Loading...
HomeMy WebLinkAbout07 - Recycling ContractTO: Mayor and City Council FROM: General Services Director SUBJECT: Recycling Contract Recommendation: City Council Agenda Item No. t 7 February 26, 1996 Y4� FEB 2 Approve the attached six year contract with CRT, Inc. for the processing of solid waste for recyclables. Background On March 23, 1990, the City and CRT, Inc. entered into a 10 year contract for the processing of all City rubbish for recyclables. The actual start date of the contract was delayed until September 1990 due to delays in the completion of the Materials Recovery Facility (MRF). The major details of that current contract are noted by the upper section of Attachment A. During the past five years, CRT, Inc. has exceeded the mandatory 25% recycling rate by at least 5% on an annual basis. In addition, CRT, Inc. has provided various new programs to the City at no additional cost such as a green waste recycling program and the recycling of Christmas trees and phone books. In April 1995, when it became clear that the City would be impacted by a County landfill disposal fee increase of 52%, CRT, Inc. and staff began discussions to seek financial solutions. Subsequently, CRT, Inc. provided four options during May, 1995 that would have resulted in reduced recycling costs to the City. These options were considered, but not acted upon due to the impending study of various solid waste issues and alternatives to offset the landfill fee increases. The Council did direct staff on September 11, 1995 to proceed with further negotiations with CRT, Inc. Staff also addressed various alternatives available to the City such as: continuing the current recycling contract, renegotiating the current contract, and soliciting proposals for recycling services near the end of the contract. There had been interest by one Councilmember at the September 11 meeting and again on October 9 to explore the rebidding of the recycling contract. However, with over four and one half years of the contract remaining and the interest by CRT, Inc. to offer concessions to the City to provide relief from the landfill fee increases, it is prudent to consider the CRT, Inc. options. The Assistant City Attorney has indicated by the attached correspondence (Attachment B) that the existing contract with CRT, Inc. may be terminated only upon default of CRT, Inc., or by mutual consent of the City and CRT, Inc. Preparation of this report was further delayed as staff researched all possible disposal locations, including the La Paz, Arizona and El Sorbrante, Corona, California landfills, for lower disposal costs. The effects of a possible sale of the Orange County landfills to either a private entity or the County Sanitation District was also considered. Staff plans to provide Council a landfill disposal alternative during March, 1996. On a separate note, the recycling surcharge of $1.98 per month cannot be reset until a decision is made on the CRT, Inc. proposals since the CRT, Inc. fee is an integral part of the formula used to determine the surcharge. In addition, any change to the landfill disposal fee will directly affect the amount of the recycling surcharge. ThisrniSSinn Attachment A, which was mentioned earlier, depicts the current CRT, Inc. contract conditions as well as illustrates the stipulations of the proposed agreements with CRT, Inc. for FY 95-96 and FY 96-97. Each needs to be addressed in sequence. Staff have thoroughly researched a number of options that would offset the landfill fee increases. This study includes not only the CRT, Inc. contract, but all other recent and similiar municipal recycling contracts in Orange County. A comparison of the CRT, Inc. offer with other mixed waste processing contracts is included in Attachment C. Attachment D notes estimated City cost avoidance that would result from the approval of the proposed recycling agreement (Attachment E). Rate The current CRT, Inc. rate to recycle a minimum of 25% of the waste stream is $47.99 per ton. This rate includes a $9.19 increase on July 1, 1995 that represents a 75% assumption of the landfill fee increase (a minimum of 25% of the waste stream does not go to a landfill) as per the current contract. The second increase, also a part of the current contract rate, was a $.65 per ton increase on August 1, 1995 that was due to a CPI increase. The proposed agreement (Attachment E) would lower the current rate from $47.99 per ton to $45.75 per ton effective March 1, 1996. The actual rate for FY 95-96 would be $43.00 per ton retroactive to July 1, 1995 to assist the City offset the 52% tipping fee increase by the County, and 2 would be the lowest recycling fee in the County for mixed waste processing. The most recent negotiated rates for similiar city contracts (Costa Mesa, Fullerton, Huntington Beach, and Fountain Valley) for processing of solid waste for recyclables are listed on Attachment C. It is important to note that the Fullerton, Huntington Beach, and Fountain Valley recycling contracts have not only higher current rates, but have no CPI caps. In addition, the CPI increase for the Fullerton contract is calculated using the full recycling fee, and not on a smaller base net cost such as incorporated in the current and proposed CRT, Inc. contracts with our City and the Costa Mesa Sanitary District. By continuing to use this contract provision, the City will reduce increases associated with CPI increases when compared with other Orange County agencies. The proposed contract also contains a clause that would lower the CRT service fee should the County landfill fee be decreased or if a lower out of county disposal fee becomes available. Since there is a possibility of this occurring should the landfills be sold or transferred to another government agency, staff recommends that this possibility be addressed in the agreement. Just as the City is and would be responsible by the current and proposed contract for only 75% of any landfill fee increase due to a stipulated minimum recycling rate of 25%, the reduction level of the service fee would be only 75% of the total decrease. The contract also provides for a similiar calculation if the City opts for a 50% recycling rate at a future date. The proposed contract contains a "most favored nation" clause (Section V, Paragraph H, page 6) that provides valuable future protection to the City. CRT guarantees that the City recycling service fee will be the most favorable rate given to any customer using service simihar to that provided the City. If a more favorable rate is granted any CRT customer subsequent to the approval of the proposed contract, or if CRT lowers the rate of the Costa Mesa Sanitary District, then the new rate shall become the new rate for the City. In summary, the current recycling fee is $47.99 per ton. The proposed contract fee is $45.75 per ton with a temporary rate of $43.00 per ton for FY 95-96 only. The fee reverts to $45.75 per ton on July 1, 1996. Term The term of the contract with CRT, Inc. is proposed to be six years with automatic annual renewals. This type of contract is used throughout Orange County and Southern California in the solid waste industry and is commonly referred to as an "evergreen or rolling" contract. A termination for cause clause in the proposed contract remains as protection for the City should recycling mandates not be met or other problems develop. The length of the contract with renewal rights is of primary concern to CRT, Inc. Without assurances of a continuing contract, the company may be restricted from obtaining financing to upgrade their Materials Recovery Facility (MRF) to ensure continued efficiency and the capability to recycle j 50% of the waste stream to meet the AB 939 mandate of the year 2000. The City gains in several ways from a longer term contract such as a fee decrease, CERCLA indemnification, assurances of recycling 50% of the waste stream (our current contract would expire in September 2000, three months before the AB 939 50% recycling rate mandate deadline), cost avoidance worth $189,620 in FY 95-96, and the continuation of a high level of service with a company that has consistently exceeded contract specifications or provided amenities at no additional cost. Recycling Requirements Since the actual processing for recyclables program started in 1990, CRT, Inc. has annually exceeded the 25% recycling rate required by contract. For January 1996, CRT, Inc. recycled 35% of the City solid waste stream including 470 tons of green waste. Voluntary separation of green waste by CRT, Inc. has negated the necessity, the costs, and the inconvenience to the residents for a separate City green waste program. The proposed contract would offer as a future City option, an increase in the recycling rate to 50% on July 1, 1999 at an additional cost of $13.95 per ton. This would permit a postponement of additional recycling expenses over the next three and a half years and allow an opportunity for the California Integrated Waste Management Board to possibly lower or rescind the 50% recycling mandate. Currently, study of the options to a 50% recycling rate has been solicited by the CIWMB. The attached contract allows for future changes of the recycling rate by the CIWMB. CPI The current contract with CRT, Inc. permits a 3% to 6% CPI annual adjustment based on the local CPI index. The CPI increase in CY 94 resulted in a $ .63 per ton increase in the service fee on August 1, 1995. The proposed contract would lower the CPI cap to 3% with adjustments effective on July 1 (the same time the landfill fee adjustments are made) vice the current August 1 date. The current contract has a provision for an annual minimum CPI increase of 3%. The new contract would link any CPI increases to the actual CPI change, but would limit any increase to a 3% cap. For example, unlike the current contract, the new contract would allow a decrease in the rate for any CPI index below the 3% level. Another advantage the proposed contract would offer is a smaller CPI increase due to the lesser base net cost amount that is used in the A � calculation. In other words, the CPI is multiplied against the CRT base net cost of $22.25 instead of the service fee of $45.75. The advantages of this calculation method were explained in the third paragraph of the "Rate" section (top of page 3). Landfill Designation The proposed contract specifies that Brea or Bowerman landfills may be used by CRT, Inc. without any rate change. A rate change may be required if CRT, Inc. were to be required to permanently use other than Brea or Bowerman landfills. The contract also includes an option for the City to designate the disposal site should better disposal rates become available during the term of the contract. Staff will continue to research more economical disposal options. A time distance study to the new disposal location would be used as the basis for any fee change. Indemnification The proposed contract would include indemnification provided by CRT, Inc. from any and all claims made or liability that may arise as a result of CERCLA (Superfund) claims, as well as standard commercial general liability, automobile liability, and worker's compensation and employee's claims. This is an important feature that provides valuable current and future protection to the City. The CRT, Inc. indemnification is separate and in addition to the recently attained City insurance policy regarding CERCLA protection under "arranger" liability status. Amenities In addition to the service fee reductions, CRT, Inc. also offers the following amenities: a) Backup collection and transportation services in the event of City manpower or equipment stoppages b) Rolloff containers provided for any City recycling event (to include non- profit organizations) with fair market value paid for recyclables less transportation costs of containers c) Continuation of complimentary Christmas tree, phone book, and green waste recycling programs 5 r, - d) Public education program to include MRF tours, biennial recycling and hazardous waste brochure, and anti -scavenging program; actual annual costs not to exceed $5,000 Conclusions The contract conditions offered by CRT, Inc. will save the City a minimum of $189,620 during FY 95-96 and a minimum of $90,120 per year thereafter. Anticipated cost savings of $1,005,700 are expected over the next 10 years as a result of the approval of the proposed contract (Attachment D). These savings offset the FY 95-96 landfill fee increase of approximately $200,000 and permit a stabilization of recycling costs over the next ten years. Other provisions, such as the establishment of anti -scavenging and green waste programs, effectively address earlier solid waste issues that have developed in the past year. These issues would be effectively resolved by the acceptance of the attached contract. Most importantly, the City would be renewing a contract with very favorable conditions, built in annual cost avoidance over current costs, substantial added liability protection, and a guarantee that the service fee for the City will be the most favorable rate granted by CRT, Inc. (with the exception of the Costa Mesa Sanitary District rate which is $ .01 per ton lower). Finally, the agreement would be with a contractor that has exceeded performance requirements for the past 5 years, while providing valuable assistance on several occasions when City refuse operations were confronted with equipment problems. Summary Staff recommends approval of the recycling contract for the following major reasons: • Provides rate reductions of $189,620 (FY 95-96) and $85,120 (FY 96-97 and thereafter) • Contract ensures long term refuse processing cost stability • Improved CPI index provisions • Optional provisions for 50% recycling rate • Future landfill or disposal designation option • CERCLA indemnification 6 Contract guarantees most favorable rate in future (except for Costa Mesa Sanitary District) • Cost avoidance of contract offsets landfill fee increases • Continued or expanded recycling programs at no additional cost to City * City service amenities valued at $5,000/year • Avoided costs of $1,005,700 over initial ten year term of contract Very respectfully, David E. Niederhaus DEN/pp Attachments: (A) Recycling Contract Comparison (B) Assistant City Attorney Memo of December 27, 1995 (C) Comparison of Recycling Contract Options (D) City Savings With Proposed Contract (E) Proposed Recycling Agreement CD r I r, , CD M I :7, 0 C) CD x CD cn co CP t4 0 CD t4 0 CD CL 0 + CA CD (D CM 0 rA OD 00 CA tD C) C) 00 CD M 1 14 '4 CD wi .64 69 to 69 00 CD w P alp C) C> rn m rq- CAD .69 S, CM 0 ZI :$ CD CD CD 0 0 0 0 -4 CD ct al 9D 0 M (D CD OrQ IM (D PD 0 0 + C+ 0 m rA CA 0 CD CD CD C;j 'C> C) C) CD r I r, , CD M I :7, 0 C) CD x CD cn co CP t4 0 CD t4 0 I I CA CD CL CD En + CA CD (D rA I I CA CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY December 27, 1995 TO: Kevin Murphy, City Manager Dave Niederhaus, General Services FROM: Robin Clauson, Assistant City Attorney RE: CRT Recycling Agreement You have asked me to review whether the City can terminate the Recycling Agreement with CRT Transfer, Inc. ("CRT"). The Agreement does not expire until September, 2000. By its terms, the Agreement may be terminated under two conditions: (1) CRT's failure to comply with the provisions of the Agreement, or (2) the mutual consent of the parties. I understand that CRT has so far complied with all the requirements of the Agreement, therefore, without the consent of CRT, the City cannot unilaterally terminate the Agreement without risking litigation from CRT. de\KMcrta9r.mem 11 RO CLAUS0N Attachment B General Services Department ocoo�o�mcn�w�v bro �' bd � cx � ro (� �' v QR V 0CL 8 co CDm CD p w p AD fir' CD m OD CD p o PD p- G a ti ro CD � y r' oA o 'C",chi ° cam* V+' PD CD to td 00 61k 0 b n CO O y• �QQ a�-r O� f0/1 � C�O� � v � `J � ear "x p N O -'• m K or o E. �°om �o�aco �0wm m �p m Q69 � 'R to C� 5 o.cn�, n ti � o o o 7-1 ti m 00 .Vi � o c� coCA 'ID ti a; °p .� m (,oc c* o cn ti o K �' r 0� 1r Kn 1t 12 rn Cie�.� cro o� m m m m m m m m r c�+ •+� O .`y � N KK N K M ~ N C �fD� '1 fD 'S f0 Vi CA y W N m `< m Q4 Op Oq c b l .� y � a m S crtoD o v b (L o r :.4 to con a• -GO CL 0 o' ^Os cD 0o c 0 M O O W N b -4 bo 1--+ t� 1-� W 00 [� 00 cn OD W �. rn o 0 o hD G O O O O O O O O C17 vz, + + + ' + + -ca 69. 61k CAD Cl)OOD W W O kt- CJS Co O a 0 0 0 0 O n y� 0000 tooo � � G t�rJ CSD CSD O 0 0 0 0 tc tD to w 00 00 O to al C 01 OD Cn O O o O O O O O O O W 0 CD z O v m y I ty w CDcn �-3 .. A m 0 aq � A e+ 0 CD O C fA D CD a a o 0 y O A v c* 69 b9 Cb Cb CD cD CA ND O O -GS c�D fi9 Cb O Ui CA C t -0O O O CD y -Ga V9- Cn fyD Cn cCAn vii o i--+ O i O O O O O O « y C) CA Ol Ol OCA o o ).q RECYCLING AGREEMENT This AGREEMENT between the CITY OF NEWPORT BEACH (herein- after referred to as the "CITY") and CR TRANSFER, INC. (hereinafter referred to as the "CRT"), dated this —day of 1996, for purposes of identification, is made with reference to the following recitals: RECITALS A. The State Legislature has enacted laws that requires CITY to recycle twenty-five percent (25%) of its solid waste stream by December 31, 1995 and fifty percent (50%) by December 31, 2000, and the Newport Beach City Council would like to meet the State mandates. B. CRT is a California Corporation in the business of accepting solid waste from public and private haulers at its Stanton Transfer Station, located at 11232 Knott Avenue, Stanton, California, ("CRT processing site") separating recyclable material from solid waste, delivering the recyclables for sale to users of recycled material, and disposing of unusable solid waste in a landfill. C. CITY entered into a Recycling Agreement dated March 23, 1990, with CRT, which agreement will expire in September 2000. Paragraph XI of the agreement provides that the agreement may be terminated by the mutual consent of the Parties. D. CITY is the only municipality in Orange County that is currently using City staff to collect, haul, and dispose of solid waste generated by its residents, the City Council has evaluated alternative programs designed to satisfy State recycling requirements, and the City Council has determined that CRT represents the most feasible method of satisfying these requirements. E. CITY and CRT desire to terminate the Recycling Agreement dated March 23,1990 and enter into this new AGREEMENT. F. CITY and CRT will each benefit from a new AGREEMENT in that CITY will provide CRT with a substantial and dependable solid waste stream and CRT will separate from that waste stream recyclable material in sufficient quantity to satisfy CITY's recycling obligations. In addition, CRT will provide additional protection and benefits to CITY, such as indemnification from a variety of liabilities, long term processing cost stability, a green waste recycling program, service of various CITY waste containers, phone book and Christmas tree recycling, rebates, and additional public education assistance, which were not included in the agreement dated March 23,1990. NOW, THEREFORE, the Parties agree as follows: SECTION I TERM A. The term of this AGREEMENT shall be six (6) years effective on March 1, 1996 through February 28, 2002. The term shall thereafter be automatically renewed for a new six (6) year term on each March 1st of successive six (6) year periods beginning on March 1, 2002, unless otherwise terminated pursuant to this AGREEMENT. The automatic renewal of any six (6) year term of this AGREEMENT may be terminated by written notice of cancellation of the renewal. Notice of cancellation of the automatic renewal may be given by either party at anytime, without cause, and will cause this AGREEMENT to terminate when the balance of the remaining six (6) year term expires. B. This AGREEMENT may also be terminated pursuant to Section XII of this AGREEMENT or by mutual consent of the Parties. SECTION II REPRESENTATIONS AND WARRANTIES A. CITY warrants and represents that it has the right to, and does, collect, haul and dispose of solid waste generated by the vast majority of residential units, and some commercial and industrial properties, within CITY. CITY further warrants and represents that it will maintain, during the term of this AGREEMENT and subject to budgetary constraints, manpower and equipment sufficient to collect and haul solid waste generated within CITY. B. CRT represents and warrants that it will maintain adequate space, manpower, and equipment to perform the duties required of it pursuant to this AGREEMENT. CRT further represents that it will actively seek markets for recycled materials reclaimed from CITY solid waste stream such that CRT continues to have a financial interest in performing the duties required by this AGREEMENT. 2 SECTION III DUTIES OF CRT CRT shall perform the following basic services: A. Maintain a solid waste transfer station at the CRT processing site in the City of Stanton, or an equal facility no further from CITY, with adequate space to accept all solid waste delivered by CITY, sufficient manpower and equipment to separate recyclables from the waste stream and store recycled material prior to shipment, without causing undue delays to CITY. Undue delays are defined as delays of access to unloading of CITY's solid waste at the CRT processing facility greater than thirty (30) minutes per load. B. 1. Sort through the waste stream delivered by CITY and remove recyclable materials to the extent of twenty-five percent (25%) or more of the weight of all materials in the waste stream. 2. On July 1, 1999, or such later date as CITY may designate in writing, continence to sort and remove recyclable materials to the extent of fifty - percent (50%) or more of the weight of all materials in the waste stream, or such other percentage as may be required by CITY to comply with State Law. CITY shall provide CRT with six (6) months prior written notice of its intent to implement the fifty percent (50%) recycling rate. C. After separation of recyclable materials, dispose of the remaining solid waste at a location and/or in a mariner that fully complies with all relevant local, State, and federal laws, rules and regulations and this AGREEMENT. D. Provide documentation, satisfactory to CITY and the County of Orange, and as required by State law, attesting to the tonnage of solid waste received from CITY and deposited in a landfill. CRT shall also provide a monthly recycling report which will include, at a minimum, the total solid waste tonnage, the amount of solid waste recycled by category, and the recycling rate. E. If requested by CITY due to a mechanical breakdown of CITY refuse transfer equipment, provide, on a temporary basis, refuse transfer equipment, and drivers, to transport CITY refuse from Corporation Yard at 592 Superior Avenue, Newport Beach to the CRT processing facility. CITY will compensate CRT under the provisions of Section V, Paragraph F. F. In the event of a major CITY manpower or equipment stoppage related to CITY refuse collection activities, CRT will provide any available CRT 3 [4 resources to CITY on a temporary basis at the average Countywide monthly residential collection rate. G. CRT shall provide AB 939 education programs by providing up to five (5) tours of their Materials Recovery Facility each year and preparing with CITY staff concurrence, a recycling, household hazardous waste, and anti - scavenging brochure for each residence on a biennial basis. CITY will provide mailing labels. The brochure will be mailed by CRT within ninety (90) days of written request by CITY. Costs to CRT shall not exceed five -thousand dollars ($5,000) annually. H. CRT shall have an agreement in place throughout the term of this AGREEMENT for composting or processing green waste with a properly licensed facility and divert CITY green waste to same. This diversion of green waste will be included in the overall 25% or 50% recycling rate requirement noted in Section III, Paragraph B.1. and B.2, unless future Federal or State mandates no longer permit the use of green waste in diversion totals. I. CRT shall provide complimentary Christmas tree and phone book recycling on an annual basis. J. CRT shall provide roll off containers for any CITY sponsored recycling event, including non-profit organizations, with CRT to pay fair market value for recyclables collected less transportation costs of the containers provided to the event. SECTION IV DUTIES OF CITY CITY shall be required to perform the following duties: A. Deliver at a minimum all solid waste collected by CITY personnel from residential units to the current CRT processing facility in Stanton or such other facility as CRT may direct, provided the alternate site is no greater distance nor driving time from Newport Beach than the current facility, at no cost nor expense to CITY, except as otherwise noted in Section III, Paragraph E. B. Solid waste shall be delivered to CRT between the hours of 7:00 a.m. through 6:00 p.m., Monday through Saturday, and shall be off-loaded by CITY personnel using CITY equipment. The solid waste delivered to CRT shall be the same material collected by CITY personnel and deposited into CITY K vehicles. CITY shall not further compact, or alter the composition of, the waste collected, except to the extent the material is compacted in the original collection vehicle. SECTION V COMPENSATION A. CITY shall compensate CRT at the rate of $45.75 per ton of solid waste delivered by CITY. This service fee ($45.75) includes a base net cost of $22.25 per ton. B. The base net cost shall be increased on July 1, 1996, and every twelve (12) months thereafter, to reflect any increase in the Consumer Price Index (CPI - all urban consumers for the Los Angeles -Anaheim -Riverside area - 1995 base year) as specified in this subsection. Base net cost increases shall reflect increases in the CPI. The base net cost of CRT operations as of the effective date of this AGREEMENT is $22.25 per ton and that sum will be used to calculate the service fee increase to be effective on, July 1, 1996. The base net cost of CRT shall increase in subsequent years to reflect prior increases in the CPI (for example, assuming a CPI increase of three percent (3%) prior to January 1, 1996, the base net cost used to calculate the July 1, 1997 service fee increase will be $22.92 per ton). Base net cost increases shall reflect actual changes in CPI provided, however, in the event the CPI increases more than three percent (3%) during the preceding twelve (12) months, the increase in the service fee shall be limited to three percent (3%) multiplied by the then current base net cost. C. The service fee assumes a current disposal fee of $35.00 per ton. In the event disposal fees are increased or decreased from the current rate of $35.00 per ton, the service fee shall be increased or decreased by an amount equal to seventy-five percent (75%) of the difference between the current disposal fee and the new fee. If CITY opts for an increased recycling rate of fifty percent (50%) as provided for in Section III, Paragraph B.2. the seventy-five percent (75%) calculation noted above shall be reduced to fifty percent (50%) of the difference between the current disposal fee and the new fee. D. The service fee may be increased by $13.95 per ton of solid waste received by CRT from CITY upon CITY's request pursuant to Section III, Paragraph B.2. to increase the recycling rate to fifty percent (50%). The $13.95 service fee increase assumes an increased recycling requirement at fifty percent (50%) of the solid waste stream. If the California Integrated Waste Management Board designates a lesser percentage, CRT agrees to negotiate with CITY to 5 I(" reduce the $13.95 per ton increase by an amount which will reflect reduced recycling costs incurred by CRT in recycling. E. The service fee assumes CRT will, during the term of this AGREEMENT, be able to dispose of solid waste at Bowerman or Brea Canyon landfills. If both the Bowerman and Brea Canyon landfills are closed or CITY designates another facility under the provisions of Section VII below, the service fee shall be adjusted to reflect any change in disposal and transportation costs which result from transporting solid waste to a new or different facility location. If there is a resulting change in disposal costs the fee shall be adjusted as provided in Section V, Paragraph C. If there is a resulting change in transportation costs, the adjusted fee will be based upon a precise time/distance study conducted jointly by CITY and CRT. F. In the event CRT is required to provide, on a temporary basis, personnel and refuse equipment to transfer solid waste in the event of a breakdown of CITY equipment, CRT shall receive an additional five dollars, ninety cents ($5.90) per ton for all solid waste transported in CRT equipment. G. Compensation due CRT pursuant to this AGREEMENT shall be paid within thirty (30) days after receipt of an invoice, accompanied by supporting documentation as required by State law establishing the total weight of the solid waste provided by CITY, the amount disposed of by CRT, and the weight of the recycled or reclaimed materials recovered from the solid waste delivered to CRT by CITY. H. CRT guarantees CITY that its service fee will be the most favorable rate given to any customer using service similar to that provided to CITY. If CRT negotiates a more favorable service fee with any customer subsequent to the date of this AGREEMENT, that fee shall become the rate for CITY. I. CRT shall compensate CITY at the rate of two dollars and seventy- four cents ($2.74) per ton of all waste delivered to the CRT processing site by CITY personnel between the dates of July 1, 1995 to February 29, 1996. In addition, CRT, Inc., shall compensate CITY at the rate of two dollars and twenty- _ (+79 five cents ($2.25) per ton of all waste delivered to the CRT, Inc., processing site by �-� CITY personnel between the dates of July 1, 1995, and June 30,1996. • __ �'J SECTION VI -7t)/#Q OWNERSHIP OF SOLID WASTE 2 2 S Azo N 14 7 ,s 6 `�? 1 I-7 CRT shall become the owner of all solid waste when delivered to the CRT processing site, or such alternate site as may be designated during the term of this AGREEMENT. CRT shall have the exclusive right to market all recyclable material reclaimed from solid waste generated by CITY pursuant to this AGREEMENT and shall be entitled to any and all income derived from the sale or use of the recycled material. CRT shall make an every reasonable effort to recover any inadvertently disposed materials which are owned by CITY or residents and return them upon request. SECTION VII LOCATION OF DISPOSAL A. CRT shall dispose of solid waste only by taking such solid waste to a landfill, transfer station, recycling facility or materials recovery facility which is lawfully authorized to accept such solid waste. CRT shall not dispose of solid waste by depositing it on any land (except a permitted recycling facility) whether public or private, in any river, stream or other waterway, in any sanitary sewer or storm drainage system, or any manner prohibited by law. . B. CRT agrees that CITY has the future right, at any time, to direct CRT to dispose of CITY solid waste at a permitted disposal facility designated by CITY. For example, CITY may exercise this right in order to save money on disposal costs, to avoid disposal sites with potential cleanup problems, or to meet the requirements for access to a disposal site. CRT agrees to dispose of the solid waste which CITY delivers to CRT at any disposal facility directed by CITY. This exercise of "flow control" by CITY shall be made upon at least one hundred - twenty (120) days prior written notice to CRT. SECTION VIII INDEPENDENT CONTRACTOR CRT, in performing the services required by this AGREEMENT, is acting in the capacity of an independent contractor. CRT is solely responsible for determining the type, method and manner of the work or tools and instrumentalities required to perform the services specified in this AGREEMENT. CRT is solely responsible for the payment of all salaries, benefits, unemployment insurance taxes, social security taxes and any other payments required by law. II SECTION IX INDEMNIFICATION A. 1. CRT assumes the sole risk for all the work covered by this AGREEMENT done at the CRT processing site for solid waste. CRT agrees to indemnify, defend, save and hold harmless CITY, its elected and appointed boards and commissions, officers, agents, and employees from and against losses, damages, liability, claims, costs and expenses for damages of any nature, but not limited to, bodily injury, death, personal injury, property damage, attorneys' fees and court costs arising from any and all negligent actions of CRT, its employees, agents or subcontractors in the performance of services under this AGREEMENT. 2. CRT shall indemnify and hold harmless CITY, its City Council, boards and conunissions, officers and employees from and against any and all loss, damages, liability, claims, costs and expenses whatsoever, including reasonable attorneys' fees, which may accrue to any and all persons, or business entities furnishing or supplying work, services, materials, equipment or supplies to contractor in the performance of services under this AGREEMENT. 3. In the event that CRT and CITY are sued by a third party for damages allegedly caused by negligence or other wrongful conduct of CRT, or by a dangerous condition of CITY's property created by CRT or existing while the property was under the control of CRT, CRT shall not be relieved of its indemnity obligation to CITY by any settlement with any such third party unless that settlement includes a full release and dismissal of all claims by the third party against CITY. B. 1. CRT shall indemnify, defend and hold harmless CITY, as well as its officers, employees, agents and representatives with respect to any loss, damage, liability, claim, cost, expense or cause of action arising out of any act or omission of CRT, its directors, officers, agents, employees, subsidiaries, affiliates, successors, assigns or insureds in any way related to the services to be performed by CRT pursuant to this AGREEMENT. 2. In addition, CRT shall indemnify CITY, defend with counsel approved by CITY, protect and hold harmless CITY, its officers, employees, agents, assigns, and any successor or successors to CITY's interest from and against all claims, actual damages including, but not limited to, special and consequential damages, natural resource damage, punitive damages, injuries, E:l I� costs, response, remediation, and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity, of any kind whatsoever paid, incurred or suffered by, or asserted against, CITY or its officers, employees, agents or CRT arising from or attributable to CRT's activities under this AGREEMENT concerning any hazardous substances or hazardous waste at any place where CRT stores or disposes of solid or hazardous waste pursuant to this AGREEMENT between CITY and CRT. The foregoing indemnity is intended to operate as an AGREEMENT pursuant to CERCLA, 42 USC Section 9607(e) and any amendments thereto; California Health & Safety Code Section 25364, to insure, protect, hold harmless and indemnify CITY from liability. 3. CRT shall protect, defend, indernnify, and hold harmless CITY against all fines or penalties imposed on City by the California Integrated Waste Management Board with respect to CRT's failure to meet the recycling requirements of this AGREEMENT. C. CITY and CRT shall promptly notify the other of any claim or lawsuit for which the other has obligations pursuant to this Section. D. If pursuant to Section VII, Paragraph B, CITY directs CRT to dispose of CITY solid waste at a disposal location outside the County of Orange, the indemnification provision of Section IX, Paragraph B.2., shall be rescinded at CRT's option. SECTION X INSURANCE A. Without limiting CRT's indemnification of CITY, CRT shall obtain and maintain at its own expense during the term of this AGREEMENT, policy or policies of liability insurance of the type and amounts described below and satisfactory to CITY. Insurance policies shall be signed by a person authorized by that insurer to bind coverage on its behalf and must be filed with CITY prior to exercising any right or performing any work pursuant to this AGREEMENT. Prior to the commencement of work, CRT shall provide to CITY certificates of insurance from an insurance company certified to do business in the State of California, with original endorsements. At the option of CITY, CRT shall provide copies of all policies providing coverage as required by this 9 AGREEMENT. CRT shall provide the following insurance, with Best's rating A - VII or better carriers, unless otherwise approved by the City Risk Manager: 1. Worker's Compensation and Employers Liability insuring statutory Worker's Compensation limits as required by the California Labor Code and one million dollars ($1,000,000) per accident Employers' Liability; 2. Commercial general liability insurance covering third party liability risks, including without limitation, contractual liability, in a minimum amount of one million dollars ($1,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. If the policy does not apply separately to this AGREEMENT or contains a general aggregate limit, then the aggregate limit shall not be less than two million dollars ($2,000,000); 3. Automobile liability and property insurance covering all owned and rented vehicles of CRT coverage with a minimum amount of two million dollars ($2,000,000) combined single limit per accident for bodily injury and property damage, and shall include sudden and accidental coverage. B. Endorsements to the policies providing the above insurance shall be obtained by CRT, adding the following three provisions: 1. Additional Insureds: "CITY and its elected and appointed boards, officers agents, and employees as additional insureds." 2. Notice: "The policy shall not terminate, nor shall it be canceled nor the coverage reduced, until thirty (30) days after written notice is given to CITY." 3. Other Insurance: "Any other insurance maintained by CITY shall be excess and not contributing with the insurance provided by this policy." C. CRT shall give to CITY prompt and timely notice of any claim made or suit instituted arising out of CRT's performance of this AGREEMENT. CRT shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. D. CRT agrees that in the event of loss due to any of the perils for which it has agreed to provide, comprehensive general and automotive liability 10 ;�i insurance, that CRT shall look solely to its insurance for recovery. CRT hereby grants to CITY, on behalf of any insurer providing, comprehensive general and automotive liability insurance to either CRT or CITY with respect to the services of CRT, a waiver of any right of subrogation which any such insurer of CRT may acquire against CITY by virtue of the payment of any loss under insurance. SECTION XI PROHIBITION AGAINST TRANSFERS CRT may not assign any right or obligation of this .AGREEMENT or any interest in this AGREEMENT by operation without prior written consent of CITY. Any attempted or purported assignment without consent of CITY shall be null and void. CRT may not employ any subcontractors unless specifically authorized by CITY. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of CRT, or of the interest of any general partner or joint -venturer which shall result in changing the control of CRT, shall be construed as an assignment of this AGREEMENT. Control means fifty percent (50%) or more of the voting power, or twenty five percent (25%) or more of the assets of the corporation, partnership or joint -venture. SECTION XII DEFAULT/REMEDIES/TERMINATION A. A party shall be considered in default if and when the party fails or refuses to perform any of the provisions of this AGREEMENT in the manner required. The party in default shall have the right to cure the default within thirty (30) days after written notice from the other party specifying the nature of the default and its intention to exercise the remedies provided in this AGREEMENT in the event of a failure to cure. If the default requires more than thirty (30) days to cure, the breaching party must commence cure within thirty (30) days after written notice from the non -breaching party and diligently pursue the cure to completion. B. In the event a party fails to cure a default as specified in this Section, the non -breaching party shall have the right to terminate the AGREEMENT and to exercise any other remedy provided by law. 11 C. The Parties agree that remedies at law, including monetary damages, are not adequate to protect CITY in the event that CRT fails to accept the waste stream generated by CITY or fails to separate from that waste stream recyclables equal to twenty-five percent (25%), or more, of the total weight of the entire waste stream received by CRT. In such event, the CITY's remedies shall include, but not limited to, the right to a Court Order requiring CRT to specifically perform in accordance with this AGREEMENT. SECTION XIII PERMITS/LICENSES CRT shall obtain, at its sole cost and expense, all permits and licenses required by any public agency having jurisdiction over its operations that are necessary for the performance of services pursuant to this AGREEMENT and, upon request, shall provide proof to CITY that such licenses and/or permits have been obtained. SECTION XIV MISCELLANEOUS PROVISIONS A. Notices Any notice required by this AGREEMENT shall be deemed given when personally delivered or when deposited in the United States Mail, first class postage prepaid, and addressed as provided below: CR Transfer, Inc. " 191- X114 11292 Western Avenue P.O. Box 125 Stanton, California 90680 General Services Director City of Newport Beach 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92659-1768 B. Cost of Litigation ,rya - 141d Y%� If any legal action is necessary to enforce any provision of this AGREEMENT, or for damages by reason for an alleged breach of any provisions 12 1'3 of this AGREEMENT, the Parties agree that the court with jurisdiction over the action may determine and fix reasonable attorneys' fees and expenses to be paid to the successful party. C. Arbitration The parties may mutually agree to submit disputes over the terms of this Agreement to arbitration. D. Compliances CRT represents that it is familiar with and shall comply with all laws, State or federal and all ordinances, rules and regulations enacted or issued by CITY which are applicable to the performance of services under this AGREEMENT. E. Integrated Contract This AGREEMENT represents the full and complete understanding of every kind or nature whatsoever between the Parties and all preliminary negotiations and agreements of whatsoever kind or nature are merged in this AGREEMENT. No verbal AGREEMENT or implied covenant shall be held to vary the provisions hereon. Any modification of this AGREEMENT will be effective only by written execution signed by both CITY and CRT. F. Waiver A waiver by CITY of any breach of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein whether of the same or a different character. G. Authori Each of the Parties warrants and represents to the other that this AGREEMENT has been approved by its governing body and that the officers whose names appear below have been duly authorized to execute this AGREEMENT and bind the respective Parties. 13 Cq� SECTION XV 1990 RECYLING AGREEMENT Upon execution of this AGREEMENT by CITY and CRT, the March 23, 1990 Recyling Agreement is terminated and of no further force or affect. IN WITNESS WHEREOF, each of the Parties hereto has caused this AGREEMENT to be executed by its duly authorized representative as of the date set forth below by such authorized signature. APPROVED AS TO FORM: Lai Cit " Attorney Attest: City Clerk de\winword\recyclin.doc 2-16-96 CITY OF NEWPORT BEACH A Municipal Corporation BN7: Mayor Date: CR TRANSFER, INC. 11292 Western Avenue P.O. Box 125 Stanton, California 90680 14