the City. B. Pursuant to Article XIII of the City Charter, Chapter 12.63 of the City of Newport Beach Municipal Code ( "Code "), and Sections 49300 and 49500 -49523 of the Public Resources Code, the City is authorized to enter into nonexclusive franchise agreements for commercial solid waste handling services. C. Pursuant to this Agreement, City desires to authorize Franchisee to provide nonexclusive commercial solid waste handling services within the City. Franchisee shall furnish all personnel, equipment, and supplies necessary to collect, transport, or otherwise remove and dispose of solid waste and recyclable materials from commercial, institutional, or industrial premises within the City. D. The City Council has determined that the grant of a nonexclusive franchise is in the public interest. NOW, THEREFORE, CITY AND FRANCHISEE DO HEREBY AGREE AS FOLLOWS: SECTION 1. GRANT OF FRANCHISE A. By Ordinance No. 2010 -_, City has granted to Franchisee a nonexclusive franchise authorizing Franchisee to provide commercial solid waste handling services for solid waste kept, accumulated, or generated in the City of Newport Beach and to use the public streets and public right -of -ways for such purpose ( "Franchise "). Franchisee acknowledges that the Franchise is not exclusive and that the Franchise is subject to the provisions of Article XIII of the City Charter, Ordinance No.2010 -, Chapter 12.63 of the Code, 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 conduct of commercial solid waste handling services in the City arising under and pursuant to any prior franchise issued to Franchisee shall be deemed to be terminated and of no further force or effect. SECTION 2. TERM OF FRANCHISE The term of this Agreement shall commence on the Effective Date, and shall terminate on the 1st Day of March, 2017 ( "Termination Date "), unless terminated earlier as set forth herein ( "Term "). SECTION 3. DEFINITIONS Unless otherwise defined herein, or if the use or context clearly requires a different definition, all words, terms and phrases in this Agreement and the derivations thereof shall have the meanings set forth in Section 12.63.020 of the Code. SECTION 4. FRANCHISE FEES A. During the Term of the Franchise, Franchisee shall pay to City franchise fees for the privilege of providing commercial solid waste handling services in the City of Newport Beach and for the use of public streets, right -of -ways and places for such purposes. The franchise fee that Franchisee shall pay to the City shall be ten and a half percent (10.5 %) of the gross receipts for all commercial solid waste handling services provided by the Franchisee in the City of Newport Beach ( "Franchise Fees "). One half percent (.5 %) of the Franchise Fee shall be attributable to the maintenance and implementation of the City's Source Reduction and Recycling Element ( "SRRE "), and shall be separately accounted for, and used only for the costs stated in Public Resources Code section 41901 or any successor provision. B Franchise Fees shall be paid quarterly on forms prescribed by the Administrative Services Director. C. Franchisee shall pay all required Franchise Fees to: City of Newport Beach Attn: Administrative Services Director P.O. Box 1768 3300 Newport Boulevard Newport Beach, CA 92658 D. Franchise Fees shall be due and payable on the thirtieth (30th) day of the month following the end of each quarter. Since the Effective Date for this Agreement is starting in the middle of a quarter, the first payment of the Franchise Fees due and payable to the City from the Effective Date to the end of the first quarter (i.e. December 31, 2010) will be due and payable on the 30th day of January 2011. Nonexclusive Franchise Agreement Page 2 E. The parties hereto agree that Franchisee's failure to make Franchise Fee and Environmental Liability Fund Fee, as set forth in Section 8 (hereinafter the Franchise Fee and Environmental Liability Fund Fee shall collectively be referred to as "Fee(s) "), payments within the time allowed will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. If Fees are not paid by Franchisee when due then in addition to the Fees, Franchisee shall pay a late charge in an amount equal to ten percent (10 %) of the amount of the Fee that was not timely paid by Franchisee. If Franchisee fails to pay delinquent Fees within thirty (30) days of the date due, Franchisee shall pay a second (2 "d) late charge in an amount equal ten percent (10 %) on both the amount of the Fee outstanding and the first late charge. The second (2 "d) late charge shall be in addition to the first (15) late charge. Execution of this Agreement shall constitute agreement by the parties that the late charges set forth in this subsection is the minimum value of the costs and actual damages caused by the failure of the Franchisee to pay the Fees within the allotted time. Such sum is liquidated damages and shall not be construed as a penalty. , In addition to the late charges imposed on Franchisee for failing to pay Fees in accordance with this Agreement, Franchisee shall pay interest on the amount of Fees and late charges due and owing at the rate of one and one -half percent (1' /z %) per month for each month or portion of a month that the Fees and late charges remain unpaid. F. 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 Administrative Services Director on a form provided by the Director. If proof of overpayment is satisfactory to the Director, the 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 Administrative Services Director in writing. G. Each Franchise Fee payment shall be accompanied by a written statement described in Section 12.63.090 of the Code on a form provided by the Administrative Services 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. H. 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. CASH DEPOSIT Nonexclusive Franchise Agreement Page 3 Franchisee shall, prior to the placement of any commercial solid waste container on public property, provide City with a cash deposit in the sum of Five Thousand Dollars and no /100 ($5,000.00) to ensure compliance with the duties and obligations imposed by the provisions of the Code, regulations adopted by the City Manager or his designee and this Agreement. SECTION 6. DISPOSAL OF SOLID WASTE A. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City and /or Franchisee. On a quarterly basis Franchisee shall divert solid waste collected from landfills as follows: Year 1: fifty percent (50 %); Year 2: fifty -one percent (51 %); Year 3: fifty -two percent (52 %); Year 4: fifty -three percent (53 %); Year 5: fifty -four percent (54 %); Years 6 -10: fifty -five percent (55 %). In no event shall Franchisee deposit more solid waste at any landfill during any calendar quarter than the required diversion rate mandated by the City. In the event new or additional diversion requirements are imposed by law, ordinance or regulation on City and /or Franchisee, the City shall have the right to require Franchisee to divert additional solid waste from landfills by providing Franchisee with ten (10) days written notice of the new diversion requirements. Upon request of the General Services Director, Franchisee shall provide all documents and information requested by the General Services Director to prove that Franchisee has complied with this subsection, any applicable law, ordinance, regulation, or condition related to recycling and diversion of solid waste. B. Franchisee shall dispose of solid waste collected or transported by Franchisee only by taking such solid waste 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 solid 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 center, or other solid waste disposal facility. C. All solid waste, in addition to recyclables, collected by Franchisee shall become the property of Franchisee upon placement by the customer for collection. If Franchisee violates the terms in Section 6(A) and Section 6(B) above, Franchisee agrees that the City has the future right to direct that solid waste be delivered to a permitted disposal facility designated by City. This exercise of "flow control' by the City shall be made upon at least 30 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 requirements and delivery/disposal of materials in accordance to the designated certified /licensed facility 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 of Franchisees vehicles or disposal bins /containers, and other equipment. Nonexclusive Franchise Agreement Page 4 E. 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, shall be maintained for the length of the term of the Franchise, and shall be made available to the City upon request. SECTION 7. REPORTS A. Franchisee shall submit to City monthly reports stating the total amount (in tons) of solid waste which Franchisee collected in the City of Newport Beach during the reportable month; the total weight (in tons) of solid waste disposed of by Franchisee at landfills and transfer stations which Franchisee collected in the City of Newport Beach during the reportable month; the total weight and the weight by material category (in tons) of solid waste disposed of by Franchisee at recycling and materials recovery facilities during the reportable month which Franchisee collected in the City of Newport Beach; the name and location of all solid waste and recycling facilities where City of Newport Beach materials were delivered; such other tonnage or other information as requested by the General Services Director including weigh tickets, recycling records; and any complaints received by the Franchisee. Such monthly reports shall be prepared on such form as required by the General Services Director. Each monthly report shall be submitted on or before the 15th day of the month following the end of the month (i.e. report due April 15 for first month after the Effective Date) and submitted to: General Services Director City of Newport Beach P.O. Box 1768 3300 Newport Blvd. Newport Beach, CA 92658 -8915 B. If the report required under Subsection A is not filed by the due date specified above, the report shall be deemed delinquent. If the report remains delinquent for more than fifteen (15) days, Franchisee shall pay to City a delinquent report charge in the amount of One Hundred Dollars and no /100 ($100.00). If the report remains delinquent for more than forty -five (45) days, Franchisee shall pay to City a delinquent report charge in the amount of Five Hundred Dollars and no /100 ($500.00). Such delinquent report charges shall be in addition to any Franchise Fees or other charges payable by Franchisee under this Agreement. C. Franchisee shall comply with all recycling and diversion requirements imposed by law, ordinance, or regulation on the City. Monthly reports stating the total amount (in tons) of solid waste which Franchisee landfilled, recycled and collected should accurately reflect the diversion rate required by the City (Year 1- 50 %, Year 2- 51 %, Year 3- 52 %, Year 4- 53 %, Year 5- 54 %, Years 6 -10- 55 %). At the end of each quarter, monthly reports will be evaluated for compliance with City diversion requirements. Failure to comply with the recycling and diversion requirements shall be a material breach of this Agreement. Nonexclusive Franchise Agreement Page 5 SECTION 8. ENVIRONMENTAL LIABILITY FUND FEE A. City and Franchisee acknowledge the potential liability which can result from commercial solid waste handling services under Federal and State environmental laws. City intends to take reasonable actions to obtain protection and indemnification against future environmental liability for solid waste generated within the City of Newport Beach and the activities of Franchisee under this Agreement for handling such solid waste. To provide protection and indemnification to City for Franchisee's solid waste handling activities in the City of Newport Beach, Franchisee agrees to collect from its customers a fee for payment into an Environmental Liability Fund which shall be a separate Fund established and maintained by City. The Fund shall be used to purchase insurance which will insure the City against environmental liability which may be imposed upon City as a result of Franchisee's activities under this Franchise and /or shall be used to pay environmental liability costs and expenses arising from or related in any way to commercial solid waste handling services. The Fund shall not be commingled with or included in the City's General Fund. B. The fee that Franchisee shall pay to the City Environmental Liability Fund shall be five and a half percent (5.5 %) of the gross receipts for all commercial solid waste handling services provided by the Franchisee in the City of Newport Beach ( "Environmental Liability Fund Fee(s) "). Payment of the Environmental Liability Fund Fee shall be made concurrently with the payment of the Franchise Fees specified in Section 4 of this Agreement. Franchisee agrees to pay late charges and interest as provided in Section 4(E) of this Agreement if Franchisee fails to pay the Environmental Liability Fund Fee within the time frames set forth herein. C. Compliance with this obligation shall not limit Franchisee's indemnification as set forth in Section 11; however, the indemnification provisions of 11(C) shall be secondary to the Fund established by this Section or any insurance purchased with the funds provided. SECTION 9. FRANCHISEE'S RECORDS A. Franchisee shall keep and maintain books of account, income statements, tonnage reports and supporting documents and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement during the Term of this Agreement and for a minimum period of three (3) years, or for any longer period required by law, after the Termination Date. Such records shall be kept at Franchisee's place of business and shall be clearly identifiable B. Franchisee shall allow a representative of City to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents, and all other documents that relate in any way to business transactions conducted by Franchisee in connection with the commercial solid waste handling services of Franchisee under this Agreement at Franchisee's place of business during normal business hours within three (3) working days of the City Manager, or his Nonexclusive Franchise Agreement Page 6 designees request or demand to inspect and /or audit these records. The purpose of such inspection and /or audit shall be for verification of the Fees paid by Franchisee under this Agreement, and the accuracy thereof; and for verification of the amounts of solid waste reported by Franchisee pursuant to this Agreement. Franchisee's books of account, income statements, tonnage reports and other documents accessed by City shall be kept confidential unless these documents are deemed necessary by City to enforce the terms of this Agreement or are required to be produced pursuant to any applicable law. C. The parties agree that Franchisee's failure to provide its records in accordance with City's request to examine, audit and make transcripts or copies of the books of account, income statements, tonnage reports and supporting documents in accordance with Subsection B above, shall be considered a material breach of this Agreement and will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. The parties agree that if Franchisee fails to provide its records in accordance with Subsection B above, the City may, in its discretion terminate this Agreement and /or charge a late charge in the amount of Two Hundred Fifty and No /100 Dollars ($250.00) for each working day that Franchisee does not provide said records. Execution of this Agreement shall constitute agreement by the parties that the late charge set forth in this subsection is the minimum value of the costs and actual damages caused by the failure of the Franchisee to provide records in accordance with Subsection B above. Such sum is liquidated damages and shall not be construed as a penalty. D. Franchisee shall reimburse City for 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; or 2. There is a one thousand dollars ($1,000.00) or greater discrepancy in the amount of Fees due to the City. Such reimbursement shall be paid by Franchisee within thirty (30) days of the date City notifies Franchisee in writing that the Franchisee is liable to reimburse the City in conformance with this subsection and the amount of City's audit costs. E. If Franchisee refuses to provide City's auditor with its records as required by Subsection B above or disagrees with City's audit findings, then Franchisee may, within ten (10) days after written request by City's designated representative for records disclosure, or within ten (10) days after service of the audit finding, appeal the imposition of late charge or the audit findings by filing a written appeal with the City Council specifying the basis of Franchisee's failure to provide records, or the reason for its disagreement with City's audit findings. If Franchisee fails to timely request such an appeal to the City Council, then the late charges and /or discrepancy determinations shall be final and conclusive and the amounts shall become immediately due and payable and /or the violation shall be deemed established. Nonexclusive Franchise Agreement Page 7 SECTION 10. INSURANCE REQUIREMENTS Without limiting Franchisee's indemnification of City, and prior to commencement of Work, Franchisee shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. A. Coverage and Limit Requirements 1. Workers' Compensation. Franchisee shall maintain Workers' Compensation Insurance providing statutory benefits and employer's liability insurance with limits of at least one million dollars ($1,000,000) each type for Franchisee's employees in accordance with the laws of the State of California, Section 3700 of the Labor Code. In addition, Franchisee shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California, Section 3700 for all of the subcontractor's employees. The insurer issuing the Workers' Compensation insurance shall amend its policy by endorsement to waive all rights of subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers. Franchisee shall submit to City, along with the required certificate of insurance, a copy of such waiver of subrogation endorsement. 2. General Liability. Franchisee shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) General Aggregate and two million dollars ($2,000,000) Products and Completed Operations Aggregate for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability. Coverage shall be at least as broad as that provided by Insurance Services Office form CG 00 01. None of the policies required herein shall be in compliance with these requirements if they include any limiting endorsement that has not been first submitted to City and approved in writing. 3. Automobile Liability. Franchisee shall maintain automobile insurance covering bodily injury and property damage for all activities of the Franchisee arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each accident. B. Other Insurance Provisions or Requirements Nonexclusive Franchise Agreement Page 8 1. Evidence of Insurance. Franchisee shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and an additional insured endorsement for general liability. Insurance certificates and endorsements must be approved by City's Risk Manager prior to commencement of performance or issuance of any permit. Current evidence of insurance shall be kept on file with City at all times during the term of this Agreement. All of the executed documents referenced in this Agreement must be returned within ten (10) working days after the date on the "Notification of Award," so that the City may review and approve all insurance and bond documentation. City reserves the right to require complete, certified copies of all required insurance policies, at any time. 2. General liability insurance provisions. Primary and excess or umbrella liability policies are to contain, or be endorsed to contain, the following provisions: a. City, its elected or appointed officers, agents, officials, employees, and volunteers are to be covered as additional insureds as respects: liability arising out of activities performed by or on behalf of Franchisee, including the insured's general supervision of Franchisee; products and completed operations of Franchisee; premises owned, occupied or used by Franchisee. The coverage shall contain no special limitations on the scope of protection afforded to City, its elected or appointed officers, officials, employees, agents or volunteers. Franchisee shall submit to City a copy of the additional insured endorsement along with the required certificates of insurance. b. Franchisee's insurance coverage shall be primary insurance and/or primary source of recovery as respects City, its elected or appointed officers, agents, officials, employees and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Franchisee's operations or services provided to the City. Any insurance or self - insurance maintained by City, its officers, officials, employees and volunteers shall be excess of the Franchisee's insurance and shall not contribute with it. C. Franchisee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 3. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Nonexclusive Franchise Agreement Page 9 Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 4. Notice of Cancellation. Franchisee agrees to oblige its insurance broker and insurers to provide to City with 30 days notice of cancellation (except for nonpayment for which 10 days notice is required) or nonrenewal of coverage for each required coverage except for builder's risk insurance. The builder's risk policy will contain or be endorsed to contain a provision providing for 30 days written notice to City of cancellation or nonrenewal, except for nonpayment for which 10 days notice is required.. 5. Self- Insured Retentions. Franchisee agrees not to self- insure or to use any self- insured retentions on any portion of the insurance required herein and further agrees that it will not allow any indemnifying party to self- insure its obligations to City. If Franchisee's existing coverage includes a self- insured retention, the self- insured retention must be declared to City. City may review options with the Franchisee, which may include reduction or elimination of the self- insured retention, substitution of other coverage, or other solutions. Franchisee agrees to be responsible for payment of any deductibles on their policies. 6. Timely Notice of Claims. Franchisee shall give City prompt and timely notice of any claim made or suit instituted arising out of or resulting from Franchisee's performance under this agreement. 7. Waiver. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers, or shall specifically allow Franchisee or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Franchisee hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors. 8. Enforcement of Contract Provisions. Franchisee acknowledges and agrees that any actual or alleged failure on the part of the City to inform Franchisee of non - compliance with any requirement imposes no additional obligations on the City nor does it waive any rights hereunder. 9. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a Nonexclusive Franchise Agreement Page 10 limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. 10. City's Remedies. City shall have the right to order the Franchisee to stop Work under this Agreement and /or withhold any payment(s) that become due to Franchisee hereunder until Franchisee demonstrates compliance with the requirements of this article. In the alternative, City may purchase the required coverage and charge Franchisee the cost of the premiums or deduct the cost from Franchisee's payments. 11. Coverage not Limited. All insurance coverage and limits provided by Franchisee and available or applicable to this agreement are intended to apply to the full extent of the policies. Nothing contained in this agreement or any other agreement relating to the city or its operations limits the application of such insurance coverage. 12. Coverage Renewal. Franchisee will renew the coverage required here annually as long as Franchisee continues to provide any Services under this or any other contract or agreement with the City. Franchisee shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. A coverage binder or letter from Franchisee's insurance agent to this effect is acceptable. A certificate of insurance and /or additional insured endorsement as required in these specifications applicable to the renewing or new coverage must be provided to City within five days of the expiration of the coverages. SECTION 11. RESPONSIBILITY FOR DAMAGES AND INJURY /INDEMNIFICATION A. Franchisee Responsibility. Franchisee shall be responsible for any damages caused as a result of Franchisees acts or omissions including, but not limited to injuries to or death of any person or damage to public and /or private property and damages public improvements as a result of Franchisees placement and retrieval of the commercial solid waste containers. 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 ") harmless for, from and against any costs, Nonexclusive Franchise Agreement Page 11 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 or omission of Franchisee or its respective officers, directors, shareholder members, partners, employees, agents, Franchisees, 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 Services performed under the Franchise and /or this Agreement; (iv) any violation or alleged violation of any law, ordinance or statute now or hereafter enacted arising out of Services performed pursuant to the Franchise and /or this Agreement; (v) the negligence or willful misconduct of Franchisee or any of Franchisee representatives in the performance of the Services under the Franchise and /or this Agreement; and (vi) any breach of the Franchise and /or this Agreement. 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 attorney's 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, 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 concerning 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 9607(e) and any amendments thereto; California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify City from liability. As used herein, the term "Environmental Laws" shall mean "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. §§ 9601 et seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code). Nonexclusive Franchise Agreement Page 12 As used herein, the term "Hazardous Substance" shall mean "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 affect 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, municipal solid waste, steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources." D. AB939 Indemnification. Franchisee agrees to meet all requirements of City's Source Reduction and Recycling Element as to the portion of the solid waste stream handled by Franchisee. Franchisee agrees to protect, defend, indemnify, and hold City harmless against all fines or penalties imposed by the California Integrated Waste Management Board, or other entity, arising from the failure of Franchisee to meet the Integrated Waste Management Act diversion requirements with respect to the portion of the commercial waste stream collected by Franchisee. E. 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. SECTION 12. COMMERCIAL SOLID WASTE COLLECTION SERVICES A. Frequency of Collection. Franchisee shall collect all solid waste, including recyclable materials, as authorized in this Agreement, on a schedule to be agreed upon between the Franchisee and its customers. The schedule shall provide for collection service at least once per week; provided, however, that such schedule shall not permit the accumulation of solid waste in quantities that are unreasonable or detrimental to the public health or safety. Requests for collection from premises with overflowing bins or containers, or from premises where there have been missed pickups, shall be serviced within twenty four (24) hours of any such request by the customer or City. If requested by the City at any time, Franchisee's collection schedule shall be submitted to the City for its approval. B. Hours and Days of Collections. No collection of solid waste shall occur in any area of the City after 6:30 p.m. and prior to 5:00 a.m. No collection of solid waste from commercial premises within five hundred (500) feet of occupied residential premises, motels or hotels shall be made by Franchisee, 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. Collection on Sundays shall be limited to the disposal of commercial waste from commercial premises which require collection every day due to public health and safety concerns. Nonexclusive Franchise Agreement Page 13 SECTION 13. VEHICLES AND EQUIPMENT A. Any and all containers provided to customers of Franchisee for storage, collection or transportation of commercial solid wastes shall meet the requirements designated by the General Services Director as well as State of California minimum standards for solid waste handling established under Public Resources Code Section 43020 and applicable health requirements. B. All containers and all vehicles used by Franchisee in the performance of commercial solid waste handling services shall be marked with Franchisee's name and telephone number in letters which are not less than four inches (4 ") high or which are easily read by the general public. C. Equipment. 1. Franchisee shall, at all times, provide such number of vehicles and such equipment as will be adequate for the collection, transportation and disposal 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 the required periodic "BIT" inspection and Franchisee shall provide evidence of such to the General Services Department as requested. 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 repair, and shall be uniformly painted. All commercial solid waste containers used in the performance of this Agreement shall be kept clean and in good repair and shall be uniformly painted to the satisfaction of the General Services Director. All vehicles and equipment used by Franchisee in the performance of this Agreement may be subject to inspection by the City upon twenty -four (24) hours notice by the General Services 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. 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 solid waste shall be transported by means of vehicles which are covered in such a manner as to securely contain all solid waste and to prevent such solid waste from projecting, blowing, falling or leaking out of the vehicles. Any solid waste 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. Nonexclusive Franchise Agreement Page 14 3. Franchisee shall not store any vehicle or equipment on any public street, public right -of -way or other public property in the City of Newport Beach without obtaining a Temporary Street Closure Permit from the Public Works Department and prior written consent of the General Services Director. 4. Should the General Services 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 General Services Director. 5. Placement of containers and equipment shall be in accordance with the standards set by the Director of Public Works and in accordance with the standards set forth in Exhibit A which is incorporated herein by this reference. Any deviation from the standards set by the Director of Public Works or the standards set forth in Exhibit A shall require written approval from the Public Works Director. SECTION 14. ABANDONED CONTAINERS A. If Franchisee abandons any commercial solid waste container within the City of Newport Beach, the City may remove the container and /or dispose of the contents of the container. B. If City is required to remove a roll -off or compactor container abandoned by Franchisee and /or disposes of the contents of any container abandoned by Franchisee, City may charge Franchisee for City's costs incurred in such removal /disposal and for City's costs of storage of the container. Franchisees who are engaged in providing roll -off containers shall maintain a Five Thousand Dollars and No/ 100 ($5,000.00) cash deposit with City Revenue Division to reimburse City for such costs within ten (10) days of the date of City's invoice for such costs. C. For the purposes of this Section, "abandoned" includes: 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; 2. Franchisee's failure to remove the container within ten (10) working days after the expiration 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 solid waste for which the container was used pursuant to this Agreement. 3. Franchisee's failure to collect the container and dispose of the contents of the container within five (5) calendar days after City's Director of General Services issues written notice to Franchisee to dispose of the contents. SECTION 15. COMPLIANCE WITH LAW Nonexclusive Franchise Agreement Page 15 A. Franchisee shall perform all commercial solid waste handling services in accordance with applicable federal, state, and local law, including Chapter 12.63 of the Code, Article XIII of the City Charter, Ordinance No. 2007 -07 and in accordance with 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 solid waste handling obligations or requirements for solid waste management. Franchisee agrees to comply with any such amendment of the City's ordinances. SECTION 16. 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 Franchise Fees and Environmental Liability Fund Fees shall be in addition to any permit or license fees or business tax prescribed by the City for the same period. Franchisee shall obtain and maintain for the Term of this Agreement an account with the Orange County landfills. If Franchisee disposes of solid waste at an Orange County landfill, the Franchisee shall only dispose of Newport Beach solid waste at Orange County landfills utilizing their account (no "cash only" disposal). SECTION 17. PUBLIC EDUCATION ACTIVITIES A. City and Franchisee shall cooperate in co- sponsoring not more than one promotional event per year, as mutually agreed upon in advance by the parties, which is related to the implementation of commercial solid waste handling services and recycling services. B. Each year during the term of this Agreement, on an annual basis, Franchise shall transmit promotional brochures or fliers to its customers and to such prospective customers as it may select, informing them of the commercial solid waste handling services and recycling services which are provided by the Franchisee as well as hazardous waste disposal requirements. C. All promotional brochures, fliers or other information distributed by Franchisee hereunder shall be printed on recycled paper. All such informational materials shall be approved in advance by the City's General Services Director. SECTION 18. TERMINATION AND SUSPENSION A. The franchise granted to Franchisee may be terminated by the City Council pursuant to Section 12.63.140 of the Code. Nonexclusive Franchise Agreement Page 16 B. In the event the Franchise is terminated pursuant to Subsection A above or the term of this Agreement expires: 1. Franchisee shall have no right or authority to engage in commercial solid waste handling operations in the City of Newport Beach, subject to the provisions of Sections 49520 -49523 of the Public Resources Code. 2. Franchisee shall, however, remain liable to City for any and all Franchise Fees and Environmental Liability Fund Fees that would otherwise be payable by Franchisee, for any and all late charges and interest assessed pursuant to Section 4 of this Agreement, and for any and all delinquent report/record charges assessed pursuant to Sections 7 or 9 of this Agreement. 3. Franchisee shall have a continuing obligation to submit to City all reports required by Sections 7 and 9 of this Agreement which relates to commercial solid waste handling services performed by Franchisee up to and including the date of termination, suspension, or expiration. 4. Franchisee shall allow the solid waste generators served by Franchisee to arrange for commercial solid waste handling services with a solid waste enterprise collector 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 agrees to continue to provide the indemnifications required in this contract after its suspension or termination. Such indemnifications include, but are not limited to, the hazardous materials indemnification and AB939 indemnification as set forth in Section 11. C. In the event this Franchise is terminated pursuant to Subsection A above, then within the time period specified by the City Council, Franchisee shall remove all of Franchisee's commercial solid waste containers, from all Franchisee's collection service locations and shall properly dispose of all solid waste in such containers. D. In the event the Franchise is terminated pursuant to Subsection A above or expires without an extension of the term and without a grant of a subsequent franchise allowing Franchisee to continue performing such services, then within ten (10) days of such termination or expiration Franchisee shall either: 1. Submit to City's General Services Director a list of the names and addresses of solid waste generators in Newport Beach for which Franchisee provided services as of the date of termination or expiration (i.e. Franchisee's City of Newport Beach customer list); or 2. Send written notification to each solid waste generator on Franchisee's customer list that Franchisee is no longer authorized to provide commercial solid waste handling services in the City of Newport Beach. Such notification shall be in the form provided by City's General Services Director and shall Nonexclusive Franchise Agreement Page 17 be personally delivered or shall be sent by first class mail, postage prepaid, to the customers' billing addresses. Franchisee shall submit to City's General Services Director an affidavit, signed under penalty of perjury, stating that the required notification has been provided by Franchisee to all of Franchisee's City of Newport Beach customers. SECTION 19. ASSIGNMENT Franchisee shall not assign, sell, subcontract, transfer or otherwise delegate its authority to perform any portion of the solid waste handling 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 20. 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: To: General Services Director City of Newport Beach P.O. Box 1768 3300 Newport Blvd. Newport Beach, CA 92658 -8915 To Franchisee: United Pacific Waste P.O. Box 908 Pico Rivera, CA 90660 Attention: Michael Kandilian Notice shall be deemed effective on the date personally served or, if mailed, three (3) 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 the party against whom the same is sought to be enforced. Nonexclusive Franchise Agreement Page 18 D. Applicable Law. The laws of the 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. E. Authority. The parties signing below represent and warrant that they have the requisite authority to bind the entities on whose behalf they are signing. F. 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. G. 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. H. 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. I. 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. J. 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 solid waste collection business in the City and that the issuance of a business license does not grant the Franchisee a right to conduct solid waste collection or other business in the City. K. Conflicts of Interest. Franchisee or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "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 Act, Franchisee shall conform to all requirements of the 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. Nonexclusive Franchise Agreement Page 19 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Leonie Mulvihill Assistant City Attorney ATTEST: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, A California municipal corporation Keith D. Curry Mayor CONSULTANT: UNITED PACIFIC WASTE, a California corporation By: Michael Kandilian CEO By: Shana Kandilian Secretary/Treasurer Nonexclusive Franchise Agreement Page 20